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TEXTS ADOPTED

at the sitting of

Wednesday12 June 2013

P7_TA-PROV(2013)06-12 PROVISIONAL EDITION PE 510.965

EN EN

EUROPEAN PARLIAMENT 2013 - 2014

CONTENTS

TEXTS ADOPTED

P7_TA-PROV(2013)0249Appointment of a Member of the European CommissionEuropean Parliament decision of 12 June 2013 approving the appointment of Neven Mimica as a Member of the Commission (2013/0806(NLE)).............................................1

P7_TA-PROV(2013)0250Numerical strength of the standing committees(B7-0268/2013)European Parliament decision of 12 June 2013 on the numerical strength of the standing committees (2013/2671(RSO))............................................................................................2

P7_TA-PROV(2013)0251Appointment of a member of the Court of Auditors(A7-0182/2013 - Rapporteur: Inés Ayala Sender)European Parliament decision of 12 June 2013 on the nomination of Neven Mates as a Member of the Court of Auditors (C7-0106/2013 – 2013/0804(NLE))...............................4

P7_TA-PROV(2013)0252Appointment of a member of the Court of Auditors(A7-0181/2013 - Rapporteur: Inés Ayala Sender)European Parliament decision of 12 June 2013 on the nomination of George Pufan as a Member of the Court of Auditors (C7-0115/2013 – 2013/0805(NLE))...............................5

P7_TA-PROV(2013)0253Illegal, unreported and unregulated fishing ***I(A7-0144/2013 - Rapporteur: Raül Romeva i Rueda)European Parliament legislative resolution of 12 June 2013 on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1005/2008 establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing (COM(2012)0332 – C7-0158/2012 – 2012/0162(COD)).................................................................................................................6

P7_TA-PROV(2013)0254Standards for the reception of applicants for international protection (recast) ***II(A7-0214/2013 - Rapporteur: Antonio Masip Hidalgo)European Parliament legislative resolution of 12 June 2013 on the Council position at first reading with a view to the adoption of a directive of the European Parliament and of the Council laying down standards for the reception of applicants for international protection (recast) (14654/2/2012 – C7-0165/2013 – 2008/0244(COD)).............................................8

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P7_TA-PROV(2013)0255Application for international protection lodged in a Member State by a third-country national or a stateless person (recast) ***II(A7-0216/2013 - Rapporteur: Cecilia Wikström)European Parliament legislative resolution of 12 June 2013 on the Council position at first reading with a view to the adoption of a regulation of the European Parliament and of the Council establishing the criteria and mechanisms for determining the Member State responsible for examining an application for international protection lodged in one of the Member States by a third-country national or a stateless person (recast) (15605/3/2012 – C7-0164/2013 – 2008/0243(COD))...................................................................................10

P7_TA-PROV(2013)0256Granting and withdrawing international protection (recast) ***II(A7-0217/2013 - Rapporteur: Sylvie Guillaume)European Parliament legislative resolution of 12 June 2013 on the Council position at first reading with a view to the adoption of a directive of the European Parliament and of the Council on common procedures for granting and withdrawing international protection (recast) (08260/2/2013 – C7-0163/2013 – 2009/0165(COD))...........................................13

P7_TA-PROV(2013)0257Fund for European aid to the most deprived ***I(A7-0183/2013 - Rapporteur: Emer Costello)Amendments adopted by the European Parliament on 12 June 2013 on the proposal for a regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived (COM(2012)0617 – C7-0358/2012 – 2012/0295(COD))...............14

P7_TA-PROV(2013)0258Establishment of 'Eurodac' for the comparison of fingerprints ***I(A7-0432/2012 - Rapporteur: Monica Luisa Macovei)European Parliament legislative resolution of 12 June 2013 on the amended proposal for a regulation of the European Parliament and of the Council on the establishment of 'EURODAC' for the comparison of fingerprints for the effective application of Regulation (EU) No […/…] (establishing the criteria and mechanisms for determining the Member State responsible for examining an application for international protection lodged in one of the Member States by a third-country national or a stateless person) and to request comparisons with EURODAC data by Member States' law enforcement authorities and Europol for law enforcement purposes and amending Regulation (EU) No 1077/2011 establishing a European Agency for the operational management of large-scale IT systems in the area of freedom, security and justice (recast) (COM(2012)0254 – C7-0148/2012 – 2008/0242(COD)).........................................................................................54

P7_TA-PROV(2013)0259Temporary reintroduction of border control at internal borders ***I(A7-0200/2012 - Rapporteur: Renate Weber)European Parliament legislative resolution of 12 June 2013 on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 562/2006 in order to provide for common rules on the temporary reintroduction of border control at internal borders in exceptional circumstances (COM(2011)0560 – C7-0248/2011 – 2011/0242(COD)).......................................................................................194

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P7_TA-PROV(2013)0260Establishment of an evaluation mechanism to verify application of the Schengen acquis *(A7-0215/2013 - Rapporteur: Carlos Coelho)European Parliament legislative resolution of 12 June 2013 on the draft Council regulation on the establishment of an evaluation mechanism to verify the application of the Schengen acquis (10273/2013 – C7-0160/2013 – 2010/0312(NLE))........................237

P7_TA-PROV(2013)0261Financial statements and related reports of certain types of undertakings ***I(A7-0278/2012 - Rapporteur: Klaus-Heiner Lehne)European Parliament legislative resolution of 12 June 2013 on the proposal for a directive of the European Parliament and of the Council on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings (COM(2011)0684 – C7-0393/2011 – 2011/0308(COD))................................................239

P7_TA-PROV(2013)0262Transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market ***I(A7-0292/2012 - Rapporteur: Arlene McCarthy)European Parliament legislative resolution of 12 June 2013 on the proposal for a directive of the European Parliament and of the Council amending Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and Commission Directive 2007/14/EC (COM(2011)0683 – C7-0380/2011 – 2011/0307(COD))............................455

P7_TA-PROV(2013)0263Adjustment rate to direct payments provided for in Regulation (EC) No 73/2009 in respect of calendar year 2013 ***I(A7-0186/2013 - Rapporteur: Luis Manuel Capoulas Santos)European Parliament legislative resolution of 12 June 2013 on the proposal for a regulation of the European Parliament and of the Council on fixing an adjustment rate to direct payments provided for in Regulation (EC) No 73/2009 in respect of calendar year 2013 (COM(2013)0159 – C7-0079/2013 – 2013/0087(COD)).......................................526

P7_TA-PROV(2013)0264Amendment of Schengen border code and Convention implementing the Schengen Agreement ***I(A7-0206/2013 - Rapporteur: Georgios Papanikolaou)European Parliament legislative resolution of 12 June 2013 on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 562/2006 of the European Parliament and of the Council establishing a Community Code on the rules governing the movement of persons across borders (Schengen Borders Code) and the Convention implementing the Schengen Agreement (COM(2011)0118 – C7-0070/2011 – 2011/0051(COD)).......................................................................................530

P7_TA-PROV(2013)0265Draft decision of the European Council establishing the composition of the European Parliament ***(A7-0213/2013 - Rapporteurs: Roberto Gualtieri and Rafał Trzaskowski)

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European Parliament legislative resolution of 12 June 2013 on the draft European Council decision establishing the composition of the European Parliament (00110/2013 – C7-0166/2013 – 2013/0900(NLE))........................................................................................569

P7_TA-PROV(2013)0266Social investment for growth and cohesion(B7-0255/2013)European Parliament resolution of 12 June 2013 on the Commission Communication ‘Towards Social Investment for Growth and Cohesion – including implementing the European Social Fund 2014-2020’ (2013/2607(RSP))....................................................570

P7_TA-PROV(2013)0267Regional policy as a part of wider State support schemes(A7-0204/2013 - Rapporteur: Oldřich Vlasák)European Parliament resolution of 12 June 2013 on regional policy as a part of wider State support schemes (2013/2104(INI))..........................................................................584

P7_TA-PROV(2013)0268Annual report on competition policy(A7-0143/2013 - Rapporteur: Antolín Sánchez Presedo)European Parliament resolution of 12 June 2013 on the Annual Report on EU Competition Policy (2012/2306(INI))..............................................................................593

P7_TA-PROV(2013)0269Preparations for the European Council meeting (27-28 June 2013) - Democratic decision making in the future EMU(B7-0271/2013)European Parliament resolution of 12 June 2013 on strengthening European democracy in the future EMU (2013/2672(RSP))..................................................................................607

P7_TA-PROV(2013)0270Preparations for the European Council meeting (27-28 June 2013) - European action to combat youth unemployment(B7-0270, 0276 and 0279/2013)European Parliament resolution of 12 June 2013 on preparations for the European Council meeting (27-28 June 2013) – European action to combat youth unemployment (2013/2673(RSP)).............................................................................................................610

P7_TA-PROV(2013)0271Deadlock on the revision of Regulation (EC) No 1049/2001(B7-0256, 0259, 0261, 0265 and 0266/2013)European Parliament resolution of 12 June 2013 on the deadlock on the revision of Regulation (EC) No 1049/2001 (2013/2637(RSP)).........................................................615

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P7_TA-PROV(2013)0249

Appointment of a Member of the European Commission

European Parliament decision of 12 June 2013 approving the appointment of Neven Mimica as a Member of the Commission (2013/0806(NLE))

The European Parliament,

– having regard to the Act of accession of Croatia, and in particular Article 21(1) thereof,

– having regard to the proposal submitted by the Croatian Government on 25 April 2013, with a view to the appointment of Neven Mimica as a Member of the Commission,

– having regard to the Council's letter of 2 May 2013, whereby the Council consulted Parliament on a decision, to be taken by common accord with the President of the Commission, on the appointment of Neven Mimica as a Member of the Commission,

– having regard to the hearing of Neven Mimica on 4 June 2013, led by the Committee on the Internal Market and Consumer Protection with the association of the Committee on the Environment, Public Health and Food Safety, and to the statement of evaluation drawn up following that hearing;

– having regard to Rule 106 of, and Annex XVII to, its Rules of Procedure,

1. Approves the appointment of Neven Mimica as a Member of the Commission for the remainder of the Commission’s term of office until 31 October 2014;

2. Instructs its President to forward this decision to the Council, the Commission and the governments and parliaments of the Member States and the Republic of Croatia.

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P7_TA-PROV(2013)0250

Numerical strength of the standing committees

European Parliament decision of 12 June 2013 on the numerical strength of the standing committees (2013/2671(RSO))


– having regard to the proposal by the Conference of Presidents,

– having regard to its decisions of 15 July 20091, 14 December 20112 and 18 January 20123 on the numerical strength of the standing committees,

– having regard to Rule 183 of its Rules of Procedure,

1. Decides to amend the numerical strength of the standing committees as follows:

I. Committee on Foreign Affairs: 79 members

II. Committee on Development: 30 members

III. Committee on International Trade: 31 members

IV. Committee on Budgets: 45 members

V. Committee on Budgetary Control: 31 members

VI. Committee on Economic and Monetary Affairs: 50 members

VII. Committee on Employment and Social Affairs: 50 members

VIII. Committee on the Environment, Public Health and Food Safety: 71 members

IX. Committee on Industry, Research and Energy: 61 members

X. Committee on the Internal Market and Consumer Protection: 41 members

XI. Committee on Transport and Tourism: 47 members

XII. Committee on Regional Development: 50 members

XIII. Committee on Agriculture and Rural Development: 44 members

XIV. Committee on Fisheries: 25 members

XV. Committee on Culture and Education: 31 members

1 OJ C 224 E, 19.8.2010, p. 34.2 Texts adopted, P7_TA(2011)0570.3 Texts adopted, P7_TA(2012)0001.

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XVI. Committee on Legal Affairs: 25 members

XVII. Committee on Civil Liberties, Justice and Home Affairs: 60 members

XVIII. Committee on Constitutional Affairs: 26 members

XIX. Committee on Women’s Rights and Gender Equality: 35 members

XX. Committee on Petitions: 35 members;

2. Decides that this decision will enter into force on 1 July 2013;

3. Instructs its President to forward this decision to the Council and the Commission, for information.

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P7_TA-PROV(2013)0251

Appointment of a member of the Court of Auditors

European Parliament decision of 12 June 2013 on the nomination of Neven Mates as a Member of the Court of Auditors (C7-0106/2013 – 2013/0804(NLE))

(Consultation)


– having regard to Article 286(2) of the Treaty on the Functioning of the European Union, pursuant to which the Council consulted Parliament (C7-0106/2013),


– having regard to the report of the Committee on Budgetary Control (A7-0182/2013),

A. whereas Parliament’s Committee on Budgetary Control proceeded to evaluate the credentials of the nominee, in particular in view of the requirements laid down in Article 286(1) of the Treaty on the Functioning of the European Union;

B. whereas at its meeting of 27 May 2013, the Committee on Budgetary Control heard the Council’s nominee for membership of the Court of Auditors;

1. Delivers a negative opinion on the Council’s nomination of Neven Mates as a Member of the Court of Auditors;

2. Instructs its President to forward this decision to the Council and, for information, the Court of Auditors, the other institutions of the European Union and the audit institutions of the Member States.

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P7_TA-PROV(2013)0252

Appointment of a member of the Court of Auditors

European Parliament decision of 12 June 2013 on the nomination of George Pufan as a Member of the Court of Auditors (C7-0115/2013 – 2013/0805(NLE))

(Consultation)


– having regard to Article 286(2) of the Treaty on the Functioning of the European Union, pursuant to which the Council consulted Parliament (C7-0115/2013),


– having regard to the report of the Committee on Budgetary Control (A7-0181/2013),

A. whereas Parliament’s Committee on Budgetary Control proceeded to evaluate the credentials of the nominee, in particular in view of the requirements laid down in Article 286(1) of the Treaty on the Functioning of the European Union;

B. whereas at its meeting of 27 May 2013, the Committee on Budgetary Control heard the Council’s nominee for membership of the Court of Auditors;

1. Delivers a favourable opinion on the Council’s nomination of George Pufan as a Member of the Court of Auditors;

2. Instructs its President to forward this decision to the Council and, for information, the Court of Auditors, the other institutions of the European Union and the audit institutions of the Member States.

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P7_TA-PROV(2013)0253

Illegal, unreported and unregulated fishing ***I

European Parliament legislative resolution of 12 June 2013 on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1005/2008 establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing (COM(2012)0332 – C7-0158/2012 – 2012/0162(COD))

(Ordinary legislative procedure: first reading)


– having regard to the Commission proposal to Parliament and the Council (COM(2012)0332),

– having regard to Article 294(2) and Article 43(2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0158/2012),

– having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

– having regard to the opinion of the European Economic and Social Committee of 28 March 20121


– having regard to the report of the Committee on Fisheries (A7-0144/2013),

1. Adopts its position at first reading hereinafter set out;

2. Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3. Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment 1

Proposal for a regulationRecital 4

Text proposed by the Commission Amendment

(4) It is of particular importance that the Commission carry out appropriate

(4) It is of particular importance that the Commission carry out appropriate

1 OJ C 181, 21.6.2012, p. 183.

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consultations during its preparatory work for the adoption of delegated acts, including at expert level. The Commission, when preparing and drawing-up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and Council.

consultations during its preparatory work for the adoption of delegated acts, including at expert level, so that it has objective, rigorous, complete and up-to-date information. The Commission, when preparing and drawing-up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council.

Amendment 2

Proposal for a regulationArticle 1 – point 19Regulation (EC) No 1005/2008Article 54a – paragraph 2


2. The delegation of powers referred to in Articles 6(3), 9(1), 12(5), 12(6), 16(1), 16(4) and 17(3) shall be conferred for an indeterminate period of time.

2. The power to adopt delegated acts referred to in Articles 6(3), 9(1), 12(5), 12(6), 16(1), 16(4) and 17(3) shall be conferred on the Commission for a period of three years from …*. The Commission shall draw up a report in respect of the delegation of power not later than nine months before the end of the three-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period.

______________

* OJ: please insert the date of the entry into force of this Regulation.

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P7_TA-PROV(2013)0254

Standards for the reception of applicants for international protection (recast) ***II

European Parliament legislative resolution of 12 June 2013 on the Council position at first reading with a view to the adoption of a directive of the European Parliament and of the Council laying down standards for the reception of applicants for international protection (recast) (14654/2/2012 – C7-0165/2013 – 2008/0244(COD))

(Ordinary legislative procedure: second reading)


– having regard to the Council position at first reading (14654/2/2012 – C7-0165/2013),

– having regard to the opinions of the European Economic and Social Committee of 16 July 20091 and of 26 October 20112,

– having regard to the opinion of the Committee of the Regions of 7 October 20093,

– having regard to its position at first reading4 on the Commission proposal to Parliament and the Council (COM(2008)0815),

– having regard to the amended Commission proposal (COM(2011)0320),



– having regard to the recommendation for second reading of the Committee on Civil Liberties, Justice and Home Affairs (A7-0214/2013),

1. Approves the Council position at first reading;

2. Notes that the act is adopted in accordance with the Council position;

3. Instructs its President to sign the act with the President of the Council, in accordance with Article 297(1) of the Treaty on the Functioning of the European Union;

4. Instructs its Secretary-General to sign the act, once it has been verified that all the procedures have been duly completed, and, in agreement with the Secretary-General of the Council, to arrange for its publication in the Official Journal of the European Union;


1 OJ C 317, 23.12.2009, p. 110.2 OJ C 24, 28.1.2012, p. 80.3 OJ C 79, 27.3.2010, p. 58.4 OJ C 212 E, 5.8.2010, p. 348.

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P7_TA-PROV(2013)0255

Application for international protection lodged in a Member State by a third-country national or a stateless person (recast) ***II

European Parliament legislative resolution of 12 June 2013 on the Council position at first reading with a view to the adoption of a regulation of the European Parliament and of the Council establishing the criteria and mechanisms for determining the Member State responsible for examining an application for international protection lodged in one of the Member States by a third-country national or a stateless person (recast) (15605/3/2012 – C7-0164/2013 – 2008/0243(COD))




– having regard to the opinion of the European Economic and Social Committee of 16 July 20091,

– having regard to the opinion of the Committee of the Regions of 7 October 20092,






2. Approves the joint statement by Parliament, the Council and the Commission annexed to this resolution;


4. Instructs its President to sign the act with the President of the Council, in accordance with Article 297(1) of the Treaty on the Functioning of the European Union

5. Instructs its Secretary-General to sign the act, once it has been verified that all the procedures have been duly completed, and, in agreement with the Secretary-General of the Council, to arrange for its publication in the Official Journal of the European Union, together with the joint statement by Parliament, the Council and the Commission;

1 OJ C 317, 23.12.2009, p. 115.2 OJ C 79, 27.3.2010, p. 58.3 OJ C 212 E, 5.8.2010, p. 370.

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ANNEX TO THE LEGISLATIVE RESOLUTION

Joint statement by the Council, the European Parliament and the Commission

The Council and the European Parliament invite the Commission to consider, without prejudice

to its right of initiative, a revision of Article 8(4) of the Recast of the Dublin Regulation once

the Court of Justice rules on case C-648/11 MA and Others vs. Secretary of State for the Home

Department and at the latest by the time limits set in Article 46 of the Dublin Regulation. The

European Parliament and the Council will then both exercise their legislative competences,

taking into account the best interests of the child.

The Commission, in a spirit of compromise and in order to ensure the immediate adoption of

the proposal, accepts to consider this invitation, which it understands as being limited to these

specific circumstances and not creating a precedent.

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P7_TA-PROV(2013)0256

Granting and withdrawing international protection (recast) ***II

European Parliament legislative resolution of 12 June 2013 on the Council position at first reading with a view to the adoption of a directive of the European Parliament and of the Council on common procedures for granting and withdrawing international protection (recast) (08260/2/2013 – C7-0163/2013 – 2009/0165(COD))




– having regard to the opinions of the European Economic and Social Committee of 28 April 20101 and of 26 October 20112.


– having regard to the amended Commission proposal (COM(2011)0319),






3. Instructs its President to sign the act with the President of the Council, in accordance with Article 297(1) of the Treaty on the Functioning of the European Union;

4. Instructs its Secretary-General to sign the act, once it has been verified that all the procedures have been duly completed, and, in agreement with the Secretary-General of the Council, to arrange for its publication in the Official Journal of the European Union;


1 OJ C 18, 19.1.2011, p. 80.2 OJ C 24, 28.1.2012, p. 79.3 OJ C 296 E, 2.10.2012, p. 184.

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P7_TA-PROV(2013)0257

Fund for European aid to the most deprived ***I

Amendments adopted by the European Parliament on 12 June 2013 on the proposal for a regulation of the European Parliament and of the Council on the Fund for European Aid to the Most Deprived (COM(2012)0617 – C7-0358/2012 – 2012/0295(COD))1


Amendment 1



(1) In line with the conclusions of the European Council of 17 June 2010, whereby the Union strategy for smart, sustainable and inclusive growth was adopted, the Union and the Member States have set themselves the objective of having at least 20 million fewer people at risk of poverty and social exclusion by 2020.

(1) In line with the conclusions of the European Council of 17 June 2010, whereby the Union strategy for smart, sustainable and inclusive growth ("Europe 2020 strategy") was adopted, the Union and the Member States have set themselves the objective of having at least 20 million fewer people at risk of poverty and social exclusion by 2020. Nonetheless, in 2010, nearly one quarter of Europeans (119,6 million) were at risk-of-poverty or social exclusion, approximately 4 million people more than in the previous year. However, poverty and social exclusion are not uniform across the Union and the gravity varies between the Member States.

Amendment 2



(2) The number of persons suffering from material or even severe material deprivation in the Union is increasing and those persons are often too excluded to benefit from the activation measures of

(2) The number of persons suffering from material , or even severe material deprivation, in the Union is increasing and in 2012 nearly 8 % of Union citizens lived in conditions of severe material

1 The matter was referred back to the committee responsible for reconsideration pursuant to Rule 57(2), second subparagraph (A7-0183/2013).

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Regulation (EU) No […CPR], and, in particular of Regulation (EU) No […ESF].

deprivation. In addition, those persons are often too excluded to benefit from the activation measures of Regulation (EU) No ../….[CPR], and, in particular of Regulation (EU) No ../….[ESF].

Amendment 3

Proposal for a regulationRecital 2 a (new)


(2a) Women and children are over-represented among deprived people at- risk-of-poverty and of social exclusion, while women are often responsible for the food security and subsistence of families. Member States and the Commission should take appropriate steps to prevent any discrimination and should ensure equality between men and women and the coherent integration of the gender perspective at all stages of the preparation, the programming, management and implementation, the monitoring and the evaluation of the Fund, as well as in information and awareness raising campaigns and exchanges of best practices.

Amendment 4

Proposal for a regulationRecital 2 b (new)


(2b) Article 2 of the Treaty on European Union underlines that the Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities.

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Amendment 5

Proposal for a regulationRecital 2 c (new)


(2c) Article 6 of the Treaty on European Union underlines that the Union recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights of the European Union.

Amendment 6

Proposal for a regulationRecital 2 d (new)


(2d) In order to prevent the marginalisation of vulnerable and low-income groups and to avert the increased risk of poverty and social exclusion, it is necessary to adopt strategies that promote active inclusion.

Amendment 7



(4) The Fund for European Aid to the Most Deprived (hereinafter the ‘Fund’) should strengthen social cohesion by contributing to the reduction of poverty in the Union by supporting national schemes that provide non-financial assistance to the most deprived persons to alleviate food deprivation, homelessness and material deprivation of children.

(4) The Fund for European Aid to the Most Deprived (hereinafter the ‘Fund’) should strengthen social cohesion by contributing to the reduction of poverty in the Union by supporting national schemes that provide non-financial assistance to the most deprived persons to alleviate food and severe material deprivation.

Amendment 8


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(4a) The ETHOS definition (European typology of homelessness) is a potential starting point for allocating the fund to different categories of severely deprived people.

Amendment 9



(4b) The Fund should not replace public policies undertaken by Member State governments with the aim of limiting the need for emergency food aid and developing sustainable targets and policies for the full eradication of hunger, poverty and social exclusion.

Amendment 10



(4c) Given the increasing number of those at risk of poverty and social exclusion, a trend which is set to continue in the coming years, it is necessary to step up resources earmarked for the Fund under the Multiannual Financial Framework.

Amendment 11

Proposal for a regulationRecital 4 d (new)


(4d) The Fund should also support efforts by the Member States to alleviate the acute material deprivation of the homeless.

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Amendment 12



(6) Those provisions also ensure that the operations supported shall comply with applicable Union and national laws, notably in regard to the safety of the goods that are distributed to the most deprived persons.

(6) Those provisions also ensure that the operations supported shall comply with applicable Union and national laws, notably in regard to the safety of food aid and basic material assistance to the most deprived persons.

Amendment 13



(8) The operational programme of each Member State should identify and justify the forms of material deprivation to be addressed, and describe the objectives and features of the assistance to the most deprived persons that will be provided through the support of national schemes. It should also include elements necessary to ensure effective and efficient implementation of the operational programme.

(8) The operational programme of each Member States should identify and justify the forms of food and material deprivation to be addressed, and should describe the objectives and features of the assistance to the most deprived persons that will be provided through the support of national schemes. It should also include elements necessary to ensure the effective and efficient implementation of the operational programmes.

Amendment 14



(8a) Severe food deprivation in the Union coincides with significant food wastage. The operational programme of each Member State should include a reference to how it will seek to exploit synergies between policies for reducing food wastage and combating food deprivation, in a coordinated manner. The operational programme of each Member State should also include a reference to how it will seek

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to address any administrative obstacles that obstruct commercial and non-commercial organisations willing to donate excess food supplies to not-for-profit organisations engaged in combating food deprivation.

Amendment 15



(8b) With a view to ensuring the effective and efficient implementation of the measures financed from the Fund, cooperation should be fostered between regional and local authorities and bodies representing civil society. Member States should therefore promote the participation by all those involved in drawing up and implementing measures financed from the Fund.

Amendment 16



(9) In order to maximise effectiveness of the Fund, in particular as regards the national circumstances, it is appropriate to set out a procedure for potential amendment of the operational programme.

(9) In order to maximise the effectiveness of the Fund and to ensure the maximum synergy with ESF measures, in particular as regards possible changes in national circumstances, it is appropriate to set out a procedure for the potential amendment of the operational programme.

Amendment 17



(9a) In order to respond in the most effective and adequate manner to the various needs and to better reach out to

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the most deprived persons, the partnership principle should apply at all stages of the Fund.

Amendment 18



(10) Exchanges of experience and best practices have a significant added value and the Commission should facilitate such dissemination.

(10) Exchanges of experience and best practices have a significant added value because they facilitate mutual learning and the Commission should facilitate and promote such dissemination, while seeking synergies with the exchange of best practices in the context of related Funds, in particular the ESF.

Amendment 19



(11) In order to monitor the progress of operational programmes implementation, the Member States should draw up and provide to the Commission annual and final implementation reports thus ensuring the availability of essential and up-to-date date information. For the same purposes, Commission and each Member State should meet every year for a bilateral review, except if they agree otherwise.

(11) In order to monitor the progress of operational programmes implementation, the Member States should, in cooperation with the non-governmental organisations involved, draw up and provide to the Commission annual and final implementation reports thus ensuring the availability of essential and up-to-date date information. For the same purposes, Commission and each Member State should meet every year for a bilateral review, except if they agree otherwise.

Amendment 20



(12) In order to improve the quality and design of each operational programme and evaluate the effectiveness and efficiency of

(12) In order to improve the quality and design of each operational programme and evaluate the effectiveness and efficiency of

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the Fund, ex ante and ex post evaluations should be conducted. Those evaluations should be supplemented by surveys on the most deprived persons who have benefited from the operational programme and, if necessary, by evaluations during the programming period. The responsibilities of Member States and the Commission in this respect should be specified.

the Fund, ex ante and ex post evaluations should be conducted. Those evaluations should be supplemented by surveys on the most deprived persons who have benefited from the operational programme and, if necessary, by evaluations during the programming period. Those evaluation should also respect the privacy of end recipients and be carried out in such a way as not to stigmatise the most deprived people. The responsibilities of Member States and the Commission in this respect should be specified.

Amendment 21



(12a) As highlighted in the Eurostat study "Measuring material deprivation in the EU - Indicators for the whole population and child-specific indicators", substantial research has been carried out on material deprivation, enabling more refined data collection in the near future on materially deprived households, adults and children.

Amendment 22



(12b) When carrying out those evaluations, supplemented by surveys on the most deprived persons, it should be borne in mind that deprivation is a complex concept which is difficult to grasp when using a small number of indicators as they can be misleading and thus result in ineffective policies.

Amendment 23


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(12c) As highlighted in the Eurofound (2012) - Third European Quality of Life Survey, material deprivation in the Union should be measured by the inability to afford items that are considered essential no matter what people own and how much they earn. Therefore, for the purpose of developing a deprivation index which allows for a more refined assessment of material deprivation of households, indicators such as income level, income inequality, the ability of making ends meet, over-indebtedness and satisfaction with living standards should be taken into account.

Amendment 24



(13) Citizens have the right to know how the Union’s financial resources are invested and to what effects. For the purpose of ensuring wide dissemination of information about the achievements of the Fund and to ensure accessibility and transparency of funding opportunities, detailed rules about information and communication, especially in relation to the responsibilities of the Member States and the beneficiaries, should be set out.

(13) Citizens have the right to know how the Union’s financial resources are invested and to what effects. For the purpose of ensuring wide dissemination of information about the achievements of the Fund and to ensure accessibility and transparency of funding opportunities, detailed rules about information and communication, especially in relation to the responsibilities of local and regional authorities in the Member States and the beneficiaries, should be set out.

Amendment 25



(15) It is necessary to establish a maximum level of co-financing from the Fund to the operational programmes to provide for a multiplier effect of Union resources, while

(15) It is necessary to establish a level of co-financing from the Fund to the operational programmes to provide for a multiplier effect of Union resources. The

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the situation of Member States facing temporary budget difficulties should be addressed.

situation of Member States facing temporary budget difficulties should also be addressed.

Amendment 26



(16) Uniform and equitable rules on the eligibility period, operations and expenditures for the Fund should be applied across the Union. The conditions of eligibility should reflect the specific nature of the Fund’s objectives and target populations, notably through adequate conditions of eligibility of the operations as well as forms of support and rules and conditions of reimbursement.

(16) Uniform, simple and equitable rules on the eligibility period, operations and expenditures for the Fund should be applied across the Union. The conditions of eligibility should reflect the specific nature of the Fund’s objectives and target populations, notably through adequate and simplified conditions of eligibility of the operations as well as forms of support and rules and conditions of reimbursement.

Amendment 27



(17) [Proposal for a] Regulation of the European Parliament and of the Council establishing a common organisation of the markets in agricultural products (Single CMO Regulation)5 provides that products bought under public intervention may be disposed of by making them available for the scheme for food distribution to the most deprived in the Union if that scheme so provides. Given that, depending on the circumstances, obtaining of food from the use, processing or sale of such stocks might be economically the most favourable option, it is appropriate to provide for such a possibility in this Regulation. The amounts derived from a transaction concerning the stocks should be used for the benefit of the most deprived, and should not be applied so as to diminish the obligation of the Member States to co-finance the programme. In order to ensure

(17) [Proposal for a] Regulation of the European Parliament and of the Council establishing a common organisation of the markets in agricultural products (Single CMO Regulation)5 provides that products bought under public intervention may be disposed of by making them available for the scheme for food distribution to the most deprived in the Union if that scheme so provides. Given that, depending on the circumstances, obtaining of food from the use, processing or sale of such stocks might be economically the most favourable option, it is appropriate to provide for such a possibility in this Regulation. The amounts derived from a transaction concerning the stocks should be used for the benefit of the most deprived, and should not be applied so as to diminish the obligation of the Member States to co-finance the programme. In order to ensure

23

the most efficient possible use of the intervention stocks and the proceeds thereof, the Commission should in accordance with Article 19(e) of the Regulation (EU) No [CMO] adopt implementing acts establishing procedures by which the products in intervention stocks may be used, processed or sold for the purposes of the most deprived programme.

the most efficient possible use of the intervention stocks and the proceeds thereof, the Commission should in accordance with Article 19(e) of the Regulation (EU) No [CMO] adopt implementing acts establishing procedures by which the products in intervention stocks may be used, processed or sold for the purposes of the most deprived programme. Partner organisations should be allowed to distribute additional food supplies coming from other sources including intervention stock made available under Article 15 of Regulation (EU) No. ... [CMO].

Amendment 28



(18) It is necessary to specify the types of actions that can be undertaken at the initiative of the Commission and of the Member States as technical assistance supported by the Fund.

(18) It is necessary to specify the types of actions that can be undertaken at the initiative of the Commission and of the Member States as technical assistance supported by the Fund. Which types of action are specified should be decided in close co-operation with the managing authorities and partner organisations.

Amendment 29



(27) Union budget commitments should be effected annually. In order to ensure effective programme management, it is necessary to lay down common rules for interim payment requests, the payment of the annual balance and the final balance.

(27) Union budget commitments should be effected annually. In order to ensure effective programme management, it is necessary to lay down simple common rules for interim payment requests, the payment of the annual balance and the final balance.

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Amendment 30



(30) In order to safeguard the Union's financial interests, there should be measures limited in time that allow the authorising officer by delegation to interrupt payments where there is evidence to suggest a significant deficiency in the functioning of the management and control system, evidence of irregularities linked to a payment application, or a failure to submit documents for the purpose of the examination and acceptance of accounts.

(30) In order to safeguard the Union's financial interests, there should be measures limited in time that allow the authorising officer by delegation to interrupt payments where there is evidence to suggest a significant deficiency in the functioning of the management and control system, evidence of irregularities linked to a payment application, or a failure to submit documents for the purpose of the examination and acceptance of accounts, or serious delays in project implementation, with convincing evidence that the objectives set for the projects in question are not being met.

Amendment 31



(32) In order to ensure that expenditure financed by the Union budget in any given financial year is used in accordance with the applicable rules, an appropriate framework should be created for the annual examination and acceptance of accounts. Under this framework, the designated bodies should submit to the Commission, in respect of the operational programme, a management declaration accompanied by the certified annual accounts, an annual summary of the final audit reports and of controls carried out and an independent audit opinion and control report.

(32) In order to ensure that expenditure financed by the Union budget in any given financial year is used in accordance with the applicable rules, an appropriate and simple framework should be created for the annual examination and acceptance of accounts. Under this framework, the designated bodies should submit to the Commission, in respect of the operational programme, a management declaration accompanied by the certified annual accounts, an annual summary of the final audit reports and of controls carried out and an independent audit opinion and control report.

Amendment 32


25


(35) The frequency of audits on operations should be proportionate to the extent of the Union's support from the Fund. In particular, the number of audits carried out should be reduced where the total eligible expenditure for an operation does not exceed EUR 100 000. Nevertheless, it should be possible to carry out audits at any time where there is evidence of an irregularity or fraud, or as part of an audit sample. In order that the level of auditing by the Commission is proportionate to the risk, the Commission should be able to reduce its audit work in relation to operational programmes where there are no significant deficiencies or where the audit authority can be relied on. In addition, the scope of audits should take fully into account the objective and the features of the target populations of the Fund.

(35) The frequency of audits on operations should be proportionate to the extent of the Union's support from the Fund. In particular, the number of audits carried out should be reduced where the total eligible expenditure for an operation does not exceed EUR 100 000. Nevertheless, it should be possible to carry out audits at any time where there is evidence of an irregularity or fraud, or as part of an audit sample. In order that the level of auditing by the Commission is proportionate to the risk, the Commission should be able to reduce its audit work in relation to operational programmes where there are no significant deficiencies or where the audit authority can be relied on. In addition, the scope of audits should take fully into account the objective and the features of the target populations of the Fund, as well as the voluntary character of its beneficiary bodies.

Amendment 33



(41) This Regulation respects fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union, including respect for human dignity and for private and family life, the right to the protection of personal data, the rights of the child, the rights of the elderly, equality between men and women, and the prohibition of discrimination. This Regulation must be applied according to these rights and principles.

(41) This Regulation respects fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union, including respect for human dignity and for private and family life, the right to the protection of personal data, the rights of the child, the right to social assistance and to housing, the rights of the elderly, equality between men and women, and the prohibition of discrimination. This Regulation must be applied according to these rights and principles.

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Amendment 34



(42a) Taking into account the date by which invitations to tender have to be issued, the time limits for adoption of this Regulation and the time needed for the preparation of operational programmes, rules should be put in place to permit a smooth transition in 2014 so that there is no interruption in the supply of food.

Amendment 35



(42b) It should be ensured that the Fund complements programmes and actions funded under the ESF and is coordinated as closely as possible with the ESF. Setting up parallel structures in the fight against poverty which increase administrative burdens and make coordination and synergies difficult, should be avoided.

Amendment 36

Proposal for a regulationArticle 1


1. This Regulation establishes the Fund for European Aid to the Most Deprived (hereinafter ‘the Fund’) for the period from 1 January 2014 to 31 December 2020 and determines the objectives of the Fund, the scope of its support, the financial resources available and the criteria for their allocation and lays down the rules necessary to ensure the effectiveness of the Fund.

1. This Regulation establishes the Fund for European Aid to the Most Deprived (hereinafter ‘the Fund’) for the period from 1 January 2014 to 31 December 2020 and determines the objectives of the Fund, the scope of its support, the financial resources available and the criteria for their allocation and lays down the rules necessary to ensure the effectiveness and efficiency of the Fund.

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Amendment 37



The following definitions shall apply: For the purpose of this Regulation the following definitions shall apply:

(1) ‘most deprived persons’ means physical persons, whether individuals, families, households or groups composed of such persons, whose need for assistance has been established according to the objective criteria adopted by the national competent authorities, or defined by the partner organisations and which are approved by those competent authorities;

(1) ‘most deprived persons’ means physical persons, whether individuals, families, households or groups composed of such persons, whose need for assistance has been established according to the objective criteria set by the national competent authorities in collaboration with relevant stakeholders, or defined by the partner organisations and which are approved by those national competent authorities;

(2) ‘partner organisations’ means public bodies or non-for-profit organisations that deliver the food or goods directly or through other partner organisations to the most deprived persons, and whose operations have been selected by the managing authority in accordance with Article 29(3)(b);

(2) ‘partner organisations’ means public bodies or non-for-profit organisations that deliver the food and/or basic material assistance - in accordance with the eligibility criteria set out in Article 24 - directly or through other partner organisations to the most deprived persons, and whose operations have been selected by the managing authority in accordance with Article 29(3)(b);

(3) 'national schemes' means any scheme having, at least partly, the same objectives as the Fund and which is being implemented at national, regional or local level by public bodies or non-for-profit organisations;

(3) 'national schemes' means any scheme having, at least partly, the same objectives as the Fund and which is being implemented at national, regional or local level by public bodies or non-for-profit organisations;

(4) 'operation' means a project, contract or action selected by the managing authority of the operational programme concerned, or under its responsibility, contributing to the objectives of the operational programme to which it relates;

(4) 'operation' means a project, contract or action selected by the managing authority of the operational programme concerned, or under its responsibility, contributing to the objectives of the operational programme to which it relates;

(5) 'completed operation' means an operation that has been physically completed or fully implemented and in respect of which all related payments have been made by beneficiaries and the support from the corresponding operational programme has been paid to the

(5) 'completed operation' means an operation that has been physically completed or fully implemented and in respect of which all related payments have been made by beneficiaries and the support from the corresponding operational programme has been paid to the

28

beneficiaries; beneficiaries;

(6) 'beneficiary' means a public or private body responsible for initiating or initiating and implementing operations;

(6) 'beneficiary' means a public or private body responsible for initiating or initiating and implementing operations;

(7) ‘end recipient’ means the most deprived persons receiving the food or goods and/or benefiting from the accompanying measures;

(7) ‘end recipient’ means people suffering from food and/or material deprivation and receiving non-financial assistance and/or benefiting from the accompanying measures in the framework of this fund;

(7a) 'accompanying measures' means measures beyond the distribution of food and basic material assistance, taken with the aim of overcoming social exclusion and of tackling social emergencies in a more empowering and sustainable way;

(8) ‘public support' means any financial support given to an operation that originates from the budget of national, regional or local public authorities, the budget of the Union related to the Fund, the budget of public law bodies or the budget of associations of public authorities or any body governed by public law within the meaning of Article 1(9) of Directive 2004/18/EC of the European Parliament and of the Council;

(8) ‘public support' means any financial support given to an operation that originates from the budget of national, regional or local public authorities, the budget of the Union related to the Fund, the budget of public law bodies or the budget of associations of public authorities or any body governed by public law within the meaning of Article 1(9) of Directive 2004/18/EC of the European Parliament and of the Council;

(9) 'intermediate body' means any public or private body which acts under the responsibility of a managing or certifying authority, or which carries out duties on behalf of such an authority in relation to beneficiaries' implementing operations;

(9) 'intermediate body' means any public or private body which acts under the responsibility of a managing or certifying authority, or which carries out duties on behalf of such an authority in relation to beneficiaries' implementing operations;

(10) 'accounting year’ means the period from 1 July to 30 June, except for the first accounting year, in respect of which it means the period from the starting date for eligibility of expenditure until 30 June 2015, the final accounting year being from 1 July 2022 to 30 June 2023;

(10) 'accounting year’ means the period from 1 July to 30 June, except for the first accounting year, in respect of which it means the period from the starting date for eligibility of expenditure until 30 June 2015, the final accounting year being from 1 July 2022 to 30 June 2023;

(11) 'financial year' means the period from 1 January to 31 December.

(11) 'financial year' means the period from 1 January to 31 December.

Amendment 73

Proposal for a regulationArticle 2 a (new)

29


Article 2a

The right to use the Fund shall apply to all Members States.

Amendment 38



1. The Fund shall promote social cohesion in the Union by contributing to achieving the poverty reduction target of at least 20 million of the number of persons at risk of poverty and social exclusion in accordance with the Europe 2020 strategy. The Fund shall contribute to achieving the specific objective of alleviating the worst forms of poverty in the Union by providing non-financial assistance to the most deprived persons. This objective shall be measured by the number of persons receiving assistance from the Fund.

1. The Fund shall promote social cohesion, enhance social inclusion and combat poverty in the Union by contributing to achieving the poverty reduction target of at least 20 million of the number of persons at risk of poverty and social exclusion in accordance with the Europe 2020 strategy, whilst complementing the European Social Fund. The Fund shall contribute to achieving the specific objective of alleviating and eradicating the worst forms of poverty, in particular food poverty, by providing non-financial assistance to the most deprived persons.

2. The Fund shall contribute to the sustainable eradication of food poverty, offering most deprived persons the prospect of a decent life. This objective and the structural impact of the fund shall be qualitatively and quantitatively assessed.

3. The Fund shall complement and shall not replace or reduce sustainable national poverty eradication and social inclusion programmes, which remain the responsibility of Member States.

Amendment 39


30


1. The Fund shall support national schemes whereby food products and basic consumer goods for the personal use of homeless persons or of children are distributed to the most deprived persons through partner organisations selected by Member States.

1. The Fund shall support national schemes whereby food products and/or basic material assistance, including starter packs, for the personal use of the end recipients are distributed to the most deprived persons through partner organisations selected by Member States.

2. The Fund may support accompanying measures, complementing the provision of food and goods, contributing to the social inclusion of the most deprived persons.

2. The Fund may support accompanying measures, complementing the provision of food and basic material assistance, contributing to social inclusion and a healthy diet and reducing dependencies of the most deprived persons. Such measures should be closely linked to the local activities of the European Social Fund and the activities of organisations which focus on the eradication of poverty.

2a. The Fund may provide beneficiaries with assistance to make more efficient use of local food supply chains, thereby augmenting and diversifying the supply of food for the most deprived, as well as reducing and preventing food wastage.

3. The Fund shall promote mutual, learning, networking and dissemination of good practices in the area of non-financial assistance to the most deprived persons.

3. The Fund shall promote, at European level, mutual learning, networking and dissemination of good practices in the area of non-financial assistance to the most deprived persons. Relevant organisations and projects that do not make use of the Fund may also be included.

Amendments 40 and 76



1. The part of the Union budget allocated to the Fund shall be implemented within the framework of shared management between the Member States and the Commission, in accordance with Article 55(1)(b) of the Financial Regulation, with the exception of technical assistance at the initiative of the

1. The part of the Union budget allocated to the Fund shall be implemented within the framework of shared management between the Member States and the Commission, in accordance with Article 55(1)(b) of the Financial Regulation, with the exception of technical assistance at the initiative of the

31

Commission, which shall be implemented in the framework of direct management in accordance with Article 55(1) (a) of the Financial Regulation.

Commission, which shall be implemented in the framework of direct management in accordance with Article 55(1) (a) of the Financial Regulation.

2. The Commission and the Member States shall ensure that support from the Fund is consistent with the policies and priorities of the Union and complementary to other instruments of the Union.

2. The Commission and the Member States shall ensure that support from the Fund is consistent with the policies and priorities of the Union and complementary to other instruments of the Union.

3. Support from the Fund shall be implemented in close cooperation between the Commission and the Member States.

3. Support from the Fund shall be provided in close co-operation between the Commission and the Member States in co-operation with as well as the competent regional and local authorities and partner organisations involved.

4. Member States and the bodies designated by them for that purpose shall be responsible for implementing the operational programmes and carrying out their tasks under this Regulation in accordance with the institutional, legal and financial framework of the Member State and subject to compliance with this Regulation.

4. Member States and the bodies designated by them for that purpose, or where appropriate, the competent regional authorities, shall be responsible for implementing the operational programmes and carrying out their tasks under this Regulation in accordance with the institutional, legal and financial framework of the Member State and subject to compliance with this Regulation.

5. Arrangements for the implementation and use of the Fund, and in particular the financial and administrative resources required in relation to reporting, evaluation, management and control shall take into account the principle of proportionality having regard to the level of support allocated.

5. Arrangements for the implementation and use of the Fund, and in particular the financial and administrative resources required in relation to reporting, evaluation, management and control shall take into account the limited administrative capacity of organisations that function in the main thanks to volunteers, and shall ensure that the administrative burden placed on them is not greater than it was under the previous programme.

6. In accordance with their respective responsibilities, the Commission and the Member States shall ensure coordination with the European Social Fund, and with other Union policies and instruments

6. In accordance with their respective responsibilities, and in order to prevent double funding, the Commission and the Member States shall ensure coordination with the European Social Fund, and with other Union policies and instruments, in particular Union actions in the field of health.

7. The Commission and the Member States and the beneficiaries shall apply the

7. The Commission and the Member States and the beneficiaries shall apply the

32

principle of sound financial management in accordance with Article 26 of the Financial Regulation.

principle of sound financial management in accordance with Article 26 of the Financial Regulation.

8. The Commission and the Member States shall ensure the effectiveness of the Fund, in particular through monitoring, reporting and evaluation.

8. The Commission and the Member States shall ensure the effectiveness of the Fund, in particular through monitoring, reporting and evaluation and through the close and regular consultation of local and regional authorities and partner organisations implementing the fund's measures in the impact assessments.

9. The Commission and the Member States shall carry out their respective roles in relation to the Fund with the aim of reducing the administrative burden for beneficiaries.

9. The Commission and the Member States shall take action to guarantee the effectiveness of the Fund, and shall carry out their respective roles in relation to the Fund with the aim of reducing the administrative burden for beneficiaries;

10. The Commission and the Member States shall ensure that equality between men and women and the integration of the gender perspective are promoted during the various stages of the implementation of the Fund. The Commission and the Member States shall take appropriate steps to prevent any discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation in obtaining access to the Fund.

10. The Commission and the Member States shall ensure that equality between men and women and the integration of the gender perspective are taken into account during the various stages of the preparation, the programming, management and implementation, the monitoring and the evaluation of the Fund, as well as in information and awareness raising campaigns and exchanges of best practices, while using data broken down by gender where available. The Commission and the Member States shall take appropriate steps to prevent any discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation in obtaining access to the Fund, and related programmes and operations.

11. Operations financed by the Fund shall comply with applicable Union and national law. In particular, the Fund may only be used to support distribution of food or goods that are in conformity with the Union legislation on consumer product safety.

11. Operations financed by the Fund shall comply with applicable Union and national law. In particular, the Fund may only be used to support distribution of food or basic material assistance that are in conformity with the Union legislation on consumer product safety.

11a. Where appropriate, the choice of food products shall be based on principles of balanced nutrition and quality food, including fresh produce, and should contribute to a healthy diet of the end

33

recipients.

12. Member States and beneficiaries shall choose the food products and the goods on the basis of objective criteria. The selection criteria for the food products, and where appropriate for goods, shall also take into consideration climatic and environmental aspects, in particular with a view to reduction of food waste.

12. Member States and beneficiaries shall choose food products and the basic material assistance on the basis of objective criteria related to the needs of the most deprived persons.

12a. Where appropriate priority should be given to local and regional products, taking climatic and environmental considerations into account, in particular with a view to the reduction of food waste at every stage of the distribution chain. This may include partnerships with companies throughout the food chain in a spirit of corporate social responsibility.

12b. The Commission and the Member States shall ensure that aid granted in the framework of this Fund respects the dignity of the most deprived persons.

Amendment 75

Proposal for a regulationArticle 6 - paragraph 1


1. The global resources available for budgetary commitment from the Fund for the period 2014-2020 shall be EUR 2 500 000 000 at 2011 prices, in accordance with the annual breakdown set out in Annex II.

1. The global resources available for budgetary commitment from the Fund for the period 2014-2020 (in 2011 prices) shall not be less, in real terms, than seven times the budgetary allocation, adopted in the 2011 budget, for the aid for deprived persons programme.

Amendment 42

Proposal for a regulationArticle 6 – paragraph 3


3. The Commission shall adopt a decision, by means of implementing acts, setting out the annual breakdown of the global

3. The Commission shall adopt a decision, by means of implementing acts, setting out the annual breakdown of the global

34

resources by Member State, in accordance with Article 84(5) of Regulation (EU) No… (CPR), without prejudice to paragraph 4 of this Article, taking into account the following indicators established by Eurostat:

resources by Member State, in accordance with Article 84(5) of Regulation (EU) No… (CPR), without prejudice to paragraph 4 of this Article, based on the most recent indicators established by Eurostat concerning:

(a) the population suffering from severe material deprivation;

(a) the population suffering from severe material deprivation, as a percentage of the total population;

(b) the population living in households with very low work intensity.

(b) changes in the population living in households with very low work intensity.

Amendment 43



1. Each Member State shall submit to the Commission one operational programme covering the period between 1 January 2014 and 31 December 2020 within three months of the entry into force of this Regulation, containing the following items:

1. Each Member State shall submit to the Commission one operational programme covering the period between 1 January 2014 and 31 December 2020 within three months of the entry into force of this Regulation, containing the following items:

(-a) a specification of the amount of its allocated share to be used.

(a) an identification of and a justification for selecting the type(s) of material deprivation to be addressed under the operational programme and a description for each type of material deprivation addressed of the main characteristics and the objectives of the distribution of food or goods and the accompanying measures to be provided, having regard to the results of the ex ante evaluation carried out in accordance with Article 14;

(a) a justification for selecting the type(s) of material deprivation to be addressed and a description of the main characteristics of the operational programme, having regard to the results of the ex ante evaluation carried out in accordance with Article 14;

(b) a description of the corresponding national scheme(s) for each type of material deprivation addressed;

(b) a description of the corresponding national scheme(s) for each type of material deprivation addressed;

(c) a description of the mechanism setting the eligibility criteria for the most deprived persons, differentiated if necessary by type of material deprivation addressed;

(c) a description of the mechanism setting the eligibility criteria for the most deprived persons, differentiated if necessary by type of material deprivation addressed;

(d) the criteria for the selection of operations and a description of the

(d) the criteria for the selection of operations and a description of the

35

selection mechanism differentiated if necessary by type of material deprivation addressed;

selection mechanism differentiated if necessary by type of material deprivation addressed;

(e) the criteria for the selection of the partner organisations differentiated if necessary by type of material deprivation addressed;

(e) the criteria for the selection of the partner organisations differentiated if necessary by type of material deprivation addressed;

(f) a description of the mechanism used to ensure complementarity with the European Social Fund;

(f) a description of the mechanism used to ensure complementarity with the European Social Fund showing a clear demarcation line between activities covered by those two funds;

(fa) a description of the specific measures envisaged and of the funds allocated to give effect to the principles set out in Article 5.

(g) a description of the provisions for implementing the operational programme containing the identification of the managing authority, the certifying authority where applicable, the audit authority and the body to which payments are to be made by the Commission and a description of the monitoring procedure;

(g) a description of the provisions for implementing the operational programme containing the identification of the managing authority, the certifying authority where applicable, the audit authority and the body to which payments are to be made by the Commission and a description of the monitoring procedure;

(h) a description of the measures taken to involve the competent regional, local and other public authorities as well as bodies representing civil society and bodies responsible for promoting equality and non-discrimination in the preparation of the operational programme;

(h) a description of the measures taken to involve the competent regional, local and other public authorities as well as bodies representing civil society and bodies responsible for promoting equality and non-discrimination in the preparation of the operational programme;

(i) a description of the planned use of technical assistance in accordance with Article 25(2), including actions to reinforce the administrative capacity of the beneficiaries in relation to the implementation of the operational programme;

(i) a description of the planned use of technical assistance in accordance with Article 25(2), including actions to reinforce the administrative capacity of the beneficiaries in relation to the implementation of the operational programme;

(j) a financing plan containing following tables:

(j) a financing plan containing following tables:

(i) a table specifying for each year in accordance with Article 18 the amount of the financial appropriation envisaged for support from the Fund and the co-financing in accordance with Article 18;

(i) a table specifying for each year in accordance with Article 18 the amount of the financial appropriation envisaged for support from the Fund and the co-financing in accordance with Article 18;

(ii) a table specifying, for the whole (ii) a table specifying, for the whole

36

programming period, the amount of the total financial appropriation in respect of support from the operational programme for each type of material deprivation addressed as well as the corresponding accompanying measures.

programming period, the amount of the total financial appropriation in respect of support from the operational programme for each type of material deprivation addressed as well as the corresponding accompanying measures.

The partner organisations referred to in point (e) that deliver directly the food or goods shall themselves undertake activities complementing the provision of material assistance, aiming at the social inclusion of the most deprived persons, whether or not these activities are supported by the Fund.

The partner organisations referred to in point (e) that deliver directly the food and/or basic material assistance shall themselves or in cooperation with other organisations undertake activities complementing the provision of material assistance, aiming at the social inclusion of the most deprived persons, whether or not these activities are supported by the Fund.

2. Operational programmes shall be drawn up by Member States or any authority designated by them in cooperation with the competent regional, local and other public authorities as well as bodies representing civil society and bodies responsible for promoting equality and non-discrimination.

2. Operational programmes shall be drawn up by Member States or any authority designated by them in cooperation with the competent regional, local and other public authorities as well as all relevant stakeholders. Member States shall ensure that the operational programmes are closely linked to national social inclusion policies.

3. The Member States shall draft their operational programmes in accordance with the template set out in Annex I.

3. The Member States shall draft their operational programmes in accordance with the template set out in Annex I.

Amendment 44



1. Member State may submit a request for amendment of the operational programme. It shall be accompanied by the revised operational programme and the justification for the amendment.

1. A Member State may submit a request for amendment of the operational programme. It shall be accompanied by the revised operational programme and the justification for the amendment.

Amendment 45


37


Platform Exchange of good practice

The Commission shall set up a Union level platform to facilitate the exchange of experience, capacity building and networking, as well as dissemination of relevant outcomes in the area of non-financial assistance to the most deprived persons.

The Commission shall facilitate the exchange of experience, capacity building, networking and social innovation at Union level, thereby linking partner organisations and other relevant stakeholders from all Member States.

In addition, the Commission shall consult, at least once a year, the organisations which represent the partner organisations at Union level on the implementation of support from the Fund.

In addition, the Commission shall consult, at least once a year, the organisations which represent the partner organisations at Union level on the implementation of support from the Fund and shall thereafter report back to the European Parliament and to the Council in due course.

The Commission shall also facilitate the online dissemination of relevant outcomes, reports and information in relation to the Fund.

Amendment 46



1. From 2015 to 2022, the Member States shall submit to the Commission, by 30 June of each year, an annual implementation report for the operational programme in the previous financial year.

1. From 2015 to 2022, the Member States shall submit to the Commission, by 30 June of each year, an annual implementation report for the operational programme in the previous financial year.

2. The Member States shall draft the annual implementation report in accordance with the template adopted by the Commission, including the list of common input and outcome indicators.

2. The Member States shall draft the annual implementation report in accordance with the template adopted by the Commission, including the list of common input and outcome indicators.

These indicators shall include:

(a) recent changes in social policy spending on severe material deprivation, in absolute terms, in relation to GDP and in relation to total public spending.

(b) recent changes in social policy legislation on access to funding for

38

beneficiaries and other organisations addressing severe material deprivation.

3. The annual implementation reports shall be admissible where they contain all the information required in accordance with the template referred in paragraph 2, including the common indicators. The Commission shall inform the Member State concerned within 15 working days from the date of receipt of the annual implementation report if it is not admissible. Where the Commission has not sent that information within the time limit, the report shall be deemed admissible.

3. The annual implementation reports shall be admissible where they contain all the information required in accordance with the template referred in paragraph 2, including the common indicators. The Commission shall inform the Member State concerned within 15 working days from the date of receipt of the annual implementation report if it is not admissible. Where the Commission has not sent that information within the time limit, the report shall be deemed admissible.

4. The Commission shall examine the annual implementation report and inform the Member State of its observations within two months of the receipt of the annual implementation report.

4. The Commission shall examine the annual implementation report and inform the Member State of its observations within two months of the receipt of the annual implementation report.

Where the Commission does not provide observations within this time limit, the reports shall be deemed to be accepted.


5. The Member States shall submit a final report on the implementation of the operational programme by 30 September 2023.

5. The Member States shall submit a final report on the implementation of the operational programme by 30 September 2023.

The Member States shall draft the final implementation report in accordance with the template adopted by the Commission.

The Member States shall draft the final implementation report in accordance with the template adopted by the Commission.

The Commission shall examine the final implementation report and inform the Member State of its observations within five months of receipt of the final report.

The Commission shall examine the final implementation report and inform the Member State of its observations within five months of receipt of the final report.



6. The Commission shall adopt the template for the annual implementation report, including the list of common indicators and for the final implementation report by means of implementing act. This implementing act shall be adopted in accordance with the advisory procedure referred to in Article 60(2).

6. The Commission shall adopt the template for the annual implementation report, including the list of common indicators and for the final implementation report by means of implementing act. This implementing act shall be adopted in accordance with the advisory procedure referred to in Article 60(2).

7. The Commission may address observations to a Member State concerning

7. The Commission may address observations to a Member State concerning

39

the implementation of the operational programme. The managing authority shall within three months inform the Commission of the corrective measures taken.

the implementation of the operational programme. The managing authority shall within three months inform the Commission of the corrective measures taken.

8. The managing authority shall make public a summary of the contents of each annual and final implementation report.

8. The managing authority shall make public a summary of the contents of each annual and final implementation report.

8a. The Commission shall present a summary of the annual implementation reports and the final implementation reports to the European Parliament and Council in due time.

8b. The procedure concerning implementation reports shall not be excessive in comparison to the funds allocated and to the nature of the support and shall not cause unnecessary administrative burdens.

Amendment 47



Bilateral review meeting Bilateral review meetings

1. The Commission and each Member State shall meet every year from 2014 to 2022, unless otherwise agreed, to examine the progress in implementing the operational programme, taking account of the annual implementation report and the Commission's observations referred to in Article 11(7), where applicable.

1. The Commission and each Member State shall meet every year from 2014 to 2022, unless otherwise agreed, to examine the progress in implementing the operational programme, taking account of the annual implementation report and the Commission's observations referred to in Article 11(7), where applicable.

2. The bilateral review meeting shall be chaired by the Commission.

2. The bilateral review meeting shall be chaired by the Commission.

3. The Member State shall ensure that appropriate follow-up is given to any comments of the Commission following the meeting.

3. The Member State shall ensure that appropriate follow-up is given to any comments of the Commission following the meeting and refer to it in the implementation report of the following year or , as appropriate, years

40

Amendment 48



1. Member States shall provide the resources necessary for carrying out evaluations, and shall ensure that procedures are in place to produce and collect the data necessary for evaluations, including data related to the common indicators referred to in Article 11.

1. Member States shall provide the resources necessary for carrying out evaluations, and shall ensure that procedures are in place to produce and collect the data necessary for evaluations, including data related to the common indicators referred to in Article 11.

2. Evaluations shall be carried out by experts that are functionally independent of the authorities responsible for operational programme implementation. All evaluations shall be made public in their entirety.

2. Evaluations shall be carried out by experts that are functionally independent of the authorities responsible for operational programme implementation. All evaluations shall be made public in their entirety but may under no circumstances include information regarding the identity of end recipients.

2a. The evaluations shall not be excessive in comparison to the funds allocated or to the nature of the support and shall not cause unnecessary administrative burdens.

Amendment 49



1. Member States shall carry out an ex ante evaluation of the operational programme.

1. Member States shall carry out an ex ante evaluation of the operational programme.

2. The ex ante evaluation shall be carried out under the responsibility of the authority responsible for preparing the operational programmes. It shall be submitted to the Commission at the same time as the operational programme, together with an executive summary.

2. The ex ante evaluation shall be carried out under the responsibility of the authority responsible for preparing the operational programmes. It shall be submitted to the Commission at the same time as the operational programme, together with an executive summary.

3. Ex ante evaluations shall appraise the following elements:

3. Ex ante evaluations shall appraise the following elements:

(a) the contribution to the Union objective of at least 20 million fewer people at risk

(a) the contribution to the Union objective of at least 20 million fewer people living in

41

of poverty and social exclusion by 2020, having regard to the selected type of material deprivation to be addressed, taking into account national circumstances in terms of poverty and social exclusion and material deprivation;

poverty or at risk of poverty and social exclusion by 2020, having regard to the selected type of material deprivation to be addressed, taking into account national circumstances in terms of poverty and social exclusion and material deprivation;

(aa) the contribution to the reduction of food waste;

(b) the internal coherence of the proposed operational programme and its relation with other relevant financial instruments;

(b) the internal coherence of the proposed operational programme and its relation with other relevant financial instruments;

(c) the consistency of the allocation of budgetary resources with the objective of the operational programme;

(c) the consistency of the allocation of budgetary resources with the objective of the operational programme;

(d) contribution of the expected outputs to the results;

(d) the contribution of the expected outputs to the objectives of the Fund;

(da) the effective engagement of relevant stakeholders in the design and implementation of the operational programme;

(e) the suitability of the procedures for monitoring the operational programme and for collecting the data necessary to carry out evaluations.

(e) the suitability of the procedures for monitoring the operational programme and for collecting the data necessary to carry out evaluations.

Amendment 50



1. During the programming period, the managing authority may carry out evaluations for assessing the effectiveness and efficiency of the operational programme.

1. During the programming period, the managing authority shall evaluate the effectiveness and efficiency of the operational programme.

2. The managing authority shall carry out a structured survey on end recipients in 2017 and 2021, in accordance with the template provided by the Commission. The Commission shall adopt the template by means of an implementing act. This implementing act shall be adopted in accordance with the advisory procedure referred to in Article 60(2).

2. The managing authority shall carry out a structured survey on end recipients in 2017 and 2021, in accordance with the template provided by the Commission. The Commission shall adopt implementing acts establishing the template after the consultation of relevant stakeholders. This implementing act shall be adopted in accordance with the advisory procedure

42

referred to in Article 60(2).

3. The Commission may carry out, at its own initiative, evaluation of operational programmes.

3. The Commission may at its own initiative, evaluate operational programmes.

3a. The Commission shall present a mid-term assessment of the Fund to the European Parliament and to the Council by March 2018 at the latest.

Amendment 51



At its own initiative and in close cooperation with the Member States, the Commission shall carry out, with the assistance of external experts, an ex-post evaluation, to assess the effectiveness and sustainability of results obtained as well as to measure the added value of the Fund. This ex post evaluation shall be completed by 31 December 2023.

At its own initiative and in close cooperation with the Member States, the Commission shall carry out, with the assistance of external experts, an ex-post evaluation, to assess the effectiveness and efficiency of the fund and the sustainability of results obtained, as well as to measure the added value of the Fund. This ex post evaluation shall be completed by 31 December 2023.

Amendment 52



1. The Member States shall provide information on and promote the actions supported by the Fund. The information shall be addressed to the most deprived persons, the media and the wider public. It shall highlight the role of the Union and ensure that the contribution from the Fund is visible.

1. The Commission and the Member States shall provide information on and promote the actions supported by the Fund. The information shall, in particular, be addressed to the most deprived persons, as well as to the wider public and the media. It shall highlight the role of the Union and ensure that the contribution from the Fund, the Member States and the partner organisations regarding the Union's social cohesion objectives is visible without stigmatising end recipients.

2. The managing authority shall, in order to maintain transparency in the support of the

2. The managing authority shall, in order to maintain transparency in the support of the

43

Fund, maintain a list of operations supported by the Fund in CSV or XML format which shall be accessible through a website. The list shall include at least information on the beneficiary name, its address and allocated amount of Union funding as well as the type of material deprivation addressed.

Fund, maintain a list of operations supported by the Fund in CSV or XML format which shall be accessible through a website The list shall include at least information on the beneficiary name, its address and allocated amount of Union funding as well as the type of material deprivation addressed.

The list of operations shall be updated at least every twelve months.

The list of operations shall be updated at least every twelve months.

3. During the implementation of an operation, the beneficiaries and partner organisations shall inform the public about the support obtained from the Fund by placing at least one poster with information about the operation (minimum size A3), including about the financial support from Union, at a location readily visible to the public, at each place of provision of food, goods and any accompanying measure, except if this is not possible due to the circumstances of the distribution.

3. During the implementation of an operation, the beneficiaries and partner organisations shall inform the public about the support obtained from the Fund by placing either at least one poster with information about the operation (minimum size A3), including about the financial support from Union or a European Union flag of reasonable size, at a location readily visible to the public, at each place of provision of food and/or basic material assistance and any accompanying measure without stigmatising end-recipients, except if this is not possible due to the circumstances of the distribution.

Those beneficiaries and partner organisations which have websites shall also provide a short description of the operation, including its aims and results, and highlighting the financial support from the Union.

Those beneficiaries and partner organisations which have websites shall also provide a short description of the operation, including its aims and results, and highlighting the financial support from the Union.

4. All information and communication measures undertaken by the beneficiary and the partner organisations shall acknowledge support from the Fund to the operation by displaying the emblem of the Union together with a reference to the Union and the Fund.

4. All information and communication measures undertaken by the beneficiary and the partner organisations shall acknowledge support from the Fund to the operation by displaying the emblem of the Union together with a reference to the Union and the Fund.

5. The managing authority shall inform beneficiaries of publication of the list of operations in accordance with paragraph 2. The managing authority shall provide information and publicity kits, including templates in electronic format, to help beneficiaries and partner organisations to meet their obligations as set out in paragraph 3.

5. The managing authority shall inform beneficiaries of publication of the list of operations in accordance with paragraph 2. The managing authority shall provide information and publicity kits, including templates in electronic format, to help beneficiaries and partner organisations to meet their obligations as set out in paragraph 3.

44

6. In processing personal data pursuant to this Article, the managing authority as well as the beneficiaries and partner organisations shall comply with Directive 95/46/EC.

6. In processing personal data pursuant to Articles 13 to 17, the managing authority as well as the beneficiaries and partner organisations shall comply with Directive 95/46/EC.

Amendment 53



1. The co-financing rate at the level of the operational programme shall not be higher than 85% of the public eligible expenditure.

1. The co-financing rate at the level of the operational programme amounts to 85% of the public eligible expenditure. It may be increased in the cases described in Article 19(1). Member States shall be free to support the Fund's initiatives with additional national resources.

1a. Beneficiaries shall not under any circumstance co-finance operations of the Fund.

2. The Commission decision adopting an operational programme shall fix the co-financing rate applicable to the operational programme and the maximum amount of support from the Fund.

2. The Commission decision adopting an operational programme shall fix the co-financing rate applicable to the operational programme and the maximum amount of support from the Fund.

3. The technical assistance measures implemented at the initiative of, or on behalf of, the Commission may be financed at the rate of 100%.

3. The technical assistance measures implemented at the initiative of, or on behalf of, the Commission may be financed at the rate of 100%.

Amendment 54



1. At the request of a Member State, interim payments and payments of the final balance may be increased by 10 percentage points above the co-financing rate applicable to the operational programme. The increased rate, which can not exceed 100%, shall apply to requests for payment relating to the accounting period in which

1. At the request of a Member State, interim payments and payments of the final balance may be increased by 10 percentage points above the co-financing rate applicable to the operational programme. The increased rate, which can not exceed 100%, shall apply to requests for payment relating to the accounting period in which

45

the Member State has submitted its request and subsequent accounting periods during which the Member State meets one of the following conditions:

the Member State has submitted its request and subsequent accounting periods during which the Member State meets one of the following conditions:

(a) where the Member State concerned has adopted the euro, it receives macrofinancial assistance from the Union in accordance with Council Regulation (EU) No 407/2010;

(a) where the Member State concerned has adopted the euro, it receives macrofinancial assistance from the Union in accordance with Council Regulation (EU) No 407/2010;

(b) where the Member State concerned has not adopted the euro, it receives medium-term financial assistance in accordance with Council Regulation (EC) No 332/2002;

(b) where the Member State concerned has not adopted the euro, it receives medium-term financial assistance in accordance with Council Regulation (EC) No 332/2002;

(c) financial assistance is made available to it in accordance with the Treaty establishing the European Stability Mechanism.

(c) financial assistance is made available to it in accordance with the Treaty establishing the European Stability Mechanism.

2. Notwithstanding paragraph 1, Union support through interim payments and payments of the final balance shall not be higher than the public support and the maximum amount of support from the Fund, as laid down in the Commission decision approving the operational programme.

2. Notwithstanding paragraph 1, Union support through interim payments and payments of the final balance shall not be higher than the public and/or private support and the maximum amount of support from the Fund, as laid down in the Commission decision approving the operational programme.

Amendment 55



1. Operations supported by the operational programme shall be located in the Member State covered by the operational programme.

1. Operations supported by the operational programme shall be located in the Member State covered by the operational programme.

2. Operations may receive support from the operation programme provided that they have been selected in accordance with a fair and transparent procedure, on the basis of the criteria laid down in the operational programme.

2. Operations may receive support from the operation programme provided that they have been selected in accordance with a fair and transparent procedure, on the basis of the criteria laid down in the operational programme.

3. The food and the goods for homeless persons or for children may be purchased by the partner organisations themselves.

3. The food and/or the items for basic material assistance for the personal use of the end recipients may be purchased by the

46

partner organisations themselves.

They may also be purchased by a public body and made available free of charge to the partner organisations. In that case, the food may be obtained from the use, processing or sale of the products in intervention stocks made available in accordance with Article 15 of the Regulation (EU) No [CMO], provided that this is economically the most favourable option and does not unduly delay the delivery of the food products to the partner organisations. Any amount derived from a transaction concerning those stocks shall be used for the benefit of the most deprived persons, and shall not be applied so as to diminish the obligations of the Member States, provided in Article 18 of this Regulation, to co-finance the programme.

They may also be purchased by a public body and made available free of charge to the partner organisations. The partner organisations may, in addition, distribute food supplies coming from other sources including intervention stock made available under Article 15 of the Regulation (EU) No. ... [CMO].

The Commission shall apply the procedures adopted pursuant to Article 19(e) of the Regulation (EU) No [CMO] by which the products in intervention stocks may be used, processed or sold for the purposes of this Regulation, in order to ensure the most efficient possible use of the intervention stocks and proceeds thereof.

The Commission shall apply the procedures adopted pursuant to Article 19(e) of the Regulation (EU) No [CMO] by which the products in intervention stocks may be used, processed or sold for the purposes of this Regulation, in order to ensure the most efficient possible use of the intervention stocks and proceeds thereof.

4. That material assistance shall be distributed free of charge to the most deprived persons.

4. The food and/or the items for basic material assistance shall be distributed free of charge to the most deprived persons without any exception.

5. An operation supported by the Fund shall not receive support from another Union instrument.

5. An operation supported by the Fund shall not receive support from another Union instrument in order to avoid double funding. However, beneficiaries shall not be prevented from applying to use other European Funds such as the ESF to undertake complementary actions aimed at addressing poverty relief and social inclusion.

Amendment 56


47


1. The costs eligible for a support from the operational programme shall be:

1. The costs eligible for a support from the operational programme shall be:

(a) the costs of purchasing food and basic consumer goods for personal use of homeless persons or of children;

(a) the costs of purchasing food and items for basic material assistance for the personal use of end-recipients;

(b) where a public body purchases the food or basic consumer goods for personal use of homeless persons or of children and provide them to partner organisations, the costs of transporting of food or goods to the storage depots of the partner organisations at a flat rate of 1% of the costs referred to in point (a);

(b) where a public body purchases the food or basic consumer goods for the personal use of end-recipients and provides them to partner organisations, the costs of transporting food or items for basic material assistance to the storage depots of the partner organisations at a flat rate of 1% of the costs referred to in point (a);

(c) the administrative, transport and storage costs borne by the partner organisations at a flat rate of 5 % of the costs referred to in point (a);

(c) the administrative, transport and storage costs borne by the partner organisations at a flat rate of 5 % of the costs referred to in point (a); or 5 % of the value of the food intervention stocks transferred in accordance with Article 15 of the Regulation (EU) No. ../…. [CMO];

(ca) the administrative, transport, and storage costs borne by the partner organisations in relation to the collection of food waste.

(d) the costs of social inclusion activities undertaken and declared by the partner organisations delivering directly the material assistance to the most deprived persons at a flat rate of 5% of the costs referred to in point (a);

(d) the costs of social inclusion activities undertaken and declared by the partner organisations delivering directly or indirectly the basic material assistance to the end recipients at a flat rate of 5% of the costs referred to in point (a)

(e) costs incurred pursuant to Article 25. (e) costs incurred pursuant to Article 25.

2. The following costs shall not be eligible for a support from the operational programme:

2. The following costs shall not be eligible for a support from the operational programme:

(a) interest on debt; (a) interest on debt;

(b) costs of second-hand goods; (b) costs of second-hand goods;

48

(c) value added tax. However, VAT amounts shall be eligible where they are not recoverable under national VAT legislation and are paid by a beneficiary other than a non-taxable person as defined in the first subparagraph of Article 13(1) of Council Directive 2006/112/EC.

(c) value added tax. However, VAT amounts shall be eligible where they are not recoverable under national VAT legislation and are paid by a beneficiary other than a non-taxable person as defined in the first subparagraph of Article 13(1) of Council Directive 2006/112/EC.

Amendment 57



4. The Member State shall designate a national public authority or body, functionally independent from the managing authority and the certifying authority, as audit authority.

4. The Member State shall designate a national public authority or body, functionally independent from the managing authority and the certifying authority, as audit authority. The national audit office or the national court of auditors may be designated as the audit authority.

Amendment 58

Proposal for a regulationArticle 29 – paragraph 4 – point e


(o) draw up the management declaration and annual summary referred to in Article 56 (5)(a) and (b) of the Financial Regulation.

(e) draw up the management declaration and annual summary referred to in Article 59(5)(a) and (b) of the Financial Regulation.

Amendment 59

Proposal for a regulationArticle 30 – paragraph 1 – point 2


2. drawing up the annual accounts referred to in Article 56 (5) (a) of the Financial Regulation;

2. drawing up the annual accounts referred to in Article 59(5)(a) of the Financial Regulation;

49

Amendment 60

Proposal for a regulationArticle 30 – paragraph 1 – point 8


8. keeping an account of amounts recoverable and of amounts withdrawn following cancellation of all or part of the contribution for an operation. Amounts recovered shall be repaid to the general budget of the Union prior to the closure of the operational programme by deducting them from the next statement of expenditure.

8. keeping an account of amounts recoverable and of amounts withdrawn following cancellation of all or part of the contribution for an operation. Amounts recovered shall be repaid to the Fund prior to the closure of the operational programme by deducting them from the next statement of expenditure.

Amendment 61



4. The audit authority shall, within six months of adoption of the operational programme, prepare an audit strategy for performance of audits. The audit strategy shall set out the audit methodology, the sampling method for audits on operations and the planning of audits in relation to the current accounting year and the two subsequent accounting years. The audit strategy shall be updated annually from 2016 until and including 2022. The audit authority shall submit the audit strategy to the Commission upon request.

4. The audit authority shall, within six months of adoption of the operational programme, prepare an audit strategy for performance of audits. The audit strategy shall set out the audit methodology, the sampling method for audits on operations and the planning of audits in relation to the current accounting year and the two subsequent accounting years. The audit strategy shall be updated annually from 2016 until and including 2022. The audit authority shall submit the audit strategy to the Commission. The Commission shall be empowered to request that the audit authority introduces changes to its audit strategy, which, in its view, are necessary for ensuring that audits are carried out in a proper manner, in accordance with the internationally accepted audit standards. In doing so the Commission shall ensure that performance audit has been sufficiently taken into account.

50

Amendment 62

Proposal for a regulationArticle 31 – paragraph 5 – subparagraph 1 – point a


(r) an audit opinion in accordance with Article 56 (5) of the Financial Regulation;

(a) an audit opinion in accordance with Article 59(5) of the Financial Regulation;

Amendment 63



3. The Commission may require a Member State to take the actions necessary to ensure the effective functioning of their management and control systems or the correctness of expenditure in accordance with this Regulation.

3. The Commission shall require Member States to take the actions necessary to ensure the effective functioning of their management and control systems or the correctness of expenditure in accordance with this Regulation.

Amendment 64



The budget commitments of the Union in respect of each operational programme shall be made in annual instalments during the period between 1 January 2014 and 31 December 2020. The decision of the Commission adopting the operational programme shall constitute the financing decision within the meaning of Article 81(2) of the Financial Regulation and once notified to the Member State concerned, a legal commitment within the meaning of that Regulation.

The budget commitments of the Union in respect of each operational programme shall be made in annual instalments during the period between 1 January 2014 and 31 December 2020. The decision of the Commission adopting the operational programme shall constitute the financing decision within the meaning of Article 84(2) of the Financial Regulation and once notified to the Member State concerned, a legal commitment within the meaning of that Regulation.

51

Amendment 65



1. For each year from 2015 until and including 2022, by 15 February of the year following the end of the accounting period, the designated bodies shall submit to the Commission the following documents and information in accordance with Article 56 of the Financial Regulation:

1. For each year from 2015 until and including 2022, by 15 February of the year following the end of the accounting period, the designated bodies shall submit to the Commission the following documents and information in accordance with Article 59 of the Financial Regulation:

(dd) the certified annual accounts of the relevant bodies designated pursuant to Article 32 as referred to in Article 56(5) of the Financial Regulation;

(a) the certified annual accounts of the relevant bodies designated pursuant to Article 32 as referred to in Article 59(5) of the Financial Regulation;

(ee) the management declaration as referred to in Article 56(5) of the Financial Regulation;

(b) the management declaration as referred to in Article 59(5) of the Financial Regulation;

(ff) an annual summary of the final audit reports and of controls carried out, including an analysis of the nature and extent of errors and of weaknesses, as well as corrective actions taken or planned;

(c) an annual summary of the final audit reports and of controls carried out, including an analysis of the nature and extent of errors and of weaknesses, as well as corrective actions taken or planned;

(gg) an audit opinion by the designated independent audit body as referred in Article 56(5) of the Financial Regulation, accompanied by a control report setting out the findings of the audits carried out relating to the accounting year covered by the opinion.

(d) an audit opinion by the designated independent audit body as referred in Article 59(5) of the Financial Regulation, accompanied by a control report setting out the findings of the audits carried out relating to the accounting year covered by the opinion.

Amendment 66



1. The managing authority shall ensure that all supporting documents on operations are made available to the Commission and the European Court of Auditors upon request for a period of three years. This three year period shall run from 31 December of the year of the decision on acceptance of

1. The managing authority shall ensure that all supporting documents on operations are made available to the Commission and the European Court of Auditors upon request for a period of five years. This five year period shall run from the date of payment of the final balance.

52

accounts by the Commission pursuant to Article 47 or, at the latest, from the date of payment of the final balance.

This three year period shall be interrupted either in the case of legal or administrative proceedings or by a duly justified request of the Commission.

This five year period shall be interrupted either in the case of legal or administrative proceedings or by a duly justified request of the Commission.

Amendment 67



Article 60a

Transitional provisions

The Commission and the Member States shall ensure via transitional provisions that activities eligible for support can start as of 1 January 2014, even if operational programmes have not yet been submitted.

Amendment 68



This Regulation shall enter into force on the twentieth day after publication following that of its publication in the Official Journal of the European Union.

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

53

P7_TA-PROV(2013)0258

Establishment of 'Eurodac' for the comparison of fingerprints ***I

European Parliament legislative resolution of 12 June 2013 on the amended proposal for a regulation of the European Parliament and of the Council on the establishment of 'EURODAC' for the comparison of fingerprints for the effective application of Regulation (EU) No […/…] (establishing the criteria and mechanisms for determining the Member State responsible for examining an application for international protection lodged in one of the Member States by a third-country national or a stateless person) and to request comparisons with EURODAC data by Member States' law enforcement authorities and Europol for law enforcement purposes and amending Regulation (EU) No 1077/2011 establishing a European Agency for the operational management of large-scale IT systems in the area of freedom, security and justice (recast) (COM(2012)0254 – C7-0148/2012 – 2008/0242(COD))

(Ordinary legislative procedure – recast)


– having regard to the amended Commission proposal to Parliament and the Council (COM(2012)0254),

– having regard to Article 294(2), Article 78(2)(e), Article 87(2)(a) and Article 88(2)(a) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0148/2012),


– having regard to the Interinstitutional Agreement of 28 November 2001 on a more structured use of the recasting technique for legal acts1,

– having regard to the letter of 20 September 2012 from the Committee on Legal Affairs to the Committee on Civil Liberties, Justice and Home Affairs in accordance with Rule 87(3) of its Rules of Procedure,

– having regard to the undertaking given by the Council representative by letter of 27 March 2013 to approve Parliament’s position, in accordance with Article 294(4) of the Treaty on the Functioning of the European Union,

– having regard to Rules 87 and 55 of its Rules of Procedure,

– having regard to the report of the Committee on Civil Liberties, Justice and Home Affairs (A7-0432/2012),

A. whereas, according to the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission, the proposal in question does not include any

1 OJ C 77, 28.3.2002, p. 1.

54

substantive amendments other than those identified as such in the proposal and whereas, as regards the codification of the unchanged provisions of the earlier acts together with those amendments, the proposal contains a straightforward codification of the existing texts, without any change in their substance;

1. Adopts its position at first reading hereinafter set out, taking into account the recommendations of the Consultative Working Party of the legal services of the European Parliament, the Council and the Commission;



55

P7_TC1-COD(2008)0242

Position of the European Parliament adopted at first reading on 12 June 2013 with a view to the adoption of Regulation (EU) No …/2013 of the European Parliament and of the Council on the establishment of 'Eurodac' for the comparison of fingerprints for the effective application of Regulation (EU) No …/…* establishing the criteria and mechanisms for determining the Member State responsible for examining an application for international protection lodged in one of the Member States by a third-country national or a stateless person and on requests for the comparison with Eurodac data by Member States' law enforcement authorities and Europol for law enforcement purposes, and amending Regulation (EU) No 1077/2011 establishing a European Agency for the operational management of large-scale IT systems in the area of freedom, security and justice

(recast)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 78 (2)(e), 87(2)(a) and 88(2)(a) thereof,

Having regard to the proposal from the European Commission

Having regard to the opinion of the European Data Protection Supervisor1,

Acting in accordance with the ordinary legislative procedure2,

* OJ: Please insert the number of the Regulation in doc. 15605/2/12 REV 2 [Dublin Regulation].

1 OJ C 92 10.4.2010, p. 1.2 Position of the European Parliament of 12 June 2013.

56

Whereas:

(1) A number of substantive changes are to be made to Council Regulation (EC) No

2725/2000 of 11 December 2000 concerning the establishment of 'Eurodac' for the

comparison of fingerprints for the effective application of the Dublin Convention1 and

to Council Regulation (EC) No 407/2002 of 28 February 2002 laying down certain

rules to implement Regulation (EC) No 2725/2000 concerning the establishment of

"Eurodac" for the comparison of fingerprints for the effective application of the Dublin

Convention2. In the interest of clarity, those Regulations should be recast.

(2) A common policy on asylum, including a Common European Asylum System, is a

constituent part of the European Union's objective of progressively establishing an area

of freedom, security and justice open to those who, forced by circumstances, ▌seek

international protection in the Union.

1 OJ L 316, 15.12.2000, p. 1.2 OJ L 62, 5.3.2002, p. 1.

57

(3) The European Council of 4 November 2004 adopted The Hague Programme which set

the objectives to be implemented in the area of freedom, security and justice in the

period 2005-2010. The European Pact on Immigration and Asylum endorsed by the

European Council of 15-16 October 2008 called for the completion of the

establishment of a Common European Asylum System by creating a single procedure

comprising common guarantees and a uniform status for refugees and for persons

eligible for subsidiary protection.

(4) For the purposes of applying ▌Regulation (EU) No …/… of the European Parliament

and of the Council of ... establishing the criteria and mechanisms for determining the

Member State responsible for examining an application for international protection

lodged in one of the Member States by a third-country national or a stateless person1*,

it is necessary to establish the identity of applicants for international protection and of

persons apprehended in connection with the unlawful crossing of the external borders

of the Union. It is also desirable, in order effectively to apply ▌Regulation (EU) No

…/… *, and in particular Article 18(1)(b) and (d) thereof, to allow each Member State

to check whether a third-country national or stateless person found illegally staying on

its territory has applied for international protection in another Member State.

1 OJ L ….* OJ: Please insert the number, date and publication reference of the Regulation in doc.

15605/2/12 REV 2 [Dublin Regulation].

58

(5) Fingerprints constitute an important element in establishing the exact identity of such

persons. It is necessary to set up a system for the comparison of their fingerprint data.

(6) To that end, it is necessary to set up a system known as 'Eurodac', consisting of a

Central System, which will operate a computerised central database of fingerprint data,

as well as of the electronic means of transmission between the Member States and the

Central System, hereinafter the "Communication Infrastructure".

59

(7) The Hague Programme called for the improvement of access to existing data filing

systems in the Union. In addition, The Stockholm Programme called for well targeted

data collection and a development of information exchange and its tools that is driven

by law enforcement needs.

(8) It is essential in the fight against terrorist offences and other serious criminal offences

for the law enforcement authorities to have the fullest and most up-to-date information

if they are to perform their tasks. The information contained in Eurodac is necessary

for the purposes of the prevention, detection or investigation of terrorist offences as

referred to in Council Framework Decision 2002/475/JHA of 13 June 2002 on

combating terrorism1 or of other serious criminal offences as referred to in Council

Framework Decision 2002/584/JHA of 13 June 2002 on the European arrest warrant

and the surrender procedures between Member States2. Therefore, the data in Eurodac

should be available, subject to the conditions set out in this Regulation, for comparison

by the designated authorities of Member States and the European Police Office

(Europol).

1 OJ L 164, 22.6.2002, p. 3.2 OJ L 190, 18.7.2002, p. 1.

60

(9) The powers granted to law enforcement authorities to access Eurodac should be

without prejudice to the right of an applicant for international protection to have his

or her application processed in due course in accordance with the relevant law.

Furthermore, any subsequent follow-up after obtaining a 'hit' from Eurodac should

also be without prejudice to that right.

(10) The Commission outlines in its Communication to the Council and the European

Parliament of 24 November 2005 on improved effectiveness, enhanced interoperability

and synergies among European databases in the area of Justice and Home Affairs that

authorities responsible for internal security could have access to Eurodac in well

defined cases, when there is a substantiated suspicion that the perpetrator of a terrorist

or other serious criminal offence has applied for international protection. In that

Communication the Commission also found that the proportionality principle requires

that Eurodac be queried for such purposes only if there is an overriding public security

concern, that is, if the act committed by the criminal or terrorist to be identified is so

reprehensible that it justifies querying a database that registers persons with a clean

criminal record, and it concluded that the threshold for authorities responsible for

internal security to query Eurodac must therefore always be significantly higher than

the threshold for querying criminal databases.

61

(11) Moreover, Europol plays a key role with respect to cooperation between Member

States' authorities in the field of cross-border crime investigation in supporting Union-

wide crime prevention, analyses and investigation. Consequently, Europol should also

have access to Eurodac within the framework of its tasks and in accordance with

Council Decision 2009/371/JHA of 6 April 2009 establishing the European Police

Office (Europol)1.

(12) Requests for comparison of Eurodac data by Europol should be allowed only in

specific cases, under specific circumstances and under strict conditions.

1 OJ L 121, 15.5.2009, p. 37.

62

(13) Since Eurodac was originally established to facilitate the application of the Dublin

Convention, access to Eurodac for the purposes of preventing, detecting or

investigating terrorist offences or other serious criminal offences constitutes a change

of the original purpose of Eurodac, which interferes with the fundamental right to

respect for the private life of individuals whose personal data are processed in

Eurodac. Any such interference must be in accordance with the law, which must be

formulated with sufficient precision to allow individuals to adjust their conduct and it

must protect individuals against arbitrariness and indicate with sufficient clarity the

scope of discretion conferred on the competent authorities and the manner of its

exercise. Any interference must be necessary in a democratic society to protect a

legitimate and proportionate interest and proportionate to the legitimate objective it

aims to achieve.

63

(14) Even though the original purpose of the establishment of Eurodac did not require the

facility of requesting comparisons of data with the database on the basis of a latent

fingerprint, which is the dactyloscopic trace which may be found at a crime scene,

such a facility is fundamental in the field of police cooperation. The possibility to

compare a latent fingerprint with the fingerprint data which is stored in Eurodac in

cases where there are reasonable grounds for believing that the perpetrator or victim

may fall under one of the categories covered by this Regulation will provide the

designated authorities of the Member States with a very valuable tool in preventing,

detecting or investigating terrorist offences or other serious criminal offences, when

for example the only evidence available at a crime scene are latent fingerprints.

64

(15) This Regulation also lays down the conditions under which requests for comparison of

fingerprint data with Eurodac data for the purposes of preventing, detecting or

investigating terrorist offences or other serious criminal offences should be allowed

and the necessary safeguards to ensure the protection of the fundamental right to

respect for the private life of individuals whose personal data are processed in

Eurodac. The strictness of those conditions reflects the fact that the Eurodac

database registers fingerprint data of persons who are not presumed to have

committed a terrorist offence or other serious criminal offence.

65

(16) With a view to ensuring equal treatment for all applicants and beneficiaries of

international protection, as well as in order to ensure consistency with the current

Union asylum acquis, in particular with ▌Directive 2011/95/EU of the European

Parliament and of the Council of 13 December 2011 on ▌standards for the

qualification ▌of third-country nationals or stateless persons as beneficiaries of

international protection, for a uniform status for refugees or for persons eligible for

subsidiary protection, and for the content of the protection granted1 and Regulation

(EU) No …/… *, it is appropriate to extend the scope of this Regulation in order to

include applicants for subsidiary protection and persons eligible for subsidiary

protection.

1 OJ L 337, 20.12.2011, p. 9.* OJ: Please insert the number of the Regulation in recital 4 [Dublin Regulation].

66

(17) It is also necessary to require the Member States promptly to take and transmit the

fingerprint data of every applicant for international protection and of every third-

country national or stateless person who is apprehended in connection with the

irregular crossing of an external border of a Member State, if they are at least 14 years

of age.

(18) It is necessary to lay down precise rules for the transmission of such fingerprint data to

the Central System, the recording of such fingerprint data and of other relevant data in

the Central System, their storage, their comparison with other fingerprint data, the

transmission of the results of such comparison and the marking and erasure of the

recorded data. Such rules may be different for, and should be specifically adapted to,

the situation of different categories of third-country nationals or stateless persons.

67

(19) Member States should ensure the transmission of fingerprint data of an appropriate

quality for the purpose of comparison by means of the computerised fingerprint

recognition system. All authorities with a right of access to Eurodac should invest in

adequate training and in the necessary technological equipment. The authorities

with a right of access to Eurodac should inform the European Agency for the

operational management of large-scale IT systems in the area of freedom, security

and justice established by Regulation (EU) No 1077/2011 of the European

Parliament and of the Council1 (the "Agency") of specific difficulties encountered

with regard to the quality of data, in order to resolve them.

(20) The fact that it is temporarily or permanently impossible to take and/or to transmit

fingerprint data, due to reasons such as insufficient quality of the data for

appropriate comparison, technical problems, reasons linked to the protection of

health or due to the data subject being unfit or unable to have his or her fingerprints

taken owing to circumstances beyond his or her control, should not adversely affect

the examination of or the decision on the application for international protection

lodged by that person.

1 OJ L 286, 1.11.2011, p. 1.

68

(21) Hits obtained from Eurodac should be verified by a trained fingerprint expert in order

to ensure the accurate determination of responsibility under Regulation (EU) No …/… * and the exact identification of the criminal suspect or victim of crime whose data

might be stored in Eurodac.

(22) Third-country nationals or stateless persons who have requested international

protection in one Member State may have the option of requesting international

protection in another Member State for many years to come. Therefore, the maximum

period during which fingerprint data should be kept by the Central System should be of

considerable length. Given that most third-country nationals or stateless persons who

have stayed in the Union for several years will have obtained a settled status or even

citizenship of a Member State after that period, a period of ten years should be

considered a reasonable period for the storage of fingerprint data.

* OJ: Please insert the number, date and publication reference of the Regulation in recital 4 [Dublin Regulation].

69

(23) The storage period should be shorter in certain special situations where there is no

need to keep fingerprint data for that length of time. Fingerprint data should be erased

immediately once third-country nationals or stateless persons obtain citizenship of a

Member State.

(24) It is appropriate to store data relating to those data subjects whose fingerprints were

initially recorded in Eurodac upon lodging their applications for international

protection and who have been granted international protection in a Member State in

order to allow data recorded upon lodging an application for international protection to

be compared against them.

70

(25) The Agency has been entrusted with the Commission's tasks relating to the operational

management of Eurodac in accordance with this Regulation and with certain tasks

relating to the Communication Infrastructure as from the date on which the Agency

took up its responsibilities on 1 December 2012. The Agency should take up the tasks

entrusted to it under this Regulation, and the relevant provisions of Regulation (EU)

No 1077/2011 should be amended accordingly. In addition, Europol should have

observer status at the meetings of the Management Board of the Agency when a

question in relation to the application of this Regulation concerning access for

consultation of Eurodac by designated authorities of Member States and by Europol

for the purposes of the prevention, detection or investigation of terrorist offences or of

other serious criminal offences is on the agenda. Europol should be able to appoint a

representative to the Eurodac Advisory Group of the Agency.

71

(26) The Staff Regulations of Officials of the European Union (Staff Regulations of

Officials) and the Conditions of Employment of Other Servants of the European Union

('Conditions of Employment'), laid down in Regulation (EEC, Euratom, ECSC)

No 259/68 of the Council1 (together referred to as the ‘Staff Regulations’) should

apply to all staff working in the Agency on matters pertaining to this Regulation.

(27) It is necessary to lay down clearly the respective responsibilities of the Commission

and the Agency, in respect of the Central System and the Communication

Infrastructure, and of the Member States, as regards data processing, data security,

access to, and correction of, recorded data.

1 OJ L 56, 4.3.1968, p. 1.

72

(28) It is necessary to designate the competent authorities of the Member States as well as

the National Access Point through which the requests for comparison with Eurodac

data are made and to keep a list of the operating units within the designated authorities

that are authorised to request such comparison for the specific purposes of the

prevention, detection or investigation of terrorist offences or of other serious criminal

offences.

73

(29) Requests for comparison with data stored in the Central System should be made by the

operating units within the designated authorities to the National Access Point, through

the verifying authority and should be reasoned. The operating units within the

designated authorities that are authorised to request comparisons with Eurodac data

should not act as a verifying authority. The verifying authorities should act

independently of the designated authorities and should be responsible for ensuring, in

an independent manner, strict compliance with the conditions for access as

established in this Regulation. The verifying authorities should then forward the

request, without forwarding the reasons for it, for comparison through the National

Access Point to the Central System following verification that all conditions for access

are fulfilled. In exceptional cases of urgency where early access is necessary to

respond to a specific and actual threat related to terrorist offences or other serious

criminal offences, the verifying authority should process the request immediately and

only carry out the verification afterwards.

74

(30) The designated authority and the verifying authority may be part of the same

organisation, if permitted under national law, but the verifying authority should act

independently when performing its tasks under this Regulation.

(31) For the purposes of protection of personal data, and to exclude systematic comparisons

which should be forbidden, the processing of Eurodac data should only take place in

specific cases and when it is necessary for the purposes of preventing, detecting or

investigating terrorist offences or other serious criminal offences. ▌A specific case

exists in particular when the request for comparison is connected to a specific and

concrete situation or to a specific and concrete danger associated with a terrorist

offence or other serious criminal offence, or to specific persons in respect of whom

there are serious grounds for believing that they will commit or have committed any

such offence. A specific case also exists when the request for comparison is connected

to a person who is the victim of a terrorist offence or other serious criminal offence.

The designated authorities and Europol should thus only request a comparison with

Eurodac when they have reasonable grounds to believe that such a comparison will

provide information that will substantially assist them in preventing, detecting or

investigating a terrorist offence or other serious criminal offence.

75

(32) In addition, access should be allowed only on condition that comparisons with the

national fingerprint databases of the Member State and with the automated

fingerprinting identification systems of all other Member States under Council

Decision 2008/615/JHA of 23 June 2008 on the stepping up of cross-border

cooperation, particularly in combating terrorism and cross-border crime1 did not

lead to the establishment of the identity of the data subject. That condition requires

the requesting Member State to conduct comparisons with the automated

fingerprinting identification systems of all other Member States under Decision

2008/615/JHA which are technically available, unless that Member State can justify

that there are reasonable grounds to believe that it would not lead to the

establishment of the identity of the data subject. Such reasonable grounds exist in

particular where the specific case does not present any operational or investigative

link to a given Member State. That condition requires prior legal and technical

implementation of Decision 2008/615/JHA by the requesting Member State in the

area of fingerprint data, as it should not be permitted to conduct a Eurodac check

for law enforcement purposes where those above steps have not been first taken.

1 OJ L 210, 6.8.2008, p. 1.

76

(33) Prior to searching Eurodac, designated authorities should also, provided that the

conditions for a comparison are met, consult the Visa Information System under

Council Decision 2008/633/JHA of 23 June 2008 concerning access for consultation

of the Visa Information System (VIS) by designated authorities of Member States

and by Europol for the purposes of the prevention, detection and investigation of

terrorist offences and of other serious criminal offences1.

(34) For the purpose of efficient comparison and exchange of personal data, Member

States should fully implement and make use of the existing international agreements

as well as of Union law concerning the exchange of personal data already in force,

in particular of Decision 2008/615/JHA.

1 OJ L 218, 13.8.2008, p. 129.

77

(35) The best interests of the child should be a primary consideration for Member States

when applying this Regulation. Where the requesting Member State establishes that

Eurodac data pertain to a minor, these data may only be used for law enforcement

purposes by the requesting Member State in accordance with that State’s laws

applicable to minors and in accordance with the obligation to give primary

consideration to the best interests of the child.

(36) While the non-contractual liability of the Union in connection with the operation of

the Eurodac system will be governed by the relevant provisions of the Treaty on the

Functioning of the European Union (TFEU), it is necessary to lay down specific rules

for the non-contractual liability of the Member States in connection with the operation

of the system.

78

(37) Since the objective of this Regulation, namely the creation of a system for the

comparison of fingerprint data to assist the implementation of Union asylum policy,

cannot, by its very nature, be sufficiently achieved by the Member States and can

therefore be better achieved at Union level, the Union may adopt measures in

accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on

European Union (TEU). In accordance with the principle of proportionality, as set out

in that Article, this Regulation does not go beyond what is necessary in order to

achieve that objective.

(38) Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995

on the protection of individuals with regard to the processing of personal data and on

the free movement of such data1 applies to the processing of personal data by the

Member States carried out in application of this Regulation unless such processing is

carried out by the designated or verifying authorities of the Member States for the

purposes of the prevention, detection or investigation of terrorist offences or of other

serious criminal offences.

1 OJ L 281, 23.11.1995, p. 31.

79

(39) The processing of personal data by ▌the authorities of the Member States for the

purposes of the prevention, detection or investigation of terrorist offences or of other

serious criminal offences pursuant to this Regulation should be subject to a standard

of protection of personal data under their national law which complies with Council

Framework Decision 2008/977/JHA of 27 November 2008 on the protection of

personal data processed in the framework of police and judicial co-operation in

criminal matters1.

(40) The principles set out in Directive 95/46/EC regarding the protection of the rights and

freedoms of individuals, notably their right to privacy, with regard to the processing of

personal data should be supplemented or clarified, in particular as far as certain sectors

are concerned.

1 OJ L 350, 30.12.2008, p. 60.

80

(41) Transfers of personal data obtained by a Member State or Europol pursuant to this

Regulation from the Central System to any third country or international organisation

or private entity established in or outside the Union should be prohibited, in order to

ensure the right to asylum and to safeguard applicants for international protection from

having their data disclosed to a third country. This implies that Member States should

not transfer information obtained from the Central System concerning: the Member

State(s) of origin; the place and date of application for international protection; the

reference number used by the Member State of origin; the date on which the

fingerprints were taken as well as the date on which the Member State(s) transmitted

the data to Eurodac; the operator user ID; and any information relating to any

transfer of the data subject under Regulation (EU) No …/…*. That prohibition

should be without prejudice to the right of Member States to transfer such data to third

countries to which Regulation (EU) No …/…*applies, in order to ensure that Member

States have the possibility of cooperating with such third countries for the purposes of

this Regulation.

* OJ: Please insert the number of the Regulation in recital 4 [Dublin Regulation].

81

(42) National supervisory authorities ▌ should monitor the lawfulness of the processing of

personal data by the Member States, and the supervisory authority set up by Decision

2009/371/JHA should monitor the lawfulness of data processing activities performed

by Europol.

(43) Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18

December 2000 on the protection of individuals with regard to the processing of

personal data by the Community institutions and bodies and on the free movement of

such data1, and in particular Articles 21 and 22 thereof concerning confidentiality and

security of processing, applies to the processing of personal data by Union institutions,

bodies, offices and agencies carried out in application of this Regulation. However,

certain points should be clarified in respect of the responsibility for the processing of

data and of the supervision of data protection, bearing in mind that data protection is

a key factor in the successful operation of Eurodac and that data security, high

technical quality and lawfulness of consultations are essential to ensure the smooth

and proper functioning of Eurodac as well as to facilitate the application of

Regulation (EU) No …/… *.

1 OJ L 8, 12.1.2001, p. 1.* OJ: Please insert the number of the Regulation in recital 4 [Dublin Regulation].

82

(44) The data subject should be informed of the purpose for which his or her data will be

processed within Eurodac, including a description of the aims of Regulation (EU)

No …/…*, and of the use to which law enforcement authorities may put his or her

data.

(45) It is appropriate that national supervisory authorities monitor the lawfulness of the

processing of personal data by the Member States, whilst the European Data Protection

Supervisor, as referred to in Regulation (EC) No 45/2001, should monitor the activities

of the Union institutions, bodies, offices and agencies in relation to the processing of

personal data carried out in application of this Regulation.

(46) Member States, the European Parliament, the Council and the Commission should

ensure that the national and European supervisory authorities are able to supervise

the use of and access to Eurodac data adequately.


83

(47) It is appropriate to monitor and evaluate the performance of Eurodac at regular

intervals, including in terms of whether law enforcement access has led to indirect

discrimination against applicants for international protection, as raised in the

Commission's evaluation of the compliance of this Regulation with the Charter of

Fundamental Rights of the European Union ('the Charter'). The Agency should

submit an annual report on the activities of the Central System to the European

Parliament and to the Council.

(48) Member States should provide for a system of effective, proportionate and dissuasive

penalties to sanction the processing of data entered in the Central System contrary to

the purpose of Eurodac.

84

(49) It is necessary that Member States be informed of the status of particular asylum

procedures, with a view to facilitating the adequate application of Regulation (EU) No

…/…*.

(50) This Regulation respects the fundamental rights and observes the principles recognised

in particular by the Charter. In particular, this Regulation seeks to ensure full respect

for the protection of ▌personal data and for the right to seek international protection,

and to promote the application of Articles 8 and 18 of the Charter. This Regulation

should therefore be applied accordingly.


85

(51) In accordance with Articles 1 and 2 of Protocol No 22 on the position of Denmark,

annexed to the TEU and to the TFEU, Denmark is not taking part in the adoption of

this Regulation and is not bound by it or subject to its application.

86

(52) In accordance with Article 3 of Protocol No 21 on the position of the United Kingdom

and Ireland in respect of the Area of Freedom, Security and Justice, annexed to the

TEU and to the TFEU, the United Kingdom has notified its wish to take part in the

adoption and application of this Regulation.

(53) In accordance with Article 1 and 2 of Protocol No 21 on the position of the United

Kingdom and Ireland in respect of the Area of Freedom, Security and Justice, annexed

to the TEU and to the TFEU, and without prejudice to Article 4 of that Protocol,

Ireland is not taking part in the adoption of this Regulation and is not bound by it or

subject to its application.

87

(54) It is appropriate to restrict the territorial scope of this Regulation so as to align it on the

territorial scope of Regulation (EU) No …/…*,

HAVE ADOPTED THIS REGULATION:


88

CHAPTER I

GENERAL PROVISIONS

Article 1

Purpose of "Eurodac"

1. A system known as "Eurodac" is hereby established, the purpose of which shall be to

assist in determining which Member State is to be responsible pursuant to Regulation

(EU) No …/…* for examining an application for international protection lodged in a

Member State by a third-country national or a stateless person, and otherwise to

facilitate the application of Regulation (EU) No …/…* under the conditions set out in

this Regulation.


89

2. This Regulation also lays down the conditions under which Member States' designated

authorities and the European Police Office (Europol) may request the comparison of

fingerprint data with those stored in the Central System for law enforcement

purposes.

3. Without prejudice to the processing of data intended for Eurodac by the Member State

of origin in databases set up under the latter's national law, fingerprint data and other

personal data may be processed in Eurodac only for the purposes set out in this

Regulation and Article 34(1) of Regulation (EU) No …/…*.


90

Article 2

Definitions

1. For the purposes of this Regulation:

(a) 'applicant for international protection' means a third-country national or a

stateless person who has made an application for international protection as

defined in Article 2(h) of ▌Directive 2011/95/EU in respect of which a final

decision has not yet been taken;

91

(b) 'Member State of origin' means:

(i) in relation to a person covered by Article 9(1), the Member State which

transmits the personal data to the Central System and receives the results of

the comparison;

(ii) in relation to a person covered by Article 14(1), the Member State which

transmits the personal data to the Central System;

(iii) in relation to a person covered by Article 17(1), the Member State which

transmits the personal data to the Central System and receives the results of

the comparison;

(c) 'beneficiary of international protection' means a third-country national or a

stateless person who has been granted international protection as defined in

Article 2(a) of ▌Directive 2011/95/EU;

92

(d) 'hit' means the existence of a match or matches established by the Central

System by comparison between fingerprint data recorded in the computerised

central database and those transmitted by a Member State with regard to a

person, without prejudice to the requirement that Member States shall

immediately check the results of the comparison pursuant to Article 25(4);

(e) 'National Access Point' means the designated national system which

communicates with the Central System;

(f) 'Agency' means the Agency established by Regulation (EU) No 1077/2011;

(g) 'Europol' means the European Police Office established by Decision

2009/371/JHA;

(h) 'Eurodac data' means all ▌data stored in the Central System in accordance with

Article 11 and Article 14(2);

(i) 'law enforcement' means the prevention, detection or investigation of terrorist

offences or of other serious criminal offences;

93

(j) 'terrorist offences' means the offences under national law which correspond or

are equivalent to those referred to in Articles 1 to 4 of Framework Decision

2002/475/JHA;

(k) 'serious criminal offences' means the forms of crime which correspond or are

equivalent to those referred to in Article 2(2) of Framework Decision

2002/584/JHA, if they are punishable under national law by a custodial sentence

or a detention order for a maximum period of at least three years;

(l) 'fingerprint data' means the data relating to fingerprints of all or at least the index

fingers, and if those are missing, the prints of all other fingers of a person, or a

latent fingerprint.

94

2. The terms defined in Article 2 of Directive 95/46/EC shall have the same meaning in

this Regulation in so far as personal data are processed by the ▌authorities of the

Member States for the purposes laid down in Article 1(1) of this Regulation.

3. Unless stated otherwise, the terms defined in Article 2 of Regulation (EU) No …/…*

shall have the same meaning in this Regulation.

4. The terms defined in Article 2 of Framework Decision 2008/977/JHA shall have the

same meaning in this Regulation in so far as personal data are processed by ▌the

authorities of the Member States for the purposes laid down in Article 1(2) of this

Regulation.


95

Article 3

System architecture and basic principles

1. Eurodac shall consist of:

(a) a computerised central fingerprint database ("Central System") composed of:

(i) a Central Unit,

(ii) a Business Continuity Plan and System;

(b) a communication infrastructure between the Central System and Member States

that provides an encrypted virtual network dedicated to Eurodac data

("Communication Infrastructure").

2. Each Member State shall have a single National Access Point.

96

3. Data on persons covered by Articles 9(1), 14(1) and 17(1) which are processed in the

Central System shall be processed on behalf of the Member State of origin under the

conditions set out in this Regulation and separated by appropriate technical means.

4. The rules governing Eurodac shall also apply to operations carried out by the Member

States as from the transmission of data to the Central System until use is made of the

results of the comparison.

97

5. The procedure for taking fingerprints shall be determined and applied in accordance

with the national practice of the Member State concerned and in accordance with the

safeguards laid down in the Charter of Fundamental Rights of the European Union, in

the Convention for the Protection of Human Rights and Fundamental Freedoms and in

the United Nations Convention on the Rights of the Child.

Article 4

Operational management

1. The Agency shall be responsible for the operational management of Eurodac.

The operational management of Eurodac shall consist of all the tasks necessary to keep

Eurodac functioning 24 hours a day, 7 days a week in accordance with this Regulation,

in particular the maintenance work and technical developments necessary to ensure

that the system functions at a satisfactory level of operational quality, in particular as

regards the time required for interrogation of the Central System. A Business

Continuity Plan and System shall be developed taking into account maintenance

needs and unforeseen downtime of the system, including the impact of business

continuity measures on data protection and security.

The Agency shall ensure, in cooperation with the Member States, that at all times the

best available and most secure technology and techniques, subject to a cost-benefit

analysis, are used for the Central System.

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2. The Agency shall be responsible for the following tasks relating to the Communication

Infrastructure:

(a) supervision;

(b) security;

(c) the coordination of relations between the Member States and the provider.

3. The Commission shall be responsible for all tasks relating to the Communication

Infrastructure other than those referred to in paragraph 2, in particular:

(a) the implementation of the budget;

(b) acquisition and renewal;

(c) contractual matters.

99

▌

4. Without prejudice to Article 17 of the Staff Regulations, the Agency shall apply

appropriate rules of professional secrecy or other equivalent duties of confidentiality to

all its staff required to work with Eurodac data. This obligation shall also apply after

such staff leave office or employment or after the termination of their duties.

100

Article 5

Member States' designated authorities for law enforcement purposes

1. For the purposes laid down in Article 1(2), Member States shall designate the

authorities that are authorised to request comparisons with Eurodac data pursuant to

this Regulation. Designated authorities shall be authorities of the Member States which

are responsible for the prevention, detection or investigation of terrorist offences or of

other serious criminal offences. Designated authorities shall not include agencies or

units exclusively responsible for intelligence relating to national security.

2. Each Member State shall keep a list of the designated authorities.

3. Each Member State shall keep a list of the operating units within the designated

authorities that are authorised to request comparisons with Eurodac data through the

National Access Point.

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Article 6

Member States' verifying authorities for law enforcement purposes

1. For the purposes laid down in Article 1(2), each Member State shall designate a

single national authority or a unit of such an authority to act as its verifying

authority. The verifying authority shall be an authority of the Member State which is

responsible for the prevention, detection or investigation of terrorist offences or of

other serious criminal offences.

The designated authority and the verifying authority may be part of the same

organisation, if permitted under national law, but the verifying authority shall act

independently when performing its tasks under this Regulation. The verifying

authority shall be separate from the operating units referred to in Article 5(3) and

shall not receive instructions from them as regards the outcome of the verification.

Member States may designate more than one verifying authority to reflect their

organisational and administrative structures, in accordance with their constitutional

or legal requirements.

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2. The verifying authority shall ensure that the conditions for requesting comparisons of

fingerprints with Eurodac data are fulfilled.

Only duly empowered staff of the verifying authority shall be authorised to receive

and transmit a request for access to Eurodac in accordance with Article 19.

Only the verifying authority shall be authorised to forward requests for comparison of fingerprints to the National Access Point.

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Article 7

Europol

1. For the purposes laid down in Article 1(2), Europol shall designate a specialised unit

with duly empowered Europol officials to act as its verifying authority, which shall act

independently of the designated authority referred to in paragraph 2 of this Article

when performing its tasks under this Regulation and shall not receive instructions

from the designated authority as regards the outcome of the verification. The unit

shall ensure that the conditions for requesting comparisons of fingerprints with

Eurodac data are fulfilled. Europol shall designate in agreement with any Member

State the National Access Point of that Member State which shall communicate its

requests for comparison of fingerprint data to the Central System.

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2. For the purposes laid down in Article 1(2), Europol shall designate an operating unit

that is authorised to request comparisons with Eurodac data through its designated

National Access Point. The designated authority shall be an operating unit of

Europol which is competent to collect, store, process, analyse and exchange

information to support and strengthen action by Member States in preventing,

detecting or investigating terrorist offences or other serious criminal offences falling

within Europol's mandate.

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Article 8

Statistics

1. The Agency shall draw up statistics on the work of the Central System every quarter,

indicating in particular:

(a) the number of data sets transmitted on persons referred to in Articles 9(1), 14(1)

and 17(1);

(b) the number of hits for applicants for international protection who have lodged an

application for international protection in another Member State;

(c) the number of hits for persons referred to in Article 14(1) who have subsequently

lodged an application for international protection;

(d) the number of hits for persons referred to in Article 17(1) who had previously

lodged an application for international protection in another Member State;

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(e) the number of fingerprint data which the Central System had to request more

than once from the Member States of origin because the fingerprint data

originally transmitted did not lend themselves to comparison using the

computerised fingerprint recognition system;

(f) the number of data sets marked, unmarked, blocked and unblocked in

accordance with Article 18(1) and (3);

(g) the number of hits for persons referred to in Article 18(1) for whom hits have

been recorded under points (b) and (d) of this Article;

(h) the number of requests and hits referred to in Article 20(1);

(i) the number of requests and hits referred to in Article 21(1).

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2. At the end of each year, statistical data shall be established in the form of a

compilation of the quarterly statistics for that year, including an indication of the

number of persons for whom hits have been recorded under paragraph 1(b), (c) and

(d). The statistics shall contain a breakdown of data for each Member State. The

results shall be made public.

CHAPTER II

APPLICANTS FOR INTERNATIONAL PROTECTION

Article 9

Collection, transmission and comparison of fingerprints

1. Each Member State shall promptly take the fingerprints of all fingers of every

applicant for international protection of at least 14 years of age and shall, as soon as

possible and no later than 72 hours after the lodging of his or her application for

international protection, as defined by Article 20(2) of Regulation (EU) No …/…*,

transmit them together with the data referred to in Article 11(b) to (g) of this

Regulation to the Central System.


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Non-compliance with the 72-hour time-limit shall not relieve Member States of the obligation to take and transmit the fingerprints to the Central System. Where the condition of the fingertips does not allow the taking of the fingerprints of a quality ensuring appropriate comparison under Article 25, the Member State of origin shall retake the fingerprints of the applicant and resend them as soon as possible and no later than 48 hours after they have been successfully retaken.

2. By way of derogation from paragraph 1, where it is not possible to take the fingerprints

of an applicant for international protection on account of measures taken to ensure his

or her health or the protection of public health, Member States shall take and send such

fingerprints as soon as possible and no later than 48 hours after those health grounds

no longer prevail.

In the event of serious technical problems, Member States may extend the 72-hour

time-limit in paragraph 1 by a maximum of a further 48 hours in order to carry out

their national continuity plans.

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3. Fingerprint data within the meaning of Article 11(a) transmitted by any Member State,

with the exception of those transmitted in accordance with Article 10(b), shall be

compared automatically with the fingerprint data transmitted by other Member States

and already stored in the Central System.

4. The Central System shall ensure, at the request of a Member State, that the comparison

referred to in paragraph 3 covers the fingerprint data previously transmitted by that

Member State, in addition to the data from other Member States.

5. The Central System shall automatically transmit the hit or the negative result of the

comparison to the Member State of origin. Where there is a hit, it shall transmit for all

data sets corresponding to the hit the data referred to in Article 11(a) to (k) along with,

where appropriate, the mark referred to in Article 18(1).

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Article 10Information on the status of the data subject

The following information shall be sent to the Central System in order to be stored in accordance with Article 12 for the purpose of transmission under Article 9(5):

(a) when an applicant for international protection or another person as referred to in Article 18(1)(d) of Regulation (EU) No …/…* arrives in the Member State responsible following a transfer pursuant to a decision acceding to a take back request as referred to in Article 25 thereof, the Member State responsible shall update its data set recorded in conformity with Article 11 of this Regulation relating to the person concerned by adding his or her date of arrival;

(b) when an applicant for international protection arrives in the Member State responsible following a transfer pursuant to a decision acceding to a take charge request according to Article 22 of Regulation (EU) No …/…*, the Member State responsible shall send a data set recorded in conformity with Article 11 of this Regulation relating to the person concerned and shall include his or her date of arrival;


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(c) as soon as the Member State of origin establishes that the person concerned whose data was recorded in Eurodac in accordance with Article 11 of this Regulation has left the territory of the Member States, it shall update its data set recorded in conformity with Article 11 of this Regulation relating to the person concerned by adding the date when that person left the territory, in order to facilitate the application of Articles 19(2) and 20(5) of Regulation (EU) No …/…*;

(d) as soon as the Member State of origin ensures that the person concerned whose data was recorded in Eurodac in accordance with Article 11 of this Regulation has left the territory of the Member States in compliance with a return decision or removal order issued following the withdrawal or rejection of the application for international protection as provided for in Article 19(3) of Regulation (EU) No …/…*, it shall update its data set recorded in conformity with Article 11 of this Regulation relating to the person concerned by adding the date of his or her removal or when he or she left the territory;


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(e) the Member State which becomes responsible in accordance with Article 17(1) of Regulation (EU) No …/…*shall update its data set recorded in conformity with Article 11 of this Regulation relating to the applicant for international protection by adding the date when the decision to examine the application was taken.

Article 11

Recording of data

Only the following data shall be recorded in the Central System:

(a) fingerprint data;

(b) Member State of origin, place and date of the application for international protection;

in the cases referred to in Article 10(b), the date of application shall be the one entered

by the Member State who transferred the applicant;

(c) sex;

(d) reference number used by the Member State of origin;


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(e) date on which the fingerprints were taken;

(f) date on which the data were transmitted to the Central System;

(g) operator user ID;

(h) where applicable in accordance with Article 10(a) or (b), the date of the arrival of the

person concerned after a successful transfer;

(i) where applicable in accordance with Article 10(c), the date when the person concerned

left the territory of the Member States;

(j) where applicable in accordance with Article 10(d), the date when the person concerned

left or was removed from the territory of the Member States;

(k) where applicable in accordance with Article 10(e), the date when the decision to

examine the application was taken.

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Article 12

Data storage

1. Each set of data, as referred to in Article 11, shall be stored in the Central System for ten years from the date on which the fingerprints were taken.

2. Upon expiry of the period referred to in paragraph 1, the Central System shall automatically erase the data from the Central System.

Article 13

Advance data erasure

1. Data relating to a person who has acquired citizenship of any Member State before

expiry of the period referred to in Article 12(1) shall be erased from the Central

System in accordance with Article 27(4) as soon as the Member State of origin

becomes aware that the person concerned has acquired such citizenship.

2. The Central System shall, as soon as possible and no later than after 72 hours,

inform all Member States of origin of the erasure of data in accordance with paragraph

1 by another Member State of origin having produced a hit with data which they

transmitted relating to persons referred to in Article 9(1) or 14(1).

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CHAPTER III

THIRD-COUNTRY NATIONALS OR STATELESS PERSONS APPREHENDED IN

CONNECTION WITH THE IRREGULAR CROSSING OF AN EXTERNAL BORDER

Article 14

Collection and transmission of fingerprint data

1. Each Member State shall promptly take the fingerprints of all fingers of every third-

country national or stateless person of at least 14 years of age who is apprehended by

the competent control authorities in connection with the irregular crossing by land, sea

or air of the border of that Member State having come from a third country and who is

not turned back or who remains physically on the territory of the Member States and

who is not kept in custody, confinement or detention during the entirety of the period

between apprehension and removal on the basis of the decision to turn him or her

back.

2. The Member State concerned shall, as soon as possible and no later than 72 hours after

the date of apprehension, transmit to the Central System the following data in relation

to any third-country national or stateless person, as referred to in paragraph 1, who is

not turned back:

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(a) fingerprint data;

(b) Member State of origin, place and date of the apprehension;

(c) sex;

(d) reference number used by the Member State of origin;

(e) date on which the fingerprints were taken;

(f) date on which the data were transmitted to the Central System;

(g) operator user ID.

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3. By way of derogation from paragraph 2, the data specified in paragraph 2 relating to

persons apprehended as described in paragraph 1 who remain physically on the

territory of the Member States but are kept in custody, confinement or detention upon

their apprehension for a period exceeding 72 hours shall be transmitted before their

release from custody, confinement or detention.

4. Non-compliance with the 72-hour time-limit referred to in paragraph 2 of this Article

shall not relieve Member States of the obligation to take and transmit the fingerprints

to the Central System. Where the condition of the fingertips does not allow the taking

of fingerprints of a quality ensuring appropriate comparison under Article 25, the

Member State of origin shall retake the fingerprints of persons apprehended as

described in paragraph 1 of this Article, and resend them as soon as possible and no

later than 48 hours after they have been successfully retaken.

5. By way of derogation from paragraph 1, where it is not possible to take the fingerprints

of the apprehended person on account of measures taken to ensure his or her health or

the protection of public health, the Member State concerned shall take and send such

fingerprints as soon as possible and no later than 48 hours after those health

grounds no longer prevail.

In the event of serious technical problems, Member States may extend the 72-hour

time-limit in paragraph 2 by a maximum of a further 48 hours in order to carry out

their national continuity plans.

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Article 15

Recording of data

1. The data referred to in Article 14(2) shall be recorded in the Central System.

Without prejudice to Article 8, data transmitted to the Central System pursuant to Article 14(2) shall be recorded solely for the purposes of comparison with data on applicants for international protection subsequently transmitted to the Central System and for the purposes laid down in Article 1(2).

The Central System shall not compare data transmitted to it pursuant to Article 14(2) with any data previously recorded in the Central System, or with data subsequently transmitted to the Central System pursuant to Article 14(2).

2. As regards the comparison of data on applicants for international protection

subsequently transmitted to the Central System with the data referred to in paragraph

1, the procedures provided for in Article 9(3) and (5) and in Article 25(4) shall apply.

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Article 16

Storage of data

1. Each set of data relating to a third-country national or stateless person as referred to in

Article 14(1) shall be stored in the Central System for 18 months from the date on

which his or her fingerprints were taken. Upon expiry of that period, the Central

System shall automatically erase such data.

2. The data relating to a third-country national or stateless person as referred to in Article

14(1) shall be erased from the Central System in accordance with Article 28(3) as soon

as the Member State of origin becomes aware of one of the following circumstances

before the 18 month period referred to in paragraph 1 of this Article has expired:

(a) the third-country national or stateless person has been issued with a residence

document;

(b) the third-country national or stateless person has left the territory of the Member

States;

(c) the third-country national or stateless person has acquired the citizenship of any

Member State.

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inform all Member States of origin of the erasure of data for the reason specified in

paragraph 2(a) or (b) of this Article by another Member State of origin having

produced a hit with data which they transmitted relating to persons referred to in

Article 14(1).


inform all Member States of origin of the erasure of data for the reason specified in

paragraph 2(c) of this Article by another Member State of origin having produced a hit

with data which they transmitted relating to persons referred to in Article 9(1) or 14(1).

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CHAPTER IV

THIRD-COUNTRY NATIONALS OR STATELESS PERSONS FOUND ILLEGALLY

STAYING IN A MEMBER STATE

Article 17

Comparison of fingerprint data

1. With a view to checking whether a third-country national or a stateless person found

illegally staying within its territory has previously lodged an application for

international protection in another Member State, a Member State may transmit to the

Central System any fingerprint data relating to fingerprints which it may have taken of

any such third-country national or stateless person of at least 14 years of age together

with the reference number used by that Member State.

As a general rule there are grounds for checking whether the third-country national or stateless person has previously lodged an application for international protection in another Member State where:

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(a) the third-country national or stateless person declares that he or she has lodged

an application for international protection but without indicating the Member

State in which he or she lodged the application;

(b) the third-country national or stateless person does not request international

protection but objects to being returned to his or her country of origin by

claiming that he or she would be in danger, or

(c) the third-country national or stateless person otherwise seeks to prevent his or

her removal by refusing to cooperate in establishing his or her identity, in

particular by showing no, or false, identity papers.

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2. Where Member States take part in the procedure referred to in paragraph 1, they shall

transmit to the Central System the fingerprint data relating to all or at least the index

fingers and, if those are missing, the prints of all the other fingers, of third-country

nationals or stateless persons referred to in paragraph 1.

3. The fingerprint data of a third-country national or a stateless person as referred to in

paragraph 1 shall be transmitted to the Central System solely for the purpose of

comparison with the fingerprint data of applicants for international protection

transmitted by other Member States and already recorded in the Central System.

The fingerprint data of such a third-country national or a stateless person shall not be recorded in the Central System, nor shall they be compared with the data transmitted to the Central System pursuant to Article 14(2).

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4. Once the results of the comparison of fingerprint data have been transmitted to the Member State of origin, the record of the search shall be kept by the Central System only for the purposes of Article 28. Other than for those purposes, no other record of the search may be stored either by Member States or by the Central System.

5. As regards the comparison of fingerprint data transmitted under this Article with the

fingerprint data of applicants for international protection transmitted by other Member

States which have already been stored in the Central System, the procedures provided

for in Article 9(3) and (5) and in Article 25(4) shall apply.

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CHAPTER V

BENEFICIARIES OF INTERNATIONAL PROTECTION

Article 18

Marking of data

1. For the purposes laid down in Article 1(1), the Member State of origin which granted

international protection to an applicant for international protection whose data were

previously recorded in the Central System pursuant to Article 11 shall mark the

relevant data in conformity with the requirements for electronic communication with

the Central System established by the Agency. That mark shall be stored in the Central

System in accordance with Article 12 for the purpose of transmission under Article

9(5). The Central System shall inform all Member States of origin of the marking of

data by another Member State of origin having produced a hit with data which they

transmitted relating to persons referred to in Article 9(1) or 14(1). Those Member

States of origin shall also mark the corresponding data sets.

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2. The data of beneficiaries of international protection stored in the Central System and marked pursuant to paragraph 1 of this Article shall be made available for comparison for the purposes laid down in Article 1(2) for a period of three years after the date on which the data subject was granted international protection.

Where there is a hit, the Central System shall transmit the data referred to in Article 11(a) to (k) for all the data sets corresponding to the hit. The Central System shall not transmit the mark referred to in paragraph 1 of this Article. Upon the expiry of the period of three years, the Central System shall automatically block such data from being transmitted in the event of a request for comparison for the purposes laid down in Article 1(2), whilst leaving those data available for comparison for the purposes laid down in Article 1(1) until the point of their erasure. Blocked data shall not be transmitted, and the Central System shall return a negative result to the requesting Member State in the event of a hit.

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3. The Member State of origin shall unmark or unblock data concerning a third-country national or stateless person whose data were previously marked or blocked in accordance with paragraphs 1 or 2 of this Article if his or her status is revoked or ended or the renewal of his or her status is refused under Articles 14 or 19 of ▌Directive 2011/95/EU.

CHAPTER VI

PROCEDURE FOR COMPARISON AND DATA TRANSMISSION FOR LAW

ENFORCEMENT PURPOSES

Article 19

Procedure for comparison of fingerprint data with Eurodac data

1. For the purposes laid down in Article 1(2), the designated authorities referred to in

Articles 5(1) and 7(2) may submit a reasoned electronic request as provided for in

Article 20(1) together with the reference number used by them, to the verifying

authority for the transmission for comparison of fingerprint data to the Central System

via the National Access Point. Upon receipt of such a request, the verifying authority

shall verify whether all the conditions for requesting a comparison referred to in

Articles 20 or 21, as appropriate, are fulfilled.

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2. Where all the conditions for requesting a comparison referred to in Articles 20 or 21

are fulfilled, the verifying authority shall transmit the request for comparison to the

National Access Point which will process it to the Central System in accordance with

Article 9(3) and (5) for the purpose of comparison with ▌the ▌data transmitted to the

Central System pursuant to Articles 9(1) and 14(2).

3. In exceptional cases of urgency where there is a need to prevent an imminent danger

associated with a terrorist offence or other serious criminal offence, the verifying

authority may transmit the fingerprint data to the National Access Point for

comparison immediately upon receipt of a request by a designated authority and only

verify ex-post whether all the conditions for requesting a comparison referred to in

Article 20 or Article 21 are fulfilled, including whether an exceptional case of urgency

actually existed. The ex-post verification shall take place without undue delay after the

processing of the request.

4. Where an ex-post verification determines that the access to Eurodac data was not

justified, all the authorities that have accessed such data shall erase the information

communicated from Eurodac and shall inform the verifying authority of such erasure.

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Article 20

Conditions for access to Eurodac by designated authorities

1. For the purposes laid down in Article 1(2), designated authorities may submit a

reasoned electronic request for the comparison of fingerprint data with the data stored

in the Central System within the scope of their powers only if comparisons with the

following databases did not lead to the establishment of the identity of the data

subject:

– ▌national fingerprint databases;

– ▌the automated fingerprinting identification systems of all other Member States

under Decision 2008/615/JHA where comparisons are technically available,

unless there are reasonable grounds to believe that a comparison with such

systems would not lead to the establishment of the identity of the data subject.

Such reasonable grounds shall be included in the reasoned electronic request

for comparison with Eurodac data sent by the designated authority to the

verifying authority; and

– the Visa Information System provided that the conditions for such a comparison laid down in Decision 2008/633/JHA are met;

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and where the following cumulative conditions are met:

(a) the comparison is necessary for the purpose of the prevention, detection or

investigation of terrorist offences or of other serious criminal offences, which

means that there is an overriding public security concern which makes the

searching of the database proportionate;

(b) the comparison is necessary in a specific case (i.e. systematic comparisons shall

not be carried out); and

(c) there are reasonable grounds to consider that the comparison will substantially

contribute to the prevention, detection or investigation of any of the criminal

offences in question. Such reasonable grounds exist in particular where there

is a substantiated suspicion that the suspect, perpetrator or victim of a terrorist

offence or other serious criminal offence falls in a category covered by this

Regulation.

2. Requests for comparison with Eurodac data shall be limited to searching with

fingerprint data.

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Article 21

Conditions for access to Eurodac by Europol

1. For the purposes laid down in Article 1(2), Europol's designated authority may

submit a reasoned electronic request for the comparison of fingerprint data with the

data stored in the Central System within the limits of Europol's mandate and where

necessary for the performance of Europol's tasks only if comparisons with fingerprint

data stored in any information processing systems that are technically and legally

accessible by Europol did not lead to the establishment of the identity of the data

subject and where the following cumulative conditions are met:

(a) the comparison is necessary to support and strengthen action by Member

States in preventing, detecting or investigating terrorist offences or other

serious criminal offences falling under Europol's mandate, which means that

there is an overriding public security concern which makes the searching of

the database proportionate;

(b) the comparison is necessary in a specific case (i.e. systematic comparisons

shall not be carried out); and

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(c) there are reasonable grounds to consider that the comparison will substantially

contribute to the prevention, detection or investigation of any of the criminal

offences in question. Such reasonable grounds exist in particular where there

is a substantiated suspicion that the suspect, perpetrator or victim of a terrorist

offence or other serious criminal offence falls in a category covered by this

Regulation.

2. Requests for comparison with Eurodac data shall be limited to comparisons of

fingerprint data.

3. Processing of information obtained by Europol from comparison with Eurodac data

shall be subject to the authorisation of the Member State of origin. Such authorisation

shall be obtained via the Europol national unit of that Member State.

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Article 22

Communication between the designated authorities, the verifying authorities and the National

Access Points

1. Without prejudice to Article 26, all communication between the designated

authorities, the verifying authorities and the National Access Points shall be secure

and take place electronically.

2. For the purposes laid down in Article 1(2), fingerprints shall be digitally processed

by the Member States and transmitted in the data format referred to in Annex I, in

order to ensure that the comparison can be carried out by means of the computerised

fingerprint recognition system.

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CHAPTER VII

DATA PROCESSING, DATA PROTECTION AND LIABILITY

Article 23

Responsibility for data processing

1. The Member State of origin shall be responsible for ensuring that:

(a) fingerprints are taken lawfully;

(b) fingerprint data and the other data referred to in Article 11, Article 14(2) and

Article 17(2) are lawfully transmitted to the Central System;

(c) data are accurate and up-to-date when they are transmitted to the Central System;

(d) without prejudice to the responsibilities of the Agency, data in the Central

System are lawfully recorded, stored, corrected and erased;

(e) the results of fingerprint data comparisons transmitted by the Central System are

lawfully processed.

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2. In accordance with Article 34, the Member State of origin shall ensure the security of

the data referred to in paragraph 1 before and during transmission to the Central

System as well as the security of the data it receives from the Central System.

3. The Member State of origin shall be responsible for the final identification of the data

pursuant to Article 25(4).

4. The Agency shall ensure that the Central System is operated in accordance with the

provisions of this Regulation. In particular, the Agency shall:

(a) adopt measures ensuring that persons working with the Central System process

the data recorded therein only in accordance with the purposes of Eurodac as laid

down in Article 1;

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(b) take the necessary measures to ensure the security of the Central System in

accordance with Article 34;

(c) ensure that only persons authorised to work with the Central System have access

thereto, without prejudice to the competences of the European Data Protection

Supervisor.

The Agency shall inform the European Parliament and the Council as well as the European Data Protection Supervisor of the measures it takes pursuant to the first subparagraph.

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Article 24

Transmission

1. Fingerprints shall be digitally processed and transmitted in the data format referred to

in Annex I. As far as necessary for the efficient operation of the Central System, the

Agency shall establish the technical requirements for transmission of the data format

by Member States to the Central System and vice versa. The Agency shall ensure that

the fingerprint data transmitted by the Member States can be compared by the

computerised fingerprint recognition system.

2. Member States shall transmit the data referred to in Article 11, Article 14(2) and

Article 17(2) electronically. The data referred to in Article 11 and Article 14(2) shall

be automatically recorded in the Central System. As far as necessary for the efficient

operation of the Central System, the Agency shall establish the technical requirements

to ensure that data can be properly electronically transmitted from the Member States

to the Central System and vice versa.

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3. The reference number referred to in Articles 11(d), 14(2)(d), 17(1) and 19(1) shall

make it possible to relate data unambiguously to one particular person and to the

Member State which is transmitting the data. In addition, it shall make it possible to

tell whether such data relate to a person referred to in Article 9(1), 14(1) or 17(1).

4. The reference number shall begin with the identification letter or letters by which, in

accordance with the norm referred to in Annex I, the Member State transmitting the

data is identified. The identification letter or letters shall be followed by the

identification of the category of person or request. "1" refers to data relating to persons

referred to in Article 9(1), "2" to persons referred to in Article 14(1), "3" to persons

referred to in Article 17(1), "4" to requests referred to in Article 20, "5" to requests

referred to in Article 21 and "9" to requests referred to in Article 29.

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5. The Agency shall establish the technical procedures necessary for Member States to

ensure receipt of unambiguous data by the Central System.

6 The Central System shall confirm receipt of the transmitted data as soon as possible.

To that end, the Agency shall establish the necessary technical requirements to ensure

that Member States receive the confirmation receipt if requested.

Article 25

Carrying out comparisons and transmitting results

1. Member States shall ensure the transmission of fingerprint data of an appropriate

quality for the purpose of comparison by means of the computerised fingerprint

recognition system. As far as necessary to ensure that the results of the comparison by

the Central System reach a very high level of accuracy, the Agency shall define the

appropriate quality of transmitted fingerprint data. The Central System shall, as soon

as possible, check the quality of the fingerprint data transmitted. If fingerprint data do

not lend themselves to comparison using the computerised fingerprint recognition

system, the Central System shall inform the Member State concerned. That Member

State shall then transmit fingerprint data of the appropriate quality using the same

reference number as the previous set of fingerprint data.

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2. The Central System shall carry out comparisons in the order of arrival of requests.

Each request shall be dealt with within 24 hours. A Member State may for reasons

connected with national law require particularly urgent comparisons to be carried out

within one hour. Where such time-limits cannot be respected owing to circumstances

which are outside the Agency's responsibility, the Central System shall process the

request as a matter of priority as soon as those circumstances no longer prevail. In such

cases, as far as is necessary for the efficient operation of the Central System, the

Agency shall establish criteria to ensure the priority handling of requests.

3. As far as necessary for the efficient operation of the Central System, the Agency shall

establish the operational procedures for the processing of the data received and for

transmitting the result of the comparison.

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4. The result of the comparison shall be immediately checked in the receiving Member

State ▌by a fingerprint expert as defined in accordance with its national rules,

specifically trained in the types of fingerprint comparisons provided for in this

Regulation. For the purposes laid down in Article 1(1) of this Regulation, final

identification shall be made by the Member State of origin in cooperation with the

other Member States concerned, pursuant to Article 34 of Regulation (EU) No …/…*.

Information received from the Central System relating to other data found to be unreliable shall be erased as soon as the unreliability of the data is established.

5. Where final identification in accordance with paragraph 4 reveals that the result of the

comparison received from the Central System does not correspond to the fingerprint

data sent for comparison, Member States shall immediately erase the result of the

comparison and communicate this fact as soon as possible and no later than after

three working days to the Commission and to the Agency.


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Article 26

Communication between Member States and the Central System

Data transmitted from the Member States to the Central System and vice versa shall use the Communication Infrastructure. As far as is necessary for the efficient operation of the Central System, the Agency shall establish the technical procedures necessary for the use of the Communication Infrastructure.

Article 27

Access to, and correction or erasure of, data recorded in Eurodac

1. The Member State of origin shall have access to data which it has transmitted and

which are recorded in the Central System in accordance with this Regulation.

No Member State may conduct searches of the data transmitted by another Member State, nor may it receive such data apart from data resulting from the comparison referred to in Article 9(5).

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2. The authorities of Member States which, pursuant to paragraph 1 of this Article, have

access to data recorded in the Central System shall be those designated by each

Member State for the purposes laid down in Article 1(1). That designation shall

specify the exact unit responsible for carrying out tasks related to the application of

this Regulation. Each Member State shall without delay communicate to the

Commission and the Agency a list of those units and any amendments thereto. The

Agency shall publish the consolidated list in the Official Journal of the European

Union. Where there are amendments thereto, the Agency shall publish once a year an

updated consolidated list online.

3. Only the Member State of origin shall have the right to amend the data which it has

transmitted to the Central System by correcting or supplementing such data, or to erase

them, without prejudice to erasure carried out in pursuance of Article 12(2) or 16(1).

144

4. If a Member State or the Agency has evidence to suggest that data recorded in the

Central System are factually inaccurate, it shall advise the Member State of origin as

soon as possible.

If a Member State has evidence to suggest that data were recorded in the Central System in breach of this Regulation, it shall advise the Agency, the Commission and the Member State of origin as soon as possible. The Member State of origin shall check the data concerned and, if necessary, amend or erase them without delay.

5. The Agency shall not transfer or make available to the authorities of any third country

data recorded in the Central System ▌. This prohibition shall not apply to transfers of

such data to third countries to which Regulation (EU) No …/…* applies.


145

Article 28

Keeping of records

1. The Agency shall keep records of all data processing operations within the Central

System. These records shall show the purpose, date and time of access, the data

transmitted, the data used for interrogation and the name of both the unit entering or

retrieving the data and the persons responsible.

2. The records referred to in paragraph 1 of this Article may be used only for the data

protection monitoring of the admissibility of data processing as well as to ensure data

security pursuant to Article 34. The records must be protected by appropriate measures

against unauthorised access and erased after a period of one year after the storage

period referred to in Article 12(1) and in Article 16(1) has expired, unless they are

required for monitoring procedures which have already begun.

3. For the purposes laid down in Article 1(1), each Member State shall take the

necessary measures in order to achieve the objectives set out in paragraphs 1 and 2 of

this Article in relation to its national system. In addition, each Member State shall keep

records of the staff duly authorised to enter or retrieve the data.

146

Article 29

Rights of the data subject

1. A person covered by Article 9(1), Article 14(1) or Article 17(1) shall be informed by

the Member State of origin in writing, and where necessary, orally, in a language that

he or she understands or is reasonably supposed to understand, of the following:

(a) the identity of the controller within the meaning of Article 2(d) of Directive

95/46/EC and of his or her representative, if any;

(b) the purpose for which his or her data will be processed in Eurodac, including a

description of the aims of Regulation (EU) No …/…*, in accordance with Article

4 thereof and an explanation in intelligible form, using clear and plain

language, of the fact that Eurodac may be accessed by the Member States and

Europol for law enforcement purposes;

(c) the recipients of the data;

(d) in relation to a person covered by Article 9(1) or 14(1), the obligation to have his

or her fingerprints taken;


147

(e) the ▌right of access to data relating to him or her, and the right to request that

inaccurate data relating to him or her be corrected or that unlawfully processed

data relating to him or her be erased, as well as the right to receive information

on the procedures for exercising those rights including the contact details of the

controller and the national supervisory authorities referred to in Article 30(1).

2. In relation to a person covered by Article 9(1) or 14(1), the information referred to in paragraph 1 of this Article shall be provided at the time when his or her fingerprints are taken.

In relation to a person covered by Article 17(1), the information referred to in paragraph 1 of this Article shall be provided no later than at the time when the data relating to that person are transmitted to the Central System. That obligation shall not apply where the provision of such information proves impossible or would involve a disproportionate effort.

Where a person covered by Article 9(1), Article 14(1) and Article 17(1) is a minor, Member States shall provide the information in an age-appropriate manner.

148

3. A common leaflet, containing at least the information referred to in paragraph 1 of this Article and the information referred to in Article 4(1) of ▌Regulation (EU) No …/…*

shall be drawn up in accordance with the procedure referred to in Article 44(2) of that Regulation.

The leaflet shall be clear and simple, drafted in a language that the person concerned understands or is reasonably supposed to understand.


149

The leaflet shall be established in such a manner as to enable Member States to complete it with additional Member State-specific information. This Member State-specific information shall include at least the rights of the data subject, the possibility of assistance by the national supervisory authorities, as well as the contact details of the office of the controller and the national supervisory authorities.

4. For the purposes laid down in Article 1(1) of this Regulation, in each Member State

any data subject may, in accordance with the laws, regulations and procedures of that

State, exercise the rights provided for in Article 12 of Directive 95/46/EC.

150

Without prejudice to the obligation to provide other information in accordance with Article 12(a) of Directive 95/46/EC, the data subject shall have the right to obtain communication of the data relating to him or her recorded in the Central System and of the Member State which transmitted them to the Central System. Such access to data may be granted only by a Member State.

5. For the purposes laid down in Article 1(1), in each Member State, any person may

request that data which are factually inaccurate be corrected or that data recorded

unlawfully be erased. The correction and erasure shall be carried out without excessive

delay by the Member State which transmitted the data, in accordance with its laws,

regulations and procedures.

151

6. For the purposes laid down in Article 1(1), if the rights of correction and erasure are

exercised in a Member State other than that, or those, which transmitted the data, the

authorities of that Member State shall contact the authorities of the Member State or

States which transmitted the data so that the latter may check the accuracy of the data

and the lawfulness of their transmission and recording in the Central System.

7. For the purposes laid down in Article 1(1), if it emerges that data recorded in the

Central System are factually inaccurate or have been recorded unlawfully, the Member

State which transmitted them shall correct or erase the data in accordance with Article

27(3). That Member State shall confirm in writing to the data subject without

excessive delay that it has taken action to correct or erase data relating to him or her.

152

8. For the purposes laid down in Article 1(1), if the Member State which transmitted the

data does not agree that data recorded in the Central System are factually inaccurate or

have been recorded unlawfully, it shall explain in writing to the data subject without

excessive delay why it is not prepared to correct or erase the data.

That Member State shall also provide the data subject with information explaining the steps which he or she can take if he or she does not accept the explanation provided. This shall include information on how to bring an action or, if appropriate, a complaint before the competent authorities or courts of that Member State and any financial or other assistance that is available in accordance with the laws, regulations and procedures of that Member State.

9. Any request under paragraphs 4 and 5 shall contain all the necessary particulars to

identify the data subject, including fingerprints. Such data shall be used exclusively to

permit the exercise of the rights referred to in paragraphs 4 and 5 and shall be erased

immediately afterwards.

153

10. The competent authorities of the Member States shall cooperate actively to enforce

promptly the rights laid down in paragraphs 5, 6 and 7.

11. Whenever a person requests data relating to him or her in accordance with paragraph 4,

the competent authority shall keep a record in the form of a written document that such

a request was made and how it was addressed, and shall make that document available

to the national supervisory authorities without delay ▌.

154

12. For the purposes laid down in Article 1(1) of this Regulation, in each Member State,

the national supervisory authority shall, on the basis of his or her request, assist the

data subject in accordance with Article 28(4) of Directive 95/46/EC in exercising his

or her rights.

13. For the purposes laid down in Article 1(1) of this Regulation, the national

supervisory authority of the Member State which transmitted the data and the national

supervisory authority of the Member State in which the data subject is present shall

assist and, where requested, advise him or her in exercising his or her right to correct

or erase data. Both national supervisory authorities shall cooperate to this end.

Requests for such assistance may be made to the national supervisory authority of the

Member State in which the data subject is present, which shall transmit the requests to

the authority of the Member State which transmitted the data.

155

14. In each Member State any person may, in accordance with the laws, regulations and

procedures of that State, bring an action or, if appropriate, a complaint before the

competent authorities or courts of the State if he or she is refused the right of access

provided for in paragraph 4.

15. Any person may, in accordance with the laws, regulations and procedures of the

Member State which transmitted the data, bring an action or, if appropriate, a

complaint before the competent authorities or courts of that State concerning the data

relating to him or her recorded in the Central System, in order to exercise his or her

rights under paragraph 5. The obligation of the national supervisory authorities to

assist and, where requested, advise the data subject in accordance with paragraph 13

shall subsist throughout the proceedings.

156

Article 30

Supervision by the national supervisory authorities

1. For the purposes laid down in Article 1(1) of this Regulation, each Member State

shall provide that the national supervisory authority or authorities designated pursuant

to Article 28(1) of Directive 95/46/EC shall monitor independently, in accordance with

its respective national law, the lawfulness of the processing, in accordance with this

Regulation, of personal data by the Member State in question, including their

transmission to the Central System.

2. Each Member State shall ensure that its national supervisory authority has access to

advice from persons with sufficient knowledge of fingerprint data.

157

Article 31

Supervision by the European Data Protection Supervisor

1. The European Data Protection Supervisor shall ensure that all the personal data

processing activities concerning Eurodac, in particular by the Agency, are carried out

in accordance with Regulation (EC) No 45/2001 and with this Regulation.

2. The European Data Protection Supervisor shall ensure that an audit of the Agency's

personal data processing activities is carried out in accordance with international

auditing standards at least every three years. A report of such audit shall be sent to the

European Parliament, the Council, the Commission, the Agency, and the national

supervisory authorities. The Agency shall be given an opportunity to make comments

before the report is adopted.

158

Article 32

Cooperation between national supervisory authorities and the European Data Protection

Supervisor

1. The national supervisory authorities and the European Data Protection Supervisor

shall, each acting within the scope of their respective competences, cooperate actively

in the framework of their responsibilities and shall ensure coordinated supervision of

Eurodac.

2. Member States shall ensure that every year an audit of the processing of personal

data for the purposes laid down in Article 1(2) is carried out by an independent body,

in accordance with Article 33(2), including an analysis of a sample of reasoned

electronic requests.

The audit shall be attached to the annual report of the Member States referred to in Article 40(7).

159

3. The national supervisory authorities and the European Data Protection Supervisor

shall, each acting within the scope of their respective competences, exchange relevant

information, assist each other in carrying out audits and inspections, examine

difficulties of interpretation or application of this Regulation, study problems with the

exercise of independent supervision or in the exercise of the rights of data subjects,

draw up harmonised proposals for joint solutions to any problems and promote

awareness of data protection rights, as necessary.

4. For the purpose laid down in paragraph 3, the national supervisory authorities and the

European Data Protection Supervisor shall meet at least twice a year. The costs and

servicing of these meetings shall be for the account of the European Data Protection

Supervisor. Rules of procedure shall be adopted at the first meeting. Further working

methods shall be developed jointly as necessary. A joint report of activities shall be

sent to the European Parliament, the Council, the Commission and the Agency every

two years.

160

Article 33

Protection of personal data for law enforcement purposes

1. Each Member State shall provide that the provisions adopted under national law

implementing Framework Decision 2008/977/JHA are also applicable to the

processing of ▌personal data by its national authorities for the purposes laid down in

Article 1(2) of this Regulation.

2. The monitoring of the lawfulness of the processing of personal data under this

Regulation by the Member States for the purposes laid down in Article 1(2) of this

Regulation, including their transmission to and from Eurodac, shall be carried out

by the national supervisory authorities designated pursuant to Framework Decision

2008/977/JHA.

161

3. The processing of personal data by Europol pursuant to this Regulation shall be in

accordance with Decision 2009/371/JHA and shall be supervised by an independent

external data protection supervisor. Articles 30, 31 and 32 of that Decision shall be

applicable to the processing of personal data by Europol pursuant to this

Regulation. The independent external data protection supervisor shall ensure that

the rights of the individual are not violated.

4. Personal data obtained pursuant to this Regulation from Eurodac for the purposes laid

down in Article 1(2) shall only be processed for the purposes of the prevention,

detection or investigation of the specific case for which the data have been requested

by a Member State or by Europol.

162

5. The Central System, the designated and verifying authorities and Europol shall

keep records of the searches for the purpose of permitting the national data

protection authorities and the European Data Protection Supervisor to monitor the

compliance of data processing with Union data protection rules, including for the

purpose of maintaining records in order to prepare the annual reports referred to in

Article 40(7). Other than for such purposes, personal data, as well as the records of

the searches, shall be erased in all national and Europol files after a period of one

month, unless the data are required for the purposes of the specific ongoing criminal

investigation for which they were requested by a Member State or by Europol.

▌

163

Article 34

Data security

1. The Member State of origin shall ensure the security of the data before and during

transmission to the Central System.

2. Each Member State shall, in relation to all data processed by its competent authorities

pursuant to this Regulation, adopt the necessary measures, including a security plan,

in order to:

(a) physically protect the data, including by making contingency plans for the

protection of critical infrastructure;

(b) deny unauthorised persons access to national installations in which the Member

State carries out operations in accordance with the purposes of Eurodac (checks

at entrance to the installation);

164

(c) prevent the unauthorised reading, copying, modification or removal of data

media (data media control);

(d) prevent the unauthorised input of data and the unauthorised inspection,

modification or erasure of stored personal data (storage control);

(e) prevent the unauthorised processing of data in Eurodac and any unauthorised

modification or erasure of data processed in Eurodac (control of data entry);

(f) ensure that persons authorised to access Eurodac have access only to the data

covered by their access authorisation, by means of individual and unique user

IDs and confidential access modes only (data access control);

165

(g) ensure that all authorities with a right of access to Eurodac create profiles

describing the functions and responsibilities of persons who are authorised to

access, enter, update, erase and search the data, and make those profiles and any

other relevant information which those authorities may require for supervisory

purposes available to the national supervisory authorities referred to in Article

28 of Directive 95/46/EC and in Article 25 of Framework Decision

2008/977/JHA without delay at their request (personnel profiles);

(h) ensure that it is possible to verify and establish to which bodies personal data

may be transmitted using data communication equipment (communication

control);

(i) ensure that it is possible to verify and establish what data have been processed in

Eurodac, when, by whom and for what purpose (control of data recording);

166

(j) prevent the unauthorised reading, copying, modification or erasure of personal

data during the transmission of personal data to or from Eurodac or during the

transport of data media, in particular by means of appropriate encryption

techniques (transport control);

(k) monitor the effectiveness of the security measures referred to in this paragraph

and take the necessary organisational measures related to internal monitoring in

order to ensure compliance with this Regulation (self-auditing) and to

automatically detect within 24 hours any relevant events arising from the

application of measures listed in points (b) to (j) that might indicate the

occurrence of a security incident.

3. Member States shall inform the Agency of security incidents detected on their

systems. The Agency shall inform the Member States, Europol and the European

Data Protection Supervisor in case of security incidents. The Member States

concerned, the Agency and Europol shall collaborate during a security incident.

4. The Agency shall take the necessary measures in order to achieve the objectives set out

in paragraph 2 as regards the operation of Eurodac, including the adoption of a security

plan.

167

Article 35

Prohibition of transfers of data to third countries, international organisations or private

entities

1. Personal data obtained by a Member State or Europol pursuant to this Regulation from

the Central System shall not be transferred or made available to any third country,

international organisation or private entity established in or outside the Union. This

prohibition shall also apply if those data are further processed at national level or

between Member States within the meaning of Article 2(b) of Framework Decision

2008/977/JHA.

2. Personal data which originated in a Member State and are exchanged between

Member States following a hit obtained for the purposes laid down in Article 1(2)

shall not be transferred to third countries if there is a serious risk that as a result of

such transfer the data subject may be subjected to torture, inhuman and degrading

treatment or punishment or any other violation of his or her fundamental rights.

3. The prohibitions referred to in paragraphs 1 and 2 shall be without prejudice to the

right of Member States to transfer such data to third countries to which Regulation

(EU) No …/…* applies.


168

Article 36

Logging and documentation

1. Each Member State and Europol shall ensure that all data processing operations

resulting from requests for comparison with Eurodac data for the purposes laid down

in Article 1(2) are logged or documented for the purposes of checking the

admissibility of the request, monitoring the lawfulness of the data processing and data

integrity and security, and self-monitoring.

2. The log or documentation shall show in all cases:

(a) the exact purpose of the request for comparison, including the concerned form of

a terrorist offence or other serious criminal offence and, for Europol, the exact

purpose of the request for comparison;

(b) the reasonable grounds given not to conduct comparisons with other Member

States under Decision 2008/615/JHA, in accordance with Article 20(1) of this

Regulation;

(c) the national file reference;

169

(d) the date and exact time of the request for comparison by the National Access

Point to the Central System;

(e) the name of the authority having requested access for comparison, and the person

responsible who made the request and processed the data;

(f) where applicable, the use of the urgent procedure referred to in Article 19(3) and

the decision taken with regard to the ex-post verification;

(g) the data used for comparison;

(h) in accordance with national rules or with Decision 2009/371/JHA, the

identifying mark of the official who carried out the search and of the official who

ordered the search or supply.

3. Logs and documentation shall be used only for monitoring the lawfulness of data

processing and for ensuring data integrity and security. Only logs containing non-

personal data may be used for the monitoring and evaluation referred to in Article 40.

The competent national supervisory authorities responsible for checking the

admissibility of the request and monitoring the lawfulness of the data processing and

data integrity and security shall have access to these logs at their request for the

purpose of fulfilling their duties.

170

Article 37

Liability

1. Any person who, or Member State which, has suffered damage as a result of an

unlawful processing operation or any act incompatible with this Regulation shall be

entitled to receive compensation from the Member State responsible for the damage

suffered. That State shall be exempted from its liability, in whole or in part, if it proves

that it is not responsible for the event giving rise to the damage.

2. If the failure of a Member State to comply with its obligations under this Regulation

causes damage to the Central System, that Member State shall be liable for such

damage, unless and insofar as the Agency or another Member State failed to take

reasonable steps to prevent the damage from occurring or to minimise its impact.

3. Claims for compensation against a Member State for the damage referred to in

paragraphs 1 and 2 shall be governed by the provisions of national law of the

defendant Member State.

171

CHAPTER VIII

AMENDMENTS TO REGULATION (EU) No 1077/2011

Article 38Amendments to Regulation (EU) No 1077/2011

Regulation (EU) No 1077/2011 is amended as follows:

(1) Article 5 is replaced by the following:

"Article 5

Tasks relating to Eurodac

In relation to Eurodac, the Agency shall perform:

(a) the tasks conferred on it by Regulation (EU) No …./…. of the European

Parliament and of the Council of …on the establishment of 'Eurodac' for the

comparison of fingerprints for the effective application of Regulation (EU) No

…/…establishing the criteria and mechanisms for determining the Member State

responsible for examining an application for international protection lodged in

one of the Member States by a third-country national or a stateless person), and

on requests for the comparison with Eurodac data by Member States' law

enforcement authorities and Europol for law enforcement purposes*+; and

(b) tasks relating to training on the technical use of Eurodac.

________________________

* OJ L ….";

+ OJ: Please insert the number, date and publication reference of this Regulation.

172

(2) Article 12(1) is amended as follows:

(a) points (u) and (v) are replaced by the following:

173

"(u) adopt the annual report on the activities of the Central System of Eurodac

pursuant to Article 40(1) of Regulation (EU) No …./…. +;

(v) make comments on the European Data Protection Supervisor's reports on

the audits pursuant to Article 45(2) of Regulation (EC) No 1987/2006,

Article 42(2) of Regulation (EC) No 767/2008 and Article 31(2) of

Regulation (EU) No …./….+ and ensure appropriate follow-up of those

audits;";

+

174

(b) point (x) is replaced by the following:

"(x) compile statistics on the work of the Central System of Eurodac pursuant

to Article 8(2) of Regulation (EU) No …./…. +;";

(c) point (z) is replaced by the following:

"(z) ensure annual publication of the list of units pursuant to Article 27(2) of

Regulation (EU) No …/…. +;";

+ OJ: Please insert the number of this Regulation.

175

(3) Article 15(4) is replaced by the following:

"4. Europol and Eurojust may attend the meetings of the Management Board as

observers when a question concerning SIS II, in relation to the application of

Decision 2007/533/JHA, is on the agenda. Europol may also attend the meetings

of the Management Board as observer when a question concerning VIS, in

relation to the application of Decision 2008/633/JHA, or a question concerning

Eurodac, in relation to the application of Regulation (EU) No …/….+, is on the

agenda.";


176

(4) Article 17 is amended as follows:

(a) in paragraph 5, point (g) is replaced by the following:

"(g) without prejudice to Article 17 of the Staff Regulations, establish

confidentiality requirements in order to comply with Article 17 of

Regulation (EC) No 1987/2006, Article 17 of Decision 2007/533/JHA,

Article 26(9) of Regulation (EC) No 767/2008 and Article 4(4) of

Regulation (EU) No …/….+;";


177

(b) in paragraph 6, point (i) is replaced by the following:

"(i) reports on the technical functioning of each large-scale IT system referred

to in Article 12(1)(t) and the annual report on the activities of the Central

System of Eurodac referred to in Article 12(1)(u), on the basis of the

results of monitoring and evaluation.";


"3. Europol and Eurojust may each appoint a representative to the SIS II Advisory Group. Europol may also appoint a representative to the VIS and Eurodac Advisory Groups.".

178

CHAPTER IX

FINAL PROVISIONS

Article 39

Costs

1. The costs incurred in connection with the establishment and operation of the Central

System and the Communication Infrastructure shall be borne by the general budget of

the European Union.

2. The costs incurred by national access points and the costs for connection to the Central

System shall be borne by each Member State.

3. Each Member State and Europol shall set up and maintain at their expense the

technical infrastructure necessary to implement this Regulation, and shall be

responsible for bearing its costs resulting from requests for comparison with Eurodac

data for the purposes laid down in Article 1(2)

179

Article 40

Annual report: monitoring and evaluation

1. The Agency shall submit to the European Parliament, ▌the Council, the Commission

and the European Data Protection Supervisor an annual report on the activities of the

Central System, including on its technical functioning and security. The annual

report shall include information on the management and performance of Eurodac

against pre-defined quantitative indicators for the objectives referred to in paragraph 2.

2. The Agency shall ensure that procedures are in place to monitor the functioning of the

Central System against objectives relating to output, cost-effectiveness and quality of

service.

3. For the purposes of technical maintenance, reporting and statistics, the Agency shall

have access to the necessary information relating to the processing operations

performed in the Central System.

▌

180

4. By...* and every four years thereafter, the Commission shall produce an overall

evaluation of Eurodac, examining the results achieved against objectives and the

impact on fundamental rights, including whether law enforcement access has led to

indirect discrimination against persons covered by this Regulation, and assessing the

continuing validity of the underlying rationale and any implications for future

operations, and shall make any necessary recommendations. The Commission shall

transmit the evaluation to the European Parliament and the Council.

5. Member States shall provide the Agency and the Commission with the information

necessary to draft the annual report referred to in paragraph 1.

6. The Agency, Member States and Europol shall provide the Commission with the

information necessary to draft the overall evaluation provided for in paragraph 4. This

information shall not jeopardise working methods or include information that reveals

sources, staff members or investigations of the designated authorities.

▌

* OJ: Please insert the date: five years after the date of entry into force of this Regulation.

181

7. While respecting the provisions of national law on the publication of sensitive

information, each Member State and Europol shall prepare annual reports on the

effectiveness of the comparison of fingerprint data with Eurodac data for law

enforcement purposes, containing information and statistics on:

- the exact purpose of the comparison, including the type of terrorist offence or

serious criminal offence,

- grounds given for reasonable suspicion,

- the reasonable grounds given not to conduct comparison with other Member

States under Decision 2008/615/JHA, in accordance with Article 20(1) of this

Regulation,

- number of requests for comparison,

- the number and type of cases which have ended in successful identifications, and

- the need and use made of the exceptional case of urgency, including those cases

where that urgency was not accepted by the ex post verification carried out by

the verifying authority.

Member States' and Europol annual reports shall be transmitted to the Commission by

30 June of the subsequent year.

8. On the basis of Member States and Europol annual reports provided for in

paragraph 7 and in addition to the overall evaluation provided for in paragraph 4,

the Commission shall compile an annual report on law enforcement access to

Eurodac and shall transmit it to the European Parliament, the Council and the

European Data Protection Supervisor.

182

Article 41

Penalties

Member States shall take the necessary measures to ensure that any processing of data entered

in the Central System contrary to the purposes of Eurodac as laid down in Article 1 is

punishable by penalties, including administrative and/or criminal penalties in accordance with

national law, that are effective, proportionate and dissuasive.

Article 42

Territorial scope

The provisions of this Regulation shall not be applicable to any territory to which Regulation

(EU) No …/…* does not apply.


183

Article 43

Notification of designated authorities and verifying authorities

1. By ...*, each Member State shall notify the Commission of its designated authorities, of

the operating units referred to in Article 5(3) and of its verifying authority, and shall

notify without delay any amendment thereto.

2. By...*, Europol shall notify the Commission of its designated authority, of its verifying

authority and of the National Access Point which it has designated, and shall notify

without delay any amendment thereto.

3. The Commission shall publish the information referred to in paragraphs 1 and 2 in the

Official Journal of the European Union on an annual basis and via an electronic

publication that shall be available online and updated without delay.

* OJ: Please insert the date: three months after the date of entry into force of this Regulation.

184

Article 44

Transitional provision

Data blocked in the Central System in accordance with Article 12 of Regulation (EC) No

2725/2000 shall be unblocked and marked in accordance with Article 18(1) of this Regulation

on …*.

Article 45

Repeal

Regulation (EC) No 2725/2000 and Regulation (EC) No 407/2002 are repealed with effect from

...*.

References to the repealed Regulations shall be construed as references to this Regulation and

shall be read in accordance with the correlation table in Annex III.

* OJ: Please insert the date: two years after the date of entry into force of this Regulation.

185

Article 46

Entry into force and applicability

This Regulation shall enter into force on the twentieth day following that of its publication in

the Official Journal of the European Union.

This Regulation shall apply from ...* .

Member States shall notify the Commission and the Agency as soon as they have made the

technical arrangements to transmit data to the Central System, and in any event no later

than ...*.

This Regulation shall be binding in its entirety and directly applicable in the Member States in

accordance with the Treaties.

Done at ...,

For the European Parliament For the Council

The President The President

* OJ: Please insert the date: two years after the date of entry into force of this Regulation.

186

ANNEX I

DATA FORMAT AND FINGERPRINT FORM

Data format for the exchange of fingerprint data

The following format is prescribed for the exchange of fingerprint data:

ANSI/NIST-ITL 1a-1997, Ver.3, June 2001 (INT-1) and any future further developments of this standard.

Norm for Member State identification letters

The following ISO norm will apply: ISO 3166 - 2 letters code.

187

ANNEX II

REPEALED REGULATIONS (REFERRED TO IN ARTICLE 45)Council Regulation (EC) No 2725/2000Council Regulation (EC) No 407/2002

(OJ L 316, 15.12.2000, p. 1.)(OJ L 62, 5.3.2002 p. 1.)

189

ANNEX IIICORRELATION TABLE

Regulation (EC) No 2725/2000 This Regulation

Article 1(1) Article 1(1)

Article 1(2), first subparagraph,

points (a) and (b)

Article 3(1)(a)

Article 1(2), first subparagraph, point

(c)

-

Article 1(2), second subparagraph Article 3(4)


Article 2(1)(a) -

Article 2(1)(b) to (e) Article 2(1)(a) to (d)

- Article 2(1)(e) to (j)

Article 3(1) -


Article 3(3)(a) to (e) Article 8(1)(a) to (e)

- Article 8(1)(f) to (i)

Article 3(4) -

Article 4(1) Article 9(1) and Article 3(5)

190

Article 4(2) -





Article 5(1), points (a) to (f) Article 11, points (a) to (f)

- Article 11, points (g) to (k)

Article 5(1), points (g) and (h) -

Article 6 Article 12





Article 11(1) to (3) Article 17(1) to (3)




191


Article 14 -


Article 16 Article 28(1) and (2)

- Article 28(3)


Article 18 Article 29(1), (2), (4) to (10)

and (12) to (15)

- Article 29(3) and (11)


- Articles 31 to 36

Article 20 -

Article 21 Article 39(1) and (2)

Article 22 -

Article 23 -

Article 24(1) and (2) Article 40(1) and (2)

- Article 40(3) to (8)



- Articles 43 to 45


192

Regulation 407/2002/EC This Regulation


Article 3 Article 25(1) to (3)

- Article 25(4) and (5)



Annex I Annex I

Annex II -

193

P7_TA-PROV(2013)0259

Temporary reintroduction of border control at internal borders ***I

European Parliament legislative resolution of 12 June 2013 on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 562/2006 in order to provide for common rules on the temporary reintroduction of border control at internal borders in exceptional circumstances (COM(2011)0560 – C7-0248/2011 – 2011/0242(COD))




– having regard to Article 294(2) and Article 77(1) and (2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0248/2011),


– having regard to the reasoned opinions submitted, within the framework of Protocol No 2 on the application of the principles of subsidiarity and proportionality, by the French National Assembly, the Netherlands Senate, the Netherlands House of Representatives, the Portuguese Parliament, the Romanian Senate, the Slovak Parliament, and the Swedish Parliament, asserting that the draft legislative act does not comply with the principle of subsidiarity,

– having regard to the undertaking given by the Council representative by letter of 30 May 2013 to approve Parliament´s position, in accordance with Article 294 (4) of the Treaty on the Functioning of the European Union,




2. Approves the joint statement by Parliament, the Council and the Commission, annexed to this resolution;



194

P7_TC1-COD(2011)0242

Position of the European Parliament adopted at first reading on 12 June 2013 with a view to the adoption of Regulation (EU) No .../2013 of the European Parliament and of the Council amending Regulation (EC) No 562/2006 in order to provide for common rules on the temporary reintroduction of border control at internal borders in exceptional circumstances


Having regard to the Treaty on the Functioning of the European Union, and in particular Article

77(1) and (2) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national Parliaments,


TEXT HAS NOT YET UNDERGONE LEGAL-LINGUISTIC FINALISATION.1 Position of the European Parliament of 12 June 2013.

195

Whereas:

(1) The creation of an area in which the free movement of persons across internal borders

is ensured is one of the main achievements of the European Union. In such an area

without controls at internal borders, it is necessary to have a common response to

situations seriously affecting the public policy or internal security of this area, or parts

thereof, or of one or more Member States by allowing for the reintroduction of border

control at internal borders in exceptional circumstances, but without jeopardising the

principle of the free movement of persons. Given the impact that such measures of last

resort may have on all persons having the right to move within this area without

internal border controls, the conditions and procedures for doing so should be laid

down, so as to ensure that any such measure is exceptional and that the principle of

proportionality is respected. The scope and duration of any temporary reintroduction

of border control at internal borders should be restricted to the bare minimum needed

to respond to that threat.

196

(2) Free movement within the area without internal border controls is a key Union

achievement. As free movement is affected by the temporary reintroduction of border

control at internal borders, any decision to do so should be taken in accordance with

commonly agreed criteria and be duly notified to the Commission or be

recommended by a Union institution. In any case, reintroduction of border control at

internal borders should remain an exception and should only take place as a measure

of last resort, for a strictly limited scope and period of time, based on specific objective

criteria and on an assessment of its necessity which should be monitored at Union

level. In cases where the serious threat to public policy or internal security requires

immediate action, a Member State should be able to reintroduce border control at its

internal borders for a period not exceeding ten days, any prolongation of which needs

to be monitored at Union level.

(3) When decisions on the reintroduction of border control at internal borders are taken,

the necessity and proportionality of the measure should be considered compared to the

threat to public policy or internal security triggering the need to reintroduce border

control at internal borders, as should alternative measures which could be taken at

national and/or Union level, as well as the impact of such a measure on free movement

within the area without internal borders.

197

(3a) In accordance with the case law of the Court of justice, a derogation from the

fundamental principle of free movement of persons must be interpreted strictly and

the concept of public policy presupposes the existence of a genuine, present and

sufficiently serious threat affecting one of the fundamental interest of society.

(4) Reintroduction of border control at internal borders might exceptionally be necessary

in case of a serious threat to public policy or to internal security at the level of the area

without internal border controls or at national level, in particular following terrorist

incidents or threats as well as threats posed by organised crime.

198

(4a) Based on the experience gathered with respect to the functioning of the area without

internal border controls and in order to help ensuring a consistent implementation

of the Schengen acquis, the Commission may draw up guidelines on the

reintroduction of border control at internal borders, both in cases which require

such a measure as a temporary reaction and in cases where immediate action is

needed. These guidelines should provide clear indicators to facilitate the assessment

of what circumstances may constitute serious threats to public policy and to internal

security.

(4b) Migration and the crossing of external borders by a large number of third-country

nationals should not, per se, be considered to be a threat to public policy or to

internal security.

199

(8) Where serious deficiencies in the carrying out of external border control are

identified in an evaluation report and with a view to ensuring compliance with the

recommendations adopted in accordance with Regulation (EU) No XXX/2013 on the

establishment of an evaluation and monitoring mechanism to verify the application

of the Schengen acquis, implementing powers should be conferred on the

Commission to recommend the evaluated Member State to take certain specific

measures such as the deployment of European Border Guard teams, the submission

of strategic plans or, as a last resort in view of the seriousness of the situation, the

closing of a specific border crossing-point. These powers should be exercised in

accordance with Regulation (EU) No 182/2011 of the European Parliament and of the

Council of 16 February 2011 laying down the rules and general principles concerning

mechanisms for control by Member States of the Commission's exercise of

implementing powers1. ▌In view of the terms of Article 2(2)(b)(iii) of that Regulation,

the examination procedure is applicable.

1 OJ L 55 of 28.2.2011, p. 13.

200

(8a) The temporary reintroduction of controls at certain internal borders under a specific

Union-level procedure could also be a response, in exceptional circumstances and as

a measure of last resort where the overall functioning of the area without internal

border controls is put at risk as a result of persistent serious deficiencies related to

external borders identified in the context of a rigorous evaluation process in

accordance with Articles 13 and 13AA of Regulation (EU) No XXX/2013, in so far

as these circumstances would be such as to constitute a serious threat to public

policy or to internal security within the area without internal border controls or

parts thereof. Such a specific procedure for reintroducing temporarily certain

controls at internal borders could also be triggered, under the same conditions, as a

result of the evaluated Member State seriously neglecting its obligations.

In view of the politically sensitive nature of such measures which touch on national

executive and enforcement powers regarding the control at internal borders,

implementing powers to adopt recommendations under this specific Union-level

procedure should be conferred on the Council, acting on a proposal from the

Commission.

201

(8b) Before any such recommendation is adopted on the temporary reintroduction of

certain controls at internal borders, the possibility of resorting to measures aimed at

addressing the underlying situation, including assistance by Union bodies such as

Frontex or Europol, and technical or financial support measures at the national

and/or Union level, should be fully explored in a timely manner. In the case of a

serious deficiency being detected, the Commission may provide financial support

measures to help the Member State concerned. Moreover, any Commission and

Council recommendation should be based on substantiated information.

(8c) On duly justified grounds of urgency, the Commission should be conferred

implementing powers to adopt immediately necessary recommendations on the

prolongation for up to 14 days of temporary internal border controls already

reintroduced under the specific Union-level procedure.

202

(8d) The evaluation reports and the recommendations referred to in Articles 13 and

13AA of the Council Regulation (EU) No XXX/2013 of XX 2013 on the

establishment of an evaluation mechanism to verify the application of the Schengen

acquis should form the basis for the triggering of the specific measures in case of

serious deficiencies related to the external border control and of the specific

procedure in case of exceptional circumstances putting the overall functioning of

the area without internal border controls at risk provided for in this Regulation. The

Member States and the Commission jointly conduct regular, objective and impartial

evaluations in order to verify the correct application of this Regulation and the

Commission coordinates the evaluations in close cooperation with the Member

States. This evaluation mechanism consists of the following elements: multiannual

and annual programmes, announced and unannounced visits on the spot carried out

by a small team consisting of Commission representatives and of experts designated

by Member States, reports on the outcome of the evaluation adopted by the

Commission and recommendations for remedial actions adopted by the Council on a

proposal from the Commission, appropriate follow-up, monitoring and reporting.

203

(10) In accordance with Articles 1 and 2 of the Protocol on the position of Denmark, as

annexed to the Treaty on European Union and to the Treaty on the Functioning of the

European Union, Denmark is not taking part in adoption of this Regulation and is

therefore not bound by it or subject to application thereof. Given that this Regulation

builds upon the Schengen acquis, under Title V of Part Three of the Treaty on the

Functioning of the European Union, Denmark shall, in accordance with Article 4 of

that Protocol, decide within six months after adoption of this Regulation whether it

will implement it in its national law.

(11) This Regulation constitutes a development of provisions of the Schengen acquis, in

which the United Kingdom is not participating, in accordance with Council Decision

2000/365/EC of 29 May 2000 concerning the request of the United Kingdom of Great

Britain and Northern Ireland to take part in some of the provisions of the Schengen

acquis1. The United Kingdom is therefore not taking part in adoption of this Regulation

and is not bound by it or subject to application thereof.

1 OJ L 131, 1.6.2000, p. 43.

204

(12) This Regulation constitutes a development of provisions of the Schengen acquis, in

which Ireland is not participating, in accordance with Council Decision 2002/192/EC

of 28 February 2002 concerning Ireland’s request to take part in some of the provisions

of the Schengen acquis1. Ireland is therefore not taking part in adoption of this

Regulation and is not bound by it or subject to application thereof.

(13) As regards Iceland and Norway, this Regulation constitutes a development of

provisions of the Schengen acquis, as provided for by the Agreement concluded by the

Council of the European Union and the Republic of Iceland and the Kingdom of

Norway concerning the association of those two States with the implementation,

application and development of the Schengen acquis2.

1 OJ L 64, 7.3.2002, p. 20.2 OJ L 176, 10.7.1999, p. 36.

205

(14) As regards Switzerland, this Regulation constitutes a development of provisions of the

Schengen acquis, as provided for by the Agreement between the European Union, the

European Community and the Swiss Confederation concerning the association of the

Swiss Confederation with the implementation, application and development of the

Schengen acquis1.

(15) As regards Liechtenstein, this Regulation constitutes a development of provisions of

the Schengen acquis, as provided for by the Protocol between the European Union, the

European Community, the Swiss Confederation and the Principality of Liechtenstein

on the accession of the Principality of Liechtenstein to the Agreement between the

European Union, the European Community and the Swiss Confederation on the Swiss

Confederation’s association with the implementation, application and development of

the Schengen acquis2.

(16) As regards Cyprus, this Regulation constitutes an act building on the Schengen acquis

or otherwise related to it, as provided for by Article 3(2) of the 2003 Act of Accession.

1 OJ L 53, 27.2.2008, p. 52.2 OJ L 160 of 18.6.2011, p. 19.

206

(17) As regards Bulgaria and Romania, this Regulation constitutes an act building on the

Schengen acquis or otherwise related to it, as provided for by Article 4(2) of the 2005

Act of Accession.

(18) This Regulation respects fundamental rights and observes the principles recognised in

particular by the Charter of Fundamental Rights of the European Union, including the

freedom of movement and of residence. This Regulation must be implemented

according to those rights and principles.


207

Article 1

Regulation (EC) No 562/2006 is hereby amended as follows:

-1. The following Chapter V is added to Title II (External Borders):

"CHAPTER V

Specific measures in case of serious deficiencies

related to the external border control

Article 19A

Measures at the external borders and Frontex support

1. Where serious deficiencies in the carrying out of external border control are

identified in an evaluation report established in accordance with Article 13 of

the Regulation on the establishment of an evaluation mechanism to verify the

application of the Schengen acquis, and with a view to ensuring compliance

with the recommendations referred to in Article 13AA of that Regulation, the

Commission may recommend to the evaluated Member State to take certain

specific measures, which may include one or more of the following:

208

- initiation of the deployment of European Border Guard teams in

accordance with the provisions of the Frontex Regulation;

- submission of its strategic plans based on risk assessment, including

information on the deployment of personnel and equipment, for opinion

to Frontex.

This implementing act shall be adopted in accordance with the examination

procedure referred to in Article 33A(2).

209

2. The Commission shall inform the committee established in accordance with

Article 33A on a regular basis on the progress in the implementation of the

measures referred to in paragraph 1 and on its impact on the deficiencies

identified.

It shall also inform the European Parliament and the Council.

3. Where, in an evaluation report as referred to in paragraph 1, it has been

concluded that the evaluated Member State was seriously neglecting its

obligations and therefore had to report on the implementation of the relevant

action plan within three months in accordance with Article 13A(4) of the

Regulation on the establishment of an evaluation and monitoring to verify the

application of the Schengen acquis, and if, following that three months period,

the Commission finds that the situation persists, it may trigger the application

of the procedure provided for in Article 26 where all the conditions for doing

so are fulfilled."

210

(1) Articles 23 to 26, in Title III (Internal Borders), are replaced by the following:

"Article 23

General framework for the temporary reintroduction of border control at internal

borders

1. Where in the area without border control at internal borders there is a serious

threat to public policy or internal security in a Member State, that Member State

may exceptionally reintroduce border control at internal borders ▌ at all or

specific parts of its internal borders ▌ for a limited period of no more than 30

days or for the foreseeable duration of the serious threat if its duration exceeds

the period of 30 days. The scope and duration of the temporary reintroduction of

border control at internal borders shall not exceed what is strictly necessary to

respond to the serious threat.

211

2. Border control at internal borders may only be reintroduced as a last resort, and

in accordance with ▌Articles 24, 25 and 26 of this Regulation. The criteria listed,

respectively, in Articles 23A and 26A shall be taken into account in each case

where a decision on the reintroduction of border control at internal borders is

considered pursuant, respectively, to Article 24 or 25 or Article 26.

3. If the serious threat to public policy or internal security in the Member State

concerned persists beyond the period provided for in paragraph 1, that Member

State may prolong border control at its internal borders ▌, taking account of the

criteria listed in Article 23A and in accordance with the procedure provided for

in Article 24, on the same grounds as those referred to in paragraph 1 and, taking

into account any new elements, for renewable periods of up to 30 days.

4. The total period during which border control is reintroduced at internal borders,

on the basis of the initial period under paragraph 1 and prolongations under

paragraph 3, shall not exceed six months. In cases of exceptional circumstances

as referred to in Article 26, this total period may be extended to the maximum

length of two years referred to in Article 26(1).

212

Article 23A

Criteria for the temporary reintroduction of border control at internal borders

1. When a Member State, in cases referred to in Articles 23 and 25(1), decides, as

a last resort, the temporary reintroduction of border control at one or more

internal borders or parts thereof or decides to prolong the temporary

reintroduction of border control, it shall assess the extent to which such a

measure is likely to adequately remedy the threat to public policy or internal

security ▌, and shall assess the proportionality of the measure in relation to that

threat. ▌In making such an assessment, the following considerations shall in

particular be taken into account in cases referred to in Articles 23 and 25:

213

(a) the likely impact of any threats to public policy or internal security in the

Member State concerned, including following terrorist incidents or threats

as well as threats posed by organised crime;

▌

(b) the likely impact of such a measure on free movement within the area

without internal border controls.

Article 24

Procedure for the temporary reintroduction of border control at internal borders

under Article 23(1)

214

1. Where a Member State is planning to reintroduce border control at internal

borders ▌ under Article 23(1), it shall notify the other Member States and the

Commission accordingly at the latest four weeks before the planned

reintroduction, or within a shorter period where the circumstances giving rise to

the need to reintroduce border control at internal borders do not become known

until less than four weeks before the planned reintroduction, and shall supply the

following information:

(a) the reasons for the proposed reintroduction, including all relevant data

detailing the events that constitute a serious threat to public policy or

internal security in the Member State;

(b) the scope of the proposed reintroduction, specifying at which part or parts

of the internal borders border control is to be reintroduced;

(c) the names of the authorised crossing-points;

(d) the date and duration of the planned reintroduction;

215

(e) where appropriate, the measures to be taken by the other Member States.

Such a notification may also be submitted jointly by two or more Member

States.

The Member State may, when necessary and in accordance with national law,

decide to classify parts of the information.

Classification shall not preclude information from being made available by the

Commission to the European Parliament. Information and documents

transmitted to the European Parliament under this Article shall be treated in

compliance with rules concerning the forwarding and handling of classified

information which are applicable between the European Parliament and the

Commission.

If necessary, the Commission may request additional information from the

Member State concerned.

216

2. The information referred to in paragraph 1 shall ▌ be submitted at the same time

to the European Parliament and to the Council.

2a. Following the notification from the Member State concerned, and with a view

to the consultation provided for in paragraph 4, the Commission or any of the

other Member States may issue an opinion without prejudice to Article 72

TFEU.

If, based on the information contained in the notification or any additional

information it has received, the Commission has concerns as regards the

necessity or proportionality of the planned reintroduction of border control at

internal borders, or if it considers that a consultation on some aspect of the

notification would be appropriate, it shall issue such an opinion.

217

4. The information referred to in paragraph 1, as well as the opinion that the

Commission or any of the other Member States may provide in accordance

with paragraph 2a, shall be the subject of consultations, including, where

appropriate, joint meetings, between the Member State planning to reintroduce

border control, the other Member States, especially those directly affected by a

reintroduction of border control, and the Commission, with a view to

organising, where appropriate, mutual cooperation between the Member States

and to examining the proportionality of the measures to the events giving rise

to the reintroduction of border control and the threats to public policy or

internal security.

5. The consultation referred to in paragraph 4 shall take place at least ten days

before the date planned for the reintroduction of border control.

218

Article 25

Specific procedure for cases requiring immediate action

1. Where a serious threat to public policy or internal security in a Member State

demands immediate action to be taken, the Member State concerned may

exceptionally and immediately reintroduce border control at internal borders, for

a limited period of no more than ten days.

2. The Member State reintroducing border control at internal borders shall at the

same time notify the other Member States and the Commission accordingly, and

shall supply the information referred to in Article 24(1) and the reasons that

justify the use of this procedure. The Commission may consult the other Member

States immediately upon receipt of the notification.

219

3. If the serious threat to public policy or internal national security persists beyond

the period provided for in paragraph 1, the Member State may decide to prolong

the border control at internal borders for renewable periods of up to 20 days. In

doing so, the Member State concerned shall take into account the criteria listed

in Article 23A, including an updated assessment of the necessity and the

proportionality of the measure, and take into account any new elements.

In the event of such a prolongation decision being taken, the provisions of

Article 24(2a) and (4) shall apply mutatis mutandis, and the consultation shall

take place without delay after the prolongation decision has been notified to

the Commission and the Member States.

220

3a. Without prejudice to Article 23(4), the total period during which border control

is reintroduced at internal borders, on the basis of the initial period under

paragraph 1 and prolongations under paragraph 3, shall not exceed two

months.

3b. The Commission shall inform the European Parliament without delay of the

notifications made under this Article.

Article 26

Specific procedure in case of exceptional circumstances putting the overall

functioning of the area without internal border controls at risk

1. In exceptional circumstances where the overall functioning of the area without

internal border controls is put at risk as a result of persistent serious

deficiencies related to external border control as referred to in Article 19A, and

insofar as these circumstances constitute a serious threat to public policy or

internal security within the area without internal border controls or parts

thereof, border control at internal borders may be reintroduced in accordance

with paragraph 1a for a period of no more than six months. This period can be

prolonged by a further period of no more than six months if such circumstances

still exist. No more than three such prolongations will be possible.

221

1a. The Council may, as a last resort and as a measure to protect the common

interests within the area without internal border controls, where all other

measures, in particular those referred to in Article 19A(1), are incapable of

effectively mitigating the serious threat identified, recommend for one or more

specific Member States to decide to reintroduce border control at all or specific

parts of its internal borders. The Council’s recommendation shall be based on

a proposal from the Commission. The Member States may request the

Commission to submit such a proposal to the Council for a recommendation.

In its recommendation, the Council shall at least indicate the elements referred

to in points (a) to (e) of Article 24(1).

222

The Council may recommend a prolongation in accordance with the same

conditions and procedures.

Before a Member State reintroduces border control at all or specific parts of its

internal borders under this paragraph, it shall notify the other Member States

and the Commission and the European Parliament accordingly.

1b. In the event that the recommendation referred to in paragraph 1a is not

implemented by a Member State, that Member State shall without delay inform

the Commission in writing of its reasons.

In such a case, the Commission shall present a report to the European

Parliament and the Council assessing the reasons provided by the said

Member State and the consequences for protecting the common interests of the

area without internal border controls.

223

4. On duly justified grounds of urgency, related to situations where the

circumstances giving rise to the need to prolong border control at internal

borders, in accordance with paragraph 1a, do not become known until less than

10 days before the end of the preceding reintroduction period, the Commission

may adopt immediately any necessary recommendations. At the latest 14 days

after its adoption, the Commission shall submit to the Council a proposal for a

recommendation in accordance with paragraph 1a.

4a. This Article shall be without prejudice to measures that may be adopted by the

Member States in the event of a serious threat to public policy or internal

security under Articles 23 to 25."

224

(1a) A new Article 26A is inserted as follows:

"Article 26A

Criteria for the temporary reintroduction of border control at internal borders in

case of exceptional circumstances putting the overall functioning of the area without

internal border control at risk

1. When, as a last resort, the Council recommends in accordance with Article

26(1a) the temporary reintroduction of border control at one or more internal

borders or parts thereof, the Council shall assess the extent to which such a

measure is likely to adequately remedy the threat to public policy or internal

security within the area without internal border controls, and shall assess the

proportionality of the measure in relation to that threat. This assessment shall

be based on the detailed information submitted by the Member State(s)

concerned and by the Commission and any other relevant information,

including any information obtained pursuant to paragraph 2. In making such

an assessment, the following considerations shall in particular be taken into

account:

225

(a) the availability of technical or financial support measures which could

be or have been resorted to at the national and/or European level,

including assistance by Union bodies such as Frontex, the EASO or

Europol, and the extent to which such measures are likely to adequately

remedy the threats to public policy or internal security within the area

without internal border controls;

(b) the current and likely future impact of any serious deficiencies related to

external border control identified by Schengen evaluations in accordance

with the Regulation on the establishment of an evaluation and

monitoring mechanism to verify the application of the Schengen acquis;

and the extent to which such serious deficiencies constitute serious

threats to public policy or internal security within the area without

internal border controls;

(c) the likely impact of such a measure on free movement within the area

without internal border controls.

226

2. Before adopting a proposal for a Council recommendation, in accordance with

Article 26(1a), the Commission may:

(a) request Member States, Frontex, Europol or other Union bodies to

provide it with further information,

(b) carry out inspection visits, with the support of experts from Member

States and of Frontex, Europol and any other relevant Union body, in

order to obtain or verify information relevant for a recommendation to

temporarily reintroduce border control at internal borders."

227


"Article 27

Informing the European Parliament and the Council

The Commission and the Member State(s) concerned shall inform the European

Parliament and the Council as soon as possible of any reasons which might trigger the

application of Articles 19A and 23 to 26A."

(3) Articles 29 and 30 are replaced by the following:

"Article 29

Report on the reintroduction of border control at internal borders

228

At the latest four weeks after the lifting of border control at internal borders, the

Member State which has carried out border control at internal borders shall present a

report to the European Parliament, the Council and the Commission on the

reintroduction of border control at internal borders, outlining, in particular, the initial

assessment and the respect of the criteria referred to in Articles 23A, 25 and 26A, the

operation of the checks, the practical cooperation with neighbouring Member States,

the resulting impact on free movement, the effectiveness of the reintroduction of

border control at internal borders, including an ex-post assessment of the

proportionality of the reintroduction of border control.

229

The Commission may issue an opinion on that ex-post assessment of the temporary

reintroduction of border control at one or more internal borders or at parts thereof.

The Commission shall present to the European Parliament and to the Council, at

least annually, a report on the functioning of the area without internal border

controls. The report shall include a list of all decisions to reintroduce border control

at internal borders taken during the relevant year.

Article 30

Informing the public

The Commission and the Member State concerned shall inform the public in a

coordinated manner on a decision to reintroduce border control at internal borders and

indicate in particular the start and end date of such a measure, unless there are

overriding security reasons for not doing so."

230

(4) A new Article 33A is introduced:

"Article 33A

Committee procedure

1. The Commission shall be assisted by a committee. That committee shall be a

committee within the meaning of Regulation (EU) No 182/2011.

2. Where reference is made to this paragraph Article 5 of Regulation (EU) No

182/2011 shall apply. Where the committee delivers no opinion, the

Commission shall not adopt the draft implementing act and the third

subparagraph of Article 5(4) of Regulation (EU) No 182/2011 shall apply.

3. Where reference is made to this paragraph Article 8 of Regulation (EU) No

182/2011, in conjunction with Article 5 thereof, shall apply."

231

(4a) A new Article 37A is introduced:

"Article 37A

Evaluation mechanism

1. In accordance with the Treaties and without prejudice to their provisions on

infringement procedures, the implementation by each Member State of this

Regulation shall be evaluated through an evaluation mechanism.

2. The rules on the evaluation mechanism are specified in Council Regulation

(EU) No XXX/2013. In accordance with this evaluation mechanism, the

Member States and the Commission jointly conduct regular, objective and

impartial evaluations in order to verify the correct application of this

Regulation and the Commission coordinates the evaluations in close

cooperation with the Member States. Under this mechanism, every Member

State is evaluated at least every five years by a small team consisting of

Commission representatives and of experts designated by the Member States.

232

Evaluations may consist of announced or unannounced on-site visits at

external and internal borders.

In accordance with the evaluation mechanism referred to in this paragraph,

the Commission is responsible for adopting the multiannual and annual

evaluation programmes and the evaluation reports.

3. In case of possible deficiencies recommendations for remedial actions may be

addressed to the Member States concerned.

Where serious deficiencies in the carrying out of external border control are

identified in an evaluation report adopted by the Commission in accordance

with Article 13 of the Council Regulation (EU) No XXX/2013, Article 19A and

26 of this Regulation shall apply.

233

4. The European Parliament and the Council shall be informed at all stages of

the evaluation and be transmitted all the relevant documents, in accordance

with the rules on classified documents.

5. The European Parliament shall be immediately and fully informed of any

proposal to amend or to replace the rules laid down in Council Regulation

(EU) No XXX/2013."

234

Article 2

This Regulation shall enter into force on the twentieth day following that of its publication in

the Official Journal of the European Union.



Done at Brussels,



235


Joint statement from the European Parliament, the Council and the Commission

The European Parliament, the Council and the Commission welcome the adoption of the Regulation amending the Schengen Borders Code in order to provide for common rules on the temporary reintroduction of border control at internal borders in exceptional circumstances and of the Regulation on the establishment of an evaluation and monitoring mechanism to verify the application of the Schengen acquis. They believe that these new mechanisms address adequately the call of the European Council in its Conclusions of 24 June 2011 for an enhancement of the cooperation and the mutual trust between the Member States in the Schengen area and for an effective and reliable monitoring and evaluation system in order to ensure the enforcement of common rules and the strengthening, adaptation and extension of the criteria based on the EU acquis, while recalling that Europe’s external borders must be effectively and consistently managed, on the basis of common responsibility, solidarity and practical cooperation.

They state that this amendment to the Schengen Borders Code will reinforce the coordination and cooperation at the level of the Union by providing on the one hand for criteria for any reintroduction of border controls by Member States and on the other hand for an EU-based mechanism to respond to truly critical situations where the overall functioning of the area without internal border controls is put at risk.

They underline that this new evaluation system is an EU-based mechanism and that it will cover all aspects of the Schengen acquis and involve experts from the Member States, the Commission and relevant EU agencies.

They understand that any future proposal from the Commission for amending this evaluation system would be submitted to the consultation of the European Parliament in order to take into consideration its opinion, to the fullest extent possible, before the adoption of a final text.

236

P7_TA-PROV(2013)0260

Establishment of an evaluation mechanism to verify application of the Schengen acquis *

European Parliament legislative resolution of 12 June 2013 on the draft Council regulation on the establishment of an evaluation mechanism to verify the application of the Schengen acquis (10273/2013 – C7-0160/2013 – 2010/0312(NLE))

(Special legislative procedure – consultation)


– having regard to the Council draft (10273/2013),

– having regard to Article 70 of the Treaty on the Functioning of the European Union,

– having regard to the request for an opinion received from the Council (C7-0160/2013),

– having regard to the undertaking given by the Council representative by letter of 30 May 2013 to adopt the act in the form as transmitted to Parliament,



1. Approves the Council draft;

2. Approves the joint statement by Parliament, the Council and the Commission, annexed to this resolution;

3. Instructs its President to forward its position to the Council and the Commission.

237


Joint statement by the European Parliament, the Council and the Commission

The European Parliament, the Council and the Commission welcome the adoption of the Regulation amending the Schengen Borders Code in order to provide for common rules on the temporary reintroduction of border control at internal borders in exceptional circumstances and of the Regulation on the establishment of an evaluation and monitoring mechanism to verify the application of the Schengen acquis. They believe that these new mechanisms address adequately the call of the European Council in its Conclusions of 24 June 2011 for an enhancement of the cooperation and the mutual trust between the Member States in the Schengen area and for an effective and reliable monitoring and evaluation system in order to ensure the enforcement of common rules and the strengthening, adaptation and extension of the criteria based on the EU acquis, while recalling that Europe’s external borders must be effectively and consistently managed, on the basis of common responsibility, solidarity and practical cooperation.

They state that this amendment to the Schengen Borders Code will reinforce the coordination and cooperation at the level of the Union by providing on the one hand for criteria for any reintroduction of border controls by Member States and on the other hand for an EU-based mechanism to respond to truly critical situations where the overall functioning of the area without internal border controls is put at risk.

They underline that this new evaluation system is an EU-based mechanism and that it will cover all aspects of the Schengen acquis and involve experts from the Member States, the Commission and relevant EU agencies.

They understand that any future proposal from the Commission for amending this evaluation system would be submitted to the consultation of the European Parliament in order to take into consideration its opinion, to the fullest extent possible, before the adoption of a final text.

238

P7_TA-PROV(2013)0261

Financial statements and related reports of certain types of undertakings ***I

European Parliament legislative resolution of 12 June 2013 on the proposal for a directive of the European Parliament and of the Council on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings (COM(2011)0684 – C7-0393/2011 – 2011/0308(COD))






– having regard to the opinion of the European Economic and Social Committee of 29 March 20121,

– having regard to the opinion of the Committee of Regions of 19 July 20122,

– having regard to the undertaking given by the Council representative by letter of 17 April 2013 to approve Parliament's position, in accordance with Article 294(4) of the Treaty on the Functioning of the European Union,


– having regard to the report of the Committee on Legal Affairs and the opinions of the Committee on Foreign Affairs, the Committee on Development and the Committee on Economic and Monetary Affairs (A7-0278/2012),




1 OJ C 181, 21.6.2012, p. 84.2 OJ C 277, 13.9.2012, p. 171.

239

P7_TC1-COD(2011)0308

Position of the European Parliament adopted at first reading on 12 June 2013 with a view to the adoption of Directive 2013/.../EU of the European Parliament and of the Council on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC

(Text with EEA relevance)



50(1) thereof,


After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee1,


1 OJ C 181, 21.6.2012, p. 84.2 Position of the European Parliament of 12 June 2013.

240

Whereas:

(1) This Directive takes into account the Commission's better regulation programme, and,

in particular, the Commission Communication entitled "Smart Regulation in the

European Union", which aims at designing and delivering regulation of the highest

quality whilst respecting the principles of subsidiarity and proportionality and ensuring

that the administrative burdens are proportionate to the benefits they bring. The

Commission Communication entitled "Think Small First ▌- Small Business Act ▌for

Europe", adopted in June 2008 and revised in February 2011, ▌recognises the central

role played by small and medium-sized enterprises (SMEs) in the Union economy

▌and aims to improve the overall approach to entrepreneurship and to anchor the

"think small first" principle in policy-making from regulation to public service. The

European Council of 24 and 25 March 2011 welcomed the Commission's intention to

present the "Single Market Act" with measures creating growth and jobs, bringing

tangible results to citizens and businesses.

241

The Commission Communication entitled "Single Market Act", adopted in April 2011,

proposes to simplify the Fourth Council Directive 78/660/EEC of 25 July 1978 based

on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies1

and the Seventh Council Directive 83/349/EEC of 13 June 1983 based on the Article

54(3)(g) of the Treaty on consolidated accounts2 (the Accounting Directives) as

regards financial information obligations and to reduce administrative burdens, in

particular for SMEs. "The Europe 2020 Strategy" for smart, sustainable and inclusive

growth aims to reduce administrative burdens and improve the business environment,

in particular for SMEs, and to promote the internationalisation of SMEs. The

▌European Council of 24 and 25 March 2011 also called for the overall regulatory

burden, in particular for SMEs, to be reduced at both Union and national level and

suggested measures to increase productivity, such as the removal of red tape and the

improvement of the regulatory framework for SMEs.

1 OJ L 222, 14.8.1978, p. 11.2 OJ L 193, 18.7.1983, p. 1.

242

(2) On 18 December 2008 the European Parliament adopted a non-legislative resolution

on accounting requirements as regards small and medium-sized companies,

particularly micro-entities1, stating that the Accounting Directives are often very

burdensome for small and medium-sized companies, and in particular for micro-

entities, and asking the Commission to continue its efforts to review those Directives.

(3) The coordination of national provisions concerning the presentation and content of

annual financial statements and management reports, the measurement bases used

therein and their publication in respect of certain types of undertakings with limited

liability is of special importance for the protection of shareholders, members and third

parties. Simultaneous coordination is necessary in those fields for such types of

undertakings because, on the one hand, some undertakings operate in more than one

Member State and, on the other hand, such undertakings offer no safeguards to third

parties beyond the amounts of their net assets.

1 OJ C 45 E, 23.2.2010, p. 58.

243

(4) Annual financial statements pursue various objectives and do not merely provide

information for investors in capital markets but also give an account of past

transactions and enhance corporate governance. Union accounting legislation needs

to strike an appropriate balance between the interests of the addressees of financial

statements and the interest of undertakings in not being unduly burdened with

reporting requirements.

(5) The scope of this Directive should include certain undertakings with limited liability

such as public and private limited liability companies. Additionally, there is a

substantial number of partnerships and limited partnerships all ▌the fully liable

members of which are constituted either as public or as private limited liability

companies, and such partnerships should therefore be subject to the coordination

measures of this Directive. This Directive should also ensure that partnerships fall

within its scope where members of a partnership which are not constituted as private

or public limited companies in fact have limited liability for the partnership’s

obligations because that liability is limited by other undertakings within the scope of

this Directive. The exclusion of not-for-profit undertakings from the scope of this

Directive is consistent with its purpose, in line with point (g) of Article 50(2) of the

Treaty on the Functioning of the European Union (TFEU).

244

(6) The scope of this Directive should be principles-based and should ensure that it is

not possible for an undertaking to exclude itself from that scope by creating a group

structure containing multiple layers of undertakings established inside or outside the

Union.

(7) The provisions of this Directive should apply only to the extent that they are not

inconsistent with, or contradicted by, provisions on the financial reporting of certain

types of undertakings or provisions regarding the distribution of an undertaking's

capital which are laid down in other legislative acts in force adopted by one or more

Union institutions.

245

(8) It is necessary, moreover, to establish minimum equivalent legal requirements at

Union level as regards the extent of the financial information that should be made

available to the public by undertakings that are in competition with one another.

(9) Annual financial statements should be prepared on a prudent basis and should give a

true and fair view of an undertaking's assets and liabilities, financial position and profit

or loss. It is possible that, in exceptional cases, a financial statement does not give

such a true and fair view where provisions of this Directive are applied. In such

cases, the undertaking should depart from such provisions in order to give a true

and fair view. The Member States should be allowed to define such exceptional cases

and to lay down the relevant special rules which are to apply in those cases. Those

exceptional cases should be understood to be only very unusual transactions and

unusual situations and should, for instance, not be related to entire specific sectors.

246

(10) This Directive should ensure that the requirements for small undertakings are to a

large extent harmonised throughout the Union. This Directive is based on the "think

small first" principle ▌. In order to avoid disproportionate administrative burdens on

those undertakings, Member States should only be allowed to require a few

disclosures by way of notes that are additional to the mandatory notes. In the case of

a single filing system, however, Member States may in certain cases require a limited

number of additional disclosures where these are explicitly required by their

national tax legislation and are strictly necessary for the purposes of tax collection.

It should be possible for Member States to impose requirements on medium-sized

and large undertakings that go further than the minimum requirements prescribed by

this Directive.

(11) Where this Directive allows Member States to impose additional requirements on,

for instance, small undertakings, this means that Member States can make use of

this option in full or in part by requiring less than the option allows for. In the same

way, where this Directive allows Member States to make use of an exemption in

relation to, for instance, small undertakings, this means that Member States can

exempt such undertakings wholly or in part.

247

(12) Small, medium-sized and large undertakings should be defined and distinguished by

reference to balance sheet total, net turnover and the average number of employees

during the financial year, as those criteria typically provide objective evidence as to

the size of an undertaking. However, where a parent undertaking is not preparing

consolidated financial statements for the group, Member States should be allowed to

take steps they deem necessary to require that such an undertaking be classified as a

larger undertaking by determining its size and resulting category on a consolidated

or aggregated basis. Where a Member State applies one or more of the optional

exemptions for micro-undertakings, micro-undertakings should also be defined by

reference to balance sheet total, net turnover and the average number of employees

during the financial year. Member States should not be obliged to define separate

categories for medium-sized and large undertakings in their national legislation if

medium-sized undertakings are subject to the same requirements as large

undertakings.

248

(13) Micro-undertakings have limited resources with which to comply with demanding

regulatory requirements. Where no specific rules are in place for micro-

undertakings, the rules applying to small undertakings apply to them. Those rules

place on them administrative burdens which are disproportionate to their size and

are, therefore, relatively more onerous for micro-undertakings as compared to other

small undertakings. Therefore, it should be possible for Member States to exempt

micro-undertakings from certain obligations applying to small undertakings that

would impose excessive administrative burdens on them. However, micro-

undertakings should still be subject to any national obligation to keep records

showing their business transactions and financial position. Moreover, investment

undertakings and financial holding undertakings should be excluded from the

benefits of simplifications applicable to micro-undertakings.

(14) Member States should take into account the specific conditions and needs of their

own markets when making a decision about whether or how to implement a distinct

regime for micro-undertakings within the context of this Directive.

249

(15) Publication of financial statements can be burdensome for micro-undertakings. At

the same time, Member States need to ensure compliance with this Directive.

Accordingly, Member States making use of the exemptions for micro-undertakings

provided for in this Directive should be allowed to exempt micro-undertakings from

a general publication requirement, provided that balance sheet information is duly

filed, in accordance with national law, with at least one designated competent

authority and that the information is forwarded to the business register, so that a

copy should be obtainable upon application. In such cases, the obligation laid down

in this Directive to publish any accounting document in accordance with Article 3(5)

of Directive 2009/101/EC of the European Parliament and of the Council of 16

September 2009 on coordination of safeguards which, for the protection of the

interests of members and third parties, are required by Member States of companies

within the meaning of the second paragraph of Article 48 of the Treaty, with a view

to making such safeguards equivalent1, should not apply.

(16) To ensure the disclosure of comparable and equivalent information, recognition and

measurement principles should include the going concern, the prudence, and the

accrual bases. Set-offs between asset and liability items and income and expense items

should not be allowed ▌and components of assets and liabilities should be valued

separately. In specific cases, however, Member States should be allowed to permit or

require undertakings to perform set-offs between asset and liability items and

income and expense items. The presentation of items in financial statements should

have regard to the economic reality or commercial substance of the underlying

transaction or arrangement. Member States should, however, be allowed to exempt

undertakings from applying that principle.

1 OJ L 258, 1.10.2009, p. 11.

250

(17) The principle of materiality should govern recognition, measurement, presentation,

disclosure and consolidation in financial statements. According to the principle of

materiality, information that is considered immaterial may, for instance, be

aggregated in the financial statements. However, while a single item might be

considered to be immaterial, immaterial items of a similar nature might be

considered material when taken as a whole. Member States should be allowed to

limit the mandatory application of the principle of materiality to presentation and

disclosure. The principle of materiality should not affect any national obligation to

keep complete records showing business transactions and financial position.

(18) Items recognised in annual financial statements should be measured on the basis of the

principle of purchase price or production cost to ensure the reliability of information

contained in financial statements. However, Member States should be allowed to

permit or require undertakings to revalue fixed assets in order that more relevant

information may be provided to the users of financial statements.

251

(19) The need for comparability of financial information throughout the Union makes it

necessary to require Member States to allow a system of fair value accounting for

certain financial instruments. Furthermore, systems of fair value accounting provide

information that can be of more relevance to the users of financial statements than

purchase price or production cost-based information. Accordingly, Member States

should permit the adoption of a fair value system of accounting by all undertakings or

classes of undertaking, other than micro-undertakings making use of the exemptions

provided for in this Directive, in respect of both annual and consolidated financial

statements or, if a Member State so chooses, in respect of consolidated financial

statements only. Furthermore, Member States should be allowed to permit or require

fair value accounting for assets other than financial instruments.

252

(20) A limited number of layouts for the balance sheet is necessary to allow users of

financial statements to better compare the financial position of undertakings within the

Union. Member States should require the use of one layout for the balance sheet and

should be allowed to offer a choice from amongst permitted layouts. However,

Member States should be able to permit or require undertakings to modify the layout

and present a balance sheet distinguishing between current and non-current items. A

profit and loss account layout showing the nature of expenses and a profit and loss

account layout showing the function of expenses should be permitted. Member States

should require the use of one layout for the profit and loss account and should be

allowed to offer a choice from amongst permitted layouts. Member States should also

be able to allow undertakings to present a statement of performance instead of a profit

and loss account prepared in accordance with one of the permitted layouts.

Simplifications of the required layouts may be made available for small and medium-

sized undertakings. However, Member States should be allowed to restrict layouts of

the balance sheet and profit and loss account if necessary for the electronic filing of

financial statements.

(21) For comparability reasons, a common framework for recognition, measurement and

presentation of, inter alia, value adjustments, goodwill, provisions, stocks of goods and

fungible assets, and income and expenditure of exceptional size or incidence should be

provided.

253

(22) The recognition and measurement of some items in financial statements are based

on estimates, judgements and models rather than exact depictions. As a result of

the uncertainties inherent in business activities, certain items in financial

statements cannot be measured precisely but can only be estimated. Estimation

involves judgements based on the latest available reliable information. The use of

estimates is an essential part of the preparation of financial statements. This is

especially true in the case of provisions, which by their nature are more uncertain

than most other items in the balance sheet. Estimates should be based on a prudent

judgement of the management of the undertaking and calculated on an objective

basis, supplemented by experience of similar transactions and, in some cases, even

reports from independent experts. The evidence considered should include any

additional evidence provided by events after the balance-sheet date.

254

(23) The information presented in the balance sheet and in the profit and loss account

should be supplemented by disclosures by way of notes to the financial statements.

Users of financial statements typically have a limited need for supplementary

information from small undertakings, and it can be costly for small undertakings to

collate that supplementary information ▌. A limited disclosure regime for small

undertakings is, therefore, justified. However, where a micro- or small undertaking

considers that it is beneficial to provide additional disclosures of the types required of

medium-sized and large undertakings, or other disclosures not provided for in this

Directive, it should not be prevented from doing so.

(24) Disclosure in respect of accounting policies is one of the key elements of the notes to

the financial statements. Such disclosure should include, in particular, the

measurement bases applied to various items, a statement on the conformity of those

accounting policies with the going concern concept and any significant changes to

the accounting policies adopted.

255

(25) Users of financial statements prepared by medium-sized and large undertakings

typically have more sophisticated needs. Therefore, further disclosures should be

provided in certain areas. Exemption from certain disclosure obligations is justified

where such disclosure would be prejudicial to certain persons or to the undertaking.

(26) The management report and the consolidated management report are important

elements of financial reporting. A fair review of the development of the business and

of its position should be provided, in a manner consistent with the size and complexity

of the business. The information should not be restricted to the financial aspects of the

undertaking's business, and there should be an analysis of environmental and social

aspects of the business necessary for an understanding of the undertaking's

development, performance or position. In ▌cases where the consolidated management

report and the parent undertaking management report are presented in a single report, it

may be appropriate to give greater emphasis to those matters which are significant to

the undertakings included in the consolidation taken as a whole. However, having

regard to the potential burden placed on small and medium-sized undertakings, it is

appropriate to provide that Member States may choose to waive the obligation to

provide non-financial information in the ▌management report of such undertakings.

256

(27) Member States should have the possibility of exempting small undertakings from the

obligation to draw up a management report provided that such undertakings include,

in the notes to the financial statements, the data concerning the acquisition of own

shares referred to in Article 24(2) of Directive 2012/30/EU of the European Parliament

and of the Council of 25 October 2012 on coordination of safeguards which, for the

protection of the interests of members and others, are required by Member States of

companies within the meaning of the second paragraph of Article 54 of the Treaty on

the Functioning of the European Union, in respect of the formation of public limited

liability companies and the maintenance and alteration of their capital, with a view to

making such safeguards equivalent1.

(28) Given that listed undertakings can have a prominent role in the economies in which

they operate, the provisions of this Directive concerning the corporate governance

statement should apply to undertakings whose transferable securities are admitted to

trading on a regulated market.

1 OJ L 315, 14.11.2012, p. 74.

257

(29) Many undertakings own other undertakings and the aim of coordinating the

legislation governing consolidated financial statements is to protect the interests

subsisting in companies with share capital. Consolidated financial statements should

be drawn up so that financial information concerning such ▌undertakings may be

conveyed to members and third parties. National law governing consolidated financial

statements should therefore be coordinated in order to achieve the objectives of

comparability and equivalence in the information which undertakings should publish

within the Union. However, given the lack of an arm's-length transaction price,

Member States should be allowed to permit intra-group transfers of participating

interests, so-called common control transactions, to be accounted for using the

pooling of interests method of accounting, in which the book value of shares held in

an undertaking included in a consolidation is set off against the corresponding

percentage of capital only.

258

(30) In Directive 83/349/EEC there was a requirement to prepare consolidated financial

statements for groups in cases where either the parent undertaking or one or more

of the subsidiary undertakings was established as one of the types of undertakings

listed in Annex I or Annex II to this Directive. Member States had the option of

exempting parent undertakings from the requirement to draw up consolidated

accounts in cases where the parent undertaking was not of the type listed in Annex I

or Annex II. This Directive requires only parent undertakings of the types listed in

Annex I or, in certain circumstances, Annex II to draw up consolidated financial

statements, but does not preclude Member States from extending the scope of this

Directive to cover other situations as well. In substance there is therefore no change,

as it remains up to the Member States to decide whether to require undertakings

which do not fall within the scope of this Directive to prepare consolidated financial

statements.

(31) Consolidated financial statements should ▌present the activities of a parent

undertaking and its subsidiaries as a single economic entity (a group). Undertakings

controlled by the parent undertaking should be considered as subsidiary undertakings.

Control should be based on holding a majority of voting rights, but control may also

exist where there are agreements with fellow shareholders or members. In certain

circumstances control may be effectively exercised where the parent holds a minority

or none of the shares in the subsidiary. Member States should be entitled to require

that undertakings not subject to control, but which are managed on a unified basis or

have a common administrative, managerial or supervisory body, be included in

consolidated financial statements.

259

(32) A subsidiary undertaking which is itself a parent undertaking should draw up

consolidated financial statements. Nevertheless, Member States should be entitled to

exempt such a parent undertaking from the obligation to draw up such consolidated

financial statements in certain circumstances, provided that its members and third

parties are sufficiently protected.

(33) Small groups should be exempt from the obligation to prepare consolidated financial

statements as the users of small undertakings' financial statements do not have

sophisticated information needs and it can be costly to prepare consolidated financial

statements in addition to the annual financial statements of the parent and subsidiary

undertakings. Member States should be able to exempt medium-sized groups from the

obligation to prepare consolidated financial statements on the same cost/benefit

grounds unless any of the affiliated undertakings is a public-interest entity.

(34) Consolidation requires the full incorporation of the assets and liabilities and of the

income and expenditure of group undertakings, the separate disclosure of non-

controlling interests in the consolidated balance sheet within capital and reserves and

the separate disclosure of non-controlling interests in the profit and loss of the group in

the consolidated profit and loss accounts. However, the necessary corrections should

be made to eliminate the effects of the financial relations between the undertakings

consolidated. ▌

260

(35) Recognition and measurement principles applicable to the preparation of annual

financial statements should also apply ▌to the preparation of consolidated financial

statements. However, Member States should be allowed to permit the general

provisions and principles stated in this Directive to be applied differently in annual

financial statements than in consolidated financial statements.

(36) Associated undertakings should be included in consolidated financial statements by

means of the equity method. The provisions on measurement of associated

undertakings should in substance remain unchanged from Directive 83/349/EEC,

and the methods allowed under that Directive can still be applied. Member States

should also be able to permit or require that a jointly managed undertaking be

proportionately consolidated within consolidated financial statements.

(37) Consolidated financial statements should include all disclosures by way of notes to the

financial statements for the undertakings included in the consolidation taken as a

whole. The names, registered offices and group interest in the undertakings' capital

should also be disclosed in respect of subsidiaries, associated undertakings, jointly

managed undertakings and participating interests.

261

(38) The annual financial statements of all undertakings to which this Directive applies

should be published in accordance with Directive 2009/101/EC. It is, however,

appropriate to provide that certain derogations may be granted ▌in this area for small

and medium-sized undertakings.

(39) The Member States are strongly encouraged to develop electronic publication systems

that allow undertakings to file accounting data, including statutory financial

statements, only once and in a form that allows multiple users to access and use the

data easily. With regard to the reporting of financial statements, the Commission is

encouraged to explore means for a harmonised electronic format. Such systems

should, however, not be burdensome to small and medium-sized undertakings.

262

(40) The Members of the administrative, management and supervisory bodies of an

undertaking should, as a minimum requirement, be collectively responsible to the

undertaking for drawing up and publishing annual financial statements and

management reports. The same approach should also apply to members of the

administrative, management and supervisory bodies of undertakings drawing up

consolidated financial statements. Those bodies act within the competences assigned to

them by national law. This should not prevent Member States from going further and

providing for direct responsibility to shareholders or even other stakeholders.

(41) Liability for drawing up and publishing annual financial statements and consolidated

financial statements, as well as management reports and consolidated management

reports, is based on national law. Appropriate liability rules, as laid down by each

Member State under its national law, should be applicable to members of the

administrative, management and supervisory bodies of an undertaking. Member States

should be allowed to determine the extent of the liability.

(42) In order to promote credible financial reporting processes across the Union, members

of the body within an undertaking that is responsible for the preparation of the

undertaking's financial statements should ensure that the financial information

included in the undertaking's annual financial statement and the group's consolidated

financial statement gives a true and fair view.

263

(43) Annual financial statements and consolidated financial statements should be audited.

The requirement that an audit opinion should state whether annual or consolidated

financial statements give a true and fair view in accordance with the relevant financial

reporting framework should not be understood as restricting the scope of that opinion

but as clarifying the context in which it is expressed. The annual financial statements

of small undertakings should not be covered by this audit obligation, as audit can be a

significant administrative burden for that category of undertaking, while for many

small undertakings the same persons are both shareholders and managers and,

therefore, have limited need for third-party assurance on financial statements.

However, this Directive should not prevent Member States from imposing an audit

on their small undertakings, taking into account the specific conditions and needs of

small undertakings and the users of their financial statements. Furthermore, it is

more appropriate to define the content of the audit report in Directive 2006/43/EC of

the European Parliament and of the Council of 17 May 2006 on statutory audits of

annual accounts and consolidated accounts1. Therefore that directive should be

amended accordingly.

1 OJ L 157, 9.6.2006, p. 87.

264

(44) In order to provide for enhanced transparency of payments made to governments, large

undertakings and public-interest entities which are active in the extractive industry or

logging of primary forests1 should disclose material payments made to governments in

the countries in which they operate in a separate report, on an annual basis. Such

undertakings are active in countries rich in natural resources, in particular minerals, oil,

natural gas and primary forests. The report should include types of payments

comparable to those disclosed by an undertaking participating in the Extractive

Industries Transparency Initiative (EITI). The initiative is also complementary to the

Forest Law Enforcement, Governance and Trade Action Plan of the European Union

(EU FLEGT) and the provisions of Regulation (EU) No 995/2010 of the European

Parliament and of the Council of 20 October 2010 laying down the obligations of

operators who place timber and timber products on the market2, which require traders

of timber products to exercise due diligence in order to prevent illegal wood from

entering the Union market.

1 Defined in Directive 2009/28/EC as "forest of native species, where there is no clearly visible indication of human activities and the ecological processes are not significantly disturbed.".

2 OJ L 295, 12.11.2010, p. 23.

265

(45) The report should serve to help governments of resource-rich countries to implement

the EITI principles and criteria and account to their citizens for payments such

governments receive from undertakings active in the extractive industry or loggers of

primary forests operating within their jurisdiction. The report should incorporate

disclosures on a country and project basis. A project should be defined as the

operational activities that are governed by a single contract, license, lease,

concession or similar legal agreements and form the basis for payment liabilities to a

government. Nonetheless, if multiple such agreements are substantially

interconnected, this should be considered a project. ‘Substantially interconnected’

legal agreements should be understood as a set of operationally and geographically

integrated contracts, licenses, leases or concessions or related agreements with

substantially similar terms that are signed with a government, giving rise to payment

liabilities. Such agreements can be governed by a single contract, joint venture,

production sharing agreement, or other overarching legal agreement.

(46) Any payment, whether made as a single payment or as a series of related payments,

need not be taken into account in the report if it is below EUR 100 000 within a

financial year. This means that, in the case of any arrangement providing for

periodic payments or instalments (e.g. rental fees), the undertaking must consider

the aggregate amount of the related periodic payments or instalments of the related

payments in determining whether the threshold has been met for that series of

payments, and accordingly, whether disclosure is required.

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(47) Undertakings active in the extractive industry or the logging of primary forests

should not be required to disaggregate and allocate payments on a project basis

where payments are made in respect of obligations imposed on the undertakings at

the entity level rather than the project level. For instance, if an undertaking has

more than one project in a host country, and that country’s government levies

corporate income taxes on the undertaking with respect to the undertaking’s income

in the country as a whole, and not with respect to a particular project or operation

within the country, the undertaking would be permitted to disclose the resulting

income tax payment or payments without specifying a particular project associated

with the payment.

(48) An undertaking active in the extractive industry or in the logging of primary forests

generally does not need to disclose dividends paid to a government as a common or

ordinary shareholder of that undertaking as long as the dividend is paid to the

government on the same terms as to other shareholders. However, the undertaking

will be required to disclose any dividends paid in lieu of production entitlements or

royalties.

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(49) In order to address the potential for circumvention of disclosure requirements, this

Directive should specify that payments are to be disclosed with respect to the

substance of the activity or payment concerned. Therefore, the undertaking should

not be able to avoid disclosure by, for example, re-characterising an activity that

would otherwise be covered by this Directive. In addition, payments or activities

should not be artificially split or aggregated with a view to evading such disclosure

requirements.

(50) In order to ascertain the circumstances in which undertakings should be exempted

from the reporting requirements provided for in Chapter 9, the power to adopt

delegated acts in accordance with Article 290 of the TFEU should be delegated to

the Commission in respect of determining the criteria to be applied when assessing

whether third country reporting requirements are equivalent to the requirements of

that Chapter. It is of particular importance that the Commission carry out

appropriate consultations during its preparatory work, including at expert level. The

Commission, when preparing and drawing up delegated acts, should ensure a

simultaneous, timely and appropriate transmission of relevant documents to the

European Parliament and to the Council.

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(51) In order to ensure uniform conditions for the implementation of Article 40a(3),

implementing powers should be conferred upon the Commission. Those powers

should be exercised in accordance with Regulation (EU) No 182/2011 of the

European Parliament and of the Council of 16 February 2011 laying down the rules

and general principles concerning mechanisms for the control by Member States of

the Commission’s exercise of implementing powers1.

(52) The reporting regime should be subject to a review and a report by the Commission

within three years of the expiry of the deadline for transposition of this Directive by

the Member States. That review should consider the effectiveness of the regime and

take into account international developments, including issues of competitiveness and

energy security. The review should also consider the extension of reporting

requirements to additional industry sectors and whether the report should be

audited. In addition, the review should take into account the experience of preparers

and users of the payments information and consider whether it would be appropriate to

include additional payment information such as effective tax rates and recipient details

such as bank account information.

1 OJ L 55, 28.2.2011, p. 13.

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(53) In line with the conclusions of the G8 Summit in Deauville in May 2011 and in order

to promote a level international playing field, the Commission should continue to

encourage all the international partners to introduce similar requirements concerning

reporting on payments to governments. Continued work on the relevant international

accounting standard is particularly important in this context.

(54) In order to take account of future changes to the laws of the Member States and to

Union legislation concerning company types, the Commission should be empowered

to adopt delegated acts in accordance with Article 290 of the TFEU in order to update

the lists of undertakings contained in Annexes I and II. The use of delegated acts is

also necessary in order to adapt the undertaking size criteria, as with the passage of

time inflation will erode their real value. It is of particular importance that the

Commission carry out appropriate consultations during its preparatory work, including

at expert level. The Commission, when preparing and drawing up delegated acts,

should ensure a simultaneous, timely and appropriate transmission of relevant

documents to the European Parliament and to the Council.

▌

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(55) Since the objectives of this Directive, namely facilitating cross-border investment and

improving Union-wide comparability and public confidence in financial statements

and reports through enhanced and consistent specific disclosures, cannot be

sufficiently achieved by the Member States and can therefore, by reason of the scale

and the effects of this Directive, be better achieved at Union level, the Union may

adopt measures, in accordance with the principle of subsidiarity as set out in Article 5

of the Treaty on European Union. In accordance with the principle of proportionality,

as set out in that Article, this Directive does not go beyond what is necessary in order

to achieve those objectives.

(56) This Directive replaces Directives 78/660/EEC and 83/349/EEC. Therefore, those

Directives should be repealed.

(57) This Directive respects fundamental rights and observes the principles recognised, in

particular, by the Charter of Fundamental Rights of the European Union.

271

(58) In accordance with the Joint Political Declaration of Member States and the

Commission on explanatory documents of 28 September 2011, Member States have

undertaken to accompany, in justified cases, the notification of their transposition

measures with one or more documents explaining the relationship between the

components of a directive and the corresponding parts of national transposition

instruments. With regard to this Directive, the legislator considers the transmission

of correlation tables to be justified,

HAVE ADOPTED THIS DIRECTIVE:

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CHAPTER 1

SCOPE, DEFINITIONS AND CATEGORIES OF UNDERTAKINGS AND GROUPS

Article 1

Scope

1. The coordination measures prescribed by this Directive shall apply to ▌the laws,

regulations and administrative provisions of the Member States relating to the types of

undertakings listed:

(a) in Annex I;

(b) in Annex II, where all of the direct or indirect members of the undertaking

having otherwise unlimited liability in fact have limited liability by reason of

those members being undertakings which are:

(i) of the types listed in Annex I; or

(ii) not governed by the law of a Member State but which have a legal form

comparable to those listed in Annex I.

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2. Member States shall inform the Commission within a reasonable period of time of

changes in the types of undertakings in their national law that may affect the

accuracy of Annex I or Annex II. In such a case, the Commission shall be

empowered to adapt, by means of delegated acts in accordance with Article 49, the

lists of undertakings contained in Annexes I and II.

Article 2

Definitions

For the purposes of this Directive, the following definitions shall apply:

(1) 'public-interest entities' means undertakings within the scope of Article 1 which are:

(a) governed by the law of a Member State and whose transferable securities are

admitted to trading on a regulated market of any Member State within the

meaning of point (14) of Article 4(1) of Directive 2004/39/EC of the European

Parliament and of the Council of 21 April 2004 on markets in financial

instruments1;

1 OJ L 145, 30.4.2004, p. 1.

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(b) credit institutions as defined in point (1) of Article 4 of Directive 2006/48/EC

of the European Parliament and of the Council of 14 June 2006 relating to the

taking up and pursuit of the business of credit institutions1, other than those

referred to in Article 2 of that Directive;

(c) insurance undertakings within the meaning of Article 2(1) of Council

Directive 91/674/EEC of 19 December 1991 on the annual accounts of

insurance undertakings2; or

(d) designated by Member States as public-interest entities, for instance

undertakings that are of significant public relevance because of the nature of

their business, their size or the number of their employees;

(2) 'participating interest' means rights in the capital of other undertakings, whether or not

represented by certificates, which, by creating a durable link with those undertakings,

are intended to contribute to the activities of the undertaking which holds those rights.

The holding of part of the capital of another undertaking is presumed to constitute a

participating interest where it exceeds a percentage threshold fixed by the Member

States which is lower than or equal to 20 %;

1 OJ L 177, 30.6.2006, p. 1.2 OJ L 374, 31.12.1991, p. 7.

275

(3) 'related party' has the same meaning as in the international accounting standards

adopted in accordance with Regulation (EC) No 1606/2002 of the European

Parliament and of the Council of 19 July 2002 on the application of international

accounting standards1;

(4) 'fixed assets' means those assets which are intended for use on a continuing basis for

the undertaking's activities;

(5) 'net turnover' means the amounts derived from the sale of products and the provision of

services after deducting sales rebates and value added tax and other taxes directly

linked to turnover;

(6) 'purchase price' means the price payable and any incidental expenses minus any

incidental reductions in the cost of acquisition;

(7) 'production cost' means the purchase price of raw materials, consumables and other

costs directly attributable to the item in question. Member States shall permit or

require the inclusion of a reasonable proportion of fixed or variable overhead costs

indirectly attributable to the item in question, ▌to the extent that they relate to the

period of production. Distribution costs shall not be included;

1 OJ L 243, 11.9.2002, p. 1.

276

(8) 'value adjustment' means the adjustments intended to take account of changes in the

values of individual assets established at the balance sheet date, whether the change is

final or not;

(9) 'parent undertaking' means an undertaking which controls one or more subsidiary

undertakings;

(10) 'subsidiary undertaking' means an undertaking ▌controlled by a parent undertaking,

including any subsidiary undertaking of an ultimate parent undertaking;

(11) 'group' means a parent undertaking and all its subsidiary undertakings ▌;

(12) 'affiliated undertakings' means any two or more undertakings ▌within a group;

(13) 'associated undertaking' means an undertaking in which another undertaking has a

participating interest, and over whose operating and financial policies that other

undertaking exercises significant influence. An undertaking is presumed to exercise a

significant influence over another undertaking where it has 20 % or more of the

shareholders' or members' voting rights in that other undertaking;

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(14) 'investment undertakings' means:

(a) undertakings the sole object of which is to invest their funds in various

securities, real property and other assets, with the sole aim of spreading

investment risks and giving their shareholders the benefit of the results of the

management of their assets,

(b) undertakings associated with investment undertakings with fixed capital, if the

sole object of those associated undertakings is to acquire fully paid shares

issued by those investment undertakings without prejudice to point (h) of

Article 22(1) of Directive 2012/30/EU;

(15) 'financial holding undertakings' means undertakings the sole object of which is to

acquire holdings in other undertakings and to manage such holdings and turn them

to profit, without involving themselves directly or indirectly in the management of

those undertakings, without prejudice to their rights as shareholders;

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(16) 'material' means the status of information where its omission or misstatement could

reasonably be expected to influence decisions that users make on the basis of the

financial statements of the undertaking. The materiality of individual items shall be

assessed in the context of other similar items.

Article 3

Categories of undertakings and groups

1. In applying one or more of the options in Article 36, Member States shall define

micro-undertakings as undertakings which on their balance sheet dates do not

exceed the limits of at least two of the three following criteria:

(a) balance sheet total: EUR 350 000;

(b) net turnover: EUR 700 000;

(c) average number of employees during the financial year: 10.

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2. Small undertakings shall be undertakings which on their balance sheet dates do not

exceed the limits of at least two of the three following criteria:

(a) balance sheet total: EUR 4 000 000;

(b) net turnover: EUR 8 000 000;


Member States may define thresholds exceeding the thresholds in points (a) and (b)

of the first subparagraph. However, the thresholds shall not exceed EUR 6 000 000

for the balance sheet total and EUR 12 000 000 for the net turnover.

3. Medium-sized undertakings shall be undertakings which are not micro-undertakings

or small undertakings and which on their balance sheet dates do not exceed the limits

of at least two of the three following criteria:


(b) net turnover: EUR 40 000 000; ▌


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4. Large undertakings shall be undertakings which on their balance sheet dates exceed at

least two of the three following criteria:




5. Small groups shall be groups consisting of parent and subsidiary undertakings to be

included in a consolidation and which, on a consolidated basis, do not exceed the

limits of at least two of the three following criteria on the balance sheet date of the

parent undertaking:




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Member States may define thresholds exceeding the thresholds in points (a) and (b)

of the first subparagraph. However, the thresholds shall not exceed EUR 6 000 000

for the balance sheet total and EUR 12 000 000 for the net turnover.

6. Medium-sized groups shall be groups which are not small groups, which consist of

parent and subsidiary undertakings to be included in a consolidation and which, on a

consolidated basis, do not exceed the limits of at least two of the three following

criteria on the balance sheet date of the parent undertaking:




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7. Large groups shall be groups consisting of parent and subsidiary undertakings to be

included in a consolidation and which, on a consolidated basis, exceed the limits of

at least two of the three following criteria on the balance sheet date of the parent

undertaking:




8. Member States shall permit ▌the set-off referred to in Article 24(3) ▌and any

elimination as a consequence of Article 24(7) not to be effected when the limits in

paragraphs 5 to 7 of this Article are calculated. In such cases, the limits for the balance

sheet total and net turnover criteria shall be increased by 20 %.

9. In the case of those Member States which have not adopted the euro, the amount in

national currency equivalent to the amounts set out in paragraphs 1 to 7 shall be that

obtained by applying the exchange rate published in the Official Journal of the

European Union as at the date of the entry into force of any Directive setting those

amounts.

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For the purposes of conversion into the national currencies of those Member States

which have not adopted the euro, the amounts in euro specified in paragraphs 1, 3,

4, 6 and 7 may be increased or decreased by not more than 5 % in order to produce

round sum amounts in the national currencies.

10. Where, on its balance sheet date, an undertaking or a group exceeds or ceases to

exceed the limits of two of the three criteria set out in paragraphs 1 to 7, that fact shall

affect the application of the derogations provided for in this Directive only if it occurs

in two consecutive financial years.

11. The balance sheet total referred to in paragraphs 1 to 7 of this Article shall consist of

the total value of the assets in A to E under ‘Assets’ in the layout set out in Annex III

or of the assets in A to E in the layout set out in Annex IV.

12. When calculating the thresholds in paragraphs 1 to 7, Member States may require

the inclusion of income from other sources for undertakings for which "net

turnover" is not relevant. Member States may require parent undertakings to

calculate their thresholds on a consolidated basis rather than on an individual basis.

Member States may also require affiliated undertakings to calculate their thresholds

on a consolidated or aggregated basis where such undertakings have been

established for the sole purpose of avoiding the reporting of certain information.

284

13. In order to adjust for the effects of inflation, the Commission shall at least every five

years review and, where appropriate, amend, by means of delegated acts in accordance

with Article 49, the thresholds referred to in paragraphs 1 to 7 of this Article, taking

into account measures of inflation as published in the Official Journal of the European

Union.

CHAPTER 2

GENERAL PROVISIONS AND PRINCIPLES

Article 4

General provisions

1. The annual financial statements shall constitute a composite whole and shall for all

undertakings comprise, as a minimum, the balance sheet, the profit and loss account

and the notes to the financial statements.

Member States may require undertakings other than small undertakings to include

other statements in the annual financial statements in addition to the documents

referred to in the first subparagraph.

2. The annual financial statements shall be drawn up clearly and in accordance with the

provisions of this Directive.

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3. The annual financial statements shall give a true and fair view of the undertaking's

assets, liabilities, financial position and profit or loss. Where the application of this

Directive would not be sufficient to give a true and fair view of the undertaking's

assets, liabilities, financial position and profit or loss, such additional information as is

necessary to comply with that requirement shall be given in the notes to the financial

statements.

4. Where in exceptional cases the application of a provision of this Directive is

incompatible with the obligation laid down in paragraph 3, that provision shall be

disapplied in order to give a true and fair view of the undertaking's assets, liabilities,

financial position and profit or loss. The disapplication of any such provision shall be

disclosed in the notes to the financial statements together with an explanation of the

reasons for it and ▌of its effect on the undertaking's assets, liabilities, financial

position and profit or loss.

The Member States may define the exceptional cases in question and lay down the

relevant special rules which are to apply in those cases.

286

5. Member States may require undertakings other than small undertakings to disclose

information in their annual financial statements which is additional to that required

pursuant to this Directive.

6. By way of derogation from paragraph 5, Member States may require small

undertakings to prepare, disclose and publish information in the financial

statements which goes beyond the requirements of this Directive, provided that any

such information is gathered under a single filing system and the disclosure

requirement is contained in the national tax legislation for the strict purposes of tax

collection. The information required in accordance with this paragraph shall be

included in the relevant part of the financial statements.

7. Member States shall communicate to the Commission any additional information

they require in accordance with paragraph 6 upon the transposition of this Directive

and when they introduce new requirements in accordance with paragraph 6 in

national law.

287

8. Member States using electronic solutions for filing and publishing annual financial

statements shall ensure that small undertakings are not required to publish, in

accordance with Chapter 7, the additional disclosures required by national tax

legislation, as referred to in paragraph 6.

Article 5

General disclosure

The document containing the financial statements shall state the name of the undertaking

and the information prescribed by points (a) and (b) of Article 5 of Directive 2009/101/EC.

Article 6

General financial reporting principles

1. Items presented in the annual and consolidated financial statements shall be

recognised and measured in accordance with the following general principles:

(a) the undertaking shall be presumed to be carrying on its business as a going

concern;

(b) accounting policies and measurement bases shall be applied consistently from

one financial year to the next;

(c) recognition and measurement shall be on a prudent basis, and in particular:

288

(i) only profits made at the balance sheet date may be recognised,

(ii) all liabilities arising in the course of the financial year concerned or in the

course of a previous financial year shall be recognised, even if such

liabilities become apparent only between the balance sheet date and the

date on which the balance sheet is drawn up, and

(iii) all negative value adjustments shall be recognised, whether the result of

the financial year is a profit or a loss;

(d) amounts recognised in the balance sheet and profit and loss account shall be

computed on the accrual basis;

(e) the opening balance sheet for each financial year shall correspond to the closing

balance sheet for the preceding financial year;

(f) the components of asset and liability items shall be valued separately;

(g) any set-off between asset and liability items, or between income and expenditure

items, shall be prohibited;

289

(h) items in the profit and loss account and balance sheet shall be accounted for and

presented having regard to the substance of the transaction or arrangement

concerned;

(i) items recognised in the financial statements shall be measured in accordance

with the principle of purchase price or production cost; and

(j) the requirements set out in this Directive regarding recognition, measurement,

presentation, disclosure and consolidation need not be complied with when the

effect of complying with them is immaterial.

2. Notwithstanding point (g) of paragraph 1, Member States may in specific cases

permit or require undertakings to perform a set-off between asset and liability items,

or between income and expenditure items, provided that the amounts which are set

off are specified as gross amounts in the notes to the financial statements.

3. Member States may exempt undertakings from the requirements of point (h) of

paragraph 1.

4. Member States may limit the scope of point (j) of paragraph 1 to presentation and

disclosures.

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5. In addition to those amounts recognised in accordance with point (c)(ii) of paragraph

1, Member States may permit or require the recognition of all foreseeable liabilities

and potential losses arising in the course of the financial year concerned or in the

course of a previous financial year, even if such liabilities or losses become apparent

only between the balance sheet date and the date on which the balance sheet is drawn

up.

▌

Article 7

Alternative measurement basis of fixed assets at revalued amounts

1. By way of derogation from point (i) of Article 6(1), Member States may permit or

require, in respect of all undertakings or any classes of undertaking, the measurement

of fixed assets at revalued amounts. Where national law provides for the revaluation

basis of measurement, it shall define its content and limits and the rules for its

application.

2. Where paragraph 1 is applied, the amount of the difference between measurement on a

purchase price or production cost basis and measurement on a revaluation basis shall

be entered in the balance sheet in the revaluation reserve under 'Capital and reserves'.

The revaluation reserve may be capitalised in whole or in part at any time.

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The revaluation reserve shall be reduced where the amounts transferred to that reserve

are no longer necessary for the implementation of the revaluation basis of accounting.

The Member States may lay down rules governing the application of the revaluation

reserve, provided that transfers to the profit and loss account from the revaluation

reserve may be made only where the amounts transferred have been entered as an

expense in the profit and loss account or reflect increases in value which have actually

been realised. No part of the revaluation reserve may be distributed, either directly or

indirectly, unless it represents a gain actually realised.

Save as provided under the second and third subparagraphs of this paragraph, the

revaluation reserve may not be reduced.

3. Value adjustments shall be calculated each year on the basis of the revalued amount.

However, by way of derogation from Articles 9 and 13, Member States may permit or

require that only the amount of the value adjustments arising as a result of the purchase

price or production cost measurement basis be shown under the relevant items in the

layouts set out in Annexes V and VI and that the difference arising as a result of the

measurement on a revaluation basis under this Article be shown separately in the

layouts.

292

Article 8

Alternative measurement basis of fair value

1. By way of derogation from point (i) of Article 6(1) and subject to the conditions set

out in this Article:

(a) Member States shall permit or require, in respect of all undertakings or any

classes of undertaking, the measurement of financial instruments, including

derivative financial instruments, at fair value; and

(b) Member States may permit or require, in respect of all undertakings or any

classes of undertaking, the measurement of specified categories of assets other

than financial instruments at amounts determined by reference to fair value.

Such permission or requirement may be restricted to consolidated financial statements.

2. For the purpose of this Directive, commodity-based contracts that give either

contracting party the right to settle in cash or some other financial instrument shall be

considered to be derivative financial instruments, except where such contracts:

(a) ▌were entered into and continue to meet the undertaking's expected purchase,

sale or usage requirements at the time they were entered into and subsequently;

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(b) ▌were designated as commodity-based contracts at their inception; and

(c) ▌are expected to be settled by delivery of the commodity.

3. Point (a) of paragraph 1 shall apply only to the following liabilities:

(a) liabilities held as part of a trading portfolio; and

(b) derivative financial instruments.

4. Measurement according to point (a) of paragraph 1 shall not apply to the following:

(a) non-derivative financial instruments held to maturity;

(b) loans and receivables originated by the undertaking and not held for trading

purposes; and

(c) interests in subsidiaries, associated undertakings and joint ventures, equity

instruments issued by the undertaking, contracts for contingent consideration in a

business combination, and other financial instruments with such special

characteristics that the instruments, according to what is generally accepted, are

accounted for differently from other financial instruments.

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5. By way of derogation from point (i) of Article 6(1), Member States may, in respect of

any assets and liabilities which qualify as hedged items under a fair value hedge

accounting system, or identified portions of such assets or liabilities, permit

measurement at the specific amount required under that system.

6. By way of derogation from paragraphs 3 and 4, Member States may permit or require

the recognition, measurement and disclosure of financial instruments in conformity

with international accounting standards adopted in accordance with Regulation (EC)

No 1606/2002.

7. The fair value within the meaning of this Article shall be determined by reference to

one of the following values:

(a) in the case of financial instruments for which a reliable market can readily be

identified, the market value. Where the market value is not readily identifiable

for an instrument but can be identified for its components or for a similar

instrument, the market value may be derived from that of its components or of

the similar instrument;

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(b) in the case of financial instruments for which a reliable market cannot be readily

identified, a value resulting from generally accepted valuation models and

techniques, provided that such valuation models and techniques ▌ensure a

reasonable approximation of the market value.

Financial instruments that cannot be measured reliably by any of the methods

described in points (a) and (b) of the first subparagraph shall be measured in

accordance with the principle of purchase price or production cost in so far as

measurement on that basis is possible.

8. Notwithstanding point (c) of Article 6(1), where a financial instrument is measured at

fair value, a change in value shall be included in the profit and loss account, except in

the following cases, where such a change shall be included directly in a fair value

reserve ▌:

(a) the instrument accounted for is a hedging instrument under a system of hedge

accounting that allows some or all of the change in value not to be shown in the

profit and loss account; or

(b) the change in value relates to an exchange difference arising on a monetary item

that forms part of an undertaking's net investment in a foreign entity.

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Member States may permit or require a change in the value of an available for sale

financial asset, other than a derivative financial instrument, to be included directly in a

fair value reserve. That fair value reserve shall be adjusted when amounts shown

therein are no longer necessary for the implementation of points (a) and (b) of the first

subparagraph.

9. Notwithstanding point (c) of Article 6(1), Member States may permit or require, in

respect of all undertakings or any classes of undertaking, that, where assets other than

financial instruments are measured at fair value, a change in the value be included in

the profit and loss account.

CHAPTER 3

BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

Article 9

General provisions concerning the balance sheet and the profit and loss account

1. The layout of the balance sheet and of the profit and loss account shall not be changed

from one financial year to the next. Departures from that principle shall, however, be

permitted in exceptional cases in order to give a true and fair view of the undertaking's

assets, liabilities, financial position and profit or loss. Any such departure and the

reasons therefor shall be disclosed in the notes to the financial statements ▌.

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2. In the balance sheet and in the profit and loss account the items set out in Annexes III

to VI shall be shown separately in the order indicated. Member States shall permit a

more detailed subdivision of those items, subject to adherence to the prescribed

layouts. Member States shall permit the addition of subtotals and of new items,

provided that the contents of such new items are not covered by any of the items in the

prescribed layouts. Member States may require such subdivision or subtotals or new

items.

3. The layout, nomenclature and terminology of items in the balance sheet and profit and

loss account that are preceded by arabic numerals shall be adapted where the special

nature of an undertaking so requires. Member States may require such adaptations for

undertakings which form part of a particular economic sector.

Member States may permit or require balance sheet and profit and loss account

items that are preceded by arabic numerals to be combined where they are

immaterial in amount for the purposes of giving a true and fair view of the

undertaking's assets, liabilities, financial position and profit or loss or where such

combination makes for greater clarity, provided that the items so combined are dealt

with separately in the notes to the financial statements.

298

4. By way of derogation from paragraphs 2 and 3 of this Article, Member States may

limit the undertaking's ability to depart from the layouts set out in Annexes III to VI

to the extent that this is necessary in order for the financial statements to be filed

electronically.

5. In respect of each balance sheet and profit and loss account item, the figure for the

financial year to which the balance sheet and the profit and loss account relate and

the figure relating to the corresponding item for the preceding financial year shall be

shown. Where those figures are not comparable, Member States may require the

figure for the preceding financial year to be adjusted. Any case of non-comparability

or any adjustment of the figures shall be disclosed, with explanations, in the notes to

the financial statements.

6. Member States may permit or require adaptation of the layout of the balance sheet and

profit and loss account in order to include the appropriation of profit or the treatment

of loss.

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7. In respect of the treatment of participating interests in annual financial statements:

(a) Member States may permit or require participating interests to be accounted for

▌using the equity method as provided for in Article 27, taking account of the

essential adjustments resulting from the particular characteristics of annual

financial statements as compared to consolidated financial statements;

(b) Member States may permit or require that the proportion of the profit or loss

attributable to the participating interest be recognised in the profit and loss

account only to the extent of the amount corresponding to dividends already

received or the payment of which can be claimed; and

(c) where the profit ▌attributable to the participating interest and recognised in the

profit and loss account exceeds the amount of dividends already received or the

payment of which can be claimed, the amount of the difference shall be placed in

a reserve which cannot be distributed to shareholders.

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Article 10

Presentation of the balance sheet

For the presentation of the balance sheet, Member States shall prescribe one or both of the

layouts set out in Annexes III and IV. If a Member State prescribes both layouts, it shall

permit undertakings to choose which of the prescribed layouts to adopt.

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Article 11

Alternative presentation of the balance sheet

Member States may permit or require undertakings, or certain classes of undertaking, to present

items on the basis of a distinction between current and non-current items in a different layout

from that set out in Annexes III and IV, provided that the information given is at least

equivalent to that otherwise to be provided in accordance with Annexes III and IV.

Article 12

Special provisions relating to certain balance sheet items

1. Where an asset or liability relates to more than one layout item, its relationship to other

items shall be disclosed either under the item where it appears or in the notes to the


2. Own shares and shares in affiliated undertakings shall be shown only under the items

prescribed for that purpose.

3. Whether particular assets are to be shown as fixed assets or current assets shall depend

upon the purpose for which they are intended.

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4. Rights to immovables and other similar rights as defined by national law shall be

shown under ‘Land and buildings’.

5. The purchase price or production cost or revalued amount, where Article 7(1) applies,

of fixed assets with limited useful economic lives shall be reduced by value

adjustments calculated to write off the value of such assets systematically over their

useful economic lives ▌.

6. Value adjustments to fixed assets shall be subject to the following:

(a) Member States may permit or require value adjustments to be made in respect

of financial fixed assets, so that they are valued at the lower figure to be

attributed to them at the balance sheet date;

(b) value adjustments shall be made in respect of fixed assets, whether their useful

economic lives are limited or not, so that they are valued at the lower figure to be

attributed to them at the balance sheet date if it is expected that the reduction in

their value will be permanent;

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(c) the value adjustments referred to in points (a) and (b) shall be charged to the

profit and loss account and disclosed separately in the notes to the financial

statements if they have not been shown separately in the profit and loss account;

(d) measurement at the lower of the values provided for in points (a) and (b) may

not continue if the reasons for which the value adjustments were made have

ceased to apply; this provision shall not apply to value adjustments made in

respect of goodwill.

7. Value adjustments shall be made in respect of current assets with a view to showing

them at the lower market value or, in particular circumstances, another lower value to

be attributed to them at the balance sheet date.

Measurement at the lower value provided for in the first subparagraph may not

continue if the reasons for which the value adjustments were made no longer apply.

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8. Member States may permit or require that interest on capital borrowed to finance the

production of fixed or current assets be included within production costs, to the extent

that it relates to the period of production. Any application of this provision shall be

disclosed in the notes to the financial statements.

9. Member States may permit the purchase price or production cost of stocks of goods of

the same category and all fungible items including investments to be calculated either

on the basis of weighted average prices, on the basis of the ‘first in, first out’ (FIFO)

method, the 'last in, first out' (LIFO) method, or a method reflecting generally

accepted best practice.

10. Where the amount repayable on account of any debt is greater than the amount

received, Member States may permit or require that the difference be shown as an

asset. It shall be shown separately in the balance sheet or in the notes to the

financial statements. The amount of that difference shall be written off by a

reasonable amount each year and completely written off no later than at the time of

repayment of the debt.

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11. Intangible assets shall be written off over the useful economic life of the intangible

asset.

In exceptional cases where the useful life of goodwill and development costs cannot be

reliably estimated, such assets shall be written off within a maximum period set by the

Member State. That maximum period shall not be shorter than five years and shall not

exceed 10 years. An explanation of the period over which goodwill is written off shall

be provided within the notes to the financial statements.

Where national law authorises the inclusion of costs of development under ‘Assets’ and

the costs of development have not been completely written off, Member States shall

require that no distribution of profits take place unless the amount of the reserves

available for distribution and profits brought forward is at least equal to that of the costs

not written off.

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Where national law authorises the inclusion of formation expenses under ‘Assets’,

they shall be written off within a period of maximum five years. In that case,

Member States shall require that the third subparagraph apply mutatis mutandis to

formation expenses.

In exceptional cases, the Member States may permit derogations from the third and

fourth subparagraphs. Such derogations and the reasons therefor shall be disclosed in

the notes to the financial statements.

▌

12. Provisions shall cover liabilities the nature of which is clearly defined and which at the

balance sheet date are either likely to be incurred or certain to be incurred, but

uncertain as to their amount or as to the date on which they will arise.

The Member States may also authorise the creation of provisions intended to cover

expenses the nature of which is clearly defined and which at the balance sheet date are

either likely to be incurred or certain to be incurred, but uncertain as to their amount or

as to the date on which they will arise.

At the balance sheet date, a provision shall represent the best estimate of the expenses

likely to be incurred or, in the case of a liability, of the amount required to meet that

liability. Provisions shall not be used to adjust the values of assets.

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Article 13

Presentation of the profit and loss account

1. For the presentation of the profit and loss account, Member States shall prescribe one

or both of the layouts set out in Annexes V and VI. If a Member State prescribes both

layouts, it may permit undertakings to choose which of the prescribed layouts to adopt.

2. By way of derogation from Article 4(1), Member States may permit or require all

undertakings, or any classes of undertaking, to present a statement of their

performance instead of the presentation of profit and loss items in accordance with

Annexes V and VI, provided that the information given is at least equivalent to that

otherwise required by Annexes V and VI.

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▌

Article 14

Simplifications for small and medium-sized undertakings

1. Member States may permit small undertakings to draw up abridged balance sheets

showing only those items in Annexes III and IV preceded by letters and roman

numerals, disclosing separately:

(a) the information required in brackets in D (II) under ‘Assets’ and C under

‘Capital, reserves and liabilities’ of Annex III, but in the aggregate for each; or

(b) the information required in brackets in D (II) of Annex IV.

2. Member States may permit small and medium-sized undertakings to draw up abridged

profit and loss accounts within the following limits:

(a) in Annex V, items 1 to 5 may be combined under one item called ‘Gross profit or

loss’;

(b) in Annex VI, items 1, 2, 3 and 6 may be combined under one item called ‘Gross

profit or loss’.

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CHAPTER 4

NOTES TO THE FINANCIAL STATEMENTS

Article 15

General provisions concerning the notes to the financial statements

Where notes to the balance sheet and profit and loss account are presented in accordance

with this Chapter, the notes shall be presented in the order in which items are presented in

the balance sheet and in the profit and loss account.

Article 16

Content of the notes to the financial statements relating to all undertakings

1. In the notes to the financial statements all undertakings shall, in addition to the

information required under other provisions of this Directive, ▌disclose information in

respect of the following:

(a) accounting policies adopted ▌;

(b) where fixed assets are measured at revalued amounts, a table showing:

(i) movements in the revaluation reserve in the financial year, with an

explanation of the tax treatment of items therein, and

(ii) the carrying amount in the balance sheet that would have been recognised

had the fixed assets not been revalued;

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(c) where financial instruments and/or assets other than financial instruments are

measured at fair value ▌:

(i) the significant assumptions underlying the valuation models and

techniques where fair values have been determined in accordance with

point (b) of Article 8(7),

(ii) for each category of financial instrument or asset other than financial

instruments, the fair value, the changes in value included directly in the

profit and loss account and changes included in ▌fair value reserves,

(iii) for each class of derivative financial instrument, information about the

extent and the nature of the instruments, including significant terms and

conditions that may affect the amount, timing and certainty of future cash

flows, and

(iv) a table showing movements in ▌fair value reserves during the financial

year;

(d) the total amount of any financial commitments, guarantees or contingencies that

are not included in the balance sheet, and an indication of the nature and form of

any valuable security which has been provided; any commitments concerning

pensions and affiliated or associated undertakings shall be disclosed separately;

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(e) the amount of advances and credits granted to members of the administrative,

managerial and supervisory bodies, with indications of the interest rates, main

conditions and any amounts repaid or written off or waived, as well as

commitments entered into on their behalf by way of guarantees of any kind,

with an indication of the total for each category;

(f) the amount and nature of individual items of income or expenditure which are

of exceptional size or incidence;

▌

(g) amounts owed by the undertaking becoming due and payable after more than

five years, as well as the undertaking's entire debts covered by valuable security

furnished by the undertaking, with an indication of the nature and form of the

security; and

(h) the average number of employees during the financial year.

▌

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2. Member States may require mutatis mutandis that small undertakings are to disclose

information as required in points (a), (m), (p), (q) and (r) of Article 17(1).

For the purposes of applying the first subparagraph, the information required in

point (p) of Article 17(1) shall be limited to the nature and business purpose of the

arrangements referred to in that point.

For the purposes of applying the first subparagraph, the disclosure of the

information required in point (r) of Article 17(1) shall be limited to transactions

entered into with the parties listed in the fourth subparagraph of that point.

3. Member States shall not require disclosure for small undertakings beyond what is

required or permitted by this Article.

▌

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Article 17

Additional disclosures for medium-sized and large undertakings and public-interest entities

1. In the notes to the financial statements, medium-sized and large undertakings and

public-interest entities shall, in addition to the information required under Article 16

and any other provisions of this Directive, disclose information in respect of the

following matters:

(a) for the various fixed asset items:

(i) the purchase price or production cost or, where an alternative basis of

measurement has been followed, the fair value or revalued amount at the

beginning and end of the financial year,

(ii) additions, disposals and transfers during the financial year,

(iii) the accumulated value adjustments at the beginning and end of the

financial year,

(iv) value adjustments charged during the financial year,

(v) movements in accumulated value adjustments in respect of additions,

disposals and transfers during the financial year, and

(vi) where interest is capitalised in accordance with Article 12(8), the amount

capitalised during the financial year.

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(b) if fixed or current assets are the subject of value adjustments for taxation

purposes alone, the amount of the adjustments and the reasons for making them;

(c) where financial instruments are measured at purchase price or production cost:

(i) for each class of derivative financial instrument:

– the fair value of the instruments, if such a value can be determined

by any of the methods prescribed in point (a) of Article 8(7), and

– information about the extent and nature of the instruments,

(ii) for financial fixed assets carried at an amount in excess of their fair value:

– the book value and the fair value of either the individual assets or

appropriate groupings of those individual assets, and

– the reasons for not reducing the book value, including the nature of

the evidence underlying the assumption that the book value will be

recovered;

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(d) the amount of the emoluments granted in respect of, the financial year to the

members of ▌administrative, managerial and supervisory bodies by reason of

their responsibilities ▌and any commitments arising or entered into in respect of

retirement pensions of former members of those bodies, with an indication of the

total for each category of body.

Member States may waive the requirement to disclose such information where

its disclosure would make it possible to identify the financial position of a

specific member of such a body;

▌

(e) the average number of employees during the financial year, broken down by

categories and, if they are not disclosed separately in the profit and loss account,

the staff costs relating to the financial year, broken down between wages and

salaries, social security costs and pension costs;

(f) where a provision for deferred tax is recognised in the balance sheet, the

deferred tax balances at the end of the financial year, and the movement in those

balances during the financial year;

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(g) the name and registered office of each of the undertakings in which the

undertaking, either itself or through a person acting in his own name but on the

undertaking's behalf, holds a participating interest, showing the proportion of the

capital held, the amount of capital and reserves, and the profit or loss for the

latest financial year of the undertaking concerned for which financial statements

have been adopted; the information concerning capital and reserves and the

profit or loss may be omitted where the undertaking concerned does not publish

its balance sheet and is not controlled by the undertaking.

Member States may allow the information required to be disclosed by the first

subparagraph of this point to take the form of a statement filed in accordance

with Article 3(1) and (3) of Directive 2009/101/EC; the filing of such a statement

shall be disclosed in the notes to the financial statements. Member States may

also allow that information to be omitted when its nature is such that it would be

seriously prejudicial to any of the undertakings to which it relates. Member

States may make such omissions subject to prior administrative or judicial

authorisation. Any such omission shall be disclosed in the notes to the financial

statements;

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(h) the number and the nominal value or, in the absence of a nominal value, the

accounting par value of the shares subscribed during the financial year within the

limits of the authorised capital, without prejudice as far as the amount of that

capital is concerned to point (e) of Article 2 ▌of Directive 2009/101/EC or to

points (c) and (d) of Article 2 of Directive 2012/30/EU;

(i) where there is more than one class of shares, the number and the nominal value

or, in the absence of a nominal value, the accounting par value for each class;

(j) the existence of any participation certificates, convertible debentures, warrants,

options or similar securities or rights, with an indication of their number and the

rights they confer;

(k) the name, the head or registered office and the legal form of each of the

undertakings of which the undertaking is a member having unlimited liability;

(l) the name and registered office of the undertaking which draws up the

consolidated financial statements of the largest body of undertakings of which

the undertaking forms part as a subsidiary undertaking;

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(m) the name and registered office of the undertaking which draws up the

consolidated financial statements of the smallest body of undertakings of which

the undertaking forms part as a subsidiary undertaking and which is also

included in the body of undertakings referred to in point (l);

(n) the place where copies of the consolidated financial statements referred to in

points (l) and (m) may be obtained, provided that they are available;

(o) the proposed appropriation of ▌profit or treatment of ▌loss, or where

applicable, the appropriation of the profit or treatment of the loss;

▌

(p) the nature and business purpose of the undertaking's arrangements that are

not included in the balance sheet and the financial impact on the undertaking

of those arrangements, provided that the risks or benefits arising from such

arrangements are material and in so far as the disclosure of such risks or

benefits is necessary for the purposes of assessing the financial position of the

undertaking;

(q) the nature and the financial effect of material events arising after the balance

sheet date which are not reflected in the profit and loss account or balance

sheet; and

319

(r) transactions which have been entered into with related parties by the

undertaking, including the amount of such transactions, the nature of the

related party relationship and other information about the transactions

necessary for an understanding of the financial position of the undertaking.

Information about individual transactions may be aggregated according to

their nature except where separate information is necessary for an

understanding of the effects of related party transactions on the financial

position of the undertaking.

Member States may permit or require that only transactions with related

parties that have not been concluded under normal market conditions be

disclosed.

Member States may permit that transactions entered into between one or more

members of a group be not disclosed, provided that subsidiaries which are

party to the transaction are wholly owned by such a member.

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Member States may permit that a medium-sized undertaking limit the

disclosure of transactions with related parties to transactions entered into with:

(i) owners holding a participating interest in the undertaking;

(ii) undertakings in which the undertaking itself has a participating interest;

and

(iii) members of the administrative, management or supervisory bodies of the

undertaking.

2. Member States shall not be required to apply point (g) of paragraph 1 to an

undertaking which is a parent undertaking governed by their national laws in the

following cases:

(a) where the undertaking in which that parent undertaking holds a participating

interest for the purposes of point (g) of paragraph 1 is included in consolidated

financial statements drawn up by that parent undertaking, or in the consolidated

financial statements of a larger body of undertakings as referred to in Article

23(4);

(b) where that participating interest has been dealt with by that parent undertaking

in its annual financial statements in accordance with Article 9(7), or in the

consolidated financial statements drawn up by that parent undertaking in

accordance with Article 27(1) to (8).

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Article 18

Additional disclosures for large undertakings and public-interest entities

1. In the notes to the financial statements, large undertakings and public-interest entities

shall, in addition to the information required under Articles 16 and 17 and any other

provisions of this Directive, disclose information in respect of the following matters:

(a) the net turnover broken down by categories of activity and into geographical

markets, in so far as those categories and markets differ substantially from one

another, taking account of the manner in which the sale of products and the

provision of services are organised; and

(b) the total fees for the financial year charged by each statutory auditor or audit

firm for the statutory audit of the annual financial statements, and the total fees

charged by each statutory auditor or audit firm for other assurance services, for

tax advisory services and for other non-audit services.

2. Member States may allow the information referred to in point (a) of paragraph 1 ▌to

be omitted where the disclosure of that information would be seriously prejudicial to

the undertaking. Member States may make such omissions subject to prior

administrative or judicial authorisation. Any such omission shall be disclosed in the

notes to the financial statements.

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3. Member States may provide that point (b) of paragraph 1 is not to apply to the

annual financial statements of an undertaking where that undertaking is included

within the consolidated financial statements required to be drawn up under Article

22, provided that such information is given in the notes to the consolidated financial

statements.

CHAPTER 5

MANAGEMENT REPORT

Article 19

Contents of the management report

1. The management report shall include ▌a fair review of the development and

performance of the undertaking's business and of its position, together with a

description of the principal risks and uncertainties that it faces.

The review shall be a balanced and comprehensive analysis of the development and

performance of the undertaking's business and of its position, consistent with the size

and complexity of the business.

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To the extent necessary for an understanding of the undertaking's development,

performance or position, the analysis shall include both financial and, where

appropriate, non-financial key performance indicators relevant to the particular

business, including information relating to environmental and employee matters. In

providing the analysis, the management report shall, where appropriate, include

references to, and additional explanations of, amounts reported in the annual financial

statements.

2. The management report shall also give an indication of:

▌

(a) the undertaking's likely future development;

(b) activities in the field of research and development;

(c) the information concerning acquisitions of own shares prescribed by Article

24(2) of Directive 2012/30/EU;

(d) the existence of branches of the undertaking; and

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(e) in relation to the undertaking's use of financial instruments and where material

for the assessment of its assets, liabilities, financial position and profit or loss:

(i) the undertaking's financial risk management objectives and policies,

including its policy for hedging each major type of forecasted transaction

for which hedge accounting is used; and

(ii) the undertaking's exposure to price risk, credit risk, liquidity risk and cash

flow risk.

3. Member States may exempt small undertakings from the obligation to prepare

management reports, provided that they require the information referred to in Article

24(2) of Directive 2012/30/EU concerning the acquisition by an undertaking of its own

shares to be given in the notes to the financial statements.

4. Member States may exempt small and medium-sized undertakings from the obligation

set out in the third subparagraph of paragraph 1 in so far as it relates to non-financial

information.

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Article 20

Corporate governance statement

1. Undertakings referred to in point (1)(a) of Article 2 shall include a corporate

governance statement in their management report. That statement shall be included as

a specific section of the management report and shall contain at least the following

information:

(a) a reference to ▌the following, where applicable:

(i) the corporate governance code to which the undertaking is subject ▌,

(ii) the corporate governance code which the undertaking may have voluntarily

decided to apply ▌,

(iii) all relevant information about the corporate governance practices applied

over and above the requirements of national law.

Where reference is made to a corporate governance code referred to in points (i)

or (ii), the undertaking shall also indicate where the relevant texts are publicly

available. Where reference is made to the information referred to in point (iii),

the undertaking shall make details of its corporate governance practices publicly

available;

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(b) where an undertaking, in accordance with national law, departs from a corporate

governance code referred to in points (a)(i) or (ii), an explanation by the

undertaking as to which parts of the corporate governance code it departs from

and the reasons for doing so; where the undertaking has decided not to refer to

any provisions of a corporate governance code referred to in points (a)(i) or (ii),

it shall explain its reasons for not doing so;

(c) a description of the main features of the undertaking's internal control and risk

management systems in relation to the financial reporting process;

(d) the information required by points (c), (d), (f), (h) and (i) of Article 10(1) of

Directive 2004/25/EC of the European Parliament and of the Council of 21 April

2004 on takeover bids1, where the undertaking is subject to that Directive;

(e) unless the information is already fully provided for in national law, a description

of the operation of the shareholder meeting and its key powers and a description

of shareholders’ rights and how they can be exercised; and

(f) the composition and operation of the administrative, management and

supervisory bodies and their committees.

1 OJ L 142, 30.4.2004, p. 12.

327

2. Member States may permit the information required by paragraph 1 of this Article to

be set out in:

(a) a separate report published together with the management report in the manner

set out in Article 30; or

(b) a document ▌publicly available on the undertaking’s website, to which

reference is made in the management report.

That separate report or that document referred to in points (a) and (b), respectively,

may cross-refer to the management report, where the information required by point (d)

of paragraph 1 of this Article is made available in that management report.

3. The statutory auditor or audit firm shall express an opinion in accordance with the

second subparagraph of Article 34(1) regarding information prepared under points

(c) and (d) of paragraph 1 of this Article and shall check that the information

referred to in points (a), (b), (e) and (f) of paragraph 1 of this Article has been

provided.

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4. ▌Member States may exempt undertakings referred to in paragraph 1 which have

only issued securities other than shares admitted to trading on a regulated market,

within the meaning of point (14) of Article 4(1) of Directive 2004/39/EC, from the

application of points (a), (b), (e) and (f) of paragraph 1 of this Article, unless such

undertakings have issued shares which are traded in a multilateral trading facility,

within the meaning of point (15) of Article 4(1) of Directive 2004/39/EC.

CHAPTER 6

CONSOLIDATED FINANCIAL STATEMENTS AND REPORTS

Article 21

Scope of the consolidated financial statements and reports

For the purposes of this Chapter, a parent undertaking and all of its subsidiary undertakings

shall be undertakings to be consolidated where the parent undertaking is an undertaking to

which the coordination measures prescribed by this Directive apply by virtue of Article 1(1).

329

Article 22

The requirement to prepare consolidated financial statements

1. A Member State shall require any undertaking governed by its national law to draw up

consolidated financial statements and a consolidated management report if that

undertaking (a parent undertaking) ▌:

(a) ▌has a majority of the shareholders' or members' voting rights in another

undertaking (a subsidiary undertaking);

(b) ▌has the right to appoint or remove a majority of the members of the

administrative, management or supervisory body of another undertaking (a

subsidiary undertaking) and is at the same time a shareholder in or ▌member of

that undertaking;

(c) ▌has the right to exercise a dominant influence over an undertaking (a

subsidiary undertaking) of which it is a shareholder or ▌member, pursuant to a

contract entered into with that undertaking ▌or to a provision in its

memorandum or articles of association, where the law governing that subsidiary

undertaking ▌permits its being subject to such contracts or provisions.

▌

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A Member State need not prescribe that a parent undertaking must be a

shareholder in or member of its subsidiary undertaking. Those Member States

the laws of which do not provide for such contracts or clauses shall not be

required to apply this provision; or

▌

(d) ▌is a shareholder in or member of an undertaking, and:

(i) a majority of the members of the administrative, management or

supervisory bodies of that undertaking (a subsidiary undertaking) who

have held office during the financial year, during the preceding financial

year and up to the time when the consolidated financial statements are

drawn up, have been appointed solely as a result of the exercise of its

voting rights; or

(ii) controls alone, pursuant to an agreement with other shareholders in or

members of that undertaking (a subsidiary undertaking), a majority of

shareholders’ or members’ voting rights in that undertaking. The Member

States may introduce more detailed provisions concerning the form and

contents of such agreements.

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Member States shall prescribe at least the arrangements referred to in point

(ii). They may subject the application of point (i) to the requirement that the

voting rights represent at least 20 % of the total.

However, point (i) shall not apply where a third party has the rights referred to in

points (a), (b) or (c) with regard to that undertaking ▌.

2. In addition to the cases mentioned in paragraph 1, Member States may require any

undertaking governed by their national law to draw up consolidated financial

statements and a consolidated management report if:

(a) that undertaking (a parent undertaking) has the power to exercise, or actually

exercises, dominant influence or control over another undertaking (the

subsidiary undertaking); or

(b) that undertaking (a parent undertaking) and another undertaking (the

subsidiary undertaking) are managed on a unified basis by the parent

undertaking.

3. For the purposes of points (a), (b) and (d) of paragraph 1, the voting rights and the

rights of appointment and removal of any other subsidiary undertaking as well as those

of any person acting in his own name but on behalf of the parent undertaking or of

another subsidiary undertaking shall be added to those of the parent undertaking.

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4. For the purposes of points (a), (b) and (d) of paragraph 1, the rights mentioned in

paragraph 3 shall be reduced by the rights:

(a) attaching to shares held on behalf of a person who is neither the parent

undertaking nor a subsidiary of that parent undertaking; or

(b) attaching to shares:

(i) held by way of security, provided that the rights in question are

exercised in accordance with the instructions received, or

(ii) held in connection with the granting of loans as part of normal

business activities, provided that the voting rights are exercised

in the interests of the person providing the security.

5. For the purposes of points (a) and (d) of paragraph 1, the total of the shareholders' or

members' voting rights in the subsidiary undertaking shall be reduced by the voting

rights attaching to the shares held by that undertaking itself, by a subsidiary

undertaking of that undertaking or by a person acting in his own name but on behalf of

those undertakings.

6. Without prejudice to Article 23(9), a parent undertaking and all of its subsidiary

undertakings shall be undertakings to be consolidated regardless of where the

registered offices of such subsidiary undertakings are situated.

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▌

7. Without prejudice to this Article and Articles 21 and 23, a Member State may require

any undertaking governed by its national law to draw up consolidated financial

statements and a consolidated management report if:

(a) that undertaking and one or more other undertakings to which it is not related as

described in paragraphs 1 or 2, are managed on a unified basis in accordance

with:

(i) a contract concluded with that undertaking, or

(ii) the memorandum or articles of association of those other

undertakings; or

(b) the administrative, management or supervisory bodies of that undertaking and of

one or more other undertakings to which it is not related, as described in

paragraphs 1 or 2, consist in the majority of the same persons in office during

the financial year and until the consolidated financial statements are drawn up.

8. Where the Member State option referred to in paragraph 7 is exercised, the

undertakings ▌described in that ▌paragraph and all of their subsidiary undertakings

shall be consolidated, where one or more of those undertakings is established as one of

the types of undertaking listed in Annex I or Annex II.

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9. Paragraph 6 ▌of this Article, Article 23(1), (2), (9) and (10) and Articles 24 to 29

shall apply to the consolidated financial statements and the consolidated management

report referred to in paragraph 7 of this Article, subject to the following

modifications:

(a) references to parent undertakings shall be understood to refer to all of the

undertakings specified in ▌paragraph 7 of this Article; and

(b) without prejudice to Article 24(3)▌, the items ‘capital’, ‘share premium

account’, ‘revaluation reserve’, ‘reserves’, ‘profit or loss brought forward’, and

‘profit or loss for the financial year’ to be included in the consolidated financial

statements shall be the aggregate amounts attributable to each of the

undertakings specified in ▌paragraph 7 of this Article.

Article 23

Exemptions from consolidation

1. Small groups shall be exempted from the obligation to draw up consolidated financial

statements and a consolidated management report, except where any affiliated

undertaking is a public-interest entity.

2. Member States may exempt medium-sized groups from the obligation to draw up

consolidated financial statements and a consolidated management report, except where

any affiliated undertaking is a public-interest entity.

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▌

3. Notwithstanding paragraphs 1 and 2 of this Article, a Member State shall, in the

following cases, exempt from the obligation to draw up consolidated financial

statements and a consolidated management report any parent undertaking (the

exempted undertaking) governed by its national law which is also a subsidiary

undertaking, including a public-interest entity unless that public-interest entity falls

under point (1)(a) of Article 2, the own parent undertaking of which is governed by

the law of a Member State and:

(a) the parent undertaking of the exempted undertaking holds all of the shares in the

exempted undertaking. The shares in the exempted undertaking held by members

of its administrative, management or supervisory bodies pursuant to a legal

obligation or an obligation in its memorandum or articles of association shall be

ignored for this purpose; or

(b) the parent undertaking of the exempted undertaking holds 90 % or more of the

shares in the exempted undertaking and the remaining shareholders in or

members of the exempted undertaking have approved the exemption.

4. The exemptions referred to in paragraph 3 shall fulfil all of the following conditions:

(a) the exempted undertaking and, without prejudice to paragraph 9, all of its

subsidiary undertakings are consolidated in the financial statements of a larger

body of undertakings, the parent undertaking of which is governed by the law of

a Member State;

336

(b) the consolidated financial statements referred to in point (a) and the consolidated

management report of the larger body of undertakings are drawn up by the parent

undertaking of that body, in accordance with the law of the Member State by

which that parent undertaking ▌is governed, in accordance with this Directive or

international accounting standards adopted in accordance with Regulation

(EC) No 1606/2002;

(c) in relation to the exempted undertaking the following documents are published

in the manner prescribed by the law of the Member State by which that

exempted undertaking is governed, in accordance with Article 30:

(i) the consolidated financial statements referred to in point (a)

and the consolidated management report referred to in point

(b), ▌

(ii) the audit report, and

(iii) where appropriate, the appendix referred to in paragraph 6.

That Member State may require that the documents referred to in points

(i), (ii) and (iii) be published in its official language and that the translation

be certified;

(d) the notes to the annual financial statements of the exempted undertaking disclose

the following:

337

(i) the name and registered office of the parent undertaking that

draws up the consolidated financial statements referred to in

point (a), and

(ii) the exemption from the obligation to draw up consolidated

financial statements and a consolidated management report.

5. In cases not covered by paragraph 3, a Member State may, without prejudice to

paragraphs 1, 2 and 3 of this Article ▌, exempt from the obligation to draw up

consolidated financial statements and a consolidated management report any parent

undertaking (the exempted undertaking) governed by its national law which is also a

subsidiary undertaking, including a public-interest entity unless that public-interest

entity falls under point (1)(a) of Article 2, the parent undertaking of which is

governed by the law of a Member State, provided that all the conditions set out in

paragraph 4 are fulfilled and provided further:

(a) that the shareholders in or members of the exempted undertaking who own a

minimum proportion of the subscribed capital of that undertaking have not

requested the preparation of consolidated financial statements at least six months

before the end of the financial year;

(b) that the minimum proportion referred to in point (a) does not exceed the

following limits:

(i) 10 % of the subscribed capital in the case of public limited

liability companies and ▌limited partnerships with share

capital; and

338

(ii) 20 % of the subscribed capital in the case of undertakings of

other types;

(c) that the Member State does not make the exemption subject to:

(i) the condition ▌that the parent undertaking, which prepared the

consolidated financial statements referred to in point (a) of

paragraph 4, is governed by the national law of the Member

State granting the exemption, or

(ii) conditions relating to the preparation and auditing of those

financial statements▌.

6. A Member State may make the exemptions provided for in paragraphs 3 and 5 subject

to the disclosure of additional information, in accordance with this Directive, in the

consolidated financial statements referred to in point (a) of paragraph 4, or in an

appendix thereto, if that information is required of undertakings governed by the

national law of that Member State which are obliged to prepare consolidated financial

statements and are in the same circumstances.

7. Paragraphs 3 to 6 shall apply without prejudice to Member State ▌legislation on the

drawing-up of consolidated financial statements or consolidated management reports

in so far as those documents are required:

(a) for the information of employees or their representatives; or

339

(b) by an administrative or judicial authority for its own purposes.

8. Without prejudice to paragraphs 1, 2, 3 and 5 of this Article ▌, a Member State which

provides for exemptions under paragraphs 3 and 5 of this Article may also exempt

from the obligation to draw up consolidated financial statements and a consolidated

management report any parent undertaking (the exempted undertaking) governed by its

national law which is also a subsidiary undertaking, including a public-interest entity

unless that public-interest entity falls under point (1)(a) of Article 2, the parent

undertaking of which is not governed by the law of a Member State, if all of the

following conditions are fulfilled:

(a) the exempted undertaking and, without prejudice to paragraph 9, all of its

subsidiary undertakings are consolidated in the financial statements of a larger

body of undertakings;

(b) the consolidated financial statements referred to in point (a) and, where

appropriate, the consolidated management report are drawn up:

(i) in accordance with this Directive,

(ii) in accordance with international accounting standards

adopted pursuant to Regulation (EC) No 1606/2002,

340

(iii) in a manner equivalent to consolidated financial statements and

consolidated management reports drawn up in accordance with

this Directive, or

(iv) in a manner equivalent to international accounting standards as

determined in accordance with Commission Regulation (EC)

No 1569/2007 of 21 December 2007 establishing a mechanism for

the determination of equivalence of accounting standards applied

by third country issuers of securities pursuant to Directives

2003/71/EC and 2004/109/EC of the European Parliament and of

the Council1;

(c) the consolidated financial statements referred to in point (a) have been audited

by one or more statutory auditor(s) or audit firm(s) authorised to audit financial

statements under the national law governing the undertaking which drew ▌up

those statements.

Points (c) and (d) of paragraph 4 and paragraphs 5, 6 and 7 shall apply.

9. An undertaking, including a public-interest entity, need not be included in

consolidated financial statements where at least one of the following conditions is

fulfilled:

(a) in extremely rare cases where the information necessary for the preparation of

consolidated financial statements in accordance with this Directive cannot be

obtained without disproportionate expense or undue delay;

(b) the shares of that undertaking are held exclusively with a view to their

subsequent resale; or

1 OJ L 340, 22.12.2007, p. 66.

341

(c) severe long-term restrictions substantially hinder:

(i) the parent undertaking in the exercise of its rights over the

assets or management of that undertaking; or

(ii) the exercise of unified management of that undertaking where

it is in one of the relationships defined in Article 22(7) ▌.

10. Without prejudice to point (b) of Article 6(1), Article 21 and paragraphs 1 and 2 of

this Article, any parent undertaking, including a public-interest entity, shall be

exempted from the obligation imposed in Article 22 if:

(a) it only has subsidiary undertakings which are immaterial, both individually

and collectively; or

(b) all its subsidiary undertakings can be excluded from consolidation by virtue of

paragraph 9 of this Article.

Article 24

The preparation of consolidated financial statements

1. Chapters 2 and 3 shall apply in respect of ▌consolidated financial statements, taking

into account the essential adjustments resulting from the particular characteristics of

consolidated financial statements as compared to annual financial statements.

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2. The assets and liabilities of undertakings included in a consolidation shall be

incorporated in full in the consolidated balance sheet.

3. The book values of shares in the capital of undertakings included in a consolidation

shall be set off against the proportion which they represent of the capital and reserves

of those undertakings in accordance with the following:

(a) except in the case of shares in the capital of the parent undertaking held either

by that undertaking itself or by another undertaking included in the

consolidation, which shall be treated as own shares in accordance with

Chapter 3, that set-off shall be effected on the basis of book values as they stand

on the date on which those undertakings are included in a consolidation for the

first time. Differences arising from that set-off shall, as far as possible, be

entered directly against those items in the consolidated balance sheet which have

values above or below their book values;

(b) a Member State may permit or require set-offs on the basis of the values of

identifiable assets and liabilities as at the date of acquisition of the shares or, in

the event of acquisition in two or more stages, as at the date on which the

undertaking became a subsidiary;

343

(c) any difference remaining after the application of point (a) or resulting from the

application of point (b) shall be shown as goodwill in the consolidated balance

sheet;

(d) the methods used to calculate the value of goodwill and any significant changes

in value in relation to the preceding financial year shall be explained in the notes

to the financial statements;

(e) where the offsetting of positive and negative goodwill is authorised by a

Member State, ▌the notes to the financial statements shall include an analysis

of the goodwill;

(f) negative goodwill may be transferred to the consolidated profit and loss account

where such a treatment is in accordance with the principles set out in Chapter 2.

▌

4. Where shares in subsidiary undertakings included in the consolidation are held by

persons other than those undertakings, the amount attributable to those shares shall

be shown separately in the consolidated balance sheet as non-controlling interests.

5. The income and expenditure of undertakings included in a consolidation shall be

incorporated in full in the consolidated profit and loss account.

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6. The amount of any profit or loss attributable to the shares referred to in paragraph 4

shall be shown separately in the consolidated profit and loss account as the profit or

loss attributable to non-controlling interests.

7. Consolidated financial statements shall show the assets, liabilities, financial positions,

profits or losses of the undertakings included in a consolidation as if they were a single

undertaking. In particular, the following shall be eliminated from the consolidated

financial statements:

(a) debts and claims between the undertakings;

(b) income and expenditure relating to transactions between the undertakings;

and

(c) profits and losses resulting from transactions between the undertakings, where

they are included in the book values of assets.

8. Consolidated financial statements shall be drawn up as at the same date as the annual

financial statements of the parent undertaking.

A Member State may, however, permit or require ▌consolidated financial

statements to be drawn up as at another date in order to take account of the

balance sheet dates of the largest number or the most important of the

undertakings included in the consolidation, provided that:

(a) that fact shall be disclosed in the notes to the consolidated financial statements

and reasons given;

345

(b) account shall be taken, or disclosure made, of important events concerning the

assets and liabilities, the financial position and the profit or loss of an

undertaking included in a consolidation which have occurred between that

undertaking's balance sheet date and the consolidated balance sheet date; and

(c) where an undertaking's balance sheet date precedes or follows the consolidated

balance sheet date by more than three months, that undertaking shall be

consolidated on the basis of interim financial statements drawn up as at the

consolidated balance sheet date.

9. If the composition of the undertakings included in a consolidation has changed

significantly in the course of a financial year, the consolidated financial statements

shall include information which makes the comparison of successive sets of

consolidated financial statements meaningful. This obligation may be fulfilled by the

preparation of an adjusted comparative balance sheet and an adjusted comparative

profit and loss account.

10. Assets and liabilities ▌included in consolidated financial statements shall be measured

on a uniform basis and in accordance with Chapter 2.

11. An undertaking which draws up consolidated financial statements shall apply the same

measurement bases as are applied in its annual financial statements. However,

Member States may permit or require that other measurement bases in accordance with

Chapter 2 be used in consolidated financial statements. Where use is made of this

derogation, that fact shall be disclosed in the notes to the consolidated financial

statements and ▌reasons ▌given.

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12. Where assets and liabilities ▌included in consolidated financial statements have been

measured by undertakings included in the consolidation using bases differing from

those used for the purposes of the consolidation, those assets and liabilities shall be re-

measured in accordance with the bases used for the consolidation. Departures from this

requirement shall be permitted in exceptional cases. Any such departures shall be

disclosed in the notes to the consolidated financial statements and ▌reasons ▌given.

13. Deferred tax balances shall be recognised on consolidation provided that it is probable

that a charge to tax will arise within the foreseeable future for one of the undertakings

included in the consolidation.

14. Where assets ▌included in consolidated financial statements have been the subject of

value adjustments solely for tax purposes, they shall be incorporated in the

consolidated financial statements only after those adjustments have been eliminated.

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Article 25

Business combinations within a group

1. A Member State may permit or require the book values of shares held in the capital

of an undertaking included in the consolidation to be set off against the

corresponding percentage of capital only, provided that the undertakings in the

business combination are ultimately controlled by the same party both before and

after the business combination, and that control is not transitory.

2. Any difference arising under paragraph 1 shall be added to or deducted from

consolidated reserves, as appropriate.

3. The application of the method described in paragraph 1, the resulting movement in

reserves and the names and registered offices of the undertakings concerned shall be

disclosed in the notes to the consolidated financial statements.

Article 26

Proportional consolidation

1. Where an undertaking included in a consolidation manages another undertaking jointly

with one or more undertakings not included in that consolidation, Member States may

permit or require the inclusion of that other undertaking in the consolidated financial

statements in proportion to the rights in its capital held by the undertaking included in

the consolidation.

348

2. Article 23(9) and (10) and Article 24 shall apply mutatis mutandis to the proportional

consolidation referred to in paragraph 1 of this Article.

Article 27

Equity accounting of associated undertakings

1. Where an undertaking included in a consolidation has an associated undertaking, that

associated undertaking shall be shown in the consolidated balance sheet as a separate

item with an appropriate heading.

2. When this Article is applied for the first time to an associated undertaking, that

associated undertaking shall be shown in the consolidated balance sheet either:

(a) at its book value calculated in accordance with the measurement rules laid

down in Chapters 2 and 3. The difference between that value and the amount

corresponding to the proportion of capital and reserves represented by the

participating interest in that associated undertaking shall be disclosed

separately in the consolidated balance sheet or in the notes to the consolidated

financial statements. That difference shall be calculated as at the date on

which that method is used for the first time; or

(b) at an amount corresponding to the proportion of the associated undertaking's

capital and reserves represented by the participating interest in that associated

undertaking. The difference between that amount and the book value calculated

in accordance with the measurement rules laid down in Chapters 2 and 3 shall

be disclosed separately in the consolidated balance sheet or in the notes to the

consolidated financial statements. That difference shall be calculated as at the

date on which that method is used for the first time.

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A Member State may prescribe the application of one or other of the options

provided for in points (a) and (b). In such cases, the consolidated balance sheet or

the notes to the consolidated financial statements shall indicate which of those

options has been used.

In addition, for the purposes of points (a) and (b), a Member State may ▌permit or

require the calculation of the difference as at the date of acquisition of the shares or,

where they were acquired in two or more stages, as at the date on which the

undertaking became an associated undertaking.

3. Where an associated undertaking's assets or liabilities have been valued by methods

other than those used for consolidation in accordance with Article 24(11), they may,

for the purpose of calculating the difference referred to in points (a) and (b) of

paragraph 2, be revalued by the methods used for consolidation. Where such

revaluation has not been carried out ▌, that fact shall be disclosed in the notes to the

consolidated financial statements. A Member State may require such revaluation.

4. The book value referred to in point (a) of paragraph 2, or the amount corresponding

to the proportion of the associated undertaking's capital and reserves referred to in

point (b) of paragraph 2, shall be increased or reduced by the amount of any variation

which has taken place during the financial year in the proportion of the associated

undertaking's capital and reserves represented by that participating interest; it shall be

reduced by the amount of the dividends relating to that participating interest.

350

5. In so far as the positive difference referred to in points (a) and (b) of paragraph 2

cannot be related to any category of assets or liabilities ▌, it shall be treated in

accordance with the rules applicable to the item 'goodwill' as set out in point (d) of

Article 12(6), the first subparagraph of Article 12(11), point (c) of Article 24(3), and

Annex III and Annex IV.

6. The proportion of the profit or loss of the associated undertakings attributable to the

participating interests in such associated undertakings shall be shown in the

consolidated profit and loss account as a separate item under an appropriate heading.

7. The eliminations referred to in Article 24(7) shall be effected in so far as the facts are

known or can be ascertained ▌.

8. Where an associated undertaking draws up consolidated financial statements,

paragraphs 1 to 7 shall apply to the capital and reserves shown in such consolidated


9. This Article need not be applied where the participating interest in the capital of the

associated undertaking is not material.

Article 28

The notes to the consolidated financial statements

1. The notes to the consolidated financial statements shall set out the information

required by Articles 16, 17 and 18, in addition to any other information required under

other provisions of this Directive, in a way which facilitates the assessment of the

financial position of the undertakings included in the consolidation taken as a

whole, taking account of the essential adjustments resulting from the particular

characteristics of consolidated financial statements as compared to annual financial

statements, including the following▌:

351

(a) in disclosing transactions between related parties, transactions between related

parties included in a consolidation that are eliminated on consolidation shall

not be included;

(b) in disclosing the average number of employees employed during the financial

year, there shall be separate disclosure of the average number of employees

employed by undertakings that are proportionately consolidated; and

(c) in disclosing the amounts of emoluments and advances and credits granted to

members of the administrative, managerial and supervisory bodies, only amounts

granted by the parent undertaking and its subsidiary undertakings to members

of the administrative, managerial and supervisory bodies of the parent

undertaking shall be disclosed▌.

2. The notes to the consolidated financial statements shall, in addition to the information

required under paragraph 1, set out the following information:

(a) in relation to undertakings included in the consolidation:

(i) the names and registered offices of those undertakings,

352

(ii) the proportion of the capital held in those undertakings▌, other

than the parent undertaking, by the undertakings included in

the consolidation or by persons acting in their own names but

on behalf of those undertakings, and

(iii) information as to which of the conditions referred to in Article

22(1), (2) and ▌(7) following the application of Article 22(3),

(4) and (5) has formed the basis on which the consolidation has

been carried out. That disclosure may, however, be omitted

where consolidation has been carried out on the basis of point

(a) of Article 22(1) and where the proportion of the capital and

the proportion of the voting rights held are the same.

The same information shall be given in respect of undertakings

excluded from a consolidation on the grounds of immateriality

pursuant to point (j) of Article 6(1) and Article 23(10), and an

explanation shall be given for the exclusion of the undertakings

referred to in Article 23(9);

(b) the names and registered offices of associated undertakings included in the

consolidation as described in Article 27(1) and the proportion of their capital

held by undertakings included in the consolidation or by persons acting in their

own names but on behalf of those undertakings;

353

(c) the names and registered offices of undertakings proportionally consolidated

under Article 26, the factors on which joint management of those undertakings

is based, and the proportion of their capital held by the undertakings included in

the consolidation or by persons acting in their own names but on behalf of those

undertakings; and

(d) in relation to each of the undertakings, other than those referred to in points (a),

(b) and (c), in which undertakings included in the consolidation, either

themselves or through persons acting in their own names but on behalf of those

undertakings, hold a participating interest:

(i) the name and registered office of those undertakings,

(ii) the proportion of the capital held,

(iii) the amount of the capital and reserves, and the profit or loss for

the latest financial year of the undertaking concerned for which

financial statements have been adopted▌.

354

The information concerning capital and reserves and the profit or loss may

also be omitted where the undertaking concerned does not publish its

balance sheet.

3. Member States may allow the information required by points (a) to (d) of paragraph 2

to take the form of a statement filed in accordance with Article 3(3) of Directive

2009/101/EC. The filing of such a statement shall be disclosed in the notes to the

consolidated financial statements. Member States may also allow that information to

be omitted when its nature is such that its disclosure would be seriously prejudicial to

any of the undertakings to which it relates. Member States may make such omissions

subject to prior administrative or judicial authorisation. Any such omission shall be

disclosed in the notes to the consolidated financial statements.

Article 29

The consolidated management report

1. The consolidated management report shall, as a minimum, in addition to any other

information required under other provisions of this Directive, set out ▌the information

required by Articles 19 and 20, taking account of the essential adjustments resulting

from the particular characteristics of a consolidated management report as compared to

a management report in a way which facilitates the assessment of the position of the

undertakings included in the consolidation taken as a whole.

355

2. The following adjustments to the information required by Articles 19 and 20 shall

apply:

(a) in reporting details of own shares acquired, the consolidated management report

shall indicate the number and nominal value or, in the absence of a nominal

value, the accounting par value of all of the parent undertaking's shares held by

that parent undertaking ▌, by subsidiary undertakings of that parent undertaking

or by a person acting in his own name but on behalf of any of those

undertakings. A Member State may permit or require the disclosure of those

particulars in the notes to the consolidated financial statements;

(b) in reporting on internal control and risk management systems, the corporate

governance statement shall refer to the main features of the internal controls and

risk management systems for the undertakings included in the consolidation,

taken as a whole.

3. Where a consolidated management report is required in addition to the management

report, the two reports may be presented as a single report.

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CHAPTER 7

PUBLICATION

Article 30

General publication requirement

1. Member States shall ensure that undertakings publish within a reasonable period of

time, which shall not exceed 12 months after the balance sheet date, the duly

approved annual financial statements and the management report, together with the

opinion submitted by the statutory auditor or audit firm referred to in Article 34 of this

Directive, as laid down by the laws of each Member State in accordance with Chapter

2 of Directive 2009/101/EC.

Member States may, however, exempt undertakings from the obligation to

publish the management report where a copy of all or part of any such

report can be easily obtained upon request at a price ▌not exceeding its

administrative cost.

2. ▌Member States may exempt an undertaking referred to in Annex II to which the

coordination measures prescribed by this Directive apply by virtue of point (b) of

Article 1(1) from publishing its financial statements in accordance with Article 3 of

Directive 2009/101/EC, provided that those financial statements are available to the

public at its head office, in the following cases:

357

(a) all the members of the undertaking concerned that have unlimited liability are

undertakings referred to in Annex I governed by the laws of Member States other

than the Member State whose law governs that undertaking, and none of those

undertakings publishes the financial statements of the undertaking concerned

with its own financial statements;

(b) all the members of the undertaking concerned that have unlimited liability are

undertakings which are not governed by the laws of a Member State but which

have a legal form comparable to those referred to in Directive 2009/101/EC.

Copies of the financial statements shall be obtainable upon request. The

price of such a copy may not exceed its administrative cost.

3. Paragraph 1 shall apply with respect to consolidated financial statements and

consolidated management reports.

358

Where the undertaking drawing up the consolidated financial statements is

▌ established as one of the types of undertaking listed in Annex II and is

not required by the national law of its Member State to publish the

documents referred to in paragraph 1 in the same manner as prescribed in

Article 3 of Directive 2009/101/EC, it shall, as a minimum, make those

documents available to the public at its head office and a copy shall be

provided upon request, the price of which shall not exceed its

administrative cost.

Article 31

Simplifications for small and medium-sized undertakings

1. Member States may exempt small undertakings from the obligation to publish their

profit and loss accounts and management reports.

2. Member States may permit medium-sized undertakings to publish:

(a) abridged balance sheets showing only those items preceded by letters and roman

numerals in Annexes III and IV and disclosing separately, either in the balance

sheet or in the notes to the financial statements:

(i) C (I) (3), C (II) (1), (2), (3) and (4), C (III) (1), (2), (3) ▌and

(4), D (II) (2), (3) and (6) and D (III) (1) and (2) under ‘Assets’

and C, (1), (2), (6), (7) and (9) under 'Capital, reserves and

liabilities' in Annex III,

359

(ii) C (I) (3), C (II) (1), (2), (3) and (4), C (III) (1), (2), (3) and

(4), D (II) (2), (3) and (6), D (III) (1) and (2), F (1), (2), (6),

(7) and (9) and (I) (1), (2), (6), (7) and (9) in Annex IV,

(iii) the information required as indicated in brackets in D (II) under

‘Assets’ and C under ‘Capital, reserves and liabilities’ in

Annex III, in total for all the items concerned and separately

for D (II) (2) and (3) under ‘Assets’ and C (1), (2), (6), (7) and

(9) under ‘Capital, reserves and liabilities’,

(iv) the information required as indicated in brackets in D (II) in

Annex IV, in total for all the items concerned, and separately

for D (II) (2) and (3);

(b) abridged notes to their financial statements without the information required in

points (f) and (j) of Article 17(1).

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This paragraph shall be without prejudice to Article 30(1), in so far as that

Article relates to the profit and loss account, the management report and

the opinion of the statutory auditor or audit firm.

Article 32

Other publication requirements

1. Where the annual financial statements and the management report are published in full,

they shall be reproduced in the form and text on the basis of which the statutory

auditor or audit firm has drawn up his/her/its opinion. They shall be accompanied by

the full text of the audit report ▌.

2. If the annual financial statements are not published in full, the abridged version of

those financial statements, which shall not be accompanied by the audit report,

shall:

(a) indicate that the version published is abridged;

(b) refer to the register in which the financial statements have been filed in

accordance with Article 3 of Directive 2009/101/EC or, where the financial

statements have not yet been filed, disclose that fact;

361

(c) disclose whether an unqualified, qualified or adverse audit opinion was

expressed by the statutory auditor or audit firm, or whether the statutory auditor

or audit firm was unable to express an audit opinion;

(d) disclose whether the audit report ▌included a reference to any matters to which

the statutory auditor or audit firm drew attention by way of emphasis without

qualifying the audit opinion.

Article 33

Responsibility and liability for drawing up and publishing the financial

statements and the management report

1. Member States shall ensure that the members of the administrative, management and

supervisory bodies of an undertaking, acting within the competences assigned to

them by national law, have collective responsibility for ensuring that:

(a) the annual financial statements, the management report and, when provided

separately, the corporate governance statement; and

(b) the consolidated financial statements, consolidated management reports and,

when provided separately, the consolidated corporate governance statement,

362

are drawn up and published in accordance with the requirements of this

Directive and, where applicable, ▌with the international accounting

standards adopted in accordance with Regulation (EC) No 1606/2002. ▌

2. Member States shall ensure that ▌their laws, regulations and administrative provisions

on liability, at least towards the undertaking, apply to the members of the

administrative, management and supervisory bodies of the undertakings ▌for breach of

the duties referred to in paragraph 1.

CHAPTER 8

AUDITING

Article 34

General requirement

1. Member States shall ensure that the financial statements of public-interest entities,

medium-sized and large undertakings are audited by one or more statutory auditors or

audit firms approved by Member States to carry out statutory audits on the basis of

Directive 2006/43/EC.

The statutory auditor(s) or audit firm(s) shall also:

(a) express an opinion on:

363

(i) whether the management report is consistent with the financial

statements for the same financial year, and

(ii) whether the management report has been prepared in

accordance with the applicable legal requirements;

(b) state whether, in the light of the knowledge and understanding of the

undertaking and its environment obtained in the course of the audit, he, she or

it has identified material misstatements in the management report, and shall

give an indication of the nature of any such misstatements.

2. The first subparagraph of paragraph 1 shall apply mutatis mutandis with respect to

consolidated financial statements. The second subparagraph of paragraph 1 shall apply

mutatis mutandis with respect to consolidated financial statements and consolidated

management reports.

Article 35

Amendment of Directive 2006/43/EC as regards the audit report

Article 28 of Directive 2006/43/EC is replaced by the following:

"Article 28

Audit reporting

1. The audit report ▌shall include:

364

(a) an introduction which shall, as a minimum, identify the financial statements that

are the subject of the statutory audit, together with the financial reporting

framework that has been applied in their preparation;

(b) a description of the scope of the statutory audit which shall, as a minimum,

identify the auditing standards in accordance with which the statutory audit was

conducted;

(c) an audit opinion, which shall be either unqualified, qualified or an adverse

opinion and shall state clearly the opinion of the statutory auditor as to:

(i) whether the annual financial statements give a true and fair

view in accordance with the relevant financial reporting

framework, and,

(ii) where appropriate, whether the annual financial statements

comply with statutory requirements.

If the statutory auditor is unable to express an audit opinion, the

report shall contain a disclaimer of opinion;

(d) a reference to any matters to which the statutory auditor draws attention by way

of emphasis without qualifying the audit opinion;

▌

365

(e) the opinion and statement referred to in the second subparagraph of Article

34(1) of Directive ….

2. The audit report shall be signed and dated by the statutory auditor. Where an audit

firm carries out the statutory audit, the audit report shall bear the signature of at

least the statutory auditor(s) carrying out the statutory audit on behalf of the audit

firm. In exceptional circumstances Member States may provide that such

signature(s) need not be disclosed to the public if such disclosure could lead to an

imminent and significant threat to the personal security of any person. In any case

the name(s) of the person(s) involved shall be known to the relevant competent

authorities.

3. The audit report on the consolidated financial statements shall comply with the

requirements set out in of paragraphs 1 and 2. In reporting on the consistency of the

management report and the financial statements as required by point (e) of paragraph

1, the statutory auditor or audit firm shall consider the consolidated financial

statements and the consolidated management report. Where the annual financial

statements of the parent undertaking are attached to the consolidated financial

statements, the audit reports required by this Article may be combined.

___________

OJ L …".

OJ: Please insert the number, date and title of this Directive. OJ: Please insert the publication reference of this Directive.

366

CHAPTER 9

PROVISIONS CONCERNING EXEMPTIONS AND RESTRICTIONS ON EXEMPTIONS

Article 36

Exemptions for micro-undertakings

1. Member States may exempt micro-undertakings from any or all of the following

obligations:

(a) the obligation to present 'Prepayments and accrued income' and 'Accruals and

deferred income'. Where a Member State makes use of that option, it may

permit those undertakings, only in respect of other charges as referred to in

point (b)(vi) of paragraph 2 of this Article, to depart from point (d) of Article

6(1) with regard to the recognition of 'Prepayments and accrued income' and

'Accruals and deferred income', provided that this fact is disclosed in the notes

to the financial statements or, in accordance with point (b) of this paragraph,

at the foot of the balance sheet;

(b) the obligation to draw up notes to the financial statements in accordance with

Article 16, provided that the information required by points (d) and (e) of

Article 16(1) of this Directive and by Article 24(2) of Directive 2012/30/EU is

disclosed at the foot of the balance sheet;

(c) the obligation to prepare a management report in accordance with Chapter 5,

provided that the information required by Article 24(2) of Directive

2012/30/EU is disclosed in the notes to the financial statements or, in

accordance with point (b) of this paragraph, at the foot of the balance sheet;

(d) the obligation to publish annual financial statements in accordance with

Chapter 7 of this Directive, provided that the balance sheet information

contained therein is duly filed, in accordance with national law, with at least

one competent authority designated by the Member State concerned. Whenever

the competent authority is not the central register, commercial register or

367

companies register, as referred to in Article 3(1) of Directive 2009/101/EC, the

competent authority is required to provide the register with the information

filed.

368

2. Member States may permit micro-undertakings:

(a) to draw up only an abridged balance sheet showing separately at least those

items preceded by letters in Annexes III or IV, where applicable. In cases

where point (a) of paragraph 1 of this Article applies, items E under 'Assets'

and D under 'Liabilities' in Annex III or items E and K in Annex IV shall be

excluded from the balance sheet;

(b) to draw up only an abridged profit and loss account showing separately at least

the following items, where applicable:

(i) net turnover,

(ii) other income,

(iii) cost of raw materials and consumables,

(iv) staff costs,

(v) value adjustments,

(vi) other charges,

(vii) tax,

(viii) profit or loss.

369

3. Member States shall not permit or require the application of Article 8 to any micro-

undertaking making use of any of the exemptions provided for in paragraphs 1 and

2 of this Article.

4. In respect of micro-undertakings, annual financial statements drawn up in

accordance with paragraphs 1, 2 and 3 of this Article shall be regarded as giving the

true and fair view required by Article 4(3), and consequently Article 4(4) shall not

apply to such financial statements.

5. If point (a) of paragraph 1 of this Article applies, the balance sheet total referred to

in point (a) of Article 3(1) shall consist of the assets referred to in items A to D under

'Assets' in Annex III or items A to D in Annex IV.

6. Without prejudice to this Article, Member States shall ensure that micro-

undertakings are otherwise regarded as small undertakings.

7. Member States shall not make available the derogations provided for in paragraphs

1, 2 and 3 in respect of investment undertakings or financial holding undertakings.

370

8. Member States which at … have brought into force laws, regulations or

administrative provisions in compliance with Directive 2012/6/EU of the European

Parliament and of the Council of 14 March 2012 amending Council Directive

78/660/EEC on the annual accounts of certain types of companies as regards micro-

entities1, may be exempted from the requirements set out in Article 3(9) with regard

to the conversion into national currencies of thresholds set out in Article 3(1) when

applying the first sentence of Article 53(1).

9. By ... the Commission shall submit to the European Parliament, to the Council and

to the European Economic and Social Committee a report on the situation of micro-

undertakings taking account, in particular, of the situation at national level

regarding the number of undertakings covered by the size criteria and the reduction

of administrative burdens resulting from the exemption from the publication

requirement.

Article 37

Exemption for subsidiary undertakings

Notwithstanding the provisions of Directives 2009/101/EC and 2012/30/EU, a Member State

shall not be required to apply the provisions of this Directive concerning the content, auditing

and publication of the annual financial statements and the management report to undertakings

governed by their national laws which are subsidiary undertakings, where the following

conditions are fulfilled:

(1) the parent undertaking is subject to the laws of a Member State;

(2) all shareholders or members of the subsidiary undertaking have, in respect of each

financial year in which the exemption is applied, declared their agreement to the

exemption from such obligation; ▌

OJ: please insert the date: the date of entry into force of this Directive.1 OJ L 81, 21.3.2012, p. 3. OJ: please insert the date: five years after the entry into force of this Directive.

371

(3) the parent undertaking has declared that it guarantees the commitments entered into by

the subsidiary undertaking;

(4) the declarations referred to in points (2) and (3) of this Article are published by the

subsidiary undertaking as laid down by the laws of the Member State in accordance

with Chapter 2 of Directive 2009/101/EC;

(5) the subsidiary undertaking is included in the consolidated financial statements drawn

up by the parent undertaking in accordance with this Directive;

(6) the exemption is disclosed in the notes to the consolidated financial statements drawn

up by the parent undertaking; and

(7) the consolidated financial statements referred to in point (5) of this Article, the

consolidated management report, and the audit report ▌are published for the

subsidiary undertaking as laid down by the laws of the Member State in accordance

with Chapter 2 of Directive 2009/101/EC.

372

Article 38

Undertakings which are members having unlimited liability of other

undertakings

1. Member States may require undertakings referred to in point (a) of Article 1(1) which

are governed by their laws and which are members having unlimited liability of any

undertaking referred to in point (b) of Article 1(1) ('the undertaking concerned'), to

draw up, have audited and publish, with their own financial statements, the financial

statements of the undertaking concerned in accordance with this Directive; in such

case the requirements of this Directive shall not apply to the undertaking concerned.

2. Member States shall not be required to apply the requirements of this Directive to the

undertaking concerned where:

(a) the financial statements of the undertaking concerned are drawn up, audited and

published in accordance with the provisions of this Directive by an undertaking

which:

(i) is a member having unlimited liability of that undertaking

concerned, and

(ii) is governed by the laws of another Member State;

373

(b) the undertaking concerned is included in consolidated financial statements

drawn up, audited and published in accordance with this Directive by:

(i) a member having unlimited liability, or

(ii) where the undertaking concerned is included in the

consolidated financial statements of a larger body of

undertakings drawn up, audited and published in conformity

with this Directive, a parent undertaking governed by the laws

of a Member State. This exemption shall be disclosed in the

notes to the consolidated financial statements.

3. In the cases referred to in paragraph 2, the undertaking concerned shall, upon request,

reveal the name of the undertaking publishing the financial statements ▌.

Article 39

Profit and loss account exemption for parent undertakings preparing

consolidated financial statements

A Member State shall not be required to apply the provisions of this Directive concerning the

auditing and publication of the profit and loss account to undertakings governed by its national

laws which are parent undertakings, provided that the following conditions are fulfilled:

(1) the parent undertaking draws up consolidated financial statements in accordance with

this Directive and is included in those consolidated financial statements;

374

(2) the exemption is disclosed in the notes to the annual financial statements of the parent

undertaking;

(3) the exemption is disclosed in the notes to the consolidated financial statements drawn

up by the parent undertaking; and

(4) the profit or loss of the parent undertaking, determined in accordance with this

Directive, is shown in its balance sheet.

Article 40

Restriction of exemptions for public-interest entities

Unless expressly provided for in this Directive, ▌Member States shall not make the

simplifications and exemptions set out in this Directive available to public-interest entities. A

public-interest entity shall be treated as a large undertaking regardless of its net turnover,

balance sheet total or average number of employees during the financial year.

375

CHAPTER 10

REPORT ON PAYMENTS TO GOVERNMENTS

Article 41

Definitions relating to reporting on payments to governments

For the purpose of this Chapter, the following definitions shall apply:

(1) 'undertaking active in the extractive industry' means an undertaking with any activity

involving the exploration, prospection, discovery, development, and extraction of

minerals, oil, natural gas deposits or other materials, within the economic activities

listed in Section B, Divisions 05 to 08 of Annex I to Regulation (EC) No 1893/2006 of

the European Parliament and of the Council of 20 December 2006 establishing the

statistical classification of economic activities NACE Revision 21;

(2) 'undertaking active in the logging of primary forests' means an undertaking with

activities as referred to in Section A, Division 02, Group 02.2 of Annex I to Regulation

(EC) No 1893/2006, in primary forests;

(3) 'government' means any national, regional or local authority of a Member State or of a

third country. It includes a department, agency or undertaking controlled by that

authority as laid down in Article 22(1) to (6) of this Directive;

1 OJ L 393, 30.12.2006, p. 1.

376

(4) 'project' means the operational activities that are governed by a single contract,

license, lease, concession or similar legal agreements and form the basis for

payment liabilities with a government. None the less, if multiple such agreements are

substantially interconnected, this shall be considered a project;

(5) 'payment' means an amount paid, whether in money or in kind, for activities, as

described in points 1 and 2, of the following types:

(a) production entitlements;

(b) taxes levied on the income, production or profits of companies, excluding taxes

levied on consumption such as value added taxes, personal income taxes or

sales taxes;

(c) royalties;

(d) dividends;

(e) signature, discovery and production bonuses;

(f) licence fees, rental fees, entry fees and other considerations for licences and/or

concessions; and

(g) payments for infrastructure improvements.

377

Article 42

Undertakings required to report on payments to governments

1. Member States shall require large undertakings and all public-interest entities active in

the extractive industry or the logging of primary forests to prepare and make public a

report on payments made to governments on an annual basis.

2. That obligation shall not apply to any undertaking governed by the law of a Member

State which is a subsidiary or parent undertaking, where both of the following

conditions are fulfilled:

(a) the parent undertaking is subject to the laws of a Member State; and

(b) the payments to governments made by the undertaking are included in the

consolidated report on payments to governments drawn up by that parent

undertaking in accordance with Article 44.

Article 43

Content of the report

1. Any payment, whether made as a single payment or as a series of related payments,

need not be taken into account in the report if it is below EUR 100 000 within a

financial year.

378

2. The report shall disclose the following information in relation to activities as

described in points (1) and (2) of Article 41 in respect of the relevant financial year:

(a) the total amount of payments made to each government;

(b) the total amount per type of payment as specified in points (5)(a) to (g) of

Article 41 made to each government;

(c) where those payments have been attributed to a specific project, the total amount

per type of payment as specified in point (5)(a) to (g) of Article 41, made for

each such project and the total amount of payments for each such project.

Payments made by the undertaking in respect of obligations

imposed at entity level may be disclosed at the entity level rather

than at project level.

▌

3. Where payments in kind are made to a government, they shall be reported in value

and, where applicable, in volume. Supporting notes shall be provided to explain how

their value has been determined.

▌

4. The disclosure of the payments referred to in this Article shall reflect the substance,

rather than the form, of the payment or activity concerned. Payments and activities

may not be artificially split or aggregated to avoid the application of this Directive.

379

5. In the case of those Member States which have not adopted the euro, the euro

threshold identified in paragraph 1 shall be converted into national currency by:

(a) applying the exchange rate published in the Official Journal of the European

Union as at the date of the entry into force of any Directive fixing that

threshold, and

(b) rounding to the nearest hundred.

Article 44

Consolidated report on payments to governments

1. A Member State shall require any large undertaking or any public-interest entity active

in the extractive industry or the logging of primary forests and governed by its national

law to draw up a consolidated report on payments to governments in accordance with

Articles 42 and 43 if that parent undertaking is under the obligation to prepare

consolidated financial statements as laid down in Article 22(1) to (6).

A parent undertaking is considered to be active in the extractive industry or the

logging of primary forests if any of its subsidiary undertakings are active in the

extractive industry or the logging of primary forests.

The consolidated report shall only include payments resulting from extractive

operations and/or operations relating to the logging of primary forests.

380

2. The obligation to draw up the consolidated report referred to in paragraph 1 shall not

apply to:

(a) a parent undertaking of a small group, as defined in Article 3(5), except where

any affiliated undertaking is a public-interest entity;

(b) a parent undertaking of a medium-sized group, as defined in Article 3(6), except

where any affiliated undertaking is a public-interest entity; and

(c) a parent undertaking governed by the law of a Member State which is also a

subsidiary undertaking, if its own parent undertaking is governed by the law of a

Member State.

3. An undertaking, including a public-interest entity, need not be included in a

consolidated report on payments to governments where at least one of the following

conditions is fulfilled:

(a) severe long-term restrictions substantially hinder the parent undertaking in the

exercise of its rights over the assets or management of that undertaking;

381

(b) extremely rare cases where the information necessary for the preparation of the

consolidated report on payments to governments in accordance with this

Directive cannot be obtained without disproportionate expense or undue delay;

(c) the shares of that undertaking are held exclusively with a view to their

subsequent resale.

The above exemptions shall apply only if they are also used for the purposes of the

consolidated financial statements.

Article 45

Publication

1. The report referred to in Article 42 and the consolidated report referred to in Article 44

on payments to governments shall be published as laid down by the laws of each

Member State in accordance with Chapter 2 of Directive 2009/101/EC.

2. Member States shall ensure that the members of the responsible bodies of an

undertaking, acting within the competences assigned to them by national law, have

responsibility for ensuring that, to the best of their knowledge and ability, the report

on payments to governments is drawn up and published in accordance with the

requirements of this Directive.

382

Article 46

Equivalence criteria

1. Undertakings referred to in Articles 42 and 44 that prepare and make public a report

complying with third-country reporting requirements assessed, in accordance with

Article 47, as equivalent to the requirements of this Chapter are exempt from the

requirements of this Chapter except for the obligation to publish this report as laid

down by the laws of each Member State in accordance with Chapter 2 of Directive

2009/101/EC.

2. The Commission shall be empowered to adopt delegated acts in accordance with

Article 49 identifying the criteria to be applied when assessing, for the purposes of

paragraph 1 of this Article, the equivalence of third-country reporting requirements

and the requirements of this Chapter.

3. The criteria identified by the Commission in accordance with paragraph 2 shall:

(a) include the following:

(i) target undertakings,

(ii) target recipients of payments,

(iii) payments captured,

(iv) attribution of payments captured,

(v) breakdown of payments captured,

(vi) triggers for reporting on a consolidated basis,

383

(vii) reporting medium,

(viii) frequency of reporting, and

(ix) anti-evasion measures;

(b) otherwise be limited to criteria which facilitate a direct comparison of third-

country reporting requirements with the requirements of this Chapter.

Article 47

Application of equivalence criteria

The Commission shall be empowered to adopt implementing acts identifying those third-

country reporting requirements which, after applying the equivalence criteria identified in

accordance with Article 46, it considers equivalent to the requirements of this Chapter. Those

implementing acts shall be adopted in accordance with the examination procedure referred to

in Article 50(2).

384

Article 48

Review

The Commission shall review and report on the implementation and effectiveness of this

Chapter, in particular as regards the scope of, and compliance with, the reporting obligations

and the modalities of the reporting on a project basis.

The review shall ▌take into account international developments, in particular with regard to

enhancing transparency of payments to governments, assess the impacts of other

international regimes and consider the effects on competitiveness and security of energy

supply. It shall be completed by ….

The report shall be submitted to the European Parliament and to the Council, together with a

legislative proposal, if appropriate. That report shall consider the extension of the reporting

requirements to additional industry sectors and whether the report on payments to

governments should be audited. The report shall also consider the disclosure of additional

information on the average number of employees, the use of subcontractors and any

pecuniary penalties administered by a country.

In addition, the report shall analyse the feasibility of the introduction of an obligation for all

Union issuers to carry out due diligence when sourcing minerals to ensure that supply chains

have no connection to conflict parties and respect the EITI and OECD recommendations on

responsible supply chain management.

PB: please insert date: three years after the expiry of the deadline for transposition of this Directive.

385

CHAPTER 11

FINAL PROVISIONS

Article 49

Exercise of delegated powers

1. The power to adopt delegated acts is conferred on the Commission subject to the

conditions laid down in this Article.

2. The power to adopt delegated acts referred to in Article 1(2), Article 3(13) and

Article 46(2) shall be conferred on the Commission for an indeterminate period of

time from the date referred to in Article 54.

3. The delegation of power referred to in Article 1(2), Article 3(13) and Article 46(2)

may be revoked at any time by the European Parliament or by the Council. A decision

to revoke shall put an end to the delegation of the power specified in that decision. It

shall take effect the day following the publication of that decision in the Official

Journal of the European Union or at a later date specified therein. It shall not affect the

validity of any delegated acts already in force.

4. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to

the European Parliament and to the Council.

386

5. A delegated act adopted pursuant to Article 1(2), Article 3(13) or Article 46(2) shall

enter into force only if no objection has been expressed either by the European

Parliament or the Council within a period of two months of notification of that act to

the European Parliament and the Council or if, before the expiry of that period, the

European Parliament and the Council have both informed the Commission that they

will not object. That period shall be extended by two months at the initiative of the

European Parliament or the Council.

Article 50

Committee procedure

1. The Commission shall be assisted by a committee. That committee shall be a

committee within the meaning of Regulation (EU) No 182/2011.

2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No

182/2011 shall apply.

Article 51

Penalties

Member States shall provide for penalties applicable to infringements of the national provisions

adopted in accordance with this Directive and shall take all the measures necessary to ensure

that those penalties are enforced. The penalties provided for shall be effective, proportionate

and dissuasive.

387

Article 52

Repeal of Directives 78/660/EEC and 83/349/EEC

Directives 78/660/EEC and 83/349/EEC are repealed.

References to the repealed Directives shall be construed as references to this Directive and shall

be read in accordance with the correlation table in Annex VII.

Article 53

Transposition

1. Member States shall bring into force the laws, regulations and administrative

provisions necessary to comply with this Directive by …. They shall immediately

inform the Commission thereof ▌.

Member States may provide that the provisions referred to in the first subparagraph

are first to apply to financial statements for financial years beginning on 1 January

201x** or during the calendar year 201x**.

When Member States adopt those provisions, they shall contain a reference to this

Directive or be accompanied by such a reference on the occasion of their official

publication. The methods of making such reference shall be laid down by Member

States.

OJ: Please insert the date: Two years after entry into force of this Directive.* * OJ: Please insert the date: the year which is the next one after the transposition

deadline.*

388

2. Member States shall communicate to the Commission the text of the main provisions

of national law which they adopt in the field covered by this Directive.

Article 54

Entry into force

This Directive shall enter into force on the twentieth day following that of its publication in the

Official Journal of the European Union.

Article 55

Addressees

This Directive is addressed to the Member States.

Done at ...



_______________________

389

ANNEX I

Types of undertaking referred to in point (a) of Article 1(1)

– Belgium:

la société anonyme/de naamloze vennootschap, la société en

commandite par actions/de commanditaire vennootschap op

aandelen, la société privée à responsabilité limitée/de besloten

vennootschap met beperkte aansprakelijkheid, la société

coopérative à responsabilité limitée/de coöperatieve vennootschap

met beperkte aansprakelijkheid;

– Bulgaria:

акционерно дружество, дружество с ограничена отговорност,

командитно дружество с акции;

– the Czech Republic:

společnost s ručením omezeným, akciová společnost;

390

– Denmark:

aktieselskaber, kommanditaktieselskaber, anpartsselskaber;

– Germany:

die Aktiengesellschaft, die Kommanditgesellschaft auf Aktien, die

Gesellschaft mit beschränkter Haftung;

– Estonia:

aktsiaselts, osaühing;

– Ireland:

public companies limited by shares or by guarantee, private

companies limited by shares or by guarantee;

– Greece:

η ανώνυμη εταιρία, η εταιρία περιορισμένης ευθύνης, η

ετερόρρυθμη κατά μετοχές εταιρία;

391

– Spain:

la sociedad anónima, la sociedad comanditaria por acciones, la

sociedad de responsabilidad limitada;

– France:

la société anonyme, la société en commandite par actions, la société

à responsabilité limitée, la société par actions simplifiée;

– Italy:

la società per azioni, la società in accomandita per azioni, la società

a responsabilità limitata;

– Cyprus:

Δημόσιες εταιρείες περιορισμένης ευθύνης με μετοχές ή με

εγγύηση, ιδιωτικές εταιρείες περιορισμένης ευθύνης με μετοχές ή

με εγγύηση;

392

– Latvia:

akciju sabiedrība, sabiedrība ar ierobežotu atbildību;

– Lithuania:

akcinės bendrovės, uždarosios akcinės bendrovės;

– Luxembourg:

la société anonyme, la société en commandite par actions, la société

à responsabilité limitée;

– Hungary:

részvénytársaság, korlátolt felelősségű társaság;

393

– Malta:

kumpanija pubblika —public limited liability company,

kumpannija privata —private limited liability company,

soċjeta in akkomandita bil-kapital maqsum f'azzjonijiet —

partnership en commandite with the capital divided into shares;

– the Netherlands:

de naamloze vennootschap, de besloten vennootschap met beperkte

aansprakelijkheid;

– Austria:

die Aktiengesellschaft, die Gesellschaft mit beschränkter Haftung;

– Poland:

spółka akcyjna, spółka z ograniczoną odpowiedzialnością, spółka

komandytowo-akcyjna;

394

– Portugal:

a sociedade anónima, de responsabilidade limitada, a sociedade em

comandita por ações, a sociedade por quotas de responsabilidade

limitada;

– Romania:

societate pe acțiuni, societate cu răspundere limitată, societate în

comandită pe acțiuni.

– Slovenia:

delniška družba, družba z omejeno odgovornostjo, komanditna

delniška družba;

395

– Slovakia:

akciová spoločnosť, spoločnosť s ručením obmedzeným;

– Finland:

yksityinen osakeyhtiö/privat aktiebolag, julkinen

osakeyhtiö/publikt aktiebolag;

– Sweden:

aktiebolag;

– the United Kingdom:

public companies limited by shares or by guarantee, private

companies limited by shares or by guarantee

______________

396

ANNEX II

Types of undertaking referred to in point (b) of Article 1(1)

– Belgium

la société en nom collectif/de vennootschap onder firma, la société

en commandite simple/de gewone commanditaire vennootschap, la

société coopérative à responsabilité illimitée/de coöperatieve

vennootschap met onbeperkte aansprakelijkheid;

– Bulgaria:

събирателно дружество, командитно дружество;

– the Czech Republic:

veřejná obchodní společnost, komanditní společnost▌;

– Denmark:

interessentskaber, kommanditselskaber;

397

– Germany:

die offene Handelsgesellschaft, die Kommanditgesellschaft;

– Estonia:

täisühing, usaldusühing;

– Ireland:

partnerships, limited partnerships, unlimited companies;

– Greece:

η ομόρρυθμος εταιρία, η ετερόρρυθμος εταιρία;

– Spain:

sociedad colectiva, sociedad en comandita simple;

398

– France:

la société en nom collectif, la société en commandite simple;

– Italy:

la società in nome collettivo, la società in accomandita semplice;

– Cyprus:

Ομόρρυθμες και ετερόρρυθμες εταιρείες (συνεταιρισμοί);

– Latvia:

pilnsabiedrība, komandītsabiedrība;

– Lithuania:

tikrosios ūkinės bendrijos, komanditinės ūkinės bendrijos;

399

– Luxembourg:

la société en nom collectif, la société en commandite simple;

– Hungary:

közkereseti társaság, betéti társaság, közös vállalat, egyesülés,

egyéni cég;

– Malta:

soċjeta f'isem kollettiv jew soċjeta in akkomandita, bil-kapital li

mhux maqsum f'azzjonijiet meta s-soċji kollha li għandhom

responsabbilita' llimitata huma soċjetajiet in akkomandita bil-

kapital maqsum f'azzjonijiet — partnership en nom collectif or

partnership en commandite with capital that is not divided into

shares, when all the partners with unlimited liability are partnership

en commandite with the capital divided into shares;

– the Netherlands:

de vennootschap onder firma, de commanditaire vennootschap;

400

– Austria:

die offene Gesellschaft, die Kommanditgesellschaft;

– Poland:

spółka jawna, spółka komandytowa;

– Portugal:

sociedade em nome colectivo, sociedade em comandita simples;

– Romania:

societate în nume colectiv, societate în comandită simplă;

– Slovenia:

družba z neomejeno odgovornostjo, komanditna družba;

401

– Slovakia:

verejná obchodná spoločnosť, komanditná spoločnosť;

– Finland:

avoin yhtiö/ öppet bolag, kommandiittiyhtiö/kommanditbolag;

– Sweden:

handelsbolag, kommanditbolag;

– the United Kingdom:

partnerships, limited partnerships, unlimited companies.

_______________________________

402

ANNEX III

Horizontal layout of the balance sheet provided for in Article 10

▌

Assets

A. Subscribed capital unpaid

of which there has been called

(unless national law provides that called-up capital is to be shown under ‘Capital and reserves’,

in which case the part of the capital called but not yet paid shall appear as an asset either under

A or under D (II) (5)).

403

B. Formation expenses

as defined by national law, and in so far as national law permits their being shown as an

asset. National law may also provide for formation expenses to be shown as the first item

under ‘Intangible assets’.

C. Fixed assets

I. Intangible assets

1. Costs of ▌development, in so far as national law permits their being shown as assets.

2. Concessions, patents, licences, trade marks and similar rights and assets, if they were:

(a) acquired for valuable consideration and need not be shown under C (I) (3); or

(b) created by the undertaking itself, in so far as national law permits their being

shown as assets.

3. Goodwill, to the extent that it was acquired for valuable consideration.

4. Payments on account.

404

II. Tangible assets

1. Land and buildings.

2. Plant and machinery.

3. Other fixtures and fittings, tools and equipment.

4. Payments on account and tangible assets in the course of construction.

III. Financial assets

1. Shares in affiliated undertakings.

2. Loans to affiliated undertakings.

3. Participating interests.

4. Loans to undertakings with which the undertaking is linked by virtue of participating

interests.

5. Investments held as fixed assets.

6. Other loans.

▌

405

D. Current assets

I. Stocks

1. Raw materials and consumables.

2. Work in progress.

3. Finished goods and goods for resale.


II. Debtors

(Amounts becoming due and payable after more than one year shall be shown separately for

each item.)

1. Trade debtors.

2. Amounts owed by affiliated undertakings.

3. Amounts owed by undertakings with which the undertaking is linked by virtue of

participating interests.

406

4. Other debtors.

5. Subscribed capital called but not paid (unless national law provides that called-up

capital is to be shown as an asset under A).

6. Prepayments and accrued income (unless national law provides that such items are to

be shown as assets under E).

III. Investments


2. Own shares (with an indication of their nominal value or, in the absence of a nominal

value, their accounting par value), to the extent that national law permits their being

shown in the balance sheet.

3. Other investments.

IV. Cash at bank and in hand

407

E. Prepayments and accrued income

(Unless national law provides that such items are to be shown as assets under D (II) (6).)

Capital, reserves and liabilities

A. Capital and reserves

I. Subscribed capital

(Unless national law provides that called-up capital is to be shown under this item, in which

case the amounts of subscribed capital and paid-up capital shall be shown separately.)

II. Share premium account

III. Revaluation reserve

IV. Reserves

1. Legal reserve, in so far as national law requires such a reserve.

2. Reserve for own shares, in so far as national law requires such a reserve, without

prejudice to point (b) of Article 24(1 ▌) of Directive 2012/30/EU.

408

3. Reserves provided for by the articles of association.

4. Other reserves, including the fair value reserve.

V. Profit or loss brought forward

VI. Profit or loss for the financial year

B. Provisions

1. Provisions for pensions and similar obligations.

2. Provisions for taxation.

3. Other provisions.

C. Creditors

(Amounts becoming due and payable within one year and amounts becoming due and payable

after more than one year shall be shown separately for each item and for the aggregate of those

items.)

1. Debenture loans, showing convertible loans separately.

2. Amounts owed to credit institutions.

3. Payments received on account of orders, in so far as they are not shown separately as

deductions from stocks.

409

4. Trade creditors.

5. Bills of exchange payable.

6. Amounts owed to affiliated undertakings.

7. Amounts owed to undertakings with which the undertaking is linked by virtue of


8. Other creditors, including tax and social security authorities.

9. Accruals and deferred income (unless national law provides that such items are to be

shown under D).

D. Accruals and deferred income

(Unless national law provides that such items are to be shown under C (9) under ‘Creditors’.)

_______________________________

410

ANNEX IV

Vertical layout of the balance sheet provided for in Article 10

A. Subscribed capital unpaid

of which there has been called

(unless national law provides that called-up capital is to be shown under L, in which case the

part of the capital called but not yet paid must appear either under A or under D (II) (5).)

B. Formation expenses

as defined by national law, and in so far as national law permits their being shown as an

asset. National law may also provide for formation expenses to be shown as the first item

under ‘Intangible assets’.

C. Fixed assets

I. Intangible assets

1. Costs of development, in so far as national law permits their being shown as assets.

2. Concessions, patents, licences, trade marks and similar rights and assets, if they

were:

(a) acquired for valuable consideration and need not be shown under C (I) (3); or

(b) created by the undertaking itself, in so far as national law permits their being

shown as assets.

411

3. Goodwill, to the extent that it was acquired for valuable consideration.


II. Tangible assets

1. Land and buildings.

2. Plant and machinery.

3. Other fixtures and fittings, tools and equipment.

4. Payments on account and tangible assets in the course of construction.

III. Financial assets


2. Loans to affiliated undertakings.

3. Participating interests.

412

4. Loans to undertakings with which the undertaking is linked by virtue of


5. Investments held as fixed assets.

6. Other loans.

D. Current assets

I. Stocks

1. Raw materials and consumables.

2. Work in progress.

3. Finished goods and goods for resale.


413

II. Debtors

(Amounts becoming due and payable after more than one year must be shown separately for

each item.)

1. Trade debtors.

2. Amounts owed by affiliated undertakings.

3. Amounts owed by undertakings with which the company is linked by virtue of


4. Other debtors.

5. Subscribed capital called but not paid (unless national law provides that called-up

capital is to be shown as an asset under A).

6. Prepayments and accrued income (unless national law provides that such items are

to be shown as assets under E).

414

III. Investments


2. Own shares (with an indication of their nominal value or, in the absence of a

nominal value, their accounting par value), to the extent that national law permits

their being shown in the balance sheet.

3. Other investments.

IV. Cash at bank and in hand

E. Prepayments and accrued income

(Unless national law provides that such items are to be shown under D (II) (6).)

F. Creditors: amounts becoming due and payable within one year



3. Payments received on account of orders, in so far as they are not shown separately

as deductions from stocks.

415

4. Trade creditors.



7. Amounts owed to undertakings with which the company is linked by virtue of



9. Accruals and deferred income (unless national law provides that such items are to

be shown under K).

G. Net current assets/liabilities

(Taking into account prepayments and accrued income when shown under E and accruals

and deferred income when shown under K.)

H. Total assets less current liabilities

416

I. Creditors: amounts becoming due and payable after more than one year



3. Payments received on account of orders, in so far as they are not shown separately

as deductions from stocks.

4. Trade creditors.



7. Amounts owed to undertakings with which the company is linked by virtue of



9. Accruals and deferred income (unless national law provides that such items are to

be shown under K).

417

J. Provisions

1. Provisions for pensions and similar obligations.

2. Provisions for taxation.

3. Other provisions.

K. Accruals and deferred income

(Unless national law provides that such items are to be shown under F (9) or I (9) or both.)

L. Capital and reserves

I. Subscribed capital

(Unless national law provides that called-up capital is to be shown under this item, in which

case the amounts of subscribed capital and paid-up capital must be shown separately.)

418

II. Share premium account

III. Revaluation reserve

IV. Reserves

1. Legal reserve, in so far as national law requires such a reserve.

2. Reserve for own shares, in so far as national law requires such a reserve, without

prejudice to point (b) of Article 24(1) of Directive 2012/30/EU.

3. Reserves provided for by the articles of association.

4. Other reserves, including the fair value reserve.

V. Profit or loss brought forward

VI. Profit or loss for the financial year

_______________________________

419

ANNEX V

Layout of the profit and loss account – by nature of expense, provided for in Article 13

1. Net turnover.

2. Variation in stocks of finished goods and in work in progress.

3. Work performed by the undertaking for its own purposes and capitalised.

4. Other operating income.

420

5. (a) Raw materials and consumables.

(b) Other external expenses.

6. Staff costs:

(a) wages and salaries;

(b) social security costs, with a separate indication of those relating to pensions.

7. (a) Value adjustments in respect of formation expenses and of tangible and

intangible fixed assets.

(b) Value adjustments in respect of current assets, to the extent that they exceed the

amount of value adjustments which are normal in the undertaking concerned.

8. Other operating expenses.

9. Income from participating interests, with a separate indication of that derived from

affiliated undertakings.

10. Income from other investments and loans forming part of the fixed assets, with a

separate indication of that derived from affiliated undertakings.

421

11. Other interest receivable and similar income, with a separate indication of that derived

from affiliated undertakings.

12. Value adjustments in respect of financial assets and of investments held as current

assets.

13. Interest payable and similar expenses, with a separate indication of amounts payable to


14. Tax on profit or loss.

15. Profit or loss after taxation.

16. Other taxes not shown under items 1 to 15.

17. Profit or loss for the financial year.

_______________________________

422

ANNEX VI

Layout of the profit and loss account – by function of expense, provided for in Article 13

1. Net turnover.

2. Cost of sales (including value adjustments).

3. Gross profit or loss.

4. Distribution costs (including value adjustments).

5. Administrative expenses (including value adjustments).

6. Other operating income.

7. Income from participating interests, with a separate indication of that derived from


423

8. Income from other investments and loans forming part of the fixed assets, with a

separate indication of that derived from affiliated undertakings.

9. Other interest receivable and similar income, with a separate indication of that derived

from affiliated undertakings.

10. Value adjustments in respect of financial assets and of investments held as current

assets.

11. Interest payable and similar expenses, with a separate indication of amounts payable to


12. Tax on profit or loss.

13. Profit or loss after taxation.

14. Other taxes not shown under items 1 to 13.

15. Profit or loss for the financial year.

_______________________________

424

ANNEX VII

CORRELATION TABLE

425

Directive 78/660/EEC Directive 83/349/EEC This Directive

Article 1(1), first subparagraph,

introductory wording

- Article 1(1), point (a)

Article 1(1), first subparagraph, first to

twenty seventh indents

- Annex I

Article 1(1), second subparagraph

- Article 1(1), point (b)

Article 1(1), second subparagraph, points (a)

to (aa)

- Annex II

Article 1(1), third subparagraph

- -

Article 1(2) - -

Article 2(1) - Article 4(1)






Article 3 - Article 9(1)





426

Article 4(5) - -

Article 4(6) - Article 6(1), point (h) andArticle 6(3)

Article 5(1) - -

Article 5(2) - Article 2, point (14)



Article 7 - Article 6(1), point (g)

Article 8 - Article 10

Article 9(A) - Annex III (A)

Article 9(B) - Annex III (B)

Article 9(C) - Annex III (C)

Article 9(D) - Annex III (D)

Article 9(E) - Annex III (E)

Article 9(F) - -

Liabilities

Article 9(A)

- Capital, reserves and liabilities

Annex III (A)

Article 9(B) - Annex III (B)

Article 9(C) - Annex III (C)

Article 9(D) - Annex III (D)

Article 9(E) - -

427

Article 10 - Annex IV

Article 10a - Article 11

Article 11 first subparagraph

- Article 3(2) and Article 14(1)

Article 11 second subparagraph

- -

Article 11 third subparagraph

- Article 3(9), first subparagraph


Article 12(2) - Article 3(9), second subparagraph




Article 14 - Article 16(1), point (d)



Article 15(3), point (a) - Article 17(1), point (a)

Article 15(3), point (b) - -

Article 15(3), point (c) - Article 17(1), point (a)(i)

Article 15(4) - -


Article 17 - Article 2, point (2)

Article 18 - -

428


Article 20(1) - Article 12(12), first subparagraph

Article 20(2) - Article 12(12), second subparagraph

Article 20(3) - Article 12(12), third subparagraph

Article 21 - -

Article 22, first subparagraph

- Article 13(1)

Article 22, second subparagraph

- Article 13(2)

Article 23, items 1 to 15 - Annex V, items 1 to 15

Article 23, items16 to 19 - -

Article 23, items 20 and 21

- Annex V, items 16 and 17

Article 24 - -

Article 25, items 1 to 13 - Annex VI, items 1 to 13

Article 25, items 14 to 17

- -

Article 25, items 18 and 19

- Annex VI, items 14 and 15

Article 26 - -

Article 27, first subparagraph,

introductory wording

- Article 3(3)

Article 27, first subparagraph, points (a)

- Article 14(2), points (a) and (b)

429

and (c)

Article 27, first subparagraph, points (b)

and (d)

- -


- Article 3(9) first subparagraph


Article 29 - -

Article 30 - -

Article 31(1) - Article 6(1), introductory wording and points (a) to (f)

Article 31(1a) - Article 6(5)


Article 32 - Article 6(1), point (i)

Article 33(1), introductory wording

- Article 7(1)

Article 33(1), points (a) and (b) and the second

and third subparagraphs

- -

Article 33(1), point (c) - Article 7(1)

Article 33(2), point (a), first subparagraph and

Article 33(2), points (b), (c) and (d)

- Article 7(2)

Article 33(2), point (a), second subparagraph

- Article 16(1), point (b)


Article 33(4) - Article 16(1), point (b)(ii)

430

Article 33(5) - -

Article 34 - Article 12(11), fourth subparagraph

Article 35(1), point (a) - Article 6(1), point (i)

Article 35(1), point (b) - Article 12(5)

Article 35(1), point (c) - Article 12(6)

Article 35(1), point (d) - Article 17(1), point (b)



Article 35(4) - Article 12(8) and Article 17(1), point (a)(vi)

Article 36 - -

Article 37(1) - Article 12(11) first, third and fifth subparagraphs

Article 37(2) - Article 12(11), first and second subparagraphs

Article 38 - -

Article 39(1), point (a) - Article 6(1), point (i)

Article 39(1), point (b) - Article 12(7), first subparagraph

Article 39(1), point (c) - -

Article 39(1), point (d) - Article 12(7), second subparagraph

Article 39(1), point (e) - Article 17(1), point (b)


431


Article 40(2) - -


Article 42, first subparagraph

- Article 12(12), third subparagraph


- -

Article 42a(1) - Article 8(1), point (a)

Article 42a(2) - Article 8(2)




Article 42a(5a) - Article 8(6)

Article 42b - Article 8(7)

Article 42c - Article 8(8)

Article 42d - Article 16(1), point (c)

Article 42e - Article 8(1), point (b)

Article 42f - Article 8(9)

Article 43(1), introductory wording

- Article 16(1), introductory wording

Article 43(1), point (1) - Article 16(1), point (a)

Article 43(1), point (2), first subparagraph

- Article 17(1), point (g), first subparagraph

Article 43(1), point (2), - Article 17(1), point (k)

432

second subparagraph

Article 43(1), point (3) - Article 17(1), point (h)

Article 43(1), point (4) - Article 17(1), point (i)

Article 43(1), point (5) - Article 17(1), point (j)

Article 43(1), point (6) - Article 16(1), point (g)

Article 43(1), point (7) - Article 16(1), point (d)

Article 43(1), point (7a) - Article 17(1), point (p)

Article 43(1), point (7b) - Article 2, point (3) and Article 17(1), point (r)

Article 43(1), point (8) - Article 18(1), point (a)

Article 43(1), point (9) - Article 17(1), point (e)

Article 43(1), point (10) - -

Article 43(1), point (11) - Article 17(1), point (f)

Article 43(1), point (12) - Article 17(1), point (d), first subparagraph

Article 43(1), point (13) - Article 16(1), point (e)

Article 43(1), point (14)(a)

- Article 17(1), point (c)(i)

Article 43(1), point (14)(b)

- Article 17(1), point (c)(ii)

Article 43(1), point (15) - Article 18(1), point (b) andArticle 18(3)

Article 43(2) - -

Article 43(3) - Article 17(1), point (d), second subparagraph

433

Article 44 - -

Article 45(1) - Article 17(1), point (g), second subparagraph

Article 28(3)




Article 47(1) and (1a) - Article 30(1) and (2)





Article 50 - Article 17(1), point (o)

Article 50a - -

Article 50b - Article 33(1), point (a)

Article 50c - Article 33(2)


Article 51(2) - -

Article 51(3) - -


Article 52 - -


434


Article 55 - -

Article 56(1) - -

Article 56(2) - Article 17(1), points (l), (m) and (n)




Article 59(1) - Article 9(7), point (a)

Article 59(2) to (6), point (a)

- Article 9(7), point (a) and Article 27

Article 59(6), points (b) and (c)

- Article 9(7), points (b) and (c)

Article 59(7) and (8) - Article 9(7), point (a) and Article 27


Article 60 - -



Article 61a - -


- Article 1(1) Article 22(1)


- Article 2(1), (2) and (3) Article 22(3), (4) and (5)

435


- Article 3(2) Article 2, point (10)

- Article 4(1) Article 21

- Article 4(2) -

- Article 5 -



- Article 6(3) Article 3(9), second subparagraph, Article 3(10)

and (11)




- Article 7(3) Article 23(3), introductory wording

- Article 8 Article 23(5)


- Article 9(2) -






436

- Article 13(1) and (2) Article 2, point (16) andArticle 6(1), point (j)

- Article 13(2a) Article 23(10)


- Article 15 -

- Article 16 Article 4


- Article 17(2) -


- Article 19 Article 24(3), points (a) to (e)

- Article 20 -




- Article 24 -

- Article 25(1) Article 6(1), point (b)



- Article 26(2) -

- Article 26(3) Article 6(1), point (j)


437







- Article 30(1) Article 24(3), point (c)

- Article 30(2) -

- Article 31 Article 24(3), point (f)

- Article 32(1) and (2) Article 26

- Article 32(3) -


- Article 34, introductory wording and Article 34(1),

first sentence

Article 16(1), point (a) andArticle 28(1)

- Article 34(1), second sentence

-

- Article 34(2) Article 28(2), point (a)

- Article 34(3), point (a) Article 28(2), point (b)

- Article 34(3), point (b) -

- Article 34(4) Article 28(2), point (c)

- Article 34(5) Article 28(2), point (d)

- Article 34(6) Article 16(1), point (g) andArticle 28(1)

438

- Article 34(7) Article 16(1), point (d) andArticle 28(1)

- Article 34(7a) Article 17(1), point (p)

- Article 34(7b) Article 17(1), point (r)

- Article 34(8) Article 18(1), point (a)

- Article 34(9), point (a) Article 17(1), point (e)

- Article 34(9), point (b) Article 28(1), point (b)

- Article 34(10) -

- Article 34(11) Article 17(1), point (f) andArticle 28(1)

- Article 34(12) and (13) Article 28(1), point (c)

- Article 34(14) Article 16(1), point (c) andArticle 28(1)

- Article 17(1), point (c) Article 17(1), point (c) andArticle 28(1)

- Article 34(16) Article 18(1), point (b) andArticle 28(1)


- Article 35(2) -

- Article 36(1) Article 19(1) andArticle 29(1)

- Article 36(2), point (a) -

- Article 36(2), points (b) and (c)

Article 19(2), points (b) and (c)

- Article 36(2), point (d) Article 29(2), point (a)

439

- Article 36(2), point (e) Article 19(2), point (e) andArticle 29(1)

- Article 36(2), point (f) Article 29(2), point (b)


- Articles 36a Article 33(1), point (b)

- Articles 36b Article 33(2)

- Article 37(1) Article 34(1) and (2)



- Article 38(1) Article 30(1), first subparagraph andArticle 30(3), first

subparagraph

- Article 38(2) Article 30(1), second subparagraph

- Article 38(3) -

- Article 38(4) Article 30(3), second subparagraph

- Article 38(5) and (6) -


- Article 38a -

- Article 39 -

- Article 40 -

- Article 41(1) Article 2, point (12)

- Article 41(1a) Article 2, point (3)

440

- Article 41(2) to (5) -

- Article 42 -

- Article 43 -

- Article 44 -

- Article 45 -

- Article 46 -

- Article 47 -


- Article 49 -

- Article 50 -

- Article 50a -


441

P7_TA-PROV(2013)0262

Transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market ***I

European Parliament legislative resolution of 12 June 2013 on the proposal for a directive of the European Parliament and of the Council amending Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and Commission Directive 2007/14/EC (COM(2011)0683 – C7-0380/2011 – 2011/0307(COD))




– having regard to Article 294(2) and Articles 50 and 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0380/2011),


– having regard to the opinion of the European Central Bank of 10 February 20121,

– having regard to the opinion of the European Economic and Social Committee of 22 February 20122,

– having regard to the undertaking given by the Council representative by letter of 29 May 2013 to approve Parliament's position, in accordance with Article 294(4) of the Treaty on the Functioning of the European Union,


– having regard to the report of the Committee on Legal Affairs and the opinions of the Committee on Economic and Monetary Affairs, the Committee on Development and the Committee on International Trade (A7-0292/2012),




1 OJ C 93, 30.3.2012, p. 2.2 OJ C 143, 22.5.2012, p. 78.

442

P7_TC1-COD(2011)0307

Position of the European Parliament adopted at first reading on 12 June 2013 with a view to the adoption of Directive 2013/.../EU of the European Parliament and of the Council amending Directive 2004/109/EC of the European Parliament and of the Council on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, Directive 2003/71/EC of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading and Commission Directive 2007/14/EC laying down detailed rules for the implementation of certain provisions of Directive 2004/109//EC

(Text with EEA relevance)



50 and Article 114 thereof,


After transmission of the draft legislative act to the national Parliaments,

Having regard to the opinion of the European Central Bank1,

Having regard to the opinion of the European Economic and Social Committee2 ,


TEXT HAS NOT YET UNDERGONE LEGAL-LINGUISTIC FINALISATION.1 OJ C 93, 30.3.2012, p. 2.2 OJ C 143, 22.5.2012, p. 78.3 Position of the European Parliament of 12 June 2013.

443

Whereas:

(1) According to Article 33 of Directive 2004/109/EC of the European Parliament and of

the Council ▌1 the Commission had to report on the operation of that Directive to the

European Parliament and to the Council including on the appropriateness of ending the

exemption for existing debt securities after the 10-year period as provided for by

Article 30(4) of that Directive, and on the potential impact of the operation of that

Directive on the European financial markets.

(2) On 27 May 2010 the Commission adopted a report on the operation of Directive

2004/109/EC2 which identified areas where the regime created by that Directive could

be improved. In particular, the report demonstrates the need to provide for the

simplification of certain issuers' obligations with a view to making regulated markets

more attractive to small and medium-sized issuers raising capital in the Union.

Furthermore, the effectiveness of the existing transparency regime needs to be

improved, notably with respect to the disclosure of corporate ownership.

1 OJ L 390, 31.12.2004, p. 38.2 COM (2010), 243 final.

444

(3) In addition, in its Communication to the European Parliament, the Council, the

Economic and Social Committee and the Committee of the Regions entitled "Single

Market Act, Twelve levers to boost growth and strengthen confidence, Working

together to create new growth ▌", the Commission identified the need to review

Directive 2004/109/EC in order to make the obligations applicable to listed small and

medium-sized enterprises more proportionate, whilst guaranteeing the same level of

investor protection.

(4) According to the Commission report and ▌the Commission Communication, the

administrative burden associated with obligations linked to admission to trading on

regulated markets should be reduced for small and medium-sized issuers in order to

improve their access to capital. The obligation to publish interim management

statements or quarterly financial reports represent an important burden for many small

and medium-sized issuers whose securities are admitted to trading on regulated

markets, without being necessary for investor protection. Those obligations also

encourage short-term performance and discourage long-term investment. In order to

encourage sustainable value creation and long-term oriented investment strategy it is

essential to reduce short-term pressure on issuers and ▌ give investors incentive to

adopt a longer term vision. The requirement to publish interim management statements

should therefore be abolished.

445

(4a) Member States should not be allowed to impose the requirement to publish periodic

financial information on a more frequent basis than annual financial reports and

half-yearly financial reports in their national legislation. However, Member States

may nevertheless require issuers to publish additional periodic financial information

if such requirement does not constitute a significant financial burden and if the

additional information required is proportionate to what contributes to investment

decisions. This directive is without prejudice to any additional information that may

be required by sectorial European legislation and in particular Member States may

require the publication of additional periodic financial information by financial

institutions. Moreover, a regulated market may require issuers which have their

securities admitted to trading on that regulated market to publish additional periodic

financial information in all or some of its market segments.

(4b) In order to provide additional flexibility and thereby reduce administrative burdens,

the deadline to publish half-yearly financial reports should be extended to three

months after the end of the reporting period. As the period in which issuers can

publish their half-yearly financial reports is extended, small and medium-sized

issuers’ reports are expected to get more attention from the market participants, and

thereby these issuers become more visible.

▌

446

(7) In order to provide for enhanced transparency of payments made to governments,

issuers whose securities are admitted to trading on a regulated market and which have

activities in the extractive or logging of primary forest industries should disclose in a

separate report on an annual basis payments made to governments in the countries in

which they operate. The report should include types of payments comparable to those

disclosed under the Extractive Industries Transparency Initiative (EITI). The

disclosure of payments to governments should provide civil society and investors,

with information to hold governments of resource-rich countries to account for their

receipts from the exploitation of natural resources. The initiative is also

complementary to the EU FLEGT Action Plan (Forest Law Enforcement, Governance

and Trade) ▌ and the Timber Regulation ▌ which require traders of timber products to

exercise due diligence in order to prevent illegal wood from entering into the EU

market. Member States shall ensure that the members of the responsible bodies of an

undertaking, acting within the competences assigned to them by national law, have

responsibility for ensuring that, to the best of their knowledge and ability, the report

on payments to governments is prepared in accordance with the requirements of this

Directive. The detailed requirements are defined in Chapter 9 of Directive 2012/../EU

of the European Parliament and of the Council [Accounting Directive]".

447

(7a) For the purposes of transparency and investor protection, Member States should

require the following principles to apply to reporting on payments to governments in

accordance with Chapter 9 of Directive 2012/.../EU on the annual financial

statements, consolidated financial statements and related reports of certain types of

undertakings: materiality (any payment, whether made as a single payment or a

series of related payments, need not be taken into account in the report if it is below

EUR 100,000 within a financial year); government and project-by-project reporting

(reporting on payments to governments should be done on a government and

project-by-project basis); universality (no exemptions, for instance for issuers active

in certain countries, should be made which have a distortive impact and allow

issuers to exploit lax transparency requirements); comprehensiveness (all relevant

payments to governments should be reported, in line with Chapter 9 of Directive

2012/.../EU [Accounting Directive] and supporting recitals).

448

(8) Financial innovation has lead to the creation of new types of financial instruments that

give investors economic exposure to companies, the disclosure of which has not been

provided for in Directive 2004/109/EC. Those instruments could be used to acquire

secret stocks in companies, which could result in market abuse and give a false and

misleading picture of economic ownership of publicly listed companies. In order to

ensure that issuers and investors have full knowledge of the structure of corporate

ownership, the definition of financial instruments in that Directive should cover all

instruments with similar economic effect to holding shares and entitlements to acquire

shares.

(8a) Financial instruments with similar economic effect to holding shares and

entitlements to acquire shares which provide for cash settlement shall be calculated

on a ‘delta-adjusted’ basis, by multiplying the notional amount of underlying shares

by the delta of the instrument. Delta indicates how much a financial instrument’s

theoretical value would move in case of the underlying instrument’s price variation

and provides an accurate picture of the exposure to the underlying instrument of the

holder. This approach is taken to ensure that the total voting rights accessible by the

investor is as accurate as possible.

449

(9) In addition, in order to ensure adequate transparency of major holdings, where a holder

of financial instruments exercises its entitlement to acquire shares and the total

holdings of voting rights attaching to physical shares exceed the notification threshold

without affecting the overall percentage of the previously notified holdings, a new

notification should be required to disclose the change in the nature of the holdings.

450

(10) A harmonised regime for notification of major holdings of voting rights, especially

regarding aggregation of holdings of shares with holdings of financial instruments,

should improve legal certainty, enhance transparency and reduce administrative burden

for cross-border investors. Member States should therefore not be allowed to adopt

more stringent rules ▌than those provided in Directive 2004/109/EC regarding the

calculation of notification thresholds, aggregation of holdings of voting rights

attaching to shares with holdings of voting rights relating to financial instruments

and exemptions from the notification requirements. However, taking into account the

existing differences in ownership concentration in the Union, and the differences in

company laws in the Union leading to the total number of shares differing from the

total number of voting rights for some issuers, Member States should continue to be

allowed to set both lower and additional thresholds for notification of holdings of

voting rights, and to require equivalent notifications in relation to thresholds based

on capital holdings.

451

Moreover, Member States should continue to be allowed to set stricter obligations

than those provided in Directive 2004/109/EC with regard to the content (such as

disclosure of shareholders’ intentions), process and the timing for notification and

to be able to require additional information regarding major holdings not provided

for by Directive 2004/109/EC. In particular, Member States should also be able to

continue to apply laws, regulations or administrative provisions adopted in relation

to take-over bids, merger transactions and other transactions affecting the

ownership or control of companies regulated by the supervisory authorities

appointed by Member States pursuant to Article 4 of Directive 2004/25/EC of the

European Parliament and of the Council of 21 April 2004 on takeover bids1 that

impose disclosure requirements more stringent than those in Directive 2004/109/EC.

1 OJ L 142, 30.4.2004, p. 12.

452

(11) Technical standards should ensure consistent harmonisation of the regime for

notification of major holdings and adequate transparency levels. It would be efficient

and appropriate to entrust ESMA with the elaboration, for submission to the

Commission, of draft regulatory technical standards which do not involve policy

choices ▌ . The Commission should adopt the draft regulatory technical standards

developed by ESMA to specify the conditions for the application of existing

exemptions from the notification requirements for major holdings of voting rights.

Using its expertise, ESMA should in particular determine the cases of exemptions

while taking account of their possible misuse to circumvent notification requirements.

(12) In order to take account of technical developments, the power to adopt acts in

accordance with Article 290 of the Treaty on the Functioning of the European Union

(TFEU) should be delegated to the Commission to ▌specify the contents of

notification of major holdings of financial instruments. As set out in the Declaration

(No 39) on Article 290 TFEU, annexed to the Final Act of the Intergovernmental

Conference which adopted the Treaty of Lisbon, it is of particular importance that the

Commission carries out appropriate consultations during its preparatory work,

including at expert level. The Commission, when preparing and drafting up of

delegated acts, should ensure a simultaneous, timely and appropriate transmission of

relevant documents to the European Parliament and to the Council.

453

(13) To facilitate cross-border investment, investors should be able to easily access

regulated information for all listed companies in the Union. However, the current

network of ▌officially appointed national storage mechanisms for regulated

information does not ensure an easy search for such information across the Union. In

order to ensure cross-border access to information and to take account of technical

developments in financial markets and in communication technologies, the power to

adopt acts in accordance with Article 290 TFEU should be delegated to the

Commission to specify minimum standards for dissemination of regulated information,

access to regulated information at Union level and central storage mechanism of

regulated information. The Commission, with assistance of ESMA, should also be

empowered to take measures to improve the functioning of the network of national

officially appointed storage mechanisms and develop technical criteria for access to

regulated information at the Union level, in particular, concerning the operation of a

central access point for the search of regulated information at the Union level. ESMA

should develop and operate a web portal serving as European electronic access point

("the access point").

454

(14) In order to improve compliance with the requirements of Directive 2004/109/EC and

following the Communication from the Commission of 9 December 2010 entitled

▌"Reinforcing sanctioning regimes in the financial sector ▌", the sanctioning powers

▌ should be enhanced and should satisfy certain essential requirements in relation to

addressees, criteria to be taken into account when applying an administrative

sanction or measure, key sanctioning powers and levels of administrative pecuniary

sanctions. Those sanctioning powers should be available at least in case of breach of

key provisions of the Directive; Member States may also apply them in other

circumstances. In particular, Member States should ensure that the administrative

sanctions and measures that can be applied include the possibility to impose

pecuniary sanctions which are sufficiently high to be dissuasive. In case of breaches

by legal entities, Member States should provide for the application of sanctions to

members of administrative, management or supervisory bodies of the legal entity or

other individuals who can be held liable for those breaches under the conditions laid

down in national law. Member States should also provide for the suspension or for

the possibility to suspend the exercise of voting rights for holders of shares and

financial instruments who do not comply with the notification requirements.

455

Member States may opt to provide that the suspension of voting rights applies only to

the most serious breaches. This Directive should refer to both administrative

sanctions and measures in order to cover all cases of non-compliance, irrespective of

their qualification as a sanction or a measure under national law and should be

without prejudice to any provisions in the law of Member States relating to criminal

sanctions. Member States may provide for additional sanctions or measures and for

higher levels of administrative pecuniary sanctions than these provided for in this

Directive, having regard to the need for sufficiently dissuasive sanctions in order to

support clean and transparent markets. These and the provisions regarding the

publication of administrative sanctions do not constitute a precedent for other EU

legislation, in particular for more serious regulatory breaches.

456

(14a) In order to ensure that decisions imposing an administrative measure or sanction

have a dissuasive effect on the public at large, they should normally be published. The

publication of decisions is also an important tool to inform market participants of

what behaviour is considered to be in violation of this directive and to promote wider

good behaviour amongst market participants. However if publication of a decision

would seriously jeopardise the stability of the financial system or an ongoing official

investigation, would cause, insofar as it can be determined, disproportionate and

serious damage to the institutions or individuals involved, or where, in case the

sanction is imposed on a natural person, publication of personal data is shown to be

disproportionate by an obligatory prior assessment of the proportionality of such

publication, the competent authority may decide to delay publication or to publish

the information on an anonymous basis.

(15) In order to clarify the treatment of non-listed securities represented by depository

receipts admitted to trading on a regulated market and in order to avoid transparency

gaps, the definition of "issuer" should be further specified to include issuers of non-

listed securities represented by depository receipts admitted to trading on a regulated

market. It is also appropriate to amend the definition of 'issuer' taking into account that

in some Member States issuers can be natural persons with securities admitted to

trading on regulated markets.

457

(15a) According to Directive 2004/109/EC, in case of a third country issuer of debt

securities the denomination per unit of which is less than EUR 1 000 or shares the

issuer’s home Member State is the Member State referred to in point (iii) of Article

2(1)(m) of Directive 2003/71/EC. To clarify and simplify the determination of the

home Member State of such third country issuers, the definition should be amended

to establish that the home Member State should be the Member State chosen by the

issuer from amongst the Member States where its securities are admitted to trading

on a regulated market.

458

(16) All issuers whose securities are admitted to trading on a regulated market within the

Union should be supervised by a competent authority of a Member State to ensure that

they comply with their obligations. Issuers who, according to Directive 2004/109/EC,

have to choose their home Member State but who have not done so, could avoid being

supervised by any competent authority in the Union. Therefore, Directive

2004/109/EC should be amended to determine a home Member State for issuers that

have not disclosed their choice of home Member State to the competent authorities

within a three-month period. In such case, the home Member State should be the

Member State where the issuer's securities are admitted to trading on a regulated

market in its territory. In case the securities are admitted to trading on a regulated

market in more than one Member State, all those Member States will be home

Member States until the issuer makes a choice of an unique home Member State and

discloses it. This would become an incentive for such issuers to choose and disclose

their choice of home Member State to the relevant competent authorities, and in the

meantime competent authorities would no longer be without the necessary powers to

intervene until an issuer has disclosed its choice of home Member State.

459

(17) According to Directive 2004/109/EC, in case of an issuer of debt securities with the

denomination per unit of which is EUR 1 000 or more the issuer’s choice of a home

Member State is valid for three years. However, where an issuer’s securities are no

longer admitted to trading on the regulated market in the issuer’s home Member State

and ▌ remains admitted to trading in one or more host Member States, such issuer

has no relationship ▌with its originally chosen home Member State where that is not

the Member State of its registered office. Such issuer may choose one of its host

Member States or the Member State where it has its registered office, as its new

home Member State before the expiration of the three-year period. The same

possibility to choose a new home Member State would also apply to a third country

issuer of debt securities the denomination per unit which is less than EUR 1 000 or

shares whose securities are no longer admitted to trading on the regulated market in

the issuer’s home Member State, but remain admitted to trading in one or more host

Member States.

460

(17a) There should be consistency between Directives 2004/109/EC and 2003/71/EC

concerning the definition of the home Member State. In this respect, in order for

supervision to be ensured by the most relevant Member State, Directive 2003/71/EC

of the European Parliament and of the Council of 4 November 2003 should be

modified to provide for more flexibility for situations where the securities of an

issuer incorporated in a third country are no longer admitted to trading on the

regulated market in its home Member State but instead are admitted to trading in

one or more other Member States.

461

(18) Commission Directive 2007/14/EC ▌1 contains in particular rules concerning the

notification of the choice of the home Member State by the issuer. These rules are

moved to Directive 2004/109/EC. To avoid that competent authorities of the host

Member State(s) and of the Member State where the issuer has its registered office,

where such Member State is neither home nor host Member State, are not informed

about the choice of home Member State by the issuer, all issuers should be required to

communicate the choice of their home Member State to the competent authority of its

home Member State, the competent authorities of all host Member States and to the

competent authority of the Member State where they have their registered office,

where it is different from their home Member State. The rules concerning notification

of the choice of home Member State should therefore be amended accordingly.

1 OJ L 69, 9.3.2007, p. 27.

462

(19) The requirement of Directive 2004/109/EC regarding disclosure of new loans has led

to many implementation problems in practice and its application is considered to be

complex. Furthermore, that requirement overlaps partially with the requirements laid

down in Directive 2003/71/EC of the European Parliament and of the Council of 4

November 2003 on the prospectus to be published when securities are offered to the

public or admitted to trading ▌1 and Directive 2003/6/EC of the European Parliament

and of the Council of 28 January 2003 on insider dealing and market manipulation

(market abuse) ▌2 and it does not provide much additional information to the market. In

order to reduce unnecessary administrative burden for issuers, that requirement should

therefore be abolished.

(20) The requirement to communicate any amendment of issuer's instruments of

incorporation or statutes to the competent authorities of the home Member State

overlaps with the similar requirement of Directive 2007/36/EC of the European

Parliament and of the Council of 11 July 2007 on the exercise of certain rights of

shareholders in listed companies ▌3 and can result in confusion regarding the role of the

competent authority. In order to reduce unnecessary administrative burden for issuers,

that requirement should therefore be abolished.

1 OJ L 345, 31.12.2003, p. 64.2 OJ L 96, 12.4. 2003, p. 16.3 OJ L 184, 14.7.2007, p. 17.

463

(21) Directive 95/46 of the European Parliament and of the Council of 24 October 1995 on

the protection of individuals with regard to the processing of personal data and on the

free movement of such data ▌1 and Regulation (EC) No 45/2001 of the European

Parliament and of the Council of 18 December 2000 on the protection of individuals

with regard to the processing of personal data by the EU institutions and bodies and on

the free movement of such data ▌2, are fully applicable to the processing of personal

data for the purposes of this Directive.

1 OJ L 281, 23.11.1995, p. 31.2 OJ L 8, 12.1.2001, p. 1.

464

(21a) A harmonised electronic format for reporting would be very beneficial for issuers,

investors and competent authorities, since it would make reporting easier and

facilitate accessibility, analysis and comparability of annual financial reports.

Therefore, preparation of annual financial reports in a single electronic reporting

format should be mandatory with effect from 1 January 2020, provided that a cost

benefit analysis has been undertaken by ESMA. ESMA should develop draft

regulatory standards for adoption by the Commission, to specify the electronic

reporting format, with due reference to current and future technological options,

such as eXtensible Business Reporting Language (XBRL). ESMA, when preparing

the draft regulatory technical standards, should conduct open public consultations

for all stakeholders concerned, make a thorough assessment of the potential impacts

of the adoption of the different technological options, and conduct appropriate tests

in Member States on which it should report to the Commission when it submits the

draft regulatory technical standards. In developing the draft regulatory technical

standards on the formats to be applied to banks and financial intermediaries and to

insurance companies, ESMA should cooperate regularly and closely with the EBA

and the EIOPA, in order to take into account the peculiarities of these sectors,

ensuring cross-sectoral consistency of work and reaching joint positions. The

European Parliament and the Council should be able to object to the regulatory

technical standards in line with Article 13(3) of the ESMA Regulation, in which case

these standards shall not enter into force.

465

(21b) This Directive respects the fundamental rights and observes the principles

recognised in the Charter of Fundamental Rights of the European Union as

enshrined in the Treaty and has to be implemented in accordance with those rights

and principles.

(21c) In accordance with the Joint Political Declaration of Member States and the

Commission on explanatory documents of 28 September 2011, Member States have

undertaken to accompany, in justified cases, the notification of their transposition

measures with one or more documents explaining the relationship between the

components of a directive and the corresponding parts of national transposition

instruments. With regard to this Directive, the legislator considers the transmission

of such documents to be justified.

(22) Directives 2004/109/EC, 2003/71/EC and 2007/14/EC should therefore be amended

accordingly,

HAVE ADOPTED THIS DIRECTIVE:

466

Article 1

Amendments to Directive 2004/109/EC

Directive 2004/109/EC is hereby amended as follows:

(1) Article 2(1) is amended as follows:

(a) point (d) is replaced by the following:

"(d) "issuer" means a natural person, or legal entity governed by private or

public law, including a State, whose securities are admitted to trading on a

regulated market.

In case of depository receipts admitted to trading on a regulated market,

the issuer means the issuer of the securities represented, whether or not

those securities are admitted to trading on a regulated market ▌; ▌";

467

(b) point (i) is amended as follows:

(i) in sub point (i) the second indent is replaced by the following::

“- where the issuer is incorporated in a third country, the Member

State chosen by the issuer from amongst the Member States where

its securities are admitted to trading on a regulated market. The

home Member State shall remain valid unless the issuer has

chosen a new home Member State under sub point (iii) and has

disclosed the choice according to sub point (iv);”;

(ii) sub point (ii ) is replaced by the following :

“for any issuer not covered by (i), the Member State chosen by the issuer

from among the Member State in which the issuer has its registered

office, where applicable, and those Member States where its securities

are admitted to trading on a regulated market. The issuer may choose

only one Member State as its home Member State. Its choice shall

remain valid for at least three years unless its securities are no longer

admitted to trading on any regulated market in the Union or unless the

issuer becomes covered by (i) or (iii), during the three-year period;”;

468

(iii) the following sub points are added:

“(iii) ▌ an issuer ▌ whose securities are no longer admitted to trading on a

regulated market in its home Member State as defined by sub point

(i) second indent or sub point (ii) but instead are admitted to trading

in one or more other Member States, that issuer may choose a new

home Member State from amongst the Member States where its

securities are admitted to trading on a regulated market and, where

applicable, the Member State where the issuer has its registered

office;

(iv) an issuer shall disclose its home Member State in accordance with

Articles 20 and 21. In addition, an issuer shall disclose its home

Member State to the competent authority of the Member State

where it has its registered office, where applicable, to the competent

authority of the home Member State and to the competent

authorities of all host Member States.

469

In absence of disclosure by the issuer of its home Member State as

defined by sub point (i) second indent or sub point (ii) within a

period of three months from the date the issuers’ securities are first

admitted to trading on a regulated market, the home Member State

shall be the Member State where the issuers securities are admitted

to trading on a regulated market on its territory. Where the issuer’s

securities are admitted to trading on regulated markets situated or

operating within more than one Member State, those Member

States shall be the issuer’s home Member States until a subsequent

choice of a unique home Member State has been taken and

disclosed by the issuer.”

(c) the following point ▌is added:

"(q) "formal agreement" means an agreement which is binding under the

applicable law .".

(1a) In Article 2 the following paragraph is added:

“2a. Any reference to legal entities in this Directive shall be understood as

including registered business associations without legal personality and

trusts.”

470


(a) Paragraph 1 is replaced by the following:

"1. The home Member State may make an issuer subject to requirements more

stringent than those laid down in this Directive, except requiring issuers to

publish periodic financial information on a more frequent basis than

annual financial reports referred to in Article 4 and half-yearly financial

reports referred to in Article 5.”

(b) The following Paragraphs are inserted:

“1a. By derogation from paragraph 1, the home Member States may require

issuers to publish additional periodic financial information on a more

frequent basis than the annual financial reports referred to in Article 4

and the half-yearly financial reports referred to in Article 5, where the

following conditions are met:

- the additional periodic financial information does not constitute a

disproportionate financial burden in the Member State concerned,

in particular for the small and medium sized issuers concerned;

and

471

- the content of the additional periodic financial information

required is proportionate to what contributes to investment

decisions by the investors in the Member State concerned.

Before taking a decision requiring issuers to publish additional periodic

financial information, Member States shall assess both whether such

additional requirements may lead to an excessive focus on short-term

results and performance of the issuers and whether they may impact

negatively on access of small and medium sized issuers to the regulated

markets.

This is without prejudice to the ability of Member States to require the

publication of additional periodic financial information by issuers who

are financial institutions.

472

The home Member State may not make a holder of shares, or a natural

person or legal entity referred to in Articles 10 or 13, subject to

requirements more stringent than those laid down in this Directive,

except when:

(i) setting lower or additional notification thresholds than those laid down

in Article 9(1) and requiring equivalent notifications in relation to

thresholds based on capital holdings;

(ii) applying more stringent requirements than those referred to in Article

12; and

473

(iii) applying laws, regulations or administrative provisions adopted in

relation to takeover bids, merger transactions and other transactions

affecting the ownership or control of companies, regulated by the

supervisory authorities appointed by Member States pursuant to Article 4

of Directive 2004/25/EC of the European Parliament and of the Council

of 21 April 2004 on takeover bids (*).

_____________

(*) OJ L 142, 30.4.2004, p. 12.".

(2a) Article 4 is amended as follows:


'1. The issuer shall make public its annual financial report at the latest four

months after the end of each financial year and shall ensure that it

remains publicly available for at least 10 years.';

474

(c) The following paragraph is added:

7a. With effect from 1 January 2020 all annual financial reports shall be

prepared in a single electronic reporting format provided that a cost

benefit analysis has been undertaken by ESMA.

ESMA shall develop draft regulatory technical standards to specify the

electronic reporting format, with due reference to current and future

technological options. Before the adoption of the draft regulatory technical

standards, ESMA shall carry out an adequate assessment of possible electronic

reporting formats and conduct appropriate field tests. ESMA shall submit

those draft regulatory technical standards to the Commission at the latest by 31

December 2016.

Power is delegated to the Commission to adopt the regulatory technical

standards referred to in the second subparagraph of this paragraph in

accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

475

(2b) Article 5(1) is replaced by the following:

"1. The issuer of shares or debt securities shall make public a half-yearly financial

report covering the first six months of the financial year as soon as possible

after the end of the relevant period, but at the latest three months thereafter.

The issuer shall ensure that the half-yearly financial report remains available

to the public for at least 10 years.”

__________

(*) OJ L 331, 15.12.2010, p. 84.'

(1) ▌

476


"Article 6

Report on payments to governments

Member States shall require issuers active in the extractive or logging of primary

forest industries, as defined in Article 36, paragraphs 1 and 2 of [the Accounting

Directive] (*) to prepare, in accordance with Chapter 9 of [the Accounting Directive],

a report on payments made to governments on an annual basis. The report shall be

made public at the latest six months after the end of each financial year and shall

remain publicly available for at least ten years. Payments to governments shall be

reported at consolidated level.

________

(*) OJ: Please insert the number for the Directive contained in doc. st….. and

complete the reference in the footnote.

477



"1. Articles 4 and 5 ▌ shall not apply to apply to the following issuers:

(a) a State, a regional or local authority of a State, a public international

body of which at least one Member State is a member, the ECB, the

European Financial Stability Facility (EFSF) as established by

EFSF Framework Agreement and any other mechanism

established with the objective to preserve financial stability of

European monetary union by providing temporary financial

assistance to euro area Member States and Member States' national

central banks whether or not they issue shares or other securities; and

(b) ▌ an issuer exclusively of debt securities admitted to trading on a

regulated market, the denomination per unit of which is at least EUR

100 000 or, in the case of debt securities denominated in a currency

other than euro, the value of such denomination per unit is, at the

date of the issue, equivalent to at least EUR 100 000.";

478

(c) Paragraph 4 is replaced by the following:

"4. By way of derogation from paragraph 1a of this Article, Articles 4 and 5

shall not apply to issuers of exclusively debt securities the denomination

per unit of which is at least EUR 50 000 or, in the case of debt securities

denominated in a currency other than euro, the value of such denomination

per unit is, at the date of the issue, equivalent to at least EUR 50 000,

which have already been admitted to trading on a regulated market in the

Union before 31 December 2010, for as long as such debt securities are

outstanding:".


(a) ▌

479

(b) Paragraph 6 is replaced by the following:

"6. This Article shall not apply to voting rights held in the trading book, as

defined in Article 11 of Directive 2006/49/EC of the European Parliament

and of the Council of 14 June 2006 on the capital adequacy of investment

firms and credit institutions (*), of a credit institution or investment firm

provided that:

(a) the voting rights held in the trading book do not exceed 5 %, and

(b) the voting rights attached to shares held in the trading book are not

exercised nor otherwise used to intervene in the management of the

issuer.

▌

___________________

(*) OJ L 177, 30.6.2006, p. 201.'.

480

(c) The following paragraphs are inserted:

"6a. This Article shall not apply to voting rights attached to shares acquired

for stabilisation purposes in accordance with Commission Regulation

(EU) No 2273/2003 of 22 December 2003 implementing Directive

2003/6/EC of the European Parliament and of the Council as regards

exemptions for buy-back programmes and stabilisation of financial

instruments (**), provided the voting rights attached to these shares are

not exercised nor otherwise used to intervene in management of the

issuer.

(**) OJ L 336, 23.12.2003, p. 33."

6b. ESMA shall develop draft regulatory technical standards to specify the

method of calculation of the 5 % threshold referred to in paragraphs 5

and 6, including in the case of a group of companies, taking into account

Article 12(4) and (5).

481

ESMA shall submit those draft regulatory technical standards to the

Commission by [insert date: one year after the date of entry into force of

this Directive].


standards referred to in the first subparagraph ▌in accordance with

Articles 10 to 14 of Regulation (EU) No 1095/2010."

(7a) Article 12 is amended as follows:

(a) In paragraph 2, the introductory wording is replaced by the following:

'The notification to the issuer shall be effected promptly, but not later than

four trading days [...] after the date on which the shareholder, or the natural

person or legal person referred to in Article 10,';

482



'1. The notification requirements laid down in Article 9 shall also apply to a

natural person or legal entity who holds, directly or indirectly:

(a) financial instruments that, on maturity, give the holder, under a

formal agreement, either the unconditional right to acquire or the

discretion as to his right to acquire, shares to which voting rights are

attached, already issued, of an issuer whose shares are admitted to

trading on a regulated market;

(b) financial instruments which are not included in point (a) but which

are referenced to shares referred to in that point and with economic

effect similar to financial instruments referred to in that point ▌,

whether they give right to a physical settlement or not.

483

The notification required shall include the breakdown by type of financial

instruments held according to point (a) ▌and financial instruments held

according to point (b), distinguishing between the financial instruments

which give right to a physical settlement and the financial instruments

which give right to a cash settlement.

(b) The following paragraphs ▌ are inserted:

'1a. The number of voting rights shall be calculated by reference to the full

notional amount of shares underlying the financial instrument except

where the financial instrument provides exclusively for a cash settlement,

in which case the number of voting rights shall be calculated on a ‘delta-

adjusted’ basis, by multiplying the notional amount of underlying shares

by the delta of the instrument. For this purpose, the holder shall aggregate

and notify all financial instruments relating to the same underlying issuer.

Only long positions shall be taken into account for the calculation of voting

rights. Long positions shall not be netted with short positions relating to

the same underlying issuer.

484

ESMA shall develop draft regulatory technical standards to specify:

(a) the method to calculate the number of voting rights referred to in the

first subparagraph in case of financial instruments referenced to a

basket of shares or an index ; and

(b) the methods of determination of delta for the purposes of

calculation of voting rights relating to financial instruments which

provide exclusively for a cash settlement as required by the first

subparagraph.



this Directive].



accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.

485

1b. For the purposes of paragraph 1 the following shall be considered to be

financial instruments, provided they satisfy any of the conditions set out

in points (a) or (b) of paragraph 1:

(a) transferable securities;

(b) options ▌;

(c) futures ▌;

(d) swaps ▌;

(e) forward rate agreements ▌;

(f) contracts for differences; and ,

(g) any other ▌contracts or agreements with similar economic effects

which may be settled physically or in cash ▌.

ESMA shall establish and periodically update an indicative list of financial

instruments that are subject to notification requirements according to

paragraph 1, taking into account technical developments on financial

markets .";

486

(c) Paragraph 2 is replaced by the following:

'2. The Commission shall be empowered to adopt by means of delegated acts

in accordance with Article 27(2a), (2b) and (2c), and subject to the

conditions of Articles 27a and 27b, the measures to ▌

specify the contents of the notification to be made, the notification period

and to whom the notification is to be made ▌ as referred to in paragraph 1.

(d) The following paragraph 4 is added:

'4. The exemptions laid down in Article 9(4), (5) and (6) and in Article 12(3),

(4) and (5) shall apply mutatis mutandis to the notification requirements

under this Article.

ESMA shall develop draft regulatory technical standards to specify the

cases in which the exemptions referred to in the first subparagraph apply to

financial instruments held by a natural person or a legal entity fulfilling

orders received from clients or responding to a client's requests to trade

otherwise than on a proprietary basis, or hedging positions arising out of

such dealings.

487



this Directive].



accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.'.

(9) The following Article 13a is inserted:

'Article 13a

Aggregation

1. The notification requirements laid down in Articles 9, 10 and 13 shall also apply

to a natural person or a legal entity when the number of voting rights held

directly or indirectly by such person or entity under Articles 9 and 10 aggregated

with the number of voting rights relating to financial instruments held directly or

indirectly under Article 13 reaches, exceeds or falls below the thresholds set out

in Article 9(1).

488

The notification required under the first subparagraph of this paragraph shall

include the breakdown of the number of voting rights attached to shares held

according to Articles 9 and 10 and voting rights relating to financial instruments

within the meaning of Article 13.

2. Voting rights relating to financial instruments that have already been notified

according to Article 13 shall be notified again when the natural person or the

legal entity has acquired the underlying shares and such acquisition results in the

total number of voting rights attached to shares issued by the same issuer

reaching or exceeding the thresholds of Article 9(1).'.

(10) Article 16(3) is deleted.

(11) In Article 19(1), the second subparagraph is deleted.

489


'4. The Commission shall be empowered to adopt, by means of delegated acts in

accordance with Article 27(2a), (2b) and (2c), and subject to the conditions of

Articles 27a and 27b, measures to specify the following minimum standards and

rules:

(a) minimum standards for the dissemination of regulated information, as

referred to in paragraph 1;

(b) minimum standards for the central storage mechanism as referred to in

paragraph 2;

(c) rules to ensure the interoperability of the information and communication

technologies used by the national officially appointed mechanisms and the

access to regulated information at the Union level, as referred to in

paragraph 2.

The Commission may also specify and update a list of media for the

dissemination of information to the public.'.

490

(12a) The following article is inserted:

'Article 21a

1. A web portal serving as European electronic access point ("the access point")

shall be established by 1 January 2018. ESMA shall develop and operate the

access point.

2. The system of interconnection of officially appointed mechanisms shall be

composed of:

– the central storage mechanisms of Member States,

– the portal serving as the European electronic access point.

3. Member States shall ensure the access to their central storage mechanisms via

the access point.'

491


'Article 22

Access to regulated information at the Union level

1. ESMA shall develop draft regulatory technical standards setting technical

requirements regarding access to regulated information at the Union level in

order to specify the following:

(a) the technical requirements regarding ▌communication technologies used

by the national officially appointed mechanisms

(b) the technical requirements for the operation of the central access point for

the search of regulated information at the Union level;

(c) the technical requirements regarding the use of a unique identifier for each

issuer by the national officially appointed mechanisms;

492

(d) the common format for delivering regulated information by national

officially appointed mechanisms;

(e) the common classification of regulated information by national officially

appointed mechanisms and the common list of types of regulated

information.

2. In developing the draft regulatory technical standards, ESMA shall take into

account the technical requirements for the system of interconnection of

business registers established by the Directive 2012/17/EU of the European

Parliament and of the Council (*).

ESMA shall submit those draft regulatory technical standards to the Commission

by [insert date: two years after the date of entry into force of this Directive].

493

Power is delegated to the Commission to adopt the regulatory technical standards

referred to in the first subparagraph of this paragraph in accordance with Articles

10 to 14 of Regulation (EU) No 1095/2010.'

________

(*) OJ: Please complete the reference in the footnote.

(13a) In Article 23, paragraph 1, a subparagraph is added after the second subparagraph:

"The information covered by the requirements laid down in the third country shall

be filed in accordance with Article 19 and disclosed in accordance with Articles 20

and 21."

(13b) In Article 24 the following paragraph is added:

“4a. Without prejudice to paragraph 4, competent authorities shall be given all

investigative powers that are necessary for the exercise of their functions.

Those powers shall be exercised in conformity with national law.”

494

4b. Competent authorities shall exercise their sanctioning powers, in accordance

with this Directive and national law, in any of the following ways:

- directly;

- in collaboration with other authorities;

- under their responsibility by delegation to such authorities;

- by application to the competent judicial authorities.

(13c) In Article 25 (2) the following subparagraph is added:

“In the exercise of their sanctioning and investigative powers, competent authorities

shall cooperate to ensure that sanctions or measures produce the desired results and

coordinate their action when dealing with cross border cases.”

495

(14) The following title is inserted after Article 27b:

"CHAPTER VIa

SANCTIONS AND MEASURES"


"Article 28

Administrative measures and sanctions

1. Without prejudice to the powers of competent authorities in accordance with

Article 24 and the right of Member States to provide for and impose criminal

sanctions, Member States shall lay down rules on administrative measures and

sanctions applicable to breaches of the national provisions adopted in the

implementation of this Directive ▌and shall take all measures necessary to

ensure that they are implemented. Those administrative sanctions and measures

shall be effective, proportionate and dissuasive.

496

2. Without prejudice to Article 7, Member States shall ensure that where

obligations apply to legal entities, in case of a breach, sanctions can be applied,

subject to the conditions laid down in national law, to the members of

administrative, management or supervisory bodies of the legal entity, and to

▌other individuals who are responsible for the breach under national law.".

(16) The following articles are inserted:

"Article 28a

Breaches

▌ Article 28ab shall apply at least to the following breaches:

(a) failure by the issuer to make public information required under the national

provisions adopted in the implementation of Articles 4, 5, 6, 14 and 16 within

the required time limit;

497

(b) failure by the natural or the legal person to notify the acquisition or disposal of a

major holding according to the national provisions adopted in the

implementation of Articles 9, 10, 12, 13 and 13a within the required time limit.

Article 28ab

Sanctioning powers

1. In case of breaches referred to in Article 28a competent authorities shall have

the power to impose at least the following administrative measures and

sanctions ▌:

(a) a public statement which indicates the natural person or the legal entity

responsible and the nature of the breach;

(b) an order requiring the natural person or the legal entity responsible to

cease the conduct and to desist from a repetition of that conduct;

498

(c) administrative pecuniary sanctions of;

(i) in case of a legal entity,

- up to EUR 10 000 000 or up to 5 % of the total annual

turnover

499

- according to the last available accounts approved by the

management body; where the legal entity is a parent

undertaking or a subsidiary of a parent undertaking which

has to prepare consolidated financial accounts according to

Directive 83/349/EEC, the relevant total turnover shall be the

total annual turnover or the corresponding type of income

according to the relevant accounting Directives according to

the last available consolidated account approved by the

management body of the ultimate parent undertaking; or

- up to twice the amount of the profits gained or losses avoided

because of the breach, where those can be determined;

whichever is higher;

500

(ii) in case of a natural person :

- up to EUR 2 000 000; or

- up to twice the amount of the profits gained or losses avoided

because of the breach, where those can be determined;

whichever is higher.

In Member States where the Euro is not the official currency, the

corresponding value to Euro in the national currency shall be calculated

taking into account the official exchange rate on ▌the date of entry into

force of this Directive.

2. Without prejudice to the powers of competent authorities in accordance with

Article 24 and the right of Member States to impose criminal sanctions,

Member States shall ensure that their laws, regulations or administrative

provisions provide for possibility to suspend the exercise of voting rights

attached to shares in case of the breaches referred to in Article 28a point (b).

Member States may provide that the suspension of voting rights applies only to

the most serious breaches.

501

2a. Member States may provide for additional sanctions or measures and for

higher levels of administrative pecuniary sanctions than those provided for in

this Directive.

▌

Article 28c

Exercise of sanctioning powers ▌

1. Member States shall ensure that when determining the type and level of

administrative sanctions or measures ▌, the competent authorities shall take into

account all relevant circumstances, including where appropriate:

(a) the gravity and the duration of the breach;

(b) the degree of responsibility of the responsible natural person or legal

entity;

502

(c) the financial strength of the responsible natural person or legal entity, for

example as indicated by the total turnover of the responsible legal entity or

the annual income of the responsible natural person;

(d) the importance of profits gained or losses avoided by the responsible

natural person or legal entity, insofar as they can be determined;

(e) the losses for third parties caused by the breach, insofar as they can be

determined;

(f) the level of cooperation of the responsible natural person or legal entity

with the competent authority;

(g) previous breaches by the responsible natural person or legal entity.

1a. The processing of personal data collected in or for the exercise of the

supervisory and investigatory powers in accordance with this Directive shall be

carried out in accordance with Directive 95/46/EC and Regulation 45/2001

where relevant.".

▌

503

(17) The following title is inserted before Article 29:

"CHAPTER VIb

Publication of decisions"

(17a) Article 29 is replaced by the following:

"Article 29

Publication of decisions

1..........Member States shall provide that competent authorities publish every

decision on sanctions and measures imposed for a breach of this Directive

without undue delay, including at least information on the type and nature of

the breach and the identity of natural persons or legal entities responsible for

it.

504

However competent authorities may delay publication of a decision, or may

publish the decision on an anonymous basis in a manner which is in

conformity with national law in any of the following circumstances:

(a) where, in case the sanction is imposed on a natural person, publication

of personal data is found to be disproportionate by an obligatory prior

assessment of the proportionality of such publication;

(b where publication would seriously jeopardise the stability of the

financial system or an on-going official investigation;

(c) where publication would cause, insofar as it can be determined,

disproportionate and serious damage to the institutions or natural

persons involved.

505

2.......If the decision published under paragraph 1 is appealed, the competent

authority is obliged to include this information in the publication either at the

time of the publication or amend the publication if appeal is submitted after

the initial publication.”.

(18) Article 31(2) is replaced by the following

"2. Where Member States adopt measures pursuant to Articles 3(1), 8(2), 8(3) or

Article 30, they shall immediately communicate those measures to the

Commission and to the other Member States".

506

Article 1a


Directive 2003/71/EC is amended as follows:

In Article 2(1)(m) sub point (iii) is replaced by the following:

“(iii) for all issuers of securities incorporated in a third country, which are not mentioned

in (ii), the Member State where the securities are intended to be offered to the public

for the first time after the date of entry into force of this Directive or where the first

application for admission to trading on a regulated market is made, at the choice of

the issuer, the offeror or the person asking for admission, as the case may be, subject

to a subsequent election by issuers incorporated in a third country in the following

circumstances:

- where the home Member State was not determined by their choice; or

- in accordance with Article 2(1)(i) sub point (iii) of Directive 2004/109/EC.”

507

Article 2


Directive 2007/14/EC is hereby amended as follows:

(1) Article 2 is deleted.

▌

(2) In Article 11, paragraphs 1 and 2 are deleted.


508

Article 2a

Transitional provisions

1. By way of derogation from Article 1(1)(b), for an issuer whose securities are already

admitted to trading on a regulated market and that has not made a choice of a home

Member State prior to the date in Article 3(1) [or prior to the date of entry into force

of this Directive], the period of three months will start on the date in Article 3(1) [or

the date of entry into force of this Directive] ;

2. By way of derogation from Article 1(1)(b)(iii), an issuer that has made a choice of a

home Member State and has communicated this choice to the competent authorities

of the home Member State prior to the date in Article 3(1) [or prior to the date of

entry into force of this Directive], shall be exempted from the requirement of Article

1(1)(b)(iii), unless such issuer chooses another home Member State after the date in

Article 3(1) [or after the date of entry into force of this Directive].

509

Article 3

Transposition

1. Member States shall bring into force the laws, regulations and administrative

provisions necessary to comply with this Directive 24 months from the date of entry

into force of the Directive. They shall forthwith communicate to the Commission the

text of those provisions ▌.

When Member States adopt those provisions, they shall contain a reference to this

Directive or be accompanied by such a reference on the occasion of their official

publication. The methods of making such reference shall be laid down by Member

States.

2. Member States shall communicate to the Commission the text of the main provisions

of national law which they adopt in the field covered by this Directive.

510

Article 3a

Review

Three years after the transposition date of this Directive, the Commission shall report on the

operation of this Directive to the European Parliament and the Council, including on its

impact on small and medium-sized issuers, the application of sanctions, in particular whether

they are effective, proportionate and dissuasive, and

review the functioning and assess the effectiveness of the retained method to calculate the

number of voting rights relating to the financial instruments referred to Article 13(1a), first

subparagraph.

The report shall be submitted together with a legislative proposal, if appropriate.

511

Article 4

Entry into force

This Directive shall enter into force on the twentieth day following that of its publication in the

Official Journal of the European Union.

Article 5

Addressees

This Directive is addressed to the Member States.

Done at Brussels,



______________________

512

P7_TA-PROV(2013)0263

Adjustment rate to direct payments provided for in Regulation (EC) No 73/2009 in respect of calendar year 2013 ***I

European Parliament legislative resolution of 12 June 2013 on the proposal for a regulation of the European Parliament and of the Council on fixing an adjustment rate to direct payments provided for in Regulation (EC) No 73/2009 in respect of calendar year 2013 (COM(2013)0159 – C7-0079/2013 – 2013/0087(COD))






– having regard to the opinion of the European Economic and Social Committee of 23 May 20131,


– having regard to the report of the Committee on Agriculture and Rural Development and the opinion of the Committee on Budgets (A7-0186/2013),




1 Not yet published in the Official Journal.

513

Amendment 1Proposal for a regulation

Recital 2


(2) The forecasts for the direct payments and market related expenditure determined in the preparation of the 2014 Draft Budget show that the annual ceiling for the European Agricultural Guarantee Fund (EAGF) in respect of financial year 2014 is likely to be exceeded taking into account the need to establish the reserve for crises referred to in the Conclusions of the European Council (7/ 8 February 2013) on the Multiannual Financial Framework. An adjustment rate to the direct payments listed in Annex I to Regulation (EC) No 73/2009 should therefore be determined.

(2) Pending the adoption of a regulation laying down the multiannual financial framework on the basis of Article 312(2) of the Treaty on the Functioning of the European Union, the level of the applicable ceiling for the year 2014 remains uncertain. Until there is clarity on the level of the applicable ceiling, it is not possible to determine whether an adjustment of the direct payments for 2013 is necessary and, if so, what the rate should be. The amount of financial discipline required should be revised by the budgetary authority in the framework of the adoption of the Budget 2014 on the basis inter alia of the Amending letter to the Draft General Budget 2014 by which the Commission provides updated estimated needs on market related expenditures and direct payments.

Amendment 2



1. The amounts of direct payments within the meaning of Article 2(d) of Regulation (EC) No 73/2009 to be granted to a farmer in excess of EUR 5000 for an aid application submitted in respect of calendar year 2013 shall be reduced by 4.981759 %.

1. The amounts of direct payments within the meaning of Article 2(d) of Regulation (EC) No 73/2009 to be granted to a farmer in excess of EUR 5000 for an aid application submitted in respect of calendar year 2013 shall be reduced by 0,748005 %.

Amendment 3

Proposal for a regulationArticle 1 – paragraph 1 a (new)


1a. In the event of non-agreement on the

514

multiannual financial framework 2014-2020, no financial discipline for the 2014 financial year shall apply, since the total amount will be calculated on the basis of the 2013 budget figures, plus 2 % inflation.

Amendment12

Proposal for a regulationArticle 1 - paragraph 2 a (new)


2a. The reduction provided for in paragraph 1 shall not apply to the outermost regions which are the subject of Article 349 of the Treaty on the Functioning of the European Union or to the smaller Aegean islands as defined in Article 1(2) of Regulation(EC) No 229/2013 of the European Parliament and of the Council of 13 March 2013 laying down specific measures for agriculture in favour of the smaller Aegean islands.

_______

OJ L 78, 20.3.2013, p. 41.

Amendment 4



Article 1a

1. The provisions of Articles 1 and 2 are adopted without prejudice to the subsequent adoption of Regulation (EU) No [XX/XX of ... laying down the multiannual financial framework for the years 2014-2020] and the Inter-institutional agreement between the European Parliament, the Council and the Commission on cooperation in budgetary matters and sound financial management.

515

2. In the event that a correction to the adjustment rate defined in Article 1(1) is required as a consequence of the adoption of the Regulation and Inter-institutional agreement referred to in paragraph 1, the Commission shall submit a proposal to the European Parliament and to the Council concerning the fixing of a new adjustment rate.

3. The amount of financial discipline required shall be revised by the budgetary authority in the framework of the adoption of the Budget 2014 on the basis inter alia of the Amending letter to the Draft General Budget 2014 by which the Commission provides updated estimated needs on market related expenditures and direct payments.

516

P7_TA-PROV(2013)0264

Amendment of Schengen border code and Convention implementing the Schengen Agreement ***I

European Parliament legislative resolution of 12 June 2013 on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 562/2006 of the European Parliament and of the Council establishing a Community Code on the rules governing the movement of persons across borders (Schengen Borders Code) and the Convention implementing the Schengen Agreement (COM(2011)0118 – C7-0070/2011 – 2011/0051(COD))




– having regard to Article 294(2) and Article 77(1) and (2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0070/2011),

– having regard to the opinion of the Committee on Legal Affairs on the proposed legal basis,


– having regard to the undertakings given by the Council representative by letter of 19 December 2012 to approve Parliament's position, in accordance with Article 294 (4) of the Treaty on the Functioning of the European Union,

– having regard to Rule 55 and Rule 37 of its Rules of Procedure,





517

P7_TC1-COD(2011)0051

Position of the European Parliament adopted at first reading on 12 June 2013 with a view to the adoption of Regulation (EU) No …/2013 of the European Parliament and of the Council amending Regulation (EC) No 562/2006 of the European Parliament and of the Council establishing a Community Code on the rules governing the movement of persons across borders (Schengen Borders Code), the Convention implementing the Schengen Agreement, Council Regulations (EC) No 1683/95 and (EC) No 539/2001 and Regulations (EC) No 767/2008 and (EC) No 810/2009 of the European Parliament and of the Council



77 ▌(2) thereof,


After transmission of the draft legislative act to the national parliaments,


Whereas:

(1) Union policy in the field of external borders aims for integrated management to ensure

a uniform and high level of control and surveillance, which is a necessary corollary to

the free movement of persons within the Union and a fundamental component of an

area of freedom, security and justice. To this end, common rules on standards and

procedures for the control of external borders should be established, taking into

account the specific and disproportionate pressures faced by some Member States at

their external borders. The rules set should be governed by the principle of solidarity

between Member States.

(2) The free movement of people within the Schengen area has been one of the biggest

achievements of European integration. Freedom of movement is a fundamental

right, the conditions for the exercise of which are laid down in the Treaty on

European Union (TEU) and the Treaty on the Functioning of the European Union

(TFEU) and in Directive 2004/38/EC of the European Parliament and of the

1 Position of the European Parliament of 12 June 2013.

518

Council of 29 April 2004 on the right of citizens of the Union and their family

members to move and reside freely within the territory of the Member States1.

(3) The abolition of internal border controls requires full mutual trust between Member

States in their capacity to fully implement the accompanying measures allowing

those controls to be lifted.

(4) Regulation (EC) No 562/2006 of the European Parliament and of the Council of 15

March 2006 establishing a Community Code on the rules governing the movement of

persons across borders (Schengen Borders Code)2 entered into force on 13 October

2006.

(5) After several years of practical application, the need for a number of amendments has

emerged, based on the practical experiences of the Member States and of the

Commission in applying Regulation (EC) No 562/2006, on the results of Schengen

evaluations, on reports and requests submitted by Member States and on developments

in primary and secondary Union law, as has the need for clarification and more

efficient mapping of critical technical issues.

(6) The Commission report of 21 September 2009 on the operation of the provisions on

stamping of the travel documents of third-country nationals in accordance with

Articles 10 and 11 of Regulation (EC) No 562/2006 as well as the Commission report

of 13 October 2010 on the application of Title III (Internal Borders) of Regulation

(EC) No 562/2006 contain concrete suggestions for technical amendments to

Regulation (EC) No 562/2006.

(7) Recently adopted Union legislative acts, in particular Regulation (EC) No 810/2009 of

the European Parliament and of the Council of 13 July 2009 establishing a Community

Code on Visas (Visa Code)3 and Directive 2008/115/EC of the European Parliament

and of the Council of 16 December 2008 on common standards and procedures in

Member States for returning illegally staying third-country nationals4, require certain

amendments to Regulation (EC) No 562/2006.

1 OJ L 158, 30.4.2004, p. 77.2 OJ L 105, 13.4.2006, p. 1.3 OJ L 243, 15.9.2009, p. 1.4 OJ L 348, 24.12.2008, p. 98.

519

(8) Equally, certain provisions of the Convention implementing the Schengen

Agreement of 14 June 1985 between the Governments of the States of the Benelux

Economic Union, the Federal Republic of Germany and the French Republic on the

gradual abolition of checks at their common borders1 ("the Convention

implementing the Schengen Agreement") should be amended in order to reflect the

changes in Regulation (EC) No 562/2006 and the current legal situation.

(9) Pursuant to Case C-241/05 Nicolae Bot v Préfet du Val-de-Marne2, there is a need to

amend the rules dealing with the calculation of the authorised length of short-term

stays in the Union. Clear, simple and harmonised rules in all legal acts dealing with

this issue would benefit both travellers as well as border and visa authorities.

Regulation (EC) No 562/2006 and the Convention implementing the Schengen

Agreement, Council Regulation (EC) No 1683/95 of 29 May 1995 laying down a

uniform format for visas3 and Council Regulation (EC) No 539/2001 of 15 March

2001 listing the third countries whose nationals must be in possession of visas when

crossing the external borders and those whose nationals are exempt from that

requirement4, Regulation (EC) No 767/2008 of 9 July 2008 concerning the Visa

Information System (VIS) and the exchange of data between Member States on

short-stay visas (VIS Regulation)5 and Regulation (EC) No 810/2009, should

therefore be amended accordingly.

(10) The adoption of Regulation (EU) No 1168/2011 of the European Parliament and of

the Council of 25 October 2011 amending Council Regulation (EC) No 2007/2004

establishing a European Agency for the Management of Operational Cooperation at

the External Borders of the Member States of the European Union6(Frontex) ("the

Agency") improves the integrated management of the external borders and provides

a further enhancement of the role of the Agency in line with the objective of the

Union to develop a policy with a view to the gradual introduction of the concept of

Integrated Border Management.

1 OJ L 239, 22.9.2000, p. 19.2 [2006] ECR I-9627.3 OJ L 164, 14.7.1995, p. 1.4 OJ L 81, 21.3.2001, p. 1.5 OJ L 218, 13.8.2008, p. 60.6 OJ L 304, 22.11.2011, p. 1.

520

(11) In order to align the provisions of Regulation (EC) No 562/2006 with the TFEU, the

power to adopt acts in accordance with Article 290 of the TFEU should be delegated

to the Commission in respect of the adoption of additional measures governing

surveillance as well as amendments to the Annexes to Regulation (EC) No 562/2006.

It is of particular importance that the Commission carry out appropriate consultations

during its preparatory work, including at expert level. The Commission, when

preparing and drawing up delegated acts, should ensure a simultaneous, timely and

appropriate transmission of relevant documents to the European Parliament and to the

Council.

(12) Since the objective of this Regulation, namely to provide for technical amendments to

the existing rules of Regulation (EC) No 562/2006 and the Convention implementing

the Schengen Agreement, as well as Regulations (EC) No 1683/95, (EC) No 539/2001,

(EC) No 767/2008 and (EC) No 810/2009, can only be achieved at Union level, the

▌Union may adopt measures in accordance with the principle of subsidiarity as set out

in Article 5 of the TEU. In accordance with the principle of proportionality, as also set

out in that Article, this Regulation does not go beyond what is necessary in order to

achieve that objective.

(13) As regards Iceland and Norway, this Regulation constitutes a development of the

provisions of the Schengen acquis within the meaning of the Agreement concluded by

the Council of the European Union and the Republic of Iceland and the Kingdom of

Norway concerning the latters’ association with the implementation, application and

development of the Schengen acquis1 which fall within the area referred to in Article

1, point A, of Council Decision 1999/437/EC of 17 May 1999 on certain arrangements

for the application of that Agreement2.

(14) As regards Switzerland, this Regulation constitutes a development of the provisions of

the Schengen acquis within the meaning of the Agreement between the European

Union, the European Community and the Swiss Confederation on the Swiss

Confederation's association with the implementation, application and development of

the Schengen acquis3 which fall within the area referred to in Article 1, point A, of

1 OJ L 176, 10.7.1999, p. 36.2 OJ L 176, 10.7.1999, p. 31.3 OJ L 53, 27.2.2008, p. 52.

521

Decision 1999/437/EC read in conjunction with Article 3 of Council Decision

2008/146/EC1.

(15) As regards Liechtenstein, this Regulation constitutes a development of the provisions

of the Schengen acquis within the meaning of the Protocol between the European

Union, the European Community, the Swiss Confederation and the Principality of

Liechtenstein on the accession of the Principality of Liechtenstein to the Agreement

between the European Union, the European Community and the Swiss Confederation

on the Swiss Confederation’s association with the implementation, application and

development of the Schengen acquis2 which fall within the area referred to in Article

1, point A, of Decision 1999/437/EC read in conjunction with Article 3 of Council

Decision 2011/350/EU3.

(16) In accordance with Articles 1 and 2 of Protocol (No 22) on the position of Denmark,

annexed to the TEU and to the TFEU, Denmark is not taking part in the adoption of

this Regulation and is not bound by it or subject to its application. Given that this

Regulation builds upon the Schengen acquis, Denmark shall, in accordance with

Article 4 of that Protocol, decide within a period of six months after the Council has

decided on this Regulation whether it will implement it in its national law.

(17) This Regulation constitutes a development of the provisions of the Schengen acquis in

which the United Kingdom does not take part, in accordance with Council Decision

2000/365/EC of 29 May 2000 concerning the request of the United Kingdom of Great

Britain and Northern Ireland to take part in some of the provisions of the Schengen

acquis4; the United Kingdom is therefore not taking part in its adoption and is not

bound by it or subject to its application.

(18) This Regulation constitutes a development of the provisions of the Schengen acquis in

which Ireland does not take part, in accordance with Council Decision 2002/192/EC of

28 February 2002 concerning Ireland's request to take part in some of the provisions of

the Schengen acquis5; Ireland is therefore not taking part in its adoption and is not

bound by it or subject to its application,1 OJ L 53, 27.2.2008, p. 1.2 OJ L 160, 18.6.2011, p.21.3 OJ L 160, 18.6.2011, p. 19.4 OJ L 131, 1.6.2000, p. 43.5 OJ L 64, 7.3.2002, p. 20.

522


523

Article 1

Amendments to Regulation (EC) No 562/2006



(a) in point 1, point (c) is replaced by the following:

"(c) sea, river and lake ports of the Member States for regular internal ferry

connections ▌;";

(b) point 4 is replaced by the following:

"4.' regular internal ferry connection' means any ferry connection between the

same two or more ports situated on the territory of the Member States, not

calling at any ports situated outside the territory of the Member States and

consisting of the transport of passengers and vehicles according to a

published timetable;";

▌

(c) point 5 is amended as follows:

(i) the introductory part is replaced by the following:

"5. 'persons enjoying the right of free movement under Union law'

means:";

(ii) in point (a), the reference "Article 17(1)" is replaced by the reference

"Article 20(1)";

(iii) in point (b), the word "Community" is replaced by the word "Union";

(d) in point 6, the reference "Article 17(1)" is replaced by the reference "Article

20(1)";

(e) the following point is inserted:

524

"8a. 'shared border crossing point' means any border crossing point situated

either on the territory of a Member State or on the territory of a third

country, at which Member State border guards and third-country border

guards carry out exit and entry checks one after another in accordance

with their national law and pursuant to a bilateral agreement;";

(f) point 15 is replaced by the following:

"15. 'residence permit' means:

(a) all residence permits issued by the Member States according to the

uniform format laid down by Council Regulation (EC) No 1030/2002

of 13 June 2002 laying down a uniform format for residence permits

for third-country nationals and residence cards issued in accordance

with Directive 2004/38/EC;

(b) all other documents issued by a Member State to third-country

nationals authorising a stay on its territory, that have been the subject

of a notification and subsequent publication in accordance with

Article 34, with the exception of:

(i) temporary permits issued pending examination of a first

application for a residence permit as referred to in point (a) or

an application for asylum and

(ii) visas issued by the Member States in the uniform format laid

down by Council Regulation (EC) No 1683/95 of 29 May 1995

laying down a uniform format for visas;

____________________

OJ L 157, 15.6.2002, p. 1.

OJ L 164, 14.7.1995, p. 1.";

(g) the following point is inserted:

525

"18a. 'offshore worker' means a person working on an offshore installation

located in the territorial waters or in an area of exclusive maritime

economic exploitation of the Member States as defined by international

maritime law, and who returns regularly by sea or air to the territory of

the Member States;";

(2) in Article 3, point (a) is replaced by the following:

“(a) the rights of persons enjoying the right of free movement under Union law;”;

(3) the following Article is inserted:

"Article 3a

Fundamental Rights

When applying this Regulation, Member States shall act in full compliance with

relevant Union law, including the Charter of Fundamental Rights of the European

Union ("the Charter of Fundamental Rights"); relevant international law, including

the Convention Relating to the Status of Refugees done at Geneva on 28 July 1951

("the Geneva Convention"); obligations related to access to international protection,

in particular the principle of non-refoulement; and fundamental rights. In

accordance with the general principles of Union law, decisions under this

Regulation shall be taken on an individual basis.";

(4) in Article 4, paragraph 2 is replaced by the following:

"2. By way of derogation from paragraph 1, exceptions to the obligation to cross

external borders only at border crossing points and during fixed opening hours

may be allowed:

(a) for individuals or groups of persons, where there is a requirement of a

special nature for the occasional crossing of external borders outside

border crossing points or outside fixed opening hours, provided that they

are in possession of the permits required by national law and that there is

no conflict with the interests of public policy and the internal security of

the Member States. Member States may make specific arrangements in

526

bilateral agreements. General exceptions provided for by national law and

bilateral agreements shall be notified to the Commission pursuant to

Article 34;

(b) for individuals or groups of persons in the event of an unforeseen

emergency situation;

(c) in accordance with the specific rules set out in Articles 18 and 19 in

conjunction with Annexes VI and VII.";


(a) paragraph 1 is amended as follows:

(i) the introductory part is replaced by the following:

"1. For intended stays on the territory of the Member States of a duration of no

more than 90 days in any 180-day period ▌ , which entails considering

the 180-day period preceding each day of stay, the entry conditions for

third-country nationals shall be the following:";

(ii) point (a) is replaced by the following:

"(a) they are in possession of a valid travel document entitling the holder to

cross the border satisfying the following criteria:

(i) its validity shall extend at least three months after the intended date of

departure from the territory of the Member States. In a justified case of

emergency, this obligation may be waived;

(ii) it shall have been issued within the previous 10 years;";

527

(b) the following paragraph is inserted:

"1a. For the purposes of implementing paragraph 1, the date of entry shall be

considered as the first day of stay on the territory of the Member States

and the date of exit shall be considered as the last day of stay on the

territory of the Member States. Periods of stay authorised under a

residence permit or a long-stay visa shall not be taken into account in the

calculation of the duration of stay on the territory of the Member

States.";

(c) paragraph 4 is amended as follows:

(i) point (a) is replaced by the following:

"(a) third-country nationals who do not fulfil all the conditions laid down

in paragraph 1 but who hold a residence permit or a long-stay visa

shall be authorised to enter the territories of the other Member States

for transit purposes so that they may reach the territory of the

Member State which issued the residence permit or the long-stay

visa, unless their names are on the national list of alerts of the

Member State whose external borders they are seeking to cross and

the alert is accompanied by instructions to refuse entry or transit;";

528

(ii) in point (b), the first and second paragraphs are replaced by the following:

"(b) third-country nationals who fulfil the conditions laid down in

paragraph 1, except for that laid down in point (b), and who present

themselves at the border may be authorised to enter the territories of

the Member States, if a visa is issued at the border in accordance

with Articles 35 and 36 of Regulation (EC) No 810/2009 of the

European Parliament and of the Council of 13 July 2009

establishing a Community Code on Visas (Visa Code)*.

Member States shall compile statistics on visas issued at the border

in accordance with Article 46 of Regulation (EC) No 810/2009 and

Annex XII thereto.

____________________

* OJ L 243, 15.9.2009, p. 1.";

529

(6) in Article 6(1), the first subparagraph is replaced by the following:

"1. Border guards shall, in the performance of their duties, fully respect

human dignity, in particular in cases involving vulnerable persons.";


(a) in paragraph 2, the second, third and fourth subparagraphs are replaced by the

following:

"The minimum check referred to in the first subparagraph shall be the rule for

persons enjoying the right of free movement under Union law.

However, on a non-systematic basis, when carrying out minimum checks on

persons enjoying the right of free movement under Union law, border guards

may consult national and European databases in order to ensure that such persons

do not represent a genuine, present and sufficiently serious threat to the internal

security, public policy, international relations of the Member States or a threat to

the public health.

The consequences of such consultations shall not jeopardise the right of entry of

persons enjoying the right of free movement under Union law into the territory

of the Member State concerned as laid down in Directive 2004/38/EC.";

(b) in paragraph 5, the first subparagraph is replaced by the following:

"Without prejudice to the second subparagraph, third-country nationals subject

to a thorough second line check shall be given written information in a language

which they understand or may reasonably be presumed to understand, or in

another effective way, on the purpose of, and the procedure for, such a check.";

(c) paragraph 6 is replaced by the following:

"6. Checks on a person enjoying the right of free movement under Union law

shall be carried out in accordance with Directive 2004/38/EC.";

(d) the following paragraph is added:

530

"8. Where points (a) or (b) of Article 4(2) apply, Member States may also

provide derogations from the rules set out in this Article.";


(a) paragraph 2 is replaced by the following:

"2.(a) Persons enjoying the right of free movement under Union law are

entitled to use the lanes indicated by the sign in part A ("EU, EEA, CH") of

Annex III. They may also use the lanes indicated by the sign in part B1 ("visa

not required") and part B2 ("all passports") of Annex III.

Third-country nationals who are not obliged to possess a visa when crossing the

external borders of the Member States in accordance with Regulation (EC) No

539/2001 and third-country nationals who hold a valid residence permit or long-

stay visa may use the lanes indicated by the sign in part B1 ("visa not required")

of Annex III to this Regulation. They may also use the lanes indicated by the

sign in part B2 ("all passports") of Annex III to this Regulation.

(b) All other persons shall use the lanes indicated by the sign in part

B2 ("all passports") of Annex III.

The indications on the signs referred to in points (a) and (b) may be displayed in

such language or languages as each Member State considers appropriate.

The provision of separate lanes indicated by the sign in part B1 ("visa not

required") of Annex III is not obligatory. Member States shall decide whether to

do so and at which border crossing points in accordance with practical needs.";

(b) paragraph 5 is deleted;

(9) Article 10 is ▌ amended as follows:

(a) the title is replaced by the following: " Stamping of the travel documents”;

(b) paragraph 2 is replaced by the following:

531

“2. The travel documents of nationals of third countries who are members of

the family of a Union citizen to whom Directive 2004/38/EC applies, but

who do not present the residence card provided for in that Directive, shall

be stamped on entry and exit.

The travel documents of nationals of third countries who are members of

the family of nationals of third countries enjoying the right of free

movement under Union law, but who do not present the residence card

provided for in Directive 2004/38/EC, shall be stamped on entry and exit.";

(c) paragraph 3 is amended as follows:

(i) in the first subparagraph, the following points are added:

"(f) to the travel documents of crews of passengers and goods trains on

international connections;

(g) to the travel documents of nationals of third countries who present a

residence card provided for in Directive 2004/38/EC.";

(ii) the second subparagraph is replaced by the following:

"Exceptionally, at the request of a third-country national, insertion of an

entry or exit stamp may be dispensed with if insertion might cause

serious difficulties for that person. In that case, entry or exit shall be

recorded on a separate sheet indicating that person's name and passport

number. That sheet shall be given to the third-country national. The

competent authorities of the Member States may keep statistics of such

exceptional cases and may provide those statistics to the Commission.";

532



"3. Should the presumption referred to in paragraph 1 not be rebutted, the

third-country national may be returned in accordance with Directive

2008/115/EC of the European Parliament and of the Council of 16

December 2008 on common standards and procedures in Member States

for returning illegally staying third-country nationals* and with national

law respecting that Directive.

_______________

* OJ L 348, 24.12.2008, p. 98.";

(b) the following paragraph is added:

"4. The relevant provisions of paragraph 1 and 2 shall apply mutatis mutandis

in the absence of an exit stamp.";



"1. The main purpose of border surveillance shall be to prevent

unauthorised border crossings, to counter cross-border criminality and

to take measures against persons who have crossed the border illegally. A

person who has crossed a border illegally and who has no right to stay on

the territory of the Member State concerned shall be apprehended and

made subject to procedures respecting Directive 2008/115/EC";

(b) paragraph 5 is replaced by the following:

"5. The Commission shall be empowered to adopt delegated acts in

accordance with Article 33 concerning additional measures governing

surveillance.";

533


"5. Member States shall collect statistics on the number of persons refused entry, the

grounds for refusal, the nationality of the persons who were refused entry and the

type of border (land, air or sea) at which they were refused entry and submit

them yearly to the Commission (Eurostat) in accordance with Regulation (EC)

No 862/2007 of the European Parliament and of the Council of 11 July 2007 on

Community statistics on migration and international protection.*

____________________

OJ L 199, 31.7.2007, p. 23.";

(13) in Article 15(1), the third subparagraph is replaced by the following:

"Member States shall ensure that the border guards are specialised and properly

trained professionals, taking into account common core curricula for border

guards established and developed by the European Agency for the Management

of Operational Cooperation at the External Borders of the Member States

established by Council Regulation (EC) No 2007/2004. Training curricula shall

include specialised training for detecting and dealing with situations involving

vulnerable persons, such as unaccompanied minors and victims of trafficking.

Member States, with the support of the Agency, shall encourage border guards

to learn the languages ▌necessary for the carrying-out of their tasks.";

(14) in Article 18, the second paragraph is replaced by the following:

"Those specific rules may contain derogations from Articles 4 and 5 and Articles

7 to 13.";

(15) in Article 19, paragraph 1 is amended as follows:

(a) ▌the following points are added to the first subparagraph:

"(g) rescue services, police and fire brigades and border guards;

(h) offshore workers.";

534

(b) the second subparagraph is replaced by the following:

"Those specific rules may contain derogations from Articles 4 and 5 and Article

7 to 13.";

(16) in Article 21, point (d) is replaced by the following:

“(d) the possibility for a Member State to provide by law for an obligation on

third-country nationals to report their presence on its territory pursuant to the

provisions of Article 22 of the Schengen Convention.”;


"Article 32

Amendments to the Annexes

The Commission shall be empowered to adopt delegated acts in accordance with

Article 33 concerning amendments to Annexes III, IV and VIII.";


"Article 33

Exercise of the delegation

1. The power to adopt delegated acts is conferred on the Commission subject to the

conditions laid down in this Article.

2. The ▌ power to adopt delegated acts referred to in Articles 12(5) and 32 shall be

conferred on the Commission for an indeterminate period of time from ….

3. The delegation of powers referred to in Articles 12(5) and 32 may be revoked at

any time by the European Parliament or by the Council. A decision to revoke

shall put an end to the delegation of the power specified in that decision. It shall

take effect the day following the publication of the decision in the Official

Journal of the European Union or at a later date specified therein. It shall not

affect the validity of any delegated acts already in force.

OJ: please insert the date of entry into force of this Regulation.

535

4. As soon as it adopts a delegated act, the Commission shall notify it

simultaneously to the European Parliament and to the Council.

5. A delegated act adopted pursuant to Articles 12(5) and 32 shall enter into force

only if no objection has been expressed either by the European Parliament or the

Council within a period of two months of notification of that act to the European

Parliament and the Council or if, before the expiry of that period, the European

Parliament and the Council have both informed the Commission that they will

not object. That period shall be extended by two months at the initiative of the

European Parliament or of the Council.";

(19) in Article 34, paragraph 1 is amended as follows:

(a) point (a) is replaced by the following:

"(a) the list of residence permits, distinguishing between those covered by point

(a) of point 15 of Article 2 and those covered by point (b) of point 15 of

Article 2 and accompanied by a specimen for permits covered by point (b)

of point 15 of Article 2. Residence cards issued in accordance with

Directive 2004/38/EC shall be specifically highlighted as such and

specimens shall be provided for those residence cards which have not

been issued in accordance with the uniform format laid down by

Regulation (EC) No 1030/2002.";

(b) the following points are added:

"(ea) the exceptions to the rules regarding the crossing of the external borders

referred to in point (a) of Article 4(2);

(eb) the statistics referred to in Article 10(3).";

536

(20) in Article 37, the first paragraph is replaced by the following:

"The Member States shall notify the Commission of national provisions relating

to Article 21(c) and (d), the penalties as referred to in Article 4(3) and the

bilateral agreements authorised by this Regulation. Subsequent changes to those

provisions shall be notified within five working days.";

(21) Annexes III, IV, VI, VII and VIII to Regulation (EC) No 562/2006 are amended in

accordance with Annex I to this Regulation.

Article 2

Amendments to the Convention implementing the Schengen Agreement

The Convention implementing the Schengen Agreement ▌ is hereby amended as follows:

(1) in Article 18(1), the words "three months" are replaced by the words "90 days";


(a) in paragraph 1, the phrase "three months during the six months following the

date of first entry" is replaced by the phrase "90 days in any 180-day period";

(b) in paragraph 2, the words "three months" are replaced by the words "90

days";


(a) in paragraph 1, the phrase "three months in any six-month" is replaced by the

phrase"90 days in any 180-day";

(b) paragraph 3 is deleted;


“Article 22

Aliens who have legally entered the territory of one of the Contracting Parties may

be obliged to report, in accordance with the conditions laid down by each

Contracting Party, to the competent authorities of the Contracting Party whose

537

territory they enter. Such aliens shall report either on entry or within three working

days of entry, at the discretion of the Contracting Party whose territory they enter.”;


Article 3

Amendment to Regulation (EC) No 1683/95

Article 5 of Regulation (EC) No 1683/95 is replaced by the following:

"Article 5

For the purposes of this Regulation, 'visa' means a visa as defined in Article 2(2)(a)

of Regulation (EC) No 810/2009 of the European Parliament and of the Council of

13 July 2009 establishing a Community Code on Visas (Visa Code).

_________________

OJ L 243, 15.9.2009, p. 1.".

Article 4



(1) in Article 1(2), the first subparagraph is replaced by the following:

"Nationals of third countries on the list in Annex II shall be exempt from the

requirement set out in paragraph 1 for stays of no more than 90 days in any 180-day

period.";


"Article 2

For the purposes of this Regulation, 'visa' means a visa as defined in Article 2(2)(a)

of Regulation (EC) No 810/2009 of the European Parliament and of the Council of

13 July 2009 establishing a Community Code on Visas (Visa Code).

_________________

538

OJ L 243, 15.9.2009, p. 1.".

539

Article 5

Amendment to Regulation (EC) No 767/2008

In Article 12(2)(a) of Regulation (EC) No 767/2008, point (iv) is replaced by the following:

"(iv) has already stayed for 90 days during the current 180-day period on the

territory of the Member States on the basis of a uniform visa or a visa with limited

territorial validity;".

Article 6




"1. This Regulation establishes the procedures and conditions for issuing visas for

transit through or intended stays on the territory of the Member States not

exceeding 90 days in any 180-day period.";

(2) in Article 2(2), point (a) is replaced by the following:

"(a) transit through or an intended stay on the territory of the Member States of a

duration of no more than 90 days in any 180-day period;";

(3) in Article 25(1), point (b) is replaced by the following:

"(b) when for reasons deemed justified by the consulate, a new visa is issued for a

stay during the same 180-day period to an applicant who, over this 180-day

period, has already used a uniform visa or a visa with limited territorial

validity allowing for a stay of 90 days.";

(4) in Article 32(1)(a), point (iv) is replaced by the following:

"(iv) has already stayed for 90 days during the current 180-day period on the

territory of the Member States on the basis of a uniform visa or a visa with

limited territorial validity;";

540

(5) Annexes VI, VII and XI to Regulation (EC) No 810/2009 are amended in accordance

with Annex II to this Regulation.

Article 7

Entry into force

This Regulation shall enter into force on … .

Article 1(5)(a)(i), Article 1(5)(b), Article 2(1) and (2), Article 2(3)(a), Articles 3, 4, 5 and 6,

point (3) of Annex I, and Annex II shall apply from …*.



Done at …,



OJ: please, insert the date: 20 days after the date of the publication of this Regulation in the OJ.

OJ: please, insert the date: 90 days after the date of entry into force of this Regulation.

541

ANNEX I

The Annexes to Regulation (EC) No 562/2006 are hereby amended as follows:

(1) Annex III is amended as follows:

(a) Part B is replaced by the following:

"PART B1: 'visa not required';

542

VISA NOT REQUIRED

PART B2: 'all passports'.

ALL PASSPORTS

";

543

(b) in Part C, the following signs are inserted between the signs "EU, EEA, CH" and

the signs "ALL PASSPORTS":

"

";

544

(2) in Annex IV, point 3, the first paragraph is replaced by the following:

"3. On the entry and exit of third-country nationals subject to the visa obligation, the

stamp shall, as a general rule, be affixed on the page facing the one on which the

visa is affixed.";

(3) in Annex V, part B, in the Standard form for refusal of entry at the border, letter (F) ""

is replaced by the following:

"� (F) has already stayed for 90 days in the preceding 180-day period on the territory

of the Member States of the European Union";

(4) Annex VI is amended as follows:

(a) point 1 is amended as follows:

(i) in point 1.1., the following point is added:

"1.1.4. Shared border crossing points

1.1.4.1.Member States may conclude or maintain bilateral agreements with

neighbouring third countries concerning the establishment of shared border

crossing points, at which Member State border guards and third-country border

guards carry out exit and entry checks one after another in accordance with

their national law on the territory of the other party. Shared border crossing

points may be located either on the territory of a Member State territory or on the

territory of a third country.

1.1.4.2.Shared border crossing points located on Member State territory:

Bilateral agreements establishing shared border crossing points located on

Member State territory shall contain an authorisation for third-country border

guards to exercise their tasks in the Member State, respecting the following

principles:

(a) International protection: A third-country national asking for international

protection on Member State territory shall be given access to relevant

Member State procedures in accordance with the Union asylum acquis.

545

(b) Arrest of a person or seizure of property: If third-country border guards

become aware of facts justifying the arrest or placing under protection of a

person or seizure of property, they shall ▌ inform Member State authorities

of those facts and Member State authorities shall ensure an appropriate

follow-up in accordance with national, Union and international law,

independently of the nationality of the concerned person.

▌

(c) Persons enjoying the right of free movement under Union law entering

Union territory: Third-country border guards shall not prevent persons

enjoying the right of free movement under Union law from entering Union

territory. If there are reasons justifying refusal of exit from the third

country concerned, third-country border guards shall inform Member State

authorities of those reasons and Member State authorities shall ensure an

appropriate follow-up in accordance with national, Union and international

law.

1.1.4.3.Shared border crossing points located on third-country territory:

Bilateral agreements establishing shared border crossing points located on third-

country territory shall contain an authorisation for Member State border guards

to perform their tasks in the third country. For the purpose of this Regulation,

any check carried out by Member State border guards in a shared border

crossing point located on the territory of a third country shall be deemed to be

carried out on the territory of the Member State concerned. Member State

border guards shall exercise their tasks in accordance with Regulation (EC) No

562/2006 and respecting the following principles:

(a) International protection: A third-country national who has passed exit

control by third-country border guards and subsequently asks Member

State border guards present in the third country for international

protection, shall be given access to relevant Member State procedures in

accordance with Union asylum acquis. Third-country authorities shall

accept the transfer of the person concerned into Member State territory.

546

(b) Arrest of a person or seizure of property: If Member State border guards

become aware of facts justifying the arrest or placing under protection of a

person or seizure of property, they shall act in accordance with ▌ national,

Union and international law. Third-country authorities shall accept a

transfer of the person or object concerned into Member State territory.

(c) Access to IT systems: Member State border guards shall be able to use

information systems processing personal data in accordance with Article

7. Member States shall be allowed to establish the technical and

organisational security measures required by Union law to protect

personal data against accidental or unlawful destruction or accidental

loss, alteration, unauthorised disclosure or access, including access by

third-country authorities.

1.1.4.4. Before concluding or amending any bilateral agreement on shared border

crossing points with a neighbouring third country, the Member State concerned

shall consult the Commission as to the compatibility of the agreement with

Union law. Pre-existing bilateral agreements shall be notified to the Commission

by ….

If the Commission considers the agreement to be incompatible with Union law,

it shall notify the Member State concerned. The Member State shall take all

appropriate steps to amend the agreement within a reasonable period in such a

way as to eliminate the incompatibilities established. ▌";

(ii) in point 1.2., points 1.2.1. and 1.2.2. are replaced by the

following:

"1.2.1. Checks shall be carried out both on train passengers and on railway

staff on trains crossing external borders, including those on goods trains or

empty trains. Member States may conclude bilateral or multilateral agreements

on how to conduct those checks respecting the principles set out in point 1.1.4.

Those checks shall be carried out in one of the following ways:

OJ: please insert the following date: 6 months after the entry into force of this Regulation.

547

– in the first station of arrival or last station of departure on the territory

of a Member State,

– on board the train, during transit between the last station of departure in

a third country and the first station of arrival on the territory of a

Member State or vice versa,

– in the last station of departure or the first station of arrival on the

territory of a third country.

1.2.2. In addition, in order to facilitate rail traffic flows of high-speed passenger

trains, the Member States on the itinerary of these trains from third countries

may also decide, by common agreement with third countries concerned

respecting the principles set out in point 1.1.4., to carry out entry checks on

persons on trains from third countries in either one of the following ways:

– in the stations in a third country where persons board the train,

– in the stations where persons disembark within the territory of the Member

States,

– on board the train during transit between stations on the territory of a third

country and stations on the territory of the Member States, provided that

the persons stay on board the train.";

(b) ▌point 3.1. is replaced by the following:

"3.1 General checking procedures on maritime traffic

3.1.1. Checks on ships shall be carried out at the port of arrival or departure,

or in an area set aside for that purpose, located in the immediate vicinity of the

vessel or on board ship in the territorial waters as defined by the United

Nations Convention on the Law of the Sea. Member States may conclude

▌agreements according to which checks may also be carried out during

crossings or, upon the ship's arrival or departure, on the territory of a third

country, respecting the principles set out in point 1.1.4.

548

3.1.2. The master, the ship's agent or some other person duly authorised by the

master or authenticated in a manner acceptable to the public authority

concerned (in both cases hereinafter referred to as ‘the master’), shall draw up a

list of the crew and any passengers containing the information required in the

forms 5 (crew list) and 6 (passenger list) of the Convention on Facilitation of

International Maritime Traffic (FAL Convention) ▌ as well as, where applicable,

the visa or residence permit numbers:

– at the latest twenty-four hours before arriving in the port, or

– at the latest at the time the ship leaves the previous port, if the voyage time

is less than twenty-four hours, or

– if the port of call is not known or it is changed during the voyage, as soon

as this information is available.

The master shall communicate the list(s) to the ▌ border guards or, if national

law so provides, to other relevant authorities which shall forward the list(s)

without delay to the border guards ▌.

3.1.3. A confirmation of receipt (signed copy of the list(s) or an electronic

receipt confirmation) shall be returned to the master by the border guards or by

the authorities referred to in point 3.1.2., who shall produce it on request when

the ship is in port.

3.1.4. The master shall promptly report to the competent authority any changes

to the composition of the crew or the number of passengers.

In addition, the master shall notify the competent authorities promptly, and

within the time-limit set out in point 3.1.2., of the presence on board of

stowaways. Stowaways, however, remain under the responsibility of the master.

By way of derogation from Articles 4 and 7, no systematic border checks shall

be carried out on persons staying aboard. Nevertheless a search of the ship and

▌checks on the persons staying aboard shall be carried out by border guards

only when this is justified on the basis of an assessment of the risks related to

internal security and illegal immigration.

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3.1.5. The master shall notify the competent authority of the ship's departure in

due time and in accordance with the rules in force in the port concerned.";

(c) point 3.2. is amended as follows:

(i) point 3.2.1. is replaced by the following:

"3.2.1. The cruise ship's master shall transmit to the competent authority

the itinerary and the programme of the cruise, as soon as they have been

established and no later than within the time-limit set out in point 3.1.2.";

(ii) in point 3.2.2., the second paragraph is replaced by the following:

"Nevertheless, ▌ checks shall be carried out on the crew and passengers of

those ships only when this is justified on the basis of an assessment of the

risks related to internal security and illegal immigration.";

(iii) in points 3.2.3.(a) and 3.2.3.(b), the reference "point 3.2.4" is replaced by

the reference "point 3.1.2.";

(iv) in point 3.2.3.(e), the second subparagraph is replaced by the following:

"Nevertheless, ▌ checks shall be carried out on the crew and passengers of

those ships only when this is justified on the basis of an assessment of the

risks related to internal security and illegal immigration.";

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(v) point 3.2.4. is deleted;

(vi) in point 3.2.9., the second paragraph is deleted;

(vii) in point 3.2.10., the following point is added:

"(i) point 3.1.2. (obligation to submit passenger and crew lists) does not

apply. If a list of the persons on board has to be drawn up in

accordance with Council Directive 98/41/EC of 18 June 1998 on the

registration of persons sailing on board passenger ships operating to

or from ports of the Member States of the Community*, a copy of

that list shall be transmitted not later than thirty minutes after

departure from a third-country port by the master to the competent

authority of the port of arrival on the territory of the Member States.

____________________

* OJ L 188, 2.7.1998, p. 35.";

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(viii) the following point is inserted:

"3.2.11. Where a ferry coming from a third country with more than one

stop within the territory of the Member States takes passengers on

board only for the remaining leg within that territory, those

passengers shall be subject to an exit check at the port of departure

and an entry check at the port of arrival.

Checks on persons who, during those stop-overs, are already on

board the ferry and have not boarded in the territory of the Member

States shall be carried out at the port of arrival. The reverse

procedure shall apply where the country of destination is a third

country.";

(ix) the following titled point is added:

"Cargo connections between Member States

3.2.12. By way of derogation from Article 7, no border checks shall be

carried out on cargo connections between the same two or more

ports situated on the territory of the Member States, not calling at

any ports outside the territory of the Member States and consisting

of the transport of goods.

Nevertheless, checks shall be carried out on the crew and

passengers of those ships only when they are justified on the basis

of an assessment of the risks relating to internal security and illegal

immigration.";

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(5) Annex VII is amended as follows:

(a) in point 3, points 3.1. and 3.2. are replaced by the following:

"3.1 By way of derogation from Articles 4 and 7, Member

States may authorise seamen holding a seafarer's identity document

issued in accordance with the International Labour Organization

(ILO) Seafarers' Identity Documents Convention No 108 (1958) or

No 185 (2003), the Convention on Facilitation of International

Maritime Traffic (FAL Convention) and the relevant national law, to

enter ▌the territory of the Member States by going ashore to stay in

the area of the port where their ships call or in the adjacent

municipalities, or exit the territory of the Member States by

returning to their ships, without presenting themselves at a border

crossing point, on condition that they appear on the crew list, which

has previously been submitted for checking by the competent

authorities, of the ship to which they belong.

However, on the basis of an assessment of the risks of internal security and

illegal immigration, seamen shall be subject to a check in accordance with

Article 7 by the border guards before they go ashore.";

(b) in point 6, the following points are inserted:

"6.4. Member States shall nominate national contact points for consultation on

minors and inform the Commission thereof. A list of these national contact

points shall be made available to the Member States by the Commission.

6.5. Where there is doubt as to any of the circumstances set out in points 6.1. to

6.3., border guards shall make use of the list of national contact points for

consultation on minors.";

(c) the following points are added:

"7. Rescue services, police ▌, fire brigades and border guards

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The arrangements for the entry and exit of members of rescue services, police ▌,

fire brigades acting in emergency situations as well as border guards

crossing the border in exercise of their professional tasks shall be laid

down by national law ▌. Member States may conclude bilateral

agreements with third countries on the entry and exit of those categories

of persons. These arrangements and bilateral agreements may provide for

derogations from Articles 4, 5 and 7.

8. Offshore workers

By way of derogation from Articles 4 and 7, offshore workers as defined in

Article 2, point 18a who regularly return by sea or air to the territory of the

Member States without having stayed on the territory of a third country

shall not be systematically checked.

Nevertheless, an assessment of the risks of illegal immigration, in

particular where the coastline of a third country is located in the immediate

vicinity of an offshore site, shall be taken into account in order to

determine the frequency of the checks to be carried out.";

(6) in Annex VIII, the standard form is amended as follows:

(a) the words "entry stamp" are replaced by the words "entry or exit stamp";

(b) the word "entered" is replaced by the words "entered or left".

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ANNEX II

Annexes to Regulation (EC) No 810/2009 are hereby amended as follows:

(1) in Annex VI, in the "Standard form for notifying and motivating refusal, annulment

or revocation of a visa", point 4 is replaced by the following:

"4. � you have already stayed for 90 days during the current 180-day period on the

territory of the Member States on the basis of a uniform visa or a visa with

limited territorial validity";

(2) in Annex VII, point 4, the fourth paragraph is replaced by the following:

"When a visa is valid for more than six months, the duration of stays is 90 days in

any 180-day period.";

(3) in Annex XI, Article 5(2) is replaced by the following:

"2. The visa issued shall be a uniform, multiple-entry visa authorising a stay of

not more than 90 days for the duration of the Olympic and/or Paralympic

Games.".

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P7_TA-PROV(2013)0265

Draft decision of the European Council establishing the composition of the European Parliament ***

European Parliament legislative resolution of 12 June 2013 on the draft European Council decision establishing the composition of the European Parliament (00110/2013 – C7-0166/2013 – 2013/0900(NLE))

(Consent)


– having regard to the draft European Council decision establishing the composition of the European Parliament (00110/2013),

– having regard to the request for consent submitted by the European Council in accordance with the second subparagraph of Article 14(2) of the Treaty on European Union (C7-0166/2013),

– having regard to its resolution of 13 March 2013 on the composition of the European Parliament with a view to the 2014 elections and to its proposal for a decision of the European Council annexed thereto,1

– having regard to Rules 74f and 81(1) of its Rules of Procedure,

– having regard to the recommendation of the Committee on Constitutional Affairs (A7-0213/2013)

1. Consents to the draft European Council decision;

2. Instructs its President to forward its position to the European Council and to the government and parliament of the Republic of Croatia, and, for information, to the Commission and to the governments and parliaments of the Member States.

1 Texts adopted, P7_TA(2013)0082.

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P7_TA-PROV(2013)0266

Social investment for growth and cohesion

European Parliament resolution of 12 June 2013 on the Commission Communication ‘Towards Social Investment for Growth and Cohesion – including implementing the European Social Fund 2014-2020’ (2013/2607(RSP))


– having regard to the Treaty on the Functioning of the European Union (TFEU), in particular Articles 5, 6, 9, 14, 147, 148, 149, 151 and 153 thereof, and to the Charter of Fundamental Rights of the European Union, in particular Articles 24, 25, 26, 29, 33, 34, 35 and 36,

– having regard to the Commission communication of 20 February 2013 entitled ‘Towards Social Investment for Growth and Cohesion – including implementing the European Social Fund 2014-2020’ (COM(2013)0083),

– having regard to the Commission recommendation of 20 February 2013 entitled ‘Investing in children: breaking the cycle of disadvantage’ (2013/112/EU)1,

– having regard to the Commission Staff Working Document of 20 February 2013 entitled ‘Evidence on Demographic and Social Trends: Social Policies’ Contribution to Inclusion, Employment and the Economy’ (SWD(2013)0038),

– having regard to the Commission Staff Working Document of 20 February 2013 entitled ‘Follow-up on the implementation by the Member States of the 2008 European Commission recommendation on active inclusion of people excluded from the labour market - Towards a social investment approach’ (SWD(2013)0039),

– having regard to the Commission Staff Working Document of 20 February 2013 entitled ‘3rd Biennial Report on Social Services of General Interest’ (SWD(2013)0040),

– having regard to the Commission Staff Working Document of 20 February 2013 entitled ‘Long-term care in ageing societies - Challenges and policy options’ (SWD(2013)0041),

– having regard to the Commission Staff Working Document of 20 February 2013 entitled ‘Confronting Homelessness in the European Union’ (SWD(2013)0042),

– having regard to the Commission Staff Working Document of 20 February 2013 entitled ‘Investing in Health’ (SWD(2013)0043),

– having regard to the Commission Staff Working Document of 20 February 2013 entitled ‘Social investment through the European Social Fund’ (SWD(2013)0044),

1 OJ L 59, 2.3.2013, p. 5.

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– having regard to the Commission communication of 28 November 2012 on the Annual Growth Survey 2013 (AGS) (COM(2012)0750), and the Draft Joint Employment Report annexed thereto,

– having regard to its resolution of 7 February 2013 on the European Semester for Economic Policy Coordination: employment and social aspects in the 2013 Annual Growth Survey1,

– having regard to the Commission communication of 3 March 2010 entitled ‘Europe 2020: a strategy for smart, sustainable and inclusive growth’ (COM(2010)2020),

– having regard to the Commission communication of 18 April 2012 entitled ‘Towards a job-rich recovery’ (COM(2012)0173),

– having regard to the question for oral answer to the Commission and the accompanying resolution of Parliament of 14 June 2012 on ‘Towards a job-rich recovery’2,

– having regard to the Commission communication of 23 November 2010 entitled ‘an Agenda for new skills and jobs: a European contribution towards full employment’ (COM(2010)0682),

– having regard to its resolution of 26 October 2011 on the Agenda for New Skills and Jobs3,

– having regard to the Commission communication of 16 December 2012 entitled ‘The European Platform against Poverty and Social Exclusion: A European framework for social and territorial cohesion’ (COM(2010)0758), and the opinion of the European Economic and Social Committee4 and the resolution of Parliament of 15 November 2011 on that subject5,

– having regard to the Commission communication of 20 December 2011 entitled ‘Youth Opportunities Initiative’ (COM(2011)0933),

– having regard to the question for oral answer to the Commission and the accompanying resolution of Parliament of 24 May 2012 on the Youth Opportunities Initiative6,

– having regard to the Commission communication of 5 December 2012 entitled ‘Moving Youth into Employment’(COM(2012)0727),

– having regard to its resolution of 7 September 2010 on developing the job potential of a new sustainable economy7,

– having regard to the European Pact for Gender Equality (2011-2020) adopted by the Council on 7 March 2011,

1 Texts adopted, P7_TA(2013)0053.2 Texts adopted, P7_TA(2012)0260.3 OJ C 131 E, 8.5.2013, p. 87.4 OJ C 248, 25.8.2011, p. 130-134.5 OJ C 153 E, 31.5.2013, p. 57.6 Texts adopted, P7_TA(2012)0224.7 OJ C 308 E, 20.10.2011, p. 6.

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– having regard to the Commission communication of 3 October 2008 on a Commission Recommendation on the active inclusion of people excluded from the labour market (COM(2008)0639) and to its resolution thereon of 6 May 20091,

– having regard to its resolution of 14 March 2013 on the integration of migrants, its effects on the labour markets and the external dimension of social security coordination2,

– having regard to its resolution of 5 July 2011 on the future of social services of general interest3,

– having regard to the Commission communication of 2 July 2008 entitled ‘Renewed social agenda: Opportunities, access and solidarity in 21st century Europe’ (COM(2008)0412) and its resolution thereon of 6 May 20094,

– having regard to the Commission communication on the long-term sustainability of public finances for a recovering economy (COM(2009)0545) and its resolution thereon of 20 May 20105,

– having regard to the Commission proposal for a Regulation of the European Parliament and of the Council on the European Social Fund and repealing Council Regulation (EC) No 1081/2006 (COM(2011)0607/2 - 2011/0268 (COD)) of 14 March 2012 and the draft legislative resolution thereon of 20 August 20126,

– having regard to its resolution of 20 November 2012 on ‘The Social Business Initiative – Creating a favourable climate for social enterprises, key stakeholders in the social economy and innovation’7,

– having regard to its resolution of 6 February 2013 on ‘Corporate Social Responsibility: promoting society’s interests and a route to sustainable and inclusive recovery’8,

– having regard to its resolution of 20 November 2012 on ‘The Social Investment Pact - as a response to the crisis’9,

– having regard to the Commission communication of 16 February 2012 entitled ‘An Agenda for adequate, safe and sustainable pensions’ (COM(2012)055),

– having regard to ILO Convention No 117 on Social Policy (basic aims and standards),

– having regard to ILO Recommendation No 202 on Social Protection Floors,

1 OJ C 212 E, 5.8.2010, p. 23.2 Texts adopted, P7_TA(2013)00923 OJ C 33 E, 5.2.2013, p. 65.4 OJ C 212 E, 5.8.2010, p. 11.5 OJ C 161 E, 31.5.2011, p. 112.6 Report A7-0250/2012 of Parliament's Committee on Employment and Social Affairs.7 Texts adopted, P7_TA(2012)0429.8 Texts adopted, P7_TA(2013)0050.9 Texts adopted, P7_TA(2012)0419.

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– having regard to the question for oral answer to the Commission on its communication ‘Towards Social Investment for Growth and Cohesion – including implementing the European Social Fund 2014-2020’ (O-000057/2013 – B7-0207/2013),

– having regard to Rules 115(5) and 110(2) of its Rules of Procedure,

A. whereas in many Member States fiscal consolidation measures have led to the favouring of short-term expenditure goals at the expense of investment in sustainable growth, employment, social cohesion and competitiveness in order to achieve the Europe 2020 strategy goals;

B. whereas the sovereign debt crisis that has hit Europe, and especially the eurozone countries, has led to a severe economic downturn with negative social consequences for most Member States through rising unemployment, poverty rates and social exclusion;

C. whereas the crisis has brought to the fore the economic interdependence of Member States and the considerable divergence in Member States’ capacity to respond to labour market and social challenges;

D. whereas the crisis, combined with demographic change, makes it urgent for Member States to improve the effectiveness of social spending and to design the potential reforms of their social protection system in line with this objective;

E. whereas social partners at national level can play an important role in the financing and running of social security systems;

F. whereas well-targeted and efficient social investments help stabilise the economy, promote employment and enhance the skills of the labour force, thus boosting the EU’s competitiveness;

G. whereas the growing skill intensity of available jobs and the skills needed for future job- rich sectors, adapted to a sustainable economy and society, require adequate investment in education and training programmes;

H. whereas average EU household incomes are declining, and long-term unemployment as well as poverty and social exclusion including in-work poverty and social polarisation are on the rise in many Member States;

I. whereas 10,5 % of the working-age population are now unemployed;

J. having regard to the statement by the European Council of 30 January 2012, which reads: ‘Growth and employment will only resume if we pursue a consistent and broad-based approach, combining a smart fiscal consolidation preserving investment in future growth, sound macroeconomic policies and an active employment strategy preserving social cohesion’;

K. whereas the effects of economic stagnation and the persistent public debt crisis, combined with demographic change, challenge social welfare systems and decent social security arrangements, including statutory and voluntary social insurance schemes;

L. whereas 22,8 % of young people in the EU are currently unemployed, with youth unemployment exceeding 50 % in some Member States;

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M. whereas 8,3 million Europeans under 25 are neither in employment nor in education or training (NEETs); whereas these figures continue to rise, posing the risk of a lost generation;

N. whereas young people with a migrant background are at greater risk of exiting the education and training system without having obtained an upper secondary qualification;

O. whereas 27 % of children are at risk of poverty or social exclusion, compared to an average of 24 % for the EU population as a whole1;

P. whereas 8 % of EU citizens are living in conditions of severe material deprivation and cannot afford a number of necessities that are considered essential for living a decent life in Europe;

Q. whereas 15 % of children leave school without completing secondary education, and 10 % of EU citizens are living in jobless households;

R. whereas the Social Protection Committee (SPC) has warned that these numbers are continuing to rise in many Member States, partly due to the impact of fiscal consolidation measures;

S. whereas the most vulnerable groups, such as the elderly and people with disabilities, have been those most severely affected by the financial, economic and social crisis;

T. whereas social policies are primarily the competence of the Member States and the EU’s role is to support, assist and complement their activities;

U. whereas having a decent job is a real protection against poverty;

V. whereas active labour market policies and activation strategies are key to helping the unemployed find a decent job;

W. whereas suitable individual guidance for those looking for a decent job can improve their chances of success;

X. whereas austerity measures, including cuts in public services and welfare budgets, must not be allowed to worsen the situation for the most disadvantaged or to put people unnecessarily at risk of unemployment;

Y. whereas austerity measures must not be allowed to jeopardise the availability, accessibility and affordability of healthcare and long-term care services or to exacerbate health inequalities;

Z. whereas the economic crisis is liable to affect women more than men; whereas there is a risk that the current recession will delay advances, or even reverse progress, with long-term consequences for social protection systems, social inclusion and demography;

AA. whereas any stringent budgetary policy needs to be intelligent, with scope for counter-cyclical investment in major policy priorities and in line with economic performance and productivity;

1 http://europa.eu/rapid/press-release_STAT-13-28_en.htm?locale=en

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http://europa.eu/rapid/press-release_STAT-13-28_en.htm?locale=en

AB. whereas marginalised communities live in deplorable socio-economic conditions and are often subjected to serious discrimination and segregation in all aspects of life;

AC. whereas the first indications that a young person is likely to drop out of school are an early warning sign of a recurring cycle of poverty;

AD. whereas homelessness remains a problem in all EU Member States, and is one of the most extreme forms of poverty and deprivation, eroding human dignity and compromising the fundamental human right to access to housing;

AE. whereas guaranteeing access to decent housing is an international obligation incumbent on all Member States, under which social housing is provided in parallel with market-based housing supply;

AF. whereas homeless people require specific measures to integrate them into society and avoid social exclusion;

AG. whereas poverty and social exclusion remain a key social determinant of health and living conditions, particularly in view of the impact of child poverty on child health and well-being;

AH. whereas gender discrimination at work, the gender pay gap and the consequent pension disparities remain persistent in the EU;

AI. whereas only 63 % of women in the EU work, compared with 76 % of men, partly owing to the lack of care facilities and of concrete measures to help achieve a healthy work-life balance;

AJ. whereas the gender dimension is crucial to achieving the EU 2020 headline targets, as women form the greatest reserve of as yet unused labour power; whereas, therefore, concrete measures and specific policies for gender mainstreaming must be developed as part of the European Semester;

AK. whereas women form the majority of heads of household, single parents and carers, and active inclusion policies require an all-encompassing set of measures to enable them to increase their participation in the labour market;

1. Welcomes the Commission’s Social Investment Package, which establishes the necessary links between national social policies, the process of the European Semester reforms and the relevant EU Cohesion Fund allocations;

2. Notes that the Commission communication adds to the original function of social protection of welfare systems those of social investment and stabilisation of the economy; stresses that the current economic and social crisis highlights the need for these three functions to be complementary rather than opposite;

3. Reiterates the need to improve the coordination of social and economic policies at EU level so as to avoid discrepancies, build synergies between them and allow them to reinforce each other’s objectives;

4. Stresses that the most efficient tool to fight unemployment in the long run is economic growth;

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5. Regrets the fact that the communication is accompanied by a recommendation in only one area while austerity measures have a major impact in several social policy fields;

6. Is convinced that social policy reforms should be guided notably by the principles of active inclusion and activation - enabling the unemployed and the most disadvantaged to enter and participate in the labour market;

7. Recalls that social investments generate both social and economic returns by preventing and addressing social risks; stresses that social investment focuses on public policies and human capital investment strategies which facilitate transition in changing labour markets and enable the acquisition of new skills for future job-rich sectors adapted to a sustainable economy and society;

8. Stresses that social investment should be regarded as investment by Member States, and that this may give rise to a double dividend with long-term returns and countercyclical effects, thus lowering the risk of damage; calls on the Commission to carry out an analysis to determine which parts of public social expenditure can be considered as productive investment;

9. Considers, in this connection, that targeted social investments should be an important part of Member States’ economic and employment policies and should be incorporated in the European Semester process, with a view to achieving the employment, social and educational objectives of the Europe 2020 strategy;

10. Welcomes, therefore, the Commission’s call on the Member States to include social investments in their medium and long-term budgetary targets, as well as in their National Reform Programmes;

11. Reiterates that resources for social policies are not exclusively provided by the public sector;

12. Emphasises, therefore, that Member States should make more use of innovative approaches to financing, including participation by the private sector and financial engineering through instruments such as social impact bonds, public-private partnerships, microfinance, the social investment passport and policy-based guarantees;

13. Urges the Member States, therefore, also to involve social enterprises, since they can complement public-sector efforts;

14. Calls on the Commission, in this context, to consider developing a scoreboard for common social investment indicators, which would constitute a warning mechanism for monitoring progress in the Member States;

15. Welcomes the Commission’s insistence on allocating at least 25 % of cohesion policy funding to human capital and social investment through the European Social Fund;

16. Calls on the Member States to ensure the efficient monitoring of social policy expenditure, in order to channel resources into targeted and efficient measures and avoid unnecessary administrative burdens;

Sustainability

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17. Urges the Member States to modernise, and, where needed, structurally reform their social investment policies without delay, in order to offer the best possible services to citizens;

18. Stresses that the Member States should make their social investment policy sustainable and future-proof by improving the efficiency and effectiveness of the system and the resources available;

19. Emphasises that where they are willing to improve the sustainability of social investment policies, Member States should not necessarily ‘spend more’, but should ‘spend more efficiently and effectively’;

20. Calls on the Member States, therefore, to ensure that their social investment policy is target-oriented, and to undertake frequent monitoring of progress;

Combating poverty and social exclusion

21. Reiterates its call on the Commission to address in-work poverty, poverty among people with limited or no links to the labour market, and poverty among elderly people in its next country-specific recommendations; calls on the European Council to endorse the above guidelines as a priority;

22. Stresses the important components of the European strategy for the active inclusion of people excluded from the labour market, namely sufficient income support, inclusive labour markets, and access to quality services; regrets that national active inclusion strategies are too often reduced to employment activation, excluding de facto people who are outside the labour market and for whom returning to it is not an option, for example owing to their age or functional limitations;

23. Reminds the Member States that active inclusion policies should:

– be consistent with a life-cycle approach to education, lifelong learning and social and employment policies;

– be tailor-made, targeted and needs-oriented, as well as being grounded in universal access and non-discrimination;

– be based on an integrated approach and be participative in nature;

– respect the prior conditions which are essential to allow participation while not creating conditions that endanger a minimum living income; and

– follow, given the importance of local and regional circumstances, the direction of efforts made within the framework of the cohesion policy to achieve economic, social and territorial cohesion;;

24. Calls on the Member States to systematically assess the impact of austerity measures on vulnerable groups in the framework of active inclusion policies;

25. Calls on the Member States to ensure the quality of social services for those eligible for them, including their availability, accessibility and affordability, especially in the areas of

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health, long-term care, education, social housing, energy, water, transport and communications;

26. Stresses the need to raise the productivity of care delivery, reducing the incidence of frailty and disability and enabling the elderly to continue to manage independent living, even in case of functional limitations;

27. Calls on the Member States to consider the introduction of social default tariffs for vulnerable groups in fields such as energy, water and public transport;

28. Calls for the active involvement of organisations representing marginalised communities in the drafting and implementation of integration strategies for those communities, such as the national Roma integration strategies up to 2020;

29. Regrets the fact that in many Member States insufficient efforts are being made to integrate migrants; stresses the need to invest in appropriate programmes and services and in efficient information systems regarding access to these programmes, in order to facilitate the integration of migrants and reduce the risk of social exclusion;

30. Calls on the Commission to draw up a concrete and detailed roadmap for the implementation of active inclusion strategies; stresses that this roadmap should specify timelines and realistic targets, on the basis of specific indicators and detailed dialogue between the interested parties, and should be closely monitored through the Open Method of Coordination, with relevant tools and procedures being available in case of non-compliance;

Combating child poverty

31. Welcomes the Commission’s recommendation on child poverty, as announced in its communication entitled ‘Platform against Poverty and Social Exclusion: a European framework for Social and Territorial Cohesion’; further recalls the rights of the child as enshrined in the Charter of Fundamental Rights of the European Union;

32. Welcomes the comprehensive approach promoted in the recommendation, which is based on the three pillars of access to adequate resources, access to high-quality services and participation in society and decision-making, and which recognises children as rights holders;

33. Reiterates that all children and young people have the right to education under the UN Convention on the Rights of the Child, including children and young people who do not have a residence permit in the countries in which they reside;

34. Stresses that the fight against child poverty must focus on prevention and early intervention rather than reaction, and should be based on the guiding principle of equal access to high-quality early childhood education and childcare services;

35. Encourages, in this context, moves to establish more facilities for children, such as activity centres open during both termtime and holiday periods, as well as extracurricular cultural and sports activities, with meals provided;

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36. Stresses the need for adequate financial resources for these services, and in particular for policies to support poor and vulnerable families, such as families with children with disabilities, single-parent families and families with large numbers of children;

37. Highlights the importance of the parent-child relationship and of the necessary support for parents to help them fulfil their parental responsibilities, thus preventing children being separated from their parents and placed in care as a consequence of severe poverty;

Confronting homelessness

38. Welcomes the Commission’s Staff Working Document on ‘Confronting Homelessness’;

39. Recalls Parliament’s request for a concrete and detailed roadmap for the implementation of the EU Homelessness Strategy;

40. Stresses that investment in social housing, besides its crucial role in alleviating the consequences of poverty, should be considered as a social investment which leads to decent job creation and sustainable growth in the long term;

41. Calls on the Member States to remove unnecessary administrative burdens affecting applications for social housing, and to eliminate any discrimination against minorities or vulnerable groups, in order to ensure equal access for all;

42. Recalls that energy costs typically represent a large part of household expenses, and therefore calls on the Member States to strengthen their policies in support of household energy efficiency;

43. Calls on the Member States to prepare specific programmes for the homeless, based on the assessment of local situations, and to place particular emphasis on housing and longer- term assistance for vulnerable persons and marginalised communities, rather than only on the provision of temporary accommodation;

Youth employment

44. Stresses that investment in youth employment must be a key component of national social investment strategies;

45. Urges the Member States to take strong measures to fight youth unemployment, in particular through preventive action against early dropout from school or from training or apprenticeship schemes (e.g. by implanting a dual educational system or other equally efficient types of framework), and to develop comprehensive strategies for young people who are not in employment, education or training (NEETs);

46. Stresses that social investment in favour of NEETs would reduce the present loss to the economy caused by the disengagement of young people from the labour market, which is estimated by Eurofound to amount to EUR 153 billion, or 1,2 % of EU GDP;

47. Regrets the failure of the current social investment policy to lay sufficient stress on the need to focus resources in priority on the long-term unemployed, young unemployed people, and older workers at risk of becoming long-term unemployed;

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48. Notes that social investment in youth may take a wide range of forms, including: developing partnerships between schools, training centres and local or regional businesses; providing targeted quality training and high-quality youth internship programmes; vocational schemes in cooperation with enterprises; senior employee sponsorship schemes aimed at the recruitment and training of young persons on the job or at securing a better transition from education to work; encouraging young people’s participation in society; and promoting regional, European and international mobility, by means of further progress towards the mutual recognition of qualifications and skills; also stresses that social investment can go hand in hand with efficient incentives, such as employment subsidies or insurance contributions for young people that will guarantee decent living and working conditions, in order to encourage public and private employers to hire young people, invest in both quality job creation for young people and continuous training and upgrading of their skills during employment, and support entrepreneurship among youth;

49. Stresses the need to enhance the coordination of national social security systems, especially pension systems, in order to encourage mobility;

50. Stresses the need for statistical information that is comparable between Member States on youth unemployment and labour market expenditure for young people;

Job creation and labour markets

51. Warns that austerity measures can compromise the quality of employment, social protection and health and safety standards, and stresses that they should accordingly be accompanied by measures aimed at sustaining adequate standards;

52. Stresses the importance of lifelong learning in strengthening people’s capacity to participate in society and the labour market, up to the legal retirement age and, if desired, even longer;

53. Reiterates its call on the Member States to adopt measures favourable to job creation as part of their social investment programmes, such as introducing labour-related tax reforms incentivising employment, promoting and supporting self-employment and business start-ups, improving the framework for doing business and facilitating access to financing for SMEs, transforming informal and undeclared work into regular employment, creating incentives to improve the employment level of the most vulnerable social groups, reforming labour markets in order to make them more dynamic and non-discriminatory, and integrating flexicurity and modernising wage-setting systems in order to align wages with productivity developments;

54. Stresses the need to exploit the job creation potential of innovative sectors under Horizon 2020, such as the sustainable non-carbon economy, health and social care and the digital, cultural and creative sectors, which should be supported with adequate investment in new skills and social investment instruments, making use of the concept of smart specialisation in order to align research and innovation strengths with market developments;

55. Points out that respect for the principles of flexicurity enables both adequate social protection for workers and access to training and career development, allowing the acquisition of new skills;

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Social entrepreneurship

56. Welcomes the focus on social entrepreneurship and access to microfinance for, among others, vulnerable groups; stresses that these are crucial elements in the context of social investment, in that they not only allow the creation of new sustainable jobs and the development of the social and solidarity economy, but also enable social enterprises to generate and reinvest profits;

57. Stresses the need to ensure active and healthy ageing in a lifetime perspective, and to emphasise prevention and rehabilitation in order to reduce the incidence, postpone the onset, and reverse and mitigate the course of frailty, functional limitations and disability;

58. Regrets that the communication does not highlight the important role of the Grundtvig programme in preventing poverty and social exclusion and promoting social investment; calls on the Commission to raise awareness concerning lifelong learning programme opportunities, vocational education and training, and calls on the Member States to improve their quality and accessibility;

59. Highlights the important role of EU financial instruments and of the European Social Entrepreneurship Funds in improving access to financial markets for social enterprises;

60. Calls on the Commission to consider the introduction of a common European framework for data publishing, which would guarantee transparent information on investments in social enterprises in Member States and encourage peer pressure;

61. Stresses that CSR should focus on both environmental and social standards with a view to securing responsible behaviour of companies;

Gender dimension

62. Welcomes the fact that the gender dimension is included in the Commission’s Communication on Social Investment strategies;

63. Stresses that the supply of quality childcare and other care facilities plays a crucial role, since it enables women to enter the labour market and work full-time; calls on the Member States to organise sufficient childcare and other care facilities in order to allow the participation of both parents in the labour market, all the more since the availability of childcare places is at present rather unequal between Member States;

64. Joins the Commission in its call on the Member States to invest in services – such as affordable, full-time and high-quality childcare, all-day school places, care for the elderly and support for informal carers – that help promote gender equality, foster a better work-life balance for men and women (including paternity leave for men), and create a framework which makes it possible to enter or re-enter the labour market while ensuring equal pay for equal work for both men and women;

65. Reiterates the importance of gender-sensitive educational systems which offer children the possibilities of discovering their talents, thus avoiding gender segregation in the labour market in the long term;

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66. Calls on the Member States to respect and foster gender equality as part of their national policies and National Reform Programmes (NRPs);

EU funds

67. Highlights the crucial role played by cohesion policy and the Structural Funds in promoting social investments; underlines in this context the significant contribution of the European Globalisation Adjustment Fund (EGF) in preventing poverty among workers hit by the crisis, and of the European Progress Microfinance Facility in supporting entrepreneurship by means of training, retraining and workforce measures aimed at getting people back to work;

68. Stresses that the Structural Funds should concentrate on priority areas that have a clear impact in terms of growth and jobs and are proposed as focuses for cohesion policy;

69. Stresses that the European Social Fund should become more clearly oriented towards active measures that actually meet employers’ needs;

70. Welcomes the Commission’s emphasis on the European Social Fund as the main instrument intended to foster social investment; strongly supports, in this respect, allocating at least 25 % of cohesion policy funding to the ESF and earmarking 20 % of ESF allocations in each Member State for promoting social inclusion and combating poverty;

714. Calls on the Member States to ensure that the Multiannual Financial Framework for 2014-2020 contains appropriate budgetary resources to stimulate and support social investments in the EU;

72. Calls, as a matter of urgency, for the frontloading of the EUR 6 billion allocated for the new Youth Employment Initiative in the first years of the Multiannual Financial Framework in order to address youth unemployment and implement youth guarantees; stresses that the costs of implementing youth guarantees across the eurozone are estimated at EUR 21 billion by the ILO; calls, therefore, for the allocation to be revised upwards in the context of a revision of the Multiannual Financial Framework; welcomes the extension of the eligibility group for the youth guarantee to those aged under 30;

73. Welcomes the Commission’s intention to explore the use of new financial instruments to increase the leverage of public social investments; calls on the Commission to come forward with more detailed proposals on the matter;

Social dimension of EMU

74. Considers that budgetary discipline in the eurozone should not be measured only by fiscal and macroeconomic benchmarks, but that this should be complemented, on an equal footing, by employment and social benchmarks as well as progress reports on structural reforms, the aim being to ensure an appropriate and efficient level of social investment and, therefore, the sustainability of a social European Union in a long-term perspective;

75. Urges the Commission, when considering how the social dimension of a genuine economic and monetary union can be strengthened, to address Member States’ public

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investment needs, particularly those relating to the social and education targets under the Europe 2020 strategy;

76. Reiterates that a Social Package for Europe should promote the following:

– ensuring that the establishment of European economic governance is complemented by improved social governance, on a basis of full respect for the autonomy of the social partners and the importance of tripartite social dialogue;

– definition of instruments for the swift introduction of a European Youth Guarantee; a quality framework for internships and apprenticeships; decent and accessible public services; decent living wages with national minimum incomes preventing in-work poverty; social protection and portability of pension rights; access to affordable and adequate social housing; a social protection floor to guarantee equal access to essential health services regardless of income; the implementation of a social protocol to protect fundamental social and labour rights; equal pay for male and female workers for equal work or work of equal value; and a renewed health and safety strategy;

– a new legislative initiative on the right of national parliaments to require a legislative initiative from the Commission as a ‘green card’, on the basis of Article 352 TFEU;

– new rights for national parliaments to require a legislative initiative from the Commission as a ‘green card’ through a treaty change;

– ensuring appropriate resources for social investment, including the allocation of 25 % of cohesion policy funding to the ESF.

77. Calls on the Member States, where unjustified blocking minorities are preventing necessary progress, to expand the principle of enhanced cooperation to social and employment policies;

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78. Instructs its President to forward this resolution to the Commission and the Council.

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P7_TA-PROV(2013)0267

Regional policy as a part of wider State support schemes

European Parliament resolution of 12 June 2013 on regional policy as a part of wider State support schemes (2013/2104(INI))


– having regard to Articles 174 et seq. of the Treaty on the Functioning of the European Union (TFEU), which establish the objective of economic, social and territorial cohesion and define the structural financial instruments for achieving this,

– having regard to Article 107(3) (a) and (c) TFEU, which provide for the eligibility for regional State aid to promote the economic development of certain disadvantaged areas in the European Union,

– having regard to the Commission proposal of 6 October 2011 for a Regulation of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund covered by the Common Strategic Framework and laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Council Regulation (EC) No 1083/2006 (COM(2012)0496), as amended (COM(2013)0146),

– having regard to its resolution of 17 January 2013 on State aid modernisation1,

– having regard to the Opinion of the Committee of the Regions No 2232/2012 of 1 February 2013 on the regional State aid guidelines for 2014-2020,

– having regard to the Opinion of the European Economic and Social Committee INT/653 of 26 March 2013 on the internal market and State aid for the regions,

– having regard to the Commission Guidelines on national regional aid for 2007-20132,

– having regard to the Commission communication of 8 May 2012 entitled ‘EU State aid Modernisation (SAM)’ (COM (2012)0209),

– having regard to the decision of the Commission, C(2012)7542, in the case SA 33243 Jornal da Madeira,

– having regard to the Commission’s ‘Paper of the services of DG Competition containing draft guidelines on regional State aid for 2014-2020’3,

1 Texts adopted, P7_TA (2013)0026.2 OJ C 54, 4.3.2006, p. 13.3 Brussels, 2012 (no date).

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– having regard to point 57 of the European Council Conclusions on the Multiannual Financial Framework (7-8 February 2013 – Regional Aid)4,

– having regard to the communication from the Commission to the Member States of 1998 on ‘the links between regional and competition policy – reinforcing concentration and mutual consistency’ (COM(98)0673),

– having regard to the judgment of the Court of Justice of the European Union in Joint Cases T-443/08 and T-455/08T (Mitteldeutsche Flughafen and Flughafen Leipzig/Halle v Commission),

– having regard to the Commission communication entitled ‘“Think Small First”- A “Small Business Act” for Europe’, (COM(2008)0394),


– having regard to the report of the Committee on Regional Development and the opinions of the Committee on Economic and Monetary Affairs and the Committee on Employment and Social Affairs (A7-0204/2013),

A. whereas the Commission is carrying out the process of State aid modernisation (SAM), the objectives of which are to foster growth, focus on major cases, and simplify, streamline and hasten the implementation of the relevant rules;

B. whereas the legal basis for the new proposals, as stipulated by Article 109 TFEU, provides only for the consultation of Parliament and not for the ordinary legislative procedure; whereas Parliament has no say in the adoption of the guidelines on regional State aid for 2014-2020;

C. whereas the ordinary legislative procedure on the Cohesion Policy legislative package on the European Structural and Investment Funds for 2014-2020 has not yet been concluded;

D. whereas the most common forms of State support schemes take the form of grants and subsidies, tax deductions, waivers, incentive awards, soft loans, guarantees, preferential borrowing rates and equity participation granted by national, regional and local government, as well as by publicly controlled entities and through an increasing number of forms of public-private partnership;

E. whereas there are a number of rules on State aid, as well as guidelines which apply at regional, sector-specific or horizontal levels, while the choice of which type of aid to apply is to a certain extent left to the discretion of the Member States;

F. whereas, according to the Commission, the purpose of its Regional Aid Guidelines (RAG) is to promote a competitive and coherent single market, while at the same time ensuring that the distorting effects of aid are kept to a minimum;

G. whereas State aid should complement and seek balance with the objectives of other EU policies, in particular Cohesion Policy;

4 EUCO 37/13, 8.2.2013, p. 22.

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H. whereas the application and interpretation of State aid rules also depend heavily on the case-law of the Court of Justice;

I. whereas the existence of a mechanism ensuring the effective implementation and application of EU State aid is one of the general ex ante conditionalities provided for in the draft set of regulations on Cohesion Policy for 2014-2020;

J. whereas the ex post impact of State aid and State aid controls on Member States, regions and local authorities, as well as on companies, markets and the overall economy, has not been sufficiently assessed, as the Court of Auditors points out in its report entitled ‘Efficiency of Commission in assessing State aid’1;

K. whereas anxiety over administrative burdens is the main concern affecting beneficiaries when dealing with State aid or Cohesion Policy rules;

Coordination of State aid rules and Cohesion Policy

1. Welcomes the Commission’s draft regional aid guidelines for 2014-2020 as an integral part of the State aid modernisation (SAM) programme; reiterates its support for an approach where the compatibility rules to assess State aid are rooted on common principles and are consistent across the General Block Exemption Regulation2 (GBER) and the different guidelines; favours the adoption of simpler, predictable and more effective State aid control and enforcement rules based on sound economic analysis;

2. Takes the view that the implementation of both Cohesion Policy and the rules on State support schemes to reinforce local and regional investment and public-private partnerships are of key importance for promoting economic, social and territorial cohesion, regional and local development, smart, sustainable and inclusive growth, and job creation; is, however, concerned as to whether the State aid rules are consistent with the implementation of the European Structural and Investment Funds; urges the Commission, therefore, to ensure consistency of the SAM with the Cohesion Policy regulations 2014 – 2020, so that there are no major variations in treatment of areas belonging to the same category of region within the framework of Cohesion Policy;

3. Regrets that Article 109 TFEU – the Treaty basis for the enabling regulation and, indirectly, the GBER – provides only for consultation of Parliament, not codecision; believes that this democratic deficit cannot be tolerated; proposes that this deficit be overcome as soon as possible, through interinstitutional arrangements in the field of competition policy, and corrected in the next Treaty change; points out that the Commission blueprint for a deeper Economic and Monetary Union foresees proposals for a Treaty change by 2014; deems that such a proposal should include, inter alia, a specific proposal amending Article 109 TFEU in order to adopt the regulations referred to in that Article in accordance with the ordinary legislative procedure;

4. Encourages the Commission to continue to issue soft law guidelines in the field of competition policy, in particular on State aid, duly taking into account the existing Court of Justice case law, in order to ensure some legal certainty for the stakeholders;

1 Court of Auditors Special Report no. 15: Efficiency of Commission in assessing State aid. 2011.2 Commission Regulation (EC) No 800/2008 of 6 August 2008 declaring certain categories of aid

compatible with the common market in application of Articles 87 and 88 of the Treaty (General block exemption Regulation), OJ L 214, 9.8.2008, p. 3.

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5. Underlines the fact that the primary role of State aid control is to ensure a level playing field in a competitive and coherent internal market; fully supports the SAM overall aim of tailoring State aid rules to the need to promote economic growth in the EU; notes that it is particularly relevant to promote economic growth in the most disadvantaged regions of the EU, keeping distortive effects of aid within the internal market to a minimum;

6. Emphasises that the State aid rules, as well as the Cohesion Policy objectives, should lead to improving the situation of the regions and the most disadvantaged areas, and that the SAM process must reflect the objectives of cohesion throughout the EU, i.e. to contribute to the sustainable development of the regions and improve wellbeing; believes that the modernisation of competition rules needs to be grounded in full awareness of the impact of the rules at subnational level;

7. Calls on the Commission to ensure that promoting smart, sustainable and inclusive growth through State aid is implemented in overall consistency with credible strategies for long-term fiscal consolidation; suggests that the Commission take better account of links between State aid policies and fiscal surveillance in drafting Country Specific Recommendations, and calls on the Member States to take these links into account when drafting their Stability and Convergence Programmes and National Reform Programmes; underlines the need for a simplification of rules and for less, but better-targeted, State aid, keeping in mind that State aid is meant to be an exception, not the rule; emphasises the need to prevent and avoid subsidy races between Member States, particularly in times of tight budgetary constraints across the EU;

8. Believes that regional aid can only play an effective role if it is used sparingly and proportionately and is concentrated on the most disadvantaged regions of the EU, where it is needed the most; emphasises the structural contribution of aid to regional development, particularly in the current context of deep economic crisis; calls on the Commission to recognise that the crisis criterion of ‘serious disturbance in the economy of a Member State’ still applies in the real economy as well as in the financial sector, and to clarify and standardise the criteria for making this assessment;

9. Notes that there is a margin of overlap between Cohesion Policy structural funds and State aid to companies; highlights that a significant part of the expenditure under EU Cohesion Policy in the period 2014-2020 falls under the GBER and that not only the RAG but also other horizontal or sector-specific guidelines are relevant in this context; notes that all these State aid instruments have to be coherent among themselves and with the Cohesion Policy objectives, and that all these rules should ultimately ensure effective spending of public money and promote growth;

10. Notes the importance of the GBER in the whole SAM process as a block exemption from the notification requirement for certain categories of aid can seriously reduce the administrative burden for Member States, while allowing the Commission to concentrate its resources on the most distortive cases and better prioritise its enforcement activities; believes, therefore, that the draft new GBER and its set of common principles should have been published by the Commission before any specific guidelines;

11. Welcomes the Commission’s aim in the SAM process to make the principles clearer, more straightforward and easier; takes the view that these principles should be both well coordinated with other EU policies and sufficiently clear, predictable and flexible to meet the needs of certain Member States and their regions which are facing a time of crisis and

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severe economic hardship; reiterates its recognition of the role played by State aid and public investment in addressing the economic crisis and achieving the objectives of growth and employment; believes, in this regard, that the Commission should ensure that the aid intensities laid down in the future RAG are not applied to public subsidies from the European Structural and Investment Funds; expresses its concern that the proposal as published for consultation is not sufficiently evidence-based and could go against the objective of simplification;

Territorial coverage of regional State aid 2014-2020

12. Notes that, contrary to other types of State aid which can be granted across the EU, regional aid should by definition have a limited geographical scope and population coverage;

13. Takes the view that the geographical zoning of the new RAG 2014-2020, however, should be preserved or should go beyond the current level of 45 %, and that the aid intensity should be maintained at the present level, given the political, economic and social situation in the Member States as well as the natural, geographic and demographic handicaps of certain regions; points out that, in the global context, the EU and EEA economies could be placed at a disadvantage relative to third countries benefiting from less stringent employment models or lower costs, thus jeopardising the attractiveness of the former; points out that in the disadvantaged areas of the EU necessary balance-sheet adjustments in the private sector, austerity-driven cuts in public finances and economic uncertainty are undermining investment and access to finance, thus increasing disparities across regions;

14. Is of the opinion that the new rules should not have a restrictive impact on investment in and growth of regions as they move from the less developed to the more developed category; is aware that certain regions eligible for State aid under the current system might not meet the zoning criteria of the RAG in the future period and might face exclusion from the zoning scheme; believes that those regions should have a special safety regime, similar to that for transition regions under Cohesion Policy, which would provide for more consistency between the Cohesion Policy regulations 2014 - 2020 and competition rules and would allow Member States to cope with their new situation; in this regard proposes that the regions considered as ‘a’ regions in the period 2007 - 2013 should have the predefined status of ‘c’ regions for the period 2014-2020; asks the Commission to ensure the possibility of increasing the maximum aid intensity in former ‘a’ regions including the statistical effect regions, and in “c”‘’ regions, accordingly;

15. Highlights the role of State aid in economies which have been particularly hard hit by the crisis and for which public funding under Cohesion Policy might be the only source of investment; proposes, in this connection, that consideration be given to specific regional derogations outside the regional aid maps, to allow Member States to tackle the backlash effects of the crisis; points out that, as regards economic development, the period 2008-2010 and, as regards unemployment, the period 2009 - 2011 are to be used by the Commission as a basis for State aid eligibility, despite the fact that those years cannot yet constitute a measure for the territorial impact of the disruption caused by the crisis and by natural disasters; asks the Commission to act on the basis of more recent and specific data; proposes that, in order to avoid a gap, the Commission should extend the validity of the current RAG and regional maps by at least 6 months, since the new maps will not have been approved in time; welcomes the Commission’s intention to carry out a mid-term review of the regional maps of the ‘c’ regions in 2017;

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16. Calls on the Commission to consider the economic effects of its regional aid decisions in a wider geographical context as border regions can compete with the EEA territory for economic activity location; recommends that the Commission take this point into consideration in its EU neighbourhood policy and in negotiations with candidate countries;

17. Recalls the position of the European Council, which has instructed the Commission to ensure that the particular situation of regions bordering convergence regions is accommodated for; highlights, therefore, the importance of a balanced approach to the designation of so-called ‘a’ and ‘c’ areas with a view to minimising the disparities in aid intensity between regions from different Member States sharing the same border; asks the Commission to ensure that regions ineligible for State aid that border on “a”‘’ areas of another country are granted a specific allocation in terms of ‘c’ coverage; considers that this allocation should, by way of derogation from the overall coverage ceiling, be assigned to the Member States in addition to the allocation of predefined and non-predefined ‘c’ areas; insists that the difference in aid intensity between all categories of region and all sizes of company should be limited to a maximum of 15 %;

18. Draws the Commission’s attention to the situation of the outermost and sparsely populated regions and of the island regions; proposes State aid as an adequate compensation for their insularity, remoteness, small size, difficult topography, climate and market-size limitations; asks for the alignment of the cohesion legislative package with the operating aid of the competition policy requirements for these territories; requests that the Commission clearly restates in the new RAG the principles of non-degressivity and non- limitation in time for operating aids in these regions; asks the Commission to clarify its definition of State aid granted to outermost regions, with specific reference to additional transport costs;

19. Calls on the Commission to include all NUTS 2 level regions consisting solely of an island or of several islands in the list of ‘predefined “c” areas’ covered by Article 107(3)(c) TFEU;

20. Proposes that the Member States should be allowed to use a broader set of parameters for determining regional disadvantages, so that besides low population density other criteria, such as geographical disadvantages, demographic handicaps or liability to natural disasters, are taken into account when determining spatial eligibility for State aid; takes the view that State aid represents a legitimate compensation for the handicaps of insularity, remoteness and small size of a territory, and that such a condition should be considered as an independent criterion for the purposes of the territorial coverage of regional State aid for 2014–2020, in order to enable island territories to overcome their structural handicaps and ensure the conditions for economic, social and territorial growth;

Administrative constraints of the State aid rules in the context of Cohesion Policy

21. Believes that the application of State aid rules within the Cohesion Policy programmes could be better achieved by focusing on large-scale and better-targeted aid, simplified rules including the notification rules, and extension of the horizontal categories in the Enabling Regulation1 and the scope of the block exemption rules in the GBER; recommends increasing the de minimis ceilings; points out that raising the de minimis threshold, especially for the agricultural, fisheries and transport sectors in the outermost regions and island territories could help them equalise their competitiveness with the mainland regions;

1 Council Regulation No 994/98 of 7 May 1998. OJ L 142. 14.5.1998, p. 1.

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22. Reiterates its call on the Commission to provide promptly for clear guidance for assessing what is and is not State aid under the definition of Article 107(1) TFEU, as well as for detailed criteria for distinguishing between important and less important State aid cases as announced in the SAM roadmap;

23. Takes the view that with regard to the ruling of the Court of Justice in the Joint Cases Mitteldeutsche Flughafen and Flughafen Leipzig/Halle v Commission, it is important to guarantee a correct application of the State aid rules within the Cohesion Policy programmes in infrastructure projects used for economic activities, so as to ensure that local and regional authorities and/or their public entities are not faced with additional administrative burdens; stresses that the implementation of these projects should not be jeopardised by the demanding financial management rules, including the decommitment rules pertaining to Cohesion Policy and the complaint practice in the State aid procedure;

24. Reiterates, in order to ensure a simplified but consistent approach, its request for clarification regarding the assessment of the State aid granted under the Block Exemption Regulations by the Member States, since this is likely to present particular difficulties not only for SMEs but also for local and regional authorities and their entities under the Cohesion Policy programming for 2014-2020; stresses that simplification should not be sought at the expense of enforcement;

25. Highlights that the general ex ante conditionality regarding State aid within Cohesion Policy requires that the Commission should apply a more proactive approach to State aid cases, in particular if the size and scope of aid exempt from notification increases; endorses the Court of Auditors’ view that the Commission should raise awareness concerning the obligation to notify, promote best practices, provide targeted information on the different types of notification, provide for the publication of a regularly updated section addressing frequently asked questions on its competition website, and set up a helpdesk for questions relating to the interpretation of the guidelines;

26. Believes that the Member States and regions should coordinate their activities with the Commission better, in terms of the quality and timeliness of the information they submit and the notifications they prepare; calls on the Member States to ensure the proper application of the State aid ex ante conditionality under Cohesion Policy, as well as better compliance with State aid rules at national level;

27. Calls on the Commission and the Member States to target their information campaigns regarding State aid rules specifically on regional and local bodies, many of which have only occasionally granted State aid and therefore have limited knowledge of the rules applying to it; calls on the Commission to take this into consideration when assessing the ex ante conditionality applying to State aid in Member States;

28. Calls on the Commission to ensure the administrative, legal and transparency obligations of application of the SAM rules remain as clear as possible; believes that certain newly proposed rules in the draft RAG for 2014-2020 – such as counterfactual scenarios, clear evidence that the aid has an impact on the investment choice, or the condition that work on the project must not start before a decision to award aid is taken by public authorities – which the Commission wishes to apply in the coming period, both to companies applying for incentives and to the Member States and their subnational government structures – are not compatible with the principle of simplification and ‘debureaucratisation’ as promoted under Cohesion Policy and other EU and national policies; reiterates that such rules may

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mean that certain projects will be excluded from investment aid or will never get off the ground; considers that the requirement of a regular assessment of the desirability of State aid in the outermost regions could jeopardise the security and predictability that are needed if investors and enterprises are to seek market opportunities in the regions concerned;

Attractiveness of regions and State aid rules

29. Stresses the importance of ensuring clear and straightforward rules for regional as well as sector-specific State aid for attracting foreign direct investment to the EU and its regions and for ensuring their global competitiveness as well as their economic, social and territorial cohesion;

30. Welcomes the new proposed rules on transparency (paragraphs 127 and 128 of the draft guidelines); encourages the Member States to comply with these rules and to publish in a central website complete and accurate information about granted aid;

31. Urges the Commission to make access to State aid for SMEs in those most disadvantaged regions simpler and clearer, recognising the importance of those entities for regional development; at the same time, asks the Commission to step up enforcement efforts in bigger, potentially more distortive cases;

32. Acknowledges the problems regarding investment aid to large enterprises indicated by the Commission, given that evidence suggests a lack of incentive effect; believes that, although State aid should be primarily provided to SMEs, excluding large enterprises, a category which also includes family-owned enterprises exceeding the definition of SMEs or mid-cap companies, from State aid rules in areas covered by Article 107(3)(c) TFEU is not justified given their contribution to employment, the supply chains they create with SMEs, their common involvement in innovation, research and development, and their positive role in combating the economic crisis; takes the view that the presence of large undertakings is often key to the success of SMEs that benefit from clusters led by large companies and from their subcontracting activities; recalls that it was the Commission itself that recognised the contribution of investment by large enterprises to creating knock-on effects and to access for the EU to the world markets; stresses that a decision to exclude large enterprises in “”‘c’ areas could lead to job losses, reduced economic activity in the regions, reduced regional competitiveness, reduced attractiveness for foreign investment and the relocation of companies to other regions either within or outside the EU; considers, therefore, that such companies should remain eligible for State aid in “”‘c’ areas, subject to particular scrutiny following individual notification and to additional compatibility criteria concerning incentive effect and contribution to regional development through clusters and subcontracting;

33. Believes that the eligibility of large enterprises for State aid incentives should be determined not only on the basis of the size of the enterprise or the sector in which it operates, but also on the basis of the estimated number of jobs that could be created and preserved under the incentive, the quality and the sustainability of the jobs or project concerned and the long-term effects for the development of the region, including the social aspects; stresses that, in compliance with the principle of subsidiarity, decisions determining which particular projects have the highest potential to achieve the objectives of EU policies should be left to the Member States, the regions concerned and the local authorities;

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34. Agrees with the Commission that it should be avoided that State aid leads to relocation of an activity from one site to another within the EEA; expresses doubts, however, about the proposed draft paragraphs 24-25 and 122-124, believing them to be insufficiently complementary to Cohesion Policy and incompatible with the objective of simplification; notes, in particular, that the figure of two years is necessarily arbitrary and that this rule may be impossible to enforce, as any causal link and the existence of a plan two years ahead will be difficult to prove; is concerned that this rule may favour non-European over European companies and that it may lead to relocation outside the EEA when an activity could otherwise be attracted by regional aid to the assisted area;

35. Notes the risks of relocation of companies granted State aid, both within and outside the EU, which are very real for the regions; notes the safeguard clause proposed by the Commission, which would oblige companies to maintain investment and jobs created in the area where the aid was awarded or, otherwise, reimburse the aid; draws the Commission’s attention to the ongoing negotiation of the Cohesion Policy regulations for 2014-2020, and requests that the respective periods under Cohesion Policy and competition policy for maintaining investment and jobs by companies granted EU funds / State aid be aligned;

36. Expresses doubts also about the ineligibility for regional aid of ‘firms in difficulties within the meaning of the Community guidelines on State aid for rescuing and restructuring firms in difficulty’ (paragraph 11 of the draft guidelines); believes that companies undergoing restructuring should not be exposed to more stringent measures, especially when a priori negative assessment of aid requests from these companies might lead to relocation outside the EU; points out that responsible company restructuring in today’s uncertain and constantly changing business environment is the main measure to provide the long-term sustainability of investment, jobs and growth; notes that the proposed rule as drafted is not only inconsistent with helping firms affected by the economic crisis in assisted regions but also impossible to implement, given that those guidelines explicitly contain no precise definition of firms in difficulty; recalls its resolution of 15 January 2013 with recommendations to the Commission on information and consultation of workers, anticipation and management of restructuring1 calling for a legal act on those matters, and requests that the Commission acts without delay;

37. Is convinced that it is essential that some margin of flexibility for the revision of the guidelines is kept, as mentioned in draft paragraph 177, in order to allow for any future required adjustments, since these guidelines are designed to cover a period of 7 years;

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38. Instructs its President to forward this resolution to the Council and the Commission.

1 Texts Adopted, P7_TA(2013)0005.

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P7_TA-PROV(2013)0268

Annual report on competition policy

European Parliament resolution of 12 June 2013 on the Annual Report on EU Competition Policy (2012/2306(INI))


– having regard to the Treaty on the Functioning of the European Union (TFEU), and in particular Articles 101, 102 and 107 thereof,

– having regard to the Commission report on Competition Policy 2011 (COM(2012)0253) and the accompanying Commission staff working document (SWD(2012)0141),

– having regard to Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty1,

– having regard to Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation)2,

– having regard to the Commission communication of 13 October 2008 on the application of State aid rules to measures taken in relation to financial institutions in the context of the current global financial crisis3 (the Banking Communication),

– having regard to the Commission communication of 5 December 2008 entitled ‘The recapitalisation of financial institutions in the current financial crisis: limitation of aid to the minimum necessary and safeguards against undue distortions of competition’4 (the Recapitalisation Communication),

– having regard to the Commission communication of 25 February 2009 on the treatment of impaired assets in the Community banking sector5 (the Impaired Assets Communication),

– having regard to the Commission communication of 23 July 2009 on the return to viability and the assessment of restructuring measures in the financial sector in the current crisis under the State aid rules6 (the Restructuring Communication),

– having regard to the Commission communication of 17 December 2008 on a temporary Community framework for State aid measures to support access to finance in the current financial and economic crisis7 (the original Temporary Framework),

– having regard to the Commission communication of 1 December 2010 on a temporary Union framework for State aid measures to support access to finance in the current financial

1 OJ L 1, 4.1.2003, p. 1.2 OJ L 24, 29.1.2004, p. 1.3 OJ C 270, 25.10.2008, p. 8.4 OJ C 10, 15.1.2009, p. 2.5 OJ C 72, 26.3.2009, p. 1.6 OJ C 195, 19.8.2009, p. 9.7 OJ C 16, 22.1.2009, p. 1.

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and economic crisis1 (the new Temporary Framework, which ended on 31 December 2010),

– having regard to the final report of 2 October 2012 by the High-level Expert Group on reforming the structure of the EU banking sector2,

– having regard to the Commission communication on the application of the European Union State aid rules to compensation granted for the provision of services of general economic interest3,

– having regard to the Commission decision of 20 December 2011 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest4,

– having regard to the Commission communication entitled ‘European Union framework for State aid in the form of public service compensation (2011)’5,

– having regard to Commission Regulation (EU) No 360/2012 of 25 April 2012 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of general economic interest6,

– having regard to the study of June 2011 commissioned by Parliament entitled ‘State aid – Crisis rules for the financial sector and the real economy’7,

– having regard to the study of June 2012 commissioned by Parliament entitled ‘Collective redress in Antitrust’8,

– having regard to the Commission staff working document entitled ‘Public consultation: Towards a Coherent European Approach to Collective Redress’ (SEC(2011)0173),

– having regard to the Commission communication entitled ‘EU State Aid Modernisation (SAM)’ (COM(2012)0209),

– having regard to the European Court of Auditors’ special report No 15/2011 entitled ‘Do the Commission procedures ensure effective management of state aid control?’9,

– having regard to the Commission guidelines on certain State aid measures in the context of the greenhouse gas emission allowance trading scheme post-2012 (hereinafter ‘the ETS Guidelines’)10,

1 OJ C 6, 11.1.2011, p. 5.2 http://ec.europa.eu/internal_market/bank/docs/high-level_expert_group/report_en.pdf3 OJ C 8, 11.1.2012, p. 4.4 OJ L 7, 11.1.2012, p. 3.5 OJ C 8, 11.1.2012, p. 15. 6 OJ L 114, 26.4.2012, p. 8.7 http://www.europarl.europa.eu/activities/committees/studies/download.do?

language=en&file=422888 http://www.europarl.europa.eu/committees/en/studiesdownload.html?

languageDocument=EN&file=743519 http://eca.europa.eu/portal/pls/portal/docs/1/10952771.PDF10 OJ C 158, 5.6.2012, p. 4.

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http://www.europarl.europa.eu/committees/en/studiesdownload.html?languageDocument=EN&file=74351

http://www.europarl.europa.eu/committees/en/studiesdownload.html?languageDocument=EN&file=74351

http://www.europarl.europa.eu/activities/committees/studies/download.do?language=en&file=42288

http://www.europarl.europa.eu/activities/committees/studies/download.do?language=en&file=42288

http://ec.europa.eu/internal_market/bank/docs/high-level_expert_group/report_en.pdf

– having regard to the Framework Agreement of 20 November 2010 on relations between the European Parliament and the European Commission1 (hereinafter ‘the Framework Agreement’), and in particular paragraphs 122 and 163 thereof,

– having regard to the Euro Area Summit Statement of 29 June 20124,

– having regard to its resolutions of 22 February 2005 on ‘the Commission’s XXXIIIrd Report on Competition Policy – 2003’5, of 4 April 2006 on the Commission Report on Competition Policy 20046, of 19 June 2007 on the Report on Competition Policy 20057, of 10 March 2009 on the Reports on competition policy 2006 and 20078, of 9 March 2010 on the Report on Competition Policy 20089, of 20 January 2011 on the Report on Competition Policy 200910 and of 2 February 2012 on the Annual Report on EU Competition Policy11,

– having regard to its resolution of 15 November 2011 on reform of the EU state aid rules on Services of General Economic Interest12,


– having regard to the report of the Committee on Economic and Monetary Affairs and the opinions of the Committee on Employment and Social Affairs, the Committee on the Internal Market and Consumer Protection and the Committee on Transport and Tourism (A7-0143/2013),

A. whereas competition policy based on the principles of open markets and a level playing field in all sectors is part of the EU genetic code, as well as being a cornerstone of the European social market economy, a tool at the service of European consumers in ensuring a socially and economically healthy internal market and in combating abusive practices by economic operators, and a key factor in ensuring the proper functioning of the internal market;

B. whereas the free movement of goods, services, persons and capital has been essential for European growth;

C. whereas the economic, financial and sovereign debt crisis began in autumn 2008 and

1 OJ L 304, 20.11.2010, p. 47.2 ‘Each Member of the Commission shall make sure that there is a regular and direct flow of

information between the Member of the Commission and the chair of the relevant parliamentary committee.’

3 ‘Within 3 months after the adoption of a parliamentary resolution, the Commission shall provide information to Parliament in writing on action taken in response to specific requests addressed to it in Parliament’s resolutions, including in cases where it has not been able to follow Parliament’s views.’

4 http://consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/131359.pdf5 OJ C 304 E, 1.12.2005, p. 114.6 OJ C 293 E, 2.12.2006, p. 143.7 OJ C 146 E, 12.6.2008, p. 105.8 OJ C 87 E, 1.4.2010, p. 43.9 OJ C 349 E, 22.12.2010, p. 16.10 OJ C 136 E, 11.5.2012, p. 60.11 Texts adopted, P7_TA(2012)0031.12 Texts adopted, P7_TA(2011)0494.

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worsened in 2011, resulting in a recession in the EU economy;

D. whereas the Commission responded to the crisis by, among other measures, adopting special rules on state aid, and used competition policy as a crisis management tool; whereas this was, and still is, meant to be a temporary regime;

E. whereas competition policy is essential in order to respond to the crisis and to support the Europe 2020 strategy and the single market, as well as progress towards a banking union, genuine economic and monetary union, and deeper integration and convergence;

F. whereas protectionism would only deepen and prolong the crisis and strict enforcement of competition rules is essential to get the European economy back on track;

G. whereas the Annual Report on Competition Policy should serve as an instrument for furthering the Union’s overall competitiveness by expanding competition and opening up to new actors, thereby widening and deepening the internal market, and should thus not relate exclusively to the practical implementation of competition policy by the Commission;

H. whereas competition does not operate in an equally satisfactory manner in all Member States;

I. whereas the sectors where the level of competition is inferior are often the very same ones in which there is underperformance in terms of economic output;

General remarks

1. Takes note of the Commission Report on Competition Policy 2011, and welcomes the fact that the new thematic structure addresses the topics raised by Parliament and allows the clear identification of priorities, objectives and action taken;

2. Stresses that competition policy is a cornerstone of the European social market economy; underlines the importance of strengthening antitrust, state aid and merger control measures to ensure economic efficiency, a well-functioning internal market and social progress; also emphasises that better access for SMEs and the third sector and the related participation in the internal market call for an active competition policy that will remove existing barriers;

3. Calls for consistency between EU competition policy and all other EU policies, including sectoral regulation, in order to ensure that the internal market in products and services works well for citizens, the environment and businesses;

4. Calls on the Commission to undertake, in cooperation with national competition authorities, a thorough examination of distortions in the functioning of competition and their economic impact; asks the Commission to identify possible imbalances between Member States in this field, as well as their causes;

5. Stresses that the implementation of competition policy in the broader sense should not aim at strengthening established companies or providers of goods and services, but should, rather, have as its overarching objective the facilitation of the entry of new actors and the emergence of new ideas and techniques, thereby maximising the benefits to Union citizens;

6. Points out that the extension of the extraordinary state aid crisis regime was a decision imposed by circumstances, and that it has contributed to preventing further financial and

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economic instability, avoiding protectionism and providing a mechanism for bank restructuring and crisis resolution, all of which are particularly useful in programme countries which are facing serious problems;

7. Is concerned, however, at the fact that, while the state aid crisis regime was intended to be temporary in nature, it seems to have become not that temporary; notes that in its third consecutive annual report Parliament has emphasised the need to discontinue these temporary measures as soon as possible; regrets, furthermore, the fact that in some cases the approach has been failing, and insists that the lessons from previous interventions must be learned and practices adopted accordingly;

8. Maintains that banks receiving state aid must focus their business model on the viable part of their activities, improve access to credit for families and businesses, cap remuneration, and minimise the impact on unaided competitors and EU taxpayers; notes in this regard that there is a need to consider the proposals of the High-Level Expert Group on reforming the structure of the EU banking sector;

9. Stresses that the ongoing consolidation in the banking sector has actually increased the market share of several major financial institutions, and therefore urges the Commission to maintain a close watch on the sector in order to enhance competition in European banking markets,

10. Recalls the Euro Area Summit Statement of 29 June 2012; agrees that it is imperative to break the vicious circle prevailing between banks and sovereigns and to develop their commitments as a matter of urgency;

11. Asks the Commission strictly to enforce antitrust and merger control rules in order to achieve better-regulated, transparent, open and fair financial markets; appreciates its investigations in the over-the-counter (OTC) derivatives market, in particular in relation to credit default swap (CDS) trade data and services, payments services and the distribution of financial information to markets;

12. Calls on the EU competition authorities to work in cooperation with other jurisdictions and monitor the behaviour and market impact of large financial players and oligopolies such as credit rating agencies (CRAs), along with episodes of price volatility related to financial markets, and to give top priority to investigating the alleged rate-rigging at LIBOR, EURIBOR and TIBOR;

13. Believes that the above matters should be fully investigated, also to determine whether all the EU instruments have been used to prevent such occurrences; calls on the Commission, furthermore, to investigate the impact of such distortions in price development in sectors such as mortgage credit;

Supporting sustainable growth, jobs and competitiveness

14. Recognises that competition policy is an essential tool for further developing and preserving the single market and is a key driver of productivity, efficiency and global competitiveness, playing a major role in supporting fair and open markets, sound public finances, and the Europe 2020 objectives for smart, sustainable and inclusive growth;

15. Emphasises that deepening the single market, the return of economic growth, the

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attractiveness of the European market at a global level, achieving the Digital Agenda and encouraging research and innovation all require strong competition, a healthy plurality of economic entities, and a proactive industrial policy; notes that all antitrust, state aid and merger control instruments are essential to improving market regulation, encouraging transparency and rebuilding the economy;

16. Expects the Commission to enforce competition policy effectively and to promote environment-friendly technologies and resources; believes that the new ETS guidelines should contribute to preventing carbon leakage, preserving price signals and minimising distortions; considers that the current low ETS price does little to promote climate-friendly technologies and is delaying the transition to a low-carbon economy;

17. Defends that public actions adopted to provide support to victims of extended fraud and illegal financial practices with the sole goal of avoiding further damages and restoring their rights should not be considered as state aid;

Services of General Economic Interest (SGEIs)

18. Notes that European citizens want a high-quality, area-wide and affordable supply of necessary and important public services, while increasing competition and promoting a more level playing-field between providers of those services, whether they are public or private; highlights that, to that end, safeguarding competition between different providers is crucial; stresses that the recent SGEI package could lead to a simpler, clearer and more flexible framework in this regard; emphasises the Commission’s responsibility, under the TFEU competition rules, to ensure that the compensation granted to SGEIs is compatible with EU rules on state aid, in order to avoid imposing low-quality but expensive services on the public; expresses its concern with regard to exempting too many services from the scrutiny of competition authorities;

19. Calls on the EU competition authorities to monitor the pharmaceutical, health and insurance services markets (in particular the markets in generics and innovative medicines), identifying potential misuse of patent rights and discriminatory behaviour; notes that although the organisation of the healthcare sector and social protection fall primarily within the competence of the Member States, these services should be subject to control in order to preserve public finances and uphold competition law and the rights of EU citizens;

Improving consumer welfare: sectoral developments

20. Is concerned that since mid-2007 food prices have significantly increased, with high volatility in producer prices, recalling that consumer food prices make a major contribution to overall inflation; stresses that the new framework for collective bargaining in the value chain should be accompanied by the pro-competitive operation of producer organisations and by a platform for monitoring food prices; urges the Commission, in cooperation with national competition authorities, to thoroughly scrutinise competition in the agro-industrial sector in terms of support, transparency and consumer price evolution at all levels of the value chain; recalls that the benefits to consumers which can be achieved in the food sector can be multiplied by carrying out similar competitive reforms in all other sectors of the economy;

21. Stresses that services of both general economic interest (SGEIs) and general social interest (SGSIs) represent a significant share of total service provision in Member States, and that

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this implies that noteworthy gains can be accrued by making SGEIs and SGSIs more efficient; highlighting that, in this perspective, it is essential to ensure that the rules governing SGEIs and SGSIs prioritise protecting consumers;

22. Highlights the major role played by speculation on food markets in causing price volatility; calls on the Commission to examine this issue on the Report on Competition Policy 2012 and to take initiatives to tackle speculation on food markets;

23. Calls on the Commission to look more closely at the beneficial role of producers’ organisations and cooperatives in increasing small farmers’ welfare and bargaining power in relation to upstream industry;

24. Looks forward to the European Competition Network (ECN) report on this subject; takes note of the fact that cereals and dairy products are the most investigated sectors in antitrust cases, and encourages the national competition authorities (NCAs) to step up their initiatives in this field; calls on the Commission to examine the European sugar sector, in which there was particularly high price inflation in 2011 and 2012;

25. Urges the Commission once again to pursue the full implementation of the internal energy market package; encourages it, insofar as an open and competitive single market in energy has not yet been fully achieved, to actively monitor competition in energy markets, specifically wherever privatisation of public utilities starts out from a system of monopolistic or oligopolistic markets;

26. Calls on the Commission to carefully examine developments on the EU air cargo and express services market; notes that the US operates a form of duopoly in the express market, and has in practice foreclosed the market to European competitors over the past ten years; concludes that further mergers in the sector would leave only one major European express and logistics company to compete, and that price competition on the internal market could be significantly impacted to the disadvantage of consumers;

27. Stresses that no level playing-field exists for European companies in the US aviation market, and that there is an obvious imbalance on the EU-US aviation market even today, since European cargo airlines are denied access to the US domestic market and struggle to compete under unfavourable conditions; emphasises that this unequal market access distorts competition and finally hurts the European logistics industry and its customers;

Promoting legitimacy and effectiveness for competition policy

28. Supports an active role for Parliament in shaping competition policy, including co-legislative powers; considers that the Commission must be fully accountable and must follow up Parliament’s resolutions; aims to reinforce the ongoing structured dialogue;

29. Calls on the Commission to continue acting impartially and objectively and to be open to improvements in competition procedures; defends procedural rights, including the right of undertakings to have access to the Commission’s file prior to being heard;

30. Encourages the Commission to further promote a fair competition culture by identifying general principles and supporting companies’ actions in this area, in particular by demonstrating greater interest and a more positive attitude towards compliance, as this will have a decisive preventive effect that is in the public interest;

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31. Requests the Commission to take into consideration the use of Alternative Dispute Resolution and to present the long overdue proposal under the ordinary legislative procedure to facilitate individual and collective private actions for damage suffered by companies and consumers as a result of breaches of EU antitrust law; believes that such a proposal should promote competition while not encouraging unmeritorious litigation, cover minor and diffuse damages, and ensure full compliance with EU transparency rules, and that any exceptions in the context of the leniency procedures will be properly and specifically justified, with full coherence ensured with public enforcement;

32. Refers again to its earlier resolutions of 2 February 2012 on the Annual Report on EU Competition Policy and the idea of a possible Commission proposal on collective redress;

33. Takes a positive view of cooperation within the European Competition Network (ECN) and with national courts with a view to ensuring the EU-wide effectiveness and coherence of competition policies; supports the effective sharing of responsibility between the ECN members, given that some markets tend to have more national dimensions than others owing to different legal, economic and cultural conditions; invites the Commission to promote convergence and cooperation agreements with other jurisdictions, including provisions for information exchange during investigations, under appropriate conditions;

34. Is aware of the Commission’s high and rising workload in the area of competition enforcement, and reiterates, therefore, that the Commission needs more resources, especially via the allocation of existing resources, in order to be proactive and more effective in dealing with it;

35. Invites the Commission to foster a culture of competition both in the EU and internationally;

Fining policy

36. Recommends that the settlement procedure and, where appropriate, dissuasive and proportionate fines should be used, while avoiding the adverse economic and social consequences of driving stressed undertakings out of the market;

37. Notes that fines should not prevent companies from holding their executives and staff responsible internally to account; nor, where appropriate, should they prevent Member States from dealing with issues of criminal responsibility; calls on the Commission to consider and report on these aspects;

38. Is concerned that the use of fines as the sole instrument may be too limited, not least with a view to potential job losses as a result of inability to pay, and calls for the development of a wider range of more sophisticated instruments, covering such issues as individual responsibility, transparency and accountability of firms, shorter procedures, the right to defence and due process, mechanisms to ensure the effective operation of leniency applications (in particular to overcome the interference caused by discovery processes in the US), corporate compliance programmes, and the development of European standards; favours a ‘carrot-and-stick’ approach with penalties that serve as an effective deterrent while encouraging compliance;

39. Notes again that the method for setting fines is contained in a non-legislative instrument - the 2006 Fining Guidelines - and once again urges the Commission to incorporate a detailed

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basis for calculating fines, based on the principle of legality, into Regulation (EC) No 1/2003, along with new fining principles;

40. Reiterates its call for a general review of the Commission’s fining guidelines, taking account of six years of practical experience; believes this review should examine the role of compliance programmes, specify the conditions under which parent companies exercising decisive influence over a subsidiary should be made jointly and severally liable for antitrust infringements on the part of their subsidiaries, and consider the issues of leniency, recidivism, the turnover cap, and the interaction between public and private liabilities;

41. Reiterates that the number of requests for fine reduction on account of inability to pay has increased, particularly from ‘mono-product’ undertakings and SMEs; affirms once again that a system of delayed and/or split payments could be considered as an alternative to fine reduction in order to avoid putting undertakings out of business;

42. Welcomes the fact that the Commission has taken account of the specific needs of ‘mono-product’ undertakings in its decision (COMP/39452 of 28/03/2012);

Sector-specific considerations

43. Calls on the Commission and the Member States to continue to make progress towards completing the single market in transport, while ensuring open and fair competition in the transport, postal and tourism sectors, and while respecting other Union policy objectives such as properly functioning transport and mobility services, policy objectives in the areas of public services, social standards, safety and environmental protection, and the EU targets for reducing CO2 emissions and oil dependency; welcomes the announcement of a Single Market Act II, aimed at finally establishing the Single European Sky and continuing the opening-up of the rail market and the establishment of a single railway area;

44. Believes that the Commission should further strengthen the links between competition policy and transport policy in order to improve the competitiveness of the European transport sector;

45. Urges the Commission to be more proactive in promoting convergence of competition rules in international negotiations, so as to ensure a level playing field between the EU and third countries in the transport sector;

46. Stresses the importance of uniformly developing a European transport area and eliminating the development gaps between Member States’ transport infrastructures and systems, in order genuinely to achieve a single European market and ensure fair competition in the field of transport;

47. Emphasises the impact that tax differences have on competition between the various modes of transport and on intermodal transport, and calls on the Commission to provide an overview of taxes and differing VAT systems for the various transport modes;

48. Stresses that if there is to be free and fair competition at European level, physical, technical and regulatory barriers between Member States must be removed, in particular through the development of interoperable and efficient trans-European networks;

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49. Welcomes, in principle, the Commission’s communication on passenger rights in all transport modes, but stresses that each mode of transport is inherently different and that any Commission proposal, while guaranteeing existing rights for passengers, must also ensure a proportionate and flexible approach which recognises the differences between modes;

50. Urges the relevant authorities, in the light of the EU-US Air Transport Agreement, to intensify their cooperation in working to develop compatible regulatory approaches to airline alliance competition issues, and to actively seek ways to make the major alliances compete more vigorously within the transatlantic market;

51. Calls on the Commission and the Member States to speed up the implementation of the Single European Sky legislation, with a view to making the pricing of services more transparent, thereby facilitating the monitoring of compliance with competition rules and maximising competitiveness and safety in the European hub, and to continue working to foster competitiveness in European airports for the benefit of both the economy and passengers;

52. Invites the Commission to provide an evidence-backed overview of cases where air carriers are at an advantage with regard to other service providers through special conditions or, as alleged, abuse their dominant position at certain airports, in particular through the imposition of a ‘one bag’ rule and other restrictions on cabin baggage allowances;

53. Considers that commercial activities are a major source of income for airports, and that such aggressive practices may constitute an abuse of a carrier’s dominant position;

54. Urges the Commission to strengthen monitoring of the trading, use and allocation of slots at European airports, in order to ensure fair competition as well as protection of regional connectivity across Europe;

55. Calls on the Commission to monitor the measures affecting low-cost air operators, in order to ensure that they are not instruments of unfair competition;

56. Urges the Commission, when dealing with the revision of the EU aviation and airport state aid guidelines, to ensure that there is no distortion of competition and to establish a level playing field for all market participants;

57. Points out that limited progress has been made in liberalising Europe’s rail sector, and that this state of affairs puts rail transport at a disadvantage with regard to other means of travel, especially considering the issues related to the competitiveness of the sector across Europe;

58. Urges the Commission to complete the implementation of the Single European Railway Area by ensuring that the right conditions are in place in order to open up the sector to free and fair competition, including measures to enable efficient and innovative rail companies to operate without restrictions, a clear separation between infrastructure ownership and rail operators, strong national regulatory bodies, and the harmonisation of provisions governing staff; calls on the Commission to take account of the different operational models of national rail companies when preparing to open up domestic passenger rail markets, and to make specific proposals in order to put an end to the indirect restrictions on competition resulting from inconsistent provisions on safety, interoperability and authorisation;

59. Calls on the Commission and the Member States to guarantee the opening-up of the rail

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transport sector to fair competition, as well as to ensure a better quality of services, without compromising public service provisions;

60. Stresses that the further opening-up of the EU road haulage market can only be acceptable if a level playing-field between transport undertakings is guaranteed and the protection of social legislation and of the working conditions of mobile workers is safeguarded in all Member States;

61. Stresses the need to avoid unfair competition within the liberalised road transport sector by guaranteeing the proper application of social, safety and environmental rules, with special attention to the opening of this market for cabotage and to dumping practices;

62. Calls on the Commission to make specific proposals, in cooperation with the Member States, to eliminate the considerable differences which exist between Member States in terms of penalties for serious breaches of Community law in road transport, thus putting an end to those distortions of competition;

63. Calls on the Member States to implement the third Postal Directive; encourages the Commission to examine closely and report on the social consequences of the liberalisation of the postal market and the universal service obligation in this field, including the financing of the universal service;

64. Calls on the Commission, having regard to the Treaty of Lisbon, the new consolidated competencies and the economic potential of tourism for the EU, to facilitate proactive cooperation among tourism enterprises and to take the necessary measures to ensure the worldwide competitiveness of EU tourism excellence destinations; calls on the Commission to speed up the procedures of the legislative proposal on travel packages in order to ensure adequate competition and guarantee a clear free market in the European tourism sector;

65. Takes the view that enforcement of the law on state aid should seek to achieve the objectives set out in the EU 2020 Strategy, in particular by enabling investment in the real economy and fostering a greater concentration of resources on research, innovation and sustainable development;

66. Notes that the European market in electronic payments is still fragmented, both across and within national borders; encourages the necessary measures and enforcement to ensure a more open, transparent, innovative and competitive single market in payments, in such a way that it brings advantages and choice to all consumers with regard to card, internet and mobile payment options and mobile wallets, interoperability, costs and portability; asks the Commission, therefore, to assess the possible ways of bringing new entrants into the European market for card, internet and mobile payments while protecting future technological innovations in this sector; believes that the supervision of multilateral interchange fees needs to be strengthened, and welcomes the proposals set out in the Single Market Act II relating to a revision of the Payment Services Directive and a legislative initiative on multilateral bank charges;

67. Approves the Commission’s intention to remain vigilant with regard to the transparency of financial markets, but believes that an extra effort is needed to ensure that timely, reliable and high-quality information is provided, especially for the derivatives markets;

68. Believes that competition between companies must take place within a framework that

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ensures that consumer rights are effectively respected, and that a collective redress system and an alternative dispute resolution system are vital tools for this purpose;

69. Points out that it is the Commission’s practice only to assess the misuse of a company’s market position; believes that in some markets this is not enough to prevent the risk of cartel agreements; requests the Commission to examine how to assess how to minimise the danger of cartels and maximise competition; calls on the Commission to put forward clear and transparent guidelines for competition policy which take account of these principles;

70. Urges the Commission to pursue the full implementation of the internal energy market package, given that an open and competitive single market in the energy sector has not yet been fully achieved; encourages it to actively monitor competition in energy markets, specifically whenever privatisation of public utilities originates in monopolistic or oligopolistic markets;

71. Notes that the lack of effective legal provisions for compensation for damage caused by breach of competition rules works to the disadvantage of consumers, and that fines for such breaches are paid solely to the benefit of the public budgets of the Member States;

72. Calls on the Commission to ensure a fair balance of bargaining power between manufacturers and distributors, while emphasising the following:

– the importance of combating discriminatory practices in the field of online distribution as governed by the Vertical Restraints Block Exemption Regulation (Commission Regulation 330/2010), so as to safeguard the ability of distributors to use innovative distribution methods such as online platforms and to reach a greater number and variety of customers;

– the importance of dealers on the markets for the sale of new motor vehicles following the expiry of Commission Regulation (EC) No 1400/2002 on 31 May 2013; asks the Commission to insist on the need to develop principles of good conduct between manufacturers and dealers with regard to vertical agreements in the motor vehicle sector, particularly with regard to the protection of investments after termination of a contract and the possibility of transferring a business to another member of the same brand network, in order to promote transparency in commercial and contractual relations between the parties;

73. Welcomes, in this context, the efforts made by stakeholders in the food supply chain to agree on principles of good practice in B2B relations and on implementing measures in respect of free and fair competition; calls on the Commission to maintain its commitment to monitoring the implementation of these principles, as will Parliament through its yearly Retail Roundtable;

74. Recognises that franchising is a good formula enabling independent retailers to survive in a highly competitive environment; calls on the Commission to monitor developments in relations between franchisers and franchisees, ensure a fair balance of bargaining power between them, and, if appropriate, come forward with legislative proposals;

75. Considers that, alongside its relationship with Parliament and with the European Economic and Social Committee, the Commission should also ensure a better structuring of its cooperation with consumer organisations, and that this relationship should be considered an

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important aspect of the monitoring of competition rules; for this reason, the dialogue between the Commission’s DG Competition and those organisations should be encouraged and stepped up;

76. Welcomes the state aid policy, which has helped stabilise the financial system when applied to banks; calls on the Commission to extend the assessment of the proper functioning of the single market to include state-owned long-term investment banks, including the European Investment Bank;

77. Believes that media ownership and management should be transparent and not concentrated; calls on the Commission to assess how existing competition rules relate to the increasing concentration of commercial media in the Member States; also calls on the Commission to apply the competition rules and to intervene where there is excessive media concentration and where media pluralism is in danger; calls for rules to ensure that conflicts of interest are properly addressed and resolved;

78. Calls on the Commission to better integrate competition policy with respect to the employment targets of the EU 2020 Strategy, allowing better support for SMEs, which are the main job creators;

79. Calls on the Commission to make a specific reference to the impact of competition policy on employment and social affairs in future Annual Reports.

80. Points out that competitiveness in the EU will be achieved through innovation and the contribution of highly skilled workers while not undermining the level of wages and/or pensions, by encouraging high social standards in all Member States, and by strengthening domestic demand; calls on the Member States, therefore, to make greater investment in education, vocational training and research and development;

81. Calls on the Member States to pursue an active and integrative labour market policy in order to strengthen the competitiveness of the Union’s economies and to offer those seeking work secure and sustainable quality jobs;

82. Welcomes the Commission’s approach to defining SGEIs by introducing measures for the integration/reintegration of workers on the labour market under the heading of services of particular interest to citizens;

83. Calls on the Commission to give prior attention to the assessment of future developments regarding employees of companies that are undergoing restructuring and privatisation, recalling that during the privatisation process the employment component must remain a core concern for national governments as well as for the Commission;

84. Calls on the Commission to continue monitoring the implementation of state aid rules, given that the spillover effects of the crisis are still present, and underlines the need to preserve services of general interest in the Member States;

85. Calls on the Commission to continue reporting to Parliament, on an annual basis, on developments and effects in the application of competition policy.

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86. Instructs its President to forward this resolution to the Council, the Commission and the national competition authorities (NCAs).

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P7_TA-PROV(2013)0269

Preparations for the European Council meeting (27-28 June 2013) - Democratic decision making in the future EMU

European Parliament resolution of 12 June 2013 on strengthening European democracy in the future EMU (2013/2672(RSP))


– having regard to Rule 110(2) of its Rules of Procedure,

A. whereas in its resolution of 23 May 2013 on ‘future legislative proposals on EMU: response to the Commission communication’1, Parliament takes the view that formal ex ante coordination of economic policy reforms at EU level should be: (i) strengthened on the basis of the Community method, (ii) aligned with the instruments of the European Semester for economic policy coordination, and (iii) designed in conjunction with new solidarity- and incentive-based instruments;

B. whereas mechanisms to be put in place for ex ante coordination should apply to all euro area Member States and be open to all Member States of the Union;

C. whereas in its aforementioned resolution of 23 May 2013, Parliament takes the view that any proposed new Convergence and Competitiveness Instrument (CCI) should be adopted in accordance with the ordinary legislative procedure, be based on the Community method and provide for proper scrutiny by Parliament; whereas Parliament points out that such a mechanism should be funded by means of a new facility triggered and governed under the Community method as an integral part of the EU budget, but over and above the Multiannual Financial Framework (MFF) ceilings, so as to ensure that Parliament is fully involved; whereas it agrees with the Commission that CCIs are the first building blocks of a genuine fiscal capacity that supports solidarity and the implementation of sustainable, growth-enhancing structural reforms;

D. whereas the Commission should put forward proposals immediately, in accordance with the ordinary legislative procedure, to transpose into secondary legislation the commitments made by the Heads of State or Government on 28 June 2012 in relation to a ‘growth and job compact’;

E. whereas in its aforementioned resolution of 23 May 2013 Parliament stresses the need for the adoption, under the European Semester, of a convergence code based on the Europe 2020 strategy and including a social pillar;

1. Finds the overwhelming general lack of ambition being demonstrated by the Council in its response to the crisis to be of very great concern; is worried, furthermore, about the negative influence that national electoral cycles are having on the Union’s ability to take autonomous decisions; deplores the further postponing of all decisions on the future architecture of the EMU; likewise deplores the fact that the European Council has twice delayed its anticipated decisions on the future of the EMU and that it may do so once again at the next summit;

1 Texts adopted, P7_TA(2013)0222.

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2. Is deeply concerned that democratic accountability in the EMU (the fourth building block) has not so far been tackled properly in the Council’s deliberations; considers this entirely deplorable;

3. Reiterates once again that any further initiative for a deep and genuine EMU based on stability, sustainable growth, solidarity and democracy must imperatively be established in accordance with the Community method; emphasises that the European institutions are required to practise sincere mutual cooperation; reminds the European Council that it does not have any Treaty-based prerogative of legislative initiative and that it must stop instructing the Commission on the form and/or content of any further legislative initiative and bypassing the Commission’s coordinating, executive and management roles as laid down in the Treaties;

4. Warns the European Council, in this connection, not to interfere unduly in the European Semester process, and to ensure that the agreed procedures are followed;

5. Reiterates that it cannot accept any further intergovernmental elements in relation to the EMU and that it will take all necessary and appropriate action within its prerogatives if such warnings are not heeded; recalls that the ‘fiscal compact’ should be integrated into EU law within five years at the latest, on the basis of an assessment of the experience with its implementation, as stipulated in Article 16 of the Treaty on Stability, Coordination and Governance in the EMU;

6. Recalls its fundamental position that the strengthened EMU should not divide the EU but, on the contrary, establish deeper integration and stronger governance, which should be open to all non-euro Member States on a voluntary basis;

7. Reminds the Commission that it has the sole right of legislative initiative; is therefore perplexed as to why the Commission has not yet presented legislative texts based on the proposals contained in its ‘Blueprint for a deep and genuine EMU’ (COM(2012)0777) and the Commission declaration annexed to the ‘Two-Pack’ regulations; believes that if the Commission does not take such an initiative as a matter of urgency, it will be neglecting its political and Treaty-based responsibilities;

8. Calls on the Commission to bring forward, under the European Semester, a proposal to adopt a convergence code based on the Europe 2020 strategy and establishing a strong social pillar; insists that National Implementation Programmes must ensure that the convergence code is implemented by all Member States, supported by an incentive-based mechanism;

9. Recalls that Parliament’s priority is to ensure that any new financial instrument linked to the Convergence and Competitiveness Instrument (CCI ) is an integral part of the EU budget and is fully subject to the ordinary budgetary procedure;

10. Underlines the fact that the currency of the Union is the euro, that its parliament is the European Parliament and that the future architecture of the EMU must recognise that Parliament is the seat of accountability at Union level; demands that whenever new competences are transferred to, or created at, Union level or new Union institutions established, a corresponding degree of democratic control by, and accountability to, Parliament be ensured;

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11. Reiterates its repeated demands that the European Stability Mechanism (ESM) be integrated into the Community acquis so that it can be managed in accordance with the Community method, and that it be made accountable to Parliament; asks the Commission to put forward a proposal to that end; reminds the Eurogroup that Parliament has received written assurances that the ESM will be subject to the scrutiny of Parliament;

12. Recalls that EU participation in the ‘troika’ system should be subject to democratic scrutiny by, and accountability to, Parliament;

13. Is extremely worried about the delays in setting up the Banking Union and the practical modalities of direct banking recapitalisation by the ESM; is, in particular, alarmed by the ongoing fragmentation of the EU banking system; emphasises that a robust and ambitious Banking Union is a key component of a deeper and genuine EMU, and a key policy on which Parliament has been insisting for more than three years, in particular since the adoption of its positions on the European Banking Authority regulation;

14. Insists that at the spring European Council the President of Parliament should present Parliament’s views on the annual growth survey; takes the view that an interinstitutional agreement should be negotiated in order to involve Parliament in the approval of the annual growth survey and of the economic policy and employment guidelines;

15. Instructs its President to forward this resolution to the European Council and the Commission.

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P7_TA-PROV(2013)0270

Preparations for the European Council meeting (27-28 June 2013) - European action to combat youth unemployment

European Parliament resolution of 12 June 2013 on preparations for the European Council meeting (27-28 June 2013) – European action to combat youth unemployment (2013/2673(RSP))


– having regard to the Commission communication of 20 December 2011 entitled ‘Youth Opportunities Initiative’ (COM(2011)0933),

– having regard to the question for oral answer to the Commission and the accompanying resolution of Parliament of 24 May 2012 on the Youth Opportunities Initiative1,

– having regard to the Commission communication of 5 December 2012 entitled ‘Moving Youth into Employment’ (COM(2012)0727),

– having regard to its resolution of 16 January 2013 on a Youth Guarantee2,

– having regard to the conclusions from the European Council of 7-8 February 2013,

– having regard to the Council Recommendation of 28 February 2013 on Establishing a Youth Guarantee,

– having regard to the Commission communication of 12 March 2013 on the Youth Employment Initiative (COM(2013)0144),

– having regard to its resolution of 14 March 2013 on the integration of migrants, its effects on the labour market and the external dimension of social security coordination3,

– having regard to Rule 110(2) and (4) of its Rules of Procedure,

A. whereas in April 2013 23,5 % of young people in the EU are currently unemployed, with the rates ranging from 7,5 % in Germany and 8 % in Austria to 62,5 % in Greece and 56,4 % in Spain, indicating marked geographical differences;

B. whereas 8,3 million Europeans under 25 are neither in employment nor in education or training (NEETs); whereas these figures continue to rise, posing the risk of a lost generation;

C. whereas young people from particularly vulnerable backgrounds are at greater risk of exiting the education and training system without having obtained an upper secondary qualification;

1 Texts adopted, P7_TA(2012)0224.2 Texts adopted, P7_TA(2013)0016.3 Texts adopted, P7_TA(2013)0092.

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D. whereas 15 % of children leave school without completing secondary education, and 10 % of EU citizens are living in jobless households;

E. whereas the first indications that a young person is likely to drop out of school are an early warning sign of a recurring cycle of poverty;

F. whereas in 2011 the economic loss due to the disengagement of young people from the labour market was estimated at EUR 153 billion, corresponding to 1,2 % of EU GDP; whereas this represents a serious social and economic burden;

G. whereas education and training policies can play a crucial role in combating the high level of youth unemployment and fundamentally support integration and participation; whereas more investment is required in vocational education and training, integration into learning structures, higher education and research; whereas up-skilling is essential to equip individuals for quality jobs in sectors of job growth such as green jobs, ICT and the care sector;

H. whereas despite high overall levels of youth unemployment, certain sectors such as the ICT and health sectors are finding it increasingly difficult to fill vacancies with qualified personnel;

I. whereas currently many policies affecting young people are developed without involving those concerned and other stakeholders;

J. whereas by virtue of their emphasis on practical skills, the dual system of vocational training and the combined academic-vocational degree courses employed in some Member States have proved their worth during the crisis in particular, keeping levels of youth unemployment lower by making young people more employable;

1. Welcomes the fact that the European Council has acknowledged the importance of youth employment to Europe’s prosperity; urges the European Council and Commission to step up their efforts to combat youth unemployment, as a part of a wider move to promote social rights and to address social imbalances within the European Union; stresses that the European Parliament will closely monitor progress and observe whether the promised measures are implemented, especially as regards the Youth Guarantee;

2. Urges the Commission and the Member States to take a rights-based approach to youth and employment; stresses that, particularly in times of high crisis, the quality of work for young people must not be compromised, and that core labour standards, as well as other standards related to quality of work, must be a core element;

3. Points out that the internal imbalances between Member States, especially as regards employment and social indicators pertaining to young people in particular, are widening; calls for immediate EU action to correct these imbalances in the framework of the European Semester;

4. Calls, in this context, on the Commission to develop common social investment indicators, especially regarding youth unemployment;

5. Insists that the solution to the urgent problem of youth unemployment lies in an improvement of the overall economic environment, such as strengthening the single market

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in services and the digital economy, furthering trade through free trade agreements, and promoting the interests of SMEs and microenterprises whilst upholding fundamental social rights; stresses that the most efficient tool to fight unemployment in the long run is sustainable economic growth; further believes that special measures focused on young people are important but the key remains to ensure that the EU relies on a strong, competitive and modern economy; welcomes short- and medium-term investments such as the Youth Employment Initiative, while drawing attention to the lack of any long-term structural measures and the absence of necessary reform to enable education systems in certain Member States to rise to future challenges with a view to ensuring employability;

6. Stresses the importance of enhancing voluntary mobility among young people by removing existing barriers for cross-border apprenticeships, traineeships and internships to better match supply and demand of work-based training opportunities for young people, particularly in border regions, and by enhancing the portability of pensions and labour and social protection rights across the EU, whilst taking the risk of brain drain into consideration; also calls on the Commission and the Member States to take all necessary steps to prevent the phenomenon of brain drain through sustainable measures which ensure that a good proportion of highly-skilled people in the labour force will either remain in their own communities or return to their Member States of origin so as to allow those Member States to achieve economic recovery and viable growth;

7. Calls on the Commission to draw up recommendations on the feasibility of defining a common level of unemployment allowance in the EU in relation with the previous wages of the unemployed person;

Youth Guarantee

8. Welcomes the Council Recommendation of 28 February 2013 on Establishing a Youth Guarantee; calls for the swift implementation of Youth Guarantee schemes in all Member States; emphasises that the Youth Guarantee is not a job guarantee but an instrument ensuring that all unemployed EU citizens and legal residents up to the age of 25 years, and recent graduates under 30, receive a good-quality offer of employment, continued education or apprenticeship within four months of becoming unemployed or leaving formal education; stresses in particular that Youth Guarantee schemes should effectively improve the situation of young people who are not in employment, education or training (NEETs);

9. Calls on the Commission and Member States to develop clear objectives and indicators for the Youth Guarantee Scheme, in order to be able to effectively measure and evaluate the impact of this initiative; stresses that it intends to monitor closely all Member State activities to make the Youth Guarantee a reality and invites youth organisations to keep the European Parliament updated on their analysis of Member State actions;

10. Notes that Youth Guarantee schemes should be accompanied by a quality framework in order to ensure that training and jobs offered include appropriate pay, working conditions and health and safety standards;

EU funding

11. Welcomes the EUR 6 billion allocated for the new Youth Employment Initiative and calls for a frontloading in the first few years of the Multiannual Financial Framework to address youth unemployment and implement youth guarantees as a matter of urgency; emphasises

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that the costs of implementing youth guarantees across the eurozone are estimated at EUR 21 billion by the International Labour Organisation and therefore calls for the allocation to be revised upwards as part of a revision of the Multiannual Financial Framework; welcomes the extension of the eligibility group for the Youth Guarantee under the age of 30;

12. Welcomes the proposed successor to the Progress Microfinance Facility included in the Programme for Social Change and Innovation for the period 2014-2020 as a valuable instrument also for young people, aiming at the creation of new, sustainable, quality jobs;

13. Emphasises that EU funding to fight youth unemployment is available before 2014 in particular by reprogramming available structural funds and making full use of the EUR 60 billion from the European Investment Bank as provided for in the Compact for Growth and Jobs; welcomes the reallocation and acceleration of EUR 16 billion of structural funds to support job opportunities for young people and to help SMEs access finance;

14. Calls on the Commission to actively ask for support and initiatives as well as other forms of cooperation with the private sector in tackling youth unemployment; encourages the European Investment Bank to contribute to the implementation of the Youth Guarantee, for instance by linking loans to the creation of jobs and training places, or supporting the development of dual education systems; stresses, however, that EIB loans should be seen as a supplement to and not a replacement for EU funding in the form of grants;

Combating Youth unemployment at national level

15. Stresses that investment in youth employment must be a key component of national social investment strategies;

16. Calls for an ambitious, holistic policy approach which looks at education, training, employment and self-employment initiatives, for all young people at all the various levels, in an integrated way; points out that it is essential to target the transition between the different educational and training pathways and recognise competences based on non-formal and informal learning; stresses that income security and trust in labour market prospects are essential pre-conditions for choosing higher education and that young people with a higher risk of exclusion are overly affected by this;

17. Is strongly concerned at the budget cuts being made by Member States in the fields of education, training and youth, and therefore emphasises the need for the educational systems of the Member States to be reformed, using national and EU resources, with a view to making youth education more cost effective and competitive;

18. Urges the Member States to take sweeping measures to fight youth unemployment, in particular through preventive action against early dropout from school or from training or apprenticeship schemes (e.g. by introducing a dual educational system or other equally efficient types of framework), and to develop comprehensive strategies for young people who are not in employment, education or training (NEETs);

19. Notes that social investment in youth may take a wide range of forms, including: developing partnerships between schools, training centres and local or regional businesses; providing targeted quality training and high-quality youth internship programmes; vocational schemes in cooperation with enterprises; senior employee sponsorship schemes aimed at the

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recruitment and training of young people on the job or at securing a better transition from education to work; encouraging young people’s participation in society; and promoting regional, European and international mobility by means of further progress towards the mutual recognition of qualifications and skills; also stresses that social investment can go hand in hand with efficient incentives, such as employment subsidies or insurance contributions for young people that will guarantee decent living and working conditions, in order to encourage public and private employers to hire young people, invest in both quality job creation for young people and continuous training and upgrading of their skills during employment, and support entrepreneurship among young people;

20. Calls on the Member States to consider tried and tested practices, especially those of Member States with low unemployment rates, and to explore whether concepts such as dual education and training and vocational schooling, as well as Youth Guarantee schemes that have already been implemented, might be compatible with their national systems; emphasises that the dual vocational training system and twin-track studies, with their focus on practical experience, have stood the test of the economic crisis particularly well, helping to reduce youth unemployment by making people more employable, and calls, therefore, on crisis-hit Member States to consider reforming their training systems along these lines;

21. Stresses that the crisis countries currently have extremely alarming rates of youth unemployment; therefore, calls on the Commission to assess crisis measures in terms of their impact on youth employment and calls on the Member States and the Commission to consider ending those crisis measures which have a negative impact on youth employment;

22. Calls on the Member States to improve cooperation between businesses and the educational sector at all levels with a view to improving the way in which curricula are linked to the demands of the labour market, for example by extending Sector Skills Alliances and Knowledge Alliances; stresses that more flexible curricula are needed in order to better adapt to future labour market developments;

23. Stresses the need for Member States to improve support for self-employment among young people while preventing insolvency and bogus self-employment;

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24. Instructs its President to forward this resolution to the Commission, the European Council and the Council.

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P7_TA-PROV(2013)0271

Deadlock on the revision of Regulation (EC) No 1049/2001

European Parliament resolution of 12 June 2013 on the deadlock on the revision of Regulation (EC) No 1049/2001 (2013/2637(RSP))


– having regard to Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents,

– having regard to the proposal for a regulation of the European Parliament and of the Council regarding public access to European Parliament, Council and Commission documents (COM(2008)0229),

– having regard to the proposal for a regulation of the European Parliament and of the Council amending Regulation (EC) No 1049/2001 regarding public access to European Parliament, Council and Commission documents (COM(2011)0137),

– having regard to Article 15 of the Treaty on the Functioning of the European Union,

– having regard to its position of 15 December 2011 on the proposal for a regulation of the European Parliament and of the Council regarding public access to European Parliament, Council and Commission documents1,

– having regard to its resolution of 12 December 2012 on the situation of fundamental rights in the European Union (2010-2011)2,

– having regard to the questions to the Council and Commission on the deadlock on the revision of Regulation (EC) No 1049/2001 on access to documents (O-00049/2013 O-00050/2013, O-00051/2013, O-00052/2013, O-00053/2013, O-00054/2013, O-00058/2013 and O-00059/2013),

– having regard to the Commission statement of 21 May 2013 on the deadlock on the revision of Regulation (EC) No 1049/2001,

– having regard to Rule 110(2) and (4) of its Rules of Procedure,

A. whereas transparency is an essential tool to enable citizens to participate in the EU decision-making process as well as in securing the accountability of the European institutions to their citizens and thereby increasing their engagement and trust;

B. whereas the entry into force of the Treaty of Lisbon further enhanced EU transparency obligations and enshrined access to documents as a fundamental right;

C. whereas Parliament has on several occasions called for enhanced transparency in the 1 Texts adopted, P7_TA(2011)0580.2 Texts adopted, P7_TA(2012)0500.

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legislative procedure, including transparency in respect of Council working groups, publication of legal opinions in legislative procedures, and greater transparency in the ‘trilogues’;

D. whereas Parliament has also regretted the lack of transparency in EU agencies, in international negotiations and in the Commission’s dialogue with Member States, notably when fundamental rights or the interests of European citizens are at stake1;

E. whereas the case-law of the Court of Justice of the European Union and decisions of the European Ombudsman have substantially influenced understanding of Regulation (EC) No 1049/2001; whereas such case-law and decisions, especially as regards the use of non-recognition grounds in a legislative procedure, such as Turco and Access Info, should be reflected in the legislation;

F. whereas Regulation (EC) No 1049/2001 is perceived by EU citizens and the EU public as a key piece of legislation which provides the tools for proper oversight of EU actions; whereas application of Regulation (EC) No 1049/2001 has still to be improved, as shown by several cases dealt with by the Ombudsman;

G. whereas in 2008 the Commission proposed a recast of Regulation (EC) No 1049/2001, and whereas it did not withdraw this proposal following the entry into force of the Treaty of Lisbon; whereas Parliament duly informed the Commission about the inappropriateness of the use of the recast procedure;

H. whereas in 2011 the Commission made an additional proposal which only implicitly extends the scope of Regulation (EC) No 1049/2001 to all EU institutions, offices, agencies and bodies; whereas Parliament merged the 2008 and 2011 procedures into a single procedure;

I. whereas Parliament adopted its first-reading position on 15 December 2011, and trilogues were started with the Danish Presidency in the first half of 2012; whereas the Commission did not agree with the proposed possible compromises, which is the main reason for a standstill which has lasted more than a year;

J. whereas the Cypriot and Irish presidencies were unable to unblock the matter in the Council and start further negotiations because of resistance from the Commission, which triggers a unanimity requirement in the Council on certain points;

K. whereas, given the enhanced transparency obligations included in the Treaties following the entry into force of the Treaty of Lisbon, any revision of Regulation (EC) No 1049/2001 should not lower the current level of transparency;

L. whereas a failure to agree on a new version of Regulation (EC) No 1049/2001 would send the wrong signal about the nature of the EU to its citizens, and whereas such a failure would undermine the legitimacy of EU decision-making, especially in the light of the fast-approaching key European elections;

1. Strongly reaffirms the importance of the fundamental right of access to information and documents, of transparency and openness of institutions and of their decision-making processes, which are pillars of democracy and can bring citizens closer to the EU;

1 Texts adopted, P7_TA(2012)0500, paragraph 18.

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2. Calls on all EU institutions, offices, bodies and agencies to fully implement Regulation (EC) No 1049/2001;

3. Considers that amending Regulation (EC) No 1049/2001 should be a priority for all the EU institutions, and regrets the deadlock that has been created; asks all the EU institutions to work together to find a way out as soon as possible;

4. Reaffirms its commitment to revising Regulation (EC) No 1049/2001, which, taken overall, should give EU citizens wider and improved access to EU documents;

5. Calls on the Commission to engage fully, at the political and the technical level, in the amending and ‘Lisbonising’ of Regulation (EC) No 1049/2001, or to take any appropriate measures to break the deadlock;

6. Calls on the Council immediately to restart debates on Regulation (EC) No 1049/2001, to adopt its first-reading position and to continue negotiations;

7. Reaffirms its above mentioned first-reading position as adopted on 15 December 20111 as the starting position for negotiations and insists that an amended text, as an absolute minimum, and in accordance with the Treaty requirements, should: explicitly extend the scope to all EU institutions, offices and agencies; enhance legislative transparency, including access to legislative legal opinions, whereby any use of exceptions in the legislative procedure should constitute an exemption from the general rule of legislative transparency; clarify the relationship between transparency and data protection; include the Aarhus Convention; consider the current broad definition of a document as a minimum basis for further development; ensure appropriate access to documents and transparency in relation to international negotiations and agreements; provide for financial transparency of EU funds; not introduce any block exemptions;

8. Instructs its President to forward this resolution to the Council, the Commission and the governments and parliaments of the Member States.

1 EP-PE_TC1-COD(2008)0090.

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