Inhaltsverzeichnis2… · Web viewA strategy for fisheries in the Adriatic and Ionian Seas (A7-0234/2013 - Rapporteur: Guido Milana) European Parliament resolution of 10 September

United in diversity

TEXTS ADOPTED

at the sitting of

Tuesday10 September 2013

P7_TA-PROV(2013)09-10 PROVISIONAL EDITION PE 514.523

EN EN

EUROPEAN PARLIAMENT 2013 - 2014

CONTENTS

TEXTS ADOPTED

P7_TA-PROV(2013)0336Amendment of Council Regulation (EC) No 850/98 concerning the conseration of fishery resources through technical measures for the protection of juveniles of marine organisms ***I(A7-0256/2013 - Rapporteur: Rareş-Lucian Niculescu)European Parliament legislative resolution of 10 September 2013 on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 850/98 concerning the conservation of fishery resources through technical measures for the protection of juveniles of marine organisms (COM(2012)0432 – C7-0211/2012 – 2012/0208(COD))...........................................................................................1

P7_TA-PROV(2013)0337Property consequences of registered partnerships *(A7-0254/2013 - Rapporteur: Alexandra Thein)European Parliament legislative resolution of 10 September 2013 on the proposal for a Council regulation on jurisdiction, applicable law and the recognition and enforcement of decisions regarding the property consequences of registered partnerships (COM(2011)0127 – C7-0094/2011 – 2011/0060(CNS)).....................................................7

P7_TA-PROV(2013)0338Matrimonial property regimes *(A7-0253/2013 - Rapporteur: Alexandra Thein)European Parliament legislative resolution of 10 September 2013 on the proposal for a Council regulation on jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes (COM(2011)0126 – C7-0093/2011 – 2011/0059(CNS))............................................................................................................66

P7_TA-PROV(2013)0339European transport-technology strategy for Europe's future sustainable mobility(A7-0241/2013 - Rapporteur: Michael Cramer)European Parliament resolution of 10 September 2013 on promoting a European transport-technology strategy for Europe’s future sustainable mobility (2012/2298(INI))119

P7_TA-PROV(2013)0340Right of access to a lawyer in criminal proceedings and right to communicate upon arrest ***I(A7-0228/2013 - Rapporteur: Elena Oana Antonescu)European Parliament legislative resolution of 10 September 2013 on the proposal for a directive of the European Parliament and of the Council on the right of access to a lawyer

PE 514.523\ I

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in criminal proceedings and on the right to communicate upon arrest (COM(2011)0326 – C7-0157/2011 – 2011/0154(COD)).................................................................................127

P7_TA-PROV(2013)0341Credit agreements relating to residential property ***I(A7-0202/2012 - Rapporteur: Antolín Sánchez Presedo)Amendments adopted by the European Parliament on 10 September 2013 on the proposal for a directive of the European Parliament and of the Council on credit agreements relating to residential property (COM(2011)0142 – C7-0085/2011 – 2011/0062(COD))176

P7_TA-PROV(2013)0342Insider dealing and market manipulation (market abuse) ***I(A7-0347/2012 - Rapporteur: Arlene McCarthy)European Parliament legislative resolution of 10 September 2013 on the proposal for a regulation of the European Parliament and of the Council on insider dealing and market manipulation (market abuse) (COM(2011)0651 – C7-0360/2011 – 2011/0295(COD)). 414

P7_TA-PROV(2013)0343Amendment of Council Regulation (EC) No 2187/2005 for the conservation of fishery through technical measures in the Baltic Sea, the Belts and the Sound ***I(A7-0259/2013 - Rapporteur: Marek Józef Gróbarczyk)European Parliament legislative resolution of 10 September 2013 on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 2187/2005 for the conservation of fishery through technical measures in the Baltic Sea, the Belts and the Sound (COM(2012)0591 – C7-0332/2012 – 2012/0285(COD)).............................................................................................................636

P7_TA-PROV(2013)0344Making the internal energy market work(A7-0262/2013 - Rapporteur: Jerzy Buzek)European Parliament resolution of 10 September 2013 on making the internal energy market work (2013/2005(INI)).........................................................................................639

P7_TA-PROV(2013)0345Implementation and impact of the energy efficiency measures under the cohesion policy(A7-0271/2013 - Rapporteur: Mojca Kleva Kekuš)European Parliament resolution of 10 September 2013 on the implementation and impact of the energy efficiency measures under Cohesion Policy (2013/2038(INI))..................655

P7_TA-PROV(2013)0346A strategy for fisheries in the Adriatic and Ionian Seas(A7-0234/2013 - Rapporteur: Guido Milana)European Parliament resolution of 10 September 2013 on a fisheries strategy in the Adriatic and Ionian seas (2012/2261(INI))......................................................................667

P7_TA-PROV(2013)0347More efficient and cost-effective interpretation in the European Parliament(A7-0233/2013 - Rapporteur: Esther de Lange)European Parliament resolution of 10 September 2013 on ‘Towards more efficient and cost effective interpretation in the European Parliament’ (2011/2287(INI))...................675

II /PE 514.523

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P7_TA-PROV(2013)0348Online gambling in the internal market(A7-0218/2013 - Rapporteur: Ashley Fox)European Parliament resolution of 10 September 2013 on online gambling in the internal market (2012/2322(INI))..................................................................................................682

P7_TA-PROV(2013)0349Appointment of Luigi Berlinguer to the panel set up under Article 255 of the TFEU(B7-0384/2013)European Parliament decision of 10 September 2013 proposing the appointment of Luigi Berlinguer to the panel set up under Article 255 of the Treaty on the Functioning of the European Union (2013/2161(INS))..................................................................................693

PE 514.523\ III

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P7_TA-PROV(2013)0336

Amendment of Council Regulation (EC) No 850/98 concerning the conseration of fishery resources through technical measures for the protection of juveniles of marine organisms ***I

European Parliament legislative resolution of 10 September 2013 on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 850/98 concerning the conservation of fishery resources through technical measures for the protection of juveniles of marine organisms (COM(2012)0432 – C7-0211/2012 – 2012/0208(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

– having regard to the Commission proposal to Parliament and the Council (COM(2012)0432),

– 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 (C7-0211/2012),

– 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 14 November 20121,

– having regard to its resolution of 22 November 2012 on the conservation of fishery resources through technical measures for the protection of juveniles of marine organisms2,

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the report of the Committee on Fisheries (A7-0256/2013),

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.

1 OJ C 11, 15.1.2013, p. 86.2 Texts adopted, P7_TA(2012)0448.

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Amendment 1

Proposal for a regulationRecital 3

Text proposed by the Commission Amendment

(3) In order to apply certain provisions of Regulation (EC) No 850/98, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of the following:

(3) In order to enable certain provisions of this Regulation to be updated efficiently to reflect technical and scientific progress, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of the following:

– the division of regions into geographical areas;

– the division of regions into geographical areas;

– to amend rules concerning the conditions for the use of certain mesh size combinations;

– the amendment of rules concerning the conditions for the use of certain mesh size combinations;

– to adopt detailed rules for obtaining the percentage of target species taken by more than one fishing vessel, in order to ensure that such percentages are respected by all the vessels involved in the fishing operation;

– the adoption of detailed rules for obtaining the percentage of target species taken by more than one fishing vessel, in order to ensure that such percentages are respected by all the vessels involved in the fishing operation;

– to adopt rules concerning the technical descriptions and method of use of authorised devices that might be attached to the fishing net, and which do not obstruct or diminish the effective mesh opening of the net;

– the adoption of rules concerning the technical descriptions and method of use of authorised devices that might be attached to the fishing net, and which do not obstruct or diminish the effective mesh opening of the net;

– conditions under which vessels exceeding eight meters length overall shall be permitted to use beam trawls within certain waters of the Union;

– conditions under which vessels exceeding eight meters length overall shall be permitted to use beam trawls within certain waters of the Union;

– measures designed to address unexpectedly small or large recruitments of juveniles, changes in migration patterns or any other changes in the conservation status of fish stocks, with immediate effect.

– measures designed to address unexpectedly small or large recruitments of juveniles, changes in migration patterns or any other changes in the conservation status of fish stocks, with immediate effect;

– acts excluding specific fisheries of a Member State, in ICES sub-areas VIII, IX and X, from the application of certain provisions for gillnets, entangling nets and trammel nets, with a very low level of shark by-catches and of discards.

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Amendment 2



(4) It is of particular importance that the Commission carry out appropriate consultations during its preparatory work for the adoption of delegated acts, including at expert level.

(4) It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, especially at expert level, in order to obtain objective, rigorous, complete and up-to-date information.

Amendment 3

Proposal for a regulationArticle 1 – point 1Regulation (EC) N° 850/98Article 2 – paragraph 3


3. The regions referred to in paragraph 1 may be divided into geographical areas, in particular on the basis of the definitions referred to in paragraph 2. The Commission shall be empowered to adopt delegated acts in accordance with Article 48a concerning the division of regions into geographical areas for the purpose of identifying geographical areas where specific technical conservation measures apply.

3. The regions referred to in paragraph 1 may be divided into geographical areas, in particular on the basis of the definitions referred to in paragraph 2. The Commission shall be empowered to adopt delegated acts in accordance with Article 48a concerning the division of regions for the purpose of identifying geographical areas where specific technical conservation measures apply.

Amendment 4

Proposal for a regulationArticle 1 – point 8 a (new)Regulation (EC) N° 850/98Article 34b – paragraph 11


(8a) In Article 34b, paragraph 11 is replaced by the following:

"11. After consulting STECF, the Commission shall be empowered to adopt delegated acts excluding specific fisheries of a Member State, in ICES sub-areas

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VIII, IX and X, from the application of paragraphs 1 to 9, where information provided by Member States shows that those fisheries result in a very low level of shark by-catches and of discards."

Amendment 5

Proposal for a regulationArticle 1 – point 9Regulation (EC) No 850/98Article 45 – paragraph 1


1. The Commission shall be empowered to establish, by means of delegated acts adopted in accordance with Article 48a, technical conservation measures on the use of towed or fixed gear or on fishing activities in certain areas or during certain periods in addition to or by way of derogation to this Regulation. Those measures shall be designed to address unexpectedly small or large recruitments of juveniles, changes in migration patterns or any other changes in the conservation status of fish stocks, with immediate effect.

1. The Commission shall be empowered to establish, by means of delegated acts adopted in accordance with Article 48a, technical conservation measures on the use of towed or fixed gear or on fishing activities in certain areas or during certain periods in addition to or by way of derogation to this Regulation. Those measures shall be designed to address unexpectedly small or large recruitments of juveniles, changes in migration patterns or any other changes in the conservation status of stocks of marine organisms, with immediate effect.

Amendment 6

Proposal for a regulationArticle 1 – point 12Regulation (EC) No 850/1998Article 48a – paragraph 2


2. The delegation of powers referred to in Articles 2(3), 4(4)c, 4(5)b, 16(2), 29(6) and 45(1) shall be conferred for an indeterminate period of time.

2. The power to adopt delegated acts referred to in Article 2(3), point (c) of Article 4(4), point (b) of Article 4(5), Article 16(2), Article 29(6), Article 29d(7), Article 34b(11) and Article 45(1) 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

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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.

Amendment 7



3. The delegation of powers referred to in Articles 2(3), 4(4)c, 4(5)b, 16(2), 29(6) and 45(1) may be revoked at any time by the European Parliament or by the Council. A decision of revocation 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.

3. The delegation of powers referred to in Article 2(3), point (c) of Article 4(4), point (b) of Article 4(5), Article 16(2), Article 29(6), Article 34b(11) and Article 45(1) 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.

Amendment 8



5. A delegated act adopted pursuant to Articles 2(3), 4(4)c, 4(5)b, 16(2), 29(6) and 45(1) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of 2 months of notification of that act to the European Parliament and the

5. A delegated act adopted pursuant to Article 2(3), point (c) of Article 4(4), point (b) of Article 4(5), Article 16(2), Article 29(6), Article 34b(11) or Article 45(1) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period

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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 2 months at the initiative of the European Parliament or the Council.

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.

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P7_TA-PROV(2013)0337

Property consequences of registered partnerships *

European Parliament legislative resolution of 10 September 2013 on the proposal for a Council regulation on jurisdiction, applicable law and the recognition and enforcement of decisions regarding the property consequences of registered partnerships (COM(2011)0127 – C7-0094/2011 – 2011/0060(CNS))

(Special legislative procedure – consultation)


– having regard to the Commission proposal to the Council (COM(2011)0127),

– having regard to Article 81(3) of the Treaty on the Functioning of the European Union, pursuant to which the Council consulted Parliament (C7-0094/2011),

– having regard to the reasoned opinion submitted, within the framework of Protocol No 2 on the application of the principles of subsidiarity and proportionality, by the Italian Senate, the Polish Sejm, the Polish Senate and the Romanian Senate, asserting that the draft legislative act does not comply with the principle of subsidiarity,

– having regard to the opinion of the European Union Agency for Fundamental Rights of 31 May 2012,

– having regard to Article 55 of its Rules of Procedure,

– having regard to the report of the Committee on Legal Affairs and the opinion of the Committee on Civil Liberties, Justice and Home Affairs (A7-0254/2013),

1. Approves the Commission proposal as amended;

2. Calls on the Commission to alter its proposal accordingly, in accordance with Article 293(2) of the Treaty on the Functioning of the European Union;

3. Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

4. Asks the Council to consult Parliament again if it intends to substantially amend the Commission proposal;


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Amendment 1



(8) The specific features of these two forms of union, namely marriage and registered partnerships, and the resultant differences in the principles applicable to them, are the grounds for enacting two separate instruments containing the provisions governing matrimonial property regimes and those governing the property consequences of registered partnerships, which are the subject of this Regulation.

deleted

Amendment 2

Proposal for a regulationRecital 8 a (new)


(8a) Recognition in a Member State of a decision relating to the property consequences of a registered partnership has as its only object to allow the enforcement of the property consequences determined in that decision. It does not imply recognition by that Member State of the partnership underlying the property consequences which gave rise to that decision. Member States where the institution of a registered partnership does not exist are not obliged by this Regulation to create such an institution.

Amendment 3



(10) The Regulation covers matters arising from the property consequences of registered partnerships. 'Registered

(10) This Regulation covers matters arising from the property consequences of registered partnerships. 'Registered

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partnership' is defined here solely for the purposes of this Regulation. The actual substance of the concept is defined in the national laws of the Member States.

partnership' is defined here solely for the purposes of this Regulation. For the purposes of this Regulation, a registered partnership is a form of union other than marriage. The actual substance of the concept of a registered partnership is defined in the national laws of the Member States.

Amendment 4



(11a) This Regulation should not, however, apply to areas of civil law concerning matters other than the property regime of a registered partnership. For reasons of clarity, therefore, a number of questions which could be seen as having a link with matters of that regime should be explicitly excluded from the scope of this Regulation.

(Corresponds to recital 11 in Regulation (EU) No 650/2012 and AM 3 of the report in 2011/0059 (CNS).)

Amendment 5



(12) As the maintenance obligations between registered partners are provided for in Council Regulation (EC) No 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations, they must be excluded from the scope of this Regulation, as should issues relating to the validity and effects of gifts covered by Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the

(12) The maintenance obligations between registered partners, which are provided for in Council Regulation (EC) No 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations, should be excluded from the scope of this Regulation, as should issues relating to succession, which are covered by Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable

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law applicable to contractual obligations. law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession1.____________________

1 OJ L 201, 27.7.2012, p. 107.

(Corresponds to AM 4 of the report in 2011/0059 (CNS).)

Amendment 6



(13) Issues relating to the nature of rights in rem that may exist under the national law of Member States, and those linked to the disclosure of such rights, should also be excluded from the scope of this Regulation, as they are in Regulation (EU) No ... [of the European Parliament and of the Council on jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession]. This means that the courts of the Member State in which a property of one or both partners is located may take measures under property law, regarding such things as the recording of a transfer of the property in the public register, where the law of that Member State so provides.

(13) This Regulation – like Regulation (EU) No 650/2012 – should not affect the limited number (‘numerus clausus’) of rights in rem known in the national law of some Member States. A Member State should not be required to recognise a right in rem relating to property located in that Member State if the right in rem in question is not known in its law.


Amendment 7



(13a) However, in order to allow the beneficiaries to enjoy in another Member

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State the rights which have been created or transferred to them by the liquidation of the property regime of a registered partnership, this Regulation should provide for the adaptation of an unknown right in rem to the closest equivalent right in rem under the law of that other Member State. In the context of such an adaptation, account should be taken of the aims and the interests pursued by the specific right in rem and the effects attached to it. For the purposes of determining the closest equivalent national right in rem, the authorities or competent persons of the State whose law applies to the property regime of the registered partnership may be contacted for further information on the nature and the effects of the right. To that end, the existing networks in the area of judicial cooperation in civil and commercial matters could be used as well as any other available means facilitating the understanding of foreign law.


Amendment 8

Proposal for a regulationRecital 13 b (new)


(13b) The requirements for the recording in a register of a right in immovable or movable property should be excluded from the scope of this Regulation. It should therefore be the law of the Member State in which the register is kept (for immoveable property, the lex rei sitae) which determines under what legal conditions and how the recording must be carried out and which authorities, such as land registers or notaries, are in charge of checking that all requirements are met and that the documentation presented or established is sufficient or contains the

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necessary information.

(Corresponds in part to recital 18 in Regulation (EU) No 650/2012 and AM 7 of the report in 2011/0059 (CNS).)

Amendment 9

Proposal for a regulationRecital 13 c (new)


(13c) The effects of the recording of a right in a register should also be excluded from the scope of this Regulation. It should therefore be the law of the Member State in which the register is kept which determines whether the recording is, for instance, declaratory or constitutive in effect. Thus, where, for example, the acquisition of a right in an immovable property requires a recording in a register under the law of the Member State in which the register is kept in order to ensure the erga omnes effect of registers or to protect legal transactions, the moment of such acquisition should be governed by the law of that Member State.


Amendment 10

Proposal for a regulationRecital 13 d (new)


(13d) Like Regulation (EU) No 650/2012, this Regulation should respect the different systems for dealing with property-regime issues applied in the Member States. For the purposes of this Regulation, the term ‘court’ should therefore be given a broad meaning so as to cover not only courts in the true sense of the word, exercising judicial functions, but also the notaries or registry offices in some Member States who or which, in

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certain matters of property regimes, exercise judicial functions like courts, and the notaries and legal professionals who, in some Member States, exercise judicial functions in a given property-regime matter by delegation of power by a court. All courts as defined in this Regulation should be bound by the rules of jurisdiction set out in this Regulation. Conversely, the term ‘court’ should not cover non-judicial authorities of a Member State empowered under national law to deal with matters of property regimes, such as the notaries in most Member States where, as is usually the case, they are not exercising judicial functions.


Amendment 11



(15) Similarly, this Regulation must provide for extension of the jurisdiction of the courts of a Member State handling an application for dissolution or annulment of a registered partnership to include matters relating to the property consequences of the registered partnership arising in connection with that application, if the partners so agree.

(15) Similarly, this Regulation must provide for extension of the jurisdiction of the courts of a Member State handling an application for dissolution or annulment of a registered partnership to include matters relating to the property consequences of the registered partnership arising in connection with that application, if the jurisdiction of the courts concerned has been recognised expressly or impliedly by the partners.

Amendment 12



(15a) Where matters of property regimes are not linked to the dissolution or annulment of the partnership or to the

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death of a partner, the partners may decide to submit questions related to their property regime to the courts of the Member State of the law they chose as the law applicable to their property regime. This requires an agreement between the partners, which may be concluded, at the latest, until the matter is put before the court and subsequently as provided for by the lex fori.


Amendment 13



(16) In other situations, this Regulation must protect the territorial jurisdiction of a Member State's courts to deal with claims relating to the property consequences of the registered partnership in accordance with a list of criteria listed in order of precedence designed to ensure the existence of a close link between the partners and the Member State whose courts have jurisdiction. Courts other than those of the Member State where the partnership was registered may decline this extension of jurisdiction if their domestic law does not provide for registered partnerships. Finally, if no court has jurisdiction to deal with the situation in the light of the other provisions of this Regulation, an alternative jurisdictional rule has been included to avoid any risk of denial of justice.

(16) This Regulation must protect the territorial jurisdiction of a Member State’s courts over applications concerning the property consequences of the registered partnership to be determined in cases other than those of separation of the partners or death of a partner in accordance with a set of criteria listed in order of precedence designed to ensure the existence of a close link between the partners and the Member State whose courts have jurisdiction. Courts other than those of the Member State where the partnership was registered should be given the opportunity to decline this extension of jurisdiction if their domestic law does not provide for registered partnerships.

Amendment 14



(16a) In order to remedy, in particular, situations of denial of justice this

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Regulation should provide a forum necessitatis allowing a court of a Member State, on an exceptional basis, to rule on a property regime case which is closely connected with a third State. Such an exceptional basis may be deemed to exist when proceedings prove impossible in the third State in question, for example because of civil war, or when a beneficiary cannot reasonably be expected to initiate or conduct proceedings in that State. Jurisdiction based on forum necessitatis should, however, be exercised only if the case has a sufficient connection with the Member State of the court seised.


Amendment 15



(18) To facilitate the partners' management of their property, the law of the Member State where the partnership was registered will apply to all the partners' property, even if this law is not the law of a Member State.

(18) To facilitate registered partners’ management of their property, this Regulation should authorise them to choose the law applicable to their property, regardless of the nature or location of the property, from amongst the legal systems with which they have close links because of residence or their nationality. There is no reason why that choice should be denied to registered partnerships. If the partners choose a law which does not recognise registered partnerships, the choice of law should be considered null and void. The law determined by the objective connection should then be applied. Even though the parties concerned are generally well informed about their rights, the requirement concerning particular legal protection should be countered by the requirement for judicial advice on the impact of the choice of law. That requirement will be met, in particular,

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where the advice is guaranteed by additional formal rules concerning the choice of law, notably on notarisation.

Amendment 16



(18a) In order to create legal certainty and clarity, this Regulation should also include a rule concerning multiple registrations of a registered partnership, which should relate to the most recent registration. The Member States should ensure that there are no multiple registrations of registered partnerships.

Amendment 17



(18b) Where no applicable law is chosen, and with a view to reconciling predictability and legal certainty with consideration of the life actually lived by the partners, this Regulation must introduce harmonised conflict-of-laws rules to establish the law applicable to all the partners’ property on the basis of a scale of connecting factors. The common habitual residence of the partners at the time of the establishment of the partnership or the first common habitual residence of the partners following the establishment of the partnership should constitute the first criterion, ahead of the partners' common nationality of the at the time of the establishment of the partnership. If neither of those criteria applies, or failing a first common habitual residence in cases where the partners have dual common nationalities at the time of the establishment of the registered partnership, the third criterion should be

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the State with which the partners have the closest links, taking into account all the circumstances, it being made clear that those links are to be considered as they were at the time of the establishment of the partnership. The laws defined by those criteria should not be applied if they do not recognise registered partnerships. As a default rule the law of the State in which the partnership was registered should apply to the partners’ property.


Amendment 18



(18c) If nationality is used to determine the applicable law, account must be taken of the fact that some States with a legal system based on common law use domicile and not nationality as a connecting factor.

Amendment 19



(18d) To ensure the legal certainty of transactions and to prevent any change of the law applicable to the property consequences of registered partnerships being made without the partners being notified, no such change should be made save at the express request of the parties. Such a change by the partners should not have retroactive effect unless they expressly so stipulate. Whatever the case, it may not infringe the rights of third parties and the validity of transactions entered into previously.

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Amendment 20



(19a) All necessary information should be made available in a simple manner and by appropriate means, in particular through a multilingual internet site of the Commission.

Amendment 21


Text of the Commission Amendment

(19b) Exchanges of good practice among legal practitioners should be encouraged.

Amendment 22



(19c) The Commission should introduce an information and training tool for the relevant court officials and legal practitioners by setting up an interactive portal in all official languages of the institutions of the Union, including a system for sharing professional expertise and practices.

Amendment 23



(23) Since mutual recognition of decisions rendered in the Member States is one of the objectives of this Regulation, this

(23) Since mutual recognition of decisions on questions of property regimes concerning registered partnerships

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Regulation must lay down rules on the recognition and enforcement of decisions on the basis of Regulation (EC) No 44/2001, adjusted where necessary to meet the specific requirements of matters covered by this Regulation. Therefore it should not be possible in a Member State to refuse the recognition and enforcement, in whole or in part, of a decision concerning the property consequences of a registered partnership if that Member State's national law does not recognise such partnerships or provides for different consequences with regard to the property.

rendered in the Member States is one of the objectives of this Regulation, this Regulation must lay down rules on the recognition, enforceability and enforcement of decisions on the basis of other legal instruments in the area of judicial cooperation in civil matters, adjusted where necessary to meet the specific requirements of matters covered by this Regulation. Therefore, it should not be possible in a Member State to refuse the recognition and enforcement, in whole or in part, of a decision concerning the property consequences of a registered partnership if that Member State's national law does not recognise such partnerships or provides for different consequences with regard to the property.


Amendment 24



(24) In order to take into account different ways of dealing with matters of the property consequences of registered partnerships in the Member States, this Regulation must guarantee the recognition and enforcement of authentic instruments. Nevertheless, the authentic instruments cannot be treated as court decisions with regard to their recognition. The recognition of authentic instruments means that they enjoy the same evidentiary effect with regard to their contents and the same effects as in their Member State of origin, and a presumption of validity which may be rebutted if they are contested.

(24) In order to take into account the different systems for dealing with matters of the property consequences of registered partnerships in the Member States, this Regulation should guarantee the acceptance and enforceability in all Member States of authentic instruments in matters of property regimes concerning registered partnerships.


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Amendment 25



(24a) In terms of the recognition, enforceability and enforcement of judicial decisions and of the acceptance and enforceability of authentic instruments and the enforceability of court settlements, this Regulation should lay down rules on the basis of, in particular, Regulation (EU) No 650/2012.


Amendment 26



(25) While the law applicable to the property consequences of registered partnerships must govern the legal relationship between a partner and a third party, the conditions for relying on that law should be regulated by the law of the Member State of habitual residence of the partner or the third party, in the interests of the third party's protection. The law of that Member State may thus provide that the partner may invoke the law of his or her property regime against the third party only if the conditions of registration or disclosure laid down in that Member State have been complied with, unless the third party was aware or ought to have been aware of the law applicable to the property consequences of the registered partnership.

(25) The law applicable to the property consequences of registered partnerships under this Regulation must govern the legal relationship between a registered partner and a third party. However, in the interests of the third party’s protection, neither partner should be able to invoke that law or overriding mandatory provisions in a legal relationship between one of the partners and a third party if the partner who has a legal relationship with the third party, and the third party, are habitually resident in the same State, which is not the State whose law is applicable to the property regime of the registered partnership. Exceptions should apply if the third party does not merit protection, in other words if he or she was aware, or ought to have been aware, of the law applicable, or if the requirements applicable to registration or publicity in the State were complied with.


20

Amendment 27



(26a) In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission with regard to the establishment and subsequent amendment of the attestations and forms pertaining to the declaration of enforceability of decisions, court settlements and authentic instruments. 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 control by Member States of the Commission’s exercise of implementing powers1.

______________

1OJ L 55, 28.2.2011, p. 13.


Amendment 28



(26b) The advisory procedure should be used for the adoption of implementing acts establishing and subsequently amending the attestations and forms provided for in this Regulation in accordance with the procedure laid down in Article 4 of Regulation (EU) No 182/2011.


21

Amendment 29



(28) This Regulation respects fundamental rights and observes the principles recognised in the Charter of Fundamental Rights of the European Union, in particular Articles 7, 9, 17, 21 and 47 concerning, respectively, respect for private and family life, the right to marry and to found a family according to national laws, property rights, the prohibition of any form of discrimination and the right to an effective remedy and to a fair trial. The Member States' courts must apply this Regulation in a manner consistent with these rights and principles.

(28) This Regulation respects fundamental rights and observes the principles recognised in the Charter of Fundamental Rights of the European Union, in particular Articles 7, 9, 17, 20, 21 and 47 concerning, respectively, respect for private and family life, the right to marry and to found a family according to national laws, property rights, equality before the law, the prohibition of any form of discrimination and the right to an effective remedy and to a fair trial. The Member States’ courts must apply this Regulation in a manner consistent with those rights and principles.

(Corresponds in part to recital 81 in Regulation (EU) No 650/2012 and AM 25 of the report in 2011/0059 (CNS).)

Amendment 30

Proposal for a regulationArticle 1 – paragraph 3 – point a


(a) the personal effects of registered partnerships,

deleted

Amendment 31

Proposal for a regulationArticle 1 – paragraph 3 – point b


(b) the legal capacity of partners, (b) the general capacity of partners,


Amendment 32

Proposal for a regulationArticle 1 – paragraph 3 – point b a (new)

22


(ba) the existence, validity or recognition of the partnership,


Amendment 33

Proposal for a regulationArticle 1 – paragraph 3 – point d


(d) gifts between partners, deleted

Amendment 34

Proposal for a regulationArticle 1 – paragraph 3 – point e


(e) the succession rights of a surviving partner,

(e) issues of succession concerning the surviving partner,


Amendment 35

Proposal for a regulationArticle 1 – paragraph 3 – point f


(f) companies set up between registered partners,

(f) questions governed by the law of companies and other bodies, corporate or unincorporated,

(Corresponds to Article 1, point (h), of Regulation (EU) No 650/2012 and AM 30 of the report in 2011/0059 (CNS).)

Amendment 36

Proposal for a regulationArticle 1 – paragraph 3 – point g

23


(g) the nature of rights in rem relating to a property and the disclosure of such rights.

(g) the nature of rights in rem,

(Corresponds to Article 1, point (k), of Regulation (EU) No 650/2012 and AM 31 of the report in 2011/0059 (CNS).)

Amendment 37

Proposal for a regulationArticle 1 – paragraph 3 – point g a (new)


(ga) any recording in a register of rights in immovable or movable property, including the legal requirements for such recording, and the effects of recording or failing to record such rights in a register, and

(Corresponds to Article 1, point (l), of Regulation (EU) No 650/2012 and AM 32 of the report in 2011/0059 (CNS).)

Amendment 38

Proposal for a regulationArticle 1 – paragraph 3 – point g b (new)


(gb) questions of entitlement to transfer or adjustment, in the case of a dissolution of the registered partnership, between partners or former partners, of rights to retirement or disability pensions accrued during the registered partnership.


Amendment 39



(b) 'registered partnership': regime (b) ‘registered partnership’: regime

24

governing the shared life of two people which is provided for in law and is registered by an official authority;

governing the shared life of two people which is established in the manner provided for in law in the Member State where the partnership is registered;

Amendment 40



(ba) ‘partnership agreement’: any agreement by means of which the partners or future partners organise the property regime of their partnership;


Amendment 41

Proposal for a regulationArticle 2 – paragraph 1 – point c – introductory part


(c) 'authentic instrument': an instrument which has been officially drawn up or registered as an authentic instrument in the Member State of origin and the authenticity of which:

(c) ‘authentic instrument’: a document in a matter concerning the property regime in a registered partnership which has been formally drawn up or registered as an authentic instrument in a Member State and the authenticity of which:

(Corresponds to Article 3(1), point (i), of Regulation (EU) No 650/2012 and AM 36 of the report in 2011/0059 (CNS).)

Amendment 42



(d) 'decision': any decision given in a matter of the property consequences of a registered partnership by a court of a Member State, whatever the decision may be called, including the terms 'decree', 'judgment', 'order' or 'writ of execution', and the determination of costs or expenses

(d) ‘decision’: any decision given in a matter of the property consequences of a registered partnership by a court of a Member State, whatever the decision may be called, including a decision on the determination of costs or expenses by an officer of the court;

25

by an officer of the court;

(Corresponds to Article 31(1), point (g), of Regulation (EU) No 650/2012 and AM 37 of the report in 2011/0059 (CNS).)

Amendment 43



(e) 'Member State of origin': the Member State in which, as the case may be, the decision was given, the partnership contract concluded, the authentic instrument or the instrument liquidating the common property or any other instrument produced by or before the judicial authority or authority of delegation was drawn up;

(e) ‘Member State of origin’: the Member State in which the decision has been given the authentic instrument established or the court settlement approved or concluded;

(Corresponds to Article 3(1), point (e), of Regulation (EU) No 650/2012 and AM 38 of the report in 2011/0059 (CNS).)

Amendment 44



(f) 'Member State addressed': the Member State in which recognition and/or enforcement of the decision, partnership contract, authentic instrument, instrument of liquidation of the common property or any other instrument produced by or before the judicial authority or authority of delegation is requested;

(f) ‘Member State of enforcement’: the Member State in which the declaration of enforceability or the enforcement of the decision, the court settlement or the authentic instrument is sought;

(Corresponds to Article 3(1), point (f), of Regulation (EU) No 650/2012 and AM 39 of the report in 2011/0059 (CNS).)

Amendment 45


26


(g) 'court': any competent judicial authority in the Member States which carries out a judicial function in matters of the property consequences of registered partnerships or any other non-judicial authority or person carrying out, by delegation or designation by a judicial authority of a Member State, the functions falling within the jurisdiction of the courts as provided for in this Regulation;

deleted


Amendment 46

Proposal for a regulationArticle 2 – paragraph 1 a (new)


1a. For the purposes of this Regulation the term ‘court’ means any judicial authority and all other authorities and legal professionals with competence in matters of property regimes in registered partnerships which exercise judicial functions or act pursuant to a delegation of power by a judicial authority or act under the control of a judicial authority, provided that such other authorities and legal professionals offer guarantees with regard to impartiality and the right of all parties to be heard and provided that their decisions under the law of the Member State in which they operate:

(a) may be made the subject of an appeal to, or review by, a judicial authority; and

(b) have a similar force and effect as a decision of a judicial authority on the same matter.

The Member States shall notify the Commission of the other authorities and legal professionals referred to in the first subparagraph in accordance with Article

27

33a(1).

Amendment 47

Proposal for a regulationArticle -3


Article -3

Jurisdiction in matters of property regimes within the Member States

This Regulation shall not affect domestic jurisdiction over property regime cases in the Member States.


Amendment 48

Proposal for a regulationArticle 3 – paragraph 1


1. The courts of a Member State seised by an application concerning the succession of a registered partner under Regulation (EC) ... [of the European Parliament and of the Council on jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession] shall also have jurisdiction to rule on matters of the property consequences of the partnership arising in connection with the application.

1. The courts of a Member State seised in matters of the succession of a registered partner under Regulation (EU) No 650/2012 shall also have jurisdiction to rule on matters of the property consequences of the partnership arising in connection with the succession case.


Amendment 49

Proposal for a regulationArticle 4


Jurisdiction in cases of separation of the Jurisdiction in cases of dissolution or

28

partners annulment

The courts of a Member State seised by an application for dissolution or annulment of a registered partnership shall also have jurisdiction, if the partners so agree, to rule on the property consequences arising in connection with the application.

The courts of a Member State seised of an application for dissolution or annulment of a registered partnership shall also have jurisdiction to rule on the property consequences arising in connection with the application if the jurisdiction of the courts concerned has been recognised, expressly or otherwise in an unequivocal manner by the partners.

Such an agreement may be concluded at any time, even during the proceedings. If it is concluded before the proceedings, it must be drawn up in writing and dated and signed by both parties.

Failing agreement between the partners, jurisdiction is governed by Article 5.

Failing recognition of the jurisdiction of the court referred to in paragraph 1, jurisdiction shall be governed by Article 5.


Amendment 50

Proposal for a regulationArticle 4 a (new)


Article 4a

Choice-of-court agreement

1. The partners may agree that the courts of the Member State whose law they have chosen, in accordance with Article 15b, as the law applicable to the property regime of their partnership are to have jurisdiction to rule on that property regime. Such jurisdiction shall be exclusive.

Without prejudice to the third subparagraph, a choice-of-court agreement may be concluded or amended at any time, but at the latest when the court is seised.

If the law of the forum so provides, the partners may also choose the competent jurisdiction after the court has been seised. In that event, such choice shall be

29

recorded in court in accordance with the law of the forum.

If the agreement is concluded before the proceedings, it must be drawn up in writing and dated and signed by both parties. Any communication by electronic means which provides a durable record of the agreement shall be equivalent to ‘writing’.

2. The partners may also agree that, if no court has been chosen, the courts of the Member State whose law is applicable pursuant to Article 15 to the property regime of their partnership are to have jurisdiction.

Amendment 51

Proposal for a regulationArticle 4 b (new)


Article 4b

Jurisdiction based on the appearance of the defendant

1. Apart from jurisdiction derived from other provisions of this Regulation, a court of a Member State whose law has been chosen under Article -15b, or whose law is applicable under Article 15, and before which a defendant enters an appearance shall have jurisdiction. This rule shall not apply where an appearance was entered to contest the jurisdiction, or where another court has jurisdiction by virtue of Article 3, Article 4 or Article 4a.

2. Before assuming jurisdiction under paragraph 1, the court shall ensure that the defendant is informed of his or her right to contest the jurisdiction and of the consequences of entering or not entering an appearance.


30

Amendment 52



1. In cases other than those provided for in Articles 3 and 4, jurisdiction to rule on proceedings concerning the property consequences of a registered partnership shall lie with the courts of the Member State:

1. Where no court has jurisdiction pursuant to Articles 3, 4 and 4a, jurisdiction to rule on proceedings concerning property consequences shall lie with the courts of the Member State:

(a) of the partners' common habitual residence, or failing that,

(a) in whose territory the partners are habitually resident at the time when the court is seised, or failing that,

(b) of the last common habitual residence if one of them still resides there, or failing that

(b) in whose territory the partners were last habitually resident if one of them still resides there at the time when the court is seised, or failing that,

(c) of the defendant's habitual residence, or failing that,

(c) in whose territory the defendant is habitually resident at the time when the court is seised, or failing that,

(ca) of the nationality of both partners at the time when the court is seised or, in the case of the United Kingdom and Ireland, of their common domicile, or failing that,

(d) of registration of the partnership. (d) of registration of the partnership.

2. The courts referred to in points (a), (b) and (c) of paragraph 1 may decline jurisdiction if their law does not recognise the institution of registered partnership.

2. The courts referred to in points (a), (b), (c) and (ca) of paragraph 1 may decline jurisdiction if their law does not recognise the institution of registered partnership.

(Regarding Article 5(ca)(new), see the amendment to Article 6(1)(b), Corresponds to AM 47 of the report in 2011/0059 (CNS).)

Amendment 53



Where no court has jurisdiction under Articles 3, 4 or 5, or the court designated

Where no court of a Member State has jurisdiction pursuant to Articles 3, 4, 4a or

31

by those provisions has declined jurisdiction, the courts of a Member State shall have jurisdiction in so far as:

5, or the court has declined jurisdiction, the courts of a Member State shall have jurisdiction in so far as immovable property or registered assets of one or both partners are located in the territory of that Member State; in that event the court seised shall have jurisdiction to rule only in respect of the immovable property or registered assets in question.

(a) property or properties of one or both partners are located in the territory of that Member State, but in that event the court seised shall have jurisdiction to rule only in respect of the property or properties in question;

(b) both partners are nationals of that Member State or, in the case of the United Kingdom and Ireland, have their common 'domicile' there.

In such cases the courts of a Member State shall have jurisdiction to rule only on immovable property or registered assets located in that Member State.


Amendment 54



Where no court of a Member State has jurisdiction under Articles 3, 4, 5 or 6, or the court designated by those provisions has declined jurisdiction, the courts of a Member State may, exceptionally and if the case has a sufficient connection with that Member State, rule on the property consequences of a registered partnership if proceedings would be impossible or cannot reasonably be brought or conducted in a third State.

Where no court of a Member State has jurisdiction pursuant to Articles 3, 4, 4a, 5 or 6, the courts of a Member State may, on an exceptional basis, rule on a property regime case if proceedings cannot reasonably be brought or conducted, or would be impossible, in a third State with which the case is closely connected.

The case must have a sufficient connection with the Member State of the court seised.

(Corresponds to Article 11 of Regulation (EU) No 650/2012 and AM 49 of the report in 2011/0059 (CNS).)

32

Amendment 55



The court seised pursuant to Articles 3, 4, 5, 6 or 7 before which proceedings are pending shall also have jurisdiction to rule on a counterclaim if it falls within the scope of this Regulation.

The court seised pursuant to Articles 3, 4, 4a, 5, 6 or 7 before which proceedings are pending shall also have jurisdiction to rule on a counterclaim if it falls within the scope of this Regulation.

If a court has been seised pursuant to Article 6, its jurisdiction to rule on a counterclaim shall be limited to the immovable property or registered assets which form the subject-matter of the main proceedings.


Amendment 56



A court shall be deemed to be seised: For the purposes of this Chapter, a court shall be deemed to be seised:

(a) at the time when(…) the document instituting the proceedings or an equivalent document is lodged with the court, provided that the applicant(…) has not subsequently failed to take the steps he (…)was required to take to have service effected on the defendant, or

(a) at the time when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the applicant has not subsequently failed to take the steps he was required to take to have service effected on the defendant;

(b) where the document has to be served before being lodged with the court, on the date on which it is formally drawn up or registered by the authority responsible for service, provided that the applicant has not subsequently failed to take the steps he or she was required to take to have the document lodged with the court.

(b) if the document has to be served before being lodged with the court, on the date on which it is formally drawn up or registered by the authority responsible for service, provided that the applicant has not subsequently failed to take the steps he was required to take to have the document lodged with the court, or

(ba) if the proceedings are opened of the court's own motion, at the time when the decision to open the proceedings is taken

33

by the court, or, where such a decision is not required, at the time when the case is registered by the court.


Amendment 57



1. Where proceedings involving the same cause of action and between the same parties are brought before courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.

1. Where proceedings involving the same cause of action and between the partners are brought before courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.


Amendment 59



2. Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.

2. Where those actions are pending at first instance, any court other than the court first seised may also, on the application of one of the partners, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.


34

Amendment 60



Provisional, including protective, measures provided for by the law of a Member State may be requested from the courts of that State, even where, under this Regulation, the courts of another Member State have jurisdiction as to the substance of the matter.

Application may be made to the courts of a Member State for such provisional, including protective, measures as may be available under the law of that State, even if, under this Regulation, the courts of another Member State have jurisdiction as to the substance of the matter.


Amendment 61

Proposal for a regulationArticle -15 (new)


Article -15

Unity and scope of the applicable law

1. The law applicable to the property consequences of a registered partnership shall apply to all assets that are subject to those consequences, regardless of where the assets are located.

2. The law applicable to the property consequences of registered partnerships shall determine, without prejudice to points (g) and (ga) of Article 1(3), inter alia:

(a) the division of the partners’ property into different categories before and after the registered partnership;

(b) the transfer of property from one category to another;

(c) liability for the other partner’s debts, where necessary;

(d) the partners’ rights of disposal during the partnership;

35

(e) dissolution and liquidation of the property regime of a registered partnership and division of property in the event of dissolution of the registered partnership;

(f) the impact of the property regime of a registered partnership on a legal relationship between one of the partners and a third party on the basis of Article 31.

(Corresponds to AMs 57 and 58 of the report in 2011/0059 (CNS).)

Amendment 62

Proposal for a regulationArticle -15 a (new)


Article -15a

Universal application

Any law specified by this Regulation shall be applied whether or not it is the law of a Member State.

(See amendment to Article 16; the text has been changed. Corresponds to Article 20 of Regulation (EU) No 650/2012 and AM 59 of the report in 2011/0059 (CNS).)

Amendment 63

Proposal for a regulationArticle -15 b (new)


Article -15b

Choice of law

1. The partners or future partners may agree on or change the law applicable to the property regime of their registered partnership, provided that that law recognises the institution of registered partnership and attaches property consequences to it, and provided that it is one of the following:

(a) the law of the State in which the

36

partners or future partners, or one of them, is/are habitually resident at the time when the agreement is concluded, or

(b) the law of a State of which one of the partners or future partners is a national at the time when the agreement is concluded, or

(c) the law of a State in which the partnership is registered.

2. If the law chosen does not recognise the institution of registered partnership or does not attach property consequences to it, the applicable law shall be determined in accordance with Article 15.

3. The choice of law pursuant to paragraph 1 shall be valid only if the partners or future partners can prove that, prior to making the choice, they have taken advice on its legal consequences.

This requirement shall be deemed to be fulfilled if the provision of advice is ensured by additional national formal rules governing the choice of law.

4. Unless the partners agree otherwise, a change of the law applicable to the property regime of their registered partnership made during the partnership shall have prospective effect only.

5. If the partners choose to make that change retroactive, its retroactive effect shall not affect the validity of previous transactions entered into under the law hitherto applicable or the rights of third parties under the law previously applicable.

(Corresponds in part to AM 60 of the report in 2011/0059 (CNS).)

Amendment 64



Determination of the applicable law Establishing the applicable law where no

37

choice is made

The law applicable to the property consequences of registered partnerships is the law of the State in which the partnership was registered.

1. If no choice-of-law agreement is made pursuant to Article -15b, the property consequences of registered partnerships shall be governed by the law of the State:

(a) in which the partners have their first common habitual residence at the time when their partnership was established or where they set up their first common habitual residence after establishing their partnership, or

(b) whose nationality of both partners have at the time when their partnership is established, or

(c) with which the partners have the closest ties at the time when their partnership is established, with due consideration given to all the circumstances, or

(d) in which the partnership is registered.

2. Points (a), (b) and (c) of paragraph 1 shall not apply if the law in question does not recognise the institution of registered partnership.

3. Point (b) of paragraph 1 shall not apply if the partners have more than one common nationality.

(Corresponds in part to AM 61 et seq. of the report in 2011/0059 (CNS).)

Amendment 65



Article 15a

Multiple registration

If registered partnerships between the same persons exist in different States, the partnership which was most recently established, dating from the day on which it was established, shall be decisive for the purposes of determining the applicable law pursuant to point (d) of Article 15(1).

38

Amendment 66



Article 16 deleted

Universal nature of the conflict-of-law rule

Any law determined in accordance with the provisions of this Chapter shall apply even if it is not the law of a Member State.


Amendment 67



Article 16a

Formal requirements for choosing the applicable law

1. The agreement on the choice of law referred to in Article -15b shall be expressed in writing, dated and signed by both partners. Any communication by electronic means which provides a durable record of the agreement shall be deemed equivalent to writing.

2. That agreement shall comply with the formal requirements of the law applicable to the property regime of the registered partnership or the law of the State in which the agreement was concluded.

3. However, if the law of the State in which both partners have their habitual residence at the time of their agreement on the choice of applicable law provides for additional formal requirements for agreements of that type or, failing that, for the partnership agreement, those requirements shall apply.

4. If the partners are habitually resident

39

in different States at the time when the choice is made and the laws of those States provide for different formal requirements, the agreement shall be formally valid if it satisfies the requirements of either of those laws.

(Similar to Article 5(2) of Regulation (EU) No 650/2012. See also AM 65 of the report in 2011/0059 (CNS).)

Amendment 68



Article 16b

Formal requirements for a partnership agreement

The formal aspects of a partnership agreement shall be governed mutatis mutandis by Article 16a. Any additional formal requirements within the meaning of Article 16a(3) shall, for the purposes of this Article relate only to the partnership agreement.


Amendment 69

Proposal for a regulationArticle 16 c (new)


Article 16c

Adaptation of rights in rem

Where a person invokes a right in rem to which he or she is entitled under the law applicable to the property regime of the registered partnership and the law of the Member State in which that right is invoked does not know the right in rem in question, that right shall, if necessary and to the extent possible, be adapted to the closest equivalent right in rem under the

40

law of that State, taking into account the aims and the interests pursued by the specific right in rem and the effects attached to it.


Amendment 70



The provisions of this Regulation shall be without prejudice to the application of imperative provisions the upholding of which is regarded as crucial by a Member State for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the property consequences of a registered partnership under this Regulation.

1. Overriding mandatory provisions are provisions the disregard for which would be manifestly incompatible with the public policy (ordre public) of the Member State concerned. The competent authorities should not interpret the public policy exception in a way that is contrary to the Charter of Fundamental rights of the European Union, and in particular Article 21 thereof, which prohibits all forms of discrimination.

2. This Regulation shall not restrict the application of the overriding mandatory provisions of the law of the forum, without prejudice to the transaction protection provisions applicable pursuant to Article 31.


Amendment 71



1. The application of a rule of the law determined by this Regulation may be refused only if such application is manifestly incompatible with the public policy of the forum.

1. The application of a rule of the law of any State determined by this Regulation may be refused only if its application is manifestly incompatible with the public policy of the forum.

41


Amendment 72



Where this Regulation provides for the application of the law of a State, it means the rules of substantive law in force in that State other than its rules of private international law.

Where this Regulation provides for the application of the law of a State, it refers to the rules of law in force in that State other than its rules of private international law.


Amendment 73



States with two or more legal systems — territorial conflicts of laws

States with more than one legal system — territorial conflicts of laws

1. Where the law specified by this Regulation is that of a State which comprises several territorial units each of which has its own rules of law in respect of property regimes of registered partnerships, the internal conflict-of-laws rules of that State shall determine the relevant territorial unit whose rules of law are to apply.

Where a State comprises several territorial units, each of which has its own system of law or its own set of rules concerning matters governed by this Regulation:

1a. In the absence of such internal conflict-of-laws:rules:

(a) any reference to the law of that State shall be construed, for the purposes of determining the law applicable under this Regulation, as a reference to the law in force in the relevant territorial unit;

(a) any reference to the law of that State referred to in paragraph 1 shall, for the purposes of determining the law applicable pursuant to provisions referring to the habitual residence of the partners, be construed as referring to the law in force in the territorial unit in which the partners have their habitual residence;

42

(b) any reference to habitual residence in that State shall be construed as a reference to habitual residence in a territorial unit;

(b) any reference to the law of the State referred to in paragraph 1 shall, for the purposes of determining the law applicable pursuant to provisions referring to the nationality of the partners, be construed as referring to the law of the territorial unit with which the partners have the closest connection;

(c) any reference to nationality shall refer to the territorial unit determined by the law of that State, or, in the absence of relevant rules, to the territorial unit chosen by the parties or, in absence of such a choice, to the territorial unit with which the spouse or spouses has or have the closest connection.

(c) any reference to the law of the State referred to in paragraph 1 shall, for the purposes of determining the law applicable pursuant to any other provisions referring to other elements as connecting factors, be construed as referring to the law of the territorial unit in which the relevant element is located.


Amendment 74



Article 20a

States with more than one legal system – inter-personal conflicts of laws

In relation to a State which has two or more systems of law or sets of rules applicable to different categories of persons in respect of the property regimes of registered partnerships, any reference to the law of such a State shall be construed as referring to the system of law or set of rules determined by the rules in force in that State. In the absence of such rules, the system of law or the set of rules with which the partners have the closest connection shall apply.


Amendment 75


43


Article 20b

Non-application of this Regulation to internal conflicts of laws

A Member State which comprises several territorial units each of which has its own rules of law in respect of the property regimes of registered partnerships shall not be required to apply this Regulation to conflicts of laws arising between such units only.


Amendment 76


Text of the Commission Amendment

1. A decision given in a Member State shall be recognised in the other Member States without any special procedure being required.

1. A decision given in a Member State shall be recognised in the other Member States without any special procedure being required. The recognition of such decisions shall not, however, imply that Member States recognise registered partnerships as a legal institution in their own law.

Amendment 77



2. Any interested party who raises the recognition of a decision as the principal issue in a dispute may, in accordance with the procedures set out in Articles [38 to 56] of Regulation (EC) No 44/2001, apply for the decision to be recognised.

2. Any interested party who raises the recognition of a decision as the principal issue in a dispute may, in accordance with the procedures set out in Articles 27b to 27o, apply for that decision to be recognised.


44

Amendment 78

Proposal for a regulationArticle 22 – point a


(a) such recognition is manifestly contrary to public policy in the Member State addressed;

(a) such recognition is manifestly contrary to public policy in the Member State in which recognition is sought;


Amendment 79

Proposal for a regulationArticle 22 – point b


(b) where it was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him or her to arrange for his or her defence, unless the defendant failed to commence proceedings to challenge the decision when it was possible for him or her to do so;

(b) where it was given in default of appearance, if the defendant was not served with the document which instituted the proceedings or with an equivalent document in sufficient time and in such a way as to enable him or her to arrange for his or her defence, unless the defendant failed to appeal against the decision when it was possible for him or her to do so;

(Corresponds in part to Article 40 of Regulation (EU) No 650/2012.)

Amendment 80

Proposal for a regulationArticle 22 – point c


(c) it is irreconcilable with a decision given in a matter between the same parties in the Member State addressed;

(c) it is irreconcilable with a decision given in proceedings between the same parties in the Member State in which recognition is granted;


45

Amendment 81

Proposal for a regulationArticle 22 – point d


(d) it is irreconcilable with an earlier decision given in another Member State or in a third State involving the same cause of action and between the same parties, provided that the earlier decision fulfils the conditions necessary for its recognition in the Member State addressed.

(d) it is irreconcilable with an earlier decision given in another Member State or in a third State in proceedings involving the same cause of action and between the same parties, provided that the earlier decision fulfils the conditions necessary for its recognition in the Member State in which recognition is sought;


Amendment 82



Under no circumstances may a foreign decision be reviewed as to its substance.

Under no circumstances may a decision given in a Member State be reviewed as to its substance.


Amendment 83



A court of a Member State in which recognition is sought of a decision given in another Member State may stay the proceedings if an ordinary appeal against the decision has been lodged.

A court of a Member State in which recognition of a decision given in another Member State is sought may stay the proceedings if an ordinary appeal against the decision has been lodged in the Member State of origin.


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Amendment 84



Decisions given and enforceable in a Member State and court settlements shall be enforced in the other Member States in accordance with Articles [38 to 56 and 58] of Regulation (EC) No 44/2001.

Decisions given in a Member State and enforceable in that State and court settlements shall be enforceable in another Member State if, on the application of any interested party, they have been declared enforceable there in accordance with the procedure provided for in Articles 27b to 27o.


Amendment 85



Article 27a

Determination of domicile

To determine whether, for the purposes of the procedure provided for in Articles 27b to 27o, a party is domiciled in the Member State of enforcement, the court seised shall apply the internal law of that Member State.


Amendment 86



Article 27b

Jurisdiction of local courts

1. The application for a declaration of enforceability shall be submitted to the

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court or competent authority of the Member State of enforcement notified by that Member State to the Commission in accordance with Article 33.

2. The local jurisdiction shall be determined by reference to the place of domicile of the party against whom enforcement is sought, or to the place of enforcement.


Amendment 87



Article 27c

Procedure

1. The application procedure shall be governed by the law of the Member State of enforcement.

2. The applicant shall not be required to have a postal address or an authorised representative in the Member State of enforcement.

3. The application shall be accompanied by the following documents:

(a) a copy of the decision which satisfies the conditions necessary to establish its authenticity;

(b) the attestation issued by the court or competent authority of the Member State of origin using the form to be established in accordance with the advisory procedure referred to in Article 33c(2), without prejudice to Article 27d.


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Amendment 88

Proposal for a regulationArticle 27 d (new)


Article 27d

Non-production of the attestation

1. If the attestation referred to in point (b) of Article 27c(3) is not produced, the court or competent authority may specify a deadline for its production or accept an equivalent document or, if it considers that it has sufficient information before it, dispense with its production.

2. If the court or competent authority so requires, a translation of the documents shall be produced. The translation shall be done by a person qualified to do translations in one of the Member States.


Amendment 89

Proposal for a regulationArticle 27 e (new)


Article 27e

Declaration of enforceability

The decision shall be declared enforceable immediately on completion of the formalities in Article 27c without any review under Article 22. The party against whom enforcement is sought shall not at this stage of the proceedings be entitled to make any submissions on the application.


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Amendment 90

Proposal for a regulationArticle 27 f (new)


Article 27f

Notice of the decision on the application for a declaration of enforceability

1. The decision on the application for a declaration of enforceability shall forthwith be brought to the notice of the applicant in accordance with the procedure laid down by the law of the Member State of enforcement.

2. The declaration of enforceability shall be served on the party against whom enforcement is sought, accompanied by the decision, if not already served on that party.


Amendment 91

Proposal for a regulationArticle 27 g (new)


Article 27g

Appeal against the decision on the application for a declaration of

enforceability

1. The decision on the application for a declaration of enforceability may be appealed against by either party.

2. The appeal shall be lodged with the court communicated by the Member State concerned to the Commission in accordance with Article 33.

3. The appeal shall be dealt with in accordance with the rules governing procedure in contradictory matters.

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4. If the party against whom enforcement is sought fails to appear before the appellate court in proceedings concerning an appeal brought by the applicant, Article 11 shall apply, even where the party against whom enforcement is sought is not domiciled in any of the Member States.

5. An appeal against the declaration of enforceability shall be lodged within 30 days of service thereof. If the party against whom enforcement is sought is domiciled in a Member State other than that in which the declaration of enforceability was given, the time for appealing shall be 60 days and shall run from the date of service, either on him or her in person or at his or her residence. No extension may be granted on account of distance.


Amendment 92

Proposal for a regulationArticle 27 h (new)


Article 27h

Procedure to contest the decision given on appeal

The decision given on the appeal may be contested only by the procedure communicated by the Member State concerned to the Commission in accordance with Article 33.


Amendment 93

Proposal for a regulationArticle 27 i (new)

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Article 27i

Refusal or revocation of a declaration of enforceability

The court with which an appeal is lodged under Article 27g or Article 27h shall refuse or revoke a declaration of enforceability only on one of the grounds specified in Article 22. It shall give its decision without delay.


Amendment 94

Proposal for a regulationArticle 27 j (new)


Article 27j

Staying of proceedings

The court with which an appeal is lodged under Article 27g or Article 27h shall, on the application of the party against whom enforcement is sought, stay the proceedings if the enforceability of the decision is suspended in the Member State of origin by reason of an appeal.


Amendment 95

Proposal for a regulationArticle 27 k (new)


Article 27k

Provisional, including protective, measures

1. When a decision must be recognised in accordance with this Section, nothing

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shall prevent the applicant from availing himself or herself of provisional, including protective, measures in accordance with the law of the Member State of enforcement without a declaration of enforceability under Article 27e being required.

2. The declaration of enforceability shall carry with it by operation of law the power to proceed to any protective measures.

3. During the time specified for an appeal pursuant to Article 27g(5) against the declaration of enforceability and until any such appeal has been determined, no measures of enforcement may be taken other than protective measures against the property of the party against whom enforcement is sought.


Amendment 96

Proposal for a regulationArticle 27 l (new)


Article 27l

Partial enforceability

1. Where a decision has been given in respect of several matters and the declaration of enforceability cannot be given for all of them, the court or competent authority shall give it for one or more of them.

2. An applicant may request a declaration of enforceability limited to parts of a decision.


Amendment 97

Proposal for a regulationArticle 27 m (new)

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Article 27m

Legal aid

An applicant who, in the Member State of origin, has benefited from complete or partial legal aid or exemption from costs or expenses, shall be entitled, in any proceedings for a declaration of enforceability, to benefit from the most favourable legal aid or the most extensive exemption from costs or expenses provided for by the law of the Member State of enforcement.


Amendment 98

Proposal for a regulationArticle 27 n (new)


Article 27n

No security, bond or deposit

No security, bond or deposit, however described, shall be required of a party who in one Member State applies for recognition, enforceability or enforcement of a decision given in another Member State on the ground that he or she is a foreign national or that he or she is not domiciled or resident in the Member State of enforcement.


Amendment 99

Proposal for a regulationArticle 27 o (new)

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Article 27o

No charge, duty or fee

In proceedings for the issue of a declaration of enforceability, no charge, duty or fee calculated by reference to the value of the matter at issue may be levied in the Member State of enforcement.


Amendment 100



Recognition of authentic instruments Acceptance of authentic instruments

1. Authentic instruments drawn up in a Member State shall be recognised in the other Member States, unless their validity is disputed in accordance with the applicable law, and provided such recognition is not manifestly contrary to public policy in the Member State addressed.

1. Authentic instruments established in a Member State shall have the same evidentiary effects in another Member State as they have in the Member State of origin or the most comparable effects, provided this is not manifestly contrary to public policy in the Member State concerned.

A person wishing to use an authentic instrument in another Member State may ask the authority establishing the authentic instrument in the Member State of origin to fill in the form to be established in accordance with the advisory procedure referred to in Article 33(2) describing the evidentiary effects which the authentic instrument produces in the Member State of origin.

1a. Any challenge relating to the authenticity of an authentic instrument shall be made before the courts of the Member State of origin and shall be decided upon under the law of that State. The authentic instrument challenged shall not produce any evidentiary effect in another Member State as long as the

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challenge is pending before the competent court.

1b. Any challenge relating to the legal acts or legal relationships recorded in an authentic instrument shall be made before the courts having jurisdiction under this Regulation and shall be decided upon under the law applicable pursuant to Chapter III or the law referred to in Article 32. The authentic instrument challenged shall not produce any evidentiary effect in a Member State other than the Member State of origin as regards the matter being challenged as long as the challenge is pending before the competent court.

1c. If the outcome of proceedings in a court of a Member State depends on the determination of an incidental question relating to the legal acts or legal relationships recorded in an authentic instrument in property regime matters, that court shall have jurisdiction over that question.

2. The recognition of authentic instruments confers on them evidentiary effect with regard to their contents and a presumption of validity.


Amendment 101



1. Authentic instruments drawn up and enforceable in one Member State shall, on request, be declared enforceable in another Member State following the procedure set out in Articles [38 to 57] of Regulation (EC) No 44/2001.

1. An authentic instrument which is enforceable in the Member State of origin shall be declared enforceable in another Member State on the application of any interested party in accordance with the procedure provided for in Articles 27b to 27o.

1a. For the purposes of point (b) of Article 27c(3), the authority which established

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the authentic instrument shall, on the application of any interested party, issue an attestation using the form to be established in accordance with the advisory procedure referred to in Article 33(2).

2. The court with which an appeal is lodged under Articles [43 and 44] of Regulation (EC) No 44/2001 may refuse or revoke a declaration of enforceability only if enforcement of the instrument is manifestly contrary to public policy in the Member State addressed.

2. The court with which an appeal is lodged under Article 27g or Article 27h shall refuse or revoke a declaration of enforceability only if enforcement of the instrument is manifestly contrary to public policy in the Member State of enforcement.


Amendment 102



Recognition and enforceability of court settlements

Enforceability of court settlements

Court settlements that are enforceable in the Member State of origin shall be recognised and declared enforceable in another Member State at the request of any interested party under the same conditions as authentic instruments. The court with which an appeal is lodged under Article [42 or 44] of Regulation (EC) No 44/2001 may refuse or revoke a declaration of enforceability only if enforcement of the court settlement is manifestly contrary to public policy in the Member State addressed.

1. Court settlements which are enforceable in the Member State of origin shall be declared enforceable in another Member State on the application of any interested party in accordance with the procedure provided for in Articles 27b to 27o.

1a. For the purposes of point (b) of Article 27c(3), the court which approved the settlement or before which it was concluded shall, on the application of any interested party, issue an attestation using the form to be established in accordance with the advisory procedure referred to in Article 33c(2).

1b. The court with which an appeal is

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lodged under Article 27g or Article 27h shall refuse or revoke a declaration of enforceability only if enforcement of the court settlement is manifestly contrary to the public policy (ordre public) of the Member State of enforcement.


Amendment 103

Proposal for a regulationArticle 31 – title


Effects in respect of third parties Protection of third parties

(Corresponds AM 101 of the report in 2011/0059 (CNS).)

Amendment 104



1. The property consequences of a registered partnership for a legal relationship between a partner and a third party are governed by the law of the State where the partnership was registered in accordance with Article 15.

1. The property consequences of a registered partnership for a legal relationship between a partner and a third party are governed by the law applicable to property regimes of registered partnerships under this Regulation.

Amendment 105



2. However, the law of a Member State may provide that the law applicable may not be relied on by a partner in dealings with a third party if one or other of the partners or the third party has their habitual residence in the territory of that Member State and the conditions of disclosure or registration provided for in

2. However, in a legal relationship between a partner and a third party, neither of the partners may rely on the law applicable to the property regime of a registered partnership if the partner in a legal relationship with the third party and the third party have their habitual residence in the same State, which is not

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the law of that State are not satisfied, unless the third party was aware of or ought to have been aware of the law applicable to the property consequences of the registered partnership.

the State whose law is applicable to the property regime of the registered partnership. In such cases, the law of the Member State where the partner concerned and the third party have their habitual residence shall apply to the effects of the property regime on the third party.


Amendment 106



3. The law of the Member State in which immovable property is located may provide for a similar rule to that laid down in paragraph 2 in respect of the legal relationship between a partner and a third party in respect of that property.

3. Paragraph 2 shall not apply if:

(a) the third party was aware, or ought to have been aware, of the law applicable to the property regime of a registered partnership;

(b) the requirements concerning registration or disclosure of the property regime of the registered partnership in accordance with the law of the State of the habitual residence of the third party and the partner in a legal relationship with the third party were fulfilled, or

(c) in dealings concerning immovable property, the requirements concerning registration or disclosure of the property regime of the registered partnership in respect of the immovable property in accordance with the law of the State of the location of the immovable property were fulfilled.


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Amendment 107



Article -32

Habitual residence

1. For the purposes of this Regulation, the habitual residence of companies, associations and legal persons shall be the place of their central administration. The habitual residence of natural persons acting in the course of their business activities shall be their principal place of business.

2. Where the legal relationship is concluded in the course of the operations of a branch, agency or any other establishment, or if, under the contract, performance is the responsibility of such branch, agency or establishment, the place where the branch, agency or any other establishment is located shall be treated as the place of habitual residence.

3. For the purposes of determining the habitual residence, the relevant point in time shall be the time of conclusion of the legal relationship.


Amendment 108



(ba) the names and contact details of the courts or authorities with competence to deal with applications for a declaration of enforceability in accordance with Article 27b(1) and with appeals against decisions on such applications in accordance with Article 27g(2);

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(Corresponds to Article 78(1), point (a), of Regulation (EU) No 650/2012 and AM 105 of the report in 2011/0059 (CNS).)

Amendment 109

Proposal for a regulationArticle 33 – paragraph 1 – point b b (new)


(bb) the procedures to contest the decision given on appeal referred to in Article 27h.

Amendment 110



2. Member States shall notify the Commission of any subsequent changes in this information.

2. Member States shall apprise the Commission of any subsequent changes to this information.

Amendment 111



3. The Commission shall make all information communicated in accordance with paragraphs 1 and 2 publicly available by appropriate means, in particular through the multilingual internet site of the European Judicial Network in civil and commercial matters.

3. The Commission shall make all information communicated in accordance with paragraphs 1 and 2 publicly available in a simple manner by appropriate means, in particular through the multilingual internet site of the European Judicial Network in civil and commercial matters.

The Member States shall ensure that the information on that multilingual website is also accessible through any official website they set up, in particular by providing a link to the Commission website.

(Corresponds to Article 78(3) of Regulation (EU) No 650/2012 and AM 108 of the report in 2011/0059 (CNS).)

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Amendment 112



3a. The Commission shall introduce an information and training tool for the relevant court officials and legal practitioners by setting up an interactive portal in all official languages of the institutions of the Union, including a system for sharing professional expertise and practices.


Amendment 113



Article 33a

Establishment and subsequent amendment of the list containing the

information referred to in Article 2(1a)

1. The Commission shall, on the basis of the notifications by the Member States, establish the list of the other authorities and legal professionals referred to in Article 2(1a).

2. The Member States shall notify the Commission of any subsequent changes to the information contained in that list. The Commission shall amend the list accordingly.

3. The Commission shall publish the list and any subsequent amendments in the Official Journal of the European Union.

4. The Commission shall make all information notified in accordance with paragraphs 1 and 2 publicly available through any other appropriate means, in particular through the European Judicial Network in civil and commercial matters.

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Amendment 114



Article 33b

Establishment and subsequent amendment of the attestations and forms referred to in Articles 27c, 28, 29 and 30

The Commission shall adopt implementing acts establishing and/or subsequently amending the attestations and forms referred to in Articles 27c, 28, 29 and 30. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 33c(2).


Amendment 115



Article 33c

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 4 of Regulation (EU) No 182/2011 shall apply.


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Amendment 116

Proposal for a regulationArticle 34 – paragraph 1 – subparagraph 1 a (new)


The Commission shall investigate the following issues in its reports:

– the use made by registered partnerships of the opportunities to agree on the choice of law and court and its practical impact,

– the effectiveness of the advisory requirement in the choice of law,

– the use made of the possibility of lack of jurisdiction by the courts of those Member States which do not recognise the institution of registered partnership, and the practical impact of this, and

– the potential for further convergence of the rules laid down in this Regulation with those laid down in [the Regulation on jurisdiction, applicable law, recognition and enforcement of decisions in matters of matrimonial property regimes], with the objective of increasing equality.

Amendment 117



3. Chapter III shall apply only to partners who have registered their partnership.

3. Chapter III shall apply only to registered partners who, following the date of application of this Regulation, have

(a) entered into a registered partnership, or

(b) made a choice of law with respect to the law applicable to their property regime.

An agreement on the choice of law made prior to [date of application of this Regulation] shall likewise be valid if it meets the conditions set out in Chapter III

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or if it is valid under the law applicable in accordance with the relevant rules of private international law at the time when the agreement on the choice of law is concluded.

Where an agreement on the choice of law has been concluded prior to [date of application of this Regulation] in anticipation of the possibility of choosing the law provided for in this Regulation, but that agreement was not valid under the law applicable in accordance with the relevant rules of private international law at the time when the agreement on the choice of law was concluded because no possibility of making a choice of law for registered partnerships existed under the applicable law, that agreement shall be valid as from [date of application of this Regulation].

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P7_TA-PROV(2013)0338

Matrimonial property regimes *

European Parliament legislative resolution of 10 September 2013 on the proposal for a Council regulation on jurisdiction, applicable law and the recognition and enforcement of decisions in matters of matrimonial property regimes (COM(2011)0126 – C7-0093/2011 – 2011/0059(CNS))

(Special legislative procedure – consultation)


– having regard to the Commission proposal to the Council (COM(2011)0126),

– having regard to Article 81(3) of the Treaty on the Functioning of the European Union, pursuant to which the Council consulted Parliament (C7-0093/2011),

– having regard to the reasoned opinion submitted, within the framework of Protocol No 2 on the application of the principles of subsidiarity and proportionality, by the Italian Senate, asserting that the draft legislative act does not comply with the principle of subsidiarity,


– having regard to the report of the Committee on Legal Affairs and the opinions of the Committee on Civil Liberties, Justice and Home Affairs and the Committee on Women’s Rights and Gender Equality (A7-0253/2013),

1. Approves the Commission proposal as amended;

2. Calls on the Commission to alter its proposal accordingly, in accordance with Article 293(2) of the Treaty on the Functioning of the European Union;

3. Calls on the Council to notify Parliament if it intends to depart from the text approved by Parliament;

4. Asks the Council to consult Parliament again if it intends to substantially amend the Commission proposal;


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Amendment 1



(10) This Regulation covers issues in connection with matrimonial property regimes. It does not define 'marriage', which is defined by the national laws of the Member States.

(10) This Regulation covers issues in connection with matrimonial property regimes. It does not define 'marriage', which is defined by the national laws of the Member States. Rather, it adopts a neutral attitude towards that concept. This Regulation does not affect the definition of the concept of marriage in the national law of the Member States.

Amendment 2



(11) The scope of this Regulation should extend to all civil matters in relation to matrimonial property regimes, both the daily management of marital property and the liquidation of the regime, in particular as a result of the couple’s separation or the death of one of the spouses.

(11) The scope of this Regulation should extend to all civil matters in relation to matrimonial property regimes, both the daily management of marital property and the liquidation of the regime, in particular as a result of the couple’s separation, or divorce or the death of one of the spouses.

(Corresponds to recital 9 in Regulation (EU) No 650/2012.)

Amendment 3



(11a) This Regulation should not, however, apply to areas of civil law concerning matters other than matrimonial property regimes. For reasons of clarity, therefore, a number of questions which could be seen as having a link with matters of matrimonial property regimes should be explicitly excluded

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from the scope of this Regulation.


Amendment 4



(12) As maintenance obligations between spouses are governed by Regulation (EC) No 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations, they should be excluded from the scope of this Regulation, as should issues relating to the validity and effect of gifts covered by Regulation (EC) No 593/2008 of the European Parliament and Council of 17 June 2008 on the law applicable to contractual obligations (Rome I).

(12) Maintenance obligations between spouses, which are governed by Regulation (EC) No 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations, should be excluded from the scope of this Regulation, as should issues relating to legal succession in the event of death covered by Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession1.

______________1 OJ L 201, 27.7.2012, p. 107.

Amendment 5



(13) Issues relating to the nature of rights in rem that may exist under the national law of Member States, and those linked to the disclosure of such rights, should also be excluded from the scope of this Regulation, as they are from Regulation (EU) No ... [of the European Parliament and of the Council on jurisdiction, applicable law, recognition and

(13) This Regulation – like Regulation (EU) No 650/2012 – should not affect the limited number (‘numerus clausus’) of rights in rem known in the national law of some Member States. A Member State should not be required to recognise a right in rem relating to property located in that Member State if the right in rem in question is not known in its law.

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enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession. This means that the courts of the Member State in which property of one or both spouses is located may take measures under property law, regarding such things as the recording of a transfer of the property in the public register, where the law of that Member State so provides.

(Corresponds in part to recital 15 in Regulation (EU) No 650/2012.)

Amendment 6



(13a) However, in order to allow the beneficiaries to enjoy in another Member State the rights which have been created or transferred to them, for example in the context of a dispute concerning a matrimonial property regime, this Regulation should provide for the adaptation of an unknown right in rem to the closest equivalent right in rem under the law of that other Member State. In the context of such an adaptation, account should be taken of the aims and the interests pursued by the specific right in rem and the effects attached to it. For the purposes of determining the closest equivalent national right in rem, the authorities or competent persons of the State whose law applies to the matrimonial property regime may be contacted for further information on the nature and the effects of the right. To that end, the existing networks in the area of judicial cooperation in civil and commercial matters could be used as well as any other available means facilitating the understanding of foreign law.


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Amendment 7



(13b) The requirements for the recording in a register of a right in immovable or movable property should be excluded from the scope of this Regulation. It should therefore be the law of the Member State in which the register is kept (for immovable property, the lex rei sitae) which determines under what legal conditions and how the recording must be carried out and which authorities, such as land registers or notaries, are in charge of checking that all requirements are met and that the documentation presented or established is sufficient or contains the necessary information.


Amendment 8



(13c) The effects of the recording of a right in a register should also be excluded from the scope of this Regulation. It should therefore be the law of the Member State in which the register is kept which determines whether the recording is, for instance, declaratory or constitutive in effect. Thus where, for example, the acquisition of a right in immovable property requires a recording in a register under the law of the Member State in which the register is kept in order to ensure the erga omnes effect of registers or to protect legal transactions, the moment of such acquisition should be governed by the law of that Member State.

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Amendment 9



(13d) The term ‘matrimonial property regime’, which determines the scope of this Regulation, should cover all rules concerning property relationships between spouses and in respect of third parties arising from their marriage and after its termination. These include not only the compulsory provisions of the applicable law but also any optional arrangements which the spouses may have agreed in accordance with the applicable law.

Amendment 10

Proposal for a regulationRecital 13 e (new)


(13e) Like Regulation (EU) No 650/2012, this Regulation should respect the different systems for dealing with property-regime issues applied in the Member States. For the purposes of this Regulation, the term ‘court’ should therefore be given a broad meaning so as to cover not only courts in the true sense of the word, exercising judicial functions, but also the notaries or registry offices in some Member States who or which, in certain matters of property regimes, exercise judicial functions like courts, and the notaries and legal professionals who, in some Member States, exercise judicial functions in a given property-regime matter by delegation of power by a court. All courts as defined in this Regulation should be bound by the rules of jurisdiction set out in this Regulation.

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Conversely, the term ‘court’ should not cover non-judicial authorities of a Member State empowered under national law to deal with property regimes, such as the notaries in most Member States where, as is usually the case, they are not exercising judicial functions.


Amendment 11



(14) To reflect the increasing mobility of couples during their married life and facilitate the proper administration of justice, the rules on jurisdiction in this Regulation provide that matters of matrimonial property regimes, including liquidation of the regime as a result of divorce, legal separation or marriage annulment, are to be dealt with by the courts of the Member State having jurisdiction to deal with the divorce, separation or marriage annulment proceedings under Council Regulation (EC) No 2201/2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000.

(14) To reflect the increasing mobility of couples during their married life and facilitate the proper administration of justice, the rules on jurisdiction in this Regulation provide that matters of matrimonial property regimes, including liquidation of the regime as a result of divorce, legal separation or marriage annulment, are to be dealt with by the courts of the Member State having jurisdiction to deal with the divorce, separation or marriage annulment proceedings under Council Regulation (EC) No 2201/2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000, if the jurisdiction of the courts concerned has been expressly or in some other manner recognised by the spouses.

Amendment 12



(16) Where matters of matrimonial property regimes are not linked to a divorce, separation or marriage annulment

(16) Where matters of matrimonial property regimes are not linked to a divorce, separation or marriage annulment

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or to the death of a spouse, the spouses may decide to submit questions related to their matrimonial regime to the courts of the Member State of the law they chose as the law applicable to their matrimonial property regime. Such a decision is expressed by an agreement between the spouses which may be concluded at any moment, even during the proceedings.

or to the death of a spouse, the spouses may decide to submit questions related to their matrimonial regime to the courts of the Member State of the law they chose as the law applicable to their matrimonial property regime. This requires an agreement between the spouses which may be concluded, at the latest, until the matter is put before the court and subsequently as provided for by the lex fori.

Amendment 13



(17) This Regulation must allow the territorial jurisdiction of a Member State's courts over applications concerning matrimonial property regimes to be determined in cases other than those of separation of the couple or death of a spouse, and must in particular have a forum necessitatis provision to prevent situations where justice is denied.

(17) This Regulation must protect the territorial jurisdiction of a Member State's courts over applications concerning matrimonial property regimes to be determined in cases other than those of separation of the couple or death of a spouse, in accordance with a set of criteria, listed in order of precedence, designed to ensure the existence of a close link between the spouses and the Member State whose courts have jurisdiction.

Amendment 14



(17a) In order to remedy, in particular, situations of denial of justice, this Regulation should provide a forum necessitatis allowing a court of a Member State, on an exceptional basis, to rule on a matrimonial property case which is closely connected with a third State. Such an exceptional basis may be deemed to exist when proceedings prove impossible in the third State in question, for example because of civil war, or when a beneficiary cannot reasonably be expected to initiate or conduct proceedings in that

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State. Jurisdiction based on forum necessitatis should, however, be exercised only if the matrimonial property case has a sufficient connection with the Member State of the court seised.


Amendment 15



(21) Where no applicable law is chosen, and with a view to reconciling predictability and legal certainty with consideration of the life actually lived by the couple, this Regulation must introduce harmonised conflict-of-laws rules to establish the law applicable to all the spouses' property on the basis of a scale of connecting factors. The first common habitual residence of the spouses after marriage should constitute the first criterion, ahead of the law of the spouses' common nationality at the time of their marriage. If neither of these criteria apply, or failing a first common habitual residence in cases where the spouses have dual common nationalities at marriage, the third criterion should be the State with which the spouses have the closest links, taking into account all the circumstances, including the place where the marriage was celebrated, it being made clear that these links are to be considered as they were at the time the marriage was entered into.

(21) Where no applicable law is chosen, and with a view to reconciling predictability and legal certainty with consideration of the life actually lived by the couple, this Regulation must introduce harmonised conflict-of-laws rules to establish the law applicable to all the spouses' property on the basis of a scale of connecting factors. The common habitual residence of the spouses at the time of marriage or the first common habitual residence of the spouses after marriage should constitute the first criterion, ahead of the spouses' common nationality at the time of their marriage. If neither of those criteria applies, or failing a first common habitual residence in cases where the spouses have dual common nationalities at marriage, the third criterion should be the State with which the spouses have the closest links, taking into account all the circumstances, it being made clear that those links are to be considered as they were at the time the marriage was entered into.

Amendment 16



(22a) For the purposes of the application of this Regulation, i.e. where it refers to

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nationality as a criterion for the application of the law of a State, the question of how to deal with cases of plural nationality and whether a person is to be regarded as a national of a State should be left to national law, or where appropriate also to international agreements, in full observance of the general principles of the European Union.

Amendment 17



(24) Given the importance of choosing the law applicable to the matrimonial property regime, the Regulation must contain some guarantees to ensure that spouses or prospective spouses are aware of the consequences of their choice. This choice should be made in the form prescribed for the marriage contract by the law of the State chosen or by that of the State where the instrument is drawn up, and at least be in writing and dated and signed by the couple. Any additional formal requirements imposed by the law of the State chosen or that of the State where the instrument is drawn up concerning the validity, disclosure or registration of such contracts should be complied with.

(24) Given the importance of choosing the law applicable to the matrimonial property regime, this Regulation must contain some guarantees to ensure that spouses or prospective spouses are aware of the consequences of their choice. The agreement establishing that choice should at least be in writing and dated and signed by the couple. The choice should be made in the form prescribed by the law applicable to the matrimonial property regime or the law of the State where the agreement has been concluded.

Amendment 18



(24a) To take account of certain rules of the Member States, in particular those for protection of the family home and for assigning rights of use in relations between the spouses, this Regulation should not prevent the application of overriding mandatory rules by the court

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before which a matter is brought, and should therefore allow a Member State to set aside the application of a foreign law in favour of its own. For this purpose ‘overriding mandatory rules’ should refer to imperative provisions, the upholding of which is regarded as crucial by a Member State for safeguarding its public interests, particularly its political, social or economic organisation. In order, for example, to protect the family home, the Member State where the home is located should be permitted to apply its own law, without prejudice to the transaction protection provisions applicable in the Member State concerned, whose precedence is guaranteed by Article 35.

Amendment 19



(27) Since mutual recognition of decisions rendered in the Member States is one of the objectives of this Regulation, this Regulation must lay down rules on the recognition and enforcement of decisions on the basis of Regulation (EC) No 44/2001, adjusted where necessary to meet the specific requirements of matters covered by this Regulation.

(27) Since mutual recognition of decisions rendered in the Member States in matrimonial property cases is one of the objectives of this Regulation, this Regulation must lay down rules on the recognition, enforceability and enforcement of decisions on the basis of other legal instruments of the Union in the field of judicial cooperation in civil matters.

Amendment 20



(28) In order to take into account the different methods of dealing with matters of matrimonial property regimes in the Member States, this Regulation must guarantee the recognition and enforcement of authentic instruments. Nevertheless, authentic instruments cannot be treated

(28) In order to take into account the different systems for dealing with matrimonial property cases in the Member States, this Regulation should guarantee the acceptance and enforceability in all Member States of authentic instruments in

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as court decisions with regard to their recognition. The recognition of authentic instruments means that they enjoy the same evidentiary effect with regard to their contents and the same effects as in their country of origin, and a presumption of validity which may be rebutted if they are contested.

matrimonial property matters.


Amendment 21



(28a) In terms of the recognition, enforceability and enforcement of judicial decisions and of the acceptance and enforceability of authentic instruments and the enforceability of court settlements, this Regulation should therefore lay down rules on the basis of, in particular, Regulation (EU) No 650/2012.

Amendment 22



(29) While the law applicable to matrimonial property regimes must govern the legal relationship between a spouse and a third party, the conditions for relying on that law should be regulated by the law of the Member State of habitual residence of the spouse or the third party, in the interests of the third party's protection. The law of that Member State may thus provide that the spouse may invoke the law of his or her matrimonial property regime against the third party only if the conditions of registration or disclosure laid down in that Member State have been complied with, unless the third party was

(29) The law applicable to matrimonial property regimes under this Regulation must govern the legal relationship between a spouse and a third party. However, in the interests of the third party's protection, neither of the spouses should be able to invoke that law in a legal relationship between one of the spouses and a third party if the spouse who has a legal relationship with the third party, and the third party, are habitually resident in the same State, which is not the State whose law is applicable to the matrimonial property. Exceptions should apply if the third party does not merit protection, in

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aware of or ought to have been aware of the law applicable to the matrimonial property regime.

other words if he or she was aware of, or ought to have been aware of, the law applicable or if the requirements applicable to registration or disclosure in the State were complied with.

Amendment 23



(30a) In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission with regard to the establishment and subsequent amendment of the attestations and forms pertaining to the declaration of enforceability of decisions, court settlements and authentic instruments. 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 control by Member States of the Commission’s exercise of implementing powers1.

_____________1 OJ L 55, 28.2.2011, p. 13.


Amendment 24



(30b) The advisory procedure should be used for the adoption of implementing acts establishing and subsequently amending the attestations and forms provided for in this Regulation in accordance with the procedure laid down in Article 4 of Regulation (EU)

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No 182/2011.


Amendment 25



(32) This Regulation respects fundamental rights and observes the principles recognised in the Charter of Fundamental Rights of the European Union, in particular Articles 7, 9, 17, 21 and 47 concerning, respectively, respect for private and family life, the right to marry and to found a family according to national laws, property rights, the prohibition of any form of discrimination and the right to an effective remedy and to a fair trial. The Member States' courts must apply this Regulation in a manner consistent with these rights and principles.

(32) This Regulation respects fundamental rights and observes the principles recognised in the Charter of Fundamental Rights of the European Union, in particular Articles 7, 9, 17, 20, 21, 23 and 47 concerning, respectively, respect for private and family life, the right to marry and to found a family according to national laws, property rights, equality before the law, the prohibition of any form of discrimination and the right to an effective remedy and to a fair trial. The Member States' courts must apply this Regulation in a manner consistent with those rights and principles.


Amendment 26



(a) the capacity of spouses, (a) the general capacity of spouses,

Amendment 27

Proposal for a regulationArticle 1 – paragraph 3 – point a a (new)


(aa) the existence, validity or recognition of a marriage,

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Amendment 28

Proposal for a regulationArticle 1 – paragraph 3 – point c


(c) gifts between spouses, deleted

Amendment 29



(d) the succession rights of a surviving spouse,

(d) issues relating to succession due to death with reference to the surviving spouse,

Amendment 30



(e) companies set up between spouses, (e) questions governed by the law of companies and other bodies, corporate or unincorporated,

(Corresponds to Article 1, point (h), of Regulation (EU) No 650/2012.)

Amendment 31



(f) the nature of rights in rem relating to a property and the disclosure of such rights.

(f) the nature of rights in rem,

(Corresponds to Article 1, point (k), of Regulation (EU) No 650/2012.)

Amendment 32

Proposal for a regulationArticle 1 – paragraph 3 – point f a (new)

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(fa) any recording in a register of rights in movable or immovable property, including the legal requirements for such recording, and the effects of recording or failing to record such rights in a register, and

(Corresponds to Article 1, point (l), of Regulation (EU) No 650/2012.)

Amendment 33

Proposal for a regulationArticle 1 – paragraph 3 – point f b (new)


(fb) questions of entitlement to transfer or adjustment, in the case of a divorce, between spouses or former spouses, of rights to retirement or disability pensions accrued during marriage.

Amendment 34



(a) ‘matrimonial property regime’: a set of rules concerning the property relationships of spouses, between the spouses and in respect of third parties;

(a) ‘matrimonial property regime’: a set of rules applicable to the property relationships of spouses, between the spouses and in respect of third parties, as a result of marriage;

Amendment 35



(b) 'marriage contract': any agreement by which spouses organise their property relationships between themselves and in relation to third parties;

(b) 'marriage contract': any agreement by which spouses or future spouses organise their matrimonial property relationships;

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Amendment 36

Proposal for a regulationArticle 2 – paragraph 1 – point c – introductory part


(c) 'authentic instrument': an instrument which has been officially drawn up or registered as an authentic instrument in the Member State of origin and the authenticity of which:

(c) 'authentic instrument': an instrument in property matters which has been formally drawn up or registered as an authentic instrument in a Member State and the authenticity of which:

(Corresponds to Article 3(1), point (i), of Regulation (EU) No 650/2012.)

Amendment 37



(d) 'decision': any decision given in a matter of a matrimonial property regime by a court of a Member State, whatever the decision may be called, including the terms 'decree', 'judgment', 'order' or 'writ of execution', and the determination of costs or expenses by an officer of the court;

(d) 'decision': any decision given in a matter of a matrimonial property regime by a court of a Member State, whatever the decision may be called, and the determination of costs or expenses by an officer of the court;

(Corresponds to Article 3(1), point (g), of Regulation (EU) No 650/2012.)

Amendment 38



(e) 'Member State of origin': the Member State in which, as the case may be, the decision has been given, the marriage contract concluded, the authentic instrument drawn up, the court settlement approved or the instrument liquidating the common property or any other instrument produced by or before the judicial authority or authority of delegation or designation;

(e) 'Member State of origin': the Member State in which the decision has been given, the authentic instrument established or the court settlement approved or concluded;

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(Corresponds to Article 3(1), point (e), of Regulation (EU) No 650/2012.)

Amendment 39



(f) 'Member State addressed': the Member State in which recognition and/or enforcement of the decision, marriage contract, authentic instrument, court settlement, instrument of liquidation of the common property or any other instrument produced by or before the judicial authority or authority of delegation or designation is requested;

(f) ‘Member State of enforcement’: the Member State in which the declaration of enforceability or enforcement of the decision, court settlement or authentic instrument is sought;

(Corresponds to Article 3(1), point (f), of Regulation (EU) No 650/2012.)

Amendment 40



(g) any competent judicial authority in the Member States which carries out a judicial function in matters of matrimonial property regimes, or any other non-judicial authority or person carrying out, by delegation or designation by a judicial authority of a Member State, the functions falling within the jurisdiction of the courts as provided for in this Regulation;

deleted

Amendment 41



1a. For the purposes of this Regulation, the term ‘court’ means any judicial authority and all other authorities and legal professionals with competence in

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matters of matrimonial property regimes which exercise judicial functions or act pursuant to a delegation of power by a judicial authority or act under the control of a judicial authority, provided that such other authorities and legal professionals offer guarantees with regard to impartiality and the right of all parties to be heard and provided that their decisions under the law of the Member State in which they operate:

(a) may be made the subject of an appeal to or review by a judicial authority; and

(b) have a similar force and effect as a decision of a judicial authority on the same matter.

The Member States shall notify the Commission of the other authorities and legal professionals referred to in the first subparagraph in accordance with Article 37a.

(This provision corresponds to Article 3(2) of Regulation (EU) No 650/2012.)

Amendment 42



Article -3

Jurisdiction in matters of matrimonial property regimes within the Member

States

This Regulation shall not affect domestic jurisdiction over matrimonial property cases in the Member States.

Amendment 43



The courts of a Member State seised by an application concerning the succession of a

The courts of a Member State seised in matters of the succession of a spouse under

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spouse under Regulation (EC) ... [of the European Parliament and of the Council on jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession] shall also have jurisdiction to rule on matters of the matrimonial property regime arising in connection with the application.

Regulation (EU) No 650/2012 shall also have jurisdiction to rule on matters of the matrimonial property regime arising in connection with the succession case.

Amendment 44



The courts of a Member State called upon to rule on an application for divorce, judicial separation or marriage annulment under Regulation (EC) No 2201/2003, shall also have jurisdiction, where the spouses so agree, to rule on matters of the matrimonial property regime arising in connection with the application.

The courts of a Member State called upon to rule on an application for divorce, judicial separation or marriage annulment under Regulation (EC) No 2201/2003 shall also have jurisdiction to rule on matters of the matrimonial property regime arising in connection with the application, if the jurisdiction of the courts concerned has been recognised, expressly or otherwise in an unequivocal manner by the spouses.


Failing agreement between the spouses, jurisdiction is governed by Articles 5 et seq.

Failing recognition of the jurisdiction of the court referred to in paragraph 1, jurisdiction shall be governed by Article 5 et seq.

Amendment 45



Article 4a

Choice-of-court agreement

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1. The spouses may agree that the courts of the Member State whose law they have chosen as the law applicable to their matrimonial property regime in accordance with Article 16 are to have jurisdiction to rule on matters of their matrimonial property regime. Such jurisdiction shall be exclusive.

Without prejudice to the third subparagraph, a choice-of-court agreement may be concluded or amended at any time, but no later than when the case is brought before the court.

If the law of the forum so provides, the spouses may also choose the court after the case has been brought before the court. In that event, such choice shall be recorded in court in accordance with the law of the forum.

If the agreement is concluded before the proceedings, it must be drawn up in writing and dated and signed by the spouses. Any communication by electronic means which provides a durable record of the agreement shall be equivalent to ‘writing’.

2. The spouses may also agree that, if no court has been chosen, the courts of the Member State whose law is applicable pursuant to Article 17 are to have jurisdiction.

Amendment 46



Article 4b

Jurisdiction based on the appearance of the defendant

1. Apart from jurisdiction derived from other provisions of this Regulation, a court of a Member State whose law has been chosen under Article 16, or whose law is applicable under Article 17, and

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before which a defendant enters an appearance shall have jurisdiction. This rule shall not apply where an appearance was entered to contest the jurisdiction, or where another court has jurisdiction by virtue of Article 3, Article 4 or Article 4a.

2. Before assuming jurisdiction under paragraph 1, the court shall ensure that the defendant is informed of his or her right to contest the jurisdiction and of the consequences of entering or not entering an appearance.

Amendment 47



(1) In cases other than those provided for in Articles 3 and 4 jurisdiction to rule on proceedings in a matter of the spouses' matrimonial property regime shall lie with the courts of the Member State:

Where no court has jurisdiction pursuant to Articles 3, 4 and 4a, jurisdiction to rule on proceedings in a matter of the spouses' matrimonial property regime shall lie with the courts of the Member State:

(a) of the spouses' common habitual residence, or failing that,

(a) in whose territory the spouses are habitually resident at the time when the court is seised, or failing that,

(b) of the last common habitual residence if one of them still resides there, or, failing that,

(b) in whose territory the spouses were last habitually resident, if one of them still resides there at the time when the court is seised, or, failing that,

(c) of the defendant's habitual residence, or failing that,

(c) in whose territory the defendant is habitually resident at the time when the court is seised, or failing that,

(d) of the nationality of both spouses or, in the case of the United Kingdom and Ireland, of their common 'domicile'.

(d) of the nationality of both spouses at the time when the court is seised or, in the case of the United Kingdom and Ireland, of their common 'domicile', or failing that,

(2) Both parties may also agree that the courts of the Member State whose law they have chosen as the law applicable to their matrimonial property regime in accordance with Articles 16 and 18 shall also have jurisdiction to rule on matters of their matrimonial property regime.

(da) of the nationality of the defendant or, in the case of the United Kingdom and Ireland, of his or her domicile.

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(With regard to paragraph 2, see amendment to Article 4a (new); the text has been altered.)

Amendment 48



Where no court has jurisdiction according to Articles 3, 4 and 5, the courts of a Member State shall have jurisdiction in so far as property or properties of one or both spouses are located in the territory of that Member State, but in that event the court seised shall have jurisdiction to rule only in respect of the property or properties in question.

Where no court of a Member State has jurisdiction pursuant to Articles 3, 4, 4a and 5, the courts of a Member State shall have jurisdiction in so far as immovable property or registered assets of one or both spouses are located in the territory of that Member State; in that event the court seised shall have jurisdiction to rule only in respect of the immovable property or registered assets in question.

In such cases the courts of a Member State shall have jurisdiction to rule only on immovable property or registered assets located in that Member State.

Amendment 49



Where no court of a Member State has jurisdiction under Articles 3, 4, 5 and 6, the courts of a Member State may, exceptionally and if the case has a sufficient connection with that Member State, rule on a matrimonial property regime case if proceedings would be impossible or cannot reasonably be brought or conducted in a third State.

Where no court of a Member State has jurisdiction pursuant to Articles 3, 4, 4a, 5 and 6, the courts of a Member State may, on an exceptional basis, rule on a matrimonial property regime case if proceedings cannot reasonably be brought or conducted, or would be impossible, in a third State with which the case is closely connected.

The case must have a sufficient connection with the Member State of the court seised.

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(Corresponds to Article 11 of Regulation (EU) No 650/2012.)

Amendment 50



The court seised pursuant to Articles 3, 4, 5, 6 or 7 before which proceedings are pending shall also have jurisdiction to rule on a counterclaim if it falls within the scope of this Regulation.

The court seised pursuant to Articles 3, 4, 4a, 5, 6 or 7 before which proceedings are pending shall also have jurisdiction to rule on a counterclaim if it falls within the scope of this Regulation.

If the court has been seised pursuant to Article 6, its jurisdiction to rule on a counterclaim shall be limited to the immovable property or registered assets which form the subject-matter of the main proceedings.

Amendment 51



A court shall be deemed to be seised: For the purposes of this Chapter, a court shall be deemed to be seised:

(a) on the date when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the plaintiff has not subsequently failed to take the steps he or she was required to take to have service effected on the defendant, or

(a) on the date when the document instituting the proceedings or an equivalent document is lodged with the court, provided that the applicant has not subsequently failed to take the steps he or she was required to take to have service effected on the defendant,

(b) where the document has to be served before being lodged with the court, on the date on which it is formally drawn up or registered by the authority responsible for service, provided that the applicant has not subsequently failed to take the steps he or she was required to take to have the document lodged with the court.

(b) if the document has to be served before being lodged with the court, on the date on which it is formally drawn up or registered by the authority responsible for service, provided that the applicant has not subsequently failed to take the steps he or she was required to take to have the document lodged with the court, or

(ba) if the proceedings are opened of the court's own motion, at the time when the decision to open the proceedings is taken

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by the court, or, where such a decision is not required, at the time when the case is registered by the court.


Amendment 52



1. Where proceedings involving the same cause of action and between the same parties are brought before courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.

1. Where proceedings involving the same cause of action and between the spouses are brought before courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.


Amendment 54



2. Where these actions are pending at first instance, any court other than the court first seised may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.

2. Where those actions are pending at first instance, any court other than the court first seised may also, on the application of one of the spouses, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof.


Amendment 55



Article 13a

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Provision of information to spouses

The competent authority shall be obliged to inform the spouse(s), within a reasonable time, of any matrimonial property regime proceedings which are initiated against them.

Amendment 56



Provisional, including protective, measures provided for by the law of a Member State may be requested from the courts of that State, even where, under this Regulation, the courts of another Member State have jurisdiction as to the substance of the matter.

Application may be made to the courts of a Member State for such provisional, including protective, measures as may be available under the law of that State, even if, under this Regulation, the courts of another Member State have jurisdiction as to the substance of the matter.


Amendment 57



The law applicable to a matrimonial property regime under Article 16, 17 and 18 shall apply to all the couple's property.

1. The law applicable to a matrimonial property regime under Articles 16 and 17 shall apply to all assets falling under that regime, regardless of their location.

Amendment 58



1a. The law applicable to a matrimonial property regime shall determine, without prejudice to points (f) and (fa) of Article 1(3), inter alia:

(a) the division of the spouses’ property into different categories before and after

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the marriage;

(b) the transfer of property from one category to another;

(c) liability for the other spouse’s debts, where necessary;

(d) the spouses’ rights of disposal during the marriage;

(e) dissolution and liquidation of the matrimonial property regime and division of property in the event of dissolution of the marriage;

(f) the impact of the matrimonial property regime on a legal relationship between one of the spouses and a third party on the basis of Article 35;

(g) the material validity of a matrimonial property agreement.

Amendment 59



Article 15a

Universal application

Any law specified by this Regulation shall be applied whether or not it is the law of a Member State.

(See amendment to Article 21; the text has been altered.)

Amendment 60



The spouses or future spouses may choose the law applicable to their matrimonial property regime, as long as it is one of the following laws:

1. The spouses or future spouses may agree to designate or to change the law applicable to their matrimonial property regime, as long as it is one of the following laws:

(a) the law of the State of the habitual

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common residence of the spouses or future spouses, or

(b) the law of the State of habitual residence of one of the spouses at the time this choice is made, or

(a) the law of the State where the spouses or future spouses, or one of them, is/are habitually resident at the time when the agreement is concluded, or

(c) the law of the State of which one of the spouses or future spouses is a national at the time this choice is made.

(b) the law of a State of which one of the spouses or future spouses is a national at the time when the agreement is concluded.

2. Unless the spouses agree otherwise, a change of the law applicable to the matrimonial property regime made during the marriage shall have prospective effect only.

3. If the spouses choose to make that change of applicable law retroactive, its retroactive effect shall not affect the validity of previous transactions entered into under the law hitherto applicable or the rights of third parties deriving from the law previously applicable.

Amendment 61

Proposal for a regulationArticle 17 – paragraph 1 – introductory part


1. If the spouses do not make a choice, the law applicable to the matrimonial property regime shall be:

1. If no choice-of-law agreement is made pursuant to Article 16, the law applicable to the matrimonial property regime shall be:

Amendment 62



(a) the law of the State of the spouses' first common habitual residence after their marriage or, failing that,

(a) the law of the State of the spouses’ common habitual residence at the time of marriage or of their first common habitual residence after their marriage or, failing that,

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Amendment 63

Proposal for a regulationArticle 17 – paragraph 1 – point c


(c) the law of the State with which the spouses jointly have the closest links, taking into account all the circumstances, in particular the place where the marriage was celebrated.

(c) the law of the State with which the spouses jointly have the closest links at the time of the marriage, taking into account all the circumstances, regardless of the place where the marriage was celebrated.

Amendment 64



Article 18 deleted

Change of applicable law

The spouses may, at any time during the marriage, make their matrimonial property regime subject to a law other than the one hitherto applicable. They may designate only one of the following laws:

(a) the law of the State of habitual residence of one of the spouses at the time this choice is made;

(b) the law of a State of which one of the spouses is a national at the time this choice is made.

Unless the spouses desire otherwise, a change of the law applicable to the matrimonial property regime made during the marriage shall be effective only in the future.

If the spouses choose to make this change of applicable law retrospective, the retrospective effect may not affect the validity of previous transactions entered into under the law applicable hitherto or the rights of third parties deriving from the law previously applicable.

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Amendment 65



1. The choice of applicable law shall be made in the way specified for the marriage contract, either by the law of the State chosen or by the law of the State in which the document is drawn up.

1. The agreement on the choice of applicable law referred to in Article 16 shall be expressed in writing, dated and signed by both spouses. Any communication by electronic means which provides a durable record of the agreement shall be deemed equivalent to writing.

2. Notwithstanding paragraph 1, the choice must at least be made expressly in a document dated and signed by both spouses.

2. That agreement shall comply with the formal requirements of the law applicable to the matrimonial property regime or of the law of the State in which the agreement was concluded.

3. If the law of the Member State in which the spouses have their common habitual residence at the time of the choice referred to in paragraph 1 provides for additional formal requirements for the marriage contract, these requirements must be complied with.

3. However, if the law of the State in which both spouses have their habitual residence at the time of their agreement on the choice of applicable law provides for additional formal requirements for agreements of that type or, failing that, for the marriage contract, those requirements shall apply.

4. If the spouses are habitually resident in different States at the time of their agreement on the choice of the applicable law and the laws of those States provide for different formal requirements, the agreement shall be formally valid if it satisfies the requirements of either of those laws.

5. If only one of the spouses is habitually resident in a Member State at the time when the agreement is concluded and that State lays down additional formal requirements for agreements of that type, those requirements shall apply.

(Similar to Article 5(2) of Regulation (EU) No 650/2012.)

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Amendment 66



Law applicable to the form of marriage contract

Formal requirements for a marriage contract

1. The form of the marriage contract shall be that prescribed by the law applicable to the matrimonial property regime or by the law of the State where the contract is drawn up.

The formal aspects of a marriage contract shall be governed mutatis mutandis by Article 19. Any additional formal requirements within the meaning of Article 19(3) shall for the purposes of this Article relate only to the marriage contract.

2. Notwithstanding paragraph 1, the marriage contract must at least be set out in a document dated and signed by both spouses.

3. If the law of the Member State in which the spouses have their common habitual residence at the time the marriage contract is concluded provides for additional formal requirements for that contract, these requirements must be complied with.

Amendment 67



Article 20a

Adaptation of rights in rem

Where a person invokes a right in rem to which he or she is entitled under the law applicable to the matrimonial property regime and the law of the Member State in which the right is invoked does not know the right in rem in question, that right shall, if necessary and to the extent possible, be adapted to the closest equivalent right in rem under the law of that State, taking into account the aims and the interests pursued by the specific

96

right in rem and the effects attached to it.


Amendment 68



Article 21 deleted

Universal nature of the conflict-of-law rule

Any law determined in accordance with the provisions of this Chapter shall apply even if it is not the law of a Member State.

Amendment 69



The provisions of this Regulation shall be without prejudice to the application of imperative provisions the upholding of which is regarded as crucial by a Member State for safeguarding its public interests, such as its political, social or economic organisation, to such an extent that they are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the matrimonial property regime under this Regulation.

1. Overriding mandatory provisions are provisions the disregard for which would be manifestly incompatible with the public policy (ordre public) of the Member State concerned. The competent authorities should not interpret the public policy exception in a way that is contrary to the Charter of Fundamental rights of the European Union, and in particular Article 21 thereof, which prohibits all forms of discrimination.

2. This Regulation shall not restrict the application of the overriding mandatory provisions of the law of the forum, without prejudice to the transaction protection provisions applicable pursuant to Article 35.

Amendment 70


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The application of a rule of the law determined by this Regulation may be refused only if such application is manifestly incompatible with the public policy of the forum.

The application of a rule of the law of any State determined by this Regulation may be refused only if such application is manifestly incompatible with the public policy of the forum.


Amendment 71



Where this Regulation provides for the application of the law of a State, it means the rules of substantive law in force in that State other than its rules of private international law.

Where this Regulation provides for the application of the law of a State, it refers to the rules of law in force in that State other than its rules of private international law.

Amendment 72



States with two or more legal systems — territorial conflicts of laws

States with more than one legal system – territorial conflicts of laws

1. Where the law specified by this Regulation is that of a State which comprises several territorial units each of which has its own rules of law in respect of matrimonial property regimes, the internal conflict-of-laws rules of that State shall determine the relevant territorial unit whose rules of law are to apply.

Where a State comprises several territorial units each of which has its own system of law or its own rules concerning matters governed by this Regulation:

1a. In the absence of such internal conflict-of-laws rules:

(a) any reference to the law of that State shall be construed, for the purposes of determining the law applicable under this

(a) any reference to the law of the State referred to in paragraph 1 shall, for the purposes of determining the law applicable

98

Regulation, as a reference to the law in force in the relevant territorial unit;

pursuant to provisions referring to the habitual residence of the spouses, be construed as referring to the law of the territorial unit in which the spouses have their habitual residence;

(b) any reference to habitual residence in that State shall be construed as a reference to habitual residence in a territorial unit;

(b) any reference to the law of the State referred to in paragraph 1 shall, for the purposes of determining the law applicable pursuant to provisions referring to the nationality of the spouses, be construed as a reference to the law of the territorial unit with which the spouses have the closest connection;

(c) any reference to nationality shall refer to the territorial unit determined by the law of that State, or, in the absence of relevant rules, to the territorial unit chosen by the parties or, in absence of such a choice, to the territorial unit with which the spouse or spouses has or have the closest connection.

(c) any reference to the law of the State referred to in paragraph 1 shall, for the purposes of determining the law applicable pursuant to any other provisions referring to other elements as connecting factors, be construed as referring to the law of the territorial unit in which the relevant element is located.


Amendment 73



Article 25a

States with more than one legal system – inter-personal conflicts of laws

In relation to a State which has two or more systems of law or sets of rules applicable to different categories of persons in respect of matrimonial property regimes, any reference to the law of such a State shall be construed as referring to the system of law or set of rules determined by the rules in force in that State. In the absence of such rules, the system of law or the set of rules with which the spouses have the closest connection shall apply.

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Amendment 74



Article 25b

Non-application of this Regulation to internal conflicts of laws

A Member State which comprises several territorial units each of which has its own rules of law in respect of matrimonial property regimes shall not be required to apply this Regulation to conflicts of laws arising between such units only.


Amendment 75



2. Any interested party who raises the recognition of a decision as the principal issue in a dispute may, in accordance with the procedures set out in Articles [38 to 56] of Regulation (EC) No 44/2001, apply for the decision to be recognised.

2. Any interested party who raises the recognition of a decision as the principal issue in a dispute may, in accordance with the procedures set out in Articles 31b to 31o, apply for that decision to be recognised.


Amendment 76

Proposal for a regulationArticle 27 – point a


(a) such recognition is manifestly contrary to public policy in the Member State addressed;

(a) such recognition is manifestly contrary to public policy in the Member State in which recognition is sought;


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Amendment 78

Proposal for a regulationArticle 27 – point c


(c) it is irreconcilable with a decision given in a matter between the same parties in the Member State addressed;

(c) if it is irreconcilable with a decision given in proceedings between the same parties in the Member State in which recognition is sought;


Amendment 79

Proposal for a regulationArticle 27 – point d


(d) it is irreconcilable with an earlier decision given in another Member State or in a third State involving the same cause of action and between the same parties, provided that the earlier decision fulfils the conditions necessary for its recognition in the Member State addressed.

(d) if it is irreconcilable with an earlier decision given in another Member State or in a third State in proceedings involving the same cause of action and between the same parties, provided that the earlier decision fulfils the conditions necessary for its recognition in the Member State in which recognition is sought.


Amendment 80



Under no circumstances may a foreign decision be reviewed as to its substance.

Under no circumstances may a decision given in a Member State be reviewed as to its substance.


Amendment 81


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A court of a Member State in which recognition is sought of a decision given in another Member State may stay the proceedings if an ordinary appeal against the decision has been lodged.

A court of a Member State in which recognition is sought of a decision given in another Member State may stay the proceedings if an ordinary appeal against the decision has been lodged in the Member State of origin.


Amendment 82



Decisions given in a Member State where they are enforceable shall be enforced in the other Member States in accordance with Articles [38 to 56 and 58] of Regulation (EC) No 44/2001.

Decisions given in a Member State and enforceable in that State shall be enforceable in another Member State when, on the application of any interested party, they have been declared enforceable there in accordance with the procedure laid down in Articles 31b to 31o.


Amendment 83



Article 31a

Determination of domicile

To determine whether, for the purposes of the procedure provided for in Articles 31b to 31o, a party is domiciled in the Member State of enforcement, the court seised shall apply the internal law of that Member State.


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Amendment 84



Article 31b

Jurisdiction of local courts

1. The application for a declaration of enforceability shall be submitted to the court or competent authority of the Member State of enforcement communicated by that Member State to the Commission in accordance with Article 37.

2. The local jurisdiction shall be determined by reference to the place of domicile of the party against whom enforcement is sought, or to the place of enforcement.


Amendment 85



Article 31c

Procedure

1. The application procedure shall be governed by the law of the Member State of enforcement.

2. The applicant shall not be required to have a postal address or an authorised representative in the Member State of enforcement.

3. The application shall be accompanied by the following documents:

(a) a copy of the decision which satisfies the conditions necessary to establish its authenticity;

(b) the attestation issued by the court or

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competent authority of the Member State of origin using the form established in accordance with the advisory procedure referred to in Article 37c(2), without prejudice to Article 31d.


Amendment 86

Proposal for a regulationArticle 31 d (new)


Article 31d

Non-production of the attestation

1. If the attestation referred to in point (b) of Article 31c(3) is not produced, the court or competent authority may specify a time for its production or accept an equivalent document or, if it considers that it has sufficient information before it, dispense with its production.

2. If the court or competent authority so requires, a translation of the documents shall be produced. The translation shall be done by a person qualified to do translations in one of the Member States.


Amendment 87

Proposal for a regulationArticle 31 e (new)


Article 31e

Declaration of enforceability

The decision shall be declared enforceable immediately on completion of the formalities in Article 31c without any review under Article 27. The party against whom enforcement is sought shall not at this stage of the proceedings be entitled to

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make any submissions on the application.


Amendment 88

Proposal for a regulationArticle 31 f (new)


Article 31f

Notice of the decision on the application for a declaration of enforceability

1. The decision on the application for a declaration of enforceability shall forthwith be brought to the notice of the applicant in accordance with the procedure laid down by the law of the Member State of enforcement.

2. The declaration of enforceability shall be served on the party against whom enforcement is sought, accompanied by the decision, if not already served on that party.


Amendment 89

Proposal for a regulationArticle 31 g (new)


Article 31g

Appeal against the decision on the application for a declaration of

enforceability

1. The decision on the application for a declaration of enforceability may be appealed against by either party.

2. The appeal shall be lodged with the court communicated by the Member State concerned to the Commission in accordance with Article 37.

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3. The appeal shall be dealt with in accordance with the rules governing procedure in contradictory matters.

4. If the party against whom enforcement is sought fails to appear before the appellate court in proceedings concerning an appeal brought by the applicant, Article 11 shall apply, even where the party against whom enforcement is sought is not domiciled in any of the Member States.

5. An appeal against the declaration of enforceability shall be lodged within 30 days of service thereof. If the party against whom enforcement is sought is domiciled in a Member State other than that in which the declaration of enforceability was given, the time for appealing shall be 60 days and shall run from the date of service, either on him or her in person or at his or her residence. No extension may be granted on account of distance.


Amendment 90

Proposal for a regulationArticle 31 h (new)


Article 31h

Procedure to contest the decision given on appeal

The decision given on the appeal may be contested only by the procedure communicated by the Member State concerned to the Commission in accordance with Article 37.


Amendment 91

Proposal for a regulationArticle 31 i (new)

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Article 31i

Refusal or revocation of a declaration of enforceability

The court with which an appeal is lodged under Article 31g or Article 31h shall refuse or revoke a declaration of enforceability only on one of the grounds specified in Article 27. It shall give its decision without delay.


Amendment 92

Proposal for a regulationArticle 31 j (new)


Article 31j

Staying of proceedings

The court with which an appeal is lodged under Article 31g or Article 31h shall, on the application of the party against whom enforcement is sought, stay the proceedings if the enforceability of the decision is suspended in the Member State of origin by reason of an appeal.


Amendment 93

Proposal for a regulationArticle 31 k (new)


Article 31k

Provisional, including protective, measures

1. When a decision must be recognised in accordance with this Section, nothing shall prevent the applicant from availing himself or herself of provisional,

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including protective, measures in accordance with the law of the Member State of enforcement without a declaration of enforceability under Article 31e being required.

2. The declaration of enforceability shall carry with it by operation of law the power to proceed to any protective measures.

3. During the time specified for an appeal pursuant to Article 31g(5) against the declaration of enforceability and until any such appeal has been determined, no measures of enforcement may be taken other than protective measures against the property of the party against whom enforcement is sought.


Amendment 94

Proposal for a regulationArticle 31 l (new)


Article 31l

Partial enforceability

1. Where a decision has been given in respect of several matters and the declaration of enforceability cannot be given for all of them, the court or competent authority shall give it for one or more of them.

2. An applicant may request a declaration of enforceability limited to parts of a decision.


Amendment 95

Proposal for a regulationArticle 31 m (new)

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Article 31m

Legal aid

An applicant who, in the Member State of origin, has benefited from complete or partial legal aid or exemption from costs or expenses, shall be entitled, in any proceedings for a declaration of enforceability, to benefit from the most favourable legal aid or the most extensive exemption from costs or expenses provided for by the law of the Member State of enforcement.


Amendment 96

Proposal for a regulationArticle 31 n (new)


Article 31n

No security, bond or deposit

No security, bond or deposit, however described, shall be required of a party who in one Member State applies for recognition, enforceability or enforcement of a decision given in another Member State on the ground that he or she is a foreign national or that he or she is not domiciled or resident in the Member State of enforcement.


Amendment 97

Proposal for a regulationArticle 31 o (new)


Article 31o

No charge, duty or fee

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In proceedings for the issue of a declaration of enforceability, no charge, duty or fee calculated by reference to the value of the matter at issue may be levied in the Member State of enforcement.


Amendment 98



Recognition of authentic instruments Acceptance of authentic instruments

1. Authentic instruments drawn up in a Member State shall be recognised in the other Member States, unless their validity is disputed in accordance with the applicable law, and provided such recognition is not contrary to public policy in the Member State addressed.

1. An authentic instrument established in a Member State shall have the same evidentiary effects in another Member State as it has in the Member State of origin, or the most comparable effects, provided that this is not manifestly contrary to the public policy (ordre public) of the Member State concerned.

A person wishing to use an authentic instrument in another Member State may ask the authority establishing the authentic instrument in the Member State of origin to fill in the form established in accordance with the advisory procedure referred to in Article 37c(2) describing the evidentiary effects which the authentic instrument produces in the Member State of origin.

1a. Any challenge relating to the authenticity of an authentic instrument shall be made before the courts of the Member State of origin and shall be decided upon under the law of that State. The authentic instrument challenged shall not produce any evidentiary effect in another Member State as long as the challenge is pending before the competent court.

1b. Any challenge relating to the legal acts or legal relationships recorded in an authentic instrument shall be made before the courts having jurisdiction under this

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Regulation and shall be decided upon under the law applicable pursuant to Chapter III or the law referred to in Article 36. The authentic instrument challenged shall not produce any evidentiary effect in a Member State other than the Member State of origin as regards the matter being challenged as long as the challenge is pending before the competent court.

1c. If the outcome of proceedings in a court of a Member State depends on the determination of an incidental question relating to the legal acts or legal relationships recorded in an authentic instrument concerning a property regime, that court shall have jurisdiction over that question.

2. The recognition of authentic instruments confers on them evidentiary effect with regard to their contents and a presumption of validity.


Amendment 99



1. Authentic instruments drawn up and enforceable in one Member State shall, on request, be declared enforceable in another Member State following the procedure set out in Articles [38 to 57] of Regulation (EC) No 44/2001.

1. An authentic instrument which is enforceable in the Member State of origin shall be declared enforceable in another Member State on the application of any interested party in accordance with the procedure provided for in Articles 31b to 31o.

1a. For the purposes of point (b) of Article 31c(3), the authority which established the authentic instrument shall, on the application of any interested party, issue an attestation using the form established in accordance with the advisory procedure referred to in Article 37c(2).

2. The court with which an appeal is lodged under Articles [43 and 44] of

2. The court with which an appeal is lodged under Article 31g or Article 31h

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Regulation (EC) No 44/2001 may refuse or revoke a declaration of enforceability only if enforcement of the instrument is manifestly contrary to public policy in the Member State addressed.

shall refuse or revoke a declaration of enforceability only if enforcement of the authentic instrument is manifestly contrary to the public policy (ordre public) of the Member State of enforcement.


Amendment 100



Recognition and enforceability of court settlements

Enforceability of court settlements

Court settlements that are enforceable in the Member State of origin shall be recognised and declared enforceable in another Member State at the request of any interested party under the same conditions as authentic instruments. The court with which an appeal is lodged under Article [42 or 44] of Regulation (EC) No 44/2001 may refuse or revoke a declaration of enforceability only if enforcement of the court settlement is manifestly contrary to public policy in the Member State addressed.

1. Court settlements which are enforceable in the Member State of origin shall be declared enforceable in another Member State on the application of any interested party in accordance with the procedure provided for in Articles 31b to 31o.

1a. For the purposes of point (b) of Article 31c(3), the court which approved the settlement or before which it was concluded shall, on the application of any interested party, issue an attestation using the form established in accordance with the advisory procedure referred to in Article 37c(2).

1b. The court with which an appeal is lodged under Article 31g or 31h shall refuse or revoke a declaration of enforceability only if enforcement of the court settlement is manifestly contrary to the public policy (ordre public) of the Member State of enforcement.


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Amendment 101

Proposal for a regulationArticle 35 – title


Effects in respect of third parties Protection of third parties

Amendment 102



2. However, the law of a Member State may provide that the law applicable to the matrimonial property regime may not be relied on by a spouse in dealings with a third party if one or other has their habitual residence in the territory of that Member State and the conditions of disclosure or registration provided for in the law of that State are not satisfied, unless the third party was aware of or ought to have been aware of the law applicable to the matrimonial property regime.

2. However, in a legal relationship between a spouse and a third party, neither of the spouses may rely on the law applicable to the matrimonial property regime if the spouse in a legal relationship with the third party and the third party have their habitual residence in the same State, which is not the State whose law is applicable to the matrimonial property regime. In such cases, the law of the Member State of the habitual residence of that spouse and the third party shall apply to the effects on the third party of the matrimonial property regime.

Amendment 103



3. The law of the Member State in which immovable property is located may provide for a similar rule to that laid down in paragraph 2 in respect of the legal relationship between a spouse and a third party in respect of that property.

3. Paragraph 2 shall not apply if:

(a) the third party was aware, or ought to have been aware, of the legal order applicable to the matrimonial property regime, or

(b) the requirements concerning

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registration or disclosure of the matrimonial property regime in accordance with the law of the State of the habitual residence of the third party and the spouse dealing with the third party were fulfilled, or

(c) in dealings concerning immovable property, the requirements concerning registration or disclosure of the matrimonial property regime in respect of the immovable property in accordance with the law of the State of the location of the immovable property were fulfilled.

Amendment 104



Article -36

Habitual residence

1. For the purposes of this Regulation, the habitual residence of companies and other bodies, corporate or unincorporated, shall be the place of their central administration.

The habitual residence of a natural person acting in the course of his or her business activity shall be his or her principal place of business.

2. Where the legal relationship is concluded in the course of the operations of a branch, agency or any other establishment, or if, under the contract, performance is the responsibility of such branch, agency or establishment, the place where the branch, agency or any other establishment is located shall be treated as the place of habitual residence.

3. For the purposes of determining the habitual residence, the relevant point in time shall be the time of the conclusion of the legal relationship.

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Amendment 105



(ba) the names and contact details of the courts and authorities with competence to deal with applications for a declaration of enforceability in accordance with Article 31b(1) and with appeals against decisions on such applications in accordance with Article 31g(2);

(Corresponds to Article 78(1), point (a), of Regulation (EU) No 650/2012.)

Amendment 106

Proposal for a regulationArticle 37 – paragraph 1 – point b b (new)


(bb) the procedures to contest the decision given on appeal referred to in Article 31h;

Amendment 108



3. The Commission shall make all information communicated in accordance with paragraphs 1 and 2 publicly available by appropriate means, in particular through the multilingual internet site of the European Judicial Network in civil and commercial matters.

3. The Commission shall make all information communicated in accordance with paragraphs 1 and 2 publicly available in a simple manner by appropriate means, in particular, through the multilingual internet site of the European Judicial Network in civil and commercial matters.

The Member States shall ensure that the information on that multilingual website is also accessible through any official website they set up, in particular by providing a link to the Commission website.

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(Corresponds to Article 78(3) of Regulation (EU) No 650/2012.)

Amendment 109



3a. The Commission shall introduce an information and training tool for the relevant court officials and legal practitioners by setting up an interactive portal in all official languages of the institutions of the Union, including a system for sharing professional expertise and practices.

Amendment 110



Article 37a

Establishment and subsequent amendment of the list containing the

information referred to in Article 2(1a)

1. The Commission shall, on the basis of the notifications by the Member States, establish the list of the other authorities and legal professionals referred to in Article 2(1a).

2. The Member States shall notify the Commission of any subsequent changes to the information contained in that list. The Commission shall amend the list accordingly.

3. The Commission shall publish the list and any subsequent amendments in the Official Journal of the European Union.

4. The Commission shall make all information notified in accordance with paragraphs 1 and 2 publicly available through any other appropriate means, in particular through the European Judicial Network in civil and commercial matters.

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Amendment 111



Article 37b

Establishment and subsequent amendment of the attestations and forms referred to in Articles 31c, 32, 33 and 34

The Commission shall adopt implementing acts establishing and subsequently amending the attestations and forms referred to in Articles 31c, 32, 33 and 34. Those implementing acts shall be adopted in accordance with the advisory procedure referred to in Article 37c(2).


Amendment 112



Article 37c

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 4 of Regulation (EU) No 182/2011 shall apply.


Amendment 113


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3. Chapter III shall apply only to spouses who marry or who specify the law applicable to the matrimonial property regime after the date of application of this Regulation.

3. Chapter III shall apply only to spouses who after the date of application of this Regulation:

(a) marry, or

(b) specify the law applicable to the matrimonial property regime.

An agreement on the choice of applicable law concluded before [the time of application of this Regulation] shall likewise be valid if it meets the conditions laid down in Chapter III or if it is valid in application of the rules of private international law in force at the time when the agreement on the choice of law is concluded.

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P7_TA-PROV(2013)0339

European transport-technology strategy for Europe's future sustainable mobility

European Parliament resolution of 10 September 2013 on promoting a European transport-technology strategy for Europe’s future sustainable mobility (2012/2298(INI))


– having regard to the Commission communication entitled ‘Research and innovation for Europe’s future mobility – Developing a European transport-technology strategy’ (COM(2012)0501),

– having regard to the Commission communication entitled ‘Horizon 2020 – The Framework Programme for Research and Innovation’ (COM(2011)0808),

– having regard to the 2011 Commission White Paper entitled ‘Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system’ (COM(2011)0144),

– having regard to the Commission communication entitled ‘Europe 2020 – A strategy for smart, sustainable and inclusive growth’ (COM(2010)2020),

– having regard to its resolution of 27 September 2011 on European road safety 2011-20201,


– having regard to the report of the Committee on Transport and Tourism and the opinion of the Committee on Regional Development (A7-0241/2013),

A. whereas the Commission has identified the shortcomings of Europe’s transport innovation system;

B. whereas investment in research and innovation in the transport sector is simultaneously an investment in the economy and in job creation, and can therefore have a three-pronged effect;

C. whereas innovation is essential in order to create a smarter, safer and more intelligent transport system for the public, meet the environmental challenges facing the transport sector and achieve a low-carbon economy;

D. whereas the Europe 2020 strategy’s climate change and energy targets are closely linked to transport innovation: 20 % fewer greenhouse gas emissions than in 1990, 20 % of energy from renewables and a 20 % increase in energy efficiency, as well as the target of 50 % fewer deaths in road accidents than in 2001;

1 OJ C 56 E, 26.2.2013, p. 54.

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E. whereas there will need to be a real change in users’ attitudes, and in the standards they demand, if a large number of businesses and service providers are to be persuaded to shift their paradigms and to exploit the innovation opportunities offered by the creative convergence and out-of-the-box thinking described in point 5.3 of the Commission communication COM(2012)0501;

F. whereas the initiatives set out in the White Paper on transport are welcomed, particularly those mentioned in section 3.2 (entitled ‘Innovating for the future – technology and behaviour’), along with initiatives 7 (‘Multimodal transport of goods: e-freight’) and 22 (‘Seamless door-to-door mobility’);

G. whereas Europe’s strategy must ensure that a balance is struck between efforts to reduce the environmental imprint of transport and efforts to ensure freedom of movement in the European Union in order to achieve a single European transport area that is intermodal, interconnected, integrated and effective in its use of resources;

H. whereas in 2012 more than 31 000 people were still killed and more than 1 500 000 injured – in some cases seriously – in road accidents in the European Union;

I. whereas technologies that will help attain the objectives of the ‘European transport safety area’ are already available but have not yet been placed on the market;

General principles

1. Emphasises that a European transport-technology strategy for Europe’s future sustainable mobility should first and foremost promote quality of service, the convenience of passengers and businesses, and sustainable mobility, and should be based on the Union’s targets and legislation regarding the reduction of energy consumption, traffic noise, air pollutants, raw materials and greenhouse gas emissions up to 2020, 2030 and 2050, as well as improving health and quality of life, increasing the quality of services, providing increasingly customised solutions geared ever more closely to users’ needs, and enhancing safety and security;

2. Calls on the Commission and Council, in view of the importance of research and innovation (R&I) to the whole European economy, to recognise the importance of the Horizon 2020 initiative and to finance it adequately;

3. Confirms the Commission’s objective of better aligning transport R&I with European transport policy goals and roadmaps for each field, but believes that the approach proposed in the Commission’s communication needs to be adjusted according to the priorities defined hereinafter;

4. Believes that European strategy in the field of transport technologies should cover all regions of the EU in order to ensure the efficient circulation of people and goods, and hence the creation of a genuine European single market;

5. Believes that more efficient, coherent and targeted use of R&I in the setting and implementation of transport policy is key to being able to respond to new realities, break away from conventional thinking and focus on pioneering ideas, and thereby be able to provide users with innovative transport solutions that meet the needs, and fulfil the requirements, of availability, profitability, credibility, quality and continuity;

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6. Encourages the Commission to create a framework favourable to R&I by creating fair, efficient and innovative pricing systems for all mobility and transport modes, particularly through the internalisation of external costs, taking into account the ‘polluter pays’ and ‘user pays’ principles;

7. Points to the usefulness of the Commission’s proposed Transport Research and Innovation Monitoring and Information System (TRIMIS) and maintains that the user’s perspective be incorporated into it, as it would offers an ideal means of detecting the barriers to innovation created by force of habit, of identifying opportunities and of encouraging the spread of new service possibilities to spur and promote changes in social attitudes to sustainable transport;

8. Stresses that technology lock-in is liable to prevent the full potential of transport innovation from being reached and can hamper the development of new innovative ideas; considers, therefore, that Union policies should be technologically neutral with regard to alternative technologies for transport (‘technology neutrality’), with priorities and funding being decided on the basis of results over the entire life-cycle of technologies used in specific fields of transport, and that harmonisation efforts must not be an obstacle to the development of innovative or alternative solutions in the field of transport, the diversity of the energy mix and deployment of smart communication technologies;

9. Emphasises that in order to help businesses and public bodies absorb new solutions and innovative technologies, more efficiency is needed in the innovation chain, and more investments are needed in measures such as economic incentives to overcome barriers to deployment and market uptake (‘full-cycle commitments’); encourages, therefore, the Commission to act on its idea that, in order to release the full innovative potential of the transport sector and support innovative undertakings, subsidies should also be used to help launch new solutions on the market, demonstrate them and implement them fully, and that appropriate management and financing tools can guarantee the swift implementation of research results;

10. Believes that all European regions, and their respective labour pools, should take advantage of such a strategy, and stresses the need to take account of regional specificities and potential, especially when developing cleaner transport modes; calls on the authorities at subsidiary levels to create, alongside stakeholders, innovation partnerships in the field of sustainable mobility;

11. Calls for stronger support for the R&I activities of small and medium-sized enterprises (SMEs), notably through easier access to EU funds and the reduction of administrative burdens, and highlights the importance of creating and maintaining employment and sustainable growth through R&I;

12. Maintains that investments under the EU Structural Funds and investment funds create great opportunities in European regions to develop smart specialisation in the area of sustainable mobility;

13. Encourages national and regional authorities to devise research and development strategies that are based on the concept of smart specialisation, with a view to ensuring a more efficient take-up of structural funding and to enhancing synergies between private and public sector investment;

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14. Recalls, in this connection, that a strategy for innovative technology needs to be conceived on the basis of the characteristics and distinguishing features of the territories concerned, which means that a one-size-fits-all approach will not suffice; considers, for instance, that regions affected by specific territorial constraints, such as islands and mountainous, outermost and sparsely populated regions, have specific types of economic and other potential which, to be realised, call for appropriate and innovative mobility solutions; points out, in this context, the need to allocate adequate resources for sustainable transport infrastructure;

15. Stresses the need for greater simplification of the administrative procedures for R&I funding at European, national, regional, local and cross-border levels, in order to establish a clear and transparent legal framework;

16. Stresses that efforts to reduce the number of people killed or injured on the roads must be unremitting; urges the Commission to consider and implement those proposals for improving road safety that Parliament has adopted by a large majority;

17. Considers that a change in transport technology is right and important; stresses, however, that this change must be brought about not through prohibitions but through incentives to use new low-resource technologies;

18. Stresses that there must be no prohibitions against thinking about innovative new transport solutions or about the use of tried and tested procedures in new combinations;

General measures

19. Believes that R&I in the area of sustainable mobility should be based on the principle of integration, in particular through the abolition of trans-border missing links (interconnections), increased compatibility between and within the systems (interoperability) as well as through the objectives of achieving a shift towards the combination of the most appropriate and sustainable transport mode for a given route (inter- and co-modality);

20. Recalls the need for the EU to develop a genuine common transport policy, ensuring the relevance of transport within and between European regions and its coherence across local, regional, national and European levels; calls on the Member States and regions to ensure that the mix of models ensures a greater focus on genuinely sustainable mobility;

21. Stresses that this strategy must be based on an integrative model in which interregional connections and cross-border missing links are accorded the highest importance, including in geographically fragmented regions, and innovative solutions for multimodal transport can reduce regional disparities, stimulate labour mobility and enhance territorial cohesion; is mindful of the fact that there are currently considerable differences between regions in the field of transport networks, and draws attention to the need for investment in sustainable transport technologies and solutions in regions with specific disadvantages, also taking into account the potential of the Connecting Europe Facility;

22. Stresses that R&I should also focus on the development of sustainable infrastructure elements in support of a shift to using renewable primary products such as wood or compound material as railway infrastructure components (e.g. poles for catenary systems or signalisation, building material for platform or bridges); points out that this also includes

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R&I activities aimed at developing a substance for impregnating wooden sleepers that can serve as an alternative to creosote, the use of which will, under EU legislation, be abolished in 2018;

23. Emphasises that new approaches to mobility cannot be imposed and that, in order to promote more sustainable behaviour, there is a need for stronger research efforts in to the fields of eco-social knowledge and urban and spatial planning, and in technologies in the fields of mobility demand and behavioural change aimed at better control of transport flows, through, inter alia, innovative mobility management instruments, seamless door-to-door mobility chains that answer to users’ requirements, ecological and intelligent driving systems, and the use of real-time information and communication technologies;

24. Considers it essential for local and regional authorities to be involved in European innovation policy governance as it applies to transport and mobility; points out that such public authorities can bring their experience and expertise to bear both in integrating technologies, infrastructure, vehicles and passengers and in fostering new social habits where mobility is concerned; notes that local and regional authorities can identify, and are tasked to manage, the most acute mobility problems, that they are constantly testing and inaugurating good practices and innovative ideas, and that, given the variety of situations with which they have to deal, they are especially familiar with innovation;

25. Underlines the need for research on fair intra- and intermodal competition in the transport sector, and on the barriers created by vested interests linked to current business models, including, in particular, research on the technological tools needed to improve the consistent and effective enforcement of, and controls on, the rules on cabotage, the social provisions in road transport and the working conditions of persons employed in the sector;

26. Emphasises that innovative solutions to reduce noise from all transport modes, in particular at the source, are urgently needed in order to protect the health and quality of life of EU citizens and ensure acceptance among the population; recalls emphatically, in this context, its resolution on a Single European Transport Area, which called for the reduction by 2020 of noise and vibrations from, and energy consumption of, rail vehicles by 20 % relative to the reference values for 2010, and stresses once again that noise emissions should, from the outset, play a prominent part in the development of new technologies, strategies and infrastructure in the field of transport;

27. Is convinced that innovative technologies addressing the interaction between infrastructure and vehicles can play a significant role in reducing accidents, noise and vibrations, energy consumption, gas emissions and climate impact;

28. Confirms that efforts to achieve cleaner power for transport and mobility technologies should be linked to more efficient concepts and to better vehicle design; underlines the potential for energy savings through the use of innovative ideas, such as energy harvesting measures that take advantage of the opportunities offered by renewables and the use of alternative fuels;

29. Stresses the need not only to think about building a new transport infrastructure but, in research and development strategies, explicitly to take into account the aspects of repair, maintenance and upgrading (e.g. by equipping it with components for intelligent traffic management and ‘car to infrastructure’ technology);

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30. Calls on the Member States and the Commission to invest in intelligent transport system (ITS) research and see to it that it is carried out, thereby helping to reduce traffic congestion, increase European transport eco-efficiency and improve safety standards;

31. Calls on the Commission to consider the harmonisation of containers and other transport receptacles, and the dimensions of vehicles in all modes of transport, in order to promote the objective of interoperability and intermodality;

32. Calls on the Commission to provide Member States with a manual of best practice for compliance with the limit values laid down in the Air Quality Directive;

Specific measures

33. Acknowledges the importance of R&I in the area of individual mobility and stresses that the behaviour of transport users is decisive; calls for the creation of incentives to choose sustainable, physically active, safe and healthy means of transport and mobility, in order to develop innovative approaches that promote environmentally friendly public transport, walking and cycling, taking into account the needs and specificities of urban, peri-urban, interurban and rural areas; considers it important to improve interoperability between transport services, and believes that approval authorities will need to be particularly alert to, and deal promptly with, such technical or administrative problems as might arise, the object being to open up the market to new transport options matching the above characteristics;

34. Underlines the need for the EU institutions to set examples of good practice within their own mobility management services and to manage the necessary effort and its fruits in a transparent way, making this their hallmark;

35. Stresses the need to promote successful practices in the field of sustainable transport and to step up cooperation and exchange of good practices between regions with similar development potentials; recommends that local authorities build on examples of good practice by developing sustainable urban mobility plans in close consultation with civil society;

36. Believes that European satellite navigation systems such as Galileo should be a major pillar for developing intelligent and efficient transport in Europe;

37. Supports R&I that can contribute to a shift from vehicle ownership towards unconventional user behaviour and new forms of transport-related services, such as car- and bike-sharing; encourages the Commission to intensify its promotion of collective forms of individual mobility and of individualised public and collective transport systems;

38. Calls for research to extend to the tax and administrative sphere in order to pave the way for creative incentives in terms of taxes, fees and public tariffs aimed both at private individuals and at manufacturers or providers of products, services, and/or content, with a view to encouraging cycling and walking, when suitable in combination with public transport and other forms of sustainable mobility;

39. Highlights once again the need to improve and promote multimodal transport through integrated and electronic information and ticketing schemes, based on open-data solutions; points out that research and innovation in this field should particularly be geared to freedom

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from barriers, interoperability, affordability, price transparency, user-friendliness and efficiency;

40. Stresses the need to develop innovative long-lasting infrastructure solutions – including greater development of information, payment and reservation systems – that particularly take into account barrier-free accessibility for all passengers, and specifically for disabled people and persons with reduced mobility (PRMs) such as users with wheelchairs, buggies, bicycles or heavy luggage;

41. Advocates making data on timetables and delays in public transport freely available, allowing third parties to develop telematics applications that can offer further convenience to passenger, such as real-time information on how to reach a specific destination using different modes of transport, or a comparison of the ecological footprints of different modes of transport when travelling to a specific destination;

42. Stresses that, when it comes to developing innovation for transport and mobility in urban and residential areas, focus should be placed on health and quality of life, including a fair share of space for all, reduced noise and cleaner air;

43. Reminds the Commission of the urgent need to improve safety for all road users, in particular the most vulnerable ones, such as children, elderly people, pedestrians, cyclists and people with disabilities or reduced mobility; endorses R&I projects that combine technological solutions with intelligent drivers and their behavioural approaches;

44. Believes that in order to ease traffic congestion in urban areas and heavily built-up regions, it is important not only to increase the efficiency of existing means of transport but also, through technological progress, to pinpoint alternative transport solutions and promote their use;

45. Encourages the Commission strongly to promote innovation in the field of zero-emission ships, in particular ferries, cruise liners and maritime ships, based on the use of renewable energies from wind, solar and wave power, and linked with fuel-cell technologies;

46. Calls on the Commission to focus research efforts on further reducing the health and climate impact of emissions from all modes of transport;

47. Considers that a coherent and efficient European transport-technology strategy must be in line with the EU 2020 Strategy (COM(2010)2020) and the 1990 reduction targets, as well as being in full compliance with the 2011 White Paper on Transport, ‘Roadmap to a Single European Transport Area – Towards a competitive and resource efficient transport system’ (COM(2011)0144), in terms of territorial cohesion and balanced development; believes that it should permit reductions in energy consumption, traffic noise, traffic needs, air pollutants and greenhouse gas emissions; maintains that if the EU is to achieve those ends it will need to set firm targets for 2020, 2030 and 2050;

48. Stresses the need to reinforce R&I in the field of inland navigation, namely in order to develop clean vessels and technologies adapted to low-draught navigation such as River Adapted Ships for Sustainable Inland Navigation (RASSIN), which would allow savings to be made in inland waterway infrastructure;

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49. Welcomes the Commission’s proposal for the establishment of a Transport Research and Innovation Monitoring and Information System (TRIMIS); underlines the importance of providing regular, free, easily accessible and reliable information to regional policymakers; regrets the fact that to date it is still very difficult to access information concerning EU funding for transport projects;

50. Recommends that the Commission develop initiatives to identify and reward sustainable urban development programmes, along the lines of, for example, the RegioStars awards;

51. Stresses that a comprehensive European strategy must be supported from the bottom up, by well-prepared integrated transport strategies on the part of local and regional authorities and national governments; takes the view that the design of such strategies should be supported by the European funds;

52. Considers that all public support should be provided in accordance with relevant European legislation on State aid, including rules on research, development and innovation activities, and on the funding of transport activities and infrastructure; takes the view, however, that the EU’s State aid rules should also take adequate account of the specific disadvantages of certain regions;

53. Highlights the need for the Commission to improve its activities in the transfer of knowledge resulting from R&I activities to interested users (such as SMEs or research institutes) by creating a clustered database providing a clear categorised overview of all R&I projects funded by the EU;

54. Stresses the importance of new initiatives such as the pooling of transport and logistics capacity with a view to more efficient goods transport; calls on the Commission to tackle the possible obstacles to such initiatives;

55. Underlines the importance of emission standards for certain modes of transport, i.e. cars; takes the view that a similar approach should be explored for aviation and ships;

56. Supports further R&I in the field of security solutions for the transport sector, provided that the principles of proportionality, non-discrimination and data protection are respected;

57. Endorses and supports the approach proposed by the Commission with its measures for a European transport technology strategy; stresses, however, that this does not provide a legal basis for delegated legal acts or the like but that the Commission must propose measures for adoption under co-decision;

58. Calls on the Commission to take into account the priorities set out in this report when preparing the European strategic transport-technology plan and options for further action;

o

o o

59. Instructs its President to forward this resolution to the Council and the Commission.

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P7_TA-PROV(2013)0340

Right of access to a lawyer in criminal proceedings and right to communicate upon arrest ***I

European Parliament legislative resolution of 10 September 2013 on the proposal for a directive of the European Parliament and of the Council on the right of access to a lawyer in criminal proceedings and on the right to communicate upon arrest (COM(2011)0326 – C7-0157/2011 – 2011/0154(COD))






– having regard to the contributions submitted by the Bulgarian Parliament, the Italian Senate and the Portuguese Parliament on the draft legislative act,

– having regard to the opinion of the European Economic and Social Committee of 7 December 20111,

– after consulting the Committee of the Regions,

– having regard to the undertaking given by the Council representative by letter of 4 June 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 Civil Liberties, Justice and Home Affairs and the opinion of the Committee on Legal Affairs (A7-0228/2013),




1 OJ C 43, 15.2.2012, p. 51.

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P7_TC1-COD(2011)0154

Position of the European Parliament adopted at first reading on 10 September 2013 with a view to the adoption of Directive 2013/.../EU of the European Parliament and of the Council on the right of access to a lawyer in criminal proceedings and in European arrest warrant proceedings, and on the right to have a third party informed upon deprivation of liberty and to communicate with third persons and with consular authorities while deprived of liberty

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 point (b) of Article 82(2) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee1,

After consulting the Committee of the Regions ▌,

Acting in accordance with the ordinary legislative procedure2,

1 OJ C 43, 15.2.2012, p. 51.2 Position of the European Parliament of 10 September 2013.

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Whereas:

(1) Article 47 of the Charter of Fundamental Rights of the European Union (the Charter),

Article 6 of the European Convention for the Protection of Human Rights and

Fundamental Freedoms (the ECHR) and Article 14 of the International Covenant on

Civil and Political Rights (the ICCPR) enshrine the right to a fair trial. Article 48(2) of

the Charter guarantees respect for the rights of the defence.

(2) The Union has set itself the objective of maintaining and developing an area of

freedom, security and justice. According to the Presidency conclusions of the

European Council in Tampere of 15 and 16 October 1999, and in particular point

(33) thereof, the principle of mutual recognition of judgments and other decisions of

judicial authorities should become the cornerstone of judicial cooperation in civil and

criminal matters within the Union because enhanced mutual recognition and the

necessary approximation of legislation would facilitate cooperation between

competent authorities and the judicial protection of individual rights.

(3) Pursuant to Article 82(1) of the Treaty on the Functioning of the European Union

(TFEU)," [j]udicial cooperation in criminal matters in the Union shall be based on

the principle of mutual recognition of judgments and judicial decisions…".

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(4) The implementation of the principle of mutual recognition of decisions in criminal

matters presupposes that Member States trust in each other's criminal justice

systems. The extent of the mutual recognition is very much dependent on a number

of parameters, which include mechanisms for safeguarding the rights of suspects or

accused persons and common minimum standards necessary to facilitate the

application of the principle of mutual recognition.

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(5) Although the Member States are party to the ECHR and to the ICCPR, experience has

shown that that alone does not always provide a sufficient degree of trust in the

criminal justice systems of other Member States.

(6) Mutual recognition of decisions in criminal matters can operate effectively only in a

spirit of trust in which not only judicial authorities, but all actors in the criminal

process consider decisions of the judicial authorities of other Member States as

equivalent to their own, implying not only trust in the adequacy of other Member

States’ rules, but also trust that those rules are correctly applied. Strengthening

mutual trust requires detailed rules on the protection of the procedural rights and

guarantees arising from the Charter, the ECHR and the ICCPR. It also requires, by

means of this Directive and by means of other measures, further development within

the Union of the minimum standards set out in the Charter and in the ECHR.

(7) Article 82(2) TFEU provides for the establishment of minimum rules applicable in

the Member States so as to facilitate mutual recognition of judgments and judicial

decisions and police and judicial cooperation in criminal matters having a cross-

border dimension. That Article refers to "the rights of individuals in criminal

procedure" as one of the areas in which minimum rules may be established.

(8) Common minimum rules should lead to increased confidence in the criminal justice

systems of all Member States, which, in turn, should lead to more efficient judicial

cooperation in a climate of mutual trust and to the promotion of a fundamental

rights culture in the Union. Such common minimum rules should also remove

obstacles to the free movement of citizens throughout the territory of the Member

States. Such common minimum rules should be established in relation to the right of

access to a lawyer in criminal proceedings, the right to have a third party informed

upon deprivation of liberty and the right to communicate with third persons and with

consular authorities while deprived of liberty.

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(9) On 30 November 2009, the Council adopted a Resolution on a Roadmap for

strengthening the procedural rights of suspected or accused persons in criminal

proceedings (‘the Roadmap’)1. ▌Taking a step-by-step approach, the Roadmap calls

for the adoption of measures regarding the right to translation and interpretation

(measure A) ▌, the right to information on rights and information about the charges

(measure B) ▌, the right to legal advice and legal aid (measure C), the right to

communicate with relatives, employers and consular authorities (measure D), and

special safeguards for suspects or accused persons who are vulnerable (measure E).

The Roadmap emphasises that the order of the rights is only indicative and thus

implies that it may be changed in accordance with priorities. The Roadmap is designed

to operate as a whole; only when all its components are implemented will its benefits

be felt in full.

(10) On 11 December 2009, the European Council welcomed the Roadmap and made it

part of the Stockholm programme - An open and secure Europe serving and

protecting citizens2 (point 2.4). The European Council underlined the non-

exhaustive character of the Roadmap, by inviting the Commission to examine

further elements of minimum procedural rights for suspects and accused persons,

and to assess whether other issues, for instance the presumption of innocence, need

to be addressed, in order to promote better cooperation in that area.

1 OJ C 295, 4.12.2009, p. 1.2 OJ C 115, 4.5.2010, p. 1.

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(11) Two measures have been adopted pursuant to the Roadmap to date, namely

Directive 2010/64/EU of the European Parliament and of the Council of 20 October

2010 on the right to interpretation and translation in criminal proceedings1 and

Directive 2012/13/EU of the European Parliament and of the Council of 22 May

2012 on the right to information in criminal proceedings2.

(12) This Directive lays down minimum rules concerning the right of access to a lawyer in

criminal proceedings and in proceedings for the execution of a European arrest warrant

pursuant to Council Framework Decision 2002/584/JHA of 13 June 2002 on the

European arrest warrant and the surrender procedures between Member States3

(European arrest warrant proceedings) and the right to have a third party informed

upon deprivation of liberty and to communicate with third persons and with

consular authorities while deprived of liberty. In doing so, it promotes the application

of the Charter, in particular Articles 4, 6, 7, 47 and 48 thereof, by building upon

Articles 3, 5, 6 and 8 ECHR, as interpreted by the European Court of Human Rights,

which, in its case-law, on an ongoing basis, sets standards on the right of access to a

lawyer. That case-law provides, inter alia, that the fairness of proceedings requires

that a suspect or accused person be able to obtain the whole range of services

specifically associated with legal assistance. In that regard, the lawyers of suspects

or accused persons should be able to secure without restriction, the fundamental

aspects of the defence.

1 OJ L 280, 26.10.2010, p. 1.2 OJ L 142, 1.6.2012, p. 1.3 OJ L 190, 18.7.2002, p. 1.

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(13) Without prejudice to the obligations of Member States under the ECHR to ensure

the right to a fair trial, proceedings in relation to minor offending which take place

within a prison and proceedings in relation to offences committed in a military

context which are dealt with by a commanding officer should not be considered to be

criminal proceedings for the purposes of this Directive.

(14) This Directive should be implemented taking into account the provisions of Directive

2012/13/EU, which provide that suspects or accused persons are provided promptly

with information concerning the right of access to a lawyer, and that suspects or

accused persons who are arrested or detained are provided promptly with a written

Letter of Rights containing information about the right of access to a lawyer.

(15) The term "lawyer" in this Directive refers to any person who, in accordance with

national law, is qualified and entitled, including by means of accreditation by an

authorised body, to provide legal advice and assistance to suspects or accused

persons.

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(16) In some Member States an authority other than a court having jurisdiction in

criminal matters has competence for imposing sanctions other than deprivation of

liberty in relation to relatively minor offences. That may be the case, for example, in

relation to traffic offences which are committed on a large scale and which might be

established following a traffic control. In such situations, it would be unreasonable

to require that the competent authorities ensure all the rights under this Directive.

Where the law of a Member State provides for the imposition of a sanction regarding

minor offences by such an authority and there is either a right of appeal or the

possibility for the case to be otherwise referred to a court having jurisdiction in

criminal matters, this Directive should therefore apply only to the proceedings before

that court following such an appeal or referral.

(17) In some Member States certain minor offences, in particular minor traffic offences,

minor offences in relation to general municipal regulations and minor public order

offences, are considered to be criminal offences. In such situations, it would be

unreasonable to require that the competent authorities ensure all the rights under

this Directive. Where the law of a Member State provides in respect of minor

offences that deprivation of liberty cannot be imposed as a sanction, this Directive

should therefore apply only to the proceedings before a court having jurisdiction in

criminal matters.

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(18) The scope of application of this Directive in respect of certain minor offences should

not affect the obligations of Member States under the ECHR to ensure the right to a

fair trial including obtaining legal assistance from a lawyer.

(19) Member States should ensure that suspects or accused persons have the right of

access to a lawyer without undue delay in accordance with this Directive. In any

event, suspects or accused persons should be granted access to a lawyer during

criminal proceedings before a court, if they have not waived that right.

(20) For the purposes of this Directive, questioning does not include preliminary

questioning by the police or by another law enforcement authority the purpose of

which is to identify the person concerned, to verify the possession of weapons or

other similar safety issues or to determine whether an investigation should be

started, for example in the course of a road-side check, or during regular random

checks when a suspect or accused person has not yet been identified.

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(21) Where a person other than a suspect or accused person, such as a witness, becomes

a suspect or accused person, that person should be protected against self-

incrimination and has the right to remain silent, as confirmed in the case-law of the

European Court of Human Rights. This Directive therefore makes express reference

to the practical situation where such a person becomes a suspect or accused person

during questioning by the police or by another law enforcement authority in the

context of criminal proceedings. Where, in the course of such questioning, a person

other than a suspect or accused person becomes a suspect or accused person,

questioning should be suspended immediately. However, questioning may be

continued if the person concerned has been made aware that he or she is a suspect

or accused person and is able to fully exercise the rights provided for in this

Directive.

▌

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(22) Suspects or accused persons should have the right to meet in private with the lawyer

representing them. Member States may make practical arrangements concerning the

duration and frequency of such meetings, taking into account the circumstances of the

proceedings, in particular ▌the complexity of the case and the procedural steps

applicable. Member States may also make practical arrangements to ensure safety

and security, in particular of the lawyer and of the suspect or accused person, in the

place where such a meeting is conducted. Such practical arrangements should not

prejudice the effective exercise or essence of the right of suspects or accused persons

to meet their lawyer.

(23) Suspects or accused persons should have the right to communicate with the lawyer

representing them. Such communication may take place at any stage, including

before any exercise of the right to meet that lawyer. Member States may make

practical arrangements concerning the duration, frequency and means of such

communication, including concerning the use of videoconferencing and other

communication technology in order to allow such communications to take place.

Such practical arrangements should not prejudice the effective exercise or essence

of the right of suspects or accused persons to communicate with their lawyer.

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(24) In respect of certain minor offences, this Directive should not prevent Member

States from organising the right of suspects or accused persons to have access to a

lawyer by telephone. However, limiting the right in this way should be restricted to

cases where a suspect or accused person will not be questioned by the police or by

another law enforcement authority.

(25) Member States should ensure that suspects or accused persons have the right for

their lawyer to be present and participate effectively when they are questioned by the

police or by another law enforcement or judicial authority, including during court

hearings. Such participation should be in accordance with any procedures under

national law which may regulate the participation of a lawyer during questioning of

the suspect or accused person by the police or by another law enforcement or

judicial authority, including during court hearings, provided that such procedures

do not prejudice the effective exercise and essence of the right concerned. During

questioning by the police or by another law enforcement or judicial authority of the

suspect or accused person or in a court hearing, the lawyer may inter alia, in

accordance with such procedures, ask questions, request clarification and make

statements, which should be recorded in accordance with national law.

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(26) Suspects or accused persons have the right for their lawyer to attend investigative or

evidence-gathering acts, insofar as they are provided for in the national law

concerned and in so far as the suspects or accused persons are required or permitted

to attend. Such acts should at least include identity parades, at which the suspect or

accused person figures among other persons in order to be identified by a victim or

witness; confrontations, where a suspect or accused person is brought together with

one or more witnesses or victims where there is disagreement between them on

important facts or issues and reconstructions of the scene of a crime in the presence

of the suspect or accused person, in order to better understand the manner and

circumstances under which a crime was committed and to be able to ask specific

questions to the suspect or accused person. Member States may make practical

arrangements concerning the presence of a lawyer during investigative or evidence-

gathering acts. Such practical arrangements should not prejudice the effective

exercise and essence of the rights concerned. Where the lawyer is present during an

investigative or evidence-gathering act, this should be noted using the recording

procedure in accordance with the law of the Member State concerned.

(27) Member States should endeavour to make general information available, for

instance on a website or by means of a leaflet that is available at police stations, to

facilitate the obtaining of a lawyer by suspects or accused persons. However,

Member States would not need to take active steps to ensure that suspects or accused

persons who are not deprived of liberty will be assisted by a lawyer if they have not

themselves arranged to be assisted by a lawyer. The suspect or accused person

concerned should be able freely to contact, consult and be assisted by a lawyer.

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(28) Where suspects or accused persons are deprived of liberty, Member States should

make the necessary arrangements to ensure that such persons are in a position to

exercise effectively the right of access to a lawyer, including by arranging for the

assistance of a lawyer when the person concerned does not have one, unless they

have waived that right. Such arrangements could imply, inter alia, that the

competent authorities arrange for the assistance of a lawyer on the basis of a list of

available lawyers from which the suspect or accused person could choose. Such

arrangements could include those on legal aid if applicable.

(29) The conditions in which suspects or accused persons are deprived of liberty should

fully respect the standards set out by the ECHR, by the Charter, and by the case-law

of the Court of Justice of the European Union (the Court of Justice) and of the

European Court of Human Rights. When providing assistance under this Directive

to a suspect or to an accused person who is deprived of liberty, the lawyer concerned

should be able to raise a question with the competent authorities regarding the

conditions in which that person is deprived of liberty.

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(30) In cases of geographical remoteness of the suspect or accused person, such as in

overseas territories or where the Member State undertakes or participates in military

operations outside its territory, Member States are permitted to derogate temporarily

from the right of the suspect or accused person to have access to a lawyer without

undue delay after deprivation of liberty. During such a temporary derogation, the

competent authorities should not question the person concerned or carry out any of

the investigative or evidence-gathering acts provided for in this Directive. Where

immediate access to a lawyer is not possible because of the geographical remoteness

of the suspect or accused person, Member States should arrange for communication

via telephone or video conference unless this is impossible.

(31) Member States should be permitted to derogate temporarily from the right of access

to a lawyer in the pre-trial phase when there is a need, in cases of urgency, to avert

serious adverse consequences for the life, liberty or physical integrity of a person.

During a temporary derogation on that ground, the competent authorities may

question suspects or accused persons without the lawyer being present, provided that

they have been informed of their right to remain silent and can exercise that right,

and provided that such questioning does not prejudice the rights of the defence,

including the privilege against self-incrimination. Questioning may be carried out

for the sole purpose and to the extent necessary to obtain information that is

essential to avert serious adverse consequences for the life, liberty or physical

integrity of a person. Any abuse of this derogation would in principle irretrievably

prejudice the rights of the defence.

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(32) Member States should also be permitted to derogate temporarily from the right of

access to a lawyer in the pre-trial phase where immediate action by the investigating

authorities is imperative to prevent substantial jeopardy to criminal proceedings, in

particular to prevent destruction or alteration of essential evidence, or to prevent

interference with witnesses. During a temporary derogation on that ground, the

competent authorities may question suspects or accused persons without a lawyer

being present, provided that they have been informed of their right to remain silent

and can exercise that right, and provided that such questioning does not prejudice

the rights of the defence, including the privilege against self-incrimination.

Questioning may be carried out for the sole purpose and to the extent necessary to

obtain information that is essential to prevent substantial jeopardy to criminal

proceedings. Any abuse of this derogation would in principle irretrievably prejudice

the rights of the defence.

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(33) Confidentiality of communication between suspects or accused persons and their

lawyer is key to ensuring the effective exercise of the rights of the defence and is an

essential part of the right to a fair trial. Member States should therefore respect the

confidentiality of meetings and other forms of communication between the lawyer

and the suspect or accused person in the exercise of the right of access to a lawyer

provided for in this Directive, without derogation. This Directive is without prejudice

to procedures that address the situation where there are objective and factual

circumstances giving rise to the suspicion that the lawyer is involved with the suspect

or accused person in a criminal offence. Any criminal activity on the part of a

lawyer should not be considered to be legitimate assistance to suspects or accused

persons within the framework of this Directive. The obligation to respect

confidentiality not only implies that Member States should refrain from interfering

with or accessing such communication but also that, where suspects or accused

persons are deprived of liberty or otherwise find themselves in a place under the

control of the State, Member States should ensure that arrangements for

communication uphold and protect confidentiality. This is without prejudice to any

mechanisms that are in place in detention facilities with the purpose of avoiding

illicit enclosures being sent to detainees, such as screening correspondence, provided

that such mechanisms do not allow the competent authorities to read the

communication between suspects or accused persons and their lawyer. This

Directive is also without prejudice to procedures under national law according to

which forwarding correspondence may be rejected if the sender does not agree to the

correspondence first being submitted to a competent court.

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(34) This Directive should be without prejudice to a breach of confidentiality which is

incidental to a lawful surveillance operation by competent authorities. This Directive

should also be without prejudice to the work that is carried out, for example, by

national intelligence services to safeguard national security in accordance with

Article 4(2) of the Treaty on European Union (TEU) or that falls within the scope of

Article 72 TFEU, pursuant to which Title V on an area of Freedom, Security and

Justice must not affect the exercise of the responsibilities incumbent upon Member

States with regard to the maintenance of law and order and the safeguarding of

internal security.

(35) Suspects or accused persons who are deprived of liberty should have the right to have

at least one person, such as a relative or an employer, nominated by them, informed

of their deprivation of liberty without undue delay, provided that this does not

prejudice the due course of the criminal proceedings against the person concerned

or any other criminal proceedings. Member States may make practical arrangements

in relation to the application of that right. Such practical arrangements should not

prejudice the effective exercise and essence of the right. In limited, exceptional

circumstances, however, it should be possible to derogate temporarily from that right

when this is justified, in the light of the particular circumstances of the case, by a

compelling reason as specified in this Directive. When the competent authorities

envisage making such a temporary derogation in respect of a specific third person,

they should firstly consider whether another third person, nominated by the suspect

or accused person, could be informed of the deprivation of liberty.

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(36) Suspects or accused persons should, while deprived of ▌ liberty, have the right to

communicate without undue delay with at least one third person, such as a relative,

nominated by them. Member States may limit or defer the exercise of that right in

view of imperative requirements or proportionate operational requirements. Such

requirements could include, inter alia, the need to avert serious adverse

consequences for the life, liberty or physical integrity of a person, the need to

prevent prejudice to criminal proceedings, the need to prevent a criminal offence,

the need to await a court hearing, and the need to protect victims of crime. When the

competent authorities envisage limiting or deferring the exercise of the right to

communicate in respect of a specific third person, they should first consider whether

the suspects or accused persons could communicate with another third person

nominated by them. Member States may make practical arrangements concerning

the timing, means, duration and frequency of communication with third persons,

taking account of the need to maintain good order, safety and security in the place

where the person is being deprived of liberty.

(37) The right of suspects and accused persons who are deprived of liberty to consular

assistance is enshrined in Article 36 of the 1963 Vienna Convention on Consular

Relations where it is a right conferred on States to have access to their nationals. This

Directive confers a corresponding right on suspects or accused persons who are

deprived of liberty, subject to their wishes. Consular protection may be exercised by

diplomatic authorities where such authorities act as consular authorities.

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(38) Member States should clearly set out in their national law the grounds and criteria

for any temporary derogations from the rights granted under this Directive, and they

should make restricted use of those temporary derogations. Any such temporary

derogations should be proportional, should be strictly limited in time, should not be

based exclusively on the type or the seriousness of the alleged offence, and should

not prejudice the overall fairness of the proceedings. Member States should ensure

that where a temporary derogation has been authorised under this Directive by a

judicial authority which is not a judge or a court, the decision on authorising the

temporary derogation can be assessed by a court, at least during the trial stage.

(39) Suspects or accused persons should be able to waive a right granted under this

Directive provided that they have been given information about the content of the

right concerned and the possible consequences of waiving that right. When

providing such information, the specific conditions of the suspects or accused

persons concerned should be taken into account, including their age and their

mental and physical condition.

147

(40) A waiver and the circumstances in which it was given should be noted using the

recording procedure in accordance with the law of the Member State concerned.

This should not lead to any additional obligation for Member States to introduce

new mechanisms or to any additional administrative burden.

(41) Where a suspect or accused person revokes a waiver in accordance with this

Directive, it should not be necessary to proceed again with questioning or any

procedural acts that have been carried out during the period when the right

concerned was waived.

▌

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(42) Persons subject to a European arrest warrant ('requested persons') should have the right

of access to a lawyer in the executing Member State in order to allow them to exercise

their rights effectively under Framework Decision 2002/584/JHA. Where a lawyer

participates in a hearing of a requested person by an executing judicial authority,

that lawyer may, inter alia, in accordance with procedures provided for under

national law, ask questions, request clarification and make statements. The fact that

the lawyer has participated in such a hearing should be noted using the recording


(43) Requested persons should have the right to meet in private with the lawyer

representing them in the executing Member State. Member States may make

practical arrangements concerning the duration and frequency of such meetings,

taking into account the particular circumstances of the case. Member States may

also make practical arrangements to ensure safety and security, in particular of the

lawyer and of the requested person, in the place where the meeting between the

lawyer and the requested person is conducted. Such practical arrangements should

not prejudice the effective exercise and essence of the right of requested persons to

meet with their lawyer.

149

(44) Requested persons should have the right to communicate with the lawyer

representing them in the executing Member State. It should be possible for such

communication to take place at any stage, including before any exercise of the right

to meet with the lawyer. Member States may make practical arrangements

concerning the duration, frequency and means of communication between requested

persons and their lawyer, including concerning the use of videoconferencing and

other communication technology in order to allow such communications to take

place. Such practical arrangements should not prejudice the effective exercise and

essence of the right of requested persons to communicate with their lawyer.

(45) Executing Member States should make the necessary arrangements to ensure that

requested persons are in a position to exercise effectively their right of access to a

lawyer in the executing Member State, including by arranging for the assistance of a

lawyer when requested persons do not have one, unless they have waived that right.

Such arrangements, including those on legal aid if applicable, should be governed

by national law. They could imply, inter alia, that the competent authorities arrange

for the assistance of a lawyer on the basis of a list of available lawyers from which

requested persons could choose.

150

(46) Without undue delay after being informed that a requested person wishes to appoint

a lawyer in the issuing Member State, the competent authority of that Member State

should provide the requested person with information to facilitate the appointment

of a lawyer in that Member State. Such information could, for example, include a

current list of lawyers, or the name of a lawyer on duty in the issuing State, who can

provide information and advice in European arrest warrant cases. Member States

could request that the appropriate bar association draw up such a list.

(47) The surrender procedure is crucial for cooperation in criminal matters between the

Member States. Observance of the time-limits contained in Framework Decision

2002/584/JHA is essential for such cooperation. Therefore, while requested persons

should be able to exercise fully their rights under this Directive in European arrest

warrant proceedings, those time-limits should be respected.

▌

151

(48) Pending a legislative act of the Union on legal aid, Member States should ▌apply their

national law in relation to legal aid, which should be in line with the Charter, the

ECHR and the case-law of the European Court of Human Rights. ▌

(49) In accordance with the principle of effectiveness of Union law, Member States

should put in place adequate and effective remedies to protect the rights that are

conferred upon individuals by this Directive.

▌

(50) Member States should ensure that in the assessment of statements made by suspects

or accused persons or of evidence obtained in breach of their right to a lawyer, or in

cases where a derogation from that right was authorised in accordance with this

Directive, the rights of the defence and the fairness of the proceedings are respected.

In this context, regard should be had to the case-law of the European Court of

Human Rights, which has established that ▌the rights of the defence will, in principle,

be irretrievably prejudiced when incriminating statements made during police

interrogation without access to a lawyer are used for a conviction. This should be

without prejudice to the use of statements for other purposes permitted under national

law, such as the need to execute urgent investigative acts ▌to avoid the perpetration of

other offences or serious adverse consequences for any person or related to an urgent

need to prevent substantial jeopardy to criminal proceedings where access to a

lawyer or delaying the investigation would irretrievably prejudice the ongoing

investigations regarding a serious crime. Further, this should be without prejudice

to national rules or systems regarding admissibility of evidence, and should not

prevent Member States from maintaining a system whereby all existing evidence can

be adduced before a court or a judge, without there being any separate or prior

assessment as to admissibility of such evidence.

152

(51) The duty of care towards suspects or accused persons who are in a potentially weak

position underpins a fair administration of justice. The prosecution, law

enforcement and judicial authorities should therefore facilitate the effective exercise

by such persons of the rights provided for in this Directive, for example by taking

into account any potential vulnerability that affects their ability to exercise the right

of access to a lawyer and to have a third party informed upon deprivation of liberty,

and by taking appropriate steps to ensure those rights are guaranteed.

▌

(52) This Directive upholds the fundamental rights and principles recognised by the Charter

▌, including the prohibition of torture and inhuman and degrading treatment, the right

to liberty and security, respect for private and family life, the right to the integrity of

the person, the rights of the child, integration of persons with disabilities, the right to

an effective remedy and the right to a fair trial, the presumption of innocence and the

rights of the defence. This Directive should be implemented in accordance with those

rights and principles.

(53) Member States should ensure that the provisions of this Directive, where they

correspond to rights guaranteed by the ECHR, are implemented consistently with

those of the ECHR and as developed by case-law of the European Court of Human

Rights.

(54) This Directive sets minimum rules. Member States may extend the rights set out in

this Directive in order to provide a higher level of protection. Such higher level of

protection should not constitute an obstacle to the mutual recognition of judicial

decisions that those minimum rules are designed to facilitate. The level of protection

should never fall below the standards provided by the Charter or by the ECHR, as

interpreted in the case-law of the Court of Justice and of the European Court of

Human Rights.

153

(55) This Directive promotes the rights of children and takes into account the Guidelines of

the Council of Europe on child friendly justice, in particular its provisions on

information and advice to be given to children. The Directive ensures that suspects

and accused persons, including children, are provided with adequate information to

understand the consequences of waiving a right under this Directive and that any

such waiver is made voluntarily and unequivocally. Where the suspect or accused

person is a child, the holder of parental responsibility should be ▌notified as soon as

possible after the child's deprivation of liberty and should be provided with the

reasons therefor. If providing such information to the holder of parental

responsibility is contrary to the best interests of the child, another suitable adult such

as a relative should be informed instead. This should be without prejudice to

provisions of national law which require that any specified authorities, institutions

or individuals, in particular those that are responsible for the protection or welfare

of children, should be informed of the deprivation of liberty of a child. Member

States should refrain from limiting or deferring the exercise of the right to

communicate with a third party in respect of suspects or accused persons who are

children and who are deprived of liberty, save in the most exceptional circumstances.

Where a deferral is applied the child should, however, not be held incommunicado

and should be permitted to communicate, for example with an institution or an

individual responsible for the protection or welfare of children.

154

(56) In accordance with the Joint Political Declaration of 28 September 2011 of Member

States and the Commission on explanatory documents1, 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.

▌

(57) Since the objectives of this Directive, namely setting common minimum rules for the

right of access to a lawyer in criminal proceedings and in European arrest warrant

proceedings and the right to have a third person informed of the deprivation of

liberty and to communicate with third persons and with consular authorities while

deprived of liberty, cannot be sufficiently achieved by the Member States, but can

rather, by reason of the scale of the measure, be better achieved at Union level, the

Union may adopt measures, in accordance with the principle of subsidiarity as set out

in Article 5 TEU. 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.

1 OJ C 369, 17.12.2011, p. 14.

155

(58) In accordance with Articles 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, those

Member States are not taking part in the adoption of this Directive and are not bound

by it or subject to its application.

(59) 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 Directive, and is not bound by it or subject to its application,

HAVE ADOPTED THIS DIRECTIVE:

156

Article 1

Subject matter

This Directive lays down minimum rules concerning the rights of suspects and accused persons

in criminal proceedings and of persons subject to proceedings pursuant to Framework Decision

2002/584/JHA ("European arrest warrant proceedings") to have access to a lawyer, to have a

third party informed of the deprivation of liberty and to communicate with third persons and

with consular authorities while deprived of liberty.

Article 2

Scope

1. This Directive applies to suspects or accused persons in criminal proceedings from

the time when they are made aware by the competent authorities of a Member State,

by official notification or otherwise, that they are suspected or accused of having

committed a criminal offence, and irrespective of whether they are deprived of

liberty. It applies until the conclusion of the proceedings, which is understood to mean

the final determination of the question whether the suspect or accused person has

committed the offence, including, where applicable, sentencing and the resolution of

any appeal.

157

2. This Directive applies to persons subject to European arrest warrant proceedings

(requested persons) from the time of their arrest in the executing Member State in

accordance with Article 10.

3. This Directive also applies, under the same conditions as provided for in paragraph

1, to persons other than suspects or accused persons who, in the course of

questioning by the police or by another law enforcement authority, become suspects

or accused persons.

4. Without prejudice to the right to a fair trial, in respect of minor offences:

(a) where the law of a Member State provides for the imposition of a sanction by

an authority other than a court having jurisdiction in criminal matters, and the

imposition of such a sanction may be appealed or referred to such a court; or

(b) where deprivation of liberty cannot be imposed as a sanction,

this Directive shall only apply to the proceedings before a court having jurisdiction

in criminal matters.

In any event, this Directive shall fully apply where the suspect or accused person is

deprived of liberty, irrespective of the stage of the criminal proceedings.

158

Article 3

The right of access to a lawyer in criminal proceedings

1. Member States shall ensure that suspects and accused persons have the right of access

to a lawyer in such time and in such a manner so as to allow the persons concerned

to exercise their rights of defence practically and effectively.

2. Suspects or accused persons shall have access to a lawyer without undue delay. In

any event, suspects or accused persons shall have access to a lawyer from whichever

of the following points in time is the earliest:

(a) before they are questioned by the police or by another law enforcement or

judicial authority;

(b) upon the carrying out by investigating or other competent authorities of an

investigative or other evidence-gathering act in accordance with point (c) of

paragaph 3;

(c) without undue delay after deprivation of liberty;

159

(d) where they have been summoned to appear before a court having jurisdiction

in criminal matters, in due time before they appear before that court.

3. The right of access to a lawyer shall entail the following:

(a) Member States shall ensure that suspects or accused persons have the right to

meet in private and communicate with the lawyer representing them, including

prior to questioning by the police or by another law enforcement or judicial

authority;

(b) Member States shall ensure that suspects or accused persons have the right for

their lawyer to be present and participate effectively when questioned. Such

participation shall be in accordance with procedures under national law,

provided that such procedures do not prejudice the effective exercise and

essence of the right concerned. Where a lawyer participates during

questioning, the fact that such participation has taken place shall be noted

using the recording procedure in accordance with the law of the Member State

concerned;

160

(c) Member States shall ensure that suspects or accused persons shall have, as a

minimum, the right for their lawyer to attend the following investigative or

evidence-gathering acts where those acts are provided for under national law

and if the suspect or accused person is required or permitted to attend the act

concerned:

(i) identity parades;

(ii) confrontations;

(iii) reconstructions of the scene of a crime.

4. Member States shall endeavour to make general information available to facilitate

the obtaining of a lawyer by suspects or accused persons.

Notwithstanding provisions of national law concerning the mandatory presence of a

lawyer, Member States shall make the necessary arrangements to ensure that

suspects or accused persons who are deprived of liberty are in a position to exercise

effectively their right of access to a lawyer, unless they have waived that right in

accordance with Article 9.

161

5. In exceptional circumstances and only at the pre-trial stage, Member States may

temporarily derogate from the application of point (c) of paragraph 2 where the

geographical remoteness of a suspect or accused person makes it impossible to

ensure the right of access to a lawyer without undue delay after deprivation of

liberty.

6. In exceptional circumstances and only at the pre-trial stage, Member States may

temporarily derogate from the application of the rights provided for in paragraph 3

to the extent justified in the light of the particular circumstances of the case, on the

basis of one of the following compelling reasons:

(a) where there is an urgent need to avert serious adverse consequences for the

life, liberty or physical integrity of a person;

(b) where immediate action by the investigating authorities is imperative to

prevent substantial jeopardy to criminal proceedings.

162

Article 4

Confidentiality

Member States shall respect the confidentiality of communication between suspects or

accused persons and their lawyer in the exercise of the right of access to a lawyer provided

for under this Directive. Such communication shall include meetings, correspondence,

telephone conversations and other forms of communication permitted under national law.

Article 5

The right to have a third person informed of the deprivation of liberty

1. Member States shall ensure that suspects or accused persons who are deprived of

liberty have the right to have at least one person, such as a relative or an employer,

nominated by them, informed of their deprivation of liberty without undue delay if

they so wish.

163

2. If the suspect or accused person is a child, Member States shall ensure that the holder

of parental responsibility of the child is informed as soon as possible of the

deprivation of liberty and of the reasons pertaining thereto, unless it would be contrary

to the best interests of the child, in which case another appropriate adult shall be

informed. For the purposes of this paragraph, a person below the age of 18 years

shall be considered to be a child.

3. Member States may temporarily derogate from the application of the rights set out in

paragraphs 1 and 2 where justified in the light of the particular circumstances of the

case on the basis of one of the following compelling reasons:

(a) where there is an urgent need to avert serious adverse consequences for the

life, liberty or physical integrity of a person;

(b) where there is an urgent need to prevent a situation where criminal

proceedings could be substantially jeopardised.

164

4. Where Member States temporarily derogate from the application of the right set out

in paragraph 2, they shall ensure that an authority responsible for the protection or

welfare of children is informed without undue delay of the deprivation of liberty of

the child.

Article 6

The right to communicate, while deprived of liberty, with third persons

1. Member States shall ensure that suspects or accused persons who are deprived of

liberty have the right to communicate without undue delay with at least one third

person, such as a relative, nominated by them.

2. Member States may limit or defer the exercise of the right referred to in paragraph 1

in view of imperative requirements or proportionate operational requirements.

165

Article 7

The right to communicate with consular ▌authorities

1. Member States shall ensure that suspects or accused persons ▌who are non-nationals

and who are deprived of liberty have the right to have the consular ▌authorities of their

State of nationality informed of the deprivation of liberty without undue delay and to

communicate with those authorities, if they so wish. However, where suspects or

accused persons have two or more nationalities, they may choose which consular

authorities, if any, are to be informed of the deprivation of liberty and with whom

they wish to communicate.

2. Suspects or accused persons also have the right to be visited by their consular

authorities, the right to converse and correspond with them and the right to have

legal representation arranged for by their consular authorities, subject to the

agreement of those authorities and the wishes of the suspects or accused persons

concerned.

3. The exercise of the rights laid down in this Article may be regulated by national law

or procedures, provided that such law or procedures enable full effect to be given to

the purposes for which these rights are intended.

▌

166

Article 8

General conditions for applying temporary derogations

1. Any temporary derogation under Article 3(5) or (6) or under Article 5(3) shall

(a) be proportionate and not go beyond what is necessary;

(b) be strictly limited in time;

(c) not be based exclusively on the type or the seriousness of the alleged offence;

and

▌

(d) not prejudice the overall fairness of the proceedings.

▌

167

2. Temporary derogations under Article 3(5) or (6) may be authorised only by a duly

reasoned decision taken ▌on a case-by-case basis, either by a judicial authority, or by

another competent authority on condition that the decision can be submitted to

judicial review. The duly reasoned decision shall be recorded using the recording


3. Temporary derogations under Article 5(3) may be authorised only on a case-by-case

basis, either by a judicial authority, or by another competent authority on condition

that the decision can be submitted to judicial review.

Article 9

Waiver

1. Without prejudice to national law requiring the mandatory presence or assistance of a

lawyer, Member States shall ensure that, in relation to any waiver of a right

▌referred to in Articles 3 and 10:

(a) the suspect or accused person has been provided, orally or in writing, with clear

and sufficient information in simple and understandable language about the

content of the right concerned and the possible consequences of waiving it; and

▌

(b) the waiver is given voluntarily and unequivocally.

168

2. The waiver, which can be made in writing or orally, shall be noted, as well as the

circumstances under which the waiver was given, using the recording procedure in

accordance with the law of the Member State concerned.

3. Member States shall ensure that suspects or accused persons may revoke a waiver

subsequently at any point during the criminal proceedings and that theyare informed

about that possibility. Such a revocation shall have effect from the moment it is

made.

▌

Article 10

The right of access to a lawyer in European arrest warrant proceedings

1. Member States shall ensure that a requested person has the right of access to a lawyer

in the executing Member State upon arrest pursuant to the European arrest warrant ▌.

169

2. With regard to the content of the right of access to a lawyer in the executing Member

State, requested persons shall have the following rights in that Member State:

(a) the right of access to a lawyer in such time and in such a manner as to

allow the requested persons to exercise their rights effectively and in any event

without undue delay from deprivation of liberty;

(b) the right to meet and communicate with the lawyer representing them;

(c) the right for their lawyer to be present ▌and, in accordance with

procedures in national law, participate during a hearing of a requested person

by the executing judicial authority. Where a lawyer participates during the

hearing this shall be noted using the recording procedure in accordance with the

law of the Member State concerned.

3. The rights provided for in Articles 4, 5, 6, 7, 9, and, when a temporary derogation

under Article 5(3) is applied, Article 8, shall apply, mutatis mutandis, to European

arrest warrant proceedings in the executing Member State.

170

4. The competent authority in the executing Member State shall, without undue delay

after deprivation of liberty, inform requested persons that they have the right to

appoint a lawyer in the issuing Member State. The role of that lawyer in the issuing

Member State is to assist the lawyer in the executing Member State by providing that

lawyer with information and advice with a view to the effective exercise of the rights

of requested persons under Framework Decision 2002/584/JHA.

5. Where requested persons wish to exercise the right to appoint a lawyer in the issuing

Member State and do not already have such a lawyer, the competent authority in the

executing Member State shall promptly inform the competent authority in the

issuing Member State. The competent authority of that Member State shall, without

undue delay, provide the requested persons with information to facilitate them in

appointing a lawyer there.

6. The right of a requested person to appoint a lawyer in the issuing Member State is

without prejudice to the time-limits set out in Framework Decision 2002/584/JHA or

the obligation on the executing judicial authority to decide, within those time-limits

and the conditions defined under that Framework Decision, whether the person is to

be surrendered.

▌

171

Article 11

Legal aid

▌This Directive is without prejudice to national law in relation to legal aid, which shall apply

in accordance with the Charter and the ECHR.

▌

Article 12

Remedies

1. Member States shall ensure that suspects or accused persons in criminal proceedings,

as well as requested persons in European arrest warrant proceedings, have an

effective remedy under national law in the event of a breach of the rights under this

Directive.

▌

2. Without prejudice to national rules and systems on the admissibility of evidence,

Member States shall ensure that, in criminal proceedings, in the assessment of

statements made by suspects or accused persons or of evidence obtained in breach of

their right to a lawyer or in cases where a derogation to this right was authorised in

accordance with Article 3(6), the rights of the defence and the fairness of the

proceedings are respected.

172

Article 13

Vulnerable persons

Member States shall ensure that the particular needs of vulnerable suspects and vulnerable accused

persons are taken into account in the application of this Directive.

Article 14

Non-regression clause

Nothing in this Directive shall be construed as limiting or derogating from any of the rights and

procedural safeguards that are ensured under the Charter, the ECHR, or other relevant

provisions of international law or the law of any Member State which provides a higher level of

protection.

Article 15

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.

▌

2. When Member States adopt those measures, they shall contain a reference to this

Directive or shall be accompanied by such a reference on the occasion of their official

publication. The methods of making such a reference shall be laid down by the

Member States.

OJ: Please insert the date 36 months after date of entry into force of this Directive.

173

3. Member States shall communicate to the Commission the text of the measures of

national law which they adopt in the field covered by this Directive.

▌

Article 16

Report

The Commission shall, by …, submit a report to the European Parliament and to the

Council, assessing the extent to which the Member States have taken the necessary measures

in order to comply with this Directive, including an evaluation of the application of Article

3(6) in conjunction with Article 8(1) and (2), accompanied, if necessary, by legislative

proposals.

OJ: Please insert the date 36 months after the date referred to in Article 15(1).

174

Article 17

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 18

Addressees

This Directive is addressed to the Member States in accordance with the Treaties.

Done at ...,

For the European Parliament For the Council

The President The President

_______________________

175

P7_TA-PROV(2013)0341

Credit agreements relating to residential property ***I

Amendments adopted by the European Parliament on 10 September 2013 on the proposal for a directive of the European Parliament and of the Council on credit agreements relating to residential property (COM(2011)0142 – C7-0085/2011 – 2011/0062(COD))1


[Amendment No 117]

AMENDMENTS BY THE EUROPEAN PARLIAMENT*

to the Commission proposal

---------------------------------------------------------

DIRECTIVE 2013/…/EU

OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on credit agreements for consumers relating to residential immovable property and

amending Directive 2008/48/EC

(Text with EEA relevance)


Having regard to the Treaty on the Functioning of the European Union, and in particular Article

114 thereof,


1 The matter was referred back to the committee responsible for reconsideration pursuant to Rule 57(2), second subparagraph (A7-0202/2012).

* Amendments: new or amended text is highlighted in bold italics; deletions are indicated by the symbol ▌.

176


Having regard to the opinion of the European Central Bank1,


▌

Acting in accordance with the ordinary legislative procedure,

1 OJ C 240, 18.8.2011, p. 3.2 OJ C 318, 29.10.2011, p. 133.

177

Whereas:

(1) In March 2003, the Commission launched a process of identifying and assessing the

impact of barriers to the internal market for credit agreements relating to residential

immovable property. On 18 December 2007, it adopted a White Paper on the Integration

of EU Mortgage Credit Markets. The White Paper announced the Commission’s

intention to assess the impact of, among other things, the policy options for pre-

contractual information, credit databases, creditworthiness, the annual percentage rate of

charge (APRC) and advice on credit agreements. The Commission established an

Expert Group on Credit Histories to assist the Commission in preparing measures to

improve the accessibility, comparability and completeness of credit data. Studies on the

role and operations of credit intermediaries and non-credit institutions providing credit

agreements relating to residential immovable property were also launched.

(2) In accordance with the Treaty on the Functioning of the European Union (TFEU), the

internal market comprises an area without internal frontiers in which the free movement

of goods and services and the freedom of establishment are ensured. The development

of a more transparent and efficient credit market within that area is vital in promoting

the development of cross-border activity and creating an internal market for credit

agreements relating to residential immovable property. There are substantial differences

in the laws of the various Member States with regard to the conduct of business in the

granting of credit agreements relating to residential immovable property and in the

regulation and supervision of credit intermediaries and non-credit institutions providing

credit agreements relating to residential immovable property. Such differences create

obstacles that restrict the level of cross-border activity on the supply and demand sides,

thus reducing competition and choice in the market, raising the cost of lending for

providers and even preventing them from doing business.

178

(3) The financial crisis has shown that irresponsible behaviour by market participants can

undermine the foundations of the financial system, leading to a lack of confidence

among all parties, in particular consumers, and potentially severe social and economic

consequences. Many consumers have lost confidence in the financial sector and

borrowers have found their loans increasingly unaffordable, resulting in defaults and

forced sales rising. As a result, the G20 has commissioned work from the Financial

Stability Board to establish principles on sound underwriting standards in relation to

residential immovable property. Although some of the greatest problems in the

financial crisis occurred outside the Union, consumers within the Union hold

significant levels of debt, much of which is concentrated in credits related to

residential immovable property. It is therefore appropriate to ensure that the Union's

regulatory framework in this area is robust, consistent with international principles

and makes appropriate use of the range of tools available, which may include the use

of loan-to-value, loan-to-income, debt-to-income or similar ratios, minimum levels

below which no credit would be deemed acceptable or other compensatory measures

for the situations where the underlying risks are higher to consumers or where needed

to prevent household over-indebtedness. In view of the problems brought to light in the

financial crisis and with a view to ensuring an efficient and competitive internal market

which contributes to financial stability, the Commission has proposed, in its

Communication of 4 March 2009 entitled 'Driving European recovery', measures with

regard to credit agreements relating to residential immovable property, including a

reliable framework on credit intermediation, in the context of delivering responsible and

reliable markets for the future and restoring consumer confidence. The Commission

reaffirmed its commitment to an efficient and competitive internal market in its

Communication of 13 April 2011 entitled 'Single Market Act: Twelve levers to boost

growth and strengthen confidence'.

179

(4) A series of problems have been identified in ▌mortgage markets within the Union

relating to irresponsible lending and borrowing ▌and the potential scope for

irresponsible behaviour by market participants including credit intermediaries and non-

credit institutions ▌. Some problems concerned credits denominated in a foreign

currency which consumers had taken out in that currency in order to take advantage of

the borrowing rate offered but without having ▌adequate information about or

understanding of the exchange rate risk involved. Those problems are driven by market

and regulatory failures as well as other factors such as the general economic climate and

low levels of financial literacy. Other problems include ineffective, inconsistent, or non-

existent ▌ regimes for credit intermediaries and non-credit institutions providing credit

for residential immovable property. The problems identified have potentially significant

macroeconomic spill-over effects, can lead to consumer detriment, act as economic or

legal barriers to cross-border activity and create an unlevel playing field between actors.

(5) In order to facilitate the emergence of a smoothly functioning internal market with a

high level of consumer protection in the area of credit agreements relating to

▌immovable property and in order to ensure that consumers looking for such

agreements ▌ are able to do so confident in the knowledge that the institutions they

interact with act in a professional and responsible manner, an appropriately harmonised

Union legal framework needs to be established in a number of areas, taking into

account differences in credit agreements arising in particular from differences in

national and regional immovable property markets.

180

(6) This Directive should therefore develop a more transparent, efficient and competitive

internal market, through consistent, flexible and fair credit agreements relating to

immovable property, while promoting sustainable lending and borrowing and

financial inclusion, and hence providing a high level of consumer protection.

(7) In order to create a genuine internal market with a high and equivalent level of

consumer protection, this Directive lays down provisions subject to maximum

harmonisation in relation to the provision of pre-contractual information through the

European Standardised Information Sheet (ESIS) standardised format and the

calculation of the APRC. However, taking into account the specificity of credit

agreements relating to immovable property and differences in market developments

and conditions in Member States, concerning in particular market structure and

market participants, categories of products available and procedures involved in the

credit granting process, Member States should be allowed to maintain or introduce

more stringent provisions than those laid down in this Directive in those areas not

clearly specified as being subject to maximum harmonisation. Such a targeted

approach is necessary in order to avoid adversely affecting the level of protection of

consumers relating to credit agreements in the scope of this Directive. Member States

should, for example, be allowed to maintain or introduce more stringent provisions

with regard to knowledge and competence requirements for staff and instructions for

completing the ESIS.

181

(8) This Directive should improve conditions for the establishment and functioning of the

internal market through the approximation of Member States’ laws and the

establishment of quality standards for certain services, in particular with regard to the

distribution and provision of credit through creditors and credit intermediaries and the

promotion of good practices. The establishment of quality standards for services for the

provision of credit necessarily involves the introduction of certain provisions regarding

admission, supervision and prudential requirements.

(9) For those areas not covered by this Directive, Member States are free to maintain or

introduce national law. In particular, Member States may maintain or introduce

national provisions in areas such as contract law relating to the validity of credit

agreements, property law, land registration, contractual information and, to the extent

that they are not regulated in this Directive, post-contractual issues. Member States

may provide that the appraiser or appraisal company or notaries may be chosen by

mutual agreement of the parties. Given the differences between the processes for the

purchase or sale of residential immovable property in the Member States, there is

scope for creditors or credit intermediaries to seek to receive payments in advance

from consumers on the understanding that such payments could help to secure the

conclusion of a credit agreement or the purchase or sale of an immovable property,

and for such practices to be misused in particular where consumers are unfamiliar

with the requirements and usual practice in that Member State. It is therefore

appropriate to allow Member States to impose restrictions on such payments.

182

(10) This Directive should apply irrespective of whether the creditor or credit intermediary

is a legal person or a natural person. However, this Directive should not affect the

right of Member States to limit, in conformity with Union law, the role of creditor or

credit intermediary under this Directive to legal persons only or to certain types of

legal persons.

(11) Since consumers and enterprises are not in the same position, they do not need the same

level of protection. While it is important to guarantee the rights of consumers ▌ by

means of provisions that cannot be derogated from by contract, it is reasonable to allow

enterprises and organisations to enter into other agreements. ▌

(12) The definition of consumer should cover natural persons who are acting outside their

trade, business or profession. However, in the case of dual purpose contracts, where

the contract is concluded for purposes partly within and partly outside the person’s

trade, business or profession and the trade, business or professional purpose is so

limited as not to be predominant in the overall context of the contract, that person

should also be considered as a consumer.

183

(13) While this Directive regulates credit agreements which solely or predominantly relate

to residential immovable property, it does not prevent Member States from extending

the measures taken in accordance with this Directive to protect consumers in relation

to credit agreements related to other forms of immovable property, or from otherwise

regulating such credit agreements.

(14) The definitions set out in this Directive determine the scope of harmonisation. The

obligations of Member States to transpose this Directive should therefore be limited to

its scope as determined by those definitions. For instance, the obligations of Member

States to transpose this Directive are limited to credit agreements concluded with

consumers, meaning with natural persons who, in transactions covered by this

Directive, are acting outside their trade, business or profession. Similarly, Member

States are obliged to transpose provisions of this Directive regulating the activity of

persons acting as credit intermediary as defined in the Directive. However, this

Directive should be without prejudice to the application by Member States, in

accordance with Union law, of this Directive to areas not covered by its scope. In

addition, the definitions set out in this Directive should be without prejudice to the

possibility for Member States to adopt sub-definitions under national law for specific

purposes, provided that they are still compliant with the definitions set out in this

Directive. For example, Member States should be allowed to determine under national

law sub-categories of credit intermediaries that are not identified in this Directive,

where such sub-categories are necessary at national level for instance to differentiate

the level of knowledge and competence requirements to be fulfilled by the different

credit intermediaries.

184

(15) The objective of this Directive is to ensure that consumers entering into credit

agreements relating to immovable property benefit from a high level of protection. It

should therefore apply to credits secured by immovable property regardless of the

purpose of the credit, refinancing agreements or other credit agreements that would

help an owner or part owner continue to retain rights in immovable property or land

and credits which are used to purchase an immovable property in some Member States

including credits that do not require the reimbursement of the capital or, unless

Member States have an adequate alternative framework in place, those whose purpose

is to provide temporary financing between the sale of one immovable property and the

purchase of another, and to secured credits for the renovation of residential immovable

property ▌.

(16) This Directive should not apply to certain credit agreements where the creditor

contributes a lump sum, periodic payments or other forms of credit disbursement in

return for a sum deriving from the sale of an immovable property and whose primary

objective is to facilitate consumption, such as equity release products or other equivalent

specialised products. Such credit agreements have specific characteristics which are

beyond the scope of this Directive. An assessment of the consumer’s creditworthiness,

for example, is irrelevant since the payments are made from the creditor to the consumer

rather than the other way round. Such a transaction would require, inter alia,

substantially different pre-contractual information. Furthermore, other products, such as

home reversions, which have comparable functions to reverse mortgages or lifetime

mortgages, do not involve the provision of credit and so would remain outside the scope

of this Directive. ▌

185

(17) This Directive should not cover other explicitly listed types of niche credit agreements,

that are different in their nature and risks involved from standard mortgage credits

and therefore require a tailored approach, in particular credit agreements which are

the outcome of a settlement reached in court or before another statutory authority,

and certain types of credit agreements where the credit is granted by an employer to

his employees under certain circumstances, as already provided in Directive

2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit

agreements for consumers1. It is appropriate to allow Member States to exclude

certain credit agreements, such as those which are granted to a restricted public on

advantageous terms or provided by credit unions, provided that adequate alternative

arrangements are in place to ensure that policy objectives relating to financial

stability and the internal market can be met without impeding financial inclusion and

access to credit. Credit agreements where the immovable property is not to be

occupied as a house, apartment or another place of residence by the consumer or a

family member of the consumer and is occupied as a house, apartment or another

place of residence on a basis of a rental agreement, have risks and features that are

different from standard credit agreements and therefore may require a more adapted

framework. Member States should therefore be able to exclude such credit agreements

from the Directive where an appropriate national framework is in place for them.

(18) Unsecured credit agreements the purpose of which is the renovation of a residential

immovable property involving a total amount of credit above EUR 75 000 should fall

under the scope of Directive 2008/48/EC in order to ensure an equivalent level of

protection to those consumers and to avoid any regulatory gap between that Directive

and this Directive. Directive 2008/48/EC should therefore be amended accordingly.

1 OJ L 133, 22.5.2008, p. 66.

186

(19) For reasons of legal certainty, the Union legal framework in the area of credit

agreements relating to residential immovable property should be consistent with and

complementary to other Union acts, particularly in the areas of consumer protection and

prudential supervision. Certain essential definitions including the definition of

▌'consumer', ▌ and 'durable medium', as well as key concepts used in standard

information to designate the financial characteristics of the credit, including 'total

amount payable by the consumer' and ▌'borrowing rate ▌' should be in line with those

set out in Directive 2008/48/EC so that the same terminology refers to the same type of

facts irrespective of whether the credit is a consumer credit or a credit relating to

residential immovable property. Member States should therefore ensure, in the

transposition of this Directive, that there is ▌consistency of application and

interpretation in relation to those essential definitions and key concepts.

(20) In order to ensure a consistent framework for consumers in the area of credit as well as

to minimise the administrative burden for creditors and credit intermediaries, the core

framework of this Directive should follow the structure of Directive 2008/48/EC where

possible, notably the notions that information included in advertising concerning credit

agreements relating to residential immovable property ▌be provided to the consumer by

means of a representative example, that detailed pre-contractual information ▌be given

to the consumer by means of a standardised information sheet, that the consumer

receives adequate explanations before concluding the credit agreement, a common

basis be established for calculating the APRC excluding notary fees, and that creditors

▌ assess the consumer’s creditworthiness before providing a credit. Similarly, non-

discriminatory access for creditors to relevant credit databases should be ensured in

order to achieve a level playing field with the provisions laid down in Directive

2008/48/EC. Similarly to Directive 2008/48/EC, this Directive should ensure the

appropriate admission process and supervision of all creditors providing credit

agreements relating to ▌immovable property and should lay down requirements for the

establishment of, and access to, out-of-court dispute resolution mechanisms.

187

(21) This Directive should supplement Directive 2002/65/EC of the European Parliament and

of the Council of 23 September 2002 concerning the distance marketing of consumer

financial services1 which requires that in distance sales a consumer be informed of the

existence or absence of a right of withdrawal and provides for a right of withdrawal.

However, while Directive 2002/65/EC provides for the possibility for the supplier to

communicate pre-contractual information after the conclusion of the contract, this would

be inappropriate for contracts for credit agreements relating to residential immovable

property given the significance of the financial commitment for the consumer. This

Directive should not affect national general contract law such as the rules on the

validity, formation or effect of a contract, insofar as general contract law aspects are

not regulated in this Directive. ▌

(22) At the same time, it is important to take into consideration the specificities of credit

agreements relating to residential immovable property, which justify a differentiated

approach. Given the nature and the possible consequences of a credit agreement relating

to residential immovable property for the consumer, advertising materials and

personalised pre-contractual information should include adequate specific risk

warnings, for instance about the potential impact of exchange rate fluctuations on

what the consumer has to repay and, where assessed as appropriate by the Member

States, the nature and implications of taking out a security. Following what already

existed as a voluntary approach by the industry concerning home loans, general pre-

contractual information should be made available at all times in addition to the

personalised pre-contractual information. Furthermore, a differentiated approach is

justified in order to take into consideration the lessons learnt from the financial crisis

and in order to ensure that credit origination takes place in a sound manner. In this

respect, the provisions on the creditworthiness assessment should be strengthened in

comparison to consumer credit, more precise information should be provided by credit

intermediaries on their status and relationship with the creditors in order to disclose

potential conflicts of interest, and all actors involved in the origination of credit

agreements relating to ▌immovable property should be adequately admitted and

supervised.

1 OJ L 271, 9.10.2002, p. 16.

188

(23) It is necessary to regulate some additional areas in order to reflect the specificity of

credits related to residential immovable property. Given the significance of the

transaction it is necessary to ensure that consumers have sufficient time of at least

seven days to consider the implications. Member States should have flexibility to

provide this sufficient time either as a period of reflection before the credit agreement

is concluded, a period of withdrawal after the conclusion of the credit agreement or a

combination of the two. It is appropriate that Member States should have the

flexibility to make the reflection period binding on the consumer for a period not

exceeding 10 days but that in other cases consumers who wish to proceed during the

reflection period are able to do so and that, in the interests of legal certainty in the

context of property transactions, Member States should be able to provide that the

reflection period or right of withdrawal should cease where the consumer undertakes

any action which, under national law, results in the creation or transfer of a property

right connected to or using funds obtained through the credit agreement or, where

applicable, transfers the funds to a third party.

189

(24) Given the particular characteristics of credit agreements related to residential

immovable property it is common practice for creditors to offer to consumers a set of

products or services which can be purchased together with the credit agreement.

Therefore, given the significance of such agreements for consumers, it is appropriate

to lay down specific rules on tying practices. Combining a credit agreement with one

or more other financial services or products in packages is a means for creditors to

diversify their offer and to compete against each other, provided that the components

of the package can also be bought separately. While a combination of credit

agreements with one or more other financial services or products in packages can

benefit consumers, it may negatively affect consumers' mobility and their ability to

make informed choices, unless the components of the package can be bought

separately. It is important to prevent practices such as tying of certain products which

may induce consumers to enter into credit agreements which are not in their best

interest, without however restricting product bundling which can be beneficial to

consumers. Member States should however continue monitoring retail financial

services markets closely to ensure that bundling practices do not distort consumer

choice and competition in the market.

190

(25) As a general rule, tying practices should not be allowed unless the financial service or

product offered together with the credit agreement could not be offered separately as

it is a fully integrated part of the credit, for example in the event of a secured

overdraft. In other instances, it may however be justified for creditors to offer or sell a

credit agreement in a package with a payment account, savings account, investment

product or pension product, for instance where the capital in the account is used to

repay the credit or is a prerequisite for pooling resources to obtain the credit, or in

situations where, for instance, an investment product or a private pension product

serves as an additional security for the credit. While it is justified for creditors to be

able to require the consumer to have a relevant insurance policy in order to guarantee

repayment of the credit or insure the value of the security, the consumer should have

the opportunity to choose his own insurance provider, provided that his insurance

policy has an equivalent level of guarantee as the insurance policy proposed or

offered by the creditor. Moreover Member States may standardise, wholly or in part,

the cover provided by insurance contracts in order to facilitate comparisons between

different offers for consumers who wish to make such comparisons.

191

(26) It is important to ensure that the residential immovable property is appropriately

valued before the conclusion of the credit agreement and, in particular where the

valuation affects the residual obligation of the consumer in the event of default.

Member States should therefore ensure that reliable valuation standards are in place.

In order to be considered reliable, valuation standards should take into account

internationally recognised valuation standards, in particular those developed by the

International Valuation Standards Committee, the European Group of Valuers'

Associations or the Royal Institution of Chartered Surveyors. Those internationally

recognised valuation standards contain high level principles which require creditors,

amongst others, to adopt and adhere to adequate internal risk management and

securities management processes, which include sound appraisal processes, to adopt

appraisal standards and methods that lead to realistic and substantiated property

appraisals in order to ensure that all appraisal reports are prepared with appropriate

professional skill and diligence and that appraisers meet certain qualification

requirements and to maintain adequate appraisal documentation for securities that is

comprehensive and plausible. In this regard it is desirable to ensure appropriate

monitoring of residential immovable property markets and for the mechanisms in

such provisions to be in line with Directive 2013/36/EU of the European Parliament

and the Council of 26 June 2013 on access to the activity of credit institutions and the

prudential supervision of credit institutions and investment firms 1. The provisions of

this Directive relating to property valuation standards can be complied with for

example through law or self-regulation.

1 OJ L 176, 27.6.2013, p. 338.

192

(27) Given the significant consequences for creditors, consumers and potentially financial

stability of foreclosure, it is appropriate to encourage creditors to deal proactively with

emerging credit risk at an early stage and that the necessary measures are in place to

ensure that creditors exercise reasonable forbearance and make reasonable attempts

to resolve the situation through other means before foreclosure proceedings are

initiated. Where possible, solutions should be found which take account of the

practical circumstances and reasonable need for living expenses of the consumer.

Where after foreclosure proceedings outstanding debt remains, Member States should

ensure the protection of minimum living conditions and put in place measures to

facilitate repayment while avoiding long-term over-indebtedness. At least where the

price obtained for the immovable property affects the amount owed by the consumer,

Member States should encourage creditors to take reasonable steps to obtain the best

efforts price for the foreclosed immovable property in the context of market

conditions. Member States should not prevent the parties to a credit agreement from

expressly agreeing that the transfer of the security to the creditor is sufficient to repay

the credit.

193

(28) Intermediaries often engage in more activities than just credit intermediation, in

particular insurance intermediation or investment services provision. This Directive

should therefore also ensure a degree of coherence with Directive 2002/92/EC of the

European Parliament and of the Council of 9 December 2002 on insurance mediation1

and Directive 2004/39/EC of the European Parliament and of the Council of 21 April

2004 on markets in financial instruments2. In particular, credit institutions authorised

in accordance with Directive 2013/36/EU and other financial institutions subject to an

equivalent admission regime under national law should not require a separate

admission to operate as a credit intermediary in order to simplify the process of

establishing as a credit intermediary and operating cross-border. The full and

unconditional responsibility placed on creditors and credit intermediaries for the

activities of tied credit intermediaries or appointed representatives should only extend

to activities within the scope of this Directive unless Member States choose to extend

that responsibility to other areas.

1 OJ L 9, 15.1.2003, p. 3.2 OJ L 145, 30.4.2004, p. 1.

194

(29) In order to increase the ability of consumers to make informed decisions for

themselves about borrowing and managing debt responsibly, Member States should

promote measures to support the education of consumers in relation to responsible

borrowing and debt management in particular relating to mortgage credit agreements.

It is particularly important to provide guidance for consumers taking out mortgage

credit for the first time. In that regard, the Commission should identify examples of

best practices to facilitate the further development of measures to enhance consumers'

financial awareness.

(30) Due to the significant risks attached to borrowing in a foreign currency, it is

necessary to provide for measures to ensure that consumers are aware of the risk they

are taking on and that the consumer has the possibility to limit their exposure to

exchange rate risk during the lifetime of the credit. The risk could be limited either

through giving the consumer the right to convert the currency of the credit, or

through other arrangements such as caps or, where they are sufficient to limit the

exchange rate risk, warnings.

195

(31) The applicable legal framework should give consumers the confidence that creditors,

credit intermediaries and appointed representatives take account of the interests of the

consumer, based on the information available to the creditor, credit intermediary and

appointed representative at that moment in time and on reasonable assumptions about

risks to the consumer's situation over the term of the proposed credit agreement. It

could imply, amongst other things, that creditors should not market the credit so that

the marketing significantly impairs or is likely to impair the consumer’s ability to

carefully consider the taking of the credit, or that the creditor should not use the

granting of the credit as a main method of marketing when marketing goods, services

or immovable property to consumers. A key aspect of ensuring such consumer

confidence is the requirement to ensure a high degree of fairness, honesty and

professionalism in the industry, appropriate management of conflicts of interest

including those arising from remuneration and to require advice to be given in the

best interests of the consumer.

196

(32) It is appropriate to ensure that the relevant staff of creditors, credit intermediaries and

appointed representatives possess an adequate level of knowledge and competence in

order to achieve a high level of professionalism. This Directive should, therefore,

require relevant knowledge and competence to be proven at the level of the company,

based on the minimum knowledge and competence requirements set out in this

Directive. Member States should be free to introduce or maintain such requirements

applicable to individual natural persons. Member States should be able to allow

creditors, credit intermediaries and appointed representatives to differentiate between

the levels of minimum knowledge requirements according to the involvement in

carrying out particular services or processes. In this context, staff includes outsourced

personnel, working for and within the creditor, credit intermediary or appointed

representatives as well as their employees. For the purpose of this Directive, staff

directly engaged in activities under this Directive should include both front- and back-

office staff, including management, who fulfil an important role in the credit

agreement process. Persons fulfilling support functions which are unrelated to the

credit agreement process (for instance human resources and information and

communications technology personnel) should not be considered as staff under this

Directive.

197

(33) Where a creditor or credit intermediary provides its services within the territory of

another Member State under the freedom to provide services, the home Member State

should be responsible for establishing the minimum knowledge and competence

requirements applicable to the staff. However host Member States which deem it

necessary should be able to establish their own competence requirements in certain

specified areas applicable to creditors and credit intermediaries that provide services

within the territory of that Member State under the freedom to provide services.

(34) Given the importance of ensuring that knowledge and competence requirements are

applied and complied with in practice, Member States should require competent

authorities to supervise creditors, credit intermediaries and appointed representatives

and empower them to obtain such evidence as they need to reliably assess compliance.

198

(35) The way in which creditors, credit intermediaries and appointed representatives

remunerate their staff should constitute one of the key aspects of ensuring consumer

confidence in the financial sector. This Directive provides rules for staff

remuneration, with the aim of limiting mis-selling practices and of ensuring that the

way in which staff are remunerated does not impede compliance with the obligation to

take account of the interests of the consumer. In particular, creditors, credit

intermediaries and appointed representatives should not design their remuneration

policies in a way that would incentivise their staff to conclude a given number or type

of credit agreements or to offer particular ancillary services to consumers with no

explicit consideration of their interests and needs. In this context, Member States may

find it necessary to decide that a particular practice, for example, tied intermediaries

collecting fees, is against the interests of a consumer. Member States should also be

able to specify that the remuneration received by staff is not dependent on the rate or

the type of credit agreement concluded with the consumer.

199

(36) This Directive provides for harmonised rules as regards the fields of knowledge and

competence that creditors', credit intermediaries' and appointed representatives' staff

should possess in relation to the manufacturing, offering, granting and

intermediation of a credit agreement. This Directive does not provide for specific

arrangements directly related to the recognition of professional qualifications

obtained by an individual in one Member State in order to meet the knowledge and

competence requirements in another Member State. Directive 2005/36/EC of the

European Parliament and of the Council of 7 September 2005 on the recognition of

professional qualifications1 should therefore continue to apply concerning the

conditions for recognition and the compensation measures that a host Member State

may require from an individual whose qualification has not been issued within its

jurisdiction.

(37) Creditors and credit intermediaries frequently use advertisements, often featuring special

terms and conditions, to attract consumers to a particular product. Consumers should,

therefore, be protected against unfair or misleading advertising practices and should be

able to compare advertisements. Specific provisions on the advertising of credit

agreements ▌and a list of items to be included in advertisements and marketing

materials directed at consumers where such advertising specifies interest rates or any

figures relating to the cost of credit, are necessary to enable them to compare different

offers. ▌Member States should remain free to introduce or maintain disclosure

requirements in their national laws regarding advertising which does not indicate an

interest rate or contain any figures relating to the cost of credit. Any such

requirements should take into account the specificities of credit agreements relating to

residential immovable property. In any event, it should be ensured in accordance with

Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005

concerning unfair business-to-consumer commercial practices in the internal market2

that advertising of credit agreements should not create a misleading impression of the

product.

1 OJ L 255, 30.9.2005, p. 22.2 OJ L 149, 11.6.2005, p. 22.

200

(38) Advertising tends to focus on one or several products in particular, while consumers

should be able to make their decisions in full knowledge of the range of credit products

on offer. In that respect, general information plays an important role in educating the

consumer in relation to the broad range of products and services available ▌and the key

features thereof. Consumers should therefore be able at all times to access general

information on ▌credit products available. Where this requirement is not applicable to

non-tied credit intermediaries, this should be without prejudice to their obligation to

provide consumers with personalised pre-contractual information.

(39) In order to ensure a level playing field and in order for the consumer’s decision to be

based on the details of the credit products on offer rather than on the distribution

channel through which such credit products are accessed, consumers should receive

information on the credit regardless of whether they are dealing directly with a creditor

or a credit intermediary.

201

(40) Consumers should further receive personalised information in good time prior to the

conclusion of the credit agreement in order to enable them to compare and reflect on

the characteristics of credit products. Pursuant to Commission Recommendation

2001/193/EC of 1 March 2001 on pre-contractual information to be given to consumers

by lenders offering home loans1, the Commission committed itself to monitoring

compliance with the Voluntary Code of Conduct on pre-contractual information for

home loans, which contains the ESIS which provides information, personalised for the

consumer, on the credit agreement being provided. ▌Evidence collected by the

Commission ▌ highlighted the need to revise the content and presentation of the ESIS to

ensure that it is clear, understandable and contains all information found to be relevant

for consumers. The content and layout of the ESIS should incorporate the necessary

improvements identified during consumer testing in all Member States. The structure of

the ESIS, ▌in particular, the order of the information items ▌, should be revised, the

wording should be more user-friendly, while sections, such as 'nominal rate' and 'annual

percentage rate of charge', should be merged and new sections, such as 'flexible

features', should be added. An illustrative amortisation table should be provided to a

consumer as part of the ESIS where the credit is a deferred interest credit, in which

the repayment of principal is deferred for an initial period or where the borrowing

rate is fixed for the duration of the credit agreement. Member States should be able to

provide that such an illustrative amortisation table in the ESIS is not compulsory for

other credit agreements.

1 OJ L 69, 10.3.2001, p. 25.

202

(41) Consumer research has underlined the importance of using simple and

understandable language in disclosures provided to consumers. For this reason, the

terms used in the ESIS are not necessarily the same as the legal terms defined in this

Directive but have the same meaning.

203

(42) The information requirements on credit agreements contained in the ESIS should be

without prejudice to Union or national information requirements for other products

or services that might be offered with the credit agreement, as conditions for

obtaining the credit agreement related to immovable property, or offered so as to

obtain that agreement at a lower borrowing rate, such as fire or life insurance or

investment products. Member States should be free to maintain or introduce national

law where no harmonised provisions exist, for instance information requirements on

the level of usury rates at the pre-contractual stage or information which might be

useful for the purposes of financial education or for out-of-court settlements. Any

additional information should, however, be given in a separate document which may

be annexed to the ESIS. Member States should be able, in their national languages, to

use different vocabulary in the ESIS, without changing its contents and the order in

which information is provided, when this is needed in order to employ a language

which might be more easily understandable for consumers.

204

(43) In order to ensure that the ESIS provides the consumer with all relevant information

to make an informed choice, the creditor should follow the instructions set out in this

Directive when completing the ESIS. Member States should be able to elaborate or

further specify the instructions for completing the ESIS on the basis of the

instructions set out in this Directive. For instance, Member States should be able to

further specify the information to be given in order to describe the 'type of borrowing

rate' in order to take into account the specificities of the national products and

market. However, such further specifications should not be contrary to the

instructions contained in this Directive nor imply any change in the text of the ESIS

model, which should be reproduced as such by the creditor. Member States should be

able to specify further warnings on credit agreements, adapted to their national

market and practices, where such warnings are not already specifically included in

the ESIS. Member States should be able to provide that the creditor is bound by the

information provided for in the ESIS, provided that the creditor decides to grant the

credit.

205

(44) The consumer should receive information by means of the ESIS without undue delay

after the consumer has delivered the necessary information on his needs, financial

situation and preferences and in good time before the consumer is bound by any

credit agreement or offer, in order to enable him to compare and reflect on the

characteristics of credit products and obtain third party advice if necessary. In

particular when a binding offer is made to the consumer, it should be accompanied by

the ESIS, unless the ESIS has already been delivered to the consumer and the

characteristics of the offer are consistent with the information previously provided.

However, Member States should be able to provide for the obligatory provision of the

ESIS both before the provision of any binding offer and together with the binding

offer, where an ESIS containing the same information has not previously been given.

While the ESIS should be personalised and reflect the preferences expressed by the

consumer, the provision of such personalised information should not imply an

obligation to provide advice. Credit agreements should only be concluded where the

consumer has had sufficient time to compare offers, assess their implications, obtain

third party advice if necessary and has taken an informed decision on whether to

accept an offer.

206

(45) Where the consumer has a secured credit agreement for the purchase of immovable

property or land and the duration of the security is longer than that of the credit

agreement, and where the consumer can decide to withdraw the repaid capital again

subject to signature of a new credit agreement, a new ESIS disclosing the new APRC

and based on the specific characteristics of the new credit agreement should be

provided to the consumer before the signature of the new credit agreement.

(46) At least where no right of withdrawal exists, the creditor or, where applicable, the

credit intermediary or appointed representative should provide the consumer with a

copy of the draft credit agreement, at the time of the provision of an offer binding on

the creditor. In other cases, the consumer should at least be offered a copy of the draft

credit agreement at the time a binding offer is made.

207

(47) In order to ensure the fullest possible transparency and to prevent abuses arising from

possible conflicts of interest when consumers use the services of credit intermediaries,

the latter should be subject to certain information disclosure obligations prior to the

performance of their services. Such disclosures should include information on their

identity and links with creditors, for instance whether they are considering products

from a broad range of creditors or only from a more limited number of creditors. The

existence of any commission or other inducement payable to the credit intermediary

by the creditor or by third parties in relation to the credit agreement should be

disclosed to consumers before the carrying out of any credit intermediation activities

and consumers should be informed at that stage either of the amount of such

payments, where that is known, or of the fact that the amount will be disclosed at a

later pre-contractual stage in the ESIS and of their right to be given information on

the level of such payments at that stage. Consumers should be informed of any fees

they should pay to credit intermediaries in relation to their services. Without prejudice

to competition law, Member States should be free to introduce or maintain provisions

prohibiting the payment of fees by consumers to some or all categories of credit

intermediary.

208

(48) A consumer may still need additional assistance in order to decide which credit

agreement, within the range of products proposed, is the most appropriate for his needs

and financial situation. Creditors and, where applicable, credit intermediaries should

provide such assistance in relation to the credit products which they offer to the

consumer by explaining the relevant information including in particular the essential

characteristics of the products proposed ▌ to the consumer in a personalised manner so

that the consumer can understand the effects which they may have on his economic

situation. Creditors and, where applicable, credit intermediaries should adapt the way

in which such explanations are ▌given to the ▌ circumstances in which the credit is

offered and the consumer's need for assistance, taking into account the consumer's

knowledge and experience of credit and the nature of individual credit products. Such

explanations should not in itself constitute a personal recommendation.

(49) In order to promote the establishment and functioning of the internal market and to

ensure a high degree of protection for consumers throughout the Union, it is necessary

to uniformly ensure the comparability of information relating to the APRC throughout

the Union.

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(50) The total cost of the credit to the consumer should comprise all the costs that the

consumer has to pay in connection with the credit agreement and which are known to

the creditor. It should therefore include interest, commissions, taxes, fees for credit

intermediaries, the costs of property valuation for a mortgage and any other fees,

except for notarial fees, required to obtain the credit, for example life insurance, or to

obtain it on the terms and conditions marketed, for example fire insurance. The

provisions of this Directive concerning ancillary products and services (for instance

concerning the costs of opening and maintaining a bank account) should be without

prejudice to Directive 2005/29/EC and Council Directive 93/13/EEC of 5 April 1993

on unfair terms in consumer contracts1. The total cost of the credit to the consumer

should exclude costs that the consumer pays in relation to the purchase of the

immovable property or land, such as associated taxes and notarial costs or the costs of

land registration. The creditor’s actual knowledge of the costs should be assessed

objectively, taking into account the requirements of professional diligence. In that

respect, the creditor should be presumed to have knowledge of the costs of the

ancillary services which he offers to the consumer himself, or on behalf of a third

party, unless the price thereof depends on the specific characteristics or situation of

the consumer.

1 OJ L 95, 21.4.1993, p. 29.

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(51) If estimated information is used, the consumer should be made aware of this and that

the information is expected to be representative of the type of agreement or practices

under consideration. The additional assumptions for the calculation of the APRC aim

to ensure that the APRC is calculated in a consistent way and to ensure

comparability. Additional assumptions are necessary for specific types of credit

agreement, such as where the amount, duration or cost of the credit are uncertain or

vary depending on how the agreement is operated. Where the provisions in themselves

do not suffice to calculate the APRC, the creditor should use the additional

assumptions set out in Annex I. However, given that the calculation of the APRC will

depend on the terms of the individual credit agreement, only those assumptions

necessary and relevant to a given credit should be used.

211

(52) In order to further ensure a high degree of comparability of the APRC between offers

from different creditors, the intervals between dates used in the calculation should not

be expressed in days where they can be expressed as a whole number of years, months

or weeks. Implicit in that context is that if certain time intervals are used in the APRC

formula, those intervals should be used to ascertain the amounts of interest and other

charges used in the formula. For this reason, creditors should use the method of

measurement of time intervals described in Annex I to obtain the figures for the

payment of charges. However, that is only applicable for the purposes of calculation

of the APRC and does not impact on the amounts actually charged by the creditor

under the credit agreement. Where those numbers are different it may be necessary to

explain them to the consumer in order to avoid misleading the consumer. That implies

that in the absence of non-interest charges and assuming an identical method of

calculation the APRC will be equal to the effective borrowing rate of the credit.

212

(53) As the APRC can at the advertising stage be indicated only through an example, such an

example should be representative. Therefore, it should correspond, for instance, to the

average duration and total amount of credit granted for the type of credit agreement

under consideration. When determining the representative example, the prevalence of

certain types of credit agreements in a specific market should be taken into account. It

may be preferable for each creditor to base the representative example on an amount

of credit which is representative of that creditor’s own product range and expected

customer base, as these may vary considerably among creditors. As regards the APRC

disclosed in the ESIS, the preferences of and information provided by the consumer

should where possible be taken into account and the creditor or credit intermediary

should make it clear whether the information provided is illustrative or reflects the

preferences and information given. In any event, the representative examples should

not be contrary to the requirements of Directive 2005/29/EC. It is important that in

the ESIS it is made clear to the consumer, where applicable, that the APRC is based

on assumptions and could change so that consumers can take this into account when

comparing products. It is important that the APRC should take account of all

drawdowns under the credit agreement, whether paid directly to the consumer or to a

third party on the consumer's behalf.

213

(54) In order to ensure consistency between the calculation of the APRC for different types

of credit, the assumptions used for calculating similar forms of credit agreement

should be generally consistent. In this respect, assumptions from Commission

Directive 2011/90/EU of 14 November 2011 amending Part II of Annex I to Directive

2008/48/EC of the European Parliament and of the Council providing additional

assumptions for the calculation of the annual percentage rate of charge1, modifying

the assumptions for calculating the APRC should be incorporated. While not all

assumptions will necessarily apply to credit agreements available now, product

innovation in this sector is active and so it is necessary to have the assumptions in

place. Furthermore, for the purpose of calculating the APRC, the identification of the

most common drawdown mechanism should be based on reasonable expectations of

the drawdown mechanism most frequently used by consumers for the type of product

offered by that specific creditor. For existing products, the expectation should be

based on the previous 12 months.

1 OJ L 296, 15.11.2011, p. 35.

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(55) It is essential that the consumer's ability and propensity to repay the credit is assessed

and verified before a credit agreement is concluded. That assessment of

creditworthiness should take into consideration all necessary and relevant factors that

could influence a consumer’s ability to repay the credit over its lifetime. In particular,

the consumer's ability to service and fully repay the credit should include

consideration of future payments or payment increases needed due to negative

amortisation or deferred payments of principal or interest and should be considered in

the light of other regular expenditure, debts and other financial commitments as well

as income, savings and assets. Reasonable allowance should be made for future

events during the term of the proposed credit agreement such as a reduction in

income where the credit term lasts into retirement or, where applicable, an increase in

the borrowing rate or negative change in the exchange rate. While the value of the

immovable property is an important element in ascertaining the amount of the credit

that may be granted to a consumer under a secured credit agreement, the assessment

of creditworthiness should focus on the consumer’s ability to meet their obligations

under the credit agreement. Consequently, the possibility that the value of the

immovable property could exceed the credit amount or could increase in the future

should not generally be a sufficient condition for granting the credit in question.

Nevertheless, where the purpose of a credit agreement is to construct or renovate an

existing immovable property, the creditor should be able to consider this possibility.

Member States should be able to issue additional guidance on those or additional

criteria and on methods to assess a consumer’s creditworthiness, for example by setting

limits on loan-to-value or loan-to-income ratios and should be encouraged to

implement the Financial Stability Board's Principles for Sound Residential Mortgage

Underwriting Practices.

215

(56) Specific provisions may be necessary for the different elements that may be taken into

consideration in the creditworthiness assessment of certain types of credit agreements.

For example, for credit agreements which relate to an immovable property which

explicitly state that the immovable property is not to be occupied as a house,

apartment or another place of residence by the consumer or a family member of the

consumer (buy-to-let agreements), Member States should be able to specify that future

rental income is taken into account when assessing the consumer's ability to repay the

credit. In those Member States where such a specification is not set out by national

provisions, creditors may decide to include a prudent assessment of future rental

income. The assessment of creditworthiness should not imply the transfer of

responsibility to the creditor for any subsequent non-compliance by the consumer

with his obligations under the credit agreement.

(57) The creditor's decision as to whether to grant the credit should be consistent with the

outcome of the assessment of creditworthiness. For example, the capacity for the

creditor to transfer part of the credit risk to a third party should not lead him to ignore

the conclusions of the creditworthiness assessment by making a credit agreement

available to a consumer who is likely not to be able to repay it. Member States should

be able to transpose this principle by requiring competent authorities to take relevant

actions as part of the supervisory activities and to monitor the compliance of

creditors’ creditworthiness assessment procedures. However, a positive

creditworthiness assessment should not constitute an obligation for the creditor to

provide credit.

216

(58) In line with the recommendations of the Financial Stability Board, the assessment of

creditworthiness should be based on information on the financial and economic

situation, including income and expenses, of the consumer. That information can be

obtained from various sources including from the consumer, and the creditor should

appropriately verify such information before granting the credit. In that respect

consumers should provide information in order to facilitate the creditworthiness

assessment, since failure to do so is likely to result in refusal of the credit they seek to

obtain unless the information can be obtained from elsewhere. Without prejudice to

private contract law, Member States should ensure that creditors cannot terminate a

credit agreement because they realised, after the signature of the credit agreement,

that the assessment of creditworthiness was incorrectly conducted due to incomplete

information at the time of the creditworthiness assessment. However, this should be

without prejudice to the possibility for Member States to allow creditors to terminate

the credit agreement where it can be established that the consumer deliberately

provided inaccurate or falsified information at the time of the creditworthiness

assessment or intentionally did not provide information that would have led to a

negative creditworthiness assessment or where there are other valid reasons

compatible with Union law. While it would not be appropriate to apply sanctions to

consumers for not being in a position to provide certain information or assessments or

for deciding to discontinue the application process for getting a credit, Member States

should be able to provide for sanctions where consumers knowingly provide

incomplete or incorrect information in order to obtain a positive creditworthiness

assessment, in particular where the complete and correct information would have

resulted in a negative creditworthiness assessment and the consumer is subsequently

unable to fulfil the conditions of the agreement.

217

(59) Consultation of a credit database is a useful element in the assessment of

creditworthiness. Some Member States require creditors to assess the creditworthiness

of consumers on the basis of a consultation of the relevant database. Creditors should be

able to consult the credit database over the lifetime of the credit solely in order to

identify and assess the potential for default. Such consultation of the credit database

should be subject to appropriate safeguards to ensure that it is used for the early

identification and resolution of credit risk in the interest of the consumer and not to

inform commercial negotiations. Pursuant to 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,

consumers should be informed by creditors of the consultation of the credit database

prior to its consultation, and should have the right to access the information held on

them in such a credit database in order to, where necessary, rectify, erase or block the

personal data concerning them processed therein where it is inaccurate or has been

unlawfully processed.

1 OJ L 281, 23.11.1995, p. 31.

218

(60) To prevent any distortion of competition among creditors, it should be ensured that all

creditors, ▌including credit institutions or non-credit institutions providing credit

agreements relating to residential immovable property, have access to all public and

private credit databases concerning consumers under non-discriminatory conditions.

Such conditions should not therefore include a requirement for creditors to be

established as a credit institution. Access conditions, such as the costs of accessing the

database or requirements to provide information to the database on the basis of

reciprocity should continue to apply. Member States should be free to determine

whether, within their jurisdictions, credit intermediaries may have access to such

databases.

(61) Where a decision to reject an application for credit is based on data obtained through the

consultation of a database or the lack of data therein, the creditor should inform the

consumer thereof, and provide the name of the database consulted and of any other

elements required by Directive 95/46/EC so as to enable the consumer to exercise his

right to access and, where justified, rectify, erase or block personal data concerning him

and processed therein. Where a decision to reject an application for credit results from a

negative creditworthiness assessment, the creditor should inform the consumer of the

rejection without undue delay. Member States should be free to decide whether they

require creditors to provide further explanations on the reasons of the rejection.

However, the creditor should not be required to give such information when to do so

would be prohibited by other Union law such as provisions on money laundering or the

financing of terrorism. Such information should not be provided where to do so would

be contrary to the objectives of public policy or public security such as the prevention,

investigation, detection or prosecution of criminal offences.

219

(62) This Directive addresses the use of personal data in the context of the assessment of a

consumer’s creditworthiness. In order to ensure the protection of personal data,

Directive 95/46/EC should apply to the data processing activities carried out within the

context of such assessments. ▌

(63) Providing advice in the form of a personalised recommendation is a distinct activity

which may but need not be combined with other aspects of granting or intermediating

credit. Therefore, in order to be in a position to understand the nature of the services

provided to them, consumers should be made aware of whether advisory services are

being or can be provided and when they are not and of what constitutes advisory

services. Given the importance which consumers attach to the use of the terms

“advice” and “advisors”, it is appropriate that Member States should be allowed to

prohibit the use of the those terms, or similar terms, when advisory services are being

provided to consumers. It is appropriate to ensure that Member States impose

safeguards where advice is described as independent to ensure that the range of

products considered and remuneration arrangements are commensurate with

consumers’ expectations of such advice.

220

(64) Those providing advisory services should comply with certain standards in order to

ensure that the consumer is presented with ▌products suitable for his needs and

circumstances. Advisory services should be based on a fair and sufficiently wide-ranging

analysis of the products offered, where the advisory services are provided by creditors

and tied credit intermediaries, or, where the advisory services are provided by credit

intermediaries that are not tied, of products available on the market. Those providing

advisory services should be able to specialise in certain 'niche' products such as

bridging finance, provided they consider a range of products within that particular

'niche' and 'their specialisation in those 'niche' products is made clear to the

consumer. In any event, creditors and credit intermediaries should disclose to the

consumer whether they are advising only on their own product range or a wide range

from across the market to ensure that the consumer understands the basis for a

recommendation.

(65) Advisory services should be based on a proper understanding of the consumer's

financial situation, preferences and objectives ▌ based on the necessary up-to-date

information and reasonable assumptions about risks to the consumer's circumstances

during the lifetime of the credit agreement. Member States should be able to clarify how

the suitability of a given product is to be assessed in the context of the provision of

advisory services.

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(66) A consumer's ability to repay the credit prior to the expiry of the credit agreement may

play an important role in promoting competition in the internal market and the free

movement of Union citizens as well as helping to provide the flexibility during the

lifetime of the credit agreement needed to promote financial stability in line with the

recommendations of the Financial Stability Board. However, substantial differences

exist between the national principles and conditions under which consumers have the

ability to repay their credit and the conditions under which such early repayment can

take place. Whilst recognising the diversity in mortgage funding mechanisms and the

range of products available, certain standards with regard to early repayment of credit

are essential at Union level in order to ensure that consumers have the possibility to

discharge their obligations before the date agreed in the credit agreement and the

confidence to compare offers in order to find the best products to meet their needs.

Member States should therefore ensure, whether through law or other means such as

contractual clauses, that consumers have a right to early repayment. Nevertheless,

Member States should be able to define the conditions for the exercise of such a right.

These conditions may include time limitations on the exercise of the right, different

treatment depending on the type of the borrowing rate ▌ or ▌ restrictions with regard to

the circumstances under which the right may be exercised. Where the early repayment

falls within a period for which the borrowing rate is fixed, exercise of the right may be

made subject to the existence of a legitimate interest on the part of the consumer

specified by the Member State. Such legitimate interest may for example occur in the

event of divorce or unemployment. The conditions set by Member States may provide

that the creditor is entitled to fair and objectively justified compensation for potential

costs directly linked to early repayment of the credit. In the event where Member

States provide that the creditor is entitled to compensation such compensation should

be a fair and objectively justified compensation for potential costs directly linked to

early repayment of the credit in accordance with the national rules on compensation.

The compensation should not exceed the financial loss of the creditor.

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(67) It is important to ensure that sufficient transparency exists to provide clarity for

consumers on the nature of the commitments made in the interests of preserving

financial stability and on where there is flexibility during the term of the credit

agreement. Consumers should be provided with information concerning the

borrowing rate during the contractual relationship as well as at the pre-contractual

stage. Member States should be able to maintain or introduce restrictions or

prohibitions on unilateral changes to the borrowing rate by the creditor. Member

States should be able to provide that where the borrowing rate changes the consumer

is entitled to receive an updated amortisation table.

(68) Although credit intermediaries play a central role in the distribution of credit agreements

relating to residential immovable property in the Union, substantial differences remain

between national provisions on the conduct of business and supervision of credit

intermediaries which create barriers to the taking-up and pursuit of the activities of

credit intermediaries in the internal market. The inability of credit intermediaries to

operate freely throughout the Union hinders the proper functioning of the internal

market in credit agreements relating to residential immovable property. While

recognising the diversity in the types of actor involved in credit intermediation, certain

standards at Union level are essential in order to ensure a high level of professionalism

and service.

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(69) Before being able to carry out their activities, credit intermediaries should be subject to

an admission process by the competent authority of their home Member State and

subject to ongoing supervision to ensure that they meet strict professional requirements

at least in relation to their competence, good repute ▌ and professional indemnity

cover.▌Such requirements should apply at least at the level of the institution. However,

Member States may clarify whether such requirements for admission apply to individual

employees of the credit intermediary. The home Member State may provide for

additional requirements, for instance that the credit intermediary's shareholders are

of good repute or that a tied credit intermediary can only be tied to one creditor, where

those are proportionate and compatible with other Union law. Relevant information

about admitted credit intermediaries should be entered in a public register. Tied credit

intermediaries who work exclusively with one creditor under its full and

unconditional responsibility should have the possibility to be admitted by the

competent authority under the auspices of the creditor on whose behalf they act.

Member States should have the right to maintain or to impose restrictions regarding

the legal form of certain credit intermediaries, whether they are allowed to act

exclusively as legal or natural persons. Member States should be free to decide

whether all credit intermediaries are entered into one register or whether different

registers are required depending on whether the credit intermediary is tied or acts as

independent credit intermediary. Furthermore Member States should be free to

maintain or to impose restrictions on the possibility to charge any fees to consumers

by the credit intermediaries tied to one or more creditors.

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(70) In some Member States, credit intermediaries may decide to use the services of

appointed representatives to perform activities on their behalf. Member States should

have the possibility to apply the specific regime laid down by this Directive for

appointed representatives. However, Member States should be free not to introduce

such a regime or to allow other entities to perform a role which is comparable to that

of appointed representatives, provided that those entities are subject to the same

regime as credit intermediaries. The rules on appointed representatives set out in this

Directive do not oblige Member States to allow appointed representatives to operate in

their jurisdiction unless such appointed representatives are considered credit

intermediaries under this Directive.

(71) In order to ensure the effective supervision of credit intermediaries by competent

authorities, a credit intermediary which is a legal person should be admitted in the

Member State in which it has its registered office. A credit intermediary which is not a

legal person should be admitted in the Member State in which it has its head office. In

addition, Member States should require that a credit intermediary’s head office

always be situated in its home Member State and that it actually operates there.

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(72) The requirements for admission should allow credit intermediaries to operate in other

Member States in accordance with the principles of freedom of establishment and

freedom to provide services, provided that an appropriate notification procedure has

been followed between the competent authorities. Even in cases where Member States

decide to admit all individual staff within the credit intermediary, the notification of the

intention to provide services should be made on the basis of the credit intermediary

rather than the individual employee. However, while this Directive provides a

framework for all admitted credit intermediaries, including credit intermediaries tied

to only one creditor, to operate throughout the Union, this Directive does not provide

such a framework for appointed representatives. In such instances, appointed

representatives wishing to operate in another Member State would have to comply

with the requirements for the admission of credit intermediaries set out in this

Directive.

(73) In some Member States, credit intermediaries can carry out their activities in respect

of credit agreements offered by non-credit institutions and credit institutions. As a

principle, admitted credit intermediaries should be allowed to operate in the entire

territory of the Union. However, the admission by the competent authorities of the

home Member States should not allow credit intermediaries to provide their services

in relation to credit agreements offered by non-credit institutions to a consumer in a

Member State where such non-credit institutions are not allowed to operate.

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(74) Member States should be able to provide that persons carrying out credit

intermediation activities only on an incidental basis in the course of professional

activity, such as lawyers or notaries, are not subject to the admission procedure set out

in this Directive provided that such professional activity is regulated and the relevant

rules do not prohibit the carrying out, on an incidental basis, of credit intermediation

activities. Such an exemption from the admission procedure laid down in this

Directive should however mean that such persons cannot benefit from the passport

regime provided in this Directive. Persons who merely introduce or refer a consumer

to a creditor or credit intermediary on an incidental basis in the course of their

professional activity, for instance by indicating the existence of a particular creditor

or credit intermediary to the consumer or a type of product with this particular

creditor or credit intermediary to the consumer without further advertising or

engaging in the presentation, offering, preparatory work or conclusion of the credit

agreement, should not be regarded as credit intermediaries for the purposes of this

Directive. Neither should borrowers who merely transfer a credit agreement to a

consumer through a process of subrogation without carrying out any other credit

intermediation activity be regarded as credit intermediaries for the purposes of this

Directive.

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(75) In order to ensure a level playing field between creditors and promote financial stability,

and pending further harmonisation, Member States should ensure that appropriate

measures are in place for the admission and supervision of non-credit institutions

providing credit agreements relating to residential immovable property. In accordance

with the principle of proportionality, this Directive should not lay down detailed

conditions for the admission or supervision of creditors providing such credit

agreements and that are not credit institutions as defined in Regulation (EU) No

575/2013 of the European Parliament and the Council of 26 June 2013 on prudential

requirements for credit institutions and investment firms1. The number of such

institutions operating in the Union at present is limited as is their market share and the

number of Member States in which they are active, particularly since the financial crisis.

Nor should the introduction of a 'passport' for such institutions be provided for in this

Directive for the same reason.

(76) Member States should lay down rules on sanctions applicable to infringements of the

national provisions adopted pursuant to this Directive and ensure that they are

implemented. While the choice of sanctions remains within the discretion of Member

States, the sanctions provided for should be effective, proportionate and dissuasive.

1 OJ L 176, 27.6.2013, p. 1.

228

(77) Consumers should have access to out-of-court complaint and redress procedures for the

settlement of disputes arising from the rights and obligations set out in this Directive

between creditors and consumers as well as between credit intermediaries and

consumers. Member States should ensure that participation in such alternative dispute

resolution procedures is not optional for creditors and credit intermediaries. To

ensure the smooth functioning of alternative dispute resolution procedures in cases of

cross-border activity, Member States should require and encourage the bodies

responsible for resolving out-of-court complaints and redress to cooperate. In that

context, Member States' out-of-court complaint and redress bodies should be

encouraged to participate in FIN-NET, a financial dispute resolution network of

national out-of-court schemes that are responsible for handling disputes between

consumers and financial services providers.

(78) In order to ensure consistent harmonisation and to take account of developments in the

markets for credit agreements or in the evolution of credit products or in economic

conditions, and in order to further specify certain requirements in this Directive, the

power to adopt acts in accordance with Article 290 TFEU should be delegated to the

Commission in respect of amending the standard wording or the instructions for

completing the ESIS and amending the remarks or update the assumptions used to

calculate the APRC. 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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(79) In order to facilitate the ability of credit intermediaries to provide their services on a

cross-border basis, for the purposes of cooperation, information exchange and dispute

resolution between competent authorities, the competent authorities responsible for the

admission of credit intermediaries should be those acting under the auspices of the

European Supervisory Authority (European Banking Authority) (EBA), as set out in

Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24

November 2010 establishing a European Supervisory Authority (European Banking

Authority)1 or other national authorities provided that they cooperate with the

authorities acting under the auspices of EBA in order to carry out their duties under

this Directive.

(80) Member States should designate competent authorities empowered to ensure

enforcement of this Directive and ensure that they are granted investigation and

enforcement powers and adequate resources necessary for the performance of their

duties. Competent authorities could act for certain aspects of this Directive by

application to courts competent to grant a legal decision, including, where

appropriate, by appeal. This could enable Member States, in particular where

provisions of this Directive were transposed into civil law, to leave the enforcement of

these provisions to the abovementioned bodies and the courts. Member States should

be able to designate different competent authorities in order to enforce the wide

ranging obligations laid down in this Directive. For instance, for some provisions,

Member States could designate competent authorities responsible for the enforcement

of consumer protection, while for others, they could decide to designate prudential

supervisors. The option to designate different competent authorities should not affect

the obligations for ongoing supervision and cooperation between the competent

authorities, as provided for in this Directive.

1 OJ L 331, 15.12.2010, p. 12.

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(81) The efficient functioning of this Directive will need to be reviewed, as will progress on

the establishment of an internal market with a high level of consumer protection for

credit agreements relating to residential immovable property. The review should

include, among other things, an assessment of compliance with and the impact of this

Directive, an assessment of whether the scope of the Directive remains appropriate, an

analysis of the provision of credit agreements by non-credit institutions, an assessment

of the need for further measures, including a passport for non-credit institutions and

examination of the necessity to introduce further rights and obligations with regard to

the post-contractual stage of credit agreements ▌.

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(82) Action by Member States alone is likely to result in different sets of rules, which may

undermine or create new obstacles to the functioning of the internal market. Since the

objective of this Directive, namely the creation of an efficient and competitive internal

market in credit agreements relating to residential immovable property whilst ensuring a

high level of consumer protection, cannot be sufficiently achieved by Member States

and can therefore, by reason of the effectiveness of the action, 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 that objective.

(83) Member States may decide to transpose certain aspects covered by this Directive in

national law by prudential law, for example the creditworthiness assessment of the

consumer, while others are transposed by civil or criminal law, for example the

obligations relating to responsible borrowers.

232

(84) In accordance with the Joint Political Declaration of Member States and the

Commission on explanatory documents of 28 September 20111, 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.

(85) The European Data Protection Supervisor delivered an opinion on 25 July 20112

based on Article 28(2) of 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 data3,

HAVE ADOPTED THIS DIRECTIVE:

1 OJ C 369, 17.12.2011, p. 14.2 OJ C 377, 23.12.2011, p. 5.3 OJ L 8, 12.1.2001, p. 1.

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Chapter 1

Subject matter, scope, definitions and competent authorities

Article 1

Subject matter

This Directive lays down a common framework for certain aspects of the laws, regulations and

administrative provisions of the Member States concerning ▌agreements covering credit for

consumers secured by a mortgage or otherwise relating to residential immovable property,

including an obligation to carry out a creditworthiness assessment before granting a credit,

as a basis for the development of effective underwriting standards in relation to residential

immovable property in the Member States, and for certain prudential and supervisory

requirements, including for the establishment and supervision of credit intermediaries,

appointed representatives and non-credit institutions.

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Article 2

Level of harmonisation

1. This Directive shall not preclude Member States from maintaining or introducing

more stringent provisions in order to protect consumers, provided that such

provisions are consistent with their obligations under Union law.

2. Notwithstanding paragraph 1, Member States shall not maintain or introduce in

their national law provisions diverging from those laid down in Article 14(2) and

Annex II Part A with regard to standard pre-contractual information through a

European Standardised Information Sheet (ESIS) and Article 17(1) to (5), (7) and

(8) and Annex I with regard to a common, consistent Union standard for the

calculation of the annual percentage rate of charge (APRC).

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Article 3

Scope

1. This Directive shall apply to ▌:

(a) credit agreements which are secured either by a mortgage or by another

comparable security commonly used in a Member State on residential

immovable property or secured by a right related to residential immovable

property; and

(b) credit agreements the purpose of which is to acquire or retain property rights in

land or in an existing or projected ▌building.

▌

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2. This Directive shall not apply to:

(a) Equity release credit agreements where the creditor:

i) contributes a lump sum, periodic payments or other forms of credit

disbursement in return for a sum deriving from the future sale of a

residential immovable property or a right relating to residential

immovable property; and

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ii) will not seek repayment of the credit until the occurrence of one or more

specified life events of the consumer, as defined by Member States,

unless the consumer breaches his contractual obligations which allows

the creditor to terminate the credit agreement ;

(b) credit agreements where the credit is granted by an employer to his employees as

a secondary activity where such a credit agreement is offered free of interest or at

an APRC lower than those prevailing on the market and not offered to the public

generally;

(c) credit agreements where the credit is granted free of interest and without any

other charges except those that recover costs directly related to the securing of

the credit;

(d) credit agreements in the form of an overdraft facility and where the credit has

to be repaid within one month;

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(e) credit agreements which are the outcome of a settlement reached in court or

before another statutory authority;

(f) credit agreements which relate to the deferred payment, free of charge, of an

existing debt and which do not fall within the scope of point (a) of paragraph

1.

3. Member States may decide not to apply:

(a) Articles 11 and 14 and Annex II to credit agreements for consumers, secured

by a mortgage or by another comparable security commonly used in a Member

State on residential immovable property or secured by a right related to

residential immovable property, the purpose of which is not to acquire or

retain the right to residential immovable property, provided that the Member

States apply to such credit agreements Articles 4 and 5 of and Annexes II and

III to Directive 2008/48/EC;

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(b) this Directive to credit agreements which relate to an immovable property

where the credit agreement provides that the immovable property cannot at any

time be occupied as a house, apartment or another place of residence by the

consumer or a family member of the consumer and is to be occupied as a

house, apartment or another place of residence on the basis of a rental

agreement;

(c) this Directive to credit agreements which relate to credits granted to a

restricted public under a statutory provision with a general interest purpose,

free of interest or at lower borrowing rates than those prevailing on the market

or on other terms which are more favourable to the consumer than those

prevailing on the market and at borrowing rates not higher than those

prevailing on the market;

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(d) this Directive to bridging loans;

(e) this Directive to credit agreements where the creditor is an organisation within

the scope of Article 2(5) of Directive 2008/48/EC.

4. Member States which use the option referred to in point (b) of paragraph 3 shall

ensure the application of an appropriate framework at a national level for this type

of credit.

5. Member States which use the option referred to in point (c) or (e) of paragraph 3

shall ensure the application of adequate alternative arrangements to ensure

consumers receive timely information on the main features, risks and costs of such

credit agreements at the pre-contractual stage and that advertising of such credit

agreements is fair, clear and not misleading.

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Article 4

Definitions

For the purposes of this Directive, the following definitions shall apply:

(1) 'Consumer' means a consumer as defined in point (a) of Article 3 of Directive

2008/48/EC.

(2) 'Creditor' means a natural or legal person who grants or promises to grant credit falling

within the scope of Article 3 in the course of his trade, business or profession.

(3) 'Credit agreement' means an agreement whereby a creditor ▌ grants or promises to

grant, to a consumer, a credit falling within the scope of Article 3 in the form of a

deferred payment, loan or other similar financial accommodation.

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(4) 'Ancillary service' means a ▌service offered to the consumer ▌in conjunction with the

credit agreement.

(5) 'Credit intermediary' means a natural or legal person who is not acting as a creditor or

notary and not merely introducing, either directly or indirectly, a consumer to a

creditor or credit intermediary, and who, in the course of his trade, business or

profession, for remuneration, which may take a pecuniary form or any other agreed

form of financial consideration:

(a) presents or offers credit agreements ▌to consumers;

(b) assists consumers by undertaking preparatory work or other pre-contractual

administration in respect of credit agreements ▌other than as referred to in point

(a); or

(c) concludes credit agreements ▌with consumers on behalf of the creditor.

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(6) 'Group' means a group of creditors which are to be consolidated for the purposes of

drawing up consolidated accounts, as defined in Directive 2013/34/EU of the

European Parliament and of the Council of 26 June 2013 on the annual financial

statements, consolidated financial statements and related reports of certain types of

undertakings 1.

(7) 'Tied credit intermediary' means any credit intermediary who acts on behalf of and

under the full and unconditional responsibility of:

(a) only one creditor;

(b) only one group; or

(c) a number of creditors or groups which does not represent the majority of the

market.

1 OJ L 182, 29.6.2013, p. 19.

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(8) ‘Appointed representative’ means a natural or legal person who performs activities

referred to in point 5 that is acting on behalf of and under the full and unconditional

responsibility of only one credit intermediary.

(9) 'Credit institution' means credit institution as defined in point 1 of Article 4(1) of

Regulation (EU) No 575/2013.

(10) 'Non-credit institution' means any creditor that is not a credit institution.

(11) 'Staff' means:

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(a) any natural person working for the creditor, or credit intermediary who is

directly engaged in the activities covered by this Directive or who has contacts

with consumers in the course of activities covered by this Directive;

(b) any natural person working for an appointed representative who has contacts

with consumers in the course of activities covered by this Directive;

(c) any natural person directly managing or supervising the natural persons

referred to in points (a) and (b).

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(12) ‘Total amount of credit’ means the total amount of credit as defined in point (l) of

Article 3 of Directive 2008/48/EC.

(13) 'Total cost of the credit to the consumer' means the total cost of the credit to the

consumer as defined in point (g) of Article 3 of Directive 2008/48/EC including the

cost of valuation of property where such valuation is necessary to obtain the credit

but excluding registration fees for the transfer of ownership of the immovable

property. It excludes any charges payable by the consumer for non-compliance with

the commitments laid down in the credit agreement.

(14) 'Total amount payable by the consumer' means the total amount payable by the

consumer as defined in point (h) of Article 3 of Directive 2008/48/EC.

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(15) 'Annual percentage rate of charge' (APRC) means the total cost of the credit to the

consumer, expressed as an annual percentage of the total amount of credit, where

applicable, including the costs referred to in Article 17(2) and equates, on an annual

basis, to the present value of all future or existing commitments (drawdowns,

repayments and charges) agreed by the creditor and the consumer.

(16) 'Borrowing rate' means the borrowing rate as defined in point (j) of Article 3 of

Directive 2008/48/EC.

(17) 'Creditworthiness assessment' means the evaluation of the prospect for the debt

obligation resulting from the credit agreement to be met.

(18) 'Durable medium' means durable medium as defined in point (m) of Article 3 of

Directive 2008/48/EC.

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(19) 'Home Member State' means:

(a) where the creditor or credit intermediary is a natural person, the Member State in

which his head office is situated ▌;

(b) where the creditor or credit intermediary is a legal person, the Member State in

which its registered office is situated or, if under its national law it has no

registered office, the Member State in which its head office is situated.

(20) 'Host Member State' means the Member State, other than the home Member State, in

which the creditor or credit intermediary has a branch or provides services.

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(21) 'Advisory services' means the provision of personal recommendations to a consumer

in respect of one or more transactions relating to credit agreements and constitutes a

separate activity from the granting of a credit and from the credit intermediation

activities set out in point 5.

(22) ‘Competent authority’ means an authority designated as competent by a Member

State in accordance with Article 5.

(23) ‘Bridging loan’ means a credit agreement either of no fixed duration or which is due

to be repaid within 12 months, used by the consumer as a temporary financing

solution while transitioning to another financial arrangement for the immovable

property.

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(24) ‘Contingent liability or guarantee’ means a credit agreement which acts as a

guarantee to another separate but ancillary transaction, and where the capital

secured against an immovable property is only drawn down if an event or events

specified in the contract occur.

(25) ‘Shared equity credit agreement’ means a credit agreement where the capital

repayable is based on a contractually set percentage of the value of the immovable

property at the time of the capital repayment or repayments.

(26) 'Tying practice' means the offering or the selling of a credit agreement in a package

with other distinct financial products or services where the credit agreement is not

made available to the consumer separately.

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(27) 'Bundling practice' means the offering or the selling of a credit agreement in a

package with other distinct financial products or services where the credit agreement

is also made available to the consumer separately but not necessarily on the same

terms or conditions as when offered bundled with the ancillary services.

(28) ‘Foreign currency loan’ means a credit agreement where the credit is:

(a) denominated in a currency other than that in which the consumer receives the

income or holds the assets from which the credit is to be repaid; or

(b) denominated in a currency other than that of the Member State in which the

consumer is resident.

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Article 5 ▌

Competent authorities

1. Member States shall designate the national competent authorities empowered to

ensure the application and enforcement of this Directive and shall ensure that they are

granted investigating and enforcement powers and adequate resources necessary for

the efficient and effective performance of their duties.

The authorities referred to in the first subparagraph shall be either public

authorities or bodies recognised by national law or by public authorities expressly

empowered for that purpose by national law. They shall not be creditors, credit

intermediaries or appointed representatives.

2. Member States shall ensure that competent authorities, all persons who work or who

have worked for the competent authorities, as well as auditors and experts instructed

by the competent authorities, are bound by the obligation of professional secrecy. No

confidential information which they may receive in the course of their duties may be

divulged to any person or authority whatsoever, save in summary or aggregate form,

without prejudice to cases covered by criminal law or by this Directive. This shall

not, however, prevent the competent authorities from exchanging or transmitting

confidential information in accordance with national and Union law.

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3. Member States shall ensure that the authorities designated as competent for ensuring

the application and enforcement of Articles 9, 29, 32, 33, 34 and 35 of this Directive

are either or both of the following:

(a) competent authorities as defined in Article 4(2) of Regulation (EU) No

1093/2010;

(b) authorities other than the competent authorities referred to in point (a)

provided that national laws, regulations or administrative provisions require

those authorities to cooperate with the competent authorities referred to in

point (a) whenever necessary in order to carry out their duties under this

Directive, including for the purposes of co-operating with the European

Supervisory Authority (European Banking Authority) (EBA) as required

under this Directive.

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4. Member States shall inform the Commission and EBA of the designation of the

competent authorities and any changes thereto, indicating any division of the

respective duties between different competent authorities. The first such notification

shall be made as soon as possible and at the latest on ....

5. The competent authorities shall exercise their powers in conformity with national

law either:

(a) directly under their own authority or under the supervision of the judicial

authorities; or

OJ: please insert date:_ two years after the date of entry into force of this Directive.

255

(b) by application to courts which are competent to grant the necessary decision,

including, where appropriate, by appeal, if the application to grant the

necessary decision is not successful, except for Articles 9, 29, 32,33, 34 and 35.

6. Where there is more than one competent authority on their territory, Member States

shall ensure that their respective duties are clearly defined and that those authorities

collaborate closely so that they can discharge their respective duties effectively.

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7. The Commission shall publish a list of the competent authorities in the Official

Journal of the European Union at least once a year, and update it continuously on

its website.

Chapter 2

Financial education

Article 6

Financial education of consumers

1. Member States shall promote measures that support the education of consumers in

relation to responsible borrowing and debt management, in particular in relation to

mortgage credit agreements. Clear and general information on the credit granting

process is necessary in order to guide consumers, especially those who take out a

mortgage credit for the first time. Information regarding the guidance that

consumer organisations and national authorities may provide to consumers, is also

necessary.

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2. The Commission shall publish an assessment of the financial education available to

consumers in the Member States and identify examples of best practices which could

be further developed in order to increase the financial awareness of consumers.

Chapter 3

Conditions applicable to creditors, credit intermediaries and appointed

representatives

Article 7

Conduct of business obligations when providing credit to consumers

1. Member States shall require that ▌ when manufacturing credit products or granting,

intermediating or providing advisory services on credit and, where appropriate,

ancillary services to consumers or when executing a credit agreement, the creditor,

credit intermediary or appointed representative acts honestly, fairly, transparently and

professionally, taking account of the rights and interests of the consumers. In relation

to the granting, intermediating or provision of advisory services on credit and, where

appropriate, of ancillary services the activities shall be based on information about

the consumer's circumstances and any specific requirement made known by a

consumer and on reasonable assumptions about risks to the consumer's situation

over the term of the credit agreement. In relation to such provision of advisory

services, the activity shall in addition be based on the information required under

point (a) of Article 22(3).

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2. Member States shall ensure that the manner in which creditors remunerate their staff

and ▌credit intermediaries and the manner in which credit intermediaries remunerate

their staff and appointed representatives do not impede compliance with the

obligation ▌set out in paragraph 1.

3. Member States shall ensure that, when establishing and applying remuneration

policies for staff responsible for the assessment of creditworthiness, creditors comply

with the following principles in a way and to the extent that is appropriate to their

size, internal organisation and the nature, scope and complexity of their activities:

(a) the remuneration policy is consistent with and promotes sound and effective

risk management and does not encourage risk-taking that exceeds the level of

tolerated risk of the creditor;

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(b) the remuneration policy is in line with the business strategy, objectives, values

and long-term interests of the creditor, and incorporates measures to avoid

conflicts of interest, in particular by providing that remuneration is not

contingent on the number or proportion of applications accepted.

4. Member States shall ensure that where creditors, credit intermediaries or appointed

representatives provide advisory services the remuneration structure of the staff

involved does not prejudice their ability to act in the consumer's best interest and in

particular is not contingent on sales targets. In order to achieve that goal, Member

States may in addition ban commissions paid by the creditor to the credit

intermediary.

5. Member States may prohibit or impose restrictions on payments from a consumer to

a creditor or credit intermediary prior to the conclusion of a credit agreement.

Article 8

Obligation to provide information free of charge to consumers

Member States shall ensure that, when information is provided to consumers in compliance

with the requirements set out in this Directive, such information is provided without charge

to the consumer.

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Article 9

Knowledge and competence requirements for staff

1. ▌Member States shall ensure that ▌creditors, credit intermediaries and appointed

representatives require their staff to possess and to keep up-to-date an appropriate

level of knowledge and competence in relation to the manufacturing, the offering or

granting of credit agreements, the carrying out of credit intermediation activities set

out in point 5 of Article 4 or the provision of advisory services. Where the conclusion

of a credit agreement includes an ancillary service, ▌appropriate knowledge and

competence in relation to that ancillary service shall be required.

2. Except in the circumstances referred to in paragraph 3, home Member States shall

establish minimum knowledge and competence requirements for creditors’, credit

intermediaries’ and appointed representatives’ staff in accordance with the

principles set out in Annex III.

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3. Where a creditor or credit intermediary provides its services within the territory of

one or more other Member States:

(i) through a branch, the host Member State shall be responsible for establishing

the minimum knowledge and competence requirements applicable to the staff

of a branch;

(ii) under the freedom to provide services, the home Member State shall be

responsible for establishing the minimum knowledge and competence

requirements applicable to the staff in accordance with Annex III, however

host Member States may establish the minimum knowledge and competence

requirements for those requirements referred to in points (b), (c), (e) and (f) of

paragraph 1 of Annex III.

4. Member States shall ensure that compliance with the requirements of paragraph 1 is

supervised by the competent authorities, and that the competent authorities have

powers to require creditors, credit intermediaries and appointed representatives to

provide such evidence as the competent authority deems necessary to enable such

supervision.

5. For the effective supervision of creditors and credit intermediaries providing their

services within the territory of other Member States under the freedom to provide

services, the competent authorities of the host and the home Member States shall

cooperate closely for the effective supervision and enforcement of the minimum

knowledge and competence requirements of the host Member State. For that

purpose they may delegate tasks and responsibilities to each other.

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Chapter 4

Information and practices ▌ preliminary to the conclusion of the credit

agreement

Article 10

General provisions applicable to advertising and marketing

Without prejudice to Directive 2005/29/EC, Member States shall require that any advertising

and marketing communications concerning credit agreements ▌are fair, clear and not

misleading ▌. In particular, wording that may create false expectations for a consumer

regarding the availability or the cost of a credit shall be prohibited.

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Article 11

Standard information to be included in advertising

1. Member States shall ensure that any advertising concerning credit agreements ▌ which

indicates an interest rate or any figures relating to the cost of the credit to the consumer

includes the standard information in accordance with this Article.

Member States may provide that the first subparagraph shall not apply where

national law requires the indication of the APRC in advertising concerning credit

agreements which does not indicate an interest rate or any figures relating to any

cost of credit to the consumer within the meaning of the first subparagraph.

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2. The standard information shall specify ▌ in a clear, concise and prominent way ▌:

(a) the identity of the creditor or, where applicable, the credit intermediary or

appointed representative;

(b) where applicable, that the ▌credit agreement will be secured ▌ by a mortgage or

another comparable security commonly used in a Member State on residential

immovable property or by a right related to residential immovable property;

(c) the borrowing rate, indicating whether this is fixed or variable or a combination

of both, together with particulars of any charges included in the total cost of the

credit to the consumer;

(d) the total amount of credit;

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(e) the APRC which shall be included in the advertisement at least as prominently

as any interest rate;

(f) where applicable, the duration of the credit agreement;

(g) where applicable, the amount of the instalments;

(h) where applicable, the total amount payable by the consumer;

(i) where applicable, the number of instalments;

(j) where applicable, a warning regarding the fact that possible fluctuations of the

exchange rate could affect the amount payable by the consumer.

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3. The information listed in paragraph 2, other than that listed in points (a), (b) or (j)

thereof, shall be specified by means of a representative example and shall adhere to

that representative example throughout. Member States shall adopt criteria for

determining a representative example.

4. Where the conclusion of a contract regarding an ancillary service ▌, in particular

insurance, is compulsory in order to obtain the credit or to obtain it on the terms and

conditions marketed, and the cost of that service cannot be determined in advance, the

obligation to enter into that contract shall be stated in a clear, concise and prominent

way, together with the APRC.

▌

5. The information referred to in paragraphs 2 and 4 shall be easily legible or clearly

audible as appropriate, depending on the medium used for advertising.

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6. Member States may require the inclusion of a concise and proportionate warning

concerning specific risks associated with credit agreements. They shall notify those

requirements to the Commission without delay.

7. This Article shall be without prejudice to Directive 2005/29/EC.

Article 12

Tying and bundling practices

1. Member States shall allow bundling practices but shall prohibit tying practices.

2. Notwithstanding paragraph 1, Member States may provide that creditors can request

the consumer or a family member or close relation of the consumer to:

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(a) open or maintain a payment or a savings account, where the only purpose of

such an account is to accumulate capital to repay the credit, to service the

credit, to pool resources to obtain the credit, or to provide additional security

for the creditor in the event of default;

(b) purchase or keep an investment product or a private pension product, where

such product which primarily offers the investor an income in retirement

serves also to provide additional security for the creditor in the event of default

or to accumulate capital to repay the credit, to service the credit or to pool

resources to obtain the credit;

(c) conclude a separate credit agreement in conjunction with a shared-equity

credit agreement to obtain the credit.

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3. Notwithstanding paragraph 1, Member States may allow tying practices when the

creditor can demonstrate to its competent authority that the tied products or

categories of product offered, on terms and conditions similar to each other, which

are not made available separately, result in a clear benefit to the consumers taking

due account of the availability and the prices of the relevant products offered on the

market. This paragraph shall only apply to products which are marketed after ... .

4. Member States may allow creditors to require the consumer to hold a relevant

insurance policy related to the credit agreement. In such cases Member States shall

ensure that the creditor accepts the insurance policy from a supplier different to his

preferred supplier where such policy has a level of guarantee equivalent to the one

the creditor has proposed.

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

270

Article 13

General information

1. Member States shall ensure that clear and comprehensible general information about

credit agreements is made available by creditors or, where applicable, by tied credit

intermediaries or their appointed representatives at all times on paper or on another

durable medium or in electronic form. In addition, Member States may provide that

general information is made available by non-tied credit intermediaries.

Such general information shall include at least the following:

(a) the identity and the geographical address of the issuer of the information;

(b) the purposes for which the credit may be used;

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(c) the forms of security, including, where applicable, the possibility for it to be

located in a different Member State;

(d) the possible duration of the credit agreements;

(e) ▌ types of ▌available borrowing rate, indicating whether fixed or variable or

both, with a short description of the characteristics of a fixed and variable rate ▌,

including related implications for the consumer;

(f) where foreign currency loans are available, an indication of the foreign

currency or currencies, including an explanation of the implications for the

consumer where the credit is denominated in a foreign currency;

(g) a representative example of the total amount of credit, the total cost of the

credit to the consumer, the total amount payable by the consumer and the

APRC;

272

(h) an indication of possible further costs, not included in the total cost of the

credit to the consumer, to be paid in connection with a credit agreement;

(i) the range of different options available for reimbursing the credit to the creditor,

including the number, frequency and amount of the regular repayment

instalments;

(j) where applicable, a clear and concise statement that compliance with the terms

and conditions of the credit agreement does not guarantee repayment of the

total amount of credit under the credit agreement;

(k) ▌ a description of the conditions directly relating to early repayment;

(l) whether a valuation of the property is necessary and, where applicable, who is

responsible for ensuring that the valuation is carried out, and whether any

related costs arise for the consumer;

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(m) indication of ancillary services the consumer is obliged to acquire in order to

obtain the credit or to obtain it on the terms and conditions marketed and,

where applicable, a clarification that the ancillary services may be purchased

from a provider that is not the creditor; and

(n) a general warning concerning possible consequences of non-compliance with

the commitments linked to the credit agreement.

2. Member States may oblige the creditors to include other types of warnings which are

relevant in a Member State. They shall notify those requirements to the Commission

without delay.

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Article 14

Pre-contractual information

1. Member States shall ensure that the creditor and, where applicable, the credit

intermediary or appointed representative, provides the consumer with the personalised

information needed to compare the credits available on the market, assess their

implications and make an informed decision on whether to conclude a credit

agreement:

(a) without undue delay after the consumer has given the necessary information

on his needs, financial situation and preferences in accordance with Article

20; and

(b) in good time before the consumer is bound by any credit agreement or offer.

2. The personalised information referred to in paragraph 1, on paper or on another

durable medium, shall be provided by means of the ESIS, as set out in Annex II.

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3. Member States shall ensure that when an offer binding on the creditor is provided to

the consumer, it shall be provided on paper or on another durable medium and

accompanied by an ESIS where:

(a) no ESIS has been provided to the consumer previously; or

(b) the characteristics of the offer are different from the information contained in

the ESIS previously provided.

4. Member States may provide for the obligatory provision of the ESIS before the

provision of an offer binding on the creditor. Where a Member State so provides, it

shall require that the ESIS shall only be required to be provided again where point

(b) of paragraph 3 is met.

5. Member States which before ...* have implemented an information sheet that meets

equivalent information requirements to those set out in Annex II may continue to

use it for the purposes of this Article until …**.

* OJ: please insert the date of entry into force of this Directive.* * OJ: please insert the date: five years after entry into force of this Directive.

276

6. Member States shall specify a time period of at least seven days during which the

consumer will have sufficient time to compare ▌offers, assess their implications and

make an informed decision ▌.

Member States shall specify that the time period referred to in the first subparagraph

shall be either a reflection period before the conclusion of the credit agreement or a

period for exercising a right of withdrawal after the conclusion of the credit

agreement or a combination of the two.

Where a Member State specifies a reflection period before the conclusion of a credit

agreement:

(a) the offer shall be binding on the creditor for the duration of the reflection

period; and

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(b) the consumer may accept the offer at any time during the reflection period.

Member States may provide that consumers cannot accept the offer for a period not

exceeding the first 10 days of the reflection period.

Where the borrowing rate or other costs applicable to the offer are determined on

the basis of the selling of underlying bonds or other long-term funding instruments,

Member States may provide that the borrowing rate or other costs may vary from

that stated in the offer in accordance with the value of the underlying bond or other

long-term funding instrument.

Where the consumer has a right of withdrawal in accordance with the second

subparagraph of this paragraph, Article 6 of Directive 2002/65/EC shall not apply.

278

7. The creditor and, where applicable, the credit intermediary or appointed

representative who has supplied the ESIS to the consumer shall be deemed to have

fulfilled the requirements regarding information provision to the consumer prior to the

conclusion of a distance contract as laid down in Article 3(1) of Directive 2002/65/EC

and shall be deemed to satisfy the requirements of Article 5(1) of that Directive only

where they have at least supplied the ESIS prior to the conclusion of the contract.

8. Member States shall not modify the ESIS model other than as provided for in Annex

II. Any additional information which the creditor or, where applicable, the credit

intermediary or appointed representative, may provide to the consumer or is required

to provide to the consumer by national law shall be given in a separate document

which may be annexed to the ESIS.

9. The Commission shall be empowered to adopt delegated acts in accordance with

Article 40 to amend the standard wording in Part A of Annex II or the instructions

in Part B thereof to address the need for information or warnings concerning new

products that were not marketed before .... Such delegated acts shall however not

change the structure or format of the ESIS.

▌

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

279

10. In the case of voice telephony communications, as referred to in Article 3(3) of

Directive 2002/65/EC, the description of the main characteristics of the financial

service to be provided pursuant to the second indent of point (b) of Article 3(3) of that

Directive shall include at least the items referred to in sections 2 to 5 of Part A of

Annex II to this Directive.

11. Member States shall ensure that at least where no right of withdrawal exists the

creditor or, where applicable, the credit intermediary or appointed representative

provides the consumer with a copy of the draft credit agreement, at the time of the

provision of an offer binding on the creditor. Where a right of withdrawal exists,

Member States shall ensure that the creditor or, where applicable, the credit

intermediary or appointed representative offers to provide the consumer with a copy

of the draft credit agreement at the time of the provision of an offer binding on the

creditor.

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Article 15

Information requirements concerning credit intermediaries and appointed representatives

1. Member States shall ensure that in good time before the carrying out of any of the

credit intermediation activities set out in point 5 of Article 4, the credit intermediary or

appointed representative shall provide the consumer with at least the following

information on paper or on another durable medium:

(a) the identity and the geographical address of the credit intermediary;

(b) the register in which he has been included, the registration number, where

applicable, and the means for verifying such registration;

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(c) whether the credit intermediary is tied to or works exclusively for one or more

creditors. Where the credit intermediary is tied to or works exclusively for one

or more creditors, it shall provide the names of the creditors for which it is

acting. The credit intermediary may disclose that it is independent where it

meets the conditions laid down in accordance with Article 22(4);

(d) whether the credit intermediary offers advisory services;

(e) the fee, where applicable, payable by the consumer to the credit intermediary for

its services or where this is not possible, the method for calculating the fee;

(f) the ▌procedures allowing consumers or other interested parties to register

complaints internally about credit intermediaries and, where appropriate, the

means by which recourse to ▌out-of-court complaint and redress procedures can

be sought;

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(g) where applicable, the existence and where known the amount of commissions

or other inducements, payable by the creditor or third parties to the credit

intermediary for their services in relation to the credit agreement. Where the

amount is not known at the time of disclosure the credit intermediary shall

inform the consumer that the actual amount will be disclosed at a later stage in

the ESIS.

2. Credit intermediaries who are not tied but who receive commission from one or more

creditors shall, at the consumer’s request, provide information on the variation in

levels of commission payable by the different creditors providing the credit

agreements being offered to the consumer. The consumer shall be informed that he has

the right to request such information.

3. Where the credit intermediary charges a fee to the consumer and additionally

receives commission from the creditor or a third party, the credit intermediary shall

explain to the consumer whether or not the commission will be offset against the fee,

either in part or in full.

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4. Member States shall ensure that the fee, if any, payable by the consumer to the

credit intermediary for its services is communicated to the creditor by the credit

intermediary, for the purpose of calculating of the APRC.

5. Member States shall require credit intermediaries to ensure that in addition to the

disclosures required by this Article, their appointed representative discloses to the

consumer the capacity in which he is acting and the credit intermediary he is

representing when contacting or before dealing with any consumer.

▌

Article 16

Adequate explanations

1. Member States shall ensure that creditors and, where applicable, credit intermediaries

or appointed representatives provide adequate explanations to the consumer on the

proposed credit agreements and any ancillary services, in order to place the consumer

in a position enabling him to assess whether the proposed credit agreements and

ancillary services are adapted to his needs and financial situation. ▌

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The explanations shall, where applicable, include in particular:

(a) the pre-contractual information to be provided in accordance with:

(i) Article 14 in the case of creditors;

(ii) Articles 14 and 15 in the case of credit intermediaries or appointed

representatives;

(b) the essential characteristics of the products proposed;

(c) the specific effects the products proposed may have on the consumer, including

▌the consequences of default in payment by the consumer; and

(d) where ancillary services are bundled with a credit agreement, whether each

component of the bundle can be terminated separately and the implications for

the consumer of doing so.

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2. Member States may adapt the manner by which and the extent to which the

explanations referred to in paragraph 1 is given, as well as by whom it is given, to

the circumstances of the situation in which the credit agreement is offered, the

person to whom it is offered and the nature of the credit offered.

Chapter 5

Annual percentage rate of charge

Article 17

Calculation of the APRC

1. The APRC ▌ shall be calculated in accordance with the mathematical formula set out

in Annex I.

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2. The costs of opening and maintaining a specific account, of using a means of

payment for both ▌transactions and drawdowns on that account ▌ and of other costs

relating to payment transactions shall be included in the total cost of credit to the

consumer whenever the opening or maintaining of an account is obligatory in order

to obtain the credit or to obtain it on the terms and conditions marketed.

3. The calculation of the APRC shall be based on the assumption that the credit

agreement is to remain valid for the period agreed and that the creditor and the

consumer will fulfil their obligations under the terms and by the dates specified in the

credit agreement.

4. In the case of credit agreements containing clauses allowing variations in the

borrowing rate and, where applicable, in the charges contained in the APRC but

unquantifiable at the time of calculation, the APRC shall be calculated on the

assumption that the borrowing rate and other charges will remain fixed in relation to

the level set at the conclusion of the contract.

▌

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5. For credit agreements for which a fixed borrowing rate is agreed in relation to the

initial period of at least five years, at the end of which a negotiation on the

borrowing rate takes place to agree on a new fixed rate for a further material period,

the calculation of the additional, illustrative APRC disclosed in the ESIS shall cover

only the initial fixed rate period and shall be based on the assumption that, at the

end of the fixed borrowing rate period, the capital outstanding is repaid.

6. Where the credit agreement allows for variations in the borrowing rate, Member

States shall ensure that the consumer is informed of the possible impacts of

variations on the amounts payable and on the APRC at least by means of the ESIS.

This shall be done by providing the consumer with an additional APRC which

illustrates the possible risks linked to a significant increase in the borrowing rate.

Where the borrowing rate is not capped, this information shall be accompanied by a

warning highlighting that the total cost of the credit to the consumer, shown by the

APRC, may change. This provision shall not apply to credit agreements where the

borrowing rate is fixed for an initial period of at least five years, at the end of which

a negotiation on the borrowing rate takes place in order to agree on a new fixed rate

for a further material period, for which an additional, illustrative APRC is provided

for in the ESIS.

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7. Where applicable, the additional assumptions set out in Annex I shall be used in

calculating the APRC.

8. The Commission shall be empowered to adopt delegated acts in accordance with

Article 40 in order to amend ▌ the remarks or update the assumptions used to

calculate the APRC as set out in Annex I, in particular if the remarks or assumptions

set out in this Article and in Annex I do not suffice to calculate the APRC in a uniform

manner or are no longer adapted ▌to the commercial situation on the market.

▌

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Chapter 6

Creditworthiness assessment

Article 18

Obligation to assess the creditworthiness of the consumer

1. Member States shall ensure that, before concluding a credit agreement, the creditor

makes a thorough assessment of the consumer's creditworthiness. That assessment

shall take appropriate account of factors relevant to verifying the prospect of the

consumer to meet his obligations under the credit agreement.

2. Member States shall ensure that the procedures and information on which the

assessment is based are established, documented and maintained.

3. The assessment of creditworthiness shall not rely predominantly on the value of the

residential immovable property exceeding the amount of the credit or the assumption

that the residential immovable property will increase in value unless the purpose of

the credit agreement is to construct or renovate the residential immovable property.

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4. Member States shall ensure that where a creditor concludes a credit agreement with

a consumer the creditor shall not subsequently cancel or alter the credit agreement

to the detriment of the consumer on the grounds that the assessment of

creditworthiness was incorrectly conducted. This paragraph shall not apply where it

is demonstrated that the consumer knowingly withheld or falsified the information

within the meaning of Article 20.

5. Member States shall ensure that:

▌

(a) the creditor only makes the credit available to the consumer where the result of

the creditworthiness assessment indicates that the obligations resulting from

the credit agreement are likely to be met in the manner required under that

agreement;

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(b) in accordance with Article 10 of Directive 95/46/EC, the creditor informs the

consumer in advance that a database is to be consulted;

(c) where the credit application is rejected ▌the creditor informs the consumer

without delay of the rejection and, where applicable, that the decision is based

on automated processing of data. Where the rejection is based on the result of

the database consultation, the creditor shall inform the consumer of the result

of such consultation and of the particulars of the database consulted.

▌

6. Member States shall ensure that ▌ the consumer’s creditworthiness is re-assessed on

the basis of updated information before any significant increase in the total amount of

credit is granted after the conclusion of the credit agreement unless such additional

credit was envisaged and included in the original creditworthiness assessment.

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Article 19

Property valuation

1. Member States shall ensure that reliable standards for the valuation of residential

immovable property for mortgage lending purposes are developed within their

territory. Member States shall require creditors to ensure that those standards are

used where they carry out a property valuation or to take reasonable steps to ensure

that those standards are applied where a valuation is conducted by a third party.

Where national authorities are responsible for regulating independent appraisers

who carry out property valuations they shall ensure that they comply with the

national rules that are in place.

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2. Member States shall ensure that internal and external appraisers conducting

property valuations are professionally competent and sufficiently independent from

the credit underwriting process so that they can provide an impartial and objective

valuation, which shall be documented in a durable medium and of which a record

shall be kept by the creditor.

Article 20

Disclosure and verification of consumer information

▌

1. The assessment of creditworthiness referred to in Article 18 shall be carried out on

the basis of information on the consumer's income and expenses and other financial

and economic circumstances which is necessary, sufficient and proportionate. The

information shall be obtained by the creditor from relevant internal or external

sources, including the consumer, and including information provided to the credit

intermediary or appointed representative during the credit application process. The

information shall be appropriately verified, including through reference to

independently verifiable documentation when necessary.

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2. Member States shall ensure that credit intermediaries or appointed representatives

accurately submit the necessary information obtained from the consumer to the

relevant creditor to enable the creditworthiness assessment to be carried out.

3. Member States shall ensure that creditors specify in a clear and straightforward way

at the pre-contractual phase ▌ the necessary information and independently verifiable

evidence ▌that the consumer needs to provide and the timeframe within which the

consumer needs to provide the information. Such request for information shall be

proportionate and limited to what is necessary to conduct a proper creditworthiness

assessment. Member States shall allow creditors to seek clarification of the

information received in response to that request where necessary to enable the

assessment of creditworthiness.

Member States shall not allow a creditor to terminate the credit agreement on the

grounds that the information provided by the consumer before the conclusion of the

credit agreement was incomplete.

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The second subparagraph shall not prevent Member States from allowing the

termination of the credit agreement by the creditor where it is demonstrated that the

consumer knowingly withheld or falsified the information.

4. Member States shall have measures in place to ensure that consumers are aware of

the need to provide correct information in response to the request referred to in the

first subparagraph of paragraph 3 and that such information is as complete as

necessary to conduct a proper creditworthiness assessment. The creditor, credit

intermediary or appointed representative shall warn the consumer that, where the

creditor is unable to carry out an assessment of creditworthiness because the

consumer chooses not to provide the information or verification necessary for an

assessment of creditworthiness, the credit cannot be granted. That warning may be

provided in a standardised format.

5. This Article shall be without prejudice to Directive 95/46/EC, in particular Article 6

thereof.

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Chapter 7

Database access

Article 21

Database access

1. Each Member State shall ensure ▌access for all creditors from all Member States to

databases used in that Member State for assessing the creditworthiness of consumers

and for the sole purpose of monitoring consumers' compliance with the credit

obligations over the life of the credit agreement. The conditions for such access shall

be non-discriminatory.

2. Paragraph 1 shall apply both to databases which are operated by private credit

bureaux or credit reference agencies and to public registers.

▌


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Chapter 8

Advisory services

Article 22

Standards for advisory services

▌

1. Member States shall ensure that the creditor, credit intermediary or appointed

representative explicitly informs the consumer, in the context of a given transaction,

whether advisory services are being or can be provided to the consumer.

2. Member States shall ensure that before the provision of advisory services or, where

applicable, the conclusion of a contract for the provision of advisory services, the

creditor, credit intermediary or appointed representative provides the consumer with

the following information on paper or another durable medium:

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(a) whether the recommendation will be based on considering only their own

product range in accordance with point (b) of paragraph 3 or a wide range of

products from across the market in accordance with point (c) of paragraph 3

so that the consumer can understand the basis on which the recommendation

is made;

(b) where applicable, the fee payable by the consumer for the advisory services or,

where the amount cannot be ascertained at the time of disclosure, the method

used for its calculation.

The information referred to in points (a) and (b) of the first subparagraph may be

provided to the consumer in the form of additional pre-contractual information.

3. Where advisory services are provided to consumers, Member States shall ensure, in

addition to the requirements set out in Articles 7 and 9, that:

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(a) creditors, credit intermediaries or appointed representatives obtain the

necessary information regarding the consumer’s personal and financial situation,

his preferences and objectives so as to enable the recommendation of suitable

credit agreements. Such an assessment shall be based on information that is up to

date at that moment in time and shall take into account reasonable assumptions

as to risks to the consumer’s situation over the term of the proposed credit

agreement ▌;

(b) creditors, tied credit intermediaries or appointed representatives of tied credit

intermediaries consider a sufficiently large number of credit agreements in

their product range and recommend a suitable credit agreements or several

suitable credit agreements from among their product range for the consumer’s

needs, financial situation and personal circumstances;

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(c) non-tied credit intermediaries or appointed representatives of non-tied credit

intermediaries consider a sufficiently large number of credit agreements

available on the market and recommend a suitable credit agreement or several

suitable credit agreements available on the market for the consumer’s needs,

financial situation and personal circumstances;

(d) creditors, credit intermediaries or appointed representatives act in the best

interests of the consumer by:

(i) informing themselves about the consumer's needs and circumstances;

and

(ii) recommending suitable credit agreements in accordance with points (a),

(b) and (c); and

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(e) creditors, credit intermediaries or appointed representatives give the consumer

a record on paper or on another durable medium of the recommendation

provided.

4. Member States may prohibit the use of the term "advice" and "advisor" or similar

terms when the advisory services are being provided to consumers by creditors, tied

credit intermediaries or appointed representatives of tied credit intermediaries.

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Where Member States do not prohibit the use of the term 'advice' and 'advisor', they

shall impose the following conditions on the use of the term "independent advice"

or "independent advisor" by creditors, credit intermediaries or appointed

representatives providing advisory services:

(a) creditors, credit intermediaries or appointed representatives shall consider a

sufficiently large number of credit agreements available on the market; and

(b) creditors, credit intermediaries or appointed representatives shall not be

remunerated for those advisory services by one or more creditors.

Point (b) of the second subparagraph shall apply only where the number of creditors

considered is less than a majority of the market.

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Member States may impose more stringent requirements in relation to the use of the

terms "independent advice" or "independent advisor" by creditors, credit

intermediaries or appointed representatives, including a ban on receiving

remuneration from a creditor.

5. Member States may provide for an obligation for creditors, credit intermediaries and

appointed representatives to warn a consumer when, considering the consumer's

financial situation, a credit agreement may induce a specific risk for the consumer.

6. Member States shall ensure that advisory services are only provided by creditors,

credit intermediaries or appointed representatives.

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Member States may decide not to apply the first subparagraph to persons:

(a) carrying out the credit intermediation activities set out in point 5 of Article 4 or

providing advisory services where those activities are carried out or services

are provided in an incidental manner in the course of a professional activity

and that activity is regulated by legal or regulatory provisions or a code of

ethics governing the profession which do not exclude carrying out of those

activities or the provision of those services;

(b) providing advisory services in the context of managing existing debt which are

insolvency practitioners where that activity is regulated by legal or regulatory

provisions or public or voluntary debt advisory services which do not operate

on a commercial basis; or

(c) providing advisory services who are not creditors, credit intermediaries or

appointed representatives where such persons are admitted and supervised by

competent authorities in accordance with the requirements for credit

intermediaries under this Directive.

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Persons benefiting from the waiver in the second subparagraph shall not benefit

from the right referred to in Article 32(1) to provide services for the entire territory

of the Union.

7. This Article shall be without prejudice to Article 16 and to Member States'

competence to ensure that services are made available to consumers to help them

understand their financial needs and which types of products are likely to meet those

needs.

Chapter 9

Foreign currency loans and variable rate loans

306

Article 23

Foreign currency loans

1. Member States shall ensure that, where a credit agreement relates to a foreign

currency loan, an appropriate regulatory framework is in place at the time the credit

agreement is concluded to at least ensure that:

(a) the consumer has a right to convert the credit agreement into an alternative

currency under specified conditions; or

(b) there are other arrangements in place to limit the exchange rate risk to which

the consumer is exposed under the credit agreement.

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2. The alternative currency referred to in point (a) of paragraph 1 shall be either:

(a) the currency in which the consumer primarily receives income or holds assets

from which the credit is to be repaid, as indicated at the time the most recent

creditworthiness assessment in relation to the credit agreement was made; or

(b) the currency of the Member State in which the consumer either was resident at

the time the credit agreement was concluded or is currently resident.

Member States may specify whether both of the choices referred to in points (a) and

(b) of the first subparagraph are available to the consumer or only one of them or

may allow creditors to specify whether both of the choices referred to in points (a)

and (b) of the first subparagraph are available to the consumer or only one of them.

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3. Where a consumer has a right to convert the credit agreement into an alternative

currency in accordance with point (a) of paragraph 1, the Member States shall

ensure that the exchange rate at which the conversion is carried out is the market

exchange rate applicable on the day of application for conversion unless otherwise

specified in the credit agreement.

4. Member States shall ensure that where a consumer has a foreign currency loan, the

creditor warns the consumer on a regular basis on paper or on another durable

medium at least where the value of the total amount payable by the consumer which

remains outstanding or of the regular instalments varies by more than 20 % from

what it would be if the exchange rate between the currency of the credit agreement

and the currency of the Member State applicable at the time of the conclusion of the

credit agreement were applied. The warning shall inform the consumer of a rise in

the total amount payable by the consumer, set out where applicable the right to

convert to an alternative currency and the conditions for doing so and explain any

other applicable mechanism for limiting the exchange rate risk to which the

consumer is exposed.

5. Member States may further regulate foreign currency loans provided that such

regulation is not applied with retrospective effect.

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6. The arrangements applicable under this Article shall be disclosed to the consumer in

the ESIS and in the credit agreement. Where there is no provision in the credit

agreement to limit the exchange rate risk to which the consumer is exposed to a

fluctuation in the exchange rate of less than 20 %, the ESIS shall include an

illustrative example of the impact of a 20 % fluctuation in the exchange rate.

Article 24Variable rate credits

Where the credit agreement is a variable rate credit, Member States shall ensure that:

(a) any indexes or reference rates used to calculate the borrowing rate are clear,

accessible, objective and verifiable by the parties to the credit agreement and the

competent authorities; and

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(b) historical records of indexes for calculating the borrowing rates are maintained

either by the providers of these indexes or the creditors.

Chapter 10

Sound execution of credit agreements and related rights

Article 25

Early repayment

1. Member States shall ensure that the consumer has a ▌ right to discharge fully or

partially his obligations under a credit agreement prior to the expiry of that agreement.

In such cases, the consumer shall be entitled to a reduction in the total cost of the

credit to the consumer, ▌ such ▌ reduction consisting of the interest and the costs for

the remaining duration of the contract.

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2. Member States may provide that the exercise of the right referred to in paragraph 1 is

subject to certain conditions. Such conditions may include time limitations on the

exercise of the right, a different treatment depending on the type of the borrowing rate

or on the moment the consumer exercises the right, or restrictions with regard to the

circumstances under which the right may be exercised.

3. Member States may ▌provide that the creditor is entitled to fair and objective

compensation, where justified, for possible costs directly linked to the early repayment

but shall not impose a sanction on the consumer. In that regard, the compensation

shall not exceed the financial loss of the creditor. Subject to those conditions

Member States may provide that the compensation may not exceed a certain level or

be allowed only for a certain period of time.

4. Where a consumer seeks to discharge his obligations under a credit agreement prior

to the expiry of the agreement, the creditor shall provide the consumer without delay

after receipt of the request, on paper or on another durable medium, with the

information necessary to consider that option. That information shall at least

quantify the implications for the consumer of discharging his obligations prior to the

expiry of the credit agreement and clearly set out any assumptions used. Any

assumptions used shall be reasonable and justifiable.

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5. Where the early repayment falls within a period for which the borrowing rate is fixed

Member States may provide that the exercise of the right referred to in paragraph 1

is subject to the existence of a legitimate interest on the part of the consumer.

▌

Article 26

Flexible and reliable markets

1. Member States shall have appropriate mechanisms in place to ensure that the claim

against the security is enforceable by or on behalf of creditors. Member States shall

ensure that creditors keep appropriate records concerning the types of immovable

property accepted as a security as well as the related mortgage underwriting policies

used.

2. Member States shall take the necessary measures to ensure an appropriate statistical

monitoring of the residential property market, including for market surveillance

purposes, where appropriate by encouraging the development and use of specific

price indexes which may be public or private or both.

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Article 27

Information concerning changes in the borrowing rate

1. Member States shall ensure that the creditor informs the consumer of any change in

the borrowing rate, on paper or another durable medium, before the change takes

effect. The information shall at least state the amount of the payments to be made

after the new borrowing rate takes effect and, in cases where the number or

frequency of the payments changes, particulars thereof.

2. However, the Member States may allow the parties to agree in the credit agreement

that the information referred to in paragraph 1 is to be given to the consumer

periodically where the change in the borrowing rate is correlated with a change in a

reference rate, the new reference rate is made publicly available by appropriate

means and the information concerning the new reference rate is kept available in

the premises of the creditor and communicated personally to the consumer together

with the amount of new periodic instalments.

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3. Creditors may continue to inform consumers periodically where the change in the

borrowing rate is not correlated with a change in a reference rate where this was

allowed under national law before …*.

4. Where changes in the borrowing rate are determined by way of auction on the

capital markets and it is therefore impossible for the creditor to inform the consumer

of any change before the change takes effect, the creditor shall, in good time before

the auction, inform the consumer on paper or on another durable medium of the

upcoming procedure and provide an indication of how the borrowing rate could be

affected.

Article 28

Arrears and foreclosure

1. Member States shall adopt measures to encourage creditors to exercise reasonable

forbearance before foreclosure proceedings are initiated.

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

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2. Member States may require that, where the creditor is permitted to define and

impose charges on the consumer arising from the default, those charges are no

greater than is necessary to compensate the creditor for costs it has incurred as a

result of the default.

3. Member States may allow creditors to impose additional charges on the consumer in

the event of default. In that case Member States shall place a cap on those charges.

4. Member States shall not prevent the parties to a credit agreement from expressly

agreeing that return or transfer to the creditor of the security or proceeds from the

sale of the security is sufficient to repay the credit.

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5. Where the price obtained for the immovable property affects the amount owed by the

consumer Member States shall have procedures or measures to enable the best

efforts price for the foreclosed immovable property to be obtained.

Where after foreclosure proceedings outstanding debt remains, Member States shall

ensure that measures to facilitate repayment in order to protect consumers are put in

place.

Chapter 11

Requirements for establishment and supervision of credit

intermediaries and appointed representatives

Article 29

Admission of credit intermediaries

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1. Credit intermediaries shall be duly admitted to carry out all or part of the credit

intermediation activities set out in point 5 of Article 4 or to provide advisory services

by a competent authority ▌in their home Member State. Where a Member State

allows appointed representatives under Article 31, such an appointed representative

shall not need to be admitted as a credit intermediary under this Article.

▌

2. Member States shall ensure that the admission of credit intermediaries is made

subject to fulfilment of at least the following professional requirements in addition to

the requirements provided for in Article 9:

(a) Credit intermediaries shall hold professional indemnity insurance covering the

territories in which they offer services, or some other comparable guarantee

against liability arising from professional negligence. However, for tied credit

intermediaries, the home Member State may provide that such insurance or

comparable guarantee can be provided by a creditor for which the credit

intermediary is empowered to act.

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Powers are delegated to the Commission to adopt and, where necessary amend,

regulatory technical standards to stipulate the minimum monetary amount of

the professional indemnity insurance or comparable guarantee referred to in

the first paragraph of this point. Those regulatory technical standards shall be

adopted in accordance with Articles 10 to 14 of Regulation (EU) No

1093/2010.

EBA shall develop draft regulatory technical standards to stipulate the

minimum monetary amount of the professional indemnity insurance or

comparable guarantee referred to in the first paragraph of this point for

submission to the Commission by …*. EBA shall review, and if necessary,

develop draft regulatory technical standards to amend the minimum monetary

amount of the professional indemnity insurance or comparable guarantee

referred to in the first paragraph of this point for submission to the

Commission for the first time by …** and every two years thereafter.

* OJ please insert date: 6 months after the entry into force of this Directive.* * OJ please insert date: 4 years after the entry into force of this Directive.

319

(b) A natural person established as a credit intermediary, the members of the

board of a credit intermediary established as a legal person and natural

persons performing equivalent tasks within a credit intermediary which is a

legal person but does not have a board shall be of good repute. As a minimum

they shall have a clean police record or any other national equivalent in

relation to serious criminal offences linked to crimes against property or other

crimes related to financial activities and they shall not have previously been

declared bankrupt, unless they have been rehabilitated in accordance with

national law.

(c) A natural person established as a credit intermediary, the members of the

board of a credit intermediary established as a legal person and natural

persons performing equivalent tasks within a credit intermediary which is a

legal person but does not have a board shall possess the appropriate level of

knowledge and competence in relation to credit agreements. The home

Member State shall establish the appropriate level of knowledge and

competence in accordance with the principles set out in Annex III.

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3. Member States shall ensure that the criteria established in order for credit

intermediaries’ or creditors’ staff to meet their professional requirements are made

public.

4. Member States shall ensure that all admitted credit intermediaries, whether established

as natural or legal persons, are entered into a register with a competent authority in

their home Member State. Member States shall ensure that the register of credit

intermediaries is kept up to date and is publicly available online.

The register of credit intermediaries shall contain at least the following information:

(a) the names of the persons within the management who are responsible for the

intermediation business. Member States may require the registration of all

natural persons who exercise a client-facing function in an undertaking that

pursues the activity of credit intermediation;

(b) the Member States in which the credit intermediary conducts business under the

rules on the freedom of establishment or on the freedom to provide services and

of which the credit intermediary has informed the competent authority of the

home Member State in accordance with Article 32(3);

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(c) whether the credit intermediary is tied or not.

Member States that decide to avail themselves of the option referred to in Article 30

shall ensure that the register indicates the creditor on whose behalf the tied credit

intermediary acts.

Member States that decide to avail themselves of the option referred to in Article 31

shall ensure that the register indicates the credit intermediary or in the case of an

appointed representative of a tied credit intermediary, the creditor on whose behalf

the appointed representatives acts.

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5. Member States shall ensure that:

(a) any credit intermediary which is a legal person has its head office in the same

Member State as its registered office if under its national law it has a

registered office;

(b) any credit intermediary which is not a legal person or any credit intermediary

which is a legal person but under its national law has no registered office has

its head office in the Member State in which it actually carries on its main

business.

6. Each Member State shall establish a single information point to allow quick and easy

public access to information from the national register, which shall be compiled

electronically and kept constantly updated. These information points shall provide the

identification details of the competent authorities of each Member State.

EBA shall publish on its website references or hyperlinks to that information point.

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7. Home Member States shall ensure that all admitted credit intermediaries and

appointed representatives comply with the requirements defined in paragraph 2 on a

continuing basis. This paragraph shall be without prejudice to Articles 30 and 31.

▌

8. Member States may decide not to apply this Article to persons carrying out the credit

intermediation activities set out in point 5 of Article 4 where those activities are

carried out in an incidental manner in the course of a professional activity and that

activity is regulated by legal or regulatory provisions or a code of ethics governing

the profession which do not exclude the carrying out of those activities.

324

9. This Article shall not apply to credit institutions authorised in accordance with

Directive 2013/36/EU or to other financial institutions which under national law are

subject to an equivalent authorisation and supervision regime.

Article 30

Credit intermediaries tied to only one creditor

1. Without prejudice to Article 31(1), Member States may allow tied credit

intermediaries specified in point (a) of point 7 of Article 4 to be admitted by

competent authorities through the creditor on whose behalf the tied credit

intermediary is exclusively acting.

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In such cases, the creditor shall remain fully and unconditionally responsible for

any action or omission on the part of the tied credit intermediary that is acting on

behalf of the creditor in areas regulated by this Directive. Member States shall

require the creditor to ensure that those tied credit intermediaries comply with at

least the professional requirements set out in Article 29(2).

▌

2. Without prejudice to Article 34, creditors shall monitor the activities of tied credit

intermediaries specified in point (a) of point 7 of Article 4 in order to ensure that

they continue to comply with this Directive. In particular, the creditor shall be

responsible for monitoring compliance with the knowledge and competence

requirements of the tied credit intermediary and its staff.

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Article 31

Appointed representatives

1. Member States may decide to allow a credit intermediary to appoint appointed

representatives.

Where the appointed representative is appointed by a tied credit intermediary

specified in point (a) of point 7 of Article 4, the creditor shall remain fully and

unconditionally responsible for any action or omission on the part of the appointed

representative that is acting on behalf of that tied credit intermediary in areas

regulated by this Directive. In other cases the credit intermediary shall remain fully

and unconditionally responsible for any action or omission on the part of the

appointed representative acting on behalf of the credit intermediary in areas

regulated by this Directive.

2. The credit intermediaries shall ensure that their appointed representatives comply at

least with the professional requirements set out in Article 29(2). However, the home

Member State may provide that the professional indemnity insurance or a

comparable guarantee can be provided by a credit intermediary for which the

appointed representative is empowered to act.

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3. Without prejudice to Article 34, credit intermediaries shall monitor the activities of

their appointed representatives in order to ensure full compliance with this Directive.

In particular, the credit intermediaries shall be responsible for monitoring

compliance with the knowledge and competence requirements of the appointed

representatives and their staff.

4. Member States that decide to allow a credit intermediary to appoint appointed

representatives shall establish a public register containing at least the information

referred to in Article 29(4). Appointed representatives shall be registered in the

public register in the Member State where they are established. The register shall be

updated on a regular basis. It shall be publicly available for consultation online.

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Article 32

Freedom of establishment ▌and ▌ freedom to provide ▌services by credit intermediaries

1. The admission of a credit intermediary by the competent authority of its home

Member State as laid down in Article 29(1) shall be effective for the entire territory of

the Union without ▌further admission by the competent authorities of the host

Member States being required for the carrying out of the activities and provision of

services covered by the admission, provided that the activities a credit intermediary

intends to carry out in the host Member States are covered by the admission.

However, credit intermediaries shall not be allowed to provide their services in

relation to credit agreements offered by non-credit institutions to consumers in a

Member State where such non-credit institutions are not allowed to operate.

2. Appointed representatives appointed in Member States which avail themselves of the

option under Article 31 are not allowed to carry out part or all of the credit

intermediation activities set out in point 5 of Article 4 or to provide advisory services

in Member States where such appointed representatives are not allowed to operate.

329

3. Any admitted credit intermediary intending to carry out business for the first time in

one or more Member States under the freedom to provide services or when

establishing a branch shall inform the competent authorities of its home Member

State.

Within a period of one month after being informed, those competent authorities shall

notify the competent authorities of the host Member States concerned of the intention

of the credit intermediary and shall at the same time inform the credit intermediary

concerned of that notification. They shall notify the competent authorities of the host

Member States concerned of the creditors to which the credit intermediary is tied

and whether the creditors take full and unconditional responsibility for the credit

intermediary’s activities. The host Member State shall use the information received

from the home Member State to enter the necessary information into its register.

The credit intermediary may start business one month after the date on which he was

informed by the competent authorities of the home Member State of the notification

referred to in the second subparagraph.

330

4. Before the branch of a credit intermediary commences its activities or within two

months of receiving the notification referred to in the second subparagraph of

paragraph 3, the competent authorities of the host Member State shall prepare for

the supervision of the credit intermediary in accordance with Article 34 and, if

necessary, indicate to the credit intermediary the conditions under which, in areas

not harmonised in Union law, those activities are to be carried out in the host

Member State.

Article 33

Withdrawal of admission of credit intermediaries

1. The competent authority of the home Member State may withdraw the admission

granted to a credit intermediary in accordance with Article 29 where such a credit

intermediary:

(a) expressly renounces the admission or has carried out neither credit

intermediation activities set out in point 5 of Article 4 nor provided advisory

services for the preceding six months, unless the Member State concerned has

provided for admission to lapse in such cases;

331

(b) has obtained the admission through false or misleading statements or any

other irregular means;

(c) no longer fulfils the requirements under which admission was granted;

(d) falls within any of the cases where national law, in respect of matters outside

the scope of this Directive, provides for withdrawal;

(e) has seriously or systematically infringed the provisions adopted pursuant to

this Directive governing the operating conditions for credit intermediaries.

2. Where the admission of a credit intermediary is withdrawn by the competent

authority of the home Member State, the latter shall notify the competent authorities

of the host Member States of such withdrawal as soon as possible and at the latest

within 14 days, by any appropriate means.

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3. Member States shall ensure that credit intermediaries whose admission has been

withdrawn are deleted from the register without undue delay.

Article 34

Supervision of credit intermediaries and appointed representatives

1. Member States shall ensure that credit intermediaries are subject to supervision of

their ongoing activities by the competent authorities of the home Member State.

Home Member States shall provide that tied credit intermediaries are to be subject to

supervision directly or as part of the supervision of the creditor on behalf of which

they act if the creditor is a credit institution authorised in accordance with Directive

2013/36/EU or another financial institution which under national law is subject to

an equivalent authorisation and supervision regime. However, if the tied credit

intermediary provides services in a Member State other than the home Member

State, then the tied credit intermediary shall be subject to supervision directly.

333

Home Member States which allow credit intermediaries to appoint representatives in

accordance with Article 31 shall ensure that such appointed representatives are

subject to supervision either directly or as part of the supervision of the credit

intermediary on behalf of which it acts.

2. The competent authorities of the Member States in which a credit intermediary has a

branch shall be responsible for ensuring that the services provided by the credit

intermediary within its territory comply with the obligations laid down in Article 7(1)

and Articles 8, 9, 10, 11, 13, 14, 15, 16, 17, 20, 22 and 39 and in measures adopted

pursuant thereto.

334

Where the competent authorities of a host Member State ascertain that a credit

intermediary that has a branch within its territory is in breach of the measures

adopted in that Member State pursuant to Article 7(1) and Articles 8, 9, 10, 11, 13,

14, 15, 16, 17, 20, 22 and 39, those authorities shall require the credit intermediary

concerned to put an end to its irregular situation.

If the credit intermediary concerned fails to take the necessary steps, the competent

authorities of the host Member State shall take all appropriate action to ensure that

the credit intermediary concerned puts an end to its irregular situation. The nature

of that action shall be communicated to the competent authorities of the home

Member State.

If, despite the action taken by the host Member State, the credit intermediary persists

in breaching the measures referred to in the first subparagraph in force in the host

Member State, the host Member State may, after informing the competent

authorities of the home Member State, take appropriate action to prevent or to

penalise further irregularities and, in so far as necessary, to prevent the credit

intermediary from initiating any further transactions within its territory. The

Commission shall be informed of any such action without undue delay.

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Where the competent authority of the home Member State disagrees with such

action taken by the host Member State, it may refer the matter to EBA and request

its assistance in accordance with Article 19 of Regulation (EU) No 1093/2010. In

that case, EBA may act in accordance with the powers conferred on it by that

Article.

3. The competent authorities of the Member States in which the branch is located shall

have the right to examine branch arrangements and to request such changes as are

strictly needed to fulfil its responsibilities under paragraph 2 and to enable the

competent authorities of the home Member State to enforce the obligations under

Article 7(2),(3) and (4) and measures adopted pursuant thereto with respect to the

services provided by the branch.

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4. Where the competent authority of the host Member State has clear and demonstrable

grounds for concluding that a credit intermediary acting within its territory under

the freedom to provide services is in breach of the obligations arising from the

measures adopted pursuant to this Directive or that a credit intermediary that has a

branch within its territory is in breach of the obligations arising from the measures

adopted pursuant to this Directive, other than those specified in paragraph 2, it shall

refer those findings to the competent authority of the home Member State which

shall take the appropriate action.

Where the competent authority of the home Member State fails to take any action

within one month from obtaining those findings or where, despite the action taken

by the competent authority of the home Member State, a credit intermediary persists

in acting in a manner that is clearly prejudicial to the interests of the host Member

State consumers or orderly functioning of the markets, the competent authority of

the host Member State:

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(a) shall, after having informed the competent authority of the home Member

State take all appropriate action needed to protect consumers and ensure the

proper functioning of the markets, including by preventing the offending credit

intermediary from initiating any further transactions within its territory. The

Commission and EBA shall be informed of such action without undue delay;

(b) may refer the matter to EBA and request its assistance in accordance with

Article 19 of Regulation (EU) No 1093/2010. In that case EBA may act in

accordance with the powers conferred on it by that Article.

5. Member States shall provide that, where a credit intermediary admitted in another

Member State has established a branch within its territory, the competent authorities

of the home Member State, in the exercise of their responsibilities and after having

informed the competent authorities of the host Member State, may carry out on-site

inspections in that branch.

338

6. The allocation of tasks between Member States specified in this Article shall be

without prejudice to the Member States’ competences in relation to fields not

covered by this Directive in conformity with their obligations under Union law.

Chapter 12

Admission and supervision of non-credit institutions

Article 35

Admission and supervision of non-credit institutions

Member States shall ensure that non-credit institutions are subject to adequate admission

process including entering the non-credit institution in a register and supervision

arrangements by a competent authority.

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Chapter 13

Cooperation between competent authorities of different Member

States

Article 36

Obligation to cooperate

1. Competent authorities of different Member States shall cooperate with each other

whenever necessary for the purpose of carrying out their duties under this Directive,

making use of their powers, whether set out in this Directive or in national law.

Competent authorities shall render assistance to competent authorities of the other

Member States. In particular, they shall exchange information and cooperate in any

investigation or supervisory activities.

340

In order to facilitate and accelerate cooperation, and more particularly the exchange

of information, Member States shall designate one single competent authority as a

contact point for the purposes of this Directive. Member States shall communicate to

the Commission and to the other Member States the names of the authorities which

are designated to receive requests for exchange of information or cooperation

pursuant to this paragraph.

2. Member States shall take the necessary administrative and organisational measures

to facilitate assistance provided for in paragraph 1.

3. Competent authorities of Member States having been designated as contact points

for the purposes of this Directive in accordance with paragraph 1 shall without

undue delay supply one another with the information required for the purposes of

carrying out the duties of the competent authorities, designated in accordance with

Article 5, set out in the measures adopted pursuant to this Directive.

341

Competent authorities exchanging information with other competent authorities

under this Directive may indicate at the time of communication that such

information must not be disclosed without their express agreement, in which case

such information may be exchanged solely for the purposes for which those

authorities gave their agreement.

The competent authority having been designated as the contact point may transmit

the information received to the other competent authorities, however it shall not

transmit the information to other bodies or natural or legal persons without the

express agreement of the competent authorities which disclosed it and solely for the

purposes for which those authorities gave their agreement, except in duly justified

circumstances in which case it shall immediately inform the contact point that

supplied the information.

342

4. A competent authority may refuse to act on a request for cooperation in carrying out

an investigation or supervisory activity or to exchange information as provided for in

paragraph 3 only where:

(a) such an investigation, on-the-spot verification, supervisory activity or

exchange of information might adversely affect the sovereignty, security or

public policy of the Member State addressed;

(b) judicial proceedings have already been initiated in respect of the same actions

and the same persons before the authorities of the Member State addressed;

(c) final judgement has already been delivered in the Member State addressed in

respect of the same persons and the same actions.

In the event of such a refusal, the competent authority shall notify the requesting

competent authority accordingly, providing as detailed information as possible.

343

Article 37

Settlement of disagreements between competent authorities of different Member States

The competent authorities may refer the situation to EBA where a request for cooperation, in

particular the exchange of information, has been rejected or has not been acted upon within a

reasonable time, and request EBA’s assistance in accordance with Article 19 of Regulation

(EU) No 1093/2010. In such cases, EBA may act in accordance with the powers conferred on it

by that Article and any binding decision made by EBA in accordance with that Article shall

be binding on the competent authorities concerned regardless of whether those competent

authorities are members of EBA or not.

▌

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Chapter 14

Final provisions

Article 38

Sanctions

1. Member States shall lay down the rules on sanctions applicable to infringements of

the national provisions adopted on the basis of this Directive and shall take all

measures necessary to ensure that they are implemented. Those sanctions shall be

effective, proportionate and dissuasive.

2. Member States shall provide that the competent authority may disclose to the public

any administrative sanction that will be imposed for infringement of the measures

adopted in the transposition of this Directive, unless such disclosure would seriously

jeopardise the financial markets or cause disproportionate damage to the parties

involved.

345

Article 39

Dispute resolution mechanisms

1. Member States shall ensure that appropriate and effective complaints and redress

procedures are established for the out-of-court settlement of consumer disputes with

creditors, credit intermediaries and appointed representatives in relation to credit

agreements, using existing bodies where appropriate. Member States shall ▌ensure

that such procedures are applicable to creditors and credit intermediaries and cover

the activities of appointed representatives.

2. Member States shall require the bodies responsible for the out-of-court settlement of

consumer disputes to cooperate so that cross-border disputes concerning credit

agreements can be resolved.

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Article 40

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 ▌14(9) and 17(8) shall be

conferred on the Commission for an indeterminate period of time from …*.

3. The delegation of power referred to in Articles 14(9) and 17(8) 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 powers 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 date of entry into force of this Directive.

347

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 14(9) and 17(8) shall enter into force

only if no objection has been expressed either by the European Parliament or the

Council within a period of three months ▌ of notification of that act to the European

Parliament and to 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 three months at the initiative of the

European Parliament or of the Council ▌.

348

Article 41

Imperative nature of this Directive

Member States shall ensure that:

(a) consumers may not waive the rights conferred on them by national law transposing

this Directive;

(b) the measures they adopt in transposing this Directive cannot be circumvented in a way

which could lead to consumers losing the protection granted by this Directive as a

result of the way in which agreements are formulated, in particular by integrating

credit agreements falling within the scope of this Directive into credit agreements the

character or purpose of which would make it possible to avoid the application of those

measures.

▌

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Article 42

Transposition

1. Member States shall adopt and publish, by …*, the laws, regulations and

administrative provisions necessary to comply with this Directive. They shall forthwith

communicate to the Commission the text of those measures.

Where the documents accompanying notification of transposition measures provided

by the Member States are not sufficient to assess fully the compliance of those

measures with certain provisions of this Directive, the Commission may, upon

EBA's request with a view to carrying out its tasks under Regulation (EU) No

1093/2010, or on its own initiative, require Member States to provide more detailed

information regarding the transposition of this Directive and the implementation of

those measures.

2. Member States shall apply measures referred to in paragraph 1 from …*.

When Member States adopt those measures, they shall contain a reference to this

Directive or be accompanied by such a reference on the occasion of their official

publication. Member States shall determine how such reference is to be made.

* OJ please insert date: two years after the entry into force of this Directive.

350

3. 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 43

Transitional provisions

1. This Directive shall not apply to credit agreements existing before ...*.

* OJ please insert date: 2 years after entry into force of this Directive.

351

2. Credit intermediaries already carrying out credit intermediation activities set out in

point 5 of Article 4 before …* and which have not yet been admitted in accordance

with the conditions set out in the national law of the home Member State

transposing this Directive may continue to carry out those activities in compliance

with national law until …**. Where a credit intermediary relies on this derogation it

may perform the activities only within their home Member State unless it also

satisfies the necessary legal requirements of the host Member States.

3. Creditors, credit intermediaries or appointed representatives performing activities

regulated by this Directive before …*** shall comply with the national law

transposing Article 9 by …**.

* OJ please insert date: 2 years after entry into force of this Directive.* * OJ please insert date: 3 years after entry into force of this Directive.* ** OJ please insert date of entry into force of this Directive.

352

Article 44

Review clause

1. The Commission shall undertake a review of this Directive by …*. The review shall

consider the effectiveness and appropriateness of the provisions on consumers and the

internal market.

The review shall include the following:

(a) an assessment of the use and consumer understanding of and satisfaction with

the ESIS;

(b) an analysis of other pre-contractual disclosures;


353

(c) an analysis of cross-border business by credit intermediaries and creditors;

(d) an analysis of the evolution of the market for non-credit institutions providing

credit agreements relating to residential immovable property;

(e) an assessment on the need for further measures, including a passport for non-

credit institutions providing credit agreements relating to residential immovable

property;

(f) an examination of the need to introduce additional rights and obligations with

regard to the post-contractual stage of credit agreements;

(g) an assessment of whether the scope of this Directive remains appropriate,

taking account of its impact on other, substitutable forms of credit;

354

(h) an assessment of whether additional measures are necessary to ensure the

traceability of credit agreements secured against residential immovable

property;

(i) an assessment of the availability of data on trends in prices of residential

immovable property and on the extent to which data are comparable;

(j) an assessment of whether it continues to be appropriate to apply Directive

2008/48/EC to unsecured credits the purpose of which is the renovation of a

residential immovable property involving a total amount of credit above the

maximum amount specified in point (c) of Article 2(2) of that Directive;

355

(k) an assessment of whether the arrangements for the publication of sanctions

under Article 38(2) provide sufficient transparency;

(l) an assessment of the proportionality of warnings referred to in Article 11(6)

and in Article 13(2) and the potential for further harmonisation of risk

warnings.

Article 45

Further initiatives on responsible lending and borrowing

By ...*, the Commission shall submit a comprehensive report assessing the wider challenges

of private over-indebtedness directly linked to credit activity. It will also examine the need for

the supervision of credit registers and the possibility for the development of more flexible and

reliable markets. That report shall be accompanied, where appropriate, by legislative

proposals.


356

Article 46

Amendment to Directive 2008/48/EC

In Article 2 of Directive 2008/48/EC, the following paragraph is inserted:

"2a. Notwithstanding point (c) of paragraph 2, this Directive shall apply to unsecured

credit agreements the purpose of which is the renovation of a residential immovable

property involving a total amount of credit above EUR 75 000."

357

Article 47

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 48

Addressees

This Directive is addressed to the Member States.

Done at …

For the European Parliament For the CouncilThe President The President

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ANNEX I

CALCULATION OF THE ANNUAL PERCENTAGE RATE OF CHARGE (APRC)

I. Basic equation expressing the equivalence of drawdowns on the one hand and

repayments and charges on the other.

The basic equation, which establishes the annual percentage rate of charge (APRC),

equates, on an annual basis, the total present value of drawdowns on the one hand and

the total present value of repayments and payments of charges on the other hand, i.e.:

lk sm

ll

m

k

tk XDXC

11'

11

where:

X is the APRC

m is the number of the last drawdown

k is the number of a drawdown, thus 1 ≤ k ≤ m

Ck is the amount of drawdown k

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tk is the interval, expressed in years and fractions of a year, between the date of

the first drawdown and the date of each subsequent drawdown, thus t1 = 0

m' is the number of the last repayment or payment of charges

l is the number of a repayment or payment of charges

Dl is the amount of a repayment or payment of charges

sl is the interval, expressed in years and fractions of a year, between the date of

the first drawdown and the date of each repayment or payment of charges.

Remarks:

(a) The amounts paid by both parties at different times shall not necessarily be equal and

shall not necessarily be paid at equal intervals.

360

(b) The starting date shall be that of the first drawdown.

(c) Intervals between dates used in the calculations shall be expressed in years or in

fractions of a year. A year is presumed to have 365 days (or 366 days for leap years),

52 weeks or 12 equal months. An equal month is presumed to have 30,41666 days (i.e.

365/12) regardless of whether or not it is a leap year.

Where intervals between dates used in the calculations cannot be expressed as a

whole number of weeks, months or years, the intervals shall be expressed as a whole

number of one of those periods in combination with a number of days. Where using

days:

361

(i) every day shall be counted, including weekends and holidays;

(ii) equal periods and then days shall be counted backwards to the date of the

initial drawdown;

(iii) the length of the period of days shall be obtained excluding the first day and

including the last day and shall be expressed in years by dividing this period by

the number of days (365 or 366 days) of the complete year counted backwards

from the last day to the same day of the previous year.

362

(d) The result of the calculation shall be expressed with an accuracy of at least one

decimal place. If the figure at the following decimal place is greater than or equal to 5,

the figure at the preceding decimal place shall be increased by one.

(e) The equation can be rewritten using a single sum and the concept of flows (Ak), which

will be positive or negative, in other words either paid or received during periods 1 to

n, expressed in years, i.e.:

ktn

kk XAS

11

,

S being the present balance of flows. If the aim is to maintain the equivalence of flows,

the value will be zero.

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II. Additional assumptions for the calculation of the APRC

(a) If a credit agreement gives the consumer freedom of drawdown, the total amount

of credit shall be deemed to be drawn down immediately and in full.

(b) If a credit agreement provides different ways of drawdown with different charges

or borrowing rates, the total amount of credit shall be deemed to be drawn down

at the highest charge and borrowing rate applied to the most common drawdown

mechanism for this type of credit agreement.

(c) If a credit agreement gives the consumer freedom of drawdown in general but

imposes, amongst the different ways of drawdown, a limitation with regard to

the amount of credit and period of time, the amount of credit shall be deemed to

be drawn down on the earliest date provided for in the credit agreement and in

accordance with those drawdown limits.

▌

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(d) If different borrowing rates and charges are offered for a limited period or

amount, the highest borrowing rate and charges shall be deemed to be the

borrowing rate and charges for the whole duration of the credit agreement.

▌

(e) For credit agreements for which a fixed borrowing rate is agreed in relation to

the initial period, at the end of which a new borrowing rate is determined and

subsequently periodically adjusted according to an agreed indicator or internal

reference rate the calculation of the APRC shall be based on the assumption

that, at the end of the fixed borrowing rate period, the borrowing rate is the same

as at the time of calculation of the APRC, based on the value of the agreed

indicator or internal reference rate at that time, but is not less than the fixed

borrowing rate.

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(f) If the ceiling applicable to the credit has not yet been agreed, that ceiling is

assumed to be EUR 170 000. In the case of credit agreements, other than

contingent liabilities or guarantees, the purpose of which is not to acquire or

retain a right in immovable property or land, overdrafts, deferred debit cards

or credit cards this ceiling is assumed to be EUR 1 500.

(g) In the case of credit agreements other than overdrafts, bridging loans, shared

equity credit agreements, contingent liabilities or guarantees and open-ended

credit agreements as referred to in the assumptions set out in points (i), (j), (k),

(l) and (m):

(i) if the date or amount of a repayment of capital to be made by the

consumer cannot be ascertained, it shall be assumed that the repayment

is made at the earliest date provided for in the credit agreement and is for

the lowest amount for which the credit agreement provides;

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(ii) if the interval between the date of initial drawdown and the date of the

first payment to be made by the consumer cannot be ascertained, it shall

be assumed to be the shortest interval.

(h) Where the date or amount of a payment to be made by the consumer cannot be

ascertained on the basis of the credit agreement or the assumptions set out in

points (g), (i), (j), (k), (l) and (m) it shall be assumed that the payment is made

in accordance with the dates and conditions required by the creditor and, when

these are unknown:

(i) interest charges are paid together with the repayments of the capital;

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(ii) non-interest charges expressed as a single sum are paid at the date of the

conclusion of the credit agreement;

(iii) non-interest charges expressed as several payments are paid at regular

intervals, commencing with the date of the first repayment of capital, and

if the amount of such payments is not known they shall be assumed to be

equal amounts;

(iv) the final payment clears the balance of capital, interest and other

charges, if any.

(i) In the case of an overdraft facility, the total amount of credit shall be deemed

to be drawn down in full and for the whole duration of the credit agreement. If

the duration of the overdraft facility is not known, the APRC shall be

calculated on the assumption that the duration of the credit is three months.

(j) In the case of a bridging loan, the total amount of credit shall be deemed to be

drawn down in full and for the whole duration of the credit agreement. If the

duration of the credit agreement is not known the APRC shall be calculated on

the assumption that the duration of the credit is 12 months.

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(k) In the case of an open ended credit agreement, other than an overdraft facility

and bridging loan, it shall be assumed that:

(i) for credit agreements, the purpose of which is to acquire or retain rights

in immovable property the credit is provided for a period of 20 years

starting from the date of the initial drawdown, and that the final payment

made by the consumer clears the balance of capital, interest and other

charges, if any; in the case of credit agreements the purpose of which is

not to acquire or retain rights in immovable property or which are drawn

down by deferred debit cards or credit cards, this period shall be of one

year;

(ii) the capital is repaid by the consumer in equal monthly payments,

commencing one month after the date of the initial drawdown. However,

in cases where the capital must be repaid only in full, in a single

payment, within each payment period, successive drawdowns and

repayments of the entire capital by the consumer shall be assumed to

occur over the period of one year. Interest and other charges shall be

applied in accordance with those drawdowns and repayments of capital

and as provided for in the credit agreement.

369

For the purposes of this point, an open-ended credit agreement is a credit

agreement without fixed duration and includes credits which must be repaid in

full within or after a period but, once repaid, become available to be drawn

down again.

(l) In the case of contingent liabilities or guarantees:

(i) the total amount of credit shall be deemed to be drawn down in full as a

single amount at the earlier of:

(a) the latest draw down date permitted under the credit agreement

being the potential source of the contingent liability or guarantee;

or

(b) in the case of a rolling credit agreement at the end of the initial

period prior to the roll over of the agreement.

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(m) In the case of shared equity credit agreements:

(i) the payments by consumers shall be deemed to occur at the latest date or

dates permitted under the credit agreement;

(ii) percentage increases in value of the immovable property which secures

the shared equity credit agreement, and the rate of any inflation index

referred to in the agreement, shall be assumed to be a percentage equal

to the higher of the current central bank target inflation rate or the level

of inflation in the Member State where the immovable property is located

at the time of conclusion of the credit agreement or 0 % if those

percentages are negative.

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ANNEX II

European Standardised Information Sheet (ESIS)

PART A

The text in this model shall be reproduced as such in the ESIS. Indications between square

brackets shall be replaced with the corresponding information. Instructions for the creditor or,

where applicable, credit intermediary on how to complete the ESIS are provided in Part B.

Wherever the words 'where applicable' are indicated, the creditor shall provide the information

required if it is relevant to the credit agreement. Where the information is not relevant, the

creditor shall delete the information in question or the entire section (for example, in cases

where the section is not applicable). Where the entire section is deleted, the numbering of the

ESIS sections shall be adjusted accordingly.

The information below ▌ shall be provided in a single document. The font used shall be clearly

readable. Bold font, shading or larger font sizes shall be used for the information elements to be

highlighted. All applicable risk warnings shall be highlighted.

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ESIS Model

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(Introductory text)

This document was produced for [name of consumer] on [current date].

This document was produced on the basis of the information that you have provided

so far and on the current financial market conditions.

The information below remains valid until [validity date], (where applicable) apart

from the interest rate and other costs. After that date, it may change in line with

market conditions.

(Where applicable) This document does not constitute an obligation for [name of

creditor] to grant you a loan.

1. Lender

[Name]

[Telephone number]

[Geographical address]

(Optional) [E-mail address]

(Optional) [Fax number]

(Optional) [Web address]

(Optional)[Contact person/point]

(Where applicable information as to whether advisory services are being provided:)

[(We recommend, having assessed your needs and circumstances, that you take out

this mortgage./We are not recommending a particular mortgage for you. However,

based on your answers to some questions, we are giving you information about this

mortgage so that you can make your own choice.)]

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2. (Where applicable) Credit intermediary

[Name]

[Telephone number]

[Geographical address]

(Optional) [E-mail address]

(Optional) [Fax number]

(Optional) [Web address]

(Optional)[Contact person/point]

(Where applicable [information as to whether advisory services are being provided])

[(We recommend, having assessed your needs and circumstances, that you take out

this mortgage./We are not recommending a particular mortgage for you. However,

based on your answers to some questions, we are giving you information about this

mortgage so that you can make your own choice.)]

[Remuneration]

3. Main features of the loan

Amount and currency of the loan to be granted: [value][currency]

(Where applicable) This loan is not in [national currency of the borrower].

(Where applicable) The value of your loan in [national currency of the borrower]

could change.

(Where applicable) For example, if the value of [national currency of the borrower]

fell by 20 % relative to [credit currency], the value of your loan would increase to

[insert amount in national currency of the borrower]. However, it could be more

than this if the value of [national currency of the borrower] falls by more than 20

%.

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(Where applicable) The maximum value of your loan will be [insert amount in

national currency of the borrower].(Where applicable) You will receive a warning if

the credit amount reaches [insert amount in national currency of the borrower].

(Where applicable) You will have the opportunity to [insert right to renegotiate

foreign currency loan or right to convert loan into [relevant currency] and

conditions].

Duration of the loan: [duration]

[Type of loan]

[Type of applicable interest rate]

Total amount to be reimbursed:

This means that you will pay back [amount] for every [unit of the currency]

borrowed.

(Where applicable) [This /Part of this] is an interest-only loan. You will still owe

[insert amount of loan on an interest-only basis] at the end of the mortgage term.

(Where applicable) Value of the property assumed to prepare this information

sheet: [insert amount]

(Where applicable) Maximum available loan amount relative to the value of the

property [insert ratio] or Minimum value of the property required to borrow the

illustrated amount [insert amount]

(Where applicable) [Security]

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4. Interest rate and other costs

The annual percentage rate of charge (APRC) is the total cost of the loan expressed

as an annual percentage. The APRC is provided to help you to compare different

offers.

The APRC applicable to your loan is [APRC].

It comprises:

Interest rate [value in percentage or, where applicable, indication of a reference

rate and percentage value of creditor’s spread]

[Other components of the APRC]

Costs to be paid on a one-off basis

(Where applicable) You will need to pay a fee to register the mortgage. [Insert

amount of fee where known or basis for calculation.]

Costs to be paid regularly

(Where applicable) This APRC is calculated using assumptions regarding the

interest rate.

(Where applicable) Because [part of] your loan is a variable interest rate loan, the

actual APRC could be different from this APRC if the interest rate for your loan

changes. For example, if the interest rate rose to [scenario as described in Part B],

the APRC could increase to [insert illustrative APRC corresponding to the

scenario].

(Where applicable) Please note that this APRC is calculated on the basis that the

interest rate remains at the level fixed for the initial period throughout the duration

of the contract.

(Where applicable) The following costs are not known to the lender and are

therefore not included in the APRC: [Costs]

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(Where applicable)You will need to pay a fee to register the mortgage.

Please make sure that you are aware of all other taxes and costs associated with

your loan.

5. Frequency and number of payments

Repayment frequency: [frequency]

Number of payments: [number]

6. Amount of each instalment

[Amount] [currency]

Your income may change. Please consider whether you will still be able to afford

your [frequency] repayment instalments if your income falls.

(Where applicable) Because [this/part of this] is an interest-only loan you will need

to make separate arrangements to repay the [insert amount of loan on an interest-

only basis] you will owe at the end of the mortgage term. Remember to add any

extra payments you will need to make to the instalment amount shown here.

(Where applicable) The interest rate on [part of] this loan can change. This means

the amount of your instalments could increase or decrease. For example, if the

interest rate rose to [scenario as described in Part B] your payments could increase

to [insert instalment amount corresponding to the scenario].

(Where applicable) The value of the amount you have to pay in [national currency

of the borrower] each [frequency of instalment] could change. (Where applicable)

Your payments could increase to [insert maximum amount in national currency of

the borrower] each [insert period]. (Where applicable) For example, if the value of

[national currency of the borrower] fell by 20 % relative to [credit currency] you

would have to pay an extra [insert amount in national currency of the borrower]

each [insert period]. Your payments could increase by more than this.

(Where applicable) The exchange rate used for converting your repayment in

[credit currency] to [national currency of the borrower] will be the rate published

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by [name of institution publishing exchange rate] on [date] or will be calculated on

[date] using [insert name of benchmark or method of calculation].

(Where applicable) [Details on tied savings products, deferred-interest loans]

7. (Where applicable) Illustrative repayment table

This table shows the amount to be paid every [frequency].

The instalments (column [relevant no.]) are the sum of interest to be paid (column

[relevant no.]), where applicable, capital paid (column [relevant no.]) and, where

applicable, other costs (column [relevant no.]). (Where applicable) The costs in the

other costs column relate to [list of costs]. Outstanding capital (column [relevant

no.]) is the amount of the loan that remains to be reimbursed after each instalment.

[Table]

8. Additional obligations

The borrower must comply with the following obligations in order to benefit from

the lending conditions described in this document.

[Obligations]

(Where applicable) Please note that the lending conditions described in this

document (including the interest rate) may change if these obligations are not

complied with.

(Where applicable) Please note the possible consequences of terminating at a later

stage any of the ancillary services relating to the loan:

[Consequences]

9. Early repayment

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You have the possibility to repay this loan early, either fully or partially.

(Where applicable) [Conditions]

(Where applicable) Exit charge: [insert amount or, where not possible, the method

of calculation]

(Where applicable) Should you decide to repay this loan early, please contact us to

ascertain the exact level of the exit charge at that moment.

10. Flexible features

(Where applicable) [Information on portability/subrogation] You have the

possibility to transfer this loan to another [lender][or] [property]. [Insert conditions]

(Where applicable) You do not have the possibility to transfer this loan to another

[lender] [or] [property].

(Where applicable) Additional features: [insert explanation of additional features

listed in Part B and, optionally, any other features offered by the lender as part of

the credit agreement not referred to in previous sections].

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11. Other rights of the borrower

(Where applicable) You have [length of reflection period] after [point in time when

the reflection period begins] to reflect before committing yourself to taking out this

loan. (Where applicable) Once you have received the credit contract from the

lender, you may not accept it before the end of [length of reflection period].

(Where applicable) For a period of [length of withdrawal period] after [point in

time when the withdrawal period begins] you may exercise your right to cancel the

agreement. [Conditions] [Insert procedure]

(Where applicable) You may lose your right to cancel the agreement if, during that

period, you buy or sell a property connected to this credit agreement.

(Where applicable) Should you decide to exercise your right of withdrawal [from

the credit agreement], please verify whether you will remain bound by your other

obligations relating to the loan [including the ancillary services relating to the loan]

[, referred to in Section 8].

12. Complaints

If you have a complaint please contact [insert internal contact point and source of

information on procedure].

(Where applicable) Maximum time for handling the complaint [period of time]

(Where applicable) [If we do not resolve the complaint to your satisfaction

internally,] you can also contact: [insert name of external body for out-of-court

complaints and redress] (Where applicable) or you can contact FIN-NET for details

of the equivalent body in your own country.

13. Non-compliance with the commitments linked to the loan: consequences for the

borrower

[Types of non-compliance]

[Financial and/or legal consequences]

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Should you encounter difficulties in making your [frequency] payments, please

contact us straight away to explore possible solutions.

(Where applicable) As a last resort, your home may be repossessed if you do not

keep up with payments.

(Where applicable) 14. Additional information ▌

(Where applicable) [Indication of the law applicable to the credit contract].

(Where the lender intends to use a language different from the language of the

ESIS) Information and contractual terms will be supplied in [language]. With your

consent, we intend to communicate in [language/s] during the duration of the credit

agreement.

[Insert statement on right to be provided with or offered, as applicable, a draft credit

agreement]

15. Supervisor

This lender is supervised by [Name(s), and web address(es) of supervisory

authority/ies]

(Where applicable) This credit intermediary is supervised by [Name and web

address of supervisory authority].

▌

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PART B

Instructions to complete the ESIS

In completing the ESIS, at least the following instructions shall be followed. Member States

may however elaborate or further specify the instructions for completing the ESIS.

Section 'Introductory text'

(1) The validity date shall be properly highlighted. For the purpose of this section, the

‘validity date’ means the length of time the information, e.g. the borrowing rate,

contained in the ESIS will remain unchanged and will apply should the creditor

decide to grant the credit within this period of time. Where the determination of the

applicable borrowing rate and other costs depends on the results of the selling of

underlying bonds, the eventual borrowing rate and other costs may be different from

those stated. In those circumstances only, it shall be stipulated that the validity date

does not apply to the borrowing rate and other costs by adding the words: “apart

from the interest rate and other costs”.

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Section '1. Lender'

(1) Name, telephone number, and geographical address ▌of the creditor shall refer to the

contact information that the consumer may use for future correspondence.

(2) Information on the e-mail address, fax number, web address and contact person/point

is optional.

(3) In line with Article 3 of Directive 2002/65/EC, where the transaction is being offered

at a distance, the creditor shall indicate, where applicable, the name and geographical

address of its representative in the Member State of residence of the consumer.

Indication of the telephone number, e-mail address and web address of the

representative of the credit provider is optional.

(4) Where Section 2 is not applicable, the creditor shall inform the consumer whether

advisory services are being provided and on what basis using the wording in Part A.

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(Where applicable) Section '2. Credit intermediary'

Where the product information is being provided to the consumer by a credit intermediary,

that intermediary shall include the following information:

(1) Name, telephone number and geographical address of the credit intermediary shall

refer to the contact information that the consumer may use for future

correspondence.

(2) Information on the e-mail address, fax number, web address and contact

person/point is optional.

(3) The credit intermediary shall inform the consumer whether advisory services are

being provided and on what basis using the wording in Part A.

(4) An explanation of how the credit intermediary is being remunerated. Where it is

receiving commission from a creditor, the amount and, where different from the

name in Section 1, the name of the creditor shall be provided.

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Section '3. Main features of the loan'

(1) This section shall clearly explain the main characteristics of the credit, including the

value and currency and the potential risks associated with the borrowing rate,

including the ones referred to in point (8), and amortisation structure.

(2) Where the credit currency is different from the national currency of the consumer,

the creditor shall indicate that the consumer will receive a regular warning at least

when the exchange rate fluctuates by more than 20 %, where applicable the right to

convert the currency of the credit agreement or to the possibility to renegotiate the

conditions and any other arrangements available to the consumer to limit their

exposure to exchange rate risk. Where there is a provision in the credit agreement to

limit the exchange rate risk, the creditor shall indicate the maximum amount the

consumer could have to pay back. Where there is no provision in the credit

agreement to limit the exchange rate risk to which the consumer is exposed to a

fluctuation in the exchange rate of less than 20 %, the creditor shall indicate an

illustration of the effect of a 20 % fall in the value of consumer's national currency

relative to the credit currency on the value of the credit.

(3) The duration of the credit shall be expressed in years or months, whichever is the most

relevant. Where the duration of the credit can vary during the lifetime of the contract,

the creditor shall explain when and under which conditions this can occur. Where the

credit is open-ended, for example, for a secured credit card, the creditor shall clearly

state that fact.

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(4) The type of credit shall be clearly indicated (e.g. mortgage credit, home loan,

secured credit card). The description of the type of credit shall clearly indicate how

the capital and the interest shall be reimbursed during the life of the credit (i.e. the

amortisation structure), specifying clearly whether the credit agreement is on capital

repayment or interest-only basis, or a mixture of the two.

(5) Where all or part of the credit is an interest-only credit, a statement clearly

indicating that fact shall be inserted prominently at the end of this section using the

wording in Part A.

(6) This section shall explain whether the borrowing rate is fixed or variable and, where

applicable, the periods during which it will remain fixed; the frequency of subsequent

revisions and the existence of limits to the borrowing rate variability, such as caps or

floors.

The formula used to revise the borrowing rate and its different components (e.g.

reference rate, interest rate spread) shall be explained. The creditor shall indicate, e.g.

by means of a web address, where further information on the indices or rates used in

the formula can be found, e.g. Euribor or central bank reference rate.

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(7) If different borrowing rates apply in different circumstances, the information shall

be provided on all applicable rates.

(8) The 'total amount to be reimbursed' corresponds to the total amount payable by the

consumer. It shall be shown as the sum of the credit amount and the total cost of the

credit to the consumer. Where the borrowing rate is not fixed for the duration of the

contract, it shall be highlighted that this amount is illustrative and may vary in

particular in relation with the variation in the borrowing rate.

(9) Where the credit will be secured by a mortgage on the immovable property or

another comparable security or by a right related to immovable property, the creditor

shall draw the consumer’s attention to this. Where applicable the creditor shall

indicate the assumed value of the immovable property or other security used for the

purpose of preparing this information sheet.

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(10) The creditor shall indicate, where applicable, either:

a) 'maximum available loan amount relative to the value of the property',

indicating the loan-to-value ratio. This ratio is to be accompanied by an example

in absolute terms of the maximum amount that can be borrowed for a given

property value; or

b) the 'minimum value of the property required by the creditor to lend the

illustrated amount'.

(11) Where credits are multi-part credits (e.g. concurrently part fixed rate, part variable

rate), this shall be reflected in the indication of the type of credit and the required

information shall be given for each part of the credit.

Section '4. Interest rate' and other costs

(1) The reference to ‘interest rate’ corresponds to the borrowing rate or rates.

(2) The borrowing rate shall be mentioned as a percentage value. Where the borrowing

rate is variable and based on a reference rate the creditor may indicate the

borrowing rate by stating a reference rate and a percentage value of creditor’s

spread. The creditor shall however indicate the value of the reference rate valid on

the day of issuing the ESIS.

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Where the borrowing rate is variable the information shall include: (a) the

assumptions used to calculate the APRC; (b) where relevant, the applicable caps and

floors and (c) a warning that the variability could affect the actual level of the

APRC. In order to attract the consumer's attention the font size used for the warning

shall be bigger and shall figure prominently in the main body of the ESIS. The

warning shall be accompanied by an illustrative example on the APRC. Where there

is a cap on the borrowing rate, the example shall assume that the borrowing rate

rises at the earliest possible opportunity to the highest level foreseen in the credit

agreement. Where there is no cap the example shall illustrate the APRC at the

highest borrowing rate in at least the last 20 years, or where the underlying data for

the calculation of the borrowing rate is available for a period of less than 20 years

the longest period for which such data is available, based on the highest value of any

external reference rate used in calculating the borrowing rate where applicable or

the highest value of a benchmark rate specified by a competent authority or EBA

where the creditor does not use an external reference rate. Such requirement shall

not apply to credit agreements where the borrowing rate is fixed for a material initial

period of several years and may then be fixed for a further period following

negotiation between the creditor and the consumer. For credit agreements where the

borrowing rate is fixed for a material initial period of several years and may then be

fixed for a further period following negotiation between the creditor and the

consumer, the information shall include a warning that the APRC is calculated on

the basis of the borrowing rate for the initial period. The warning shall be

accompanied by an additional, illustrative APRC calculated in accordance with

Article 17(4). Where credits are multi-part credits (e.g. concurrently part fixed rate,

part variable rate), the information shall be given for each part of the credit.

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(3) In the section on ‘other components of the APRC’ all the other costs contained in

the APRC shall be listed, including one-off costs such as administration fees, and

regular costs, such as annual administration fees. The creditor shall list each of the

costs by category (costs to be paid on a one-off basis, costs to be paid regularly and

included in the instalments, costs to be paid regularly but not included in the

instalments), indicating their amount, to whom they are to be paid and when. This

does not have to include costs incurred for breaches of contractual obligations.

Where the amount is not known, the creditor shall provide an indication of the

amount if possible, or if not possible, how the amount will be calculated and specify

that the amount provided is indicative only. Where certain costs are not included in

the APRC because they are unknown to the creditor, this shall be highlighted.

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Where the consumer has informed the creditor of one or more components of his

preferred credit, such as the duration of the credit agreement and the total amount

of credit, the creditor shall, where possible, use those components; if a credit

agreement provides different ways of drawdown with different charges or borrowing

rates and the creditor uses the assumptions set out in Part II of Annex I, it shall

indicate that other drawdown mechanisms for this type of credit agreement may

result in a higher APRC. Where the conditions for drawdown are used for

calculating the APRC, the creditor shall highlight the charges associated with other

drawdown mechanisms that are not necessarily the ones used in calculating the

APRC.

(4) Where a fee is payable for registration of the mortgage or comparable security that

shall be disclosed in this section with the amount, where known, or where this is not

possible the basis for determining the amount. Where the fees are known and

included in the APRC the existence and amount of the fee shall be listed under

"Costs to be paid on a one-off basis". Where the fees are not known to the creditor

and therefore not included in the APRC the existence of the fee shall be clearly

mentioned in the list of costs which are not known to the creditor. In either case the

standardised wording in Part A shall be used under the appropriate heading.

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Section '5. Frequency and number of payments'

(1) Where payments are to be made on a regular basis, the frequency of payments shall be

indicated (e.g. monthly). Where the frequency of payments will be irregular, this shall

be clearly explained to the consumer.

(2) The number of payments indicated shall cover the whole duration of the credit.

Section '6. Amount of each instalment'

(1) The credit currency and currency of the instalments shall be clearly indicated.

(2) Where the amount of the instalments may change during the life of the credit, the

creditor shall specify the period during which that initial instalment amount will

remain unchanged and when and how frequently afterwards it will change.

(3) Where all or part of the credit is an interest-only credit, a statement clearly

indicating that fact, shall be inserted prominently at the end of this section using the

wording in Part A.

If there is a requirement for the consumer to take out a tied savings product as a

condition for being granted an interest-only credit secured by a mortgage or another

comparable security, the amount and frequency of any payments for this product

shall be provided.

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(4) Where the borrowing rate is variable the information shall include a statement

indicating that fact, using the wording in Part A and an illustration of a maximum

instalment amount. Where there is a cap, the illustration shall show the amount of

the instalments if the borrowing rate rises to the level of the cap. Where there is no

cap, the worst case scenario shall illustrate the level of instalments at the highest

borrowing rate in the last 20 years, or where the underlying data for the calculation

of the borrowing rate is available for a period of less than 20 years the longest period

for which such data is available, based on the highest value of any external

reference rate used in calculating the borrowing rate where applicable, or the

highest value of a benchmark rate specified by a competent authority or EBA where

the creditor does not use an external reference rate. The requirement to provide an

illustrative example shall not apply to credit agreements where the borrowing rate is

fixed for a material initial period of several years and may then be fixed for a further

period following negotiation between the creditor and the consumer. Where credits

are multi-part credits (e.g. concurrently part fixed rate, part variable rate), the

information shall be given for each part of the credit, and in total.

(5) (Where applicable) Where the credit currency is different from the consumer's

national currency or where the credit is indexed to a currency which is different

from the consumer’s national currency, the creditor shall include a numerical example

clearly showing how changes to the relevant exchange rate may affect the amount of

the instalments using the wording in Part A. That example shall be based on a 20 %

reduction in the value of the consumer’s national currency together with a

prominent statement that the instalments could increase by more than the amount

assumed in that example. Where there is a cap which limits that increase to less than

20 %, the maximum value of the payments in the consumer's currency shall be given

instead and the statement on the possibility of further increases omitted.

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(6) Where the credit is fully or partly a variable rate credit and point 3 applies, the

illustration in point 5 shall be given on the basis of the instalment amount referred

to in point 1.

(7) Where the currency used for the payment of instalments is different from the credit

currency or where the amount of each instalment expressed in the consumer’s

national currency depends on the corresponding amount in a different currency, this

section shall indicate the date at which the applicable exchange rate is calculated

and either the exchange rate or the basis on which it will be calculated and the

frequency of their adjustment. Where applicable such indication shall include the

name of institution publishing the exchange rate.

(8) Where the credit is a deferred-interest credit under which interest due is not fully

repaid by the instalments and is added to the total amount of credit outstanding,

there shall be an explanation of: how and when deferred interest is added to the

credit as a cash amount; and what the implications are for the consumer in terms of

their remaining debt.

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Section '7. Illustrative repayment table'

(1) This section shall be included where the credit is a deferred interest credit under

which interest due is not fully repaid by the instalments and is added to the total

amount of credit outstanding or where the borrowing rate is fixed for the duration of

the credit agreement. Member States may provide that the illustrative amortisation

table is compulsory in other cases.

Where the consumer has the right to receive a revised amortisation table, this shall

be indicated along with the conditions under which the consumer has that right.

(2) Member States may require that where the borrowing rate may vary during the

lifetime of the credit, the creditor shall indicate the period during which that initial

borrowing rate will remain unchanged.

(3) The table to be included in this section shall contain the following columns:

'repayment schedule' (e.g. month 1, month 2, month 3), 'amount of the instalment',

'interest to be paid per instalment', 'other costs included in the instalment' (where

relevant), 'capital repaid per instalment' and 'outstanding capital after each instalment'.

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(4) For the first repayment year the information shall be given for each instalment and a

subtotal shall be indicated for each of the columns at the end of that first year. For the

following years, the detail can be provided on an annual basis. An overall total row

shall be added at the end of the table and shall provide the total amounts for each

column. The total cost of the credit paid by the consumer (i.e. the overall sum of the

'amount of the instalment' column) shall be clearly highlighted and presented as such.

(5) Where the borrowing rate is subject to revision and the amount of the instalment after

each revision is unknown, the creditor may indicate in the amortisation table the same

instalment amount for the whole credit duration. In such a case, the creditor shall draw

that fact to the attention of the consumer by visually differentiating the amounts which

are known from the hypothetical ones (e.g. using a different font, borders or shading).

In addition, a clearly legible text shall explain for which periods the amounts

represented in the table may vary and why.

Section '8. Additional obligations'

(1) The creditor shall refer in this section to obligations such as the obligation to insure

the immovable property, to purchase life insurance, to have a salary paid into an

account with the creditor or to buy any other product or service. For each obligation,

the creditor shall specify towards whom and by when the obligation needs to be

fulfilled.

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(2) The creditor shall specify the duration of the obligation, e.g. until the end of the

credit agreement. The creditor shall specify for each obligation any costs to be paid

by the consumer, which are not included in the APRC.

(3) The creditor shall state whether it is compulsory for the consumer to hold any

ancillary services to obtain the credit on the stated terms, and if so whether the

consumer is obliged to purchase them from the creditor's preferred supplier or

whether they may be purchased from a provider of consumer’s choice. Where such

possibility is conditional on the ancillary services meeting certain minimum

characteristics, such characteristics shall be described in this section.

Where the credit agreement is bundled with other products the creditor shall state

the key features of those other products and clearly state whether the consumer has

a right to terminate the credit agreement or the bundled products separately, the

conditions for and implications of doing so, and, where applicable, of the possible

consequences of terminating the ancillary services required in connection with the

credit agreement.

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Section '9. Early repayment'

(1) The creditor shall indicate under what conditions the consumer can repay the credit

early, either fully or partially.

(2) In the section on exit charges the creditor shall draw the consumer's attention to any

exit charge or other costs payable on early repayment in order to compensate the

creditor and where possible indicate their amount. In cases where the amount of

compensation would depend on different factors, such as the amount repaid or the

prevailing interest rate at the moment of the early repayment, the creditor shall indicate

how the compensation will be calculated and provide the maximum amount that the

charge might be, or where this is not possible, an illustrative example in order to

demonstrate to the consumer the level of compensation under different possible

scenarios.

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Section '10. Flexible features

(1) Where applicable, the creditor shall explain the possibility to and conditions for

transferring the credit to another creditor or immovable property.

(2) (Where appropriate) Additional features: Where the product contains any of the

features listed in point 5, this section must list these features and provide a brief

explanation of: the circumstances in which the consumer can use the feature; any

conditions attached to the feature; if the feature being part of the credit secured by a

mortgage or comparable security means that the consumer loses any statutory or

other protections usually associated with the feature; and the firm providing the

feature (if not the creditor).

(3) If the feature contains any additional credit, then this section must explain to the

consumer: the total amount of credit (including the credit secured by the mortgage

or comparable security); whether the additional credit is secured or not; the relevant

borrowing rates; and whether it is regulated or not. Such additional credit amount

shall either be included in the original creditworthiness assessment or, if it is not,

this section shall make clear that the availability of the additional amount is

dependent on a further assessment of the consumer's ability to repay.

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(4) If the feature involves a savings vehicle, the relevant interest rate must be explained.

(5) The possible additional features are: 'Overpayments/Underpayments' [paying more

or less than the instalment ordinarily required by the amortisation structure];

'Payment holidays' [periods where the consumer is not required to make payments];

'Borrow back' [ability for the consumer to borrow again funds already drawn down

and repaid]; 'Additional borrowing available without further approval'; 'Additional

secured or unsecured borrowing' [in accordance with point 3 above]; 'Credit card';

'Linked current account'; and 'Linked savings account'.

(6) The creditor may include any other features offered by the creditor as part of the

credit agreement not mentioned in previous sections.

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Section '11. Other rights of the borrower

(1) The creditor shall clarify the right(s) of e.g. withdrawal or reflection and where

applicable other rights such as, portability (including subrogation) that exist, specify

the conditions to which this/these right(s) is subject, the procedure that the consumer

will need to follow in order to exercise this/these right(s), inter alia, the address to

which the notification of withdrawal shall be sent, and the corresponding fees (where

applicable).

(2) Where a reflection period or right of withdrawal for the consumer applies this shall

be clearly mentioned.

(3) In line with Article 3 of Directive 2002/65/EC, where the transaction is being offered

at a distance, the consumer shall be informed of the existence or absence of a right of

withdrawal.

405

Section '12. Complaints'

(1) This Section shall indicate the internal contact point [name of the relevant

department] and a means of contacting them to complain [Geographical address] or

[Telephone number] or [Contact person:] [contact details] and a link to the

complaints procedure on the relevant page of a website or similar information

source.

(2) It shall indicate the name of the relevant external body for out-of-court complaints

and redress and where using the internal complaint procedure is a precondition for

access to that body, indicate that fact using the wording in Part A.

(3) In the case of credit agreements with a consumer who is resident in another Member

State, the creditor shall refer to the existence of FIN-NET

(http://ec.europa.eu/internal_market/fin-net/).

406

Section '13. Non-compliance with the commitments linked to the credit:

consequences for the borrower'

(1) Where non-observance of any of the consumer’s obligations linked to the credit may

have financial or legal consequences for the consumer, the creditor shall describe in

this section the different main cases (e.g. late payments/default, failure to respect the

obligations set out in Section 8 'Additional obligations') and indicate where further

information could be obtained.

(2) For each of those cases, the creditor shall specify, in clear, easy comprehensible terms,

the sanctions or consequences to which they may give rise. Reference to serious

consequences shall be highlighted.

(3) Where the immovable property used to secure the credit may be returned or

transferred to the creditor, if the consumer does not comply with the obligations, this

section shall include a statement indicating that fact, using the wording in Part A.

407

Section '14. Additional information

(1) In the case of distance marketing, this section will include any clause stipulating the

law applicable to the credit agreement or the competent court.

(2) Where the creditor intends to communicate with the consumer during the life of the

contract in a language different from the language of the ESIS that fact shall be

included and the language of communication named. This is without prejudice to

point (g) of point 3 of paragraph 1 of Article 3 of Directive 2002/65/EC.

(3) The creditor or credit intermediary shall state the consumer’s right to be provided

with or offered, as applicable, a copy of the draft credit agreement at least once an

offer binding on the creditor has been made.

Section '15. Supervisor

(1) The relevant authority or authorities for the supervision of the pre-contractual stage

of lending shall be indicated.

408

ANNEX III

Minimum knowledge and competence requirements

1. The minimum knowledge and competence requirements for creditors’, credit

intermediaries’ and appointed representatives’ staff referred to in Article 9 and for

persons involved in the management of credit intermediaries or appointed

representatives referred to in point (c) of Article 29(2) and Article 31(2) need to

include at least:

(a) appropriate knowledge of credit products within the scope of Article 3 and the

ancillary services typically offered with them;

(b) appropriate knowledge of the laws related to the credit agreements for

consumers, in particular consumer protection;

(c) appropriate knowledge and understanding of the immovable property

purchasing process;

(d) appropriate knowledge of security valuation;

(e) appropriate knowledge of organisation and functioning of land registers;

(f) appropriate knowledge of the market in the relevant Member State;

409

(g) appropriate knowledge of business ethics standards;

(h) appropriate knowledge of the consumer’s creditworthiness assessment process

or where applicable, competence in assessing consumers' creditworthiness;

(i) appropriate level of financial and economic competency.

2. When establishing minimum knowledge and competence requirements Member

States may differentiate between the levels and types of requirements applicable to

the staff of creditors, the staff of credit intermediaries or appointed representatives

and the management of credit intermediaries or appointed representatives.

410

3. Member States shall determine the appropriate level of knowledge and competence on

the basis of:

(a) professional qualifications, e.g. diplomas, degrees, training, competency tests;

or

(b) professional experience, which may be defined as a minimum number of years

working in areas related to the origination, distribution or intermediation of

credit products.

After …*, the determination of the appropriate level of knowledge and competence

shall not be based solely on the methods listed in point (b) of the first subparagraph.


411

P7_TA-PROV(2013)0342

Insider dealing and market manipulation (market abuse) ***I

European Parliament legislative resolution of 10 September 2013 on the proposal for a regulation of the European Parliament and of the Council on insider dealing and market manipulation (market abuse) (COM(2011)0651 – C7-0360/2011 – 2011/0295(COD))



– having regard to the Commission proposal to Parliament and the Council (COM(2011)0651) and the amended Commission proposal to Parliament and the Council (COM(2012)0421),

– having regard to Article 294(2) and Article 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0360/2011),


– having regard to the opinion of the European Central Bank of 22 March 20121,

– having regard to the opinion of the European Economic and Social Committee of 28 March 20122,

– having regard to the undertaking given by the Council representative by letter of 26 June 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 Economic and Monetary Affairs and the opinions of the Committee on Environment, Public Health and Food Safety and of the Committee on Legal Affairs (A7-0347/2012),




1 OJ C 161, 7.6.2012, p. 3.2 OJ C 181, 21.6.2012, p. 64.

412

P7_TC1-COD(2011)0295

Position of the European Parliament adopted at first reading on 10 September 2013 with a view to the adoption of Regulation (EU) No .../2013 of the European Parliament and of the Council on insider dealing and market manipulation (market abuse)

(Text with EEA relevance)


Having regard to the Treaty on the Functioning of the European Union, and in particular Article

114 thereof,



Having regard to the opinion of the European Central Bank1,


Acting in accordance with the ordinary legislative procedure3,

TEXT HAS NOT YET UNDERGONE LEGAL-LINGUISTIC FINALISATION.1 OJ C 161, 7.6.2012, p. 3.2 OJ C 181, 21.6.2012, p. 64.3 Position of the European Parliament of 10 September 2013.

413

Whereas:

(1) A genuine internal market for financial services is crucial for economic growth and

job creation in the Union.

(2) An integrated, efficient and transparent financial market requires market integrity.

The smooth functioning of securities markets and public confidence in markets are

prerequisites for economic growth and wealth. Market abuse harms the integrity of

financial markets and public confidence in securities and derivatives.

(3) Directive 2003/6/EC of the European Parliament and of the Council1 completed and

updated the Union's legal framework to protect market integrity. However, given the

legislative, market and technological developments since then that have resulted in

considerable changes to the financial landscape, that Directive should now be replaced

to ensure that it keeps pace with these developments. A new legislative instrument is

also needed to ensure uniform rules and clarity of key concepts and to ensure a single

rulebook in line with the conclusions of the High Level Group on Financial

Supervision2.

1 Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse) (OJ L 96, 12.4.2003, p. 16).

2 Report of the High-Level Group on Financial Supervision in the EU, Brussels, 25.2.2009.

414

(4) There is a need to establish a more uniform and stronger framework in order to

preserve market integrity and to avoid potential regulatory arbitrage and to ensure

accountability in the event of attempted manipulation, as well as to provide more

legal certainty and less regulatory complexity for market participants. This directly

applicable legal act aims at contributing in a determining manner to the smooth

functioning of the internal market and should, consequently, be based on the

provisions of Article 114 TFEU, as interpreted in accordance with the consistent case-

law of the Court of Justice of the European Union.

415

(5) In order to remove the remaining obstacles to trade and significant distortions of

competition resulting from divergences between national laws and to prevent any

further likely obstacles to trade and significant distortions of competition from arising,

it is therefore necessary to adopt a Regulation establishing a more uniform

interpretation of the EU market abuse framework which more clearly defines rules

applicable in all Member States. Shaping market abuse requirements in the form of a

Regulation should ensure that those requirements will be directly applicable. This

should ensure uniform conditions by preventing diverging national requirements as a

result of the transposition of a directive. This Regulation should entail that all persons

follow the same rules in all the Union. A Regulation should also reduce regulatory

complexity and firms' compliance costs, especially for firms operating on a cross-

border basis, and contribute to eliminating competitive distortions.

416

(6) The Commission Communication on "A Small Business Act for Europe"1 calls on the

Union and its Member States to design rules in order to reduce administrative burdens,

to adapt legislation to the needs of issuers on markets for small and medium sized

enterprises and to facilitate the access to finance of those issuers. A number of

provisions in Directive 2003/6/EC impose administrative burdens on issuers, notably

those whose financial instruments are admitted to trading on SME growth markets,

that should be reduced.

(7) Market abuse is the concept that encompasses ▌unlawful behaviour in the financial

markets and for the purposes of this Regulation it should be understood to consist of

insider dealing or the misuse of inside information and market manipulation. Such

behaviours prevent full and proper market transparency, which is a pre requisite for

trading for all economic actors in integrated financial markets.

1 Commission Communication ‘Think Small First’ - A ‘Small Business Act’ for Europe, COM(2008)0394.

417

(8) The scope of Directive 2003/6/EC focused on financial instruments admitted to trading

on regulated markets or for which a request for admission to trading on such a

market had been made. However, in recent years financial instruments have been

increasingly traded on multilateral trading facilities (MTFs). There are also financial

instruments which are only traded on other types of organised trading facilities (OTFs)

▌or only traded over the counter. The scope of this Regulation should therefore

▌include any financial instrument traded on a regulated market, MTF or an OTF, ▌or

any other conduct or action which can have an effect on such a financial instrument

irrespective of whether it takes place on a trading venue. In the case of certain types

of MTFs which, like regulated markets, help companies raise equity finance, the

prohibition against market abuse equally applies when a request for admission to

trading on such a market has been made; therefore, the scope of this Regulation

should include the period beginning when an application for admission to trading

on a MTF has been made. This should improve investor protection, preserve the

integrity of markets and ensure that market manipulation of such instruments ▌is

clearly prohibited.

418

(8a) For transparency purposes, operators of a regulated market, a MTF or an OTF

should notify without delay to their competent authority details of their financial

instruments which they have admitted to trading, for which there has been a request

for admission to trading or that have been traded on their trading venue. A second

notification should also be made when the instrument ceases to be admitted to

trading. Such an obligation should also apply to financial instruments for which

there has been a request for admission to trading on their trading venue, financial

instruments that have been admitted to trading prior to the entry into force of this

Regulation. Based on these notifications, which should be notified to ESMA by the

competent authorities, ESMA should publish a list of all of these financial

instruments. This Regulation should apply to such financial instruments whether or

not they are included in the list published by ESMA..

419

(8b) Certain financial instruments which are not traded on a trading venue may be used

for market abuse. This includes financial instruments the price or value of which

depends on or has an effect on financial instruments traded on a trading venue, or

the trading of which has an effect on the price or value of other financial

instruments traded on a trading venue. Examples may include inside information

relating to a share or bond, which can be used to buy a derivative of that share or

bond, or an index the value of which depends on that share or bond. When a

financial instrument is used as a reference price, an OTC traded derivative can be

used to benefit from manipulated prices, or be used to manipulate the price of a

financial instrument traded on a venue. A further example is the planned issuance

of a new tranche of securities that are not otherwise within the scope of this

Regulation, but where trading in those instruments could affect the price or value of

existing listed securities that are within the scope of this Regulation. This Regulation

also covers the possible situation where the price or value of the instrument traded

on a trading venue depends on the OTC traded instrument. The same principle

should apply to spot commodity contracts the price of which is based on that of a

derivative, as well as to the buying of spot commodity contracts to which financial

instruments are referenced.

420

(8c) Activities of trading in own shares in buy-back programmes and of stabilisation of a

financial instrument which would not benefit from the exception of the prohibitions

of this Regulation as provided for by Article 3, should not in themselves be deemed

to constitute market abuse.

(9) Trading in securities or associated instruments for the stabilisation of securities or

trading in own shares in buy-back programmes can be legitimate, in certain

circumstances, for economic reasons and should not, therefore, in themselves be

regarded as market abuse provided the actions are carried out under the necessary

transparency, where relevant information regarding the stabilisation or buy-back

programme is disclosed.

421

(10) Member States, members of the European System of Central Banks, ministries and

other agencies or special purpose vehicles of one or several Member States, or as well

as the Union and certain other public bodies or persons acting on their behalf should

not be restricted in carrying out monetary, exchange-rate or public debt management

▌policy insofar as they are undertaken in the public interest and solely in pursuit of

these policies. Neither should transactions, orders or behaviours carried out by the

Union, a special purpose vehicle for one or several Member States, the European

Investment Bank, the European Financial Stability Facility, the European Stability

Mechanism or an international financial institution established by two or more

Member States be restricted in mobilising funding and provide financial assistance

to the benefit of its members. This exclusion from the scope of the Regulation may,

in accordance with this Regulation, be extended to certain public bodies charged

with or intervening in the management of the public debt and central banks of third

countries. At the same time, these exemptions for monetary, exchange-rate or public

debt management policy should not extend to cases when those public bodies engage

in transactions, orders or behaviours which are not in the pursuit of these policies or

when persons working for those bodies engage in transactions, orders or behaviours

on their own account.

422

(11) Reasonable investors base their investment decisions on information already available

to them, that is to say, on ex ante available information. Therefore, the question

whether, in making an investment decision, a reasonable investor would be likely to

take into account a particular piece of information should be appraised on the basis of

the ex ante available information. Such an assessment has to take into consideration

the anticipated impact of the information in light of the totality of the related issuer's

activity, the reliability of the source of information and any other market variables

likely to affect the financial instruments, the related spot commodity contracts, or the

auctioned products based on the emission allowances in the given circumstances.

(12) Ex post information may be used to check the presumption that the ex ante information

was price sensitive, but should not be used to take action against persons who drew

reasonable conclusions from ex ante information available to them.

423

(12a) When inside information concerns a process which occurs in stages, each stage of

the process as well as the overall process could constitute inside information. An

intermediate step in a protracted process may in itself constitute a set of

circumstances or an event which exists or where there is a realistic prospect that

they will come into existence or occur, on the basis of an overall assessment of the

factors existing at the relevant time. However, that notion should not be interpreted

as meaning that the magnitude of the effect of that set of circumstances or that event

on the prices of the financial instruments concerned must be taken into

consideration. An intermediate step maybe inside information if it, by itself, meets

the criteria set forth in this Regulation for inside information.

424

(13) Legal certainty for market participants should be enhanced through a closer definition

of two of the elements essential to the definition of inside information, namely the

precise nature of that information and the significance of its potential effect on the

prices of the financial instruments, the related spot commodity contracts, or the

auctioned products based on the emission allowances. For derivatives which are

wholesale energy products, notably information required to be disclosed according to

Regulation (EU) No 1227/2011 of the European Parliament and of the Council1 should

be considered as inside information.

1 Regulation (EU) No 1227/2011 of the European Parliament and of the Council of … on Wholesale Energy Market Integrity and Transparency (OJ L …).

425

(14) Information which relates to an event or set of circumstances which is an

intermediate stage in a protracted process, may constitute inside information as

defined in this regulation. Such inside information may relate, for example, to the

state of contract negotiations, terms provisionally agreed in contract negotiations, the

possibility of the placement of financial instruments, conditions under which financial

instruments will be marketed, ▌provisional terms for the placement of financial

instruments, the consideration of the inclusion of a financial instrument in a major

index or the deletion of a financial instrument from such index.

(14a) This Regulation is not intended to prohibit discussions of a general nature regarding

the business and market developments between shareholders and management

concerning an issuer. Such relationships are essential for the efficient functioning

of markets and should not be prohibited by this Regulation.

426

(15) Spot markets and related derivative markets are highly interconnected and global, and

market abuse may take place across markets as well as across borders which can lead

to significant systemic risks. This is true for both insider dealing and market

manipulation. In particular, inside information from a spot market can benefit a person

trading on a financial market. The definition of inside information in relation to a

derivative of a commodity should be information which both meets the general

definition of inside information in relation to financial markets and which is

required to be made public in accordance with legal or regulatory provisions at the

Union or national level, market rules, contracts or customs on the relevant

commodity derivative or spot market. Notable examples of such rules are REMIT for

the energy market and the JODI database for oil. Such information may serve as the

basis of market participants’ decisions to enter into commodity derivatives or the

related spot commodity contracts and therefore constitutes inside information

required to be made public, where it is likely to have a significant effect on the prices

on such derivatives or related spot commodity contracts. Moreover, manipulative

strategies can also extend across spot and derivatives markets. Trading in financial

instruments, including commodity derivatives, can be used to manipulate related spot

commodity contracts and spot commodity contracts can be used to manipulate related

financial instruments. The prohibition of market manipulation should capture these

inter-linkages. However, it is not appropriate or practicable to extend the scope of the

Regulation to behaviour that does not involve financial instruments, for example, to

trading in spot commodity contracts that only affects the spot market. In the specific

case of wholesale energy products, the competent authorities should take into account

the specific characteristics of the definitions of Regulation (EU) No 1227/2011 when

they apply the definitions of the inside information, insider dealing and market

manipulation of this Regulation to financial instruments related to wholesale energy

products.

427

(16) Pursuant to Directive 2003/87/EC of the European Parliament and of the Council1,

the Commission, Member States and other officially designated bodies are inter alia

responsible for the technical issuance of emission allowances, their free allocation to

eligible industry sectors and new entrants and more generally the development and

implementation of the Union's climate policy framework which underpins the supply

of emission allowances to compliance buyers of the Union's emissions trading

scheme (EU ETS ). In the exercise of those duties, those public bodies may inter alia

have access to price-sensitive, non-public information and pursuant to Directive

2003/87/EC they may need to perform certain market operations in relation to

emission allowances. As a consequence of the classification of emission allowances as

financial instruments as part of the review of the Markets in Financial Instruments

Directive, those instruments will also come within the scope of this Regulation. In

order to preserve the ability of the Commission, Member States and other officially

designated bodies to develop and execute the Union's climate policy, the activities of

those public bodies, insofar as they are undertaken in the public interest and

explicitly in pursuit of that policy and concerning emission allowances, should be

exempt from the application of this Regulation. Such exemption should not have a

negative impact on overall market transparency, as those public bodies have

statutory obligations to operate in a way that ensures orderly, fair and non-

discriminatory disclosure of, and access to, any new decisions, developments and

data that have a price-sensitive nature. Furthermore, safeguards of fair and non-

discriminatory disclosure of specific price-sensitive information held by public

authorities exist under Directive 2003/87/EC and the implementing measures

adopted pursuant thereto. At the same time, the exemption for public bodies acting

in pursuit of the Union's climate policy should not extend to cases when those public

bodies engage in conduct or in transactions which are not in the pursuit of the

Union's climate policy or when persons working for those bodies engage in conduct

or in transactions on their own account.

1 Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ L 275, 25.10.2003, p. 32).

428

(16a) Moreover, the duty to disclose inside information needs to be addressed to the

participants in the carbon market in general. In order to avoid exposing the market to

reporting that is not useful and as well as to maintain cost-efficiency of the measure

foreseen, it appears necessary to limit the regulatory impact of that duty to only those

EU ETS operators, that – by virtue of their size and activity – can reasonably be

expected to be able to have a significant effect on the price of emission allowances.

The Commission should adopt measures establishing a minimum threshold for the

purposes of application of this exemption by means of a delegated act. The

information to be disclosed should concern the physical operations of the disclosing

party and not own plans or strategies for trading emission allowances. Where

emission allowance market participants already comply with equivalent inside

information disclosure duties, notably pursuant to Regulation (EU) No 1227/2011 , the

obligation to disclose inside information concerning emission allowances should not

lead to the duplication of mandatory disclosures with substantially the same content.

In the case of emission allowance market participants with aggregate emissions or

rated thermal input at or below the threshold set, since the information about their

physical operations is deemed to be non-material for the disclosure purposes, it

should also be deemed not to have a significant effect on the price of emission

allowances, auctioned products based thereon or on the prices of related derivative

financial instruments. Such emission allowance market participants should

nevertheless be covered by the prohibition of insider dealing in relation to any other

information they have access to and which is inside information.

429

(16b) Pursuant to Article 43 of the TFEU or for the implementation of international

agreements concluded under the TFEU, the Commission, Member States and other

officially designated bodies are inter alia responsible for the pursuit of the Union's

Common Agricultural Policy and the Union’s Common Fisheries Policy. In the

exercise of those duties, those public bodies undertake activities and take measures

aiming at the management of the agricultural markets and fisheries, including those

of public intervention, imposition of additional or suspension of import duties.

Bearing in mind the scope of this Regulation, applying also to spot commodity

contracts which have or are likely to have an effect on financial instruments and

financial instruments the value of which depends on the value of spot commodity

contracts and which have or are likely to have an effect on spot commodity

contracts, it is necessary to ensure that the activity of Member States, the

Commission and other officially designated bodies in the pursuit of the Union's

Common Agricultural Policy and Common Fisheries Policy, is not restricted. In

order to preserve the ability of the Commission, Member States and other officially

designated bodies to develop and execute the Union's Common Agricultural Policy

and Common Fisheries Policy, their activities, insofar as they are undertaken in the

public interest and solely in pursuit of those policies, should be exempted from the

application of this Regulation. Such exemption should not have a negative impact

on overall market transparency, as those public bodies have statutory obligations to

operate in a way that ensures orderly, fair and non-discriminatory disclosure of, and

access to, any new decisions, developments and data that have a price-sensitive

nature. At the same time, the exemption for public bodies acting in pursuit of the

Union's Common Agricultural Policy and Common Fisheries Policy should not

extend to cases when those public bodies engage in conduct or in transactions which

are not in the pursuit of these common Policies of the Union or when persons

working for those bodies engage in conduct or in transactions on their own account.

430

(16c) The essential characteristic of insider dealing consists in an unfair advantage being

obtained from inside information to the detriment of third parties who are unaware

of it and, consequently, the undermining of the integrity of financial markets and

investor confidence. Consequently, the prohibition on insider dealing applies where

an insider who is in a possession of inside information takes unfair advantage of the

benefit gained from that information by entering into market transactions in

accordance with that information by acquiring or disposing of, or attempting to

acquire or dispose of, or by cancelling or amending or attempting to cancel or

amend an order to acquire or dispose, for his own account or for the account of a

third party, either directly or indirectly, financial instruments to which that

information relates. Use of inside information can also consist of trading in

emission allowances and derivatives thereof and of bidding in the auctions of

emission allowances or other auctioned products based thereon that are held

pursuant to Commission Regulation (EU) No 1031/20101.

1 Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community (OJ L 302, 18.11.2010, p. 1).

431

(16d) A person in possession of inside information who carries out any transaction related

to that information shall be presumed to have used that information. Orders placed

before a person possesses inside information should not be presumed to be insider

dealing, but when a person has received inside information, any subsequent change

related to that information to these orders, including the cancellation or amendment

of an order, or an attempt to cancel or amend an order, should be presumed to

constitute insider dealing. The presumption may, however, be rebutted if the person

establishes that he did not use the inside information in carrying out the transaction.

432

(16e) When a legal or natural person in possession of inside information, acquires or

disposes of, or attempts to acquire or dispose of, for his own account or for the

account of a third party, either directly or indirectly, financial instruments to which

that information relates it should be implied that the person has “used that

information”. This presumption is without prejudice to the rights of defence. The

question whether a person has infringed the prohibition on insider dealing or

attempt to commit insider dealing should be analysed in the light of the purpose of

this Regulation, which is to protect the integrity of the financial market and to

enhance investor confidence, which is based, in turn, on the assurance that investors

will be placed on an equal footing and protected from the misuse of inside

information.

(16f) Use of inside information can consist in the acquisition or disposal of a financial

instrument, or an auctioned product based on emission allowances, or in the

cancellation or amendment of an order, or in an attempt to acquire or dispose of a

financial instrument or to cancel or amend an order, by a person who knows, or

ought to have known, that the information possessed constitutes inside information.

In this respect, the competent authorities should consider what a normal and

reasonable person would know or should have known in the circumstances.

433

(16g) This Regulation should be interpreted in a manner consistent with the measures

adopted by the Member States to protect the interests of holders of transferable

securities carrying voting rights in a company (or which may carry such rights as a

consequence of the exercise of rights or conversion) when the company is subject to

a public take-over bid or other proposed change of control. In particular this

Regulation should be interpreted in a manner consistent with the laws, regulations

and administrative provisions adopted in relation to takeover bids, merger

transactions and other transactions affecting 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 Council1.

1 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).

434

(16h) Research and estimates developed from publicly available data, should not be

regarded in itself as inside information and, therefore, any transaction carried out

on the basis of such research or estimates should not in itself be deemed to constitute

the use of inside information. An example of where this information may constitute

inside information is where the information’s publication or distribution is routinely

expected by the market and it contributes to the price-formation process of financial

instruments, or the information provides views from a recognised market

commentator or institution which may inform the prices of related financial

instruments. Market actors must therefore consider the extent to which the

information is non-public and the possible effect on financial instruments if they

were to trade on this in advance of its publication or distribution, to establish

whether they would be trading on the basis of inside information.

(16i) In order to avoid inadvertently prohibiting forms of financial activity which are

legitimate, namely where there is no effect of market abuse, it is necessary to

recognise certain legitimate behaviours. This may include, for example, recognising

the role of market makers, when acting in the legitimate capacity of providing

market liquidity.

435

(16j) The mere fact that market makers or persons authorised to act as counterparties,

confine themselves to pursuing their legitimate business of buying or selling

financial instruments or that persons authorised to execute orders on behalf of third

parties with inside information confine themselves to carrying out cancelling or

amending an order dutifully, should not be deemed, in itself, to constitute use of

such inside information. However, the protections in this Regulation to market

makers, bodies authorised to act as counter parties or persons authorised to execute

orders on behalf of third parties with inside information do not extend to activities

clearly prohibited under this Regulation including, for example the practice

commonly known as “front-running”. Another example may be the situation where

legal persons have taken all reasonable measures to prevent abuse from occurring

but nevertheless natural persons within their employment commit abuse on behalf of

the legal person. Another example may be transactions conducted in the discharge

of a prior obligation that has become due. Having access to inside information

relating to another company and using it in the context of a public take-over bid for

the purpose of gaining control of that company or proposing a merger with that

company should not be deemed, in itself, to constitute insider dealing.

436

(16k) Since the acquisition or disposal of financial instruments necessarily involves a

prior decision to acquire or dispose taken by the person who undertakes one or other

of these operations, the carrying out of this acquisition or disposal should not be

deemed in itself to constitute the use of inside information. Acting on the basis of

one’s own plans and strategies for trading should not be considered as using inside

information. However, none of these persons, either legal or natural persons as

appropriate, will be protected by virtue of their professional function; they will only

be protected if they act in a fit and proper manner, meeting both the standards

expected of their profession and of this Regulation namely market integrity and

investor protection. A breach could still be deemed to have occurred if the competent

authority established that there was an illegitimate reason behind these transactions,

orders to trade or behaviours or that the person used inside information.

437

(16l) Market soundings are interactions between a seller of financial instruments and one

or more potential investors, prior to the announcement of a transaction, in order to

gauge the interest of potential investors in a possible transaction and its pricing, size

and structuring. Market soundings may involve an initial or secondary offer of

relevant securities, and are distinct from ordinary trading. They are a highly

valuable tool to gauge the opinion of potential investors, enhance shareholder

dialogue, ensure that deals run smoothly, and that the views of issuers, existing

shareholders and potential new investors are aligned. They may be particularly

beneficial when markets lack confidence or a relevant benchmark, or are volatile.

Thus the ability to conduct market soundings is important for the proper functioning

of capital markets and market soundings should not in themselves be regarded as

market abuse.

438

(16m) Examples of market soundings would include, but are not limited to, where the sell-

side firm has been in discussions with an issuer about a potential transaction, and it

has decided to gauge potential investor interest in order to determine the terms that

will make up a transaction; where an issuer intends to announce a debt issuance or

additional equity offering and key investors are contacted by a sell-side firm and

given the full terms of the deal to obtain a financial commitment to participate in the

transaction; or where the sell-side is seeking to sell a large amount of securities on

behalf of an investor and seeks to gauge potential interest in these securities from

other potential investors.

439

(16n) Conducting market soundings may require disclosure to potential investors of inside

information. There will generally only be the potential to benefit financially from

trading on the basis of inside information passed in a market sounding where there

is an existing market in the financial instrument that is the subject of the market

sounding or in a related financial instrument. Given the timing of such discussions,

it is possible that inside information may be disclosed to the potential investor in the

course of the market sounding after a financial instrument has been admitted to

trading on a regulated market or traded on a MTF or OTF. Before engaging in a

market sounding, the disclosing market participant must assess whether that market

sounding will involve the disclosure of inside information.

440

(16o) Inside information should be deemed as being disclosed legitimately if it is disclosed

in the normal course of the exercise of a person’s employment, profession or duty.

Where a market sounding involves the disclosure of inside information, the

disclosing market participant will be considered to be acting within the course of his

employment, profession or duty where, at the time of making the disclosure, he

informs and receives the consent of the person to whom the disclosure is made that

he may be given inside information; that he will be restricted by the provisions of

this Regulation from trading or acting on that information; that reasonable steps

must be taken to protect the ongoing confidentiality of the information; and that he

must inform the disclosing market participant of the identities of all natural and

legal persons to whom the information is disclosed in the course of developing a

response to the market sounding. The disclosing market participant must also

comply with the obligations, to be set out in detail in regulatory technical standards,

regarding the maintenance of records of information disclosed. Market participants

who do not comply with the detailed provisions of this Regulation when conducting

a market sounding should not be presumed to have improperly disclosed inside

information but they cannot take advantage of the exemption given to those who

have complied with such provisions. The question whether they have infringed the

prohibition on improper disclosure of inside information should be analysed in light

of all the relevant provisions of this Regulation, and all disclosing market

participants are under an obligation to record in writing their assessment, before

engaging in a market sounding, whether that market sounding will involve the

disclosure of inside information.

441

(16p) Potential investors who are the subject of a market sounding in turn should consider

if the information disclosed to them amounts to inside information which would

prohibit them from dealing on the basis of it or further disclosing the inside

information. Potential investors remain subject to insider dealing and improper

disclosure rules, as set out in this Regulation. In order to assist potential investors in

their considerations and as regards what steps they should take so as not to

contravene the provisions of this Regulation, ESMA shall issue guidelines.

(17) Commission Regulation (EU) No 1031/2010 provided for two parallel market abuse

regimes applicable to the auctions of emission allowances. However, as a consequence

of the classification of emission allowances as financial instruments, this Regulation

should constitute a single rulebook of market abuse measures applicable to the entirety

of the primary and secondary market in emission allowances. The Regulation shall

also apply to the auctioning of emission allowances or other auctioned products based

thereon pursuant to Commission Regulation (EU) No 1031/2010.

442

(18) This Regulation should provide measures regarding market manipulation that are

capable of being adapted to new forms of trading or new strategies that may be

abusive. To reflect the fact that trading of financial instruments is increasingly

automated, it is desirable that the definition of market manipulation provides examples

of specific abusive strategies that may be carried out by any available means of

trading including algorithmic and high frequency trading. The examples provided are

neither intended to be exhaustive nor are they intended to suggest that the same

strategies carried out by other means would not also be abusive.

(18a) The prohibitions on insider dealing and market manipulation should also cover

those persons who act in collaboration to commit market abuse. Examples may

include, but are not limited to, brokers who devise and recommend a trading strategy

designed to result in market abuse, persons who encourage a person with inside

information to disclose that information improperly, persons who develop software

in collaboration with a trader for the purpose of facilitating market abuse.

443

(18b) To ensure that liability is conferred on both the legal person and any natural person

who participates in the decision making of the legal person, it is necessary to give

recognition of the different national legal mechanisms in Member States. This

relates directly to the methods of attribution of liability in national law.

(19) In order to complement the prohibition of market manipulation, this Regulation should

include a prohibition against attempting to engage in market manipulation ▌. An

attempt to engage in market manipulation should be distinguished from actual

behaviour which is likely to result in market manipulation as both activities are

prohibited under this Regulation. Such an attempt may include, but not be limited to,

situations where the activity is started but not completed, for example as a result of

failed technology or an instruction to trade which is not acted upon. Prohibiting

attempts to engage in market manipulation is necessary to enable competent

authorities to sanction such attempts, even in the absence of an identifiable effect on

market prices.

444

(19a) Without prejudice to the aim of this Regulation and its directly applicable provisions,

a person who enters into transactions or issues orders to trade which may be deemed

to constitute market manipulation may be able to establish that his reasons for

entering into such transactions or issuing orders to trade were legitimate and that

the transactions and orders to trade were in conformity with accepted practice on the

market concerned. An accepted market practice can only be established by the

competent authority responsible for the market abuse supervision of the market

concerned. A practice that is accepted in a particular market cannot be considered

applicable to other markets unless the competent authorities of such other markets

have officially accepted that practice. A breach could still be deemed to have

occurred if the competent authority established that there was an illegitimate, reason

behind these transactions or orders to trade.

(20) This Regulation should also clarify that engaging in market manipulation or attempting

to engage in market manipulation in a financial instrument may take the form of using

related financial instruments such as derivative instruments that are traded on another

trading venue or over the counter.

445

(20a) Many financial instruments are priced by reference to benchmarks. The actual or

attempted manipulation of benchmarks, including interbank offer rates, can have a

serious impact on market confidence and may result in significant losses to investors

or distort the real economy. Therefore, specific provisions in relation to benchmarks

are required in order to preserve the integrity of the markets and ensure that competent

authorities can enforce a clear prohibition of the manipulation of benchmarks. These

provisions should cover all published benchmarks including those accessible

through the internet whether free of charge or not such as CDS benchmarks and

indices of indices. It is necessary to complement the general prohibition of market

manipulation by prohibiting the manipulation of the benchmark itself and the

transmission of false or misleading information, provision of false or misleading

inputs, or any other action that manipulates the calculation of a benchmark, where

calculation is broadly defined to include the receipt and evaluation of all data which

relates to the calculation of that benchmark and include in particular trimmed data,

and including the benchmark's methodology, whether algorithmic or judgement

based in whole or in part. Those rules are in addition to Regulation (EU) No

1227/2011 which prohibits the deliberate provision of false information to

undertakings which provide price assessments or market reports on wholesale energy

products with the effect of misleading market participants acting on the basis of those

price assessments or market reports.

446

(21) In order to ensure uniform market conditions between trading venues and facilities

subject to this Regulation, any person who operates the business of regulated markets,

MTFs and OTFs should be required to adopt effective arrangements, systems and

procedures aimed at preventing and detecting market manipulation and abusive

practices.

(22) Manipulation or attempted manipulation of financial instruments may also consist in

placing orders which may not be executed. Further, a financial instrument may be

manipulated through behaviour which occurs outside a trading venue. Persons who

professionally arrange or execute transactions ▌are required to have and maintain

effective arrangement, systems and procedures in place to detect and report

suspicious transactions. This should also include reporting suspicious orders and

suspicious transactions that take place outside a trading venue.

447

(23) Manipulation or attempted manipulation of financial instruments may also consist in

disseminating false or misleading information. The spreading of false or misleading

information can have a significant impact on the prices of financial instruments in a

relatively short period of time. It may consist in the invention of manifestly false

information, but also the wilful omission of material facts, as well as the knowingly

inaccurate reporting of information. This form of market manipulation is particularly

harmful to investors, because it causes them to base their investment decisions on

incorrect or distorted information. It is also harmful to issuers, because it reduces the

trust in the available information related to them. A lack of market trust can in turn

jeopardise an issuer's ability to issue new financial instruments or to secure credit from

other market participants in order to finance its operations. Information spreads

through the market place very quickly. As a result, the harm to investors and issuers

may persist for a relatively long-time until the information is found to be false or

misleading, and can be corrected by the issuer or those responsible for its

dissemination. It is therefore necessary to qualify the spreading of false or misleading

information, including rumours and false or misleading news, as being a breach of this

Regulation. It is therefore appropriate not to allow those active in the financial markets

to freely express information contrary to their own opinion or better judgement, which

they know or should know to be false or misleading, to the detriment of investors and

issuers.

448

(23a) Given the rise in the use of websites, blogs and social media, it is important to clarify

that disseminating false or misleading information via the internet, including

through social media sites or unattributable blogs, should be considered for the

purposes of this Regulation in the same way as doing so via more traditional

communication channels.

(24) The ▌public disclosure of inside information by an issuer is essential to avoid insider

trading and ensure that investors are not mislead. Issuers should therefore be required

to inform the public as soon as possible of inside information. However this obligation

may under special circumstances prejudice the legitimate interests of the issuer. In

such circumstances, delayed desclosure should be permitted provided that the delay

would not be likely to mislead the public and the issuer is able to ensure the

confidentiality of the information. The issuer of a financial instrument is only under

an obligation to disclose inside information if it has requested or approved

admission of the financial instrument to trading.

(24a) For the purposes of applying paragraph 12(3) and 12(4) of this Regulation,

legitimate interests may, in particular, relate to the following non-exhaustive

circumstances:

449

(a) negotiations in course, or related elements, where the outcome or normal

pattern of those negotiations would be likely to be affected by public

disclosure. In particular, in the event that the financial viability of the

issuer is in grave and imminent danger, although not within the scope of

the applicable insolvency law, public disclosure of information may be

delayed for a limited period where such a public disclosure would seriously

jeopardise the interest of existing and potential shareholders by

undermining the conclusion of specific negotiations designed to ensure the

long-term financial recovery of the issuer;

(b) decisions taken or contracts made by the management body of an issuer

which need the approval of another body of the issuer in order to become

effective, where the organisation of such an issuer requires the separation

between these bodies, provided that a public disclosure of the information

before such approval together with the simultaneous announcement that

this approval is still pending would jeopardise the correct assessment of the

information by the public.

450

(25) In order to protect the public interest, to preserve the stability of the financial system

and for example to avoid that liquidity crises in financial institutions turn into

solvency crises due to a sudden withdrawal of funds, it may be appropriate to allow,

in exceptional circumstances, the delay of the disclosure of inside information for

credit institutions or other financial institutions. In particular, this may apply to

information pertinent to temporary liquidity problems, where they need to receive

central banking lending including emergency liquidity assistance from a central

bank where disclosure of the information would have a systemic impact. This delay

should be conditional upon the issuer obtaining the consent of the relevant

competent authority and it being clear that the wider public and economic interest in

delaying disclosure outweights the interest of the market in receiving the

information which is subject to delay.

451

(25a) In respect to financial institutions, notably where they receive central bank lending,

including emergency liquidity assistance, the assessment of whether the information

is of systemic importance and whether delay of disclosure is in the public interest

should be made by the competent authority, after consulting as appropriate with the

central bank, the macro-prudential authority or any other relevant national

authority.

(25b) The use or attempted use of inside information to trade either on one’s own account

or on the account of a third party should be clearly prohibited. Use of inside

information can also consist of trading in emission allowances and derivatives

thereof and of bidding in the auctions of emission allowances or other auctioned

products based thereon that are held pursuant to Regulation (EU) No 1031/2010 by

persons who know, or ought to know, that the information they possess constitutes

inside information. Information regarding the market participant’s own plans and

strategies for trading should not be considered as inside information, although

information regarding a third party’s plans and strategies for trading may amount to

inside information.

452

(26) The requirement to disclose inside information can be burdensome for small and

medium-sized enterprises, [as defined by Directive …/…/EU of the European

Parliament and of the Council1 (new MiFID)], whose financial instruments are

admitted to trading on SME growth markets, given the costs of monitoring information

in their possession and seeking legal advice about whether and when information

needs to be disclosed. Nevertheless, prompt disclosure of inside information is

essential to ensure investor confidence in those issuers. Therefore, the European

Securities and Markets Authority (ESMA) should be able to issue guidelines which

assist issuers to comply with the obligation to disclose inside information without

compromising investor protection.

1 Directive …/…/EU of the European Parliament and of the Council of … (OJ L …).

453

(27) Insider lists are an important tool for regulators when investigating possible market

abuse, but national differences in regards to data to be included in those lists impose

unnecessary administrative burdens on issuers. Data fields required for insider lists

should therefore be uniform in order to reduce those costs. It is important that persons

included on insider lists are informed of that fact and its implications under this

Regulation and Directive …/…/EU of the European Parliament and of the Council1

[new MAD]. The requirement to keep and constantly update insider lists imposes

administrative burdens specifically on issuers on SME growth markets. As competent

authorities are able to exercise effective market abuse supervision without having those

lists available at all times for those issuers they should be exempt from this obligation

in order to reduce the administrative costs imposed by this Regulation. However, such

issuers should provide an insider list to the competent authorities upon request.

1 Directive …/…/EU of the European Parliament and of the Council of … (OJ L …).

454

(27a) The establishment, by issuers or any person acting on their behalf or account, of

lists of persons working for them under a contract of employment or otherwise and

having access to inside information relating, directly or indirectly, to the issuer, is a

valuable measure for protecting market integrity. These lists may serve issuers or

such persons to control the flow of inside information and thereby help manage

their confidentiality duties. Moreover, these lists may also constitute a useful tool for

competent authorities to identify any person who has access to inside information

and the date on which they gained access. Access to inside information relating,

directly or indirectly, to the issuer by persons included on such a list is without

prejudice to their duty to refrain from insider dealing.

455

(28) Greater transparency of transactions conducted by persons discharging managerial

responsibilities at the issuer level and, where applicable, persons closely associated

with them, constitutes a preventive measure against market abuse, particularly insider

dealing. The publication of those transactions on at least an individual basis can also

be a highly valuable source of information to investors. It is necessary to clarify that

the obligation to publish those managers' transactions also includes the pledging or

lending of financial instruments, as the pledging of shares can result in a material

and potentially destabilising impact on the company in the event of a sudden,

unforeseen disposal. Without disclosure, the market would not know that there was

the increased possibility of, for example, a significant future change in share

ownership; increase in the supply of shares to the marketplace; or loss of voting

rights in that company. For this reason, notification under this Regulation will be

required where the pledge of the securities is made as part of a wider transaction in

which the manager pledges the securities as collateral to gain credit from a third

party. Additionally, full and proper market transparency is a prerequisite for the

confidence of market actors and, in particular, the confidence of a company’s

shareholders. It is also necessary to clarify that the obligation to publish those

managers' transactions includes transactions by another person exercising discretion

for the manager. In order to ensure an appropriate balance between the level of

transparency and the number of reports notified to competent authorities and the

public, thresholds should be introduced in this Regulation below which transactions

shall not be notified.

456

(28a) The notification of transactions conducted by a person discharging managerial

responsibilities within an issuer on their own account, or by person closely

associated with them, is not only valuable information for market participants, but

also constitutes an additional means for competent authorities to supervise markets.

The obligation to notify transactions is without prejudice to the duty to refrain from

insider dealing.

(28b) Notification of transactions should be in accordance with the rules on transfer of

personal data laid down in Directive 95/46/EC of the European Parliament and of

the Council1.

1 Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on protection of individuals with regard to the processing of personal data and on the movement of such data (OJ L 281, 23.11.1995, p. 31).

457

(28c) Persons discharging managerial responsibilities within an issuer should be

prohibited from trading before the announcement of an interim financial report or a

year-end report which the relevant issuer is obliged to make public according to the

rules of the trading venue where the issuer’s shares are admitted to trading or

according to national law, unless specific and restricted circumstances exist which

would justify a permission of trading by the issuers. However, any such permission

by the issuer is without prejudice to the duty of the persons discharging managerial

responsibilities to refrain from insider dealing.

(29) A set of effective tools and powers and resources for the competent authority of each

Member State guarantees supervisory effectiveness. This Regulation therefore in

particular foresees a minimum set of supervisory and investigative powers competent

authorities of Member States should be entrusted with in accordance with national

law. Those powers should be exercised, where the national law so requires, by

application to the competent judicial authorities. When exercising their powers

under this Regulation competent authorities should act objectively and impartially

and remain autonomous in their decision making.

458

(29a) Market undertakings and all economic actors should also contribute to market

integrity. In this sense, the designation of a single competent authority for market

abuse should not exclude collaboration links or delegation under the responsibility of

the competent authority, between that authority and market undertakings with a view

to guaranteeing efficient supervision of compliance with the provisions in this

Regulation. Where persons who produce or disseminate investment

recommendations or other information recommending or suggesting an investment

strategy in one or more financial instruments also deal on own account in such

instruments, the competent authorities should, inter alia, be able to require or

demand from such persons any information necessary to determine whether the

recommendations produced or disseminated by that person are compliant with this

Regulation.

459

(30) For the purpose of detecting cases of insider dealing and market manipulation, it is

necessary for competent authorities to have, in accordance with national law, the

ability access to the premises of natural and legal persons in order to seize

documents. The access to such premises is necessary when there is resonable

suspicion that documents and other data related to the subject matter of an

investigation exist and may be relevant to prove a case of insider dealing or market

abuse. Additionally the access to such premises is necessary where: the person to

whom a demand for information has already been made fails (wholly or in part) to

comply with it; or where there are reasonable grounds for believing that if a demand

were to be made, it would not be complied with, or that the documents or information

to which the information requirement relates, would be removed, tampered with or

destroyed. If prior authorisation is needed from the judicial authority of the Member

State concerned, in accordance with national law, such power for access into

premises shall be used after having obtained that prior judicial authorisation.

460

(31) Existing recordings of telephone conversations and data traffic records from

investment firms executing and documenting the executions of transactions, as well

as existing telephone and data traffic records from telecommunications operators

constitute crucial, and sometimes the only, evidence to detect and prove the existence

of insider dealing and market manipulation. Telephone and data traffic records may

establish the identity of a person responsible for the dissemination of false or

misleading information or that persons have been in contact at a certain time, and that

a relationship exists between two or more people. Therefore, competent authorities

should be able to require existing recordings of telephone conversations, electronic

communications and data traffic records held by an investment firm or credit

institution in accordance with Directive …/…/EU [new MiFID]. Access to data and

telephone records is necessary to provide evidence and investigate leads on possible

insider dealing or market manipulation, and therefore for the detection and

sanctioning of market abuse. In order to introduce a level playing field in the Union in

relation to the access ▌to telephone and existing data traffic records held by a

telecommunication operator or the existing recordings of telephone conversations

and data traffic held by an investment firm, competent authorities should in

conformity with national law be able to require existing telephone and existing data

traffic records held by a telecommunication operator insofar as permitted under

national law and existing recordings of telephone conversations as well as data

traffic held by an investment firm, in those cases where a reasonable suspicion exists

that such records related to the subject-matter of the inspection or investigation may

be relevant to prove insider dealing or market manipulation ▌in violation of this

Regulation ▌. Access to telephone and data traffic records held by a

telecommunications operator do not encompass the content of voice communications

by telephone.

461

(31a) While this Regulation specifies a minimum set of powers competent authorities

should have, these powers are to be exercised within a complete system of national

law which guarantees the respect for fundamental rights, including the right to

privacy. For the exercise of those powers, which may amount to serious

interferences with the right to respect private and family life, home and

communications, Member States should have in place adequate and effective

safeguards against any abuse, for instance, where appropriate prior authorisation

from the judicial authorities of a Member State concerned. Member States should

allow the possibility for competent authorities to exercise such intrusive powers to

the extent necessary for the proper investigation of serious cases where there are no

equivalent means for effectively achieving the same result.

462

(32) Since market abuse can take place across borders and markets, in all but exceptional

circumstances competent authorities should be required to cooperate and exchange

information with other competent and regulatory authorities, and with ESMA, in

particular in relation to investigation activities. Where a competent authority is

convinced that market abuse is being, or has been, carried out in another Member State

or affecting financial instruments traded in another Member State, it should notify that

fact to the competent authority and ESMA. In cases of market abuse with cross-border

effects, ESMA should be able to coordinate the investigation if requested to do so by

one of the competent authorities concerned.

(32a) It is necessary for competent authorities to have the necessary tools for effective

cross market order-book surveillance. Pursuant to [Article 51(7)] of Directive

…/…/EU [MiFID], competent authorities are able to request and receive data from

other competent authorities relating to the order book to assist in monitoring and

detecting market manipulation on a cross border basis.

463

(33) In order to ensure exchanges of information and cooperation with third country

authorities in relation to the effective enforcement of this Regulation, competent

authorities should conclude cooperation arrangements with their counterparts in third

countries. Any transfer of personal data carried out on the basis of those agreements

shall comply with Directive 95/46/EC and with Regulation (EC) No 45/2001 of the

European Parliament and of the Council1.

1 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 data (OJ L 8, 12.1.2001, p. 1).

464

(34) A sound prudential and conduct of business framework for the financial sector should

rest on strong supervisory, investigatory and sanctioning regimes. To this end,

supervisory authorities should be equipped with sufficient powers to act and should be

able to rely on equal, strong and deterrent sanctions regimes against all financial

misconduct, sanctions which should be enforced effectively. However, the High Level

Group considered that none of these elements is currently in place. A review of

existing sanctioning powers and their practical application aimed at promoting

convergence of sanctions across the range of supervisory activities has been carried out

in the Commission Communication of 8 December 2010 on reinforcing sanctioning

regimes in the financial sector1.

1 European Commission, Communication on Reinforcing sanctioning regimes in the financial sector, COM(2010)0716, 8 December 2010.

465

(35) Therefore, ▌a set of administrative measures, sanctions and fines should be provided

for to ensure a common approach in Member States and to enhance their deterrent

effect. The possibility of a disbarment from management functions within

investment firms should be available to the competent authority. Sanctions applied

in specific cases should be determined taking into account where appropriate factors

such as the disgorgement of any identified financial benefit, the gravity and duration of

the breach, any aggravating or mitigating factors, the need for fines to have a deterrent

effect and, where appropriate, include a discount for cooperation with the competent

authority. In particular, the actual amount of administrative fines to be imposed in a

specific case may reach the maximum level provided for in this Regulation, or the

higher level provided for in national law, for very serious breaches, while fines

significantly lower than the maximum level may be applied to minor breaches or in

case of settlement. The possibility of a disbarment from management functions

within investment firms should be available to the competent authority. This

regulation should not limit Member States in their ability to provide for higher levels

of administrative sanctions.

466

(35a) Even though nothing prevents Member States from laying down rules for

administrative sanctions as well as criminal sanctions on the same infringements,

Member States should not be required to lay down rules for administrative sanctions

on the infringements of this Regulation which are already subject to national

criminal law by ...*. In conformity with national law, Member States are not obliged

to impose both administrative and criminal sanctions for the same offence, but they

can do so if their national law permits them. However, the maintenance of criminal

sanctions instead of administrative sanctions for violations of this Regulation or of

Directive …/…/EU [New MAD] should not reduce or otherwise affect the ability of

competent authorities to cooperate, access and exchange information in a timely way

with competent authorities in other Member States for the purposes of this

Regulation, including after any referral of the relevant infringements to the

competent judicial authorities for criminal prosecution.

* OJ: Please insert date: 24 months after the date of entry into force of this Regulation.

467

(35b) In order to ensure that decisions made by competent authorities have a dissuasive

effect on the public at large, they should normally be published. The publication of

decisions is also an important tool for competent authorities to inform market

participants of what behaviour is considered to be a violation of this Regulation and

to promote wider good behaviour amongst market participants. If such publication

causes disproportionate damage to the persons involved, jeopardises the stability of

financial markets or an ongoing investigation the competent authority should

publish the sanctions and measures on an anonymous basis in a manner which is in

conformity with national law or delay the publication. Competent authorities should

have the option not to publish sanctions where anonymous or delayed publication is

considered insufficient to ensure that the stability of financial markets will not be

jeopardised. Competent authorities are also not required to publish measures which

are deemed to be of a minor nature where publication would be disproportionate.

468

(36) Whistleblowers bring new information to the attention of competent authorities which

assists them in detecting and sanctioning cases of insider dealing and market

manipulation. However, whistleblowing may be deterred for fear of retaliation, or for

lack of incentives. Reporting of violations of this Regulation is necessary to ensure

that a competent authority may detect and sanction market abuse. Measures on

whistleblowing are necessary to facilitate detection of market abuse and to ensure

the protection and the respect of the rights of the whistleblower and the accused

person. This Regulation should therefore ensure that adequate arrangements are in

place to enable whistleblowers to alert competent authorities to possible breaches of

this Regulation and to protect them from retaliation. Member States may provide for

financial incentives for those persons who offer salient information about potential

breaches of this Regulation. However, whistleblowers should only be eligible for

those incentives where they bring to light new information which they are not already

legally obliged to notify and where this information results in a sanction for a breach

of this Regulation. Member States should also ensure that whistleblowing schemes

they implement include mechanisms that provide appropriate protection of an accused

person, particularly with regard the right to the protection of his personal data and

procedures to ensure the right of the accused person of defence and to be heard before

the adoption of a decision concerning him as well as the right to seek effective remedy

before a court against a decision concerning him.

469

(37) Since Member States have adopted legislation implementing Directive 2003/6/EC, and

since delegated acts and implementing technical standards are foreseen which should

be adopted before the framework to be introduced can be usefully applied, it is

necessary to defer the application of the substantive provisions of this Regulation for a

sufficient period of time.

(38) In order to facilitate a smooth transition to the entry into application of this Regulation,

market practices existing before the entry into force of this Regulation and accepted by

competent authorities in accordance with Commission Regulation (EC) No 2273/20031

for the purpose of applying point 2(a) of Article 1 of Directive 2003/6/EC, may remain

applicable until one year after the date specified for effective application of this

Regulation provided that they are notified to ESMA.

1 Commission Regulation (EC) 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 (OJ L 336, 23.12.2003, p. 33).

470

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

in the Charter of Fundamental Rights of the European Union. Accordingly, this

Regulation should be interpreted and applied in accordance with those rights and

principles. Notably, when this Regulation refers to rules governing the freedom of

the press and the freedom of expression in other media and the rules or codes

governing the journalist professions, consideration should be given to these

freedoms as they are guaranteed in the Union and in the Member States and as

recognised under Article 11 of the Charter of Fundamental Rights and other

relevant provisions.

(39a) In order to increase transparency and to better inform the operation of the sanctions

regimes, competent authorities should provide anonymised and aggregated data to

ESMA on an annual basis. This data should comprise of the number of investigative

case that have been opened, the number that are ongoing and the number that have

been closed during the relevant period.

471

(40) Directive 95/46/EC and Regulation (EC) No 45/2001 govern the processing of

personal data carried out by ESMA within the framework of this Regulation and under

the supervision of the Member States competent authorities, in particular the public

independent authorities designated by the Member States. Any exchange or

transmission of information by competent authorities should be in accordance with the

rules on the transfer of personal data as laid down in Directive 95/46/EC. And any

exchange or transmission of information by ESMA should be in accordance with the

rules on the transfer of personal data as laid down in Regulation (EC) No 45/2001.

(41) This Regulation, as well as the delegated acts, standards and guidelines adopted in

accordance with it, are without prejudice to the application of the Union rules on

competition.

472

(42) The Commission should be empowered to adopt delegated acts in accordance with

Article 290 TFEU. In particular, delegated acts should be adopted to extend the

exclusion from the scope of the Regulation to certain public bodies and central

banks of third countries and to certain designated public bodies of third countries

that have a linking agreement with the EU in the meaning of Article 25 of Directive

2003/87/EC, in respect of ▌the indicators for manipulative behaviour listed in the

Annex to this Regulation, the thresholds for determining the application of the public

disclosure obligation to emission allowance market participants and the circumstances

under which trading during a closed period may be permitted. 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 Council.

473

(43) In order to ensure uniform conditions for the implementation of this Regulation in

respect of procedures for the reporting of violations of this Regulation implementing

powers should be conferred on the Commission to specify the procedures, including

the modalities for following up of the reports and measures for the protection of

persons working under a contract of employment and measures for the protection of

personal data. Those powers should be exercised in accordance with Regulation (EU)

No 182/2011 of the European Parliament and of the Council1.

(44) Technical standards in financial services should ensure uniform conditions across the

Union in matters covered by this Regulation. As a body with highly specialised

expertise, it would be efficient and appropriate to entrust ESMA, with the elaboration

of draft regulatory technical standards and draft implementing technical standards

which do not involve policy choices, for submission to the Commission.

1 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 the Member States of the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13).

474

(45) The Commission should adopt the draft regulatory technical standards developed by

ESMA to specify the content of notifications that will have to be made by the

operators of regulated markets, MTFs and OTFs concerning the financial

instruments that are admitted to trading traded or for which a request for admission

to trading in their venue has been made, the manner and conditions of compilation,

publication and maintenance of the list of these instruments by ESMA, to specify the

conditions that buy back programmes and stabilisation measures must meet

including conditions for trading, time and volume restrictions, disclosure and

reporting obligations and price conditions for the stabilisation, in relation to

procedures and arrangements systems for trading venues aimed at preventing and

detecting market abuse and of systems and templates to be used by persons in order to

detect and notify suspicious orders and transactions, to specify appropriate

arrangements, procedures and record-keeping requirements in the process of market

soundings and in respect of technical arrangements for categories of persons for

objective presentation of information recommending an investment strategy and for

disclosure of particular interests or indications of conflicts of interest by means of

delegated acts pursuant to Article 290 TFEU and in accordance with Articles 10 to 14

of Regulation (EU) No 1093/2010 of the European Parliament and of the Council1. It is

of particular importance that the Commission carry out appropriate consultations

during its preparatory work, including at expert level.

1 Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12).

475

(46) The Commission should also be empowered to adopt implementing technical standards

by means of implementing acts pursuant to Article 291 TFEU and in accordance with

Article 15 of Regulation (EU) No 1093/2010. ESMA should be entrusted with drafting

implementing technical standards for submission to the Commission with regard to

public disclosure of inside information, formats of insider lists and formats and

procedures for the cooperation and exchange of information of competent authorities

among themselves and with ESMA.

(47) Since the objective of the proposed action, namely to prevent market abuse in the form

of insider dealing and market manipulation, cannot be sufficiently achieved by the

Member States and can therefore, by reason of the scale and effects of the measures, 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

Regulation does not go beyond what is necessary in order to achieve that objective.

476

(48) The provisions of Directive 2003/6/EC being no longer relevant and sufficient, that

Directive should be repealed from ...*. The requirements and prohibitions of this

Regulation are strictly related to those in the MiFID, therefore they should enter in to

application on the date of entry into application of the MiFID review.

(49) For the correct application of this Regulation, it is necessary that certain provisions

of this Regulation, namely Articles 16, 17, 26, 29 and 30a, are implemented by

Member States before entry into application of this Regulation.

(49a) The European Data Protection Supervisor delivered an opinion on 10 February

20121,

HAVE ADOPTED THIS REGULATION:

* OJ: Please insert date: 24 months after the date of entry into force of this Regulation.1 OJ C 177, 20.6.2012, p. 1.

477

CHAPTER 1

GENERAL PROVISIONS

SECTION 1

SUBJECT MATTER AND SCOPE

Article 1

Subject matter

This Regulation establishes a common regulatory framework on insider dealing, misuse of

inside information and market manipulation as well as measures to prevent market abuse to

ensure the integrity of financial markets in the Union and to enhance investor protection and

confidence in those markets.

478

Article 2

Scope

1. This Regulation applies to the following:

(a) financial instruments admitted to trading on a regulated market or for which a

request for admission to trading on a regulated market has been made;

(b) financial instruments traded, admitted to trading or for which a request for

admission to trading on a MTF has been made;

(ba) financial instruments traded on an OTF;

(c) financial instruments not covered by points (a) or (b) or (ba) the price or value

of which depends on or has an effect on the price or value of a financial

instrument referred to in those points, including, but not limited to, credit

default swaps and contracts for difference.

479

This Regulation also applies to bids, relating to the auctioning of emission allowances

or other auctioned products based thereon pursuant to Regulation (EU) No 1031/2010.

Without prejudice to any specific provisions referring to bids submitted in the context

of an auction, any requirements and prohibitions in this Regulation referring to orders

to trade shall apply to such bids.

2. Market operators of regulated markets and investment firms and market operators

operating an MTF or an OTF shall without delay, notify their competent authority

of each financial instrument the first time that is admitted to trading, has been

traded or for which there has been a request for admission to trading on their

trading venue. A second notification shall be made when the instrument in question

ceases to trade or be admitted to trading. Where the date when the instrument in

question will cease to trade or be admitted to trading is known and included in the

first notification, no second notification shall be required.

480

Such notifications shall include, in particular, details of the names and numbers of

the instruments, and the date and time at which the first trade was entered into, or

the request for admission to trading or the admission to trading was made.

Market operators and investment firms shall also transmit to their competent

authority all information required under the previous paragraphs for the financial

instruments which are admitted to trading or for which a request for admission to

trading on their trading venue has been made prior to the entry into force of this

Regulation.

These notifications shall be transmitted by competent authorities without delay to

ESMA, which shall publish them immediately on its website, in the form of a list.

ESMA shall update this list immediately on receipt of a notification from a

competent authority. This list shall not limit the scope of this Regulation.

481

This list shall contain:

(a) names and numbers of the instruments which are traded, admitted to trading

or for which a request for admission to trading has been made on regulated

markets, MTFs and OTFs, on the basis of the information provided by

competent authorities in accordance with the fourth subparagraph;

(b) the date and time at which the first trade, request for admission to trading or

the admission to trading was made;

(c) details of the trading venues on which these instruments have been traded for

the first time, or where they were first admitted to trading, or where a request

for admission to trading has been made, and

(d) the date and time at which the instrument in question ceases to trade or be

admitted to trading.

482

3. Articles 8 and 10 shall also apply to ▌:

▌

(b) spot commodity contracts, which are not wholesale energy products, where the

transaction, order or behaviour has or is likely or intended to have an effect on

the price or value of a financial instrument referred to in paragraph 1 of this

Article; or

(c) types of financial instruments, including derivative contracts or derivative

instruments for the transfer of credit risk where the transaction, order, bid or

behaviour has or is likely ▌to have an effect on the price or value of a spot commodity contract where the price or value depends on the price or value of those financial instruments.

▌

483

3a. Articles 8 and 10 shall also apply to behaviour in relation to benchmarks.

4. This Regulation applies to any transaction, order or behaviour concerning the

financial instruments as defined in paragraphs 1 and 3 of this Article, irrespective of

whether or not such transaction, order or behaviour takes place on a trading venue.

5. The prohibitions and requirements in this Regulation shall apply to actions and

omissions, carried out in the Union or outside the Union, concerning instruments

referred to in paragraphs 1 to 3.

484

6. Power is conferred on the Commission to adopt the regulatory technical standards

referred to in the first subparagraph in accordance with Articles 10 to 14 of

Regulation (EU) No 1095/2010 of the European Parliament and of the Council1

regarding:

(a) the content of the notifications under paragraph 2;

(b) the manner and conditions of the compilation, publication and maintenance of

the list.

7. Power is conferred on the Commission to adopt the implementing technical standards

referred to in the first subparagraph in accordance with Article 15 of Regulation

(EU) No 1095/2010 defining the timing and the format and template of the

notifications under paragraph 2 [pertaining to the list of the financial instruments].

1 Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).

485

SECTION 2

EXCLUSION FROM THE SCOPE

Article 3

Exemption for buy-back programmes and stabilisation

1. The prohibitions in Articles 9 and 10 of this Regulation do not apply to trading in own

shares in buy-back programmes when the full details of the programme are disclosed

prior to the start of trading, trades are reported as being part of the buy-back

programme to the competent authority and subsequently disclosed to the public, and

adequate limits with regards to price and volume are respected. Such trading must be

carried out in accordance with the objectives specified in paragraph 1a and the

regulatory technical standards referred to in paragraph 2c of this Article.

486

1a. In order to benefit from the exemption provided for in this Article, a buy-back

programme shall comply with conditions for buy-back programmes laid down in the

regulatory technical standards referred to in paragraph 3b. In addition, the sole

purpose of that buy-back programme must be to reduce the capital of an issuer (in

value or in number of shares) or to meet obligations arising from any of the

following:

(a) debt financial instruments exchangeable into equity instruments;

(b) share option programmes or other allocations of shares, to employees or to

members of the administrative management or supervisory bodies of the issuer

or of an associate company.

487

1b. The issuer must have in place the mechanisms ensuring that it fulfils trade reporting

obligations to the competent authority of the regulated market on which the shares

have been admitted to trading. These mechanisms must record each transaction

related to "buy-back" programmes, including the information specified in Article

20(1) of Council Directive 93/22/EEC1.

2. The prohibitions in Articles 9 and 10 of this Regulation do not apply to trading in

securities or associated instruments for the stabilisation of securities when

stabilisation is carried out for a limited time period, when relevant information about

the stabilisation is disclosed, notified to the competent authority, and adequate limits

with regards to price are respected and provided that such trading it complies with the

conditions for stabilisation laid down in the regulatory technical standards referred

to in paragraph 2c of this Article.

▌

1 Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field (OJ L 141, 11.6.1993, p. 27).

488

2a. For the purposes of this Article, “securities” shall mean:

(a) shares and other securities equivalent to shares;

(b) bonds and other forms of securitised debt, or

(c) securitised debt convertible or exchangeable into shares or into other securities

equivalent to shares.

2b. Without prejudice to Article 17(1) of this Regulation, the details of all stabilisation

transactions must be notified by issuers, offerors, or entities undertaking the

stabilisation acting, or not, on behalf of such persons, to the competent authority of

the relevant market no later than the end of the seventh daily market session

following the date of execution of such transactions.

489

2c. ESMA shall develop draft regulatory technical standards to specify the conditions that

buy-back programmes and stabilisation measures referred to in paragraphs 1 and 3

must meet, including conditions for trading, restrictions regarding time and volume,

disclosure and reporting obligations, and price conditions.

ESMA shall submit those draft regulatory technical standards to the Commission

by ...*.

Power is conferred to the Commission to adopt the regulatory technical standards




490

Article 4

Exclusion for monetary and public debt management activities and climate policy activities

1. This Regulation does not apply to transactions, orders or behaviours carried out in

pursuit of monetary, exchange rate or public debt management policy by a Member

State, by the members of the European System of Central Banks (ESCB), ▌ by any

other ministry, agency or special purpose vehicle of one or several Member States, or

by any person acting on their behalf and, in the case of a Member State that is a federal

state, to such transactions, orders or behaviours carried out by a member making up the

federation. It shall also not apply to ▌transactions, orders or behaviours carried out by

the European Commission or any other officially designated body or by any person

acting on its behalf, in pursuit of public debt management policy.

491

1a. This Regulation shall also not apply to transactions, orders or behaviours carried out

by the Union, a special purpose vehicle for one or several Member States, the

European Financial Stability Facility, European Stability Mechanism, the European

Investment Bank or an international financial institution established by two or more

Member States, which has the purpose to mobilise funding and provide financial

assistance to the benefit of its members that are experiencing or threatened by severe

financing problems ▌.

2. This Regulation does not apply to the activity of a Member State, the European

Commission or any other officially designated body, or of any person acting on their

behalf, which concerns emission allowances and which is undertaken in the pursuit of

the Union's climate policy in accordance with Directive 2003/87/EC.

492

2a. This Regulation does not apply to the activity of a Member State, the European

Commission or any other officially designated body, or of any person acting on their

behalf, which is undertaken in the pursuit of the Union's Common Agricultural

Policy or in the pursuit of the Union’s Common Fisheries Policy in accordance with

acts adopted or international agreements concluded under the Treaty.

2b. The Commission shall be empowered to adopt delegated acts in accordance with

Article 32 to extend the exclusion set out in paragraph 1 to certain public bodies and

central banks of third countries.

To that end, the Commission shall prepare and present to the European Parliament

and the Council a report by ...* assessing the international treatment of public bodies

charged with or intervening in the management of the public debt and central banks

in third countries.


493

The report shall include a comparative analysis of the treatment of those bodies and

of central banks within the legal framework of third countries, and the risk

management standards applicable to the transactions entered into by those bodies

and the central banks in those jurisdictions. If the report concludes, in particular in

regard to the comparative analysis, that the exemption of the monetary

responsibilities of those third-country central banks from the obligations and

prohibitions of this Regulation is necessary the Commission shall include them in

the list set out in subparagraphs 1 and 2.

2c. The Commission shall also be empowered to adopt delegated acts in accordance with

Article 32 to extend the exclusion set out in paragraph 2 to certain designated public

bodies of third countries that have a linking agreement with the EU in the meaning

of Article 25 of Directive 2003/87/EC.

494

2d. Paragraphs 1 to 2c shall not apply to persons working under a contract of

employment or otherwise for the bodies referred to in paragraphs 1 to 2c when they

engage in transactions, orders or behaviours, directly or indirectly, on their own

account.

SECTION 3

DEFINITIONS

Article 5

Definitions

For the purposes of this Regulation, the following definitions apply:

(1) "financial instrument" means any instrument within the meaning of Article 4(2)(14) of

Directive …/…/EU [new MiFID].

(1a) "investment firm" means any person within the meaning of Article 2(1)(1) of

Regulation (EU) No …/… [MiFIR].

495

(1b) "credit institution or other financial institutions" means a credit institution or other

financial institutions within the meaning [of Article 4 Directive 2006/48/EC of the

European Parliament and of the Council1].

(2) "regulated market" means a multilateral system in the Union within the meaning of

Article 2(1)(5) of Regulation (EU) No …/… [MiFIR].

(3) "multilateral Trading Facility (MTF)" means a multilateral system in the Union within

the meaning of Article 2(1)(6) of Regulation (EU) No …/… [MiFIR].

(4) "organised Trading Facility (OTF)" means a system or facility in the Union referred to

in Article 2(1)(7) of Regulation (EU) No …/… [MiFIR].

(4a) "accepted market practices" means specific market practices that are accepted by

the competent authority of a given Member State in accordance with Article 8a of

this Regulation.

1 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 institutions (OJ L 177, 30.6.2006, p. 1).

496

(4b) "stabilisation" means any purchase or offer to purchase relevant securities, or any

transaction in associated instruments equivalent thereto, by investment firms or

credit institutions, which is undertaken in the context of a significant distribution of

such relevant securities exclusively for supporting the market price of these relevant

securities for a predetermined period of time, due to a selling pressure in such

securities.

(4c) "associated instruments" means the following financial instruments (including

those which are not admitted to trading on a regulated market, or for which a

request for admission to trading on such a market has not been made, provided that

the relevant competent authorities have agreed to standards of transparency for

transactions in such financial instruments):

(a) contracts or rights to subscribe for, acquire or dispose of relevant securities;

(b) financial derivatives on relevant securities;

497

(c) where the relevant securities are convertible or exchangeable debt instruments,

the securities into which such convertible or exchangeable debt instruments

may be converted or exchanged;

(d) instruments which are issued or guaranteed by the issuer or guarantor of the

relevant securities and whose market price is likely to materially influence the

price of the relevant securities, or vice versa;

(e) where the relevant securities are securities equivalent to shares, the shares

represented by those securities (and any other securities equivalent to those

shares).

498

(5) "trading venue" means a system or facility in the Union referred to in Article 2(1)(25) of

Regulation (EU) No …/… [MiFIR].

(5a) "Significant distribution" means an initial or secondary offer of securities that is

distinct from ordinary trading both in terms of the amount in value of the securities

to be offered and the selling method to be employed.

(6) "SME growth market" means a MTF in the Union within the meaning of Article 4(2)

(11) of Directive …/…/EU [new MiFID].

(7) "competent authority" means the competent authority designated in accordance with

Article 16.

(8) "person" means any natural or legal person.

499

(9) "commodity" means a commodity within the meaning of Article 2(1) of Commission

Regulation (EC) No 1287/20061.

(10) "spot commodity contract" means any contract for the supply of a commodity traded on

a spot market which is promptly delivered when the transaction is settled, as well as

other contracts for the supply of a commodity (such as physically settled forward

contracts) that are not financial instruments.

(11) "spot market" means any commodity market in which commodities are sold for cash and

promptly delivered when the transaction is settled, as well as other non financial

markets, such as forward markets for commodities.

1 Commission Regulation (EC) No 1287/2006 of 10 August 2006 implementing Directive 2004/39/EC of the European Parliament and of the Council as regards record-keeping obligations for investment firms, transaction reporting, market transparency, admission of financial instruments to trading, and defined terms for the purposes of that Directive (OJ L 241, 2.9.2006, p. 1).

500

(12) "buy-back programme" means trading in own shares in accordance with Articles 21 to

27 of Directive 2012/30/EU of the European Parliament and of the Council1.

(13) "algorithmic trading" means trading of financial instruments using computer algorithms

within the meaning of Article 4(2)(30) of Directive …/…/EU [new MiFID].

(14) "emission allowance" means a financial instrument as defined in point (11) of Section C

of Annex I of Directive …/…/EU [new MiFID].

(15) "emission allowance market participant" means any person who enters into

transactions, including the placing of orders to trade, in emission allowances.

1 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 equivalent (OJ L 315, 14.11.2012, p. 74).

501

(16) "issuer of a financial instrument" means a legal entity governed by private or public

law, which issues or proposes to issue financial instruments, the issuer being, in case

of depository receipts representing financial instruments, the issuer of the financial

instrument represented.

▌

(18) "wholesale energy product" has the same meaning as in Article 2(4) of Regulation

(EU) No 1227/2011 .

(19) "national regulatory authority" has the same meaning as in Article 2(10) of Regulation

(EU) No 1227/2011.

502

(19a) "commodity derivatives" means commodity derivatives within the meaning of Article

2(1)(15) of Regulation (EU) No …/… [MiFIR].

(19b) "Person discharging managerial responsibilities within an issuer" shall mean a

person who is:

(a) a member of the administrative management or supervisory bodies of the

issuer,

(b) a senior executive, who is not a member of the bodies as referred to in point

(a), having regular access to inside information relating, directly or indirectly,

to the issuer, and the power to make managerial decisions affecting the future

developments and business prospects of this issuer.

503

(19c) "Persons closely associated with another" shall mean:

(a) the spouse of the person, or any partner of that person considered by national

law as equivalent to the spouse;

(b) according to national law, dependent children;

(c) other relatives of the person, who have shared the same household as that

person for at least one year on the date of the transaction concerned;

504

(d) Any legal person, trust or partnership, whose managerial responsibilities are

discharged by a person referred to in point (21) of this Article or in letters (a),

(b) and (c) of this point, or which is directly or indirectly controlled by such a

person, or that is set up for the benefit of such a person, or whose economic

interests are substantially equivalent to those of such person.

(19d) "data traffic records" means the records of "traffic data" as defined in Article 2

point (b) of Directive 2002/58/EC of the European Parliament and the Council1.

1 Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) (OJ L 201, 31.7.2002, p. 37).

505

(19e) "persons professionally arranging or executing transactions in financial

instruments" means a person, professionally engaged in the reception and

transmission of orders or in the execution of transactions in financial instruments.

(20) "benchmark" means any rate, index or ▌figure, made available to the public or

published that is periodically or regularly determined by the application of a formula

to, or on the basis of: the value of one or more underlying assets or prices, including

estimated prices, actual or estimated interest rates or other values, or surveys, and by

reference to which the amount payable under a financial instrument or the value of a

financial instrument is determined.

(20a) "market maker" means a person within the meaning of Article 4(2)(6) of Directive

…/…/EU [new MiFID].

506

SECTION 4

INSIDE INFORMATION, INSIDER DEALING AND MARKET MANIPULATION

Article 6

Inside information

1. For the purposes of this Regulation, inside information shall comprise the following

types of information:

(a) information of a precise nature, which has not been made public, relating,

directly or indirectly, to one or more issuers of financial instruments or to one or

more financial instruments, and which if it were made public, would be likely to

have a significant effect on the prices of those financial instruments or on the

price of related derivative financial instruments;

507

(b) in relation to derivatives on commodities, information of a precise nature, which

has not been made public, relating, directly or indirectly ▌to one or more such

derivatives or relating directly to the related spot commodity contract, and

which, if it were made public, would be likely to have a significant effect on the

prices of such derivatives or related spot commodity contracts and where this is

information which is reasonably expected to be disclosed or required to be

disclosed in accordance with legal or regulatory provisions at the Union or

national level, market rules, contracts, practices or customs, on the relevant

commodity derivatives or spot markets.

(c) in relation to emission allowances or auctioned products based thereon,

information of a precise nature, which has not been made public, relating,

directly or indirectly, to one or more such instruments, and which, if it were

made public, would be likely to have a significant effect on the prices of such

instruments or on the prices of related derivative financial instruments.

508

(d) for persons charged with the execution of orders concerning financial

instruments, it also means information conveyed by a client and related to the

client's pending orders in financial instruments, which is of a precise nature,

which relates, directly or indirectly, to one or more issuers of financial

instruments or to one or more financial instruments, and which, if it were made

public, would be likely to have a significant effect on the prices of those

financial instruments, the price of related spot commodity contracts, or on the

price of related derivative financial instruments.

▌

2. For the purposes of applying paragraph 1, information shall be deemed to be of a

precise nature if it indicates a set of circumstances which exists or may reasonably be

expected to come into existence or an event which has occurred or may reasonably be

expected to do so and if it is specific enough to enable a conclusion to be drawn as to

the possible effect of that set of circumstances or event on the prices of the financial

instruments, the related spot commodity contracts, or the auctioned products based on

the emission allowances. In this

509

respect in the case of a protracted process intended to bring about, or that results in,

a particular circumstance or a particular event, not only may that future

circumstance or future event be regarded as precise information, but also the

intermediate steps of that process which are connected with bringing about or

resulting in that future circumstance or event.

2a. An intermediate step in a protracted process can be inside information if, by itself, it

satisfies the criteria of inside information as referred to in this article.

3. For the purposes of applying paragraph 1, information which, if it were made public,

would be likely to have a significant effect on the prices of ▌financial instruments, ▌

related spot commodity contracts, or ▌auctioned products based on ▌emission

allowances shall mean information a reasonable investor would be likely to use as part

of the basis of his investment decisions.

510

In the case of emission allowance market participants with aggregate emissions or

rated thermal input at or below the threshold set in accordance with the third

subparagraph of Article 12(2), information about their physical operations shall be

deemed not to have a significant effect on the price of emission allowances,

auctioned products based thereon or on the prices of related derivative financial

instruments.

3a. ESMA shall issue guidelines to establish a non exhaustive indicative list of

information which reasonably expected or required to be disclosed in accordance

with legal or regulatory provisions at the Union or national level, market rules,

contracts, practices or customs, on the relevant commodity derivatives or spot

markets as referred to in paragraph 1, point (b), of this Article. ESMA shall dully

take into account specificities of these markets.

511

Article 7

Insider dealing ▌

1. For the purposes of this Regulation, insider dealings arises where a person possesses

inside information and uses that information by acquiring or disposing of, for his own

account or for the account of a third party, either directly or indirectly, financial

instruments to which that information relates. The use of inside information by

cancelling or amending an order concerning a financial instrument to which the

information relates where the order was placed before the person concerned possessed

the inside information, shall also be considered as insider dealing. In relation to

auctions of emission allowances or other auctioned products based thereon that are

held pursuant to Regulation (EU) No 1031/2010, the use of inside information shall

also comprise submitting, modifiying or withdrawing a bid by a person for its own

account or for the account of a third party.

▌

512

3. For the purposes of this Regulation, recommending that another person engages in

insider dealing, or inducing another person to engage in insider dealing, arises

where the person possesses inside information and:

(a) recommends, on the basis of that information, that another person ▌acquire or

dispose of financial instruments to which that information relates, or induces

that person to make such an acquisition or disposal, or

(b) recommends, on the basis of that information, that another person cancel or

amend an order concerning a financial instrument to which that information

relates, or induces that person to make such a cancellation or amendment.

3a. The use of the recommendations or inducements referred to in paragraph 3 amounts

to insider dealing when the person using the recommendation or inducement knows

or ought to know, that it is based upon insider information.

▌

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5. This Article applies to any legal or natural person who possesses inside information

as a result of any of the following situations:

(a) being a member of the administrative, management or supervisory bodies of the

issuer;

(b) having a holding in the capital of the issuer;

(c) his having access to the information through the exercise of an employment,

profession or duties ▌;

(d) being involved in criminal activities.

This Article also applies to any legal or natural person who has obtained inside

information ▌under circumstances other than those referred to in the first

subparagraph where that person knows or ought to know that it is inside information.

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6. In conformity with national law, where the person referred to in this Article is a legal

person, the provisions ▌shall also apply to the natural persons who participate in ▌the

decision to carry out, ▌the acquisition or disposal or cancellation or amendment of an

order for the account of the legal person concerned.

▌

Article 7a

Legitimate behaviour

1. For the purposes of Articles 7 and 9, a legal person in possession of inside

information shall not, in itself, be deemed to have used that information or

consequently to have engaged in insider dealing on the basis of an acquisition or

disposal, where the legal person:

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(a) had established, implemented and maintained adequate and effective internal

arrangements and procedures that effectively ensure that neither the natural

person who made the decision on its behalf to acquire or dispose of financial

instruments to which the information relates, nor any other natural person

who may have had any influence on that decision was in possession of the

inside information; and

(b) did not encourage, recommend to, induce or otherwise influence the natural

person who on behalf of the legal person acquired or disposed of financial

instruments to which the information relates.

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2. For the purposes of Articles 7 and 9, a person in possession of inside information

shall not, in itself, be deemed to have used that information or consequently to have

engaged in insider dealing on the basis of an acquisition or disposal where that

person:

(a) is a market maker for the financial instrument to which that information

relates or a person authorised to act as a counterparty for the financial

instrument to which that information relates and the acquisition or disposal of

financial instruments to which that information relates is made legitimately in

the normal course of the exercise of their function as a market maker or a

counter party for that financial instrument; or

(b) is authorised to execute orders on behalf of third parties, and the acquisition

or disposal of financial instruments to which the order relates is made to carry

out such an order legitimately in the normal course of the exercise of his/her

employment, profession or duties.

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3. For the purposes of Articles 7 and 9, a person in possession of inside information

shall not, in itself, be deemed to have used that information or consequently to have

engaged in insider dealing on the basis of an acquisition or disposal where that

person conducts a transaction to acquire or dispose of financial instruments where

that transaction is carried out in the discharge of an obligation that has become due

in good faith and not to circumvent the prohibition of insider dealing and:

(a) that obligation results from an order placed or an agreement concluded before

the person concerned possessed inside information; or

(b) is to satisfy a legal or regulatory obligation that arose, before the person

concerned possessed inside information.

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4. Insider dealing shall be deemed not to arise in itself where a person possessing inside

information obtained in the conduct of a public takeover or merger with a company,

uses that information solely for the purpose of proceeding with that merger or public

takeover, provided that at the point of approval of the merger or acceptance of the

offer by the shareholders of that company, any inside information has been made

public or has otherwise ceased to be inside information.

This paragraph does not apply to stakebuilding using inside information.

Stakebuilding using inside information shall not be deemed to constitute a legitimate

behaviour in accordance with this paragraph. “Stakebuilding” means an acquisition

of securities in a company which does not trigger a legal or regulatory obligation to

make an announcement of a takeover bid in relation to that company.

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5. The mere fact that a person uses their own knowledge that they have decided to

acquire or dispose of financial instruments in the acquisition or disposal of those

financial instruments shall not in itself constitute the use of inside information.

6. Notwithstanding paragraphs 1, 2, 3, 4 and 5, a breach of the prohibition of insider

dealing set out in Article 9 can still be deemed to have occurred if the competent

authority establishes that there was an illegitimate reason behind the orders to trade,

transactions or behaviours concerned.

Article 7b

Improper disclosure of inside information

1. For the purposes of this Regulation improper disclosure of inside information arises

where a person that possesses inside information discloses that information to any

other person, except where the disclosure is made in the normal course of the

exercise of an employment, profession or duties.

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This paragraph applies to any natural or legal person in the situations or

circumstances referred to in Article 7(5).

2. For the purposes of this Regulation the onward disclosure of recommendations or

inducements referred to in Article 7(3) amounts to improper disclosure of inside

information under this Article when the person disclosing the recommendation or

inducement knows or ought to know that it was based on inside information.

Article 7c

Market soundings

1. A market sounding comprises the communication of information, prior to the

announcement of a transaction, to one or more potential investors:

(a) by an issuer of a financial instrument;

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(b) by a secondary offeror of a financial instrument, in such quantity or value that

the transaction is distinct from ordinary trading and involves a selling method

based on the prior assessment of potential interest from potential investors;

(c) by an emission allowance market participant; or

(d) by a third party acting on behalf of or on the account of any of (a) to (c) above,

in order to gauge the interest of potential investors in a possible transaction

and the conditions relating to it such as its potential size or pricing.

2. Without prejudice to Article 17(5), disclosure of inside information by a person

intending to make a takeover bid for the securities of a company or a merger with a

company to parties entitled to the securities, shall also constitute a market sounding,

provided that:

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(a) the information is necessary to enable the parties entitled to the securities to

form an opinion on their willingness to offer their securities, and

(b) the willingness of parties entitled to the securities to offer their securities is

reasonably required for the decision to make the takeover bid or merger.

3. In this Regulation, the expression “a disclosing market participant” shall refer to a

natural or legal person falling into any of the categories set out in points (a) to (d) of

paragraph 1 and paragraph 2, who discloses information in the course of a market

sounding.

4. A disclosing market participant shall, prior to conducting a market sounding,

specifically consider whether the market sounding will involve the disclosure of

inside information. The disclosing market participant shall make a written record of

its conclusion and the reasons for that conclusion. It shall provide the records to the

competent authority upon request. This obligation shall apply separately to each

disclosure of information throughout the course of the market sounding and the

records referred to in this paragraph shall be updated accordingly.

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5. For the purposes of Article 7b(1), a disclosure of inside information made in the

course of a market sounding shall be deemed to have been made in the normal

course of the exercise of a person’s employment, profession or duty where:

(a) the disclosing market participant has complied with the obligations set out in

paragraph 4 above; and

(b) the disclosing market participant complies with the conditions set out in

paragraph 6 of this Article.

6. In order for paragraph 5 to apply, the disclosing market participant must:

(a) before making the disclosure:

(i) obtain the consent of the person receiving the market sounding to

receive inside information;

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(ii) inform the person receiving the market sounding that he will be

prohibited from using that information, or attempting to use that

information, by acquiring or disposing of, for his own account or for

the account of a third party, financial instruments relating to that

information;

(iii) inform the person receiving the market sounding that he will be

prohibited from using that information, or attempting to use that

information, by cancelling or amending an order which has already

been placed concerning a financial instrument to which the

information relates;

(iv) inform the person receiving the market sounding that by agreeing to

receive the information he is also agreeing to, and must, keep the

information confidential;

and

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(b) make and maintain a record of all information given to the person receiving

the market sounding, including the information given in accordance with

points (i) to (iv) of point (a), and the identity of the potential investors to whom

the information has been disclosed, including but not limited to the legal

persons and the natural persons acting on behalf of the potential investor, and

the date and time of each disclosure. It shall provide the record to the

competent authority as soon as possible upon its request.

7. Where information has been disclosed to a person in the course of a market sounding

and the information disclosed ceases to be inside information according to the

assessment of the disclosing market participant, the latter shall inform that person

that the information he has received is no longer inside information, as soon as

possible. The disclosing market participant shall maintain a record of the

information given in accordance with this paragraph and shall provide it to the

competent authority as soon as possible upon its request.

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8. Notwithstanding the provisions of this Article, the person receiving the market

sounding shall determine for itself whether it is in possession of inside information

or when it ceases to be in possession of inside information.

9. The records referred to in this Article shall be kept by the disclosing market

participant for a period of at least 5 years after being created.

10. ESMA shall develop draft regulatory technical standards to determine appropriate

arrangements, procedures and record keeping requirements for persons to comply

with the requirements established by paragraphs 5 to 9 of this Article.

ESMA shall submit the draft regulatory technical standards to the Commission

by ...*.

Power is conferred to the Commission to adopt the regulatory technical standards in

accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.


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11. ESMA shall develop draft implementing technical standards to specify the systems

and notification templates to be used by persons to comply with the requirements

established by paragraphs 5 to 9 of this Article, particularly the precise format of the

records referred to in paragraphs 5 to 9 and the technical means for appropriate

communication of the information referred to in paragraph 7 to the person receiving

the market sounding.

ESMA shall submit the draft implementing technical standards to the Commission

by ...*.

Power is conferred to the Commission to adopt the implementing technical

standards in accordance with Article 15 of Regulation (EU) No 1095/2010.

12. ESMA shall issue guidelines addressed to persons receiving the market sounding in

accordance with Article 16 of Regulation (EU) No 1095/2010 regarding:


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(a) the factors a person receiving the market sounding should take into account

when information is disclosed to him as part of a market sounding in order for

him to consider whether the information may amount to inside information;

(b) the steps that a person receiving the market sounding ought to take if inside

information has been disclosed to him in order to comply with the provisions of

Articles 7 and 7b of this Regulation; and

(c) the records a person receiving the market sounding should maintain in order

to demonstrate that he has complied with the provision of Articles 7 and 7b of

this Regulation.

Article 8

Market manipulation

1. For the purposes of this Regulation, market manipulation shall comprise the following

activities:

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(a) entering into a transaction, placing an order to trade or any other behaviour

which ▌:

– ▌ gives, or is likely to give, false or misleading signals as to the supply of,

demand for, or price of, a financial instrument or a related spot commodity

contract; or

– ▌secures, or is likely to secure, the price of one or several financial

instruments or a related spot commodity contracts at an abnormal or

artificial level;

unless the person who entered into the transactions or issued the orders to trade

establishes that his reasons for so doing are legitimate, and that these transactions

or orders to trade are in conformity with accepted market practices; or

530

(b) entering into a transaction, placing an order to trade or any other activity or

behaviour which affects or is likely to affect the price of one or several financial

instruments or a related spot commodity contract, which employs a fictitious

device or any other form of deception or contrivance; ▌

(c) disseminating information through the media, including the internet, or by any

other means, which gives, or is likely to give, false or misleading signals as to

the supply of, demand for, or price of, a financial instrument or a related spot

commodity contract or secures, or is likely to secure, the price of one or several

financial instruments or a related spot commodity contracts at an abnormal or

artificial level, including the dissemination of rumours where the person who

made the dissemination knew, or ought to have known, that the information was

false or misleading ▌;

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(d) transmitting false or misleading information or providing false or misleading

inputs where the person who made the transmission or provided the input knew

or ought to have known that it was false or misleading, or any other behaviour

which manipulates the calculation of a benchmark.

▌

3. The following behaviour shall, inter alia, be considered as market manipulation ▌:

(a) conduct by a person, or persons acting in collaboration, to secure a dominant

position over the supply of or demand for a financial instrument or related spot

commodity contracts which has, or is likely to have, the effect of fixing, directly

or indirectly, purchase or sale prices or creates, or is likely to create, other unfair

trading conditions,

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(b) the buying or selling of financial instruments, at the opening or close of the

market, which has or is likely to have the effect ▌of misleading investors acting

on the basis of the prices displayed, including the opening or closing prices,

(c) the placing of orders to a trading venue, including any cancellation or

modification thereof, by any available means of ▌trading, including electronic

means, such as algorithmic and high frequency trading strategies, and which

has one of the effects referred to in paragraph 1, point (a) or point (b), by:

– disrupting or delaying the functioning of the trading system of the trading

venue or which is likely to do so;

– making it more difficult for other persons to identify genuine orders on the

trading system of the trading venue or which is likely to do so, including

by entering orders which result in the overloading or destabilisation of

the order book; or

533

– creating or being likely to create a false or misleading signal about the

supply of or demand for, or price of a financial instrument, in particular

by entering orders to initiate or exacerbate a trend.

(d) taking advantage of occasional or regular access to the traditional or electronic

media by voicing an opinion about a financial instrument or related spot

commodity contract (or indirectly about its issuer) while having previously taken

positions on that financial instrument or related spot commodity contract and

profiting subsequently from the impact of the opinions voiced on the price of that

instrument or related spot commodity contract, without having simultaneously

disclosed that conflict of interest to the public in a proper and effective way.

534

(e) the buying or selling on the secondary market of emission allowances or related

derivatives prior to the auction held pursuant to Regulation (EU) No 1031/2010

with the effect of fixing the auction clearing price for the auctioned products at

an abnormal or artificial level or misleading bidders bidding in the auctions.

4. For the purposes of applying paragraph 1, point (a) and point (b), and without

prejudice to the forms of behaviour set out in paragraph 3, the Annex defines non-

exhaustive indicators related to the employment of fictitious devices or any other form

of deception or contrivance, and non-exhaustive indicators related to false or

misleading signals and to price securing.

4a. In conformity with national law, where the person referred to in this Article is a legal

person, the provisions shall also apply to the natural persons who participate in the

decision to carry out, activities for the account of the legal person concerned.

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5. The Commission may adopt, by means of delegated acts in accordance with Article 32,

measures specifying the indicators laid down in the Annex, in order to clarify their

elements and to take into account technical developments on financial markets.

Article 8a

Accepted market practices

1. The prohibition in Article 10 shall not apply to the activities indicated Article 8(1),

point (a), provided that the person entering into a transaction, placing an order to

trade or any other behaviour establishes that such transaction, order or behaviour

have been carried out for legitimate reasons, and are in conformity with accepted

market practices, established in accordance with this Article.

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2. Competent authorities shall be able to establish an accepted market practice taking

into account the following criteria:

(a) the specific market practice has a substantial level of transparency to the

market;

(b) the specific market practice ensures a high degree of safeguards to the

operation of market forces and the proper interplay of the forces of supply and

demand;

(c) the specific market practice has a positive impact on market liquidity and

efficiency;

(d) the specific market practice takes into account the trading mechanism of the

relevant market and enable market participants to react properly and in a

timely manner to the new market situation created by that practice;

537

(e) the specific market practice does not create risks for the integrity of, directly or

indirectly, related markets, whether regulated or not, in the relevant financial

instrument within the Union;

(f) the outcome of any investigation of the relevant market practice by any

competent authority or other authority, in particular whether the relevant

market practice breached rules or regulations designed to prevent market

abuse, or codes of conduct, be it on the market in question or on directly or

indirectly related markets within the Union;

(g) the structural characteristics of the relevant market including whether it is

regulated or not, the types of financial instruments traded and the type of

market participants, including the extent of retail investors participation in the

relevant market.

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A practice that is accepted in a particular market shall not be considered applicable

to other markets unless the competent authorities of such other markets have

officially accepted that practice.

3. Before establishing an accepted market practice in accordance with paragraph 1, the

competent authorities shall notify ESMA and the other competent authorities of the

intention to establish an accepted market practice and provide details of the

assessment made according to the criteria laid down in paragraph 2. Such

notification shall be made not less than 3 months before the accepted market

practice is intended to take effect.

539

4. Within 2 months following receipt of the notification, ESMA shall issue an opinion

to the competent authority in question assessing the compatibility of each accepted

market practice with the requirements established in paragraph 1 and specified in

the regulatory technical standards adopted pursuant to paragraph 7. Such opinion

shall also consider whether the establishment of the accepted market practice would

not threaten the market confidence in the Union's financial market. The opinion

shall be published on ESMA's website.

5. Where a competent authority establishes an accepted market practice contrary to an

ESMA opinion issued in accordance with paragraph 4, it shall publish on its website

within 24 hours of establishing the accepted market practice a notice setting out in

full its reasons for doing so, including why the accepted market practice does not

threaten market confidence.

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6. Where a competent authority considers that another competent authority has not met

the requirements of paragraph 2 in establishing an accepted market practice, ESMA

shall assist those authorities in reaching an agreement in accordance with its powers

under Article 19 of Regulation (EU) No 1095/2010.

If the competent authorities concerned fail to reach an agreement, ESMA may take

a decision in accordance with Article 19(3) of Regulation (EU) No 1095/2010.

7. In order to ensure consistent application of this Article, ESMA shall develop draft

regulatory technical standards specifying the criteria, the procedure and the

requirements for establishing an accepted market price under paragraphs 2, 3 and 4

as well as for maintaining or not or modifying the conditions for it acceptance.

ESMA shall submit those draft regulatory technical standards to the Commission

by ...*.


541

Power is delegated to the Commission to adopt the regulatory technical standards



8. Competent authorities shall review regularly and at least every two years, the accepted

market practices they have established, in particular taking into account significant

changes to the relevant market environment, such as changes to trading rules or to

market infrastructures, with a view to decide whether or not to maintain it or to

modify the conditions for its acceptance.

9. ESMA shall publish on its website a list of accepted market practices and in which

Member States they are applicable.

10. ESMA shall monitor the application of the accepted market practices and shall submit

an annual report to the Commission on how they are applied in the markets

concerned.

542

11. Competent authority shall submit accepted market practices established by them

before the entry into force of this Regulation to ESMA within three months of the

adoption by the Commission of the regulatory technical standards under paragraph

7.

Such accepted market practices shall continue to apply in the Member State

concerned until the competent authority has made a decision regarding the

continuation of this practice following ESMA’s opinion according to paragraph 4.

CHAPTER 2

INSIDER DEALING AND MARKET MANIPULATION

Article 9

Prohibition of insider dealing and of improperly disclosing inside information

A person shall not:

(a) engage or attempt to engage in insider dealing;

543

(b) recommend that another person engages in insider dealing or induce another person to

engage in insider dealing; or

(c) improperly disclose inside information.

Article 10

Prohibition of market manipulation

A person shall not engage in market manipulation or attempt to engage in market manipulation.

Article 11

Prevention and detection of market abuse

1. Market operators and investment firms that operate a trading venue shall establish

and maintain effective arrangements, systems and procedures aimed at preventing and

detecting market abuse and attempts to engage in market abuse in accordance with

[Articles 31 and 56] of Directive …/…/EU [new MiFID] ▌.

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Any person referred to in the first subparagraph shall report orders and transactions

that might constitute insider dealing, market manipulation or an attempt to engage

in insider dealing or market manipulation to the competent authority without delay.

2. Any person professionally arranging or executing transactions in financial instruments

shall establish and maintain effective arrangements, systems and procedures to

detect and report suspicious orders and transactions ▌. Whenever such a person has a

reasonable suspicion that an order or transaction in any financial instrument, whether

placed or executed on or outside a trading venue, might constitute insider dealing,

market manipulation or an attempt to engage in insider dealing or market

manipulation ▌, the person shall notify the competent authority without delay.

545

2a. Without prejudice to Article 16 of this Regulation, persons professionally arranging

transactions shall be subject to the rules of notification of the Member State in

which they are registered or have their head office, or in the case of a branch, the

Member State where the branch is situated. The notification shall be addressed to

the competent authority of this Member State.

Member States shall ensure that competent authorities receiving the notification of

suspicious transactions transmit such information immediately to the competent

authorities of the regulated markets concerned.

3. ESMA shall develop draft regulatory technical standards to determine:

(a) appropriate arrangements, systems and procedures for persons to comply with

the requirements established in paragraphs 1 and 2;

546

(b) the notification templates to be used by persons to comply with the requirements

established in paragraphs 1 and 2.

ESMA shall submit the draft regulatory technical standards referred to in the first

subparagraph to the Commission by ...*.


referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation

(EU) No 1095/2010.


547

CHAPTER 3

DISCLOSURE REQUIREMENTS

Article 12

Public disclosure of inside information

1. An issuer of a financial instrument shall inform the public as soon as possible of inside

information, which directly concerns said issuer.

The issuer shall ensure that the inside information is made public in a manner

which enables fast access and complete, correct and timely assessment of the

information by the public and, where applicable, in the Officially Appointed

Mechanism referred to in Directive …/…/EU [Transparency Directive]. The issuer

must not combine the disclosure of inside information to the public with the

marketing of its activities. The issuer shall post and maintain on its official website

for a period of at least five years, all inside information it is required to disclose

publicly.

548

This article shall apply to issuers who have requested or approved admission of their

financial instruments to trading on a regulated market in a Member State or, in the

case of instruments only being traded on a MTF or an OTF, issuers who have

approved trading of their financial instruments on a MTF or an OTF or have

requested admission to trading of their financial instruments on a MTF in a

Member State.

2. An emission allowance market participant shall publicly, effectively and in a timely

manner disclose inside information concerning emission allowances which it holds in

respect of its business, including aviation activities as specified in Annex I of Directive

2003/87/EC or installations within the meaning of Article 3(e) of the same Directive

which the participant concerned, or parent undertaking or related undertaking, owns or

controls or for which the participant, or its parent undertaking or related undertaking, is

responsible for operational matters, either in whole or in part. With regard to

installations, such disclosure shall include relevant information to the capacity and

utilisation of installations, including planned or unplanned unavailability of such

installations.

549

The first subparagraph shall not apply to an emission allowance market participant

where the installations or aviation activities that it owns, controls or is responsible for,

in the preceding year have had emissions not exceeding a minimum threshold of

carbon dioxide equivalent and, where they carry out combustion activities, have had a

rated thermal input not exceeding a minimum threshold.

The Commission shall adopt, by means of a delegated act in accordance with Article

32, measures establishing a minimum threshold of carbon dioxide equivalent and a

minimum threshold of rated thermal input for the purposes of application of the

exemption provided for in the second subparagraph.

The Commission shall adopt, by means of a delegated act in accordance with Article

32, measures establishing a minimum threshold of carbon dioxide equivalent and a

minimum threshold of rated thermal input for the purposes of application of the

exemption provided for in the second subparagraph of paragraph 2 of the present

article and to specify the competent authority for the notifications of paragraphs 3

and 4 of the present article.

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3. An issuer of a financial instrument or an emission allowance market participant, not

exempted pursuant to the second subparagraph of paragraph 2 of this Article, may

under his own responsibility delay the public disclosure of inside information, as

referred to in paragraph 1, provided that all of the following conditions are met:

– the immediate disclosure would likely prejudice his legitimate interests;

– the omission would not be likely to mislead the public;

– the issuer of a financial instrument or emission allowance market participant

is able to ensure the confidentiality of that information.

Subject to the conditions referred to above, in the case of a protracted process, which

occurs in stages, intended to bring about or which results in a particular

circumstance or a particular event, an issuer may under his own responsibility delay

the public disclosure of inside information relating to this process.

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Where an issuer of a financial instrument or emission allowance market participant

has delayed the disclosure of inside information under this paragraph, it shall

inform the competent authority that disclosure of the information was delayed and

provide in writing an explanation on how the conditions were met, immediately after

the information is disclosed to the public. National law may alternatively provide

that a record of such explanation may be submitted only upon request of the

competent authority.

4. In order to preserve the stability of the financial system, an issuer of a financial

instrument which is a credit institution or other financial institution, may under its own responsibility delay the public disclosure of inside

information, including, but not limited to, information which is related to a

temporary liquidity problem, including the need to receive temporary liquidity

assistance from a central bank or lender of last resort, provided that all the following

conditions are satisfied:

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(a) the disclosure of the information entails a risk of undermining the financial

stability of the issuer and of the financial system;

(b) it is in the public interest to delay the disclosure;

(c) the confidentiality of that information can be ensured; and

(d) the competent authority has consented to the delay on the basis that the

conditions at points (a) to (c) are met.

In order to satisfy the conditions at points (a) to (c), the issuer shall notify the

competent authority of its intention to delay the disclosure of the inside information

referred to in the firstsubparagraph and provide evidence that the conditions set out

in points (a) to (c) are met. The competent authority shall consult as appropriate the

central bank and or the macro-prudential authority where instituted or, otherwise

the following authority:

553

– if the issuer is a credit institution or an investment firm the Authority

determined according to Article 124a (1a) of Directive …/…/EU [New CRD

IV];

– in other cases the authority responsible for the supervision of the issuer.

The competent authority shall ensure that the delay is only for such period as is

necessary in the public interest. The competent authority shall as a minimum

evaluate on a weekly basis if the conditions set out in points (a) to (c) are met.

If the competent authority does not consent to the delay, the issuer shall disclose the

information immediately.

This paragraph shall apply to cases where the issuer decides not to delay the

disclosure of inside information according to paragraph 3.

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Reference to the competent authority in this paragraph is without prejudice to the

ability of the competent authority to exercise its functions in any ways referred to in

Article 17(1).

4a. If the confidentiality of inside information not disclosed under the conditions of

paragraphs 3 or 4, is no longer ensured, the issuer has to inform the public of this

information as soon as possible. This includes situations where a rumour explicitly

relates to a piece of inside information which has not been disclosed under

paragraphs 3 or 4 when that rumour is sufficiently accurate to indicate that the

confidentiality of that information is no longer ensured.

▌

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6. Where an issuer of a financial instrument or an emission allowance market participant,

not exempted pursuant to the second subparagraph of paragraph 2 of this article, or a

person acting on their behalf or for their account, discloses any inside information to

any third party in the normal course of the exercise of an employment, profession or

duty, as referred to in Article 7b(1), they must make complete and effective public

disclosure of that information, simultaneously in the case of an intentional disclosure,

and promptly in the case of a non-intentional disclosure. This paragraph shall not apply

if the person receiving the information owes a duty of confidentiality, regardless of

whether such duty is based on a law, on regulations, on articles of association, or on a

contract.

7. Inside information relating to issuers ▌, whose financial instruments are admitted to

trading on an SME growth market, may be posted by the trading venue on its website

instead of on the website of the issuer where the trading venue chooses to provide this

facility for issuers on that market. ▌

▌

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9. ESMA shall develop draft implementing technical standards to determine:

– the technical means for appropriate public disclosure of inside information as

referred to in paragraphs 1, 6 and 7;

– the technical means for delaying the public disclosure of inside information as

referred to in paragraphs 4 and 5.

ESMA shall submit the draft implementing technical standards referred to in the

first subparagraph to the Commission by ...*.


standards referred to in the first subparagraph in accordance with Article 15 of



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10. ESMA shall issue guidelines to establish a non-exhaustive indicative list of the

legitimate interests of the issuer and of situations where the omitted disclosure is

likely to mislead the public as referred to in paragraph 3.

Article 13

Insider lists

1. Issuers of a financial instrument or ▌any person acting on their behalf or on their

account, shall:

(a) draw up a list of all persons who have access to inside information, where such

persons are working for them under a contract of employment, or otherwise

performing tasks through which they have access to inside information, such as

advisers, accountants or credit rating agencies;

558

(b) promptly update the list in accordance with paragraph 1c; and

(c) provide the list to the competent authority as soon as possible upon its request.

1a. Issuers of a financial instrument or any person acting on their behalf or on their

account, shall take all reasonable steps to ensure that any person on the list

acknowledges in writing the legal and regulatory duties entailed and is aware of the

sanctions applicable to the misuse or improper disclosure of such information.

Where another person acting on behalf or the account of the issuer assumes the task

of drawing up and updating the insider list, the issuer remains fully responsible for

compliance with the obligation under this Article. The issuer shall always retain a

right of access to the list.

559

1b. The insider list shall include at least:

(a) the identity of any person having access to inside information;

(b) the reason for including that person in the list;

(c) the date and time at which such person obtained access to inside information;

(d) the date at which the insider list was created;

1c. The insider list shall be promptly updated, including the date of the update in the

following circumstances:

(a) when there is a change in the reason for including a person already on the list;

560

(b) when there is a new person who has access to inside information and needs,

therefore, to be added to the list;

(c) when a person ceases to have access to inside information.

Each update shall specify the date and time when the change triggering the update

occurred.

1d. The insider list shall be retained by the issuers and any person acting on their behalf

or account for a period of at least 5 years after being drawn up or updated.

2. Issuers ▌whose financial instruments are admitted to trading on an SME growth market

shall be exempt from drawing up such a list, if the following conditions are met:

(a) the issuer takes all reasonable steps to ensure that any person with access to

inside information acknowledges the legal and regulatory duties entailed and

is aware of the sanctions applicable to the misuse or improper circulation of

such information, and

561

(b) the issuer is able to provide the competent authority, upon request, with the

insider list of this article.

3. This Article shall ▌apply to issuers who have ▌requested or approved admission of

their financial instruments to trading on a regulated market in a Member State or, in

the case of an instrument only traded on a MTF or an OTF, have ▌approved trading of

their financial instruments on a MTF or an OTF or have requested admission to

trading of their financial instruments on a MTF in a Member State.

▌

-6. Paragraphs 1 to 1d of this Article shall also apply to emission allowance market

participants, not exempted pursuant to the second subparagraph of paragraph 2 of

Article 12 in relation to inside information concerning emission allowances and

auctioned products based thereon that arises in relation to the physical operations of

that emission allowance market participant.

562

Paragraphs 1 to 1d of this Article shall also apply to any auction platform,

auctioneer and auction monitor in relation to auctions of emission allowances or

other auctioned products based thereon that are held pursuant to Regulation (EU)

No 1031/2010.

6. ESMA shall develop draft implementing technical standards to determine the precise

format of insider lists and the format for updating insider lists referred to in this

Article.

ESMA shall submit the draft implementing technical standards referred to in the

first subparagraph to the Commission by ...*.





563

Article 14

Manager's transactions

1. Persons discharging managerial responsibilities within an issuer of a financial

instrument ▌, as well as persons closely associated with them, shall notify the issuer

and the competent authority about the existence of every transaction conducted on

their own account relating to the shares or debt instruments of that issuer, or to

derivatives or other financial instruments linked to them, or in emission allowances or

related derivatives.

Such notifications shall be made promptly and no later than 3 business days after

the transaction.

This obligation applies once the total amount of the transactions has reached the

threshold set in paragraph 3 within a calendar year.

564

1a. For the purposes of applying paragraph 1 of this Article, and without prejudice to the

right of Member States to provide for other notification obligations than those

covered by this Article, Member States shall ensure that all transactions related to

shares admitted to trading on a regulated market, or to derivatives or other financial

instruments linked to them, conducted on the own account of persons referred

paragraph 1 above, are notified to the competent authorities. The rules of

notification to which those persons have to comply with shall be those of the

Member State where the issuer is registered. The notification shall be made within

three working days of the transaction date to the competent authority of that

Member State. When the issuer is not registered in a Member State, this notification

shall be made to the competent authority of the Member State in which it is required

to file the annual information in relation to the shares in accordance with Article 10

of Directive 2003/71/EC of the European Parliament and of the Council1.

1 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 and amending Directive 2001/34/EC (OJ L 345, 31.12.2003, p. 64).

565

1b. The issuer shall ensure that the information, notified in accordance with paragraph 1

is made public promptly and no later than 3 business days after the ▌transaction in a

manner which enables fast access to this information on a non-discriminatory basis

in accordance with the standards referred to the first indent of Article 12(9)

The issuer shall use such media as may reasonably be relied upon for the effective

dissemination of information to the public throughout the Community, and, where

applicable, it shall use the officially appointed mechanism referred to in Directive

…/…/EU [transparency directive].

National law may alternatively provide that a competent authority may itself make

public the information.

566

1c. This Article shall apply to issuers who have requested or approved admission of their

financial instruments to trading on a regulated market in a Member State or, in the

case of an instrument only traded on a MTF or an OTF, have approved trading of

their financial instruments on a MTF or an OTF or have requested admission to

trading of their financial instruments on a MTF in a Member State.

1d. Issuers shall notify the persons discharging managerial responsibilities within that

issuer of their obligations under this article in writing. Issuers shall draw up a list of

all persons discharging managerial responsibilities and persons closely associated

with them.

Persons discharging managerial responsibilities within an issuer shall notify the

persons closely associated with them of their obligations under this article in writing

and shall keep a copy of this notification.

567

1e. The notification of transactions referred to in paragraph 1 shall contain the

following information:

(a) Name of the person;

(b) Reason for notification;

(c) Name of the relevant issuer;

(d) Description and identity of the financial instrument;

(e) Nature of the transaction(s) (e.g. acquisition or disposal), indicating whether it

is linked to the exercise of share option programmes or to the specific

examples set out in paragraph 2;

568

(f) Date and place of the transaction(s); and

(g) Price and volume of the transaction(s). In the case of a pledge whose terms

provide for its value to change, this should be disclosed together with its value

at the date of the pledge.

2. For the purposes of paragraph 1 transactions that must be notified shall also include:

(a) the pledging or lending of financial instruments by or on behalf of a person

referred to in paragraph 1;

(b) transactions undertaken by any person professionally arranging or executing

transactions or by any other person on behalf of a person discharging

managerial responsibilities or a person closely associated with such person

referred to in paragraph 1 including where discretion is exercised ▌.

569

(c) transactions made under a life insurance policy, defined in accordance with

Directive 2009/138/EC of the European Parliament and of the Council1,

where:

– the policyholder is a person discharging managerial responsibilities

within an issuer of a financial instrument or a person closely associated

with such person,

– the investment risk is born by the policyholder, and

– the policyholder has the power or discretion to make investment

decisions regarding specific instruments in that life insurance policy or

to execute transactions regarding specific instruments for that life

insurance policy.

1 Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1).

570

For the purposes of point (a) a pledge, or other similar security interest, of securities

in connection with the depositing of the securities in a custody account does not

need to be notified, unless and until such time that such pledge or other security

interest is designated to secure a specific credit facility.

Insofar as a policyholder of an insurance contract is required to notify transactions

according to this paragraph, an obligation to notify is not incumbent on the

insurance company.

3. Paragraph 1 shall ▌apply to any subsequent transaction once a total amount of EUR

5 000 has been reached within a calendar year. The threshold of EUR 5 000 shall be

calculated by adding without netting all transactions mentioned in paragraph 1.

571

3a. A competent authority may decide to increase the threshold set in paragraph 3 to

EUR 20 000 and shall inform ESMA of its decision and the justification of its

decision with specific reference to market conditions, to adopt the higher threshold

prior to its application. ESMA shall publish on its website the list of thresholds that

apply in accordance with this article and the justifications provided by competent

authorities for such thresholds.

4. This Article shall also apply to persons discharging managerial responsibilities

within emission allowance market participants, not exempted pursuant to the second

subparagraph of Article 12(2), as well as persons closely associated with them in so

far as their transactions involve emission allowances, derivatives thereof or

auctioned products based thereon.

This Article shall also apply to persons discharging managerial responsibilities

within any auction platform, auctioneer and auction monitor involved in the auctions

held under Regulation (EU) No 1031/2010 as well as to persons closely associated

with them in so far as their transactions involve emission allowances, derivatives

thereof or auctioned products based thereon.

572

4a. Without prejudice to the general prohibition of insider dealing and market

manipulation, a person discharging managerial responsibilities within an issuer

shall not conduct any trading on the person’s account or for the account of a third

party directly or indirectly, relating to the shares or debt instruments of the issuer or

to derivatives or other financial instruments linked to them, during a closed period

of thirty calendar days before the announcement of an interim financial report or a

year-end report which the relevant issuer is obliged to make public according to the

rules of the trading venue where the issuer’s shares are admitted to trading, or

according to national law unless a set of circumstances exists where dealing during

this closed period may be permitted by the issuer, either on a case by case basis due

to the existence of exceptional circumstances which require the immediate sale of

shares, such as severe financial difficulty, or due to the characteristics of the dealing

involved for dealings made under or related to an employee’s share scheme, saving

schemes, qualification or entitlements of shares or dealings where the beneficial

interest in the relevant security does not change.

573

4b. The Commission shall be empowered to adopt delegated acts in accordance with

Article 32 specifying the circumstances under which trading during a closed period

may be permitted by the issuer, as referred to in paragraph 4a, including the

circumstances that would be considered as exceptional and the types of dealings that

would justify the permission for trading.

▌

6. The Commission shall adopt, by means of delegated acts in accordance with Article

32, measures specifying the ▌characteristics of a transaction referred to in paragraph 2

which trigger that duty ▌.

6a. In order to ensure uniform application of paragraph 1, ESMA may develop draft

implementing technical standards concerning the format [template] in which the

information referred to in paragraph 1 is to be notified and made public.

ESMA shall submit those draft implementing technical standards to the Commission

by ...*.


574

Power is conferred on the Commission to adopt the implementing technical



Article 15

Investment recommendations and statistics

1. Persons who produce or disseminate ▌investment recommendations or other

information recommending or suggesting an investment strategy, as defined in the

second subparagraph shall take reasonable care to ensure that such information is

objectively presented, and to disclose their interests or indicate conflicts of interest

concerning the financial instruments to which that information relates.

575

For the purposes of applying this Article:

(a) investment recommendations means any information recommending or

suggesting an investment strategy, explicitly or implicitly, concerning one or

several financial instruments or the issuers of financial instruments, including

any opinion as to the present or future value or price of such instruments,

intended for distribution channels or for the public;

(b) recommending or suggesting an investment strategy means:

(i) information produced by an independent analyst, an investment firm, a

credit institution, any other person whose main business is to produce

investment recommendations or a natural person working for them

under a contract of employment or otherwise, that, directly or indirectly,

expresses a particular investment proposals in respect of a financial

instrument or an issuer of financial instruments;

576

(ii) information produced by persons other than the persons referred to in

point (a) which directly proposes a particular investment decision in

respect of a financial instrument.

2. Public institutions disseminating statistics or forecasts liable to have a significant

effect on financial markets shall disseminate them in an objective and transparent way.

3. ESMA shall develop draft regulatory technical standards to determine the technical

arrangements, for the various categories of person referred to in paragraph 1, for

objective presentation of investment recommendations or other information

recommending or suggesting an investment strategy and for disclosure of particular

interests or indications of conflicts of interest.

577

ESMA shall submit those draft regulatory technical standards ▌to the Commission by

...*.


referred to in the first subparagraph in accordance with Articles 10 to 14 of Regulation

(EU) No 1095/2010.

The technical arrangements laid down in the regulatory technical standards referred

to in paragraph 3 shall not apply to journalists subject to equivalent appropriate

regulation in the Member States, including equivalent appropriate self-regulation,

provided that such regulation achieves similar effects as those technical

arrangements. The text of that equivalent national regulation shall be notified to the

Commission.


578

Article 15a

Disclosure or dissemination of information in the media

For the purpose of applying Articles 7b, 8(1)(c) and 15 where information is disclosed or

disseminated and where recommendations are produced or disseminated for the purpose of

journalism or other form of expression in the media such disclosure or dissemination of

information shall be assessed taking into account the rules governing the freedom of the

press and freedom of expression in other media and the rules or codes governing the

journalist profession, unless:

(a) the persons concerned or persons closely associated with them derive, directly or

indirectly, an advantage or profits from the disclosure or the dissemination of the

information in question; or

(b) the disclosure or the dissemination is made with the intention of misleading the market

as to the supply of, demand for, or price of financial instruments.

579

CHAPTER 4

ESMA AND COMPETENT AUTHORITIES

Article 16

Competent authorities

Without prejudice to the competences of the judicial authorities, each Member State shall

designate a single administrative competent authority for the purpose of this Regulation.

▌Member States shall inform the Commission, ESMA and the competent authorities of other

Member States of same. The competent authority shall ensure that the provisions of this

regulation are applied on its territory, regarding all actions carried out on its territory, and

those actions carried out abroad relating to instruments admitted to trading on a regulated

market, for which a request for admission to trading on such market has been made, or

which are traded on a MTF or OTF or for which a request for admission to trading has been

made on a MTF operating, within its territory.

580

Article 17

Powers of competent authorities

1. Competent authorities shall exercise their functions and powers in any of the following

ways:

(a) directly;

(b) in collaboration with other authorities or with the market undertakings;

(c) under their responsibility by delegation to such authorities or to market

undertakings;

(d) by application to the competent judicial authorities.

581

2. In order to fulfil their duties under this Regulation, competent authorities shall have, in

conformity with national law, at least the following supervisory and investigatory

powers:

(a) have access to any document and other data in any form, and to receive or take

a copy thereof;

(b) require or demand information from any person, including those who are

successively involved in the transmission of orders or conduct of the operations

concerned, as well as their principals, and if necessary, to summon and question

any such person with a view to obtain information;

(c) in relation to commodity derivatives, request information from market

participants on related spot markets according to standardized formats, obtain

reports on transactions, and have direct access to traders' systems;

582

(d) carry out on-site inspections, or investigations at sites other than the private

residences of natural persons;

(e) enter premises of natural and legal persons in order to seize documents and

other data in any form where a reasonable suspicion exists that documents and

other data related to the subject-matter of the inspection or investigation may be

relevant to prove a case of insider dealing or market manipulation in violation of

this Regulation. Where prior authorisation is needed from the judicial

authority of the Member State concerned, in accordance with national law,

such power shall only be used after having obtained that prior authorisation;

(ea) refer matters for criminal investigation;

583

(f) require existing recordings of telephone conversations, electronic

communications or other data traffic records held by ▌investment firms, credit

institutions or other financial institutions;

(fa) require, insofar as permitted by national law, existing data traffic records held

by a telecommunication operator, where there is a reasonable suspicion of a

breach and where such records may be relevant to the investigation of insider dealing or market manipulation in violation of this Regulation;

(fb) request the freezing and/ or sequestration of assets;

(fc) suspend trading of the financial instrument concerned;

(fd) require the temporary cessation of any practice that the competent authority

considers contrary to the provisions of this Regulation;

584

(fe) impose a temporary prohibition on the exercise of professional activity;

(fg) take all necessary measures to ensure that the public is correctly informed,

including the correction of false or misleading disclosed information,

including by requiring an issuer or other person who has published or

disseminated false or misleading information to publish a corrective statement.

▌

5. Member States shall ensure that appropriate measures are in place so that competent

authorities have all the supervisory and investigatory powers that are necessary to fulfil

their duties.

585

This Regulation is without prejudice to laws, regulations and 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 that impose requirements in addition to the requirements of this Regulation.

5a. A person making information available to the Competent Authority in accordance

with this Regulation shall not be considered in breach of any restriction on

disclosure of information imposed by contract or by any legislative, regulatory or

administrative provision, and shall not involve the person notifying in liability of any

kind related to such notification.

586

Article 18

Cooperation with ESMA

1. The competent authorities shall cooperate with ESMA for the purposes of this

Regulation, in accordance with Regulation (EU) No 1095/2010.

2. The competent authorities shall, without delay, provide ESMA with all information

necessary to carry out its duties, in accordance with Article 35 of Regulation (EU) No

1095/2010.

3. ESMA shall develop draft implementing technical standards to determine the

procedures and forms for exchange of information as referred to in paragraph 2.

ESMA shall submit those draft implementing technical standards ▌to the Commission

by ...*.

Power is conferred to the Commission to adopt the implementing technical standards

referred to in the first subparagraph in accordance with Article 15 of Regulation (EU)

No 1095/2010.


587

Article 19

Obligation to co-operate

1. Competent authorities shall cooperate with each other and ESMA where it is necessary

for the purposes of this Regulation, unless one of the exceptions in paragraph 1a

apply. In particular, competent authorities shall render assistance to competent

authorities of other Member States and ESMA. In particular, they shall exchange

information, without undue delay, and cooperate in investigation, supervision and

enforcement activities.

The obligation to cooperate and assist laid down in the first subparagraph shall also

apply as regards the Commission in relation to the exchange of information relating to

commodities which are agricultural products listed in Annex I to the TFEU.

The cooperation between the competent authorities and ESMA shall be done in

accordance with Regulation (EU) No 1095/2010, in particular its Article 35.

588

Where Member States have chosen, in accordance with Article 26(1), second

subparagraph, to lay down criminal sanctions for the breaches of the provisions of

this Regulation referred to in that Article, they shall ensure that appropriate

measures are in place so that competent authorities have all the necessary powers to

liaise with judicial authorities within their jurisdiction to receive specific

information related to criminal investigations or proceedings commenced for

possible violations of this Regulation and provide the same to other competent

authorities and ESMA to fulfil their obligation to cooperate with each other and

ESMA for the purposes of this Regulation.

1a. A competent authority may refuse to act on a request for information or request to co-

operate with an investigation in the following exceptional circumstances:

(a) Communication might adversely affect the security of the Member State

addressed, in particular the fight against terrorism and other serious crimes;

589

(b) Complying would be likely to adversely affect its own investigation or

enforcement activities or where applicable, a criminal investigation;

(c) Judicial proceedings have already been initiated in respect of the same actions

and against the same persons before the authorities of the Member State

addressed; or

(d) a final judgment has already been delivered in relation to such persons for the

same actions in the Member State addressed.

590

2. Competent authorities and ESMA shall cooperate with the Agency for the

Cooperation of Energy Regulators (ACER), established under Regulation (EC) No

713/2009 of the European Parliament and of the Council1 and the national regulatory

authorities of the Member States to ensure that a coordinated approach is taken to the

enforcement of the relevant rules where transactions, orders to trade or other actions or

behaviours relate to one or more financial instruments to which this Regulation applies

and also to one or more wholesale energy products to which Article 3, 4 and 5 of

Regulation (EU) No 1227/2011 apply. Competent authorities shall consider the

specific characteristics of the definitions of Article 2 of Regulation (EU) No

1227/2011 and the provisions of Article 3, 4 and 5 of Regulation (EU) No1227/2011

when they apply Articles 6, 7 and 8 of this Regulation to financial instruments related

to wholesale energy products.

1 Regulation (EC) No 713/2009 of the European Parliament and of the Council of 13 July 2009 establishing an Agency for the Cooperation of Energy Regulators (OJ L 211, 14.8.2009, p. 1).

591

3. Competent authorities shall, on request, immediately supply any information required

for the purpose referred to in paragraph 1.

4. Where a competent authority is convinced that acts contrary to the provisions of this

Regulation are being, or have been, carried out on the territory of another Member

State or that acts are affecting financial instruments traded on a trading venue situated

in another Member State, it shall give notice of that fact in as specific a manner as

possible to the competent authority of the other Member State and to ESMA and, in

relation to wholesale energy products, to ACER. The competent authorities of the

various Member States involved shall consult each other and ESMA and, in relation to

wholesale energy products, ACER, on the appropriate action to take and inform each

other of significant interim developments. They shall coordinate their action, in order

to avoid possible duplication and overlap when applying administrative measures,

sanctions and fines to those cross border cases in accordance with Articles 26, 27 and

28, and assist each other in the enforcement of their decisions.

592

5. The competent authority of one Member State may request assistance of the competent

authority of another Member State with regard to on-site inspections or investigations.

The requesting competent authority may inform ESMA of any request referred to in

the first subparagraph. In case of an investigation or an inspection with cross-border

effect, ESMA shall if requested to do so by one of the competent authorities coordinate

the investigation or inspection.

Where a competent authority receives a request from a competent authority of another

Member State to carry out an on-site inspection or an investigation, it may do any of

the following:

(a) carry out the on-site inspection or investigation itself;

(b) allow the competent authority which submitted the request to participate in an

on-site inspection or investigation;

593

(c) allow the competent authority which submitted the request to carry out the on-

site inspection or investigation itself;

(d) appoint auditors or experts to carry out the on-site inspection or investigation;

(e) share specific tasks related to supervisory activities with the other competent

authorities.

Competent authorities may also cooperate with competent authorities of other

Member States with respect to facilitating the recovery of pecuniary sanctions.

6. Without prejudice to Article 258 TFEU, a competent authority whose request for

information or assistance in accordance with paragraphs 1, 2, 3 and 4 is not acted upon

within a reasonable time or whose request for information or assistance is rejected may

refer that rejection or absence of action within a reasonable timeframe to ESMA.

594

In those situations, ESMA may act in accordance with Article 19 of Regulation (EU)

No 1095/2010, without prejudice to the possibility of ESMA acting in accordance with

Article 17 of Regulation (EU) No 1095/2010.

7. Competent authorities shall cooperate and exchange information with relevant national

and third country regulatory authorities responsible for the related spot markets where

they have reasonable grounds to suspect that acts, which constitute market abuse in

violation of this Regulation, are being, or have been, carried out. This cooperation

shall ensure a consolidated overview of the financial and spot markets, and detect and

sanction cross-market and cross-border market abuses.

In relation to emission allowances, the co-operation and exchange of information

provided for under the preceding subparagraph shall also be ensured with:

595

(a) the auction monitor, with regard to auctions of emission allowances or other

auctioned products based thereon that are held pursuant to Regulation (EU) No

1031/2010;

(b) competent authorities, registry administrators, including the Central

Administrator, and other public bodies charged with the supervision of

compliance under Directive 2003/87/EC.

ESMA shall perform a facilitation and coordination role in relation to the cooperation

and exchange of information between competent authorities and regulatory authorities

in other Member States and third countries. Competent authorities shall wherever

possible conclude cooperation arrangements with third country regulatory authorities

responsible for the related spot markets in accordance with Article 20.

▌

596


procedures and forms for exchange of information and assistance as referred to in this

Article.

ESMA shall submit those draft implementing technical standards ▌to the Commission

by ...*.



No 1095/2010.


597

Article 20

Cooperation with third countries

1. The competent authorities of Member States shall where necessary conclude

cooperation arrangements with supervisory authorities of third countries concerning

the exchange of information with supervisory authorities in third countries and the

enforcement of obligations arising under this Regulation in third countries. These

cooperation arrangements shall ensure at least an efficient exchange of information

that allows the competent authorities to carry out their duties under this Regulation.

A competent authority shall inform ESMA and other competent authorities of Member

States where it proposes to enter into such an arrangement.

598

2. ESMA shall, wherever possible, facilitate and coordinate the development of

cooperation arrangements between the competent authorities of Member States and the

relevant supervisory authorities of third countries. ▌ ESMA shall develop draft

regulatory technical standards containing a template document for cooperation

arrangements that are to be used by competent authorities of Member States where

possible. ESMA shall submit those draft regulatory technical standards to the

Commission by ...*.

Power is delegated to the Commission to adopt the regulatory technical standards




599

ESMA shall also, whever possible, facilitate and coordinate the exchange between

competent authorities of Member States of information obtained from supervisory

authorities of third countries that may be relevant to the taking of measures under

Articles ▌ 26, 27 and 28.

3. The competent authorities shall conclude cooperation arrangements on exchange of

information with the supervisory authorities of third countries only where the

information disclosed is subject to guarantees of professional secrecy which are at least

equivalent to those set out in Article 21. Such exchange of information must be

intended for the performance of the tasks of those competent authorities.

▌

600

Article 21

Professional secrecy

1. Any confidential information received, exchanged or transmitted pursuant to this

Regulation shall be subject to the conditions of professional secrecy laid down in

paragraph 2 ▌.

1a. All the information exchanged between the competent authorities under this

Regulation that concerns business or operational conditions and other economic or

personal affairs shall be considered confidential and shall be subject to the

requirements of professional secrecy, except where the competent authority states at

the time of communication that such information may be disclosed or such

disclosure is necessary for legal proceedings.

2. The obligation of professional secrecy applies to all persons who work or who have

worked for the competent authority or for any authority or market undertaking to

whom the competent authority has delegated its powers, including auditors and experts

contracted by the competent authority. Information covered by professional secrecy

may not be disclosed to any other person or authority except by virtue of provisions

laid down by law.

▌

601

Article 22

Data protection

With regard to the processing of personal data ▌within the framework of this Regulation,

competent authorities shall carry out their tasks for the purposes of this Regulation in

accordance with national law implementing Directive 95/46/EC. With regard to the processing

of personal data by ESMA within the framework of this Regulation, ESMA shall comply with

the provisions of Regulation (EC) No 45/2001.

Personal data shall be retained for a maximum period of 5 years.

Article 23

Disclosure of personal data to third countries

1. The competent authority of a Member State may transfer personal data to a third

country provided the requirements of Directive 95/46/EC ▌are fulfilled and only on a

case-by-case basis. The competent authority ▌shall ensure that the transfer is

necessary for the purpose of this Regulation and that the third country does not

transfer the data to another third country unless it is given express written authorisation

and complies with the conditions specified by the competent authority of the Member

State. ▌

602

2. The competent authority of a Member State shall only disclose personal data received

from a competent authority of another Member State to a supervisory authority of a

third country where the competent authority of the Member State concerned has

obtained express agreement from the competent authority which transmitted the data

and, where applicable, the data is disclosed solely for the purposes for which that

competent authority gave its agreement.

3. Where a cooperation agreement provides for the exchange of personal data, it shall

comply with Directive 95/46/EC as implemented in national law.

CHAPTER 5

ADMINISTRATIVE MEASURES AND SANCTIONS

▌

603

Article 26

Administrative measures and sanctions

1. Without prejudice to criminal sanctions and without prejudice to the supervisory

powers of competent authorities in accordance with Article 17, Member States shall,

in conformity with national law, provide for competent authorities to have the power

to take appropriate administrative measures and impose at least the following

administrative measures and sanctions for:

(a) the breaches of articles 9, 10, 11(1), 11(2), 12(1), 12(2), 12(3), 12(4), 12(5), 12(6), 13(1), 13(2), 13(3), 13(4), 13(5), 14(1), 14(2), 14(3), and 15(1) of this Regulation; and

(b) failure to cooperate or comply in an investigation or with an inspection or request covered by Article 17(2).

604

Member States may decide not to lay down rules for administrative sanctions

according to the first subparagraph where those breaches are already subject to

criminal sanctions in their national law by ...*. In this case, Member States shall

notify in detail to the Commission and ESMA of the relevant criminal law rules.

By ...*, Member States shall notify in detail the rules referred to in the first

subparagraph to the Commission and ESMA. They shall notify the Commission and

ESMA without delay of any subsequent amendment thereto.

1a. In case of a breach referred to in paragraph 1, first subparagraph, point (a), Member

States shall, in conformity with national law, provide for competent authorities to

have the power to take and or impose at least the following administrative measures

and sanctions:

* OJ: Please insert date: 24 months after the date of entry into force of this Regulation.*

605

(a) an order requiring the person responsible for the breach to cease the

conduct and to desist from a repetition of that conduct;

▌

(ba) the disgorgement of the profits gained or losses avoided because of the

breach where those can be determined;

▌

(d) a public warning which indicates the person responsible and the nature of

the breach ▌;

▌

(g) withdrawal or suspension of the authorisation of an investment firm as

defined in Article 4(1) of Directive …/…/EU [new MiFID];

606

(h) a temporary ban against any person discharging managerial

responsibilities in an investment firm or any other natural person, who is

held responsible, from exercising management functions in investment

firms;

(ha) In the event of repeated breaches of Article 9 or 10, a permanent ban

against any person discharging managerial responsibilities in an

investment firm or any other natural person who is held responsible,

from exercising management functions in investment firms;

(hb) a temporary ban against any person discharging managerial

responsibilities in an investment firm or any other natural person who is

held responsible, from dealing on own account;

▌

607

(k) maximum administrative pecuniary sanctions of at least three times the

amount of the profits gained or losses avoided because of the breach where

those can be determined;

(1) in respect of a natural person, maximum administrative pecuniary sanctions of at

least:

(i) for breaches of Articles 9 and 10, EUR 5 000 000 or in the Member States

where the Euro is not the official currency, the corresponding value in the

national currency on the date of entry to force of this Regulation; or

(ii) for breaches of articles not covered by articles 9, 10, 13, 14 and 15 EUR

1 000 000 or in the Member States where the Euro is not the official

currency, the corresponding value in the national currency on the date of

entry to force of this Regulation;

608

(iii) for breaches of articles 13, 14 and 15 EUR 500 000 or in the Member

States where the Euro is not the official currency, the corresponding

value in the national currency on the date of entry into force of this

Regulation.

(2) in respect of a legal person, maximum administrative pecuniary sanctions of

at least:

609

(i) for breaches of Articles 9 and 10, EUR 15 000 000 or 15 % of its total

annual turnover according to the last available accounts approved by the

management body; where the legal person is a parent undertaking or a

subsidiary of a parent undertaking which has to prepare consolidated

financial accounts according to [as defined in Articles 1 and 2 of Council

Directive 83/349/EEC1], the relevant total annual turnover shall be the total

annual turnover or the corresponding type of income according to the

relevant accounting directives [Council Directive 86/635/EEC2 for banks,

Council Directive 91/674/EEC3 for insurance companies] according to

the last available consolidated accounts approved by the management

body of the ultimate parent undertaking; or

1 Seventh Council Directive 83/349/EEC of 13 June 1983 based on the Article 54 (3) (g) of the Treaty on consolidated accounts (OJ L 193, 18.7.1983, p. 1).

2 Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consolidated accounts of banks and other financial institutions (OJ L 372, 31.12.1986, p. 1).

3 Council Directive 91/674/EEC of 19 December 1991 on the annual accounts and consolidated accounts of insurance undertakings (OJ L 374, 31.12.1991, p. 7).

610

(ii) for breaches not covered by Articles 9, 10, 13, 14 and 15 EUR 2 500 000

or 2 % of its total annual turnover according to the last available

accounts approved by the management body; where the legal person is a

parent undertaking or a subsidiary of a parent undertaking which has to

prepare consolidated financial accounts according to [as defined in

Directive 83/349/EEC], the relevant total annual turnover shall be the

total annual turnover or the corresponding type of income according to

the relevant accounting directives [Directive 86/635/EEC for banks,

Directive 91/674/EEC for insurance companies] according to the last

available consolidated accounts approved by the management body of the

ultimate parent undertaking; or

(iii) for breaches of Articles 13, 14 and 15 EUR 1 000 000 or in the Member

States where the Euro is not the official currency, the corresponding

value in the national currency on the date of entry into force of this

Regulation.

611

References to the competent authority in this paragraph are without prejudice to the

ability of the competent authority to exercise its functions in any ways referred to in

Article 17(1).

2. Member States may provide competent authorities under national law have other

sanctioning powers in addition to those referred to in paragraph 1a and may provide

for higher levels of ▌sanctions than those established in that paragraph.

▌

Article 27

Exercise of supervisory and sanctioning powers

1. Member States shall ensure that, when determining the type and level of

administrative ▌ sanctions, competent authorities ▌take into account all relevant

circumstances, including where appropriate:

612

(a) the gravity and duration of the breach;

(b) the degree of responsibility of the responsible person;

(c) the financial strength of the responsible person, as indicated notably by the total

turnover of the responsible legal person or the annual income of the responsible

natural person;

(d) the importance of the profits gained or losses avoided by the responsible person,

insofar as they can be determined;

(e) the level of cooperation of the responsible person with the competent authority,

without prejudice to the need to ensure disgorgement of profits gained or losses

avoided by that person;

(f) previous breaches by the ▌person concerned;

613

(g) measures taken, after the breach, by a responsible person to prevent the

repetition of the breach.

▌

2. In the exercise of their sanctioning powers under circumstances defined in Article 26 competent authorities shall cooperate closely to ensure that the supervisory and investigative powers and administrative sanctions produce the desired results of this Regulation. They shall also coordinate their action in order to avoid possible duplication and overlap when applying supervisory and investigative powers and administrative sanctions and fines to cross border cases in accordance with Article 19.

▌

614

Article 29

Reporting of violations

1. Member States shall ensure that competent authorities establish effective

mechanisms to enable reporting of actual or potential breaches of the provisions of

this Regulation to competent authorities.

1a. The mechanisms referred to in paragraph 1 shall include at least:

(a) specific procedures for the receipt of reports of breaches and their follow-up,

including the establishment of secure communication channels for such

reports;

(b) within their employment, appropriate protection for persons working under a

contract of employment, who report ▌breaches or are accused of breaches,

against retaliation, discrimination or other types of unfair treatment at a

minimum;

615

(c) protection of personal data ▌both of the person who reports the breach and

the natural person who is allegedly responsible for it, including protections in

relation to preserving the confidentiality of the identity of the relevant persons,

at all stages of the procedure without prejudice to such disclosures being

required by national law in the context of investigations or subsequent judicial

proceedings.

▌

1b. Member States shall require employers engaging in activities that are regulated for

financial services purposes, to have in place appropriate procedures for their

employees to report breaches internally.

2. Member States may provide for financial incentives to persons who offer salient

information about potential breaches of this Regulation to be granted in conformity

with national law where such persons do not have other pre-existing legal or

contractual duties to report such information, and provided that the information is

new, and it results in the imposition of an administrative sanction or measure or a

criminal sanction for a breach of this Regulation.

616

3. The Commission shall adopt, by means of implementing acts in accordance with Article

33, measures to specify the procedures referred to in paragraph 1, including the

modalities of reporting and the modalities for following-up of reports, and measures

for the protection of persons working under a contract of emloyment and measures

for the protection of personal data.

Article 30

Exchange of information with ESMA

1. Competent ▌authorities shall provide ESMA annually with aggregated information

regarding all administrative measures, sanctions and fines imposed by the competent

authority in accordance with Articles ▌26, 27, 28 and 29. ESMA shall publish this

information in an annual report. Competent authorities shall also provide ESMA

annually with anonymised and aggregated data regarding all administrative

investigations undertaken in accordance with the above mentioned Articles.

617

1a. Where Member States have chosen, in accordance with Article 26(1), second

subparagraph, to lay down criminal sanctions for the breaches of the provisions of

this Regulation referred to in that Article, their competent authorities shall provide

ESMA annually with anonymised and aggregated data regarding all criminal

investigations undertaken and criminal penalties imposed by the judicial authorities

in accordance with Articles 26, 27, 28 and 29. ESMA shall publish data on criminal

sanctions imposed in an annual report.

2. Where the competent authority has disclosed administrative measures, sanctions, fines

and criminal penalties to the public, it shall simultaneously report those administrative

measures, sanctions, fines and criminal penalties to ESMA.

618

3. Where a published administrative measure, sanction, fine and criminal penalty relates

to an investment firm authorised in accordance with Directive …/…/EU [new MiFID],

ESMA shall add a reference to the published sanction in the register of investment

firms established under Article 5(3) of Directive …/…/EU [new MiFID].


procedures and forms for exchange of information as referred to in this Article.

ESMA shall submit the draft implementing technical standards referred to in the first

subparagraph to the Commission by ...*.



No 1095/2010.


619

CHAPTER 5a

Article 30a

Publication of decisions

1. A decision imposing an administrative sanction or measure for breach of this

Regulation shall be published by competent authorities on their official website

immediately after the person sanctioned is informed of that decision. The

publication shall include at least information on the type and nature of the breach

and the identity of the persons responsible. This obligation does not apply to

decisions imposing measures that are of an investigatory nature.

However, where the publication of the identity of the legal persons or personal data

of natural persons is considered by the competent authority to be disproportionate

following a case-by-case assessment conducted on the proportionality of the

publication of such data, or where publication jeopardises the stability of financial

markets or an on-going investigation, competent authorities shall either:

620

(a) delay the publication of the decision to impose a sanction or a measure until

the moment where the reasons for non publication cease to exist;

(b) publish the decision to impose a sanction or a measure on an anonymous basis

in a manner which is in conformity with national law, if such anonymous

publication ensures an effective protection of the personal data concerned; In

the case of a decision to publish a sanction or measure on an anonymous basis

the publication of the relevant data may be postponed for a reasonable period

of time if it is foreseen that within that period the reasons for anonymous

publication shall cease to exist;

(c) not publish the decision to impose a sanction or measure at all in the event that

the options set out in (a) and (b) above are considered insufficient to ensure:

621

(i) that the stability of financial markets would not be put in jeopardy; or

(ii) The proportionality of the publication of such decisions with regard to

measures which are deemed to be of a minor nature.

2. Where the decision to impose a sanction or measure is subject to an appeal before

the relevant judicial, or other authorities, competent authorities shall also publish,

immediately, on their official website such information and any subsequent

information on the outcome of such appeal. Moreover, any decision annulling a

previous decision to impose a sanction or a measure shall also be published.

3. Competent authorities shall ensure that any publication, in accordance with this

Article, shall remain on their official website for a period of at least five years after

its publication. Personal data contained in the publication shall only be kept on the

official website of the competent authority for the period which is necessary in

accordance with the applicable data protection rules.

622

CHAPTER 6

DELEGATED ACTS

▌

Article 32

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 delegation of power shall be conferred for an indeterminate period of time from the

date referred to in Article 36(1).

3. The delegation of power may be revoked at any time by the European Parliament or by

the Council. A decision of revocation 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.

623

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 shall enter into force only if no objection has been expressed either by

the European Parliament or the Council within a period of 3 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 3 months at the initiative of

the European Parliament or the Council.

624

CHAPTER 7

IMPLEMENTING ACTS

Article 33

Committee procedure

1. For the adoption of implementing acts under Article 29(3) the Commission shall be

assisted by the European Securities Committee established by Commission Decision

2001/528/EC1. 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, having regard to the provisions of Article 8 thereof.

1 Commission Decision 2001/528/EC of 6 June 2001 establishing the European Securities Committee (OJ L 191, 13.7.2001, p. 45).

625

CHAPTER 8TRANSITIONAL AND FINAL PROVISIONS

Article 34

Repeal of Directive 2003/6/EC

Directive 2003/6/EC and its implementing measures shall be repealed with effect from ...*.

References to Directive 2003/6/EC shall be construed as references to this Regulation.

▌

Article 35a

Report

By ...**, the Commission shall report to the European Parliament and the Council on the

application of this Regulation and, if necessary, on the need to review it, including with

regard to:

* OJ: Please insert date: 24 months after the date of entry into force of this Regulation.* * OJ: Please insert date: 3 years after application into force of this Regulation.

626

(a) the appropriateness of introducing common rules on the need for all Member States

to provide for administrative sanctions for insider dealing and market manipulation;

(b) whether the definition of inside information is sufficient to cover all information

relevant for competent authorities to effectively combat market abuse;

(c) the appropriateness of the conditions under which the prohibition on trading is

mandated in accordance with Article 14(4a) with a view to identifying whether there

are any further circumstances under which the prohibition should apply;

(d) assessing the possibility of establishing an EU framework for cross market order book

surveillance in relation to market abuse, including recommendations for such a

framework; and

(e) the scope of the application of the benchmark provisions.

627

In order to inform point (a) above, ESMA shall undertake a mapping exercise of the

application of administrative sanctions and, where Member States have chosen, in

accordance with Article 26(1), second subparagraph, to lay down criminal sanctions for the

breaches of this Regulation referred to in that article, the application of such criminal

sanctions within Member States. This exercise shall also include any data made available

under Article 30(1) and 30(1a).

The Commission shall submit its report accompanied, if appropriate, by a legislative

proposal.

Article 36

Entry into force and application

1. This Regulation shall enter into force on the twentieth day following that of its

publication in the Official Journal of the European Union.

628

2. It shall apply from ...* except for Articles 3(2), 8(5), 11(3), 12(9), ▌, 13(6), ▌, 14(6),

15(3), ▌19(9) ▌ and 29(3) which shall apply immediately following the entry into

force of this Regulation.

3. By ...* Member States shall implement into national law: Article 16, Article 17,

Article 26, Article 29 and Article 30a.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at ...

For the European Parliament For the CouncilThe President The President

* OJ: Please insert date: 24 months after the date of entry into force of this Regulation.* OJ: Please insert date: 24 months after the date of entry into force of this Regulation.

629

ANNEX

A. Indicators of manipulative behaviour related to false or misleading signals and to price

securing

For the purposes of applying point (a) of paragraph 1 of Article 8 of this Regulation, and

without prejudice to the forms of behaviour set out in paragraph 3 thereof, the following non-

exhaustive indicators, which should not necessarily be deemed in themselves to constitute

market manipulation, shall be taken into account when transactions or orders to trade are

examined by market participants and competent authorities:

(a) the extent to which orders to trade given or transactions undertaken represent a

significant proportion of the daily volume of transactions in the relevant financial

instrument, related spot commodity contract, or auctioned product based on emission

allowances, in particular when these activities lead to a significant change in their

prices;

630

(b) the extent to which orders to trade given or transactions undertaken by persons with a

significant buying or selling position in a financial instrument, a related spot

commodity contract, or a auctioned product based on emission allowances, lead to

significant changes in the price of that financial instrument, related spot commodity

contract, or auctioned product based on emission allowances;

(c) whether transactions undertaken lead to no change in beneficial ownership of a financial

instrument, a related spot commodity contract, or a auctioned product based on

emission allowances;

(d) the extent to which orders to trade given or transactions undertaken or orders cancelled

include position reversals in a short period and represent a significant proportion of the

daily volume of transactions in the relevant financial instrument, a related spot

commodity contract, or a auctioned product based on emission allowances, and might

be associated with significant changes in the price of a financial instrument, a related

spot commodity contract, or a auctioned product based on emission allowances;

631

(e) the extent to which orders to trade given or transactions undertaken are concentrated

within a short time span in the trading session and lead to a price change which is

subsequently reversed;

(f) the extent to which orders to trade given change the representation of the best bid or

offer prices in a financial instrument, a related spot commodity contract, or a auctioned

product based on emission allowances, or more generally the representation of the

order book available to market participants, and are removed before they are executed;

(g) the extent to which orders to trade are given or transactions are undertaken at or around

a specific time when reference prices, settlement prices and valuations are calculated

and lead to price changes which have an effect on such prices and valuations.

632

B. Indicators of manipulative behaviours related to the employment of fictitious devices or

any other form of deception or contrivance

For the purposes of applying point (b) of paragraph 1 of Article 8 of this Regulation, and

without prejudice to the forms of behaviour set out in the second paragraph of point (3) thereof,

the following non-exhaustive indicators, which should not necessarily be deemed in themselves

to constitute market manipulation, shall be taken into account when transactions or orders to

trade are examined by market participants and competent authorities:

(a) whether orders to trade given or transactions undertaken by persons are preceded or

followed by dissemination of false or misleading information by the same persons or

persons linked to them;

(b) whether orders to trade are given or transactions are undertaken by persons before or

after the same persons or persons linked to them produce or disseminate investment

recommendations which are erroneous or biased or demonstrably influenced by

material interest.

633

P7_TA-PROV(2013)0343

Amendment of Council Regulation (EC) No 2187/2005 for the conservation of fishery through technical measures in the Baltic Sea, the Belts and the Sound ***I

European Parliament legislative resolution of 10 September 2013 on the proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 2187/2005 for the conservation of fishery through technical measures in the Baltic Sea, the Belts and the Sound (COM(2012)0591 – C7-0332/2012 – 2012/0285(COD))






– having regard to the opinion of the European Economic and Social Committee of 11 July 20121,





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

1 OJ C 44, 15.2.2013, p. 157.

634

Amendment 1

Proposal for a regulationArticle 1 – point 1Regulation (EC) No 2187/2005Article 26 – paragraph 5


5. If the Commission concludes that the measures do not comply with the conditions laid down in paragraph 1 it shall adopt an implementing decision requiring the Member State to withdraw or modify the measures.

5. If the Commission concludes that the measures do not comply with the conditions laid down in paragraph 1 it shall adopt an implementing act requiring the Member State to withdraw or modify the measures.

Amendment 2



2. The delegation of power referred to in Article 29 shall be conferred on the Commission for an indeterminate period of time.

2. The power to adopt delegated acts referred to in Article 29 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 an extension not later than three months before the end of each period.

____________________

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

Amendment 3

Proposal for a regulationArticle 1 – point 4 a (new)Regulation (EC) No 2187/2005Article 31 a (new)

635


(4a) The following Article is inserted:

"Article 31a

Overall assessment and review

By ...*, the Commission shall review the effectiveness of the measures laid down in this Regulation, and, where appropriate, submit a legislative proposal to the European Parliament and to the Council for the amendment of this Regulation in order to ensure that it is compatible with Regulation (EU) No .../2013 of the European Parliament and of the Council of ... on the Common Fisheries Policy1.

_______________

* OJ: Please insert date: One year after the entry into force of Regulation (EU) No .../2013 [on the Common Fisheries Policy].1 OJ L ..."

636

P7_TA-PROV(2013)0344

Making the internal energy market work

European Parliament resolution of 10 September 2013 on making the internal energy market work (2013/2005(INI))


– having regard to the Commission Communication entitled ‘Making the Internal Energy Market Work’ and the accompanying working documents (COM(2012)0663),

– having regard to its position of 12 March 2013 on the proposal for a regulation of the European Parliament and the Council on guidelines for trans-European energy infrastructure and repealing Decision No 1364/2006/EC1,

– having regard to Regulation (EU) No 994/2010 of the European Parliament and of the Council of 20 October 2010 concerning measures to safeguard security of gas supply and repealing Council Directive 2004/67/EC2,

– having regard to Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale energy market integrity and transparency3,

– having regard to Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas4,

– having regard to Directive 2009/72/EC of the European Parliament and the Council of 13 July 2009 concerning common rules for the internal market in electricity and repealing Directive 2003/54/EC5,

– having regard to Regulation (EC) No 714/2009 of the European Parliament and the Council of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003,

– having regard to Regulation (EC) No 715/2009 of the European Parliament and the Council of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005,

– having regard to Directive 2012/27/EU of the European Parliament and the Council of 25 October 2012 on Energy Efficiency6,

– having regard to Council Directive 2009/71/Euratom of 25 June 2009 on establishing a Community framework for the nuclear safety of nuclear installations7,

1 Texts adopted, P7_TA(2013)0061.2 OJ L 295, 12.11.2010, p. 1.3 OJ L 326, 8.12.2011, p. 1.4 OJ L 211, 14.8.2009, p. 94.5 OJ L 211, 14.8.2009, p. 55.6 OJ L 315, 14.11.2012 , p. 1.7 OJ L 172, 2.7.2009, p. 18.

637

http://eur-lex.europa.eu/JOHtml.do?uri=OJ:L:2012:3150001:SOM:EN:HTML

– 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 Decision No 994/2012/EU of the European Parliament and of the Council of 25 October 2012 establishing an information exchange mechanism with regard to intergovernmental agreements between Member States and third countries in the field of energy Text with EEA relevance1,

– having regard to the Commission communication of 15 December 2011entitled ‘Energy Roadmap 2050’ (COM(2011)0885),

– having regard to the Commission communication of 3 October 2012 entitled ‘Single Market Act II Together for New Growth’ (COM(2012)0573),

– having regard to the Commission communication of 6 June 2012 entitled ‘Renewable energy: a major player in the European energy market’ (COM(2012)0271),

– having regard to its resolution of 25 November 2010 entitled ‘Towards a new Energy Strategy for Europe 2011-2020’2,

– having regard to its resolution of 12 June 2012 on engaging in energy policy cooperation with partners beyond our borders: A strategic approach to secure, sustainable and competitive energy supply3,

– having regard to its resolution of 13 December 2012 on the EU steel industry4,

– having regard to the recommendations issued on 12 February 2013 by the High-Level Round Table on the future of the European steel industry,

– having regard to its resolution of 15 March 2012 on a roadmap for moving to a competitive low carbon economy in 20505,

– having regard to its resolution of 14 March 2013 on the Energy Roadmap 2050, a future with energy6,

– having regard to its resolution on the industrial, energy and other aspects of shale gas and shale oil7 and its resolution on environmental impacts of shale gas and shale oil extraction activities8, both adopted on 21 November 2012,


– having regard to the report of the Committee on Industry, Research and Energy and the opinion of the Committee on Internal Market and Consumer Protection (A7-0262/2013),

1 OJ L 299 27.10.2012, p. 13 2 OJ C 99E, 3.4.2012, p. 64.3 Texts adopted, P7_TA(2012)0238.4 Texts adopted, P7_TA(2012)0509.5 Texts adopted, P7_TA(2012)0086.6 Texts adopted, P7_TA(2013)0088.7 Texts adopted, P7_TA(2012)0444.8 Texts adopted, P7_TA(2012)0443.

638

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52012DC0271:EN:NOT

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52012DC0271:EN:NOT

A. whereas the Member States have committed themselves to clear deadlines for the completion of the internal energy market by 2014 and for doing away with the EU’s ‘energy islands’ by 2015;

B. whereas a completed internal energy market is indispensable for the Union’s overall energy security and sustainability, and is of essential value for the Union’s global competitiveness, economic growth and the creation of new jobs, as recognised in the Single Market Act II and the Europe 2020 strategy;

C. Whereas the Commission’s Energy 2020 strategy builds on estimates for necessary investment needs in the energy sector amounting to EUR 1 trillion by 2020, of which EUR 540 billion are for power generation and EUR 210 billion for electricity and gas networks of European importance;

D. whereas the Energy Roadmap 2050 underlines that full integration of the European energy networks and the opening up of markets are critical for maintaining the balance between energy security, competitiveness, cost efficiency, a sustainable economy and consumer interests; whereas the Energy Roadmap 2050 states that energy efficiency, renewable energies and energy infrastructures are the no-regrets options;

E. whereas the share in Europe's energy mix accounted for by renewable energy sources (RES) is growing in the short, medium and long term; whereas large-scale integration of RES presupposes an adaptation of the grid and improved flexibility;

F. whereas a single energy market will empower the Union to speak with one voice vis-à-vis external partners and ensure a level playing field for all EU and non-EU companies, while also guaranteeing social and environmental standards and working towards reciprocity in third countries;

G. whereas a system needs to be established that will allow the Member States to exchange information on energy-supply agreements with third countries;

H. whereas an internal European energy market and its respective national energy markets must be competitive and deliver real choice and transparent information to all consumers, who play a central role in the energy market; whereas the completion of the internal energy market is essential to bring down energy costs and prices to affordable and competitive levels in the short, medium and long-term; whereas reduced prices on energy markets are often not passed on to the consumers;

I. whereas a European Energy Community, applying the Community method, must be based on a strong common energy market, the coordination of energy purchasing outside of the EU, and common European funding of new sustainable energy technologies, notably in the areas of research and innovation;

J. whereas certain progress has been achieved towards enhanced cross-border cooperation, partial elimination of energy islands and prevention of supply shortages;

1. Welcomes, broadly, the Communication and the accompanying Action Plan, which summarise the progress achieved so far and the challenges ahead for the completion of the internal energy market;

639

2. Acknowledges that the trend of rising energy prices is likely to continue given that these prices are currently linked – in the case of gas – to per-barrel oil price, and – in the case of electricity – to volatile fuel prices, and are further affected by Europe´s dependency on oil and gas imports, by the impact of the intervening measures, by the insufficient actions to promote energy efficiency, and by the lack of investments needed to maintain and modernise energy systems (including reverse flows and interconnectors) with a view to guaranteeing high levels of security of supply and facilitating the integration of RES; advocates, therefore, the decoupling of the gas pricing mechanism from the oil indexation to more flexible alternatives, while respecting the freedom of commercial exchange;

3 Stresses that the development of indigenous resources will lead to the emergence of new trading hubs in the EU and new spot markets for gas and electricity, thus presenting a real opportunity for the EU and the Member States to determine their own energy prices, including at a regional and local level;

4. Recognises the European added value of better energy policy coordination and cooperation among the Member States, in a spirit of solidarity, and of creating efficient and secure trans-border energy systems, thereby creating synergies through improved management of the supply and demand of energy, facilitated through smart technologies at distribution system level;

5. Points to the importance of regional markets, and of cooperation between Member States, when it comes to removing barriers, speeding up the integration process and improving network efficiency;

6. Recalls its support for the creation of a European Energy Community between the Member States, and asks the Commission and the European Council to report on the progress towards its creation;

Consumer-oriented market

7. Stresses that end energy-consumers – individuals, SME’s and industry alike – are at the very core of the user-friendly and transparent internal energy market; notes that, as such, they must be duly protected, and accurately informed with easy access to information, so that they are able to exercise their rights fully, while encouraged to play a more active role in stimulating market competition, moving from passive service recipients to active informed consumers and prosumers;

8. Emphasises the importance of ensuring a competitive, easily managed and transparent energy market that offers real choice and competing prices to consumers as well as provides all present and future EU energy consumers with safe, sustainable, affordable and reliable ways of generating energy that takes into account the interests of coming generations;

9. Takes the view that greater participation on the part of consumers will be facilitated by local cooperatives for renewable energy, collective switching initiatives and aggregators, or other enablers such as decentralised storage and smart appliances; believes that such enablers will help consumers better understand and manage their energy consumption, and thereby become more flexible and responsive (from both a demand and a supply perspective), and that they can strengthen access to renewables and generate the necessary financial investments;

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10. Draws attention to the advantage of applying variable network-use charges in order to encourage customers to consume energy outside peak periods, in the interest of promoting a sustainable energy use;

11. Believes that smart technologies must deliver accurate, understandable and user-friendly information to consumers, and must empower them to manage their energy consumption and production; believes, therefore, that smart technologies must be completed with dynamic, online transmission and distribution grid management, incorporating such services as grid support services, voluntary demand-side response, energy efficiency services, micro-generation and storage solutions, and local or home brokers; points out, however, that the levels of energy consumption required for smart meters to provide economic advantages must be duly scrutinised, and that consumers of energy volumes below such levels shall not be obliged to invest in them;

12. Expresses concern about developments encouraging telecommunication companies to manage distribution grid data, as such a responsibility on their part raises serious questions about the protection of data as well as the risk that operators would have to buy the technical data they need to fulfil their functions as distribution system operators;

13. Recognises that energy poverty presents considerable challenges in Member States; points out that the one-size-fits all approach does not take into account the diversity of national realities; considers, therefore, that vulnerable consumers require special and effective protection, and that, to that end, appropriate mechanisms must be put in place, while market distortions are avoided; highlights that specific measures already exist as required by the Third Energy Package;

14. Notes that the shale gas revolution in the US has reduced CO2 emissions while creating a significant competitive advantage for the US industry;

Current challenges in completing the internal energy market

15. Stresses that the internal energy market is not completed yet, and that national energy markets fall short of satisfying the needs and expectations of consumers, as in some Member States they continue to face: high prices; a limited choice of suppliers, producers and tariffs; overall low quality of services; often too weak consumer protection; and difficulties in switching supplier; stresses, therefore, the need to build a more user-friendly market where consumers can play an active role and become prosumers in an EU-wide market in which they are informed about the terms offered by individual providers in such a way as to facilitate comparison; notes, in this regard, the role of collective switching in empowering consumers and providing lower energy bills;

16. Believes that the lack of full implementation of internal energy market legislation remains one of the main obstacles for the completion of this market; believes that the necessary consolidation of the internal market includes extending our infrastructure whilst implementing internal market law and enforcing competition rules;

17. Stresses that modernising the existing energy infrastructure, and building new, intelligent and flexible generation, transmission (especially transborder gas and electricity interconnectors), distribution and storage infrastructures is essential for a stable, well-integrated and well-connected energy market, where any negative effects, such as unplanned power flows, are avoided, where supply at affordable and competitive prices is

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secured, where the full potential of all sustainable energy sources, and of micro-generation, cogeneration and efficiency, demand-side management and storage, is fully exploited, and where no Member State remains isolated from the European gas and electricity networks by 2015, to be achieved, i.a., through the synchronous integration of isolated power systems into the European continental networks; emphasises that large-scale investments should be made in parallel with investments in regional or even local networks, as energy generation increasingly takes place at regional/local level;

18. Notes, in this regard, that a decentralised renewable energy supply reduces the need to build new transmission lines, and hence the associated costs, as decentralised technologies –which can be directly integrated in homes, cities and remote areas – are much closer to the end-consumers;

19 Acknowledges that allowing renewable electricity production to grow without a commensurate development of the necessary infrastructure may result in uncoordinated cross-border loop-flows and, consequently, sub-optimal energy prices;

20. Recalls than the Member States’ target to reach a level of electricity and gas interconnections equivalent to at least 10 % of their installed production capacity, as agreed on at the European Council summits in 2002 and 2007, has not yet been achieved;

21. Welcomes the Commission's emphasis that Europe's future energy systems will be characterised by flexibility; notes that, in all timeframes, well-functioning cross-border wholesale markets are easily accessible sources of flexibility; calls for further efforts to stimulate the future uptake of energy storage technologies and demand-side responsiveness, all of which offer additional sources of flexibility;

22. Believes that energy efficiency is one of the most sustainable and cost-effective ways of reducing energy bills, enhancing security of supply, reducing fossil fuel import needs and avoiding carbon emissions; recognises that any measure which promotes energy efficiency must be appropriate to the needs of consumers, cost-effective and supported by the right incentives;

23. Underlines that according to International Energy Agency findings, bolder action on energy efficiency can reduce EU gas imports by one-third in 2035, corresponding to 100 bcm of gas;24. Recalls that synergies between telecommunication and energy infrastructure development, deployment and maintenance will play a key role in the efforts to fulfil the European Union energy efficiency objectives;

25. Highlights the need to continue to unbundle European energy markets in order to secure competition and ensure the supply of electricity at the lowest possible price;

26. Believes that investment in infrastructure needs to be encouraged through a stable, innovation-friendly and predictable regulatory frameworks that does not impede the functioning of the internal market, and that pension funds and institutional investors should be allowed to invest in transmission, recognising that this cannot be achieved unless market-driven; recognises at the same time, however, that, in certain specific cases, infrastructural transformations can hardly be achieved unless public funding is provided to supports key infrastructure projects that may not be commercially viable; stresses, in this connection, the importance of the Connecting Europe Facility, and regrets that this mechanism's share of the energy budget is less than the amount proposed by the Commission;

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27. Calls for studies exploring the possibility of establishing a European fund for investment in energy networks;

28. Underlines that streamlining authorisation procedures within the Member States will contribute to the development of infrastructure networks and to the unlocking of investments; stresses that local and regional authorities should play an important role in this respect by simplifying planning procedures and integrating energy infrastructure in their local and regional planning schemes;

29. Notes that the lack of open and non-discriminatory access to transmission infrastructure continues in some cases to hinder new entrants from joining the network or, indeed, from competing on the market on fair terms against incumbent companies; underlines the need to tackle structural market distortions that lead to the high level of concentration existing in several Member States;

30. Stresses, in this regard, that the rules of the third energy package should be applied fully to both European and foreign companies; believes that any exemptions from these rules granted by the Commission should be limited in their scope and length of application, and be subject to review by Parliament and the Council;

31. Stresses that the lack of transparency and the existence of anticompetitive practices in wholesale energy markets undermine consumer trust; believes there is an urgent need to understand cost formation in wholesale markets as well as the impact on consumers' bills;

32. Fully supports measures taken to introduce a level playing field by creating more decentralised and competitive market models, given that they create more opportunities for local energy producers and for new industrial players;

33. Recalls that in order to prevent dominant incumbent suppliers from foreclosing the opening of the market, it is important to enable the development of new business models, such as the ability to contract simultaneously with several suppliers;

34. Notes that a stable regulatory framework – for producers, regulators, network operators, energy suppliers, demand-related service providers and, most importantly, end consumers and prosumers – is essential for a well-functioning internal market and for attracting long-term investment in infrastructure development; underlines that development of network codes encompassing sound, non-discriminatory and well-balanced rules should lead to harmonisation of grid management, market design and interoperability; emphasises that it is crucial that agreements on unbundling of transmission networks, production and delivery are respected across the EU, including agreements on the independent position of energy regulators and on requirements for consumer protection; stresses, therefore, the need to support and further develop the role of the EU Agency for the Cooperation of Energy Regulators (ACER), particularly its capacity to scrutinise national regulatory decisions and settle disputes;

35. Notes that concerns exist that some Member States have already implemented or plan to implement national capacity-remuneration mechanisms (CRMs) in order to secure the supply of electricity without duly exploring all potential alternative solutions, in particular in terms of cross-border solutions and flexibility resources; recognises that although these mechanisms are necessary in some circumstances, they could interfere with and distort wholesale market design and, if badly designed, potentially create lock-in effects; calls on

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the Commission to ensure a more coordinated approach at EU level to guarantee that any such CRMs are needed, efficient, transparent, technologically neutral and non-discriminatory;

36. Regrets that, to date, the cooperation mechanisms introduced by Directive 2009/28/EC on the promotion of the use of energy from renewable sources have not yet been utilised; points to the Commission's findings indicating that better use of the existing scope for cooperation could bring considerable benefits, such as boosting trade; calls on the Member States, therefore, to make better use of the cooperation mechanisms where it is appropriate and to increase communication among themselves;

37 Stresses that, without prejudice either to the Member States' right to choose their energy mix or to the need for increased EU-wide coordination, the EU as a whole must make full use of the potential of all sustainable energy sources that are at the disposal of the Member States, in full respect of the threefold objectives of EU energy policy as a whole, namely competitiveness, sustainability and security of supply;

38. Notes that some Member States, being energy islands, are still totally isolated from the European gas and electricity networks and continue to pay higher price for energy resources, which alters their competitiveness; points out that without substantial infrastructure investment, those Member States will not be able to achieve the commitment reiterated by the European Council that no Member State should remain isolated from the EU networks by 2015; believes that the Commission should, at the request of those Member States, take part in negotiations with non-EU energy suppliers on the subject of energy prices, for instance where the purchase of gas is concerned;

39. Stresses that the solidarity between Member States called for by the EU Treaty should apply to both the daily working and the crisis management of the internal and external energy policy; calls on the Commission to provide a clear definition of 'energy solidarity' in order to ensure that it is respected by all Member States;

40. Emphasises the need to tackle the anticipated growth of gas and electricity imports from third countries to the EU in the short- and medium-term, with view of ensuring security of energy supply, burden-sharing and a fair functioning of the internal market; reiterates that, for some Member States, this challenge is closely linked to a dependency on gas and oil imports from a single third country and that meeting it requires actions oriented at diversifying the portfolio of energy suppliers, routes and sources; acknowledges that strategic objectives in this regard is the realisation of Southern Gas Corridor, including the Nabucco pipeline and its potential lineage to countries of Central and Eastern Europe, and the achievement of supply routes to the EU capable of providing roughly 10-20 % of the EU’s gas demand by 2020, with a view to securing each European region physical access to at least two different sources of gas;

41. Believes that an open and transparent internal market, where all EU and third country companies respect the acquis communautaire in the field of energy, can help strengthen the negotiating position of EU energy suppliers vis-à-vis external competitors, which is particularly important for the potential of further coordinating external energy purchasing at the EU level; calls on the EU to consider the establishment of a joint gas purchase agency, and the mechanisms needed for this, in order to counterbalance the monopolistic position of dominant external suppliers; notes that the reciprocity principle must be used to guide relations with EU and third-country energy suppliers; stresses the need for the Commission,

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in its relations with third country energy suppliers, to take into account, and be transparent about, the impact of its decisions on consumer prices;

42. Is convinced that the Commission should be granted mandates to conduct negotiations on infrastructure projects of strategic importance that affect the security of supply to the EU as a whole, and that such mandates should also be considered in the instances of other intergovernmental agreements considered to have a significant impact on the EU's long-term energy policy objectives, in particular its energy independence; welcomes, in this regard, the progress made in the Commission-led negotiations on the treaty between EU, Azerbaijan and Turkmenistan to build the Trans-Caspian Pipeline System;

43. Stresses that progressive convergence of renewable- and efficiency-related incentives, and of auxiliary energy costs across all Member States post 2020, is essential for a well-functioning and efficient internal energy market, at both the wholesale and retail level, and for creating favourable conditions for the long-term development, and large-scale uptake, of renewable energy sources;

44. Believes that, in the short term, regional groupings of neighbouring Member States should be encouraged to move away from national plans towards a harmonised or single regional support scheme for renewables;

45. Encourages the Member States to review their feed-in or other support tariffs regularly and in a transparent manner which would allow for their adjustment in pace with falling technological and supply costs;

46. Recognises that joint EU research projects supported by framework programmes and initiatives such as the SET-Plan have not been used sufficiently in the development of new technologies allowing for improvements in efficiency, renewables, safety and security of nuclear power plants, low-emission usage of fossil fuels, and intelligent networks, all of which areas are critical for the energy market;

47. Believes it is important to make more progress on the electricity highways of the future, and in particular the South Eastern-North Electricity Highway (SENEH), which would also help in accommodating the transfer of the energy produced by photovoltaic parks, such as the Helios project, from south-east Europe to the north and west;

Urgent actions are needed

A well-integrated, open and well-regulated, and competitive internal energy market

48. Calls on the Member States to transpose and implement fully all relevant EU legislation, in particular the third energy package, as a matter of urgency; urges the Commission to undertake action against those Member States in which implementation has been unduly delayed; welcomes the fact that the Commission has already opened formal proceedings to investigate breaches of EU rules;

49. Underlines the need to tackle structural market distortions, and lack of market transparency; calls on the Commission to increase its efforts to enforce the implementation of the third energy package;

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50. Asks the Commission to monitor closely the effective implementation of EU energy legislation, in particular the provisions that create essential consumer rights, as well as those that concern system operators, national regulating authorities and competition and state aid rules, and those that aim to reduce the phenomenon of loop flows in the internal electricity market, the latter constituting a significant though manageable challenge to the internal energy market as it weakens the security of the energy system by reducing storage options and network capacity; urges the Commission to use the most appropriate means at its disposal to address any continued non-compliance with relevant EU legislation;

51. Notes that all blackouts so far have been the result of operational failures, not capacity shortages; acknowledges that as a result of the economic recession, high natural gas prices and the increasing share of intermittent renewable electricity production, investors in the EU face considerable uncertainty when developing flexible electricity generation capacities; calls on the Commission to conduct a comprehensive assessment of generation adequacy, based on a harmonised methodology, and to provide guidance on how to enhance flexibility and maintain supply;

52. Urges the Commission and the Member States to coordinate infrastructure projects in a better way and to plan network development jointly, thereby ensuring full, EU-wide system connectivity and cost-effectiveness by taking advantage of cross-border synergies and a more efficient energy infrastructure network; points out that an integrated approach, which includes the distribution operators, should be promoted; encourages, to that end, the Commission and the Member States to ensure the rapid assessment, selection, permitting and implementation of projects of common European interest, especially with regard to electricity and gas trans-border interconnectors, including reverse flow mechanisms, liquefied natural gas, energy storage infrastructures and smart transmission and distribution networks, which are vital for a well-integrated and well-functioning energy market;

53. Recommends that, when implementing the energy budget of the ‘Connecting Europe’ facility, the Commission give priority to projects having the greatest impact on the functioning of the internal market, thereby boosting competition, speeding up the market penetration of renewables, creating necessary cross-border interconnections and enhancing security of supply;

54. Calls on the Commission to conduct a fresh review of existing plans for energy projects, especially for the construction of new liquefied natural gas terminals scheduled to take more than ten years to complete, to assess their economic benefit – taking account of the liquefied natural gas terminals which are already under construction or at the planning stage in individual Member States and which, in the near future, will contribute to energy supply security in Member States classed as ‘energy islands’ – and to contribute to the financing of such projects;

55. Urges the Commission and the Member States to put in place an efficient congestion management system in order to foster the efficient use of existing gas and electricity transmission capacity, reducing the cost of expanding network capabilities, and facilitate the increased connection of renewable generation sources to the electricity network;

56. Calls on the Member States to refrain, as soon as possible, from using price caps or regulated energy retail prices set, at national level, below the cost incurred, as such measures can distort competition and seriously threaten future investments in capacity and infrastructure in the energy sector; stresses, however, that policies in this regard shall take

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into account the legitimate interests of vulnerable consumers, who are not always able to benefit from real competition in the energy markets;

57. Welcomes the Commission's determination to enforce anti-trust and state-aid rules vis-à-vis all energy sector undertakings and their subsidiaries operating on the territory of the European Union, ensuring that a level playing field is established with equal conditions of access for all market players; calls on the Commission to issue guidelines on how to assess the abuse of a dominant position in gas and electricity markets by any company, as well as to provide guidance on best practices and on experiences gained in renewable energy support schemes;

58. Asks the Commission to review state aid rules in relation to national energy efficiency measures and to energy projects co-financed under the cohesion policy, in order to ensure that more of these actions are eligible for state funding, leading to more completed projects;

59. Recommends that the Commission use its state aid scrutiny powers to encourage the development of cross-border infrastructure; believes that such interconnectors would play a vital role when it comes to increasing the ability to draw on a neighbour's supplies in the event of an energy emergency or imbalance and to reducing subsidies over time;

60. Strongly supports the Commission's efforts, based on the coordinated work developed by ENTSOs, to introduce harmonised network codes by 2014 and rules in accordance with the plan, and to ensure the stability and increased innovation-friendliness of the regulatory framework of the internal energy market;

61. Strongly supports the regulatory measures taken by ACER and the national regulatory authorities to encourage, improve and simplify the cross-border energy trade, including on intra-day, day-ahead and balancing markets, and to bridge the gap between energy systems in different Member States by promoting transparent use of interconnectors; emphasises the need for appropriate numbers of staff – with necessary qualifications, experience and expertise – in ACER and the national regulatory authorities to carry out the tasks relating to the monitoring of wholesale transactions and the identification of insider trading practices and attempts to manipulate the market;

62. With regard to the internal electricity market, calls on the Commission urgently to provide a thorough analysis of the system adequacy and flexibility of national generation capacities in the short and long term, fully taking into account the potential contribution of all flexible measures, such as demand response, energy storage and interconnection, and to report on the impact of the applied national measures related to capacity assessment and development planning on the internal energy market and competition rules, taking into account the consequences in terms of both security of supply and the cross-border aspects of this complementary market design policy; calls, in this regard, on further efforts to be put on the future uptake of energy storage technologies and demand-side responsiveness, all of which are additional sources of flexibility;

63. Calls on the Commission to prepare guidance on the use and deployment of flexibility resources – such as demand-side management, storage, and physical infrastructures, including cross border ones – so that the Member States can prepare and implement national strategies to deploy flexibility resources on their territories;

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64. Calls on the Commission and on ENTSO-E to develop a coherent and aligned methodology for ensuring generation adequacy in Europe, including the positive contribution of renewable energy sources and, in particular, variable renewables;

65. Calls on the Commission to explore future energy market forms which, contrary to present national capacity mechanisms, could provide additional non-discriminatory revenue streams to investors in all forms of power generation and ensure a most cost-effective provision of flexibility services in the energy sector;

66. Calls on the Commission to set up rules to promote the further development of a market for ancillary services open to the participation of all energy sources, including renewables;

67. Calls on the Commission, the Member States and the relevant stakeholders to provide incentives, and to support regional initiatives and partnerships, aiming at closer market integration, through the setting up of regional energy exchanges and gas trading centres, and through more harmonised rules for gas trading and market coupling mechanisms on all timeframes, and through the uptake of an adequate level of market liquidity and transparency;

68. Underlines that internal market measures should promote the diversification of energy sources, both indigenous and external, and should not primarily focus on the continued development or enlargement of current routes and supplies;

69. Draws attention to the external dimension of the energy market, the aim of which is to make it easier for all Member States to gain access to diversified energy sources; calls on the Commission, in coordination with the EEAS, to use its foreign policy instruments to promote the rules and standards of the internal energy market in relation to third countries and, especially, within the EU's neighbourhood; urges the Commission to resolve, in bilateral dialogues with relevant third countries, the issue of clear rules on congestion management of cross-border electricity and gas connections and on third-party access to transmission networks; strongly urges the Commission to take measures to prevent anti-competitive practices on the part of third-country companies that may lead to restricted competition, higher prices or reduced security of the energy supply; calls on the Commission to ensure, in its relations with external partners, that EU companies are able to compete on equal footing globally; urges the Commission to enhance cooperation with EU neighbouring countries on nuclear safety; calls on the Commission to be transparent about all factors still causing problems with regard to the implementation of the third energy package, and to present clear figures on their impact on consumer prices;

70. Asks the Member States and the Commission to increase political and financial support to the Energy Community and to take further measures to support the extension of internal market rules to South-East and Eastern Europe;

71. Calls on the Commission and the Member States, in the light of the creation of an information exchange mechanism for intergovernmental agreements between the EU Member States and third countries on energy policy, to show further ambition in ensuring that agreements contrary to internal market legislation are not put in place; takes the view that the Commission should be able to examine draft agreements for their compatibility with the acquis communautaire and to participate in the negotiations whenever relevant;

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72. Reminds the Commission that the internal market is not independent from the global market; asks the Commission, when planning its internal market actions, to take Parliament's recommendations on the external dimension of energy policy1 fully into account; confirms its support for the idea that only a fully functioning internal market will allow the EU to speak with one voice globally; asks the Commission to develop further additional actions in the area of external energy policy;

73. Believes that the future EU-US Free Trade Agreement should include a chapter focused on such energy matters as could affect the internal market, including, among other issues: energy wholesale trading, commodities trading, maritime energy transport rules, emission trading schemes, fuel safety standards, accounting practices, state energy subsidies, and the transfer of intellectual property in relation to energy exploration, production, transformation and end-of-lifecycle products;

74. Supports the mandate given by the European Council to the Commission to present an analysis of the composition and drivers of energy prices and costs in individual Member States before the end of 2013, with a particular focus on the impact on households, SMEs and energy intensive industries, and looking more widely at the EU's competitiveness vis-à-vis its global economic counterparts; calls also on the Commission continuously to monitor energy prices and costs in the Member States;

75. Calls on the Commission and the Member States, with regard to the internal gas market, to review all gas contracts based on obsolete pricing mechanisms – in particular the oil indexation principle – that impose high prices on the consumers, and urges the Commission to assist in exploring the possibilities of renegotiating these contracts, not only in the context of their prolongation; stresses the need to develop and support all products and mechanisms aimed at strengthening short-term gas trading capacities; underlines that the aforementioned measures are crucial for ensuring real competitiveness when it comes to the price of supplying gas to all consumers on the internal gas market.

Effectively protecting and supporting consumers

76. Calls on the Commission, the Member States and the relevant stakeholders to improve the quality and availability of the information offered to consumers, to provide them with clear and transparent billing methods, to establish price-comparison tools that let them make the best-informed choices, and to make them aware of ways to control consumption of the possibilities for energy saving, energy efficiency and small-scale production; urges the Member States to implement the Directive on Alternative Dispute Resolution and the Regulation on Online Dispute Resolution for consumer disputes; welcomes the Commission’s proposal to establish an information platform on consumer rights; recommends that the Commission and the Member States roll-out consumer-friendly information campaigns in which governments and civil society organisations should take active part;

77. Points out that even though energy prices on wholesale energy markets have fallen worldwide, consumers continue to pay high prices; calls on the Commission and the Member States, and on Member State regulators, to ensure that consumers benefit directly and adequately from wholesale market price developments;

1 Texts adopted, P7_TA(2012)0238.

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78. Invites the Members States and the Commission to develop a comprehensive strategy aimed at encouraging consumers and prosumers to participate actively in the energy market, inter alia by inclusion through existing legislation as well as through the implementation of the relevant provisions of the Energy Efficiency Directive; suggests that the network-use pricing signal be adjusted regularly in order to provide both existing and future users with the necessary guidance and thus ensure consistency between network development and individual decisions;

79. Calls on the Commission to encourage further cooperation between the energy and the information and communications technology (ICT) sectors, and to review existing regulatory frameworks to encourage energy-related innovations to the benefit of all consumers, and to facilitate the deployment, in a user-friendly, secure and reliable way, of smart grids that do not place a financial burden on the consumers and that take their data privacy into account; calls for cooperation in the development of smart grids at European, national and regional level and in the development of European standards for smart grids;

80. Urges the Member States, and regional and local authorities, to incorporate and create financial incentives for investments in ICT solutions in smart grids, and to aim for a prosumer market, leading to more flexibility, energy efficiency/savings and voluntary demand-side participation;

81. Looks forward to the Commission's guidelines to help set ambitious policy objectives with regard to vulnerable consumers, which will assist the Member States in better defining their approach to this category of consumers; calls on the Commission to prepare these guidelines, taking due account of the existing national mechanisms and instruments for protecting such consumers, with a view to achieving a more coherent and comprehensive approach at EU level, while leaving it to the Member States to select the most suitable instruments for providing such support; adds that comprehensive advisory services for this category of consumers, and the exchange of best practices, can play an important role;

82. Welcomes the Commission's impending analysis on energy poverty in the EU; believes that, as part of its analysis, the Commission should make efforts to ensure that combating energy poverty becomes part of the social basket of services for Europe, e.g. through the social and cohesion funds; stipulates that existing and new energy efficiency programmes should always include a targeted focus on low-income groups;

83. Urges the Commission to develop and recommend a proper supplier-centric retail market design to harmonise European retail markets, thereby easing the administrative burden on consumers by letting the suppliers charge all levies directly on the electricity bill;

Helping future energy and climate challenges

84. Calls on the Member States, the Commission and the relevant stakeholders to convert the necessary supporting schemes for all power generators into transparent, predictable, convergent and market-driven mechanisms, as soon as it is feasible, in order to create a common market for requested support features – such as energy efficiency, prosumers, cogeneration, flexibility, renewables, and grid support services – in a way that ensures their compatibility and that avoids any overlap; calls on the Commission to present guidance on efficient and cost-effective support schemes for renewables energies;

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85. Calls on the Commission, the Member States and the national regulatory authorities to revise the indicators used to measure the degree of competition in energy markets, and to include indicators such as the proportion of consumers on the cheapest tariffs, the ability of new companies to enter the market, and the levels of customer service and innovation, all of which will help provide a real picture of the level of competition on the market;

86. With regard to the internal electricity market, calls on the Commission to examine thoroughly the implications of integrating the growing share of renewables, into the energy grids with regard to financial support, system-wide technical requirements and market design; underlines that the lack of a coordinated approach towards those sources has until now hampered their integration within the European energy systems; underlines the fact that the current European energy grid and storage infrastructures need to be adapted to the contribution of distributed generation from renewable energy; stresses the importance of gas as a back-up fuel to cope with the variability of renewable electricity production, and asks the Commission to assess the necessary level of flexibility in the power system (smart grids, demand-side management, storage and flexible back-up capacity); believes that pumped storage has a large role to play in storing electricity;

87. Asks the Commission to continue to use regional development, cohesion and other EU structural funds to support the creation of smart gas and power grids in the next period in order to better absorb new types and sources of energy and to modernisation all regions of Europe; believes that distribution system operators should also be encourage to accept adaptations to their networks;

88. Calls on the Commission and the Member States to promote incentives to unlock the untapped possibilities of micro-generation and to pay attention to the need to develop cogeneration further, as it is one of the most efficient ways of producing electrical energy and heat, and to base this option on the wide implementation of efficient district heating and cooling;

89. Stresses the potential of combined heat and power/district heating and cooling to accommodate the rising share of intermittent power by adding flexibility and resilience to the energy market and providing an economical energy storage for surplus electricity; calls on the Commission to address and reward this ability in its forthcoming initiative concerning CRMs and to support this kind of cross-sectorial integration and balancing under Horizon 2020;

90. Calls on the Commission to launch a study analysing new and cost-efficient market designs for the European electricity market with a view to ensuring that consumers receive reasonably priced electricity and to preventing carbon leakage;

91. Welcomes the work done to make research in the energy field a priority of the Horizon 2020 programme, and calls on the Member States to take full advantage of this programming area; encourages the Commission and the Member States to support research on, and the development of, innovative energy technologies, and to improve existing technologies that fall outside of the framework of Horizon 2020 and European Institute of Innovation and Technology (EIT) projects; urges the Member States to create synergies between EU and national research programmes, in recognition of the fact that research is the only way forward to reduce emissions, improve energy security, increase the competitive position of EU industry on the global market, maintain EU technology leadership, and

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contribute to the European agenda for growth and jobs; underscores the need to offer industry legislative certainty over a time span that extends beyond 2020;

92. Urges the Commission to make sufficient funding available for the development of smart distribution grids, which offer the most-cost effective way to realise the large-scale penetration of distributed generation from renewable energy sources while ensuring security of supply and making the most of energy saving potentials;

93. Notes that the current system, characterised by a fragmented internal market, poses challenges to the long-term stability of companies and investors that could lead to plant closures and uncertainties with regard to employment and capacity; asks the Commission to undertake an independent evaluation of the future of the internal market for electricity and gas in which issues pertaining to investments, sector employment, the environment and the protection of consumers are given a central role; asks that this evaluation be ready by March 2014 and that it be inclusive by taking on board the opinions of stakeholders such as social partners, representatives of low-income households, environmental organisations and SMEs;

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P7_TA-PROV(2013)0345

Implementation and impact of the energy efficiency measures under the cohesion policy

European Parliament resolution of 10 September 2013 on the implementation and impact of the energy efficiency measures under Cohesion Policy (2013/2038(INI))


– having regard to Article 194 TFEU,

– having regard to Article 37 of the Charter of Fundamental Rights of the EU,

– having regard to Article 3 of the TEU,

– having regard to Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999,

– having regard to Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999,

– having regard to Council Regulation (EC) No 1084/2006 of 11 July 2006 establishing a Cohesion Fund and repealing Regulation (EC) No 1164/94,

– having regard to Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC,

– having regard to Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings,

– having regard to the Commission’s communication of 3 March 2010 entitled ‘Europe 2020 – A strategy for smart, sustainable and inclusive growth’ (COM(2010)2020),

– having regard to the Commission’s report of 18 April 2013 entitled ‘Financial support for energy efficiency in buildings’ (COM(2013)0225),

– having regard to chapter 5 (‘The European divide in clean energy and fuel poverty’) of the European Trade Union Institute (ETUI) report ‘Benchmarking Working Europe 2013’, Brussels 2013,

– having regard to Directive 2006/32/EC of the European Parliament and of the Council of 5 April 2006 on energy end-use efficiency and energy services and repealing Council Directive 93/76/EEC,

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– having regard to its report of 30 April 2013 on social housing in the European Union1,

– having regard to the Council’s Report of 4 March 2013 entitled ‘Implementation of the European Semester – Synthesis report’ (6754/13),

– having regard to the Commission’s communication of 26 January 2011 entitled ‘Regional policy contributing to sustainable growth in Europe 2020’ (SEC(2011)0017),

– having regard to the Commission’s statistical pocketbook of 2012 entitled ‘EU energy in figures’2,

– having regard to the Commission’s communication of 16 December 2008 entitled ‘Cohesion Policy: investing in the real economy’ (COM(2008)0876),

– having regard to the Commission’s communication of 19 October 2006 entitled ‘Action Plan for Energy Efficiency: Realising the Potential’ (COM(2006)0545),

– having regard to the Court of Auditors’ Special Report No 21/2012 entitled ‘Cost-effectiveness of Cohesion Policy Investments in Energy Efficiency’,

– having regard to its resolution of 11 March 2009 on a European Economic Recovery Plan3,

– having regard to the report from KfW Research entitled ‘Impact on public budgets of KfW promotional programmes in the field of “Energy-efficient building and rehabilitation”’4,

– having regard to its resolution of 16 January 2013 on the role of EU cohesion policy and its actors in implementing the new European energy policy5,

– having regard to the Commission’s communication of 8 March 2011 entitled ‘A Roadmap for moving to a competitive low carbon economy in 2050’ (COM(2011)0112),

– having regard to its resolution of 24 May 2012 on a resource-efficient Europe6,

– having regard to the Commission’s report of 18 April 2013 entitled ‘Cohesion policy: Strategic report 2013 on programme implementation 2007-2013’ (COM(2013)0210),

– having regard to the opinion of the Committee of the Regions of 4 May 2012 entitled ‘Energy efficiency in cities and regions – a focus on the differences between rural districts and cities’7,

– having regard to the opinion of the Committee of the Regions of 14 December 2011 entitled ‘Energy efficiency’8,

1 Texts adopted, P7_TA(2013)0246.2 http://ec.europa.eu/energy/publications/doc/2012_energy_figures.pdf. 3 OJ C 87 E, 1.4.2010, p. 98.4 https://www.kfw.de/migration/Weiterleitung-zur-Startseite/Homepage/KfW-Group/Research/

PDF-Files/Energy-efficient-building-and-rehabilitation.pdf. 5 Texts adopted, P7_TA(2013)0017.6 Texts adopted, P7_TA(2012)0223.7 OJ C 225, 27.7.2012, p.52.8 OJ C 54, 23.2.2012, p. 49.

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https://www.kfw.de/migration/Weiterleitung-zur-Startseite/Homepage/KfW-Group/Research/PDF-Files/Energy-efficient-building-and-rehabilitation.pdf

https://www.kfw.de/migration/Weiterleitung-zur-Startseite/Homepage/KfW-Group/Research/PDF-Files/Energy-efficient-building-and-rehabilitation.pdf

http://ec.europa.eu/energy/publications/doc/2012_energy_figures.pdf

– having regard to the opinion of the European Economic and Social Committee (EESC) entitled ‘The proposal for a directive of the European Parliament and the Council on energy efficiency’1,

– having regard to the MARIE/ELIH-MED policy paper entitled ‘Improving MED transnational cooperation answers to energy efficiency challenges in buildings’,

– having regard to the Commission’s communication of 8 March 2011 entitled ‘Energy Efficiency Plan 2011’ (COM(2011)0109),

– having regard to the recommendations of Structural and Cohesion Funds for Sustainable Energy Investments (SF Energy Invest) entitled ‘Practical recommendations to increase the share of sustainable energy investments in the upcoming SCF programming period 2014-2020’2,

– having regard to the report submitted to the Commission by Ismeri Europa entitled ‘Expert evaluation network delivering policy analysis on the performance of Cohesion policy 2007-2013 – Synthesis of national reports 2011 – renewable energy and energy efficiency of housing’,

– having regard to the Commission’s Green Paper of 27 March 2013 entitled ‘A 2030 framework for climate and energy policies’ (COM(2013)0169),

– having regard to the study by Copenhagen Economics entitled ‘Multiple benefits of investing in energy efficient renovation of buildings’3,

– having regard to the Commission’s contribution to the European Council of 22 May 2013 entitled ‘Energy challenges and policy’,


– having regard to the report of the Committee on Regional Development and the opinion of the Committee on Industry, Research and Energy (A7-0271/2013),

A. whereas improved energy efficiency (EE) means using less energy input for an equivalent level of economic activity or service4;

B. whereas the promotion of EE is set by Article 194(1) of the Treaty on the Functioning of the European Union (TFEU) in the context of the establishment and functioning of the internal market and the need to preserve and improve the environment;

C. whereas achieving EE is a key priority for the Commission and Member States, as illustrated by one of the EU 2020 objectives to increase EE by 20 %;

1 OJ C 24, 28.1.2012, p. 134.2 http://www.sf-energyinvest.eu/fileadmin/Dateien/Downloads/May2012-Recommendations.pdf. 3 http://www.renovate-europe.eu/uploads/Multiple%20Benefits%20Study_Key%20Messages

%20Brochure.pdf. 4 Communication from the Commission – Action Plan for Energy Efficiency: Realising the

Potential (COM(2006)0545).

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http://www.renovate-europe.eu/uploads/Multiple%20Benefits%20Study_Key%20Messages%20Brochure.pdf

http://www.renovate-europe.eu/uploads/Multiple%20Benefits%20Study_Key%20Messages%20Brochure.pdf

http://www.sf-energyinvest.eu/fileadmin/Dateien/Downloads/May2012-Recommendations.pdf

D. whereas cutting consumption by means of energy efficiency is the most sustainable way of reducing dependence on fossil fuels, leading to a reduction in imports of around 25 %;

E. whereas a great deal of energy still comes from hydrocarbons which, during combustion, release greenhouse gases;

F. whereas investment in EE can bring economic, social and environmental returns to the European regions;

G. whereas a timely and cost-effective implementation of the Energy Efficiency Directive has the potential to reduce energy consumption significantly, decrease dependence on imports of fossil fuels, create new jobs, provide social protection and eradicate energy poverty;

H. whereas in the current 2007-2013 programming period, EUR 5.5 billion were allocated for energy efficiency, co-generation and energy management within the Cohesion Policy budget;

I. whereas the Commission latest report1 concludes that up to the end of 2011, almost EUR 3,8 billion had been allocated to specific EE projects, including revolving funds, representing an implementation rate of 68 %; whereas the report also noted that this implementation rate was uneven across the Union;

J. whereas the Council, in its Synthesis Report from March 20132, identified among the factors adversely affecting EE development the lack of adequate information and financial incentives, the low profile of energy efficiency measures and the inadequate implementation of existing legislation, noting that these factors are more practical than regulatory;

K. whereas the minimum amount of project funding available from the European Local Energy Assistance (ELENA) facility is EUR 50 million, and from the Intelligent Energy programme the minimum is in excess of EUR 6 million, which is more than for many projects in small and rural communities;

General remarks

1. Stresses that in the current period of crisis, and with the Union importing over 50 % of its energy needs, improving EE in a cost-effective manner can contribute in an important way to boosting EU competitiveness, creating jobs and growth at local and regional level, and could represent a win-win option in the fight against climate change and high energy expenses;

2. Supports the EU’s commitment to achieve the objective of increasing EE by 20 % by 2020; stresses that timely and proper implementation of the Energy Efficiency Directive and its instruments, in line with individual national circumstances, would bring the Member States back on track of achieving the 20 % target; urges, in this regard, the Member States to put further efforts towards achieving the EU2020 objective, and to pave the way for further savings beyond this date;

1 Report from the Commission to the European Parliament and the Council on Financial support for energy efficiency in buildings (COM(2013)0225), 18 April 2013.

2 6754/13 Council Synthesis Report: Implementation of the European Semester, 4 March 2013.

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3. Notes that European Structural and Investment Funds could help provide incentives for private investment in energy-efficient products, transport modes, buildings, industry, works and services, including energy efficiency services, and could help reduce public expenditures on energy bills, giving better value for public money; welcomes the suggested prioritisation of energy efficiency within the energy research chapter of Horizon 2020;

4. Highlights the experience of the current funding period, which shows that the funds set aside for energy efficiency from the European Structural and Investment Funds cannot be fully exploited; stresses, therefore, that in the financial framework for 2014-2020 – in which the share of funding set aside for energy efficiency is greater than before – care must be taken to facilitate access by local and regional authorities to these funds;

5. Stresses that the Member States should see the use of European Structural and Investment Funds for EE as an investment opportunity with a high leverage effect and not as an expenditure; calls on the Commission to revise the rules on State Aids further in order to allow greater national funding for EE alongside European investments;

6. Highlights the importance of Cohesion Policy, and of the financial resources allocated to it, for the full development of smart grids and intelligent networks, which result in more efficient energy systems across the regions, reducing energy consumption and energy loss;

7. Stresses that local and regional authorities must have adequate competences and responsibilities, not only with regard to energy supply and use but also to the achievement of the energy efficiency objectives;

8. Calls on the Commission to improve legal certainty with regard to regional State aid (RSA) rules for the construction of social housing that complies with energy efficiency standards and investment in sustainable buildings and energy;

9. Recalls that, according to some academic research, in 2010 close to 9 % of the citizens of the EU and of Norway and Switzerland (52,08 million people) could not heat their homes adequately; notes that fuel poverty is particularly severe in new Member States and is, in most cases, due to poorly insulated homes; calls on the Commission to examine in detail the links between EE promotion, fuel poverty and vulnerable consumers; stresses that savings made through EE measures must be passed on to consumers in reducing their bills;

10. Points out that the potential for energy efficiency has not yet been realised effectively in certain economic sectors, such as the building and transport sectors, and that allocations from the Structural Fund or the Cohesion Fund, or other forms of investment, to improve energy efficiency should help increase employment opportunities in this sector;

11. Highlights the need to ensure that social housing construction and renovation is conducted with a view to achieving energy efficiency objectives and standards; while respecting the principle of subsidiarity, asks the Member States and all stakeholders to take account of social housing in their national reform programmes and in the shaping of strategic priorities under partnership agreements in the upcoming programming period 2014-2020; reminds the Member States, in this context, of the provisions laid down in Article 20 of Directive 2012/27/EU on Energy Efficiency;

12. Acknowledges that one of the greatest obstacles to realising energy savings at local and regional level is the need to invest upfront; is convinced that any measure taken at EU level

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should take due account of the implications for, and budgetary restrictions of, municipalities and regions; recommends, therefore, that local and regional representatives be consulted when development guidelines are being established in the field of energy, and that financial support be provided for local and regional level programmes for the use of existing energy resources;

13. Recalls that Parliament has already adopted the report on the role of EU Cohesion Policy and its actors in implementing the new European energy policy, and that this report also covers energy efficiency issues;

Programming period 2014-2020 and legislative changes

14. Notes that the primary objective of Cohesion Policy remains the reduction of the economic, social and territorial disparities between regions, and considers that energy efficiency policies should not interfere with this objective; stresses that some of the EU’s poorest regions may have different priorities and require investment in other areas first; underlines that the strength of Cohesion Policy lies in its flexibility and the decentralised administration of funds at local level;

15. Recalls the 2009 amendment of the European Regional Development Fund (ERDF) Regulation regarding energy efficiency, making housing eligible for support in all parts of the EU, with a cap of 4 %; notes that, as a result of a late change to the provisions, namely a modification of operational programmes made during the programming period, in many Member States this policy action has not resulted in a substantial increase of funds diverted to this objective; notes that because this change was not met with new additional EU funding, some Member States rejected this opportunity while in others a significant correlation has been found between low absorption of funds and weak administrative functions; points to the importance of legal clarity regarding EE measures before and during the programming period 2014-2020;

16. Welcomes the new opportunities offered by, and the more important role in realising the EE objectives given to, the ERDF and the Cohesion Fund in the programming period 2014-2020; supports in particular the future role of Cohesion Policy funding in the entire building sector, including housing;

17. Urges the Member States to introduce, within their operational programmes, simple and non-bureaucratic procedures for the use of funding earmarked for the improvement of household energy efficiency;

18. Urges the Member States to ensure that decentralisation arrangements give municipal authorities direct access to funding for household energy efficiency;

19. Acknowledges the result of the negotiations on the ERDF regulation regarding the earmarked minimum percentages to be used on specific thematic objectives for each category of regions, which allow for an increase in allocations for EE and renewable energy resources; recalls that ambitious minimum shares are crucial for easier mobilisation of local actors and help create stable, long-term programmes;

20. Welcomes the Commission’s proposal to extend the use of innovative financial instruments (FI) in the programming period 2014-2020 to all thematic objectives, including EE;

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21. Endorses the Commission’s proposals for simplification of the European Structural and Investment Funds in the programming period 2014-2020; believes that the conclusion of negotiations on the Common Provisions Regulation (CPR) should result in a successful implementation of multiple-funds usage, which would greatly benefit EE projects;

22. Welcomes the progress achieved in negotiations on CPR with regard to partnership agreements; calls, in this regard, on the Member States and the Managing Authorities to work with experts from the field of energy efficiency in order to make good use of this mechanism when preparing the operational programmes (OPs);

23. Encourages the Member States to strengthen relations between their respective National Energy Efficiency Action Plans and the OPs with a view to ensuring that European Structural and Investment Funds will be part of a coherent strategy while still responding to territorial needs; stresses that the principal objective of energy efficiency should be energy autonomy at regional and local level;

24. Believes that EU measures should support energy efficiency in the energy production, distribution and consumption phases; notes that while Cohesion Policy energy funding is currently mainly spent on renewables1, a better balance must be reached whereby a greater percentage of funding is targeted at energy efficiency projects;

25. Stresses that excessive specification and binding targets as regards the implementation of the energy efficiency objectives may increase expenditures of regional and local authorities on implementing these measures and impose additional costs for costumers;

26. Stresses the importance of integrating an energy efficiency dimension into the research and innovation strategies for smart specialisation that the Member States and their regions will have to design in order to access innovation funding under the future Cohesion Policy;

27. Reminds the Member States once more of the importance of a well-funded budget for the 2014-2020 multiannual financial framework, in which the Cohesion Policy can and should act as a driver of recovery;

Raising awareness and the importance of information dissemination

28. Calls on the Commission to improve the quality and dissemination of the practical information on EE issues available to local and regional authorities, in particular as regards the gains to be made from EE investment, the best methodologies, standards and financial incentives, and the providers of relevant services, including energy performance contracting; notes that the lack of energy service companies in many regions, and in many Member States, could affect the uptake of EE funding;

29. Highlights that the lack of detailed information regarding the characteristics of the building stock at the regional level presents a major barrier for national and regional authorities when formulating strategies and plans; notes the requirements for the listing of such information,

1 Report submitted to the Commission by Ismeri Europa entitled ‘Expert evaluation network delivering policy analysis on the performance of Cohesion policy 2007-2013 – Synthesis of national reports 2011 – renewable energy and energy efficiency of housing’: http://ec.europa.eu/regional_policy/sources/docgener/evaluation/pdf/eval2007/expert_innovation/2011_synt_rep_en.pdf)

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http://ec.europa.eu/regional_policy/sources/docgener/evaluation/pdf/eval2007/expert_innovation/2011_synt_rep_en.pdf

http://ec.europa.eu/regional_policy/sources/docgener/evaluation/pdf/eval2007/expert_innovation/2011_synt_rep_en.pdf

as provided by in Directive 2012/27/EU, and asks for this to be completed at regional level as well and made available to the public;

30. Encourages the Managing Authorities to improve the visibility of OPs and the opportunities for potential beneficiaries of offered sustainable energy projects; suggests that this be done through the creation of national websites, platforms or databases for potential beneficiaries and stakeholders, the organisation of workshops and events to inform target groups, and measures to improve the visibility and accessibility to existing web resources (such as the Build Up web portal and the SF Energy Invest Manual);

31. Encourages the Managing Authorities, in the programming period 2014-2020, to promote integrated projects by adopting a holistic approach to EE on a territorial level, in particular by making use of the new strategic programming tools, such as Integrated Territorial Investment, and by involving existing initiatives, such as the Covenant of Mayors, to help develop integrated plans; encourages the Commission and the Member States to apply a ‘fast-track’ approach to fund applications from authorities which are signatures to the Covenant of Mayors and are fully implementing its requirements;

32. Welcomes the annual ‘Open Days’ conference and the number of panels dedicated to local and regional energy efficiency projects; suggests that the Commission, the Member States and the Managing Authorities build on this event in order to set up an information exchange platform with a view to promoting much needed dialogue and an exchange of best practices for the implementation and management of EE projects funded by European Structural and Investment Funds;

Capacity building and technical assistance

33. Calls on the Member States to follow up on the Commission’s recommendations1 and to increase capacity building, using technical assistance budgets, in order to strengthen the effective participation of local, regional and civil society actors in the design of regional and local energy strategies;

34. Acknowledges that the transition to energy efficient technologies requires new skills, environment-conscious vocational education and specific training in construction and other sectors; encourages, in this regard, the Member States to continue to use funds to provide technical assistance at all levels (such as through the ELENA facility); calls, furthermore, on the Member States to make use of the European Structural and Investment Funds to re-train and up-skill workers for newly emerging jobs in the low-carbon economy, and to avoid any shortages of skilled manpower in this sector;

35. Underlines the potential benefits available under the JESSICA (Joint European Support for Sustainable Investment in City Areas) and ELENA initiatives for sustainable energy investment at local level, with a view to helping cities and regions embark on viable investment projects in the fields of energy efficiency, and calls for the promotion of these initiatives;

36. Encourages further administrative support to local and regional authorities in order to assist them create groupings of small and medium-sized energy efficiency projects that on their own would be below the minimum financial thresholds for access to ELENA, JESSICA and

1 Commission’s communication of 26 January 2011 entitled ‘Regional policy contributing to sustainable growth in Europe 2020’ (SEC(2011)0017).

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Intelligent Energy funding; draws the attention of the Member States and the Commission to the fact that small and medium-sized towns and rural communities often lack the necessary administrative capacity to use new financial instruments fully;

37. Emphasises that bureaucracy and lack of procedural clarity have made access to the Structural Funds and the Cohesion Fund difficult and have discouraged those actors most in need of such funding from applying; supports, therefore, the simplification of rules and procedures, the removal of red tape, and increased flexibility in allocating these funds at both EU and national level; believes that simplification will contribute to the efficient allocation of funds, higher absorption rates, fewer errors and reduced payment periods, and allow the poorest Member States and regions to take full advantage of the financial instruments intended to reduce regional and inter-state disparities; considers that a balance needs to be struck between simplification and the stability of rules and procedures;

Role of financial instruments

38. Stresses that a combination of grants and FI can serve as a successful and innovative approach to leverage private funding, create new models of private-public partnerships and enhance innovation; stresses the importance of attracting private investment in energy efficiency from both the EU and third countries;

39. Points out that efforts to acquire finance for investment in energy efficient projects are often hindered by market, regulatory and trust barriers such as high upfront costs for investors and difficulties to forecast the exact energy savings potential; urges the Member States to find suitable ways of encouraging investment in household energy efficiency;

40. Highlights with concern that the current economic and financial crisis has made it increasingly difficult for the Member States to find the funding needed to co-finance Cohesion Policy programmes related to EE; finds it essential, in this regard, that new innovative ways of financing EE projects are found, including by the private sector;

41. Recognises the Commission’s support for the enhanced role of new and innovative FI in the programming period 2014-2020; stresses that the lack of timely delivery and legal clarity presents a significant difficulty both for the Member States and for other stakeholders included in the management of such instruments; urges the Commission to present without delay proposals for off-the-shelf FI to be available in support of EE measures;

42. Calls on the Member States to share best practices in the design of national energy efficiency funds, whereby European Structural and Investment Funds can be used as equity contributions, or similar, and be aligned with additional funding sources from the private sector;

43. Calls on the Commission to improve further the targeted financial support of the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), the Council of Europe Development Bank (CEB) and the European Energy Efficiency Fund (EEEF) for EE projects; calls on the EIB, the CEB and the EBRD to form a joint working group to study alternatives for new FI, which can be made available to the Member States together with or through their National Energy Efficiency Funds to stimulate additional private sector investment;

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44. Emphasises that the allocation of funds must be based on the principles of proportionality, cost effectiveness and economic effectiveness, and that it must not increase administrative burdens;

Climate, geographical and competitiveness realities

45. Highlights the importance of regularly assessing whether EE measures and requirements are still adequate given climate realities, the competitiveness impacts on industry and SMEs and the energy price implications in different Member States and regions; calls on the Commission to consider this carefully when preparing a set of performance indicators;

46. Stresses the need to take account as well of the specific geographical characteristics of the outermost regions (OR) with regard to EE in order to make better use of the natural assets deriving from their island status (geothermal, solar, wind and marine energy);

47. Supports the progress of the MARIE programme in setting up a Mediterranean Building Energy Efficiency Improvement Strategy; calls, in this regard, on the Member States in the Mediterranean area to share best practices in order to deliver a cost-optimal model for southern Europe; calls for the creation of similar programmes in other European regions, especially Central Europe; considers that a similar strategy could be implemented for the OR, particularly as most of them (though not all) are situated in the tropics;

Indicators and criteria

48. Calls on the Member States to set demanding targets for ensuring that public buildings, and buildings serving other purposes, meet the highest EE standards provided by in Directive 2010/31/EU, and to make them subject to energy certification on a regular basis;

49. Calls on the Commission to clarify the common indicators for EE in Cohesion Policy to be applied and used by the Member States in the programming period 2014-2020;

50. Calls on the Commission to take due account of the economic, geographic and social situation in determining, for each Member State or region, the investment costs related to achieving savings of one kWh;

51. Calls on the Commission to develop, without delay and in close consultation with the Member States and regions, EE project assessment guidelines, which could serve as a basis for setting up mechanisms for evaluating, monitoring and verifying projects and for ascertaining their cost-effectiveness;

52. Calls on the Member States to apply output indicators as defined in the Annex to ERDF Regulation, as well as to use transparent project selection criteria, and standard investment costs per unit of energy to be saved, specifying a maximum acceptable simple payback period for EE projects;

53. Takes note of the Court of Auditors’ latest report on the cost-effectiveness of Cohesion Policy investments in EE; highlights the Court’s recommendation of using transparent and stricter selection criteria for projects at both EU and Member State level; agrees with the Court’s conclusion that assessment criteria used to make investment decisions must be clearer and more precise as regards to how EE aspects are to be considered;

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54. Notes, however, that the Court’s assessment is rather restrictive in terms of sample and payback period; stresses that the Cohesion Policy is an integrated policy and, thus, that a comprehensive approach, based on life-cycle cost analysis, needs to be adopted when carrying out assessments of projects;

Importance of the buildings sector

55. Points out that in 2010 the energy consumption in buildings constituted the largest share of the total final energy consumption in the EU – 40 %, of which households accounted for 26,7 % – and that this consumption accounted for 36 % of the Union’s CO2 emissions; regrets that most Member States fall short when it comes to making full use of the energy saving potential of buildings; calls on the Commission to find ways to encourage efforts to ensure that the greatest energy saving potential does not remain untapped by delivering proposals for clear objectives as regards to the energy consumption of buildings in Member States;

56. Recalls that buildings have a natural renovation cycle of 40 years and that energy saving technologies in this sector are well developed, leaving most barriers that prevent the full use of energy saving potential to be of a non-technical nature; points out that due to the nature of EE renovation projects, which are often less visible, smaller and more difficult to aggregate, the European Structural and Investment Funds also have a crucial role to play in providing the funding needed to overcome these barriers;

57. Notes that energy saving potential, which largely depends on the condition of existing building stock, is not equally spread among the Member States and regions; asks the Member States to refine their definition of ‘decent housing’ to include energy-efficiency standards;

58. Stresses that public investment in EE in buildings is needed, in particular in the least-developed regions and in Member States which are beneficiaries of Cohesion Policy funding, where there is significant potential for reducing energy consumption through cost-effective measures;

59. Encourages the Member States to maximise the use of national and regional programmes to ensure that a high degree of EE is designed into new buildings and implemented into the existing building stock (retrofitting), including residential buildings for low-income households;

60. Notes that rural and remote areas have ideal conditions for the deployment of efficient forms of decentralised energy production, which would reduce the energy losses associated with long-distance electricity transportation;

61. Calls on the relevant public authorities to speed up the renovation of buildings they own, using Cohesion Policy funding to provide the needed leverage and create exemplarity;

62. Calls on the Member States to pay special attention to the difficulties faced by the joint ownership of multifamily apartment buildings, which represent a difficult free-rider problem;

63. Calls on the Commission to build awareness around the real potential of deep renovation and staged deep renovation of building stocks by supporting Member States and regions in

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the preparation of their renovation strategies; recommends that these strategies be developed in parallel with proposals for OPs, and that they focus on incorporating the use of innovative FI and include indicative milestones to build investor confidence;

o

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64. Instructs its President to forward this resolution to the Council, the Commission and the Committee of the Regions.

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P7_TA-PROV(2013)0346

A strategy for fisheries in the Adriatic and Ionian Seas

European Parliament resolution of 10 September 2013 on a fisheries strategy in the Adriatic and Ionian seas (2012/2261(INI))


– having regard to the Treaty on the Functioning of the European Union (TFEU),

– having regard to the Commission communication entitled ‘A Maritime Strategy for the Adriatic and Ionian Seas’ (COM(2012)0713),

– having regard to Council Regulation (EC) No 1967/2006 of 21 December 2006 concerning management measures for the sustainable exploitation of fishery resources in the Mediterranean Sea, amending Regulation (EEC) No 2847/93 and repealing Regulation (EC) No 1626/941, as subsequently amended (the Mediterranean Regulation),

– having regard to its resolution of 6 February 2013 on the common fisheries policy2,

– having regard to its resolution of 22 November 2012 on the external dimension of the common fisheries policy3,

– having regard to Directive 2008/56/EC and to the obligation for Member States to take the necessary measures to achieve or maintain good environmental status in the marine environment by the year 2020 at the latest,

– having regard to its resolution of 3 July 2012 on the evolution of EU macro-regional strategies: present practice and future prospects, especially in the Mediterranean4,

– having regard to its position of 8 March 2011 on the proposal for a regulation of the European Parliament and of the Council on certain provisions for fishing in the GFCM (General Fisheries Commission for the Mediterranean) Agreement Area5,

– having regard to its resolution of 21 October 2010 on the Integrated Maritime Policy (IMP) – evaluation of progress made and new challenges6,

– having regard to the Commission proposal for a directive establishing a framework for maritime spatial planning and integrated coastal management (COM(2013)0133),

– having regard to its resolution of 17 June 2010 on a new impetus for the strategy for the sustainable development of European aquaculture7,

1 OJ L 409, 30.12.2006, p.11; OJ L 36, 8.2.2007, p. 6; OJ L 196, 28.7.2011, p. 42. 2 Texts adopted, P7_TA(2013)0040.3 Texts adopted, P7_TA(2012)0461.4 Texts adopted, P7_TA(2012)0269.5 OJ C 199 E, 7.7.2012, p. 193.6 OJ C 70 E, 8.3.2012, p. 70.7 OJ C 236 E, 12.8.2011, p. 132.

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– having regard to the Habitats Directive1,

– having regard to the declaration of 7 October 2012 of the European ministers responsible for the integrated maritime policy, and of the Commission, on a marine and maritime agenda for growth and jobs (the Limassol Declaration),

– having regard to the Commission communication entitled ‘Blue growth: opportunities for marine and maritime sustainable growth’ (COM(2012)0494),

– having regard to the European Council resolutions of 23-24 June 2011,

– having regard to the Convention for the Protection of the Mediterranean Sea against Pollution and the protocols thereto2,

– having regard to the Commission communication entitled ‘Europe 2020 – A strategy for smart, sustainable and inclusive growth’ (COM(2010)2020),

– having regard to Committee of the Regions’ own-initiative opinion of 12 October 2011 advocating the development of a new Adriatic-Ionian macro-region3,

– having regard to the Ancona Declaration, adopted on 5 May 2010 at the 12th Ionian Council meeting,

– having regard to the United Nations Convention on the Law of the Sea (UNCLOS) of 10 December 1982,

– having regard to the FAO Code of Conduct for Responsible Fisheries, adopted on 31 October 1995,

– having regard to International Labour Organisation (ILO) Recommendation 199 concerning work in the fishing sector,



A. whereas seven countries have an outlet to the Adriatic and Ionian seas4, four of which are Member States (Italy, Greece, Croatia and Slovenia), one is a candidate country (Montenegro) and two are potential candidate countries (Albania, and Bosnia and Herzegovina);

B. whereas cross-border cooperation is essential in order to establish arrangements for the joint management of fishing activities and to make sure that fish stocks are exploited in a sustainable manner;

1 Council Directive 92/43/EEC (OJ L 206, 22.7.1992, p. 7).2 Texts adopted, P7_TA(2010)0128. 3 Opinion COTER-V-016, rapporteur Gian Mario Spacca (ALDE/IT), October 2011.4 The International Hydrographic Organisation (IHO) definition puts the southern boundary of the

Ionian Sea at a line drawn between Capo Passero (Sicily) and Cape Tenaron (Greece).

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C. whereas, although some of the Adriatic countries have established special zones, a substantial proportion of the waters of the Adriatic and Ionian seas are still international waters;

D. whereas in its recent resolution on the evolution of EU macro-regional strategies, Parliament stressed that the Adriatic-Ionian macro-regional strategy is a significant factor in efforts to achieve reconciliation between countries in the Western Balkans, and may assist those countries’ efforts to join the EU, thus enabling an overall policy for the whole Mediterranean basin to be implemented;

E. whereas the signatory states to the Ancona Declaration have called on the Commission to draw up a macro-regional strategy for the Adriatic-Ionian region, along the lines of the macro-regional strategies it has already put forward for the Baltic (2009), the Danube (2010) and the Atlantic Ocean (2011)1;

F. whereas in its resolution of 23-24 June 2011 the European Council invited the Member States to ‘continue work in cooperation with the Commission on possible future macro-regional strategies, in particular as regards the Adriatic and Ionian region’;

G. whereas, in a recent opinion, the Committee of the Regions has called on Parliament to support the establishment of an EU strategy for an Adriatic-Ionian macro-region that takes account of the major challenges facing the area, in particular as regards the fisheries and aquaculture sector;

H. whereas fishing has traditionally been an important industry in most of the regions facing on to the Adriatic and Ionian seas, and whereas fishing activities in this area are currently managed by the General Fisheries Commission for the Mediterranean (GFCM) and the International Commission for the Conservation of Atlantic Tunas (ICCAT);

I. whereas the principal geo-physical feature of the Adriatic sea basin, especially in the northern part, is a shallow and sandy seabed which only becomes deeper many miles out from the shore, the features of the Ionian sea basin are similar to those of the rest of the much deeper Mediterranean, in particular in GSAs (GFCM Geographical Sub-Areas) 18 and 19, which reach depths of up to 2000 metres;

J. whereas the Adriatic-Ionian sea basin is a multi-species fishery in which multi-gear fishing activities are carried out, ranging from small-scale artisanal fishing to demersal trawling and from pelagic mid-water trawling to recreational fishing;

K. whereas the Adriatic is home to a large number of endemic fish species; whereas, however, an increase in fishing effort and/or higher pollution levels have given rise to major problems for fish stocks and for the fishing industry in general, in particular on the Italian side of the southern Adriatic;

L. whereas, furthermore, over recent years there has been a considerable increase in aquaculture in the Adriatic-Ionian area, although there are major environmental and spatial constraints, and although not all areas are suited to the installation of offshore breeding facilities and, where they are, such facilities are not always compatible with other activities;

1 COM(2009)0248, COM(2012)0128, COM(2010)0715 and COM(2011)0782.

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M. whereas a number of valuable regional schemes to promote scientific cooperation aimed at securing responsible fishing in the Adriatic Sea, such as Adriamed1, are already in progress;

N. whereas many Member States do not have specific national or regional development plans that regulate installations in coastal and marine areas and that clearly identify the zones available for aquaculture plants, thereby preventing easily foreseeable conflicts of interest with other economic sectors, such as tourism, agriculture and coastal fishing;

O. having regard to the Adriatic Protected Areas Network (AdriaPAN), the purpose of which is to optimise the management and planning of those areas through partnership;

P. whereas the development of an integrated approach to maritime policies in the Adriatic and Ionian seas needs to be accompanied by a dialogue and partnership process with all coastal states, given the transboundary nature of marine activities and shared resources;

General considerations

1. Points out that, following the entry into force of the Lisbon Treaty, Parliament now has full co-legislative powers in the fisheries and aquaculture sector and intends to play its full part in shaping fisheries policy at EU level, as well as at regional and trans-regional level;

2. Believes that a strategy for the Adriatic and Ionian seas should make particular reference to the sustainable development and growth of the fisheries and aquaculture sector, including employment;

3. Believes that a strategy for the Adriatic and Ionian seas should strive to ensure the preservation and protection of the environment;

4. Welcomes the Commission communication of 3 December 2012 as an important step towards the adoption of a legislative framework that will foster closer cooperation between the countries and regions along the shores of the Adriatic and Ionian seas, with a view to ensuring that fishing is carried out in a responsible manner and is economically viable for coastal communities;

5. Believes, in this context, that the Integrated Maritime Policy (IMP) should play a vital role in developing a long-term strategic policy in the Adriatic and Ionian seas, aiming at sustainable marine and maritime growth and the preservation of marine ecosystems for future generations;

6. Believes further that maritime spatial planning – as the public process for analysing and planning the spatial and temporal distribution of human activities in the Adriatic and Ionian Sea areas, in particular in the north of the Adriatic Sea – is vital for the sustainable future of the fishing sector in relation to other related activities;

7. Reiterates its support to the introduction of a macro-regional strategy for this important maritime area, with a view to addressing the shared challenges and problems faced by the

1 Adriamed is an FAO regional project funded by the Italian Ministry of Agriculture, Food and Forestry Policies (MiPAAF) and the Commission that seeks to promote scientific cooperation among the Adriatic countries (Albania, Croatia, Italy, Montenegro and Slovenia), in line with the UN FAO Code of Conduct for Responsible Fisheries.

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http://www.politicheagricole.it/

http://www.politicheagricole.it/

inhabitants of the coastal regions concerned and to promoting economic development and European integration in the area;

8. Takes the view that all EU programmes and funding instruments1 for the regions in the Adriatic-Ionian sea basin, including the instrument for pre-accession assistance (IPA), should be compatible with one another and should be used as efficiently as possible, so as to provide genuine added value for fishermen and fisheries sector operators;

9. Firmly believes that all efforts that are made to secure responsible, sustainable fishing in the Adriatic-Ionian sea basin can act as a catalyst for the development of coastal and rural areas in the countries concerned, and foster the development of combined economic activities – such as fishing tourism, in which professional fishermen take tourists or researchers out on fishing trips – which remain fully in keeping with the principle of practising a sustainable form of fishing that conserves the local environment and biodiversity;

10. Considers that the Barcelona Convention and its Protocol on Integrated Coastal Management, which entered into force in March 2011, could serve as a model to render an integrated policy compulsory for Member States bordering on the Adriatic and Ionian seas;

11. Considers the data available on Adriatic-Ionian fish stocks, their movements and their distribution, as well as on recreational fishing, to be unsatisfactory, and calls, accordingly, on the relevant authorities and research bodies to make good the shortcomings at the earliest opportunity;

12. Calls on the Commission to take further measures to promote research programmes relating to the marine environment and fisheries, and to encourage the utilisation and dissemination of the findings of this research;

13. Takes the view that successful schemes for cooperation in commercial matters between administrative bodies from various regions2 can serve as examples of best practice to be used in other areas with a view to enhancing the traceability, profitability and marketing of fisheries and aquaculture products, in particular local products;

14. Endorses the participation of all stakeholders for the development of a sustainable and productive fisheries sector in this area;

15. Considers it essential, with a view to ensuring the sustainable development of the fisheries and aquaculture sector throughout the Adriatic-Ionian sea basin and to boosting employment in coastal areas, for the vital work carried out by women in the fisheries sector to be given proper recognition, for it to be made easier for women to gain professional qualifications and for women to be included in coastal action groups and producer organisations;

16. Calls for incentives that can attract young people to the fisheries and aquaculture sectors in this area and encourage them to engage in these activities;

17. Points out that Parliament has already in the past drawn attention to the need for simpler, more consistent and more transparent aquaculture legislation that removes the barriers which, to date, have prevented the potential of the EU’s aquaculture sector from being fully

1 Structural Funds (ERDF, CF, ESF, EFF/EMFF), FP7 and LIFE+.2 Such as the Socio-economic Observatory for Fishing and Aquaculture in the North Adriatic.

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exploited, and that this will require the establishment of clear and consistent EU and national rules, together with the drafting of clearly defined marine and coastal development plans by the Member States, in line with the guidelines recently adopted by the GFCM1;

18. Points out that the targeted development of the aquaculture sector could generate non-seasonal jobs in Adriatic-Ionian coastal regions, which are heavily dependent on the summer tourist trade, thus giving a significant boost to employment in the area;

19. Stresses that the expansion of aquaculture activities must not jeopardise the achievement of good environmental status under Directive 2008/56/EC and shall be carried out in full compliance with all relevant Union environmental legislation;

20. Points out that the only way of ensuring that fish stocks and the marine environment can be protected against pollution and over-fishing and/or illegal fishing is to set up an integrated network of maritime activities information and monitoring systems, in close cooperation with the states and coastal regions affected;

Specific considerations

21. Urges the coastal countries of the Adriatic-Ionic sea basin to cooperate in drafting a global overview of the area’s specific geo-physical and bathymetric features, the presence and distribution of the various marine species and the different fishing techniques, in order to obtain an overall perspective to serve as a basis for improved fisheries management and help strengthen fisheries activity within the framework of any future macro-regional strategy;

22. Urges the Commission to adopt, at the earliest opportunity and by 2013 at the latest, the action plan for the practical implementation on a macro-regional basis of the maritime strategy for the Adriatic Sea and the Ionian Sea, pointing out that the fisheries sector should form one of the priorities of that strategy, taking account of the specific geo-physical features and linking this plan of action to regional policy, the Union’s integrated maritime policy and the Connecting Europe Facility, so as to maximise its leverage effect;

23. Calls on the Commission to submit, at the earliest opportunity, a proposal for a regulation laying down common technical measures for fishing in the Adriatic-Ionian sea basin and specifying the admissible fishing effort, fishing periods and fishing gears and other relevant management measures;

24. Regrets that the Member States have not made greater use of these individual management plans, which allow certain general rules to be suspended so that specific characteristics can be taken into account; considers that this would have considerably facilitated local management and would have provided valuable data on the situation in the different zones, making it possible to introduce appropriate changes; asks, therefore, the coastal Member States to collaborate constructively with each other and with the Commission in updating and continuously adapting fisheries management measures;

1 Resolution GFCM/36/2012/1 on guidelines on Allocated Zones for Aquaculture (AZA), adopted at the 36th meeting of the GFCM (May 2012).

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25. Calls on the Commission to establish an ongoing dialogue with the non-EU countries of the Adriatic-Ionian sea basin, with a view to concluding bilateral or multilateral agreements with the aim of advancing towards a harmonisation and standardisation of the rules for fisheries management in order to achieve the objectives of the EU Common Fisheries Policy CFP in the Mediterranean while taking full advantage of the framework for collaboration provided by the international and regional fisheries organisations; points out that a strategy for the Adriatic and Ionian seas can only be of added value if all bordering countries, EU and non EU-countries alike, are taken into account;

26. Calls on the Commission to promote CFP objectives, notably the goal of achieving above maximum sustainable yield (MSY) for all fish stocks by 2020 at the latest, and to encourage the employment of an ecosystem-based approach vis-à-vis non-EU countries;

27. Calls on the Commission to step up exchanges of best conservation practice, in cooperation with the coastal states, and to promote the establishment of marine protected areas for the recovery of the most threatened species;

28 Calls on the Commission to promote the goals of the Marine Strategy Framework Directive (MSFD) vis-à-vis non-EU countries bordering on the Adriatic and Ionian seas, namely to achieve or maintain good environmental status in the marine environment by the year 2020 at the latest;

29. Calls, in this regard, on the Commission to encourage those Member States bordering on the Adriatic and Ionian seas to develop and implement marine strategies that take an eco-system-based approach and that ensure the integration of environmental concerns into the different policies that have an impact on the marine environment, taking into account the trans-boundary effects on the quality of marine waters of neighbouring third countries;

30. Recalls that funding exists, both under the future European Maritime and Fisheries Fund (EMFF), through its data collection programmes, and within the framework for the Union’s various research programmes, for improving knowledge of the marine environment, including fish species, and for introducing greater innovation and better practices in fisheries activity; calls, therefore, on the Member States to put forward projects in these areas, and considers that advance cooperation among the various coastal countries, whether or not they belong to the EU, can lead to extremely interesting initiatives able to benefit the whole of the Adriatic-Ionian basin, through projects presented by the Member States;

31. Calls on the Commission to consider whether a specific funding line for implementation of the measures and objectives laid down for this strategy should be created in cooperation with the European Investment Bank (EIB), drawing on the experience gained with the FEMIP1 so as to avoid further complicating matters through the adoption of new budgetary instruments; calls on the Commission to consider as well the possibility of using project bonds and public-private partnerships as eminently suitable financing instruments;

32. Calls on the Commission to propose that specific advisory bodies for the Adriatic Sea and the Ionian Sea should be set up within the Regional Advisory Council (RAC) already established for the Mediterranean area, drawing on the positive experience gained with the ‘maritime districts’ that have been set up in Italian waters2 (such as the Northern Adriatic fisheries district, established in 2012 for the shared and concerted management of the

1 Facility for Euro-Mediterranean Investment and Partnership.

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northern Adriatic fisheries sector from a political, economic, social and environmental point of view);

33. Calls on the Commission to include in the future legislative proposal on maritime spatial planning provisions obliging maritime Member States to make inventories of the environmental and tourism protection rules in force on their respective national territories and, in respect of areas not subject to restrictions, to adopt marine and coastal development plans establishing the admissibility and compatibility of the use and occupation of these areas, with a view to facilitating access to areas suitable for setting up aquaculture undertakings;

34. Calls on the Commission to establish a specific Work Plan for the Adriatic and Ionian Seas, setting out the future objectives in that region as is currently undertaken in the Mediterranean Sea (IMP-MED project); stresses that this Work Plan should be seen as a project eligible for funding under the EMFF;

35. Urges the Commission to create a toolbox of sanction measures to ensure that a Member State that does not fulfil its data collection and transmission obligations, or is unable to tackle problems with illegal, unreported and unregulated (IUU) fishing in its waters or by its fishing fleet, can be sanctioned;

o

o o


2 ‘Maritime districts’ were set up to improve cooperation between central and regional government in developing and providing support for the fisheries and aquaculture sector and to promote partnership with fishermen and fisheries sector operators.

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P7_TA-PROV(2013)0347

More efficient and cost-effective interpretation in the European Parliament

European Parliament resolution of 10 September 2013 on ‘Towards more efficient and cost effective interpretation in the European Parliament’ (2011/2287(INI))


– having regard to Article 286 of the Treaty on the Functioning of the European Union,

– having regard to its resolution of 5 September 2006 on the Court of Auditors’ Special Report No 5/2005 on interpretation expenditure incurred by Parliament, the Commission and the Council1,

– having regard to the European Court of Auditors’ Special Report No 5/2005 entitled ‘Interpretation expenditure incurred by the Parliament, the Commission and the Council’, together with the institutions’ replies2,

– having regard to the note to the members of the Bureau entitled ‘Resource-efficient full multilingualism in interpretation – implementation of the decision on the European Parliament’s budget 2012’,

– having regard to the report by the Secretary-General of the European Parliament of 9 April 2013 entitled ‘Preparing for Complexity: European Parliament in 2025 – The Answers’,


– having regard to the report of the Committee on Budgetary Control (A7-0233/2013),

A. whereas multilingualism is one of the key elements of the European Parliament, and of the Union as a whole, and whereas it ensures respect for cultural and linguistic diversity as well as equal treatment of EU citizens with different origins and backgrounds;

B. whereas the principle of multilingualism in the European Parliament is the foundation of the institution’s political, co-legislative and communication work;

C. whereas the principle of multilingualism in the European Parliament guards against unnecessary obstruction of the right of European citizens to stand for election to the European Parliament;

D. whereas multilingualism guarantees the right of citizens to communicate with Parliament in any of the EU’s official languages, thus enabling them to exercise their right of democratic scrutiny;

E. whereas Parliament’s linguistic services facilitate communication and, in so doing, make sure that Parliament remains open to all of Europe’s citizens, ensuring transparency within the Union’s unique multilingual structure based on 24 official languages;

1 OJ C 305 E, 14.12.2006, p. 67.2 OJ C 291, 23.11.2005, p. 1.

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F. whereas Parliament’s Rules of Procedure stipulate that Members may speak in the official language of their choice and that interpretation into the other official languages will be provided, thus respecting the democratic right to be elected to the European Parliament irrespective of one’s language skills;

G. whereas, as a result of successive enlargements, the challenge of multilingualism has reached a completely new dimension in terms of size, complexity and policy relevance, and whereas extensive multilingualism translates, naturally, into major and increasing costs for Parliament and therefore for the Union’s citizens;

H. whereas, with regard to Parliament’s 2012 budget, considerable savings, including a reduction of EUR 10 million per year in the costs of interpretation services, were necessary in order to limit the budget’s growth to 1.9 % compared with the previous year;

Interpretation framework in the European Parliament

1. Acknowledges that the European Union is the only entity in the world running an official policy of multilingualism based on 24 official languages, with a total of 552 language combinations to be covered; welcomes, in this connection, the very high quality of Parliament’s interpretation services, but believes that ways of reducing the burden entailed by the complex structure of multilingualism and its considerable and increasing costs should be sought;

2. Notes that, of all the languages spoken in plenary in Strasbourg and Brussels from September 2009 to February 2013, English was used for 26 979 minutes (29.1 %), German for 12 556 minutes (13.6 %), French for 8 841 minutes (9.5 %), Estonian for 109 minutes (0.1 %) and Maltese for 195 minutes (0.2 %);

3. Stresses that both plenary sittings and committee meetings can be publicly accessed by all through webstreaming or video on demand – new media which are increasing the transparency of European Parliament activities for EU citizens – and that their availability in all official languages highlights the democratic and multicultural nature of Parliament;

4. Notes that some multinational bodies, such as the United Nations and the North Atlantic Treaty Organisation, operate only at intergovernmental level with no legislative function; points out in this connection that the UN, with 192 members, has a language regime with six official languages, and that NATO, with 28 members, uses mainly English, despite having two official languages;

5. Stresses, however, that Parliament is a directly elected political body whose Members are elected regardless of their language skills; reaffirms, therefore, the right of every Member to speak in the official language of their choice, as a key principle of Parliament’s operating arrangements;

6. Notes that the practical implications of the use of official languages in the European Parliament are set out in its Code of Conduct on Multilingualism, updated in 2008; notes the fact that the concept of ‘controlled full multilingualism’ laid down in that Code maintains equality among Members and citizens; points out that the implementation of full multilingualism, while based on the principle of ‘interpretation on demand’, will in the long term be contingent upon making users of language services fully aware of the costs of providing those services, and hence of their responsibility to make the best possible use of

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them;

7. Believes that the principle of sound financial management needs to apply to interpretation as well, and that, with a view to ensuring the best value for money for European taxpayers, critical analysis should continually be undertaken to assess where and how efficiency can be improved, and costs controlled or limited;

Efficient use of interpretation resources

8. Notes the decision on ‘Resource-efficient full multilingualism in interpretation’ taken by Parliament’s Bureau in 2011, which increases the efficiency of interpretation services and reduces their structural costs in the following ways: (i) matching the needs arising from travel by Parliament delegations with the financial and human resources available, (ii) giving priority to interpretation for trilogues during committee weeks, (iii) spreading committee meetings more evenly over the week, (iv) applying the rules on the duration of evening meetings more stringently;

9. Welcomes the fact that, as a result, the budgetary resources devoted to interpretation services in Parliament have started to decrease; points out that in 2010 the budget outturn figure was EUR 54 990 000, that in 2011 it was EUR 56 964 283 and that it currently stands at EUR 47 000 000 for 2012, although the final outturn for 2012 will not be known until 31 December 2013 and may be higher;

10. Notes that the estimated 2013 budget figure for the interpretation DG is EUR 58 000 000, of which EUR 53 000 000 is directly linked to interpretation services; asks to be informed in detail and on a regular basis about the concrete results of the ‘Resource-efficient full multilingualism’ initiative as regards the 2013 budget, in particular in terms of expected cost reductions or increases;

11. Notes, furthermore, that while Parliament’s interpretation services cost EUR 157 954 283 in the three year-period leading up to the end of 2012, a reduction of 17 % was achieved when comparing the budgetary outturn figures for 2010 and 2012; notes that the smart savings achieved in interpretation services did not jeopardise the principle of multilingualism and insists that equal access to language services needs to be ensured for Members and that proper working conditions need to be upheld for the services concerned;

12. Welcomes the fact that Parliament’s estimates of revenue and expenditure for the financial year 2014 propose reducing interpretation costs by 23 % during an election year, compared with the 2013 budget figure of EUR 58 000 000; asks for detailed information proving that the proposed cuts are feasible and that the excellent quality of interpretation can be maintained;

13. Emphasises that the implementation of ‘resource-efficient full multilingualism’ has led to considerable gains being made through a more even spread of committee meetings during the week, without any reduction in the overall number of committee meetings; notes that, as a result, the total number of interpreter days decreased from 105 258 (EUR 107 047 386) in 2011 to 97 793 (EUR 100 237 825) in 2012, leading to savings of EUR 6 809 561;

14. Notes with concern that, according to the reports on the Code of Conduct on Multilingualism, requests for interpretation services originating from committees, delegations and political groups were still affected by a high and growing level of late

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cancellations, as illustrated by the following figures:

Committees 2009 2010 2011 2012

Requests 984 1712 2213 2448

Late

cancellations76 172 238 359

% 7.72 % 10.05 % 10.80 % 14.70 %

Delegations 2009 2010 2011 2012

Requests 624 813 836 832

Late


% 18.59 % 11.44 % 12.20 % 20.60 %

Political groups 2009 2010 2011 2012

Requests 1922 2310 2297 2146

Late


% 14.83 % 16.36 % 11.60 % 13.60 %

15. Notes with concern that the potential costs incurred as a result of these late cancellations would represent, without last-minute redeployment of some interpreters, a substantial proportion of the overall interpretation budget; notes in this connection that in 2011 EUR 4 350 000 (7.6 % of the interpretation budget) and in 2012 EUR 5 480 000 (11.9 % of the interpretation budget) would have been spent on interpretation services made available and then cancelled outside the deadlines foreseen in the Code of Conduct on Multilingualism; calls on the Bureau to provide the Committee on Budgetary Control with a detailed analysis of the growing trend in late cancellations and to introduce a mechanism to increase awareness of the lost resources due to late cancellations and to significantly reduce the number and percentage of such cancellations;

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16. Reiterates that, while maintaining a high standard of work, it is also necessary to make more efficient use of language resources and to control their costs by looking at the overall workload for each language section and ensuring that the costs generated by the late cancellation of meeting requests and delegation visits with interpretation, in contravention of the deadlines laid down in the Code of Conduct, are reduced; insists that committees, delegations and political groups should be made aware of the rules laid down in the Code of Conduct;

17. Calls on the Bureau to develop a system with further measures to combat late cancellations of interpreter bookings;

18. Calls on the administration to make full and efficient use of Members’ updated language profiles when making language arrangements for committees, delegations and political groups both in and outside the places of work; insists that all Members’ language profiles should be updated every year; points out, in addition, that a copy of the updated profiles should be forwarded to the secretariats of the committees, delegations, political groups and working groups;

19. Insists that, with due regard for the decision of Parliament’s Bureau of December 2011 on ‘Resource-efficient full multilingualism’, interpretation into an official language during a delegation visit should be provided only on the explicit written request of a participating Member of the European Parliament; stresses that during a delegation visit the number of interpreters should be kept to the absolute minimum in compliance with the applicable rules;

20. Recalls the proposal by the Secretary-General to introduce measures to raise awareness among users of interpretation services, including committees, delegations and political groups, and awaits further detailed proposals to improve awareness of the cost of late cancellations;

21. Calls on the administration to continue having the head of the team of interpreters draw up a list of interpretation facilities requested but not used at the end of each meeting and in agreement with the secretariat of that meeting; notes that a copy of that list should be forwarded to the secretariat of the meeting concerned; considers that the list should also take account of those using webstreaming or video on demand;

22. Takes note of the new Interpretation ad personam (IAP) service offered to Members and established following the pilot project which started in 2010; notes that this new service entailed costs of EUR 157 000 in 2011 and EUR 115 000 in 2012; believes that the service should be reviewed in order to look for ways to improve it;

Interpretation in the European Parliament: the way forward

23. Welcomes the fact that the interpretation services have achieved efficiency gains and cost reductions in recent years while maintaining an excellent quality of work; emphasises that interpretation and translation expenditure continues to take up a significant proportion of Parliament’s budget and therefore believes that the challenge of multilingualism at reasonable costs requires Parliament’s continual attention;

24. Believes that the Committee on Budgetary Control should be informed regularly about changes in the cost of interpretation; calls for the annual Code of Conduct report prepared

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by the interpretation services and sent to the Secretary-General to be made public to members of the committee;

25. Takes the view that situations in which interpretation into certain languages is offered without being used should be avoided as far as possible; stresses the need for measures to reduce the costs of unneeded interpretation at meetings, and calls, therefore, for the development and urgent implementation of a system that prevents situations in which interpretation is made available into languages that are not actually spoken at a given meeting or requested by webstream users;

26. Expects the Secretary-General to present, by the end of the year, a detailed analysis of the interpretation languages provided for all (working) group, committee and delegation meetings and of the languages actually spoken at these meetings, as well as an overview of the derogations from the general interpretation rules adopted by the Bureau on 12 March 20121 which are requested by and granted to delegation visits;

27. Calls on the Bureau to adopt a further decision on multilingualism by the end of the year, dealing specifically with possible scenarios for ‘interpretation on demand’ and the efficiency gains expected to be achieved as a result;

28. Asks the Court of Auditors, therefore, to provide Parliament, within a reasonable time frame and at the latest by March 2014, with a special report on the interpretation and translation expenditure incurred by Parliament, the Commission and the Council, assessing the soundness of the financial management involved and updating the findings made in its Special Report No 5/2005; notes, furthermore, that this report could be produced periodically and used for the discharge procedure; reiterates that the report should provide information on whether the institutions involved have adequate tools and procedures to ensure that:

– the services provided do not exceed the real needs,

– all the services needed can be provided,

– the services are provided at the lowest possible cost,

– the services provided are of high quality;

29. Notes also that this follow-up report should carefully compare the cost-effectiveness of Parliament’s interpretation services with that of the interpretation services provided by the Council and the Commission, and compare the actual costs of the three institutions’ interpretation services with those recorded in the audit reference period;

30. Insists, furthermore, that Parliament address, as a matter of priority, the considerable number of late cancellations and invites the Bureau to present a detailed action plan for reducing it;

1 It was decided specifically that, while delegations would continue to benefit from the full interpretation entitlement of up to five languages – as laid down in the Code of Conduct on Multilingualism – during weeks set aside for external parliamentary activities (green weeks), delegations requiring derogations for travel during committee weeks would only be provided with a limited language regime not exceeding interpretation into one language.

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31. Reiterates that interinstitutional cooperation is essential in order to exchange best practices that promote effectiveness and allow savings to be made; considers that interinstitutional cooperation should be improved as regards interpretation; calls for a thorough review to be carried out, with priority being given to more effective sharing of available resources among all the institutions and concrete measures in the area of freelance interpretation;

32. Stresses the importance of software applications as management instruments and insists that more funding be allocated for this purpose in next year’s budget; notes that a higher level of efficiency can be obtained if Parliament’s administrative services are provided with appropriate management information; considers it regrettable that certain DGs are still lagging behind in terms of the software applications available, despite improvements in the IT sector since 2010;

33. Calls on its relevant services to assess whether the considerable efficiency gains made in the area of interpretation can serve as an example for improvement within other DGs;

*

* *


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P7_TA-PROV(2013)0348

Online gambling in the internal market

European Parliament resolution of 10 September 2013 on online gambling in the internal market (2012/2322(INI))


– having regard to the Commission Communication of 23 October 2012 entitled ‘Towards a comprehensive European framework for online gambling’ (COM(2012)0596),

– having regard to the Commission communication of 18 January 2011 entitled 'Developing the European Dimension in Sport' (COM(2011)0012),

– having regard to its resolution of 14 March 2013 on match-fixing and corruption in sports1,

– having regard to its resolution of 2 February 2012 on the European dimension in sport2,

– having regard to its resolution of 15 November 2011 on online gambling in the internal market3,

– having regard to its resolution of 10 March 2009 on the integrity of online gambling4,

– having regard to the Nicosia Declaration of 20 September 2012 on the Fight Against Match-Fixing,

– having regard to the Council conclusions of 10 December 2010 and the progress reports of the French, Swedish, Spanish and Hungarian Presidencies on the framework for gambling and betting in the EU Member States,

– having regard to the preparatory action entitled 'European Partnerships on Sport' and, in particular, to the assembling of projects focusing on the prevention of match-fixing incidents through the provision of education and information to relevant stakeholders,

– having regard to Articles 51, 52 and 56 of the Treaty on the Functioning of the European Union (TFEU),

– having regard to the Protocol on the application of the principles of subsidiarity and proportionality annexed to the TFEU,

– having regard to the case-law developed by the Court of Justice of the European Union, whereby in the specific area of the organisation of games of chance, the Court notably recognizes consumer protection, the prevention of both fraud and incitement to squander on

1 Texts adopted, P7_TA(2013)0098.2 Texts adopted, P7_TA(2012)0025. 3 OJ C 153 E, 31.5.2013, p. 35.4 OJ C 87 E, 1.4.2010, p. 30.

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gaming, as well as the general need to preserve public order as reasons of overriding general interest that may justify restrictions on the freedom to provide services1,

– having regard to the opinion of the European Economic and Social Committee of 22 May 2012,


– having regard to the report of the Committee on the Internal Market and Consumer Protection and the opinions of the Committee on Culture and Education and the Committee on Legal Affairs (A7-0218/2013),

A. whereas gambling is not an ordinary economic activity given its potentially negative health and social impacts, which include: compulsive gambling, the consequences and costs of which are difficult to estimate; organised crime; money laundering; and match-fixing; whereas online gambling may involve a greater risk of addiction than traditional offline gambling, owing, inter alia, to the increased ease of access and the absence of social control, but additional research and data is needed in this regard; notes that, on these grounds, certain internal market rules – including the freedom of establishment, the freedom to provide services and the principle of mutual recognition – do not preclude Member States from determining their own additional measures for the protection of players;

B. whereas Article 35 of the Charter of Fundamental Rights of the European Union establishes the obligation to protect human health in the definition and implementation of all the Union's policies and activities;

C. whereas Article 169 of the TFEU obliges the EU to ensure a high level of consumer protection;

D. whereas, given the special nature of the online gambling sector, the protection of human health and consumers should be the main guiding principle when EU-level recommendations and national legislation are made;

E. whereas, with due regard to the principle of subsidiarity, Member States have the right to determine how the offer of online gambling services is organised and regulated in accordance with their own values and pursued objectives of general interest, while observing Union law;

F. whereas, because of its specific nature and in application of the subsidiarity principle, the supply of online gambling services is not subject to sector-specific regulation at EU level and is exempted from the services and consumer rights directives, remaining – nevertheless – subject to a number of EU secondary legislative acts, such as the data protection directive, the directive on privacy and electronic communication and the unfair commercial practices directive;

1 see, to that effect, Case C 275/92 Schindler, paragraphs 57 to 60; Case C 124/97 Läärä and Others, paragraphs 32 and 33; Case C-67/98 Zenatti, paragraphs 30 and 31; Case C-243/01 Gambelli and Others, paragraph 67; Case C-42/07Liga Portuguesa, paragraph 56; Joined Cases C 316/07, C 358/07 to C 360/07, C 409/07 and C 410/07, Markus Stoß and others, paragraph 74; Case C 212/08, Zeturf Ltd, paragraph 38; Case C-72/10 Costa paragraph 71; Case C 176/11 Hit Larix, paragraph 15; Joined Cases C 186/11 and C 209/11 Stanleybet and others, paragraph 44.

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G. whereas the online gambling sector differs from other markets on account of the risks involved in terms of consumer protection and the fight against organised crime, as repeatedly acknowledged by the Court of Justice of the European Union;

H. whereas the Court of Justice has confirmed that the provision of games of chance or gambling is an economic activity of a special nature, where restrictions may be justified for reasons of overriding general interest such as consumer protection, fraud prevention, the fight against money laundering and the preservation of public order and public health; whereas any restrictions imposed thereto need to comply with those provided for by the TFEU, such that they must be proportionate to the objectives pursued and must not be discriminatory;

I. whereas, now more than ever, the Member States share common general concerns as to the negative social and economic impact of illegal online gambling at national level, their principal objectives being to protect underage and vulnerable members of society and combat addiction, crime and tax evasion;

J. whereas the cross-border nature of online gambling, the risks involved in terms of consumer protection, fraud prevention and law enforcement against illegal activities, such as money laundering and match -fixing, as well as the need to combat illegal gambling-related activities, require better-coordinated action among Member States and at EU level;

K. whereas it is essential to introduce mechanisms for scrutinising sports competitions and financial flows, along with supervisory mechanisms;

L. whereas a comprehensive overview of the online gambling sector, in terms of information and data regarding domestic and cross-border, intra-EU and global, authorised and unauthorised offer, is currently needed;

M. whereas the form taken by advertising for online gambling varies between the Member States or is not regulated at all;

Specific nature of the online gambling sector and consumer protection

1. Considers that, in order to ensure a high level of consumer protection, in particular for those consumers who are the most vulnerable, a fair and legal offer of gambling services defined by each Member State in compliance with Union law might diminish the social costs and harmful effects of gambling activities;

2. Warns that gambling can lead to dangerous addiction, which is an issue that would need to be addressed in any legislative proposal for the sake of consumers;

3. Calls on the Commission and the Member States to take action against illegal gambling offered from within Member State territories; urges the Commission, in this regard, to call on the Member States to take enforcement measures against offers for illegal gambling in its planned recommendations on consumer protection and advertising;

4. Believes that there is a dangerous link between severe economic hardship and high levels of gambling; stresses that the present, extremely harsh social and economic climate has been instrumental in the huge upsurge in gambling, in particular among the poorest sections of

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society, and that there is, therefore, a need for close, ongoing monitoring of levels of gambling addiction and problem gambling;

5. Affirms that online gambling is a form of commercial use of sport and that, while the online gambling sector is growing steadily by keeping abreast of technological innovations, Member States face difficulties in controlling it, given the specific nature of the internet, which creates the risk of violations of consumers’ rights and of the sector being subject to investigations in the context of the fight against organised crime;

6. Insists that, regardless of the manner in which Member States decide to organise and regulate the offer of online gambling services at national level, a high level of protection of human health and consumers must be ensured; calls on the Commission to continue to explore measures at EU level to protect vulnerable consumers, including formalised cooperation between regulatory authorities in the Member States; stresses that the expert group should ensure that it is impossible for minors to access online gambling services; invites Member States to oblige operators working with a licence from the Member State to carry the logo, trustmark of the regulatory authority in a prominent fixed position on its website;

7. Asks the Commission to study what can be done to stop the practice whereby companies based in one Member State market online-gambling services – for example via satellite-TV or advertisement campaigns – in another Member State in which they are not licensed to offer such services;

8. Calls for operators to be obliged to display clear, prominent and explicit warnings to minors stating that it is illegal for them to engage in online gambling;

9. Considers that measures should be taken to ensure that the more vulnerable members of society do not have their subsistence jeopardised even further as a result of gambling;

10. Believes that additional research and data are needed in order to quantify compulsive gambling and the risks associated with different forms of gambling; calls on all the Member States and the Commission to carry out, in a coordinated manner, further studies to understand problem gambling; notes that gambling operators have a responsibility to contribute towards the prevention of gambling addiction;

11. Calls on the Commission, in cooperation with the Member States – where appropriate through the expert group – to explore the possibility of EU-wide interoperability between national self-exclusion registers that include, inter alia, self-exclusion, personal loss and time limits, and that are accessible to national authorities and licensed gambling operators, so that any customer self-excluding or surpassing their gambling limits at one gambling operator has the opportunity to be automatically self-excluded from all other licensed gambling operators; underlines the fact that any mechanism to exchange personal information on problem-gamblers must be subject to strict data protection rules; stresses the importance of the expert group in working towards the protection of citizens against gambling addictions; stresses that in order to make consumers aware of their own gambling activity, this register should show the consumer all information pertaining to her/his gambling history whenever she/he starts to play;

12. Recommends that a clear distinction be made between gambling activities and other forms of online entertainment; services which combine distinguishing features of the gambling

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sector must fall under appropriate gambling legislation and fully respect age and identity verification mechanisms;

13. Notes that self-regulatory initiatives can serve as good contributions for identifying the content of common standards; reiterates its position that, in an area as sensitive as gambling, self-regulation can only complement but not replace national legislation;

14. Calls on the Commission to consider implementing a compulsory third-party identification control in order to exclude minors or persons using fake identities from playing; suggests that this could, inter alia, be a check on social security number, bank account information or other unique identifier, noting that such identification should take place in advance of any gambling activity;

15. Believes that the software used for online gambling services should be made more secure and that common minimum certification requirements should be laid down in order to ensure that uniform parameters and standards are used;

16. Draws attention to the need to draw up efficient methods of betting supervision, bearing in mind the rapid development of the online environment, but highlights as well the importance of protecting users’ personal data against abuse;

17. Takes the view that common standards for online gambling should address the rights and obligations of both the service provider and the consumer, ensuring a high level of protection for citizens and consumers, in particular minors and other vulnerable persons, and the prevention of misleading and excessive advertisements; encourages the European gambling operators’ associations to develop and adopt self-regulatory codes of conduct;

18. Calls on the Commission to include in its recommendation that gambling operators should be obliged actively to promote the use of self-restrictions at the time of registration as well as in cases of repeated losses;

19. Recommends the introduction of uniform, pan-European common security standards for electronic identification and cross border e-verification services; welcomes the Commission’s proposal for a directive on e-identification and authentication, which will allow for interoperability of national e-identification schemes where these exist; calls, therefore, for registration and identification procedures to be streamlined and made more efficient, notably in order to ensure efficient identification mechanisms and to prevent multiple accounts per player and access by minors to online gambling websites; recommends the exchange of best practices between Member States on enforcement measures – such as on establishing white and black lists of illegal gambling websites, jointly defining secure and traceable payment solutions, and considering the feasibility of blocking financial transactions – in order to protect consumers against illegal operators;

20. Calls on the Member States and on operators to encourage responsible advertising in relation to online gambling; welcomes the Commission’s initiative to adopt a Recommendation on responsible gambling advertising: asks the Commission to include common minimum standards which provide sufficient protection for vulnerable consumers; recommends that advertising should be responsible, contain clear warnings as to the risks of gambling addiction and be neither excessive nor displayed on content specifically targeted at minors or where there is a higher risk of targeting minors, as is the case notably with social media advertising;

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21. Calls for the definition and implementation of measures to enable children and young people to attain and further develop digital literacy; believes that the introduction of school courses aimed at young people on the best uses of the Internet could make users more adept in protecting themselves against addiction to online gambling services;

22. Stresses the important role of education, advisory services and parents in raising awareness on the subject of online gambling and its consequences among minors;

23. Calls on the Commission and the Member States to introduce effective measures to raise awareness of the risks of gambling addiction, targeting young people in particular;

24. Calls for socially responsible advertising of online gambling games to be permitted only for gambling products which are legal; considers that it should never be allowed to advertise for online gambling services by exaggerating the probability of winning, so that a false impression is given that gambling is a reasonable strategy for improving a person’s finances; believes that advertising should contain clear information concerning the consequences of compulsive gambling;

25. Stresses that defining a non-harmful format for advertising, and rules on its dissemination, is key to preventing people under 18 from gambling and to combating problematic and compulsive gambling;

26. Stresses that consumer protection measures should be flanked by a combination of preventive and responsive enforcement measures to reduce the contact of citizens with unauthorised operators; stresses the importance of jointly defining the notion of legal gambling operators, so that Member States, in compliance with EU law, only authorise operators who fulfil at least the following requirements and are thus considered to be legal:

(a) the operator must have a licence which gives it a right to operate in the Member State of the player;

(b) the operator is not considered to be illegal under the law applicable in any other Member State;

27. Is of the opinion that a registration process should include, as a mandatory feature, maximum loss limits, set and defined by the player for a certain time period; as a minimum, this feature should be present in games with short frequency;

Compliance with EU law

28. Stresses that, on the one hand, providers of online gambling should in all cases respect the national laws of the Member States in which they operate and, on the other hand, that Member States should retain the right to impose the restrictions they deem necessary and justified to address illegal online gambling in order to implement national legislation and exclude illegal providers from market access;

29. Recognises that, in accordance with the principle of subsidiarity, the Member States have the right to determine how the offer of online gambling services is to be organised and regulated at national level, and the right to enforce all measures they consider necessary against illegal gambling services, while observing the basic EU Treaty principles; recognises that such legislation must be proportionate, consistent, transparent, and non-

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discriminatory; notes the need for more coherent EU policies in order to address the cross-border nature of online gambling;

30. Notes that the Commission has sent letters to a number of Member States asking for detailed information on their current gambling legislation; calls on the Commission to continue the dialogue with the Member States; takes note of the Commission’s work on the infringement cases and on complaints brought against certain Member States; calls on the Commission to continue to monitor and enforce compliance of national laws and practices with EU law, in cooperation with the Member States, and to launch infringement procedures against those Member States that appear to breach EU law; respects the decision taken by the Member States in relation to the establishment of monopolies in this sector, provided that, in line with the case-law of the Court of Justice, they are subject to strict state control and ensure a particularly high level of consumer protection, that their activities are coherent with the objectives of general interest and that they reduce gambling opportunities in a consistent manner;

31. Calls on the Commission, the Member States and the expert group on gambling services to draw up coordinated measures and strategies, including exchanges of best practice, with a view to looking into and addressing the problem of tax avoidance by authorised operators who provide online gambling services on the EU market but have their registered offices in tax havens within or outside the EU;

32. Notes the risks that access by consumers to illegal online gambling services might pose; calls on the Commission and the Member States to discuss, as part of the work of the group of experts on gambling services, the social costs of permitting regulated gambling activities versus the harmful effects of consumers resorting to illegal operators;

33. Emphasises that those Member States that choose to open up their online gambling sector must provide for a transparent and legally certain licensing application procedure based on objective and non-discriminatory criteria, in full compliance with EU law and with sufficient and strict citizen and consumer protection;

Administrative cooperation

34. Calls on the expert group on gambling services and on the Commission to facilitate, as much as possible, the flow of data between regulators in the Member States in order to share best practices and information to facilitate the establishment of a common system for identifying players, enforcement measures against illegal operators, enhance protection of consumers, responsible advertising, establishment of white and black lists, prevent match-fixing and make self-exclusion mechanisms that include, inter alia, personal time and money limits applicable throughout the EU; calls on the Commission to arrange for the expert group to benefit from the broadest expertise possible in the development of its work; urges the Member States to restart the dialogue on online gambling services in the forum of the Council Working Party on establishment and services;

35. Calls on the Commission always to include experts specialised in problem and pathological gambling in expert groups and consultations;

36. Is of the opinion that cooperation and exchanges of best practices among national experts from the social and health spheres specialising in pathological and problem gambling should be strengthened at European level;

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37. Emphasises that, while the effective exchange of information between investigative bodies is important for successful law enforcement, action to combat match-fixing must comply with national and European data protection laws and regulations;

38. Encourages the Member States, in the context of the expert group, to work in close cooperation with the Commission and with each other to coordinate steps to combat the unauthorised supply of cross-border gambling services, and to implement the action plan contained in the Commission’s communication on online gambling;

39. Recognises that cooperation among Member States is essential but stresses that it is also very important that the expert group on gambling works in close collaboration with all stakeholders, including the gambling industry and consumer organisations;

40. Stresses the importance for the expert group to work towards more transparent and simplified procedures that remove unnecessary administrative burdens on Member States that could unnecessarily increase costs for legal online operators in those countries which choose to open up their markets; notes that the removal of administrative burdens must not compromise protection of consumers;

41. Believes that steps should be taken to bring national tax regimes for gambling services into line with one other in order to prevent disproportionate tax concessions from fostering a proliferation and concentration of online gambling services;

42. Encourages national regulatory authorities in those Member States that have chosen to introduce licensing systems to exchange best practices that would facilitate the application of national gambling licenses, including technical standards for gaming equipment; encourages the competent national regulatory authorities to allow operation of a gambling company within their jurisdiction only when said company does not operate in contravention of the law in another Member State, the legislation of which has not been established as non-compliant by the Court of Justice;

Money laundering

43. Points to the fact that online gambling is a non-cash-based environment and that – given the dependency on third-party financial service providers – additional safeguards against money laundering are needed; emphasises the need for close cooperation between national gambling authorities, national police and national enforcement authorities in preventing criminal activity;

44. Calls on the Commission, the Member States and the expert group to take effective action against money laundering; welcomes, in this respect, the proposal to extend the provisions of the Anti-Money Laundering Directive to include all forms of gambling, and calls on the competent national authorities to ensure that any transaction suspected of being potentially connected to money laundering or other criminal activity is reported in accordance with the provisions of this Directive;

45. Calls on the Council to proceed in a swift and ambitious manner with the negotiations on the Commission proposal for a Directive on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (COM(2013)0045), and to address all types of gambling, including online gambling, in order to prevent the

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exploitation of online sports-betting activities by criminal interests for money laundering purposes;

46. Emphasises that solid registration and unambiguous verification systems are key tools in preventing any misuse of online gambling, such as money laundering; notes that, for such identity verification purposes, advantage can be taken of existing and developing online structures, such as online bank and credit-card verification systems;

47. Takes the view that all the online gambling companies operating in the EU area need to be registered as legitimate entities in the EU;

48. Stresses that all the Member States must identify and designate the responsible public authority in charge of monitoring online gambling; stresses that the authority will also be authorised to intervene should any suspicious online gambling appear; gaming companies should also be required to inform the authority about any suspicious gaming activity;

Integrity of sports

49. Stresses that, in view of the transnational nature of match-fixing, the fight against it requires more effective cooperation between all stakeholders, including public authorities, law enforcement agencies, the sport industry, gambling operators and gambling regulators, athletes and supporters, while emphasis should also be given to education and prevention actions in this regard; welcomes, in this respect, the recent Commission 2012 Preparatory Action, which supports transnational educating projects in order to combat match fixing; notes that match fixing occurs in both the offline and the online gambling markets and that, in the majority of cases, online betting-related match-fixing occurs through gambling operators established in unregulated markets outside the EU;

50. Calls for a code of conduct, as a part of a self-regulatory initiative containing a general ban on all staff (in particular players, coaches, referees, medical and technical staff, owners and managers of clubs) involved in sporting events who may have a direct influence on the result from placing bets on their own matches or events; also emphasises, in this context, the need for strict and reliable age and identity verifications systems at Member State level; calls on sports organisations to use education campaigns and codes of conduct to educate – from an early age – sportspersons, referees and officials on the illegality of manipulating sports results;

51. Recognises that efforts to combat sport organisations’ involvement in corrupt activities like match-fixing or money laundering, such as codes of conduct, need to address all stakeholder groups (officials, owners, managers, agents, players, referees and supporters) and all organisations (clubs, leagues, federations, etc.);

52. Calls on the Member States to increase the priority given to preventing corruption in sport and stresses the need for increased focus on efficient law enforcement in this regard; calls for the adoption at national level of effective measures to prevent conflicts of interest, notably by avoiding wagers of all stakeholders from the world of sports on betting organised on competitions in which they are involved; calls upon all sports governing bodies to commit to good governance practices in order to reduce the risk of falling victim to match-fixing; calls on the Commission, in this regard, to take into account the work of the Council of Europe on the assessment of the risks of certain types of bets and to assess

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the possible risks of spot betting, where it is possible to bet on certain bets during a competition and to take appropriate action accordingly;

53. Calls on sport federations and gambling operators to include, in a code of conduct, a ban on betting on so-called negative events, such as yellow cards, penalty kicks or free kicks during a match or event; calls on Member States and gambling operators to ban all forms of live sports betting since these have proved to be very vulnerable to match-fixing and therefore pose a risk to the integrity of sport;

54. Calls for an obligation for cooperation and exchange of information on suspicious activities at national as well as European level, among sports bodies, public authorities, Europol and Eurojust, in order to combat criminal cross-border online gambling activities;

55. Welcomes the Commission’s intention to promote a better exchange of good practice in regard to combating match-fixing; highlights the importance of the support of the European Union to the ongoing work within the Council of Europe towards the negotiation of an international convention on the protection and the promotion of sports integrity; highlights that match fixing is not always related to betting, and that this non-betting side to match fixing, which also poses a problem to the integrity of sports, needs to be addressed as well; stresses the need for strengthened cooperation at EU and global level in the fight against match fixing; calls on the Commission to take the lead in the creation of a global platform for exchange of information and best practices and in the coordination of joint prevention and enforcement actions between regulators, sports organisations, police and judicial authorities and gambling operators;

56. Considers that a consistent policy on criminal sanctions is essential to a pan-European approach to regulating the online gambling sector and, to this end, urges the Member States to ensure that the fraudulent manipulation of results for financial or other advantage is prohibited by establishing as a criminal offence any threat to the integrity of competitions, including those linked to betting operations; urges the Commission to take action at EU level against unregulated online gambling and to support the fight against match-fixing;

57. Recognises that in some Member States gambling revenues and lotteries represent a considerable source of income that can be channelled to support publicly beneficial and charitable purposes, cultural works, grassroots sports and horse racing and equine sector; underlines, furthermore, the significance of this sustainable contribution and specific role that should be acknowledged in discussions at the European level; reaffirms its position that sports bets are a form of commercial use of sporting competitions; recommends, while fully respecting the Members States’ competence on the issue, that sporting competitions should be protected from any unauthorised commercial use, notably by recognising the property rights of sports event organisers, not only in order to secure a fair financial return for the benefit of all levels of professional and amateur sport but also as a means of strengthening the fight against sports fraud, particularly match-fixing;

58. Calls for more cooperation at European level, under the coordination of the Commission, to identify and prohibit online betting operators engaged in illegal activities such as, inter alia, match-fixing or betting on junior competitions involving minors and expects the online gambling industry to respect this ban through self-regulation;

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59. Encourages the Member States to consider a ban on all forms of spot fixing, such as gambling on corner kicks, free kicks, throw-ins and yellow cards, as these has proven to be very vulnerable to match-fixing;

60. Calls up the Commission to install a European alert system for betting regulators in order rapidly to exchange information about fixed sporting events;

61. Welcomes transnational education projects to combat match-fixing on a global level;

62. Stresses that athletes need effective protection mechanisms to oppose corrupting influences, including the safeguarding of the moral and physical integrity of athletes, proper working conditions and the safeguarding of salaries or remunerations, including bans on participation at different levels of competition for sports organisations failing to regularly fulfil these obligations towards their athletes;

63. Emphasises that match-fixing allegations are often tried in public courts as well as by sports arbitration and that, under both procedures, international minimum procedural standards, as laid down in Article 6 of the European Convention on Human Rights, must be observed;

64. Calls for the strict regulation or the prohibition, after an evaluation conducted at the level of each Member State, of dangerous forms of gambling;

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65. Instructs its President to forward this resolution to the Council, the Commission, and the governments and parliaments of the Member States.

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P7_TA-PROV(2013)0349

Appointment of Luigi Berlinguer to the panel set up under Article 255 of the TFEU

European Parliament decision of 10 September 2013 proposing the appointment of Luigi Berlinguer to the panel set up under Article 255 of the Treaty on the Functioning of the European Union (2013/2161(INS))


– having regard to the second paragraph of Article 255 of the Treaty on the Functioning of the European Union (TFEU),

– having regard to Rule 107a of its Rules of Procedure,

A. whereas Luigi Berlinguer meets the conditions laid down in the second paragraph of Article 255 TFEU;

1. Proposes that Luigi Berlinguer be appointed to the panel;

2. Instructs its President to forward this decision to the President of the Court of Justice.

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Inhaltsverzeichnis2… · Web viewA strategy for fisheries in the Adriatic and Ionian Seas (A7-0234/2013 - Rapporteur: Guido Milana) European Parliament resolution of 10 September

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