               EUROPEAN COMMISSION
            Brussels, 5.2.2019
            COM(2019) 71 final
            Recommendation for a
            COUNCIL DECISION
            authorising the participation in negotiations on a second Additional Protocol to the Council of Europe Convention on Cybercrime (CETS No. 185)

               EXPLANATORY MEMORANDUM

               1.CONTEXT

               The evolution of information and communication technologies – while bringing unprecedented opportunities for mankind – also raises challenges, including for criminal justice and thus for the rule of law in cyberspace. While cybercrime and other offences entailing electronic evidence on computer systems are thriving and while evidence relating to these offences is increasingly stored on servers in foreign, multiple, shifting or unknown jurisdictions, that is, in the cloud, the powers of law enforcement remain limited by territorial boundaries.

               The European Commission committed in the April 2015 European Agenda of Security
                  1
                to review obstacles to criminal investigations into cyber-enabled crimes, notably on cross-border access to electronic evidence. On 17 April 2018, the Commission proposed to the Council and the European Parliament a Regulation on European Production and Preservation orders for electronic evidence in criminal matters
                  2
                and a Directive laying down harmonised rules on the appointment of legal representatives for the purpose of gathering evidence in criminal proceedings ("e-evidence proposals")
                  3
               . The purpose of these proposals is to speed up the process in the European Union to secure and obtain electronic evidence that is stored and/or held by service providers established in another jurisdiction.

               The Council of Europe Convention on Cybercrime

               The Council of Europe Convention on Cybercrime (CETS No. 185) aims at facilitating the fight against criminal offences making use of computer networks. It contains provisions (1) harmonising domestic criminal substantive law elements of offences and connected provisions in the area of cyber-crime, (2) provides for domestic criminal procedural law powers necessary for the investigation and prosecution of such offences as well as other offences committed by means of a computer system or evidence in relation to which is in electronic form, and (3) aims to set up a fast and effective regime of international cooperation. The Convention is open to Member States of the Council of Europe and non-members. 62 countries are currently Parties to the Convention, including 26 European Union Member States
                  4
               . The Convention does not envisage that the European Union may accede to the Convention. The European Union is nevertheless recognised as an Observer Organisation to the Convention Committee (T-CY). On that basis the European Union takes part in meetings of the Convention Committee.

               Article 46.1.c of the Convention provides that the Parties shall, as appropriate, consult periodically with a view to facilitating consideration of possible supplementation or amendment of the Convention. The Parties to the Convention on Cybercrime have been looking for some time now into existing challenges and obstacles to access by national judicial and police authorities to electronic evidence of crimes under criminal investigation in form of computer data, that is from 2012 to 2014 through a working group on transborder access to data and from 2015 to 2017 through the Cloud Evidence Group.

               Negotiations for a Second Additional Protocol to the Convention

               After proposals from the Cloud Evidence Group
                  5
               , the Cybercrime Convention Committee (T-CY) adopted several Recommendations, including on the negotiation of a Second Additional Protocol to the Convention on Cybercrime
                  6
                on enhanced international cooperation (‘Second Additional Protocol’). In June 2017, the Cybercrime Convention Committee approved the Terms of Reference for the preparation of the Second Additional Protocol during the period from September 2017 to December 2019.

               In accordance with the Terms of Reference, the Second Additional Protocol may include the following elements:

               ·Provisions for more effective mutual legal assistance, in particular:

               –a simplified regime for mutual legal assistance requests for subscriber information;

               –international production orders;

               –direct cooperation between judicial authorities in mutual legal assistance requests;

               –joint investigations and joint investigation teams;

               –requests in English language;

               –audio/video hearing of witnesses, victims and experts;

               –emergency Mutual Legal Assistance (MLA) procedures;

               ·Provisions allowing for direct cooperation with service providers in other jurisdictions with regard to requests for subscriber information, preservation requests, and emergency requests;

               ·Clearer framework and stronger safeguards for existing practices of transborder access to data;

               ·Safeguards, including data protection requirements.

               Negotiations of different provisions of the Second Additional Protocol are progressing at different speeds. The current situation in the working groups on the four main blocks of work outlined in the terms of reference are as follows:

               ·Provisions on “Languages of requests” and “Emergency mutual assistance” were preliminarily adopted by the Protocol Drafting Plenary in July 2018.

               ·Provisions on “Video conferencing” were preliminarily adopted by the Protocol Drafting Plenary in November 2018.

               ·The Protocol Drafting Plenary in November 2018 also allowed for detailed discussions (provisions on “Jurisdiction” and “Endorsement model”) and updates (“Direct cooperation with providers”, “International production orders”, “Extending searches/access based on credentials”, “Joint investigations and joint investigation teams” and “Investigative techniques”).

               ·Sufficient progress has not yet been made on other issues (safeguards, including data protection requirements).

               2.OBJECTIVES OF THE PROPOSAL

               This recommendation is submitted to the Council in order to receive authorisation to participate in negotiations on behalf of the European Union and its Member States on a Second Additional Protocol, to adopt negotiating directives and to appoint the Commission as negotiator in accordance with the draft negotiating directives attached, pursuant to Article 218 TFEU.

               Article 3(2) TFEU provides that the Union has exclusive competence “for the conclusion of an international agreement ... in so far as its conclusion may affect common rules or alter their scope.” An international agreement may affect common rules or alter their scope where the area covered by the agreement overlaps with Union legislation or is covered to a large extent by Union law.

               The European Union has adopted common rules based on Article 82(1) and 16 TFEU on elements being considered for the Second Additional Protocol. The current European Union legal framework includes in particular instruments on law enforcement and judicial cooperation in criminal matters, such as the Directive 2014/41/EU regarding the European Investigation Order in criminal matters
                  7
               , the Convention on Mutual Assistance in Criminal Matters between the Member States of the European Union
                  8
               , Regulation 2018/1727 on Eurojust
                  9
               , Regulation 2016/794 on Europol
                  10
               , Council Framework Decision 2002/465/JHA on joint investigation teams
                  11
               , Council Framework Decision 2009/948/JHA on prevention and settlement of conflicts of exercise of jurisdiction in criminal proceedings
                  12
               . Moreover, the Union has adopted several directives that reinforce procedural rights of suspects and accused persons
                  13
               .

               Externally, the European Union has concluded a number of bilateral agreements between the Union and third countries, such as the Agreements on Mutual Legal Assistance between the European Union and the United States of America
                  14
                and between the European Union and Japan
                  15
               .

               The protection of personal data is a fundamental right enshrined in EU Treaties and in the Charter of Fundamental Rights of the European Union and personal data may only be processed in accordance with the Regulation (EU) 2016/679 (the General Data Protection Regulation)
                  16
                and Directive (EU) 2016/680 (the Police Data Protection Directive)
                  17
               . The fundamental right of everyone to the respect for his or her private and family life, home and communications is also enshrined in the Charter of Fundamental Rights, and includes the respect for the privacy of one’s communications as an essential element. Electronic communications data can only be processed in accordance with Directive 2002/58/EC (the ePrivacy Directive)
                  18
               .

               Moreover, to assess whether an area is largely covered by common rules account must be taken not only of Union law as it currently stands in the area concerned, but also of its future development, in so far as that is foreseeable at the time of that analysis. The area covered by the Second Additional Protocol is of direct relevance to foreseeable future developments of the relevant common rules. In this respect, the Commission's April 2018 proposals on cross-border access to electronicevidence are also relevant.
                  19

               The scope of the proposals includes specific types of service providers that are providing services in the European Union. A provider is offering services in the European Union when it enables users in one or more Member States to use its services and where it has a substantial connection to the Union, for instance when it has an establishment in a Member State or because it provides services to a large number of users in that Member State. Those without a presence in the European Union are obliged to appoint a legal representative against whom production orders can be enforced.

               The European Council Conclusions of 18 October state that “Solutions should be found to ensure swift and efficient cross-border access to e-evidence in order to effectively fight terrorism and other serious and organised crime, both within the EU and at international level; the Commission proposals on e-evidence and access to financial information, as well as to better combat money laundering, should be agreed on by the end of the legislature. The Commission should also urgently submit negotiating mandates for the international negotiations on e-evidence”.

               The Commission's e-evidence proposals provide the basis for a coordinated and coherent approach both within the European Union and by the European Union at international level, with due regard to European Union rules, including on non-discrimination between European Union Member States and their nationals. While the Commission, in its Impact Assessment for the e-evidence proposals, already noted that the proposals could usefully be complemented by bilateral or multilateral agreements on cross-border access to electronic evidence with accompanying safeguards, the Commission decided to propose EU rules on the appropriate modalities and safeguards for cross-border access to electronic evidence, before engaging in international negotiations with third parties.
                  20

               At the international level, the Commission has continued to participate as observer in related discussions within the framework of the Council of Europe Convention on Cybercrime
                  21
               . Cross-border access to electronic evidence has been a regular point on recent EU-US Justice and Home Affairs Ministerial meetings.

               The two recommendations to participate in the negotiations of the Second Additional Protocol to the Convention on Cybercrime and to open negotiations with the United States of America are being adopted by the Commission at the same time. While the two processes will progress at a different pace, they address inter-linked issues and commitments taken in one negotiation may have a direct impact on other strands of negotiations.

               While the e-evidence proposals address the situation of specific types of service providers providing services on the EU market, there is a risk of conflicting obligations with laws in third countries. In order to address these conflicts of law, and in line with the principle of international comity, the e-evidence proposals include provisions for specific mechanisms in case a service provider is confronted with conflicting obligations deriving from the law of a third country when evidence is requested. These mechanisms include a review procedure to clarify such a situation. The Second Additional Protocol to the Council for Europe Convention on Cybercrime should aim to avoid conflicting obligations between the Parties to the Convention on Cybercrime.

               It can therefore be considered that the conclusion of the Second Additional Protocol may affect common rules or alter their scope.

               The Union accordingly has exclusive competence for the negotiation of the Second Additional Protocol supplementing the Convention on Cybercrime (by virtue of Article 3(2) TFEU).

               The subject matter of the Second Additional Protocol would fall within EU policies and competences, in particular in the field of instruments on judicial cooperation in criminal matters (Article 82(1) TFEU) and data protection (16 TFEU) and, as a matter of EU law, negotiations could not be conducted without EU participation. Moreover, the Commission has a general role in representing the European Union provided for in Article 17(1) TEU. In view of the above, the Commission should be appointed by the Council as the negotiator for the Second Additional Protocol supplementing the Convention on Cybercrime (CETS No. 185).

               3.RELEVANT PROVISIONS IN THE POLICY AREA

               The negotiations should ensure that the agreed provisions are compatible with EU law and Member States’ obligations under it, taking also account of its future development. Moreover, it will also be necessary to ensure that the Second Additional Protocol will include a disconnection clause allowing the European Union Member States that become Parties to the Second Additional Protocol to regulate the relations among themselves on the basis of EU law. In particular, the functioning of the European Commission’s e-evidence proposals, including as they evolve in the legislative procedure negotiations by the co-legislators and eventually in their final (adopted) form, should be preserved amongst European Union Member States.

               The Second Additional Protocol should include the necessary safeguards for fundamental rights and freedoms recognised by the Charter of Fundamental rights of the European Union, in particular the right to private and family life, home and communications recognised in article 7 of the Charter, the right to protection of personal data recognised in Article 8 of the Charter, the right to effective remedy and fair trial recognised in Article 47 of the Charter, the presumption of innocence and right of defence recognised in Article 48 of the Charter and principles of legality and proportionality of criminal offences and penalties recognised in Article 49 of the Charter. The Second Additional Protocol should be applied in accordance with those rights and principles.

               Appropriate data protection and privacy safeguards for the collection, transfer and subsequent use of personal data and electronic communications data must be part of the protocol so as to ensure full compliance by EU service providers with their obligations under EU data protection and privacy laws, insofar as such an international agreement could provide a legal basis for data transfers in reaction to production orders or requests issued by an authority from a non-EU Party to the Additional Protocol requiring a controller or processor to disclose personal data and electronic communications data. They should thus ensure the protection of fundamental rights and freedoms of EU citizens, including privacy and personal data protection when personal data or electronic communications data is disclosed to law enforcement authorities in countries outside the European Union.

               In view of the absence of provisions for authorities to access data without the help of an intermediary (‘direct access’) in the European Commission’s e-evidence proposals, any use of those measures can only be based on national law. Where the Second Additional Protocol may include provisions in relation to the ‘Extension of searches and access based on credentials’ and ’Investigative Techniques’, the main aim should be to pursue stronger safeguards for such cross-border direct access to data to ensure the protection of fundamental rights and freedoms of EU citizens, including privacy and personal data protection.

               The conclusion of the Second Additional Protocol should allow for the conclusion of bilateral agreements or treaties between the Parties to the Protocol and between the Parties of the Protocol and the European Union, governing their relations. To this end, an appropriate clause should be inserted envisaging that if two or more Parties to the Convention have already concluded an agreement or treaty on the matters dealt with in the Convention, or should they in future do so, they are entitled to apply that agreement or treaty or to regulate those relations accordingly, provided that this is done in a manner that is consistent with the Convention’s objectives and principles. The agreement between the European Union and the United States on cross-border access to electronic evidence for judicial cooperation in criminal matters should, in the bilateral relations between the United States of America and the European Union, take precedence over any agreement or arrangement reached in the negotiations of the Second Additional Protocol, in so far as it covers the same issues.

               Recommendation for a

               COUNCIL DECISION

               authorising the participation in negotiations on a second Additional Protocol to the Council of Europe Convention on Cybercrime (CETS No. 185)

               THE COUNCIL OF THE EUROPEAN UNION,

               Having regard to the Treaty on the Functioning of the European Union, and in particular Article 218(3) and (4) thereof,

               Having regard to the recommendation from the European Commission,

               Whereas:

               (1)On 9 June 2017, the Committee of Parties to the Council of Europe Convention on Cybercrime (CETS No. 185) (T-CY) adopted a decision adopting the Terms of Reference for the preparation of a Second Additional Protocol to the Convention.

               (2)The Terms of Reference for the Second Additional Protocol include the following elements for reflection: provisions for more effective mutual legal assistance (a simplified regime for mutual legal assistance requests for subscriber information; international production orders; direct cooperation between judicial authorities in mutual legal assistance requests; joint investigations and joint investigation teams; requests in English language; audio/video hearing of witnesses, victims and experts; emergency Mutual Legal Assistance procedures); provisions allowing for direct cooperation with service providers in other jurisdictions with regard to requests for subscriber information, preservation requests, and emergency requests; clearer framework and stronger safeguards for existing practices of transborder access to data; safeguards, including data protection requirements.

               (3)The Union has adopted common rules that overlap to a large extent with the envisaged elements being considered for the Second Additional Protocol. This includes in particular a comprehensive set of instruments in order to facilitate judicial cooperation in criminal matters,
                  22
                to ensure minimum standards of procedural rights
                  23
               , as well as data protection and privacy safeguards
                  24
               .

               (4)The Commission also submitted legislative proposals for a Regulation on European Production and Preservation Orders for electronic evidence in criminal matters, and for a Directive laying down harmonised rules on the appointment of legal representatives for the purpose of gathering evidence in criminal proceedings introducing, binding cross-border European Production and Preservation Orders to be addressed directly to a representative of a service provider in another Member State
                  25
               .

               (5)Therefore, the Second Additional Protocol may affect common Union rules or alter their scope.

               (6)Articles 82(1) and 16 of the Treaty on the Functioning of the Union specify Union competencies in the area of judicial cooperation in criminal matters as well as in data protection and privacy. In order to protect the integrity of Union law and to ensure that the rules of international law and Union law remain consistent, it is necessary that the Union participates in the negotiations on the Second Additional Protocol.

               (7)The Second Additional Protocol should include the necessary safeguards for fundamental rights and freedoms, including the right in protection of personal data and privacy, the right to private and family life, home and communications recognised in article 7 of the Charter, the right to protection of personal data recognised in Article 8 of the Charter, the right to effective remedy and fair trial recognised in Article 47 of the Charter, the presumption of innocence and right of defence recognised in Article 48 of the Charter and principles of legality and proportionality of criminal offences and penalties recognised in Article 49 of the Charter. The Second Additional Protocol should be applied in accordance with those rights and principles.

               (8) The European Data Protection Supervisor was consulted in accordance with Article 42(1) of Regulation (EU) 2018/1725 of the European Parliament and of the Council
                  26
                and delivered an opinion on …
                  27
               ,

               HAS ADOPTED THIS DECISION:

               Article 1

               The Commission is hereby authorised to negotiate, on behalf of the Union, the Second Additional Protocol to the Council of Europe Convention on Cybercrime (CETS No. 185).

               Article 2

               The negotiating directives are set out in the Annex.

               Article 3

               The negotiations shall be conducted in consultation with a special committee to be designated by the Council.

               Article 4

               This Decision is addressed to the Commission.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        Communication from the Commission to the European Parliament and Council: The European Agenda on Security, 28 April 2015, COM(2015) 185 final.

                     (2)

                        Proposal for a Regulation of the European Parliament and of the Council on European Production and Preservation Orders for electronic evidence in criminal matters, 17 April 2018, COM(2018) 225 final

                     (3)

                        Proposal for a Directive of the European Parliament and of the Council laying down harmonised rules on the appointment of legal representatives for the purpose of gathering evidence in criminal proceedings, 17 April 2018, COM(2018) 226 final.

                     (4)

                        All except Ireland and Sweden, which have signed but not ratified the Convention, but nevertheless committed to pursuing accession.

                     (5)

                        Final report of the T-CY Cloud Evidence Group ‘Criminal justice access to electronic evidence in the cloud: Recommendations for consideration by the T-CY’ of 16 September 2016.

                     (6)

                        The first additional protocol (CETS No. 189) to the Convention on Cybercrime concerning the criminalisation of acts of a racist and xenophobic nature committed through computer systems was open for signature by the States, which have signed the Convention in 2003. 31 countries are parties to the first additional protocol, including 17 EU Member States.

                     (7)

                        Directive 2014/41/EU of the European Parliament and of the Council of 3 April 2014 regarding the European Investigation Order in criminal matters, OJ L 130, p.1.

                     (8)

                        Council Act of 29 May 2000 establishing in accordance with Article 34 of the Treaty on European Union the Convention on Mutual Assistance in Criminal Matters between the Member States of the European Union, OJ C197, 12.7.2000, p.1.

                     (9)

                        Regulation (EU) 2018/1727 of the European Parliament and of the Council of 14 November 2018 on the European Union Agency for Criminal Justice Cooperation (Eurojust), and replacing and repealing Council Decision 2002/187/JHA.

                     (10)

                        Regulation (EU) 2016/794 of the European Parliament and of the Council of 11 May 2016 on the European Union Agency for Law Enforcement Cooperation (Europol) and replacing and repealing Council Decisions 2009/371/JHA, 2009/934/JHA, 2009/935/JHA, 2009/936/JHA and 2009/968/JHA, OJ L 135, 24.5.2016, p. 53.

                     (11)

                        Council Framework Decision 2002/465/JHA of 13 June 2002 on joint investigation teams, OJ L 162, 20.6.2002, p. 1.

                     (12)

                        Council Framework Decision 2009/948/JHA on prevention and settlement of conflicts of exercise of jurisdiction in criminal proceedings, OJ L328, 15.12.2009, p.42;

                     (13)

                        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 proceedings, OJ L 280, 26.10.2010, p. 1; Directive 2012/13/EU of the European Parliament and of the Council of 22 May 2012 on the right to information in criminal proceedings, OJ L 142, 1.6.2012, p. 1; Directive 2013/48/EU of the European Parliament and of the Council of 22 October 2013 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, OJ L 294, 6.11.2013, p. 1; Directive (EU) 2016/1919 of the European Parliament and of the Council of 26 October 2016 on legal aid for suspects and accused persons in criminal proceedings and for requested persons in European arrest warrant proceedings, OJ L 297, 4.11.2016, p. 1; Directive (EU) 2016/800 of the European Parliament and of the Council of 11 May 2016 on procedural safeguards for children who are suspects or accused persons in criminal proceedings, OJ L 132, 21.5.2016, p. 1; Directive (EU) 2016/343 of the European Parliament and of the Council of 9 March 2016 on the strengthening of certain aspects of the presumption of innocence and of the right to be present at the trial in criminal proceedings, OJ L 65, 11.3.2016, p. 1; Directive 2012/13/EU of the European Parliament and of the Council of 22 May 2012 on the right to information in criminal proceedings.

                     (14)

                        Council Decision 2009/820/CFSP of 23 October 2009 on the conclusion on behalf of the European Union of the Agreement on extradition between the European Union and the United States of America and the Agreement on mutual legal assistance between the European Union and the United States of America, OJ L 291, 7.11.2009, p. 40–41.

                     (15)

                        Agreement between the European Union and Japan on mutual legal assistance in criminal matters, OJ L 39, 12.2.2010, p 20.

                     (16)

                        Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC.

                     (17)

                        Directive (EU) 2016/680 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data by competent authorities for the purposes of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and on the free movement of such data, and repealing Council Framework Decision 2008/977/JHA.

                     (18)

                        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), amended by Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009 amending Directive 2002/22/EC on universal service and users’ rights relating to electronic communications networks and services, Directive 2002/58/EC concerning the processing of personal data and the protection of privacy in the electronic communications sector and Regulation (EC) No 2006/2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws.

                     (19)

                        Proposal for a Regulation of the European Parliament and of the Council on European Production and Preservation Orders for electronic evidence in criminal matters, 17 April 2018, COM(2018) 225 final;  Proposal for a Directive laying down harmonised rules on the appointment of legal representatives for the purpose of gathering evidence in criminal proceedings, 17 April 2018, COM (2018) 226 final.

                     (20)

                        While negotiations with the European Parliament and the Council are ongoing, the Council agreed a general approach on the Commission proposal for a Regulation at the Justice and Home Affairs Council on 7 December 2018.

                     (21)

                        Council of Europe Budapest Convention on Cybercrime (CETS N° 185), 23 November 2001, http://conventions.coe.int.

                     (22)

                        Council Act of 29.5.2000 establishing the Convention on Mutual Assistance in Criminal Matters between the Member States of the European Union, OJ C197, 12.7.2000, p.1; Regulation (EU) 2018/1727 of the European Parliament and of the Council on the European Union Agency for Criminal Justice Cooperation (Eurojust) and repealing Council Decision 2002/187/JHA, OJ L 295, 21.11.2018; Regulation (EU) 2016/794 of the European Parliament and of the Council of 11 May 2016 on the European Union Agency for Law Enforcement Cooperation (Europol) and replacing and repealing Council Decisions 2009/371/JHA, 2009/934/JHA, 2009/935/JHA, 2009/936/JHA and 2009/968/JHA, OJ L 135, 24.5.2016, p. 53; Council Framework Decision 2002/465/JHA of 13 June 2002 on joint investigation teams, OJ L 162, 20.6.2002, p. 1; Council Framework Decision 2009/948/JHA on prevention and settlement of conflicts of exercise of jurisdiction in criminal proceedings, OJ L328, 15.12.2009, p.42; Directive 2014/41/EU regarding the European Investigation Order in criminal matters, OJ L130, 1.5.2014, p.1.

                     (23)

                        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 proceedings, OJ L 280, 26.10.2010, p. 1; Directive 2012/13/EU of the European Parliament and of the Council of 22 May 2012 on the right to information in criminal proceedings, OJ L 142, 1.6.2012, p. 1; Directive 2013/48/EU of the European Parliament and of the Council of 22 October 2013 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, OJ L 294, 6.11.2013, p. 1; Directive (EU) 2016/1919 of the European Parliament and of the Council of 26 October 2016 on legal aid for suspects and accused persons in criminal proceedings and for requested persons in European arrest warrant proceedings, OJ L 297, 4.11.2016, p. 1; Directive (EU) 2016/800 of the European Parliament and of the Council of 11 May 2016 on procedural safeguards for children who are suspects or accused persons in criminal proceedings, OJ L 132, 21.5.2016, p. 1.

                     (24)

                        Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC; Directive (EU) 2016/680 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data by competent authorities for the purposes of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and on the free movement of such data, and repealing Council Framework Decision 2008/977/JHA.

                     (25)

                        COM (2018) 225 final and COM (2018) 226 final.

                     (26)

                        Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC  (OJ L295, 21.11.2018, p. 39).

                     (27)

                        OJ C ...

    ---documentbreak---

               EUROPEAN COMMISSION
            Brussels, 5.2.2019
            COM(2019) 71 final
            ANNEX
            to
            the Recommendation for a COUNCIL DECISION
            authorising the participation in negotiations on a second Additional Protocol to the Council of Europe Convention on Cybercrime (CETS No. 185)

               ANNEX

               1.OBJECTIVES

               The Commission should, in the course of the negotiations, aim to achieve the objectives set out in detail below:

               (a)The negotiations should ensure full compatibility of the Convention and the Additional Protocols with EU law and Member States’ obligations under it, in particular as regards investigatory powers granted to non-EU Parties.

               (b)In particular, the negotiations should ensure respect for the fundamental rights, freedoms and general principles of EU law as enshrined in the European Union Treaties and Charter of Fundamental Rights, including proportionality, procedural rights, the presumption of innocence and the rights of defence of persons subject to criminal proceedings as well as privacy and the protection of personal data and electronic communications data when such data is processed, including transfers to law enforcement authorities in countries outside the European Union, and any obligations incumbent on law enforcement and judicial authorities in this respect.

               (c)Furthermore, the Second Additional Protocol should be compatible with the Commission’s e-evidence legislative proposals, including as they evolve in the legislative procedure negotiations by the co-legislators and eventually in their final (adopted) form, and prevent conflicts of laws. In particular, such a protocol should to the greatest extent possible reduce the risks of production orders issued under a future EU instrument creating conflicts with the laws of third countries that are Parties to the Second Additional Protocol. When accompanied by appropriate data protection and privacy safeguards, it would facilitate compliance by EU service providers with their obligations under EU data protection and privacy laws, insofar as such an international agreement could provide a legal basis for data transfers in reaction to production orders or requests issued by an authority from a non-EU Party to the Second Additional Protocol requiring a controller or processor to disclose personal data or electronic communications data.

               2.SPECIFIC ISSUES

               I. Relation with EU law and other (possible) agreements

               (d)It should be ensured that the Second Additional Protocol contains a disconnection clause providing that the Member States shall, in their mutual relations, continue to apply the rules of the European Union rather than the Second Additional Protocol.

               (e)The Second Additional Protocol may apply in the absence of other more specific international agreements binding the European Union or its Member States and other Parties to the Convention, or, where such international agreements exist, only to the extent that certain issues are not regulated by those agreements. Such more specific international agreements should thus take precedence over the Second Additional Protocol provided that they are consistent with the Convention’s objectives and principles.

               II.  Provisions for more effective mutual legal assistance:

               (f)The provisions on the ‘languages of requests’ as currently drafted stipulate that requests should be made in a language acceptable to the requested Party or accompanied by a translation into such a language. The European Union should support the draft text and explanatory report preliminarily adopted.

               (g)The provisions on the ‘emergency mutual assistance’ as currently drafted enable mutual assistance to be sought on a rapidly expedited basis by sending such a request in electronic form where the requesting Party is of the view that an emergency exists, defined as a situation in which there is a significant and imminent risk to the life or safety of any natural person. The European Union should support the draft text and explanatory report preliminarily adopted. The scope of mutual assistance should be identical to that set forth in Article 25 of the Convention.

               (h)With regard to the provisions on ‘video conferencing’ the European Union should seek that the Second Additional Protocol is consistent with the corresponding provisions of the existing international agreements between European Union and its Member States and other Parties to the Convention, where possible. The provisions should allow Member States to ensure the respect of applicable procedural rights safeguards deriving from Union and national law.

               (i)With regard to the provisions on ‘endorsement model’ the European Union should seek that the draft text and explanatory memorandum include elements, such as mandatory maximum deadlines for decisions by national authorities, to ensure that its use results in swifter procedures; further, it should ensure that the burden on service providers is proportionate, and the remedies, where appropriate, shall apply;

               III.Provisions allowing for direct cooperation with service providers in other jurisdictions:

               (j)With regard to the provisions on ‘direct cooperation with providers across jurisdictions’, the European Union should ensure that the Second Additional Protocol is consistent with EU law, includes the appropriate safeguards and the burden on service providers is proportionate.

               (k)With regard to the provisions on ‘International productions orders’, the European Union should ensure that the Second Additional Protocol includes appropriate fundamental rights safeguards, taking into account the different level of sensitivity of the categories of data concerned and the safeguards included in the European Production Orders for the different categories of data.

               (l)With regard to the provisions on ‘International productions orders’, the European Union should not oppose the inclusion in the Second Additional Protocol of additional safeguards and grounds for refusal compared to the Commission’s e-evidence proposals, including as they evolve in the legislative procedure negotiations by the co-legislators and eventually in their final (adopted) form, such as a notification and consent by the state of the service provider and a prior review carried out either by a court or by an independent administrative body, as far as this does not disproportionately reduce the effectiveness of the instrument under the Second Additional Protocol (for example in cases of validly established urgency). Any additional safeguards and grounds for refusal should not affect the functioning of the EU’s e-evidence proposals amongst Member States.

               IV.Stronger safeguards for existing practices of transborder access to data:

               (m)With regard to the provisions on ‘Extension of searches and access based on credentials’ and ’Investigative Techniques’, the European Union should ensure that the Second Additional Protocol includes appropriate fundamental rights safeguards. Therefore, the draft text should also include the condition that the data stored in the connected computer system is lawfully accessible from the initial system and the access is necessary and proportionate and does not involve a breach of security measures in devices in line with the safeguards outlined below.

               (n)The European Union should also ensure that it does not restrict the possibilities for such access that are currently provided for in Member States.

               V.Safeguards, including data protection requirements:

               (o)The European Union should ensure that the Second Additional Protocol provides for appropriate data protection safeguards within the meaning of Directive (EU) 2016/680 and Regulation (EU) 2016/679 and Directive 2002/58/EC for the collection, transfer and subsequent use of personal data and electronic communications data included in the electronic evidence sought by the requesting authority. These safeguards should be included in the Second Additional Protocol, taking into account those set out in EU agreements, such as the EU-US Umbrella Agreement and in the modernised Council of Europe Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data(CETS No.108). These safeguards should address situations of processing of data in the context of both mutual assistance between law enforcement authorities and direct cooperation between law enforcement authorities and providers. The European Union should aim for these safeguards to apply to all investigatory powers, both existing in the context of the Convention and created by the Second Additional Protocol.

               3.TERRITORIAL APPLICATION, ENTRY INTO FORCE AND OTHER FINAL PROVISIONS

               The final provisions of the Additional Protocol, including provisions on entry into force, reservations, denunciation etc. should be modelled where possible and appropriate along the provisions of the Council of Europe Convention on Cybercrime (CETS No.185). Provisions diverging from standard clauses should only be used where necessary to obtain the objectives or to reflect the specific circumstances of the Second Additional Protocol.


title: Recommendation for a COUNCIL DECISION authorizing the opening of negotiations on a review of the Agreement of the United Nations Economic Commission for Europe concerning the adoption of uniform technical prescriptions for wheeled vehicles, equipment and parts which can be fitted and/or used on wheeled vehicles and the conditions for the reciprocal recognition of approvals granted on the basis of these prescriptions (‘Revised 1958 Agreement')

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               EUROPEAN COMMISSION
            Brussels, 5.6.2019
            COM(2019) 534 final
            Recommendation for a
            COUNCIL RECOMMENDATION
            with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective in Hungary
            {SWD(2019) 534 final}

               Recommendation for a

               COUNCIL RECOMMENDATION

               with a view to correcting the significant observed deviation from the adjustment path toward the medium-term budgetary objective

                  in Hungary

               THE COUNCIL OF THE EUROPEAN UNION,

               Having regard to the Treaty on the Functioning of the European Union, and in particular Article 121(4) thereof,

               Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies
                  1
               , and in particular the second subparagraph of Article 10(2) thereof,

               Having regard to the recommendation from the European Commission,

               Whereas:

               (1)In accordance with Article 121 of the Treaty, Member States are to promote sound public finances over the medium term through the coordination of economic policies and multilateral surveillance in order to avoid the occurrence of excessive government deficits.

               (2)The Stability and Growth Pact (SGP) is based on the objective of sound government finances as a means of strengthening the conditions for price stability and for strong sustainable growth conducive to employment creation.

               (3)On 22 June 2018, the Council found in accordance with Article 121(4) of the Treaty that a significant observed deviation from the medium-term budgetary objective of a general government deficit of 1,0 % of GDP in structural terms occurred in Hungary in 2017. In view of that established significant deviation, on 22 June 2018, the Council recommended Hungary
                  2
                to take the necessary measures to ensure that the nominal growth rate of net primary government expenditure
                  3
                does not exceed 2.8 % in 2018, corresponding to an annual structural adjustment of 1.0 % of GDP. It also recommended that Hungary uses any windfall gains for deficit reduction, thereby putting the country on an appropriate adjustment path toward the medium-term budgetary objective. On 4 December 2018, the Council concluded that Hungary had not taken effective action in response to the Council Recommendation of 22 June 2018. On that basis, on 4 December 2018 the Council issued a revised recommendation for Hungary to take the necessary measures to ensure that the nominal growth rate of net primary government expenditure does not exceed 3.3 % in 2019, corresponding to an annual structural adjustment of 1.0 % of GDP.

               (4)In 2018, based on the Commission 2019 spring forecast and the 2018 outturn data validated by Eurostat, the growth of net primary government expenditure was well above the expenditure benchmark, pointing to a significant deviation (deviation of 1.3 % of GDP). The structural balance deteriorated to -3.7 % of GDP from -3.4 % of GDP in 2017, also pointing to a significant deviation from the recommended structural adjustment (deviation of 1.3 % of GDP). The size of the deviation indicated by the structural balance is negatively impacted by substantial revenue shortfalls as well as higher investment expenditures amidst an overheating economy, while it is estimated to have marginally benefitted from falling interest expenditure. The expenditure benchmark is strongly negatively impacted by the medium-term potential GDP growth applied in its calculation, which includes very low potential GDP growth in the aftermath of the crisis. In addition, the GDP deflator underlying the expenditure benchmark does not seem to account properly for the increased cost pressures affecting government spending. After adjusting for these factors, the expenditure benchmark appears to adequately reflect the fiscal effort and still points to a significant deviation. Taking into account these factors, both indicators confirm a significant deviation from the requirements of the preventive arm of the SGP in 2018.

               (5)On 5 June 2019, following an overall assessment, the Commission considered that a significant observed deviation from the adjustment path toward the medium-term budgetary objective exists in Hungary and issued a warning to Hungary in accordance with Article 121(4) of the Treaty and the first subparagraph of Article 10(2) of Regulation (EC) No 1466/97.

               (6)In accordance with the second subparagraph of Article 10(2) of Regulation (EC) No 1466/97, within one month of the date of the adoption of the warning, the Council is to address a recommendation to the Member State concerned to take the necessary policy measures. Regulation (EC) No 1466/97 provides that the recommendation will set a deadline of no more than five months for the Member State to address the deviation. On that basis a deadline of 15 October 2019 for Hungary to address the deviation appears appropriate. Within that deadline, Hungary should report on action taken in response to this Recommendation.

               (7)Based on the output gap projections of the Commission 2019 spring forecast, Hungary will remain in good economic times in 2019 and 2020. While in 2019, real GDP is estimated to grow in line with potential GDP (at 3.7 %), in 2020, real GDP growth (at 2.8 %) is forecast to be lower than the growth potential (at 3.6 %). Hungary’s general government debt ratio is above the 60 %-of-GDP threshold. Hence, the minimum required structural effort prescribed by Regulation (EC) No 1466/97 and the commonly agreed adjustment matrix under the preventive arm of the SGP, which factors in the prevailing economic circumstances and possible sustainability concerns, amounts to at least 0.75 % of GDP for both 2019 and 2020.

               (8)Hungary's structural deficit has increased by 1.4 % of GDP in 2017 and by 0.3 % of GDP in 2018, to 3.7 % of GDP in 2018. It is projected in the Commission 2019 spring forecast to decrease as of 2019. An additional effort, necessary to correct for the cumulated deviations and to bring Hungary back on an appropriate consolidation path following the slippages since 2017, should complement the minimum adjustment requirement in 2019. An additional effort compared to that resulting from the commonly agreeed adjustment matrix under the preventive arm of the SGP of 0.25 % of GDP in 2019 seems appropriate given the magnitude of the observed significant deviation from the recommended adjustment path towards the medium-term objective and it will accelerate adjustment back towards the medium-term budgetary objective. The required effort for 2019 is in line with the adjustment recommended by the Council on 4 December 2018. For 2020, the minimum adjustment requirement of 0.75 % of GDP seems appropriate, contingent on compliance with the requested adjustment in 2019.

               (9)The required improvement in the structural balance by 1.0 % of GDP in 2019 and 0.75 % of GDP in 2020 is consistent with a nominal growth rate of net primary government expenditure not exceeding 3.3 % in 2019 and 4.7 % in 2020.

               (10)The Commission 2019 spring forecast projects an improvement in the structural balance by 0.4 % of GDP in 2019 and by a further 0.6 % of GDP in 2020. Therefore, a structural improvement of 1.0 % of GDP in 2019 and 0.75 % of GDP in 2020 translates into the need to adopt measures of a total structural yield of 0.6 % of GDP in 2019 and additonal measures of a structural yield of 0.2 % of GDP in 2020 compared to the current baseline in the Commission 2019 spring forecast.

               (11)The failure to act upon earlier recommendations to correct the observed significant deviation call for urgent action to put Hungary’s fiscal policy back on a prudent path.

               (12)In order to achieve the recommended budgetary targets, it is crucial that Hungary adopts and strictly implements the necessary measures and monitors the development of current expenditure closely.

               (13)Hungary should report to the Council on action taken in response to this Recommendation by 15 October 2019.

               (14)It is appropriate that this Recommendation be made public,

               HEREBY RECOMMENDS THAT HUNGARY:

               (1)take the necessary measures to ensure that the nominal growth rate of net primary government expenditure does not exceed 3.3 % in 2019 and 4.7 % in 2020, corresponding to an annual structural adjustment of 1.0 % of GDP in 2019 and 0.75 % of GDP in 2020, thereby putting the Member State on an appropriate adjustment path toward the medium-term budgetary objective;

               (2)use any windfall gains for deficit reduction; budgetary consolidation measures should secure a lasting improvement in the general government structural balance in a growth-friendly manner;

               (3)report to the Council by 15 October 2019 on action taken in response to this Recommendation; the report should provide sufficiently specified and credibly announced measures with a view to complying with the required adjustment path, including budgetary impact of each of them, as well as updated and detailed budgetary projections for 2019-2020.

               This recommendation is addressed to Hungary.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        OJ L 209, 2.8.1997, p. 1.

                     (2)

                        OJ C 223, 27.6.2018, p. 1.

                     (3)

                        Net primary government expenditure is comprised of total government expenditure excluding interest expenditure, expenditure on Union programmes fully matched by Union funds revenue and non-discretionary changes in unemployment benefit expenditure. Nationally financed gross fixed capital formation is smoothed over a four-year period. Discretionary revenue measures or revenue increases mandated by law are factored in. One-off measures on both the revenue and expenditure sides are netted out.


               EUROPEAN COMMISSION
            Brussels, 27.6.2019
            COM(2019) 291 final
            Recommendation for a
            COUNCIL DECISION
            authorising the opening of negotiations for the establishment of a regional fisheries management organisation or arrangement for the conservation and management of marine living resources in the western and central Atlantic ocean

               EXPLANATORY MEMORANDUM

               1.CONTEXT OF THE RECOMMENDATION

               •Reasons for and objectives of the recommendation

               The Western and Central Atlantic Fisheries Commission (WECAFC) is an advisory body established in 1973 under Article VI of the Constitution of the Food and Agriculture Organization of the United Nations (FAO). Its purpose is to promote the conservation, management and development of the living marine resources within its area of competence. However, the WECAFC does not take binding decisions on its members. The WECAFC Secretariat is managed and financed by the FAO. The Union is a member of the WECAFC.

               In the context of ‘Promoting regional fisheries management and cooperation in key ocean areas to fill regional governance gaps of the Joint Communication by the High Representative of the Union for Foreign Affairs and Security Policy and the European Commission on International ocean governance: an agenda for the future of oceans’, the Union pledged under action 2 to ‘support the upgrading by 2020 of the Fishery Committee for the Eastern Central Atlantic and the Western Central Atlantic Fishery Commission’.

               A process of strategic reorientation was initiated in 2012 and involved a performance review (2013-2014), a strategic plan (2014), two ‘reorientation and strategic planning’ workshops (2014 and 2015) and a cost-benefit analysis of the reorientation process (2016). At the 16th WECAFC plenary session (2016), the Members of the Commission agreed to launch a process to clarify certain key issues related to the establishment of a regional fisheries management organisation (RFMO) in the WECAFC area. At the end of 2018, the WECAFC Secretariat prepared a ‘discussion paper’ to clarify issues related to the objectives, area of competency, coverage of stocks, institutional structure, financial implications, etc. On 25 and 26 March 2019, the 1st preparatory workshop of the WECAFC reorientation took place in Barbados to prepare the 17th WECAFC plenary for July 2019, where the topic of establishing an RFMO in the WECAFC area will be addressed.

                  The creation of a binding instrument to reform WECAFC in the western and central Atlantic area will provide a firm basis for the sustainable management and conservation of marine biological resources there. This is in line with Article 28 of Regulation (EU) No 1380/2013 on the common fisheries policy of the European Parliament and of the Council and in line with the Council Conclusions of 19 March 2012 on the Communication from the Commission on the ‘External dimension of the common fisheries policy’.

               •Consistency with existing policy provisions in the policy area

                  RFMOs are international organisations formed by countries. Members include countries in the region (coastal states), regional integration organisations, such as the EU, and fishing entities with fishing interests in a given area. Some RFMOs manage all the fish stocks within a specific area, while others focus on particular highly migratory species, notably tuna, across vast geographical areas. While some are purely advisory, most have management powers to set limits on catches and fishing effort, lay down technical measures, and control obligations.

                  In line with the Commission Communication on ‘Participation in regional fisheries organisations (RFOs)’ the European Union, represented by the Commission, plays an active role in 6 tuna organisations and 11 non-tuna organisations.

                  Promoting measures to make RFMOs more effective and, where relevant, improve their governance is a central feature of the EU’s action in these fora. This is in accordance with the Joint Communication by the High Representative of the EU for Foreign Affairs and Security Policy and the European Commission on ‘International ocean governance: an agenda for the future of oceans’  and the Council conclusions on that joint communication.

               2.LEGAL ELEMENTS OF THE RECOMMENDATION

               •Legal basis

                  The objective of the present recommendation is to obtain from the Council the authorisation for the Commission to negotiate the establishment of an RFMO in the western and central Atlantic area on behalf of the EU.  The legal basis for the Council to authorise the opening of negotiations is Article 218(3) and (4) of the Treaty on the Functioning of the European Union (TFEU).

               •Choice of the instrument

                  Under Article 218(3) and (4) of the TFEU, the Commission submits recommendations to the Council, which adopts a decision authorising the opening of negotiations. The Council may address directives to the negotiator and designate a special committee to oversee the negotiations in accordance with the negotiating directives.

               3.RESULTS OF CONSULTATIONS WITH STAKEHOLDERS

               This initiative is linked to a commitment made under the Joint Communication by the High Representative of the Union for Foreign Affairs and Security Policy and the European Commission on ‘International ocean governance: an agenda for the future of oceans’, for which a stakeholder consultation was organised. In addition, the Commission presented a non-paper at the Council Working Party in March 2019, proposing EU support for the WECAFC reform process, which was broadly supported by Member States.

               4.BUDGETARY IMPLICATIONS

                  EU accession to the Convention may require that a yearly financial contribution, estimated at EUR 100 000, be paid to the new organisation from budget line 11.03.02 (Compulsory contributions to RFMOs). The EU contribution may vary, depending on the final agreement on the criteria to be used to calculate the contributions of the parties to the organisation’s expenses. The exact amount will be earmarked in the relevant budget lines in the annual budget procedure.

                  Voluntary contributions to the organisation’s budget under budget line 11.06.62.03, to promote scientific research, may also be relevant, but the exact amount is difficult to determine at this stage. Budget line 11.01.04.01 also provides for technical assistance to support the provision of scientific advice at the NPFC meeting. The cost of this is estimated at EUR 10 000 per year.

               Recommendation for a

               COUNCIL DECISION

               authorising the opening of negotiations for the establishment of a regional fisheries management organisation or arrangement for the conservation and management of marine living resources in the western and central Atlantic ocean

               THE COUNCIL OF THE EUROPEAN UNION,

               Having regard to the Treaty on the Functioning of the European Union, and in particular Article 218 (3) and (4) thereof,

               Having regard to the recommendation from the European Commission,

               Whereas:

               (1)The Union is competent to adopt measures for the conservation of marine biological resources under the common fisheries policy and to enter into agreements with third countries and international organisations.

               (2)Pursuant to Council Decision 98/392/EC, the Union is a Contracting Party to the United Nations Convention on the Law of the Sea of 10 December 1982. That convention requires all members of the international community to cooperate in conserving and managing the biological resources of the sea.

               (3)Pursuant to Council Decision 98/414/EC, the Union is a Contracting Party to the Agreement on the implementation of the provisions of the United Nations Convention on the Law of the Sea of 10 December 1982, relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks.

               (4)Regulation (EU) No 1380/2013 of the European Parliament and of the Council provides that the Union shall conduct its external fisheries relations in accordance with its international obligations and policy objectives, as well as the objectives and principles set out in Articles 2 and 3 of that Regulation, in order to ensure sustainable exploitation, management and conservation of marine biological resources and the marine environment.

               (5)The Western and Central Atlantic Fisheries Commission (WECAFC) is an advisory body established in 1973 under Article VI of the Constitution of the Food and Agriculture Organization of the United Nations (FAO), with the objective of promoting conservation, management and development of the living marine resources within its area of competence.

               (6)WECAFC initiated a process of strategic reorientation in 2012 that has involved a performance review (2013-2014), a strategic plan (2014), two ‘reorientation and strategic planning’ workshops (2014 and 2015) and the 1st preparatory workshop (March 2019).

               (7)Starting in July 2019, international consultations will take place with a view to conclude an international agreement for establishing a regional fisheries management organisation or arrangement with a power to take legally binding decisions for the conservation and management of marine living resources in the western and central Atlantic ocean with the participation of WECAFC members.

               HAS ADOPTED THIS DECISION:

               Article 1

               The Commission is hereby authorised to negotiate, on behalf of the European Union, an agreement for the establishment of a regional fisheries management organisation or an instrument for the conservation and management of marine living resources in the western and central Atlantic Ocean.

               Article 2

               These negotiations shall be conducted in consultation with the [name of the special committee to be designated by the Council] and on the basis of the negotiation directives set out in the annex to this decision.

               Article 3

               The Decision is addressed to the Commission.

               Done at Brussels,

                     For the Council

                     The President

    ---documentbreak---

               EUROPEAN COMMISSION
            Brussels, 27.6.2019
            COM(2019) 291 final
            ANNEX
            to the
            Recommendation for a Council Decision authorising the opening of negotiations for the establishment of a regional fisheries management organisation or arrangement for the conservation and management of marine living resources in the western and central Atlantic ocean

               ANNEX

               Directives for negotiations to be conducted by the Commission on behalf of the European Union for the establishment of a regional fisheries management organisation or arrangement for the conservation and management of marine living resources in the western and central Atlantic Ocean

               1.The purpose of the negotiations is to enable the European Union to participate in the negotiation process of the Western and Central Atlantic Fisheries Commission (WECAFC) in order to conclude an agreement to set up a regional fisheries management organisation or arrangement (hereafter ‘the Agreement’) which can take legally binding decisions for the conservation and management of marine living resources in the western and central Atlantic Ocean.

               2.In the negotiations with the other Parties involved in setting up a regional fisheries management organisation or arrangement for the conservation and management of marine living resources in the western and central Atlantic ocean, the Commission shall act so as to ensure that the Agreement:

               –is consistent with international law, and in particular with the provisions of the 1982 United Nations Convention on the Law of the Sea, the 1995 Agreement relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks and the 1995 Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas, without affecting the rights and obligations of costal states, the 2009 Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing;

               –ensures the compatibility between conservation and management measures established for the same stocks in the waters under national jurisdiction and the measures adopted in respect of the high seas in accordance with Article 118 of the United Nations Convention on the Law Of the Sea (UNCLOS) and Article 8 of the United Nations Fish Stocks Agreement (UNFSA);

               –does not infringe upon the role and mandates of the International Commission for the Conservation of Atlantic Tuna (ICCAT) and/or the Northwest Atlantic Fisheries Organisation (NAFO) and ensures strong cooperation and coordination between relevant measures taken respectively on the basis of the agreement and by ICCAT and/or NAFO;

               –promotes the Union’s conservation and management approach across the world's oceans and strengthens its commitment to the long-term conservation and sustainable use of global fisheries resources;

               –is consistent with the objectives and principles pursued by the Union with the common fisheries policy as laid down in Regulation (EU) 1380/2013;

               –establishes a regional fisheries management organisation or arrangement which can take legally binding decisions for the conservation and management of marine living resources in the western and central Atlantic Ocean;

               –allows for the participation of fishing entities and regional economic integration organisations (REIOs) to which its member States have transferred power over matters covered by the Agreement;

               –has as its main objective the conservation and management of fishery resources, including exploratory fisheries, by implementing the precautionary approach and aims to ensure that exploitation of living marine biological resources restores and maintains populations of harvested species above levels which can produce the maximum sustainable yield; while providing a fair standard of living for those who depend on fishing activities and contributing to the availability of seafood supplies.

               –aims at implementing the ecosystem-based approach to fisheries management, in the context of climate change, so as to contribute to the sustainable management of oceans in all its dimensions, ensure that any negative impacts of fishing activities on the marine ecosystem are minimised, and endeavour to avoid the degradation of the marine environment.

               –covers all or part of the current WECAFC area, preferably including the exclusive economic zones (EEZ) of coastal States;

               –includes an efficient decision-making process preferably providing, where applicable, for majority voting mechanisms and objection procedures;

               –includes appropriate, inclusive and transparent mechanisms for collecting relevant data and elaborating robust scientific advice to underpin decision-making as well as an appropriate involvement of stakeholders;

               –includes appropriate mechanisms to promote the effective monitoring, control and surveillance of fisheries activities, combatting illegal, unregulated and unreported (IUU) fishing, and to promote the regulation of transhipment activities, an inspection programme both at sea and in port, and the traceability of fisheries products;

               –supports cooperation to combat forced labour associated to IUU fishing and to promote decent work in fisheries in line with the Work in Fishing Convention of the International Labour Organisation (ILO);

               –includes a mechanism to promote compliance with the Agreement and the measures adopted by the organisation or the arrangement established by the Agreement;

               –establishes a periodic review of the measures adopted by the organisation or arrangement established by the Agreement;

               –includes an appropriate administrative structure and bodies, and sufficient financial resources, to which all Members contribute in a fair manner;

               –allows access to, and appropriate share of, the fisheries resources for the EU fleet in the area covered;

               –includes a process for the peaceful settlement of disputes;

               –takes into account, as appropriate, any specific circumstances of Small Islands Development States in the area covered.


               EUROPEAN COMMISSION
            Brussels,22.11.2017
            COM(2017) 770 final
            Recommendation for a
            COUNCIL RECOMMENDATION
            on the economic policy of the euro area
            {SWD(2017) 660 final}

               Recommendation for a

               COUNCIL RECOMMENDATION

               on the economic policy of the euro area

               THE COUNCIL OF THE EUROPEAN UNION,

               Having regard to the Treaty on the Functioning of the European Union, and in particular Article 136 in conjunction with Article 121(2) thereof,

               Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies
                  1
               , and in particular Article 5(2) thereof,

               Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances
                  2
               , and in particular Article 6(1) thereof,

               Having regard to the recommendation of the European Commission,

               Having regard to the conclusions of the European Council,

               Having regard to the opinion of the Economic and Financial Committee,

               Having regard to the opinion of the Economic Policy Committee,

               Whereas:

               (1)The economic expansion in the euro area continues and has become increasingly broad-based across countries. The recovery is increasingly driven by domestic demand, with private consumption as the key driver of growth and investment picking up. Employment continued to increase throughout 2016 and the first half of 2017. The unemployment rate has seen a significant reduction, though it is still higher than in 2008. The recovery in the euro area is nonetheless characterised by some atypical features: subdued core inflation and wage growth that do not reflect the labour market improvements as signalled by standard labour market indicators, a large current account surplus and a persisting, though declining, investment gap. In particular, subdued wage growth appears to be due to remaining labour market slack in some economies, low inflation expectations feeding in wage negotiations and low productivity growth. Real household income has increased but remains below 2008 levels in many countries. Divergences across euro area countries in terms of GDP per capita and unemployment rates persist. The rates of long-term unemployment and youth unemployment are still high while poverty, social exclusion and inequality remain a serious concern in several Member States.

               (2)Overall, on the basis of the reading of the economic indicators for the euro area, there appears to be a case for further supporting demand, investment and wage growth without incurring the risk of triggering inflationary pressures, while fostering internal and external rebalancing and economic and social convergence. At the same time, signs of newly emerging imbalances, e.g. in the housing market in some Member States, need to be closely monitored.
                  3

               (3)Significant imbalances persist in the euro area. While much progress has been achieved among net debtor countries in correcting their external balances, large current account surpluses remain in some creditor countries, reflecting an overall shortfall in aggregate demand. These generate a surplus for the euro area of 3.3% of GDP in 2016, projected to decline to 2.9% of GDP in 2019. The net international investment positions of the most indebted Member States have been improving at a slow pace and sustained rebalancing efforts are still needed. Countries that had large current account deficits for a long time still have large negative net international investment positions that are generally coupled with large stocks of private or government debt and constitute a vulnerability. At the same time, efforts are also needed in large current account surplus countries to support domestic demand and thereby the rebalancing of the euro area.

               (4)Wage growth contributes to the economic recovery in the euro area by supporting aggregate demand, reduces inequalities and ensures high standards of living in the area. Efficient wage setting mechanisms should ensure that wages are differentiated depending on country-specific conditions and taking due account of changes in productivity. Implementing structural reforms that increase productivity in all countries, improving the quality and composition of public expenditure to support investments, promoting wage growth and stronger demand dynamics in net creditor countries and implementing measures that contain growth in unit labour costs in net debtor countries would help accelerate the rebalancing process in the euro area.

               (5)Consistency and balance in the overall macroeconomic policy mix of the euro area, including monetary, fiscal and structural policies, is crucial to ensure a more robust and sustainable economic recovery. In recent years, this policy mix has been skewed towards monetary policy, which resorted to new unconventional tools to achieve the ECB's medium-term inflation objective, thereby supporting growth and job creation. The ECB announced to start a recalibration of its asset purchases as of January 2018. This calls for a supportive role from other policies, in Member States where space for policy action is available.

               (6)A strong coordination of national fiscal policies, based on common rules, is essential to arrive at an appropriate aggregate fiscal stance for the euro area and for the proper functioning of the monetary union. The common fiscal rules are geared towards pursuing debt sustainability at the national level, while providing room for macroeconomic stabilisation. The fiscal stances for the Member States and at aggregate level for the euro area have hence to balance the objectives of ensuring the long-term sustainability of national public finances and the short-term macroeconomic stabilisation at country and euro area level. In the light of the current economic recovery in the euro area characterised by some atypical features, the debt legacy from the crisis and the expected recalibration of asset purchases by the ECB, a broadly neutral fiscal stance at aggregate level for the euro area appears appropriate. An appropriate differentiation of fiscal efforts across euro area Member States, taking into account fiscal space and the spillovers across countries, is required.

               (7)A decisive improvement in the composition and management of national budgets, on both the revenue and expenditure sides, for instance by shifting resources towards tangible and intangible investment, would increase the impact of public budgets on demand in the short term and raise productivity in the longer term. Improvements in the functioning of national fiscal frameworks and well-managed spending reviews support the pursuit of credible and growth-friendly fiscal policies.

               (8)A well-designed structure of taxation is key to promote growth and employment, as well as to contribute to reduce inequalities. Simplifying tax systems and addressing tax fraud, evasion and avoidance are essential to make tax systems more efficient and fairer. This can free resources for public investment, education and healthcare and contributes to supporting investment, employment and improving social fairness. In particular, measures against Aggressive Tax Planning (ATP) are essential to secure government revenues, impede distortions of competition between firms, preserve social cohesion and fight increasing inequalities. The Common Consolidated Corporate Tax Base (CCCTB) would be another powerful tool against tax avoidance, while improving the Single Market for businesses.

               (9)Structural and institutional features of labour and product markets and well-functioning public administrations are important determinants of economic resilience as well as cyclical, real and social convergence across euro area Member States. Resilient economic structures prevent shocks from having significant and long-lasting effects on income and employment within Member States and across the euro area. In this way, they reduce economic fluctuations and provide a favourable environment for sustainable and inclusive growth. Better coordination of the implementation of structural reforms, in particular those prescribed in the country-specific recommendations, can create positive spillovers in the Member States and strengthen their positive effects.

               (10)Well-functioning labour markets and social protection systems are important foundations for inclusive economic growth, for reduced inequality and for the resilience of national economies and the euro area as a whole. With the aim to achieve upward convergence in this domain, the European Pillar of Social Rights sets out 20 key principles, falling into three broad chapters: (i) equal opportunities and access to the labour market; (ii) fair working conditions; and (iii) social protection and inclusion.

               (11)Despite progress with reforms to improve the adjustment capacity of labour markets, significant differences persist across the euro area, which continue to challenge its smooth functioning. Well-designed labour market policies that are fully integrated with social protection systems can support labour market transitions and reintegration, reduce labour market segmentation, provide effective automatic stabilisation and promote social fairness. Well-designed working-time arrangements can help mitigate shocks. Effective and timely activation of jobless people who can participate in the labour market can be achieved by providing individualised support for job search, training and re-qualification, while protecting those unable to participate. Emerging new forms of employment and new types of contracts bring along challenges related to job security and social protection. Against this background, employment protection legislation needs to provide for fair and decent working conditions for all workers.

               (12)Effective social protection systems are crucial to promote inclusive labour markets, ensure adequate income support and appropriate social support through access to quality services. Pension reforms and work-life balance policies are also key to foster labour market participation. Unnecessary restrictions to job, sectoral and geographical mobility of workers in employment and social protection systems should be lifted.

               (13)Access to high quality education and training is vital to ensure equal opportunities and address skills mismatches. Adequate investments in human capital through education and training systems that improve lifelong learning and ensure that skills levels match present and future labour market needs play a key role in improving the economy's adjustment capacity and real convergence in the longer run. Investment in skills can also drive innovation and increase productivity and competitiveness, in addition to ensuring social inclusion and mobility.

               (14)Product market reforms that increase competition and reforms that improve the business environment and the quality of institutions (including an effective justice system that facilitates contract enforcements) foster economic resilience in Member States and the euro area as a whole. Further integration in the Single Market has proven to be a major engine of growth and convergence between Member States. The Single Market still holds considerable unexploited potential and significant progress is needed to complete it. The Single Market for services (including financial, digital commerce, energy and transport) is the pending challenge. Attention should nonetheless also be focused on the goods markets to avoid potential market segmentation. The Digital Single Market should contribute to completing the legal environment to speed up the digitalisation of economic activities as a necessary step to improving the performance of product markets and global competitiveness.

               (15)While the overall robustness of the euro area banking sector has increased since the crisis and bank lending started to rise again, vulnerabilities remain and need to be addressed. Banks, and especially small and medium-sized institutions, are confronted with low profitability,. The costs of adapting banks' business models, the low interest rate environment and increasing competition from other forms of finance continue to exert pressure on banks' profitability. Business models therefore need to further adapt to become sustainable in the long term. NPL ratios have stabilised in nearly all more affected euro area Member States or are on a declining trend, but progress remains slow. High NPL ratios hinder banks' ability to lend, the transmission of monetary policy as well as economic adjustment capacity. They are also a source of vulnerability for the banking system as a whole. On the basis of the Action Plan to tackle NPLs that was agreed by the Council in July 2017, and as announced in its Communication on Banking Union of 11 October 2017, the Commission is currently working to deliver a comprehensive package of measures to reduce NPLs by 2018.

               (16)Strengthening the institutional architecture of EMU requires, as a matter of priority, completing the Banking Union and further progressing on the Capital Markets Union. The establishment of the Banking Union has made significant advances, but it remains unfinished. The Commission's recent Communication on completing the Banking Union attempts to set out a path on how an agreement on completing the Banking Union can be achieved, based on existing commitments by the Council. The lack of a common deposit insurance scheme and of a common backstop for the Single Resolution Fund hamper the ability of the Banking Union to sever the link from banks to sovereigns. Efforts to further reduce risk and improve risk management in banks must continue. In this context, swift work towards agreement on the regulatory package proposed by the Commission in November 2016 is crucial, as well as further advances in reducing non-performing loans and helping banks diversify their investments in sovereign bonds.

               (17)The Commission’s White Paper on the future of Europe marked the beginning of a process of reflection for the EU27 to decide on the future of the Union, outlining possible scenarios. The Commission further contributed with a series of reflection papers, among which the Reflection Paper on the Deepening of EMU offered an overall vision for the completion of EMU with a clear sequencing of what needs to be done to complete its architecture. The 2017 State of the Union address identified key elements to push the EMU agenda further and the Commission made relevant proposals in autumn 2017.

               HEREBY RECOMMENDS that euro area Member States take action, individually and collectively, within the Eurogroup in the period 2018-2019 to:

               1.Pursue policies that support sustainable and inclusive growth and improve resilience, rebalancing and convergence. Make significant progress towards completing the Single Market, particularly in services, including financial, digital commerce, energy and transport. Given the positive cyclical conditions, all Member States should prioritise reforms that increase productivity and growth potential, improve the institutional and business environment, remove bottlenecks to investment, support the creation of quality jobs and reduce inequality. Member States with current account deficits or high external debt should additionally aim at containing growth in unit labour costs. Member States with large current account surpluses should additionally promote wage growth and implement as a priority measures that foster investment, support domestic demand and facilitate rebalancing in the euro area.

               2.Aim at a broadly neutral fiscal stance at the aggregate level for the Euro Area and a balanced policy mix. Fiscal policies should strike the appropriate balance between ensuring the sustainability of public finances, in particular reducing debt ratios where they are high, and supporting the economic recovery. While ensuring the effective functioning of national fiscal frameworks, Member States should pursue fiscal policies in respect of the SGP and which support investment and improve the quality and composition of public finances, also by making use of spending reviews and adopting growth-friendly and fair tax structures. Member States should take and implement measures to reduce debt bias in taxation and fight aggressive tax planning to ensure a level playing field, provide fair treatment of taxpayers and safeguard public finances and stability within the euro area. This includes continuing work towards the Common Consolidated Corporate Tax Base (CCCTB).

               3.Implement reforms that promote quality job creation, equal opportunities and access to labour market, fair working conditions, and support social protection and inclusion. Reforms should aim at: (i) reliable and flexible labour contracts combined with adequate support during transitions and avoiding labour market segmentation; (ii) quality, efficient and life-long education and training systems, which aim at matching skills with labour market needs; (iii) effective active labour market policies that foster labour market participation; (iv) sustainable and adequate social protection systems that respond to new types of employment and employment relationships; (v) smooth labour mobility across jobs, sectors and locations; (vi) effective social dialogue and wage bargaining at the appropriate level; (vii) shifting taxes away from labour, particularly for low-income and second earners.

               4.In line with the Council (ECOFIN) roadmap of June 2016, continue work to complete the Banking Union with regard to risk reduction and risk sharing, including a European Deposit Insurance Scheme, making the common backstop for the Single Resolution Fund operational and strengthening the European supervisory framework to prevent the accumulation of risks. Take measures to tangibly accelerate reduction of the levels of non-performing loans on the basis of the agreed Council (ECOFIN) Action Plan and promote orderly deleveraging in Member States with large stocks of private debt. Enhance the integration and development of EU capital markets to support growth in the real economy while safeguarding financial market stability.

               5.Make swift progress on completing the economic and monetary union, notably on the basis of the Commission initiatives launched in autumn 2017, in full respect of the Union’s internal market and in an open and transparent manner towards non-euro area Member States.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        OJ L 209, 2.8.1997, p. 1.

                     (2)

                        OJ L 306, 23.11.2011, p. 25.

                     (3)

                        See Alert Mechanism Report 2018.