title: Commission Recommendation (EU) 2020/1307 of 18 September 2020 on a common Union toolbox for reducing the cost of deploying very high capacity networks and ensuring timely and investment-friendly access to 5G radio spectrum, to foster connectivity in support of economic recovery from the COVID-19 crisis in the Union

text:
               21.9.2020

               EN

               Official Journal of the European Union

               L 305/33

      COMMISSION RECOMMENDATION (EU) 2020/1307
      of 18 September 2020
      on a common Union toolbox for reducing the cost of deploying very high capacity networks and ensuring timely and investment-friendly access to 5G radio spectrum, to foster connectivity in support of economic recovery from the COVID-19 crisis in the Union
      THE EUROPEAN COMMISSION,
      Having regard to the Treaty on the Functioning of the European Union, and in particular Article 292 thereof,
      Whereas:

                  (1)

                  The COVID-19 crisis has shown that connectivity is essential for people and businesses in the Union. Electronic communications networks, in particular very high capacity networks, have been playing a crucial role in the response to the crisis by enabling remote working and schooling, healthcare, and personal communication and entertainment. Widespread gigabit connectivity underpins bandwidth-intensive use cases in the fields of health, education, transport, logistics, and media, which can play a key role in Europe’s economic recovery. More generally, fixed and wireless connectivity contributes significantly to providing affordable and accessible services and bridging the digital divide. It offers an important means to inform the public, help relevant public authorities contain the spread of the virus and enable healthcare organisations to exchange data and to provide teleservices.

                  (2)

                  The pandemic has changed the economic outlook for the years to come. Investment and reforms are needed more than ever to ensure convergence and a balanced, forward-looking and sustainable economic recovery. Investing in the Union’s common priorities, notably in the areas of green, digital and social policies, will improve its resilience and help create jobs and sustainable growth, while modernising Member States’ economies. Member States should therefore fully exploit the potential of the proposed recovery and resilience facility, ensuring efficient public spending and creating the conditions best suited for private investment. To that end, this Recommendation gives guidance to Member States who are in the process of designing their proposals for their recovery and resilience plans. It indicates how Member States can deploy simple and realistic measures to assign radio spectrum for the fifth generation (5G) networks under investment-friendly conditions, and how they can facilitate the deployment of very high capacity fixed and wireless networks by, for example, removing unnecessary administrative hurdles and streamlining permit granting procedures.

                  (3)

                  In this socio-economic context, it is necessary to develop a common Union approach, a ‘Toolbox’, based on best practices. The aim is to incentivise the timely deployment of very high capacity networks, including fibre and next generation wireless networks. Such approach would support emerging and future digital processes and applications, and contribute directly to growth and employment, as part of the Union’s economic recovery.

                  (4)

                  The Council Conclusions on Shaping Europe’s Digital Future of 9 June 2020 (1) stress that the COVID-19 pandemic has demonstrated the need for fast and ubiquitous connectivity. This situation calls on Member States, in close cooperation with the Commission, to develop a set of best practices to reduce the costs of network deployment and facilitate the roll-out of very high capacity infrastructures, including fibre and 5G.

                  (5)

                  5G mobile networks will bring very high capacity connectivity to mobile users. These networks are set to play a vital role in laying the basis for the digital and green transformations in areas like transport, energy, manufacturing, health, agriculture and media. The success of a number of use cases for 5G requires service continuity in substantial territories, including across national borders. It is therefore important that Member States take appropriate steps to promote deployment throughout their territories, including rural and remote areas, and cooperate with each other in the deployment of 5G in cross-border areas.

                  (6)

                  The spectrum-related actions covered by this Recommendation may support the preparation of the future Commission’s updated action plan for Europe on 5G and 6G that is announced in the Commission’s Communication ‘Shaping Europe’s digital future’ (2). That updated plan would take stock of progress made, address current network deployment deficiencies and set a new level of ambition for future 5G deployment at EU level, to ensure that 5G connectivity will realise its full potential to help meet the EU’s longer-term goals for the digital transformation of the economy.

                  (7)

                  Directive 2014/61/EU of the European Parliament and of the Council (3) (‘the Broadband Cost Reduction Directive’) aims to facilitate and incentivise the roll-out of high-speed electronic communications networks. In its report on the implementation of the Broadband Cost Reduction Directive (4), the Commission identified a number of problems in terms of its effectiveness, including the fact that some optional measures are not being used to their full potential by Member States. In response, this Recommendation should propose measures to incentivise the timely deployment of sustainable very high capacity electronic communications networks, including 5G networks.

                  (8)

                  Directive (EU) 2018/1972 of the European Parliament and of the Council (5), which has to be transposed by Member States and applied from 21 December 2020, promotes connectivity and access to, and take-up of, very high capacity networks by all citizens and businesses of the Union. This Recommendation is intended to contribute to the achievement of this objective and hence focuses on the deployment of very high capacity networks.

                  (9)

                  Member States should cooperate with each other and with the Commission to urgently develop a Toolbox containing best practices for the application of the Broadband Cost Reduction Directive and building up on its minimum requirements, making improvements in the following areas: (i) streamlining permit granting procedures, in the context of wider efforts for the improvement of the efficiency and transparency of public administrations and to contribute to easing business activities; (ii) increasing transparency and reinforcing the single information point; (iii) expanding the right to access existing physical infrastructure controlled by public sector bodies; and (iv) improving the dispute resolution mechanism. In addition, Member States should identify measures that would help reduce the environmental impact of electronic communications networks and ensure their sustainability.

                  (10)

                  Pursuant to Article 7 of the Broadband Cost Reduction Directive, Member States need to ensure that competent authorities take decisions relating to all permits for necessary civil works, with a view to deploying elements of high-speed electronic communications networks within 4 months, extended exceptionally, in duly justified cases or to comply with other deadlines or obligations laid down in national law for the proper conduct of the procedure. To avoid inconsistent practices across the Union, Member States should therefore seek to facilitate compliance with the 4 months deadline for granting or refusing all necessary permits and should also identify together best practices that further streamline permit granting procedures, such as tacit approval and simplified permit procedures.

                  (11)

                  For certain types of network deployments, some Member States have set up simplified permit procedures as a way of significantly reducing the administrative burden on both operators and national administrations. Member States should consider the use of simplified permit granting procedures or permit exemptions beyond Article 57 of the European Electronic Communication Code, as well as defining the network deployment scenarios that would benefit from these (e.g. for provisional deployments necessary to ensure the continuity of electronic communication services or for simple upgrades of existing networks, including the upgrade to 5G of existing mobile base stations).

                  (12)

                  To reduce administrative burden and streamline permit granting procedures, the use of electronic procedures should be facilitated and the role of the single information point should be enhanced. To this end, Member States should reflect on how the single information point could become an effective single entry point to submit electronic applications for permits at all administrative levels.

                  (13)

                  As a further step, an integrated approach to issuing permits under the responsibility of the single information point would bring significant added value. This could operate by way of a fully coordinated procedure in cases where more than one competent authority is involved. Member States should therefore consider giving the single information point an active role in coordinating and monitoring the permit granting procedures by different competent authorities and ensuring the proper exchange of relevant information.

                  (14)

                  To avoid undesirable delays, procedures for permits and rights of way, including along communication routes (e.g. roads, railways), pursuant to Article 43 of the European Electronic Communications Code, should be carried out in parallel. Member States should explore the possibility of granting rights of way as quickly as possible and, in any case, within the maximum deadline for permits of 4 months, thereby aligning this procedure with the provisions of Article 7(3) of the Broadband Cost Reduction Directive.

                  (15)

                  Given the increasing number of permits for deploying electronic communications networks, and their predominantly local character, fees for permits for civil works may differ significantly between and within Member States. They may also represent a significant part of the cost of deployment, particularly in rural and remote areas, where the cost of deployment per user is highest. It would therefore be very useful if Member States were to exchange and agree on ways to keep the cost of granting permits at a level which would not be a disincentive for investment, taking into account the multiplicity of permits often required.

                  (16)

                  Access to comprehensive, accurate and updated information is a prerequisite for ensuring efficient use of existing physical infrastructure and appropriate coordination of civil works. The role of the single information point is crucial in this respect. Improving the transparency of existing infrastructure and planned civil works is a key preliminary step for enabling access to existing infrastructure and enhancing coordination of civil works, which in turn generate additional benefits for the environment and individuals. Member States should therefore be encouraged to consider feeding the single information point with all the physical infrastructure information available in a given area, from different sources, and to assist in providing georeferenced information.

                  (17)

                  Member States should be encouraged to explore means to improve transparency concerning existing physical infrastructure by increasing the quantity and quality of information available via the single information point. This includes information that is provided bilaterally between operators, pursuant to Articles 4(2) and 4(4) of the Broadband Cost Reduction Directive, upon request, or that concerns physical infrastructure controlled by public sector bodies.

                  (18)

                  In addition to the requirements of the Broadband Cost Reduction Directive on access to existing physical infrastructure, the deployment of very high capacity networks can be further facilitated by enabling operators to obtain access to relevant physical infrastructure controlled by public sector bodies, on similar conditions as those set in Article 3 of that Directive. Such physical infrastructure would include buildings, particularly rooftops, and street furniture, such as poles for streetlights, street signs, traffic lights, billboards, bus and tramway stops and metro stations.

                  (19)

                  The Broadband Cost Reduction Directive provides for recourse to dispute resolution procedures in case negotiations related to access to infrastructures fail. Member States should step up their efforts to identify together best practices for effective and efficient dispute resolution mechanisms and the good functioning of dispute resolution bodies across the Union. In the interest of transparency, these practices should include the timely publication of dispute resolution bodies’ decisions.

                  (20)

                  The environmental footprint of the electronic communications sector is increasing, and it is essential to consider all possible means of counteracting this trend. Incentives to deploy networks with, for example, a reduced carbon footprint can contribute to the sustainability of the sector and to climate change mitigation and adaptation. Member States are called upon, in close cooperation with the Commission, to identify and promote such incentives, which might include fast-track permit granting procedures or reduced permit and access fees for networks which meet certain environmental criteria.

                  (21)

                  In order to avoid unduly delaying the processes for authorising spectrum use and the installation of wireless communications networks, Member States should exchange best practices on how to take account of the results of the environmental assessment, when this is required, and in particular when authorities prepare the framework for future development consent of projects, while fully respecting Union legislation, in particular Directive 2001/42/EC of the European Parliament and of the Council (6) (‘Strategic Environmental Assessment Directive’), Directive 2011/92/EU of the European Parliament and of the Council (7) (‘Environmental Impact Assessment Directive’) and Council Directive 92/43/EEC (8) (‘Habitats Directive’). The environmental assessment should take place at the stage when environmental effects can be identified and assessed.

                  (22)

                  The European Electronic Communications Code sets a common deadline of the end of 2020 for the Member States to allow use of the 3,4-3,8 GHz band and at least 1 GHz of the 24,25-27,5 GHz pioneer frequency band for 5G. In addition, Decision (EU) 2017/899 of the European Parliament and of the Council (9) sets a common deadline of 30 June 2020 for the Member States to allow use of the 700 MHz pioneer frequency band for 5G. Member States should ensure that the management of spectrum promotes high-quality connectivity for businesses and society with a cross-border dimension, as well as the digitisation of industry, thereby generating benefits for the economy and for society as a whole, including in terms of accessibility, equal opportunity and inclusivity. The attainment of that objective could be facilitated by the timely exchange of views and best practices ahead of and within the peer review process established by the European Electronic Communications Code.

                  (23)

                  In order to ensure the fast and secure deployment of 5G networks and the uptake of innovative services from 2020, in accordance with the 5G action plan (10), and taking into account the toolbox pursuant to the Commission Recommendation on cybersecurity of 5G networks (11), Member States should avoid or minimise any delays in allowing use of 5G pioneer frequency bands due to the COVID-19 crisis.

                  (24)

                  Noting the importance of secure and resilient 5G infrastructure for recovery and economic growth, spectrum authorisation procedures should support, where appropriate, infrastructure investment by alleviating the financial burden on radio spectrum users, particularly on operators, in line with State aid rules. This is even more crucial under the circumstances of the COVID-19 crisis. To this end, Member States should be encouraged to identify spectrum authorisation rules that aim to apply a pro-investment spectrum pricing methodology. Such practices may cover incentives where appropriate to provide high-quality wireless coverage to ensure widely available services, including across borders.

                  (25)

                  To avoid spectrum scarcity that leads to higher bids in spectrum auctions, best practices may cover measures not to reserve spectrum in 5G pioneer frequency bands for the purposes of public security and defence, as far as possible or measures to reserve EU-harmonised radio spectrum for electronic communications services for private radio spectrum users, as regards both the amount of spectrum and the choice of a specific frequency band, only when duly justified.

                  (26)

                  5G networks require a considerably denser cell deployment in higher frequency bands compared to previous technology generations. Passive and active infrastructure sharing and joint roll-out of wireless infrastructure can reduce the cost of such deployment (including incremental costs), particularly when using the 3,4-3,8 GHz and 24,25-27,5 GHz frequency bands, and thereby accelerate its pace, support increased network coverage and allow for more effective and efficient use of radio spectrum to the benefit of consumers. It should therefore be considered positively by competent authorities, in particular in areas of limited economic return.

                  (27)

                  The deployment of dense 5G wireless networks would also benefit from flexible authorisation regimes, which stimulate investment in wireless networks and ensure efficient spectrum use. High frequency bands above 24 GHz (‘mm-wave frequency bands’), such as the 24,25-27,5 GHz frequency band, offer a high amount of radio spectrum with geographically limited propagation characteristics. While Member States should generally use competitive selection procedures such as auctions to grant rights of use in frequency bands affected by scarcity, such procedures may constrain in certain cases the potential for investment in dense 5G wireless networks as well as flexibility and the resulting efficiency of spectrum use. Individual authorisation of harmonised mm-wave frequency bands that uses a fast-track administrative procedure which is open, objective, proportionate, non-discriminatory and follows transparent criteria and procedures, could be considered as a best practice.

                  (28)

                  In order to avoid divergent solutions when granting rights to use radio spectrum to provide cross-border wireless services, Member States should coordinate better when assigning radio spectrum so as to foster wireless connectivity that will support the Union’s industrial transformation and digital sovereignty based on the flexible, multi-service capabilities of 5G infrastructure. Coordinated spectrum assignment is particularly important to meet the connectivity requirements of new use cases that contribute to the digitalisation of operations in road and rail mobility and transport and industrial manufacturing. These conditions relate particularly to quality of service, expressed in terms of capacity, throughput, latency, reliability and network security and resilience.

                  (29)

                  To this end, the Member States should contribute to a set of best practices and agree thereupon, in close cooperation with Commission and with the support of the Radio Spectrum Policy Group, for major innovative examples in industry sectors with a cross-border dimension, such as road or rail transport (including cross-border corridors for cooperative, connected and automated mobility) and smart factories. Such practices could take advantage of the results from EU-funded pilots and trials in vertical sectors including 5G cross-border corridors. Such practices should identify relevant common frequency ranges, authorisation regimes and conditions for operators for the provision of dedicated (sectoral) wireless services. Common authorisation regimes could address individual authorisation of operators and industrial stakeholders, including shared spectrum use. Common authorisation conditions could address roll-out, quality of service, shared spectrum use, coexistence between wireless systems, spectrum hoarding, cybersecurity, and negotiated agreements between mobile operators and industrial stakeholders as well as measures to protect essential communications for air transport. In this regard, the Radio Spectrum Policy Group should assist the Commission to determine if there is a need to issue a mandate to the European Conference of Postal and Telecommunications Administrations for developing harmonised technical conditions for spectrum use.

                  (30)

                  Member States should coordinate the spectrum authorisation process and, in particular, make use of a joint authorisation process in accordance with Article 37 of the European Electronic Communication Code when implementing the set of best practices developed by the Member States in cooperation with the Commission. Such a process may include the assignment of a common dedicated frequency range under common authorisation conditions.

                  (31)

                  The implementation of the Toolbox would benefit from a clear process, adequate monitoring, increased transparency and dialogue at national and Union level.

                  (32)

                  Member States should work together, and in close cooperation with the Commission, to develop the Toolbox. Where appropriate, the Radio Spectrum Policy Group, the Body of European Regulators for Electronic Communications and national regulatory authorities, the Broadband Competence Offices network, dispute settlement bodies and the competent authorities in charge of the functions of the single information point should be closely involved.

                  (33)

                  This Recommendation is without prejudice to the application of competition law and State aid rules,

            HAS ADOPTED THIS RECOMMENDATION:
      1.   PURPOSE AND DEFINITIONS

                  1.

                  This Recommendation sets out guidance for developing best practices, referred to as the ‘Toolbox’, for fostering connectivity in support of economic recovery from the COVID-19 crisis, with a focus on three areas that aim, in particular, to:

                              (a)

                              reduce the cost and increase the speed of deploying electronic communications networks and, in particular, very high capacity networks, by streamlining permit granting procedures for civil works, improving transparency and reinforcing the capabilities of the single information point(s) established by the Broadband Cost Reduction Directive, expanding access rights to existing physical infrastructure controlled by public sector bodies and identifying measures that would help reduce the environmental impact of electronic communications networks;

                              (b)

                              provide where appropriate, timely and investment-friendly access to 5G radio spectrum through pro-investment incentives for spectrum use as well as timely spectrum assignment procedures for 5G pioneer bands;

                              (c)

                              establish a stronger coordination process for spectrum assignment, which also facilitates the cross-border provision of innovative 5G services.

                  2.

                  For the purposes of this Recommendation, the definitions set out in the Broadband Cost Reduction Directive and in the European Electronic Communications Code apply.

            2.   PROCESS FOR DEVELOPING A TOOLBOX

                  3.

                  Member States should work together, and in close cooperation with the Commission, to develop a Toolbox in the areas covered in Sections 3, 4 and 5 of this Recommendation. Where appropriate, the following should be involved:

                              (a)

                              the Body of European Regulators for Electronic Communications as well as national regulatory authorities, the Broadband Competence Offices network 0and the competent authorities in charge of the functions of the single information point with regard to the areas identified in Section 3;

                              (b)

                              the Radio Spectrum Policy Group and competent national regulatory authorities with regard to the areas identified in Sections 4 and 5.

                  4.

                  By 20 December 2020, Member States should identify and share between themselves and with the Commission best practices pursuant to Sections 3 and 4.

                  5.

                  By 30 March 2021, Member States, in close cooperation with the Commission, should agree on the Toolbox.

                  6.

                  Member States should implement the Toolbox as a matter of urgency and in close cooperation with other Member States, the Commission and other relevant stakeholders.

                  7.

                  To ensure transparency and facilitate the exchange of good practices between Member States, the Toolbox and any related information that has been reported should be made public on the Europa website and via the single information points.

            3.   ENHANCED COORDINATION AT UNION LEVEL ON REDUCING THE COST AND INCREASING THE SPEED OF DEPLOYING VERY HIGH CAPACITY NETWORKS

         Streamlining permit granting procedures

                  8.

                  Member States should develop and agree on best practices to further streamline permit granting procedures beyond the scope of the Broadband Cost Reduction Directive as defined in Article 1 therein, and to facilitate compliance with the deadline and other conditions set in Article 7(3) of the Broadband Cost Reduction Directive. In particular, Member States should explore how:

                              (a)

                              to facilitate compliance with the maximum deadline of 4 months for granting or refusing permits. To increase legal certainty and to help reduce administrative burden, in the absence of an explicit decision within the four-month period, Member States should consider tacit approval of the application;

                              (b)

                              to simplify and streamline permit granting procedures, including setting up fast-track permit granting procedures and/or permit exemptions where appropriate, and defining the type of network deployments that could benefit from these;

                              (c)

                              to provide operators with the right to submit, by electronic means via the single information point, applications for all the necessary permits required for civil works to deploy elements of very high capacity networks;

                              (d)

                              to establish the single information point as a single entry point for submitting applications for such civil works. To that end, the single information point could be required to play an active role in coordinating and monitoring permit granting procedures at all administrative levels. It could also be required to facilitate the exchange of information on the progress of these procedures between the applicants and the competent authorities, including communicating the decision issued by the competent authority(ies) to the applicant.

                  9.

                  Member States should also consider best practices to facilitate the granting of rights of way provided in Article 43 of the European Electronic Communications Code where these are required for the deployment of elements of very high capacity networks. Such best practices should ensure that where the deployments of such network elements require both civil works permits and rights of way, competent authorities grant or refuse the necessary permits in parallel within maximum 4 months from the application.

                  10.

                  Member States should exchange and agree on best practices to ensure that fees charged for the granting of permits for civil works that are needed to deploy very high capacity networks are objectively justified, transparent, non-discriminatory and proportionate to their intended purpose, and that they cover only the administrative costs incurred for the provision of such permits.

         Improving transparency through the single information point

                  11.

                  Member States should develop appropriate best practices to improve transparency concerning physical infrastructure, so that operators can access more easily all relevant information on the infrastructure available in a certain area. To that end, Member States should consider strengthening the role of the single information point and extending its functions to include, for example, georeferenced information (maps and digital models) and integrating information from different sources (in particular, information provided by competent national authorities at any level, public sector bodies and network operators).

                  12.

                  Member States are encouraged to develop best practices to ensure that the information referred to in Article 4(1) of the Directive, when held by public sector bodies, is made available via the single information point in electronic format. In addition, Member States should consider making available through the single information point information concerning physical infrastructure beyond the minimum specified in the Directive, such as the georeferenced location of the infrastructure, its digital model, its type and current use, or its total and spare capacity.

                  13.

                  To further improve the quantity and type of information available via the single information point, Member States should consider requiring network operators to make available via the single information point, and in electronic format, the information concerning their existing physical infrastructure which they have made available to other operators upon specific request.

         Expanding the right of access to existing physical infrastructure

                  14.

                  To increase the number and types of facilities available to operators for the deployment of elements of very high capacity networks, Member States should develop best practices for enabling operators to obtain access to physical infrastructure (including buildings and street furniture) controlled by public bodies, which is capable of hosting very high capacity network elements, on similar conditions as those set in Article 3 of the Broadband Cost Reduction Directive.

         Dispute resolution mechanism

                  15.

                  Member States should develop best practices in order to improve the effectiveness and efficacy of the dispute resolution mechanism in regard to disputes related to access to physical infrastructure and the functioning of dispute resolution bodies, with a view to solving related issues within the shortest possible timeframe and providing guidance to parties on appropriate conditions and charges, including by the timely publication of their decisions.

         Reducing the environmental footprint of networks

                  16.

                  Member States are encouraged to develop best practices to incentivise the deployment of electronic communications networks with a reduced environmental footprint, particularly with respect to energy use and related greenhouse gas emissions, including:

                              (a)

                              the criteria for assessing the environmental sustainability of future networks;

                              (b)

                              the incentives provided to operators to deploy environmentally sustainable networks.

         Environmental impact assessment

                  17.

                  Where Union legislation, in particular Directive 2001/42/EC (‘Strategic Environmental Assessment Directive’), Directive 2011/92/EU (‘Environmental Impact Assessment Directive’) and Directive 92/43/EEC (‘Habitats Directive’), requires an impact assessment, and in particular when authorities prepare the framework for future development consent of projects, Member States should exchange best practices on how to perform and take account of the results of the environmental assessment, at the stage when environmental effects can be identified and assessed, such as when operators present overall plans for projects entailing concrete installation or deployment of networks.

            4.   ACTION AT NATIONAL LEVEL TO ENSURE TIMELY AND INVESTMENT-FRIENDLY ACCESS TO 5G RADIO SPECTRUM

         Schedule of spectrum authorisation procedures

                  18.

                  Without prejudice to any assessment of force majeure under Union law, Member States should ensure that any postponement of procedures to grant rights to use radio spectrum due to the COVID-19 crisis is kept to a minimum and lasts only for as long as is necessary to prevent or contain the spread of COVID-19. Member States should update accordingly any relevant national spectrum roadmap.

                  19.

                  Member States should request a Peer Review Forum pursuant to Article 35 of the European Electronic Communications Code to examine in advance draft measures for granting rights of use of spectrum within the 700 MHz, 3,4-3,8 GHz and 24,25-27,5 GHz frequency bands, with a view to exchanging best practices.

         Incentives for investment

                  20.

                  To take stock of incentives for radio spectrum users to invest substantially in the roll-out of 5G networks, Member States should inform the Commission, in particular through the Radio Spectrum Policy Group, about specific measures which they consider to be best practices including those which have been implemented or are planned for implementation at national level when authorising radio spectrum in the 700 MHz, 3,4-3,8 GHz and 24,25-27,5 GHz frequency bands.
                  In particular, Member States should report on any relevant measures which have as their objectives:

                              (a)

                              promoting adequate reserve prices which reflect the minimum levels of fees for rights of use of radio spectrum;

                              (b)

                              avoiding spectrum scarcity by ensuring the assignment of the full amount of radio spectrum harmonised at Union level;

                              (c)

                              providing in a non-discriminatory manner the possibility that fees for rights of use of radio spectrum are paid in instalments within the period of those rights;

                              (d)

                              using an individual authorisation regime for the 24,25-27,5 GHz frequency band which promotes its timely use including, in particular, one that is based on fast-track administrative procedures when applied to geographically limited rights of use;

                              (e)

                              combining financial incentives with obligations or formal commitments to accelerate or to expand high-quality wireless coverage;

                              (f)

                              providing, subject to competition law, the possibility for the sharing of passive and active infrastructure, as well as for joint roll-out of infrastructure that relies on the use of radio spectrum.

            5.   ENHANCED COORDINATION AT UNION LEVEL ON SPECTRUM ASSIGNMENT FOR CROSS-BORDER USE

                  21.

                  To promote coherent practice for granting rights of use for radio spectrum to operators to deploy next-generation (including 5G) wireless infrastructure for cross-border industrial use, Member States should develop and agree on best practices as part of the Toolbox in this regard, including on:

                              (a)

                              identification of use cases with a cross-border dimension, particularly for road transport, rail transport and industrial manufacturing, in line with Union priorities (12) on 5G deployment;

                              (b)

                              for each use case identified, identification of a common dedicated frequency range in conjunction with the appropriate common authorisation regime, as well as the conditions attached to such authorisations, which are necessary to ensure service continuity across borders, including but not limited to quality of service and network security.

                  22.

                  Member States are invited to use the best practices of the Toolbox referred to in point 21 with respect to relevant users on their territory, with a particular view to jointly establishing the common aspects of and conducting a joint authorisation process pursuant to Article 37 of the European Electronic Communications Code by 30 March 2022.

            6.   REPORTING

                  23.

                  By 30 April 2021, each Member State should provide the Commission with a roadmap for the implementation of the Toolbox.

                  24.

                  By 30 April 2022, each Member State should report on the implementation of the Toolbox.

         Done at Brussels, 18 September 2020.

               For the Commission

            Thierry BRETON

               Member of the Commission

         (1)  Council Conclusions on Shaping Europe’s Digital Future, 9 June 2020, 8711/20. https://data.consilium.europa.eu/doc/document/ST-8711-2020-INIT/en/pdf

         (2)  COM(2020) 67 final.

         (3)  Directive 2014/61/EU of the European Parliament and of the Council of 15 May 2014 on measures to reduce the cost of deploying high-speed electronic communications networks (OJ L 155, 23.5.2014, p. 1).

         (4)  Report from the Commission to the European Parliament and the Council on the implementation of Directive 2014/61/EU of the European Parliament and of the Council of 15 May 2014 on measures to reduce the cost of deploying high-speed electronic communications networks, COM(2018) 492, 27 June 2018.

         (5)  Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018 establishing the European Electronic Communications Code (OJ L 321, 17.12.2018, p. 36).

         (6)  Directive 2001/42/EC of the European Parliament and of the Council of 27 June 2001 on the assessment of the effects of certain plans and programmes on the environment (OJ L 197, 21.7.2001, p. 30).

         (7)  Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment (OJ L 26, 28.1.2012, p. 1).

         (8)  Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ L 206, 22.7.1992, p. 7).

         (9)  Decision (EU) 2017/899 of the European Parliament and of the Council of 17 May 2017 on the use of the 470-790 MHz frequency band in the Union (OJ L 138, 25.5.2017, p. 131).

         (10)  Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions ‘5G for Europe: An Action Plan’, COM(2016) 588 final.

         (11)  Commission Recommendation (EU) 2019/534 of 26 March 2019 Cybersecurity of 5G networks (OJ L 88, 29.3.2019, p. 42).

         (12)  See in particular Commission Communications COM(2016) 587 and COM(2020) 67.


title: Recommendation of the European Systemic Risk Board of 15 December 2020 amending Recommendation ESRB/2020/7 on restriction of distributions during the COVID-19 pandemic (ESRB/2020/15) 2021/C 27/01

text:
                  25.1.2021

                  EN

                  Official Journal of the European Union

                  C 27/1

         RECOMMENDATION OF THE EUROPEAN SYSTEMIC RISK BOARD
         of 15 December 2020
         amending Recommendation ESRB/2020/7 on restriction of distributions during the COVID-19 pandemic
         (ESRB/2020/15)
         (2021/C 27/01)
         THE GENERAL BOARD OF THE EUROPEAN SYSTEMIC RISK BOARD,
         Having regard to the Treaty on the Functioning of the European Union,
         Having regard to Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union macroprudential oversight of the financial system and establishing a European Systemic Risk Board (1), and in particular Article 3(2)(b), (d) and (f) and Articles 16 to 18 thereof,
         Having regard to Decision ESRB/2011/1 of the European Systemic Risk Board of 20 January 2011 adopting the Rules of Procedure of the European Systemic Risk Board (2), and in particular Article 15(3)(e) and Articles 18 to 20 thereof,
         Whereas:

                     (1)

                     At the onset of the COVID-19 pandemic the European Systemic Risk Board (ESRB) acknowledged the need for financial institutions to maintain a robust level of own funds to mitigate systemic risk and contribute to economic recovery. To that end, the ESRB issued Recommendation ESRB/2020/7 on restriction of distributions during the COVID-19 pandemic (3), which aimed to ensure that all financial institutions that may pose a risk to financial stability maintain high levels of capital by asking relevant authorities to request financial institutions to refrain from making distributions for the duration of the COVID-19 pandemic and at least until 1 January 2021.

                     (2)

                     The COVID-19 crisis is still ongoing in Europe and globally, and uncertainty remains about the future impact on the economy and financial institutions, with a risk of further worsening of health and economic conditions. Markets and authorities lack information on the long-term impact of the crisis on the financial sector and credit markets. Financial institutions also remain strongly dependent on public policy support. Ensuring the continuous proper functioning of the financial system is key. An exceptional extension of pay-out restrictions to account for uncertainty about future macroeconomic development serves this objective by allowing financial institutions to maintain a sufficiently high level of capital to mitigate systemic risk and contribute to economic recovery. At the same time, the ESRB recognises the progress made by authorities and financial institutions in dealing with the effects of the pandemic. The ESRB is also aware of the importance of distributions in enabling financial institutions to raise capital externally, as rewarding investors for their investment is critical for the long-term sustainability of financial institutions and markets. Nevertheless, the ESRB calls for extreme caution as regards distributions so that they do not put the stability of the financial system and the recovery process at risk, and considers that any level of distribution should be significantly lower than in the recent years prior to the COVID-19 crisis.

                     (3)

                     Recommendation ESRB/2020/7 also covers central counterparties (CCPs) given their systemically important role in clearing financial market transactions. The intended outcome was to prevent shareholders and senior staff from drawing on the CCPs’ surplus capital through distributions at a time when operational risk – which CCPs cover with their own resources rather than contributions from clearing members – is at its most severe, also taking into account the restrictions on staff presence in the CCPs’ offices. However, the stress test exercise regarding CCPs in the Union conducted by the European Securities and Markets Authority following the outbreak of the COVID-19 pandemic confirmed the overall operational resilience of Union CCPs to common shocks and multiple defaults for credit, liquidity and concentration stress risks (4). In addition, to date there has been no evidence of system or process failures. The effectiveness of the measures deployed by CCPs to mitigate operational risk suggests that it is no longer necessary to include CCPs within the scope of Recommendation ESRB/2020/7.

                     (4)

                     The measures covered by Recommendation ESRB/2020/7 are of a temporary nature and the ESRB will continue to monitor their implications for financial institutions and their ability to contribute to economic recovery. When deciding if and when this Recommendation needs to be amended, the ESRB should take into account, inter alia, macroeconomic developments and new data on the stability of the financial system.

                     (5)

                     Section 2, Point 5 of Recommendation ESRB/2020/7 provides that the General Board may decide if and when Recommendation ESRB/2020/7 needs to be amended. Such amendments could consist, in particular, in extending the period during which Recommendation A applies.

                     (6)

                     Therefore, Recommendation ESRB/2020/7 should be amended accordingly,

               HAS ADOPTED THIS RECOMMENDATION:

            AMENDMENTS

         Recommendation ESRB/2020/7 is amended as follows:

                     1.

                     in Section 1, Recommendation A is replaced by the following:
                     ‘Recommendation A – Restriction of distributions

                     It is recommended that relevant authorities request financial institutions under their supervisory remit (*1) to refrain until 30 September 2021 from undertaking any of the following actions:

                                 (a)

                                 make a dividend distribution or give an irrevocable commitment to make a dividend distribution;

                                 (b)

                                 buy-back ordinary shares;

                                 (c)

                                 create an obligation to pay variable remuneration to a material risk taker,
                                 which has the effect of reducing the quantity or quality of own funds, unless the financial institutions apply extreme caution in carrying out any of those actions and the resulting reduction does not exceed the conservative threshold set by their competent authority. Competent authorities are recommended to engage in discussions with financial institutions prior to financial institutions taking either of the actions referred to in points (a) or (b).

                           This Recommendation applies at the EU group level (or at the individual level where the financial institution is not part of an EU group), and, where appropriate, at the sub-consolidated or individual level.

                        (*1)  This does not include branches of financial institutions.’;"

                     2.

                     Section 2(1)(1) is amended as follows:

                                 (a)

                                 point (b) is replaced by the following:

                                             ‘(b)

                                             “competent authority” means the competent or supervisory authority as defined in point (40) of Article 4(1) of Regulation (EU) No 575/2013 or in Article 13(10) of Directive 2009/138/EC of the European Parliament and of the Council (*2), as applicable;

                                    (*2)  Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1)’;"

                                 (b)

                                 point (c) is replaced by the following:

                                             ‘(c)

                                             “financial institution” means any of the following undertakings that have their head office or registered office in the Union:

                                                         (i)

                                                         an institution as defined in point (3) of Article 4(1) of Regulation (EU) No 575/2013;

                                                         (ii)

                                                         an insurance undertaking as defined in of Article 13(1) of Directive 2009/138/EC;

                                                         (iii)

                                                         a reinsurance undertaking as defined in Article 13(4) of Directive 2009/138/EC;’;

                                 (c)

                                 point (d) is replaced by the following:

                                             ‘(d)

                                             “material risk taker” means a member of a category of staff whose professional activities have a material impact on the financial institution’s risk profile, including a member of a category of staff referred to in Article 92(2) of Directive 2013/36/EU or point (c) of Article 275(1) of Commission Delegated Regulation (EU) 2015/35 (*3), as applicable;

                                    (*3)  Commission Delegated Regulation (EU) 2015/35 of 10 October 2014 supplementing Directive 2009/138/EC of the European Parliament and of the Council on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 12, 17.1.2015, p. 1).’;"

                     3.

                     In Section 2(3), the following paragraph is inserted:

                                 ‘1a.

                                 In calibrating the conservative threshold, competent authorities should pay due regard to:

                                             (a)

                                             the objectives of this Recommendation, in particular the need for financial institutions to maintain a sufficiently high level of capital - including taking into account their capital trajectory - in order to mitigate systemic risk and to contribute to economic recovery, taking into account the risks of a deterioration of the solvency position of corporations and households in view of the pandemic;

                                             (b)

                                             the need to ensure that the overall level of distributions of financial institutions under their supervisory remit is significantly lower than in the recent years prior to the COVID-19 crisis;

                                             (c)

                                             the specificities of each sector within their remit.’

                     4.

                     Section 2(4) is replaced by the following:
                     ‘4.   Timeline for the follow-up

                     In accordance with Article 17(1) of Regulation (EU) No 1092/2010 addressees must communicate to the European Parliament, the Council, the Commission and to the ESRB the actions undertaken in response to this Recommendation or substantiate any inaction. Each addressee is requested to deliver a report on the implementation of Recommendation A by 15 October 2021.’;

                     5.

                     Section 2(5) is replaced by the following:
                     ‘5.   Amendments to this Recommendation

                     Prior to 30 September 2021, the General Board will decide if and when this Recommendation needs to be amended, taking into account, inter alia, macroeconomic developments and new data on the stability of the financial system.’;

                     6.

                     In Section 2(6) on ‘Monitoring and assessment’, the following paragraph is added:

                                 ‘3.

                                 The ESRB Secretariat will assist the addressees by ensuring the coordination of reporting and the provision of relevant templates, and detailing, where necessary, the procedure and the timeline for the follow-up.’;

                     7.

                     The Annex entitled ‘Communication of the actions undertaken in response to this Recommendation’ is deleted.

            Done at Frankfurt am Main, 15 December 2020.

                  The Head of the ESRB Secretariat,

                  on behalf of the General Board of the ESRB

               Francesco MAZZAFERRO

            (1)  OJ L 331, 15.12.2010, p. 1.

            (2)  OJ C 58, 24.2.2011, p. 4.

            (3)  Recommendation ESRB/2020/7 of the European Systemic Risk Board of 27 May 2020 on restriction of distributions during the COVID-19 pandemic (OJ C 212, 26.6.2020, p. 1).

            (4)  See ESMA’s press release: ‘ESMA’s Third EU-Wide CCP Stress Test Finds System Resilient to Shocks’, available at: https://www.esma.europa.eu/press-news/esma-news/esma%E2%80%99s-third-eu-wide-ccp-stress-test-finds-system-resilient-shocks.


title: Council Recommendation of 3 April 2020 with a view to bringing an end to the situation of an excessive government deficit in Romania 2020/C 116/01

text:
               8.4.2020

               EN

               Official Journal of the European Union

               C 116/1

      COUNCIL RECOMMENDATION
      of 3 April 2020
      with a view to bringing an end to the situation of an excessive government deficit in Romania
      (2020/C 116/01)
      THE COUNCIL OF THE EUROPEAN UNION,
      Having regard to the Treaty on the Functioning of the European Union, and in particular Article 126(7) thereof,
      Having regard to the recommendation from the European Commission,
      Whereas:

                  (1)

                  According to Article 126 of the Treaty on the Functioning of the European Union (TFEU) Member States are to avoid 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 3 April 2020, the Council decided, in accordance with Article 126(6) TFEU, that an excessive deficit existed in Romania.

                  (4)

                  Article 126(7) TFEU and Article 3(4) of Council Regulation (EC) No 1467/97 (1) require the Council to make recommendations to the Member State concerned with a view to bringing the situation of excessive deficit to an end within a given period. Those recommendations have to establish a maximum deadline of six months for effective action to be taken by the Member State concerned to correct the excessive deficit. Furthermore, in a recommendation to correct an excessive deficit the Council is to request the achievement of annual budgetary targets which, on the basis of the forecast underpinning the recommendation, are consistent with a minimum annual improvement in the structural balance, i.e. a cyclically-adjusted balance, excluding one-off and other temporary measures, of at least 0,5 % of gross domestic product (GDP) as a benchmark.

                  (5)

                  According to the Commission’s 2020 winter forecast, extended with fiscal variables until 2022, real GDP growth is projected to have stood at 3,9 % in 2019. Based on a no-policy-change assumption, the Commission forecasts real GDP growth to moderate but remain robust at 3,8 % in 2020 and at 3,5 % in 2021 and 2022. On the one hand, the significant fiscal stimulus implied by current policies would continue to give some impetus to private consumption. On the other hand, the continued widening of the fiscal deficit would erode consumers’ and investors’ confidence in the sustainability of the economy’s growth trajectory. As a result, investment is expected to weaken as private investors take account of increasing macroeconomic imbalances. The contribution of net exports is expected to remain negative over the forecast horizon, as exports continue to be affected by weak external demand while imports are supported by private consumption. This in turn would further worsen the already high current account deficit.

                  (6)

                  On 10 December 2019 the government adopted and sent to the Parliament its Fiscal-Budgetary Strategy for 2020–2022 (the ‘Fiscal Strategy’), with a revised general government deficit target of 3,8 % of GDP in 2019, above the 3 % of GDP reference value. That revision, up from originally planned 2,8 % of GDP in 2019, was based on budget execution data for the year to date. The Fiscal Strategy was promulgated into law on 18 December 2019.

                  (7)

                  The Commission 2020 winter forecast, extended with fiscal variables until 2022, projects the general government deficit to remain above the 3 % of GDP reference value for the entire forecast period. The Commission projects a general government deficit of 4 % of GDP in 2019, 4,9 % in 2020, 6,9 % in 2021 and 7,7 % in 2022 under a no-policy-change assumption. The structural deficit is projected to deteriorate by 1 % of GDP in 2020, by a further 1,9 % of GDP in 2021 and by a further 0,8 % in 2022. The increase in the deficit projected by the Commission is mostly driven by significant pension increases enacted in summer 2019. The higher spending on pensions would contribute 0,9 percentage points of GDP to the deficit increase in 2020, 1,7 percentage points of GDP in 2021 and 1,1 percentage points of GDP in 2022. The doubling of the child allowance, due to enter into force in August 2020, is estimated to have an annualised budgetary cost of 0,6 % of GDP. In its Fiscal Strategy, the government projects a general government deficit of 3,6 % of GDP in 2020, 3,4 % in 2021 and 2,8 % in 2022. Based on government estimates, this would lead to a structural adjustment of 0,3 % in 2020, 0,2 % in 2021 and 0,6 % in 2022. The adjustment to the Fiscal Strategy is mostly expenditure-based. In particular, the expenditures on compensation of employees, on goods and services and on non-EU-cofinanced capital spending are projected to decrease as a share of GDP. The lower deficit projection in the Fiscal Strategy, compared with the Commission’s forecast, stems from more optimistic underlying macroeconomic projections in the Fiscal Strategy and from the fact that the Fiscal Strategy does not take into account the fiscal impact of some enacted measures, while the planned moderation of current expenditures is not fully supported by enacted, or credibly announced, measures and could therefore not be taken fully into account in the Commission forecast.

                  (8)

                  General government debt in Romania amounted to 34,7 % of GDP in 2018. According to the Commission forecast, general government debt is projected to increase to 46,6 % of GDP in 2022, thus remaining below the Treaty reference value.

                  (9)

                  Under Article 3(4) of Regulation (EC) No 1467/97, the correction of the excessive deficit is to be completed in the year following its identification (in this case 2021) unless there are special circumstances. The adjustment path should be determined in line with Regulation (EC) No 1467/97, taking into account the economic and fiscal position of the Member State.

                  (10)

                  In the present situation, such special circumstances exist in Romania. Correcting the excessive deficit by 2021 would require too sharp a fiscal adjustment and would result in a significant output loss. A longer adjustment path, while still requiring substantial annual adjustments, would have a more gradual impact on growth and would take into account the fact that the budgetary year 2020 has already started. Structural reforms pursued in parallel with fiscal consolidation will contribute to ensuring a lasting correction of the excessive deficit. In light of this, and taking into account the economic and fiscal situation in Romania, setting the deadline for the correction of the excessive deficit by 2022 is warranted.

                  (11)

                  A credible and sustainable adjustment path under this deadline would require Romania to reach a headline general government deficit target of 3,6 % of GDP in 2020, 3,4 % of GDP in 2021 and 2,8 % of GDP in 2022, which, on the basis of the Commission forecast, is consistent with a nominal growth rate of net primary government expenditure (2) of 8,2 % in 2020, 5,5 % in 2021 and 5,5 % in 2022. Such rate of growth of net expenditure will be the primary indicator used to assess the fiscal effort if a careful analysis is needed. The corresponding annual adjustment to the structural balance is of 0,5 % of GDP in 2020, 0,8 % of GDP in 2021 and 0,8 % of GDP in 2022. On the basis of the current forecast, those targets still allow for annual increases in real net expenditure. Achieving those targets will likely require reconsidering the large legislated pension increases and other recent measures which drive the sharp deterioration of the deficit in the baseline scenario.

                  (12)

                  Budgetary consolidation measures should secure a lasting correction while being geared towards enhancing the quality of public finances and reinforcing the growth potential of the economy.

                  (13)

                  Since 2016, Romania has systematically and repeatedly derogated from fiscal rules enshrined in the national fiscal framework, thereby rendering them largely ineffective. It is crucial that, in the future, Romania ensure the full application of the national fiscal framework.

                  (14)

                  In the medium and long term, risks to sound public finances appear high, driven by high fiscal deficits and costs of aging. The pension increases, enacted in summer 2019 and scheduled to enter into force over 2019–2021, play a large part in those risks. This confirms the urgent need to fully restore the long-term sustainability of public finances,

            HEREBY RECOMMENDS:

                  (1)

                  Romania should put an end to the present excessive deficit situation by 2022 at the latest.

                  (2)

                  Romania should reach a headline general government deficit target of 3,6 % of GDP in 2020, 3,4 % of GDP in 2021 and 2,8 % of GDP in 2022, which is consistent with a nominal growth rate of net primary government expenditure of 8,2 % in 2020, 5,5 % in 2021 and 5,5 % in 2022, corresponding to an annual structural adjustment of 0,5 % of GDP in 2020, 0,8 % of GDP in 2021 and 0,8 % of GDP in 2022.

                  (3)

                  Romania should specify and rigorously implement the measures that are necessary to achieve the correction of its excessive deficit by 2022. Budgetary consolidation measures should secure a lasting correction in a growth-friendly manner. Romania should use any windfall gains for deficit reduction.

                  (4)

                  The Council establishes the deadline of 15 September 2020 for Romania to take effective action and, in accordance with Article 3(4a) of Regulation (EC) No 1467/97, to report in detail the consolidation strategy that is envisaged to achieve the targets. Thereafter the Romanian authorities should report on progress made in the implementation of these recommendations at least every six months until the excessive deficit has been corrected.

            Furthermore, the Romanian authorities should ensure the full application of its national fiscal framework. To ensure the success of the fiscal consolidation strategy, it will be also important to back the fiscal consolidation with comprehensive structural reforms, in line with the Council recommendations addressed to Romania in the context of the European Semester and in particular those related to the Macroeconomic Imbalance Procedure.
      This Recommendation is addressed to Romania.

         Done at Brussels, 3 April 2020.

               For the Council

               The President

            G. GRLIĆ RADMAN

         (1)  Council Regulation (EC) No 1467/97 of 7 July 1997 on speeding up and clarifying the implementation of the excessive deficit procedure (OJ L 209, 2.8.1997, p. 6).

         (2)  Net primary government expenditure comprises 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 4-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.


               8.4.2020

               EN

               Official Journal of the European Union

               C 118/158

      P8_TA(2018)0294
      Negotiations on the EU-Azerbaijan Comprehensive Agreement
      European Parliament recommendation of 4 July 2018 to the Council, the Commission and the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy on the negotiations on the EU-Azerbaijan Comprehensive Agreement (2017/2056(INI))
      (2020/C 118/25)

         The European Parliament,

                  —

                  having regard to Articles 2, 3 and 8 and to Title V, in particular Articles 21, 22 and 36, of the Treaty on European Union, as well as to Part Five of the Treaty on the Functioning of the European Union (TFEU),

                  —

                  having regard to the launch on 7 February 2017 of negotiations between the European Union and Azerbaijan on a new comprehensive agreement which ought to replace the 1999 Partnership and Cooperation Agreement between the European Communities and their Member States, of the one part, and the Republic of Azerbaijan, of the other part (1),

                  —

                  having regard to the Council’s adoption on 7 November 2016 of the negotiating directives for this agreement,

                  —

                  having regard to the Memorandum of Understanding on a Strategic Partnership between the EU and Azerbaijan in the field of energy of 7 November 2006,

                  —

                  having regard to the main results of the 15th Cooperation Council meeting between the European Union and Azerbaijan of 9 February 2018,

                  —

                  having regard to the Commission report of 19 December 2017 on EU-Azerbaijan relations in the framework of the revised ENP (SWD(2017)0485),

                  —

                  having regard to the Euronest Parliamentary Assembly Bureau message to the Heads of State or Government of 30 October 2017,

                  —

                  having regard to its recommendation of 15 November 2017 to the Council, the Commission and the European External Action Service (EEAS) on the Eastern Partnership, in the run-up to the November 2017 Summit (2),

                  —

                  having regard to its resolution of 13 December 2017 on the annual report on the implementation of the Common Foreign and Security Policy (3),

                  —

                  having regard to the joint declarations of the Eastern Partnership summits, including that of 24 November 2017,

                  —

                  having regard to the Commission and EEAS publication of June 2016 on the ‘Global Strategy for the European Union’s Foreign and Security Policy’, and in particular the key principles therein,

                  —

                  having regard to its resolution of 15 June 2017 on the case of Azerbaijani journalist Afgan Mukhtarli (4), and to other resolutions on Azerbaijan, in particular those concerning the human rights situation and the rule of law,

                  —

                  having regard to the statement of 14 January 2018 of the Spokesperson for Foreign Affairs and Security Policy/European Neighbourhood Policy and Enlargement Negotiations on the sentencing of journalist Afgan Mukhtarli in Azerbaijan,

                  —

                  having regard to the resolution of 11 October 2017 of the Parliamentary Assembly of the Council of Europe on the functioning of democratic institutions in Azerbaijan,

                  —

                  having regard to the launch of infringement proceedings on 5 December 2017 by the Committee of Ministers of the Council of Europe due to the Azerbaijani authorities’ continued refusal to implement the Ilgar Mammadov v. Azerbaijan judgment from the European Court of Human Rights (ECtHR),

                  —

                  having regard to the Organisation for Security and Cooperation in Europe Office for Democratic Institutions and Human Rights (OSCE/ODIHR) Needs Assessment Mission report of 2 March 2018 on Azerbaijan’s early presidential election,

                  —

                  having regard to Rules 108(4) and 52 of its Rules of Procedure,

                  —

                  having regard to the report of the Committee on Foreign Affairs and the position in the form of amendments of the Committee on International Trade (A8-0185/2018),

                  A.

                  whereas the Eastern Partnership (EaP) is based on a shared commitment between Armenia, Azerbaijan, Belarus, Georgia, Moldova, Ukraine and the European Union to deepen their relations and adhere to international law and core values, including democracy, the rule of law, good governance, the respect for human rights and fundamental freedoms; whereas the new agreement between the EU and Azerbaijan should advance the interests of the Union in the region as well as promote its values;

                  B.

                  whereas Parliament favours a deepening of relations with all Eastern Partnership members in so far as they respect these core values; whereas, within the EaP policy, the attractive longer-term ‘EaP+’ model proposed by Parliament in its resolution of 15 November 2017 on the Eastern Partnership, which could eventually lead to them joining the customs, energy and digital unions and the Schengen area, among others, should also be open to countries that do not have an association agreement with the EU — such as Azerbaijan — once they are ready for such enhanced commitments and have made significant progress towards implementing mutually agreed reforms;

                  C.

                  whereas EU-Azerbaijan relations are currently regulated by the 1999 Partnership and Cooperation Agreement; whereas the EU is Azerbaijan's first trading partner and its biggest export and import market, representing 48,6 % of Azerbaijan’s total trade and constituting its largest source of foreign direct investment; whereas Azerbaijan is a strategic energy partner for the EU, allowing for a diversification of the EU’s energy sources; whereas, however, Azerbaijan’s economy relies on oil and gas for around 90 % of its exports, thus making it vulnerable to external shocks and fluctuations in global oil prices; whereas Azerbaijan is not yet a member of the WTO, giving rise to serious tariff and non-tariff barriers hampering trade and business relations with the EU;

                  D.

                  whereas the EU and Azerbaijan underlined in the Joint Declaration of the Eastern Partnership Summit of 24 November 2017 that ‘in a differentiated way, the EU will continue to jointly discuss with each of the partner countries, including Armenia, Azerbaijan and Belarus, attractive and realistic options to strengthen mutual trade and encourage investment to reflect common interests, the reformed investment policy as regards investment protection, as well as international trade rules and trade-related international standards, including in the area of intellectual property, and contribute to the modernisation and diversification of economies’;

                  E.

                  whereas the new agreement is expected to have a positive impact on Azerbaijan in terms of promoting democratic standards, growth and economic development; whereas such prospects are particularly important for Azerbaijan's young people in terms of fostering a new generation of educated Azerbaijani citizens, with a view to upholding our core values and modernising the country; whereas a fully functioning civil society is a vital precondition for securing economic diversification;

                  1.

                  Recommends the following to the Council, the Commission and the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy:

                        General principles, core values and commitment to conflict resolution

                              (a)

                              to ensure that the deepening of relations between the EU and Azerbaijan is conditional on it upholding and respecting the core values and principles of democracy, the rule of law, good governance, respect for human rights and fundamental freedoms, including freedom of expression and association, the rights of minorities, and gender equality in the interest of both parties and in particular their citizens;

                              (b)

                              to remind the Azerbaijani authorities of Parliament’s position as expressed in its recommendation of 15 November 2017 on the Eastern Partnership, which calls for Azerbaijan to comply with its international commitments and which unambiguously states that no comprehensive agreement will be ratified with a country that does not respect the EU’s fundamental values and rights, in particular with regard to the failure to implement decisions by the ECtHR and with respect to harassment, intimidation and persecution of human rights defenders, NGOs, opposition members, lawyers, journalists and environmental activists; to ensure that all political prisoners and prisoners of conscience in Azerbaijan are released — as was announced by its authorities — before any new EU-Azerbaijan agreement; to ensure that a dedicated suspension mechanism with clear provisions on respect for the rule of law, human rights and fundamental freedoms is included in the new agreement;

                              (c)

                              to remind the Azerbaijani authorities of Parliament’s position expressed in the same recommendation according to which the ratification of new agreements between the EU and each of the parties to the Nagorno-Karabakh conflict must be made conditional on meaningful commitments to and substantial progress towards the peaceful resolution of the conflict such as maintaining the ceasefire and supporting the implementation of the OSCE 2009 Basic Principles and the efforts of the OSCE Minsk Group Co-Chairs; to reiterate the need to involve both Armenian and Azerbaijani civil society in any negotiation process;

                              (d)

                              to ensure that the future agreement with Azerbaijan is ambitious, comprehensive and forward-looking, compatible with the aspirations of both the EU and Azerbaijan on the basis of shared values and interests, and aligned with the 2030 Agenda for Sustainable Development, and that it will deliver tangible and concrete benefits to both sides, not only for large companies, but also taking into account the specific characteristics of SMEs, and for the citizens of the EU and of Azerbaijan;

                              (e)

                              to ensure speedy and steady progress in the negotiations, with the objective of signing this new agreement before the next Eastern Partnership summit in 2019, in so far as the abovementioned conditions are fulfilled;

                              (f)

                              to actively and clearly communicate about the aims and conditionality of the new agreement and the ongoing negotiation process in order to improve transparency and public awareness, both in Azerbaijan and in the EU, and about the expected opportunities and benefits that would arise from its conclusion, thereby countering all disinformation campaigns;

                        Political dialogue and regional cooperation

                              (g)

                              to provide for regular and in-depth political dialogue in order to encourage strong reforms aimed at bolstering institutions and strengthening the separation of powers between them, in order to make them more democratic and independent, to uphold human rights and media freedom and to develop a regulatory environment in which civil society can operate without undue interference, including in the reform process;

                              (h)

                              to establish specific measures aimed at implementing the recommendations by the OSCE/ODHIR and the Council of Europe’s Venice Commission with a view to ensuring progress towards inclusive, competitive and transparent elections and referenda that guarantee a free and fair expression of Azerbaijani citizens’ views and aspirations;

                              (i)

                              to fully support the preliminary conclusions by the OSCE and Council of Europe’s election observation mission as regards the early presidential elections on 11 April 2018 according to which the ‘election lacked genuine competition’ due to the ‘restrictive political environment’‘a legal framework that curtails fundamental rights and freedoms’, ‘an absence of pluralism, including in the media’, ‘widespread disregard for mandatory procedures, lack of transparency and numerous serious irregularities, such as ballot box stuffing’;

                              (j)

                              to aim for provisions that enhance cooperation in promoting peace and international justice, and in particular to insist that Azerbaijan adhere to its international obligations, including as a member of the Council of Europe, that it abide by the decisions of the ECtHR; to urge Azerbaijan to sign and ratify the Rome Statute of the International Criminal Court (ICC); to also seek strong cooperation measures in countering the proliferation of weapons of mass destruction, as well as in tackling illicit trade in small arms and light weapons;

                              (k)

                              to provide for closer cooperation in foreign, defence and security matters so as to ensure as much convergence as possible, in particular as regards responses to global threats and challenges, including terrorism, conflict prevention, crisis management and regional cooperation, while also taking into account Azerbaijan's diversified foreign policy; to support the signing of a Framework Participation Agreement (FPA) between the EU and Azerbaijan to provide a legal and political basis for cooperation in common security and defence policy (CSDP) missions and operations;

                              (l)

                              to ensure that high priority is given to dialogue between Azerbaijan and Armenia and to enhanced EU participation in peacefully solving the Nagorno-Karabakh conflict in line with the OSCE 2009 Basic Principles, and notably with the support of the OSCE Minsk Group Co-Chairs, promoting all initiatives conducive to peace-building such as a observance of the ceasefire by all sides, dialogue at all levels, including high-level talks, curbing hate speech, genuine confidence-building measures, a substantial increase in OSCE international observers and deeper exchanges between Armenian and Azerbaijani civil society, including between religious and cultural figures, in order to prepare Armenian and Azerbaijani societies for peaceful co-existence; to express deep concern at the military build-up and the disproportionate defence-spending in the region;

                              (m)

                              to put in place specific provisions to support the authorities’ important efforts in aiding the large number of refugees and internally displaced persons, and to support civilians living in conflict areas within Azerbaijan’s internationally recognised borders; to insist that the rights of all persons living within the border of Azerbaijan, whether temporarily or permanently, are respected; to contribute in particular to upholding their right to return to their homes and property and to be awarded compensation in line with the rulings of the ECtHR by all parties to the conflict;

                        The rule of law, respect for human rights and fundamental freedoms

                              (n)

                              to provide support for reform of the judiciary aimed at ensuring its impartiality and independence from the executive and at strengthening the rule of law; in particular, to ensure the independence of legal professionals by removing any undue interference in the work of lawyers, to allow independent practising lawyers to represent clients under the notarised power of attorney and to put an end to the Azerbaijani Bar’s arbitrary powers to disbar lawyers and deny admissions of new members;

                              (o)

                              to also provide support to develop a strong framework for the protection of human rights, fundamental freedoms and gender equality; to underline the importance of representation of women at all levels of government, including their equal, full and active participation in the prevention and resolution of conflicts and to urge Azerbaijan to sign the Istanbul Convention on preventing and combating violence against women and domestic violence;

                              (p)

                              to put in place specific provisions to support Azerbaijan in fighting economic crime, including corruption, money laundering and tax evasion; to promote greater transparency with respect to the beneficial owners of companies and trusts, as well as to large companies’ financial activities in terms of profits realised and tax paid; to support investigations into laundering schemes, in particular the ‘Laundromat affair’ and to set up specific supervision and control mechanisms, such as restricted access to the European banking system for those involved in money laundering and fraud schemes;

                              (q)

                              to allow for increased cooperation and to support Azerbaijan in the fight against terrorism, organised crime and cybercrime, and in the prevention of radicalisation and cross-border crime; to work together, in particular, in combating recruitment drives by terrorist organisations;

                              (r)

                              to include provisions on the implementation of penal law in Azerbaijan related to the protection of human rights and fundamental freedoms and aimed at ending political prosecutions and abductions, arbitrary travel bans, the targeting of political dissidents, including through defamation, and of independent journalists, human rights defenders, NGO representatives and the most vulnerable members of society, such as members of some minority groups, including the LGBTQI community; to ensure that specific references to these groups are included in the agreement; to reiterate that these practices are unacceptable for any potential partner country of the EU; to set up a reinforced forum for an effective and result-oriented human rights dialogue between the EU and Azerbaijan in consultation with the main international and genuinely independent Azerbaijani NGOs and for which progress should be assessed annually against concrete benchmarks;

                              (s)

                              to insist on the adoption of relevant amendments in the law to enable civil society’s legitimate activities, the removal of undue restrictions to their registration requirements, operations and access to registration for foreign funding and grants, and to put an end to undue criminal investigations, unnecessary reporting to various government agencies, office raids, freezing of accounts, travel bans and persecution of their leaders;

                              (t)

                              to ensure, before the conclusion of the negotiations, that Azerbaijan releases its political prisoners and prisoners of conscience, including, among the most emblematic cases, Ilgar Mammadov, Afgan Mukhtarli, Mehman Huseynov, Ilkin Rustamzada, Seymur Haziyev, Rashad Ramazanov, Elchin Ismayilli, Giyas Ibrahimov, Beyram Mammadov, Asif Yusifli and Fuad Gahramanli, that it lifts their travel bans once released, including those of journalist Khadija Ismayilova and lawyer Intigam Aliyev, and that it fully implements the decisions of the ECtHR, notably as regards Ilgar Mammadov; to secure the release and improvement of the situation of these individuals, including their reinstatement, and that of their families via the judiciary and the application of the rule of law and to protect Azerbaijani dissidents in the EU; to condemn the fact that, contrary to the announcements of the Azerbaijani authorities, none of the political prisoners listed above were released, and further individuals were detained for peacefully exercising their constitutional rights, including members of the opposition parties and human rights lawyer Emin Aslan; to demand the immediate release of human rights lawyer Emin Aslan from his administrative detention and that he be fully cleared of the dubious charges of ‘disobedience towards the police’; to ensure that Azerbaijan ends the use of administrative detentions to silence government critics;

                              (u)

                              to ensure that Azerbaijan respects the right to freedom of peaceful assembly, that it refrains from restricting this right in ways that are not compatible with its obligations under international law, including the European Convention on Human Rights (ECHR), and that it promptly and effectively investigates all cases of excessive use of force, arbitrary arrest and wrongful detention of peaceful protesters, including in connection with the sanctioned opposition rallies in September 2017 and March 2018, and brings the perpetrators to justice;

                              (v)

                              to seek, before the conclusion of the negotiations, a commitment on the part of the Azerbaijani authorities to apply the UN Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, and that they will genuinely investigate all cases of mistreatment of political prisoners and prisoners of conscience, notably in the case of the late Mehman Galandarov, who died in custody in Azerbaijan, and of LGBTQI community members, who were harassed and arrested en masse in September 2017;

                              (w)

                              to stress the EU’s concern over the current state of press freedom in Azerbaijan, which ranks 163 out of 180 countries in the Reporters Without Borders 2018 World Press Freedom Index; to underline the importance of a free and independent media, both off- and online, and to ensure strengthened EU support, both political and financial, for free and pluralistic media in Azerbaijan, with editorial independence from dominant political and oligarchic groups and in line with EU standards; to ask the authorities to unblock access to the websites of Azadliq, and of three news outlets that have to operate from abroad: Radio Free Europe/Radio Liberty (RFE/RL) Azerbaijan Service, Meydan TV and Azerbaycan Saati;

                        Trade and economic cooperation

                              (x)

                              to include fair and ambitious trade and investment provisions, in so far as is compatible with Azerbaijan’s non-WTO-member status, that are fully in line with and do not undermine EU standards, notably sanitary, phytosanitary, environmental, labour, social, gender balance and non-discrimination standards, and that ensure the recognition and protection of intellectual property rights, including geographical indications, notably for wines and spirits; to support Azerbaijan in its accession process to the WTO;

                              (y)

                              to put in place robust measures that would ensure rapid progress towards improving the business and investment climate in Azerbaijan, in particular as regards taxation and the management of public finances and public procurement — with reference to the rules set out in the WTO Agreement on Government Procurement — in order to allow for more transparency, better governance and accountability, equal access and fair competition;

                        Energy and other areas of cooperation

                              (z)

                              to allow for increased cooperation in the energy sector in line with the EU’s and Azerbaijan’s strategic energy partnership and Azerbaijan's track record as a reliable energy supplier, while nevertheless taking into account the suspension and subsequent withdrawal of Azerbaijan from the Extractive Industries Transparency Initiative (EITI) in March 2017 due to ‘the changes in NGO legislature in Azerbaijan’ which did not comply with the group’s civil society requirements; to push for Azerbaijan to realign itself with these requirements in order to resume its activities in the EITI;

                              (aa)

                              to also support the diversification of Azerbaijan’s energy mix, promoting non-carbon energy sources and preparing for the post-carbon age by reducing dependence on fossil fuels and promoting the use of renewables, also in the interest of energy security; to support the completion of the Southern Gas Corridor after addressing the important concerns related to climate change and to the impact on local communities in the decision by the European Investment Bank on the funding of the Trans-Anatolian Gas Pipeline (TANAP);

                              (ab)

                              to put in place ambitious provisions on environmental protection and climate change reduction as part of the new agreement, in line with the Union’s climate change agenda and the commitments of both parties to the Paris agreement, including through the mainstreaming of these policies as part of other sector policies;

                              (ac)

                              to provide new prospects for enhanced cooperation in non-energy-related areas, in particular in the fields of education, health, transport, connectivity and tourism, in order to diversify the Azerbaijani economy, boost job creation, modernise the industrial and service sectors, and stimulate sustainable development in business and research; to allow for more people-to-people exchanges, both at European level and in regional exchanges with Armenian NGOs;

                              (ad)

                              to enhance cooperation with regard to youth and student exchanges by strengthening existing and already successful programmes such as the ‘Young European Neighbours’ network and by developing new scholarship programmes and training courses, as well as facilitating participation in programmes in the field of higher education, in particular the ERASMUS+ programme, which will promote the development of skills, including language skills, and enable Azerbaijani citizens to become acquainted with the EU and its values;

                              (ae)

                              to also promote economic growth via transport and connectivity; to extend the Trans-European Transport Network (TEN-T) to Azerbaijan;

                              (af)

                              in line with the Joint Declaration of the Eastern Partnership Summit of 2017, to ‘consider in due course, if conditions allow, the opening of a Visa Liberalisation Dialogue with Armenia and Azerbaijan respectively, provided that conditions for a well-managed and secure mobility are in place, including the effective implementation of Visa Facilitation and Readmission Agreements between the Parties’;

                        Institutional provisions

                              (ag)

                              to ensure that the agreement has a robust parliamentary dimension, strengthening the current provisions and mechanisms of cooperation to enable increased input into and scrutiny of its implementation, notably through the establishment of an upgraded interparliamentary structure to allow for regular and constructive dialogue between the European Parliament and the parliament of Azerbaijan on all aspects of our relations, including the implementation of agreements;

                              (ah)

                              to conduct the negotiations as transparently as possible; to inform Parliament at all stages of the negotiations in line with Article 218(10) TFEU, according to which the ‘European Parliament shall be immediately and fully informed at all stages of the procedure’; to also provide Parliament with the negotiating texts and minutes of each negotiating round; to remind the Council that, due to the infringement of Article 218(10) TFEU in the past, the Court of Justice of the European Union has already annulled Council decisions on the signing and conclusion of several agreements; to bear in mind that Parliament's consent on new agreements may also be withheld in the future, until the Council fulfils its legal obligations;

                              (ai)

                              to ensure that the new agreement is not the subject of provisional application until after Parliament has given its consent; to emphasise that Parliament's consent on new agreements and other future agreements may be withheld should this be ignored;

                  2.

                  Instructs its President to forward this recommendation to the Council, the Commission and the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy and to the President, Government and Parliament of the Republic of Azerbaijan.

         (1)  OJ L 246, 17.9.1999, p. 3.

         (2)  Texts adopted, P8_TA(2017)0440.

         (3)  Texts adopted, P8_TA(2017)0493.

         (4)  Texts adopted, P8_TA(2017)0267.