title: Commission Recommendation of 11 March 2010 on measures for self-protection and the prevention of piracy and armed robbery against ships (Text with EEA relevance)

text:
               17.3.2010

               EN

               Official Journal of the European Union

               L 67/13

         COMMISSION RECOMMENDATION
   of 11 March 2010
   on measures for self-protection and the prevention of piracy and armed robbery against ships
   (Text with EEA relevance)
   (2010/159/EU)
   THE EUROPEAN COMMISSION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Article 292 thereof,
   Whereas:

               (1)

               The resurgence of acts of piracy off the coast of Somalia led the Maritime Safety Committee of the International Maritime Organisation (IMO) to adopt a series of measures at its 86th session from 27 May to 5 June 2009. It issued a number of circulars either updating the general recommendations in force on the measures to combat piracy and armed robbery against ships or defining specific measures to tackle piracy in the Gulf of Aden and off the coast of Somalia.

               (2)

               Circular MSC.1/Circ.1334 of 23 June 2009 offers ‘Guidance to ship owners and ship operators, shipmasters and crews on preventing and suppressing acts of piracy and armed robbery against ships’. The circular lists a comprehensive series of measures that can be taken onboard ships under any circumstances to prevent attacks or, when they occur, to minimise the risks to the crew and ship.

               (3)

               Circular MSC.1/Circ.1332 of 16 June 2009 lists the best management practices to avoid, deter or delay acts of piracy in the Gulf of Aden and off the coast of Somalia, devised by maritime industry organisations on a voluntary basis and supported and encouraged by the contracting parties on account of the urgent need to combat attacks off the coast of Somalia. The maritime industry organisations updated these measures in version 2, which was published as circular MSC.1/Circ. 1335 of 29 September 2009.

               (4)

               Although the measures set out in these IMO circulars are not compulsory or binding, the clear need to improve maritime security means that ships flying the flag of a Member State should protect themselves as best they can using current know-how when they are exposed in navigation regions with a high risk of piracy and armed robbery.

               (5)

               By their very nature, acts of piracy and armed robbery against ships are often violent and pose a serious threat in several regions of the world, beyond the current situation off the coast of Somalia and in the Gulf of Aden and Indian Ocean.

               (6)

               Piracy figures for 2008 are the highest since the International Maritime Bureau began collecting data in 1991, with 293 attacks on ships, 49 captures, 889 seamen held hostage, 11 killed, and 21 missing and presumed dead. Since 2008, there has been a sharp increase in the number of ships attacked and hijacked off the coast of Somalia and in the Gulf of Aden and Indian Ocean. Numerous ships have been attacked and detained by pirates, who hold the crew hostage until a ransom is paid for their release. The periods of captivity last several weeks or even months and are as unacceptable as they are traumatic for the seamen detained.

               (7)

               The number of attacks in the Indian Ocean and Gulf of Aden has increased since the beginning of 2009, despite a brief respite in the summer on account of the monsoon and the difficult sailing conditions for pirates. Pirates carried out at least 164 attacks in 2009, 48 of which led to a ship being captured.

               (8)

               The best management practices urge maritime companies and ships to register on the website of the Maritime Security Centre — Horn of Africa (MSCHOA (http://www.mschoa.org) before passing through the Gulf of Aden. Ships that register receive all the information available on the current situation in this particular navigation region and are tracked by the EU NAVFOR-ATALANTA operation forces, reducing the risk of attack. Yet more than one third of ships in transit are still not registered with the MSCHOA and, as a result, cannot benefit from the measures in place to safeguard their transit through this region.

               (9)

               On 15 June 2009, the Council of the European Union decided to extend the EU NAVFOR-ATALANTA military operation by one year from 13 December 2009 in order to help deter, prevent and suppress acts of piracy and armed robbery off the coast of Somalia. This military operation is the first naval operation conducted under the European Security and Defence Policy (ESDP), the Council having observed that piracy off the coast of Somalia continued to pose a significant threat to sea transport in the region.

               (10)

               Since they are complementary to measures taken under the EU NAVFOR-ATALANTA operation, the effective and harmonised implementation of the preventive measures recommended by circulars MSC.1/Circ. 1334 and MSC.1/Circ. 1335 can but increase the effectiveness of the naval protection measures adopted by the Council to combat piracy off the coast of Somalia.

               (11)

               It is the responsibility of the Member States to implement the measures aimed at strengthening maritime security and to ensure that all necessary means are allocated and provided to that end,

         HAS ADOPTED THIS RECOMMENDATION:
   1.   The Member States are requested to ensure the effective and harmonised application of preventive measures to deal with the threats which ships may face during acts of piracy and armed robbery. These measures, which have been inventoried and consolidated, have received wide support from the IMO and maritime industry organisations.
   2.   General measures

               2.1.

               The Member States are requested to inform operators registered with them of circular MSC.1/Circ.1334 adopted at the 86th session of the IMO’s Maritime Safety Committee, which sets out and updates preventive measures for self-protection that ships and shipping companies are called on to implement in order to combat piracy and armed robbery wherever such risk occurs, in accordance with the International Ship and Port Facility Security Code (ISPS Code).

               2.2.

               The Member States are requested to ensure above all that their ships are sufficiently and effectively manned in accordance with Rule 4.28 of Part B of the ISPS Code, which has become compulsory under Article 3(5) of Regulation (EC) No 725/2004 of the European Parliament and of the Council (1).

         3.   Measures specific to the situation off the coast of Somalia

               3.1.

               The Member States are requested to inform operators registered with them of circular MSC.1/Circ.1332 adopted at the 86th session of the IMO’s Maritime Safety Committee, supplemented by circular MSC.1/Circ.1335, which endorse best management practices at global level to avoid, deter or delay piracy in the Gulf of Aden and off the coast of Somalia, which are published and updated by maritime industry organisations on a regular basis.

               3.2.

               The Member States are requested to take all necessary steps to ensure the dissemination, pass on the regular updates and verify the implementation of the best management practices to deter piracy off the coast of Somalia, which are set out in the Annex to this Recommendation.

      Done at Brussels, 11 March 2010.

            For the Commission

         Siim KALLAS

            Vice-President

      (1)  OJ L 129, 29.4.2004, p. 6.

      ANNEX

         Best management practices to deter piracy in the Gulf of Aden and off the coast of Somalia

         (Version 2 — August 2009)

      In an effort to counter piracy in the Gulf of Aden and off the coast of Somalia, these best management practices are supported by the following international industry representatives:

                  1.

                  International Association of Independent Tanker Owners (Intertanko)

                  2.

                  International Chamber of Shipping (ICS)

                  3.

                  Oil Companies International Marine Forum (OCIMF)

                  4.

                  Baltic and International Maritime Council (BIMCO)

                  5.

                  Society of International Gas Tanker and Terminal Operators (SIGTTO)

                  6.

                  International Association of Dry Cargo Ship Owners (Intercargo)

                  7.

                  International Group of Protection and Indemnity Clubs (IGP & I)

                  8.

                  Cruise Lines International Association (CLIA)

                  9.

                  International Union of Marine Insurers (IUMI)

                  10.

                  Joint War Committee (JWC) and Joint Hull Committee (JHC)

                  11.

                  International Maritime Bureau (IMB)

                  12.

                  International Transport Workers Federation (ITF)

            These best management practices are also supported by:

                  13.

                  Maritime Security Centre Horn of Africa (MSCHOA)

                  14.

                  UK Maritime Trade Organisation (UKMTO Dubai)

                  15.

                  Maritime Liaison Office (MARLO)

         Suggested planning and operational practices for owners, operators, managers and masters of ships transiting the Gulf of Aden and off the coast of Somalia

         Purpose

                  1.

                  The purpose of this document is to provide best management practices (BMP) to assist companies and ships in avoiding piracy attacks, deterring attacks and delaying successful attacks in the Gulf of Aden (GoA) and off the coast of Somalia. The organisations consulted on this document represent the vast majority of ship owners and operators transiting the region.

                  2.

                  These organisations will encourage their members to utilise these BMP and will endeavour to promulgate these to other shipping interests as BMP for combating piracy in the region. This document complements guidance provided in the IMO MSC Circular MSC.1/Circ.1334.

         Typical attack profiles and lessons learnt

                  1.

                  During 2008 and the first half of 2009, an increase in the number of pirate attacks on merchant ships occurred throughout the GoA and off the coast of Somalia and within the wider North-West Indian Ocean. The majority of attacks were initially clustered around the northern side of the GoA but attacks have occurred further off the east coast of Somalia.

                  2.

                  Analysis of successful attacks indicates that the following common vulnerabilities are exploited by the pirates:

                              (a)

                              low speed;

                              (b)

                              low freeboard;

                              (c)

                              inadequate planning and procedures;

                              (d)

                              visibly low state of alert and/or lack of evident self-protective measures;

                              (e)

                              where a slow response by the ship is evident.

                  3.

                  Commonly two or more small high-speed (up to 25 knots) open boats/‘skiffs’ are used in attacks often approaching from the port quarter and/or stern.

                  4.

                  The use of a pirate ‘mother ship’, which is a larger ship carrying personnel, equipment, supplies and smaller attack craft, has enabled attacks to be successfully undertaken at a greater range from the shore.

                  5.

                  Vigilance should be highest at first light and last light, as the majority of the attacks have taken place during these periods.

                  6.

                  Higher speed vessels (15 knots and above) should not presume to be safe from attack but speed is an effective form of defence. The use of small arms fire, rocket-propelled grenades (RPG), in an effort to intimidate masters of vessels to reduce speed has occurred within the area. Maintaining full sea speed in such circumstances has been shown to be effective.

                  7.

                  The majority of attempted hijacks have been repelled by ship’s crew who have planned and trained in advance of the passage and employed passive counter measures to good effect.

                  8.

                  Prevailing weather and sea state conditions also greatly influence attackers’ ability to operate. Wind strengths in excess of 18 knots and wave heights above 2 metres are considered sufficient to provide protection for all but the most vulnerable vessels, particularly where masters are taking full account of best management practices.

         Recommended best management practices

      1.   Introduction

      (a)   Whilst recognising the absolute discretion of the master at all times to adopt appropriate measures to avoid, deter or delay piracy attacks in this region, this document of best practices is provided for ship owners and ship operators, masters and their crews.
      (b)   Not all measures discussed in this document may be applicable for each ship. Therefore, as part of the risk analysis, an assessment is recommended to determine which of the BMP will be most suitable for the ship. The following have, however, generally proved effective:
      2.   Prior to transit — general planning

      (a)   General

                  (i)

                  UKMTO Dubai is the first point of contact for ships in the region. The day-to-day interface between masters and the military is provided by UKMTO Dubai, who talk to the ships and liaise directly with MSCHOA and the naval commanders at sea. UKMTO Dubai require regular updates on the position and intended movements of ships. They use this information to help the naval units maintain an accurate picture of shipping. (See Glossary at Annex A for further details.)

                  (ii)

                  The Maritime Security Centre — Horn of Africa (MSCHOA), is the planning and coordination authority for EU forces (EU NAVFOR) in the Gulf of Aden and the area off the coast of Somalia. (See Glossary at Annex A.)

                  (iii)

                  The Marine Liaison Office (MARLO) operates as a conduit for information exchange between the Combined Maritime Forces (CMF) and the commercial shipping community within the region. (See Glossary at Annex A.)

                  (iv)

                  Prior to transiting the high-risk area, the owner and master should carry out their own risk assessment to assess the likelihood and consequences of piracy attacks on the ship, based on the latest available information. The outcome of this risk assessment should identify measures for prevention, mitigation and recovery and will mean combining statutory requirements with supplementary measures to combat piracy.

                  (v)

                  Company crisis management procedures should consider appropriate measures to meet the threat of piracy by adopting IMO and other industry recommended practices as appropriate to the particular circumstances and ship type.

                  (vi)

                  Advanced notice of a vessel’s intended passage is required by the naval authorities so that they can identify vulnerabilities and plan suitable protection. This is achieved by primarily:

                              1.

                              initial report to UKMTO Dubai (e-mail or fax);

                              2.

                              initial report to MARLO (e-mail or fax);

                              3.

                              additionally, if planning to transit the Gulf of Aden, or navigate within the area bound by 12° N, 58° E and 10° S: register the vessel movement with MSCHOA (either, online or by e-mail or fax).

                  (vii)

                  Whilst measures should be taken to prevent pirates boarding, the safety of crew and passengers is paramount.

            (b)   Company planning
      It is strongly recommended that managers and/or the operations department register for access to the restricted sections of the MSCHOA website (www.mschoa.eu), review the information contained therein and share this as appropriate within their fleet.

                  (i)

                  4-5 days before the vessel enters the international recommended transit corridor (IRTC), or area bound by 12 degrees north or 58 degrees east or 10 degrees south, ensure that a ‘Vessel movement registration’ submission has been logged with MSCHOA (online, e-mail or fax). Note: This can be done by either the ship or the company.

                  (ii)

                  Review the ship security assessment (SSA) and implementation of the ship security plan (SSP) as required by the International Ship and Port Facility Code (ISPS Code) to counter the piracy threat.

                  (iii)

                  The company security officer (CSO) is encouraged to see that a contingency plan for the high-risk passage is in place, exercised, briefed and discussed with the master and the ship security officer (SSO).

                  (iv)

                  Be aware of the particular high-risk sea areas that have been promulgated.

                  (v)

                  Offer their ship’s master guidance with regard to the preferred and available methods of transiting the region (group transit, escorted group transit, national convoy, etc.).

                  (vi)

                  Conduct periodic crew training sessions.

                  (vii)

                  The use of additional private security guards is at the discretion of the company but the use of armed guards is not recommended.

                  (viii)

                  Consider additional resources to enhance watchkeeping numbers.

                  (ix)

                  Consider the outfitting of ships with self-protection measures (SPM) prior to transiting high-risk areas.

            (c)   Ship’s master planning

                  (i)

                  Communication of ‘Initial report’ to UKMTO Dubai and MARLO (e-mail or fax) when entering the reporting area between Suez, and 78 degrees east 10 degrees south, see anti-piracy planning chart Q6099.

                  (ii)

                  4-5 days before entering the IRTC, or the area within 12 degrees north, 58 degrees east or 10 degrees south, ensure that a ‘Vessel movement registration’ submission has been logged with MSCHOA (online, e-mail or fax). Note: This can be done by either the ship or the company. If it is completed by the company, masters should satisfy themselves with their companies that their details are correctly registered with MSCHOA.

                  (iii)

                  Prior to transit of the region it is recommended that the crew should be thoroughly briefed.

                  (iv)

                  The anti-piracy contingency plan has been shown to be most effective when implemented in advance. A drill is conducted prior to arrival in the area, the plan reviewed and all personnel briefed on their duties, including familiarity with the alarm signal signifying a piracy attack.

                  (v)

                  Masters are advised to also prepare an emergency communication plan, to include all essential emergency contact numbers and pre-prepared messages, which should be ready at hand or permanently displayed near the communications panel (e.g. telephone numbers of MSCHOA, IMB PRC, CSO etc. — see Contact List at Annex B).

                  (vi)

                  Define the ship’s AIS policy: SOLAS permits the master the discretion to switch off AIS if he believes that its use increases the ship’s vulnerability. However, in order to provide naval forces with tracking information within the GoA it is recommended that AIS transmission is continued but restricted to ship’s identity, position, course, speed, navigational status and safety-related information. Off the coast of Somalia the decision is again left to the master’s discretion, but current naval advice is to turn it off completely. If in doubt this can be verified with MSCHOA.

            3.   Prior to transit voyage planning

      (a)   Vessels are encouraged to report their noon position, course, speed, estimated and actual arrival times to UKMTO Dubai and MARLO whilst operating in the region.
      (b)   Vessels are also encouraged to increase the frequency of such reports when navigating in known high-risk/piracy areas and further report upon passing point A or B in the GoA, as shown on anti-piracy chart Q6099.
      (c)   Inside the GoA

                  (i)

                  EU NAVFOR strongly recommends that ships conduct their passage within the IRTC. Westbound ships should bias themselves to the northern portion of the corridor, and eastbound ships to the southern portion. Group transit (GT) guidance within the GoA for times and speeds are on the MSCHOA website, if a GT is contemplated.

                  (ii)

                  Ships should avoid entering Yemeni territorial waters (YTWs) while on transit. This is for reasons of customary international law, as it is not possible for international military forces (non-Yemeni) to protect ships that are attacked inside YTWs.

                  (iii)

                  Ships may be asked to make adjustments to passage plans to conform to MSCHOA routeing advice.

                  (iv)

                  During GTs ships should not expect to be permanently in the company of a warship. But all warships in the GoA, whether part of EU NAVFOR or coordinating with them, will be aware of the GoA GTs and will have access to the full details of vulnerable shipping.

                  (v)

                  MSCHOA strongly recommends masters make every effort to plan transit periods of highest risk areas of the GoA for night passage (MSCHOA will advise ships). Very few successful attacks have occurred at night.

            (d)   Outside the GoA

                  (i)

                  Ships navigating off the east coast of Somalia should consult with the MSCHOA website or UKMTO Dubai in order to obtain the most recent routeing advice.

                  (ii)

                  Masters should still update UKMTO Dubai in the usual manner with their ship’s course and details.

            (e)   A list of useful contact details are contained in Annex B.
      4.   Prior to transit — defensive measures

      (a)   Taking into account the manning levels, ensure that ship routines are adjusted sufficiently in advance so that well-rested and well-briefed crew are on watch and sufficient watchkeepers are available. The master and officers of the watch should be familiar with the impact of zigzag manoeuvres onboard their particular ship (in all sea conditions) and in particular the impact that these manoeuvres can have upon reducing the speed of the vessel.
      (b)   Consider minimising external communications (radios, handsets and AIS information) to essential safety- and security-related communication and SOLAS information only during transit of the GoA and passing the coast of Somalia.
      (c)   Increase readiness and redundancy by running additional auxiliary machinery, including generators and steering motors.
      (d)   Increase lookouts/bridge manning.
      (e)   Man the engine room.
      (f)   Secure and control access to the bridge, engine room, steering gear room, and all accommodation/internal spaces. All potential access points (doors, portholes, vents, etc.) should be risk-assessed and adequately secured, especially where the potential access point is considered large enough for an attacker to gain entry. Access to and from the accommodation and internal work spaces should be reduced to a single point of entry when transiting the high-risk areas. Any measures employed should not obstruct an emergency exit from within the internal space, whilst remaining secure from access by pirates outside.
      (g)   In case of emergency, warships can be contacted on VHF Ch. 16 (Backup Ch.08).
      (h)   Check all ladders and outboard equipment are stowed or up on deck.
      (i)   Check that self-protection measures put in place in advance remain securely fitted and function as intended. Be mindful that temporary devices may work loose and consequently may only provide a reduced level of protection.
      (j)   If the ship has a comparatively low freeboard, consider the possibility of extending the width of the gunwales to prevent grappling hooks from gaining hold. Check the MSCHOA website for examples of such measures.
      (k)   It is recommended that a piracy attack muster point or ‘citadel’ be designated and lock-down procedures rehearsed in order to delay access to control of the ship and buy time. Ideally this should be away from external bulkheads and portholes. Due to the ongoing debate on the use of citadels and their method of employment, masters are recommended to check regularly with MSCHOA.
      (l)   Consider the use of dummies at the rails to simulate additional lookouts. However, if ship design creates lookout black spots and the security assessment identifies this risk, then it may have to be covered by manpower.
      (m)   It is suggested fire pumps and/or hoses should be pressurised and ready for discharge overboard around the vessel, particularly at the most vulnerable points.
      (n)   Consideration should also be given to creating a water curtain around the vessel to further deter boarding.
      (o)   Consider the use of razor wire/physical barriers around stern/lowest points of access, commensurate with crew safety and escape.
      (p)   Consider the use of passive defence equipment.
      (q)   Consider providing night vision optics for use during the hours of darkness.
      (r)   Operate CCTV (if fitted).
      5.   In transit — operations

      (a)   Ship’s crew should not be exposed to undue risk when employing self-protective measures (SPM).
      (b)   All ships inside the GoA are strongly urged to use the IRTC and follow MSCHOA GT advice and timings as promulgated on the MSCHOA website.
      (c)   Attention of mariners is also drawn to IMO circular SN.1 Circ. 281 dated 4 August 2009, ‘Information on internationally recognised transit corridor (IRTC) for ships transiting the Gulf of Aden’ where advice is provided that the IRTC is subject to change by military authorities according to prevailing circumstances. Mariners are therefore urged to obtain up-to-date information from the ‘MSCHOA’ website http://www.mschoa.org or NAV warnings promulgated for that area.
      (d)   If you intend to follow a group transit (GT) through the IRTC: transit at the group transit speed, but remain aware of the ship’s limitations. (Current advice, for example, is that if your full sea speed is 16 knots, consider joining a 14-knot GT and keep those 2 knots in reserve.)
      (e)   If you do not intend to follow a GT through the IRTC: maintain full sea speed through the high-risk area. (Current advice is that if the full sea speed of the ship is more than 18 knots, then do not slow down for a GT. Instead, maintain full sea speed and aim to transit as much of the high-risk area in darkness as possible.)
      (f)   Ships should comply with the International Rules for Prevention of Collision at Sea at all times. Masters should endeavour not to impede the safe navigation of other vessels when joining and leaving the IRTC. Navigation lights should not be turned off at night. Follow the guidance given by flag State authority.
      (g)   Provide deck lighting only as required for safety. Lighting in the shadow zones around the ship’s hull may extend the area of visibility for lookouts, but only where consistent with safe navigation. Where fitted, and deemed suitable, consider the immediate use of ‘remotely operated’ ship searchlights, if suspicious activity around the vessel is observed, the use of searchlights may startle and deter a potential attack. (Current naval advice is to transit with navigation lights only).
      (h)   Keep photographs of pirate ‘mother ships’ on the bridge. Report immediately if sighted. Report all sightings of suspect mother ships to UKMTO Dubai and the IMB PRC. (See Annex C for an example of a piracy report for passing on such information or reporting on any other attack or sighting.)
      (i)   The master should try to make as early an assessment of a threat as possible. As soon as the master feels that a threat is developing he should immediately call the UKMTO Dubai.
      (j)   Keep a good lookout by all available means for suspicious craft, especially from astern and each quarter.
      (k)   Protect the crew from exposure to undue risk. Only essential work on deck should occur in transit of the high-risk area. Masters should, in so far as possible, keep crew members clear from external deck spaces during hours of darkness, whilst being mindful of their obligation to maintain a full and proper lookout at all times.
      (l)   Use light, alarm bells and crew activity to alert suspected pirates that they have been detected.
      (m)   A variety of other additional commercially available non-lethal defensive measures are available that could be considered; however these should be assessed by companies on their merits and on the particular characteristics and vulnerability of the ship concerned.
      6.   If attacked by pirates

      (a)   Follow the ship’s pre-prepared contingency plan.
      (b)   Activate the emergency communication plan, and report the attack immediately to the single primary point of contact in the event of an attack, which is UKMTO Dubai. (MSCHOA, as the continually manned maritime security watch centre for piracy attacks in the region, will continue to function as a back-up contact point in the event of an attack.)
      (c)   Activate the ship security alert system (SSAS), which will alert your company security officer and flag state. Post attack reports should be communicated as quickly as possible to all relevant piracy reporting centres as explained in section 9.
      (d)   If the master has exercised his right to turn off the automatic identification system (AIS) during transit of the piracy area, this should be turned on once the ship comes under pirate attack.
      (e)   Sound the emergency alarm and make a ‘pirate attack’ (PA) announcement in accordance with the ship’s emergency plan.
      (f)   Make a ‘mayday’ call on VHF Ch. 16 (and backup Ch. 08, which is monitored by naval units). Send a distress message via the DSC (digital selective calling) system and Inmarsat-C, as applicable. Establish telephone communication with UKMTO Dubai.
      (g)   Prevent skiffs closing on the ship by altering course and increasing speed where possible (1). Pirates have great difficulty boarding a ship that is:

                  (i)

                  making way at over 15 knots;

                  (ii)

                  manoeuvring — it is suggested that as early as possible masters undertake continuous small zigzag manoeuvres to further deter boarding whilst maintaining speed. Consider increasing the pirates’ exposure to wind/waves and using bow wave and stern wash to restrict pirate craft coming alongside. Masters and the officer of the watch (OOW) should be aware of the handling and manoeuvring characteristics of the vessel. Particular attention should be given to the effects of varying helm orders and the impact these can have on the ship’s speed.

            (h)   Activate fire pump defensive measures.
      (i)   Consider turning on forward facing deck lights to draw attention to your vessel and aid positive identification by arriving military forces as a vessel under attack.
      (j)   Muster all remaining crew in accordance with the ship’s contingency plan.
      7.   If boarded by pirates

      (a)   Before pirates gain access to the bridge, inform UKMTO Dubai and, if time permits, the company.
      (b)   Offer no resistance; this could lead to unnecessary violence and harm to the crew.
      (c)   If the bridge/engine room is to be evacuated, then the main engine should be stopped; all way taken off the vessel if possible and the ship navigated clear of other ships.
      (d)   Remain calm and cooperate fully with the pirates.
      (e)   Ensure all crew, other than the bridge team, stay together in one location.
      (f)   If in a locked down ‘citadel’ ensure internal protection/cover is available in case the pirates attempt to force entry. Keep clear of entry point/doors and portholes/windows — do not resist entry. Use citadel emergency communication methods to communicate with authorities.
      8.   In the event of military action

      (a)   Crew should be advised NOT to use cameras with flash at any time when any military action is under way.
      (b)   In the event that military personnel take action onboard the ship, all personnel should keep low to the deck, cover their heads with both hands, with hands visible and empty.
      (c)   Be prepared to answer questions on identity and status onboard.
      (d)   Be aware that English is not the working language of all naval units in the region.
      (e)   Military forces may initially secure all persons encountered. This is standard practice. Brief and prepare ship’s personnel to expect this and to cooperate fully during the initial stages of military action onboard.
      9.   Post incident reporting (reference Annex C).

      (a)   Following any piracy attack or suspicious activity, it is vital that a detailed report of the event is reported to MSCHOA, UKMTO DUBAI and the IMB.
      (b)   This will ensure full analysis and trends in piracy activity are established as well as enabling assessment of piracy techniques or changes in tactics, in addition to ensuring appropriate warnings can be issued to other merchant shipping in the vicinity.
      (c)   Masters are therefore requested to complete the standardised piracy report form contained in Annex C.

         Updating best management practices

                  1.

                  It is anticipated that these BMP will be periodically updated based upon operational experience and lessons learned. The parties to this document will endeavour to meet regularly to update these BMP and to circulate revisions to their respective members and other interested organisations.

                  2.

                  If in doubt, consult the MSCHOA website where additional relevant information will always be posted (noting that this may not be endorsed by all of the above-listed organisations).

         (1)  If you can buy time until the military forces arrive, this often leads the pirates to abort their attack. This is why early registration with MSCHOA, use of group transit timings and updating your position with UKMTO Dubai are all essential: it gives a better probability that naval support will be nearby if the pirates attack.

         ANNEX A

            GLOSSARY

         The roles and inter-relationship of the coordinating bodies involved.

            EU NAVFOR

         EU NAVFOR is the coordinating authority which operates the Maritime Security Centre (Horn of Africa). All information and contact details are to be found within the MSCHOA website.

            MSC (HOA) Maritime Security Centre (Horn of Africa)

         MSCHOA was set up by the European Union (EU) as part of a European Security and Defence Policy initiative to combat piracy in the Horn of Africa. This work commenced with the establishment of EU NAVCO in September 2008. This coordination cell working in Brussels established links with a broad cross-section of the maritime community and provided coordination with EU forces operating in the region. In November 2008, the Council of the European Union took a major step further by setting up a naval mission — EU NAVFOR ATALANTA — to improve maritime security off the Somali coast by preventing and deterring pirate attacks and by helping to safeguard merchant shipping in the region.

            UKMTO Dubai — (UK) Maritime Trade Operations

         The UK Maritime Trade Operations (UKMTO Dubai) office in Dubai acts as a point of contact for industry liaison with the combined military forces (CMF). UKMTO Dubai also administers the voluntary reporting scheme, under which merchant ships are encouraged to send daily reports, providing their position and ETA at their next port, whilst transiting the region bound by Suez, 78° E and 10° S. UKMTO Dubai subsequently tracks ships, and the positional information is passed to CMF and EU headquarters. Emerging and relevant information affecting commercial traffic can then be passed directly to ships, rather than by company offices, improving responsiveness to any incident and saving time.
         For further information, or to join the voluntary reporting scheme, please contact UKMTO Dubai: UKMTO@eim.ae

         ANNEX B

            Useful contact details

            UKMTO Dubai

                     E-mail

                     UKMTO@eim.ae

                     Telephone

                     + 971 505523215

                     Cell

                     Fax

                     + 971 43065710

                     Telex

                     (51) 210473

            MSCHOA

                     Via website for reporting

                     www.mschoa.org

                     Telephone

                     + 44 (0) 1923958545

                     Fax

                     + 44 (0) 1923958520

                     E-mail

                     postmaster@mschoa.org

            IMB PRC

                     E-mail

                     piracy@icc-ccs.org

                     Telephone

                     + 60 320310014

                     Cell

                     Fax

                     + 60 320785769

                     Telex

                     MA34199 IMBPC1

            MARLO

                     E-mail

                     Marlo.bahrain@me.navy.mil

                     Telephone

                     + 973 17853927

                     Cell

                     + 973 39442117

         ANNEX C

            FOLLOW-UP REPORT — PIRACY ATTACK REPORT

            Additional guidance for vessels engaged in fishing, supplementary to the best management practices to deter piracy in the Gulf of Aden and off the coast of Somalia

         I.   Recommendations to vessels in fishing zones

                     1.

                     Non-Somali fishing vessels should avoid operating or transiting within 200 nm of the coast of Somalia, irrespective of whether or not they had been issued with licences to do so.

                     2.

                     Do not start fishing operations when the radar indicates the presence of unidentified boats.

                     3.

                     If polyester skiffs of a type typically used by pirates are sighted, move away from them full speed, sailing into wind and sea to make their navigation more difficult.

                     4.

                     Avoid stopping at night, be alert and maintain bridge, deck and engine room watch.

                     5.

                     During fishing operations, when the vessel is more vulnerable, be alert and maintain radar watch in order to give maximum notice to the authorities if an attack is in course.

                     6.

                     While navigating at night, use only the mandatory navigation and safety lights so as to prevent the glow of lighting attracting pirates who sometimes are in boats without radars and are just lurking around.

                     7.

                     While the vessel is drifting while fishing at night, keep guard at the bridge on deck and in the engine room. Use only mandatory navigation and safety lights. The engine must be ready for an immediate start up.

                     8.

                     Keep away from unidentified ships.

                     9.

                     Use VHF as little as possible to avoid being heard by pirates and make location more difficult.

                     10.

                     Activate AIS when maritime patrol aircraft are operating in the area to facilitate identification and tracking.

               II.   Identification

                     1.

                     Managers are strongly recommended to register their fishing vessels with MSCHOA for the whole period of activity off the coast of Somalia. This should include communicating a full list of the crewmen on board and their vessels’ intentions, if possible.

                     2.

                     Carry out training prior to passage or fishing operations in the area.

                     3.

                     Whenever fishing vessels are equipped with VMS devices, their manager should provide MSCHOA with access to VMS data.

                     4.

                     Fishing vessels should avoid sailing through areas where they have been informed that suspected pirate ‘mother ships’ had been identified and should use all means to detect, as soon as possible, any movement of large or small vessels that could be suspicious.

                     5.

                     Fishing vessels should always identify themselves upon request from aircraft or ships from Operation ATALANTA or other international or national anti-piracy operation.

                     6.

                     Military, merchant and fishing vessels should respond without delay to any identification request made by a fishing vessel being approached (in order to facilitate early action to make escape possible, especially if the vessel is fishing).

               III.   In case of attack

                     1.

                     In case of an attack or sighting a suspicious craft, warn the authorities (UKMTO and MSCHOA) and the rest of the fleet.

                     2.

                     Communicate the contact details of the second master of the vessel (who is on land) whose knowledge of the vessel could contribute to the success of a military intervention.

            Recommendations only for purse-seiners

                     3.

                     Evacuate all personnel from the deck and the crow’s nest.

                     4.

                     If pirates have taken control of the vessel and the purse-seine is spread out, encourage the pirates to allow the nets to be recovered. If recovery of the purse-seine is allowed, follow the instructions for its stowage and explain the functioning of the gear in order to avoid misunderstanding.


Avis juridique important

|

31982H0490

82/490/EEC: Commission Recommendation of 6 July 1982 relating to the certificates of conformity provided for in Council Directive 76/117/EEC on the approximation of the laws of the Member States concerning electrical equipment for use in potentially-explosive atmospheres

Official Journal L 218 , 27/07/1982 P. 0027 - 0029 Spanish special edition: Chapter 13 Volume 12 P. 0190  Portuguese special edition Chapter 13 Volume 12 P. 0190

*****COMMISSION  RECOMMENDATION  of 6 July 1982  relating to the certificates of conformity provided for in Council Directive 76/117/EEC on the approximation of the laws of the Member States concerning electrical equipment for use in potentially-explosive atmospheres  (82/490/EEC)  THE COMMISSION OF THE EUROPEAN  COMMUNITIES,  Having regard to the Treaty establishing the European Economic Community, and in particular the second indent of Article 155 thereof,  Whereas Directive 76/117/EEC (1) specifies in the first indent of Article 4 that the Member States may not, on grounds of safety requirements for the design and manufacture of electrical equipment for use in potentially explosive atmospheres, prohibit the sale or free movement or the use, for its proper purpose, of the electrical equipment referred to in Articles 1 and 2 if its conformity with the harmonized standards is attested by the certificate of conformity referred to in Article 8, and by the affixing of the distinctive mark provided for in Article 10;  Whereas, for the practical application of the abovementioned provisions, Article 8 (1), first and second subparagraphs, provides that this certificate of conformity shall be issued by one of the approved bodies referred to in Article 14, and that a copy of the main points in the certificate shall be forwarded to the Member States within one month of the issue of the certificate;  Whereas, although the Directive lays down mandatory rules with regard to the issuing of the certificates of conformity and the exchange of information between the Member States on the main points in the certificates, the form of the certificates is left to the initiative of the Member States;  Whereas, to ease the work of the authorities and the competent bodies responsible for supervising the application of the provisions of the Directive and the free movement of the goods concerned, it seems necessary to use harmonized forms as far as is possible,  HEREBY RECOMMENDS THAT MEMBER STATES  take all the measures necessary to ensure that the certificates of conformity referred to in the first indent of Article 4 (1) of Directive 76/117/EEC are drawn up in accordance with the specimen form attached to this recommendation.  Done at Brussels, 6 July 1982.  For the Commission  Karl-Heinz NARJES  Member of the Commission  (1) OJ No L 24, 30. 1. 1976, p. 45.  APPENDIX  Model of the certificate of conformity - page 1/2  Space for name and address, telephone and telex of the body approved to issue the certificates.  (1) CERTIFICATE OF CONFORMITY  (2) Name or symbol of the body approved to issue the certificates - the last two numerals of the year of issue of the certificate - the serial numer of the certificate - if appropriate the sign 'X'.  (3) This certificate is issued for the following:  - identification of the certified electrical apparatus or system,  - certified type(s).  (4) (a) Manufactured by:  name and address of manufacturer;  (b) Submitted for certification by:  name and address of applicant.  (5) This electrical apparatus or system and any acceptable variations thereto are specified in the Annex to this certificate and in the descriptive documents therein referred to.  This certificate may only be reproduced in its entirety and without change.  Sheet . / . . .  The number to the left of the oblique indicates the page number, the number to the right indicates the number of pages of the certificate including Annex.  Model  of the certificate of conformity - page 2/2  Certificate of conformity - repeat point 2 above  (6) Name or symbol, approved in accordance with Article 14 of Directive 76/117/EEC of the Council of the European Communities of 18 December 1975:  - certifies that this electrical apparatus has been found to comply with the following harmonized European Standards:  (Enumerate any European Standard concerned, year of edition, enumerate the national standards concerned)  and has successfully met the type verification and test requirements of these standards,  - certifies that a confidential test report has been completed on these verifications and tests.  (If appropriate, give test report number).  (7) The code of the electrical apparatus is:  EEx, the symbol(s) of the type(s) of protection, II.  (8) By marking the supplied electrical, apparatus, the manufacturer attests on his own responsibility that this electrical apparatus complies with the descriptive documents referred to in the Annex to this certificate and has satisfied routine verifications and tests required in the harmonized European Standards referred to in point 6 above.  (9) The supplied electrical apparatus is authorized to carry the distinctive Community mark defined in Annex II of the Council Directive 79/196/EEC of 6 February 1979. This mark is reproduced on the first page of this certificate; it shall be affixed to the electrical apparatus in such a way as to be visible, legible and durable.  Place and date (year, month and day) for the issue of the certificate  The Director of the certifying body (signature)


title: Council Recommendation of 14 July 2015 on the 2015 National Reform Programme of Belgium and delivering a Council opinion on the 2015 Stability Programme of Belgium

text:
               18.8.2015

               EN

               Official Journal of the European Union

               C 272/24

         COUNCIL RECOMMENDATION
   of 14 July 2015
   on the 2015 National Reform Programme of Belgium and delivering a Council opinion on the 2015 Stability Programme of Belgium
   (2015/C 272/07)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148(4) thereof,
   Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (1), and in particular Article 5(2) thereof,
   Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances (2), and in particular Article 6(1) thereof,
   Having regard to the recommendation of the European Commission,
   Having regard to the resolutions of the European Parliament,
   Having regard to the conclusions of the European Council,
   Having regard to the opinion of the Employment Committee,
   Having regard to the opinion of the Economic and Financial Committee,
   Having regard to the opinion of the Social Protection Committee,
   Having regard to the opinion of the Economic Policy Committee,
   Whereas:

               (1)

               On 26 March 2010, the European Council agreed to the Commission's proposal to launch a new strategy for growth and jobs, Europe 2020, based on enhanced coordination of economic policies. The strategy focuses on the key areas where action is needed to boost Europe's potential for sustainable growth and competitiveness.

               (2)

               On 14 July 2015, the Council, on the basis of the Commission’s proposals, adopted a Recommendation on the broad guidelines for the economic policies of the Member States and the Union and, on 21 October 2010, it adopted a decision on guidelines for the employment policies of the Member States (3). Together these form the ‘integrated guidelines’ which Member States were invited to take into account in their national economic and employment policies.

               (3)

               On 8 July 2014, the Council adopted a Recommendation (4) on Belgium's National Reform Programme for 2014 and delivered its opinion on Belgium's updated Stability Programme for 2014. On 28 November 2014, in line with Regulation (EU) No 473/2013 of the European Parliament and of the Council (5), the Commission presented its opinion on Belgium's draft budgetary plan for 2015.

               (4)

               On 28 November 2014, the Commission adopted the Annual Growth Survey, marking the start of the 2015 European Semester for economic policy coordination. On the same day, on the basis of Regulation (EU) No 1176/2011, the Commission adopted the Alert Mechanism Report, in which Belgium was identified as one of the Member States for which an in-depth review would be carried out.

               (5)

               On 18 December 2014, the European Council endorsed the priorities for fostering investment, intensifying structural reforms and pursuing responsible growth-friendly fiscal consolidation.

               (6)

               On 26 February 2015, the Commission published its 2015 country report for Belgium. This assessed Belgium's progress in addressing the country-specific recommendations adopted on 8 July 2014. The country report also includes the results of the in-depth review under Article 5 of Regulation (EU) No 1176/2011. The Commission's analysis leads it to conclude that Belgium is experiencing macroeconomic imbalances which require policy action and monitoring. In particular, developments with regard to the external competitiveness of goods continue to present risks and deserve attention, as renewed deterioration would threaten macroeconomic stability. Further action to ensure the convergence of cost parameters would slow down the decline of employment in the tradable sectors, while tangible progress to narrow the historical cost gap could be reinforced by a tax shift towards non-labour tax bases. Public debt remains high, but several factors temper the associated macroeconomic risks.

               (7)

               On 30 April 2015, Belgium submitted its 2015 National Reform Programme and its 2015 Stability Programme. In order to take account of their interlinkages, the two programmes have been assessed at the same time.

               (8)

               Belgium is currently in the preventive arm of the Stability and Growth Pact and subject to the transitional debt rule for the period 2014-2016. On 27 February 2015, the Commission issued a Report under Article 126(3) of the TFEU, as Belgium was not expected to make sufficient progress towards compliance with the debt rule in 2014-2015 and the deficit reference value of 3 % of GDP was breached in 2014. The analysis concluded that the debt criterion should be considered as complied with at that time and that the excess of the deficit over the reference value was close to that value, temporary, and exceptional (due to methodological statistical changes). This analysis is still broadly valid. In its 2015 Stability Programme, the Government plans a gradual improvement of the structural balance in order to reach a balanced budgetary position in structural terms by 2018. However, the recalculated structural balance (6) points to a structural deficit of 0,3 % of GDP in 2018. The Government does not plan to reach the medium-term objective — a surplus of 0,75 % of GDP in structural terms — within the programme period. The government debt-to-GDP ratio is expected to peak at 106,9 % in 2015 and to gradually decline to 102 % in 2018. The macroeconomic scenario underpinning these budgetary projections is plausible. However, the measures needed to support the planned deficit targets from 2016 onwards have not been sufficiently specified. Based on the Commission's 2015 spring forecast, net expenditure growth in 2015 is expected to be in line with the expenditure benchmark. However, there is a risk of some deviation in 2014-2015 mainly resulting from the slippage in 2014. If policy is unchanged, there is also a risk of a significant deviation from the required adjustment path towards the medium-term objective in 2015-2016. Therefore further measures will be needed in both years. Based on its assessment of the Stability Programme and taking into account the Commission's 2015 spring forecast, the Council is of the opinion that there is a risk that Belgium will not comply with the provisions of the Stability and Growth Pact.

               (9)

               The Federal Government has agreed a major pension reform aimed at reducing the gap between the effective and statutory retirement ages, and raising the latter. The early retirement age is to be raised further after 2016, to 63 years by 2018, with a minimum career-length requirement of 42 years from 2019 onwards. Over the longer term, the Federal Government has agreed to increase the statutory retirement age from 65 to 66 in 2025 and 67 in 2030. The gradual introduction of a credit-based pension system is planned, with adjustment mechanisms that respond to demographic or economic developments such as higher life expectancy or changes in the economic dependency ratio. A successful consolidation strategy offsetting the budgetary impact of an ageing population and safeguarding the long-term sustainability of public finances depends on the swift implementation of this pension reform. Considering that there are still few incentives to support the employability of older workers, these pension reforms would need to be accompanied by employment-support measures and labour market reforms conducive to active ageing.

               (10)

               The Belgian tax system is characterised by a high overall tax burden, relatively high rates, and narrow bases. The tax burden is heavily skewed towards labour. This results in high labour costs, which discourage job creation, and large tax wedges, which contribute to unemployment traps. In addition, partly to alleviate the high tax rates, tax bases are generally eroded by numerous specific exemptions, deductions, reduced rates, and tax expenditures, which create efficiency losses and introduce distortions and possible loopholes. Certain features of the tax system are environmentally harmful. Given these weaknesses, Belgium has been repeatedly advised to simplify and redesign its tax system in order to rebalance the tax burden, close tax loopholes, and reduce the sometimes harmful differentiation created by taxation niches. So far, limited progress has been made towards a comprehensive tax reform entailing, in particular, a shift from labour towards less growth-distorting tax bases. Tax bases with scope for broadening include environmental and consumption taxes and certain types of financial income. Combining a shift away from labour with tax-base broadening (reviewing existing tax provisions, subsidies, exemptions, and deductions) could improve the overall balance and fairness of the tax system, support employment, competitiveness and social and environmental objectives, and counter tax evasion and aggressive tax planning.

               (11)

               Structural problems characterising the Belgian labour market continue to result in a chronic underutilisation of labour and low aggregate employment and activity rates. Shortcomings relate mainly to the weak link between wages and productivity and to financial disincentives to work. Belgium also faces shortages of highly skilled workers and skills mismatches. The various governments, in their agreements and their reform programmes make reference to the need for stronger links between education, training and employment actors so as to improve linguistic, vocational and educational training and develop alternative training for students and the unemployed. Progress is slow, however. The impact of these structural factors on certain groups in the labour market, such as the young and elderly unemployed and those from migrant backgrounds, is particularly pronounced.

               (12)

               Belgium's weakened external competitiveness continues to give rise to macroeconomic risks for its economy. The economy is marked by a problem of high labour costs, which have on average outpaced those in neighbouring countries. There is a need to align wage growth more closely with productivity and to make wage-setting more flexible so as to increase the economy's potential for adjustment. Some targeted measures have been taken to reduce labour costs for specific groups and to narrow the gap between gross and net wages at the bottom of the pay scale. However, closing the gap entirely will require additional action which hinges on reforms of the wage-setting system. The build-up of a cost disadvantage comes with job losses and will eventually provoke a correction if left unaddressed. Other key cost factors for companies are energy costs and the cost of intermediate business services, which are highly regulated and shielded from competition. There is also considerable scope for improving the non-cost dimension of external competitiveness. To safeguard and enhance current welfare levels, more emphasis will have to be put on productivity gains. This requires a sustained push towards products and associated services higher up the value chain, on the basis of stronger performance in innovation and R & D valorisation. Administrative barriers should be reduced and measures should be taken to promote entrepreneurship and unleash business dynamism. The very low start-up rate suggests a business climate that is unfavourable to new activities and expansion. Increasing competition in retail and professional services also represents a challenge. Eliminating public infrastructure bottlenecks and improving the quality and adequacy of the capital stock through additional investments, in particular in the area of road and rail infrastructure, would also strengthen Belgium's overall productivity.

               (13)

               In the context of the European Semester, the Commission has carried out a comprehensive analysis of Belgium's economic policy and published it in the 2015 country report. It has also assessed the Stability Programme and the National Reform Programme and the follow-up given to the recommendations addressed to Belgium in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Belgium but also their compliance with EU rules and guidance, given the need to strengthen the overall economic governance of the Union by providing EU-level input into future national decisions. The recommendations under the European Semester are reflected in recommendations (1) to (4) below.

               (14)

               In the light of this assessment, the Council has examined the Stability Programme, and its opinion (7) is reflected in particular in recommendation (1) below.

               (15)

               In the light of the Commission's in-depth review and this assessment, the Council has examined the National Reform Programme and the Stability Programme. Its recommendations under Article 6 of Regulation (EU) No 1176/2011 are reflected in recommendations (1) to (4) below.

               (16)

               In the context of the European Semester, the Commission has also carried out an analysis of the economic policy of the euro area as a whole. On the basis of this analysis, the Council has issued specific recommendations addressed to the Member States whose currency is the euro (8). As a country whose currency is the euro, Belgium should also ensure the full and timely implementation of these recommendations,

         HEREBY RECOMMENDS that Belgium take action in 2015 and 2016 to:

               1.

               Achieve a fiscal adjustment of at least 0,6 % of GDP towards the medium-term budgetary objective in 2015 and in 2016. Use windfall gains to put the general government debt ratio on an appropriate downward path. Complement the pension reform by linking the statutory retirement age to life expectancy. Agree on an enforceable distribution of fiscal targets among all government levels.

               2.

               Adopt and implement a comprehensive tax reform broadening the tax base, shifting the tax burden away from labour and removing inefficient tax expenditures.

               3.

               Improve the functioning of the labour market by reducing financial disincentives to work, increasing labour market access for specific target groups and addressing skills shortages and mismatches.

               4.

               Restore competitiveness by ensuring, in consultation with the social partners and in accordance with national practices, that wages evolve in line with productivity.

      Done at Brussels, 14 July 2015.

            For the Council

            The President

         P. GRAMEGNA

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  OJ L 306, 23.11.2011, p. 25.

      (3)  Maintained by Council Decision 2014/322/EU of 6 May 2014 on guidelines for the employment policies of the Member States for 2014 (OJ L 165, 4.6.2014, p. 49).

      (4)  Council Recommendation of 8 July 2014 on the National Reform Programme 2014 of Belgium and delivering a Council opinion on the Stability Programme of Belgium, 2014 (OJ C 247, 29.7.2014, p. 1).

      (5)  Regulation (EU) No 473/2013 of the European Parliament and of the Council of 21 May 2013 on common provisions for monitoring and assessing draft budgetary plans and ensuring the correction of excessive deficit of the Member States in the euro area (OJ L 140, 27.5.2013, p. 11).

      (6)  The structural balance as recalculated by the Commission based on the information in the Stability Programme, following the commonly agreed methodology.

      (7)  Under Article 5(2) of Regulation (EC) No 1466/97.

      (8)  OJ C 272, 18.8.2015, p. 98.


title: Commission Recommendation of 30 April 2009 on remuneration policies in the financial services sector (Text with EEA relevance)

text:
               15.5.2009

               EN

               Official Journal of the European Union

               L 120/22

      COMMISSION RECOMMENDATION

   of 30 April 2009
   on remuneration policies in the financial services sector
   (Text with EEA relevance)
   (2009/384/EC)
   THE COMMISSION OF THE EUROPEAN COMMUNITIES,
   Having regard to the Treaty establishing the European Community, and in particular the second indent of Article 211 thereof,
   Whereas:

               (1)

               Excessive risk-taking in the financial services industry and in particular in banks and investment firms has contributed to the failure of financial undertakings and to systemic problems in the Member States and globally. These problems have spread to the rest of the economy and led to high costs for society.

               (2)

               Whilst not the main cause of the financial crisis that unfolded in 2007 and 2008, there is a widespread consensus that inappropriate remuneration practices in the financial services industry also induced excessive risk-taking and thus contributed to significant losses of major financial undertakings.

               (3)

               Remuneration practices in a large part of the financial services industry have been running counter to effective and sound risk management. These practices tended to reward short-term profit and gave staff incentives to pursue unduly risky activities which provided higher income in the short term while exposing financial undertakings to higher potential losses in the longer term.

               (4)

               In principle, if risk management and control systems were strong and highly effective, the risk-taking incentives provided by remuneration practices would be consistent with the risk tolerance of a financial undertaking. However, all risk management and control systems have limitations and, as the financial crisis has shown, can fail to deal with the risks created by inappropriate incentives, due to the increasing complexity of the risks and the range of ways by which risk may be taken. Consequently, a simple functional separation between business units and staff responsible for risk management and control systems is necessary but no longer sufficient.

               (5)

               Creating appropriate incentives within the remuneration system itself should reduce the burden on risk management and increase the likelihood that these systems become effective. Therefore, there is a need to establish principles on sound remuneration policies.

               (6)

               Given the competitive pressures in the financial services industry and the fact that many financial undertakings operate cross-border, it is important to ensure that principles on sound remuneration policy are applied consistently throughout the Member States. However, it is acknowledged that to be more effective, principles on sound remuneration policy would need to be implemented globally and in a consistent manner.

               (7)

               In its Communication to the Spring European Council ‘Driving European Recovery’ (1), the Commission presented its plan to restore and maintain a stable and reliable financial system. In particular, the Communication announced that a new Recommendation on remuneration in the financial services sector would be presented in order to improve risk management in financial firms and align pay incentives with sustainable performance.

               (8)

               This Recommendation sets out general principles applicable to remuneration policy in the financial services sector and should apply to all financial undertakings operating in the financial services industry.

               (9)

               Those general principles may be of more relevance to certain categories of financial undertakings than others, in the light of existing regulations and common practices in the financial services industry. These principles should apply in parallel to any rule or regulation governing a specific financial sector. In particular, fees and commissions received by intermediaries and external service providers in case of outsourced activities should not be addressed, since the compensation practices relating to such fees and commissions are already partially covered by particular regimes, in particular Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments (2) and Directive 2002/92/EC of the European Parliament and of the Council of 9 December 2002 on insurance mediation (3). Furthermore, this Recommendation is without prejudice to the rights, where applicable, of social partners in collective bargaining.

               (10)

               With respect to financial undertakings whose securities are admitted to trading on a regulated market within the meaning of Directive 2004/39/EC in one or more Member States, this Recommendation apply in addition to and together with Commission Recommendation 2004/913/EC of 14 December 2004 fostering an appropriate regime for the remuneration of directors of listed companies (4) and Commission Recommendation 2009/385/EC of 30 April 2009 complementing Recommendations 2004/913/EC and 2005/162/EC as regards the regime for the remuneration of directors of listed companies (5).

               (11)

               The remuneration policy of a particular financial undertaking should also be linked to the size of the financial undertaking concerned, as well as the nature and the complexity of its activities.

               (12)

               A risk-focused remuneration policy, which is consistent with effective risk management and does not entail excessive risk exposure, should be adopted.

               (13)

               Remuneration policy should cover those categories of staff whose professional activities have a material impact on the risk profile of the financial undertaking. In order to avoid incentives for excessive risk-taking, special arrangements should be adopted with regard to the remuneration of these categories of staff.

               (14)

               Remuneration policy should aim at aligning the personal objectives of staff members with the long-term interests of the financial undertaking concerned. The assessment of the performance-based components of remuneration should be based on longer-term performance and take into account the outstanding risks associated with the performance. The assessment of performance should be set in a multi-year framework, for example of three to five years, in order to ensure that the assessment process is based on longer term performance and that the actual payment of performance-based components of remuneration is spread over the business cycle of the company.

               (15)

               Financial undertakings should be able to reclaim variable components of remuneration that were awarded for performance based on data which has subsequently proven to be manifestly misstated.

               (16)

               As a general principle, payments related to early termination of a contract which are awarded on a contractual basis should not be a reward for failure. For directors of listed financial undertakings, specific provisions on termination payments set out in Recommendation 2009/385/EC should apply.

               (17)

               In order for remuneration policy to be in line with the objectives, the business strategy, the values and the long-term interests of the financial institution, other factors, apart from financial performance, should be considered, such as compliance with systems and controls of the financial institution, as well as compliance with the standards governing the relationship with clients and investors.

               (18)

               Effective governance is a necessary condition for the remuneration policy to be sound. The decision-making process regarding the remuneration policy of a financial undertaking should be internally transparent and should be designed in such a way as to avoid conflicts of interest and ensure the independence of the persons involved.

               (19)

               The governing body of the financial undertaking should have the ultimate responsibility for establishing the remuneration policy for the whole financial undertaking and monitoring its implementation. In order to provide necessary expertise, control functions and, where appropriate, human resources departments and experts should be involved in the process. In particular, control functions should also be involved in the design and the review of the implementation of the remuneration policy, and should be adequately rewarded so as to attract skilled individuals and to ensure their independence from the business units they control. The statutory auditor, within the limits of current reporting duties, should report on material weaknesses in the review of the implementation of the remuneration policy to the (supervisory) board or to the audit committee.

               (20)

               Control of the design and implementation of the remuneration policy is more likely to be effective if the stakeholders of the financial undertaking, including, where applicable, employee representatives, are properly informed of and engaged in the process of setting up and monitoring remuneration policy. For that purpose, financial undertakings should disclose the relevant information to their stakeholders.

               (21)

               The implementation of the principles laid down in this Recommendation should be reinforced through supervisory review at the national level. Therefore, supervisor’s overall assessment of the soundness of the financial undertaking should include the assessment of compliance of the remuneration policy of the financial undertaking with the principles laid down in this Recommendation.

               (22)

               Member States should ensure that branches of financial undertakings having their registered office or their head office in a third country and which operate in the territory of a Member State should be subject to similar principles on remuneration policy which apply to financial undertakings having their registered office or their head office in the territory of a Member State.

               (23)

               This Recommendation should apply without prejudice to measures which might be adopted by Member States with respect to remuneration policies of financial undertakings which benefit from State assistance.

               (24)

               The notification of measures by Member States in accordance with this Recommendation should include a clear timeframe for financial undertakings to adopt remuneration policies consistent with the principles set out in this Recommendation,

         HEREBY RECOMMENDS:

      SECTION I

      Scope and definitions

   1.   Scope

               1.1.

               Member States should ensure that the principles contained in sections II, III and IV apply to all financial undertakings having their registered office or their head office in their territory.

               1.2.

               Member States should ensure that the principles contained in sections II, III and IV apply to the remuneration of those categories of staff whose professional activities have a material impact on the risk profile of the financial undertaking.

               1.3.

               When taking measures to ensure that financial undertakings implement those principles, Member States should take into account the nature, the size as well as the specific scope of activities of the financial undertakings concerned.

               1.4.

               Member States should apply the principles contained in sections II, III and IV to financial undertakings on an individual basis and on a consolidated basis. Principles on sound remuneration policy should apply at group level to the parent undertaking and to its subsidiaries, including those established in offshore financial centres.

               1.5.

               This Recommendation does not apply to fees and commissions received by intermediaries and external service providers in case of outsourced activities.

         2.   Definitions for the purposes of this Recommendation

               2.1.

               ‘Financial undertaking’ means any undertaking, irrespective of its legal status, whether regulated or not, which performs any of the following activities on a professional basis:

                           (a)

                           it accepts deposits and other repayable funds;

                           (b)

                           it provides investment services and/or performs investment activities within the meaning of Directive 2004/39/EC;

                           (c)

                           it is involved in insurance or reinsurance business;

                           (d)

                           it performs business activities similar to those set out in points (a), (b) or (c).

                     A financial undertaking includes, but is not limited to, credit institutions, investment firms, insurance and reinsurance undertakings, pension funds and collective investment schemes.

               2.2.

               ‘Director’ means any member of the administrative, managerial or supervisory bodies of financial undertakings.

               2.3.

               ‘Control functions’ means risk management, internal control and similar functions within a financial undertaking.

               2.4.

               ‘Variable component of remuneration’ means a component of remuneration entitlement which is awarded on the basis of performance criteria, including bonuses.

      SECTION II

      Remuneration policy

   3.   General

               3.1.

               Member States should ensure that financial undertakings establish, implement and maintain a remuneration policy which is consistent with and promotes sound and effective risk management and which does not induce excessive risk-taking.

               3.2.

               Remuneration policy should be in line with the business strategy, objectives, values and long-term interests of the financial undertaking, such as sustainable growth prospects, and be consistent with the principles relating to the protection of clients and investors in the course of services provided.

         4.   Structure of the remuneration policy

               4.1.

               Where remuneration includes a variable component or a bonus, remuneration policy should be structured with an appropriate balance of fixed and variable remuneration components. The appropriate balance of remuneration components may vary across staff members, according to market conditions and the specific context in which the financial undertaking operates. Member States should ensure that remuneration policy of a financial undertaking sets a maximum limit on the variable component.

               4.2.

               The fixed component of the remuneration should represent a sufficiently high proportion of the total remuneration allowing the financial undertaking to operate a fully flexible bonus policy. In particular, the financial undertaking should be able to withhold bonuses entirely or partly when performance criteria are not met by the individual concerned, the business unit concerned or the financial undertaking. The financial undertaking should also be able to withhold bonuses where its situation deteriorates significantly, in particular where it can no longer be presumed that it can or will continue to be able to carry out its business as a going concern.

               4.3.

               Where a significant bonus is awarded, the major part of the bonus should be deferred with a minimum deferment period. The amount of the deferred part of the bonus should be determined in relation to the total amount of the bonus as compared to the total amount of the remuneration.

               4.4.

               The deferred element of the bonus should take into account the outstanding risks associated with the performance to which the bonus relates and may consist of equity, options, cash, or other funds the payment of which is postponed for the duration of the deferment period. The measures of future performance to which the deferred element is linked should be risk adjusted as set out in point 5.

               4.5.

               Payments related to the early termination of a contract which are awarded on a contractual basis, should be related to performance achieved over time and designed in a way that does not reward failure.

               4.6.

               Member States should ensure that the (supervisory) board of a financial undertaking can require staff members to repay all or part of bonuses that have been awarded for performance based on data which has subsequently proven to be manifestly misstated.

               4.7.

               The structure of the remuneration policy should be updated over time to ensure that it evolves to meet the changing situation of the financial undertaking concerned.

         5.   Performance measurement

               5.1.

               Where remuneration is performance related, its total amount should be based on a combination of the assessment of the performance of the individual and of the business unit concerned and of the overall results of the financial undertaking.

               5.2.

               The assessment of performance should be set in a multi-year framework in order to ensure that the assessment process is based on longer term performance and that the actual payment of bonuses is spread over the business cycle of the company.

               5.3.

               The measurement of performance, as a basis for bonus or bonus pools, should include an adjustment for current and future risks related to the underlying performance and should take into account the cost of the capital employed and the liquidity required.

               5.4.

               When determining individual performance, non-financial criteria, such as compliance with internal rules and procedures, as well as compliance with the standards governing the relationship with clients and investors should be taken into account.

         6.   Governance

               6.1.

               The remuneration policy should include measures to avoid conflicts of interest. The procedures for determining remuneration within the financial undertaking should be clear and documented and should be internally transparent.

               6.2.

               The (supervisory) board should determine the remuneration of directors. In addition, the (supervisory) board should establish the general principles of the remuneration policy of the financial undertaking and be responsible for its implementation.

               6.3.

               Control functions and, where appropriate, human resources departments and external experts should also be involved in the design of the remuneration policy.

               6.4.

               Members of the (supervisory) board responsible for remuneration policy and members of the remuneration committees and staff members who are involved in the design and implementation of the remuneration policy should have relevant expertise and functional independence from the business units they control and thus be capable of forming an independent judgement on the suitability of the remuneration policy, including the implications for risk and risk management.

               6.5.

               Without prejudice to the overall responsibility of the (supervisory) board as set out in point 6.2, the implementation of the remuneration policy should, at least on an annual basis, be subject to central and independent internal review by control functions for compliance with policies and procedures defined by the (supervisory) board. The control functions should report on the outcome of this review to the (supervisory) board.

               6.6.

               Staff members engaged in control processes should be independent from the business units they oversee, have appropriate authority, and be compensated in accordance with the achievement of the objectives linked to their functions, independent of the performance of the business areas they control. In particular, with regard to insurance or reinsurance undertakings, the actuarial function and the responsible actuary should be remunerated in a manner commensurate with her or his role in the insurance or reinsurance undertaking and not in relation to the performance of the undertaking concerned.

               6.7.

               The general principles of the remuneration policy should be accessible to staff members to whom they apply. Those staff members should be informed in advance of the criteria that will be used to determine their remuneration and of the appraisal process. The appraisal process and the remuneration policy should be properly documented and transparent to the individual staff members concerned.

      SECTION III

      Disclosure

               7.

               Without prejudice to confidentiality and data protection provisions, relevant information on the remuneration policy referred to in section II and any updates in case of policy changes should be disclosed by the financial undertaking in a clear and easily understandable way to relevant stakeholders. Such disclosure may take the form of an independent remuneration policy statement, a periodic disclosure in annual financial statements or any other form.

               8.

               The following information should be disclosed:

                           (a)

                           information concerning the decision-making process used for determining the remuneration policy, including if applicable, information about the composition and the mandate of a remuneration committee, the name of the external consultant whose services have been used for the determination of the remuneration policy and the role of the relevant stakeholders;

                           (b)

                           information on linkage between pay and performance;

                           (c)

                           information on the criteria used for performance measurement and the risk adjustment;

                           (d)

                           information on the performance criteria on which the entitlement to shares, options or variable components of remuneration is based;

                           (e)

                           the main parameters and rationale for any annual bonus scheme and any other non-cash benefits.

               9.

               When determining the level of the information which should be disclosed, Member States should take into account the nature, the size as well as the specific scope of activities of the financial undertakings concerned.

      SECTION IV

      Supervision

               10.

               Member States should ensure that competent authorities take into account the size of the financial undertaking and the nature and the complexity of its activities when monitoring whether the principles contained in sections II and III are followed.

               11.

               Member States should ensure that financial undertakings are in a position to communicate the remuneration policy covered by this Recommendation to their competent authorities, including an indication of compliance with the principles set out in this Recommendation, in the form of a remuneration policy statement subject to appropriate updates.

               12.

               Member States should ensure that competent authorities may request and have access to all information they need to evaluate the extent to which the principles contained in sections II and III are followed.

      SECTION V

      Final provisions

               13.

               Member States are invited to take the necessary measures to promote the application of this Recommendation by 31 December 2009 and to notify the Commission of the measures taken in accordance with this Recommendation, in order to enable the Commission to monitor closely the situation and, on that basis, to assess the need for further measures.

               14.

               This Recommendation is addressed to the Member States.

      Done at Brussels, 30 April 2009.

            For the Commission

         Siim KALLAS

            Vice-President

      (1)  COM(2009) 114.

      (2)  OJ L 145, 30.4.2004, p. 1.

      (3)  OJ L 9, 15.1.2003, p. 3.

      (4)  OJ L 385, 29.12.2004, p. 55.

      (5)  See page 28 of this Official Journal.