title: Council Recommendation of 9 July 2013 on the National Reform Programme 2013 of Germany and delivering a Council opinion on the Stability Programme of Germany, 2012-2017

text:
               30.7.2013

               EN

               Official Journal of the European Union

               C 217/33

      COUNCIL RECOMMENDATION

   of 9 July 2013
   on the National Reform Programme 2013 of Germany and delivering a Council opinion on the Stability Programme of Germany, 2012-2017
   2013/C 217/09
   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 the recommendation of the European Commission,
   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 jobs and growth, Europe 2020, based on enhanced coordination of economic policies, which focuses on the key areas where action is needed to boost Europe’s potential for sustainable growth and competitiveness.

               (2)

               On 13 July 2010, the Council adopted a recommendation on the broad guidelines for the economic policies of the Member States and the Union (2010 to 2014) and, on 21 October 2010, it adopted a decision on guidelines for the employment policies of the Member States (2), which together form the ‘integrated guidelines’. Member States were invited to take the integrated guidelines into account in their national economic and employment policies.

               (3)

               On 29 June 2012, the Member States’ Heads of State or Government decided on a Compact for Growth and Jobs, providing a coherent framework for action at national, EU and euro area levels using all possible levers, instruments and policies. They decided on action to be taken at the level of the Member States, in particular expressing full commitment to achieving the objectives of the Europe 2020 strategy and to implementing the country-specific recommendations.

               (4)

               On 10 July 2012, the Council adopted a Recommendation (3) on Germany’s National Reform Programme for 2012 and delivered its opinion on Germany’s Stability Programme for 2012-2016.

               (5)

               On 28 November 2012, the Commission adopted the Annual Growth Survey, marking the start of the 2013 European Semester of economic policy coordination. Also on 28 November 2012, the Commission, on the basis of 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 (4), adopted the second Alert Mechanism Report, in which Germany was not identified as one of the Member States for which an in-depth review would be carried out.

               (6)

               The European Parliament has been duly involved in the European Semester, in accordance with Regulation (EC) No 1466/97, and, on 7 February 2013, adopted a resolution on employment and social aspects in the Annual Growth Survey 2013 and a resolution on the contribution to the Annual Growth Survey 2013.

               (7)

               On 14 March 2013, the European Council endorsed the priorities for ensuring financial stability, fiscal consolidation and action to foster growth. It underscored the need to pursue differentiated, growth-friendly fiscal consolidation, to restore normal lending conditions to the economy, to promote growth and competitiveness, to tackle unemployment and the social consequences of the crisis, and to modernise public administration.

               (8)

               On 12 April 2013, Germany submitted its 2013 National Reform Programme and, on 17 April 2013, its Stability Programme for the period 2012-2017. In order to take account of their interlinkages, the two Programmes have been assessed at the same time.

               (9)

               Based on the assessment of the Stability Programme pursuant to Regulation (EC) No 1466/97, the Council is of the opinion that public finances in Germany have been overall sound and the medium-term budgetary objective (MTO) has been achieved. The macroeconomic scenario underpinning the budgetary projections in the Programme is plausible. The Stability Programme’s macroeconomic projections are broadly in line with the Commission services 2013 spring forecast as regards the pace and pattern of economic growth in 2013 and 2014 as well as with the Commission’s estimate of Germany’s medium-term potential growth rate. The objective of the budgetary strategy outlined in the Stability Programme is to ensure continued achievement of the MTO. The Stability Programme confirms the previous MTO of -0,5 % of GDP. The MTO is in line with the requirements of the Stability and Growth Pact. Germany achieved a structural budgetary surplus and, hence, the MTO in 2012. According to the Stability Programme, the (recalculated) (5) structural balance will remain positive in 2013 and 2014, which is broadly in line with the Commission services 2013 spring forecast and has, consequently, created space for automatic stabilisers to play freely. Germany also complied with the expenditure benchmark of the Stability and Growth Pact in 2012. According to the information provided in the Stability Programme, the growth rate of government expenditure, net of discretionary revenue measures, would exceed the expenditure benchmark in 2013 while respecting it in 2014. According to the Stability Programme, gross debt is planned to fall to 80½ % of GDP in 2013 and to remain on a downward path thereafter.
               Following the correction of the excessive deficit in 2011, Germany is in a transitional period regarding compliance with the debt criterion and made sufficient progress towards compliance with the debt criterion in 2012. If the Stability Programme is implemented as planned, it is also making sufficient progress towards compliance with the debt criterion in 2013 and the debt benchmark will be met at the end of the transitional period in 2014. Overall, the deficit and debt targets appear realistic.

               (10)

               Germany has made only limited efforts to improve the efficiency of public spending on healthcare and long-term care. Past reform efforts in the health sector as well as this year’s reform of long-term care appear insufficient to contain expected future cost increases. Germany appears on track with respect to the national target on education and research expenditure but should envisage even more ambitious follow-up targets with a view to catching up with the most innovative economies.

               (11)

               Germany is not sufficiently tapping growth-friendly revenue sources. The application of the reduced VAT rate, currently at 7 %, to what is now quite a wide range of goods and services could be narrowed and VAT administration reviewed in an effort to increase efficiency, improve tax collection and fight fraud. Revenues from recurrent property taxes are particularly low in Germany, standing at 0,5 % of GDP in 2011 as opposed to 1,3 % in the EU-27. This may leave room for increasing revenues from the municipal real estate tax (Grundsteuer), in particular by reassessing the tax base.

               (12)

               There has been some progress in the implementation of the constitutional balanced-budget rule (debt brake) since last year’s Recommendation. However, specific implementing rules appear still to be required in most Länder so as to ensure the effective application of the debt brake in the annual budgetary procedure.

               (13)

               The financial sector has undergone significant adjustment and the regulatory and supervisory framework has been strengthened. Commission state aid decisions have continued to drive the restructuring of Landesbanken. However, there still appear to be governance obstacles to market-driven consolidation in the banking sector, which affect the overall efficiency of the financial sector.

               (14)

               Germany has taken only limited action to remove significant disincentives faced by second earners and the availability of full time childcare facilities and all-day schools should be further increased. Germany has made some progress in raising the educational achievement of disadvantaged people, but all Länder should continue pursuing ambitious efforts to create a school system that provides equal opportunities for all. Policy action to reduce the high tax wedge for low-wage earners has been limited so far. Measures to integrate the long-term unemployed into the labour market should be enhanced. Germany should do more to reduce the high taxes and social security contributions levied on low wages. Further efforts are needed to improve transition from certain types of contracts, such as mini-jobs, into more sustainable forms of contracts, thus avoiding labour-market segmentation. While real wages are still below their level in the year 2000, which contributed to the structural reduction in the unemployment rate from 8 % to 5,5 %, they have started to grow dynamically since then, without adversely affecting competitiveness. At the same time, wage disparities have increased.

               (15)

               Germany is aiming at minimising the overall economic costs of transforming the energy system. This has led to some first results but overall costs have continued to increase and major risks and potential inefficiencies remain. Germany is making significant efforts to accelerate the expansion of energy networks. Coordination of its national energy policy with the policies of neighbouring countries is insufficient.

               (16)

               The situation in the services sectors has not changed significantly since 2012 and there are still restrictions on entering and exercising certain professions. Germany should do more to open up the services sectors by removing unjustified restrictions and barriers to entry, thereby leading to lower price levels and more affordable services for lower income groups. In many craft sectors, including in the construction sector, there is still a requirement to hold a master craftsman’s certificate (Meisterbrief) or an equivalent qualification in order to run a business. The construction sector also faces restrictions as regards commercial communication and authorisation procedures. Many professional services are also subject to legal form and shareholding requirements. Germany could assess whether the same public interest objectives could not be reached with lighter regulation. The diversity of regulatory regimes across Länder also suggests there is scope for further efforts to identify the least burdensome regulatory approaches and extend them throughout the country, thus cutting red tape for businesses. The level of effective competition in the railway sector remains low. Regarding public procurement, the value of the contracts published by German authorities under Union procurement law is significantly low. The legislative process involving the revision of the Act against Competition Restrictions has not yet been concluded. In the retail sector, planning regulations significantly restrict new entries in the market.

               (17)

               In the context of the European Semester, the Commission has carried out a comprehensive analysis of Germany’s economic policy. It has assessed the National Reform Programme and the Stability Programme. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Germany, but also their compliance with EU rules and guidance, given the need to reinforce the overall economic governance of the Union by providing EU-level input into future national decisions. Its recommendations under the European Semester are reflected in recommendations (1) to (4) below.

               (18)

               In the light of this assessment, the Council has examined the Stability Programme, and its opinion (6) is reflected in particular in recommendation (1) below.

               (19)

               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 this basis, the Council has issued specific recommendations addressed to the Member States whose currency is the euro (7). As a country whose currency is the euro, Germany should also ensure the full and timely implementation of those recommendations,

         HEREBY RECOMMENDS that Germany take action within the period 2013-2014 to:

               1.

               Preserve a sound fiscal position, as envisaged, which ensures compliance with the MTO over the Programme horizon. Pursue a growth-friendly fiscal policy through additional efforts to enhance the cost-effectiveness of public spending on healthcare and long-term care through better integration of care delivery and a stronger focus on prevention and rehabilitation and independent living. Improve the efficiency of the tax system, in particular by broadening the VAT base and by reassessing the municipal real estate tax base. Use the available scope for increased and more efficient growth-enhancing spending on education and research at all levels of government. Complete the implementation of the debt brake in a consistent manner across all Länder, ensuring that monitoring procedures and correction mechanisms are timely and relevant.

               2.

               Sustain conditions that enable wage growth to support domestic demand. To this end, reduce high taxes and social security contributions, especially for low-wage earners and raise the educational achievement of disadvantaged people. Maintain appropriate activation and integration measures, especially for the long-term unemployed. Facilitate the transition from non-standard employment such as mini-jobs into more sustainable forms of employment. Take measures to improve incentives to work and the employability of workers, in particular for second earners and low-skilled workers, also with a view to improving their income. To this end, remove disincentives for second earners and further increase the availability of full time childcare facilities and all-day schools.

               3.

               Improve the coordination of its energy policy with neighbouring countries and keep the overall costs of transforming the energy system to a minimum, in particular, by further reviewing the cost-effectiveness of energy policy instruments designed to achieve renewable energy targets and by continuing efforts to accelerate the expansion of the national and cross-border electricity and gas networks.

               4.

               Take measures to further stimulate competition in the services sectors, including certain crafts, in particular in the construction sector, and professional services to boost domestic sources of growth. Take urgent action to significantly increase the value of public contracts open to procurement. Adopt and implement the announced legislative reform to improve the enforcement of competition law regarding competition restrictions. Remove planning restrictions which unduly restrict new entries in the retail sector. Take further measures to eliminate the remaining barriers to competition in the railway markets. Pursue efforts for consolidation in the banking sector, including by improving the governance framework.

      Done at Brussels, 9 July 2013.

            For the Council

            The President

         R. ŠADŽIUS

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  Maintained for 2013 by Council Decision 2013/208/EU of 22 April 2013 on guidelines for the employment policies of the Member States (OJ L 118, 30.4.2013, p. 21).

      (3)  OJ C 219, 24.7.2012, p. 35.

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

      (5)  Cyclically adjusted balance net of one-off and temporary measures, recalculated by the Commission services on the basis of the information provided in the Programme, using the commonly agreed methodology.

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

      (7)  See page 97 of the current Official Journal.


title: Council Recommendation of 8 March 2005 concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Fund (Ninth EDF) for the financial year 2005

text:
               23.3.2005

               EN

               Official Journal of the European Union

               L 77/11

         COUNCIL RECOMMENDATION
   of 8 March 2005
   concerning the discharge to be given to the Commission in respect of the implementation of the operations of the European Development Fund (Ninth EDF) for the financial year 2005
   (2005/253/EC)
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty establishing the European Community,
   Having regard to the ACP-EC Partnership Agreement, signed in Cotonou on 23 June 2000 (1),
   Having regard to the Internal Agreement on the financing and administration of Community aid under the Financial Protocol to the ACP-EC Partnership Agreement (2) setting up, amongst others, the Ninth European Development Fund (Ninth EDF), and in particular Article 32(3) of that Agreement,
   Having regard to the Financial Regulation of 27 March 2003 applicable to the Ninth European Development Fund (3), and in particular Articles 96 to 103 thereof,
   Having examined the revenue and expenditure account and the balance sheet relating to the operations of the Ninth EDF as at 31 December 2003 and the Court of Auditors’ Report concerning the financial year 2003 together with the Commission’s replies (4),
   Whereas:

               (1)

               Pursuant to Article 32(3) of the said Internal Agreement, the discharge for the financial management of the Ninth EDF is to be given to the Commission by the European Parliament on the recommendation of the Council.

               (2)

               The overall implementation by the Commission of the operations of the Ninth EDF during the financial year 2003 has been satisfactory,

         HEREBY RECOMMENDS
   that the European Parliament give the Commission a discharge in respect of the implementation of the operations of the Ninth EDF for the financial year 2003.

      Done at Brussels, 8 March 2005.

            For the Council

            The President

         J.-C. JUNCKER

      (1)  OJ L 317, 15.12.2000, p. 3.

      (2)  OJ L 317, 15.12.2000, p. 355.

      (3)  OJ L 83, 1.4.2003, p. 1.

      (4)  OJ C 293, 30.11.2004, p. 315.


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

text:
               18.8.2015

               EN

               Official Journal of the European Union

               C 272/36

         COUNCIL RECOMMENDATION
   of 14 July 2015
   on the 2015 National Reform Programme of Denmark and delivering a Council opinion on the 2015 Convergence Programme of Denmark
   (2015/C 272/10)
   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 9(2) 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 (2). 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 (3) on Denmark's National Reform Programme for 2014 and delivered its opinion on Denmark's updated Convergence Programme for 2014.

               (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 of the European Parliament and of the Council (4), the Commission adopted the Alert Mechanism Report, in which Denmark was not 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 Denmark. This assessed Denmark's progress in addressing the country-specific recommendations adopted on 8 July 2014.

               (7)

               On 27 March 2015, Denmark submitted its 2015 National Reform Programme and its 2015 Convergence Programme. In order to take account of their interlinkages, the two programmes have been assessed at the same time.

               (8)

               Denmark is currently in the preventive arm of the Stability and Growth Pact. In its 2015 Convergence Programme, the Government plans a widening of the headline deficit from 1,6 % of GDP in 2015 — when it was supported by considerable windfall gains — to 2,6 % of GDP in 2016. Thereafter, the Government also plans to reduce the deficit so as to reach a balanced budget in 2020. According to the Convergence Programme, the Government plans to meet the medium-term objective — a structural deficit of 0,5 % of GDP — from 2016 onwards. According to the Convergence Programme, the government debt-to-GDP ratio is expected to decline gradually from 39,8 % in 2015 to 36,7 % in 2020. The macroeconomic scenario underpinning these budgetary projections is plausible. Based on the Commission's 2015 spring forecast, the structural balance is expected to comply with the medium-term objective in 2015. However, based on this forecast there is a risk of some deviation from the medium-term objective in 2016, with an excess of 0,3 % of GDP of net expenditure growth over the benchmark. While this deviation is expected to be temporary as growth in net expenditure in 2016 is influenced by the phasing out of one-off measures related to the taxation of pension savings, further measures may be necessary for 2016. Based on its assessment of the Convergence Programme and taking into account the Commission's 2015 spring forecast, the Council is of the opinion that Denmark is expected to broadly comply with the provisions of the Stability and Growth Pact.

               (9)

               An adequately skilled long-term labour supply is a precondition for sustainable growth in Denmark. With the 2014 active labour market policy reform, Denmark has made progress on improving the employability of people at the margins of the labour market. The reform is at an early stage of implementation and its results need to be monitored. Additional measures for those most excluded from the labour market are still needed, in line with the Carsten-Koch II expert group recommendations. Low educational attainment, limited labour market experience, youth and migrant background appear to be key factors in this respect. In general, the labour market potential of people from migrant backgrounds remains underutilised. Despite the high expenditure on education in Denmark, educational outcomes are only average, in particular for pupils from migrant backgrounds. The reform of the primary and lower secondary school system and the vocational education and training system aims to address this challenge. Full implementation of these reforms is needed in order to improve educational outcomes.

               (10)

               Improved competitiveness is essential to strengthen economic recovery in Denmark. Productivity growth, which is vital in this regard, has generally been weak over the past two decades and has been affected by barriers to entry and regulatory burden in services sectors oriented to the domestic market. The Productivity Commission has identified the construction and retail sectors as areas in which productivity could be improved. Retail establishment regulations are very strict and no action has been taken to ease them. The construction sector is characterised by demanding building regulations and a large number of certification schemes. The Government presented a strategy on construction in November 2014. This sets out good intentions, such as the simplification of rules, the streamlining of technical elements of building applications, the introduction of international standards, the harmonisation of national standards, and the reduction of time taken to issue building permits. However, the strategy has yet to be entirely translated into concrete measures. There are still overlapping authorisation and certification schemes, which in some cases also apply to the temporary provision of cross-border services. Furthermore, authorisations and certifications issued in other Member States are not always taken into account when service providers want to establish their business in Denmark.

               (11)

               In the context of the European Semester, the Commission has carried out a comprehensive analysis of Denmark's economic policy and published it in the 2015 country report. It has also assessed the Convergence Programme and the National Reform Programme and the follow-up given to the recommendations addressed to Denmark in previous years. It has taken into account not only their relevance for sustainable fiscal and socioeconomic policy in Denmark 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 (2) below.

               (12)

               In the light of this assessment, the Council has examined the Convergence Programme and its opinion (5) is reflected in particular in recommendation (1) below,

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

               1.

               Avoid deviating from the medium-term budgetary objective in 2016.

               2.

               Enhance productivity, in particular in the services sectors oriented towards the domestic market, including retail and construction. Ease the restrictions on retail establishments and take further measures to remove remaining barriers posed by authorisation and certification schemes in the construction sector.

      Done at Brussels, 14 July 2015.

            For the Council

            The President

         P. GRAMEGNA

      (1)  OJ L 209, 2.8.1997, p. 1.

      (2)  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).

      (3)  Council Recommendation of 8 July 2014 on the National Reform Programme 2014 of Denmark and delivering a Council opinion on the Convergence Programme of Denmark, 2014 (OJ C 247, 29.7.2014, p. 17).

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

      (5)  Under Article 9(2) of Regulation (EC) No 1466/97.


				|

		52012DC0320

			Recommendation for a COUNCIL RECOMMENDATION on Latvia’s 2012 national reform programme and delivering a Council opinion on Latvia’s convergence programme for 2012-2015 /* COM/2012/0320 final  */

			   	Recommendation for a
COUNCIL RECOMMENDATION
on Latvia’s 2012 national reform programme
and delivering a Council opinion on Latvia’s convergence programme for
2012-2015
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 the recommendation of the
European Commission[2],
Having regard to the resolutions of the
European Parliament[3],
Having regard to the conclusions of the
European Council,
Having regard to the opinion of the
Employment Committee,
After consulting the Economic and Financial
Committee,
Whereas:
(1)       On 26 March 2010, the
European Council agreed to the European Commission’s proposal to launch a new
strategy for jobs and growth, Europe 2020, based on enhanced coordination of
economic policies, which will focus on the key areas where action is needed to
boost Europe’s potential for sustainable growth and competitiveness.
(2)       On 13 July 2010, the
Council adopted a recommendation on the broad guidelines for the economic
policies of the Member States and the Union (2010 to 2014) and, on 21 October
2010, adopted a decision on guidelines for the employment policies of the
Member States[4],
which together form the ‘integrated guidelines’. Member States were invited to
take the integrated guidelines into account in their national economic and
employment policies.
(3)       On 12 July 2011, the
Council adopted a recommendation on Latvia’s national reform programme for 2011
and delivered its opinion on Latvia’s updated convergence programme for 2011-2014.
(4)       On 23 November 2011, the
Commission adopted the second Annual Growth Survey, marking the start of the
second European Semester of ex-ante and integrated policy coordination, which
is anchored in the Europe 2020 strategy. On 14 February 2012, the Commission,
on the basis of Regulation (EU) No 1176/2011, adopted the Alert Mechanism Report[5], in which it did not identify
Latvia as one of the Member States for which an in-depth review would be
carried out.
(5)       Latvia has met most of the
conditions related to the financial assistance programme in 2011. The
Commission completed the fifth and final review under Latvia's
balance-of-payments programme on 21 December 2011 with an overall positive
assessment on the government's progress in budgetary, financial and structural
reforms. The programme expired in January 2012. Following the expiration of the
programme, Latvia is subject to post-programme surveillance. This surveillance
forms an integral part of the existing procedures and surveillance mechanisms
and it aims at close monitoring of risks that could jeopardise macro-economic
stability and hence affect the repayment capacity. The post-programme
surveillance will continue until the repayment of a large fraction (about 70%) of
loans.
(6)       On 2 March 2012, the
European Council endorsed the priorities for ensuring financial stability,
fiscal consolidation and action to foster growth. It underscored the need to
pursue differentiated, growth-friendly fiscal consolidation, to restore normal
lending conditions to the economy, to promote growth and competitiveness, to
tackle unemployment and the social consequences of the crisis, and to modernise
public administration.
(7)       On
2 March 2012, the European Council also invited the Member States participating
in the Euro Plus Pact to present their commitments in time for inclusion in
their stability or convergence programmes and their national reform programmes.
(8)       On 30 April 2012, Latvia
submitted its 2012 convergence programme covering the period 2012-2015 and its
2012 national reform programme. In order to take account of their
interlinkages, the two programmes have been assessed at the same time.
(9)       Based on the assessment of
the 2012 convergence programme pursuant to Council Regulation (EC) No 1466/97,
the Council is of the opinion that the macroeconomic scenario underpinning the
budgetary projections is cautious in 2012, taking into account the latest
available information, and plausible in 2013. While macroeconomic projections for
2012 in the programme scenario are very close to those in the Commission's
spring 2012 forecast (with GDP growth projections respectively at 2.0% and 2.2%),
recent economic data indicates that the outturn may be higher. The objective of
the budgetary strategy outlined in the programme is to correct an excessive
deficit by 2012 and to approach the medium-term budgetary objective (MTO) by
the end of the programme period. The 2012 convergence programme has changed the
medium-term objective from -1.0% to -0.5% of GDP; the new MTO adequately
reflects the requirements of the Stability and Growth Pact. The planned
headline deficit in 2012 complies with the deadline for correction of the
excessive deficit established in Council Recommendation of 7 July 2009. For 2013,
the programme targets a headline deficit of 1.4% of GDP, although the planned
expenditure reduction is not yet fully supported by measures. Based on the
(recalculated) structural budget balance[6],
Latvia will approach its MTO by the end of the programme period in 2015. While
the recalculated information suggests that progress towards the MTO is less
than 0.5% of GDP in structural terms in outer years of the programme, planned
expenditure restraint would ensure that the growth rate of government expenditure,
taking into account discretionary revenue measures, would be in line with the expenditure
benchmark of the Stability and Growth Pact. At the same time, possible tax
changes from the second half of 2012, which are not yet reflected in the
programme scenario but acknowledged in the letter accompanying the submission
of the 2012 convergence programme represent a risk to the attainment of targets
in 2013 and beyond. The general government debt ratio is below 60% of GDP,
increasing from 42.6% of GDP in 2011 to 46.7% of GDP in 2014, as the
authorities pre-fund large repayments related to the international financial
assistance programme that are due in 2014-2015, and falling to 38.9% in 2015 as
these repayments are made.
(10)     Latvia should pursue the
strategy of shifting taxation from labour to taxation of consumption, property,
and the use of natural and other resources, while improving the structural
balance. The relatively high tax burden on low-wage earners and the high level
of undeclared work indicate the need for appropriate labour-market policies, a review
of the tax and benefit system and increased efforts to tackle the shadow economy.
Environmental taxes remain relatively underdeveloped and are heavily dominated
by motor-fuel taxation, while taxation on other energy sources, pollution and the
use of natural resources is below the EU average. Further broadening the tax
base to other sources of environmental taxation, in particular pollution, as
well as more broad-based taxation of energy sources, would help in achieving
environmental goals while providing room for a tax shift away from the taxation
of labour.
(11)     In the process of the
on-going reform of fiscal governance, Latvia is invited to ensure adoption of
the Fiscal Discipline Law by the Parliament and to develop a medium term
budgetary framework law to support the long-term sustainability of public
finances. The adoption of the Fiscal Discipline Law will be in line with the
commitments by the Latvian government under the balance-of-payments programme;
the draft law adopted by the government also seeks to implement the evolving EU
acquis in the area of fiscal governance into Latvian legislation. When adopted
and implemented, the new law would considerably strengthen the fiscal framework
in Latvia, which currently lacks an effective mechanism to limit expenditure
growth in good economic times.
(12)     So as to ensure the
continuity of the pension reform, Latvia should restore contributions to the
mandatory funded private pension scheme at 6% of gross wages in 2013, from the
current reduced level of 2% of gross wages.
(13)     Latvia needs to strengthen
and reform the social assistance system and tackle one of the highest
unemployment rates in the EU. The challenge of youth unemployment became
especially evident during the crisis, revealing also high skills mismatches.
Special active labour market policies targeted at young people have been
designed and implemented including vocational training, volunteer work and wage
subsidies for young people. However, given the scale of the problem, these
limited activities have a relatively small impact.
(14)     In 2011, 40% of the Latvian
population is facing the risk of poverty which has implications for the
employability of the workforce and future growth prospects. Latvia adopted an
Emergency Social Safety Net Strategy. Government policies to reduce poverty are
concentrated on the reduction of income inequality, reduced tax burden for
working families and increased access to the labour market. Nevertheless,
Latvia spends relatively little on social protection and social transfers have
only a low impact on poverty reduction, as a large share of social transfers is
redistributed back to middle and high income earners. Spending on means tested
benefits is low, while the role of social safety net is partly fulfilled by
temporary low-paid public jobs. The design of social assistance benefits also
contains poverty and unemployment traps and there are abuses of the system.
Large inequality exists in access to social assistance across local governments
and poor transparency complicates evidence-based decision making. The
challenges of long term unemployment and of youth unemployment became
especially evident during the crisis. Most of the young unemployed do not
possess professional qualifications. The number of young people not in
employment, education or training (NEET's) is relatively high. Measures should
be taken in line with the outcome of the Latvian - Commission joint action team
on youth unemployment
(15)     Latvia should further improve
energy efficiency and promote competition in major energy networks, while
improving connectivity with EU energy networks. The tax system does not provide
sufficient incentives for reducing energy costs and shifting consumption and
investment towards energy efficient products (transport vehicles, insulation of
buildings, heating systems). Energy markets in Latvia remain dominated by
monopolies. For historical reasons, the gas and electricity markets are largely
separated from other EU member states.
(16)     Inefficiencies in the civil
justice system have a negative impact on business and the economic environment,
as the risk and cost of doing business increases. There is a large backlog of
proceedings in the first and second instance courts in civil and commercial
cases, especially as regards contractual obligations and insolvencies. The professional
performance of judges should be evaluated. Further improvements in the
insolvency law regime are warranted.
(17)     Despite the relatively high
educational attainment, a significant share of the workforce does not possess
professional qualifications and has limited access to higher education.
Universities perform poorly in worldwide rankings and are characterized by low
international competitiveness and weak governance. Low cooperation among
universities, research institutions, and businesses affects the very low
innovation performance. A systematic and effective research and innovation
strategy is lacking. Latvia also has the lowest business R&D expenditure in
the EU.
(18)     Latvia has made a number of
commitments under the Euro Plus Pact. These commitments, and the implementation
of the commitments presented in 2011, relate to fostering employment, improving
competitiveness, enhancing sustainability of public finances and reinforcing
financial stability. The Commission has assessed the implementation of the Euro
Plus Pact commitments. The results of this assessment have been taken into
account in the recommendations.
(19)     In the context of the
European Semester, the Commission has carried out a comprehensive analysis of
Latvia’s economic policy. It has assessed the convergence programme and
national reform programme. It has taken into account not only their relevance
for sustainable fiscal and socio-economic policy in Latvia but also their
compliance with EU rules and guidance, given the need to reinforce the overall
economic governance of the European Union by providing EU-level input into
future national decisions. Its recommendations under the European Semester are
reflected in recommendations (1) to (7) below.
(20)     In the light of this
assessment, the Council has examined Latvia’s convergence programme, and its
opinion[7]
is reflected in particular in recommendation (1) below,
HEREBY RECOMMENDS that Latvia should
take action within the period 2012-2013 to:
1.           Ensure planned progress
towards the timely correction of the excessive deficit. To this end, implement
the budget for the year 2012 as envisaged and achieve the fiscal effort
specified in the Council recommendation under the Excessive Deficit Procedure. Thereafter,
implement a budgetary strategy, supported by sufficiently specified structural
measures, for the year 2013 and beyond, to make sufficient progress towards the
medium-term budgetary objective (MTO), and to respect the expenditure
benchmark. Use better than expected cyclical revenue to reduce government debt.
2.           Implement measures to
shift taxation away from labour to consumption, property, and use of natural
and other resources while improving the structural balance; ensure adoption of
the Fiscal Discipline Law and develop a medium term budgetary framework law to
support the long-term sustainability of public finances; restore contributions
to the mandatory funded private pension scheme at 6% of gross wages from 2013.
3.           Take measures to reduce
long-term and youth unemployment by fighting early school leaving, promoting
more efficient apprenticeships and VET, enhancing the quality, coverage and
effectiveness of active labour market policy and its training component and
through an effective wage subsidy scheme
4.           Tackle
high rates of poverty and social exclusion by reforming the social assistance system
to make it more efficient, while better protecting the poor. Ensure better targeting
and increase incentives to work.
5.           Further encourage energy
efficiency by providing incentives for reducing energy costs and shifting
consumption towards energy-efficient products, including vehicles, buildings
and heating systems. Promote competition in major energy networks (electricity,
natural gas, heating) and improve connectivity with EU energy networks.
6.           Take measures to improve
management and efficiency of the judiciary, in particular to reduce the backlog and length of procedures. Take steps to improve the insolvency regime and the mediation
laws.
7.           Continue reforms in higher
education, inter alia, by implementing a new financing model that rewards
quality, strengthens links with market needs and research institutions, and
avoids fragmentation of budget resources. Design and implement an effective
research and innovation policy encouraging companies to innovate, including via
tax incentives, upgrading infrastructure and rationalising research
institutions.
Done at Brussels,
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 209, 02.08.1997, p. 1
[2]               COM(2012)320 final
[3]               P7_TA(2012)0048 and P7_TA(2012)0047
[4]               Council Decision 2012/238/EU of 26 April 2012
[5]               COM(2012) 68 final.
[6]               Cyclically adjusted balance net of one-off and
temporary measures, recalculated by the Commission services on the basis of the information provided in the programme, using
the commonly agreed methodology.
[7]               Under Article 9(2) of Council Regulation (EC) No
1466/97.


title: 2013/473/EU: Commission Recommendation of 24 September 2013 on the audits and assessments performed by notified bodies in the field of medical devices  Text with EEA relevance

text:
               25.9.2013

               EN

               Official Journal of the European Union

               L 253/27

      COMMISSION RECOMMENDATION
      of 24 September 2013
      on the audits and assessments performed by notified bodies in the field of medical devices
      (Text with EEA relevance)
      (2013/473/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 proper functioning of notified bodies is crucial for ensuring a high level of health and safety protection, the free movement of medical devices in the internal market, and citizens’ confidence in the regulatory system.

                  (2)

                  Council Directive 90/385/EEC of 20 June 1990 on the approximation of the laws of the Member States relating to active implantable medical devices (1), Council Directive 93/42/EEC of 14 June 1993 concerning medical devices (2), and Directive 98/79/EC of the European Parliament and of the Council of 27 October 1998 on in vitro diagnostic medical devices (3), contain certain provisions with regard to the audits, assessments and unannounced audits performed by notified bodies in the field of medical devices.

                  (3)

                  The interpretation of those provisions and the behaviour of notified bodies designated in the field of medical devices differ. Therefore this Recommendation should set benchmarks for assessments and unannounced audits by notified bodies and respond to the most frequent shortcomings of the current practices.

                  (4)

                  The Recommendation aims at ensuring that the notified body carries out a proper verification of the fulfilment of the legal requirements by the manufacturer.

                  (5)

                  Subject to the respective conformity assessment procedure, notified bodies perform product assessments or quality system assessments. Accordingly, it is important to differentiate between these two types of assessments. To verify the continuous compliance with legal obligations, notified bodies should perform unannounced audits in addition to product assessments and quality system assessments.

                  (6)

                  In order to satisfy the legal requirements laid down in Directive 90/385/EEC, in Directive 93/42/EEC and in Directive 98/79/EC, notified bodies should verify, where relevant, the fulfilment of the essential safety and health requirements contained in Directive 2006/42/EC of the European Parliament and of the Council of 17 May 2006 on machinery, and amending Directive 95/16/EC (4), of the requirements contained in Commission Regulation (EU) No 722/2012 of 8 August 2012 concerning particular requirements as regards the requirements laid down in Council Directives 90/385/EEC and 93/42/EEC with respect to active implantable medical devices and medical devices manufactured utilising tissues of animal origin (5) and of the common technical specifications for in vitro diagnostic medical devices laid down in Commission Decision 2002/364/EC of 7 May 2002 on common technical specifications for in vitro diagnostic medical devices (6).

                  (7)

                  In order to avoid omissions and mistakes in the verification by the notified bodies of the important aspects of clinical evaluation or, in the case of in vitro diagnostic medical devices, of performance evaluation, and with regard to the post-market clinical follow-up, or, in the case of in vitro diagnostic medical devices, to post-market follow up, it is important to provide specific advice with regard to the control of those requirements.

                  (8)

                  To facilitate the verification by the notified bodies of the technical documentation, the manufacturer’s device identification system and the declaration of conformity, it is important to provide specific advice with regard to the control of those requirements. Directive 90/385/EEC, Directive 93/42/EEC and Directive 98/79/EC do not provide any exceptions for outsourced production compared to in-house production. Accordingly, it is necessary to include in duly substantiated cases the most important subcontractors and suppliers in the conformity assessment procedures.

                  (9)

                  Subcontractors or suppliers cannot fulfil in the manufacturers’ place crucial obligations of manufacturers, such as keeping available the full technical documentation, as this would void the concept of the manufacturer as responsible in accordance with Directive 90/385/EEC, Directive 93/42/EEC and Directive 98/79/EC. Therefore, the notified bodies should be advised on what they need to verify in case of outsourcing.

                  (10)

                  Though regarded as two independent exercises, it is necessary to strengthen the link between the quality system review and the review of the technical documentation on a sampling basis.

                  (11)

                  In the absence of established practice for unannounced audits it is important to determine the practicalities for such audits, as well as to provide advice on the arrangements needed for facilitating these audits,

            HAS ADOPTED THIS RECOMMENDATION:
      1.   PURPOSE
      To facilitate the consistent application of the conformity assessment provisions contained in Directive 90/385/EEC, Directive 93/42/EEC and Directive 98/79/EC, the notified bodies should apply the provisions of this Recommendation when they perform product assessments, quality system assessments and unannounced audits.
      By providing general guidelines for such assessments and unannounced audits, this Recommendation should facilitate the work of the notified bodies as well as the Member States’ evaluation thereof. This Recommendation does not create any new rights and obligations. The legal requirements applicable to all types of devices and conformity assessments are set out in the Union legislation on medical devices.
      2.   GENERAL GUIDELINES FOR AUDITS AND ASSESSMENTS
      The notified bodies should apply the following:

                  (a)

                  Where the manufacturer has applied for a design dossier examination or for a type examination (hereinafter jointly referred to as ‘product assessment’), notified bodies should verify the conformity of the device under all product related aspects referred to in Directive 90/385/EEC, Directive 93/42/EEC and Directive 98/79/EC for detecting any non-compliance of the device and should apply Annex I.

                  (b)

                  Where the manufacturer has applied for an assessment of its quality system, notified bodies should verify the conformity of the quality system with the quality-system related requirements contained in Directive 90/385/EEC, Directive 93/42/EEC and Directive 98/79/EC for detecting non-compliances of the quality system and should apply Annex II.

                  (c)

                  To verify the day-to-day compliance with legal obligations, notified bodies should, in addition to the initial, surveillance or renewal audits, visit the manufacturer or, if this is likely to ensure more efficient control, one of its subcontractors in charge of processes which are essential for ensuring compliance with legal requirements (‘critical subcontractor’) or a supplier of crucial components or of the entire devices (both: ‘crucial supplier’) without prior notice (‘unannounced audits’) in accordance with Annex III.

            3.   FOLLOW-UP
      Member States should draw this Recommendation to the attention of the notified bodies in the field of medical devices and should supervise the practice of notified bodies with respect to this Recommendation. They should evaluate the notified bodies’ readiness to apply this Recommendation and in particular to perform unannounced audits when deciding on designations of bodies and on renewal or withdrawal of designations.
      4.   ADDRESSEES
      This Recommendation is addressed to the Member States.

         Done at Brussels, 24 September 2013.

               For the Commission

            Neven MIMICA

               Member of the Commission

         (1)  OJ L 189, 20.7.1990, p. 17.

         (2)  OJ L 169, 12.7.1993, p. 1.

         (3)  OJ L 331, 7.12.1998, p. 1.

         (4)  OJ L 157, 9.6.2006, p. 24.

         (5)  OJ L 212, 9.8.2012, p. 3.

         (6)  OJ L 131, 16.5.2002, p. 17.

         ANNEX I

            Product assessment

                     1.

                     Notified bodies should verify if the device is correctly qualified as a medical device and, in particular, whether the manufacturer has assigned a medical purpose to the device. They should furthermore verify the classification of the device and whether the manufacturer has fulfilled the applicable conformity assessment obligations. They should satisfy the obligations of consultation for certain devices that incorporate a substance which, in case used separately, may be considered to be a medicinal product, a human blood derivative or an animal tissue (1).

                     2.

                     Notified bodies should verify the compliance of the device with the relevant Essential Requirements set out in Annex 1 to Directive 90/385/EEC, Annex I to Directive 93/42/EEC and Annex I to Directive 98/79/EC and, if applicable, with the essential safety and health requirements (ESHR) set out in Directive 2006/42/EC. In the case of in vitro diagnostic medical devices, where applicable, they should also verify the compliance of the device with the common technical specifications laid down in Decision 2002/364/EC or, when duly justified, with other technical solutions of a level at least equivalent. Where doubts arise, in the framework of a design dossier examination, as to the conformity of a device, notified bodies should carry out or ask for relevant tests of the device.

                     3.

                     Notified bodies should examine the requirements regarding design and construction and the ESHR prior to examining the general requirements set out in Part I of Annex 1 to Directive 90/385/EEC, in Part A of Annex I to Directive 93/42/EEC and in Part A of Annex I to Directive 98/79/EC. They should apply special care to examine all the following aspects of the essential requirements:

                                 (a)

                                 design, manufacture and packaging;

                                 (b)

                                 labelling on the device, on the packaging for each unit or on the sales packaging and instructions for use.

                     4.

                     The examination of the general requirements should ascertain that among others the following requirements have been met:

                                 (a)

                                 all hazards have been identified;

                                 (b)

                                 all risks associated with these hazards have been evaluated and have become part of the overall risk-benefit evaluation;

                                 (c)

                                 all these risks have been reduced as far as possible;

                                 (d)

                                 all remaining risks have been subject to protection measures;

                                 (e)

                                 safety principles have been applied in a way that is compatible with the state-of-the art.

                     5.

                     For medical devices other than in vitro diagnostic devices, notified bodies should review all relevant preclinical data, the clinical evaluation and the post-market clinical follow-up undertaken or planned by the manufacturer. They should verify that the clinical evaluation is up-to-date. They should assess the need for and the appropriateness of a post-market clinical follow-up plan (2). If no clinical investigation has been undertaken, they should verify that the device type in question and all the different types of risks linked to the device design, its materials, and its use are appropriately assessed by means of scientific literature or other existing clinical data so that no clinical investigation is needed; they should furthermore examine the special justification (3) needed for implantable devices and devices classified within class III according to Annex IX to Directive 93/42/EEC.

                     6.

                     In the case of in vitro diagnostic medical devices, notified bodies should review the performance evaluation undertaken by the manufacturer and post-market follow up undertaken or planned by the manufacturer.

                     7.

                     Notified bodies should verify all documentation related to the device’s conformity assessment. To that end, they should verify that the technical documentation is correct, consistent, relevant, up-to-date and complete (4) and that it covers all variants and trade names of the device. They should furthermore verify that the manufacturer’s device identification system and its practice of defining which devices belong to the same type ensure that the notified body’s certificates, the manufacturer’s declarations of conformity and the manufacturer’s technical documentations can unequivocally be attributed to the device examined. They should finally verify that the draft declaration of conformity contains all the necessary items.

                     8.

                     The notified body should clearly document the conclusions of its assessment and it should be clearly evidenced how the conclusions are taken into account as part of the notified body’s decision making process.

            (1)  See Section 10 of Annex 1, Section 4.3 of Annex 2 and Section 5 of Annex 3 to Directive 90/385/EEC, Section 7.4 of Annex I, Section 4.3 of Annex II and Section 5 of Annex III to Directive 93/42/EEC and Regulation (EU) No 722/2012.

            (2)  See Section 1.4 of Annex 7 to Directive 90/385/EEC and Section 1.1c of Annex X to Directive 93/42/EEC.

            (3)  See Annex 7 to Directive 90/385/EEC and Annex X to Directive 93/42/EEC.

            (4)  To be regarded as complete, a technical documentation should cover with appropriate depth the items listed in the document of the Global Harmonization Task Force ‘Summary Technical Documentation for Demonstrating Conformity to the Essential Principles of Safety and Performance of Medical Devices (STED)’ as well as additional items required by the European legislation or, for in vitro diagnostic medical devices, ‘Summary Technical Documentation (STED) for Demonstrating Conformity to the Essential Principles of Safety and Performance of In Vitro Diagnostic Medical Devices’ as well as additional items required by the European legislation, see for these documents http://www.imdrf.org/ghtf/ghtf-archives-sg1.asp

         ANNEX II

            Quality system assessment

                     1.

                     In the case of full quality assurance system, the verification should ascertain that the application of the quality system assures the conformity of the devices (1) with the legal requirements set out in Directive 90/385/EEC, Directive 93/42/EEC and Directive 98/79/EC. In the case of production or product quality assurance, the verification should ascertain that the application of the quality system ensures the conformity of the devices with the device type (2).

                     2.

                     The quality system assessment should include audits on the premises of the manufacturer and, if this is also necessary to ensure efficient control, on those of its critical subcontractors or of its crucial suppliers. Notified bodies should establish a risk-based approach to identify such subcontractors and suppliers and should clearly document this decision process.

                     3.

                     Notified bodies should identify which products the manufacturer regards as covered by its application, whether these products fall under Directive 90/385/EEC, Directive 93/42/EEC and Directive 98/79/EC and whether there have been changes to these products or to the quality system since the last audit or since the application. Furthermore, notified bodies should identify the post-market information available to them or to the manufacturer, which might need to be taken into account when planning and executing the audit.

                     4.

                     For medical devices of Class IIa or IIb, the notified bodies should review the technical documentation on the basis of representative samples with a frequency and depth following established best practices, taking account of the device’s class, risk and novelty. Samples chosen and reviews conducted should be clearly documented and justified. Over the period of certification of the specific quality system (i.e. for a maximum of five years) the sampling plan should be sufficient to ensure that every device category covered by the certificate has been sampled. Where doubts arise as to the conformity of a device, including its documentation, notified bodies should carry out or ask for relevant tests of the device. Where any non-conformity of a device is detected, they should investigate whether elements of the quality system or incorrect application thereof caused the non-conformity. Where a test has been carried out, notified bodies should provide the manufacturer with a test report and with an audit report which highlights in particular the link between quality system deficiencies and detected non-conformities of devices.

                     5.

                     Notified bodies should verify whether the quality objectives and the quality manual or procedures developed by the manufacturer are appropriate to ensure the conformity of the devices falling under the application of the manufacturer.

                     6.

                     Notified bodies should verify whether the manufacturer’s business organisation is appropriate for ensuring the conformity of the quality system and of the medical devices. In particular, the following aspects should be examined: the organisational structure, the qualification of managerial staff and their organisational authority, the qualification and the training of other staff, the internal auditing, the infrastructure, and the monitoring of the quality system in operation, including with regard to involved third parties such as suppliers or subcontractors.

                     7.

                     Notified bodies should verify the existence of an unequivocal product identification system. This system should ensure that the notified body’s certificates, the manufacturer’s declarations of conformity and the manufacturer’s technical documentations can, in conjunction with that system, unequivocally be attributed to certain devices and not to others.

                     8.

                     Notified bodies should verify the manufacturer’s procedures with regard to the product documentation. The procedures relating to the product documentation should ensure that all products intended to be placed on the market or put into service are covered by the necessary certificates issued or to be issued by the notified body. The procedures with regard to the product documentation should also ensure that all products intended to be placed on the market or put into service, regardless of their trade name, are covered by the declarations of conformity of the manufacturer and that these are contained in and are compatible with the technical documentation. Notified bodies should verify the correct execution of these procedures by sampling the product documentation of individual devices.

                     9.

                     Notified bodies should verify that the manufacturer’s procedures aiming at the fulfilment of procedural legal requirements, in particular with regard to determining the appropriate class and conformity assessment procedure, are up-to-date, complete, consistent and correct. These procedures should take account of the necessity to provide data in order to allow the notified bodies to respect their consultation obligations for certain devices referred to in Section 1 of Annex I.

                     10.

                     Notified bodies should verify that the manufacturer’s procedures aiming at the fulfilment of device related legal requirements, are up-to-date, complete, consistent and correct. They should verify that the procedures on the risk management are in conformity with the legal requirements contained in Part I (general requirements) of Annex 1 to Directive 90/385/EEC, in Part I of Annex I to Directive 93/42/EEC and in Part A of Annex I to Directive 98/79/EC and that the procedures cover among others the aspects listed in Section 4 of Annex I to this Recommendation. They should verify the correct execution of these procedures by sampling the product documentation of individual devices.

                     11.

                     In case of manufacturers of medical devices other than in vitro diagnostic devices, notified bodies should verify that the manufacturer’s procedures on clinical evaluations and on the post-market clinical follow-up are complete and correct and that these are correctly implemented. To that end, they should examine clinical evaluations and the post-market clinical follow-up for some of the device types covered by the application, applying the principles described in Section 5 of Annex I to this Recommendation. They should verify the correct execution of these procedures by sampling the product documentation of individual devices.

                     12.

                     In case of manufacturers of in vitro diagnostic medical devices, notified bodies should verify the manufacturer’s working procedures on performance evaluations, on the identification of certified reference materials or reference measurement procedures to allow for metrological traceability. They should verify the correct execution of these procedures by sampling the product documentation of individual devices.

                     13.

                     Notified bodies should verify that the procedures regarding the design and product development, including any change control procedures, are appropriate to ensure the compliance of the devices.

                     14.

                     Notified bodies should verify that the manufacturer controls the manufacturing environment and processes so as to ensure the conformity of the devices with the legal requirements. Notified bodies should pay special attention to critical processes such as design control, establishment of material specifications, purchasing and control of incoming material or components, assembling, software validation, sterilisation, batch-release, packaging, and product quality control, regardless of whether they are subcontracted or not.

                     15.

                     Notified bodies should verify the manufacturer’s system ensuring traceability of materials and components, from the entry into the manufacturer’s, suppliers’ or subcontractors’ premises to the delivery of the final product. In particular where risks might be caused by the exchange of raw materials, notified bodies should check the coherence between the quantity of produced or purchased crucial raw material or components approved for the design and the quantity of finished products.

                     16.

                     Notified bodies should verify that experience gained in the post-production phase, in particular user complaints and vigilance data, is systematically collected and evaluated for the devices covered by the application of the manufacturer and that the necessary improvement of the devices or of their production has been initiated. They should in particular verify that the manufacturer has in place distributor, user or patient related business processes which are suitable for providing information indicating the need for reviewing the design of the device, its manufacturing or the quality system.

                     17.

                     Notified bodies should verify that the documentation and records with regard to the quality system and its changes, the procedure of management review, and the respective documentation control are up-to-date, consistent, complete, correct and properly structured.

                     18.

                     At each annual surveillance audit, the notified bodies should verify that the manufacturer correctly applies the approved quality management system and the post-market surveillance plan.

                     19.

                     The notified body should clearly document the conclusions of its assessment and it should be clearly evidenced how the conclusions are taken into account as part of the notified body’s decision making process.

            General advice in case of outsourcing of the production via subcontractors or suppliers

         Critical subcontractors or crucial suppliers may be suppliers of suppliers or even suppliers further down the supply chain. Notified bodies should refrain from signing arrangements with manufacturers unless they receive access to all critical subcontractors and crucial suppliers and thus to all sites where the devices or its crucial components are produced, regardless of the length of the contractual chain between the manufacturer and the subcontractor or supplier.
         Notified bodies should note that manufacturers:

                     (a)

                     have to fulfil their obligations themselves regardless of any partial or total outsourcing of the production via subcontractors or suppliers;

                     (b)

                     do not fulfil their obligation to have at their disposal the full technical documentation and/or of a quality system by referring to the technical documentation of a subcontractor or supplier and/or to their quality system;

                     (c)

                     should integrate the quality system of critical subcontractors and of crucial suppliers with their quality system;

                     (d)

                     need to control the quality of services provided and of components supplied and the quality of production thereof regardless of the length of the contractual chain between the manufacturer and the subcontractor or supplier.

            (1)  See first sentence of Section 3.2 of Annex 2 to Directive 90/385/EEC, first sentence of Section 3.2 of Annex II to Directive 93/42/EEC and first sentence of Section 3.2 of Annex IV to Directive 98/79/EC.

            (2)  See first sentence of Section 3.2 of Annex 5 to Directive 90/385/EEC, first sentence of Section 3.2 of Annex V and first sentence of Section 3.2 of Annex VI to Directive 93/42/EEC and first sentence of Section 3.2 of Annex VII to Directive 98/79/EC.

         ANNEX III

            Unannounced audits

                     1.

                     Notified bodies should carry out unannounced audits at least once every third year. Notified bodies should increase the frequency of unannounced audits if the devices bear a high risk, if the devices of the type in question are frequently non-compliant or if specific information provides reasons to suspect non-conformities of the devices or of their manufacturer. The timing of the unannounced audits should be unpredictable. As a general principle an unannounced audit should not take less than one day and should be executed by at least two auditors.

                     2.

                     Notified bodies may, instead of or in addition to visiting the manufacturer, visit one of the premises of the manufacturer’s critical subcontractors or crucial suppliers if this is likely to ensure more efficient control. This applies in particular if the main part of the design development, manufacturing, testing or another crucial process is located with the subcontractor or supplier.

                     3.

                     Within the context of such unannounced audits, the notified bodies should check a recently produced adequate sample, preferably a device taken from the ongoing manufacturing process, for its conformity with the technical documentation and with legal requirements. The check of the conformity of the device should include the verification of the traceability of all critical components and materials and of the manufacturer’s traceability system. The check should encompass a file review and, if necessary in order to establish the conformity, a test of the device.
                     To prepare the test, notified bodies should request from the manufacturer all the relevant technical documentation including previous test protocols and results. The test should be undertaken in accordance with the testing procedure defined by the manufacturer in the technical documentation which has to be validated by the notified body. The test may also be performed by the manufacturer, its critical subcontractor or crucial supplier under observation of the notified body.

                     4.

                     Notified bodies in charge of product assessment (1) should, in addition to the steps foreseen in Sections 1, 2 and 3, sample devices belonging to at least three different device types and, where the manufacturer produces more than 99 device types, devices belonging to at least every hundredth type at the end of the production chain or in the manufacturer’s warehouse with a view of testing the conformity of the device types. Variants containing a technical difference which might affect safety or performance of the device should be counted as a separate device type. Dimensional size variants should not be regarded as different types unless specific risks are linked to the dimension. These samples should be tested by the notified bodies or by qualified personnel under their observation on their own premises, or on the manufacturer’s premises, or on the premises of the manufacturer’s critical subcontractor or crucial supplier or in external laboratories. Sampling criteria and testing procedures should be defined in advance. In particular if a sampling in the manufacturer’s premises is not possible, notified bodies should take samples from the market, if necessary with support by the competent authorities, or should perform testing on a device installed at a customer location. To prepare the test, notified bodies should request from the manufacturer relevant technical documentation including final batch testing reports, previous test protocols and results.

                     5.

                     Notified bodies in charge of verifying the quality system of the manufacturer (2) should, in addition to the steps foreseen in Sections 1, 2 and 3, verify whether the manufacturing activity ongoing at the time of the unannounced audit is in line with the manufacturer’s documentation relevant for the manufacturing activity and that both are in conformity with legal requirements. In addition, these notified bodies should check in more detail at least two critical processes such as design control, establishment of material specifications, purchasing and control of incoming material or components, assembling, sterilisation, batch-release, packaging, or product quality control. Amongst the suitable critical processes, notified bodies should select one which has a high likelihood of non-conformity and one which is particularly safety relevant.

            General advice with regard to contractual arrangements between the notified body and the manufacturer for the organisation of unannounced audits

         In order to ensure that notified bodies are in a position to perform unannounced audits, some modalities, such as the following ones, should be considered.
         Unannounced audits in premises of the manufacturer or its critical subcontractors or crucial suppliers should be foreseen in the contractual arrangements between the notified bodies and the manufacturers. If a visa is needed to visit the country where the manufacturer is located, the contractual arrangements should contain, as an annex, an invitation to visit the manufacturer at any time and an invitation which leaves the date of signature and the date of visit open (to be filled-in by the notified body). The contractual arrangements should also contain, as an annex, similar invitations issued by the critical subcontractors or crucial suppliers.
         The contractual arrangements should foresee that the manufacturers continuously inform the notified bodies on the periods when devices falling under the notified bodies’ certificates will not be manufactured. The contractual arrangements should authorise the notified bodies to end the contract as soon as their permanent unannounced access to the premises of the manufacturer or its critical subcontractors or crucial suppliers is no longer assured.
         The contractual arrangements should furthermore cover the measures to be taken by notified bodies to ensure the security of their auditors. The contractual arrangements should provide for a financial compensation for the unannounced audits including, where applicable, the device acquisition, its testing and security arrangements.

            (1)  According to Section 2(a) and Annex I to this Recommendation.

            (2)  According to Section 2(b) and Annex II to this Recommendation.