               EUROPEAN COMMISSION
            Brussels, 20.12.2017
            COM(2017) 806 final
            Recommendation for a
            COUNCIL DECISION
            authorising the opening of negotiations for an agreement between the European Union and the State of Israel on the exchange of personal data between the European Union Agency for Law Enforcement Cooperation (Europol) and the Israeli competent authorities for fighting serious crime and terrorism

               EXPLANATORY MEMORANDUM

               1.CONTEXT OF THE RECOMMENDATION

               In the globalised world where serious crime and terrorism are increasingly transnational and polyvalent, law enforcement authorities should be fully equipped to cooperate with external partners to ensure the security of their citizens. Europol should therefore be able to exchange personal data with law enforcement authorities of third countries to the extent necessary for the accomplishment of its tasks.

               Since the entry into application of Regulation 2016/794 on 1 May 2017
                  1
                and pursuant to the Treaty, the Commission is responsible, on behalf of the Union, for negotiating international agreements with third countries for the exchange of personal data with Europol. In so far as necessary for the performance of its tasks, Europol may establish and maintain cooperative relations with external partners through working and administrative arrangements that cannot by themselves be a legal basis for the exchange of personal data.

               Taking into account the political strategy as outlined in the European Agenda on Security
                  2
               , Council Conclusions
                  3
               , and the Global Strategy
                  4
               , the operational needs of law enforcement authorities across the EU, and the potential benefits of closer cooperation in this area, the Commission considers it necessary to start negotiations in the short-term with eight countries, as identified in the 11th progress report towards a genuine and effective Security Union
                  5
               .

               The Commission has made its assessment of priority countries taking into account Europol's operational needs. The Europol Strategy 2016-2020 identifies the Mediterranean region as priority for enhanced partnerships
                  6
               . The Europol External Strategy 2017-2020 also stresses the need for closer cooperation between Europol and the Middle East/North Africa (MENA) due to the current terrorist threat and migration-related challenges
                  7
               .

               Europol does not have any agreements in place with any of the countries in this region.

               This Recommendation specifically concerns negotiations with Israel, although cooperation with any MENA country needs to be seen in the context of the region as a whole.

               Political context

               The EU and Israel developed sound relations based on the 1995 Association agreement (into force since 2000). Both the EU and Israel are strongly focused on countering security threats, namely countering terrorism threats. Israel is very interested in intensifying cooperation with the EU on counter-terrorism (CT). The first EU-Israel Counter Terrorism and Security Dialogue took place in Brussels in March 2015, followed by a second in Israel in September 2016. Both parties agreed to cooperate in areas such as countering violent extremism, terrorism financing, non-conventional terrorism, aviation and transport security as well as cybercrime. Interest was expressed to enhance cooperation with EU agencies in the field of justice and home affairs, notably Europol.

               The Council has already previously authorised negotiations between Europol and Israel on an operational cooperation agreement
                  8
               . The negotiations were started in 2010 but could not reach a conclusion under the old legal framework of Europol. In this context, some technical meetings already took place between Europol and Israeli authorities.

               Operational needs

               Based on data in the SOCTA 2017
                  9
                and TE-SAT 2017
                  10
               , the above discussions, as well as, inter alia, Europol's in-house expert knowledge, cooperation with Israel is needed in particular to counter the following crime phenomena:

               Terrorism: The EU and Israel face both a serious threat posed by terrorist groups operating in the region and globally. Closer cooperation, including the exchange of personal data, will aim at addressing the threat posed by terrorists (including foreign terrorist fighters) with a view to detect, prevent and prosecute terrorist travel, terrorism financing as well as terrorists' misuse of the Internet.

               Cybercrime: Cooperation with Israel should be established in particular given their expertise in investigating/dealing with high tech cybercrime. The need for increased intelligence sharing would be beneficial for a range of transnational cybercrime or cyber-enabled crimes, including Distributed Denial of Service (DDoS) attacks, cryptocurrency laundering cases, e-commerce fraud, business email compromise and online child sexual exploitation.

               2.LEGAL ELEMENTS OF THE RECOMMENDATION

               Regulation (EU) 2016/794 on the European Union Agency for Law Enforcement Cooperation (Europol) sets out a legal framework for Europol, in particular its objectives, tasks, scope of competence, data protection safeguards and ways to cooperate with external partners.

               This Recommendation is consistent with the provisions of the Europol Regulation.

               The objective of this recommendation is to obtain from the Council the authorisation for the Commission to negotiate the future agreement on behalf of the EU. The legal basis for the Council to authorise the opening of negotiations is Article 218(3) and (4) TFEU.

               In line with Article 218 of Treaty on the Functioning of the European Union, the Commission shall be nominated as the Union negotiator for the agreement between the European Union and Israel on the exchange of personal data between the European Union Agency for Law Enforcement Cooperation (Europol) and the Israeli competent authorities for fighting serious crime and terrorism.

               Recommendation for a

               COUNCIL DECISION

               authorising the opening of negotiations for an agreement between the European Union and the State of Israel on the exchange of personal data between the European Union Agency for Law Enforcement Cooperation (Europol) and the Israeli competent authorities for fighting serious crime and terrorism

               THE COUNCIL OF THE EUROPEAN UNION,

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

               Having regard to the recommendation from the European Commission,

               Whereas:

               (1)Regulation (EU) 2016/794 of the European Parliament and of the Council
                  11
                was adopted on 11 May 2016 and is applicable as of 1 May 2017.

               (2)This Regulation, in particular its Article 25, sets out the rules for the transfer of personal data from the European Union Agency for Law Enforcement Cooperation (Europol) to third countries and international organisations. Europol may transfer personal data to an authority of a third country on the basis of an international agreement concluded between the Union and that third country pursuant to Article 218 TFEU adducing adequate safeguards with respect to the protection of privacy and fundamental rights and freedoms of individuals.

               (3)Negotiations should be opened with a view to concluding such an Agreement between the European Union and the State of Israel.

               (4)The Agreement should respect the fundamental rights and observe the principles recognised by the Charter of Fundamental Rights of the European Union, in particular the right to private and family life, recognised in Article 7 of the Charter, the right to the protection of personal data, recognised in Article 8 of the Charter and the right to effective remedy and fair trial recognised by Article 47 of the Charter. The Agreement should be applied in accordance with those rights and principles.

               HAS ADOPTED THIS DECISION:

               Article 1

               The Commission is hereby authorised to negotiate, on behalf of the Union, an agreement between the European Union and the State of Israel on the exchange of personal data between the European Union Agency for Law Enforcement Cooperation (Europol) and the Israeli competent authorities for fighting serious crime and terrorism.

               Article 2

               The negotiating directives are set out in the Annex.

               Article 3

               The negotiations shall be conducted in consultation with [name of the special committee to be inserted by the Council].

               Article 4

               This Decision is addressed to the Commission.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        Regulation (EU) 2016/794 of 11 May 2016, OJ L 135, 24.5.2016, p. 53.

                     (2)

                        COM(2015) 185 final.

                     (3)

                        Council Document 10384/17, 19 June 2017.

                     (4)

                        Shared Vision, Common Action: A Stronger Europe - A Global Strategy for the European Union’s Foreign And Security Policy
                  http://europa.eu/globalstrategy/en

                     (5)

                        COM(2017) 608 final.

                     (6)

                        Europol Strategy 2016-2020, Adopted by Europol's Management Board on 1 December 2015,
                  https://www.europol.europa.eu/publications-documents/europol-strategy-2016-2020

                     (7)

                        Europol External Strategy 2017-2020, Adopted by Europol Management Board on 13 December 2016, EDOC#865852v3.

                     (8)

                        Council Decision 2009/371.

                     (9)

                  https://www.europol.europa.eu/socta/2017

                     (10)

                  https://www.europol.europa.eu/sites/default/files/documents/tesat2017.pdf
                  .

                     (11)

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

    ---documentbreak---

               EUROPEAN COMMISSION
            Brussels,20.12.2017
            COM(2017) 806 final
            ANNEX
            to the
            Recommendation for a COUNCIL DECISION
            authorising the opening of negotiations for an agreement between the European Union and the State of Israel on the exchange of personal data between the European Union Agency for Law Enforcement Cooperation (Europol) and the Israeli competent authorities for fighting serious crime and terrorism

               ANNEX

               Directives for the negotiation of an agreement between the European Union and the State of Israel on the exchange of personal data between the European Union Agency for Law Enforcement Cooperation (Europol) and the Israeli competent authorities for fighting serious crime and terrorism

               In the course of the negotiations the Commission should aim to achieve the objectives set out in detail below.

               (1)The objective of the Agreement shall be to provide the legal basis for the transfer of personal data between Europol and the competent authorities of Israel respectively, in order to support and strengthen the action by the competent authorities of this country and Member States as well as their mutual cooperation in preventing and combatting serious transnational crime and terrorism, while ensuring appropriate safeguards with respect to the protection of privacy, personal data and fundamental rights and freedoms of individuals.

               (2)To guarantee purpose limitation, cooperation under the Agreement shall only relate to crimes and related criminal offences falling within Europol's competence in accordance with Article 3 of Regulation 2016/794 (together "criminal offences"). In particular, cooperation should be aimed at tackling terrorism and preventing radicalisation, disrupting organised crime and fighting cybercrime.

               (3)The Agreement shall spell out clearly and precisely the necessary safeguards and controls with respect to the protection of personal data, fundamental rights and freedoms of individuals, irrespective of nationality and place of residence, in the exchange of personal data between Europol and the Israeli competent authorities.

               In particular:

               (a)The purposes of the processing of personal data by the Parties in the context of the Agreement shall be spelt out clearly and precisely, and shall be no wider than what is necessary in individual cases for the purpose of preventing and combating terrorism and criminal offences referred to in the Agreement.

               (b)Personal data transferred by Europol in accordance with the Agreement shall be processed fairly, on a legitimate basis and only for the purposes for which they have been transferred. The Agreement shall provide the possibility for Europol to indicate, at the moment of transferring the data, any restriction on access or use, including as regards its transfer, erasure or destruction. Personal data shall be adequate, relevant and limited to what is necessary in relation to that purpose. It shall be accurate and kept up to date. It shall not be retained for longer than is necessary for the purposes for which they have been transferred.

               (c)The transfer of personal data revealing racial or ethnic origin, political opinions, religious or philosophical beliefs, trade-union membership, genetic data and data concerning a person's health and sex life by Europol shall be prohibited, unless it is strictly necessary and proportionate in individual cases for preventing or combating criminal offences as referred to in the Agreement and subject to appropriate safeguards. The Agreement should also contain specific safeguards relating to the transfer of personal data on victims of criminal offence, witnesses or other persons who can provide information concerning criminal offences, as well as minors.

               (d)The Agreement shall ensure enforceable rights of individuals whose personal data are processed by laying down rules on the right of access, rectification and erasure, including the specific grounds which may allow any necessary and proportionate restrictions. The Agreement shall also ensure enforceable rights of administrative and judicial redress for any person whose data are processed under the agreement and guaranteeing effective remedies.

               (e)The Agreement shall lay down the rules on storage, review, correction and deletion of personal data as well as on keeping records for the purposes of logging and documentation as well as on information to be made available to individuals. It should also provide for safeguards in respect to automated processing of personal data.

               (f)The Agreement shall specify the criteria on the basis of which the reliability of the source and accuracy of the data shall be indicated.

               (g)The Agreement shall include the obligation to ensure security of personal data through appropriate technical and organisational measures, including by allowing only authorised persons to have access to personal data. The Agreement shall also include the obligation of notification in the event of a personal data breach affecting data transferred under the Agreement.

               (h)Onward transfers of information from competent authorities of Israel to other authorities in Israel shall only be allowed for the purposes of the Agreement and shall be made subject to appropriate conditions and safeguards.

               (i)The same conditions as under (h) shall apply to onward transfers of information from competent authorities of Israel to authorities in a third country, with the additional requirement that such onward transfers shall be allowed only with respect to third countries to which Europol is entitled to transfer personal data on the basis of Article 25(1) of Regulation (EU) 2016/794.

               (j)The Agreement shall ensure a system of oversight by one or more independent public authorities responsible for data protection with effective powers of investigation and intervention to exercise oversight over those public authorities of Israel that use personal data/exchanged information, and to engage in legal proceedings. In particular, the independent authorities shall have powers to hear complaints from individuals about the use of their personal data. Public authorities that use personal data shall be accountable for complying with the rules on the protection of personal data under the Agreement.

               (4)The Agreement shall provide for an effective dispute settlement mechanism with respect to its interpretation and application to ensure that the parties observe mutually agreed rules.

               (5)The Agreement shall include a provision on the entry into force and validity and a provision whereby a Party may terminate or suspend it.

               (6)In accordance with EU policy, this agreement shall not apply to the geographic areas that came under the administration of the State of Israel after 5 June 1967. This position should not be construed as prejudicing Israel's principled position on this matter. Accordingly, the Parties agree that the application of this agreement is without prejudice to the status of those areas.

               (7)The Agreement may include provisions on the monitoring and periodic evaluation of the Agreement.

               (8)In the context of these negotiations, the Commission shall promote accession of Israel to the Council of Europe Convention for the Protection of Individuals with regard to Automatic Processing of Personal Data ("Convention 108").

               (9)The Agreement shall be equally authentic in the Bulgarian, Czech, Croatian, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovenian, Spanish and Swedish languages and shall include a language clause to that effect.


               EUROPEAN COMMISSION
            Brussels,20.12.2017
            COM(2017) 830 final
            Recommendation for a
            COUNCIL DECISION
            supplementing the Council Decision of 22 May 2017 authorising the opening of negotiations with the United Kingdom of Great Britain and Northern Ireland for an agreement setting out the arrangements for its withdrawal from the European Union

               EXPLANATORY MEMORANDUM

               1.
                     CONTEXT OF THE PROPOSAL

               •Reasons for and objectives of the proposal

                  According to Article 50 of the Treaty on European Union, any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements and shall, if it so decides, notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.

                  On 29 March 2017, the United Kingdom notified the European Council of its intention to withdraw from the Union and from the European Atomic Energy Community.

                  On 29 April 2017, the European Council adopted guidelines that define the framework for negotiations under Article 50 of the Treaty on European Union and set out the overall principles that the Union will pursue throughout the negotiation.

                  On 5 April 2017, the European Parliament adopted a resolution on negotiations with the United Kingdom following the notification of its intention to withdraw from the European Union.

                  On 22 May 2017, the Council authorised the opening of negotiations with the United Kingdom for an agreement setting out the arrangements for its withdrawal from the European Union and adopted directives for the negotiation of an agreement (the “Council Decision of 22 May 2017”).

                  The opening of the negotiations took place on 19 June 2017. In line with the European Council guidelines and the Council negotiating directives, the first phase of the negotiations focused on the rights of citizens, the financial settlement, the issues relating to the island of Ireland, other separation issues, and the governance of the Withdrawal Agreement.

                  On 3 October 2017, the European Parliament adopted a resolution on the state of play of the negotiations with the United Kingdom.

                  Noting the progress made so far, on 20 October 2017, the European Council called for work to continue with a view to consolidating the convergence achieved and pursuing the negotiations in order to be able to move to the second phase of the negotiations as soon as possible. The European Council thus invited the Council and the Commission as Union negotiator to start internal preparatory discussions including on possible transitional arrangements.

                  On 13 December 2017, the European Parliament adopted a resolution on the state of play of negotiations with the United Kingdom.

               Based on:

               –the recommendation made by the Commission Communication on the state of progress of the negotiations with the United Kingdom under Article 50 of the Treaty on European Union of 8 December 2017
                  1

               –the Joint Report from the negotiators of the European Union and the United Kingdom Government on progress during phase 1 of negotiations under Article 50 TEU on the United Kingdom's orderly withdrawal from the European Union of 8 December 2017, on which the Commission's recommendation is based,

               the European Council, on 15 December 2017, welcomed the progress achieved during the first phase of the negotiations and decided that it was sufficient to move to the second phase related to transition and the framework for the future relationship. The European Council called on the Commission as Union negotiator and the United Kingdom to complete the work on all withdrawal issues, including those not yet addressed in the first phase, in conformity with the European Council guidelines of 29 April 2017, to consolidate the results obtained, and to start drafting the relevant parts of the Withdrawal Agreement. It also underlined that negotiations in the second phase could only progress as long as all commitments undertaken during the first phase were respected in full and translated faithfully into legal terms as quickly as possible.

                  During the second phase of the negotiations, in view of the specific nature of issues related to the island of Ireland, the work on detailed arrangements required to give effect to the principles and commitments set out in the Joint Report should continue in a distinct strand, some of which would be translated in the Withdrawal Agreement, others in the framework for the future relationship.

               •Fundamental rights

                  According to Article 6 of the Treaty on European Union, the Union recognises the rights, freedoms and principles set out in the Charter of Fundamental Rights of the European Union, which has the same legal value as the Treaties. Moreover, fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, constitute general principles of the Union's law.

                  These rights, freedoms and principles will continue to be fully preserved and protected in the Union, both during the process of negotiation with the United Kingdom under Article 50 of the Treaty on European Union, including any transitional arrangements, and after withdrawal of the United Kingdom from the Union.

               2.LEGAL BASIS

               •Legal basis

               The United Kingdom has notified its intention to withdraw from the European Union. As a consequence, Article 50 of the Treaty on European Union constitutes the legal basis for the negotiation and conclusion of a Withdrawal Agreement. Transitional arrangements can be laid down only in the Withdrawal Agreement.

               It is recalled that in accordance with Article 106(a) of the Treaty establishing the European Atomic Energy Community, Article 50 of the Treaty on European Union applies also to the European Atomic Energy Community.

               According to Article 218(3) of the Treaty on the Functioning of the European Union, to which Article 50 of the Treaty on European Union refers, the Commission shall submit recommendations to the Council, which shall adopt a decision authorising the opening of negotiations and nominate the Union negotiator. The Council decision supplementing the Council Decision of 22 May 2017 shall be adopted following the same procedure.

               •Choice of the instrument

                  According to Article 50 of the Treaty on European Union, an agreement is to be negotiated with the United Kingdom setting out the arrangements for its withdrawal from the European Union. Article 218(3) of the Treaty on the Functioning of the European Union provides that the Commission is to submit recommendations to the Council, which shall adopt a decision nominating the Union negotiator and authorising the opening of negotiations. A Council decision is the appropriate instrument for the supplementing the Council Decision of 22 May 2017.

               3.BUDGETARY IMPLICATIONS

                  The present Recommendation is not expected to have immediate budgetary implications, in so far as the negotiating process in concerned. It is recalled that the budgetary implications of the agreement under Article 50 of the Treaty on European Union will be outlined when the relevant proposals on signature and conclusion of the Withdrawal Agreement are presented.

               4.OTHER ELEMENTS

               •Detailed explanation of the specific provisions of the proposal

                  Article 1 of the recommended Council Decision supplements the Council Decision of 22 May 2017 in order to authorise the Commission to negotiate, within the framework of the negotiations on an agreement with the United Kingdom setting out the arrangements for its withdrawal from the European Union, any remaining issues relating to the orderly withdrawal of the United Kingdom and any necessary transitional arrangements.

               •Publication of the Decision and of the Negotiating Directives set out in the Annex

                  As for the previous negotiating directives, the Commission proposes to the Council to make public the Decision supplementing the Council Decision of 22 May 2017 authorising the Commission to open negotiations on an agreement with the United Kingdom of Great Britain and Northern Ireland setting out the arrangements for its withdrawal from the European Union, as well as the supplementary negotiating directives set out in its Annex.

               Recommendation for a

               COUNCIL DECISION

               supplementing the Council Decision of 22 May 2017 authorising the opening of negotiations with the United Kingdom of Great Britain and Northern Ireland for an agreement setting out the arrangements for its withdrawal from the European Union

               THE COUNCIL OF THE EUROPEAN UNION,

               Having regard to the Treaties, and in particular Article 50 of the Treaty on European Union, in conjunction with Article 218(3) of the Treaty on the Functioning of the European Union,

               Having regard to the guidelines of the European Council,

               Having regard to the Recommendation from the European Commission,

               Whereas:

               (1)On 29 April 2017, the European Council adopted guidelines that define the framework for negotiations under Article 50 of the Treaty on European Union and set out the overall principles that the Union will pursue throughout the negotiation.

               (2)On 22 May 2017, the Council authorised the opening of negotiations with the United Kingdom of Great Britain and Northern Ireland for an agreement setting out the arrangements for its withdrawal from the European Union and adopted directives for the negotiation of such agreement.

               (3)The opening of the negotiations took place on 19 June 2017.

               (4)On 3 October 2017, the European Parliament adopted a resolution on the state of play of the negotiations with the United Kingdom.

               (5)Noting the progress made so far, on 20 October 2017, the European Council called for work to continue with a view to consolidating the convergence achieved and pursuing negotiations in order to be able to move to the second phase of the negotiations as soon as possible. The European Council thus invited the Council and the Commission as Union negotiator to start internal preparatory discussions, including on possible transitional arrangements.

               (6)On 8 December 2017, in its Communication on the state of progress of the negotiations with the United Kingdom under Article 50 of the Treaty on European Union the Commission recommended to the European Council to conclude that sufficient progress had been made in the first phase of the negotiations on the orderly withdrawal of the United Kingdom from the European Union, allowing the negotiations to proceed to their second phase. The Commission also stated that it stood ready to begin work immediately on transitional arrangements, should the European Council so decide.

               (7)The Commission's recommendation was based on the Joint Report from the negotiators of the European Union and the United Kingdom Government on progress during phase 1 of negotiations under Article 50 TEU on the United Kingdom's orderly withdrawal from the European Union of 8 December 2017.

               (8)On 13 December 2017, the European Parliament adopted a resolution on the state of play of negotiations with the United Kingdom.

               (9)In its guidelines of 15 December 2017, the European Council welcomed the progress achieved during the first phase of the negotiations and decided that it was sufficient to move to the second phase related to transition and the framework for the future relationship. The European Council called on the Commission as Union negotiator and the United Kingdom to complete the work on all withdrawal issues, including those not yet addressed in the first phase, in conformity with the European Council guidelines of 29 April 2017, and to consolidate the results obtained in particular by drafting the relevant parts of the Withdrawal Agreement. The European Council called on the Commission to put forward appropriate recommendations to this effect, and on the Council to adopt additional negotiating directives on transitional arrangements.

               (10)It is therefore necessary to supplement the negotiating directives set out in the Annex to the Council Decision of 22 May 2017.

               (11)In accordance with Article 106(a) of the Treaty establishing the European Atomic Energy Community, Article 50 of the Treaty on European Union applies to the European Atomic Energy Community.

               HAS ADOPTED THIS DECISION:

               Article 1

               The Commission shall conduct the negotiations, on behalf of the Union, for an agreement with the United Kingdom of Great Britain and Northern Ireland setting out the arrangements for its withdrawal from the European Union and from the European Atomic Energy Community, taking account of the framework for its future relationship with the Union, in the light of the guidelines adopted by the European Council and in line with the negotiating directives set out in the Annex to the Council Decision of 22 May 2017, as supplemented by the negotiating  directives set out in the Annex to this Decision.

                  Article 2

               This Decision is addressed to the Commission.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        COM(2017) 784 final.

    ---documentbreak---

               EUROPEAN COMMISSION
            Brussels,20.12.2017
            COM(2017) 830 final
            ANNEX
            to the
            Recommendation for a COUNCIL DECISION
            supplementing the Council Decision of 22 May 2017 authorising the opening of negotiations with the United Kingdom of Great Britain and Northern Ireland for an agreement setting out the arrangements for its withdrawal from the European Union

               ANNEX

                  Supplementary directives for the negotiation of an agreement with the United Kingdom of Great Britain and Northern Ireland setting out the arrangements for its withdrawal from the European Union

               1.In line with the European Council guidelines of 29 April 2017 and the Council negotiating directives of 22 May 2017, the first phase of the negotiations focused on the rights of citizens, the financial settlement, the issues relating to the island of Ireland, other separation issues, and the governance of the Withdrawal Agreement.

               2.Noting the progress made so far, on 20 October 2017, the European Council called for work to continue with a view to consolidating the convergence achieved and pursuing negotiations in order to be able to move to the second phase of the negotiations as soon as possible. The European Council thus invited the Council and the Commission as Union negotiator to start internal preparatory discussions, including on possible transitional arrangements.

               3.Based on:

               –the recommendation made by the Commission Communication on the state of progress of the negotiations with the United Kingdom under Article 50 of the Treaty on European Union of 8 December 2017
                  1

               –the Joint Report from the negotiators of the European Union and the United Kingdom Government on progress during phase 1 of negotiations under Article 50 TEU on the United Kingdom's orderly withdrawal from the European Union of 8 December 2017, on which the Commission's recommendation is based,

               the European Council, on 15 December 2017, welcomed the progress achieved during the first phase of the negotiations and decided that it was sufficient to move to the second phase related to transition and the framework for the future relationship.

               4.The European Council also made clear that negotiations in the second phase could only progress as long as all commitments undertaken during the first phase were respected in full and translated faithfully in legal terms as quickly as possible. During the second phase of the negotiations, an overall understanding on the framework for the future relationship of the Union with the United Kingdom should also be reached. This will require additional European Council guidelines.

               5.The present set of negotiating directives is intended for the second phase of the negotiations; it therefore supplements the first set of negotiating directives adopted on 22 May 2017. The European Council guidelines of 29 April 2017 as well as the general principles and the procedural arrangements for the conduct of the negotiations established in the Council negotiating directives of 22 May 2017 continue to apply in their entirety to this phase of the negotiations, including as regards the territorial scope of the withdrawal agreement, including its provisions on transitional arrangements, and of the future framework; these negotiating directives should therefore, as the first set of the negotiating directives, fully respect paragraphs 4 and 24 of the European Council guidelines of 29 April 2017, notably as regards Gibraltar.

               6.During the second phase of the negotiations, in view of the specific nature of issues related to the island of Ireland, the work on detailed arrangements required to give effect to the principles and commitments set out in the Joint Report should continue in a distinct strand, some of which would be translated in the Withdrawal Agreement, others in the framework for the future relationship.

               I.Issues related to the orderly withdrawal of the United Kingdom from the European Union

               7.In line with the European Council guidelines of 15 December 2017 and with the negotiating directives annexed to the Council Decision of 22 May 2017 as supplemented by these negotiating directives, it is necessary to complete the work on all withdrawal issues, including those not yet addressed in the first phase.

               8.Negotiations in the second phase should furthermore translate into legal terms the results of the negotiations, including those obtained during the first phase, which should, where appropriate, be adapted in the light of the existence of the transitional arrangements referred to below. As specified in the first set of the negotiating directives, the Withdrawal Agreement should recall that Union law ceases to apply on the withdrawal date to the overseas countries and territories having special relations with the United Kingdom
                  2
                and to the European territories for whose external relations the United Kingdom is responsible, to which the Treaties apply by virtue of Article 355 of the Treaty on the Functioning of the European Union.

               II.transitional arrangements

               9.The European Council guidelines of 29 April 2017 set out general core principles applying to any agreement with the United Kingdom as well as to any transitional arrangements:

               –any agreement will have to be based on a balance of rights and obligations, and ensure a level playing field;

               –preserving the integrity of the Single Market excludes participation based on a sector-by-sector approach;

               –a non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member;

               –the four freedoms of the Single Market are indivisible and there can be no "cherry picking";

               –the Union will preserve its autonomy as regards its decision-making as well as the role of the Court of Justice of the European Union. According to the European Council guidelines of 15 December 2017, this refers notably to the competence of the Court of Justice of the European Union.

               10.In addition to these core principles, the European Council guidelines of 29 April 2017 set out specific conditions applicable to any possible transitional arrangements. To the extent necessary and legally possible, the negotiations may seek to determine transitional arrangements which are in the interest of the Union and, as appropriate, to provide for bridges towards the foreseeable framework for the future relationship in the light of the progress made. Any such transitional arrangements must be clearly defined, precisely limited in time, and subject to effective enforcement mechanisms.

               11.These supplementary negotiating directives are based on and further develop the principles and conditions laid down in the European Council guidelines of 15 December 2017.

               12.In line with those guidelines, any transitional arrangements provided for in the Withdrawal Agreement should cover the whole of the Union acquis, including Euratom matters. Notwithstanding paragraph 17 of these negotiating directives, the Union acquis should apply to and in the United Kingdom as if it were a Member State. Any changes to the acquis should automatically apply to and in the United Kingdom during the transition period. For acts adopted pursuant to Title V of Part III of the Treaty on the Functioning of the European Union relating to the Area of Freedom, Security and Justice by which the United Kingdom is bound before its withdrawal, Article 4a of Protocol (No 21) annexed to the Treaties should continue to apply during the transition period. The United Kingdom should however no longer be allowed to exercise its right under Protocol (No 21) to opt-in to measures other than those referred to in Article 4a of that Protocol.

               13.During the transition period, Union law covered by these transitional arrangements should deploy in the United Kingdom the same legal effects as those which it deploys within the Union.

               14.In line with the European Council guidelines of 29 April 2017, it is also recalled that as from the date of its withdrawal from the Union the United Kingdom will no longer benefit from the agreements concluded by the Union, or by Member States acting on its behalf, or by the Union and its Member States acting jointly. Where it is in the interest of the Union, the Union may consider whether and how arrangements can be agreed that would maintain the effects of the agreements as regards the United Kingdom during the transition period; the United Kingdom should however no longer participate in any bodies set up by those agreements.

               15.In line with the European Council guidelines of 15 December 2017, any transitional arrangements require the United Kingdom's continued participation in the Customs Union and the Single Market (with all four freedoms) during the transition. The United Kingdom should take all necessary measures to preserve the integrity of the Single Market and of the Customs Union. The United Kingdom should continue to comply with the Union trade policy. It should also in particular ensure that its customs authorities continue to act in accordance with the mission of EU customs authorities including by collecting Common Customs Tariff duties and by performing all checks required under Union law at the border vis-à-vis other third countries.

               16.In line with the European Council guidelines of 29 April 2017 and the first set of negotiating directives of 22 May 2017, any time-limited prolongation of the Union acquis requires existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures to apply, including the competence of the Court of Justice of the European Union.

               17.In relation to the application of the Union acquis to the United Kingdom, the Withdrawal Agreement should therefore, during the transitional period, preserve the competences of the Union institutions (in particular the full jurisdiction of the Court of Justice of the European Union), bodies, offices and agencies in relation to the United Kingdom and to United Kingdom natural or legal persons. In line with the European Council guidelines of 15 December 2017, the United Kingdom should however no longer participate in or nominate or elect members of the Union institutions, nor participate in the decision-making or the governance of the Union bodies, offices and agencies.

               18.Without prejudice to paragraph 17, during the transition period, the United Kingdom could be invited to attend, without voting rights, meetings of standing committees or Commission experts groups and other similar entities or of the agencies, offices or bodies where Member States are represented and:

               –where the discussion concerns individual acts to be addressed to the United Kingdom or to United Kingdom natural or legal persons; or

               –where the presence of the United Kingdom is necessary from a Union perspective for the effective implementation of the acquis during the transition period.

               19.The Withdrawal Agreement should define the precise conditions and the clear framework under which such exceptional attendance should be allowed.

               20.Specific procedural arrangements which are compliant with paragraphs 17 and 18 should also be found for the fixing and allocation of fishing opportunities (total allowable catches) during the transition period.

               21.The transitional arrangements should apply as from the date of entry into force of the Withdrawal Agreement and should not last beyond 31 December 2020.

                     (1)

                        COM(2017) 784 final.

                     (2)

                        Listed in the twelve last indents of Annex II to the Treaty on the Functioning of the European Union.


               EUROPEAN COMMISSION
            Brussels, 24.5.2017
            JOIN(2017) 19 final
            Joint Recommendation for a
            COUNCIL DECISION
            authorising the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy to open negotiations and negotiate a modernised Association Agreement with the Republic of Chile
            {SWD(2017) 172 final}{SWD(2017) 173 final}

               EXPLANATORY MEMORANDUM

               1.CONTEXT OF THE PROPOSAL

               •Reasons for and objectives of the proposal

               Chile was the first South American country to conclude an Association Agreement with the EU (‘the Agreement’). The Agreement, which includes political, cooperation and trade provisions, was applied provisionally as of 1 February 2003. The Agreement entered into force on 1 March 2005.

               The implementation of the Agreement has progressed well and its institutional framework is fully functional. The Agreement has contributed to strengthening EU-Chile (‘the Parties’) relations and has opened the way to defining new areas of cooperation and the establishment of new policy dialogues. On trade matters, the Agreement includes a Free Trade Agreement, which has contributed to a strong growth in bilateral trade and investment.

               During a meeting in the margins of the EU-CELAC Summit held in Santiago on 26-27 January 2013, leaders from the EU and Chile agreed that they should explore options to modernise the Agreement following 10 years of its implementation.  In April 2015, the 6th EU-Chile Association Council endorsed the establishment of the joint working group (‘the Group’) on the modernisation of the Agreement. The aim of the Group was to conduct a scoping exercise by assessing the level of ambition for entering into negotiations to modernise the Agreement in all areas. The Group created two subgroups, one responsible for political and cooperation and the other for trade. The subgroups concluded their work on the occasion of the 14th EU-Chile Association Committee that was held on 31 January 2017.

               A modernised Agreement should frame EU-Chile relations by encompassing political, security, sectorial cooperation and trade matters. The main policy objective is to deepen EU-Chile relations by setting out a new comprehensive text to replace the existing Agreement so as to broaden its current scope and reflect the new bilateral and global political and economic challenges. The modernisation process should, building on the experiences of implementing the current Agreement, take into account the deepening of the EU integration process and the accession of new EU Member States, the evolution of the role of the EU and Chile on the international scene.

               On trade matters there have also been major trade policy developments at global level, and the Parties have concluded highly ambitious and comprehensive agreements with third partners, which go well beyond the provisions of the EU-Chile Free Trade Agreement.

               The preparatory discussions that took place in the Group contributed to defining a number of the parameters that the modernisation process should take into account. For the political and cooperation part, the Group contributed in reaching an initial understanding on the possible structure and scope of the new Agreement. The Group also helped in identifying potential areas of mutual interest for future cooperation, focussing on continued EU-Chile international cooperation in the framework of Agenda 2030 and the achievement of sustainable development goals.

               On trade matters, the scoping exercise reflected the scope and the level of ambition that the Parties could achieve in a comprehensive modernisation of the trade part of the Agreement. It confirmed the shared objective to ambitiously upgrade the framework for the bilateral trade and investment relationship, building on the existing Agreement and going beyond WTO commitments. Negotiations should be conducted taking into account the most recent trade agreements negotiated and concluded by the Parties, and to the need to ensure complementarity and coherence with those negotiations and agreements.

                  A modernised Agreement should therefore provide for the highest possible level of liberalisation of trade in goods, services, investment and access to government procurement. It should ensure a high level of protection and enforcement of intellectual property rights, including on geographical indications. Furthermore, it should extend the scope of the existing trade provisions in addressing non-tariff barriers and other regulatory and rules-based aspects. A modernised Agreement should ensure the right of the Parties to pursue legitimate objectives of public policy in all relevant areas. It should also take forward other issues such as trade and sustainable development, trade and gender, and trade and SMEs.

               •Consistency with existing policy provisions in the policy area

               The recommendation is in line with the Global Strategy for the European Union’s Foreign and Security Policy which provides, among other aims, a deepening of relations with Latin America and the Caribbean through the conclusion of bilateral partnerships.

               The recommendation is in line with the Communication ‘Trade for All - Towards a More Effective, Transparent and Responsible Trade and Investment Policy’ which highlights the need to move the EUs bilateral relationships forward in order to deliver jobs and growth by tackling trade and investment barriers in a comprehensive way, while securing the EU high level of social and environmental protection and other policy objectives, including sustainable development and the particular needs of SMEs. The ‘Trade for All’ highlighted that the Commission would request negotiating directives to modernise the Agreement after successfully completing the scoping exercise.

               •Consistency with other Union policies

               The recommendation is in line with The Agenda for Change, adopted in 2011, as the basis for the EU's development policy towards non-EU countries. In that context, Chile has graduated from the EU bilateral cooperation assistance and new formula of international cooperation have been sought building on the European Consensus on Development and The 2030 Agenda for Sustainable Development.

               2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

               •Legal basis

               The recommendation is based on Article 218(3) and (4) of the Treaty on the Functioning of the European Union (TFEU).

               •Subsidiarity (for non-exclusive competence)

               The purpose of the Agreement is to upgrade the existing association between the EU and Chile. Therefore, action should be conducted at EU level.

               The common commercial policy is listed among the areas of exclusive competence of the Union in Article 3 of the TFEU) and under Article 5(3) of the Treaty on European Union, the subsidiarity principle does not apply in areas of exclusive competence.

               •Proportionality

               The recommendation for a Council decision authorising the Commission and the High Representative for Foreign Affairs and Security Policy (‘the High Representative’) to negotiate a modernised Agreement with Chile does not go beyond what is necessary or appropriate to achieve the policy objectives.

               On trade matters, in line with the principle of proportionality, all reasonable options for policy interventions were considered in order to assess the likely effectiveness of such policy interventions, as described in detail in the impact assessment report.

               •Choice of the instrument

                  Decision by the Council of the European Union.

               3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

               •Ex-post evaluations/fitness checks of existing legislation

                  An ex-post evaluation on the economic impact of the trade part of the Agreement was conducted by an external consultant in 2012. Further details are provided in the impact assessment report attached to this recommendation.

               •Stakeholder consultations

               Between 8 June and 8 September 2016, the Commission carried out an online public consultation, which was published on the website of the Directorate-General for TRADE and posted on ‘EU Survey’ (the Commission's online public consultations tool). Interested parties were invited to answer questions covering a wide range of themes on trade and investment between the EU and Chile. The summary of the responses to the public consultation is attached to the impact assessment report, and the  responses from interested parties were published on DG TRADE's website.

               •Collection and use of expertise

                  An external consultant was commissioned to carry out an ex-ante analysis on the potential impact of the modernisation of the trade part of the Agreement. This external study is annexed to the impact assessment report.

               •Impact assessment

                  An impact assessment on the modernisation of the trade part of the  Agreement has been conducted.  The impact assessment report and its executive summary sheet, as well as the positive opinion of the Regulatory Scrutiny Board, are attached to this Recommendation.

                  In addition to the impact assessment, an independent sustainability impact assessment will examine the potential economic, social, human rights and environmental impacts of the trade part of the modernised Agreement. It will be carried out by external consultants at the same time as the negotiations, and will rely on a wide-ranging, continuous consultation of interested parties, notably civil society. The sustainability impact assessment will be finalised ahead of the initialling of the modernised Agreement, and its findings will feed into the negotiating process.

               •Regulatory fitness and simplification

                  SMEs should benefit from new trade opportunities and cost savings due to trade liberalisation and from the enhanced legal framework, as well as from provisions improving customs procedures, and those increasing regulatory transparency. The impact assessment report contains detailed information on the potential impacts on interested parties and economic sectors.

               •Fundamental rights

                  The EU will seek to include specific clauses on democracy, the rule of law, human rights and fundamental freedoms, which need to be defined as essential elements of the Agreement.

                  The impact assessment report on the modernisatoin of the trade part of the Agreement addresses the issues of fundamental rights under social, environmental and human rights aspects. For example, in line with established EU policy, the trade part of a modernised Agreement should contain a chapter on Trade and Sustainable Development.

               4.BUDGETARY IMPLICATIONS

                  The trade part of a modernised Agreement will have a limited negative impact on the EU budget in the form of customs duties due to tariff liberalisation. Indirect positive impacts are expected in terms of increases in resources linked to value added tax and gross national income.

               5.OTHER ELEMENTS

               •Implementation plans and monitoring, evaluation and reporting arrangements

                  In line with the commitment made in the 2015 Communication ‘Trade for All – Towards a more responsible trade and investment policy’, there will be an in-depth ex-post evaluation of the effects of the trade part of the modernised Agreement once it has been in force for sufficient time to ensure availability of meaningful data. The attached impact assessment report contains detailed information on the envisaged monitoring and evaluation arrangements.

               •Explanatory documents (for directives)

                  Not applicable.

               •Detailed explanation of the specific provisions of the proposal

               Not applicable.

               Procedural aspects

                  The negotiating team will consist of the Commission and the High Representative.

               In accordance with Article 218(4) TFEU, it is suggested that the Council designates a special committee in consultation with which the negotiations must be conducted. The Working Party on Latin America and the Caribbean will be consulted on the political and cooperation parts of the modernised Agreement. The Trade Policy Committee will be consulted on trade-related parts of the modernised Agreement.

               The European Parliament will be informed at all stages of the procedure, in line with Article 218 (10) TFEU.

               The precise structure of the Agreement will be determined in the light of a further assessment of Opinion 2/15 of the Court of Justice.

               The Commission and the High Representative will inform Chile about the EU internal rules on transparency, and about the access by the Council of the European Union and the European Parliament to negotiating documents.

               The Commission and the High Representative welcome the fact that the members of the Council of the European Union are increasingly engaging at an early stage with their parliaments on trade negotiations in line with their institutional practices. It encourages the members of the Council of the European Union to do the same on this Recommendation for a Council Decision, having due regard to Council Decision 2013/488/EU.

               The Commission and the High Representative recommend that the negotiating directives be made public immediately after their adoption.

               This Recommendation for a Council Decision will be unclassified when the negotiating directives in Annex are detached from the Recommendation.

               Joint Recommendation for a

               COUNCIL DECISION

               authorising the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy to open negotiations and negotiate a modernised Association Agreement with the Republic of Chile

               THE COUNCIL OF THE EUROPEAN UNION,

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

               Having regard to the recommendation from the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy (‘High Representative’),

               WHEREAS negotiations should be opened with a view to concluding a modernised Association Agreement with Chile (‘the Agreement’) to replace the Agreement establishing an association between the European Community and its Member States, of one part, and the Republic of Chile, of the other part
                  1
               .

               HAS ADOPTED THIS DECISION:

               Article 1

               (1)The Commission and the High Representative  are hereby authorised to negotiate, on behalf of the Union, a modernised Association Agreement with  Chile (“the Agreement”),

               (2)The Commission shall be the head of the Union's negotiating team.

               Article 2

               The negotiations shall be conducted on the basis of the negotiating directives of the Council set out in the Annex to this Decision.

               Article 3

               The negotiations shall be conducted in consultation with the Council Working Party on Latin America and the Caribbean. The Trade Policy Committee shall be consulted on the trade related parts of the Agreement.

               Article 4

               This Decision and its Annex will be made public immediately after their adoption.

               Article 5

               This Decision is addressed to the Commission and the High Representative.

               Done at Brussels,

                     For the Council

                     The President

                     (1)

                        OJ L352 of 30/12/2002, p.1.

    ---documentbreak---

               EUROPEAN COMMISSION
            Brussels, 24.5.2017
            JOIN(2017) 19 final
            ANNEX
            to the
            Joint Recommendation for a Council Decision
            Authorising the European Commission and the High Representative of the Union for Foreign Affairs and Security Policy to open negotiations and negotiate with Chile a modernised Association Agreement
            {SWD(2017) 172 final}{SWD(2017) 173 final}

               ANNEX

               DIRECTIVES FOR THE NEGOTIATION OF A MODERNISED ASSOCIATION AGREEMENT WITH CHILE

               A.
                     NATURE AND SCOPE OF THE AGREEMENT

               The aim of the negotiation is to conclude a comprehensive agreement with Chile (Modernised Agreement) to modernise and replace the existing Agreement establishing an association between the European Community and its Member States, of the one part, and the Republic of Chile, of the other part
                  1
                (Association Agreement).

               The negotiations should broaden the current scope of the Association Agreement and adjust it to the new political and economic global challenges, to the new reality of the EU-Chile partnership, and to the level of ambition of recently concluded agreements and negotiations being conducted by the EU and Chile.

               The Modernised Agreement should create a coherent, comprehensive, up-to-date legally binding framework for the EU's relations with Chile.

               Given that Chile has graduated from bilateral EU development assistance, it is important that the new pattern of EU-Chile cooperation is reflected in the substance and structure of the Modernised Agreement. It should reflect the transformative nature of the 2030 Agenda and the role of international development cooperation towards the achievement of the Sustainable Development Goals.

               The Agreement should provide for strengthened political cooperation on foreign and security matters.

               The precise structure of the Agreement will be determined in the light of a further assessment of Opinion 2/15 of the Court of Justice.

               B.
                     PROPOSED CONTENT OF THE AGREEMENT

               I.
                     General Principles And Objectives

               The Modernised Agreement should be based on respect for democratic principles, the rule of law, human rights and fundamental freedoms, as enshrined in particular in the UN Charter and other relevant human rights instruments, among them the Universal Declaration on Human Rights. Together with the first part of the EU clause on non-proliferation of weapons of mass destruction, these should constitute essential elements of the Modernised Agreement. It should provide for the possibility of unilateral partial or full suspension of the Agreement in the event of infringement of these principles.

               The Modernised Agreement should allow Chile and the EU to strengthen their institutional capabilities, public policies and legislative frameworks, as well as acting as strategic partners in key multilateral and regional fora and institutions, when they so agree.

               The Modernised Agreement should require each Party to take all necessary measures in order to give effect to its provisions, including their observance at all levels of government.

               The Modernised Agreement should reflect the common cultural heritage and the strong historical, political and economic ties which unite the two sides and be in conformity with the following underlying principles and key objectives:

               ·To adapt the contents of the Association Agreement to better reflect recent global developments.

               ·To reflect the shared values of democracy, respect for human rights and fundamental freedoms, and the rule of law.

               ·To reflect the commitment to foster a stronger Association with the purpose of bringing prosperity and well-being to their citizens.

               ·To reinforce closer coordination on bilateral and international issues of mutual interest, including regional aspects.

               ·To strengthen cooperation on bilateral, regional and global issues of common concern.

               ·To reflect the importance of a strong and effective multilateral system, based upon international law, by preserving peace, preventing conflicts and strengthening international security and in tackling common challenges.

               ·To reflect the recognition that sustainable development is an overarching objective of the Parties and that they will aim at ensuring the respect, promotion and effective implementation of international environmental and labour agreements and standards consistent with the EU acquis. It should also reflect the commitment of the Parties not to encourage trade or foreign direct investment by lowering domestic environmental, labour or occupational health and safety legislation and standards, core labour standards or policies and legislation, as well as the commitment to improve laws, policies and underlying levels of environmental and labour protection.

               The objective of the trade and investment provisions of the Agreement should be to increase trade and investment between the EU and Chile by realising the untapped potential of the bilateral relationship, generating new economic opportunities, enhancing consumer welfare, strengthening competitiveness and creating jobs and growth, inter alia through:

               ·The progressive and reciprocal further liberalisation of trade in goods and services, investment as well as access to public procurement opportunities.

               ·A high level of protection of investment.

               ·A high level of protection of intellectual property rights, including Geographical Indications.

               ·A high level of protection of consumers.

               ·The elimination, reduction or prevention of unnecessary non-tariff barriers.

               ·The right to regulate economic activity in the public interest, to achieve legitimate public policy objectives such as the protection and promotion of public health, social services, public education, safety, the environment, public morals, social or consumer protection, privacy and data protection and the promotion and protection of cultural diversity.

               ·Measures to ensure that international trade contributes to the overarching objective of sustainable development, and the Parties’ commitment to implement this Agreement accordingly.

               ·The shared objective of the Parties to take into account the particular challenges faced by small and medium-sized enterprises in contributing to the development of trade and investment.

               ·The commitment of the Parties to communicate with all relevant stakeholders from civil society, including the private sector, trade unions, and other non-governmental organisations.

               ·The commitment of the Parties to an Agreement in full compliance with their rights and obligations arising out of the WTO and supportive of the multilateral trading system.

               II.
                     Areas for Cooperation

               The Agreement should advocate the widest possible scope for cooperation from which no field of activity should in principle be excluded. It should build on the experience from the existing cooperation and aim at ensuring effective international cooperation in the implementation of the 2030 Agenda and the achievement of Sustainable Development Goals.

               It should include commitments from both parties to deepen their cooperation through exchanges of knowledge and best practices in areas of common interest, also taking into account that Chile is a high income country and OECD member. It should reflect the importance of strengthening sectoral cooperation activities, which should notably be aimed at developing concrete proposals and measures and strategic objectives and fostering a dynamic culture of consultation and coordination.

               It should allow the parties to identify ways of developing and applying modern, effective, and dynamic working methods and allow a joint assessment of results, based on strategic objectives. It should foster the creation of contact networks and strengthen the necessary capacities to plan, implement, measure, evaluate, and disseminate the results of the relationship.

               Areas for cooperation:

               ·Common Foreign and Security Policy

               ·Disarmament and non-proliferation

               ·Human rights, rule of law and good governance

               ·Gender equality

               ·International security and cyberspace

               ·Fight against terrorism

               ·Judicial cooperation

               ·Combating illicit drug trafficking, organized crime and corruption

               ·International migration

               ·Consular protection

               ·Citizen security

               ·Cooperation in international crisis management

               ·Enterprise and industry

               ·Raw materials

               ·Corporate social responsibility

               ·Employment and social issues

               ·Regional cooperation

               ·Youth

               ·Culture

               ·Sustainable energy

               ·Environment

               ·Climate change

               ·Circular economy

               ·Fisheries

               ·Ocean governance

               ·Disaster preparedness

               ·International cooperation and development

               ·Blue growth

               ·Research, science, technology and innovation

               ·Earth observation

               ·Digital policy strategies

               ·Advanced human capital

               ·Education and higher education

               ·Tourism

               ·Protection of personal data

               ·Statistics

               ·Other areas, as appropriate

               III.
                     Trade and Investment

               Nature and Scope

               The objective of the trade and investment part of a modernised Agreement should be to increase the level of ambition in all areas of the existing Agreement. It should provide additional and comprehensive reciprocal liberalisation of trade in goods and services, and the establishment of detailed rules on a broad number of trade and investment-related issues, as specified below. The Agreement should also provide for progressive and reciprocal liberalization of investment, investment protection, and additional mutual access to public procurement markets. Furthermore, the Agreement should aim at removing unnecessary obstacles to trade and investment, including existing non-tariff barriers (NTBs), through effective and efficient mechanisms, and seek an ambitious level of regulatory coherence for goods and services, including through enhanced cooperation between regulators.

               The rules of the Agreement on regulatory coherence, in particular, should be without prejudice to the right of the Parties to regulate in accordance with the level of health, safety, consumer, labour, data and environmental protection that each side deems appropriate, or otherwise to achieve legitimate public policy objectives, such as cultural diversity or sustainable development objectives (as defined by each Party) through regulation.

               The trade and investment part of the Agreement should also contribute to the promotion of sustainable development and broader EU values such as human rights, inter alia by including trade-related provisions on labour, environment and gender, including through corporate social responsibility, transparency and the promotion and effective implementation of international labour and environmental standards. To address such measures, sustainable development should be taken into account throughout the Agreement, including in the form of a specific chapter on trade and sustainable development, covering both social and environmental issues.

               The Agreement should ensure that all levels of government, including sub-central authorities and relevant entities, effectively comply with the provisions of the Agreement.

               The Agreement should take account of the particular needs of small and medium-sized enterprises.

               Trade in Goods

               Further elimination of customs duties

               The Agreement should aim at full tariff liberalisation, while providing for special treatment for products identified as sensitive, for which meaningful market access should be sought through, for instance, longer dismantling periods, or partial liberalisation commitments (including tariff rate quotas), taking into account EU offensive and defensive interests.

               Any customs duties, taxes or charges on exports or any measures of equivalent effect should be abolished, and the adoption of new measures of this kind should be prohibited.

               Import and export restrictions

               The Agreement should prohibit any ban or restriction on trade between the Parties, including quantitative restrictions or authorisations requirements, which are not justified by the specific exceptions set out below, and should contain enhanced disciplines on import and export licensing, repaired goods, remanufactured goods and origin marking.

               Rules of origin

               Negotiations should aim at updating the Annex on Rules of Origin, so as to make the rules of origin and administrative cooperation in the Agreement clearer and simpler, and take into account the latest developments in EU rules of origin. Provisions on administrative cooperation should also aim to ensure that administrative errors are dealt with appropriately.

               In the interest of EU trade and investment, extension of cumulation of origin to third countries could be considered in the course of the negotiations.

               Customs-related matters and Trade Facilitation

               The Agreement should include provisions to further facilitate trade between the Parties, while ensuring effective controls and anti-fraud measures. To this end, it should build on the WTO Trade Facilitation Agreement and include detailed obligations aimed at, inter alia, promoting the modernisation and simplification of rules and procedures, standardised documentation, transparency, legal certainty and cooperation between customs authorities.

               Such cooperation should include exchanging information for supply-chain security and risk management and, where appropriate, establishing mutual recognition of risk management techniques, risk standards, security controls, and trade partnership programmes for compliant and trustworthy economic operators, to be decided and implemented by the relevant Committee. It should also include upgrading the current provisions on mutual administrative assistance in customs matters.

               These provisions should also promote convergence in the trade facilitation field, through the effective implementation and application of international rules and standards in the field of customs and other trade-related procedures, including WTO provisions and World Customs Organisation instruments and, inter alia, the revised Kyoto Convention.

               Non-tariff measures

               The Agreement should aim at removing unnecessary obstacles to trade and investment, including remaining NTBs, through effective and efficient mechanisms, and promoting regulatory coherence for goods and services between the EU and Chile.

               Product-specific NTBs should be addressed on a request and offer basis, in parallel with exchanges on tariff concessions. The Agreement should include sector-specific commitments on NTBs. The Agreement should also envisage appropriate procedures to prevent new NTBs and other unnecessary obstacles to trade from arising in the future, including through transparency in applicable laws and regulations.

               The Agreement should include provisions on State Trading Enterprises, assessing any possible distortion to competition and barriers to trade and investment that this could create.

               The issue of localisation barriers to trade (measures designed to protect, favour or stimulate domestic operators at the expense of imported goods, services or foreign-owned or foreign-developed intellectual property) should also be addressed.

               Technical regulations, standards and conformity assessment procedures

               The Parties should conclude comprehensive provisions on Technical Barriers to Trade (TBT), building on and going beyond the WTO Agreement on Technical Barriers to Trade (TBT Agreement). These provisions should aim at, inter alia, seeking compatibility and convergence of technical regulations through the application of international standards, streamlining testing and certification requirements, e.g. through a risk-based approach to conformity assessment (including the use of self-declaration of conformity in sectors where this is possible and appropriate), promoting the use of accreditation, strengthening transparency, establishing a mechanism for improved dialogue and cooperation for addressing bilateral TBT issues, and improving dissemination of information to importers and exporters.

               Sectoral Annexes with more detailed and specific disciplines could be considered.

               Sanitary and Phytosanitary measures (SPS)

               In order to ensure coherence with other similar trade agreements concluded by the EU, the new Agreement should incorporate, with appropriate institutional arrangements, the provisions of the current SPS Agreement annexed to the existing Association Agreement, considering possible adjustments in specific areas if needed.

               Trade defence instruments

               Safeguards

               The Agreement should include a clause on safeguard measures providing that any of the Parties may take appropriate measures in accordance with the WTO Agreement on Implementation of Article XIX of the General Agreement on Tariffs and Trade (GATT) 1994 or the WTO Agreement on Safeguards. The Agreement should also ensure that such safeguard measures have the least distorting effect on bilateral trade.

               To maximize liberalisation commitments, and in order to ensure any necessary protection, taking into account specificities of sensitive sectors, the Agreement should in principle contain a bilateral safeguard clause by which either party may remove, in part or in full, preferences where, as a result of the entering into force of the Agreement, a rise in imports of a product from the other party is causing or threatening to cause serious injury to its domestic industry.

               Anti-dumping and countervailing measures

               The Agreement should include a clause on anti-dumping and countervailing measures providing that any of the Parties may take appropriate measures against dumping and/or countervailable subsidies in accordance with the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (GATT) 1994 or the WTO Agreement on Subsidies and Countervailing Measures. The Agreement should also integrate commitments that go beyond WTO rules, in this area in line with EU rules and previous agreements.

               Specific provisions

               The Agreement should recognise that green box payments are not price distortive and should therefore in principle not be targeted by anti-dumping or anti-subsidy measures.

               Trade in Services and Investment

               Services and investment liberalisation and digital trade

               In line with Article V of the General Agreement on Trade in Services (GATS), the Agreement should have a substantial sectoral coverage and should cover all modes of supply. The Agreement should have no a priori exclusion from its scope other than the exclusion of audio-visual services from services and investment liberalisation commitments, and services supplied and activities performed in the exercise of governmental authority. The negotiations should aim at the progressive and reciprocal liberalisation of trade in services and investment by eliminating restrictions to market access and national treatment, beyond the Parties’ WTO commitments and offers submitted in the context of the negotiations of the Trade in Services Agreement. The Agreement should include rules concerning performance requirements related to investments.

               Furthermore, the Agreement should contain new or enhanced regulatory disciplines as compared to the GATS. To this end, the negotiations should cover matters such as:

               ·regulatory provisions on transparency and mutual recognition;

               ·horizontal provisions on domestic regulation, such as those ensuring impartiality and due process with regard to licensing and qualification requirements and procedures; and

               ·regulatory provisions for specific sectors – including telecommunication services, financial services, postal and courier services and international maritime transport services.

               In the context of the increasing digitalisation of trade, the negotiations should result in rules covering e-commerce and cross-border data flows, electronic trust and authentication services, unsolicited direct marketing communications, and should address digital protectionism and unjustified data localisation requirements, while neither negotiating nor affecting the EU personal data protection rules.

               The Agreement may include procedural commitments for the entry and stay of natural persons for business purposes pursuant to the Parties' commitments in Mode 4. At the same time, nothing in the Agreement should prevent the Parties from applying their national laws, regulations and requirements regarding entry and stay, provided that, in doing so, they do not nullify or impair the benefits accruing from the Agreement. The EU and its Member States’ laws, regulations and requirements regarding working conditions and labour rights shall continue to apply.

               The Agreement should reaffirm the right of the EU, its Member States and their national, regional and local authorities to regulate within their territories to achieve legitimate public policy objectives such as the protection and promotion of public health, social services, public education, safety, the environment, public morals, social or consumer protection, privacy and data protection and the promotion and protection of cultural diversity. The high quality of the EU public services should be preserved in accordance with the TFEU and in particular Protocol No 26 on Services of General Interest, and taking into account the EU’s reservations in this area, including GATS.

               Investment protection

               The Agreement should include:

               ·state-of-the-art, precisely defined protection standards, including provisions on fair and equitable treatment, full protection and security, national treatment, most-favoured nation treatment, protection against direct and indirect expropriation, free transfers, compensation for losses, observance of written commitments; and

               ·a state-of-the art jurisdictional mechanism to resolve disputes between investors and states, with an investment tribunal and appellate mechanism (Investment Court System). This mechanism should ensure full impartiality and transparency of dispute resolution procedures, prevent frivolous litigation and include appropriate tools to facilitate the amicable settlement of claims.

               The provisions on investment protection should ensure a strong protection of investors and investments, while fully preserving the Parties' right to regulate within their territories to achieve legitimate policy objectives such as the protection and promotion of public health, social services, public education, safety, the environment, public morals, social or consumer protection, privacy and data protection and the promotion and protection of cultural diversity.

               Capital Movement and Payments

               The Agreement should maintain provisions on the full liberalisation of current payments and capital movements, and include a standstill clause. It should contain safeguard and carve-out provisions (e.g. concerning the Union’s economic and monetary policy and balance of payments), which would be in accordance with TFEU provisions on the free movement of capital.

               The Agreement should not preclude the enforcement of exceptions on the free movement of capital and payments justifiable under the relevant WTO rules.

               Intellectual Property Rights

               The Agreement should complement and build upon the TRIPS Agreement, aiming to ensure a high level of protection and enforcement of all forms of intellectual property rights.

               Consistent with the above, the Agreement should cover general provisions; copyright and related rights; trademarks; designs; patents; plant varieties; protection of undisclosed information including trade secrets; geographical indications (GIs); and commitments, where applicable, to adhere and/or comply with relevant multilateral agreements and conventions.

               The Agreement should ensure enhanced enforcement of IPR, including in the digital environment and at the border.

               As regards Geographical indications (GIs), building on the high level of protection for wines and spirits GIs already contained in the existing Agreement, the Modernised Agreement should provide direct protection through the agreement of listed agricultural products/foodstuffs GIs, at a high level of protection building upon TRIPS Art 23 (including against evocation), enhanced enforcement, exceptions to the rights conferred to trademarks (co-existence), and the possibility to add new GIs. Issues concerning individual prior rights, for example related to plant varieties, trademarks, generic or other legitimate prior uses, should be addressed.

               The Agreement should also aim at setting up a regular dialogue/working groups on Intellectual Property to promote exchange of information on respective legislative progress, exchange of experience on enforcement and consultation in relation to third countries.

               Public Procurement

               The Agreement should aim at enhanced mutual access to public procurement markets by central and sub-central authorities, as well as by state owned enterprises and undertakings with special or exclusive rights operating in the public utilities sectors. It should aim at complementing the current market access coverage ensuring treatment no less favourable than that accorded to locally-established suppliers. Procurement of goods, services and construction services should be covered with limited exceptions and should also include negotiations of commitments in relation to works concessions, in line with the respective legislations in this area.

               The Agreement should also aim at improving the current rules and disciplines by aligning them to the revised WTO Government Procurement Agreement (GPA) and by introducing new provisions.

               Trade and Competition

               The Agreement should contain disciplines on antitrust and mergers applicable to all enterprises. It should include general enforcement principles, including transparency, non-discrimination, procedural fairness and due process.

               The Agreement should also contain provisions on subsidies covering issues such as transparency, consultations and disciplines concerning the most distortive types of subsidies. Provisions on consultations should exclude agricultural subsidies. The Agreement should include specific rules on state owned enterprises, enterprises granted special rights or privileges and designated monopolies, to ensure that they do not distort competition or create barriers to trade and investment.

               Small and Medium-Sized Enterprises

               The Agreement should include a specific SME chapter. The Agreement should assist SMEs to be fully able to take advantage of the opportunities of the Agreement, including through information-sharing arrangements on market access requirements, and an appropriate institutional set-up.

               Trade and Sustainable Development

               The Agreement should include provisions on labour and environmental aspects of trade and sustainable development of relevance in a trade and investment context. It should include provisions that promote adherence to and effective implementation of relevant internationally agreed principles and rules, including the core labour standards and fundamental conventions of the International Labour Organisation (ILO) and multilateral environmental agreements, including those related to climate change.

               The Agreement should reaffirm the right of the Parties to regulate in the labour and environmental areas, consistent with their international commitments, and in pursuit of high levels of protection. It should include provisions for domestic labour and environmental levels of protection not to be lowered in order to encourage trade and investment. This should include a commitment not to derogate from or fail to enforce domestic labour or environmental laws.

               The Agreement should promote a greater contribution of trade and investment to sustainable development, including by addressing areas such as the facilitation of trade in environmental and climate-friendly goods and services and the promotion of voluntary sustainability assurance schemes, corporate social responsibility and gender equality, having regard to internationally recognised instruments.

               The Agreement should also contain commitments promoting trade in legally obtained and sustainably managed natural resources, in particular in relation to biodiversity, wildlife, forestry products, fisheries and cover relevant international instruments and practices. It should also promote trade favouring low-emission, climate-resilient development.

               The Agreement should foresee suitable provisions for the effective implementation and monitoring of these provisions, as well as procedures to address any disputes arising between the Parties, and should provide for civil society participation.

               Trade and Gender

               The Agreement should include provisions addressing trade-related aspects of gender. It should recognize the need to enhance opportunities for women to benefit from the economic opportunities arising from the Parties' enhanced trade relationship through the Agreement.

               Energy and Raw Materials

               The Agreement should include provisions addressing trade and investment related aspects of energy and raw materials. Negotiations should aim at ensuring an open, transparent, non-discriminatory and predictable business environment and at limiting anti-competitive practices and tackling local content requirements in these areas. The Agreement should also include rules that support and further promote trade and investment in the renewable energy sector.

               Regulatory Coherence and Transparency

               The Agreement should include cross-cutting disciplines on regulatory coherence and transparency for the development and implementation of efficient, cost-effective, and more compatible regulations for goods and services. The Agreement should include, inter alia, provisions on early consultations on significant regulations, including opportunities of stakeholders to contribute to the preparation of regulatory proposals, publication of measures having an impact on trade and investment, promotion of information exchange, and the enhanced use of good regulatory practices, such as regulatory impact assessment and ex-post evaluation.

               Anti-Corruption

               The Agreement should include specific provisions targeting and discouraging corruption affecting trade and investment. Such provisions should be based on European and agreed international standards and agreements relating to anti-corruption.

               State-to-State Dispute Settlement and Mediation

               The Agreement should include an effective and binding state-to-state dispute settlement mechanism with an expedited procedure, in particular for the panel composition and the conduct of panel proceedings. The dispute settlement mechanism should be transparent, open and innovative. It should include provisions for a flexible and rapid mediation mechanism.

               General Exceptions

               The Agreement should include general exceptions, including regarding security, balance of payments, prudential supervision and taxation based on the relevant Articles of WTO Agreements.

               Other Areas

               Following analysis by the Commission, prior consultation with the Trade Policy Committee, and in accordance with EU Treaties, the Agreement may include provisions regarding other areas related to trade and investment for which mutual interest would be expressed in the course of negotiations.

               IV. General Institutional Framework

               The Agreement should include provisions on the institutional structure, building on and further developing existing arrangements and practice.

               The Association Council should keep its role of the highest body of the Modernised Agreement responsible for the general supervision of its implementation. It is suggested to adapt the periodicity of the Council meetings based on common agreement by the parties.

               The Association Committee should keep its key role in ensuring the implementation of the Agreement. The Agreement should identify ways to make the work of the Association Committee more effective, to promote synergies and provide more dynamism, in its task to assist the Association Council in the performance of its duties. Subcommittees and working groups may be set up to deal with specific issues.

               The Agreement should provide for specific Trade meetings of the Association Committee established under the Agreement (“Trade Association Committee”) to monitor the implementation of the trade and investment provisions of the Agreement. Sub-committees on specific areas may be established as appropriate, and would operate under the framework of the Trade Association Committee. The Trade Association Committee should report to the Association Council.

               The Association Parliamentary Committee should keep its role and constitute a forum of inter-parliamentary cooperation for members of the European Parliament and of the Chilean National Congress.

               The Joint Consultative Committee should be maintained to represent the opinion of civil society and social partners in the implementation of the new agreement.

               V. General and final provisions

               Notwithstanding the Dispute Settlement Mechanism for trade and trade-related issues, the Agreement should include provisions on the non-fulfilment of obligations of the Agreement, including the possibility of partially of fully suspending the Agreement in the event of violation of the essential elements. Nothing in this Agreement should affect EU legislation regarding public access to official documents.

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                        OJ L352 of 30/12/2002, p.1