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To · opinion parliamentary committee draft · 2023-03-29 ITRE-PA-745415 on the proposal for a regulation of the European Parliament and of the Council establishing a Single Market emergency instrument and repealing Council Regulation No (EC) 2679/98

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~~12.01.2023~~

PA_Legam

~~Ms Anna Cavazzini~~

SHORT JUSTIFICATION

~~Chair~~

1. Introduction

~~Committee on the Internal Market and Consumer Protection~~

The COVID-19 crisis and Russia’s illegal war in Ukraine have presented unprecedented and unique challenges for the Union. As Europe emerges from the crisis, it seeks to learn lessons and put in place mechanisms for dealing with a crisis, and preventing and preparing for one.

~~BRUSSELS~~

Crises can often birth multiple crises: threat to life, economic harm, restrictions to freedom of movement, damage to competitiveness, and vulnerabilities to law and order. Therefore, the “Single Market Emergency Instrument” aims to provide measures and fora for better cooperation and information exchange between Member States and economic operators.

Subject: Opinion on the proposal for a regulation of the European Parliament and of the Council establishing a Single Market emergency instrument and repealing Council Regulation No (EC) 2679/98 (2022/0278 (COD))

2. The Draft Opinion

~~Dear Chair,~~

The Single Market has been one of the greatest achievements and assets in the history of the EU, and has created a path to prosperity and growth for many Member States. The Rapporteur fully supports the objective to provide the Single Market with tools to ensure greater resilience and protection – “fail to prepare and prepare to fail”.

At their meeting of 26 October 2022, the Committee on Budgets’ Coordinators decided to adopt an opinion in the form of a letter on the above-mentioned proposal and mandated me to convey the position set out below.

When it comes to crisis, prevention will always be better than cure. This therefore, places particular importance upon the role of the Advisory Group in providing foresight and conducting broad and meaningful consultation with representatives of economic operators, stakeholder organisations and experts. Such an approach will help enable the Single Market to safeguard and ensure the continuity of its most precious commodity – the four freedoms.

~~Background to the proposal and overall budgetary implications~~

It is essential the Regulation provide a clear and precise framework of measures that focus on increasing cooperation, communication, and preparedness among Member States and economic operators. It must help ensure business continuity, limit industrial disruption, and make sure the heavy hand of market intervention is a last resort.

The Commission’s proposal has the objective of ensuring a coordinated approach to anticipate, prepare for and respond to crises with major effects that threaten the functioning of the Single Market, and where no EU instrument already exists or where the existing instruments do not lay down crisis-relevant provisions.

Any measures adopted must ensure that they both help protect the functioning of the Single Market, while enabling the Union to be competitive, innovative, agile, and an attractive place to invest. According to the competences of the ITRE Committee, the Rapporteur has focused on the following Articles:

More specifically, the proposal is intended to equip the EU with a crisis toolbox to minimise obstacles to the free movement of goods, services and persons and facilitate quick and practical solutions to supply chain issues in times of crisis. The toolbox includes:

A: Activation:

~~- a group advising the Commission on the appropriate measures for anticipating, preventing or responding to the impact of a crisis on the Single Market;~~

Clarity, precision, and proportionality are essential for Member States, economic operators, and workers regarding the vigilance and emergency stage measures.

~~- measures for obtaining, sharing and exchanging relevant information;~~

The vigilance mode should be activated once there is clear evidence and justification for it. Given the serious measures to be taken during this phase, ensuring there are checks and balances in place when activating the mode is essential – including the involvement of the Advisory Group, the drafting of a Single Market Crisis Protection Report and, if necessary, a vote.

~~- contingency measures aimed at anticipating and planning e.g. training on crisis coordination, cooperation and information exchange for liaison officers in the Member States;~~

The end of the vigilance mode should also provide for reflection, to improve its use in the future. Therefore, a review should be carried out. Extending or deactivating the Vigilance Mode requires further clarity and safeguards around the decision-making process. This is particularly critical for when the prolongation is used as a preventative measure for triggering the Emergency Framework, or if there is a need to end the Vigilance Mode early. To ensure coherence, the Rapporteur has merged Articles 9 and 10.

- vigilance measures for addressing impacts of significant incidents on the single market (not yet emergencies) e.g. monitoring of the supply chains of goods and services of strategic importance or identification of goods of strategic importance for which it may be necessary to build a reserve;

B: Strategic Reserves:

- emergency response measures, e.g. request of information from economic operators on their production capacities and existing stocks of crisis-relevant goods or prioritisation of certain orders for the production or supply of crisis-relevant goods.

Given the potentially serious and significant impact on the Single Market, free trade, and business continuity of building strategic reserves, the Rapporteur has sought to include important checks and balances.

~~Some measures, e.g. procurement by the Commission on behalf of Members States, can be activated under both the vigilance and emergency modes.~~

There should be a greater role for the Advisory Group to ensure a streamlined, communicative, and collaborative approach in building strategic reserves. Solidarity and effective action can best be secured by ensuring as much transparency and proportionality as possible in the actions taken.

~~These two modes are to be activated for a maximum duration of six months via implementing acts. Some measures under each mode are also to be activated by means of delegated or implementing acts.~~

The Rapporteur introduces a new article on ‘Long-Term Strategic Reserve Planning’. This provision utilises a review procedure to provide recommendations as to the necessity and usefulness of Member States and the Commission establishing a long-term plan for maintaining a permanent or phased reserve of goods of strategic importance. This will assist with preventing future shortages and the activation of the vigilance or crisis mode.

~~According to the legislative financial statement accompanying the proposal, the costs would amount to EUR 3.08 million for the period 2024-2027 of which:~~

C: Priority Rated Orders and Procurement:

~~- EUR 2.63 million for the recurrent costs of 5 FTE within the Commission. It will be in principle covered under the heading 7 “administrative expenditure”;~~

There may be occasions when priority rated orders are necessary. However, it is essential that there is a clear process that protects the integrity of the Single Market, the economic health of economic operators, and the future competitiveness of the Union.

- EUR 0.45 million for the costs for the planned training activities and the necessary extension of the IT tool used for notification. It would be covered by redeployment under the single market programme.

It is vital that when priority rated orders are requested, that they are a measure of last resort. Full and due consideration must be given to the ability of, and impact on, economic operators to carry out the order.

The additional crisis management costs in the Commission are deemed unpredictable and thus are not included in the legislative financial statement. They would be covered in principle via internal redeployment of Union resources under heading 1 “single market, innovation and digital” and/or heading 7 “administrative expenditure”.

Given the significant market intervention that priority orders represent, it is essential that there is a right to be heard by economic operators, and a larger role for scrutiny, approval, and the resolution of disagreements, for the Advisory Group and economic operators.

~~Position of the Committee on Budgets~~

D: Digital Tool:

The Committee on Budgets makes the following observations with respect to the budgetary implications of the proposal, which I would ask you to take into account in the preparation of the European Parliament position as well as during the trilogues:

It is the intention that digital tools shall support the objectives of this Regulation. Therefore, it is important that the Commission ensure sufficient resources and budget for these tasks are provided, and that high levels of data protection and cybersecurity are applied.

1. The long-standing position of the European Parliament is that new tasks and responsibilities should be matched with fresh resources and not financed by redeployment. Although the amounts involved, at least at this stage, are small, it therefore seems appropriate for the Committee on the Internal Market and Consumer Protection to challenge the approach of redeploying resources within the Single Market programme to finance the Single Market emergency instrument.

There should also be a focus on interoperability and usability, in particular for SMEs and citizens.

2. The legislative financial statement accompanying the proposal is partial and captures only the costs of the initiative in the absence of a crisis. The budgetary margin under heading 1 is very tight and even tighter under heading 7. The Commission is to provide a forecast of the costs possibly incurred with the activation of the vigilance and emergency modes over one year. It will be necessary to evaluate if the Commission would be able to deliver the intended measures in the event of a crisis within the existing budgetary margins and without impacting on other agreed programmes. In case the evaluation shows that there are not enough margins available to respond to possible crisis, this should have to be factored into the revision of the functioning of the Multiannual Financial Framework.

AMENDMENTS

3. In the event of changes with appreciable budgetary consequences introduced by the co-legislators during the negotiations, the Committee on the Internal Market and Consumer Protection could ask the Commission to update the legislative financial statement accordingly. Such changes could include inter alia a different split in the tasks entrusted to the Commission and the Member States or a change in the distribution of measures across the different modes. If not addressed in the frame of the negotiations, this could lead to a situation where the necessary resources could not be made available in the annual budgetary procedure as has happened with some past initiatives.

The Committee on Industry, Research and Energy calls on the Committee on the Internal Market and Consumer Protection, as the committee responsible, to take into account the following amendments:

~~6. The Committee on Budgets remains available to support the process.~~

Amendment 1

~~Yours sincerely,~~

Proposal for a regulation

~~Johan Van Overtveldt~~

Recital 24 a (new)

Text proposed by the Commission

Amendment

(24a) Highlights the importance of the Advisory Group in providing strategic foresight and conducting broad and comprehensive consultations with economic operators, stakeholder organisations and experts, for the purpose of preventing and tackling a crisis.

Or. en

Amendment 2

Proposal for a regulation

Recital 32

Text proposed by the Commission

Amendment

(32) Additionally, to ensure that crisis-relevant goods are available during the Single Market emergency, the Commission may invite the economic operators that operate in crisis-relevant supply chains to prioritise the orders of inputs necessary for the production of final goods that are crisis relevant, or the orders of such final goods themselves. Should an economic operator refuse to accept and prioritise such orders, following objective evidence that the availability of crisis-relevant goods is indispensable, the Commission may decide to invite the economic operators concerned to accept and prioritise certain orders, the fulfilment of which will then take precedence over any other private or public law obligations. In the event of failure to accept, the operator in question should explain its legitimate reasons for declining the request. The Commission may make such reasoned explanation or parts of it public, with due regard to business confidentiality.

(32) Additionally, to ensure that crisis-relevant goods are available during the Single Market emergency, the Commission, after consulting the Advisory Group, may invite the economic operators that operate in crisis-relevant supply chains to prioritise the orders of inputs necessary for the production of final goods that are crisis relevant, or the orders of such final goods themselves.

Or. en

Amendment 3

Proposal for a regulation

Recital 35

Text proposed by the Commission

Amendment

(35) In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission as regards the possibility to adopt supportive measures for facilitating free movement of persons, for establishing a list of individual targets (quantities and deadlines) for those strategic reserves that the Member States should maintain, so that the objectives of the initiative are achieved. Furthermore, implementing powers should be conferred on the Commission as regards activating the vigilance mode and vigilance measures in order to carefully monitor the strategic supply chains and coordinate the building up of strategic reserves for goods and services of strategic importance. Moreover, implementing powers should be conferred on the Commission as regards activation of specific emergency response measures at the time of a Single Market emergency, to allow for a rapid and coordinated response. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council.

(35) In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission as regards the possibility to adopt supportive measures for facilitating free movement of persons, for establishing a list of strategic reserves that the Member States should maintain, so that the objectives of the initiative are achieved. Furthermore, implementing powers should be conferred on the Commission as regards activating the vigilance mode and vigilance measures in order to carefully monitor the strategic supply chains and coordinate the building up of strategic reserves for goods and services of strategic importance. Moreover, implementing powers should be conferred on the Commission as regards activation of specific emergency response measures at the time of a Single Market emergency, to allow for a rapid and coordinated response. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council.

Or. en

Amendment 4

Proposal for a regulation

Article 9 – paragraph 1

Text proposed by the Commission

Amendment

1. Where the Commission, taking into consideration the opinion provided by the advisory group, considers that the threat referred to in Article 3(2) is present, it shall activate the vigilance mode for a maximum duration of six months by means of an implementing act. Such an implementing act shall contain the following:

1. Where it is assessed that the threat referred to in Article 3, point (2) is present and likely to severely and negatively affect the Union, and alternative measures have been considered, the Commission with the endorsement of the Advisory Group, shall activate the vigilance mode for a maximum duration of six months by means of an implementing act.

(a) an assessment of the potential impact of the crisis;

(b) list of the goods and services of strategic importance concerned, and

Or. en

Amendment 5

Proposal for a regulation

Article 9 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

2a. The activation of the vigilance mode and the implementing act shall be accompanied by a crisis preparation and single market protection report, drawn up by the Advisory Group and the Commission. That report shall be made available to the European Parliament.

Or. en

Amendment 6

Proposal for a regulation

Article 9 – paragraph 2 b (new)

Text proposed by the Commission

Amendment

2b. If the vigilance mode is no longer considered to be necessary, and the threat referred to in Article 3, point (2) is no longer present due to a change in circumstances, the vigilance mode and all or some of its measures may be brought to an early termination. The request for an early termination can be made either by the Commission or the Member States, provided there is sufficient evidence that that request is appropriate and proportionate.

The decision to terminate the vigilance mode shall be taken together by the Commission and the Advisory Group, either by consensus or by a qualified majority. Once such a decision is taken, the vigilance mode shall be deactivated by means of an implementing act.

Or. en

Amendment 7

Proposal for a regulation

Article 9 – paragraph 2 c (new)

Text proposed by the Commission

Amendment

2c. Not later than six months after the end of the duration of the vigilance mode, the Commission shall update the criteria for the monitoring referred to in Article 11 to consider lessons learned during the vigilance mode activation period, including the necessity for long-term strategic reserve planning and stockpiling. The Commission shall make the conclusions of that review available to the Advisory Group and to the European Parliament.

Or. en

Amendment 8

Proposal for a regulation

Article 9 – paragraph 2 d (new)

Text proposed by the Commission

Amendment

2d. If necessary, and at the request of the Commission or the Member States, the vigilance mode shall be extended by means of an implementing act for a maximum of six months, upon the presentation of an additional crisis preparation and single market protection report, and upon the confirmation of the Commission and the Advisory Group. If a consensus of the Advisory Group could not be reached, a vote by qualified majority shall be held.

Or. en

Amendment 9

Proposal for a regulation

Article 9 – paragraph 2 e (new)

Text proposed by the Commission

Amendment

2e. The extension of the vigilance mode shall be approved only on the basis of clear evidence as regards the necessity and proportionality of the extension. Specific consideration shall be given to whether strategic reserves require building further, and whether the extension of the vigilance mode could help to avoid the activation of the crisis mode. The activation of the crisis mode is to be used as a measure of a last resort.

Or. en

Amendment 10

Proposal for a regulation

Article 10

Text proposed by the Commission

Amendment

Article 10

deleted

Extension and deactivation

1. The Commission, if it considers that the reasons for activating the vigilance mode pursuant to Article 9(1) remain valid, and taking into consideration the opinion provided by the advisory group, may extend the vigilance mode for a maximum duration of six months by means of an implementing act.

2. Where the Commission, taking into consideration the opinion provided by the advisory group, finds that the threat referred to in Article 3(2) is no longer present, with respect to some or all vigilance measures or for some or all of the goods and services, it shall deactivate the vigilance mode in full or in part by means of an implementing act.

3. Implementing acts referred to in paragraphs 1 and 2 shall be adopted in accordance with the examination procedure referred to in Article 42(2).

Or. en

Justification

Articles 9 & 10 have been merged.

Amendment 11

Proposal for a regulation

Article 12 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

The Commission may, among the goods of strategic importance listed in an implementing act adopted pursuant to Article 9(1), identify those for which it may be necessary to build a reserve in order to prepare for a Single Market emergency, taking into account the probability and impact of shortages. The Commission shall inform the Member States thereof.

The Commission, after consulting the Member States, the Advisory Group, relevant economic operators, and where appropriate and necessary third countries, may among the goods of strategic importance listed in an implementing act adopted pursuant to Article 9(1), identify those for which it may be necessary to build a reserve in order to prepare for or prevent a Single Market emergency, taking into account the probability and impact of shortages. The Commission shall provide that information to Member States.

Or. en

Amendment 12

Proposal for a regulation

Article 12 – paragraph 2 – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

The Commission may require, by means of implementing acts, that the Member States provide information on the goods listed in an implementing act adopted pursuant to Article 9(1), as regards all of the following:

Through the forum of the Advisory Group, the Commission may request that Member States provide information on the goods listed in an implementing act adopted pursuant to Article 9(1), as regards all of the following:

Or. en

Amendment 13

Proposal for a regulation

Article 12 – paragraph 2 – subparagraph 1 – point a

Text proposed by the Commission

Amendment

(a) the current stock in their territory;

(a) current reserves in their territory;

Or. en

Amendment 14

Proposal for a regulation

Article 12 – paragraph 2 – subparagraph 1 – point a a (new)

Text proposed by the Commission

Amendment

(aa) existing or pending plans to increase reserves;

Or. en

Amendment 15

Proposal for a regulation

Article 12 – paragraph 2 – subparagraph 1 – point b

Text proposed by the Commission

Amendment

(b) any potential for further purchase;

(b) potential for further purchase;

Or. en

Amendment 16

Proposal for a regulation

Article 12 – paragraph 2 – subparagraph 1 – point c

Text proposed by the Commission

Amendment

Or. en

Amendment 17

Proposal for a regulation

Article 12 – paragraph 2 – subparagraph 1 – point d

Text proposed by the Commission

Amendment

(d) further information that could ensure the availability of such goods.

(d) existing bilateral agreements as regards supply with another Member State;

Or. en

Amendment 18

Proposal for a regulation

Article 12 – paragraph 2 – subparagraph 1 – point d a (new)

Text proposed by the Commission

Amendment

(da) existing agreements or obligations regarding supply with third countries;

Or. en

Amendment 19

Proposal for a regulation

Article 12 – paragraph 2 – subparagraph 1 – point d b (new)

Text proposed by the Commission

Amendment

(db) current demand for supply;

Or. en

Amendment 20

Proposal for a regulation

Article 12 – paragraph 2 – subparagraph 1 – point d c (new)

Text proposed by the Commission

Amendment

(dc) expected demand for supply in the short and medium term.

Or. en

Amendment 21

Proposal for a regulation

Article 12 – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

The implementing act shall specify the goods for which information is to be given.

deleted

Or. en

Amendment 22

Proposal for a regulation

Article 12 – paragraph 2 – subparagraph 3

Text proposed by the Commission

Amendment

Member States shall report to the Commission the levels of strategic reserves of goods of strategic importance held by them, and the levels of other stocks of such goods held on their territory.

Member States shall make available to the Commission and the Member States within the Advisory Group the levels of strategic reserves of goods of strategic importance held by them.

Or. en

Amendment 23

Proposal for a regulation

Article 12 – paragraph 3

Text proposed by the Commission

Amendment

3. Taking due account of stocks held or being built up by economic operators on their territory, Member States shall deploy their best efforts to build up strategic reserves of the goods of strategic importance identified in accordance with paragraph 1. The Commission shall provide support to Member States to coordinate and streamline their efforts.

3. Taking due account of stocks held or being built up by economic operators on their territory, Member States, where necessary, and technically and economically possible, shall build up strategic reserves of the goods of strategic importance identified in accordance with paragraph 1. Where requested by Member States, the Commission shall provide support to Member States to coordinate and streamline their efforts.

Or. en

Amendment 24

Proposal for a regulation

Article 12 – paragraph 4 – introductory part

Text proposed by the Commission

Amendment

4. Where the building of strategic reserves of goods of strategic importance identified pursuant to paragraph 1 can be rendered more effective by streamlining among Member States, the Commission may draw up and regularly update, by means of implementing acts, a list of individual targets regarding the quantities and the deadlines for those strategic reserves that the Member States should maintain. When setting the individual targets for each Member State, the Commission shall take into account:

4. Where appropriate and necessary, the Commission and the Advisory Group may establish a list of individual targets regarding the quantities and the deadlines for the strategic reserves that the Member States should maintain. When setting the individual targets for each Member State, the Commission and the Advisory Group shall take into account:

Or. en

Amendment 25

Proposal for a regulation

Article 12 – paragraph 4 – point b

Text proposed by the Commission

Amendment

(b) the level of existing stocks of the economic operators and strategic reserves across the Union, and any information on economic operators’ ongoing activities to increase their stocks;

(b) the level of existing stocks of the economic operators and strategic reserves across the Union;

Or. en

Amendment 26

Proposal for a regulation

Article 12 – paragraph 4 – point b a (new)

Text proposed by the Commission

Amendment

(ba) actions taken to increase stocks by the Member States and across the Union;

Or. en

Amendment 27

Proposal for a regulation

Article 12 – paragraph 4 – point c

Text proposed by the Commission

Amendment

Or. en

Amendment 28

Proposal for a regulation

Article 12 – paragraph 4 – point c a (new)

Text proposed by the Commission

Amendment

(ca) the financial costs and potential negative impact on economic operators;

Or. en

Amendment 29

Proposal for a regulation

Article 12 – paragraph 4 – point c b (new)

Text proposed by the Commission

Amendment

(cb) the impact on Union competitiveness, inward investment to the Single Market, and economic operators in that Member State.

Or. en

Amendment 30

Proposal for a regulation

Article 12 – paragraph 5

Text proposed by the Commission

Amendment

5. The Member States shall regularly inform the Commission about the current state of their strategic reserves. Where a Member State has reached the individual targets referred to in paragraph 4, it shall inform the Commission if it has at its disposal any stocks of the goods in question in excess of their target. The Member States whose reserves have not reached the individual targets shall explain to the Commission the reasons for this situation. The Commission shall facilitate cooperation between the Member States which have already reached their targets and the other Member States.

5. The Member States shall regularly, and where necessary at an agreed interval, inform the Commission and the Advisory Group about the current state of their strategic reserves. Where a Member State has reached the individual targets referred to in paragraph 4, it shall inform the Commission and the Advisory Group if it has at its disposal any stocks of the goods in question in excess of their target.

Or. en

Amendment 31

Proposal for a regulation

Article 12 – paragraph 6

Text proposed by the Commission

Amendment

6. Where the strategic reserves of a Member State continuously fall significantly short of the individual targets referred to in paragraph 4 and economic operators on its territory are not able to compensate that shortfall, the Commission may, at its own initiative or at the request of 14 Member States, assess the need to take further measures to build up strategic reserves of goods of strategic importance identified pursuant to paragraph 1.

deleted

Following such an assessment, where the Commission establishes, supported by objective data, that

(a) the needs for the good in question remain unchanged or have increased compared to the situation at the time the target referred to in paragraph 4 was first set or last amended pursuant to paragraph 4,

(b) access to the concerned good is indispensable to ensure preparedness for a Single Market emergency

(c) the Member State concerned has not provided sufficient evidence to explain the failure to meet the individual target, and

(d) exceptional circumstances exist, in that the failure by that Member State, considering its importance to the supply chain concerned, to build up such strategic reserves gravely imperils the Union’s preparedness in the face of an impending threat of a Single Market emergency,

the Commission may adopt an implementing act, requiring the Member State in question to build up its strategic reserves of the goods concerned by a set deadline.

Or. en

Amendment 32

Proposal for a regulation

Article 12 – paragraph 7 – subparagraph 1

Text proposed by the Commission

Amendment

When acting under this Article, the Commission shall seek to ensure that the building up of strategic reserves does not create a disproportionate strain on the supply chains of the goods identified in accordance to paragraph 1, or on the fiscal capacity of the Member State concerned.

When acting under this Article, the Commission and the Advisory Group shall seek to ensure that the building up of strategic reserves does not create a disproportionate strain on the supply chains of the goods identified, in accordance to paragraph 1, the competitiveness of the Single Market and Union industrial sectors, or on the fiscal capacity of the Member State concerned.

Or. en

Amendment 33

Proposal for a regulation

Article 12 – paragraph 7 – subparagraph 2

Text proposed by the Commission

Amendment

The Commission shall take fully into account any national security concerns raised by Member States.

The Commission shall take fully into account national security and any other relevant concerns raised by Member States.

Or. en

Amendment 34

Proposal for a regulation

Article 12 – paragraph 8

Text proposed by the Commission

Amendment

8. The implementing acts referred to in this Article shall be adopted in accordance with the examination procedure referred to in Article 42(2).

deleted

Or. en

Amendment 35

Proposal for a regulation

Article 12 a (new)

Text proposed by the Commission

Amendment

Article 12a

Long-term strategic reserve planning

1. In order to minimise disruption to the Single Market and to the Union's industrial production capabilities and competitiveness, the outcome of the review provided for in Article 9(2c) shall include recommendations as regards the necessity, proportionality and usefulness of Member States and the Commission establishing a long-term plan for maintaining permanent and phased strategic reserves of goods of strategic importance, in order to help prevent future shortages and the activation of the vigilance or crisis mode.

2. Due consideration shall be given to the costs and practicalities of building and maintaining such long-term or phased strategic reserves. Consideration shall also be given to the possible need for better cooperation, coordination and information exchange between Member States, the Advisory Group, economic operators, and where relevant third countries, in order to increase the resilience of the Single Market, improve the reliability of global supply chains in times of crisis or the run-up to a crisis, and to ensure that market intervention is a method of a last resort.

3. Capacities which are part of the rescEU reserve in accordance with Article 12 of Decision No 1313/2013/EU shall be excluded from the application of this Article.

Or. en

Amendment 36

Proposal for a regulation

Article 27 – paragraph 1

Text proposed by the Commission

Amendment

1. The Commission may invite one or more economic operators in crisis-relevant supply chains established in the Union to accept and prioritise certain orders for the production or supply of crisis-relevant goods (‘priority rated order’).

1. Where necessary and proportionate and as a measure of a last resort, the Commission and the Advisory Group may invite one or more economic operators in crisis-relevant supply chains established in the Union to accept and prioritise certain orders for the production or supply of crisis-relevant goods (‘priority rated order’).

Or. en

Amendment 37

Proposal for a regulation

Article 27 – paragraph 2

Text proposed by the Commission

Amendment

2. If an economic operator does not accept and prioritise priority rated orders, the Commission may, at its own initiative or at the request of 14 Member States, assess the necessity and proportionality of resorting to priority rated orders in such cases, the Commission shall give the economic operator concerned as well as any parties demonstrably affected by the potential priority rated order, the opportunity to state their position within a reasonable time limit set by the Commission in light of the circumstances of the case. In exceptional circumstances, following such an assessment, the Commission may address an implementing act to the economic operator concerned, requiring it to either accept and prioritise the priority rated orders specified in the implementing act or explain why it is not possible or appropriate for that operator to do so. The Commission’s decision shall be based on objective data showing that such prioritisation is indispensable to ensure the maintenance of vital societal economic activities in the Single Market

2. If an economic operator does not accept and prioritise priority rated orders the Commission and the Advisory Group shall give the economic operator concerned as well as any parties demonstrably affected by the potential priority rated order, the right to be heard and appeal, and to state their position and provide evidence to support their case, within a reasonable time limit set by the Commission and the Advisory Group.

Or. en

Amendment 38

Proposal for a regulation

Article 27 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

2a. Where the economic operator to which the decision referred to in paragraph 2 is addressed, declines to accept the requirement to accept and prioritise the orders specified in the decision, it shall provide to the Commission within 10 days from the notification of the decision, a reasoned explanation setting out duly justified reasons why it is not possible or appropriate, in light of the objectives of this provision, for it to comply with the requirement.

Such reasons include the inability of the operator to perform the priority rated order on account of insufficient production capacity, technical grounds, a serious risk that accepting the order would entail particular hardship or economic burden for the operator including risk in business continuity, or other considerations of comparable gravity.

Or. en

Amendment 39

Proposal for a regulation

Article 27 – paragraph 2 b (new)

Text proposed by the Commission

Amendment

2b. After fully considering the evidence provided by the economic operator, the Commission and the Advisory Group’s decision shall be based on objective and already available data showing that such prioritisation is indispensable to ensure the maintenance of vital societal economic activities in the Single Market. If the conclusion of Commission and the Advisory Group is divided, then the final decision of the Commission and the Advisory Group shall be taken by a qualified majority.

Or. en

Amendment 40

Proposal for a regulation

Article 27 – paragraph 2 c (new)

Text proposed by the Commission

Amendment

2c. If the Commission and the Advisory Group consider that there are insufficient grounds to refuse the priority order, and the economic operator continues to decline the order, then they shall be subject to the fines referred to in Article 28. Any further action shall be determined by national law.

Or. en

Amendment 41

Proposal for a regulation

Article 27 – paragraph 4 – subparagraph 1

Text proposed by the Commission

Amendment

Where the economic operator to which the decision referred to in paragraph 2 is addressed declines to accept the requirement to accept and prioritise the orders specified in the decision, it shall provide to the Commission, within 10 days from the notification of the decision, a reasoned explanation setting out duly justified reasons why it is not possible or appropriate, in light of the objectives of this provision, for it to comply with the requirement. Such reasons include the inability of the operator to perform the priority rated order on account of insufficient production capacity or a serious risk that accepting the order would entail particular hardship or economic burden for the operator, or other considerations of comparable gravity.

deleted

Or. en

Amendment 42

Proposal for a regulation

Article 27 – paragraph 4 – subparagraph 2

Text proposed by the Commission

Amendment

The Commission may make such reasoned explanation or parts of it public, with due regard to business confidentiality.

deleted

Or. en

Amendment 43

Proposal for a regulation

Article 27 – paragraph 5

Text proposed by the Commission

Amendment

5. When an economic operator established in the Union is subject to a measure of a third country which entails a priority rated order, it shall inform the Commission thereof.

5. When an economic operator established in the Union is subject to a measure of a third country which entails a priority rated order, it shall inform the Commission thereof. The Member State concerned and the Commission shall engage in dialogue with the third country in order to seek an amicable and managed outcome in order to limit or prevent long-term damage to the economic operator.

Or. en

Amendment 44

Proposal for a regulation

Article 27 – paragraph 6

Text proposed by the Commission

Amendment

6. The Commission shall take the decision referred to in paragraph 2 in accordance with applicable Union law, including the principles of necessity and proportionality, and the Union’s obligations under international law. The decision shall in particular take into account the legitimate interests of the economic operator concerned and any available information concerning the cost and effort required for any change in production sequence. It shall state the legal basis for its adoption, fix the time limits within which the priority rated order is to be performed and, where applicable, specify the product and quantity. It shall state the fines provided for in Article 28 for failure to comply with the decision. The priority rated order shall be placed at a fair and reasonable price.

6. The Commission shall take the decision referred to in paragraph 2 in accordance with applicable Union law, including the principles of necessity and proportionality, and the Union’s obligations under international law. The decision shall in particular take into account the legitimate interests of the economic operator concerned and any available information concerning the cost and effort required for any change in production sequence. It shall state the legal basis for its adoption, and, where applicable, specify the product and quantity. It shall state the fines provided for in Article 28 for failure to comply with the decision. The priority rated order shall be placed at a fair and reasonable price that reflects the pre-crisis market value.

Or. en

Amendment 45

Proposal for a regulation

Article 27 – paragraph 6 a (new)

Text proposed by the Commission

Amendment

6a. The Commission may work with the Advisory Group and where relevant with third countries, to exchange best practices with regard to the future application of priority rated orders.

Or. en

Amendment 46

Proposal for a regulation

Article 27 – paragraph 6 b (new)

Text proposed by the Commission

Amendment

6b. The Commission may work together with the Member States to help them to introduce or improve tax or other incentives applied to the economic operators carrying out a priority rated order.

Or. en

Amendment 47

Proposal for a regulation

Article 27 – paragraph 8 a (new)

Text proposed by the Commission

Amendment

8a. The Commission shall ensure that there is full coherence and operational continuity with other existing Union law that require priority rated orders and procurement orders during crises. Where appropriate, the Advisory Group shall consult the Management and Advisory Boards and Groups established under other existing Union law.

Or. en

Amendment 48

Proposal for a regulation

Article 28 – paragraph 1 – point a

Text proposed by the Commission

Amendment

(a) where a representative organisation of economic operators or an economic operator, intentionally or through gross negligence, supplies incorrect, incomplete or misleading information in response to a request made pursuant to Article 24, or does not supply the information within the prescribed time limit;

Or. en

Amendment 49

Proposal for a regulation

Article 28 – paragraph 1 – point b

Text proposed by the Commission

Amendment

(b) where an economic operator, intentionally or through gross negligence, does not comply with the obligation to inform the Commission of a third country obligation pursuant to Article 27 or fails to explain why it has not accepted a priority rated order;

(b) where an economic operator, intentionally or through gross negligence, does not comply with the obligation to inform the Commission of a third country obligation pursuant to Article 27, which has resulted in proven harm to the objectives of this Regulation;

Or. en

Amendment 50

Proposal for a regulation

Article 28 – paragraph 2

Text proposed by the Commission

Amendment

2. Fines imposed in the cases referred to in paragraph 1 (a) and (b) shall not exceed 200 000 EUR.

2. Fines imposed in the cases referred to in paragraph 1 (a) and (b) shall not exceed a maximum of 200 000 EUR. If the economic operator concerned is an SME, the penalty payments imposed shall not exceed a maximum of 50 000 EUR.

Or. en

Amendment 51

Proposal for a regulation

Article 28 – paragraph 3

Text proposed by the Commission

Amendment

3. Fines imposed in the cases referred to in paragraph 1 (c) shall not exceed 1 % of the average daily turnover in the preceding business year for each working day of non-compliance with the obligation pursuant to Article 27 (priority rated orders) calculated from the date established in the decision not exceeding 1% of total turnover in the preceding business year.

Or. en

Amendment 52

Proposal for a regulation

Article 28 – paragraph 4

Text proposed by the Commission

Amendment

4. In fixing the amount of the fine, regard shall be had to the size and economic resources of the economic operator concerned, to the nature, gravity and duration of the infringement, taking due account of the principles of proportionality and appropriateness.

4. In fixing the amount of the fine, regard shall be had to:

(a) the size and economic resources of the economic operator concerned;

(b) the nature, gravity and duration of the infringement;

(d) any positive actions taken in the context of this Regulation or another Union crisis measure;

(e) whether there was an intention not to comply with the requirements of this Regulation;

(f) the impact such a fine would have on the economic health of the economic operator and their business continuity.

When fixing the amount of the fine referred to in the first subparagraph, due account shall be taken of the principles of proportionality and appropriateness of the level of fine in question.

Or. en

Amendment 53

Proposal for a regulation

Article 29 – paragraph 2

Text proposed by the Commission

Amendment

2. The time shall begin to run on the day on which the Commission becomes aware of the infringement. However, in case of continuous or repeated infringements, time shall begin to run on the day on which the infringement ceases

2. The time shall begin to run on the day on which the infringement was committed. However, in case of continuous or repeated infringements, time shall begin to run on the day on which the infringement ceases.

Or. en

Amendment 54

Proposal for a regulation

Article 30 – paragraph 1

Text proposed by the Commission

Amendment

1. The power of the Commission to enforce decisions taken pursuant to Article 28 shall be subject to a limitation period of five years.

1. The power of the Commission to enforce decisions taken pursuant to Article 28 shall be subject to a limitation period of three years.

Or. en

Amendment 55

Proposal for a regulation

Article 31 – paragraph 1 – introductory part

Text proposed by the Commission

Amendment

1. Before adopting a decision pursuant to Article 28, the Commission shall give the economic operator or representative organisations of economic operators concerned the opportunity of being heard on:

1. Before adopting a decision pursuant to Article 28, the Commission shall give the economic operator or representative organisations concerned the opportunity of being heard on:

Or. en

Amendment 56

Proposal for a regulation

Article 31 – paragraph 4

Text proposed by the Commission

Amendment

4. The rights of defence of the economic operator or representative organisations of economic operators concerned shall be fully respected in any proceedings. The economic operator or representative organisations of economic operators concerned shall be entitled to have access to the Commission's file under the terms of a negotiated disclosure, subject to the legitimate interest of economic operators in the protection of their business secrets. The right of access to the file shall not extend to confidential information and internal documents of the Commission or the authorities of the Member States. In particular, the right of access shall not extend to correspondence between the Commission and the authorities of the Member States. Nothing in this paragraph shall prevent the Commission from disclosing and using information necessary to prove an infringement.

4. The rights of defence of the economic operator or representative organisations concerned shall be fully respected in any proceedings. The economic operator or representative organisations concerned shall be entitled to have access to the Commission's file under the terms of a negotiated disclosure, subject to the legitimate interest of economic operators in the protection of their business secrets. The right of access to the file shall not extend to confidential information and internal documents of the Commission or the authorities of the Member States. In particular, the right of access shall not extend to correspondence between the Commission and the authorities of the Member States. Nothing in this paragraph shall prevent the Commission from disclosing and using information necessary to prove an infringement.

Or. en

Amendment 57

Proposal for a regulation

Article 34 – paragraph 1

Text proposed by the Commission

Amendment

1. Two or more Member States may request that the Commission launch a procurement on behalf of the Member States that wish to be represented by the Commission (ʽparticipating Member Statesʼ), for the purchasing of goods and services of strategic importance listed in an implementing act adopted pursuant to Article 9(1) or crisis-relevant goods and services listed in an implementing act adopted pursuant to Article 14(5).

1. Upon agreement of the Advisory Group, two or more Member States may request that the Commission launch a procurement on behalf of the Member States that wish to be represented by the Commission (ʽparticipating Member Statesʼ), for the purchasing of goods and services of strategic importance listed in an implementing act adopted pursuant to Article 9(1) or crisis-relevant goods and services listed in an implementing act adopted pursuant to Article 14(5).

Or. en

Amendment 58

Proposal for a regulation

Article 34 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

1a. The request addressed to the Commission to procure goods and services on Member States behalf shall set out reasons of the request, and shall demonstrate that the request is used exclusively to address supply chain disruptions and shortages of goods and services related to the specific emergency situation within the Single Market, and that all other options have been considered.

Or. en

Amendment 59

Proposal for a regulation

Article 34 – paragraph 2

Text proposed by the Commission

Amendment

2. The Commission shall assess the utility, necessity and proportionality of the request. Where the Commission intends not to follow the request, it shall inform the Member States concerned and the advisory group referred to in Article 4 and give reasons for its refusal.

2. The Commission and the Advisory Group shall assess the utility, necessity and proportionality of the request. If the Commission and the Advisory Group decide that the Commission should not follow the request, it shall inform the Member States concerned and give reasons for its refusal.

Or. en

Amendment 60

Proposal for a regulation

Article 34 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

2a. Where a consensus cannot be reached between the Commission and the Advisory Group, a vote shall be held by qualified majority.

Or. en

Amendment 61

Proposal for a regulation

Article 34 – paragraph 3

Text proposed by the Commission

Amendment

3. Where the Commission agrees to procure on behalf of the Member States, it shall draw up a proposal for a framework agreement to be concluded with the participating Member States allowing the Commission to procure on their behalf. This agreement shall lay down the detailed conditions for the procurement on behalf of the participating Member States referred to in paragraph 1.

3. The Commission shall draw up a proposal for a framework agreement to be concluded with the participating Member States allowing the Commission to procure on their behalf. This agreement shall lay down the detailed conditions for the procurement on behalf of the participating Member States referred to in paragraph 1, including justification as regards the use of the procurement of goods and services by the Commission on behalf of the Member States concerned, including mechanisms and liabilities to be assumed.

Or. en

Amendment 62

Proposal for a regulation

Article 34 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

3a. Where the Commission procures goods and services on behalf of participating Member States, this shall be without prejudice to the procurement of non-participating Member States.

Or. en

Amendment 63

Proposal for a regulation

Article 38 – paragraph 1

Text proposed by the Commission

Amendment

When the Single Market emergency mode has been activated pursuant to Article 14, Member States shall consult each other and the Commission and coordinate their actions with the Commission and the representatives of the other Member States in the advisory group prior to launching procurement of crisis-relevant goods and services listed in an implementing act adopted pursuant to Article 14(5) in accordance with Directive 2014/24/EU of the European Parliament and of the Council55.

When the Single Market emergency mode has been activated pursuant to Article 14, Member States shall consult and coordinate their actions with the Commission, other Member States, and the advisory group prior to launching procurement of crisis-relevant goods and services listed in an implementing act adopted pursuant to Article 14(5) in accordance with Directive 2014/24/EU of the European Parliament and of the Council55.

__________________

55 Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ L 94, 28.3.2014, p. 65).

Or. en

Amendment 64

Proposal for a regulation

Article 39 – title

Text proposed by the Commission

Amendment

Ban of individual procurement action by participating Member States

Individual procurement action by participating Member States

Or. en

Amendment 65

Proposal for a regulation

Article 39 – paragraph 1

Text proposed by the Commission

Amendment

Where the Single Market emergency mode has been activated pursuant to Article 16 and procurement by the Commission on behalf of Member States has been launched in accordance with Articles 34 to 36, the contracting authorities of the participating Member States shall not procure goods or services covered by such procurement by other means.

Or. en

Amendment 66

Proposal for a regulation

Article 41 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

The Commission shall seek to make any digital tools compatible with existing structures already established by Member States.

Or. en

Amendment 67

Proposal for a regulation

Article 41 – paragraph 1 b (new)

Text proposed by the Commission

Amendment

The Commission shall ensure the highest levels of interoperability in the Union’s digital tools in order to avoid duplication of system requirements and any additional administrative burden.

Or. en

Amendment 68

Proposal for a regulation

Article 41 – paragraph 1 c (new)

Text proposed by the Commission

Amendment

The Commission shall ensure that the highest levels of cybersecurity and data protection are employed in the development and operation of any digital tools.

Or. en

Amendment 69

Proposal for a regulation

Article 41 – paragraph 1 d (new)

Text proposed by the Commission

Amendment

Special consideration shall be given to SMEs and citizens in order to prioritise the accessibility and usability of any digital tools and digital systems developed.

Or. en

Amendment 70

Proposal for a regulation

Article 41 – paragraph 1 e (new)

Text proposed by the Commission

Amendment

The Commission shall ensure through budgetary means that digital tools are adequately funded and resourced.

Or. en