(1)

The aim of the European satellite navigation policy is to provide the Union with two satellite navigation systems, the system established under the Galileo programme and the EGNOS system ('the systems'). These systems arise respectively from the Galileo and EGNOS programmes. Each infrastructure consists of satellites and a network of ground stations.

(2)

The aim of the Galileo programme is to establish and operate the first global satellite navigation and positioning infrastructure specifically designed for civilian purposes, which can be used by a variety of public and private actors in Europe and worldwide. The system established under the Galileo programme functions independently of other existing or potential systems, thus contributing amongst other things to the strategic autonomy of the Union, as emphasised by the European Parliament and the Council.

(3)

The aim of the EGNOS programme is to improve the quality of open signals from existing global navigation satellite systems ('GNSS') as well as those from the open service offered by the system established under the Galileo programme, when they become available. The services provided by the EGNOS programme should cover, as a priority, the Member States' territories geographically located in Europe, including for this purpose the Azores, the Canary Islands and Madeira.

(4)

The European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions have consistently given their full support to the Galileo and EGNOS programmes.

(5)

Since the Galileo and EGNOS programmes are at an advanced development stage leading to systems in an exploitation phase, a specific legal instrument is required to meet their needs, particularly in terms of governance and security, to satisfy the requirement for sound financial management and to promote the use of the systems.

(6)

The systems are infrastructures set up as trans-European networks of which the use extends well beyond the national boundaries of the Member States. Furthermore, the services offered through these systems contribute to a wide range of economic and social activities, including the development of trans-European networks in the areas of transport, telecommunications and energy infrastructures.

(7)

The Galileo and EGNOS programmes are an industrial policy tool and are part of the Europe 2020 strategy, as illustrated by the Commission Communication of 17 November 2010 entitled 'An integrated industrial policy for the globalisation era: putting competitiveness and sustainability at centre stage'. They are also referred to in the Commission Communication of 4 April 2011 entitled 'Towards a space strategy for the European Union that benefits its citizens'. Those programmes provide many advantages for the economy and citizens of the Union, whose cumulative value has been estimated at approximately EUR 130 billion in the period 2014-2034.

(8)

A growing number of economic sectors, in particular transport, telecommunications, agriculture and energy, increasingly use satellite navigation systems. Public authorities can also benefit from these systems in various areas such as emergency services, police, crisis management or border management. Developing the use of satellite navigation brings enormous benefits to the economy, society and the environment. Such socio-economic benefits are broken down into three main categories: direct benefits resulting from the growth of the space market, direct benefits resulting from the growth of the downstream market for GNSS-based applications and services, and indirect benefits resulting from the emergence of new applications in, or technology transfer to, other sectors, leading to new market opportunities in other sectors, productivity gains across industry and public benefits generated by a reduction in pollution or by improved levels of safety and security.

(9)

It is therefore important that the Union support the development of applications and services based on the systems. This will allow the citizens of the Union to reap the benefits derived from the systems, and ensure that public confidence in the Galileo and EGNOS programmes is maintained. The appropriate instrument to finance research and innovation activities relating to the development of GNSS-based applications is Horizon 2020 – the Framework Programme for Research and Innovation ("Horizon 2020") established by Regulation (EU) No 1291/2013 of the European Parliament and of the Council (2). However, a very specific upstream part of research and development activities should be financed from the budget allocated to the Galileo and EGNOS programmes under this Regulation, where such activities concern fundamental elements such as Galileo-enabled chipsets and receivers, which will facilitate the development of applications across different sectors of the economy. Such financing should nevertheless not jeopardise the deployment or exploitation of the infrastructures established under the programmes.

(10)

Given the increasing use of satellite navigation across a great number of fields of activity, an interruption in the supply of services could lead to significant harm to modern society and result in losses for many economic operators. In addition, due to their strategic aspect, satellite navigation systems are sensitive infrastructures, that could be susceptible to malicious use. These factors could affect the security of the Union, its Member States and its citizens. Security requirements should therefore be taken into account in the design, development, deployment and exploitation of the infrastructures established under the Galileo and EGNOS programmes in accordance with standard practices.

(11)

The Galileo programme includes a definition phase which has been completed, a development and validation phase until 2013, a deployment phase which was launched in 2008 and is due for completion in 2020, and an exploitation phase which should be launched progressively from 2014-15 in order to have a fully operational system in 2020. The first four operational satellites have been constructed and launched during the development and validation phase, while the full constellation of satellites should be completed during the deployment phase and replenishment should occur during the exploitation phase. The associated ground-based infrastructure should be developed and operated accordingly.

(12)

The EGNOS programme has been in the exploitation phase since its open service and 'safety of life' service were declared operational in October 2009 and March 2011 respectively. Subject to technical and financial constraints and on the basis of international agreements, the geographical coverage of the services provided by the EGNOS system could be extended to other regions of the world, in particular to the territories of candidate countries, of third countries associated with the Single European Sky and of countries in the European Neighbourhood Policy. However, such extension to other regions of the world should not be financed by the budgetary appropriations assigned to the Galileo and EGNOS programmes under Council Regulation (EU, Euratom) No 1311/2013 (3) and should not delay the extension of the coverage throughout the Member States' territories geographically located in Europe.

(13)

The original design of the Galileo safety-of-life service as provided for in Regulation (EC) No 683/2008 of the European Parliament and of the Council (4) has been re-profiled to ensure its interoperability with other GNSS, to respond effectively to safety-of-life user needs and to reduce the complexity, risks and costs of the required infrastructure.

(14)

To maximise the take-up of the EGNOS safety-of-life service, it should be provided without direct user charge. The Galileo public regulated service (PRS) should also be offered free of charge to the following PRS participants, within the meaning of Decision No 1104/2011/EU of the European Parliament and the Council (5): Member States, the Council, the Commission, the European External Action Service ("EEAS") and duly authorised Union agencies. The absence of charges should not be understood to affect the provisions regarding the costs of the functioning of a competent PRS authority as laid down in Decision No 1104/2011/EU.

(15)

In order to optimise the use of the services provided, the systems, networks and services emerging from the Galileo and EGNOS programmes should be compatible and interoperable with one another and, insofar as possible, with other satellite navigation systems and with conventional means of radio navigation where such compatibility and interoperability is laid down in an international agreement, without prejudice to the objective of strategic autonomy.

(16)

Since the Union is responsible, in principle, for financing the Galileo and EGNOS programmes in full, provision should be made for the Union to own all tangible and intangible assets created or developed under those programmes. In order to comply fully with any fundamental rights relating to ownership, the necessary arrangements should be made with existing owners, particularly with respect to essential elements of the infrastructures and their security. It should be understood that the provisions on ownership of intangible assets laid down in this Regulation do not cover intangible rights that are not transferable under relevant national laws. Such ownership by the Union should be without prejudice to the possibility for the Union, in accordance with this Regulation and where it is deemed appropriate on the basis of a case-by-case assessment, to make those assets available to third parties or to dispose of them. In particular, the Union should be able to transfer the ownership of or license the intellectual property rights arising from work under the Galileo and EGNOS programmes to third parties. In order to facilitate the market uptake of satellite navigation, there is a need to ensure that third parties can make optimum use in particular of the intellectual property rights arising from the Galileo and EGNOS programmes which belong to the Union, including at social and economic level.

(17)

Assets created or developed outside the Galileo and EGNOS programmes are not affected by the provisions on ownership laid down in this Regulation. However, such assets might, on occasion, be relevant to the performance of the programmes. In order to encourage the development of new technology outside the Galileo and EGNOS programmes, the Commission should encourage third parties to draw its attention to relevant intangible assets and should, where it would be beneficial to the programmes, negotiate terms as to the appropriate use thereof.

(18)

The deployment and exploitation phases of the Galileo programme and the exploitation phase of the EGNOS programme should be entirely financed by the Union. However in accordance with Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (6), the Member States should be able to provide additional funding to the Galileo and EGNOS programmes or a contribution in kind, on the basis of appropriate agreements, in order to fund additional programme elements relating to the potential particular objectives of the Member States concerned. Third countries and international organisations should also be able to contribute to the programmes.

(19)

In order to ensure the continuity and stability of the Galileo and EGNOS programmes and considering their European dimension and their intrinsic European added value, sufficient and consistent funding is required over financial planning periods. It is also necessary to indicate the amount required between 1 January 2014 to 31 December 2020 to finance completion of the deployment phase of the Galileo programme and the exploitation phases of the Galileo and EGNOS programmes.

(20)

Regulation (EU, Euratom) No 1311/2013 allocates a maximum of EUR 7 071,73 million in current prices for the financing of activities relating to the Galileo and EGNOS programmes for the period from 1 January 2014 to 31 December 2020. For the sake of clarity and in order to facilitate cost control, that overall amount should be broken down into various categories. Nonetheless, in the interest of flexibility and to ensure the smooth running of the programmes, the Commission should be able to re-allocate funds from one category to another. The programme activities should also include the protection of the systems and their operation, including during the launch of satellites. In this respect, a contribution to the costs of services capable of providing such protection could be financed by the budget allocated to the Galileo and EGNOS programmes insofar as possible following rigorous cost management and full compliance with the maximum amount established in Regulation (EU, Euratom) No 1311/2013. Such contribution should be used only for the provision of data and services and not for the purchase of infrastructure. This Regulation lays down a financial envelope for the continuation of the Galileo and EGNOS programmes which is to constitute the prime reference amount, within the meaning of point 17 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (7) for the European Parliament and the Council during the annual budgetary procedure.

(21)

The activities for which the Union budget appropriations assigned to the Galileo and EGNOS programmes for the period 2014-2020 are to be granted should be specified in this Regulation. Such appropriations should be granted mainly for activities relating to the deployment phase of the Galileo programme, including management and monitoring activities for that phase, and activities relating to the exploitation of the system established under the Galileo programme, including actions preceding or in preparation for the exploitation phase of that programme, as well as for activities relating to the exploitation of the EGNOS system. They should also be granted for funding certain other activities required to manage and achieve the objectives of the Galileo and EGNOS programmes, in particular support for research and development of fundamental elements, such as Galileo enabled chipsets and receivers, including as appropriate positioning and integrity-monitoring software modules. Those elements constitute the interface between the services offered by the infrastructures and downstream applications, and facilitate the development of applications throughout various sectors of the economy. Their development acts as a catalyst for the maximisation of socio-economic benefits as it facilitates the market uptake of the services offered. The Commission should report annually to the European Parliament and the Council on the cost-management strategy pursued.

(22)

It is important to note that the investment and operating costs of the systems as estimated for the period 2014-2020 do not take account of unforeseen financial obligations which the Union may be obliged to assume, in particular those relating to liability arising from the performance of the services or Union ownership of the systems, especially with regard to any malfunctioning of the systems. Those obligations are the subject of a specific analysis by the Commission.

(23)

It should also be noted that the budgetary resources planned under this Regulation do not cover work financed by funds allocated to Horizon 2020, such as that associated with the development of applications derived from the systems. Such work will help to optimise the use of the services provided in the context of the Galileo and EGNOS programmes, to ensure a good social and economic return on the investments made by the Union and to increase the know-how of businesses in the Union with regard to satellite navigation technology. The Commission should ensure that there is transparency and clarity regarding the different sources of funding for the different aspects of the programmes.

(24)

In addition, the revenue generated by the systems arising, in particular, from the commercial service provided by the system established under the Galileo programme, should accrue to the Union in order to partially compensate it for the investments that it has made previously, and that revenue should be used to support the objectives of the Galileo and EGNOS programmes. A revenue-sharing mechanism might also be provided for in contracts concluded with private sector entities.

(25)

In order to avoid the cost over-runs and delays which have affected the progress of the Galileo and EGNOS programmes in the past, efforts need to be stepped up to control risks which might lead to excess costs and/or delays as requested by the European Parliament in its resolution of 8 June 2011 on the mid-term review of the European satellite navigation programmes: implementation assessment, future challenges and financing perspectives (8) and by the Council conclusions of 31 March 2011, and as shown by the Commission Communication of 29 June 2011 entitled 'A budget for Europe 2020'.

(26)

Sound public governance of the Galileo and EGNOS programmes requires, first, that there be a strict division of responsibilities and tasks, in particular between the Commission, the European GNSS Agency and the European Space Agency (ESA) and, second, that the governance be progressively adapted to the operational requirements of the systems.

(27)

Given that the Commission represents the Union, which, in principle, provides financing for the Galileo and EGNOS programmes alone and owns the systems, the Commission should be responsible for the progress of those programmes and their overall supervision. It should manage the funds allocated to the programmes under this Regulation, supervise the implementation of all activities of the programmes and ensure a clear division of responsibilities and tasks, in particular between the European GNSS Agency and ESA. Accordingly, in addition to the tasks associated with these general responsibilities and the other tasks incumbent upon it under this Regulation, the Commission should be assigned specific tasks. In order to optimise the resources and competences of the various stakeholders, it should be able to delegate certain tasks by means of delegation agreements, in accordance with Regulation (EU, Euratom) No 966/2012.

(28)

Considering the importance for the Galileo and EGNOS programmes of the ground-based infrastructure of the systems and its impact on their security, the determination of the location of the infrastructure should be one of the specific tasks assigned to the Commission. The deployment of the ground-based infrastructure of the systems should continue to follow an open and transparent process. The location of such infrastructure should be determined by taking into account geographical and technical limitations associated with the optimum geographical distribution of the ground-based infrastructure and the possible presence of existing installations and equipment suitable for the relevant tasks, as well as by ensuring compliance with the security needs of each ground station and with the national security requirements of each Member State.

(29)

The European GNSS Agency was set up by Regulation (EU) No 912/2010 of the European Parliament and of the Council (9) in order to achieve the objectives of the Galileo and EGNOS programmes and implement certain tasks associated with the progress of those programmes. It is an agency of the Union which, as a body within the meaning of Regulation (EU, Euratom) No 966/2012, is subject to the obligations applicable to Union agencies. It should be assigned certain tasks associated with programme security and its potential designation as a competent PRS authority. It should also contribute to the promotion and marketing of the systems, including by establishing contacts with users and potential users of the services provided under the Galileo and EGNOS programmes, and it should collect information on their requirements and developments on the satellite navigation market. Furthermore, it should perform tasks which the Commission confers on it by means of one or more delegation agreements covering other various specific tasks associated with the programmes, in particular tasks associated with the exploitation phases of the systems, including the operational management of the programmes, the promotion of the applications and services on the satellite navigation market and the promotion of the development of fundamental elements relating to the programmes. In order for the Commission, representing the Union, to exercise its power of control fully, those delegation agreements should include the general conditions governing the management of funds entrusted to the European GNSS Agency.

The transfer of responsibility to the European GNSS Agency for tasks associated with the operational management of the Galileo and EGNOS programmes and their exploitation should be gradual and conditional on the successful completion of an appropriate handover review as well as on the readiness of the European GNSS Agency to take on such tasks, in order to secure those programmes' continuity. For EGNOS, the handover should take place on 1 January 2014; for Galileo, it is expected to occur in 2016.

(30)

For the deployment phase of the Galileo programme, the Union should conclude a delegation agreement with ESA setting out the tasks of ESA in that phase. The Commission, representing the Union, should make every effort to conclude that delegation agreement within six months of the date of application of this Regulation. In order for the Commission to exercise its power of control fully, the delegation agreement should include the general conditions for managing the funds entrusted to ESA. In respect of activities exclusively financed by the Union, such conditions should ensure a degree of control comparable to that required if ESA were an agency of the Union.

(31)

For the exploitation phase of the Galileo and EGNOS programmes, the European GNSS Agency should conclude working arrangements with ESA setting out the latter's task in developing future generations of the systems and in providing technical support in relation to the existing generation of systems. Those arrangements should comply with Regulation (EU, Euratom) No 966/2012. They should not cover the role of ESA as regards activities relating to research and technology, or the early phases of evolution and research activities relating to the infrastructures established under the Galileo and EGNOS programmes. Such activities should be financed outside the scope of the budget allocated to the programmes, for instance by funds allocated to Horizon 2020.

(32)

Responsibility for the progress of the Galileo and EGNOS programmes includes, in particular, responsibility for their security and the security of their systems and operation. Except in the case of application of Council Joint Action 2004/552/CFSP (10), which needs to be reviewed to reflect the changes in the Galileo and EGNOS programmes, their governance and the changes to the Treaty on European Union and the Treaty on the Functioning of the European Union resulting from the Treaty of Lisbon, the Commission is responsible for security, even if certain security-related tasks are entrusted to the European GNSS Agency. It is the responsibility of the Commission to establish mechanisms to ensure suitable coordination between the various entities responsible for security.

(33)

In the application of this Regulation, for matters relating to security, the Commission should consult the relevant security experts of the Member States.

(34)

Given the specific expertise of EEAS and its regular contact with administrations of third countries and international organisations, it is in a position to assist the Commission in performing certain of its tasks relating to the security of the systems and the Galileo and EGNOS programmes in the field of external relations, in accordance with Council Decision 2010/427/EU (11). The Commission should ensure that EEAS is fully associated with its activities in implementing security-related tasks in the field of external relations. To that end, all necessary technical support should be provided to EEAS.

(35)

To ensure the secure circulation of information, within the scope of this Regulation, the relevant security regulations should offer a degree of protection for EU-classified information equivalent to that provided by the rules on security as set out in the Annex to Commission Decision 2001/844/EC, ECSC, Euratom (12) and by the security rules of the Council set out in the Annexes to Council Decision 2013/488/EU (13). Each Member State should ensure that its national security regulations apply to all natural persons resident on its territory and to all legal entities established on its territory which deal with EU-classified information regarding the Galileo and EGNOS programmes. The security regulations of ESA and the Decision of 15 June 2011 of the High Representative of the Union for Foreign Affairs and Security Policy (14) should be considered as equivalent to the rules on security set out in the Annex to Decision 2001/844/EC, ECSC, Euratom and to the security rules set out in the Annexes to Decision 2013/488/EU.

(36)

This Regulation is without prejudice to existing and future rules on access to documents adopted in accordance with Article 15(3) of the Treaty on the Functioning of the European Union (TFEU). Furthermore, this Regulation should not be understood as imposing an obligation on Member States to disregard their constitutional requirements in respect of access to documents.

(37)

In order to allocate the Union funds attributed to the Galileo and EGNOS programmes with a ceiling total that the Commission should not exceed, effective public procurement procedures should be applied and, in particular, contracts negotiated so as to ensure optimum use of resources, satisfactory services, smooth running of programmes, good risk management and compliance with the proposed schedule. The relevant contracting authority should make every effort to meet those requirements.

(38)

As the Galileo and EGNOS programmes will be, in principle, financed by the Union, public procurement under those programmes should comply with Union rules on public contracts and should aim, first and foremost, to obtain best value for money, control costs, mitigate risks, improve efficiency and reduce reliance on a single supplier. Open access and fair competition throughout the supply chain and the balanced offering of participation opportunities to industry at all levels, including, in particular, new entrants and small and medium-sized enterprises ('SMEs'), should be ensured. Possible abuse of dominant position and of long-term reliance on single suppliers should be avoided. In order to mitigate programme risks, to avoid reliance on a single source of supply and to ensure better overall control of the programmes and their costs and schedules, multiple sourcing should be pursued, wherever appropriate. Moreover, the development of European industry should be preserved and promoted in all areas relating to satellite navigation, in accordance with international agreements to which the Union is Part. The risk of poor contract performance or of non-performance should be mitigated as much as possible. To that end, contractors should demonstrate the sustainability of their contractual performance with respect to the commitments undertaken and the duration of the contract. Therefore, contracting authorities should, wherever appropriate, specify requirements relating to the reliability of supplies and of the provision of services.

In addition, in the case of the purchase of goods and services of a sensitive nature, contracting authorities may subject such purchase to specific requirements, particularly with a view to ensuring security of information. Union industries should be permitted to rely on non-Union sources for certain components and services where substantial advantages are demonstrated in terms of quality and costs, taking account, however, of the strategic nature of the programmes and of Union security and export control requirements. Advantage should be taken of public sector investment and industrial experience and competence, including that acquired during the definition and development and validation phases of the programmes, while ensuring that the rules on competitive tendering are not contravened.

(39)

In order to better evaluate the total cost of a product, service or work being tendered, including its long term operational cost, the total cost over the useful lifecycle of the product, service or work being tendered should be taken into account wherever appropriate during the procurement, by using a cost effectiveness approach such as lifecycle costing when pursuing procurement based on the criterion of the most economically advantageous tender award. For that purpose, the contracting authority should make sure that the methodology intended to compute the costs for the useful lifecycle of a product, service or work is expressly mentioned in the contract documents or the contract notice and that it allows the accuracy of the information supplied by the tenderers to be verified.

(40)

Satellite navigation is a complex and constantly changing technology. This results in uncertainty and risk for public contracts concluded under the Galileo and EGNOS programmes, insofar as such contracts may involve long-term commitments to equipment or services. Those characteristics require specific measures to be implemented concerning public contracts which apply in addition to the rules laid down in Regulation (EU, Euratom) No 966/2012. The contracting authority should thus be able to restore a level playing-field when one or more companies have, prior to a call for tenders, privileged information on the activities associated with the call for tender. It should be possible to award a contract in the form of a conditional stage-payment contract, introduce an amendment, under certain conditions, in the context of its performance, or even impose a minimum level of subcontracting. Finally, due to the technological uncertainties that are a feature of the Galileo and EGNOS programmes, contract prices cannot always be forecast accurately and it is therefore desirable to conclude contracts in a specific form that do not stipulate a firm fixed price and include clauses to safeguard the financial interests of the Union.

(41)

It should be noted that, in accordance with Article 4(3) of the Treaty on European Union ("TEU"), the Member States should not take measures which could be detrimental to the Galileo and EGNOS programmes or the services. It should also be made clear that the Member States concerned should take all necessary measures to ensure the protection of the ground stations established on their territories. In addition, Member States and the Commission should work together and with appropriate international bodies and regulatory authorities to ensure that the radio spectrum necessary for the system established under the Galileo programme is available and protected to allow for the full development and implementation of applications based on that system, in compliance with Decision No 243/2012/EU of the European Parliament and of the Council (15).

(42)

In view of the global nature of the systems, it is essential that the Union enter into agreements with third countries and international organisations in the context of the Galileo and EGNOS programmes under Article 218 TFEU, in particular to ensure their smooth implementation, deal with certain questions relating to security and charging, optimise the services provided to citizens of the Union and meet the needs of third countries and international organisations. It is also useful, where necessary, to adapt existing agreements to changes in the Galileo and EGNOS programmes. When preparing or implementing those agreements, the Commission may have recourse to the assistance of EEAS, ESA and the European GNSS Agency, within the limits of the tasks allocated to them under this Regulation.

(43)

It should be confirmed that the Commission, in performing certain of its tasks of a non-regulatory nature, may have recourse, as required and insofar as necessary, to the technical assistance of certain external parties. Other entities involved in the public governance of the Galileo and EGNOS programmes may also make use of the same technical assistance in performing tasks entrusted to them under this Regulation.

(44)

The Union is based on respect for fundamental rights and in particular Articles 7 and 8 of the Charter of Fundamental Rights of the European Union expressly recognize the fundamental right to privacy and to the protection of personal data. Protection of personal data and private life should be ensured under the Galileo and EGNOS programmes.

(45)

The financial interests of the Union should be protected through proportionate measures throughout the expenditure cycle, including the prevention, detection and investigation of irregularities, the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, administrative and financial penalties in accordance with Regulation (EU, Euratom) No 966/2012.

(46)

It is necessary to ensure that the European Parliament and the Council are kept regularly informed about the implementation of the Galileo and EGNOS programmes, in particular with regard to risk management, cost, schedule and performance. In addition, the European Parliament, the Council and the Commission will meet in the Galileo Interinstitutional Panel in accordance with the Joint declaration on the Galileo Interinstitutional Panel published together with this Regulation.

(47)

Assessments, based on agreed indicators, should be carried out by the Commission in order to evaluate the effectiveness and efficiency of the measures taken to achieve the objectives of the Galileo and EGNOS programmes.

(48)

In order to ensure the security of the systems and their operation, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of the high level objectives necessary to ensure the security of the systems and their operation. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level. The Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council.

(49)

In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (16).

(50)

As sound public governance requires uniform management of the Galileo and EGNOS programmes, faster decision-making and equal access to information, representatives of the European GNSS Agency and ESA should be able to take part as observers in the work of the European GNSS Programmes Committee ("the Committee") established to assist the Commission. For the same reasons, representatives of third countries and international organisations who have concluded an international agreement with the Union should be able to take part in the work of the Committee subject to security constraints and as provided for in the terms of such agreement. These representatives of the European GNSS Agency, ESA, third countries and international organisations are not entitled to take part in Committee voting procedures.

(51)

Since the objective of this Regulation, namely the establishment and exploitation of satellite navigation systems, cannot be sufficiently achieved by the Member States since it exceeds the financial and technical capacities of any single Member State, and can therefore, by reason of its scale and effects, be better achieved by action at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.

(52)

The Galileo Joint Undertaking created by Council Regulation (EC) No 876/2002 (17) ceased its operations on 31 December 2006. Regulation (EC) No 876/2002 should therefore be repealed.

(53)

Given the need to evaluate the Galileo and EGNOS programmes, the extent of the changes to be made to Regulation (EC) No 683/2008, and in the interests of clarity and legal certainty, Regulation (EC) No 683/2008 should be repealed,

(1)

The multi-annual action programme for taxation which applied before 2014 has significantly contributed to facilitating and enhancing cooperation between tax authorities within the Union. The added value of that programme, including to the protection of the financial interests of Member States of the Union and of taxpayers, has been recognised by the tax administrations of the participating countries. The challenges identified for the next decade cannot be tackled if Member States do not look beyond the borders of their administrative territories or cooperate intensively with their counterparts. The Fiscalis programme, implemented by the Commission in cooperation with the participating countries, offers Member States a Union framework within which to develop those cooperation activities, and which is more cost-effective than if each Member State were to set up individual cooperation frameworks on a bilateral or multilateral basis. It is therefore appropriate to ensure the continuation of that programme by establishing a new programme in the same area.

(2)

The programme established under this Regulation, "Fiscalis 2020", and its success are vital in the present economic situation and should support cooperation in fiscal matters.

(3)

The activities under Fiscalis 2020, namely the European information systems as defined in this Regulation (European Information Systems), the joint actions for officials of tax authorities and the common training initiatives, are expected to contribute to the realisation of the Europe 2020 Strategy for smart, sustainable and inclusive growth by strengthening the functioning of the internal market, providing a framework within which to support activities enhancing the administrative capacity of tax authorities and advancing technical progress and innovation. In providing a framework for activities which strive for more efficient tax authorities, strengthen the competitiveness of businesses, promote employment and contribute to the protection of the financial and economic interests of the Member States of the Union and of taxpayers, Fiscalis 2020 will actively strengthen the functioning of the taxation systems in the internal market, while contributing to the gradual elimination of existing barriers and distortions within the internal market.

(4)

The scope of Fiscalis 2020 should be brought into line with current needs so as to focus on all taxes harmonised at Union level and other taxes in so far as they are relevant for the internal market and for administrative cooperation between the Member States.

(5)

To support the process of accession and association by third countries, Fiscalis 2020 should be open to the participation of acceding and candidate countries and to potential candidate countries and partner countries of the European Neighbourhood Policy if certain conditions are fulfilled and their participation supports only activities under Fiscalis 2020 which are aimed at fighting against tax fraud and tax evasion, and addressing aggressive tax planning. Considering the increasing level of interconnection of the world economy, Fiscalis 2020 should continue to provide for the possibility of inviting external experts to contribute to activities under Fiscalis 2020. External experts, such as representatives of governmental authorities, economic operators and their organisations or representatives of international organisations should be invited only where their contribution is considered to be essential for achieving the objectives of Fiscalis 2020.

(6)

The objectives and priorities of Fiscalis 2020 take into account the problems and challenges identified for taxation in the next decade. Fiscalis 2020 should continue to play a role in vital areas such as the coherent implementation of Union law in the field of taxation, securing the exchange of information and supporting administrative cooperation and enhancing the administrative capacity of tax authorities. Given the problem dynamics of new challenges identified, additional emphasis should be put on supporting the fight against tax fraud, tax evasion and aggressive tax planning. Emphasis should also be placed on reducing the administrative burden for tax authorities and the compliance costs for tax payers and preventing instances of double taxation.

(7)

At an operational level, Fiscalis 2020 should implement, operate and support the European Information Systems and administrative cooperation activities, reinforce the skills and competences of tax officials, enhance the understanding and implementation of Union law in the field of taxation, and support the improvement of administrative procedures and the sharing and dissemination of good administrative practices. Those objectives should be pursued with an emphasis on supporting the fight against tax fraud, tax evasion and aggressive tax planning.

(8)

The programme tools which applied before Fiscalis 2020 should be supplemented in order to respond adequately to challenges awaiting tax authorities in the next decade and to remain in line with developments in Union law. Fiscalis 2020 should cover bilateral or multilateral controls and other forms of administrative cooperation as established in the relevant Union law on administrative cooperation; expert teams; public administration capacity–building actions providing specific and specialised coaching in the field of taxation to Member States facing particular and exceptional circumstances that justify such targeted actions; and, where necessary, studies and common communication activities in order to support the implementation of Union law in the field of taxation.

(9)

The European Information Systems play a vital role in interconnecting tax authorities and thus in reinforcing the taxation systems within the Union and should therefore continue to be financed and improved under Fiscalis 2020. In addition, it should be made possible to include in Fiscalis 2020 new tax-related information systems established under Union law. The European Information Systems should, where appropriate, be based on shared development models and IT architecture.

(10)

In the context of improving administrative cooperation more widely and supportig the fight against tax fraud, tax evasion and aggressive tax planning, it may be useful for the Union to conclude agreements with third countries in order to allow those countries to use the Union components of the European Information Systems to support a secure exchange of information between them and the Member States in the framework of bilateral tax agreements.

(11)

Common training activities should also be carried out under Fiscalis 2020. Fiscalis 2020 should continue to support participating countries in strengthening professional skills and knowledge relating to taxation through enhanced jointly developed training content that targets tax officials and economic operators. To that end, the current common training approach of the Fiscalis 2020, which was mainly based on central eLearning development, should develop into a multi-facetted training support programme for the Union.

(12)

Fiscalis 2020 should cover a period of seven years to align its duration with that of the multiannual financial framework laid down in Council Regulation (EU, Euratom) No 1311/2013 (2).

(13)

This Regulation lays down a financial envelope for the entire duration of Fiscalis 2020 which is to constitute the prime reference amount, within the meaning of Point 17 of the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (3), for the European Parliament and the Council during the annual budgetary procedure.

(14)

In line with the Commission's commitment, set out in its Communication on the Budget Review of 2010, to coherence and simplification of funding programmes, resources should be shared with other Union funding instruments if the envisaged activities under Fiscalis 2020 pursue objectives which are common to various funding instruments, excluding however double financing.

(15)

The measures necessary for the financial implementation of this Regulation should be adopted in accordance with Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (4), and with Commission Delegated Regulation (EU) No 1268/2012 (5).

(16)

Participating countries should bear the cost of national elements of Fiscalis 2020 which would include, inter alia, the non-Union components of the European Information Systems, and any training which is not part of the common training initiatives.

(17)

Considering the importance of full participation of participating countries in joint actions, a co-financing rate of 100 % of the eligible costs in respect of travel and accomodation costs, costs linked to organisation of events and daily allowances is possible where it is necessary to achieve fully the objectives of Fiscalis 2020.

(18)

The financial interests of the Union should be protected through appropriate measures throughout the expenditure cycle, including the prevention, detection and investigation of irregularities, the recovery of funds lost, unduly paid or incorrectly used and, where appropriate, penalties.

(19)

In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission in respect of the establishment of annual work programmes. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (6).

(20)

Since the objective of this Regulation, namely establishing a multi-annual programme to improve the operation of the taxation systems in the internal market, cannot be sufficiently achieved by the Member States as they cannot efficiently perform the cooperation and coordination necessary to achieve that objective, the Union may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.

(21)

The Commission should be assisted by the Fiscalis 2020 Committee for the implementation of Fiscalis 2020.

(22)

To facilitate the evaluation of Fiscalis 2020, a proper framework for monitoring the results achieved by Fiscalis 2020 should be put in place from the very beginning. The Commission, together with participating countries, should establish adjustable indicators and set pre-defined baselines for monitoring the results of activities under Fiscalis 2020. A mid-term evaluation looking at the achievement of the objectives of Fiscalis 2020, its efficiency and its added value at the European level should be carried out. A final evaluation should, in addition, deal with the long-term impact and the sustainability effects of Fiscalis 2020. Full transparency with regular reporting on monitoring and with the submission of evaluation reports to the European Parliament and to the Council should be ensured.

(23)

Directive 95/46/EC of the European Parliament and of the Council (7) governs the processing of personal data carried out in the Member States in the context of this Regulation and under the supervision of the Member States competent authorities, in particular the public independent authorities designated by the Member States. Regulation (EC) No 45/2001 of the European Parliament and of the Council (8) governs the processing of personal data carried out by Commission within the framework of this Regulation and under the supervision of the European Data Protection Supervisor. Any exchange or transmission of information by competent authorities should be in accordance with the rules on the transfer of personal data as laid down in Directive 95/46/EC and any exchange or transmission of information by the Commission should be in accordance with the rules on the transfer of personal data as laid down in Regulation (EC) No 45/2001.

(24)

This Regulation replaces Decision No 1482/2007/EC of the European Parliament and of the Council (9). That Decision should therefore be repealed,

(1)

The Commission adopted a Communication entitled "Europe 2020 - A strategy for smart, sustainable and inclusive growth" in March 2010 ("the Europe 2020 Strategy"). The Communication was endorsed by the European Council of June 2010. The Europe 2020 Strategy responds to the economic crisis and is intended to prepare the Union for the next decade. It sets five ambitious objectives on climate and energy, employment, innovation, education and social inclusion to be reached by 2020, and identifies key drivers for growth aimed at making the Union more dynamic and competitive. It also emphasises the importance of reinforcing the growth of the European economy while delivering a high level of employment, a low-carbon, resource- and energy-efficient economy and social cohesion. Small and medium-sized enterprises (SMEs) should play a crucial role in reaching the Europe 2020 Strategy objectives. Their role is reflected by the fact that SMEs are mentioned in six out of seven of the flagship initiatives of the Europe 2020 Strategy.

(2)

In order to ensure that enterprises, particularly SMEs, play a central role in delivering economic growth in the Union, which is a top priority, the Commission adopted a Communication entitled "An Integrated industrial policy for the globalization era, putting competitiveness and sustainability at centre stage" in October 2010, which was endorsed by the Council of December 2010. This is a flagship initiative of the Europe 2020 Strategy. The Communication sets out a strategy aiming to boost growth and jobs by maintaining and supporting a strong, diversified and competitive industrial base in Europe, in particular by improving framework conditions for enterprises and strengthening several aspects of the internal market, including business-related services.

(3)

In June 2008 the Commission adopted a Communication entitled "Think Small First - A "Small Business Act for Europe", which was welcomed by the Council of December 2008. The Small Business Act (SBA) provides a comprehensive policy framework for SMEs, promotes entrepreneurship and anchors the "Think Small First" principle in law and policy in order to strengthen the competitiveness of SMEs. The SBA establishes ten principles and outlines policy and legislative actions to promote SMEs' potential to grow and create jobs. Implementation of the SBA contributes to achieving the objectives of the Europe 2020 Strategy. Several actions for SMEs have already been set out in the flagship initiatives.

(4)

The SBA has since been the subject of a review, published in February 2011, on the basis of which the Council on 30 and 31 May 2011 adopted conclusions. That review takes stock of the implementation of the SBA and assesses the needs of SMEs operating in the present economic environment, in which they find it increasingly difficult to obtain access to finance and to markets. It presents an overview of the progress made in the first two years of the SBA, sets out new actions to respond to challenges resulting from the economic crisis that stakeholders have reported, and proposes ways to improve the uptake and implementation of the SBA with a clear role for stakeholders and business organisations on the front-line. The specific objectives of a programme for the competitiveness of enterprises and SMEs should reflect the priorities set out in that review. It is important to ensure that the implementation of such a programme is coordinated with the implementation of the SBA.

In particular, actions under the specific objectives should contribute to fulfilling the above-mentioned ten principles and the new actions identified in the process of reviewing the SBA.

(5)

Council Regulation (EU, Euratom) No 1311/2013 (3) lays down the multiannual financial framework for the years 2014-2020. That multiannual financial framework describes how the policy goals of increasing growth and creating more jobs in Europe, and establishing a low-carbon and more environment-aware economy and internationally prominent Union will be achieved.

(6)

In order to contribute to the reinforcement of competitiveness and sustainability of Union enterprises, in particular SMEs, to support existing SMEs, to encourage an entrepreneurial culture and to promote the growth of SMEs, the advancement of the knowledge society, and development based on balanced economic growth, a programme for the competitiveness of enterprises and SMEs ("the COSME programme") should be established.

(7)

The COSME programme should give high priority to the simplification agenda, in accordance with the Commission Communication of 8 February 2012 entitled "A Simplification agenda for the MFF 2014-2020". The spending of Union and Member States' funds on the promotion of the competitiveness of enterprises and SMEs should be better coordinated in order to ensure complementarity, better efficiency and visibility, as well as to achieve greater budgetary synergies.

(8)

The Commission has committed itself to mainstreaming climate action into Union spending programmes and to direct at least 20 % of the Union budget to climate-related objectives. It is important to ensure that climate change mitigation and adaptation as well as risk prevention is promoted in the preparation, design and implementation of the COSME programme. Measures covered by this Regulation should contribute to promoting the transition to a low-carbon and climate-resilient economy and society.

(9)

It follows from Council Decision 2001/822/EC (4) that entities and bodies of the overseas countries and territories are eligible to participate in the COSME programme.

(10)

The competitiveness policy of the Union is intended to put into place the institutional and policy arrangements that create conditions for the sustainable growth of enterprises, particularly SMEs. Achieving competitiveness and sustainability entails the ability to attain and maintain the economic competitiveness and growth of enterprises in accordance with sustainable development objectives. Improved productivity, including resource and energy productivity, is the primary source of sustainable income growth. Competitiveness also depends on companies' ability to take full advantage of opportunities such as the internal market. This is especially important for SMEs, which account for 99 % of enterprises in the Union, provide two out of three existing jobs in the private sector, and 80 % of newly-created jobs, and contribute more than half of the total added value created by enterprises in the Union. SMEs are a key driver for economic growth, employment and social integration.

(11)

The Commission Communication of 18 April 2012 entitled "Towards a rich job recovery" estimated that policies promoting a transition to a green economy such as resource-efficiency, energy-efficiency, and climate change policies could generate more than five million jobs by 2020, and in particular in the SME sector. Bearing this in mind, specific actions under the COSME programme could include promoting the development of sustainable products, services, technologies and processes, as well as resource- and energy-efficiency and corporate social responsibility.

(12)

Competitiveness has been put under the spotlight of Union policy-making in recent years because of the market, policy and institutional failures that undermine the competitiveness of Union enterprises, particularly SMEs.

(13)

The COSME programme should therefore address market failures which affect the competitiveness of the Union economy on a global scale and which undermine the capacity of enterprises, particularly SMEs, to compete with their counterparts in other parts of the world.

(14)

The COSME programme should particularly address SMEs, as defined in Commission Recommendation 2003/361/EC (5). In the application of this Regulation, the Commission should consult all relevant stakeholders, including organisations representing SMEs. Particular attention should be paid to micro enterprises, enterprises engaged in craft activities, the self-employed, the liberal professions and social enterprises. Attention should also be paid to potential, new, young and female entrepreneurs, as well as to other specific target groups, such as older people, migrants and entrepreneurs belonging to socially disadvantaged or vulnerable groups such as persons with disabilities and to the promotion of business transfers, spin-offs, spin-outs and second chances for entrepreneurs.

(15)

Many of the Union's competitiveness problems involve SMEs' difficulties in obtaining access to finance because they struggle to demonstrate their credit-worthiness and have difficulties in gaining access to risk capital. Those difficulties have a negative effect on the level and quality of the new enterprises created and on the growth and survival rate of enterprises, as well as on the readiness of new entrepreneurs to take over viable companies in the context of a transfer of business/succession. Union financial instruments put in place under Decision No 1639/2006/EC of the European Parliament and of the Council (6) have a proven added value and have brought a positive contribution to at least 220 000 SMEs. The enhanced added value for the Union of the proposed financial instruments lies, inter alia, in strengthening the internal market for venture capital and in developing a pan-European SME finance market as well as in addressing market failures that cannot be addressed by Member States. The Union's actions should be coherent, consistent and complementary to the Member States' financial instruments for SMEs, provide a leverage effect and avoid creating market distortion, in accordance with Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (7). The entities entrusted with the implementation of the actions should ensure additionality and avoid double financing through Union resources.

(16)

The Commission should pay attention to the visibility of financing provided through the financial instruments of this Regulation so as to ensure that the availability of Union support is known and that the support provided is recognised in the market. To that end, there should also be an obligation for financial intermediaries to explicitly highlight to final recipients that financing was made possible through the support of the financial instruments under this Regulation. The Commission and the Member States should take adequate measures, including by means of user-friendly online systems, to disseminate information on the available financial instruments among SMEs and intermediaries. Those systems, which could include a single portal, should not duplicate existing systems.

(17)

The Enterprise Europe Network ("the Network") has proven its added value for European SMEs as a one-stop-shop for business support by helping enterprises to improve their competitiveness and explore business opportunities in the internal market and beyond. The streamlining of methodologies and working methods and provisions of a European dimension to business support services can only be achieved at Union level. In particular, the Network has helped SMEs to find cooperation or technology transfer partners in the internal market and third countries, obtain advice on sources of Union financing, on Union law and intellectual property and on Union programmes to encourage eco-innovation and sustainable production. It has also obtained feedback on Union law and standards. Its unique expertise is particularly important in overcoming information asymmetries and alleviating transaction costs associated with cross-border transactions.

(18)

A continued effort is needed to further optimise the quality of the services and performance of the Network, in particular with regard to SMEs' awareness and subsequent take-up of the services proposed, by further integrating internationalisation and innovation services, enhancing cooperation between the Network and regional and local SME stakeholders, consulting and better involving host organisations, reducing bureaucracy, improving IT support and enhancing the visibility of the Network and its services in the geographical regions covered.

(19)

The limited internationalisation of SMEs both within and outside Europe affects competitiveness. According to some estimates, currently 25 % of Union SMEs export or have exported at some point over the last three years, while only 13 % of Union SMEs export outside the Union on a regular basis and only 2 % have invested outside their home country. In addition, the 2012 Eurobarometer survey shows the untapped potential for SMEs' growth in green markets, within and outside the Union, in terms of internationalisation and access to public procurement. In line with the SBA, which called on the Union and the Member States to support and encourage SMEs to benefit from the growth of markets outside the Union, the Union provides financial assistance to several initiatives such as the EU Japan Centre for Industrial Cooperation and the China Intellectual Property Rights SME helpdesk. Union added value is created by promoting cooperation and by offering services at European level which complement but do not duplicate the core trade promotion services of Member States and which strengthen the combined efforts of public and private service providers in this field. Such services should include information on intellectual property rights, standards and public procurement rules and opportunities. Part II of the Council Conclusions of 6 December 2011, entitled "Reinforcing implementation of industrial policy across the EU", on the Commission Communication entitled "An Integrated industrial policy for the globalization era, putting competitiveness and sustainability at centre stage", should be fully taken into account. In that respect, a well-defined European cluster strategy should complement national and regional efforts to encourage clusters towards excellence and international cooperation, taking into account the fact that the clustering of SMEs can be a key means of strengthening their capacity to innovate and to begin operating in overseas markets.

(20)

To improve the competitiveness of Union enterprises, particularly SMEs, the Member States and the Commission need to create a favourable business environment. The interests of SMEs and the sectors in which they are most active need particular attention. Initiatives at Union level are also necessary in order to exchange information and knowledge on a European scale, and digital services can be particularly cost-effective in this area. Such actions can help develop a level playing-field for SMEs.

(21)

The gaps, fragmentation and unnecessary red tape within the internal market prevent citizens, consumers and enterprises, particularly SMEs, from reaping its full benefits. Therefore a concerted effort on the part of Member States, the European Parliament, the Council and the Commission to address the implementation, legislative and information shortcomings is acutely necessary. In accordance with the principles of subsidiarity and proportionality, Member States, the European Parliament, the Council and the Commission should also collaborate to reduce and avoid unnecessary administrative and regulatory burdens on SMEs. Actions under the COSME programme - which is the sole Union programme that focuses specifically on SMEs - should contribute to the implementation of those aims, particularly by helping to improve the framework conditions for enterprises. Fitness checks and impact assessments financed under the COSME programme should play a role in this effort.

(22)

Another factor which affects competitiveness is the relatively weak entrepreneurial spirit in the Union. Only 45 % of Union citizens (and fewer than 40 % of women) would like to be self-employed as compared to 55 % of the population in the United States and 71 % in China (according to the 2009 Eurobarometer survey on entrepreneurship). According to the SBA, attention should be paid to all situations that entrepreneurs face, including start-up, growth, transfer and bankruptcy (second chance). Promotion of entrepreneurship education, as well as coherence and consistency enhancing measures such as benchmarking and exchanges of good practices provide a high Union added value.

(23)

The Erasmus for Young Entrepreneurs Programme was launched with a view to enabling new or aspiring entrepreneurs to gain business experience in a Member State other than their own and thus allow them to strengthen their entrepreneurial talents. In connection with the objective of improving the framework conditions for promoting entrepreneurship and entrepreneurial culture, the Commission should be able to take measures designed to help new entrepreneurs to improve their ability to develop their entrepreneurial know-how, skills and attitudes and to improve their technological capacity and enterprise management.

(24)

Global competition, demographic changes, resource constraints and emerging social trends generate challenges and opportunities for different sectors facing global challenges and characterised by a high proportion of SMEs. For example, design-based sectors need to adapt to benefit from the untapped potential of high demand for personalised, creative, inclusive products. As these challenges apply to all SMEs in the Union in these sectors, a concerted effort at Union level is necessary in order to create additional growth through initiatives accelerating the emergence of new products and services.

(25)

In support of action taken in Member States, the COSME programme may support initiatives in both sectoral and cross-sectoral areas with significant potential for growth and entrepreneurial activity, especially those with a high proportion of SMEs, accelerating the emergence of competitive and sustainable industries, based on the most competitive business models, improved products and processes, organisational structures or modified value chains. As outlined in the Commission Communication of 30 June 2010, entitled "Europe, the world's No 1 tourist destination – a new political framework for tourism in Europe", which was welcomed by the Council in October 2010, tourism is an important sector of the Union economy. Enterprises in this sector directly contribute 5 % of the Union's gross domestic product (GDP). The Treaty on the Functioning of the European Union ("TFEU") acknowledges the importance of tourism and outlines the Union's competences in this field. The European tourism initiatives can complement Member State actions by encouraging the creation of a favourable environment and by promoting cooperation between Member States, particularly by the exchange of good practices. Actions can include improving the tourism knowledge base by providing data and analysis, and developing transnational cooperation projects in close cooperation with the Member States while avoiding mandatory requirements for Union enterprises.

(26)

The COSME programme indicates actions for the objectives, the total financial envelope for pursuing those objectives, a minimum financial envelope for financial instruments, different types of implementing measures, and transparent arrangements for monitoring and evaluation and for protection of the Union's financial interests.

(27)

The COSME programme complements other Union programmes, while acknowledging that each instrument should work according to its own specific procedures. Thus, the same eligible costs should not receive double funding. With the aim of achieving added value and substantial impact of Union funding, close synergies should be developed between the COSME programme, Regulation (EU) No 1291/2013 of the European Parliament and of the Council (8) ("the Horizon 2020 programme"), Regulation (EU) No 1303/2013 of the European Parliament and of the Council (9) ("the Structural Funds") and other Union programmes.

(28)

The principles of transparency and equal gender opportunity should be taken into account in all relevant initiatives and actions covered by the COSME programme. Respect for human rights and fundamental freedoms for all citizens should be also considered in those initiatives and actions.

(29)

The provision of grants to SMEs should be preceded by a transparent process. The award of grants and their payment should be transparent, unbureaucratic and in accordance with common rules.

(30)

This Regulation lays down a financial envelope for the entire duration of the COSME programme which is to constitute the prime reference amount, within the meaning of point 17 of the Interinstitutional Agreement between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (10), for the European Parliament and the Council during the annual budgetary procedure.

(31)

To ensure that financing is limited to tackling market, policy and institutional failures, and with a view to avoiding market distortions, funding from the COSME programme should comply with the State aid rules of the Union.

(32)

The Agreement on the European Economic Area and Protocols to Association Agreements provide for the participation of the countries concerned in Union programmes. Participation by other third countries should be possible when agreements and procedures so indicate.

(33)

It is important to ensure the sound financial management of the COSME programme and its implementation in the most effective and user-friendly manner possible, while also ensuring legal certainty and the accessibility of the COSME programme to all participants.

(34)

The COSME programme should be monitored and evaluated so as to allow for adjustments. A yearly report on its implementation should be made, presenting the progress achieved and the activities planned.

(35)

The implementation of the COSME programme should be monitored annually with the aid of key indicators for assessing results and impacts. These indicators, including relevant baselines, should provide the minimum basis for assessing the extent to which the objectives of the COSME programme have been achieved.

(36)

The interim report on the achievement of the objective of all actions supported under the COSME programme prepared by the Commission should also include an evaluation of low participation rates of SMEs, when this is identified in a significant number of Member States. Where appropriate, Member States could take the results of the interim report into account in their respective policies.

(37)

The financial interests of the Union should be protected through proportionate measures throughout the expenditure cycle, including the prevention, detection and investigation of irregularities, the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, administrative and financial penalties in accordance with Regulation (EU, Euratom) No 966/2012.

(38)

In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission, to adopt annual work programmes for the implementation of the COSME programme. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (11). Some of the actions included in the annual work programme involve the co-ordination of actions at national level. In that connection, Article 5(4) of that Regulation should apply.

(39)

The power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of additions to the indicators, changes to certain specific details regarding the financial instruments and modifications to the indicative amounts that would exceed those amounts by more than 5 % of the value of the financial envelope in each case. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level. The Commission, when preparing and drawing-up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council.

(40)

For reasons of legal certainty and clarity, Decision No 1639/2006/EC should be repealed,

(1)

The Commission's communication of 29 June 2011 entitled 'A Budget for Europe 2020' calls for a single programme in the field of education, training, youth and sport, including the international aspects of higher education, bringing together the action programme in the field of lifelong learning ('Lifelong Learning') established by Decision No 1720/2006/EC of the European Parliament and of the Council (4), the Youth in Action programme ('Youth in Action') established by Decision No 1719/2006/EC of the European Parliament and of the Council (5), the Erasmus Mundus action programme ('Erasmus Mundus') established by Decision No 1298/2008/EC of the European Parliament and of the Council (6), the ALFA III programme established by Regulation (EC) No 1905/2006 of the European Parliament and of the Council (7), and the Tempus and Edulink programmes, in order to ensure greater efficiency, a stronger strategic focus and synergies to be exploited between the various aspects of the single programme. In addition, sport is proposed as part of that single programme (the 'Programme').

(2)

The interim evaluation reports of the existing Lifelong Learning, Youth in Action and Erasmus Mundus programmes and the public consultation on the future of Union action in education, training and youth, as well as in higher education, revealed a strong and in some respects growing need for continuing cooperation and mobility in those fields at European level. The evaluation reports emphasised the importance of creating closer links between Union programmes and policy developments in education, training and youth, expressed the wish that Union action should be structured in such a way as to respond better to the lifelong learning paradigm, and pressed for a simpler, more user-friendly and more flexible approach to implementing such action and the end of the fragmentation of international higher education cooperation programmes.

(3)

The Programme should focus on the accessibility of funding and the transparency of administrative and financial procedures, including through the use of information and communication technologies (ICTs) and digitisation. Streamlining and simplifying the organisation and management, and a sustained focus on reducing administrative expenditure, are also vital to the success of the Programme.

(4)

The public consultation on the Union's strategic choices for the implementation of the new Union competence in the field of sport and the Commission's evaluation report on preparatory actions in the field of sport provided useful indications regarding priority areas for Union action, and illustrated the added value that the Union can bring in supporting activities aimed at generating, sharing and spreading experiences and knowledge about different issues affecting sport at the European level, provided that they are focused in particular at grassroots level.

(5)

The Europe 2020 strategy for smart, sustainable and inclusive growth defines the Union's growth strategy for the coming decade to support such growth, setting five ambitious objectives to be reached by 2020, particularly in the field of education, where the aim is to reduce early school-leaving rates to a level below 10 % and to enable at least 40 % of 30-34 year-olds to have completed tertiary or equivalent education. This also includes its flagship initiatives, in particular Youth on the Move and the Agenda for New Skills and Jobs.

(6)

In its conclusions of 12 May 2009, the Council called for a strategic framework for European cooperation in education and training (ET 2020), setting up four strategic objectives with a view to responding to the challenges that remain in creating a knowledge-based Europe and making lifelong learning a reality for all.

(7)

Pursuant to Articles 8 and 10 of the Treaty on the Functioning of the European Union (TFEU), as well as Articles 21 and 23 of the Charter of Fundamental Rights of the European Union, the Programme promotes inter alia equality between men and women and measures to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation. There is a need to widen access for members of disadvantaged and vulnerable groups and actively to address the special learning needs of people with disabilities in the implementation of the Programme.

(8)

The Programme should include a strong international dimension, particularly as regards higher education, in order not only to enhance the quality of European higher education in pursuit of the broader ET 2020 objectives and the attractiveness of the Union as a study destination, but also to promote understanding between people and to contribute to the sustainable development of higher education in partner countries, as well as their broader socio-economic development, inter alia by stimulating ″brain circulation″ through mobility actions with partner-country nationals. To that end, funding should be made available from the Development Cooperation Instrument (DCI), the European Neighbourhood Instrument (ENI), the Instrument for Pre-accession Assistance (IPA) and the Partnership Instrument for cooperation with third countries (PI). Funds might also be made available from the European Development Fund (EDF) in accordance with the procedures governing it. The provisions of this Regulation should apply to the use of those funds, while ensuring conformity with the respective Regulations establishing those instruments and that fund.

(9)

In its resolution of 27 November 2009 on a renewed framework for European cooperation in the youth field (2010-2018), the Council emphasised the need to consider all young people as a resource in society and sought to facilitate their participation in the development of policies affecting them by means of a continuous structured dialogue between decision-makers and young people and youth organisations at all levels.

(10)

Bringing formal, non-formal and informal learning together in a single programme should create synergies and foster cross-sectoral cooperation across the various education, training and youth sectors. During the implementation of the Programme, the specific needs of the various sectors and, where appropriate, the role of local and regional authorities should be duly taken into account.

(11)

To support mobility, equity and study excellence, the Union should establish, on a pilot basis, a Student Loan Guarantee Facility to enable students, regardless of their social background, to take their Master's degree in another country to which participation in the Programme is open (the 'Programme country'). The Student Loan Guarantee Facility should be available to financial institutions which agree to offer loans for Master's studies in other Programme countries on favourable terms for students. This additional and innovative tool for learning mobility should neither replace any current, nor impede the development of any future, grant or loan system supporting student mobility at local, national or Union level. The Student Loan Guarantee Facility should be subject to close monitoring and evaluation, in particular concerning its market uptake in different countries. In accordance with Article 21(2) and (3), a mid-term evaluation report should be submitted to the European Parliament and to the Council no later than the end of 2017, with a view to obtaining political guidance on the continuation of the Student Loan Guarantee Facility.

(12)

Member States should endeavour to adopt all appropriate measures to remove legal and administrative obstacles to the proper functioning of the Programme. This includes resolving, where possible, administrative issues that create difficulties in obtaining visas and residency permits. In line with Council Directive 2004/114/EC (8), Member States are encouraged to establish fast-track admission procedures.

(13)

The Commission's communication of 20 September 2011 entitled 'Supporting growth and jobs – an agenda for the modernisation of Europe's higher education systems' sets out a framework within which the Union, Member States and higher education institutions can cooperate to boost the number of graduates, to improve the quality of education and to maximise the contribution that higher education and research can make to helping Member States' economies and societies emerge stronger from the global economic crisis.

(14)

In order to better address youth unemployment in the Union, particular attention should be paid to transnational cooperation between higher and vocational education institutions and businesses, with a view to improving students' employability and developing entrepreneurial skills.

(15)

The Bologna Declaration, signed by the Education Ministers of 29 European countries on 19 June 1999, established an intergovernmental process aimed at creating a European area of higher education, which requires continuous support at Union level.

(16)

The crucial role played by vocational education and training (VET) in helping to achieve a number of targets set out in the Europe 2020 strategy is widely acknowledged and defined in the renewed Copenhagen process (2011-2020), taking into account, in particular, its potential in addressing Europe's high level of unemployment, especially youth unemployment and long-term unemployment, promoting a culture of lifelong learning, countering social exclusion and promoting active citizenship. Quality traineeships and apprenticeships, including those in micro-enterprises and small and medium-sized enterprises, are needed in order to bridge the gap between the knowledge acquired through education and training and the skills and competences required in the world of work, as well as to enhance the employability of young people.

(17)

It is necessary to strengthen the intensity and extent of European cooperation between schools, and of the mobility of school staff and learners, in order to address the priorities set out in the Agenda for European Cooperation on Schools for the 21st century, namely to improve the quality of school education in the Union in the fields of competence development and in order to improve equity and inclusion within school systems and institutions, as well as to reinforce and provide support for the teaching profession and school leadership. In this context, the strategic targets on reducing early school leaving, improving performance in basic skills, and improving participation and quality in early childhood education and care, should be prioritised along with targets reinforcing the professional competences of school teachers and school leaders, and improving the educational opportunities for children with a migrant background and those at a socio-economic disadvantage.

(18)

The renewed European Agenda for Adult Learning included in the Council's resolution of 28 November 2011 aims at enabling all adults to develop and enhance their skills and competences throughout their lives. Particular attention should be paid to improving learning opportunities for the high number of low-skilled Europeans, in particular by improving literacy and numeracy and by promoting flexible learning pathways and second-chance measures.

(19)

The action of the European Youth Forum, the National Academic Recognition Information Centres (NARIC), the Eurydice, Euroguidance and Eurodesk networks, the eTwinning National Support Services, the National Europass Centres, and the National Information Offices in the neighbourhood countries is essential in order to achieve the objectives of the Programme, in particular by providing the Commission with regular, updated information regarding their various fields of activity and through the dissemination of the Programme results in the Union and in the partner countries.

(20)

Cooperation under the Programme with international organisations in the field of education, training, youth and sport, in particular with the Council of Europe, should be strengthened.

(21)

In order to contribute to the development of excellence in European integration studies worldwide, and to respond to the increasing need for knowledge of, and dialogue on, the European integration process and its development, it is important to stimulate excellence in teaching, research and reflection in this area by supporting academic institutions, associations active in the field of European integration and associations pursuing an aim of European interest, through the Jean Monnet Action.

(22)

Cooperation under the Programme with civil society organisations in the fields of education, training, youth and sport, at national and Union level is of great importance in order to create a broad sense of ownership in relation to lifelong learning strategies and policies and to take into consideration stakeholders' ideas and concerns at all levels.

(23)

The Commission's communication of 18 January 2011 entitled 'Developing the European Dimension in Sport' sets out the Commission's ideas for action at Union level in the field of sport following the entry into force of the Treaty of Lisbon, and proposes a list of concrete actions to be taken by the Commission and Member States in order to increase sport's European identity in three broad chapters: the societal role of sport, the economic dimension of sport and the organisation of sport. It is also necessary to take into account the added value of sport, including indigenous sport, and its contribution to the Union's cultural and historical heritage.

(24)

There is a need to focus in particular on grassroots sport and volunteering in sport, on account of the important role that they play in promoting social inclusion, equal opportunities and health-enhancing physical activity.

(25)

Improved transparency and recognition of qualifications and competences and extended acceptance of Union transparency and recognition tools should contribute to the development of quality education and training, and facilitate mobility for both lifelong learning and occupational purposes throughout Europe, between countries as well as across sectors. Opening up access to methods, practices and technologies used in other countries will help to improve employability.

(26)

To that end, it is recommended that extended use be made of the single Union framework for the transparency of qualifications and competences (Europass) established by Decision No 2241/2004/EC of the European Parliament and of the Council (9), the European Quality Assurance Register for Higher Education (EQAR) and the European Association for Quality Assurance in Higher Education (ENQA) established pursuant to Recommendation 2006/143/EC of the European Parliament and of the Council (10), the European Qualifications Framework (EQF) established pursuant to the Recommendation of the European Parliament and of the Council of 23 April 2008 (11), the European Credit System for Vocational Education and Training (ECVET) established pursuant to the Recommendation of the European Parliament and of the Council of 18 June 2009 (12), the European Quality Assurance Reference Framework for Vocational Education and Training (EQAVET) established pursuant to the Recommendation of the European Parliament and of the Council of 18 June 2009 (13) and the European Credit Transfer and Accumulation System (ECTS).

(27)

In order to ensure greater efficiency in communication to the public at large and stronger synergies between the communication activities undertaken at the initiative of the Commission, the resources allocated to communication under this Regulation should also contribute to covering the corporate communication of the political priorities of the Union, provided that these are related to the general objective of this Regulation.

(28)

It is necessary to ensure the European added value of all actions carried out within the framework of the Programme, and their complementarity with activities undertaken by the Member States in compliance with Article 167(4) of the TFEU and with other activities, in particular those in the fields of culture and the media, employment, research and innovation, industry and enterprise, cohesion and development policy, as well as enlargement policy and initiatives, instruments and strategies in the field of regional policy and external relations.

(29)

The Programme is designed to have a positive and sustainable impact on education, training, youth and sport policies and practices. That systemic impact should be achieved through the various actions and activities envisaged in the Programme, which aim at fostering changes at institutional level and which lead, where appropriate, to innovation at system level. Individual projects for which financial support is sought from the Programme are not required to have any systemic impact as such. It is the cumulative result of those projects that should contribute to the attainment of systemic impact.

(30)

Effective performance management, including evaluation and monitoring, requires the development of specific, measurable and realistic performance indicators which can be measured over time and which reflect the logic of the intervention.

(31)

The Commission and the Member States should optimise the use of ICTs and new technologies in order to facilitate access to actions relating to education, training, youth and sport. This could include virtual mobility, which should complement, but not replace, learning mobility.

(32)

This Regulation lays down a financial envelope for the entire duration of the Programme which is to constitute the prime reference amount, within the meaning of Point 17 of the Interinstitutional Agreement between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (14), for the European Parliament and the Council during the annual budgetary procedure.

(33)

In order to ensure continuity in the funding support provided under the Programme to the functioning of bodies, the Commission should be able during the initial phase of the Programme to consider the costs directly linked to the implementation of the supported activities as eligible for financing, even if they were incurred by the beneficiary before the grant application was submitted.

(34)

There is a need to establish performance criteria on which the allocation of budget funds between Member States for the actions managed by the national agencies should be based.

(35)

The candidate countries for accession to the Union and those European Free Trade Association (EFTA) countries which form part of the European Economic Area (EEA) may participate in Union programmes on the basis of framework agreements, Association Council decisions or similar agreements.

(36)

The Swiss Confederation may participate in the Union programmes in accordance with an agreement to be signed between the Union and that country.

(37)

Individuals from an overseas country or territory (OCT) and competent public and/or private bodies and institutions from an OCT may participate in the programmes in accordance with Council Decision 2001/822/EC (15). The constraints imposed by the remoteness of the outermost regions of the Union and the OCTs should be taken into account when implementing the Programme.

(38)

The Commission and the High Representative of the European Union for Foreign Affairs and Security Policy, in their joint communication of 25 May 2011 entitled 'A new response to a changing Neighbourhood', outlined, inter alia, the aim of further facilitating neighbourhood countries' participation in Union mobility and capacity-building actions in higher education and the opening of the future education programme to the neighbourhood countries.

(39)

The financial interests of the Union should be protected through proportionate measures throughout the expenditure cycle, including the prevention, detection and investigation of irregularities, the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, penalties. While Union external assistance has an increasing need for financing, the economic and budgetary situation of the Union limits the resources available for such assistance. The Commission should, therefore, seek the most efficient and sustainable use of available resources, in particular through the use of financial instruments with leverage effect.

(40)

In order to enhance access to the Programme, the grants to support the mobility of individuals should be adjusted to the living and subsistence costs of the host country. In accordance with national law, Member States should also be encouraged to exempt those grants from any taxes and social levies. The same exemption should apply to public or private bodies awarding such financial support to the individuals concerned.

(41)

In accordance with Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (16), volunteer time can be recognised as co-financing in the form of contributions in kind.

(42)

In its communication of 29 June 2011 entitled 'A Budget for Europe 2020', the Commission underlined its commitment to simplifying Union funding. The creation of a single programme on education, training, youth and sport should result in significant simplification, rationalisation and synergies in the management of the Programme. The implementation of the Programme should be further simplified by the use of lump-sum, unit-cost or flat-rate funding, as well as by reducing formal and bureaucratic requirements for beneficiaries and Member States.

(43)

Improving implementation and the quality of spending should constitute guiding principles for achieving the objectives of the Programme, whilst ensuring the optimal use of the financial resources.

(44)

It is important to ensure sound financial management of the Programme and its implementation in the most effective and user-friendly manner possible, whilst also ensuring legal certainty and the accessibility of the Programme to all participants.

(45)

In order to ensure a quick response to changing needs throughout the duration of the Programme, the power to adopt acts in accordance with Article 290 of the TFEU should be delegated to the Commission in respect of provisions relating to additional actions managed by the national agencies. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level. The Commission, when preparing and drawing up delegated acts, should ensure the simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council.

(46)

In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (17).

(47)

The Programme should cover three different fields, and the committee established under this Regulation should deal with both horizontal and sectoral issues. It is for the Member States to ensure that they send the relevant representatives to attend meetings of that committee in accordance with the topics on its agenda, and it is for the committee chair to ensure that meeting agendas clearly indicate the sector or sectors involved and the topics, according to each sector, to be discussed at each meeting. Where appropriate, and in accordance with the committee's rules of procedure and on an ad hoc basis, it should be possible to invite external experts, including representatives of the social partners, to participate in the committee meetings as observers.

(48)

It is appropriate to ensure the correct closure of the Programme, in particular as regards the continuation of multi-annual arrangements for its management, such as the financing of technical and administrative assistance. As from 1 January 2014, the technical and administrative assistance should ensure, if necessary, the management of actions that have not yet been finalised under the predecessor programmes by the end of 2013.

(49)

Since the objective of this Regulation, namely to establish the Programme, cannot be sufficiently achieved by the Member States but can rather, by reason of its scale and effects, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty of the European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.

(50)

Decisions No 1719/2006/EC, No 1720/2006/EC and No 1298/2008/EC should therefore be repealed.

(51)

In order to ensure continuity in the funding support provided under the Programme, this Regulation should apply from 1 January 2014. For reasons of urgency, this Regulation should enter into force as soon as possible after its publication in the Official Journal of the European Union,