Brussels, 5.6.2025

COM(2025) 278 final

Recommendation for a

COUNCIL DECISION

authorising the opening of negotiations on the revision of the Transport Community Treaty


EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

•Reasons for and objectives of the proposal

The Treaty establishing the Transport Community 1 (TCT) has been approved by the European Union 2 and ratified by six Western Balkan partners – the Republic of Albania, Bosnia and Herzegovina, the Republic of North Macedonia, Kosovo 3*, Montenegro and the Republic of Serbia (hereinafter referred to as the South East European Parties). It entered into force on 1 May 2019.

It applies in the field of road, rail, inland waterway and maritime transport and provides for the progressive integration of transport markets and networks, including airport infrastructure, on the basis of the relevant EU legislation, including in the areas of technical standards, interoperability, safety, security, traffic management, competition, social policy, public procurement and environment.

Since 2019, the Transport Community has advanced this objective by strengthening regional cooperation and offering targeted technical assistance alongside capacity-building initiatives. Through these efforts, the Transport Community has made progress in aligning legislation and integrating transport markets both among the South East European Parties and between them and the EU. However, further work is still needed.

Article 42 of the TCT provides that the Treaty is to be reviewed at the request of any contracting party and at any event five years after its entry into force.

On 15 November 2022, the TCT contracting parties and the ministers in charge of transport from Ukraine, Georgia and the Republic of Moldova endorsed a joint statement on cooperation for the development of the transport sectors. This political document formed the basis of the involvement of these countries as observing participants in the work of the Transport Community. In the joint statement, the view was also expressed that the potential mutual benefits arising from the possible accession of Ukraine, the Republic of Moldova and Georgia to the TCT should be duly explored.

The present recommendation proposes that the Council authorises the Commission to open negotiations on the revision of the TCT.

The general objective should be to negotiate with the South East European Parties, Ukraine and the Republic of Moldova amendments to the TCT to support and strengthen the legislative alignment of all contracting parties with the relevant EU acquis, in view of their respective European perspectives.

This should include new mechanisms to reinforce the binding commitments contained in the TCT by providing for sanctions (such as suspending voting rights) in cases of serious and persistent breaches of these commitments. To strengthen the alignment mechanism with the acquis, a reinforced role for the Permanent Secretariat of the TCT should be sought. In addition, the amendments should refine the role of the TCT in supporting the development of the indicative extension of the trans-European transport network (TEN-T) to the South East European Parties, in particular by taking account of policy developments in the TEN-T legislative framework. Furthermore, Annex I to the TCT should also be revised, notably to add EU acquis pre-dating the signature of the TCT and to take into account relevant policy developments in the fields of transport or associated areas mentioned in Annex I. Finally, the amendments should aim to improve certain operational aspects that have been identified in the application of the TCT and to refine the rules on the application of the case law of the Court of Justice on matters covered by the TCT.

The amendments should also enable the full membership of Ukraine and the Republic of Moldova in the TCT. Further, to ensure their full integration in the TCT, the Commission should negotiate annexes on transitional arrangements, as referred to in Article 40 of the TCT, to be applicable to both of these countries upon their accession. In addition, the Commission should be able to address potential demands as regards the substance of the TCT from Ukraine and the Republic of Moldova.

In light of Georgia’s democratic backsliding, including the enactment of the Law on transparency of foreign influence, which jeopardises Georgia’s EU path and has de facto led to a halt of the accession process, the decision to take concrete steps towards Georgia’s full membership to the TCT should be deferred. This deferral is in line with the discussions held at the European Council on 27 June 2024 4 , 17 October 2024 5 , and 19 December 2024 6 and reflects the findings of the Commission’s enlargement report.

•Consistency with existing policy provisions in the policy area

The objectives of this recommendation are in line with and complement the EU’s broader efforts to support reforms in the transport sectors of the South East European Parties, Ukraine, and the Republic of Moldova, as part of their overall accession processes. Since the entry into force of the TCT, the European Council has confirmed on numerous occasions that the future of the South East European Parties lies firmly within the EU. In March 2020, the members of the European Council endorsed the General Affairs Council’s decision 7 to open accession negotiations with the Republic of North Macedonia and the Republic of Albania. In March 2024, the European Council decided 8 to open accession negotiations with Bosnia and Herzegovina. In December 2022, Kosovo submitted its application for EU membership.

The European Council of 14-15 December 2023 decided to open accession negotiations with Ukraine and the Republic of Moldova 9 . The accession negotiations for the two countries were formally launched at two intergovernmental conferences in Luxembourg on 25 June 2024.

Additionally, the objective of further supporting the integration of transport networks is in line with Regulation (EU) 2024/1679 of the European Parliament and of the Council 10 . Among other things, this Regulation provides for dedicated European Transport Corridors aiming to further strengthen connectivity between the Member States and the South East European Parties, Ukraine, and the Republic of Moldova.

•Consistency with other Union policies

The recommendation is in line with other EU policies, notably with regard to enlargement and neighbourhood policy. On 8 November 2023, the Commission adopted the new Growth Plan for the Western Balkans 11 , with the aim of bringing some of the benefits of EU membership to the region in advance of accession, boosting economic growth and accelerating much needed socio-economic convergence. The objective is to enable partners to step up reforms and investments to significantly accelerate the speed of the enlargement process and the growth of their economies.

Similarly, on 15 April 2024, the Commission endorsed the Ukraine Plan 12 , which assists Ukraine in recovery, reconstruction and modernisation, and in particular supports the country’s reform efforts on its path towards EU membership. Finally, on 10 October 2024, the Commission adopted a communication on the Growth Plan for Moldova 13 , aiming to boost Moldova’s economy and bring the country closer to EU membership by accelerating reforms and providing financial assistance.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

The aim of the Transport Community Treaty is the creation of a Transport Community in the fields of road, rail, inland waterway and maritime transport, as well as the development of the transport network between the European Union and the South East European Parties. Article 91 TFEU provides that measures concerning rail, road and inland waterway transport within the framework of the common transport policy shall be adopted in accordance with the ordinary legislative procedure. Article 100(2) provides that appropriate provisions for sea transport shall be as well adopted in accordance with the ordinary legislative procedure. The substantive legal basis for the envisaged decision authorising the opening of negotiations on an agreement and addressing directives to the negotiator is therefore Article 91 and Article 100(2) TFEU.

Article 218 of the Treaty on the Functioning of the European Union (TFEU) lays down the procedure for the negotiation and conclusion of agreements between the EU and non-EU countries or international organisations. In particular, paragraph 3 of this Article provides for the Commission to submit recommendations to the Council, which adopts a decision authorising the opening of negotiations and, depending on the subject of the agreement envisaged, nominates the EU negotiator or the head of the EU’s negotiating team. Article 218(4) provides for the possibility for the Council to address directives to the negotiator and designate a special committee in consultation with which the negotiations must be conducted. The procedural legal basis for the envisaged decision authorising the opening of negotiations on an agreement and addressing directives to the negotiator is Article 218(3) and (4) TFEU.

•Union competence

Article 216(1) TFEU stipulates:

‘The Union may conclude an agreement with one or more third countries or international organisations where the Treaties so provide or where the conclusion of an agreement is necessary in order to achieve, within the framework of the Union’s policies, one of the objectives referred to in the Treaties, or is provided for in a legally binding Union act or is likely to affect common rules or alter their scope.’

The TCT has been concluded by the Union by virtue of Council Decision (EU) 2019/392 14 . The TCT being an agreement between the EU and the South East European Parties, a modification of that agreement should be negotiated at the EU level.

The Transport Community is based on the progressive integration of transport markets of the South East European Parties into the EU transport market on the basis of the relevant acquis, including in the areas of technical standards, interoperability, safety, security, traffic management, social policy, public procurement and environment, for all modes of transport excluding air transport.

This proposal concerns the opening of negotiations in view of amending the TCT to: (i) support and strengthen the legislative alignment of the South East European Parties; (ii) strengthen the role of the Permanent Secretariat of the TCT; (iii) review Annex I to the TCT, notably to add EU acquis pre-dating the signature of the TCT and to take into account relevant policy developments in the field of transport or associated areas covered by that Annex; (iv) improve certain operational aspects; (v) refine the rules on the interpretation of the TCT in light of the case-law of the Court of Justice, pursuant to Article 19 of the TCT, to cover also case-law delivered after the date of signature of the TCT; and (vi) enable the full membership of Ukraine and the Republic of Moldova in the TCT, including by negotiating annexes on transitional arrangements for each of these countries. Therefore, the proposal does not affect the material scope of application of the agreement, is consistent with the policy objectives pursued by it and does not alter the EU’s competence in relation to it.

The EU has therefore exclusive competence to conclude an international agreement to amend the TCT and the annexes on transitional arrangements that are to be applicable upon the possible accession of Ukraine and the Republic of Moldova.

•Proportionality

The amendments to be negotiated do not modify the material scope of the TCT, and are limited to measures that are needed to ensure its more effective implementation and enable the full membership of Ukraine and the Republic of Moldova.

The envisaged agreement is the most efficient instrument to improve transport relations between the EU, the South East European Parties, Ukraine and the Republic of Moldova. The recommendation does not go beyond what is necessary to achieve the objectives pursued, in accordance with Article 5(4) of the Treaty on European Union.

•Choice of the instrument

A Commission Recommendation for a Council Decision authorising the opening of negotiations is in line with Article 218(3) of the TFEU, which provides that the Commission shall submit recommendations to the Council, which shall adopt a decision authorising the opening of negotiations.

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

•Ex post evaluations / fitness checks of existing legislation

At the request of the Commission, the Permanent Secretariat set up an informal working group in January 2024 to carry out a preliminary assessment of the current implementation of the TCT and identify potential areas for substantive and operational improvements as part of the TCT review.

The informal working group, which was headed by the Permanent Secretariat, consisted of representatives of the Commission, of the Member States and of the South East European Parties, as well as representatives of the observing participants. It was tasked with identifying:

·potential substantive changes likely to bring a positive contribution to the TCT goal of closer transport market integration of the South East European Parties, based on the relevant EU acquis;

·potential need to improve support for monitoring the development of the indicative trans-European transport network (TEN-T) in the region;

·new work strands / tasks to address developments in EU relations with the South East European Parties; and

·potential operational changes likely to improve the proper functioning and implementation of the TCT.

The reflections have concluded and the Permanent Secretariat has prepared a final report containing a summary of the work and its main conclusions, and highlighting the main areas that could be addressed during the review process.

As part of the proceedings of the informal working group, Kosovo has requested to change its denomination as currently reflected in the TCT (Kosovo*) to “the Republic of Kosovo”. Kosovo would also like to change the way its borders are depicted in the indicative TEN-T maps in Annex I to the TCT. The Republic of North Macedonia has raised the need to re-examine the bilateral protocols attached to the TCT and adapt them to the specific situation of landlocked parties, in particular as regards the provisions relating to maritime transport. Montenegro observed that certain regulations listed in Annex I to the TCT would require updating.

•Stakeholder consultations

Over the course of 2023, the Commission services held a number of bilateral discussions with the South East European Parties on the closer involvement of the observing participants from Ukraine and the Republic of Moldova in the work of the TCT 15 .

Without prejudice to the formalisation of their respective government positions, there is generally strong support for the initiative to integrate Ukraine and the Republic of Moldova more closely in the work of the TCT with a view to full membership, with a notable caveat concerning the bilateral relations between one particular Western Balkan partner (Kosovo) and the observing participants.

Albania has raised no particular issues with the closer involvement of the observing participants in the work of the TCT and has stated that it is supportive of the TCT extension to Ukraine and the Republic of Moldova.

Bosnia and Herzegovina has expressed its support for the extension of the TCT to Ukraine and the Republic of Moldova.

Kosovo has underlined that it has no major issues with full membership in the TCT for the observing participants, while raising certain concerns such as the non-recognition of Kosovo’s declaration of independence by Ukraine and the Republic of Moldova.

Montenegro has raised no issues with the closer involvement of the observing participants in the work of the TCT and has expressed support for the observing participants joining the TCT as full members.

North Macedonia has raised no issues with the closer involvement of the observing participants in the work of the TCT and has stated that it supports the accession of Ukraine and the Republic of Moldova to the TCT.

Serbia has raised no issues with the closer involvement of Ukraine and the Republic of Moldova in the work of the TCT; however, it has also noted that there is currently no official position of the government of Serbia regarding full TCT membership for the observing participants. Such a position would be determined following a more formal approach from the EU concerning the possible accession of Ukraine and the Republic of Moldova to the TCT.

In bilateral exchanges in 2023, the Commission services presented to Ukraine and the Republic of Moldova the preliminary positions of the South East European Parties on the prospects of full membership for the observing participants. The Commission services also mentioned the possible financial implications (i.e. contributions to the TCT budget). In these exchanges, Ukraine and the Republic of Moldova expressed their strong interest in joining the TCT as full members.

Additionally, the Commission published a call for evidence that ran between 6 November and 4 December 2024. The Commission received one anonymous contribution to the call for evidence, expressing overall support for the initiative to further integrate transport networks in the neighbourhood, but stressing that closer cooperation should only be sought with those partners who already closely cooperate with European partners.

•Impact assessment

The Recommendation does not commit the Commission to any specific position at this stage as it merely contains a recommendation for authorisation to enter into negotiations with the South East European Parties, Ukraine and the Republic of Moldova. These negotiations concern targeted amendments of a technical nature to an already existing international agreement and its extension to Ukraine and the Republic of Moldova. The outcome of the revision process will be determined based on international negotiations with non-EU countries. The proposed accession of Ukraine and the Republic of Moldova to the TCT is based on a clear political signal by the European Council, which has granted EU candidate status to these countries and formally launched accession negotiations with them. In addition, Article 42 of the TCT requires to review that Agreement five years after its entry into force. The Commission is to adopt a recommendation for a Council Decision authorizing the opening of negotiations to that effect. Therefore, a formal impact assessment process is not warranted.

•Regulatory fitness and simplification

Not applicable.

•Fundamental rights

The initiative fully respects the Charter of Fundamental Rights of the European Union.

4.BUDGETARY IMPLICATIONS

While the impact on the EU budget is limited, it could represent an increase of up to 34% (EUR 0.8 million) of the annual EU contribution to the TCT, depending on the outcome of the negotiations on the calculation of the regional partners’ respective contributions, and a one-off upfront investment of EUR 0.2 million.

In accordance with Article 35 of the TCT, the budget of the Transport Community only covers the operational expenses necessary for the functioning of its bodies.

The impact on the multiannual financial framework period in terms of estimated required budget and human resources is detailed in the legislative financial statement annexed to this recommendation.

5.    OTHER ELEMENTS

•    Implementation plans and monitoring, evaluation and reporting arrangements

The negotiation process is expected to start in 2025.

•    Detailed explanation of the specific provisions of the recommendation

Article 1 includes the authorisation to conduct negotiations, on behalf of the Union, on an international agreement on the revision of the Treaty establishing the Transport Community (TCT).

Article 2 sets out that the negotiations should be conducted on the basis of the negotiating directives of the Council attached in the annex to the Decision.

Article 3 provides that the negotiations are to be conducted in consultation with a special committee.

Article 4 provides that the Decision is addressed to the Commission.

•    The choice of the negotiator

Since the negotiations fall exclusively within the non-Common Foreign and Security Policy area, the Commission must be designated as the negotiator pursuant to Article 218(3) TFEU.

Recommendation for a

COUNCIL DECISION

authorising the opening of negotiations on the revision of the Transport Community Treaty

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 91 and 100(2) TFEU, in conjunction with Article 218(3) and (4) thereof,

Having regard to the recommendation from the European Commission,

Whereas:

(1)The TCT was signed by the Union in accordance with Council Decision (EU) 2017/1937 16 . On 4 March 2019, it was approved on behalf of the Union by means of Council Decision (EU) 2019/392 17 . It entered into force on 1 May 2019.

(2)The TCT furthers the development of the transport network between the Union and the Republic of Albania, Bosnia and Herzegovina, the Republic of North Macedonia, Kosovo 18 *, Montenegro and the Republic of Serbia (hereinafter referred to as the South East European Parties) in the field of road, rail, inland waterway and maritime transport, and is based on the progressive integration of transport markets of the South East European Parties into the Union transport market on the basis of the relevant provisions of the Union acquis.

(3)Article 42 of the TCT provides that the Treaty is to be reviewed at the request of any contracting party, and at any event five years after its entry into force.

(4)In January 2024, a working group was set up to hold exploratory talks on TCT review. The working group was composed of representatives of the Commission, of the Member States, of the South East European Parties, and of the current observing participants. It has concluded its discussions on the need to update the TCT.

(5)Considerable progress has been achieved in the closer engagement between the Transport Community and the observing participants from Ukraine and the Republic of Moldova.

(6)The Union should participate in the negotiations on the amendment of the TCT.

HAS ADOPTED THIS DECISION:

Article 1

The Commission is hereby authorised to conduct negotiations, on behalf of the Union, on an international agreement on the revision of the Treaty establishing the Transport Community (TCT).

Article 2

The negotiating directives are set out in the Annex.

Article 3

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

Article 4

This Decision is addressed to the Commission.

Done at Brussels,

   For the Council

   The President

(1)    OJ L 278, 27.10.2017, p. 3, ELI: http://data.europa.eu/eli/agree_internation/2017/1937/oj .
(2)    Council Decision (EU) 2019/392 of 4 March 2019 on the conclusion, on behalf of the European Union, of the Treaty establishing the Transport Community (OJ L 71, 13.3.2019, p. 1, ELI: http://data.europa.eu/eli/dec/2019/392/oj ).
(3) *    This designation is without prejudice to positions on status, and is in line with UNSCR 1244 (1999) and the ICJ Opinion on the Kosovo declaration of independence.
(4)     https://www.consilium.europa.eu/media/qa3lblga/euco-conclusions-27062024-en.pdf .
(5)     https://www.consilium.europa.eu/media/2pebccz2/20241017-euco-conclusions-en.pdf .
(6)     https://www.consilium.europa.eu/media/jhlenhaj/euco-conclusions-19122024-en.pdf .
(7)     https://data.consilium.europa.eu/doc/document/ST-7002-2020-INIT/en/pdf .
(8)     https://www.consilium.europa.eu/media/70880/euco-conclusions-2122032024.pdf .
(9)     https://www.consilium.europa.eu/media/68967/europeancouncilconclusions-14-15-12-2023-en.pdf .
(10)    Regulation (EU) 2024/1679 of the European Parliament and of the Council of 13 June 2024 on Union guidelines for the development of the trans-European transport network, amending Regulations (EU) 2021/1153 and (EU) No 913/2010 and repealing Regulation (EU) No 1315/2013 (OJ L, 2024/1679, 28.6.2024, ELI: http://data.europa.eu/eli/reg/2024/1679/oj ).
(11)     https://neighbourhood-enlargement.ec.europa.eu/enlargement-policy/new-growth-plan-western-balkans_en .
(12)     https://neighbourhood-enlargement.ec.europa.eu/proposal-council-implementing-decision-approval-assessment-ukraine-plan_en .
(13)     https://neighbourhood-enlargement.ec.europa.eu/growth-plan-moldova-commission-proposal_en .
(14)    Council Decision (EU) 2019/392 of 4 March 2019 on the conclusion, on behalf of the European Union, of the Treaty establishing the Transport Community (OJ L 71, 13.3.2019, p. 1, ELI: http://data.europa.eu/eli/dec/2019/392/oj ).
(15)    These bilateral discussions also concerned the possible closer involvement of Georgia, as a current observing participant to the Transport Community.
(16)    Council Decision (EU) 2017/1937 of 11 July 2017 on the signing, on behalf of the European Union, and provisional application of the Treaty establishing the Transport Community (OJ L 278, 27.10.2017, p. 1).
(17)    Council Decision (EU) 2019/392 of 4 March 2019 on the conclusion, on behalf of the European Union, of the Treaty establishing the Transport Community (OJ L 71, 13.3.2019, p. 1).
(18) *    This designation is without prejudice to positions on status, and is in line with UNSCR 1244 (1999) and the ICJ Opinion on the Kosovo declaration of independence.

Brussels, 5.6.2025

COM(2025) 278 final

ANNEXES

to the

Recommendation for a COUNCIL DECISION

authorising the opening of negotiations on the revision of the Transport Community Treaty


ANNEX 1

DIRECTIVES FOR THE NEGOTIATION OF AN INTERNATIONAL AGREEMENT

ON THE REVISION OF THE TRANSPORT COMMUNITY TREATY

1.SCOPE OF THE ENVISAGED AGREEMENT

The Treaty establishing the Transport Community (TCT) furthers the development of the transport network between the EU and the Republic of Albania, Bosnia and Herzegovina, the Republic of North Macedonia, Kosovo 1*, Montenegro and the Republic of Serbia (hereinafter referred to as the South East European Parties) in the field of road, rail, inland waterway and maritime transport, and is based on the progressive integration of transport markets of the South East European Parties into the EU transport market on the basis of the relevant provisions of the EU acquis. The general objective of the envisaged amendments is to support and strengthen the legislative alignment of the South East European Parties, but also to improve and clarify certain operational aspects that have been identified in its application.

The amendments should also enable the full membership of Ukraine and the Republic of Moldova in the TCT. Further, to ensure their full integration in the TCT, the Commission should negotiate annexes on transitional arrangements, as referred to in Article 40 of the TCT, to be applicable to both of these countries upon their accession.

2.NEGOTIATING OBJECTIVES

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

(1)The general objective of the amendments should be to support and strengthen the legislative alignment of all contracting parties with the relevant EU acquis, in view of their respective European perspectives, and also boost the progressive integration of their transport markets into the EU transport market.

(2)The amendments should also enable the full membership of the observing participants from Ukraine and the Republic of Moldova in the Transport Community Treaty. Further, to ensure their full integration in the TCT, the Commission should negotiate annexes on transitional arrangements, as referred to in Article 40 of the TCT, to be applicable to both of these countries upon their accession. In addition, the Commission should be able to address potential demands as regards the substance of the TCT from Ukraine and the Republic of Moldova.

(3)In this regard, the amendments might also comprise a review of the provisions that refer specifically to the Western Balkans, so that these provisions also refer, where relevant, to the countries mentioned above, as well as a review of the budgetary burden-sharing formula set out in Annex V to the Treaty to account for the expanded number of contracting parties and ensure a continued equitable distribution of the contributions.

(4)The amendments aiming to boost legislative alignment should comprise the following additional aspects:

(a)reinforce the binding commitments on acquis alignment contained in the TCT by providing for sanctions (such as suspending voting rights) in cases of serious or persistent breaches;

(b)recognising and institutionalising the current and future TCT action plans on supporting legislative alignment;

(c)strengthening and better focusing the role of the Permanent Secretariat under Article 28 to better support the European perspectives of the South East European Parties; and

(d)clarifying and developing the rules on time limits to make the relevant provisions of the legislation set out in Annex I to the TCT binding on the South East European Parties, in particular as regards Article 3(2)(b).

(5)The amendments should ensure that Annex I to the TCT is updated, notably to add EU acquis pre-dating the signature of the TCT and to take account of relevant policy developments. If appropriate, this could involve including new legislation in the field of transport or associated areas mentioned in that Annex.

(6)The amendments should update, where necessary, the provisions of Articles 8 and 9 concerning the development of the indicative trans-European transport network (TEN-T) extension to the South East European Parties and the corresponding five-year rolling work plan, to account for policy developments in the TEN-T legislative framework.

(7)The amendments should ensure a less cumbersome way of consulting experts from the South East European Parties concerning the obligations currently set out in point 4 of Annex II to the TCT.

(8)The amendments should reflect agreements already reached concerning the official denomination of the Republic of North Macedonia.

(9)The Commission should also explore the need to adapt the currently existing bilateral protocols where relevant, for example with regard to the specific situation of landlocked parties and current provisions on maritime transport.

(10)The amendments should revisit the rules on the application of the case-law of the Court of Justice, notably to cover also case-law delivered after the date of signature of the TCT.

(11)The amendments might also include minor technical issues not subsumed within any of the previous negotiating directives (e.g. existing typos, certain incorrect or outdated references).

3.CONDUCT OF THE NEGOTIATIONS

The Commission will conduct the negotiations in pursuance of these directives and will ensure proper coordination with ongoing and future negotiations in other relevant areas.

ANNEX 2

LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT

1.FRAMEWORK OF THE PROPOSAL/INITIATIVE3

1.1.Title of the proposal/initiative3

1.2.Policy area(s) concerned3

1.3.Objective(s)3

1.3.1.General objective(s)3

1.3.2.Specific objective(s)3

1.3.3.Expected result(s) and impact3

1.3.4.Indicators of performance3

1.4.The proposal/initiative relates to:4

1.5.Grounds for the proposal/initiative4

1.5.1.Requirement(s) to be met in the short or long term including a detailed timeline for roll-out of the implementation of the initiative4

1.5.2.Added value of EU involvement (it may result from different factors, e.g. coordination gains, legal certainty, greater effectiveness or complementarities). For the purposes of this section 'added value of EU involvement' is the value resulting from EU action, that is additional to the value that would have been otherwise created by Member States alone.4

1.5.3.Lessons learned from similar experiences in the past4

1.5.4.Compatibility with the multiannual financial framework and possible synergies with other appropriate instruments5

1.5.5.Assessment of the different available financing options, including scope for redeployment5

1.6.Duration of the proposal/initiative and of its financial impact5

1.7.Method(s) of budget implementation planned5

2.MANAGEMENT MEASURES7

2.1.Monitoring and reporting rules7

2.2.Management and control system(s)7

2.2.1.Justification of the budget implementation method(s), the funding implementation mechanism(s), the payment modalities and the control strategy proposed7

2.2.2.Information concerning the risks identified and the internal control system(s) set up to mitigate them7

2.2.3.Estimation and justification of the cost-effectiveness of the controls (ratio between the control costs and the value of the related funds managed), and assessment of the expected levels of risk of error (at payment & at closure)7

2.3.Measures to prevent fraud and irregularities8

3.ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE9

3.1.Heading(s) of the multiannual financial framework and expenditure budget line(s) affected9

3.2.Estimated financial impact of the proposal on appropriations10

3.2.1.Summary of estimated impact on operational appropriations10

3.2.1.1.Appropriations from voted budget10

3.2.2.Estimated output funded from operational appropriations11

3.2.3.Summary of estimated impact on administrative appropriations13

3.2.3.1. Appropriations from voted budget13

3.2.4.Estimated requirements of human resources13

3.2.4.1.Financed from voted budget13

3.2.5.Overview of estimated impact on digital technology-related investments13

3.2.6.Compatibility with the current multiannual financial framework13

3.2.7.Third-party contributions13

3.3.Estimated impact on revenue13

4.Digital dimensions14

4.1.Requirements of digital relevance14

1.FRAMEWORK OF THE PROPOSAL/INITIATIVE 

1.1.Title of the proposal/initiative

Commission Recommendation for a Council Decision authorising the opening of negotiations on the revision of the Transport Community Treaty

1.2.Policy area(s) concerned 

Transport

1.3.Objective(s)

1.3.1.General objective(s)

The goal of the proposed initiative is to review the Transport Community Treaty (TCT), as mandated by Article 42 of the Treaty. This article provides that the Treaty should be reviewed at the request of any contracting party and at any event five years after its entry into force. Additionally, the revision should allow for the full membership of Ukraine and the Republic of Moldova in the TCT.

1.3.2.Specific objective(s)

Specific objective No 1

Support and strengthen the already ongoing legislative alignment of the six Western Balkan partners (the Republic of Albania, Bosnia and Herzegovina, the Republic of North Macedonia, Kosovo 2*, Montenegro and the Republic of Serbia – hereafter referred to as the South East European Parties) to the relevant EU acquis, in view of their respective European perspectives, and improve certain other aspects of the functioning of the TCT.

Specific objective No 2

Subject to agreement of the relevant parties, the revision should also allow for the full membership of Ukraine and the Republic of Moldova in the TCT.

1.3.3.Expected result(s) and impact

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.

While the aim of the revision of the Treaty is to support and strengthen the legislative alignment of the South East European Parties, the amendments envisaged are of a technical nature and do not modify the original scope or objective of the Treaty. Achieving this original objective and ensuring legislative alignment in the transport sector, including for Ukraine and the Republic of Moldova, is expected to have positive economic, social, and environmental impacts on citizens and businesses in the EU and in the concerned countries.

1.3.4.Indicators of performance

Specify the indicators for monitoring progress and achievements.

The effectiveness of the proposed Decision will be evaluated through considering the amount of targeted support provided by the Transport Community Permanent Secretariat to the South East European Parties for Specific Objective No 1, and for Ukraine and the Republic of Moldova for Specific Objective No 2. This support should promote the progressive integration of transport markets and networks of the South East European Parties on the basis of the relevant EU legislation, including in the areas of technical standards, interoperability, safety, security, traffic management, competition, social policy, public procurement and environment. The support provided is outlined in yearly operational reports prepared by the Transport Community Permanent Secretariat. These reports are to be endorsed by the Regional Steering Committee, which consists of a representative of each of the Contracting Parties to the TCT.

1.4.The proposal/initiative relates to: 

 a new action 

 a new action following a pilot project / preparatory action 3  

 the extension of an existing action 

 a merger or redirection of one or more actions towards another/a new action

1.5.Grounds for the proposal/initiative 

1.5.1.Requirement(s) to be met in the short or long term including a detailed timeline for roll-out of the implementation of the initiative

The objectives for the Treaty negotiations contained in this Recommendation are subject to negotiation with third countries. Therefore, the short term objective is to reach an agreement on amendments supporting Specific Objective No 1, with the goal of supporting and strengthening the already ongoing legislative alignment, and on Specific Objective No 2, with the goal of achieving full membership of Ukraine and the Republic of Moldova in the TCT.

In the longer term, these amendments to the TCT should enhance the effectiveness of the support provided by the TCT and promote the legislative alignment of the South East European Parties, including Ukraine and the Republic of Moldova, to the relevant EU acquis.

1.5.2.Added value of EU involvement (it may result from different factors, e.g. coordination gains, legal certainty, greater effectiveness or complementarities). For the purposes of this section 'added value of EU involvement' is the value resulting from EU action, that is additional to the value that would have been otherwise created by Member States alone.

The TCT is an agreement between the EU and the South East European Parties. Therefore, a modification of the agreement should involve the EU and those Parties.

1.5.3.Lessons learned from similar experiences in the past

The TCT has been in force since 2019. In this period, work has been done to achieve the aforementioned objectives of progressive integration of transport markets and networks within the Western Balkans, and between the Western Balkans and the EU. While some progress has been achieved in terms of legislative alignment and developing of transport networks, some lessons learned can be drawn to increase the effectiveness of the TCT. Examples of this include the need for binding provisions concerning the commitments contained in the TCT as well as clear timelines for their implementation. These lessons learned have been taken into account in the development of the negotiating directives for this Recommendation.

1.5.4.Compatibility with the multiannual financial framework and possible synergies with other appropriate instruments

The TCT serves the progressive integration of transport markets and networks of the South East European Parties with that of the EU, thereby supporting greater socio-economic convergence on the path towards Union membership. The TCT thereby complements other (proposed) forms of assistance that work towards this goal in a broader sense, such as the new Growth Plan for the Western Balkans 4 , the Ukraine plan 5 , and the Commision proposal for the Moldova Growth Plan 6 .

The negotiations for enlargement of the Treaty to include Ukraine and the Republic of Moldova may lead to an increase in the membership contribution from the EU that may exceed the amounts earmarked for the TCT in the current financial programming. Whereas the EU contribution to the TCT is estimated to increase by about 34%, the financial programming only foresees a 2% annual increase. In addition, setting-up costs for applicable databases will be necessary during the first year of implementation of the enlarged TCT. A detailed estimate is provided in Section 3.

1.5.5.Assessment of the different available financing options, including scope for redeployment

The exact timing of when additional funds will be required remains uncertain due to the unpredictable duration and outcome of the negotiations. In case of the entry into force of the revised TCT by the start of 2027, the contribution for an enlarged TCT should be primarily funded, beyond the amount foreseen in the financial programming, by using unspent funds from the EU contribution to the current budget of the TCT (2026).

1.6.Duration of the proposal/initiative and of its financial impact

 limited duration

 unlimited duration

–Implementation with a start-up period following the signature of the Treaty Revision, planned from early 2027,

–followed by full-scale operation.

1.7.Method(s) of budget implementation planned 7  

 Direct management by the Commission

 Shared management with the Member States

 Indirect management by entrusting budget implementation tasks to:

– international organisations and their agencies (to be specified)

Comments

Implemented by the Transport Community Permanent Secretariat

2.MANAGEMENT MEASURES 

2.1.Monitoring and reporting rules 

The TCT Ministerial Council, which meets annually, is tasked with the review of the progress of the implementation of the TCT. In addition, the Regional Steering Committee, which meets at least twice a year with representatives from each TCT contracting party, is tasked with the review of the general functioning of the TCT. Finally, the Transport Community Permanent Secretariat prepares yearly operational reports, reports on acquis alignment, on the implementation of the Trans-European Transport Network (TEN-T) in the South East European Parties, as well as on the execution of the budget. These reports are endorsed by the Ministerial Council or by the Regional Steering Committee. These structures set up by the Treaty will be kept for future monitoring.

2.2.Management and control system(s) 

2.2.1.Justification of the budget implementation method(s), the funding implementation mechanism(s), the payment modalities and the control strategy proposed

The Transport Community Permanent Secretariat has been implementing the budget of the TCT since the entry into force of the Treaty in 2019. The Transport Community Permanent Secretariat is best placed to continue to carry out the activities of the TCT, considering they possess local knowledge, a local network, and can benefit from multiple years of experience gained through the existing TCT.

2.2.2.Information concerning the risks identified and the internal control system(s) set up to mitigate them

The main risk identified in relation to the implementation of the proposed budget for the TCT relates to the possible ineffective utilisation of this budget to fund the supporting activities for the South East European Parties promoting the progressive integration of transport markets and networks. The measures to mitigate this risk are already in place in the existing Treaty, and concern the preparation of yearly operational reports, reports on acquis alignment, on the implementation of the Trans-European Transport Network (TEN-T) in the South East European Parties, as well as on the execution of the budget. These reports need to be endorsed by the Regional Steering Committee of the TCT.

2.2.3.Estimation and justification of the cost-effectiveness of the controls (ratio between the control costs and the value of the related funds managed), and assessment of the expected levels of risk of error (at payment & at closure) 

The Permanent Secretariat has full responsibility for the implementation of their budget, while DG MOVE is responsible for the regular payment of the contributions established by the Budgetary Authority. The expected level of risk of error at payment and at closure is similar to that attached to the budget subsidies provided to other international organisations.

The additional tasks resulting from the proposed revision are not expected to generate specific additional controls. Therefore, the cost of control for DG MOVE (measured against the value of funds managed) is expected to remain stable.

2.3.Measures to prevent fraud and irregularities 

The financial rules and auditing procedures applicable to the Transport Community, adopted by the Regional Steering Committee, establish the procedure for the implementation of the TCT budget and for the presenting and auditing of accounts in accordance with Article 35 of the TCT. According to these Financial rules and auditing procedures, in particular Article 61 and 62, each year, the accounting officer shall establish the accounts of the previous year. These accounts shall be validated by the Director of the Transport Community Permanent Secretariat. Independent external auditors, to be designated by the Regional Steering Committee, shall carry out the annual audit of the Transport Community. The terms of service of the external auditors is renewable every year, unless otherwise specified by the Regional Steering Committee. The external auditors shall submit to the Regional Steering Committee a report, together with the statement of assets and liabilities and certified accounts, not later than eight months after the end of the financial year to which they relate.

3.ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE 

3.1.Heading(s) of the multiannual financial framework and expenditure budget line(s) affected 

·Existing budget lines

In order of multiannual financial framework headings and budget lines.

Heading of multiannual financial framework

Budget line

Type of expenditure

Contribution

Number

Diff./Non-diff. 8

from EFTA countries 9

from candidate countries and potential candidates 10

From other third countries

other assigned revenue

06

14.20.03.06 – International organisations and agreements

Diff./Non-diff.

NO

YES

NO

NO

3.2.Estimated financial impact of the proposal on appropriations 

3.2.1.Summary of estimated impact on operational appropriations 

–    The proposal/initiative does not require the use of operational appropriations

–    The proposal/initiative requires the use of operational appropriations, as explained below

3.2.1.1.Appropriations from voted budget

EUR million (to three decimal places)

Heading of multiannual financial framework

Number

06 - Neighbourhood and the World

DG: MOVE 11

Year

Year

Year

Year

TOTAL MFF 2021-2027

2024

2025

2026

2027

Operational appropriations

Budget line

Commitments

(1a)

 

 

 

1.008

1.008

Payments

(2a)

 

 

 

1.008

1.008

Budget line

Commitments

(1b)

 

 

 

 

0.000

Payments

(2b)

 

 

 

 

0.000

Appropriations of an administrative nature financed from the envelope of specific programmes 12

Budget line

 

(3)

 

 

 

 

0.000

TOTAL appropriations

for DG MOVE

Commitments

=1a+1b+3

0.000

0.000

0.000

1.008

1.008

Payments

=2a+2b+3

0.000

0.000

0.000

1.008

1.008

 

Year

Year

Year

Year

TOTAL MFF 2021-2027

2024

2025

2026

2027

TOTAL operational appropriations

Commitments

(4)

0.000

0.000

0.000

1.008

1.008

Payments

(5)

0.000

0.000

0.000

1.008

1.008

TOTAL appropriations of an administrative nature financed from the envelope for specific programmes

(6)

0.000

0.000

0.000

0.000

0.000

TOTAL appropriations under HEADING 6

Commitments

=4+6

0.000

0.000

0.000

1.008

1.008

of the multiannual financial framework

Payments

=5+6

0.000

0.000

0.000

1.008

1.008

EUR million (to three decimal places)

 

Year

Year

Year

Year

TOTAL MFF 2021-2027

2024

2025

2026

2027

TOTAL appropriations under HEADINGS 1 to 7

Commitments

0.000

0.000

0.000

1.008

1.008

of the multiannual financial framework 

Payments

0.000

0.000

0.000

1.008

1.008

3.2.2.    Estimated output funded from operational appropriations (not to be completed for decentralised agencies)

Commitment appropriations in EUR million (to three decimal places)

Indicate objectives and outputs

Year
2024

Year
2025

Year
2026

Year
2027

Enter as many years as necessary to show the duration of the impact (see Section1.6)

TOTAL

OUTPUTS

Type 13

Average cost

No

Cost

No

Cost

No

Cost

No

Cost

No

Cost

No

Cost

No

Cost

Total No

Total cost

SPECIFIC OBJECTIVE No 1 14 …

- Output

- Output

- Output

Subtotal for specific objective No 1

SPECIFIC OBJECTIVE No 2 ...

- Output

Subtotal for specific objective No 2

TOTALS

3.2.3.Summary of estimated impact on administrative appropriations 

–    The proposal/initiative does not require the use of appropriations of an administrative nature

–    The proposal/initiative requires the use of appropriations of an administrative nature, as explained below

3.2.4.Estimated requirements of human resources 

–    The proposal/initiative does not require the use of human resources

–    The proposal/initiative requires the use of human resources, as explained below

3.2.5.Overview of estimated impact on digital technology-related investments

TOTAL Digital and IT appropriations

Year

Year

Year

Year

TOTAL MFF 2021 - 2027

2024

2025

2026

2027

HEADING 7

IT expenditure (corporate) 

0.000

0.000

0.000

0.000

0.000

Subtotal HEADING 7

0.000

0.000

0.000

0.000

0.000

Outside HEADING 7

Policy IT expenditure on operational programmes

0.000

0.000

0.000

0.000

0.000

Subtotal outside HEADING 7

0.000

0.000

0.000

0.000

0.000

 

TOTAL

0.000

0.000

0.000

0.000

0.000

3.2.6.Compatibility with the current multiannual financial framework 

The proposal/initiative:

–    can be fully financed through redeployment within the relevant heading of the multiannual financial framework (MFF)

The exact timing of when additional funds will be required remains uncertain due to the unpredictable duration and outcome of the negotiations. In case of the entry into force of the revised TCT by the start of 2027, the reinforcement of line 14 20 03 06 should be primarily financed, beyond the amount foreseen in the financial programming, by utilizing unspent funds from the EU contribution to the current budget of the TCT (2026). Any additional funding is subject to availability determined through the Draft Budget 2027 procedure.

–    requires use of the unallocated margin under the relevant heading of the MFF and/or use of the special instruments as defined in the MFF Regulation

–    requires a revision of the MFF

3.2.7.Third-party contributions 

The proposal/initiative:

–    does not provide for co-financing by third parties

–    provides for the co-financing by third parties estimated below:

3.3.    Estimated impact on revenue 

–    The proposal/initiative has no financial impact on revenue.

–    The proposal/initiative has the following financial impact:

–    on own resources

–    on other revenue

–    please indicate, if the revenue is assigned to expenditure lines

4.Digital dimensions

4.1.Requirements of digital relevance

The policy initiative concerns the revision of the existing Transport Community Treaty. The implementation of this Treaty, along with any digital means to enhance its implementation, is the responsibility of the Transport Community Permanent Secretariat. Therefore, the initiative is assessed as having no requirement of digital relevance for the Commission.

(1) *    This designation is without prejudice to positions on status, and is in line with UNSCR 1244 (1999) and the ICJ Opinion on the Kosovo declaration of independence.
(2) *    This designation is without prejudice to positions on status, and is in line with UNSCR 1244 (1999) and the ICJ Opinion on the Kosovo declaration of independence.
(3)    As referred to in Article 58(2), point (a) or (b) of the Financial Regulation.
(4)     https://neighbourhood-enlargement.ec.europa.eu/enlargement-policy/new-growth-plan-western-balkans_en
(5)     https://neighbourhood-enlargement.ec.europa.eu/proposal-council-implementing-decision-approval-assessment-ukraine-plan_en
(6)     https://neighbourhood-enlargement.ec.europa.eu/growth-plan-moldova-commission-proposal_en  
(7)    Details of budget implementation methods and references to the Financial Regulation may be found on the BUDGpedia site: https://myintracomm.ec.europa.eu/corp/budget/financial-rules/budget-implementation/Pages/implementation-methods.aspx .
(8)    Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations.
(9)    EFTA: European Free Trade Association.
(10)    Candidate countries and, where applicable, potential candidates from the Western Balkans.
(11)    Budget cross-delegated from DG INTPA
(12)    Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research.
(13)    Outputs are products and services to be supplied (e.g. number of student exchanges financed, number of km of roads built, etc.).
(14)    As described in Section 1.3.2. ‘Specific objective(s)’