(1)

On 18 May 2006, the Council adopted Regulation (EC) No 765/2006.

(2)

The Council considers that there are no longer grounds for keeping certain persons and entities on the list of persons and entities subject to restrictive measures as set out in Annex I to Regulation (EC) No 765/2006.

(3)

Furthermore, the information relating to certain persons and entities on the list of persons and entities subject to restrictive measures as set out in Annex I to Regulation (EC) No 765/2006 should be updated.

(4)

Annex I to Regulation (EC) No 765/2006 should therefore be amended accordingly,

(1)

Regulation (EC) No 998/2003 lays down the animal health requirements applicable to the non-commercial movement of pet animals and the rules applicable to checks on such movements.

(2)

Part C of Annex II to Regulation (EC) No 998/2003 lists the third countries and territories which are free of rabies and the third countries and territories in respect of which the risk of rabies spreading to the Union, as a result of non-commercial movements of pet animals from them, has been found to be no higher than the risk associated with such movements between Member States.

(3)

To be included on that list, a third country should demonstrate its status with regard to rabies and that it complies with certain requirements relating to the notification of suspicion of rabies, the monitoring system, the structure and organisation of its veterinary services, the implementation of all regulatory measures for the prevention and control of rabies and the regulations on the marketing of anti-rabies vaccines.

(4)

The former Yugoslav Republic of Macedonia has submitted information regarding its status with regard to rabies, as well as information concerning the compliance with the requirements laid down in Regulation (EC) No 998/2003. From the assessment of that information, it appears that the former Yugoslav Republic of Macedonia complies with the relevant requirements laid down in that Regulation and should therefore be included in the list set out in Part C of Annex II to Regulation (EC) No 998/2003.

(5)

Regulation (EC) No 998/2003 should therefore be amended accordingly.

(6)

The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on the Food Chain and Animal Health,

(1)

Annex IB to Regulation (EEC) No 3821/85 on recording equipment in road transport sets out the technical specifications for the construction, testing, installation and inspection of digital tachographs.

(2)

Commission Regulation (EC) No 68/2009 (2) introduced an adaptor as a temporary solution, until 31 December 2013, to make it possible to install tachographs in conformity with Annex IB to Regulation (EEC) No 3821/85 in Ml and N1 type vehicles.

(3)

Regulation (EEC) No 3821/85 has been replaced by Regulation (EU) No 165/2014 of the European Parliament and of the Council (3) for which the legislative procedure was concluded on 15 January 2014.

(4)

Recital 5 of Regulation (EU) No 165/2014 provides that the Commission will consider extending the period of validity of the adaptor for Ml and N1 vehicles until 2015 and give further consideration to a long-term solution for Ml and N1 vehicles before 2015.

(5)

The Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions ‘Digital tachograph: Roadmap for future activities’ (4), which accompanied the proposal for Regulation (EU) No 165/2014, foresees a time-frame of 2 years for the preparation and adoption of annexes and appendices, following the adoption of Regulation (EU) No 165/2014.

(6)

A permanent solution concerning the adaptor should be laid down in the technical specifications of Regulation (EU) No 165/2014. In application of the principle of legitimate expectation, the possibility to use adaptors in Ml and N1 type vehicles should therefore be extended at least until the adoption of those technical annexes and appendices.

(7)

Considering that Requirement 172 expired on 31 December 2013, the extension of the adaptor solution should be valid with retroactive effect from that date.

(8)

The measures provided for in this Regulation are in accordance with the opinion of the Committee established by Article 18 of Regulation (EEC) No 3821/85,

In part I, Definitions, point (rr), first indent, the date of ‘ 31 December 2013 ’ is replaced by ‘ 31 December 2015 ’.

(1)

Implementing Regulation (EU) No 543/2011 lays down, pursuant to the outcome of the Uruguay Round multilateral trade negotiations, the criteria whereby the Commission fixes the standard values for imports from third countries, in respect of the products and periods stipulated in Annex XVI, Part A thereto.

(2)

The standard import value is calculated each working day, in accordance with Article 136(1) of Implementing Regulation (EU) No 543/2011, taking into account variable daily data. Therefore this Regulation should enter into force on the day of its publication in the Official Journal of the European Union,

(1)

Regulation (EU) No 1024/2013 establishes a Single Supervisory Mechanism (SSM) composed of the European Central Bank (ECB) and national competent authorities (NCAs).

(2)

Pursuant to Regulation (EU) No 1024/2013, the ECB is responsible for the effective and consistent functioning of the SSM for all credit institutions, financial holding companies and mixed financial holding companies in all euro area Member States as well as in non-euro area Member States which enter into close cooperation with the ECB. The rules and procedures governing the cooperation between the ECB and NCAs within the SSM and with national designated authorities are laid down in Regulation (EU) No 468/2014 of the European Central Bank (ECB/2014/17) (2).

(3)

Article 30 of Regulation (EU) No 1024/2013 provides for the levying of an annual supervisory fee by the ECB on credit institutions established in the participating Member States and on branches established in a participating Member State by a credit institution established in a non-participating Member State. The fees levied by the ECB should cover, and not exceed, expenditure incurred by the ECB in relation to the tasks conferred on it under Articles 4 to 6 of Regulation (EU) No 1024/2013.

(4)

The annual supervisory fee should comprise an amount to be paid annually by all credit institutions established in the participating Member States and branches established in a participating Member State by a credit institution established in a non-participating Member State that are supervised within the SSM.

(5)

Within the SSM, the supervisory responsibilities of the ECB and each NCA are allocated on the basis of the significance of the supervised entities.

(6)

The ECB has direct supervisory competence in respect of significant credit institutions, financial holding companies, mixed financial holding companies established in participating Member States, and branches located in participating Member States of significant credit institutions established in non-participating Member States.

(7)

The ECB also oversees the functioning of the SSM, which includes all credit institutions, whether significant or less significant. The ECB is exclusively competent in relation to all credit institutions established in the participating Member States to authorise entities to take up the business of a credit institution, to withdraw authorisations and to assess acquisitions and disposals of qualifying holdings.

(8)

The NCAs are responsible for the direct supervision of less significant supervised entities, without prejudice to the ECB's power to exercise direct supervision in specific cases where this is necessary for the consistent application of high supervisory standards. When allocating the amount to be recovered via supervisory fees between the categories of significant supervised entities and less significant supervised entities, this sharing of supervisory responsibilities within the SSM and the related expenditure incurred by the ECB is taken into account.

(9)

Article 33(2) of Regulation (EU) No 1024/2013 requires the ECB to publish by means of regulations and decisions the detailed operational arrangements for the implementation of the tasks conferred upon it by Regulation (EU) No 1024/2013.

(10)

According to Article 30(3) of Regulation (EU) No 1024/2013 the fees are to be based on objective criteria relating to the importance and risk profile of the credit institutions concerned, including risk weighted assets.

(11)

The fees are to be calculated at the highest level of consolidation within participating Member States. This means that when credit institutions are part of a supervised group established in the participating Member States, one fee shall be calculated and paid at group level.

(12)

In calculating the annual supervisory fee, subsidiaries established in non-participating Member States should not be taken into account. In this respect, and in order to determine the relevant fee factors of a supervised group, sub-consolidated data for all subsidiaries and operations controlled by the parent undertaking in the participating Member States should be provided. However, the costs of producing such sub-consolidated data may be high and, for this reason, supervised entities should be able to opt for a fee calculated on the basis of data provided at the highest level of consolidation within the participating Member States including subsidiaries established in non-participating Member States, even if this might result in a higher fee.

(13)

The institutions referred to in Article 2(5) of Directive 2013/36/EU of the European Parliament and of the Council (3) are excluded from the supervisory tasks conferred on the ECB in accordance with Regulation (EU) No 1024/2013 and, therefore, the ECB will not levy fees on them.

(14)

A regulation has general application, is binding in its entirety and directly applicable in all euro area Member States. It is thus the appropriate legal instrument to lay down the practical arrangements for the implementation of Article 30 of Regulation (EU) No 1024/2013.

(15)

In line with Article 30(5) of Regulation (EU) No 1024/2013, this Regulation is without prejudice to the right of NCAs to levy fees in accordance with national law and, to the extent supervisory tasks have not been conferred on the ECB, or in respect of costs of cooperating with and assisting the ECB and acting on its instructions, in accordance with relevant Union law and subject to the arrangements made for the implementation of Regulation (EU) No 1024/2013, including Articles 6 and 12 thereof,

(1)

The quality and comparability of the methods used for the monitoring of type parameters generated under Member States responsibility to perform water ecological monitoring pursuant to Article 8 of Directive 2000/60/EC should be ensured.

(2)

Section 1.3.6 of Annex V to Directive 2000/60/EC requires that methods used for the monitoring of type parameters conform to the international standards listed therein or such other national or international standards which will ensure the provision of data of an equivalent scientific quality and comparability. The international standards listed in Annex V were those available at the time of adoption of that Directive.

(3)

Since the publication of Directive 2000/60/EC, a number of new standards have been published by the European Committee for Standardisation (CEN), some of them jointly with the International Standards Organisation, addressing biological sampling of phytoplankton, macrophytes and phytobenthos, benthic invertebrates, fish and hydromorphological characteristics. Those standards should be added to Section 1.3.6 of Annex V to Directive 2000/60/EC.

(4)

As a result of the continued process of development of new standards and update of existing ones, some of the standards listed in Section 1.3.6 of Annex V to Directive 2000/60/EC are no longer published by CEN Member Bodies and should therefore be removed.

(5)

Two standards (EN ISO 8689-1:1999 and EN ISO 8689-2:1999 9) listed in Section 1.3.6 of Annex V to Directive 2000/60/EC addressed biological classification and not monitoring; they have been taken into account subsequently when developing protocols for setting class boundaries under the Common Implementation Strategy related to the Directive and can now be removed.

(6)

Directive 2000/60/EC should therefore be amended accordingly.

(7)

The measures provided for in this Directive are in accordance with the opinion of the Committee established by Article 21(1) of Directive 2000/60/EC,

(1)

The term of office of the Commission appointed by European Council Decision 2010/80/EU (1) comes to an end on 31 October 2014.

(2)

In accordance with Article 17(5) of the Treaty on European Union, the European Council adopted Decision 2013/272/EU (2) concerning the number of members of the Commission.

(3)

A new Commission, consisting of one national of each Member State, including its President and the High Representative of the Union for Foreign Affairs and Security Policy, who should be one of its Vice-Presidents, should be appointed for the period from the end of the current term of office of the Commission until 31 October 2019.

(4)

The European Council nominated Mr Jean-Claude JUNCKER as the person put forward to the European Parliament as President of the Commission, and the European Parliament elected him as President of the Commission at its Plenary Session of 15 July 2014.

(5)

By Decision 2014/648/EU, Euratom (3), the Council adopted, by common accord with the President-elect of the Commission, the list of the other persons whom it proposes for appointment as Members of the Commission. By Decision 2014/716/EU, Euratom (4) repealing and replacing Decision 2014/648/EU, Euratom, the Council adopted, by common accord with the President-elect of the Commission, a new list of the other persons whom it proposes for appointment as Members of the Commission.

(6)

By means of a vote held on 22 October 2014, the European Parliament gave its consent to the appointment, as a body, of the President, the High Representative of the Union for Foreign Affairs and Security Policy and the other members of the Commission.

(7)

The Commission should therefore be appointed,

—

as President:

Mr Jean-Claude JUNCKER

—

as Members:

(1)

On 15 October 2012 the Council adopted Decision 2012/642/CFSP (1).

(2)

On the basis of a review of Decision 2012/642/CFSP, the restrictive measures against Belarus should be extended until 31 October 2015.

(3)

The Council considers that there are no longer grounds for keeping certain persons and entities on the list of persons and entities subject to restrictive measures as set out in the Annex to Decision 2012/642/CFSP.

(4)

Furthermore, the information relating to certain persons and entities on the list of persons and entities subject to restrictive measures as set out in the Annex to Decision 2012/642/CFSP should be updated.

(5)

Decision 2012/642/CFSP should therefore be amended accordingly,

(1)

In Article 8, paragraph 2 is replaced by the following:

(2)

The Annex is hereby amended as set out in the Annex to this Decision.

(1)

On 27 September 2010, the Council adopted Decision 2010/573/CFSP (1).

(2)

On the basis of a review of Decision 2010/573/CFSP, the restrictive measures against the leadership of the Transnistrian region of the Republic of Moldova should be extended until 31 October 2015.

(3)

Decision 2010/573/CFSP should therefore be amended accordingly,

(1)

The procedure for recognition of central counterparties (‘CCPs’) established in third countries set out in Article 25 of Regulation (EU) No 648/2012 aims to allow CCPs established and authorised in third countries whose regulatory standards are equivalent to those laid down in that Regulation to provide clearing services to clearing members or trading venues established in the Union. That recognition procedure and the equivalence decision provided for therein thus contribute to the achievement of the overarching aim of Regulation (EU) No 648/2012 to reduce systemic risk by extending the use of safe and sound CCPs to clear over-the-counter (‘OTC’) derivative contracts, including where those CCPs are established and authorised in a third country.

(2)

In order for a third country legal regime to be considered equivalent to the legal regime of the Union in respect of CCPs, the substantial outcome of the applicable legal and supervisory arrangements should be equivalent to Union requirements in respect of the regulatory objectives they achieve. The purpose of this equivalence assessment is therefore to verify that the legal and supervisory arrangements of Japan ensure that CCPs established and authorised therein do not expose clearing members and trading venues established in the Union to a higher level of risk than the latter could be exposed to by CCPs authorised in the Union and, consequently, do not pose unacceptable levels of systemic risk in the Union.

(3)

On 1 September 2013, the Commission received the technical advice of the European Securities and Markets Authority (‘ESMA’) on the legal and supervisory arrangements applicable to CCPs established in Japan. A supplement to this advice was received on 27 January 2014. The technical advice identified a number of differences between the legally binding requirements applicable, at a jurisdictional level, to CCPs in Japan and the legally binding requirements applicable to CCPs under Regulation (EU) No 648/2012. This Decision is not only based, however, on a comparative analysis of the legally binding requirements applicable to CCPs in Japan, but also on an assessment of the outcome of those requirements in terms of the level of risk mitigation they achieve.

(4)

In accordance with Article 25(6) of Regulation (EU) No 648/2012, three conditions need to be fulfilled in order to determine that the legal and supervisory arrangements of a third country regarding CCPs authorised therein are equivalent to those laid down in that Regulation.

(5)

According to the first condition, CCPs authorised in a third country must comply with legally binding requirements which are equivalent to the requirements laid down in Title IV of Regulation (EU) No 648/2012.

(6)

The legally binding requirements of Japan for clearing organisations (‘COs’) authorised therein consist of the Financial Instruments and Exchange Act 2006 (‘FIEA’), which establishes the supervisory framework for organisations clearing securities and financial derivatives, and the Commodity Derivatives Act 2009 (‘CDA’), which provides the supervisory framework for organisations clearing commodities. The present decision only covers the regime set out in the FIEA.

(7)

The FIEA provides that before granting a licence to carry out the activities of clearing, the Prime Minister of Japan must be satisfied that the CO has business rules —the internal rules and procedures of the clearing organisation- which conform to the applicable laws and regulations; that the financial standing of the CO is sufficient for undertaking the clearing of financial instruments; that the expected income and expenditure pertaining to the business of the CO are favourable; that the CO's staff has sufficient knowledge and experience for conducting the clearing of financial instruments appropriately and with certainty; and that the structure and system of the CO are adequately developed so that settlement can function adequately. Pursuant to Article 194-7(1) of the FIEA, the Prime Minister delegates to the Commissioner of the Financial Services Agency of Japan (JFSA) the powers vested under the FIEA. Therefore, the Commissioner of the JFSA has the responsibility for granting a licence for clearing.

(8)

Moreover, in December 2013, the JFSA published the Comprehensive Guidelines for Supervision of Financial Market Infrastructures (‘the Guidelines’), which detail the supervisory framework with regard to financial market infrastructures, including COs, and in particular the way in which the FIEA will have to be complied with by the COs. The Guidelines are implemented in the internal rules and procedures of COs.

(9)

The legally binding requirements in Japan therefore comprise a two-tiered structure. The core principles for COs laid down in the FIEA (the ‘primary rules’) set out the high-level standards with which COs must comply in order to obtain a licence to provide clearing services in Japan. Those primary rules comprise the first tier of the legally binding requirements in Japan. In order to prove compliance with the primary rules, a CO must submit its internal rules and procedures to the Commissioner of the JFSA for approval. Those internal rules and procedures comprise the second tier of the legally binding requirements in Japan, which must provide prescriptive detail regarding the way in which the applicant CO will meet those standards in accordance with the Guidelines. Moreover, the internal rules and procedures of COs contain additional provisions which complement the primary rules. Once approved by the Commissioner of the JFSA, those internal rules and procedures become legally binding upon the CO. Those rules therefore form an integral part of the legal and supervisory arrangements that CCPs established in Japan must comply with. In the case of non-compliance with the primary rules or the CO's internal rules and procedures, the Commissioner of the JFSA has the power to take administrative actions against the CO, including issuing of orders to improve business operations or rescinding all or part of the CO's licence.

(10)

The primary rules applicable to COs complemented by their internal rules and procedures deliver substantial results equivalent to the effects of the rules contained in Title IV of Regulation (EU) No 648/2012. In particular, the legally binding requirements applicable to COs regarding the number of defaults to be covered by total financial resources require COs clearing more than 95 % of the volumes cleared in Japan to cover the default of at least the two clearing members to which they have the largest exposures under extreme but plausible market conditions (the ‘cover 2 principle’). That requirement ensures an equivalent degree of risk mitigation to that pursued by the requirements set out under Title IV of Regulation (EU) No 648/2012 and therefore should be considered equivalent.

(11)

The legally binding requirements applicable to COs regarding liquidity risk require COs clearing more than 95 % of the volumes cleared in Japan to apply the ‘cover 2 principle’. That requirement ensures an equivalent degree of risk mitigation to that pursued by the requirements set out under Title IV of Regulation (EU) No 648/2012 and should therefore be considered equivalent. Finally, the legally binding requirements applicable to all COs regarding business continuity, collateral requirements, investment policy, settlement risk, segregation and portability, calculation of initial margins and governance, including organisational requirements, requirements relating to senior management, risk committee, record keeping, qualifying holdings, information transmitted to the competent authority, conflict of interests, outsourcing and conduct of business deliver substantial results equivalent to those laid down in Regulation (EU) No 648/2012 and therefore should be considered equivalent.

(12)

The Commission therefore concludes that the legal and supervisory arrangements of Japan ensure that COs authorised therein comply with legally binding requirements which are equivalent to the requirements laid down in Title IV of Regulation (EU) No 648/2012.

(13)

According to the second condition under Article 25(6), the legal and supervisory arrangements of Japan in respect of CCPs authorised therein must provide for effective supervision and enforcement of those CCPs on an ongoing basis.

(14)

The JFSA is responsible for the supervision of financial market infrastructures. The JFSA conducts ongoing monitoring of COs' compliance with risk management requirements through surveillance and risk-based examination procedures including testing of prudential requirements. In particular, the JFSA can request COs to provide information, reports and other materials concerning their business and can inspect the business, records and books of COs. It also assess COs' compliance with their obligations. Those examination exercises result in a report which identifies any deficiencies perceived. Various measures are available to the JFSA to ensure that COs appropriately address any identified issues, including requiring COs to demonstrate, in writing, timely correction of such issues. The JFSA has additional means to enforce compliance, including the ability to issue orders to improve business operations and the enforcement of such orders. The JFSA can also rescind all or part of the CO's licence.

(15)

The Commission therefore concludes that the legal and supervisory arrangements of Japan in respect of CCPs authorised therein provide for effective supervision and enforcement of CCPs on an ongoing basis.

(16)

According to the third condition under Article 25(6) of Regulation (EU) No 648/2012, the legal and supervisory arrangements of Japan must include an effective equivalent system for the recognition of CCPs authorised under third country legal regimes (‘third-country CCPs’).

(17)

Third-country CCPs may apply for a ‘foreign CCP’ licence enabling them to provide the same services in Japan as they are authorised to provide in that third country. The criteria applied to a third-country CCP applying for a licence are similar to the criteria applied to the licensing of Japanese clearing organisations. In particular, the applicant third-country CCP, on the basis of the legal and supervisory arrangements applicable in the third country, should have sufficient financial basis, sufficient knowledge and experienced personnel as well as a sufficient system and structure for carrying out clearing activities appropriately and with certainty. Moreover, third-country CCPs are exempted from certain requirements applicable to domestic CCPs authorised in Japan where they have been granted an equivalent licence from foreign authorities with whom the JFSA has concluded cooperative agreements.

(18)

It should therefore be considered that the legal and supervisory arrangements of Japan provide for an effective equivalent system for the recognition of third-country CCPs.

(19)

The conditions laid down in Article 25(6) of Regulation (EU) No 648/2012 can therefore be considered to be met by the legal and supervisory arrangements of Japan regarding COs and those legal and supervisory arrangements should be considered to be equivalent to the requirements laid down in Regulation (EU) No 648/2012. The Commission, informed by ESMA, should continue monitoring the evolution of the Japanese legal and supervisory framework for CCPs and the fulfilment of the conditions on the basis of which this decision has been taken.

(20)

The measures provided for in this Decision are in accordance with the opinion of the European Securities Committee,

(1)

The procedure for recognition of central counterparties (‘CCPs’) established in third countries set out in Article 25 of Regulation (EU) No 648/2012 aims to allow CCPs established and authorised in third countries whose regulatory standards are equivalent to those laid down in that Regulation to provide clearing services to clearing members or trading venues established in the Union. That recognition procedure and the equivalence decision provided for therein thus contribute to the achievement of the overarching aim of Regulation (EU) No 648/2012 to reduce systemic risk by extending the use of safe and sound CCPs to clear over-the-counter (‘OTC’) derivative contracts, including where those CCPs are established and authorised in a third country.

(2)

In order for a third country legal regime to be considered equivalent to the legal regime of the Union in respect of CCPs, the substantial outcome of the applicable legal and supervisory arrangements should be equivalent to Union requirements in respect of the regulatory objectives they achieve. The purpose of this equivalence assessment is therefore to verify that the legal and supervisory arrangements of Singapore ensure that CCPs established and authorised therein do not expose clearing members and trading venues established in the Union to a higher level of risk than the latter could be exposed to by CCPs authorised in the Union and, consequently, do not pose unacceptable levels of systemic risk in the Union.

(3)

On 1 September 2013, the Commission received the technical advice of the European Securities and Markets Authority (‘ESMA’) on the legal and supervisory arrangements applicable to CCPs authorised in Singapore. The technical advice identified a number of differences between the legally binding requirements applicable, at a jurisdictional level, to CCPs in Singapore and the legally binding requirements applicable to CCPs under Regulation (EU) No 648/2012. This Decision is not only based, however, on a comparative analysis of the legally binding requirements applicable to CCPs in Singapore, but also on an assessment of the outcome of those requirements, and their adequacy to mitigate the risks that clearing members and trading venues established in the Union may be exposed to in a manner considered equivalent to the outcome of the requirements laid down in Regulation (EU) No 648/2012. The significantly lower risks inherent in clearing activities carried out in financial markets that are smaller than the Union financial market should thereby, in particular, be taken into account.

(4)

In accordance with Article 25(6) of Regulation (EU) No 648/2012, three conditions need to be fulfilled in order to determine that the legal and supervisory arrangements of a third country regarding CCPs authorised therein are equivalent to those laid down in that Regulation.

(5)

According to the first condition, CCPs authorised in a third country must comply with legally binding requirements which are equivalent to the requirements laid down in Title IV of Regulation (EU) No 648/2012.

(6)

The legally binding requirements of Singapore for CCPs authorised therein consist of Chapter 289 of the Securities and Futures Act (‘SFA’) and the Securities and Futures (Clearing Facilities) Regulations 2013 (‘SFA Regulations’). The SFA aims at promoting safe and efficient clearing facilities and reducing systemic risk. The SFA Regulations develop and implement the SFA requirements. The SFA introduces an authorisation regime for all systemically important clearing facilities performing the role of CCPs, which have to be authorised by the Monetary Authority of Singapore (‘MAS’) as Approved Clearing Houses (‘ACHs’). Other clearing facilities, including overseas CCPs, are authorised by MAS as Recognised Clearing Houses (‘RCHs’).

(7)

In January 2013, MAS also issued the Monograph on Supervision of Financial Market Infrastructures (‘the Monograph’) which sets out standards applicable to CCPs in implementation of the Principles for Financial Market Infrastructures (PFMIs) issued by the Committee on Payment and Settlement Systems (2) (‘CPSS’) and the International Organization of Securities Commissions (‘IOSCO’) in April 2012. In particular, the Monograph explains how MAS expects ACHs to comply with their obligations under the SFA, and it is taken into account by MAS in assessing compliance with the SFA obligations by ACHs.

(8)

To be authorised as ACHs, clearing houses have to fulfil specific requirements set out in the SFA and in the SFA Regulations. MAS may impose conditions or restrictions for the authorisation of ACHs and may at any time add or vary or revoke any condition or restriction imposed on them. ACHs have to operate clearing facilities safely and effectively, and they have to manage prudently the risks associated with their business and operations. They also must have sufficient financial, human and system resources.

(9)

Moreover, under the SFA, ACHs have to adopt, on an individual basis, internal rules and procedures ensuring the proper and efficient operation of the clearing facility and the proper regulation and supervision of its members. ACHs' internal rules and procedures must contain specific issues prescribed by MAS including requirements related to the risks in the operation of clearing facilities, the handling of defaults and the criteria and conditions to be fulfilled by their members. In this respect, the Monograph is implemented in the internal rules and procedures of ACHs. ACHs' internal rules and procedures, as well as any amendment, have to be submitted to MAS prior to their implementation. MAS can disallow, alter or supplement the internal rules and procedures or any part of the proposed amendment. In addition, under the SFA Regulations, prior approval by MAS is explicitly required for any change to the ACHs' risk management frameworks, including the type of collaterals accepted, the methodologies for collateral valuation and the determination of margins to manage ACHs' risk exposure to its participants, as well as the size of the financial resources available to cover a default of their members (excluding margins held with the ACH). The SFA provides for penalties where ACHs' internal rules and procedures are amended in a way no longer compliant with the requirements set out by MAS. Under the SFA, internal rules and procedures of ACHs are therefore binding upon ACHs.

(10)

The legally binding requirements of Singapore therefore comprise a two-tiered structure. The core requirements for ACHs laid down in the SFA and the SFA Regulations (‘the primary rules’), set out the high-level standards with which ACHs must comply in order to obtain authorisation to provide clearing services in Singapore. Those primary rules comprise the first tier of the legally binding requirements in Singapore. In order to prove compliance with the primary rules, ACHs must submit their internal rules and procedures to MAS prior to their implementation and MAS can disallow, alter or supplement them. Those internal rules and procedures comprise the second tier of the legally binding requirements of Singapore, which must provide prescriptive detail regarding the way in which the applicant ACH meets those high-level standards in accordance with the Monograph. Moreover, the internal rules and procedures of ACHs contain additional provisions which complement the primary rules.

(11)

The equivalence assessment of the legal and supervisory arrangements applicable to ACHs should also take account of the risk mitigation outcome that they ensure in terms of the level of risk to which clearing members and trading venues established in the Union are exposed to due to their participation in ACHs. The risk mitigation outcome is determined by both the level of risk inherent in the clearing activities carried out by the CCP concerned which depend on the size of the financial market in which it operates, and the appropriateness of the legal and supervisory arrangements applicable to CCPs to mitigate that level of risk. In order to achieve the same risk mitigation outcome, more stringent risk mitigation requirements are needed for CCPs carrying out their activities in bigger financial markets whose inherent level of risk is higher than for CCPs carrying out their activities in smaller financial markets whose inherent level of risk is lower.

(12)

The size of the financial markets in which ACHs carry out their clearing activities is significantly smaller than that in which CCPs established in the Union carry out theirs. In particular, over the past three years, the total value of transactions cleared in Singapore represented less than 1 % of the total value of transaction cleared in the Union's Member-States which are part of the G10. Therefore, participation in ACHs exposes clearing members and trading venues established in the Union to significantly lower risks than their participation in CCPs authorised in the Union.

(13)

The legal and supervisory arrangements applicable to ACHs may therefore be considered as equivalent where they are appropriate to mitigate that lower level of risk. The primary rules applicable to ACHs, complemented by their internal rules and procedures which implement the PFMIs, mitigate the lower level of risk existing in Singapore and achieve a risk mitigation outcome equivalent to that pursued by Regulation (EU) No 648/2012.

(14)

The Commission therefore concludes that the legal and supervisory arrangements of Singapore ensure that ACHs authorised therein comply with legally binding requirements which are equivalent to the requirements laid down in Title IV of Regulation (EU) No 648/2012.

(15)

According to the second condition under Article 25(6) of Regulation (EU) No 648/2012, the legal and supervisory arrangements of Singapore in respect of CCPs authorised therein must provide for effective supervision and enforcement of those CCPs on an ongoing basis.

(16)

MAS can issue directions, whether of a general or specific nature, for ensuring the safe and efficient operation of ACHs and, in particular, for ensuring compliance with obligations or requirements under the SFA or with the requirements prescribed by MAS which have to be incorporated in the ACHs' internal rules and procedures. The SFA provides for penalties where the ACH concerned does not comply with the directions issued by MAS. Regarding enforcement of ACHs' internal rules and procedures, MAS may apply to the High Court to issue an order requesting an ACH to comply with, observe, enforce or give effect to its internal rules and procedures. Finally, MAS may revoke the authorisation of ACHs in case of non-compliance with the requirements it prescribes, any condition or restriction imposed on authorisation, any direction issued by MAS under the SFA or any provision of the SFA, among others.

(17)

In addition, ACHs are required under the SFA Regulations to submit to MAS an annual report on how they have discharged their responsibilities under the SFA during the financial year. They also have to submit to MAS the auditors' long form report of the ACH, which has to include the findings and recommendations of the auditors, if any, on the internal controls of the ACH and on any non-compliance of the ACH with any provision of the SFA and any direction issued by MAS under the SFA.

(18)

The Commission therefore concludes that the legal and supervisory arrangements of Singapore in respect of CCPs authorised therein provide for effective supervision and enforcement on an ongoing basis.

(19)

According to the third condition under Article 25(6) of Regulation (EU) No 648/2012, the legal and supervisory arrangements of Singapore must include an effective equivalent system for the recognition of CCPs authorised under third country legal regimes (‘third country CCPs’).

(20)

Third country CCPs may apply for a RCH authorisation enabling them to provide the same services in Singapore as those they are authorised to provide in the third country.

(21)

Before granting a RCH authorisation, MAS assesses whether the regulatory regime of the third country in which the CCP is authorised is comparable to the legal and supervisory arrangements applied to CCPs established in Singapore, including whether the PFMIs are applied. The establishment of cooperation arrangements between MAS and the relevant foreign supervisory authority is also required to grant an RCH authorisation.

(22)

While noting that the structure of the recognition procedure of the legal regime of Singapore applicable to third country CCPs differs from the procedure laid down in Regulation (EU) No 648/2012, it should nonetheless be considered as providing for an effective equivalent system for the recognition of third country CCPs.

(23)

The conditions laid down in Article 25(6) of Regulation (EU) No 648/2012 can therefore be considered to be met by the legal and supervisory arrangements of Singapore regarding ACHs and those legal and supervisory arrangements should be considered to be equivalent to the requirements laid down in Regulation (EU) No 648/2012. The Commission, informed by ESMA, should continue monitoring the evolution of the Singapore legal and supervisory framework for CCPs and the fulfilment of the conditions on the basis of which this decision has been taken.

(24)

The measures provided for in this Decision are in accordance with the opinion of the European Securities Committee,

(1)

The procedure for recognition of central counterparties (‘CCPs’) established in third countries set out in Article 25 of Regulation (EU) No 648/2012 aims to allow CCPs established and authorised in third countries whose regulatory standards are equivalent to those laid down in that Regulation to provide clearing services to clearing members or trading venues established in the Union. That recognition procedure and the equivalence decision provided for therein thus contribute to the achievement of the overarching aim of Regulation (EU) No 648/2012 to reduce systemic risk by extending the use of safe and sound CCPs to clear over-the-counter (‘OTC’) derivative contracts, including where those CCPs are established and authorised in a third country.

(2)

In order for a third country legal regime to be considered equivalent to the legal regime of the Union in respect of CCPs, the substantial outcome of the applicable legal and supervisory arrangements should be equivalent to Union requirements in respect of the regulatory objectives they achieve. The purpose of this equivalence assessment is therefore to verify that the legal and supervisory arrangements of Hong Kong ensure that CCPs established and authorised therein do not expose clearing members and trading venues established in the Union to a higher level of risk than the latter could be exposed to by CCPs authorised in the Union and, consequently, do not pose unacceptable levels of systemic risk in the Union.

(3)

On 1 September 2013, the Commission received the technical advice of the European Securities and Markets Authority (‘ESMA’) on the legal and supervisory arrangements applicable to CCPs authorised in Hong Kong. The technical advice identified a number of differences between the legally binding requirements applicable, at a jurisdictional level, to CCPs in Hong Kong and the legally binding requirements applicable to CCPs under Regulation (EU) No 648/2012. This Decision is not only based, however, on a comparative analysis of the legally binding requirements applicable to CCPs in Hong Kong, but also on an assessment of the outcome of those requirements, and their adequacy to mitigate the risks that clearing members and trading venues established in the Union may be exposed to in a manner considered equivalent to the outcome of the requirements laid down in Regulation (EU) No 648/2012. The significantly lower risks inherent in clearing activities carried out in financial markets that are smaller than the Union financial market should thereby, in particular, be taken into account.

(4)

In accordance with Article 25(6) of Regulation (EU) No 648/2012, three conditions need to be fulfilled in order to determine that the legal and supervisory arrangements of a third country regarding CCPs authorised therein are equivalent to those laid down in that Regulation.

(5)

According to the first condition, CCPs authorised in a third country must comply with legally binding requirements which are equivalent to the requirements laid down in Title IV of Regulation (EU) No 648/2012.

(6)

The legally binding requirements of Hong Kong for CCPs authorised therein consist of the Clearing and Settlement Systems Ordinance (‘CSSO’) and the Securities and Futures Ordinance (‘SFO’). Entities authorised under the CSSO are regulated by the Hong Kong Monetary Authority (‘HKMA’) and entities authorised under the SFO are regulated by the Hong Kong Securities and Futures Commission (‘SFC’). CCPs in Hong Kong have been authorised under the SFO only. This Decision should be therefore limited to the regime set out under the SFO.

(7)

Under Part III of the SFO, the SFC has the power to authorise CCP as a Recognised Clearing House (‘RCH’). When considering the authorisation of a CCP as an RCH, the SFC must take the ‘interest of the investing public’ and the ‘proper regulation of markets’ into account. The SFC may also specify ‘such conditions as it considers appropriate’ before authorising a specific CCP as an RCH and may change those conditions by notice if ‘satisfied that it is appropriate’. In determining what is appropriate, the SFC is required to refer to its statutory mandates of maintaining financial stability and reducing systemic risk.

(8)

The SFO sets out the duties and requirements with which an RCH must comply. The SFC issued guidelines pursuant to Section 399(1) of the SFO (‘the Guidelines’), which implement the international standards set out under the Principles for Financial Market Infrastructures (‘PFMIs’) issued in April 2012 by the Committee on Payment and Settlement Systems (2) (‘CPSS’) and the International Organisation of Securities Commissions (‘IOSCO’). When assessing whether RCHs comply with their obligations under the SFO, the SFC takes into account the Guidelines. Where an RCH fails to comply with its obligations under the SFO as complemented by the Guidelines, the SFC may adopt measures to remedy that situation.

(9)

The SFO also requires an RCH to adopt internal rules and procedures as are necessary for the proper regulation of its clearing and settlement facilities and for the proper regulation of its clearing members. Requirements of the SFO and the Guidelines are thus implemented in the internal rules and procedures of the RCHs. Under the SFO, any internal rules and procedures adopted by an RCH and amendments thereto must be approved by the SFC.

(10)

The legally binding requirements in Hong Kong therefore comprise a two-tiered structure. The core principles for RCHs set out in the SFO (the ‘primary rules’), set out the high-level standards with which RCHs must comply in order to obtain authorisation to provide clearing services in Hong Kong. Those primary rules comprise the first tier of the legally binding requirements in Hong Kong. In order to prove compliance with the primary rules, RCHs must submit their internal rules and procedures to the SFC for approval. Those internal rules and procedures comprise the second tier of the legally binding requirements in Hong Kong, which must provide prescriptive detail regarding the way in which the RCH will meet those standards in accordance with the Guidelines. Once approved by the SFC, the internal rules and procedures become legally binding upon the RCH.

(11)

The equivalence assessment of the legal and supervisory arrangements applicable to RCHs should also take account of the risk mitigation outcome that they ensure in terms of the level of risk to which clearing members and trading venues established in the Union are exposed to due to their participation in RCHs. The risk mitigation outcome is determined by both the level of risk inherent in the clearing activities carried out by the CCP concerned which depends on the size of financial market in which it operates, and the appropriateness of the legal and supervisory arrangements applicable to CCPs to mitigate that level of risk. In order to achieve the same risk mitigation outcome, more stringent risk mitigation requirements are needed for CCPs carrying out their activities in bigger financial markets whose inherent level of risk is higher than for CCPs carrying out their activities in smaller financial markets whose inherent level of risk is lower.

(12)

The size of the financial market in which RCHs carry out their clearing activities is significantly smaller than that in which CCPs established in the Union carry out theirs. In particular, over the past three years, the annual notional value of listed derivative contracts traded in Hong Kong represented less than 1 % of the annual notional value of listed derivative contracts traded in the Union. Over the same period, the market capitalisation of securities traded on exchange in Hong Kong represented on average less than 25 % of the Union's market capitalisation. Moreover, clearing by RCHs of more complex products like OTC derivatives is at an early stage since clearing services for OTC derivative contracts were only launched on 25 November 2013. Therefore, participation in RCHs exposes clearing members and trading venues established in the Union to significantly lower risks than their participation in CCPs authorised in the Union.

(13)

The legal and supervisory arrangements applicable to RCHs may therefore be considered as equivalent where they are appropriate to mitigate that lower level of risk. The primary rules applicable to RCHs, complemented by their internal rules and procedures which implement the PFMIs, mitigate the lower level of risk existing in Hong Kong and achieve a risk mitigation outcome equivalent to that pursued by Regulation (EU) No 648/2012.

(14)

The Commission therefore concludes that the legal and supervisory arrangements of Hong Kong ensure that RCHs authorised therein comply with legally binding requirements which are equivalent to the requirements laid down in Title IV of Regulation (EU) No 648/2012.

(15)

According to the second condition under Article 25(6) of Regulation (EU) No 648/2012, the legal and supervisory arrangements of Hong Kong in respect of CCPs authorised therein must provide for effective supervision and enforcement of those CCPs on an ongoing basis.

(16)

The SFC conducts ongoing monitoring of RCHs' compliance with risk management requirements through surveillance and risk-based examination procedures including testing of prudential requirements. The SFC has additional means to enforce compliance. In particular, the SFC has the power to direct RCHs to cease to provide or operate clearing or settlement facilities or to withdraw their authorisation. In addition, the SFC may also request RCHs to make certain amendments to their rules as deemed necessary, and is empowered to make such rule changes unilaterally where the RCH concerned does not comply with the request. The SFC has the power to request RCHs to provide books and records kept by them in connection with or for the purposes of their business or in respect of any clearing and settlement arrangements for any transactions in securities or futures contracts as well as other information relating to their business or any clearing and settlement arrangements for any transactions in securities or futures contracts that the SFC may reasonably require for the performance of its functions. Failure to provide that information or documentation, without reasonable justification, may result in the imposition of fines.

(17)

The Commission therefore concludes that the legal and supervisory arrangements of Hong Kong in respect of CCPs authorised therein provide for effective supervision and enforcement on an ongoing basis.

(18)

According to the third condition under Article 25(6) of Regulation (EU) No 648/2012, the legal and supervisory arrangements of Hong Kong must include an effective equivalent system for the recognition of CCPs authorised under third-country legal regimes (‘third-country CCPs’).

(19)

To operate as a CCP in Hong Kong, an entity is required to be designated either as a RCH or recognised as a provider of ‘Automated Trading Services’ (‘ATS’) under the SFO. ATS are defined as entities providing, by means of electronic facilities, services to trade or clear securities or futures contracts. In March 2014, the Hong Kong Legislative Council passed an Amendment Ordinance to expand the scope of the ATS definition to include OTC derivatives as well.

(20)

The ATS regime is suited to third-country CCPs wishing to provide services to Hong Kong participants. Third-country CCPs may apply to be recognised in Hong Kong as ATS, enabling them to provide the same services in Hong Kong as they are authorised to provide in the third country.

(21)

When processing the ATS application from a third-country CCP, the SFC assesses the compliance of the third-country CCP with the PFMIs as a benchmark. The conclusion of a memorandum of understanding between the SFC and the competent third-country supervisory authority of the applicant CCP is also required before the ATS application is approved as the SFC relies on the home regulator for day-to-day supervision of the third-country CCP.

(22)

While noting that the structure of the recognition procedure of the legal regime of Hong Kong applicable to third-country CCPs differs from the procedure laid down in Regulation (EU) No 648/2012, it should nonetheless be considered as providing for an effective equivalent system for the recognition of third-country CCPs.

(23)

The conditions laid down in Article 25(6) of Regulation (EU) No 648/2012 can therefore be considered to be met by the legal and supervisory arrangements of Hong Kong regarding RCHs, and those legal and supervisory arrangements should be considered to be equivalent to the requirements laid down in Regulation (EU) No 648/2012. The Commission, informed by ESMA, should continue monitoring the evolution of the Hong Kong legal and supervisory framework for CCPs and the fulfilment of the conditions on the basis of which this decision has been taken.

(24)

The measures provided for in this Decision are in accordance with the opinion of the European Securities Committee,

(1)

The procedure for recognition of central counterparties (‘CCPs’) established in third countries set out in Article 25 of Regulation (EU) No 648/2012 aims to allow CCPs established and authorised in third countries whose regulatory standards are equivalent to those laid down in that Regulation to provide clearing services to clearing members or trading venues established in the Union. That recognition procedure and the equivalence decision provided for therein thus contribute to the achievement of the overarching aim of Regulation (EU) No 648/2012 to reduce systemic risk by extending the use of safe and sound CCPs to clear over-the-counter (‘OTC’) derivative contracts, including where those CCPs are established and authorised in a third country.

(2)

In order for a third country legal regime to be considered equivalent to the legal regime of the Union in respect of CCPs, the substantial outcome of the applicable legal and supervisory arrangements should be equivalent to Union requirements in respect of the regulatory objectives they achieve. The purpose of this equivalence assessment is therefore to verify that the legal and supervisory arrangements of Australia ensure that CCPs established and authorised therein do not expose clearing members and trading venues established in the Union to a higher level of risk than the latter could be exposed to by CCPs authorised in the Union and, consequently, do not pose unacceptable levels of systemic risk in the Union.

(3)

On 1 September 2013, the Commission received the technical advice of the European Securities and Markets Authority (‘ESMA’) on the legal and supervisory arrangements applicable to CCPs authorised in Australia. The technical advice concludes that all of the provisions in Title IV of Regulation (EU) No 648/2012 are replicated by corresponding legally binding requirements which are applicable, at a jurisdictional level, to CCPs authorised in Australia.

(4)

In accordance with Article 25(6) of Regulation (EU) No 648/2012, three conditions need to be fulfilled in order to determine that the legal and supervisory arrangements of a third country regarding CCPs authorised therein are equivalent to those laid down in that Regulation.

(5)

According to the first condition, CCPs authorised in a third country must comply with legally binding requirements which are equivalent to the requirements laid down in Title IV of Regulation (EU) No 648/2012.

(6)

The legally binding requirements of Australia for CCPs authorised therein consist of the Corporations Act 2001 (‘Corporations Act’), which together with the Corporations Regulations 2001 (‘Corporations Regulations’), establish the legal framework for clearing and settlement facilities (‘CS facilities’). Part 7.3 of the Corporations Act provides that before granting a licence to carry out the activities of clearing or settlement, the Minister must be satisfied, among other things, that the CCP concerned has adequate operating rules and procedures which conform to the applicable laws and regulations to ensure, as far as it is reasonably practicable, that systemic risk is reduced and that the CCP is operated in a fair and effective manner. The CCP must also have adequate arrangements for handling conflicts of interest and for enforcing its internal rules and procedures. The Australian Securities and Investments Commission (‘ASIC’) and the Reserve Bank of Australia (‘RBA’) advise the Minister regarding the granting of CS facilities' licences and changes of their internal rules and procedures, and are in charge of assessing, and in the case of ASIC of enforcing, CCPs' compliance with their obligations under the Corporations Act.

(7)

ASIC provides regulatory guidance to regulated entities to explain specific issues already covered by legislation. In particular, ASIC revised its regulatory guidance on licensing and oversight of CS facilities' licences in December 2012 under the updated Regulatory Guide 211 ‘Clearing and settlement facilities: Australian and overseas operators’ (‘RG 211’). ASIC's RG 211 implements the Principles for Financial Market Infrastructures (‘PFMIs’) issued in April 2012 by the Committee on Payment and Settlement Systems (2) (‘CPSS’) and the International Organization of Securities Commission (‘IOSCO’), which are relevant for the obligations set out in the Corporations Act, and provides guidance to CCPs on how to comply with their obligations under the Corporations Act. Therefore, failure to comply with the Corporations Act as explained in RG 211 could entail enforcement action and sanctioning measures.

(8)

RBA has the power, under the Corporations Act, to determine financial stability standards for the purpose of ensuring that CCPs operate in a way that causes or promotes the overall stability of the Australian financial system. In particular, in November 2012, RBA's Payments System Board approved the determination of new financial stability standards, the Financial Stability Standards for Central Counterparties (‘FSS’), which comprise 21 standards for CCPs, with accompanying sub-standards and guidance. Other than certain sub-standards, which came into effect on 31 March 2014, the FSS became effective in March 2013. The FSS are to be complied with by all licensed CCPs.

(9)

The core principles for CS facilities set out in Part 7.3 of the Corporations Act and the Corporations Regulations, as explained under ASIC's RG 211, and the FSS determined by RBA (together ‘the primary rules’), set out the high-level standards with which CCPs must comply in order to obtain authorisation to provide clearing services in Australia. Those primary rules comprise the first tier of the legally binding requirements in Australia. In order to comply with the primary rules, CCPs adopt, in addition, their internal rules and procedures which must conform with the specific requirements set out in the Corporations Act and the Corporations Regulations, as explained under RG 211, and the FSS, which are submitted to the Minister prior to authorisation as a CS facility. Changes to the internal rules and procedures of CCPs must be notified to the Minister. The Minister can disallow changes in the internal rules and procedures of CCPs. The internal rules and procedures of CCPs have the effect of a contract and are legally binding on CCPs and their respective participants.

(10)

The legally binding requirements set out in the primary rules applicable to CCPs authorised in Australia deliver substantial results equivalent to those of the requirements laid down in Title IV of Regulation (EU) No 648/2012.

(11)

The Commission therefore concludes that the legal and supervisory arrangements of Australia ensure that CCPs authorised therein comply with legally binding requirements which are equivalent to the requirements laid down in Title IV of Regulation (EU) No 648/2012.

(12)

According to the second condition under Article 25(6) of Regulation (EU) No 648/2012, the legal and supervisory arrangements of Australia in respect of CCPs authorised therein must provide for effective supervision and enforcement of those CCPs on an ongoing basis.

(13)

CCPs authorised in Australia are subject to on-going supervision and oversight by ASIC and RBA. ASIC is responsible for enforcing CCPs' compliance with their obligations under the Corporations Act and in this respect, it conducts periodic assessments of compliance by CCPs with their licence obligations, other than their obligations relating to FSS and systemic risk reduction, and in particular with their duty to operate in a fair and effective manner to the extent it is reasonable to do so, and submits a report to the Minister, which is published. RBA monitors compliance by CCPs with their obligations under their respective licences and relating to financial stability and reduction of systemic risk, conducts periodic assessments of compliance by each CCP with the FSS and submits a report to the Minister, which is also published. CCPs authorised in Australia may receive written directions from the Minister and from ASIC. If a CCP fails to comply with a written direction, ASIC may apply to the courts which may order the CCP to comply with the written direction.

(14)

The Commission therefore concludes that the legal and supervisory arrangements of Australia in respect of CCPs authorised therein provide for effective supervision and enforcement on an ongoing basis.

(15)

According to the third condition under Article 25(6) of Regulation (EU) No 648/2012, the legal and supervisory arrangements of Australia must include an effective equivalent system for the recognition of CCPs authorised under third country legal regimes (‘third country CCPs’).

(16)

Third country CCPs may apply for an ‘overseas clearing and settlement facility licence’ (‘an overseas CCP licence’) enabling them to provide in Australia some or all of the clearing services they are authorised to provide in their home country.

(17)

The criteria applied to third country CCPs applying for an overseas CCP licence in Australia are comparable to those provided for third country CCPs applying for recognition under Article 25 of Regulation (EU) No 648/2012. As a prerequisite for recognition, the regulatory regime of the third country in which the CCP is authorised must be deemed ‘sufficiently equivalent’, in relation to the degree of protection from systemic risk and level of effectiveness and fairness of services it achieves, to the Australian regulatory regime for comparable domestic CCPs. The assessment of ‘sufficient equivalence’ involves similar considerations as those assessed under Regulation (EU) No 648/2012. The establishment of cooperation arrangements between the Australian authorities and the relevant foreign supervisory authorities is also required to grant an overseas CCP licence.

(18)

It should therefore be considered that the legal and supervisory arrangements of Australia provide for an effective equivalent system for the recognition of third country CCPs.

(19)

The conditions laid down in Article 25(6) of Regulation (EU) No 648/2012 can therefore be considered to be met by the legal and supervisory arrangements of Australia regarding CCPs authorised therein and those legal and supervisory arrangements should be considered to be equivalent to the requirements laid down in Regulation (EU) No 648/2012. The Commission, informed by ESMA, should continue monitoring the evolution of the Australian legal and supervisory framework for CCPs and the fulfilment of the conditions on the basis of which this decision has been taken.

(20)

The measures provided for in this Decision are in accordance with the opinion of the European Securities Committee,

(1)

Annex I to Directive 98/8/EC of the European Parliament and of the Council (2) contained the list of active substances approved at Union level for inclusion in biocidal products. Commission Directives 2008/78/EC (3) and 2008/79/EC (4) added the active substances propiconazole and IPBC, respectively, for use in products belonging to product-type 8, wood preservatives, as defined in Annex V to Directive 98/8/EC. By virtue of Article 86 of Regulation (EU) No 528/2012, those substances are therefore approved active substances included in the list referred to in Article 9(2) of that Regulation.

(2)

In accordance with Article 8 of Directive 98/8/EC, the company Janssen PMP submitted applications to the United Kingdom for authorisation of three wood preservative biocidal products containing IPBC and propiconazole (‘the contested products’). The product authorisations granted by the United Kingdom covered different application methods, including automated dipping for industrial use and spraying (indoors and outdoors) for professional and non-professional use. A number of Member States have subsequently authorised the contested products through mutual recognition.

(3)

Janssen PMP (‘the applicant’) submitted complete applications to Germany for mutual recognition of the authorisations of the contested products granted by the United Kingdom.

(4)

Germany notified the Commission, the other Member States and the applicant on 28 August 2013 of its proposal to restrict the authorisations in accordance with Article 4(4) of Directive 98/8/EC. Germany considers that the contested products do not meet the requirements of Article 5(1) of Directive 98/8/EC with regard to human health and the environment.

(5)

According to Germany, the authorisation of the application method by spraying outdoors was not appropriately assessed by the United Kingdom in terms of environmental risks. The assessment performed by Germany for the three products concluded in unacceptable risks for the distant soil compartment.

(6)

Germany also considers that for one of the products, the application by automated dipping should be limited to systems with a sufficiently high degree of automation due to unacceptable risks for the health of professional users.

(7)

The Commission invited the other Member States and the applicant to submit comments to the notifications in writing within 90 days in accordance with Article 27(1) of Directive 98/8/EC. Comments were submitted within that deadline by Germany, the United Kingdom and the applicant. The notification was also discussed between the Commission and Member States' Competent Authorities for biocidal products on 24 September 2013 in the meeting of the coordination group established under Article 35 of Regulation (EU) No 528/2012.

(8)

With regard to the risks for the environment, from those discussions and comments it follows that the conclusions of the environmental assessment carried out by the United Kingdom were based on the relevant scenario of the Series on Emission Scenario Documents of the Organisation for Economic Co-operation and Development (OECD) (5) available at the time of the evaluation.

(9)

It also follows that the conclusions from Germany are based on a revised scenario of the OECD Series on Emission Scenario Documents (6), available since the authorisations were granted by the United Kingdom and also since the notification made by Germany.

(10)

In addition, according to agreed guidance by the 47th meeting of representatives of Members States Competent Authorities for the implementation of Directive 98/8/EC concerning the placing of biocidal products on the market (7), new guidance can only be taken into consideration if it was available before the date of submission of the application for product authorisation, unless scientific progress shows that the reliance on old guidance gives rise to serious concern. This guidance further establishes that a serious concern would trigger revision of existing authorisations. However, neither the United Kingdom nor the other Member States having approved the products through mutual recognition considered that the concern was such as to justify a revision of existing authorisations.

(11)

In the light of the above comments, the Commission supports the conclusions of the evaluation carried out by the United Kingdom and the other Member States having approved the products through mutual recognition, considering that the contested products fulfil the requirements set by Article 5(1) of Directive 98/8/EC with regard to the environment. The Commission therefore considers that the request by Germany to restrict the authorisations cannot be justified on the grounds put forward.

(12)

With regard to the application by automated dipping, the Commission considers that the contested product should be subject to the provisions established by a previous Commission Decision (8) addressing the protection of the health of professional users when applying IPBC containing products by this application method. Consequently, the contested product should be authorised subject to instructions on the label restricting the use to fully automated dipping processes and the product authorisation should be amended accordingly.

(13)

Regulation (EU) No 528/2012 applies to the contested product in accordance with the provisions of Article 92(2) of that Regulation. Since the legal basis for this Decision is Article 36(3) of that Regulation, this Decision should be addressed to all Member States by virtue of Article 36(4) of that Regulation.

(14)

The measures provided for in this Decision are in accordance with the opinion of the Standing Committee on Biocidal Products,

(1)

Annex I to Directive 98/8/EC of the European Parliament and of the Council (2) contained the list of active substances approved at Union level for inclusion in biocidal products. Commission Directive 2008/79/EC (3) added the active substance IPBC for use in products belonging to product-type 8, wood preservatives, as defined in Annex V to Directive 98/8/EC. By virtue of Article 86 of Regulation (EU) No 528/2012, this substance is therefore an approved active substance included in the list referred to in Article 9(2) of that Regulation.

(2)

In accordance with Article 8 of Directive 98/8/EC, the company ISP Cologne Holding GmbH submitted on 22 December 2010 an application to Denmark for authorisation of a wood preservative biocidal product containing IPBC (‘the contested product’). Denmark authorised the contested product on 19 December 2011 for Use classes 2 and 3 of the treated wood, as described in the Technical Notes for Guidance on Product Evaluation (4). The product authorisation covers different application methods, including automated dipping for professional use. Two Member States have subsequently authorised the contested product through mutual recognition.

(3)

ISP Cologne Holding GmbH (‘the applicant’) submitted on 20 February 2012 a complete application to Germany for mutual recognition of the authorisation of the contested product granted by Denmark.

(4)

Germany has notified the Commission, the other Member States and the applicant on 30 August 2013 of its proposal to restrict the authorisation in accordance with Article 4(4) of Directive 98/8/EC. Germany considers that the contested product does not meet the requirements of Article 5(1) of Directive 98/8/EC with regard to the human health and the environment.

(5)

According to Germany, the assessment performed by Denmark did not appropriately address the environmental concerns raised by the contested product. The environmental risk assessment performed by Germany of the service life of treated wood under Use Class 3 conditions concluded in an unacceptable risk for the soil compartment at day 30 (‘time 1’) regardless of the application method. As a result, Germany proposes not to authorise the use of wood treated with the contested product under Use class 3 conditions.

(6)

Germany also considers that the application by automated dipping should be limited to systems with a sufficiently high degree of automation due to unacceptable risks on the human health of professional users.

(7)

The Commission invited the other Member States and the applicant to submit comments to the notification in writing within 90 days in accordance with Article 27(1) of Directive 98/8/EC. Comments were submitted within that deadline by Germany, Denmark and the applicant. The notification was also discussed between the Commission and Member States' Competent Authorities for biocidal products on 24 September 2013 in the meeting of the coordination group established under Article 35 of Regulation (EU) No 528/2012.

(8)

With regard to the risks for the environment, from those discussions and comments it follows that the evaluation carried out by Denmark is compatible with current guidance (5). Where a risk is identified at time 1 as a result of a worst-case assumption, safe use of treated wood under Use classes 2 and 3 conditions can be assumed when the risk for the environment at the end of the service life is deemed acceptable.

(9)

The Commission also notes that cases where an unacceptable risk is identified at time 1 are currently under discussion at Union level in order to establish a harmonised approach. Against this background the Commission considers that, until such an approach is formally adopted, the conclusions of the assessment of the contested product by the Denmark should be considered as valid until the renewal of the product authorisation.

(10)

In the light of those comments, the Commission supports the conclusions of the evaluation carried out by Denmark and the other Member States having approved the product through mutual recognition, considering that the contested product fulfils the requirements set by Article 5(1) of Directive 98/8/EC with regard to the environment. The Commission therefore considers that the request by Germany to restrict the authorisation cannot be justified on the grounds put forward.

(11)

With regard to the application by automated dipping, the Commission considers that the contested product should be subject to the provisions established by a previous Commission Decision (6) addressing the protection of the health of professional users when applying IPBC containing products by this application method. Consequently, the contested product should be authorised subject to instructions on the label restricting the use to fully automated dipping processes and the product authorisation should be amended accordingly.

(12)

Regulation (EU) No 528/2012 applies to the contested product in accordance with the provisions of Article 92(2) of that Regulation. Since the legal basis for this Decision is Article 36(3) of that Regulation, this decision should be addressed to all Member States by virtue of Article 36(4) of that Regulation.

(13)

The measures provided for in this Decision are in accordance with the opinion of the Standing Committee on Biocidal Products,

(1)

Annex I to Directive 98/8/EC of the European Parliament and of the Council (2) contained the list of active substances approved at Union level for inclusion in biocidal products. Commission Directives 2008/78/EC (3), 2008/79/EC (4) and 2008/86/EC (5) added the active substances propiconazole, IPBC and tebuconazole, respectively, for use in products belonging to product-type 8, wood preservatives, as defined in Annex V to Directive 98/8/EC. By virtue of Article 86 of Regulation (EU) No 528/2012, these substances are therefore approved active substances included in the list referred to in Article 9(2) of that Regulation.

(2)

In accordance with Article 8 of Directive 98/8/EC, the company Arch Timber Protection Ltd submitted on 2 April 2010 an application to The United Kingdom for authorisation of a wood preservative biocidal product containing propiconazole, IPBC and tebuconazole (‘the contested product’). The United Kingdom authorised the contested product on 7 June 2012 for industrial use and temporary protection of freshly sawn/felled wood and unseasoned timber only, also indicating that wood treated with this product can be used for Use Classes 2 and 3 as described in the Technical Notes for Guidance on Product Evaluation (6). The product consists of two packs to be mixed and diluted at industrial premises depending on site-specific application conditions by dipping or enclosed deluge. Ten Member States have subsequently authorised the contested product through mutual recognition.

(3)

Arch Timber Protection Ltd (‘the applicant’) submitted on 16 July 2012 a complete application to Germany for mutual recognition of the authorisation of the contested product granted by the United Kingdom.

(4)

Germany notified the Commission, the other Member States and the applicant on 19 August 2013 of its proposal to refuse the authorisation in accordance with Article 4(4) of Directive 98/8/EC. Germany considered that the contested product does not meet the requirements of Article 5(1) of Directive 98/8/EC with regard to the environment.

(5)

According to Germany, the authorisation did not reflect well that the product was intended for temporary wood protection and the product was not appropriately assessed by the United Kingdom in terms of environmental risks. The assessment performed by Germany concluded in an unacceptable risk for the environment at day 30 following the application of the product (‘time 1’), which also raised concerns regarding the potential use of wood treated with the contested product under Use Classes 2 and 3 conditions.

(6)

Germany also considered that, since the ratio of the active substances and non-active substances in the working solutions of the product is variable, the product does not meet the definition of biocidal products in Article 2(a) of Directive 98/8/EC and should have been authorised as a frame formulation as defined by Article 2(j) of Directive 98/8/EC.

(7)

The Commission invited other Member States and the applicant to submit comments to the notification in writing within 90 days in accordance with Article 27(1) of Directive 98/8/EC. Comments were submitted within that deadline by Germany, The United Kingdom and the applicant. The notification was also discussed on 24 September 2013 in the meeting of the coordination group established under Article 35 of Regulation (EU) No 528/2012.

(8)

With regard to the risks for the environment, from those discussions and comments it follows that the evaluation carried out by the United Kingdom, in the absence of an agreed model for temporary wood protection, followed the best guidance available at the time (7), which is based on models for treated wood to be placed on the market under Use Classes 2 and 3 conditions. The assessment was also based on a worst-case assumption of a complete release of the active substances at time 1.

(9)

It also follows that the evaluation performed by the United Kingdom following those models is compatible with current guidance (8). Where a risk is identified at time 1 as a result of a worst-case assumption, safe use of treated wood under Use Classes 2 and 3 conditions can be assumed when the risk for the environment at the end of the service life is considered acceptable.

(10)

The Commission also notes that cases where an unacceptable risk is identified at time 1 are currently under discussion at Union level in order to establish a harmonised approach. Against this background the Commission considers that, until such an approach is formally adopted, the conclusions of the assessment of the contested product by the United Kingdom should be considered as valid until the renewal of the product authorisation.

(11)

With regard to the identity of the product, from those discussions and comments it follows that the contested product, in the form in which it is supplied to the industrial users, has specific fixed concentrations of the active and non-active substances. The Commission considers that the fact that industrial users can prepare different solutions of the product at the work place, which are process dependant, cannot be interpreted in a way as if the authorisation holder was placing on the market a group of different biocidal products as referred to in Article 2(j) of Directive 98/8/EC.

(12)

In the light of those arguments, the Commission supports the conclusions of the evaluation carried out by the United Kingdom and the other Member States having approved the product through mutual recognition, considering that the contested product meets the definition in Article 2(a) of Directive 98/8/EC and fulfils the requirements set by Article 5(1) of that Directive with regard to the environment. The Commission therefore considers that the request by Germany to refuse the authorisation cannot be justified on the grounds put forward.

(13)

Finally, on the basis of the discussions held, it appears necessary to explicitly mention in the product authorisation that the use of the product is for temporary wood protection and to ensure, as a condition for the authorisation, that specific instructions for use of the product are provided to industrial users taking into consideration the characteristics of the industrial sites where the product is to be used.

(14)

Regulation (EU) No 528/2012 applies to the contested product in accordance with the provisions of Article 92(2) of that Regulation. Since the legal basis for this Decision is Article 36(3) of that Regulation, this decision should be addressed to all Member States by virtue of Article 36(4) of that Regulation.

(15)

The measures provided for in this Decision are in accordance with the opinion of the Standing Committee on Biocidal Products,

(1)

Commission Decision 2007/777/EC (2) lays down, inter alia, the model certificates for imports into the Union of certain meat products. It provides that only consignments of meat products complying with the requirements of the model animal and public health certificate set out in Annex III in that Decision are imported into the Union. That model includes guarantees for Trichinella.

(2)

Commission Regulation (EC) No 2075/2005 (3) lays down rules for the sampling of carcases of species susceptible to Trichinella infection and for the determination of the status of holdings keeping domestic swine.

(3)

Commission Regulation (EU) No 216/2014 (4) amending Regulation (EC) No 2075/2005 grants derogation from testing provisions at slaughter to holdings which are officially recognised as applying controlled housing conditions. In addition, the Regulation (EU) No 216/2014 lays down that a holding where domestic swine are kept, can only be recognised as applying controlled housing conditions if, inter alia, the food business operator introduces new domestic swine onto this holding only if they come from other holdings also officially recognised as applying controlled housing conditions.

(4)

The model animal and public health certificate set out in Annex III to Decision 2007/777/EC should be amended to reflect the requirements relating to imports of meat products laid down in Regulation (EC) No 2075/2005, as amended by Regulation (EU) No 216/2014.

(5)

Decision 2007/777/EC should therefore be amended accordingly.

(6)

To avoid any disruption of imports into the Union of consignments of meat products from domestic porcine animals, the use of certificates issued in accordance with Decision 2007/777/EC in its version prior to the amendments being introduced by this Decision should be authorised during a transitional period subject to certain conditions.

(7)

The measures provided for in this Decision are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed,

(1)

point II.2.3.1 is replaced by the following:

;

(2)

in Part II of the Notes, the following footnote is added after footnote (5):

.

(1)

In January 2014, the German authorities notified to the Commission a measure of withdrawal from the market and prohibition of placing on the market of a heat protection suit model ‘Hitzeschutzanzug FW Typ 3’ manufactured by KONTEX Textile Hitze- und Isolierprodukte GmbH, Olgastrasse 46-48, 73614 Schorndorf (Germany). The products bore CE marking, according to Directive 89/686/EEC on personal protective equipment, having been tested and type-examined according to harmonised standard EN 1486:2007 Protective clothing for fire-fighters — Test method and requirements for reflective clothing for specialised fire-fighting.

(2)

Protective clothing for fire-fighters is personal protective equipment (PPE) classified as Certification Category III. PPE of this kind, which is designed to protect against fatal hazards or serious and irreversible risks to health, the direct effect of which the manufacturer assumes that users will be unable to recognise in time, are subject to an EC type-approval examination and an EC quality assurance check by the notified body commissioned by the manufacturer.

(3)

The audit carried out by the Institut für Arbeitsschutz der Deutschen Gesetzlichen Unfallversicherung (IFA — Institute for Occupational Health and Safety of the German Statutory Accident Insurance Fund) in St Augustin (test ref. 2013 22805, 7 August 2013) showed that the values for heat transfer (radiant heat) under Section 6.2 and heat transfer (convective heat) under Section 6.3 of the above mentioned harmonised standard are not met. Therefore, the following basic health and safety requirements set out in Annex II to Directive 89/686/EEC were not met:

(4)

As a consequence, the heat protection suit presents the risk of transferring heat during fire-fighting, so that fire-fighters are exposed to life-threatening burns or the risk of being burned to death.

(5)

In the opinion of the German authorities, since the relevant basic requirements concerning health and safety protections are not met and no valid EC type-examination certificate has been presented, the heat protection suit cannot be placed on the market. In fact, the heat protection suit does not meet the requirements of the German Order on the placing on the market of personal protective equipment (8th ProdSV) and its use endangers the safety, health and lives of fire-fighters and others.

(6)

The Commission wrote to the manufacturer inviting him to communicate his observations on the measures taken by the German authorities. No answer has been received until the date.

(7)

In light of the documentation available, the Commission considers that the heat protection suit Hitzeschutzanzug FW Typ 3 failed to comply with clauses § 6.2 and § 6.3 of the harmonised standard EN 1486:2007 referred to the basic health and safety requirements 3.6.1 PPE constituent materials and other components and 3.6.2 Complete PPE ready for use set out in Annex II to Directive 89/686/EEC,

(1)

The European Union is a Party to the Energy Community which aims to create a single regulatory space for energy markets in Europe.

(2)

The Contracting Parties (1) to the Energy Community aim at integrating their energy markets with the EU internal energy market by adapting the EU internal market legislation for gas and electricity and incorporating it into their national legislation.

(3)

The key principles of the EU internal market legislation for gas and electricity are laid down in Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for internal market in electricity (2), Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas (3), Regulation (EC) No 714/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity (4) and Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks (5), which are applicable in the Member States as of 3 March 2011. Important rules of the EU internal market legislation for gas and electricity are also set out in legally binding network codes and guidelines, adopted on the basis of the above legislation and partially under development.

(4)

The Contracting Parties of the Energy Community are obliged to implement the above-mentioned directives and regulations 1 January 2015 (6) and apply the implementing measures as from the same date subject to few exceptions. Network codes and guidelines are also progressively incorporated into the legal order of the Energy Community.

(5)

Further EU internal market legislation for gas and electricity is envisaged to be implemented by the Contracting Parties, notably Directive 2005/89/EC of the European Parliament and of the Council of 18 January 2006 concerning measures to safeguard security of electricity supply and infrastructure investment (7), Regulation (EU) No 994/2010 of the European Parliament and of the Council of 20 October 2010 concerning measures to safeguard security of gas supply and repealing Council Directive 2004/67/EC (8) and Regulation (EU) No 347/2013 of the European Parliament and of the Council of 17 April 2013 on guidelines for trans-European energy infrastructure and repealing Decision No 1364/2006/EC and amending Regulations (EC) No 713/2009, (EC) No 714/2009 and (EC) No 715/2009 (9).

(6)

The geographical application of the EU internal market legislation for gas and electricity comprises the entire territory of the EU.

(7)

The Energy Community adopted on the 23 September 2014 an Interpretation by the Ministerial Council under Article 94 of the Energy Community Treaty in order to treat in the legal acts of the Energy Community incorporating European Union legislation the energy flows, imports and exports as well as commercial and balancing transactions, network capacities and interconnectors between Contracting Parties and EU Member States in the same way as the respective flows, imports, exports, transactions, capacities and infrastructure between Contracting Parties under Energy Community law.

(8)

Uniform treatment of cross-border flows, cross-border transactions and cross-border infrastructure (interconnections) between all Parties to the Energy Community Treaty is an important element of the single regulatory space for trade in gas and electricity and is an indispensable element to achieve the goals of the Energy Community. Moreover, the cooperation between the Energy Community Regulatory Board and the Agency for Cooperation of Energy Regulators with regard to its decisions, is necessary in order to facilitate the integration of the Contracting Parties with the EU internal energy market.