(1)

The Commission’s legislative proposals on the common agricultural policy (CAP) beyond 2020 aimed to establish the strong Union framework essential to ensure that the CAP remains a common policy with a level playing field, while also giving Member States greater responsibility as regards how they meet the objectives and achieve the targets set. Accordingly, Member States are to draw up CAP strategic plans and to implement them after their approval by the Commission.

(2)

The legislative procedure regarding the Commission’s legislative proposals on the CAP beyond 2020 has not been concluded in time to allow Member States and the Commission to prepare all elements necessary to apply the new legal framework and the CAP strategic plans as from 1 January 2021, as initially proposed by the Commission. That delay has created uncertainty and risks for farmers in the Union and the entire Union agriculture sector. In order to alleviate that uncertainty and to maintain the vitality of rural areas and regions, as well as to contribute to environmental sustainability, this Regulation should provide for the continued application of the rules of the current CAP framework covering the period 2014 to 2020 (‘current CAP framework’) and for uninterrupted payments to farmers and other beneficiaries, and thus provide predictability and stability during the transitional period in the years 2021 and 2022 (‘transitional period’) until the date of application of the new legal framework covering the period starting on 1 January 2023 (‘new legal framework’).

(3)

Since the legislative procedure regarding the Commission’s legislative proposals on CAP beyond 2020 still needs to be concluded and the CAP strategic plans are still to be developed by Member States, and the stakeholders need to be consulted, the current CAP framework should continue to apply for the additional period of two years. The aim of the transitional period is to facilitate a smooth transition for beneficiaries to a new programming period and to provide for the possibility to take into account the Commission’s Communication of 11 December 2019 on the European Green Deal (‘European Green Deal’).

(4)

In order to ensure that support can be granted to farmers and other beneficiaries from the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD) in the years 2021 and 2022, the Union should continue to grant such support during the transitional period under the conditions of the current CAP framework. The current CAP framework was established, in particular, by Regulations (EU) No 1303/2013 (4), (EU) No 1305/2013 (5), (EU) No 1306/2013 (6), (EU) No 1307/2013 (7) and (EU) No 1308/2013 (8) of the European Parliament and of the Council.

(5)

This Regulation should provide Member States with sufficient time to prepare their respective CAP strategic plans, as well as facilitate the creation of administrative structures necessary for successful implementation of the new legal framework, in particular by allowing for an increase in technical assistance. All CAP strategic plans should be ready to enter into force once the transitional period ends in order to provide much-needed stability and certainty for the farming sector.

(6)

In light of the fact that the Union should continue to support rural development throughout the transitional period, Member States should have the possibility to finance their extended rural development programmes from the corresponding budget allocation for the years 2021 and 2022. The extended programmes should ensure that at least the same overall share of the EAFRD contribution is reserved for the measures referred to in Article 59(6) of Regulation (EU) No 1305/2013, in line with the new ambitions set out in the European Green Deal.

(7)

Regulation (EU) No 1303/2013 lays down common rules applicable to the EAFRD and to other funds which operate under a common framework. That Regulation should continue to apply to programmes supported by the EAFRD for the 2014–2020 programming period and programming years 2021 and 2022.

(8)

The deadlines laid down in Regulation (EU) No 1303/2013 in respect of implementation reports, annual review meetings, ex-post evaluations and synthesis reports, eligibility of expenditure and de-commitment as well as budget commitments are limited to the 2014-2020 programming period. Those deadlines should be adapted in order to take account of the extended duration of the period during which programmes relating to support from the EAFRD should be implemented.

(9)

Regulation (EU) No 1310/2013 of the European Parliament and of the Council (9) and Commission Delegated Regulation (EU) No 807/2014 (10) provide that expenditure for certain long-term commitments undertaken pursuant to certain regulations that granted support for rural development before Regulation (EU) No 1305/2013 was applicable, should continue, under certain conditions, to be paid by the EAFRD in the 2014-2020 programming period. That expenditure should also continue to be eligible for the duration of their respective legal commitment under the same conditions in the programming years 2021 and 2022. For reasons of legal clarity and certainty, it should also be made clear that the legal commitments undertaken under earlier measures that correspond to the measures of Regulation (EU) No 1305/2013 to which the integrated administration and control system applies, should be subject to that integrated administration and control system and that payments related to those legal commitments should be made within the period from 1 December to 30 June of the following calendar year.

(10)

The EAFRD should be able to support the costs of capacity-building and preparatory actions supporting the design and the future implementation of the community-led local development strategies under the new legal framework.

(11)

In 2015, at the allocation of payment entitlements or at the recalculation of payment entitlements for Member States keeping existing entitlements under Regulation (EU) No 1307/2013, some Member States made errors when establishing the number or value of payment entitlements. Many of those errors, even when they occurred in respect of a single farmer, influence the value of the payment entitlements for all farmers and for all years. Some Member States also made errors after 2015, when allocating entitlements from the reserve, for example in the calculation of the average value. Such non-compliance is normally subject to financial correction until corrective measures are taken by the Member State concerned. In the light of the time that has elapsed since the first allocation, the efforts made by Member States to establish, and where relevant, correct entitlements, and also in the interest of legal certainty, the number and value of payment entitlements should be considered legal and regular with effect from a certain date.

(12)

Under Article 24(6) of Regulation (EU) No 1307/2013, Member States were given the option to apply for the allocation of payment entitlements a reduction coefficient to eligible hectares consisting of permanent grassland located in areas with difficult climate conditions. Alpine pastures are often managed collectively and therefore areas are assigned on a yearly basis, thus creating a significant degree of uncertainty amongst farmers in the Member States concerned. The implementation of that system has proven to be particularly complex especially with regard to the exact definition of the areas concerned. Since the value of payment entitlements in areas where the reduction coefficient is not applied depends on the sum of the payment entitlements in the designated areas, that uncertainty subsequently affects all farmers in the Member States concerned. In order to stabilise the system currently applied in those Member States, and with a view to ensuring legal certainty for all farmers in the Member States concerned as early as possible, the Member States concerned should be able to consider legal and regular the value and number of all entitlements allocated to all farmers before 1 January 2020. The value of those entitlements should, without prejudice to any legal remedies open to individual beneficiaries, be the value for calendar year 2019 valid on 31 December 2019.

(13)

The confirmation of payment entitlements does not represent an exemption from Member States’ responsibility under the shared management of the EAGF to ensure the protection of the Union budget from irregular expenditure. Hence, the confirmation of the payment entitlements allocated to farmers before 1 January 2021 or, by way of derogation, before 1 January 2020, should not prejudice the Commission’s power to take decisions referred to in Article 52 of Regulation (EU) No 1306/2013 in relation to irregular payments granted in respect of any calendar year up to 2020 inclusive or, by way of derogation, up to 2019 inclusive, resulting from errors in the number or value of those payment entitlements.

(14)

In light of the fact that the new legal framework for the CAP has not yet been adopted, it should be made clear that transitional arrangements should be laid down to regulate the transition from existing support schemes granted on a multiannual basis to the new legal framework.

(15)

In order to limit a significant carry-over of commitments from the current programming period for rural development to the CAP strategic plans, the duration of new multiannual commitments in relation to agri-environment-climate, organic farming and animal welfare should, as a general rule, be limited to a period of a maximum of three years. From 2022, the extension of existing commitments should be limited to one year.

(16)

Article 31(5) of Regulation (EU) No 1305/2013 provided for transitional arrangements to facilitate the phasing-out of payments in areas that, because of the application of new delimitation criteria, would no longer be considered areas facing natural constraints. Such payments were to be paid until 2020 and for a maximum period of four years. Regulation (EU) 2017/2393 of the European Parliament and of the Council (11) extended the initial deadline for the new delimitation of such areas to 2019. For farmers in the Member States setting the delimitation in 2018 and 2019, phasing-out of payments could not reach the maximum of four years. In order to continue the phasing-out of payments, Member States should be allowed to continue paying them in the years 2021 and 2022, where applicable. In order to ensure an adequate level of payments per hectare, in accordance with Article 31(5) of Regulation (EU) No 1305/2013, the level of payments in the years 2021 and 2022 should be fixed at EUR 25 per hectare.

(17)

Since farmers are exposed to increasing economic and environmental risks as a consequence of climate change and increased price volatility, Regulation (EU) No 1305/2013 provides for a risk management measure to assist farmers in addressing those risks. That measure includes financial contributions to mutual funds and an income stabilisation tool. Specific conditions were provided for the granting of support under that measure in order to ensure that farmers receive equal treatment across the Union, competition is not distorted and the international obligations of the Union are complied with. In order to further promote the use of that measure to farmers of all sectors, Member States should be provided with the possibility to reduce the threshold of 30 % that triggers the compensation of farmers for the drop in production or income applicable to the respective tool, however to not lower than 20 %.

(18)

Farmers and rural businesses have been affected by the consequences of the COVID-19 outbreak in an unprecedented manner. The prolongation of extensive restrictions on movement put in place in the Member States, as well as mandatory closures of shops, outdoor markets, restaurants and other hospitality establishments, have created economic disruption in the agricultural sector and rural communities and have led to liquidity and cash-flow problems for farmers and for small businesses active in the processing, marketing or development of agricultural products. In order to respond to the impact of the crisis arising from the COVID-19 outbreak, the duration of the measure referred to in Article 39b of Regulation (EU) No 1305/2013 should be extended to address the ongoing liquidity problems that put at risk the continuity of farming activities and of small businesses active in the processing, marketing or development of agricultural products. Support for that measure should be financed by up to 2 % of the EAFRD funds allocated to Member States in the programming period 2014-2020.

(19)

In order to avoid a situation in which funds for community-led local development in the programming years 2021 and 2022 are unspent, Member States that make use of the possibility to transfer amounts from direct payments to rural development should be able to apply the 5 %, and in the case of Croatia 2,5 %, minimum allocation for community-led local development only to the EAFRD contribution to the rural development extended to 31 December 2022 calculated before the transfer of amounts from direct payment has been made.

(20)

In accordance with Council Regulation (EU) 2020/2094 (12) establishing a European Union Recovery Instrument (‘EURI’) to support the recovery in the aftermath of the COVID-19 crisis (‘EURI Regulation’), additional resources should be made available for the years 2021 and 2022 to address the impact of the COVID-19 crisis and its consequences for the Union agricultural sector and rural areas.

(21)

Given the unprecedented challenges the Union agricultural sector and rural areas are faced with because of the COVID-19 crisis, the additional resources provided by the EURI should be used to fund measures under Regulation (EU) No 1305/2013, paving the way for a resilient, sustainable and digital economic recovery in line with the objectives of the Union’s environmental and climate commitments and with the new ambitions set out in the European Green Deal.

(22)

Member States should therefore not reduce the environmental ambition of their existing rural development programmes. They should ensure the same overall share for the additional resources as the overall share which they reserved in their rural development programmes for measures that are particularly beneficial for the environment and climate under the EAFRD contribution (‘non-regression principle’). In addition, at least 37 % of the additional resources provided by the EURI should be devoted to measures that are particularly beneficial to the environment and climate, as well as to animal welfare and LEADER. Moreover, at least 55 % of those additional resources should be devoted to measures that promote economic and social development in rural areas, namely to investments in physical assets, farm and business development, support for basic services and village renewal in rural areas and cooperation.

(23)

In the event that Member States are otherwise unable to comply with the non-regression principle, they should have the possibility to derogate from the obligation to allocate at least 55 % of the additional resources from the EURI for measures that promote economic and social development in rural areas, and should preferably support measures that are particularly beneficial to the environment and climate. However, in order to provide Member States with sufficient flexibility, Member States should also have the possibility to derogate from the non-regression principle in respect of those additional resources to the extent necessary to comply with that obligation of 55 %.

(24)

The additional resources from the EURI are subject to specific conditions. Those additional resources should thus be programmed and monitored separately from the Union support for rural development, while applying, as a general rule, the rules set out in Regulation (EU) No 1305/2013. Hence, those additional resources should be implemented through Regulation (EU) No 1305/2013 and considered in the framework of that Regulation as amounts that finance measures under the EAFRD. In consequence, the rules set out in Regulation (EU) No 1305/2013, including the rules on amendments of rural development programmes, Regulation (EU) No 1306/2013, including the rules on automatic de-commitment, and Regulation (EU) No 1307/2013 should apply, except where this Regulation provides otherwise.

(25)

A specific maximum Union co-financing rate, as well as an increased support rate for investments contributing to a resilient, sustainable and digital economic recovery, and support aid for young farmers should be established in order to ensure the adequate leverage effect of the additional resources provided by the EURI.

(26)

In order to ensure continuity during the transitional period, the reserve for crises in the agricultural sector should be maintained for the years 2021 and 2022. The relevant amount of the reserve for the years 2021 and 2022 should be included in that reserve.

(27)

As regards pre-financing arrangements from the EAFRD, it should be made clear that neither the extension until 31 December 2022 of programmes supported by the EAFRD in accordance with this Regulation nor the additional resources made available on the basis of the EURI Regulation should lead to any additional pre-financing granted for the programmes concerned.

(28)

Article 11 of Regulation (EU) No 1307/2013 currently only provides for a notification obligation for Member States as regards their decisions taken in accordance with that Article and the estimated product related to the reduction of the part of the amount of direct payments to be granted to a farmer for a given calendar year exceeding EUR 150 000 for the years 2015 to 2020. With a view to ensuring a continuation of the existing system, Member States should also notify their decisions taken in accordance with that Article and the estimated product related to the reduction for calendar years 2021 and 2022.

(29)

Article 14 of Regulation (EU) No 1307/2013 allows Member States to transfer funds between direct payments and rural development as regards calendar years 2014 to 2020. In order to ensure that Member States may follow their own strategy, the flexibility between pillars should be made available also for calendar year 2021 (financial year 2022) and calendar year 2022 (financial year 2023).

(30)

In order to allow the Commission to be able to set the budgetary ceilings in accordance with Article 22(1), Article 36(4), Article 42(2), Article 49(2), Article 51(4) and Article 53(7) of Regulation (EU) No 1307/2013, it is necessary for Member States to notify their decisions on financial allocations by scheme for calendar year 2021 by 19 February 2021 and for calendar year 2022 by 1 August 2021.

(31)

Article 22(5) of Regulation (EU) No 1307/2013 provides for a linear adjustment of the value of payment entitlements in the event of a change in the ceiling for the basic payment scheme from one year to the following due to certain decisions taken by Member States and affecting the ceiling for the basic payment scheme. The extension of Annex II to that Regulation on national ceilings after calendar year 2020 and the possible annual changes from that date might have an impact on the ceiling for the basic payment scheme. Therefore, for Member States to be able to respect the obligation of equality of the sum of the value of payment entitlements and reserves with the ceiling for the basic payment scheme laid down in Article 22(4) of that Regulation, it is appropriate to provide for a linear adjustment to adapt to the extension of or the amendments to Annex II to that Regulation during the transitional period. Moreover, to provide Member States with greater flexibility, it appears appropriate to allow them to adapt the value of payment entitlements or of the reserve, possibly with different rates of adjustment.

(32)

In accordance with the current legal framework, Member States notified in 2014 their decisions up to calendar year 2020 on the division of the annual national ceiling for the basic payment scheme between the regions and the possible annual progressive modifications for the period covered by Regulation (EU) No 1307/2013. It is necessary that Member States also notify those decisions for calendar years 2021 and 2022.

(33)

The internal convergence mechanism is the core process for a more equitable distribution of direct income support among farmers. Significant individual differences based on old historic references become increasingly difficult to justify. In Regulation (EU) No 1307/2013, the basic model of internal convergence consists of the application by Member States of a uniform flat rate for all payment entitlements, at national or regional level, from 2015. However, in order to ensure a smoother transition to a uniform value, a derogation was set out allowing Member States to differentiate the values of payment entitlements by applying partial convergence, also called the ‘tunnel model’, between 2015 and 2019. Some Member States made use of that derogation. To continue the process towards a more equitable distribution of direct payments, Member States should be able to further converge towards a national or regional average after 2019 instead of going to a uniform flat rate or keeping the value of entitlements at their 2019 level. That possibility for Member States should therefore apply as of 1 January 2021. Member States should notify the Commission on an annual basis of their decision for the following year.

(34)

The provisions of Regulation (EU) No 1307/2013 on the adjustment of all payment entitlements being amended by this Regulation should apply retroactively from 1 January 2020 so that it is clarified that Member States were able to converge after 2019.

(35)

Article 30 of Regulation (EU) No 1307/2013 provides for annual progressive modifications in the value of the payment entitlements allocated from the reserve to reflect the annual steps of the national ceiling set out in Annex II to that Regulation, reflecting a multiannual management of the reserve. Those rules should be adapted in order to reflect that it is possible to amend both the value of all allocated payment entitlements and of the reserve to adjust to a change in the amount in Annex II to that Regulation between two years. In Member States deciding to continue internal convergence, that internal convergence is implemented on an annual basis. For calendar years 2020, 2021 and 2022, only the value of the payment entitlement of the current year needs to be determined in the year of allocation. The unit value of payment entitlements to be allocated from the reserve in a given year should be calculated after possible adjustment of the reserve in accordance with Article 22(5) of that Regulation. In any subsequent year, the value of the payment entitlements allocated from the reserve should be adapted in accordance with Article 22(5) of that Regulation.

(36)

Article 36 of Regulation (EU) No 1307/2013 provides for the application of the single area payment scheme until 31 December 2020. It is appropriate to allow the prolongation of the single area payment scheme in the years 2021 and 2022.

(37)

Given that the amendment, set out in this Regulation, to Annex II to Regulation (EU) No 1307/2013 will enter into force too late for Member States to observe the original deadline for certain notification obligations in 2020, it is necessary to postpone the deadline for Member States to take the decision to introduce for the first time the redistributive payment from 2021 or 2022, and the notification of that decision to the Commission. It is appropriate to set that deadline at the same time as the deadline for the decisions concerning flexibility between pillars.

(38)

Under Article 37 of Regulation (EU) No 1307/2013, Member States applying the single area payment scheme may decide to grant transitional national aid in the period 2015-2020 to avoid a sudden and substantial decrease of support in those sectors that benefitted from transitional national aid until 2014. In order to ensure that, during the transitional period, such aid continues to play its role in supporting the income of farmers in those specific sectors, provision should be made for the continuation of that aid under the same conditions and limitations as in the period 2015-2020.

(39)

For the sake of legal certainty, it should be clarified that Articles 41 and 42 of Regulation (EU) No 1307/2013 allow Member States to review, on an annual basis, their decisions on the redistributive payment. The deadline for the review applicable in 2021 and 2022 should be set at the same time as the deadline for the decisions concerning flexibility between pillars.

(40)

Article 52(10) of Regulation (EU) No 1307/2013 empowers the Commission to adopt delegated acts allowing Member States to decide that voluntary coupled support can continue to be paid until 2020 on the basis of the production units for which such support was granted in a past reference period. That empowerment aims at ensuring the greatest possible consistency between Union schemes targeting sectors that can be marked by structural market imbalances. It is therefore appropriate to prolong that empowerment to also cover the years 2021 and 2022.

(41)

Given that the amendment, set out in this Regulation, to Annex II to Regulation (EU) No 1307/2013 will enter into force too late for Member States to observe the original deadline for certain notification obligations in 2020, it is necessary to postpone the deadline for Member States to take the decision to introduce for the first time the voluntary coupled support from 2021 or 2022 and the notification of that decision to the Commission. It is appropriate to set that deadline at the same time as the deadline for the decisions concerning flexibility between pillars. Similarly, the deadline for a decision of Member States to continue or cease granting voluntary coupled support in the years 2021 and 2022, and the notification of that decision to the Commission, should be postponed to the same date.

(42)

Article 54 of Regulation (EU) No 1307/2013 lays down the elements of Member States’ notifications concerning voluntary coupled support. It is appropriate to clarify that those notifications for calendar years 2021 and 2022 should include the percentage of the national ceiling used to finance that support for the years 2021 and 2022.

(43)

Regulation (EU) No 1308/2013 lays down rules for the common organisation of agricultural markets and includes certain aid schemes. The Commission’s legislative proposals on the CAP beyond 2020 provided that those aid schemes are to be integrated in the future CAP strategic plans of Member States. To ensure a smooth integration of those aid schemes into the future CAP, rules should be laid down regarding the duration of each of those aid schemes when they are to be renewed during the transitional period. Therefore, as regards the aid scheme in the olive oil and table olive sector, the existing work programmes drawn up for the period running from 1 April 2018 until 31 March 2021 should be followed by new work programmes running from 1 April 2021 until 31 December 2022. Existing operational programmes in the fruit and vegetable sector that have not reached their maximum duration of five years may only be extended until 31 December 2022. New operational programmes in the fruit and vegetable sector should only be approved for a maximum duration of three years. The existing national programmes for the apiculture sector drawn up for a period running from 1 August 2019 until 31 July 2022 should be extended until 31 December 2022.

(44)

Due to the crisis caused by the COVID-19 pandemic, winegrowers holding planting authorisations for new plantings or for replanting which expire in 2020 were largely prevented from making planned use of those authorisations in the last year of their validity. To avoid the loss of those authorisations and reduce the risk of the deterioration of the conditions under which the planting would need to be carried out, it is necessary to allow for a prolongation of the validity of planting authorisations for new plantings or for replanting which expire in 2020. All planting authorisations for new plantings or for replanting expiring in 2020 should therefore be prolonged until 31 December 2021. Also, taking into account changes in market perspectives, the holders of planting authorisations that expire in 2020 should have the possibility not to use their authorisations without being subject to the administrative penalties.

(45)

The provision of Regulation (EU) No 1308/2013 on planting authorisations for new plantings or for replanting that expire in 2020, amended by this Regulation, should, because of the disturbances due to the COVID-19 pandemic and the difficulties it caused as regards the use of those planting authorisations, apply retroactively from 1 January 2020.

(46)

In 2013, transitional provisions were laid down in order to ensure a smooth transition from the former wine grape planting rights regime to the new scheme of planting authorisations, in particular in order to avoid excessive plantings before the start of that new scheme. The latest deadline for the submission of requests for conversion of planting rights into authorisations ends on 31 December 2020. However, authorisations have to be used by the applicant and are not tradable as the former planting rights used to be. Moreover, the applicants for authorisations might be requested to have a corresponding vineyard area, which can lead to situations where holders of planting rights did not yet manage to acquire the corresponding vineyard areas to use the authorisations which would result from the conversion of their planting rights. The severe economic impact of the COVID-19 pandemic on the wine sector has led to cash flow problems for winegrowers and also to uncertainty concerning the future demand for wine. Winegrowers still holding planting rights should not be forced to decide whether they want to convert their planting rights into authorisations while facing exceptional difficulties due to the crisis caused by the COVID-19 pandemic, especially as they would be subject to an administrative penalty if they do not use their planting authorisations resulting from the conversion. Those Member States that allowed winegrowers to submit their requests for conversion of planting rights until 31 December 2020 should therefore be enabled to extend the deadline for the submission of such requests to 31 December 2022. Consequently, the latest date for the validity of such converted authorisations should be adapted and should end on 31 December 2025.

(47)

Article 214a of Regulation (EU) No 1308/2013 allowed Finland to grant, under certain conditions, national aid in Southern Finland until 2020, subject to the authorisation of the Commission. In order to ensure continuity of payments of that aid during the transitional period, the granting of that national aid needs to continue to be allowed under the same conditions and same amounts as in 2020.

(48)

In order to improve the operation of the market for olive oil, Member States should be able to decide on implementation of marketing rules to regulate supply. The scope of such decisions should, however, exclude practices which could distort competition.

(49)

Recent events have shown that farmers are increasingly facing risks of income volatility, partly because of market exposure and partly because of extreme weather events and frequent sanitary and phytosanitary crises affecting Union livestock and agronomic assets. To alleviate the effects of income volatility by encouraging farmers to make savings in good years to cope with bad years, national tax measures whereby the income tax base applied to farmers is calculated on the basis of a multiannual period should be exempted from the application of State aid rules.

(50)

Since the objective of this Regulation, namely to provide for the continued application of the rules of the current CAP framework and for uninterrupted payments to farmers and other beneficiaries, and thus provide predictability and stability during the transitional period, cannot be sufficiently achieved by the Member States but can rather, by reason of the scale and effects of the action, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.

(51)

Horizontal financial rules adopted by the European Parliament and the Council on the basis of Article 322 of the Treaty on the Functioning of the European Union (TFEU) apply to this Regulation. Those rules are laid down in Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (13) and determine in particular the procedure for establishing and implementing the budget through grants, procurement, prizes and indirect implementation, and provide for checks on the responsibility of financial actors. Rules adopted on the basis of Article 322 TFEU also include a general regime of conditionality for the protection of the Union budget.

(52)

Regulations (EU) No 1305/2013, (EU) No 1306/2013, (EU) No 1307/2013 and (EU) No 1308/2013 should therefore be amended accordingly.

(53)

In order to ensure that the additional resources made available on the basis of the EURI Regulation are available from 1 January 2021, the provisions on EURI support in this Regulation should apply retroactively from that date.

(54)

In view of the overriding need to immediately ensure legal certainty for the agricultural sector in the current circumstances, this Regulation should enter into force as a matter of urgency on the day following that of its publication in the Official Journal of the European Union,

(1)

Member States have been affected by the crisis resulting from the economic, social and health consequences of the COVID-19 pandemic in an unprecedented manner. The crisis hampers growth in Member States, which in turn aggravates the serious liquidity shortages which are due to the sudden and significant increase in public investments needed in Member States’ health systems and other sectors of their economies. The crisis has also exacerbated the situation of people at risk of poverty, thus reducing the social cohesion in Member States. In addition, the closure of internal borders has had a severe impact on economic cooperation, in particular in border areas, affecting the commuting of workers and the viability of micro, small and medium-sized enterprises (SMEs). This has created an exceptional situation which needs to be addressed with specific, immediate and extraordinary measures that reach the real economy quickly.

(2)

In order to respond to the impact of the crisis, Regulations (EU) No 1301/2013 (4) and (EU) No 1303/2013 (5) of the European Parliament and the Council were amended by Regulation (EU) 2020/460 of the European Parliament and of the Council (6) in order to allow for more flexibility in the implementation of operational programmes supported by the European Regional Development Fund (the ‘ERDF’), the European Social Fund (the ‘ESF’) and the Cohesion Fund (collectively ‘the Funds’) and by the European Maritime and Fisheries Fund (the ‘EMFF’). However, as the serious negative effects on Union economies and societies worsened, both Regulations were amended again by Regulation (EU) 2020/558 of the European Parliament and of the Council (7). Those amendments have provided exceptional additional flexibility to enable the Member States to concentrate on the necessary response to the unprecedented crisis by enhancing the possibility to mobilise non-utilised support from the Funds and by simplifying procedural requirements linked to programme implementation and audits.

(3)

On 23 April 2020, the European Council endorsed the ‘Roadmap for recovery’ in order to redress huge shocks to the economy and to mitigate, on the one hand, the social and economic consequences for the Union stemming from the exceptional restrictions put in place by Member States to contain the spread of COVID-19 and, on the other, the risk of an asymmetric recovery, stemming from the different national means available in different Member States, which has, in turn, had a serious impact on the functioning of the internal market. The Roadmap for recovery has a strong investment component and calls for the establishment of the European Recovery Fund. In addition, and as restated in the conclusions of the European Council of 21 July 2020, it mandates the Commission to analyse the needs so that the resources would be targeted towards those sectors and geographical parts of the Union that are most affected, while also clarifying the link with the Multiannual Financial Framework for 2021-2027.

(4)

In accordance with Council Regulation (EU) 2020/2094 (8) and within the limits of the resources allocated therein, recovery and resilience measures under the European Structural and Investment Funds should be carried out to address the unprecedented impact of the COVID-19 crisis. Such additional resources should be used to ensure compliance with the time limits provided for in Regulation (EU) 2020/2094.

(5)

This Regulation lays down rules and implementing arrangements regarding the additional resources provided as Recovery Assistance for Cohesion and the Territories of Europe (‘REACT-EU’) to provide assistance for fostering crisis repair in the context of the COVID-19 pandemic and its social consequences and for preparing a green, digital and resilient recovery of the economy. Under REACT-EU, an additional exceptional amount of up to EUR 47 500 000 000 in 2018 prices for budgetary commitment from the Structural Funds for the years 2021 and 2022 should be made available to support those Member States and regions that are most affected by crisis repair in the context of the COVID-19 pandemic and its social consequences and that are preparing a green, digital and resilient recovery of the economy (‘REACT-EU resources’), with a view to deploying resources quickly to the real economy through the existing operational programmes. The REACT-EU resources stem from the European Union Recovery Instrument. Part of the REACT-EU resources should be allocated to technical assistance at the initiative of the Commission. The Commission should set out the breakdown of the REACT-EU resources for each Member State on the basis of an allocation method based on the latest available objective statistical data concerning Member States’ relative prosperity and the extent of the effect of the COVID-19 crisis on their economies and societies. Before the application of the allocation method concerning the REACT-EU resources for the year 2021 and to provide support for the most important sectors following the COVID-19 crisis in certain Member States, an amount of EUR 100 000 000 and EUR 50 000 000 should be allocated to Luxembourg and Malta, respectively. The allocation method should include a dedicated additional amount for the outermost regions, given the specific vulnerability of their economies and societies. In order to reflect the evolving nature of the effects of the COVID-19 crisis, the breakdown should be revised in 2021 on the basis of the same allocation method and using the latest statistical data available by 19 October 2021 to distribute the 2022 tranche of the REACT-EU resources.

(6)

In view of the importance of tackling climate change in line with the Union’s commitments to implement the Paris Agreement and the UN Sustainable Development Goals, the Funds will contribute to mainstream climate actions and to the achievement of an overall target of 30 % of the Union budget expenditure supporting climate objectives. REACT-EU is expected to contribute 25 % of the overall financial envelope to climate objectives. In line with the nature of REACT-EU as a crisis-repair instrument and the flexibility provided by this Regulation, including the lack of thematic concentration requirements and the possibility for Member States to direct the REACT-EU resources to support ERDF or ESF operations according to their needs, the level of Member States’ contributions towards that ambition may differ depending on national priorities.

(7)

Horizontal financial rules adopted by the European Parliament and the Council on the basis of Article 322 of the Treaty on the Functioning of the European Union (‘TFEU’) apply to this Regulation. Those rules are laid down in Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (9) (the ‘Financial Regulation’) and determine in particular the procedure for establishing and implementing the budget through grants, procurement, prizes, indirect implementation and provide for checks on the responsibility of financial actors. Rules adopted on the basis of Article 322 TFEU also include a general regime of conditionality for the protection of the Union budget.

(8)

In order to allow maximum flexibility to Member States in tailoring crisis repair actions in the context of the COVID-19 pandemic and its social consequences and preparing a green, digital and resilient recovery of the economy, allocations should be established by the Commission at Member State level. Furthermore, the possibility of using any REACT-EU resources to support aid for the most deprived and the Youth Employment Initiative (‘YEI’) should also be provided for. In addition, it is necessary to establish ceilings concerning the allocation to technical assistance at the initiative of the Member States while allowing maximum flexibility to the Member States as to its allocation within operational programmes supported by the ERDF or the ESF. The operational strength of the ESF should be maintained when allocating the REACT-EU resources in the policy areas of employment, in particular youth employment in line with the reinforced Youth Guarantee, skills and education, social inclusion and health, with a particular focus on reaching out to disadvantaged groups and children. Taking account of the expected quick spending of the REACT-EU resources, the commitments linked to these resources should only be decommitted at the closure of the operational programmes.

(9)

As the COVID-19 pandemic has affected regions and municipalities in Member States differently, the involvement of regional and local actors from authorities, economic and social partners and civil society, in accordance with the partnership principle, is important for the preparation, implementation, monitoring and evaluation of crisis repair supported by REACT-EU.

(10)

Possibilities for financial transfers under the Investment for growth and jobs goal between the ERDF and the ESF should also be introduced for the REACT-EU resources in accordance with Article 25a of Regulation (EU) No 1303/2013. Such transfers should not affect either the resources available under the European territorial cooperation goal or the specific allocation for the YEI.

(11)

In order to complement the actions already available under the scope of support of the ERDF, as extended by Regulations (EU) 2020/460 and (EU) 2020/558, Member States should continue to be allowed to use the REACT-EU resources primarily for investments in products and services for health services, including cross-border, and institutional, community and family-based care, for providing support in the form of working capital or investment support to SMEs, including advisory support, in particular in the sectors most affected by the COVID-19 pandemic and needing rapid revitalisation, such as tourism and culture, for investments contributing to the transition towards a digital and green economy, for investments in infrastructure providing non-discriminatory basic services to citizens, and for economic support measures for those regions which are most dependent on sectors most affected by the COVID-19 crisis. Stronger health cooperation, coordination and resilience should also be fostered. Furthermore, technical assistance should be supported. It is appropriate that the REACT-EU resources are focused exclusively under the new thematic objective ‘Fostering crisis repair in the context of the COVID-19 pandemic and its social consequences and preparing a green, digital and resilient recovery of the economy’, which should also constitute a single investment priority, to allow for simplified programming and implementation of these resources.

(12)

For the ESF, Member States should use the REACT-EU resources primarily to support access to the labour market and social systems, ensuring job maintenance, including through short-time work schemes and support to the self-employed as well as entrepreneurs and freelancers, artists and creative workers. Short-time work schemes and similar measures, in particular for the self-employed, aim to protect employees and the self-employed against the risk of unemployment while maintaining the same level of working and employment conditions and wages of employees. The REACT-EU resources allocated to such schemes are to be used exclusively to support workers. In the context of the current exceptional circumstances caused by the COVID-19 pandemic, it should be possible to provide support to short-time work schemes for employees and the self-employed even when such support is not combined with active labour market measures, unless those measures are imposed by national law. That rule should also apply in a uniform manner to short-time work schemes which have been supported in accordance with Regulation (EU) No 1303/2013, as amended by Regulations (EU) 2020/460 and (EU) 2020/558 following the COVID-19 crisis, and which continue to be supported under the dedicated investment priority ‘Fostering crisis repair in the context of the COVID-19 pandemic and its social consequences and preparing a green, digital and resilient recovery of the economy’. Union support to such short-time work schemes should be limited in time.

(13)

Support should also be provided for job creation and quality employment, in particular for people in vulnerable situations, and for social inclusion and poverty eradication measures. Youth employment measures should be extended in line with the reinforced Youth Guarantee. Investments in education, training and skills development, including reskilling and upskilling, in particular for disadvantaged groups, should be provided for. Equal access to social services of general interest, including for children, the elderly, persons with disabilities, ethnic minorities and the homeless should be promoted.

(14)

Furthermore, Member States should continue to pay special attention to people living in rural, border, less developed, insular, mountainous, sparsely populated and outermost regions, as well as in areas affected by industrial transition and depopulation and, where appropriate, use the REACT-EU resources towards supporting those people.

(15)

As the temporary closing of borders between Member States has led to significant challenges for cross-border communities and businesses, it is appropriate to allow Member States to allocate the REACT-EU resources also to existing cross-border programmes under the European territorial cooperation goal.

(16)

In order to ensure that Member States have sufficient financial means to quickly implement crisis repair actions in the context of the COVID-19 pandemic and its social consequences and to prepare a green, digital and resilient recovery of the economy, it is necessary to provide a higher level of initial pre-financing payment for the quick implementation of actions supported by the REACT-EU resources. The initial pre-financing to be paid should ensure that Member States have the means to arrange for advance payments to beneficiaries where necessary and to reimburse beneficiaries quickly following the submission of payment claims.

(17)

It should be possible for Member States to allocate the REACT-EU resources to new dedicated operational programmes under the Investment for growth and jobs goal or to new priority axes within existing programmes under the Investment for growth and jobs and the European territorial cooperation goals. In order to enable quick implementation, only already designated authorities of existing operational programmes supported by the ERDF, the ESF, or the Cohesion Fund should be allowed to be identified for new dedicated operational programmes. An ex ante evaluation by the Member States should not be required and the elements required for the submission of the operational programme to the Commission’s approval should be limited.

(18)

The REACT-EU resources should be used in accordance with the sustainable development and ‘Do no harm’ principles, taking into account the Paris Agreement and the UN Sustainable Development Goals. Furthermore, equality between men and women, gender mainstreaming and the integration of gender perspective should be taken into account and promoted throughout the implementation of operational programmes.

(19)

With a view to alleviating the burden on public budgets regarding crisis repair in the context of the COVID-19 pandemic and its social consequences and the preparation of a green, digital and resilient recovery of the economy, expenditure for operations should be eligible from 1 February 2020 and Member States should be given the exceptional possibility to request a co-financing rate of up to 100 % to be applied to the separate priority axes of operational programmes providing support from the REACT-EU resources.

(20)

While it is important to ensure that 31 December 2023 remains the end date for eligibility for the 2014-2020 programming period, it should be made clear that operations could still be selected for support in the course of 2023.

(21)

In order to ensure continuity of implementation of certain operations supported by the REACT-EU resources, the phasing provisions of a Regulation laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime and Fisheries Fund and financial rules for those and for the Asylum and Migration Fund, the Internal Security Fund and the Border Management and Visa Instrument should apply.

(22)

Following the specific flexibility measures in response to the COVID-19 outbreak introduced into Regulation (EU) No 1303/2013 by Regulation (EU) 2020/558, expenditure for physically completed or fully implemented operations that foster crisis repair in the context of the COVID-19 pandemic and its social consequences and prepare a green, digital and resilient recovery of the economy supported under the corresponding new thematic objective should also be eligible, provided that the operations concerned started from 1 February 2020.

(23)

In order to enable Member States to quickly deploy the REACT-EU resources within the current programming period, it is justified to exempt, on an exceptional basis, Member States from the obligation to comply with ex ante conditionalities and requirements on the performance reserve and application of the performance framework, on thematic concentration, also in relation to the thresholds established for sustainable urban development for the ERDF, and requirements on preparation of a communication strategy for the REACT-EU resources. It is nevertheless necessary that Member States carry out at least one evaluation by 31 December 2024 to assess the effectiveness, efficiency, impact and inclusiveness of the REACT-EU resources as well as how these resources have contributed to achieving the goals of the new dedicated thematic objective. To facilitate the availability of comparable information at Union level, Member States should be required, where appropriate, to make use of the COVID-19 programme-specific indicators made available by the Commission. In addition, while carrying out their responsibilities linked to information, communication and visibility, Member States and managing authorities should enhance the visibility of the exceptional measures and resources introduced by the Union, in particular by ensuring that potential beneficiaries, beneficiaries, participants, final recipients of financial instruments and the general public are aware of the existence, volume and additional support stemming from the REACT-EU resources.

(24)

With a view to allowing the REACT-EU resources to be targeted to the geographic areas where they are most needed, as an exceptional measure and without prejudice to the general rules for allocating Structural Funds resources, the REACT-EU resources allocated to the ERDF and the ESF should not be required to be broken down per category of region. However, Member States are expected to take into account the different regional needs and development levels in order to ensure that support is balanced between the needs of the regions and cities most affected by the impact of the COVID-19 pandemic and the need to maintain focus on less developed regions, in accordance with the objectives of economic, social and territorial cohesion set out in Article 174 TFEU. Member States should also involve local and regional authorities, as well as relevant bodies representing civil society and social partners, in accordance with the partnership principle.

(25)

Except for those cases where derogations are provided for by this Regulation, expenditure under REACT-EU should be subject to the same obligations and safeguards as all cohesion funding. That includes respect for fundamental rights and compliance with the Charter of Fundamental Rights of the European Union as well as effective anti-fraud measures implemented with the support of existing anti-fraud agencies at Member State and Union level, such as the European Anti-Fraud Office and, where relevant, the European Public Prosecutor’s Office.

(26)

When measures are adopted to protect the Union budget, it is essential that the legitimate interests of final recipients and beneficiaries be properly safeguarded.

(27)

In order to facilitate the transfers authorised by the changes introduced under this Regulation, the condition laid down in point (f) of Article 30(1) of the Financial Regulation regarding the use of appropriations for the same objective should not apply in respect of those transfers.

(28)

Since the objective of this Regulation, namely to respond to the impact of the COVID-19 crisis by introducing flexibility measures in the field of providing support from the European Structural and Investment Funds, cannot be sufficiently achieved by the Member States but can rather, by reason of the scale and effects of the proposed action, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary to achieve that objective.

(29)

Given the urgency of the situation related to the COVID-19 pandemic, this Regulation should enter into force on the day following that of its publication in the Official Journal of the European Union.

(30)

Regulation (EU) No 1303/2013 should therefore be amended accordingly.

(31)

Article 135(2) of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (10) provides that amendments to Council Regulation (EU, Euratom) No 1311/2013 (11) or Council Decision 2014/335/EU, Euratom (12) that are adopted on or after the date of entry into force of that Agreement are not to apply to the United Kingdom insofar as those amendments have an impact on the United Kingdom’s financial obligations. The support under this Regulation for 2021 and 2022 is financed from an increase of the own resources ceiling of the Union, which would have an impact on the United Kingdom’s financial obligation. Therefore, this Regulation should not apply to or in the United Kingdom,

(1)

The Agreement on the withdrawal of the United Kingdom from the European Union and the European Atomic Energy Community (2) (the ‘Withdrawal Agreement’) was concluded by the Union by Council Decision (EU) 2020/135 (3) and entered into force on 1 February 2020. The transition period referred to in Article 126 of the Withdrawal Agreement, during which Union law continues to apply to and in the United Kingdom in accordance with Article 127 of the Withdrawal Agreement (the ‘transition period’), ends on 31 December 2020.

(2)

Article 10 of the Treaty between the United Kingdom of Great Britain and Northern Ireland and the French Republic concerning the construction and operation by private concessionaires of a channel fixed link, signed at Canterbury on 12 February 1986 (the ‘Treaty of Canterbury’) established an Intergovernmental Commission to supervise all matters concerning the construction and operation of the Channel Fixed Link.

(3)

Until the end of the transition period, the Intergovernmental Commission constitutes the national safety authority within the meaning of Directive (EU) 2016/798 of the European Parliament and of the Council (4). In that capacity, it applies in the entirety of the Channel Fixed Link the provisions of Union law relevant to railway safety and, under Directive (EU) 2016/797 of the European Parliament and of the Council (5), railway interoperability.

(4)

After the end of the transition period, unless otherwise provided, Union law will no longer be applicable to the part of the Channel Fixed Link under the jurisdiction of the United Kingdom and, as regards the part of the Channel Fixed Link under the jurisdiction of France, the Intergovernmental Commission will no longer be a national safety authority under Union law. The safety authorisation for the Channel Fixed Link infrastructure manager and safety certificates for railway undertakings operating through the Channel Fixed Link issued by the Intergovernmental Commission pursuant to Article 11 and Article 10 respectively of Directive 2004/49/EC of the European Parliament and of the Council (6) will cease to be valid from 1 January 2021.

(5)

By Decision (EU) 2020/1531 of the European Parliament and of the Council (7), France was empowered to negotiate, sign and conclude an international agreement with the United Kingdom regarding the application of the railway safety and interoperability rules of the Union to the Channel Fixed Link in order to maintain a unified safety regime. Regulation (EU) 2020/1530 of the European Parliament and of the Council (8) amended Directive (EU) 2016/798 as regards, inter alia, the rules pertaining to national safety authorities.

(6)

On the basis of Regulation (EU) 2020/1530, and subject to an agreement envisaged by Decision (EU) 2020/1531 and concluded under certain conditions set out in that Decision, the Intergovernmental Commission was to remain the single safety authority for the entirety of the Channel Fixed Link while constituting, as regards the part of the Channel Fixed Link under the jurisdiction of France, the national safety authority within the meaning of point (7) of Article 3, of Directive (EU) 2016/798.It is, however, unlikely that the agreement envisaged by Decision (EU) 2020/1531 will have entered into force by the end of the transition period.

(7)

Without such an agreement, as from 1 January 2021, the Intergovernmental Commission will no longer qualify as a national safety authority within the meaning of point (7) of Article 3, of Directive (EU) 2016/798, as regards the part of the Channel Fixed Link under the jurisdiction of France. Safety authorisations and safety certificates issued by the Intergovernmental Commission will cease to be valid. The French national safety authority will become the competent national safety authority for the section of the Channel Fixed Link under the jurisdiction of France.

(8)

In light of the economic importance to the Union of the Channel Fixed Link, it is essential that the Channel Fixed Link continues to operate after 1 January 2021. To that end, the safety authorisation for the Channel Fixed Link infrastructure manager issued by the Intergovernmental Commission should remain valid for a maximum period of two months from the date of application of this Regulation, which is enough time to enable the French national safety authority to issue its own safety authorisation.

(9)

The licences issued under Chapter III of Directive 2012/34/EU of the European Parliament and of the Council (9) to railway undertakings established in the United Kingdom will no longer be valid after the end of the transition period. On 10 November 2020, pursuant to Article 14(3) of Directive 2012/34/EU, France notified the Commission of its intention to enter into negotiations on a cross-border agreement with the United Kingdom. The objective of such an agreement would be to allow rail undertakings established and licensed in the United Kingdom to use the cross-border infrastructure linking the Union and the United Kingdom through the Channel Fixed Link until the border-crossing station and terminal of Calais-Fréthun (France), without obtaining a licence under Directive 2012/34/EU from a Union licensing authority.

(10)

In order to ensure the connectivity between the Union and the United Kingdom, it is essential that the rail undertakings established and licensed in the United Kingdom continue to operate. To that end, the period of validity of their licences issued by the United Kingdom under Directive 2012/34/EU and of their safety certificates issued by the Intergovernmental Commission should be extended for a period of nine months from the date of application of this Regulation, which is enough time to enable the Member State concerned to take the necessary steps to ensure connectivity in accordance with Directives 2012/34/EU and (EU) 2016/798 and on the basis of the agreement envisaged by Decision (EU) 2020/1531.

(11)

In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission as regards the withdrawal of the benefit conferred on holders of the authorisations, certificates and licences, where compliance with the Union requirements is not ensured. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (10). The examination procedure should be used for the adoption of those measures, given their potential impact on railway safety. The Commission should adopt immediately applicable implementing acts where, in duly justified cases, imperative grounds of urgency so require.

(12)

In view of the urgency entailed by the end of the transition period, it is appropriate to provide for an exception to the eight-week period referred to in Article 4 of Protocol No 1 on the role of national Parliaments in the European Union, annexed to the Treaty on European Union, to the Treaty on the Functioning of the European Union and the Treaty establishing the European Atomic Energy Community.

(13)

Since the objective of this Regulation, namely to lay down provisional measures on certain aspects of railway safety and connectivity with regard to the end of the transition period, cannot be sufficiently achieved by the Member States but can rather, by reason of its scale and effects, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.

(14)

This Regulation should enter into force as a matter of urgency and should apply from the day following that of the end of the transition period,

(1)

The adoption of Directive (EU) 2017/1371 of the European Parliament and of the Council (3) and Council Regulation (EU) 2017/1939 (4), substantially strengthened the means available to the Union to protect its financial interests by means of criminal law. The establishment of the European Public Prosecutor’s Office (EPPO) is a key priority in the Union’s criminal justice and anti-fraud policy, having the power to carry out criminal investigations and bring indictments related to criminal offences affecting the financial interests of the Union, within the meaning of Directive (EU) 2017/1371, in the participating Member States.

(2)

To protect the financial interests of the Union, the European Anti-Fraud Office (the ‘Office’) conducts administrative investigations into administrative irregularities as well as criminal conduct. At the end of its investigations, it may make judicial recommendations to the national prosecution authorities, in order to enable them to pursue indictments and prosecutions in Member States. In the Member States participating in the EPPO, it will report suspected criminal offences to the EPPO and collaborate with the EPPO in the context of the EPPO’s investigations.

(3)

Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council (5) should be amended and adapted in light of the adoption of Regulation (EU) 2017/1939. The provisions of Regulation (EU) 2017/1939 governing the relationship between the Office and the EPPO should be reflected in, and complemented by, provisions in Regulation (EU, Euratom) No 883/2013, in order to ensure the highest level of protection of the financial interests of the Union through synergies between them, while ensuring close cooperation, information exchange, complementarity and the avoidance of duplication.

(4)

In view of their common goal of preserving the integrity of the Union budget, the Office and the EPPO should establish and maintain a close relationship based on the principle of sincere cooperation and aiming to ensure the complementarity of their respective mandates and the coordination of their action, in particular as regards the scope of the enhanced cooperation for the establishment of the EPPO. The relationship between the Office and the EPPO should contribute to ensuring that all means are used to protect the financial interests of the Union.

(5)

Regulation (EU) 2017/1939 requires the Office, as well as the institutions, bodies, offices and agencies of the Union and competent authorities of Member States, to report to the EPPO without undue delay suspected criminal conduct in respect of which the EPPO may exercise its competence. Since the mandate of the Office is to carry out administrative investigations into fraud, corruption and any other illegal activity affecting the financial interests of the Union, it is ideally placed and equipped to act as a partner and privileged source of information for the EPPO.

(6)

Elements pointing to possible criminal conduct falling within the competence of the EPPO may be present in initial allegations received by the Office or emerge only in the course of an administrative investigation opened by the Office on the grounds of a suspicion of administrative irregularity. In order to comply with its duty to report to the EPPO, the Office should therefore report suspected criminal conduct at any stage before or during its investigations.

(7)

Regulation (EU) 2017/1939 specifies the minimum elements that reports are to contain. The Office may need to conduct a preliminary evaluation of allegations to ascertain those elements and collect the necessary information. The Office should conduct such an evaluation expeditiously and by means which do not risk jeopardising a possible future criminal investigation. Upon completion of its evaluation, the Office should report to the EPPO where a suspicion of an offence within its competence is identified.

(8)

In consideration of the Office’s expertise, the institutions, bodies, offices and agencies established by, or on the basis of, the Treaties (‘institutions, bodies, offices and agencies’) should be able to make use of the Office to conduct such a preliminary evaluation of allegations reported to them.

(9)

In accordance with Regulation (EU) 2017/1939, the Office should in principle not open an administrative investigation in parallel with an investigation conducted by the EPPO into the same facts. However, in certain cases, the protection of the financial interests of the Union may require that the Office carry out a complementary administrative investigation before the conclusion of criminal proceedings initiated by the EPPO, with the purpose of ascertaining whether precautionary measures are necessary, or whether financial, disciplinary or administrative action should be taken. Such a complementary investigation may be appropriate, inter alia, to recover amounts due to the Union budget that are subject to specific time-barring rules, where the amounts at risk are very high, or where there is the need to avoid further expenditure in risk situations through administrative measures.

(10)

For the purpose of the application of the requirement of non-duplication of investigations, the notion of ‘same facts’ should be considered, in light of the case-law of the Court of Justice of the European Union (CJEU) on the ne bis in idem principle, to mean that the material facts under investigation are identical or substantially the same and understood in the sense of the existence of a set of concrete circumstances which are inextricably linked in time and space.

(11)

Regulation (EU) 2017/1939 provides that the EPPO may request the Office to carry out complementary administrative investigations. In the absence of such a request, such complementary investigations should be possible on the initiative of the Office under specific conditions after consulting the EPPO. In particular, the EPPO should be able to object to the opening or continuation of an investigation by the Office, or to the performance of certain acts pertaining to one of its investigations, in particular with a view to preserving the effectiveness of its investigation and powers. The Office should refrain from performing an action to which the EPPO has raised an objection. Where the Office opens an investigation in the absence of such an objection, it should conduct that investigation, consulting the EPPO on an ongoing basis.

(12)

The Office should actively support the EPPO’s investigations. In this regard, the EPPO should be able to request the Office to support or complement its criminal investigations through the exercise of powers under Regulation (EU, Euratom) No 883/2013. The Office should provide such support within the limits of its powers and within the framework provided for in that Regulation.

(13)

To ensure effective coordination, cooperation and transparency, the Office and the EPPO should exchange information on an ongoing basis. The exchange of information prior to the opening of investigations by the Office or the EPPO is particularly relevant to ensure proper coordination between their respective actions, to guarantee complementarity and to avoid duplication. To that end, the Office and the EPPO should make use of the hit/no-hit functions in their respective case management systems. The Office and the EPPO should specify the procedure and conditions for that exchange of information in their working arrangements. In order to ensure the proper application of the rules that seek to avoid duplication and ensure complementarity, the Office and the EPPO should agree on certain time limits for their information exchanges.

(14)

The Commission Report on Evaluation of the application of Regulation (EU, Euratom) No 883/2013 of 2 October 2017 (the ‘Commission evaluation report’) concluded that the 2013 changes to the legal framework brought clear improvements as regards the conduct of investigations, cooperation with partners and the rights of the persons concerned. At the same time, the Commission evaluation report highlighted some shortcomings which have an impact on the effectiveness and efficiency of investigations.

(15)

It is necessary to address the clearest findings of the Commission evaluation report by means of amendments to Regulation (EU, Euratom) No 883/2013. Those amendments are necessary in the short term to strengthen the framework for the Office’s investigations in order that the Office remains strong and fullyfunctioning and that it complements the EPPO’s criminal law approach with administrative investigations, without changing the Office’s mandate or powers. The amendments primarily concern areas where the lack of clarity of Regulation (EU, Euratom) No 883/2013 could hinder the effective conduct of investigations by the Office, such as the conduct of on-the-spot checks and inspections, the possibility of access to bank account information, or the admissibility of the case reports drawn up by the Office as evidence in administrative or judicial proceedings.

(16)

The amendments to Regulation (EU, Euratom) No 883/2013 do not affect the procedural guarantees applicable to the framework of investigations. The Office is bound by the procedural guarantees of Regulation (EU, Euratom) No 883/2013 and Council Regulation (Euratom, EC) No 2185/96 (6) and those contained in the Charter of Fundamental Rights of the European Union. That framework requires that the Office conduct its investigations objectively, impartially and confidentially, seeking evidence for and against the persons concerned, and carry out investigative acts on the basis of written authorisation and following a legality check. The Office is required to ensure respect for the rights of the persons concerned by its investigations, including the presumption of innocence and the right to avoid self-incrimination. When interviewed, the persons concerned have, inter alia, the right to be assisted by a person of their choice, to approve the record of the interview, and to use any of the official languages of the institutions of the Union. The persons concerned also have the right to comment on the facts of the case before conclusions are drawn.

(17)

Persons reporting fraud, corruption and any other illegal activity affecting the financial interests of the Union should be afforded the protection of Directive (EU) 2019/1937 of the European Parliament and of the Council (7).

(18)

Where the Office performs, within its mandate, supporting measures at the request of the EPPO, in order to protect the admissibility of evidence, as well as fundamental rights and procedural guarantees, while at the same time avoiding duplication of investigations and providing for an efficient and complementary cooperation, the Office and the EPPO, acting in close cooperation, should ensure that the applicable procedural safeguards of Chapter VI of Regulation (EU) 2017/1939 are observed.

(19)

The Office has power to conduct on-the-spot checks and inspections, which allow it to access the premises and documentation of economic operators in the framework of its investigations into suspected fraud, corruption or other illegal conduct affecting the financial interests of the Union. Such on-the-spot checks and inspections are carried out in accordance with Regulation (EU, Euratom) No 883/2013 and with Regulation (Euratom, EC) No 2185/96, which in some instances make the application of those powers subject to conditions of national law. The Commission evaluation report found that the extent to which national law applies is not completely clear, and as a result hinders the effectiveness of the Office’s investigative activities.

(20)

It is therefore appropriate to clarify the instances in which national law is to apply in the course of investigations by the Office, without changing the powers of the Office or the way in which Regulation (EU, Euratom) No 883/2013 operates in relation to the Member States, reflecting the judgment of the General Court of 3 May 2018 in Case T-48/16, Sigma Orionis SA v European Commission (8).

(21)

The conduct by the Office of on-the-spot checks and inspections in situations where the economic operator concerned submits to the on-the-spot check and inspection should be subject to Union law alone. This would allow the Office to exercise its investigative powers in an effective and coherent manner in all Member States with a view to contributing to a high level of protection of the financial interests of the Union throughout the Union in accordance with Article 325 of the Treaty on the Functioning of the European Union.

(22)

In situations where the Office needs to rely on the assistance of the competent authorities of Member States, particularly where an economic operator resists an on-the-spot check and inspection, Member States should ensure that the Office’s action is effective, and should provide the necessary assistance in accordance with the relevant rules of national procedural law. In order to safeguard the financial interests of the Union, the Commission should take any Member State’s failure to comply with its duty to cooperate with the Office into account in considering whether to recover the amounts concerned through the application of financial corrections on Member States, in accordance with the applicable Union law.

(23)

The Office is able, under Regulation (EU, Euratom) No 883/2013, to enter into administrative arrangements with competent authorities of Member States, such as anti-fraud coordination services, and institutions, bodies, offices and agencies, in order to specify the arrangements for their cooperation under that Regulation, in particular concerning the transmission of information, the conduct of investigations and any follow-up action.

(24)

Regulation (EU, Euratom) No 883/2013 should be amended to introduce a duty on the part of economic operators to cooperate with the Office, in accordance with their obligation under Regulation (Euratom, EC) No 2185/96 to grant access for the carrying out of on-the-spot checks and inspections of premises, land, means of transport or other areas, used for business purposes, and with the obligation set out in Article 129 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (9) that any person or entity receiving Union funds is to fully cooperate in the protection of the financial interests of the Union, including in the context of investigations by the Office.

(25)

As part of that duty of cooperation, the Office should be able to require economic operators to supply relevant information where they may have been involved in the matter under investigation or may hold such information. When complying with such requests, economic operators should not be obliged to make self-incriminating statements, but they should be obliged to answer factual questions and provide documents, even if that information may be used to establish against them or against another economic operator the existence of illegal activity. To ensure the effectiveness of investigations in the context of current work practices, the Office should be able to request access to information in privately owned devices used for work purposes. Access by the Office should be given subject to the same conditions and to the same extent that apply to national control authorities, and only if the Office has reasonable grounds to suspect that the content of such devices may be relevant for the investigation, in accordance with the principles of necessity and proportionality, and should only concern information relevant to the investigation.

(26)

Economic operators should have the possibility to use any of the official languages of the Member State where the check takes place, and should have the right to be assisted by a person of their choice, including external legal counsel, during on-the-spot checks and inspections. The presence of legal counsel should not, however, represent a legal condition for the validity of on-the-spot checks and inspections. To ensure the effectiveness of on-the-spot checks and inspections, in particular as regards the risk of evidence disappearing, the Office should be able to access to the premises, land, means of transportation or other areas used for business purposes without waiting for the economic operator to consult legal counsel. It should accept only a short, reasonable delay pending consultation of legal counsel before starting the on-the-spot check and inspection. Any such delay should be kept to the strict minimum.

(27)

To ensure transparency when carrying out on-the-spot checks and inspections, the Office should provide economic operators with appropriate information on their duty to cooperate and the consequences of a refusal to do so, and the procedure applicable, including the procedural safeguards.

(28)

In internal and, where necessary, external investigations, the Office has access to any relevant information held by the institutions, bodies, offices and agencies. It is necessary, as suggested in the Commission evaluation report, to clarify that such access should be possible irrespective of the type of medium on which that information or data are stored, in order to reflect evolving technological progress. In the course of internal investigations, the Office should be able to request access to information held on privately owned devices used for work purposes in situations where the Office has reasonable grounds to suspect that their content might be relevant for the investigation. It should be possible to subject access by the Office to specific conditions by the relevant institution, body, office or agency. Such access should comply with the principles of necessity and proportionality and should concern only information relevant to the investigation. To guarantee an effective and consistent level of access for the Office, as well as a high level of protection of the fundamental rights of the persons concerned, the institutions, bodies, offices and agencies should ensure the coherence of the rules on access to private devices adopted by the different institutions, bodies, offices and agencies in order to provide equivalent conditions in compliance with the Interinstitutional Agreement of 25 May 1999 between the European Parliament, the Council of the European Union and the Commission of the European Communities concerning internal investigations by the European Anti-fraud Office (OLAF) (10).

(29)

For a more coherent framework for the investigations of the Office, the rules applicable to internal and external investigations should be further aligned in order to address certain inconsistencies identified in the Commission evaluation report where divergent rules are not justified. For instance, reports and recommendations drawn up following an external investigation should, if necessary, be sent to the institution, body, office or agency concerned for it to take appropriate action, as is the case in internal investigations. Where possible in accordance with its mandate, the Office should support the institution, body, office or agency concerned in following up its recommendations. Where the Office does not open an investigation, it should be able to send relevant information to Member States’ authorities or to the institutions, bodies, offices or agencies for appropriate action to be taken. It should send such information where it decides not to open an investigation despite there being a sufficient suspicion of fraud, corruption or any other illegal activity affecting the financial interests of the Union. Before doing so, the Office should give due consideration to a possible interference with ongoing investigations by the EPPO.

(30)

Due to the large diversity of national institutional frameworks, Member States should, on the basis of the principle of sincere cooperation, have the possibility to notify to the Office the authorities that are competent to take actions upon recommendations of the Office, as well as the authorities that need to be informed, such as for financial, statistical or monitoring purposes, for the performance of their relevant duties. Such authorities may include national anti-fraud coordination services. In accordance with the settled case-law of the CJEU, the Office recommendations included in its reports have no binding legal effects on such authorities of Member States or on institutions, bodies, offices and agencies.

(31)

The Office should be provided with the necessary means to follow the money trail in order to uncover the modus operandi typical of much fraudulent conduct. The Office is able to obtain bank account information relevant for its investigative activity held by credit institutions in a number of Member States through cooperation with and assistance by the national authorities. To ensure an effective approach throughout the Union, Regulation (EU, Euratom) No 883/2013 should specify the duty of competent national authorities to provide bank account information to the Office, as part of their general duty to assist the Office. Member States should notify to the Commission the competent authorities through which such cooperation is to take place. When giving such assistance to the Office, the national authorities should act under the same conditions that apply to the competent national authorities of the Member State concerned.

(32)

For the purpose of protecting and complying with procedural guarantees and fundamental rights, the Commission should create an internal function in the form of a Controller of procedural guarantees (the ‘Controller’), which should – with a view to an efficient use of resources – be administratively attached to the Supervisory Committee, and be provided with adequate resources. The Controller should handle complaints in a fully independent manner, including from the Supervisory Committee and from the Office, and should have access to all information necessary to fulfil his or her duties.

(33)

A person concerned should be able to lodge a complaint with the Controller regarding the Office’s compliance with procedural guarantees as well as on the grounds of an infringement of the rules applicable to investigations by the Office, in particular infringements of procedural requirements and fundamental rights.A complaints mechanism should be established to that end. The Controller should be responsible for issuing recommendations in response to such complaints, where necessary suggesting solutions to the issues raised in the complaint. The Controller should examine the complaint in a swift, adversarial procedure, while allowing the Office to continue the ongoing investigation. The Controller should give the complainant and the Office the opportunity to provide comments on or resolve the issues raised in the complaint. The Director-General should take appropriate action as warranted by the Controller’s recommendation. The Director-General should, in duly justified cases, be able to deviate from the Controller’s recommendations. Thereasons for doing so should be attached to the final investigation report.

(34)

In order to increase transparency and accountability, the Controller should report on the complaints mechanism in his or her annual report. The annual report should cover in particular the number of complaints received, the types of infringements of procedural requirements and fundamental rights involved, the activities concerned and, where possible, the follow-up measures taken by the Office.

(35)

The early transmission of information by the Office for the purpose of adopting precautionary measures is an essential tool for the protection of the financial interests of the Union. In order to ensure close cooperation in this regard between the Office and the institutions, offices, bodies and agencies, it is appropriate that the latter have the possibility to consult at any time the Office with a view to deciding on any appropriate precautionary measures, including measures for the safeguarding of evidence.

(36)

Reports drawn up by the Office constitute admissible evidence in administrative or judicial proceedings in the same way and under the same conditions as administrative reports drawn up by national administrative inspectors. According to the Commission evaluation report this rule does not sufficiently ensure the effectiveness of the Office’s activities in some Member States. To increase the effectiveness and the consistent use of reports of the Office, Regulation (EU, Euratom) No 883/2013 should provide for the admissibility of such reports in judicial proceedings of a non-criminal nature before national courts, as well as in administrative proceedings in Member States. The rule providing for equivalence with the reports of national administrative inspectors should continue to apply in the case of national judicial proceedings of a criminal nature. Regulation (EU, Euratom) No 883/2013 should also provide for the admissibility of the reports drawn up by the Office in administrative and judicial proceedings at Union level.

(37)

The anti-fraud coordination services of Member States were introduced by Regulation (EU, Euratom) No 883/2013 to facilitate an effective cooperation and exchange of information, including information of an operational nature, between the Office and Member States. The Commission evaluation report concluded that they have contributed positively to the work of the Office. The Commission evaluation report also identified the need to further clarify the role of those anti-fraud coordination services in order to ensure that the Office is provided with the necessary assistance to ensure that its investigations are effective, while leaving the organisation and powers of the anti-fraud coordination services to each Member State. In that regard, the anti-fraud coordination services should be able to provide or coordinate the necessary assistance to the Office to carry out its tasks effectively, before, during or at the end of an external or internal investigation.

(38)

The duty of the Office to provide Member States with assistance in order to coordinate their action for the protection of the financial interests of the Union is a key element of its mandate to support cross-border cooperation among Member States. More detailed rules should be laid down in order to facilitate the coordinating activities of the Office and its cooperation in this context with Member States’ authorities, third countries and international organisations. Those rules should be without prejudice to the exercise by the Office of powers conferred on the Commission in specific provisions governing mutual assistance between Member States’ administrative authorities and cooperation between those authorities and the Commission, in particular to Council Regulation (EC) No 515/97 (11) and Regulation (EU) No 608/2013 of the European Parliament and of the Council (12), as well as coordination activities relating to the European Structural and Investment Funds.

(39)

It should be clarified that when the competent authorities of Member States, including anti-fraud-coordination services, act in cooperation with the Office or with other competent authorities for the purposes of protecting the financial interests of the Union, they continue to be bound by national law.

(40)

It should be possible for the anti-fraud coordination services in the context of coordination activities to provide assistance to the Office, as well as for the anti-fraud coordination services to cooperate among themselves, in order to further reinforce the available mechanisms for cooperation in the fight against fraud.

(41)

The competent authorities of Member States, as well as the institutions, bodies, offices and agencies, should take the actions warranted by a recommendation of the Office. In order to allow the Office to followup on the development of its cases, where the Office makes judicial recommendations to the national prosecution authorities of a Member State, Member States should, upon request of the Office, send the Office the final decision of the national court. In order to fully maintain judicial independence, such transmission should take place only after the relevant judicial proceedings have been finally determined and the final court decision has become public.

(42)

In order to supplement the procedural rules on the conduct of investigations set out in Regulation (EU, Euratom) No 883/2013, the Office should lay down guidelines on investigation procedures to be followed by the staff of the Office.

(43)

It should be clarified that the Office may participate in joint investigation teams established in accordance with Union law and that it is entitled to exchange operational information acquired in that framework. The use of such information is subject to the conditions and safeguards provided for in the Union law on the basis of which the joint investigation teams have been established. When the Office participates in such joint investigation teams, it has a supporting capacity and takes the role of a partner subject to legal constraints that may exist in Union or national law.

(44)

No later than five years after the date determined in accordance with the second subparagraph of Article 120(2) of Regulation (EU) 2017/1939, the Commission should evaluate the application of Regulation (EU, Euratom) No 883/2013 and in particular the efficiency of the cooperation between the Office and the EPPO in order to consider whether amendments are warranted on the basis of experience regarding that cooperation. The Commission should submit, where appropriate, a new comprehensive legislative proposal, no later than two years after that evaluation.

(45)

Since the objective of this Regulation, namely to strengthen the protection of the financial interests of the Union by adapting the operation of the Office to the establishment of the EPPO and by enhancing the effectiveness of the investigations by the Office, cannot be sufficiently achieved by the Member States, but can rather, by adopting rules governing the relationship between the Office and the EPPO to increase the effectiveness of the conduct of investigations by them, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.

(46)

This Regulation does not modify the powers and responsibilities of Member States to take measures to combat fraud, corruption and any other illegal activity affecting the financial interests of the Union.

(47)

The European Data Protection Supervisor was consulted in accordance with Article 28(2) of Regulation (EC) No 45/2001 of the European Parliament and of the Council (13) and delivered formal comments on 23 July 2018.

(48)

Regulation (EU, Euratom) No 883/2013 should therefore be amended accordingly,

(1)

The Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (2) (the ‘Withdrawal Agreement’) was concluded by the Union by means of Council Decision (EU) 2020/135 (3) and entered into force on 1 February 2020. The transition period referred to in Article 126 of the Withdrawal Agreement, during which Union law continues to apply to and in the United Kingdom of Great Britain and Northern Ireland (United Kingdom) in accordance with Article 127 of the Withdrawal Agreement, ends on 31 December 2020. On 25 February 2020, the Council adopted Decision (EU, Euratom) 2020/266 (4) authorising the opening of negotiations with the United Kingdom for a new partnership agreement. As implied by the negotiation directives, the authorisation covers inter alia the elements needed to address comprehensively the road transport relationship with the United Kingdom after the end of the transition period. However, it is uncertain whether an agreement between the Union and the United Kingdom governing their future relationship in the area of the transport of goods and passengers by road will have entered into force by the end of that period.

(2)

At the end of the transition period, and in the absence of any special provision, all rights and obligations ensuing from Union law in respect of market access, as established by Regulations (EC) No 1072/2009 (5) and (EC) No 1073/2009 (6) of the European Parliament and of the Council will end, insofar as the relationship between the United Kingdom and the Union and its Member States is concerned.

(3)

In such a situation, the international transport of goods and passengers by road between the Union and the United Kingdom would be severely disrupted.

(4)

Gibraltar is not included in the territorial scope of this Regulation and any reference to the United Kingdom therein does not include Gibraltar.

(5)

The multilateral quota system of the European Conference of Ministers of Transport (ECMT) is the only other available legal framework that could provide a basis for the carriage of goods by road between the Union and the United Kingdom. However, due to the limited number of permits currently available under the ECMT system and its limited scope as regards the types of road transport operations covered, the system is currently inadequate to fully address the road freight transport needs between the Union and the United Kingdom.

(6)

Serious disruptions are also expected to occur, including in respect of public order, in the context of road passenger transport services. The Agreement on the international, occasional carriage of passengers by coach and bus (7) (the ‘Interbus Agreement’) is the only available legal framework that could provide a basis for the carriage of passengers by bus and coach between the Union and the United Kingdom after the end of the transition period. The United Kingdom will become a Contracting Party in its own right to the Interbus Agreement on 1 January 2021. However, the Interbus Agreement covers only occasional services and is, therefore, inadequate to address the disruptions related to international coach and bus services between the United Kingdom and the Union resulting from the end of the transition period. A Protocol to the Interbus Agreement regarding the international regular and special regular carriage of passengers by coach and bus was negotiated and the United Kingdom is expected to ratify it as soon as possible. However, it is not expected that the Protocol will enter into force in time to offer a viable alternative solution for the period immediately after the end of the transition period. Therefore, the available instruments do not meet the needs of regular and special regular passenger transport services by bus and coach between the Union and the United Kingdom.

(7)

In order to prevent ensuing serious disruptions, including in respect of public order, it is therefore necessary to establish a temporary set of measures enabling road haulage operators and coach and bus service operators licensed in the United Kingdom to carry goods and passengers by road between the United Kingdom and the Union, or from the territory of the United Kingdom to the territory of the United Kingdom transiting one or more Member States. In order to ensure a proper equilibrium between the United Kingdom and the Union, the rights thus conferred should be conditional upon the conferral of equivalent rights and be subject to certain conditions ensuring fair competition.

(8)

The right to carry out transport operations within the territory of a Member State and between Member States is a fundamental achievement of the internal market and should, after the end of the transition period and in the absence of any special provision to the contrary, no longer be available to United Kingdom road haulage operators. However, in the immediate aftermath of the transition period and in the absence of a future agreement governing the carriage of goods by road between the Union and the United Kingdom, disruptions to traffic flows and ensuing threats to public order are likely to occur in particular at the border crossing points which are few in number and where additional controls of vehicles and their cargo are to be carried out. Increased congestion at border crossing points with the United Kingdom already occurred before the end of the transition period. The crisis linked to the COVID-19 pandemic also had negative effects on road transport, with an increase of empty loads, a trend which might be exacerbated if there is no flexibility allowing United Kingdom road haulage operators to carry out, even to a very limited extent, operations within the Union for a strictly limited period of time. Such disruptions could lead to situations with a negative impact on critical supply chains which are deemed to be necessary to manage the ongoing COVID-19 pandemic. To reduce the extent of such disruptions, United Kingdom road haulage operators should temporarily be allowed to perform a limited number of additional operations within the territory of the Union in the context of operations between the United Kingdom and the Union. Their vehicles would then not have to return to the United Kingdom immediately and would be less likely to be empty when returning to the United Kingdom, which would reduce the overall number of vehicles and hence the pressure at the border crossing points. The right to perform such additional operations should be proportionate, should not replicate the same level of rights as those enjoyed by Union road haulage operators under the rules of the internal market and should be progressively phased out.

(9)

Cross-border coach and bus services between Ireland and Northern Ireland are of particular importance for the communities living in the border regions, with a view to ensuring basic connectivity between communities inter alia as part of the Common Travel Area. Therefore, the picking up and setting down of passengers by United Kingdom coach and bus service operators should continue to be authorised in the border regions of Ireland in the course of international passenger transport services by coach and bus between Ireland and Northern Ireland.

(10)

In order to reflect their temporary character, while not setting a precedent, the set of measures provided for in this Regulation should apply for a short period. In respect of road haulage operations, that short period is designed to enable possible arrangements for basic connectivity to be made in the ECMT system, and is without prejudice to the entry into force of a future agreement governing the carriage of goods by road between the Union and the United Kingdom and future Union rules on transport. As far as passenger transport by bus and coach is concerned, that short period is designed to enable the Protocol to the Interbus Agreement regarding the international regular and special regular carriage of passengers by coach and bus to enter into force and to apply to the United Kingdom, either by the United Kingdom’s ratification of or accession to that Protocol, and is without prejudice to a possible future agreement on the matter between the Union and the United Kingdom.

(11)

Since the objective of this Regulation, namely to lay down provisional measures governing road freight and passenger transport between the Union and the United Kingdom in the event of the absence of an agreement governing their future relationship in the field of road transport at the end of the transition period, cannot be sufficiently achieved by the Member States but can rather, by reason of its scale and effects, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union (TEU). In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.

(12)

In view of the urgency entailed by the end of the transition period, it is considered to be appropriate to provide for an exception to the eight-week period referred to in Article 4 of Protocol No 1 on the role of national Parliaments in the European Union, annexed to the TEU, to the Treaty on the Functioning of the European Union (TFEU) and the Treaty establishing the European Atomic Energy Community.

(13)

This Regulation should enter into force as a matter of urgency and should apply from the day following the end of the transition period established by the Withdrawal Agreement unless an agreement governing road transport concluded with the United Kingdom has entered into force, or as the case may be, provisionally applies by that date. This Regulation should apply until the day before the entry into force or until the day before the provisional application of an international agreement governing road transport for both Parties. With the exception of the specific provisions applying in the border region of Ireland in the course of international regular and special regular services between Ireland and Northern Ireland, the right to conduct regular and special regular coach and bus services should cease to apply on the date of entry into force for the Union and for the United Kingdom of the Protocol to the Interbus agreement regarding the international regular and special regular carriage of passengers by coach and bus. This Regulation should in any event cease to apply on 30 June 2021.

(14)

Where necessary to address market needs, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of restoring the equivalence of rights granted by the Union to United Kingdom road haulage operators and to United Kingdom coach and bus service operators with those granted by the United Kingdom to Union road haulage operators and to Union coach and bus service operators, including where the rights granted by the United Kingdom are granted on the basis of the Member State of origin or otherwise are not equally available to all Union operators, and in respect of remedying occurrences of unfair competition that are to the detriment of Union road haulage operators and Union coach and bus service operators.

(15)

Those delegated acts should comply with the principle of proportionality, and their terms should therefore be commensurate with the problems arising as a result of the failure to grant equivalent rights or as a result of unfair conditions of competition. Suspension of the application of this Regulation should be envisaged by the Commission only in the most severe cases, where no equivalent rights are granted to Union road haulage operators or to Union coach and bus service operators by the United Kingdom, or where the rights so granted are minimal, or where the conditions of competition for United Kingdom road haulage operators or United Kingdom coach and bus service operators differ so much from those of Union operators that the provision of the services in question by Union operators is, for them, not economically viable.

(16)

When adopting those delegated acts, it is of particular importance that the Commission carry out appropriate consultations during its preparatory work including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making (8). In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts. The Commission should ensure that any such delegated acts adopted do not unduly affect the proper functioning of the internal market.

(17)

To ensure that rights granted by the United Kingdom to Union road haulage operators and to Union coach and bus service operators equivalent to those granted by this Regulation to United Kingdom road haulage operators and United Kingdom coach and bus service operators are equally available to all Union operators, the scope of Regulations (EC) No 1072/2009 and (EC) No 1073/2009 should be temporarily extended. Those Regulations already cover the part of a journey between a Member State and a third country on the territory of any Member State crossed in transit. It is, however, necessary to ensure, in such cases, that Regulation (EC) No 1072/2009 also applies to the part of the journey on the territory of the Member State of loading or unloading, and that Regulation (EC) No 1073/2009 applies to the part of the journey on the territory of the Member State of picking up or setting down passengers. Such an extension aims to ensure that Union operators can perform cross-trade operations to or from the United Kingdom, as well as additional stops in their operation of passenger transport,

(1)

The Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (2) (the ‘Withdrawal Agreement’) was concluded by the Union by means of Council Decision (EU) 2020/135 (3) and entered into force on 1 February 2020. The transition period provided for in Article 126 of the Withdrawal Agreement (the ‘transition period’), during which Union law continues to apply to and in the United Kingdom of Great Britain and Northern Ireland (United Kingdom) in accordance with Article 127 of the Withdrawal Agreement, ends on 31 December 2020. On 25 February 2020 the Council adopted Decision (EU, Euratom) 2020/266 (4), which authorised the opening of negotiations with the United Kingdom for a new partnership agreement. As implied by the negotiation directives, the authorisation covers, inter alia, the elements needed to address comprehensively the aviation relationship with the United Kingdom after the end of the transition period. However, it is uncertain whether an agreement between the Union and the United Kingdom governing their future relationship in this area will have entered into force by the end of that period.

(2)

Regulation (EC) No 1008/2008 of the European Parliament and of the Council (5) sets out the conditions for the granting of the Union operating licence to air carriers and establishes the freedom to provide intra-EU air services.

(3)

At the end of the transition period and in the absence of any special provisions, all rights and obligations ensuing from Union law in respect of market access as established by Regulation (EC) No 1008/2008 will end, insofar as the relationship between the United Kingdom and the Member States is concerned.

(4)

It is therefore necessary to establish a temporary set of measures enabling carriers licensed in the United Kingdom to provide air transport services between the territory of the latter and the territory of the Member States. In order to ensure a proper equilibrium between the United Kingdom and the Member States, the rights thus conferred should be conditional upon the conferral of equivalent rights by the United Kingdom to air carriers licensed in the Union and be subject to certain conditions ensuring fair competition.

(5)

The crisis arising from the COVID-19 pandemic poses significant logistical challenges to the Member States, in particular as regards the capacity to transport significant volumes of medicines, vaccines and medical equipment to and from third countries at short notice and under particularly demanding storage and logistical conditions. It is necessary to ensure that sufficient air transport capacity is made available and additional exceptional flexibility is provided for to the Member States for that purpose, including the possibility to rely on third-country aircraft. Additional elements of all-cargo fifth freedom traffic rights strictly limited to carrying out that kind of operation on an ad hoc basis should therefore be granted so that use can be made of UK air carriers in such exceptional circumstances. Member States should also be able to authorise additional rights for the provision of air ambulance services.

(6)

In order to reflect its temporary character, this Regulation should apply until 30 June 2021, or until the entry into force or, where stipulated, provisional application of a future agreement covering the provision of air services with the United Kingdom to which the Union is a party, negotiated by the Commission in accordance with Article 218 of the Treaty on the Functioning of the European Union (TFEU), whichever is earlier.

(7)

In order to maintain mutually beneficial levels of connectivity, certain cooperative marketing arrangements should be provided for in respect of both UK air carriers and Union air carriers, in line with the principle of reciprocity.