EUROPEAN UNIONTHE EUROPEAN PARLIAMENT

THE COUNCIL
Brussels, 16 December 2020
(OR. en)

2018/0136(COD)LEX 2045

PE-CONS 64/20

CADREFIN 443
RESPR 79
POLGEN 223
FIN 948
CODEC 1325

REGULATION
OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
ON A GENERAL REGIME OF CONDITIONALITY
FOR THE PROTECTION OF THE UNION BUDGET

PE-CONS 64/20

ENREGULATION (EU) 2020/…
OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of 16 December 2020
on a general regime of conditionality for the protection of the Union budget

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular point (a) of
Article 322(1) thereof,
Having regard to the Treaty establishing the European Atomic Energy Community, and in particular
Article 106a thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the Court of Auditors1,
Acting in accordance with the ordinary legislative procedure2,

1
2

OJ C 291, 17.8.2018, p. 1.
Position of the European Parliament of 4 April 2019 (not yet published in the Official
Journal) and position of the Council at first reading of 14 December 2020. Position of theEuropean Parliament of … (not yet published in the Official Journal).

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1ENWhereas:(1)

The Union is founded on the values of respect for human dignity, freedom, democracy,
equality, the rule of law and respect for human rights, including the rights of persons
belonging to minorities, enshrined in Article 2 of the Treaty on European Union (TEU). As
recalled by Article 2 TEU, those values are common to the Member States in a society inwhich pluralism, non-discrimination, tolerance, justice, solidarity and equality between
women and men prevail.

(2)

In its conclusions of 21 July 2020, the European Council stated that the financial interestsof the Union are to be protected in accordance with the general principles embedded in theTreaties, in particular the values set out in Article 2 TEU. It also underlined the importanceof the protection of the financial interests of the Union and the importance of respect for
the rule of law.

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(3)

The rule of law requires that all public powers act within the constraints set out by law, in
accordance with the values of democracy and the respect for fundamental rights as
stipulated in the Charter of Fundamental Rights of the European Union (the ‘Charter') andother applicable instruments, and under the control of independent and impartial courts. It
requires, in particular, that the principles of legality1 implying a transparent, accountable,
democratic and pluralistic law-making process; legal certainty2; prohibition of arbitrarinessof the executive powers3; effective judicial protection, including access to justice, by
independent and impartial courts4; and separation of powers,5 be respected6.

1
2

3
4

5

6

Judgment of the Court of Justice of 29 April 2004, CAS Succhi di Frutta, C-496/99 P,
ECLI:EU:C:2004:236, paragraph 63.
Judgment of the Court of Justice of 12 November 1981, Amministrazione delle finanze dello
Stato v Srl Meridionale Industria Salumi and others Ditta Italo Orlandi & Figlio and Ditta
Vincenzo Divella v Amministrazione delle finanze dello Stato. Joined cases 212 to 217/80,
ECLI:EU:C:1981:270, paragraph 10.
Judgment of the Court of Justice of 21 September 1989, Hoechst, Joined cases 46/87
and 227/88, ECLI:EU:C:1989:337, paragraph 19.
Judgment of the Court of Justice of 27 February 2018, Associação Sindical dos Juízes
Portugueses v Tribunal de Contas C‑ 64/16, ECLI:EU:C:2018:117, paragraphs 31, 40-41;
judgment of the Court of Justice of 25 July 2018, LM, C-216/18 PPU,ECLI:EU:C:2018:586, paragraphs 63-67.
Judgment of the Court of Justice of 10 November 2016, Kovalkovas, C‑ 477/16,
ECLI:EU:C:2016:861, paragraph 36; Judgment of the Court of Justice of
10 November 2016, PPU Poltorak, C‑ 452/16, ECLI:EU:C:2016:858, paragraph 35; andJudgment of the Court of Justice of 22 December 2010, DEB,C-279/09,
ECLI:EU:C:2010:811, paragraph 58.
Communication from the Commission "A new EU Framework to strengthen the Rule ofLaw", COM(2014)0158 final, Annex I.

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(4)

The accession criteria established by the Copenhagen European Council in 1993 andstrengthened by the Madrid European Council in 1995 are the essential conditions that acandidate country has to satisfy to become a Member State of the Union. Those criteria are
now enshrined in Article 49 TEU.

(5)

Once a candidate country becomes a Member State, it joins a legal structure that is basedon the fundamental premiss that each Member State shares with all the otherMember States, and recognises that they share with it, a set of common values on which
the Union is founded, as stated in Article 2 TEU. That premiss implies and justifies theexistence of mutual trust between the Member States that those values will be recognised
and, therefore, that the law of the Union that implements them will be respected.1 The laws
and practices of Member States should continue to comply with the common values on
which the Union is founded.

(6)

While there is no hierarchy among Union values, respect for the rule of law is essential forthe protection of the other fundamental values on which the Union is founded, such as
freedom, democracy, equality and respect for human rights. Respect for the rule of law isintrinsically linked to respect for democracy and for fundamental rights. There can be no
democracy and respect for fundamental rights without respect for the rule of law and viceversa.

1

Opinion 2/13, EU:C:2014:2454, paragraph 168.

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(7)

Whenever Member States implement the Union budget, including resources allocatedthrough the European Union Recovery Instrument established pursuant to Council
Regulation (EU) 2020/…1+, and through loans and other instruments guaranteed by theUnion budget, and whatever method of implementation they use, respect for the rule of law
is an essential precondition for compliance with the principles of sound financial
management enshrined in Article 317 of the Treaty on the Functioning of theEuropean Union (TFEU).

(8)

Sound financial management can only be ensured by Member States if public authorities
act in accordance with the law, if cases of fraud, including tax fraud, tax evasion,
corruption, conflict of interest or other breaches of the law are effectively pursued byinvestigative and prosecution services, and if arbitrary or unlawful decisions of publicauthorities, including law-enforcement authorities, can be subject to effective judicial
review by independent courts and by the Court of Justice of the European Union.

1+

Council Regulation (EU) 2020/… establishing a European Union Recovery Instrument tosupport the recovery in the aftermath of the COVID-19 crisis (OJ L …, p. …).
OJ: Please introduce in the text the number and in the accompanying footnote the number
and date of the Regulation contained in document ST 9971/20 (2020/0111(NLE)) and fill in
the OJ reference.

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(9)

The independence and impartiality of the judiciary should always be guaranteed, andinvestigation and prosecution services should be able to properly execute their functions.
The judiciary, and investigation and prosecution services should be endowed with
sufficient financial and human resources and procedures to act effectively and in a mannerthat fully respects the right to a fair trial, including respect for the rights of defence. Final
judgments should be implemented effectively. Those conditions are required as a minimum
guarantee against unlawful and arbitrary decisions of public authorities that could harm thefinancial interests of the Union.

(10)

The independence of the judiciary presupposes, in particular, that the judicial bodyconcerned is able to exercise, both under the relevant rules and in practice, its judicial
functions wholly autonomously, without being subject to any hierarchical constraint or
subordinated to any other body, and without taking orders or instructions from any source
whatsoever, thus being protected against external interventions or pressure liable to impair
the independent judgment of its members and to influence their decisions. The guarantees
of independence and impartiality require rules, particularly as regards the composition of
the body and the appointment, length of service and the grounds for rejection and dismissalof its members, in order to dismiss any reasonable doubt in the minds of individuals as tothe imperviousness of that body to external factors and its neutrality with respect to theinterests before it.

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(11)

Respect for the rule of law is essential not only for Union citizens, but also for businessinitiatives, innovation, investment, economic, social and territorial cohesion, and theproper functioning of the internal market, which will flourish most where a solid legal andinstitutional framework is in place.

(12)

Article 19 TEU, which gives concrete expression to the value of the rule of law set out in
Article 2 TEU, requires Member States to provide effective judicial protection in the fields
covered by Union law, including those relating to the implementation of the Union budget.
The very existence of effective judicial review designed to ensure compliance with Union
law is the essence of the rule of law and requires independent courts1. Maintaining theindependence of the courts is essential, as confirmed by the second paragraph of Article 47of the Charter2. This is true, in particular, for the judicial review of the validity ofmeasures, contracts or other instruments giving rise to public expenditure or debts,
inter alia in the context of public procurement procedures which may also be brought
before the courts.

(13)

There is therefore a clear relationship between respect for the rule of law and the efficient
implementation of the Union budget in accordance with the principles of sound financial
management.

12Case C-64/16, para 32-36.
Case C-64/16, para 40-41.

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(14)

The Union has developed a variety of instruments and processes that promote the rule oflaw and its application, including financial support for civil society organisations, theEuropean Rule of Law Mechanism and the EU Justice Scoreboard, and provide aneffective response from Union institutions to breaches of the rule of law throughinfringement proceedings and the procedure provided for in Article 7 TEU. The
mechanism provided for in this Regulation complements these instruments by protecting
the Union budget against breaches of the principles of the rule of law affecting its soundfinancial management or the protection of the financial interests of the Union.

(15)

Breaches of the principles of the rule of law, in particular those that affect the proper
functioning of public authorities and effective judicial review, can seriously harm thefinancial interests of the Union. This is the case for individual breaches of the principles of
the rule of law and even more so for breaches that are widespread or due to recurrent
practices or omissions by public authorities, or to general measures adopted by such
authorities.

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(16)

The identification of breaches of the principles of the rule of law requires a thoroughqualitative assessment by the Commission. That assessment should be objective, impartial
and fair, and should take into account relevant information from available sources andrecognised institutions, including judgments of the Court of Justice of the European Union,
reports of the Court of Auditors, the Commission's annual Rule of Law Report and
EU Justice Scoreboard, reports of the European Anti-Fraud Office (OLAF) and theEuropean Public Prosecutor’s Office (EPPO) as relevant, and conclusions andrecommendations of relevant international organisations and networks, including Councilof Europe bodies such as the Council of Europe Group of States against Corruption(GRECO) and the Venice Commission, in particular its rule-of-law checklist, and theEuropean networks of supreme courts and councils for the judiciary. The Commission
could consult the European Union Agency for Fundamental Rights and the Venice
Commission if necessary for the purpose of preparing a thorough qualitative assessment.

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(17)

Measures under this Regulation are necessary in particular in cases where other procedures
set out in Union legislation would not allow the Union budget to be protected more
effectively. Union financial legislation and the applicable sector-specific and financial
rules provide for various possibilities to protect the Union budget, including interruptions,suspensions or financial corrections linked to irregularities or serious deficiencies inmanagement and control systems. The measures to be adopted in the event of breaches ofthe principles of the rule of law and the procedure to be followed to adopt such measures
should be determined. Such measures should include the suspension of payments and ofcommitments, the suspension of the disbursement of instalments or the early repayment ofloans, a reduction of funding under existing commitments, and a prohibition on entering
into new commitments with recipients or to enter into new agreements on loans or other
instruments guaranteed by the Union budget.

(18)

The principle of proportionality should apply when determining the measures to be
adopted, in particular taking into account the seriousness of the situation, the time which
has elapsed since the relevant conduct started, the duration and recurrence of the conduct,
the intention, the degree of cooperation of the Member State concerned in putting an end tothe breaches of the principles of the rule of law, and the effects on the sound financial
management of the Union budget or the financial interests of the Union.

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(19)

It is essential that the legitimate interests of final recipients and beneficiaries are properly
safeguarded when measures are adopted in the event of breaches of the principles of therule of law. When considering the adoption of measures, the Commission should take into
account their potential impact on final recipients and beneficiaries. Taking into
consideration that in shared management payments from the Commission toMember States are legally independent from payments by national authorities tobeneficiaries, appropriate measures under this Regulation should not be considered toaffect the availability of funding for payments towards beneficiaries according to thepayment deadlines set out under the applicable sector-specific and financial rules.
Decisions adopted under this Regulation and obligations towards final recipients or
beneficiaries set out in this Regulation are part of applicable Union law with respect toimplementing funding in shared management. The Member States concerned by themeasures should regularly report to the Commission on compliance with their obligations
towards final recipients or beneficiaries. Reporting on compliance with payment
obligations towards beneficiaries set out in the applicable sector-specific and financial
rules should allow the Commission to verify that decisions under this Regulation do not
impact in any way, directly or indirectly, payments to be made under the applicablesector-specific and financial rules.

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11ENTo strengthen the protection of the final recipients or beneficiaries, the Commission should
provide information and guidance via a website or internet portal, together with adequate
tools to inform the Commission about any breach of the legal obligation of government
entities and Member States to continue making payments after measures pursuant to thisRegulation are adopted. The Commission should follow up on such information to verify
whether the applicable rules have been respected, in particular [Article 63, point (b) of
Article 68(1) and Article 98] of Regulation (EU) 2020/… of the European Parliament andof the Council1+. Where necessary, in order to ensure that any amount due by government
entities or Member States is effectively paid to final recipients or beneficiaries, theCommission should recover payments made, or, where appropriate, make a financial
correction by reducing Union support to a programme in line with the applicablesector-specific and financial rules.

1+

Regulation (EU) 2020/… of the European Parliament and of the Council laying downcommon provisions on the European Regional Development Fund, the European Social
Fund Plus, the Cohesion 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 theBorder Management and Visa Instrument (OJ L …, p. …).
OJ: Please introduce in the text the number and in the accompanying footnote the number
and date of the Regulation contained in document 2018/0196(COD) and fill in the
OJ reference.

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(20)

In order to ensure uniform conditions for the implementation of this Regulation and inview of the importance of the financial effects of measures adopted pursuant to thisRegulation, implementing powers should be conferred on the Council, which should act on
the basis of a Commission proposal.

(21)

Before proposing the adoption of any measure pursuant to this Regulation, theCommission should inform the Member State concerned why it considers that breaches ofthe principles of the rule of law might exist in that Member State. The Commission should
inform the European Parliament and the Council without delay about any such notificationand its contents. The Member State concerned should be allowed to submit its
observations. The Commission should take those observations into account.

(22)

When setting time limits in accordance with this Regulation for the Member State
concerned, the Commission should take into account, in particular, the amount of
information provided and requested, the complexity of the relevant facts and of theirassessment, as well as the administrative capacity of the Member State concerned.

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(23)

Where the Commission, after analysing the observations of the Member State concerned,
considers that the conditions for the adoption of measures are fulfilled, it should submit a
proposal for the adoption of appropriate measures to the Council. The Council should act
upon the proposal of the Commission to adopt appropriate measures by means of an
implementing decision within a period of one month, which may exceptionally be
extended by a maximum of two additional months. With a view to ensuring that theCouncil takes the decision within those time limits, the Commission should make the mostappropriate use of its rights under Article 237 TFEU and the Council’s Rules ofProcedure1.

(24)

After the adoption of any measures pursuant to this Regulation, the Commission should
regularly monitor the situation in the Member State concerned. The Commission should
reassess the situation when the Member State concerned adopts new remedial measures, orin any case at the latest one year after the adoption of the measures.

(25)

The Council should, acting on a proposal from the Commission, lift measures that have asuspensive effect if the situation leading to the imposition of those measures has been
sufficiently remedied.

1

Council Decision 2009/937/EU of 1 December 2009 adopting the Council’s Rules ofProcedure (OJ L 325, 11.12.2009, p. 35).

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(26)

The procedure for adopting and lifting the measures should respect the principles ofobjectivity, non-discrimination and equal treatment of Member States and should be
conducted according to a non-partisan and evidence-based approach. If, exceptionally, theMember State concerned considers that there are serious breaches of those principles, it
may request the President of the European Council to refer the matter to the next European
Council. In such exceptional circumstances, no decision concerning the measures should
be taken until the European Council has discussed the matter. This process shall, as a rule,
not take longer than three months after the Commission has submitted its proposal to
the Council.

(27)

The Commission should keep the European Parliament informed of any measures
proposed, adopted and lifted pursuant to this Regulation.

(28)

The Commission should report to the European Parliament and the Council on theapplication of this Regulation. When reporting to the European Parliament and theCouncil, the Commission should consider, in addition to the effectiveness of the measures
adopted, the overall effectiveness of the procedure set out in this Regulation and thecomplementarity of this instrument with others.

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(29)

This Regulation should not affect the competence of the EPPO or the obligations of theMember States which do not participate in the enhanced cooperation established byCouncil Regulation (EU) 2017/19391,

HAVE ADOPTED THIS REGULATION:

1

Council Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced
cooperation on the establishment of the European Public Prosecutor’s Office (‘the EPPO’)(OJ L 283, 31.10.2017, p. 1).

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16ENArticle 1
Subject matter
This Regulation establishes the rules necessary for the protection of the Union budget in the case of
breaches of the principles of the rule of law in the Member States.

Article 2
Definitions
For the purposes of this Regulation, the following definitions apply:(a)‘the rule of law’ refers to the Union value enshrined in Article 2 TEU. It includes theprinciples of legality implying a transparent, accountable, democratic and pluralistic
law-making process; legal certainty; prohibition of arbitrariness of the executive powers;
effective judicial protection, including access to justice, by independent and impartial
courts, also as regards fundamental rights; separation of powers; and non-discriminationand equality before the law. The rule of law shall be understood having regard to the other
Union values and principles enshrined in Article 2 TEU;

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(b)

‘government entity’ means a public authority at any level of government, including
national, regional and local authorities, as well as Member State organisations within themeaning of point (42) of Article 2 of Regulation (EU, Euratom) 2018/1046 of theEuropean Parliament and of the Council1 (the ‘Financial Regulation’).

Article 3
Breaches of the principles of the rule of law
For the purposes of this Regulation, the following may be indicative of breaches of the principles of
the rule of law:(a)endangering the independence of the judiciary;(b)failing to prevent, correct or sanction arbitrary or unlawful decisions by public authorities,
including by law-enforcement authorities, withholding financial and human resources
affecting their proper functioning or failing to ensure the absence of conflicts of interest;(c)limiting the availability and effectiveness of legal remedies, including through restrictive
procedural rules and lack of implementation of judgments, or limiting the effective
investigation, prosecution or sanctioning of breaches of law.

1

Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of
18 July 2018 on the financial rules applicable to the general budget of the Union, amending
Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013,(EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014,(EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom)
No 966/2012 (OJ L 193, 30.7.2018, p. 1).

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ENArticle 4
Conditions for the adoption of measures
1.

Appropriate measures shall be taken where it is established in accordance with Article 6that breaches of the principles of the rule of law in a Member State affect or seriously risk
affecting the sound financial management of the Union budget or the protection of thefinancial interests of the Union in a sufficiently direct way.

2.

For the purposes of this Regulation, breaches of the principles of the rule of law shallconcern one or more of the following:(a)the proper functioning of the authorities implementing the Union budget, includingloans and other instruments guaranteed by the Union budget, in particular in thecontext of public procurement or grant procedures;(b)the proper functioning of the authorities carrying out financial control, monitoring
and audit, and the proper functioning of effective and transparent financial
management and accountability systems;

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(c)

the proper functioning of investigation and public prosecution services in relation to
the investigation and prosecution of fraud, including tax fraud, corruption or otherbreaches of Union law relating to the implementation of the Union budget or to theprotection of the financial interests of the Union;(d)the effective judicial review by independent courts of actions or omissions by theauthorities referred to in points (a), (b) and (c);(e)

the prevention and sanctioning of fraud, including tax fraud, corruption or otherbreaches of Union law relating to the implementation of the Union budget or to theprotection of the financial interests of the Union, and the imposition of effective anddissuasive penalties on recipients by national courts or by administrative authorities;(f)the recovery of funds unduly paid;(g)effective and timely cooperation with OLAF and, subject to the participation of theMember State concerned, with EPPO in their investigations or prosecutions pursuant
to the applicable Union acts in accordance with the principle of sincere cooperation;(h)other situations or conduct of authorities that are relevant to the sound financial
management of the Union budget or the protection of the financial interests of
the Union.

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ENArticle 5
Measures for the protection of the Union budget
1.

Provided that the conditions set out in Article 4 of this Regulation are fulfilled, one ormore of the following appropriate measures may be adopted in accordance with theprocedure set out in Article 6 of this Regulation:(a)where the Commission implements the Union budget in direct or indirect
management pursuant to points (a) and (c) of Article 62(1) of the Financial
Regulation, and where a government entity is the recipient:(i)a suspension of payments or of the implementation of the legal commitment ora termination of the legal commitment pursuant to Article 131(3) of the
Financial Regulation;(ii)

a prohibition on entering into new legal commitments;(iii) a suspension of the disbursement of instalments in full or in part or an early
repayment of loans guaranteed by the Union budget;

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(iv) a suspension or reduction of the economic advantage under an instrument
guaranteed by the Union budget;(v)

a prohibition on entering into new agreements on loans or other instruments
guaranteed by the Union budget;(b)where the Commission implements the Union budget under shared management withMember States pursuant to point (b) of Article 62(1) of the Financial Regulation:(i)a suspension of the approval of one or more programmes or an amendment
thereof;(ii)

a suspension of commitments;(iii) a reduction of commitments, including through financial corrections ortransfers to other spending programmes;(iv) a reduction of pre-financing;(v)

an interruption of payment deadlines;(vi) a suspension of payments.

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2.

Unless the decision adopting the measures provides otherwise, the imposition of
appropriate measures shall not affect the obligations of government entities referred to inpoint (a) of paragraph 1 or of Member States referred to in point (b) of paragraph 1 to
implement the programme or fund affected by the measure, and in particular the
obligations they have towards final recipients or beneficiaries, including the obligation to
make payments under this Regulation and the applicable sector-specific or financial rules.
When implementing Union funds under shared management, Member States concerned bymeasures adopted pursuant to this Regulation shall report to the Commission on theircompliance with those obligations every three months from the adoption of thosemeasures.
The Commission shall verify whether applicable law has been complied with and, where
necessary, take all appropriate measures to protect the Union budget, in line withsector-specific and financial rules.

3.

The measures taken shall be proportionate. They shall be determined in light of the actualor potential impact of the breaches of the principles of the rule of law on the soundfinancial management of the Union budget or the financial interests of the Union. The
nature, duration, gravity and scope of the breaches of the principles of the rule of law shallbe duly taken into account. The measures shall, insofar as possible, target the Union
actions affected by the breaches.

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4.

The Commission shall provide information and guidance for the benefit of final recipientsor beneficiaries on the obligations by Member States referred to in paragraph 2 via a
website or an internet portal. The Commission shall also provide, on the same website orinternet portal, adequate tools for final recipients or beneficiaries to inform theCommission about any breach of these obligations that, in the view of these final recipientsor beneficiaries, directly affects them. This paragraph shall be applied in a manner that
ensures the protection of persons reporting on breaches of Union law, in line with theprinciples set out in Directive (EU) 2019/1937 of the European Parliament and of theCouncil1. Information provided by final recipients or beneficiaries in accordance with thisparagraph shall be accompanied by proof that the concerned final recipient or beneficiaryhas lodged a formal complaint with the relevant authority of the Member State concerned.

5.

On the basis of the information provided by the final recipients or beneficiaries inaccordance with paragraph 4 of this Article, the Commission shall do its utmost to ensurethat any amount due from government entities or Member States as referred to inparagraph 2 of this Article is effectively paid to final recipients or beneficiaries, inaccordance with in particular [Article 63, point (b) of Article 68(1) and Article 98] ofRegulation (EU) 2020/…+.

1+

Directive (EU) 2019/1937 of the European Parliament and of the Council of
23 October 2019 on the protection of persons who report breaches of Union law (OJ L 305,
26.11.2019, p. 17).
OJ: Please introduce in the number of the Regulation contained in document
2018/0196 (COD).

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ENArticle 6
Procedure
1.

Where the Commission finds that it has reasonable grounds to consider that the conditions
set out in Article 4 are fulfilled, it shall, unless it considers that other procedures set out inUnion legislation would allow it to protect the Union budget more effectively, send awritten notification to the Member State concerned, setting out the factual elements andspecific grounds on which it based its findings. The Commission shall inform the European
Parliament and the Council without delay of such notification and its contents.

2.

In light of the information received pursuant to paragraph 1, the European Parliament may
invite the Commission for a structured dialogue on its findings.

3.

When assessing whether the conditions set out in Article 4 are fulfilled, the Commission
shall take into account relevant information from available sources, including decisions,conclusions and recommendations of Union institutions, other relevant internationalorganisations and other recognised institutions.

4.

The Commission may request any additional information it requires to carry out theassessment referred to in paragraph 3, both before and after having sent the written
notification pursuant to paragraph 1.

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5.

The Member State concerned shall provide the required information and may makeobservations on the findings set out in the notification referred to in paragraph 1 within atime limit to be specified by the Commission, which shall be at least one month and not
more than three months from the date of notification of the findings. In its observations,
the Member State may propose the adoption of remedial measures to address the findings
set out in the Commission’s notification.

6.

The Commission shall take into account the information received and any observations
made by the Member State concerned, as well as the adequacy of any proposed remedial
measures, when deciding whether to submit a proposal for an implementing decision on
the appropriate measures. The Commission shall carry out its assessment within an
indicative time limit of one month from the receipt of any information from theMember State concerned or of its observations, or, when no information or observations
are received, from the expiry of the time limit set in accordance with paragraph 5, and inany event within a reasonable time frame.

7.

Where the Commission intends to make a proposal pursuant to paragraph 9, it shall, before
doing so, give the Member State the opportunity to submit its observations, in particular on
the proportionality of the envisaged measures, within one month.

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8.

When assessing the proportionality of the measures to be imposed, the Commission shalltake into account the information and guidance referred to in paragraph 3.

9.

Where the Commission considers that the conditions of Article 4 are fulfilled and that theremedial measures, if any, proposed by the Member State under paragraph 5 do notadequately address the findings in the Commission’s notification, it shall submit a proposal
for an implementing decision on the appropriate measures to the Council within one monthof receiving the Member State's observations or, in the event that no observations are
made, without undue delay and in any case within one month of the deadline set inparagraph 7. The proposal shall set out the specific grounds and evidence on which theCommission based its findings.

10.

The Council shall adopt the implementing decision referred to in paragraph 9 of this
Article within one month of receiving the Commission’s proposal. If exceptional
circumstances arise, the period for the adoption of that implementing decision may be
extended by a maximum of two months. With a view to ensuring a timely decision, theCommission shall make use of its rights under Article 237 TFEU, where it deems it
appropriate.

11.

The Council, acting by a qualified majority, may amend the Commission’s proposal andadopt the amended text by means of an implementing decision.

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Article 7
Lifting of measures
1.

The Member State concerned may, at any time, adopt new remedial measures and submit
to the Commission a written notification including evidence to show that the conditions ofArticle 4 are no longer fulfilled.

2.

At the request of the Member State concerned, or on its own initiative and at the latest one
year after the adoption of measures by the Council, the Commission shall reassess thesituation in the Member State concerned, taking into account any evidence submitted by
the Member State concerned, as well as the adequacy of any new remedial measures
adopted by the Member State concerned.
Where the Commission considers that the conditions of Article 4 are no longer fulfilled, it
shall submit to the Council a proposal for an implementing decision lifting the adopted
measures.
Where the Commission considers that the situation leading to the adoption of measures has
been remedied in part, it shall submit to the Council a proposal for an implementing
decision adapting the adopted measures.

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ENWhere the Commission considers that the situation leading to the adoption of measures has
not been remedied, it shall address to the Member State concerned a reasoned decision andinform the Council thereof.
When the Member State concerned submits a written notification pursuant to paragraph 1,
the Commission shall submit its proposal or adopt its decision within one month ofreceiving that notification. This period may be extended in duly justified circumstances, inwhich case the Commission shall without delay inform the Member State concerned of thereasons for the extension.
The procedure set out in paragraphs 3, 4, 5, 6, 9, 10 and 11 of Article 6 shall apply byanalogy as appropriate.
3.

Where measures concerning the suspension of the approval of one or more programmes oramendments thereof referred to in point (i) of Article 5(1)(b) or the suspension ofcommitments referred to in point (ii) of Article 5(1)(b) are lifted, amounts corresponding to
the suspended commitments shall be entered in the Union budget subject to [Article 5] ofCouncil Regulation (EU, Euratom) 2020/…1+. Suspended commitments of year n may not
be entered in the budget beyond year n+2.

1+

Council Regulation (EU, Euratom) 2020/… of … laying down the multiannual financial
framework for the years 2021 to 2027 (OJ L …, p. …).
OJ: Please introduce in the text the number and in the accompanying footnote the number
and date of the Regulation contained in document 2018/0166(APP) and fill in the
OJ reference.

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Article 8
Informing the European Parliament
The Commission shall immediately inform the European Parliament of any measures proposed,
adopted or lifted pursuant to Articles 5, 6 and 7.

Article 9
Reporting
The Commission shall report by … [three years after the date of entry into force of this Regulation]
to the European Parliament and the Council on the application of this Regulation, in particular on
the effectiveness of the measures adopted.

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ENArticle 10
Entry into force
This Regulation shall enter into force on the twentieth day following that of its publication in the
Official Journal of the European Union.
It shall apply from 1 January 2021.

This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels,

For the European Parliament
The President

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For the Council
The President

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EN