### it is necessary to ensure that aifm operate subject to robust governance controls . aifm should be managed and organised so as to minimise conflicts of interest . recent developments underline the crucial need to separate asset safe - keeping and management functions , and segregate investor assets from those of the manager . to this end , the aifm has to appoint a depositary and entrust it with the booking of the investor money on a segregated account , the safe - keeping of financial instruments and the verification of whether the aif or the aifm on behalf of the aif has obtained ownership of all other assets . ### it is necessary to ensure that aifm operate subject to robust governance controls . aifm should be managed and organised so as to minimise conflicts of interest . recent developments underline the crucial need to separate asset safe - keeping and management functions , and segregate investor assets from those of the manager . to this end , the aifm has to ensure that the depositary tasks of booking of the investor money on a segregated account , safe - keeping of financial instruments and verification of whether the aif or the aifm on behalf of the aif has obtained ownership of all other assets are fulfilled independently and in the sole interest of the aif investors . those tasks may be performed by a depositary .


### given that aifm employing high levels of leverage in their investment strategies may , under certain conditions , contribute to the build up of systemic risk or disorderly markets , special requirements should be imposed on aifm using certain techniques giving rise to particular risks . the information needed to detect , monitor and respond to those risks has not been collected in a consistent way throughout the community , and shared across member states so as to identify potential sources of risk to the stability of financial markets in the community . to remedy this situation , special requirements should apply to aifm , which consistently use high levels of leverage in their investment strategies . those aifm should be obliged to disclose information regarding their use and sources of leverage . that information should be aggregated and shared with other authorities in the community , so as to facilitate a collective analysis of the impact of the leverage of those aifm on the financial system in the community , as well as a common response . ### given that aifm employing high levels of leverage in their investment strategies may , under certain conditions , contribute to the build up of systemic risk or disorderly markets , special reporting requirements should be imposed on aifm employing leverage . the information needed to detect , monitor and respond to those risks has not been collected in a consistent way throughout the union , and shared across member states so as to identify potential sources of risk to the stability of financial markets in the union . to remedy this situation , special reporting requirements should apply to aifm , which use high levels of leverage in their investment strategies . those aifm should be obliged to disclose information regarding their use and sources of leverage . that information should be aggregated in a central register under the auspices of the european systemic risk board established under regulation 2009 / . . . / ec and shared with other authorities in the union , the european securities and markets authority established under regulation 2009 / . . . / ec and competent authorities in third countries , where appropriate , so as to facilitate a collective analysis of the impact of the leverage of those aifm on the financial system in the union , as well as a common response . a central register under the auspices of the esrb for banks that provide prime broker services to aif should also be set up in directives 2006 / 48 / ec and 2006 / 49 / ec .


### in particular the commission should be empowered to adopt the measures necessary for the implementation of this directive . in this respect , the commission should be able to adopt measures determining the procedures under which aifm managing portfolios of aif whose assets under management do not exceed the threshold set out in this directive may exercise their right to be treated as aifm covered by this directive . these measures are also designed to specify the criteria to be used by competent authorities to assess whether aifm comply with their obligations as regards their conduct of business , the type of conflicts of interests aifm have to identify , as well as the reasonable steps aifm are expected to take in terms of internal and organizational procedures in order to identify , prevent , manage and disclose conflicts of interest . they are designed to specify the risk management requirements to be employed by aifm as a function of the risks which the aifm incurs on behalf of the aif that it manages as well as any arrangements needed to enable aifm to manage the particular risks associated with short selling transactions , including any relevant restrictions that might be needed to protect the aif from undue risk exposures . they are designed to specify the liquidity management requirements of this directive and in particular the minimum liquidity requirements for aif . they are designed to specify the requirements that originators of securitisation instruments have to meet in order for an aifm to be allowed to invest in such instruments issued after 1 january 2011 . they are as well designed to specify the requirements that aifm have to comply with when investing in such securitisation instruments . they are designed to specify the criteria under which a valuator can be considered independent in the meaning of this directive . they are designed to specify the conditions under which the delegation of aifm functions should be approved and the conditions under which the manager could no longer be considered to be the manager of the aif in case of excessive delegation . they are designed to specify the content and format of the annual report that aifm have to make available for each aif they manage and to specify the disclosure obligations of aifm to investors and reporting requirements to competent authorities as well as their frequency . they are designed to specify the disclosure requirements imposed on aifm as regards leverage and the frequency of reporting to competent authorities and of disclosure to investors . they are designed to setting limits to the level of leverage aifm can employ when managing aif . they are designed to determine the detailed content and the way aifm acquiring controlling influence in issuers and non - listed companies should fulfil their information obligation towards issuers and non - listed companies and their respective shareholders and representatives of employees , including the information to be provided in the annual reports of the aif they manage . they are designed to specify the types of restrictions or conditions that can be imposed on the marketing of aif to professional investor in the home member state of the aifm . they are designed to specify general criteria for assessing equivalence of valuation standards of third countries where the valuator is established in a third country , the equivalence of legislation of third countries regarding depositaries and , for the purpose of the authorisation of aifm established in third countries , the equivalence of prudential regulation and ongoing supervision . they are designed to specify general criteria for assessing whether third countries grant community aifm effective market access comparable to that granted by the community to aifm from third countries . they are designed to specify the modalities , content and frequency of exchange of information regarding aifm between the competent authorities of the home member state of the aifm and other competent authorities where the aifm individually or collectively with other aifm may have an impact on the stability of systemically relevant financial institutions and the orderly functioning of markets . they are designed to specify the procedures for on - the - spot verifications and investigations . ### the commission should be empowered to adopt delegated acts in accordance with article 290 of the treaty , in particular those necessary for the implementation of this directive . in this respect , the commission should be able to adopt acts determining the procedures under which aifm managing portfolios of aif whose assets under management do not exceed the threshold set out in this directive may exercise their right to be treated as aifm covered by this directive . those acts should also be designed to specify the criteria to be used by competent authorities to assess whether aifm comply with their obligations as regards their conduct of business , the type of conflicts of interests aifm have to identify , as well as the reasonable steps aifm are expected to take in terms of internal and organisational procedures in order to identify , prevent , manage and disclose conflicts of interest . they should be designed to specify the risk management requirements to be employed by aifm as a function of the risks which the aifm incurs on behalf of the aif that it manages as well as any arrangements needed to enable aifm to manage the particular risks associated with short selling transactions , including any relevant restrictions that might be needed to protect the aif from undue risk exposures . they should also be designed to specify the liquidity management requirements of this directive and in particular the minimum liquidity requirements for aif . they should also be designed to specify the requirements that originators of securitisation instruments have to meet in order for an aifm to be allowed to invest in such instruments issued after 1 january 2011 . they should also be as well designed to specify the requirements that aifm have to comply with when investing in such securitisation instruments . they should also be designed to specify the criteria under which a valuator can be considered independent in the meaning of this directive . they should also be designed to specify the conditions under which the delegation of aifm functions should be approved and the conditions under which the manager could no longer be considered to be the manager of the aif in case of excessive delegation . they should also be designed to specify the content and format of the annual report that aifm have to make available for each aif they manage and to specify the disclosure obligations of aifm to investors and reporting requirements to competent authorities as well as their frequency . they should also be designed to specify the disclosure requirements imposed on aifm as regards leverage and the frequency of reporting to competent authorities and of disclosure to investors . they should also be designed to setting limits to the level of leverage aifm can employ when managing aif . they should also be designed to determine the detailed content and the way aifm acquiring controlling influence in issuers and non - listed companies should fulfil their information obligation towards issuers and non - listed companies and their respective shareholders and representatives of employees , including the information to be provided in the annual reports of the aif they manage . they should also be designed to specify the types of restrictions or conditions that can be imposed on the marketing of aif to professional investor in the home member state of the aifm . they should also be designed to specify general criteria for assessing equivalence of valuation standards of third countries where the valuator is established in a third country , the equivalence of legislation of third countries regarding depositaries and , for the purpose of the authorisation of aifm established in third countries , the equivalence of prudential regulation and ongoing supervision . they should also be designed to specify general criteria for assessing whether third countries grant union aifm effective market access comparable to that granted by the union to aifm from third countries . they should also be designed to specify the modalities , content and frequency of exchange of information regarding aifm between the competent authorities of the home member state of the aifm and other competent authorities where the aifm individually or collectively with other aifm may have an impact on the stability of systemically relevant financial institutions and the orderly functioning of markets . they should also be designed to specify the procedures for on - the - spot verifications and investigations . they should also be designed to state that the fund valuation standards of a specific third country are equivalent to those applicable in the union where the valuator is established in a third country . they should also be designed to state that the legislation on depositaries of a specific third country is equivalent to this directive . they should also be designed to state that the legislation on prudential regulation and on - going supervision of aifm in a specific third country is equivalent to this directive . they should also be designed to state whether a specific third country grants union aifm effective market access comparable to that granted by the union to aifm from that third country . they should also be designed to specify standard models for notification and attestations and to specify the procedure for the exchange of information between competent authorities .


### ‘ marketing’ means any general offering or placement of units or shares in an aif to or with investors domiciled in the community , regardless of at whose initiative the offer or placement takes place ; ### ‘ marketing’ means any direct or indirect offering or placement , at the initiative of the aifm or on behalf of the aifm , of shares or units in an aif that it manages to or with investors domiciled in the union ;


### the commission shall adopt implementing measures further specifying the following : ### the commission may lay down , by means of delegated acts in accordance with articles 49a , 49b and 49c , measures further specifying the following :


### those measures , designed to amend to amend non - essential elements of this directive by supplementing it , shall be adopted in accordance with the regulatory procedure with scrutiny referred to in article 49 . ### the commission may lay down by means of delegated acts in accordance with articles 49a , 49b and 49c , measures specifying originator retention of a net economic interest of not less than 5 per cent and qualitative requirements that must be met by aifm that invest in securities or other financial products .


### a description of the investment strategy and objectives of the aif , all the assets which the aif can invest in and of the techniques it may employ and of all associated risks , any applicable investment restrictions , the circumstances in which the aif may use leverage , the types and sources of leverage permitted and the associated risks and of any restrictions to the use of leverage ; ### a description of the investment strategy and objectives of the aif , all the assets which the aif can invest in and of the techniques it may employ and of all associated risks , any applicable investment restrictions , the circumstances in which the aif may use leverage , the types and sources of leverage permitted , the maximum level of leverage and the associated risks and of any restrictions to the use of leverage as well as the total amount of leverage , on a periodic basis ;


### home member states shall ensure that all information received under article 24 , aggregated in respect of all aifm that it supervises , are made available to other competent authorities through the procedure set out in article 46 on supervisory co - operation . it shall , without delay , also provide information through this mechanism , and bilaterally to other member states directly concerned , if an aifm under its responsibility could potentially constitute an important source of counterparty risk to a credit institution or other systemically relevant institution in other member states . ### the competent authorities of the home member state of the aifm shall ensure that all information gathered under article 21 in respect of all aifm that they supervise is promptly conveyed to the esma and is made available to the competent authorities of the other member states and to the esrb through the procedures set out in article 46 on supervisory co - operation . they shall , without delay , also provide information through this mechanism to the esma and the esrb , and bilaterally to the competent authorities of other member states directly concerned , if the activities of an aifm under their responsibility could potentially constitute an important source of counterparty risk to a credit institution or other systemically relevant institution in those other member states , or could affect the sound functioning of financial markets .


### in order to ensure the stability and integrity of the financial system , the commission shall adopt implementing measures setting limits to the level of leverage aifm can employ . these limits should take into account , inter alia , the type of aif , their strategy and the sources of their leverage . those measures designed to amend non - essential elements of this directive by supplementing it , shall be adopted in accordance with the regulatory procedure with scrutiny referred to in article 49 . ### for the purpose of the stability and integrity of the financial markets , the esma may , in consideration of the assessments and analyses undertaken in the course of its supervision , develop and adopt technical standards which are legally binding . such technical standards may , in particular , relate to the level or nature of the leverage used for a given investment strategy in specific circumstances , or the weight , concentration or correlation of investments by aif on a given market .


### in order to ensure the stability and integrity of the financial system , the commission shall adopt implementing measures setting limits to the level of leverage aifm can employ . these limits should take into account , inter alia , the type of aif , their strategy and the sources of their leverage . those measures designed to amend non - essential elements of this directive by supplementing it , shall be adopted in accordance with the regulatory procedure with scrutiny referred to in article 49 . ### in order to ensure the stability and integrity of the financial system , the commission may adopt delegated acts in accordance with articles 49a , 49b and 49c , setting limits to the level of leverage aifm can employ . these limits should take into account , inter alia , the type of aif , their strategy and the sources of their leverage .


### in addition to article 27 , member states shall ensure that where an aifm acquires 30 % or more of the voting rights of an issuer or a non - listed company , that aifm makes the information set out in the second and third subparagraphs available to the issuer , the non - listed company , their respective shareholders and representatives of employees or , where there are no such representatives , to the employees themselves . ### 1 in addition to article 27 , member states shall ensure that where an aifm acquires a controlling influence over a non - listed company , that aifm makes the following information available to the non - listed company concerned , its shareholders and representatives of employees :


### the aif annual report shall include the following additional information for each issuer and non listed company in which the aif has invested : ### the aif annual report shall include the following additional information for each non listed company in which the aif has acquired a controlling influence :


### on the basis of the criteria referred to in paragraph 2 , the commission shall , in accordance with the procedure referred to in article 49 , adopt implementing measures , stating that the valuation standards and rules of a third country legislation are equivalent to those applicable in the community . ### on the basis of the criteria referred to in paragraph 2 , the commission shall , in accordance with articles 49a , 49b and 49c , adopt delegated acts stating that the valuation standards and rules of a third country ' s legislation are equivalent to those applicable in the union . the commission shall ensure that those acts enter into force by . . . * . * oj please insert date : two years after the entry into force of this directive .


### on the basis of the criteria referred to in paragraph 3 , the commission shall , in accordance with the procedure referred to in article 49 , adopt implementing measures , stating that prudential regulation , supervision and standards of a third country are equivalent to this directive . ### on the basis of the criteria referred to in paragraph 3 , the commission shall , in accordance with articles 49a , 49b and 49c , adopt delegated acts stating that prudential regulation , supervision and standards of a third country are equivalent to this directive . the commission shall ensure that those acts enter into force by . . . * . * oj please insert date : two years after the entry into force of this directive .


### the commission shall , in accordance with the procedure referred to in article 49 , adopt implementing measures relating to the procedures for exchange of information between competent authorities . ### the commission shall , in accordance with articles 49a , 49b and 49c , adopt delegated acts relating to the procedures for exchange of information between competent authorities . the commission shall ensure that those acts enter into force by . . . * . * oj please insert date : two years after the entry into force of this directive .


### the commission shall adopt implementing measures concerning procedures for on - the - spot verifications and investigations . ### the commission shall , in accordance with articles 49a , 49b and 49c , adopt delegated acts concerning procedures for on - the - spot verifications and investigations and the modalities of information of the esma under this article .


### the commission shall adopt implementing measures concerning procedures for on - the - spot verifications and investigations . those measures , designed , to amend non - essential elements of this directive by supplementing it shall be adopted in accordance with the regulatory procedure with scrutiny referred to in article 49 . ### the commission may , in accordance with articles 49a , 49b and 49c , adopt delegated acts concerning procedures for on - the - spot verifications and investigations .


### associated undertakings should be included in consolidated accounts by means of the equity method . member states should be entitled permit or require that a jointly managed undertaking be proportionately consolidated within consolidated financial statements . ### associated undertakings should be included in consolidated accounts either by means of the equity method or by means of the book value method . member states should be entitled to permit or require that a jointly managed undertaking be proportionately consolidated within consolidated financial statements .


### the member states are strongly encouraged to develop electronic publication systems that allow undertakings to file accounting data , including statutory financial statements , only once and in a form that allows multiple users to access and use the data easily . such systems should , however , not be burdensome to small and medium - sized undertakings . ### a harmonised electronic format for reporting would be very beneficial for undertakings established in the union , since it would facilitate the creation of a one - stop - shop reporting system which could also be used in other fields . therefore , preparation of financial statements in extensible business reporting language should be mandatory with effect from 1 january 2018 , after an appropriate period has elapsed for preparation and testing . creation of such a system should not , however , be burdensome to small and medium sized undertakings .


### in order to provide for enhanced transparency of payments made to governments , large undertakings and public interest entities which are active in the extractive industry or logging of primary forests should disclose in a separate report on an annual basis material payments made to governments in the countries in which they operate . such undertakings are active in countries rich in natural resources , in particular minerals , oil , natural gas as well as primary forests . the report should include types of payments comparable to those disclosed by an undertaking participating in the extractive industries transparency initiative . the initiative is also complementary to the eu flegt action plan and the timber regulation which require traders of timber products to exercise due diligence in order to prevent illegal wood from entering into the eu market . ### in order to provide for enhanced transparency of payments made to governments , all large undertakings and public interest entities should disclose as part of the annual report of financial statements a report on material payments made to governments in the countries in which they operate , as well as additional financial information regarding their activities in third countries . the disclosure of these data aims at enabling investors to make better - informed decisions , improving corporate governance and accountability and contributing to containing tax evasion . the report should incorporate disclosures on a country basis . furthermore , where such undertakings are active in the extraction of natural resources , in particular minerals , oil , natural gas as well as primary forests , reporting should also specify the specific project or projects to which those payments have been attributed . the report should accordingly build upon the disclosure requirements of the extractive industries transparency initiative . the initiative is also complementary to the eu flegt action plan and the timber regulation which require traders of timber products to exercise due diligence in order to prevent illegal wood from entering into the eu market .


### the reports should serve to facilitate governments of resource - rich countries in implementing the eiti principles and criteria and account to their citizens for payments such governments receive from undertakings active in the extractive industry or loggers of primary forests operating within their jurisdiction . the report should incorporate disclosures on a country and project basis , where a project is considered as the lowest level of operational reporting unit at which the undertaking prepares regular internal management reports , such as a concession , geographical basin , etc and where payments have been attributed to such projects . in the light of the overall objective of promoting good governance in these countries , the materiality of payments to be reported should be assessed in relation to the recipient government . various criteria on materiality could be envisaged such as payments of an absolute amount , or a percentage threshold and these can be defined through a delegated act . the reporting regime should be subject to a review and a report by the commission within five years of the entry into force of the directive . the review should consider the effectiveness of the regime and take into account international developments including issues of competitiveness and energy security . the review should also take into account the experience of preparers and users of the payments information and consider whether it would be appropriate to include additional payment information such as effective tax rates and recipient details , such as bank account information . ### the disclosures should serve to facilitate governments of resource - rich countries in implementing the eiti principles and criteria , amongst other voluntary reporting standards , and account to their citizens for payments such governments receive from undertakings operating within their jurisdiction . the disclosures should be on a country - by - country and project - by - project basis , where a project is considered as the lowest level of operational reporting unit , such as a contract , license , lease or other legal agreement under which an undertaking operates , which give rise to specific liabilities and where payments have been attributed to such projects , if any one payment or set of payments of the same type amount to more than 100 000 eur . the reporting regime should be subject to a review and a report by the commission within three years of the entry into force of the directive . the review should consider the effectiveness of the regime and take into account international developments including issues of competitiveness and energy security . the review should also take into account the experience of preparers and users of the payments information and consider whether it would be appropriate to include additional financial information and recipient details , such as bank account information .


### balance sheet total : eur 5 000 000 ; ### balance sheet total : eur 4 500 000 ;


### net turnover : eur 10 000 000 ; ### net turnover : eur 9 000 000 ;


### in the case of those member states which have not adopted the euro , the amount in national currency equivalent to the amounts set out in paragraphs 1 to 5 shall be that obtained by applying the exchange rate published in the official journal of the european union on the date of the entry into force of any directive setting those amounts . ### in the case of those member states which have not adopted the euro , the amount in national currency equivalent to the amounts set out in paragraphs 1 to 5 shall be that obtained by applying the exchange rate published in the official journal of the european union on the date of the entry into force of any directive setting those amounts . the thresholds in national currency can be recalculated in case of significant , lasting shifts in the exchange rate . the commission should issue guidance on what is to be considered a significant , lasting shift and how the thresholds should be calculated in a volatile currency environment .


### items in the profit and loss account and balance sheet shall be presented having regard to the substance of the reported transaction or arrangement ; ### items in the profit and loss account and balance sheet shall be classified and presented having regard not only to the legal form but also to the economic substance of the reported transaction or arrangement ;


### member states may permit the purchase price or production cost of stocks of goods of the same category and all fungible items including investments to be calculated either on the basis of weighted average prices or on the basis of the ‘ first in , first out’ method , or a similar method . ### member states may permit the purchase price or production cost of stocks of goods of the same category and all fungible items including investments to be calculated either on the basis of weighted average prices or on the basis of the ‘ first in , first out’ method , the ‘ last in , first out’ method , or a similar method .


### a member state shall require any undertaking governed by its national law to draw up consolidated financial statements and a consolidated management report if that undertaking controls one or more other undertakings ) in any of the following situations : ### a member state shall require any undertaking governed by its national law to draw up consolidated financial statements and a consolidated management report if that undertaking :


### it has a majority of the shareholders ' or members ' voting rights in the other undertaking ; ### has a majority of the shareholders ' or members ' voting rights in other undertaking ) ;


### it has the right to appoint or remove a majority of the members of the administrative , management or supervisory body of the other undertaking and is at the same time a shareholder in or a member thereof ; ### has the right to appoint or remove a majority of the members of the administrative , management or supervisory body of other undertaking and is at the same time a shareholder in or member thereof ;


### it has the right to exercise a dominant influence over the other undertaking of which it is a shareholder or a member , pursuant to a contract entered into with the undertaking or to a provision in its memorandum or articles of association , where the law governing the other undertaking permits such contracts or provisions . ### has the right to exercise a dominant influence over other undertaking of which it is a shareholder or member , pursuant to a contract entered into with the undertaking or to a provision in its memorandum or articles of association , where the law governing the other undertaking permits such contracts or provisions . a member state need not prescribe that a parent undertaking must be a shareholder in or member of its subsidiary undertaking . those member states the laws of which do not provide for each contracts or clauses shall not be required to apply this provision ;


### controls alone , pursuant to an agreement with other shareholders in or members of the other undertaking , a majority of shareholders ' or members ' voting rights . ### controls alone , pursuant to an agreement with other shareholders in or members of the other undertaking , a majority of shareholders ' or members ' voting rights . member states may introduce more detailed provisions concerning the form and contents of such agreements .


### the report shall be signed and dated by the statutory auditor . ### the report shall be signed and dated by the statutory auditor . where an audit firm carries out the statutory audit , the audit report shall be signed by at least the statutory auditor carrying out the statutory audit on behalf of the audit firm .


### ‘ government’ means any national , regional or local authority of a member state or of a third country . it includes a department , agency or undertaking controlled by that authority as laid down in article 23 to of this directive . ### ' government ' means any national , regional or local authority of a member state or of a third country . it includes a department , agency or undertaking controlled by that authority as laid down in article 23 to of this directive , or any government entity or state undertaking or company belonging to government members that receives any payment of the type noted in article 38 from any constituent member of an undertaking .


### ‘ government’ means any national , regional or local authority of a member state or of a third country . it includes a department , agency or undertaking controlled by that authority as laid down in article 23 to of this directive . ### ‘ government’ means any international administration or any national , regional or local authority of a member state or of a third country . it includes a department , agency or undertaking controlled by that authority as laid down in article 23 to of this directive , or any government entity that receives any payment of the type noted in article 38 from any constituent entity of an undertaking .


### ‘ government’ means any national , regional or local authority of a member state or of a third country . it includes a department , agency or undertaking controlled by that authority as laid down in article 23 to of this directive . ### ‘ government’ means any national , regional or local authority of a member state or of a third country . it includes a department , agency or undertaking controlled by that authority as laid down in article 23 to of this directive . this will guarantee eu citizens the same level of accountability that would be available to their counterparts globally .


### member states shall require large undertakings and all public interest entities active in the extractive industry or the logging of primary forests to prepare and make public a report on payments made to governments on an annual basis . ### member states shall require large undertakings , including joint - venture undertakings , and all public interest entities to prepare and make public a report on payments , including payments in kind , made to governments on an annual basis as part of the annual report of financial statements . in this report , the undertaking shall also publish additional financial information regarding their activities in third countries . in particular , the report shall include activities of subsidiaries , associates , joint ventures , permanent establishments and other trading arrangements to the extent that they are consolidated in the annual financial statements of the undertaking or entity in question . the report shall be part of the notes to the financial statements .


### member states shall require large undertakings and all public interest entities active in the extractive industry or the logging of primary forests to prepare and make public a report on payments made to governments on an annual basis . ### member states shall require undertakings and public interest entities to prepare and make public a report on activities in each country in which they operate , including of payments made to governments , on an annual basis where those undertakings or entities meet or exceed two of the following criteria : balance sheet total : eur 100 000 000 ; net turnover : eur 100 000 000 ; on their balance sheet dates employ 500 people or more . the report must also be prepared where the undertaking operates in a country in the form of a joint - venture undertaking . the report shall be subject to statutory audit


### a member state shall require any large undertaking or any public interest entity active in the extractive industry or the logging of primary forests and governed by its national law to draw up a consolidated report on payments to governments in accordance with articles 37 and 38 if that parent undertaking is under the obligation to prepare consolidated financial statements as laid down in article 23 to 23 of this directive . ### a member state shall require any large undertaking or any public interest entity active governed by its national law to draw up a consolidated report on payments to governments in accordance with articles 37 and 38 if that parent undertaking is under the obligation to prepare consolidated financial statements as laid down in article 23 to 23 of this directive and if the parent undertaking on a consolidated basis meets or exceeds the thresholds in article 37 paragraph 1 .


### the union ' s financial assistance may also be provided , in accordance with the financial regulation , through contributions to international , regional or national funds , such as those established or managed by the european investment bank , international organisations , member states or by partner countries and regions , for attracting joint financing from a number of donors , or to funds set up by one or more donors for the purpose of the joint implementation of projects . ### the union ' s financial assistance may also be provided , in accordance with the financial regulation , through contributions to international , regional or national funds , such as those established or managed by the european investment bank , international and national organisations , member states or by partner countries and regions , groupings of transnational public and private actors , for attracting joint financing from a number of donors , or to funds set up by one or more donors for the purpose of the joint implementation of projects , and this shall be taken into account properly under parliament ' s responsibility for financial scrutiny .


### all supplies and goods purchased under a procurement contract , or in accordance with a grant agreement , financed under this regulation shall originate from an eligible country . however , they may originate from any country when the use of the competitive negotiated procedure is allowed . for the purposes of this regulation , the term ‘ origin’ is defined in the relevant union legislation on rules of origin for customs purposes . ### all supplies and goods purchased under a procurement contract , or in accordance with a grant agreement , financed under this regulation shall originate from an eligible country . however , this shall not apply when the use of the competitive negotiated procedure is allowed , which shall be promoted . for the purposes of this regulation , the term ‘ origin’ is defined in the relevant union legislation on rules of origin for customs purposes .


### a series of problems in eu mortgage markets associated with irresponsible lending and borrowing at the pre - contractual stage and the potential scope for irresponsible behaviour by credit intermediaries and non - credit institutions have been identified . some problems concerned loans denominated in a foreign currency which consumers had taken out in that currency to take advantage of the interest rate offered but without having an adequate understanding of the currency risk involved . these problems are driven by market and regulatory failures as well as other factors such as the general economic climate and low levels of financial literacy . other problems include ineffective , inconsistent , or non - existent registration , authorisation and supervision regimes for credit intermediaries and non - credit institutions providing credit for residential immovable property . the problems identified have potentially significant macroeconomic spill - over effects , can lead to consumer detriment , act as economic or legal barriers to cross - border activity and create an unlevel playing field between actors . ### a series of problems in some eu mortgage markets associated with irresponsible lending and borrowing at the pre - contractual stage and the potential scope for irresponsible behaviour by credit intermediaries and non - credit institutions have been identified . some problems concerned loans denominated in a foreign currency which consumers had taken out in that currency to take advantage of the interest rate offered but without having an adequate understanding of the currency risk involved . these problems are driven by market and regulatory failures as well as other factors such as the general economic climate and low levels of financial literacy . other problems include ineffective , inconsistent , or non - existent registration , authorisation and supervision regimes for credit intermediaries and non - credit institutions providing credit for residential immovable property . the problems identified have potentially significant macroeconomic spill - over effects , can lead to consumer detriment , act as economic or legal barriers to cross - border activity and create an unlevel playing field between actors .


### a series of problems in eu mortgage markets associated with irresponsible lending and borrowing at the pre - contractual stage and the potential scope for irresponsible behaviour by credit intermediaries and non - credit institutions have been identified . some problems concerned loans denominated in a foreign currency which consumers had taken out in that currency to take advantage of the interest rate offered but without having an adequate understanding of the currency risk involved . these problems are driven by market and regulatory failures as well as other factors such as the general economic climate and low levels of financial literacy . other problems include ineffective , inconsistent , or non - existent registration , authorisation and supervision regimes for credit intermediaries and non - credit institutions providing credit for residential immovable property . the problems identified have potentially significant macroeconomic spill - over effects , can lead to consumer detriment , act as economic or legal barriers to cross - border activity and create an unlevel playing field between actors . ### the commission has identified a series of problems in eu mortgage markets associated with irresponsible lending and borrowing at the pre - contractual stage and the potential scope for irresponsible behaviour by credit intermediaries and non - credit institutions . some problems concerned loans denominated in a foreign currency which consumers had taken out in that currency to take advantage of the interest rate offered but without having an adequate understanding of the currency risk involved . these problems are driven by market and regulatory failures as well as other factors such as the general economic climate and low levels of financial literacy . the commission has identified as other problems ineffective , inconsistent , or non - existent registration , authorisation and supervision regimes for credit intermediaries and non - credit institutions providing credit for residential immovable property .


### in order to facilitate the emergence of a smoothly functioning internal market with a high level of consumer protection in the area of credit agreements relating to residential immovable property , a harmonised union framework needs to be established in a number of areas . it is further necessary to establish harmonised standards in order to ensure that consumers looking for credit agreements relating to residential immovable property are able to do so confident in the knowledge that the institutions they interact with act in a professional and responsible manner . ### in order to determine the scope for the emergence of a smoothly functioning internal market with a high level of consumer protection in the area of credit agreements relating to residential immovable property , a harmonised union framework could prove useful in a number of areas . at the same time , harmonised standards could be established in order to ensure that consumers looking for credit agreements relating to residential immovable property are able to do so confident in the knowledge that the institutions they interact with act in a professional and responsible manner . in that connection , due account should be taken of the highly local nature of the market in credit agreements relating to residential immovable property . in this area in particular , consumers are very much in need of local advice .


### for those areas not covered by this directive , member states should be free to maintain or introduce national legislation . member states should be able to maintain or introduce national provisions in areas such as contract law relating to the validity of credit agreements , property valuation , land registration , contractual information , post - contractual issues , and handling defaults . ### for those areas not covered by this directive , member states , as well as regions with legislative powers on this subject , should be free to maintain or introduce legislation . they should be able to maintain or introduce provisions in areas such as contract law relating to the validity of credit agreements , property valuation , land registration , contractual information , post - contractual issues , and handling defaults .


### as consumers and enterprises are not in the same position , they do not need the same level of protection . while it is important to guarantee consumers’ rights by provisions that cannot be derogated from by contract , it is reasonable to let enterprises and organisations engage in other agreements . this directive should therefore apply to credit granted to consumers . member states should , however , have the possibility to extend the scope to natural or legal persons that are not consumers , notably micro - enterprises , as defined by commission recommendation 2003 / 361 / ec of 6 may 2003 concerning the definition of micro , small and medium - sized enterprises26 . ### as consumers and enterprises are not in the same position , they do not need the same level of protection . while it is important to guarantee consumers’ rights by provisions that cannot be derogated from by contract , it is reasonable to let enterprises and organisations engage in other agreements . this directive should therefore only apply to credit granted to consumers .


### the commission recommendation 2001 / 193 / ec on pre - contractual information to be given to consumers by lenders offering home loans32 endorsed the voluntary code agreed in 2001 between associations and federations representing lenders and consumers and which contains a european standardised information sheet . this provides information , personalised for the borrower , on the credit agreement being provided . in its recommendation , the commission committed to monitoring compliance with the code as well as its effectiveness , and to consider presenting binding legislation should the terms of the recommendation not be fully complied with . evidence collected by the commission has since highlighted the need to revise the content and presentation of the esis to ensure that it is clear , understandable and contains all information found to be relevant for consumers . the content and layout of the esis should incorporate the necessary improvements identified during consumer testing in all member states . the structure of the sheet should be revised , the wording should be more user - friendly , while sections , such as ‘ nominal rate’ and ‘ annual percentage rate of charge’ , should be merged and new sections , such as ‘ external complaint body’ and ‘ risks and warnings’ , should be added . ### in accordance with the commission recommendation 2001 / 193 / ec the commission monitored the european standardised information sheet that provides information , personalised for the borrower , on the credit agreement being provided . evidence collected by the commission has highlighted the need to revise the content and presentation of the esis to ensure that it is clear , understandable and contains all information found to be relevant for consumers . the content and layout of the esis should incorporate the necessary improvements identified during consumer testing in all member states . the structure of the sheet should be revised , the wording should be more user - friendly , while sections , such as ‘ nominal rate’ and ‘ annual percentage rate of charge’ , should be merged and new sections , such as ‘ external complaint body’ and ‘ risks and warnings’ , should be added .


### the consumer may still need additional assistance in order to decide which credit agreement , within the range of products proposed , is the most appropriate for his needs and financial situation . creditors , and where the transaction is through a credit intermediary , credit intermediaries should provide such assistance in relation to the credit products which they offer to the consumer . the relevant information , as well as the essential characteristics of the products proposed , should therefore be explained to the consumer in a personalised manner so that the consumer can understand the effects which they may have on his economic situation . member states could determine when and to what extent such explanations are to be given to the consumer , taking into account the particular circumstances in which the credit is offered , the consumer’s need for assistance and the nature of individual credit products . ### the consumer may still need additional assistance in order to decide which credit agreement , within the range of products proposed , is the most appropriate for his needs and financial situation . creditors , and where the transaction is through a credit intermediary , credit intermediaries should provide such assistance in relation to the credit products which they offer to the consumer . the relevant information , as well as the essential characteristics of the products proposed , should therefore be explained to the consumer in a personalised manner so that the consumer can understand the effects which they may have on his economic situation . member states could determine when and to what extent such explanations are to be given to the consumer , taking into account the particular circumstances in which the credit is offered , the consumer’s need for assistance and the nature of individual credit products . such explanation and provision of personalised information should not necessarily constitute a personal advice .


### in order to promote the establishment and functioning of the internal market and to ensure a high degree of protection for consumers throughout the union , it is necessary to ensure the comparability of information relating to annual percentage rates of charge throughout the union . the total cost of the credit to the consumer should comprise all the costs that the consumer has to pay in connection with the credit agreement , except for notarial costs . it should therefore include interest , commissions , taxes , fees for credit intermediaries and any other fees as well as the cost of insurance or other ancillary products , where these are obligatory in order to obtain the credit on the terms and conditions marketed . as the annual percentage rate of charge can at the pre - contractual stage be indicated only through an example , such an example should be representative . therefore , it should correspond , for instance , to the average duration and total amount of credit granted for the type of credit agreement under consideration . given the complexities of calculating an annual percentage rate of charge and in order to be able to accommodate product innovation , technical regulatory standards could be employed to amend or specify the method of calculation of the annual percentage rate of charge . the definition of and methodology used for calculating the annual percentage rate of charge in this directive should be the same as those in directive 2008 / 48 / ec in order to facilitate consumer understanding and comparison . those definitions and methodologies may , however , differ in the future should directive 2008 / 48 / ec be modified at a later date . member states are free to maintain or introduce prohibitions on unilateral changes to the borrowing rate by the creditor . ### in order to promote the establishment and functioning of the internal market and to ensure a high degree of protection for consumers throughout the union , it is necessary to ensure the comparability of information relating to annual percentage rates of charge throughout the union . the total cost of the credit to the consumer should comprise all the costs that the consumer has to pay in direct connection with the credit agreement , except for costs regarding the guarantees . also indirect costs or incentives that will only be settled later should not be taken into account . it should therefore include interest , commissions , taxes , fees for credit intermediaries and any other fees as well as the cost of credit insurance , the valuation of the property or other ancillary products , where these are obligatory in order to obtain the credit on the terms and conditions marketed . as the annual percentage rate of charge can at the pre - contractual stage be indicated only through an example , such an example should be representative . therefore , it should correspond , for instance , to the average duration and total amount of credit granted for the type of credit agreement under consideration . given the complexities of calculating an annual percentage rate of charge and in order to be able to accommodate product innovation , technical regulatory standards could be employed to amend or specify the method of calculation of the annual percentage rate of charge . the definition of and methodology used for calculating the annual percentage rate of charge in this directive should be the same as those in directive 2008 / 48 / ec in order to facilitate consumer understanding and comparison . those definitions and methodologies may , however , differ in the future should directive 2008 / 48 / ec be modified at a later date . member states are free to maintain or introduce prohibitions on unilateral changes to the borrowing rate by the creditor .


### consumers should provide all available relevant information on their financial situation and personal circumstances to the creditor or intermediary in order to facilitate the creditworthiness assessment . the consumer should not , however , be penalised where he is not in a position to provide certain information or assessments of the future evolution of his financial situation . in situations where consumers knowingly provide incomplete or inaccurate information , member states should be able to determine the appropriate penalties . ### upon the request of the creditor , consumers should provide all available relevant information on their financial situation and personal circumstances to the creditor or intermediary in order to facilitate the creditworthiness assessment . the consumer should not , however , be penalised where he is not in a position to provide certain information or assessments of the future evolution of his financial situation . in situations where consumers knowingly provide incomplete or inaccurate information , member states should be able to determine the appropriate penalties .


### consultation of a credit database is a useful element in the assessment of creditworthiness . some member states require creditors to assess the creditworthiness of consumers on the basis of a consultation of the relevant database . creditors should also be able to consult the credit database over the lifetime of the loan in order to identify and assess the potential for default . in the event that such a potential is evident or objectively demonstrated , the creditor should contact the consumer to discuss the different options to avoid the possibility of default , such as a rescheduling of the loan . in any event , the creditor should not consider withdrawing the credit without having first explored all possible alternatives with the consumer to avoid default . pursuant to directive 95 / 46 / ec of the european parliament and of the council of 24 october 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data33 , consumers should be informed by creditors of the consultation of the credit database prior to its consultation , and should have the right to access the information held on them in such a credit database in order to , where necessary , rectify , erase or block the personal data concerning them processed therein where it is inaccurate or has been unlawfully processed . ### consultation of a credit database is a useful element in the assessment of creditworthiness . some member states require creditors to assess the creditworthiness of consumers on the basis of a consultation of the relevant database . pursuant to directive 95 / 46 / ec of the european parliament and of the council of 24 october 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data33 , consumers should be informed by creditors of the consultation of the credit database , and should have the right to access the information held on them in such a credit database in order to , where necessary , rectify , erase or block the personal data concerning them processed therein where it is inaccurate or has been unlawfully processed .


### this directive shall apply to the following credit agreements : ### this directive shall apply to : – credit agreements for the purpose of acquiring or retaining rights in land or residential immovable property and which are secured either by a mortgage or another comparable security commonly used in a member state on residential immovable property or secured by a right related to residential immovable property . 1a . member states shall decide to apply either the provisions of this directive or directive 2008 / 48 / ec to the following credit agreements : credit agreements for other purposes than acquiring or retaining rights in land or residential immovable property which are secured either by a mortgage or another comparable security commonly used in a member state on residential immovable property or secured by a right related to residential immovable property . credit agreements in of more than 75 . 000 eur for the purpose of renovation of the residential immovable property a person owns or aims to acquire .


### member states shall ensure that the manner in which creditors remunerate their staff and the relevant credit intermediaries and the manner in which credit intermediaries remunerate their staff do not impede compliance with the obligation to act in accordance with the best interests of the consumer , as referred to in paragraph 1 . ### member states shall ensure that the manner in which creditors remunerate their staff and the relevant credit intermediaries and the manner in which credit intermediaries remunerate their staff do not impede compliance with the obligations , as referred to in paragraph 1 .


### an indicative example of the total cost of credit for the consumer and annual percentage rate of charge ; ### an indicative representative example of the total cost of credit for the consumer and annual percentage rate of charge ; where the consumer has informed the creditor of one or more components of his preferred credit , such as the duration of the credit agreement and the total amount of credit , the creditor shall take those components into account ;


### member states shall ensure that the creditor and , where applicable , the credit intermediary , without undue delay after the consumer has given the necessary information on his needs , financial situation and preferences in accordance with article 14 , provides the consumer with the personalised information needed to compare the credits available on the market , assess their implications and take an informed decision on whether to conclude a credit agreement . such information , on paper or on another durable medium , shall be provided by means of the european standardised information sheet , as set out in annex ii . ### the creditor and , where applicable , the credit intermediary , shall on the basis of credit terms and conditions offered by the creditor and the information received from the consumer on his needs , financial situation and preferences , provide the consumer with the personalised information needed to compare the credits available on the market , assess their implications and take an informed decision on whether to conclude a credit agreement . this information shall be given in good time before the consumer is bound by any credit agreement or offer . such information , on paper or on another durable medium , shall be provided by means of the european standardised information sheet , as set out in annex ii .


### member states shall ensure that the creditor and , where applicable , the credit intermediary , without undue delay after the consumer has given the necessary information on his needs , financial situation and preferences in accordance with article 14 , provides the consumer with the personalised information needed to compare the credits available on the market , assess their implications and take an informed decision on whether to conclude a credit agreement . such information , on paper or on another durable medium , shall be provided by means of the european standardised information sheet , as set out in annex ii . ### member states shall ensure that the creditor and , where applicable , the credit intermediary , without undue delay after the consumer has given the necessary information on his needs , financial situation and preferences in accordance with article 14 , provides the consumer with the personalised information needed to compare the credits available on the market , assess their implications and take an informed decision on whether to conclude a credit agreement . such information , on paper or on another durable medium , shall be provided by means of the european standardised information sheet , as set out in annex ii . where a substantially similar version of the esis already exists in a member state , a transition period for standardisation shall be allowed .


### the powers to adopt delegated acts referred to in articles 6 , 8 , 9 , 10 , 14 and 16 shall be conferred on the commission for an indeterminate period of time following the entry into force of this directive . 2 . as soon as it adopts a delegated act , the commission shall notify it simultaneously to the european parliament and to the council . 3 . the power to adopt delegated acts is conferred on the commission subject to the conditions laid down in articles 27 and 28 . ### the power to adopt delegated acts referred to in article 12 shall be conferred on the commission subject to the conditions laid down in this article . 2 . the power referred to in article 12 shall be conferred on the commission for an indeterminate period of time following the entry into force of this directive . 3 . the delegation of power referred to in article 12 may be revoked at any time by the european parliament or by the council . a decision to revoke shall put an end to the delegation of the power specified in that decision . it shall take effect the day following the publication of the decision in the official journal of the european union or at a later date specified therein . it shall not affect the validity of any delegated acts already in force . 3a . as soon as it adopts a delegated act , the commission shall notify it simultaneously to the european parliament and to the council . 3b . a delegated act adopted pursuant to article 12 shall enter into force only if no objection has been expressed either by the european parliament or the council within a period of three months of notification of that act to the european parliament and the council or if , before the expiry of that period , the european parliament and the council have both informed the commission that they will not object . that period shall be extended by two months at the initiative of the european parliament or the council .


### the delegation of powers referred to in articles 6 , 8 , 9 , 10 , 14 and 16 may be revoked at any time by the european parliament or by the council . ### the delegation of powers referred to in article 12 may be revoked at any time by the european parliament or by the council .


### the result of the calculation shall be expressed with an accuracy of at least one decimal place . if the figure at the following decimal place is greater than or equal to 5 , the figure at that particular decimal place shall be increased by one . ### the result of the calculation shall be expressed with an accuracy of at least one decimal place . if the figure at the following decimal place is greater than or equal to 5 , the figure at the preceding decimal place shall be increased by one .


### the commission should be empowered to adopt delegated acts in accordance with article 290 of the treaty for the purpose of amending certain references to the relevant regulations in marpol 73 / 78 and to resolutions mepc 111 and 94 , in order to align the references with amendments to those regulations and resolutions adopted by theimo , in so far as such amendments do not broaden the scope of this regulation , ### the power to adopt acts should be delegated to the commission in accordance with article 290 of the treaty on the functioning of the european union in respect of certain references to the relevant regulations in marpol 73 / 78 and to resolutions mepc 111 and 94 , in order to align the references with amendments to those regulations and resolutions adopted by the imo , in so far as such amendments do not broaden the scope of this regulation , it is of particular importance that the commission carry out appropriate consultations during its preparatory work , including at expert level . the commission , when preparing and drawing up delegated acts , should ensure a simultaneous , timely and appropriate transmission of relevant documents to the european parliament and to the council .


### the powers to adopt the delegated acts referred to in the first subparagraph of article 10 shall be conferred on the commission for an indeterminate period of time . ### - 1 . the power conferred on the commission to adopt delegated acts shall be subject to the conditions laid down in this article . the powers to adopt the delegated acts referred to in the first subparagraph of article 10 shall be conferred on the commission for a period of five years from [ date of entry into force ] . the commission shall draw up a report in respect of the delegation of power not later than nine months before the end of the&#160 ; five - year period . the delegation of power shall be tacitly extended for periods of an identical duration , unless the european parliament or the council opposes such extension not later than three months before the end of each period . 2 . the delegation of power referred to in the first subparagraph of article 10 may be revoked at any time by the european parliament or by the council . a decision of revocation shall put an end to the delegation of the power specified in that decision . the revocation shall take effect on the day following the publication of the decision in the official journal of the european union or at a later date specified therein . it shall not affect the validity of the delegated acts already in force . 3 . as soon as it adopts a delegated act , the commission shall notify it simultaneously to the european parliament and to the council . 4 . a delegated act adopted pursuant to the first subparagraph of article 10 shall enter into force only if no objection has been expressed either by the european parliament or the council within a period of two months from the notification of that act to the european parliament and the council or if , before the expiry of that period , the european parliament and the council have both informed the commission that they will not object . that period shall be extended by two months at the initiative of the european parliament or of the council .


### the intensity of the economic and fiscal surveillance should be commensurate to the severity of the financial difficulties encountered and should take due account of the nature of the financial assistance received , which may range from a mere precautionary support based on eligibility conditions up to a full macro - economic adjustment programme involving strict policy conditionality . ### the intensity of the economic and fiscal surveillance should be commensurate to the severity of the financial difficulties encountered and should take due account of the nature of the financial assistance received , which may range from a mere precautionary support based on eligibility conditions up to a full macro - economic adjustment programme involving strict policy conditionality . any macro - economic adjustment programme should , where possible , take into account the national reform programme of the member state concerned in the context of the europe 2020 strategy for growth and jobs .


### this regulation sets out provisions for strengthening the economic and budgetary surveillance of member states experiencing or threatened with serious difficulties with respect to their financial stability and / or that receive or may receive financial assistance from one or several other states , the european financial stability facility , the european financial stability mechanism , the european stability mechanism or other international financial institutions , such as the international monetary fund . ### this regulation sets out provisions for strengthening the economic and budgetary surveillance of member states experiencing or threatened with serious difficulties with respect to their financial stability and / or that have requested or receive financial assistance from one or several other states , the european financial stability facility , the european financial stability mechanism , the european stability mechanism or other international financial institutions , such as the international monetary fund . financial assistance covers all forms of financial support including pre - cautionary financial assistance .


### the commission , in liaison with the ecb , shall monitor the progress made in the implementation of the adjustment programme and inform every three months the efc or any subcommittee the latter may designate for that purpose . the member state concerned shall give the commission its full cooperation . it shall in particular provide to the commission all the information that the latter deems necessary for the monitoring of the programme . article 3 shall apply . ### the commission , in liaison with the ecb , shall monitor the progress made in the implementation of the adjustment programme and inform every three months the efc or any subcommittee the latter may designate for that purpose and the competent committee of the european parliament . the member state concerned shall give the commission its full cooperation . it shall in particular provide to the commission all the information that the latter deems necessary for the monitoring of the programme . article 3 shall apply . in the case of insufficient cooperation , the council , on a proposal from the commission , may address a public request to the member state concerned laying down the action to be taken by that member state .


### in order to provide for enhanced transparency of payments made to governments , large undertakings and public interest entities which are active in the extractive industry or logging of primary forests should disclose in a separate report on an annual basis material payments made to governments in the countries in which they operate . such undertakings are active in countries rich in natural resources , in particular minerals , oil , natural gas as well as primary forests . the report should include types of payments comparable to those disclosed by an undertaking participating in the extractive industries transparency initiative . the initiative is also complementary to the eu flegt action plan and the timber regulation which require traders of timber products to exercise due diligence in order to prevent illegal wood from entering into the eu market . ### in order to provide for enhanced transparency of payments made to governments , all large undertakings and public interest entities should disclose as part of the annual report of financial statements a report on material payments made to governments in the countries in which they operate , as well as additional financial information regarding their activities in third countries . where such undertakings are active in the extraction of natural resources , in particular minerals , oil , natural gas as well as primary forests , reporting shall also specify the specific project or projects to which those payments have been attributed . the report should build upon the disclosure requirements of the extractive industries transparency initiative . the initiative is also complementary to the eu flegt action plan and the timber regulation which require traders of timber products to exercise due diligence in order to prevent illegal wood from entering into the eu market .


### the reports should serve to facilitate governments of resource - rich countries in implementing the eiti principles and criteria and account to their citizens for payments such governments receive from undertakings active in the extractive industry or loggers of primary forests operating within their jurisdiction . the report should incorporate disclosures on a country and project basis , where a project is considered as the lowest level of operational reporting unit at which the undertaking prepares regular internal management reports , such as a concession , geographical basin , etc and where payments have been attributed to such projects . in the light of the overall objective of promoting good governance in these countries , the materiality of payments to be reported should be assessed in relation to the recipient government . various criteria on materiality could be envisaged such as payments of an absolute amount , or a percentage threshold and these can be defined through a delegated act . the reporting regime should be subject to a review and a report by the commission within five years of the entry into force of the directive . the review should consider the effectiveness of the regime and take into account international developments including issues of competitiveness and energy security . the review should also take into account the experience of preparers and users of the payments information and consider whether it would be appropriate to include additional payment information such as effective tax rates and recipient details , such as bank account information . ### the reports should serve to facilitate governments to be accountable to their citizens for payments such governments receive from undertakings operating within their jurisdiction . the report should incorporate disclosures on a country basis and in the case of undertakings active in the extractive industries or the logging of primary forests , the report should also specify the specific project or projects to which those payments have been attributed , a project being considered equivalent to the contract , licence , lease , concession or other legal agreement which gives rise to a company ' s tax and revenue liabilities in each country where it operates . where any payment liabilities are incurred on a different basis , reporting shall be on that basis . in the light of the overall objective of promoting good governance in these countries , payments shall be considered material if any one payment or set of payments of the same type amounts to more than eur 15 000 . the reporting regime should be subject to a review and a report by the commission within five years of the entry into force of the directive . the review should consider the effectiveness of the regime and take into account international developments including issues of competitiveness and energy security . the review should also take into account the experience of preparers and users of the payments information and consider whether it would be appropriate to include additional payment information .


### in order to take account of future changes to the laws of the member states and in the legislation of the union concerning company types , the commission should be empowered to adopt delegated acts in accordance with article 290 of the treaty in respect of updating the lists of undertakings contained in annexes i and ii . the use of delegated acts is also necessary to adapt the undertaking size criteria , as with the passage of time inflation will erode their real value . it is of particular importance that the commission carry out appropriate consultations during its preparatory work , including at expert level . in order to ensure a relevant and appropriate level of disclosure of payments to governments by the extractive industry and loggers of primary forests and to ensure uniform application of this directive , the commission should be empowered to adopt delegated acts in accordance with article 290 of the treaty in respect of the specification of the concept of materiality of payments . ### in order to take account of future changes to the laws of the member states and in the legislation of the union concerning company types , the commission should be empowered to adopt delegated acts in accordance with article 290 of the treaty in respect of updating the lists of undertakings contained in annexes i and ii . the use of delegated acts is also necessary to adapt the undertaking size criteria , as with the passage of time inflation will erode their real value . it is of particular importance that the commission carry out appropriate consultations during its preparatory work , including at expert level .


### ' project ' is equivalent to a specific operational reporting unit at the lowest level within the undertaking at which regular internal management reports are prepared to monitor its business . ### ' project ' is equivalent to the contract , licence , lease , concession or other legal agreement which gives rise to a company ' s tax and revenue liabilities in each country where it operates . where any payment liabilities are incurred on a different basis , reporting shall be on that basis .


### the report shall specify the following when material to the recipient government : ### the report shall specify the following :


### other direct benefits to the government concerned . ### other benefits to the government concerned .


### a member state shall require any large undertaking or any public interest entity active in the extractive industry or the logging of primary forests and governed by its national law to draw up a consolidated report on payments to governments in accordance with articles 37 and 38 if that parent undertaking is under the obligation to prepare consolidated financial statements as laid down in article 23 to 23 of this directive . ### a member state shall require any large undertaking or any public interest entity governed by its national law to draw up a consolidated report on payments to governments in accordance with articles 37 and 38 if that parent undertaking is under the obligation to prepare consolidated financial statements as laid down in article 23 to 23 of this directive .


### this regulation aims at the completion of the single electronic communications market through action on three broad , inter - related axes . first , it should secure the freedom to provide electronic communications services across borders and networks in different member states , building on the concept of a single eu authorisation which puts in place the conditions for ensuring greater consistency and predictability in the content and implementation of sector - specific regulation throughout the union . second , it is necessary to enable access on much more convergent terms and conditions to essential inputs for the cross - border provision of electronic communications networks and services , not only for wireless broadband communications , for which both licensed and unlicensed spectrum is key , but also for fixed line connectivity . third , in the interests of aligning business conditions and building the digital confidence of citizens , this regulation should harmonise rules on the protection of end - users , especially consumers . this includes rules on non - discrimination , contractual information , termination of contracts and switching , in addition to rules on access to online content , applications and services and on traffic management which not only protect end - users but simultaneously guarantee the continued functioning of the internet ecosystem as an engine of innovation . in addition , further reforms in the field of roaming should give end - users the confidence to stay connected when they travel in the union , and should become over time a driver of convergent pricing and other conditions in the union . ### this regulation aims at the completion of the single electronic communications market through action on three broad , inter - related axes . first , it should secure the freedom to provide electronic communications services across borders and networks in different member states , building on the concept of a single eu authorisation which puts in place the conditions for ensuring greater consistency and predictability in the content and implementation of sector - specific regulation throughout the union . second , it is necessary to enable access on much more convergent terms and conditions to essential inputs for the cross - border provision of electronic communications networks and services , not only for wireless broadband communications , for which both licensed and unlicensed spectrum is key , but also for fixed line connectivity . third , in the interests of aligning business conditions and building the digital confidence of citizens , this regulation should harmonise rules on the protection of end - users , especially consumers . this includes rules on non - discrimination , contractual information , termination of contracts and switching , in addition to rules on net neutrality , safeguarding non - discriminatory access to online content , applications and services and on traffic management which not only protect end - users but simultaneously guarantee the continued functioning of the internet ecosystem as an engine of innovation . in addition , further reforms in the field of roaming should give end - users the confidence to stay connected when they travel in the union , and should become over time a driver of convergent pricing and other conditions in the union .


### in a context of progressive migration to ‘ all ip networks’ , the lack of availability of connectivity products based on the ip protocol for different classes of services with assured service quality that enable communication paths across network domains and across network borders , both within and between member states , hinders the development of applications that rely on access to other networks , thus limiting technological innovation . moreover , this situation prevents the diffusion on a wider scale of efficiencies which are associated with the management and provision of ip - based networks and connectivity products with an assured service quality level , in particular enhanced security , reliability and flexibility , cost - effectiveness and faster provisioning , which benefit network operators , service providers and end users . a harmonised approach to the design and availability of these products is therefore necessary , on reasonable terms including , where requested , the possibility of cross - supply by the electronic communications undertakings concerned . ### in a context of progressive migration to ‘ all ip networks’ , the lack of availability of connectivity products based on the ip protocol for different classes of services with an enhanced quality of service within closed communications networks hinders the development of services that rely on this enhanced quality in order to function adequately . a harmonised approach to the design and availability of these services is therefore necessary , including safeguards to guarantee that the enhanced quality is not to the detriment of the performance , affordability or quality of internet access services or undermines competition , innovation or net neutrality .


### the internet has developed over the past decades as an open platform for innovation with low access barriers for end - users , content and application providers and internet service providers . the existing regulatory framework aims at promoting the ability of end - users to access and distribute information or run applications and services of their choice . recently , however , the report of the body of european regulators for electronic communications on traffic management practices published in may 2012 and a study , commissioned by the executive agency for consumers and health and published in december 2012 , on the functioning of the market of internet access and provision from a consumer perspective , showed that a significant number of end - users are affected by traffic management practices which block or slow down specific applications . these tendencies require clear rules at the union level to maintain the open internet and to avoid fragmentation of the single market resulting from individual member states ' measures . ### the internet has developed over the past decades as an open platform for innovation with low access barriers for end - users , content and application providers and internet service providers . the key driver of the unprecedented innovation and economic activity in the digital age has been the fact that all internet traffic is treated equally , without discrimination , restriction or interference , independent of its sender , receiver , type , content , device , service or application ; conform the principle of net neutrality . the existing regulatory framework aims at promoting the ability of end - users to access and distribute information or run applications and services of their choice . recently , however , the report of the body of european regulators for electronic communications on traffic management practices published in may 2012 and a study , commissioned by the executive agency for consumers and health and published in december 2012 , on the functioning of the market of internet access and provision from a consumer perspective , showed that a significant number of end - users are affected by traffic management practices which block or slow down specific content , services or applications . these tendencies require clear rules to enshrine the principle of net neutrality in law at the union level to maintain the open internet and to avoid fragmentation of the single market resulting from individual member states ' measures .


### the freedom of end - users to access and distribute information and lawful content , run applications and use services of their choice is subject to the respect of union and compatible national law . this regulation defines the limits for any restrictions to this freedom by providers of electronic communications to the public but is without prejudice to other union legislation , including copyright rules and directive 2000 / 31 / ec . ### the right of end - users to access and distribute information and lawful content , run applications and use services of their choice is subject to the respect of union and compatible national law . this regulation defines the limits for any restrictions to this right by providers of electronic communications to the public but is without prejudice to other union legislation , including directive 2000 / 31 / ec .


### in an open internet , providers of electronic communications to the public should , within contractually agreed limits on data volumes and speeds for internet access services , not block , slow down , degrade or discriminate against specific content , applications or services or specific classes thereof except for a limited number of reasonable traffic management measures . such measures should be transparent , proportionate and non - discriminatory . reasonable traffic management encompasses prevention or impediment of serious crimes , including voluntary actions of providers to prevent access to and distribution of child pornography . minimising the effects of network congestion should be considered reasonable provided that network congestion occurs only temporarily or in exceptional circumstances . ### in an open internet , providers of electronic communications to the public should not block , slow down , degrade or discriminate against specific content , applications or services or specific classes thereof except for a limited number of reasonable traffic management measures . any price discrimination against content , applications or services or any discriminatory conditions regarding data flow and volumes should be prohibited . reasonable traffic management measures should be transparent , proportionate and non - discriminatory . reasonable traffic management encompasses prevention or impediment of serious crimes , including voluntary actions of providers to prevent access to and distribution of child pornography . minimising the effects of network congestion should be considered reasonable provided that network congestion occurs only temporarily or in exceptional circumstances .


### in an open internet , providers of electronic communications to the public should , within contractually agreed limits on data volumes and speeds for internet access services , not block , slow down , degrade or discriminate against specific content , applications or services or specific classes thereof except for a limited number of reasonable traffic management measures . such measures should be transparent , proportionate and non - discriminatory . reasonable traffic management encompasses prevention or impediment of serious crimes , including voluntary actions of providers to prevent access to and distribution of child pornography . minimising the effects of network congestion should be considered reasonable provided that network congestion occurs only temporarily or in exceptional circumstances . ### in an open internet , providers of electronic communications to the public should , within contractually agreed limits on data volumes and speeds for internet access services , not block , slow down , degrade or discriminate against specific content , applications or services or specific classes thereof except for a limited number of clearly defined reasonable traffic management measures . such measures should be transparent , proportionate and non - discriminatory . reasonable traffic management encompasses prevention or impediment of serious crimes , including voluntary actions of providers to prevent access to and distribution of child pornography , subject to ex post judicial review . minimising the effects of network congestion could be considered reasonable provided that network congestion occurs only temporarily or in exceptional circumstances .


### volume - based tariffs should be considered compatible with the principle of an open internet as long as they allow end - users to choose the tariff corresponding to their normal data consumption based on transparent information about the conditions and implications of such choice . at the same time , such tariffs should enable providers of electronic communications to the public to better adapt network capacities to expected data volumes . it is essential that end - users are fully informed before agreeing to any data volume or speed limitations and the tariffs applicable , that they can continuously monitor their consumption and easily acquire extensions of the available data volumes if desired . ### volume - based tariffs should be considered compatible with the principle of an open internet as long as they allow end - users to choose the tariff corresponding to their normal data consumption based on transparent information about the conditions and implications of such choice . at the same time , such tariffs should enable providers of electronic communications to the public to better adapt network capacities to expected data volumes . it is essential that end - users are fully informed before agreeing to any data volume or speed limitations and the tariffs applicable , that they can continuously monitor their consumption and easily acquire extensions of the available data volumes if desired and that volume limits on internet traffic are applied in a non - discriminatory manner , independent of the sender , receiver , type , content , device , service or application in accordance with the principle of net neutrality .


### there is also end - user demand for services and applications requiring an enhanced level of assured service quality offered by providers of electronic communications to the public or by content , applications or service providers . such services may comprise inter alia broadcasting via internet protocol , video - conferencing and certain health applications . end - users should therefore also be free to conclude agreements on the provision of specialised services with an enhanced quality of service with either providers of electronic communications to the public or providers of content , applications or services . ### there is also end - user demand for services and applications requiring an enhanced quality of service offered by providers of electronic communications to the public or by content , applications or service providers . such services may comprise inter alia broadcasting via internet protocol , video - conferencing , gaming and certain health applications . end - users should therefore also be free to conclude voluntary agreements on the provision of specialised services with an enhanced quality of service with either providers of electronic communications to the public or providers of content , applications or services . where such agreements are concluded with a provider of internet access services , that provider shall ensure that the enhanced quality is not to the detriment of the performance , affordability or quality of internet access services and does not restrict net neutrality .