### the exception should not cover placing the product made for the exclusive purpose of export on the market in the member state where a supplementary protection certificate is in force , either directly or indirectly after export , nor should it cover re - importation of the product to the market of a member state in which a certificate is in force . moreover , it should not cover any act or activity for the purpose of import of medicinal products , or parts of medicinal products , into the union merely for the purposes of repackaging and re - exporting . ### the exception should not cover placing the product made for the exclusive purposes of export or day - 1 entry on the market in the member state where a supplementary protection certificate is in force , either directly or indirectly after export , nor should it cover re - importation of the product to the market of a member state in which a certificate is in force . moreover , it should not cover any act or activity for the purpose of import of medicinal products , or parts of medicinal products , into the union merely for the purposes of repackaging and re - exporting .


### where the seller is liable to the consumer because of a lack of conformity with the contract resulting from an act or omission by a person in earlier links of the chain of transactions , the seller shall be entitled to pursue remedies against the person or persons liable in the chain of transactions . the person against whom the seller may pursue remedies and the relevant actions and conditions of exercise , shall be determined by national law . ### where the seller is liable to the consumer because of a lack of conformity with the contract resulting from an act or omission by a person in previous links of the chain of transactions , the seller shall be entitled to pursue remedies against the person or persons liable in the chain of transactions . the person against whom the seller may pursue remedies and the relevant actions and conditions of exercise shall be determined by national law .


### conformity should cover material defects as well as legal defects . third party rights and other legal defects might effectively bar the consumer from enjoying the goods in accordance with the contract when the right ' s holder rightfully compels the consumer to stop infringing those rights . therefore the seller should ensure that the goods are free from any right of a third party , which precludes the consumer from enjoying the goods in accordance with the contract . ### conformity should cover material defects as well as legal defects . third party rights and other legal defects might effectively bar the consumer from enjoying the goods in accordance with the contract when the right ' s holder rightfully compels the consumer to stop infringing those rights . therefore the seller should ensure the observance of third - party rights in respect of the goods .


### considering that the seller is liable towards the consumer for any lack of conformity of the goods resulting from an act or omission of the seller or a third party it is justified that the seller should be able to pursue remedies against the responsible person earlier in the chain of transactions . however , this directive should not affect the principle of freedom of contract between the seller and other parties in the chain of transactions . the details for exercising that right , in particular against whom and how such remedies are to be pursued , should be provided by the member states . ### considering that the seller is liable towards the consumer for any lack of conformity of the goods resulting from an act or omission of the seller or a third party , the seller should be able to pursue remedies against the responsible person in previous links of the chain of transactions . however , this directive should not affect the principle of freedom of contract between the seller and other parties in the chain of transactions . the details for exercising that right , in particular against whom and how such remedies are to be pursued , should be provided by the member states .


### this directive lays down certain requirements concerning distance sales contracts concluded between the seller and the consumer , in particular rules on conformity of goods , remedies in case of non - conformity and the modalities for the exercise of these remedies . ### the purpose of this directive is , through the achievement of a high level of consumer protection , to contribute to the proper functioning of the internal market by laying down certain requirements concerning sales contracts concluded between the seller and the consumer , in particular rules on conformity of goods with the contract , remedies in cases of non - conformity and the modalities for the exercise of these remedies .


### where the lack of conformity with the contract relates to only some of the goods delivered under the contract and there is a ground for termination of a contract pursuant to article 9 , the consumer may terminate the contract only in relation to those goods and any other goods , which the consumer acquired as an accessory to the non - conforming goods . ### where the lack of conformity with the contract relates to only some of the goods delivered under the contract which are separable from the other goods and there is a ground for termination of a contract pursuant to article 9 in relation to those non - conforming goods , the consumer may terminate the contract only in relation to those separable goods and any other goods which the consumer acquired as an accessory to the non - conforming goods , unless the consumer cannot be expected to accept performance of the part of the contract in relation to the goods which are in conformity .


### the consumer shall be entitled to a remedy for the lack of conformity with the contract of the goods where the lack of conformity becomes apparent within two years as from the relevant time for establishing conformity . if , under national legislation , the rights laid down in article 9 are subject to a limitation period , that period shall not be shorter than two years from the relevant time for establishing conformity with the contract . ### the consumer shall be entitled to a remedy for the lack of conformity with the contract of the goods where the lack of conformity becomes apparent within two years from the relevant time for establishing conformity . where the consumer can reasonably expect that the lifespan of a product is longer than two years , and the lack of conformity becomes apparent within that lifespan , the consumer shall also be entitled to a remedy for that lack of conformity . in order to determine the lifespan of a product which is reasonable for the consumer to expect , all circumstances shall be taken into account , including in particular : durability requirements laid down by product - specific legislation , or durability information indicated in any pre - contractual or public statement made by the seller , or , where relevant , by other persons in earlier links of the chain of transactions , including the producer . if , under national legislation , the rights laid down in article 9 are subject to a limitation period , that period shall not be shorter than the time limit specified in the first subparagraph of this paragraph .


### increased competition among retailers is likely to result in wider choices at more competitive prices being offered to consumers . consumers will benefit from a high level of consumer protection and welfare gains through targeted fully harmonised rules . this in turn would increase their trust in the cross - border commerce at a distance and in particular online . consumers will more confidently buy at a distance cross - border knowing they would enjoy the same rights across the union . ### increased competition among retailers is likely to result in wider choices at more competitive prices being offered to consumers . consumers will benefit from a high level of consumer protection and welfare gains through targeted fully harmonised rules . this would also increase their trust in the cross - border commerce at a distance and in particular online . consumers will more confidently buy at a distance cross - border knowing they would enjoy the same rights across the union .


### the seller shall reimburse to the consumer the price paid without undue delay and in any event not later than 14 days from receipt of the notice and shall bear the cost of the reimbursement ; ### the seller shall reimburse to the consumer the price paid without undue delay and in any event not later than 14 days from receipt of the goods and shall bear the cost of the reimbursement . where article 13 applies , the seller shall reimburse to the consumer the price paid without undue delay and in any event not later than 14 days from receipt of the notice and shall bear the cost of the reimbursement ;


### the consumer ' s choice between repair and replacement should only be limited where the option chosen would be disproportionate compared to the other option available , impossible or unlawful . for instance , it might be disproportionate to request the replacement of goods because of a minor scratch where this replacement would create significant costs while , at the same time , the scratch could easily be repaired . ### the consumer ' s choice between repair or replacement should only be limited where the remedy chosen would be disproportionate compared to the alternative remedy available , impossible or unlawful . for instance , it might be disproportionate to request the replacement of goods because of a minor scratch where this replacement would create significant costs while , at the same time , the scratch could easily be repaired . where , however , only one remedy is available and that remedy imposes costs on the seller that are disproportionate with regard to the value the goods would have if there were no lack of conformity and to the significance of the lack of conformity , it should be possible to limit the consumer ' s right to reimbursement of the cost of removing the non - conforming goods and of installing the replacement goods to a payment by the seller of a proportionate amount .


### the reduction of price shall be proportionate to the decrease in the value of the goods which were received by the consumer compared to the value the goods would have if in conformity with the contract ### the reduction of price shall be proportionate to the decrease in the value of the goods which were received by the consumer compared to the value the goods would have if in conformity with the contract . in determining the amount of the reduction or the amount to be repaid , account shall be taken of use of the goods by the consumer .


### be of the quantity , quality and description required by the contract , which includes that where the seller shows a sample or a model to the consumer , the goods shall possess the quality of and correspond to the description of this sample or model ; ### be of the quantity , quality and description required by the contract , including in any pre - contractual statement which forms an integral part of the contract . where the seller shows a sample or a model to the consumer , the goods shall possess the quality of and correspond to the description of that sample or model ;


### at the time relevant for establishing the conformity with the contract as determined by article 8 , the goods must be free from any right of a third party , including based on intellectual property , so that the goods can be used in accordance with the contract . ### at the time relevant for establishing conformity with the contract as determined by article 8 , the goods must be free from any restriction resulting from any right of a third party , including any restriction based on intellectual property rights , that may prevent the consumer from using the goods in accordance with the contract .


### considering that the right to terminate the contract due to the lack of conformity is an important remedy applicable where repair or replacement are not feasible or have failed , the consumer should also enjoy the right to terminate the contract in cases where the lack of conformity is minor . this would provide a strong incentive to remedy all cases of a lack of conformity at an early stage . in order to make the right to terminate effective for consumers , in situations where the consumer acquires multiple goods , some being an accessory to the main item which the consumer would not have acquired without the main item , and the lack of conformity impacts that main item , the consumer should have the right to terminate the contract also in relation to the accessory elements , even if the latter are in conformity with the contract . ### considering that the right to terminate the contract due to the lack of conformity is an important remedy applicable where repair or replacement are not feasible or have failed , the consumer should enjoy the right to terminate the contract in cases where the lack of conformity is not minor . in order to make the right to terminate effective for consumers , in situations where the consumer acquires multiple goods , some being an accessory to the main item which the consumer would not have acquired without the main item , and the lack of conformity impacts that main item , the consumer should have the right to terminate the contract also in relation to the accessory elements , even if the latter are in conformity with the contract .


### this directive covers rules applicable to the online and other distance sales of goods only in relation to key contract elements needed to overcome contract - law related barriers in the digital single market . for this purpose , rules on conformity requirements , remedies available to consumers for lack of conformity of the goods with the contract and modalities for their exercise should be fully harmonised and the level of consumer protection as compared to directive 1999 / 44 / ec , should be increased . ### this directive covers rules applicable to the sale of goods , including online and other distance sales , only in relation to key contract elements needed to overcome contract - law related barriers in the single market and the digital single market . for this purpose , rules on conformity requirements , remedies available to consumers for lack of conformity of the goods with the contract and modalities for their exercise should be fully harmonised in such a way as to afford a high level of consumer protection .


### e - commerce is the main driver for growth within the digital single market . however its growth potential is far from being fully exploited . in order to strengthen union competiveness and to boost growth , the union needs to act swiftly and encourage economic actors to unleash the full potential offered by the digital single market . the full potential of the digital single market can only be unleashed if all market participants enjoy smooth access to the online sales of goods and are able to confidently engage in e - commerce transactions . the contract law rules on the basis of which market participants conclude transactions are among the key factors shaping business’ decisions whether to offer goods online cross - border . those rules also influence consumers’ willingness to embrace and trust this type of purchase . ### e - commerce is the main driver for growth within the digital single market . however its growth potential is far from being fully exploited . in order to strengthen union competitiveness and to boost economic growth , the union needs to create a transparent environment with a fully functioning digital single market for economic actors . the full potential of the digital single market can only be unleashed if all market participants enjoy smooth access to the online sales of goods and are able to confidently engage in e - commerce transactions . the contract law rules on the basis of which market participants conclude transactions are among the key factors shaping business’ decisions whether to offer goods online cross - border . those rules also influence consumers’ willingness to embrace and trust this type of purchase .


### this directive should not apply to goods like dvds and cds incorporating digital content in such a way that the goods function only as a carrier of the digital content . however , this directive should apply to digital content integrated in goods such as household appliances or toys where the digital content is embedded in such a way that its functions are subordinate to the main functionalities of the goods and it operates as an integral part of the goods . ### this directive should not apply to digital content integrated in goods such as household appliances , toys , dvds and cds where that digital content is embedded in such a way that it operates as an integral part of the goods and cannot easily be de - installed by the consumer , unless the seller proves that the lack of conformity lies in the hardware of the good .


### the seller shall reimburse to the consumer the price paid without undue delay and in any event not later than 14 days from receipt of the notice and shall bear the cost of the reimbursement ; ### the seller shall reimburse to the consumer the price paid without undue delay and in any event not later than 14 days from receipt of the notice of termination and shall bear the cost of the reimbursement ; the seller shall reimburse the sums received using the same means of payment originally used by the consumer unless the consumer has explicitly indicated his or her consent to the use of a different means of payment and provided that such means does not entail any cost to the consumer . the consumer shall provide the information , e . g . bank account details , necessary for the reimbursement of the price paid and shall not do anything to obstruct the making of the requisite payment .


### this directive should not apply to goods like dvds and cds incorporating digital content in such a way that the goods function only as a carrier of the digital content . however , this directive should apply to digital content integrated in goods such as household appliances or toys where the digital content is embedded in such a way that its functions are subordinate to the main functionalities of the goods and it operates as an integral part of the goods . ### this directive should not apply to goods like dvds and cds incorporating digital content in such a way that the goods function only as a carrier of the digital content or to digital content embedded in goods such as household appliances or toys unless the seller proves that the lack of conformity lies in the hardware of the good .


### at the time relevant for establishing the conformity with the contract as determined by article 8 , the goods must be free from any right of a third party , including based on intellectual property , so that the goods can be used in accordance with the contract . ### at the time relevant for establishing the conformity with the contract as determined by article 8 , the rights of third parties concerning the goods , including based on intellectual property , must be respected .


### the consumer shall return , at the seller ' s expense , to the seller the goods without undue delay and in any event not later than 14 days from sending the notice of termination ; ### the consumer shall return , at the seller ' s expense , to the seller the goods without undue delay and in any event not later than 14 days from sending the notice of termination . the seller shall be entitled to withhold payment of all or part of the amount to be reimbursed pending either receipt of the goods or presentation of proof that they have been dispatched , whichever occurs sooner .


### in cases where the goods were installed by the seller or under the seller’s responsibility , the time when the installation is complete shall be considered as the time when the consumer has acquired the physical possession of the goods . in a case where the goods were intended to be installed by the consumer , the time when the consumer had reasonable time for the installation but in any case not later than 30 days after the time indicated in paragraph 1 shall be considered as the time when the consumer has acquired the physical possession of the goods . ### in a case governed by point of article 6 , the time when the installation is complete shall be considered as the time when the consumer has acquired physical possession of the goods . in a case governed by point of article 6 , the time when the consumer has had reasonable time for the installation but in any case not later than 30 days after the time indicated in paragraph 1 shall be considered as the time when the consumer has acquired physical possession of the goods .


### increased competition among retailers is likely to result in wider choices at more competitive prices being offered to consumers . consumers will benefit from a high level of consumer protection and welfare gains through targeted fully harmonised rules . this in turn would increase their trust in the cross - border commerce at a distance and in particular online . consumers will more confidently buy at a distance cross - border knowing they would enjoy the same rights across the union . ### increased competition among retailers could result in wider choices at more competitive prices being offered to consumers . consumers will benefit from a high level of consumer protection and welfare gains through targeted fully harmonised rules . this in turn would increase their trust in the cross - border commerce at a distance and in particular online . consumers will more confidently buy at a distance cross - border knowing they would enjoy the same rights across the union .


### in the case of a lack of conformity with the contract , the consumer shall be entitled to have the goods brought into conformity by the seller , free of charge , by repair or replacement in accordance with article 11 . ### in the case of a lack of conformity with the contract , the consumer shall be entitled to have the goods brought into conformity by the seller , free of charge , by repair or replacement at the consumer ' s choosing , unless the chosen remedy would be impossible , unlawful or disproportionate in accordance with article 11 .


### where the lack of conformity with the contract relates to only some of the goods delivered under the contract and there is a ground for termination of a contract pursuant to article 9 , the consumer may terminate the contract only in relation to those goods and any other goods , which the consumer acquired as an accessory to the non - conforming goods . ### where the lack of conformity with the contract relates to only some of the goods delivered under the contract which are separable from the other goods and there is a ground for termination of a contract pursuant to article 9 in relation to those non - conforming goods , the consumer may terminate the contract only in relation to those separable goods and any other goods which the consumer acquired as an accessory to the non - conforming goods , unless the consumer cannot be expected to accept performance of the part of the contract in relation to the goods which are in conformity .


### this directive lays down certain requirements concerning distance sales contracts concluded between the seller and the consumer , in particular rules on conformity of goods , remedies in case of non - conformity and the modalities for the exercise of these remedies . ### the purpose of this directive is , through the achievement of a high level of consumer protection , to contribute to the proper functioning of the internal market by laying down certain requirements concerning sales contracts concluded between the seller and the consumer , in particular rules on conformity of goods with the contract , remedies in cases of non - conformity and the modalities for the exercise of these remedies .


### in order to balance the requirement of legal certainty with an appropriate flexibility of the legal rules , any reference to what can be expected of or by a person in this directive should be understood as a reference to what can reasonably be expected . the standard of reasonableness should be objectively ascertained , having regard to the nature and purpose of the contract , to the circumstances of the case and to the usages and practices of the parties involved . in particular , the reasonable time for completing a repair or replacement should be objectively ascertained , having regard to the nature of the goods and the lack of conformity . ### in order to balance the requirement of legal certainty with an appropriate flexibility of the legal rules , any reference to what can be expected from or by a party to a contract in this directive should be understood as a reference to what can reasonably be expected . the standard of reasonableness should be objectively ascertained , having regard to the nature and purpose of the contract , to the circumstances of the case and to the usages and practices of the parties involved . in particular , the reasonable time for completing a repair or replacement should be objectively ascertained , having regard to the nature of the goods and the lack of conformity .


### increased competition among retailers is likely to result in wider choices at more competitive prices being offered to consumers . consumers will benefit from a high level of consumer protection and welfare gains through targeted fully harmonised rules . this in turn would increase their trust in the cross - border commerce at a distance and in particular online . consumers will more confidently buy at a distance cross - border knowing they would enjoy the same rights across the union . ### increased competition among retailers is likely to result in wider choices at more competitive prices being offered to consumers . consumers will benefit from a high level of consumer protection and welfare gains through targeted fully harmonised rules . this in turn would increase their trust in cross - border commerce .


### this directive should not apply to goods like dvds and cds incorporating digital content in such a way that the goods function only as a carrier of the digital content . however , this directive should apply to digital content integrated in goods such as household appliances or toys where the digital content is embedded in such a way that its functions are subordinate to the main functionalities of the goods and it operates as an integral part of the goods . ### this directive should apply to goods like dvds and cds incorporating digital content in such a way that the goods function only as a carrier of the digital content . this directive should also apply to digital content integrated in goods such as household appliances or toys where the digital content is embedded in such a way that its functions are subordinate to the main functionalities of the goods and it operates as an integral part of the goods .


### the goods shall , where relevant : ### the goods shall , where applicable :


### possess qualities and performance capabilities which are normal in goods of the same type and which the consumer may expect given the nature of the goods and taking into account any public statement made by or on behalf of the seller or other persons in earlier links of the chain of transactions , including the producer , unless the seller shows that : ### possess qualities and performance capabilities which are normal in goods of the same type and which the consumer may reasonably expect given the nature of the goods and taking into account any public statement made by or on behalf of the seller or other persons in earlier links of the chain of transactions , including the producer , unless the seller shows that :


### the consumer ' s choice between repair and replacement should only be limited where the option chosen would be disproportionate compared to the other option available , impossible or unlawful . for instance , it might be disproportionate to request the replacement of goods because of a minor scratch where this replacement would create significant costs while , at the same time , the scratch could easily be repaired . ### the consumer ' s choice between repair or replacement should only be limited where the remedy chosen would be disproportionate compared to the alternative remedy available , impossible or unlawful . for instance , it might be disproportionate to request the replacement of goods because of a minor scratch where this replacement would create significant costs while , at the same time , the scratch could easily be repaired . where , however , only one remedy is available and that remedy imposes costs on the seller that are disproportionate with regard to the value the goods would have if there were no lack of conformity and to the significance of the lack of conformity , it should be possible to limit the consumer ' s right to reimbursement of the cost of removing the non - conforming goods and of installing the replacement goods to a payment by the seller of a proportionate amount .


### where the seller is liable to the consumer because of a lack of conformity with the contract resulting from an act or omission by a person in earlier links of the chain of transactions , the seller shall be entitled to pursue remedies against the person or persons liable in the chain of transactions . the person against whom the seller may pursue remedies and the relevant actions and conditions of exercise , shall be determined by national law . ### where the seller is liable to the consumer because of a lack of conformity with the contract resulting from an act or omission by a person in previous links of the chain of transactions , the seller shall be entitled to pursue remedies against the person or persons liable in the chain of transactions . the person against whom the seller may pursue remedies and the relevant actions and conditions of exercise shall be determined by national law .


### where the seller remedies the lack of conformity with the contract by replacement , the seller shall take back the replaced goods at the seller ' s expense unless the parties have agreed otherwise after the lack of conformity with the contract has been brought to the seller ' s attention by the consumer . ### where the seller remedies the lack of conformity with the contract by replacement , the seller shall take back the replaced goods at the seller ' s expense at the place where the goods were delivered unless the parties have agreed otherwise after the lack of conformity with the contract has been brought to the seller ' s attention by the consumer .


### the consumer shall be entitled to a proportionate reduction of the price in accordance with article 12 or to terminate the contract in accordance with article 13 where : ### the consumer shall be entitled to a proportionate reduction of the price in accordance with article 12 or to terminate the contract in accordance with article 13 for a lack of conformity with the contract which is not minor where :


### the consumer shall be entitled to a remedy for the lack of conformity with the contract of the goods where the lack of conformity becomes apparent within two years as from the relevant time for establishing conformity . if , under national legislation , the rights laid down in article 9 are subject to a limitation period , that period shall not be shorter than two years from the relevant time for establishing conformity with the contract . ### the consumer shall be entitled to a remedy for the lack of conformity with the contract of the goods where the lack of conformity becomes apparent within two years from the relevant time for establishing conformity . if , under national legislation , the rights laid down in article 9 are subject to a limitation period , that period shall not be shorter than two years from the relevant time for establishing conformity with the contract . notwithstanding the first subparagraph , if the lack of conformity with the contract becomes apparent after two years from the relevant time for establishing conformity , the consumer shall be entitled to exercise the right to a remedy within one year from the time when the consumer becomes aware of the lack of conformity .


### the union rules applicable to the online and other distance sales of goods are still fragmented although rules on pre - contractual information requirements , the right of withdrawal and delivery conditions have already been fully harmonised . other key contractual elements such as the conformity criteria , the remedies and modalities for their exercise for goods which do not conform to the contract are subject to minimum harmonisation in directive 1999 / 44 / ec of the european parliament and of the council39 member states have been allowed to go beyond the union standards and introduce rules that ensure even higher level of consumer protection . having done so , they have acted on different elements and to different extents . thus , national provisions transposing the union legislation on consumer contract law significantly diverge today on essential elements of a sales contract , such as the absence or existence of a hierarchy of remedies , the period of the legal guarantee , the period of the reversal of the burden of proof , or the notification of the defect to the seller . __________________ 39 directive 1999 / 44 / ec of the european parliament and of the council of 25 may 1999 on certain aspects of the sale of consumer goods and associated guarantees oj l 171 , 7 . 7 . 1999 , p . 12 . ### the union rules applicable to the sales of goods are still fragmented although rules on pre - contractual information requirements , the right of withdrawal and delivery conditions have already been fully harmonised for distance sales and other contracts in directive 2011 / 83 / eu of the european parliament and of the council38a . other key contractual elements such as the conformity criteria , the remedies and modalities for their exercise for goods which do not conform to the contract are subject to minimum harmonisation in directive 1999 / 44 / ec of the european parliament and of the council39 member states have been allowed to go beyond the union standards and introduce rules that ensure even higher level of consumer protection . having done so , they have acted on different elements and to different extents . thus , national provisions transposing the union legislation on consumer contract law significantly diverge today on essential elements of a sales contract , such as the absence or existence of a hierarchy of remedies , the period of the legal guarantee , the period of the reversal of the burden of proof , or the notification of the defect to the seller . __________________ 38a directive 2011 / 83 / eu of the european parliament and of the council of 25 october 2011 on consumer rights , amending council directive 93 / 13 / eec and directive 1999 / 44 / ec of the european parliament and of the council and repealing council directive 85 / 577 / eec and directive 97 / 7 / ec of the european parliament and of the council . 39 directive 1999 / 44 / ec of the european parliament and of the council of 25 may 1999 on certain aspects of the sale of consumer goods and associated guarantees .


### in order to contribute to the enhancement of the competitiveness and innovation capacity of the union ' s defence industry , a european defence industrial development programme should be established . the programme should aim at enhancing the competitiveness of the union ' s defence industry inter alia cyber defence by supporting the cooperation between undertakings in the development phase of defence products and technologies . the development phase , which follows the research and technology phase , entails significant risks and costs that hamper the further exploitation of the results of research and adversely impact the competitiveness of the union ' s defence industry . by supporting the development phase , the programme would contribute to a better exploitation of the results of defence research and it would help to cover the gap between research and production as well as to promote all forms of innovation . the programme should complement activities carried out in accordance with article 182 tfeu and it does not cover the production of defence products and technologies . ### in order to contribute to the enhancement of the competitiveness and innovation capacity of the union ' s defence industry , a european defence industrial development programme should be established . the programme should aim at enhancing the competitiveness of the union ' s defence industry , and thus to improve defence capabilities and security of member states , inter alia cyber defence by supporting the cooperation between undertakings in the development phase of defence products and technologies . the development phase , which follows the research and technology phase , entails significant risks and costs that hamper the further exploitation of the results of research and adversely impact the competitiveness of the union ' s defence industry . by supporting the development phase , the programme would contribute to a better exploitation of the results of defence research and it would help to cover the gap between research and production as well as to promote all forms of innovation . the programme should complement activities carried out in accordance with article 182 tfeu and it does not cover the production of defence products and technologies .


### given that the programme aims particularly at enhancing cooperation between undertakings across member states , an action should be eligible for funding under the programme only if it is undertaken by a cooperation of at least three undertakings based in at least two different member states . ### given that the programme aims particularly at enhancing cooperation between undertakings across member states , an action should be eligible for funding under the programme only if it is undertaken by a cooperation of at least three undertakings based in at least three different member states and remains open for expanding by undertakings based in other member states .


### the commission shall not own the products or technologies resulting from the action nor shall it have any ipr claim pertaining to the action ### the union shall not own the products or technologies resulting from the action nor shall it have any ipr claim pertaining to the action


### the action shall be undertaken in a cooperation of at least three undertakings which are established in at least two different member states . the undertakings which are beneficiaries shall not effectively be controlled , directly or indirectly , by the same entity or shall not control each other . ### the action shall be undertaken in a cooperation of at least three undertakings which are established in at least three different member states . the undertakings which are beneficiaries shall not effectively be controlled , directly or indirectly , by the same entity or shall not control each other .


### for actions described in points to of article 6 , the contribution to the competitiveness of the european defence industry through the demonstration by the beneficiaries that member states have committed to jointly produce and procure the final product or technology in a coordinated way , including joint procurement where applicable . ### for actions described in points to of article 6 , the contribution to the competitiveness of the european defence industry through the demonstration by the beneficiaries that member states have declared to jointly produce and procure the final product or technology in a coordinated way , including joint procurement where applicable .


### the commission should draw up an implementation report at the end of the programme , examining the financial activities in terms of financial implementation results and where possible , impact . this report should also analyse the cross border participation of smes in projects under the programme as well as the participation of smes to the global value chain . ### the commission should draw up an implementation report at the end of the programme , examining the financial activities in terms of financial implementation results and where possible , impact . this report should also analyse and promote the cross border participation of smes in projects under the programme as well as the participation of smes to the global value chain .


### beneficiaries shall be undertakings established in the union , in which member states and / or nationals of member states own more than 50% of the undertaking and effectively control it within the meaning of article 6 , whether directly or indirectly through one or more intermediate undertakings . in addition , all infrastructure , facilities , assets and resources used by the participants , including subcontractors and other third parties , in actions funded under the programme shall not be located on the territory of non - member states during the entire duration of the action . ### beneficiaries and their subcontractors shall be public or private undertakings established in the union .


### as the union support aims at enhancing the competitiveness of the sector and concerns only the specific development phase , the commission should not have ownership or intellectual property rights over the products or technologies resulting from the funded actions . the applicable intellectual property rights regime will be defined contractually by the beneficiaries . ### as the union support aims at enhancing the competitiveness of the sector and concerns only the specific development phase , the union should not have ownership or intellectual property rights over the products or technologies resulting from the funded actions . the applicable intellectual property rights regime will be defined contractually by the beneficiaries . the results of actions which receive funding under the programme should not be subject to any control or restriction by a third country or a non - eu entity .


### the action shall be undertaken in a cooperation of at least three undertakings which are established in at least two different member states . the undertakings which are beneficiaries shall not effectively be controlled , directly or indirectly , by the same entity or shall not control each other . ### the action shall be undertaken in a cooperation of at least three undertakings which are established in at least two different member states . at least two of the undertakings which are beneficiaries shall not effectively be controlled , directly or indirectly , by the same entity or shall not control each other .


### in the european defence action plan , adopted on 30 november 2016 , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing defence capabilities to respond to security challenges , as well as to foster a competitive and innovative european defence industry . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund would support cooperation during the whole cycle of defence product and technology development . ### in the european defence action plan , adopted on 30 november 2016 , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing defence capabilities to respond to security challenges , as well as to foster a competitive and innovative european defence industry . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund should complement national defence budgets&#160 ; and provide an incentive for member states to invest more in defence . the fund would support cooperation during the whole cycle of defence product and technology development .


### in view of the specificities of the sector , in practice no collaborative project between undertakings will be launched if the member states have not first agreed to support such projects . after having defined common defence capability priorities at union - level and also taking into account where appropriate collaborative initiatives on a regional basis , member states identify and consolidate military requirements and define the technical specifications of the project . they may also appoint a project manager in charge of leading the work related to the development of a collaborative project . ### after having defined common defence capability priorities at union level through the capability development plan , also taking into account the coordinated annual review on defence , and with a view to fulfilling the eu ' s level of ambition as agreed by the council in its conclusions of 14 november 2016 and endorsed by the european council on 15 december 2016 , member states identify and consolidate military requirements and define the technical specifications of the project . they may also appoint a project manager in charge of leading the work related to the development of a collaborative project .


### excellence ### excellence , industrial performance and competition ;


### the work programme shall ensure that a credible proportion of the overall budget will benefit actions enabling the cross - border participation of smes . ### the work programme shall ensure that at least 10% of the overall budget will benefit the cross - border participation of smes and / or mid - caps ; in addition , a specific category of projects dedicated to smes and / or mid - caps shall be established by the work programme .


### the financial assistance of the union provided under the programme may not exceed 20% of the total cost of the action where it relates to prototyping . in all the other cases , the assistance may cover up to the total cost of the action . ### the financial assistance of the union provided under the programme may not exceed 30% of the total cost of the action where it relates to prototyping . in all the other cases , the assistance may cover up to the total cost of the action .


### to foster the competitiveness and innovation capacity of the union defence industry by supporting actions in their development phase ; ### to foster the competitiveness and innovation capacity of the union defence industry , thus enabling the union to acquire strategic&#160 ; and technological autonomy by supporting actions carried out in the european union in their development phase ;


### the commission should establish a multiannual work programme in line with the objectives of the programme . the commission should be assisted in the establishment of the work programme by a committee of member states . in light of the union policy on small and medium enterprises as key to ensuring economic growth , innovation , job creation , and social integration in the union and the fact that the supported actions will typically require trans - national collaboration , it is of importance that the work programme will reflect and enable such cross - border participation of smes and that therefore a proportion of the overall budget will benefit such action . ### the commission should establish a multiannual work programme in line with the objectives of the programme . the commission should be assisted in the establishment of the work programme by a committee of member states . in light of the union policy on small and medium enterprises as key to ensuring economic growth , innovation , job creation , and social integration in the union and the fact that the supported actions will typically require trans - national collaboration , it is of importance that the work programme will reflect and emphasize the role of smes and their cross - border participation and therefore a proportion of the overall budget will benefit such action .


### beneficiaries shall be undertakings established in the union , in which member states and / or nationals of member states own more than 50% of the undertaking and effectively control it within the meaning of article 6 , whether directly or indirectly through one or more intermediate undertakings . in addition , all infrastructure , facilities , assets and resources used by the participants , including subcontractors and other third parties , in actions funded under the programme shall not be located on the territory of non - member states during the entire duration of the action . ### beneficiaries and their subcontractors shall be undertakings established in the union , in which member states and / or nationals of member states own more than 50% of the undertaking and effectively control it within the meaning of article&#160 ; 6 , whether directly or indirectly through one or more intermediate undertakings . in addition , all infrastructure , facilities , assets and resources used by the participants , including subcontractors and other third parties , in actions funded under the programme shall not be located on the territory of non - member states during the entire duration of the action .


### the financial assistance of the union under the programme should not exceed 20% of the total eligible cost of the action when it relates to prototyping which is often the most costly action in the development phase . the totality of the eligible costs should however be covered for other actions in the development phase . ### the financial assistance of the union under the programme should not exceed 30% of the total eligible cost of the action , including part of the indirect cost of the action , within the meaning of article 126 of regulation no . 966 / 2012 , when it relates to system prototyping which is often the most costly action in the development phase . the totality of the eligible costs should however be covered for other actions in the development phase .


### to foster the competitiveness and innovation capacity of the union defence industry by supporting actions in their development phase ; ### to foster the competitiveness and innovation capacity of the union defence industry and to contribute to the union ' s strategic defence autonomy by supporting actions in their development phase ;


### the promotion of innovation and technological development in the union defence industry should take place in a manner coherent with the security interests of the union . accordingly , the action ' s contribution to those interests and to the defence capability priorities commonly agreed by member states should serve as an award criterion . within the union , common defence capability priorities are identified notably through the capability development plan . other union processes such as the coordinated annual review on defence and the permanent structured cooperation will support the implementation of relevant priorities through enhanced cooperation . where appropriate regional or international cooperative initiatives , such as in the nato context , and serving the union security and defence interest , may also be taken into account . ### the promotion of innovation and technological development in the union defence industry should take place in a manner coherent with the security interests of the union . accordingly , the action ' s contribution to those interests and to the defence capability priorities commonly agreed by member states should serve as an award criterion . within the union , common defence capability priorities are identified notably through the capability development plan . other union processes such as the coordinated annual review on defence and the permanent structured cooperation will support the implementation of relevant priorities through enhanced cooperation . member states ' pesco national implementation plans comprising of concrete actions should be coordinated with the programme . where appropriate regional or international cooperative initiatives , such as in the nato context , and serving the union security and defence interest , may also be taken into account .


### the union ' s financial assistance shall be implemented by the commission as provided for by regulation no 966 / 2012 directly or indirectly by entrusting budget implementation tasks to the entities listed in article 58 of that regulation . ### the union ' s financial assistance shall be implemented by the commission as provided for in article 58 of regulation no 966 / 2012 .


### as the programme aims at enhancing the competitiveness of the union ' s defence industry , only entities established in the union and effectively controlled by member states or their nationals should be eligible for support . additionally , in order to ensure the protection of essential security interests of the union and its member states , the infrastructure , facilities , assets and resources used by the beneficiaries and subcontractors in actions funded under the programme , shall not be located on the territory of non - member states . ### as the programme aims at enhancing the competitiveness of the union ' s defence industry and contributing to the union’s strategic defence autonomy , only entities established in the union and effectively controlled by member states or their nationals should be eligible for support . additionally , in order to ensure the protection of essential security interests of the union and its member states , the infrastructure , facilities , assets and resources used by the beneficiaries and subcontractors in actions funded under the programme , shall not be located on the territory of non - member states .


### in case an action supported by the programme is managed by a project manager appointed by member states , the commission should inform the project manager prior to executing the payment to the beneficiary of the eligible action so that the project manager can ensure that the time - frames are respected by the beneficiaries . ### in case an action supported by the programme is managed by a project manager appointed by member states , the commission should consult the project manager on the progress made on the action prior to executing the payment to the beneficiary of the eligible action so that the project manager can ensure that the time - frames are respected by the beneficiaries .


### the programme should be implemented in full compliance with regulation no 966 / 2012 of the european parliament and of the council6 . funding may take in particular the form of grants . financial instruments or public procurement may be used where appropriate . _________________ 6 regulation no 966 / 2012 of the european parliament and of the council of 25 october 2012 on the financial rules applicable to the general budget of the union and repealing council regulation no 1605 / 2002 . ### the programme should be implemented in full compliance with regulation no 966 / 2012 of the european parliament and of the council . funding may take in particular the form of grants and public procurement for the provision of studies . financial instruments could also be used in the future based on the experience of this programme , notably for the post 2020 european defence fund capability window . the commission will start the preparatory work , assessment and relevant proposals as soon as possible .


### the programme should be implemented in full compliance with regulation no 966 / 2012 of the european parliament and of the council6 . funding may take in particular the form of grants . financial instruments or public procurement may be used where appropriate . _________________ 6 regulation no 966 / 2012 of the european parliament and of the council of 25 october 2012 on the financial rules applicable to the general budget of the union and repealing council regulation no 1605 / 2002 . ### the programme should be implemented in full compliance with regulation no 966 / 2012 of the european parliament and of the council6 . funding may take in particular the form of grants and public procurement for the provision of studies . financial instruments could also be used in the future based on the experience of this programme , notably for the post 2020 european defence fund capability window . the commission will start the preparatory work , assessment and relevant proposals as soon as possible . _________________ 6 regulation no 966 / 2012 of the european parliament and of the council of 25 october 2012 on the financial rules applicable to the general budget of the union and repealing council regulation no 1605 / 2002 .


### in case a project manager is appointed by member states , the commission shall execute the payment to the eligible beneficiaries after informing the project manager . ### member states shall appoint a project manager who shall follow the contract on their behalf and inform the commission when the payment to the eligible beneficiaries is to be executed . the eligible beneficiaries , in the consortium , shall have their project manager who shall cooperate with the project manager appointed by the member states .


### the financial assistance of the union under the programme should not exceed 20% of the total eligible cost of the action when it relates to prototyping which is often the most costly action in the development phase . the totality of the eligible costs should however be covered for other actions in the development phase . ### the financial assistance of the union under the programme should not exceed 30% of the eligible cost including part of the indirect cost of the action , within the meaning of article 126 of regulation no 966 / 2012 , where it relates to system prototyping which is often the costliest action in the development phase . the totality of the eligible costs could however be covered for other actions in the development phase .


### as the objective of the programme is to support the competitiveness of the union defence industry by de - risking the development phase of cooperative projects , actions related to the development of a defence product or technology , namely definition of common technical specifications , design , prototyping , testing , qualification , certification as well feasibility studies and other supporting measures , should be eligible to benefit from it . this will also apply to the upgrade of existing defence products and technologies . ### as the objective of the programme is to support the progressive framing of a common defence policy and the competitiveness of the union defence industry by de - risking the development phase of cooperative projects , actions related to the development of a defence product or technology , namely definition of common technical specifications , design , prototyping , testing , qualification , certification as well feasibility studies and other supporting measures , should be eligible to benefit from it . this will also apply to the upgrade of existing defence products and technologies .


### the return of third - country nationals who do not fulfil or no longer fulfil the conditions for entry , stay or residence in the member states , in full respect of fundamental rights , in particular of the principle of non - refoulement , and in compliance with the provisions of directive 2008 / 115 / ec9 , is an essential part of the comprehensive efforts to ensure the credibility and proper functioning of the union migration policies and to reduce and deter irregular migration . ___________________ 9 . directive 2008 / 115 / ec of the european parliament and of the council of 16 december 2008 on common standards and procedures in member states for returning illegally staying third - country nationals . ### the return of third - country nationals who do not fulfil or no longer fulfil the conditions for entry , stay or residence in the member states , in full respect of fundamental rights , in particular of the principle of non - refoulement , and in compliance with the provisions of directive 2008 / 115 / ec of the european parliament and of the council1 , is an essential part of the comprehensive efforts to ensure the credibility , public confidence and proper functioning of the union migration policies and to reduce and deter irregular migration . ___________________ directive 2008 / 115 / ec of the european parliament and of the council of 16 december 2008 on common standards and procedures in member states for returning illegally staying third - country nationals .


### the return of third - country nationals who do not fulfil or no longer fulfil the conditions for entry , stay or residence in the member states , in full respect of fundamental rights , in particular of the principle of non - refoulement , and in compliance with the provisions of directive 2008 / 115 / ec9 , is an essential part of the comprehensive efforts to ensure the credibility and proper functioning of the union migration policies and to reduce and deter irregular migration . _________________ 9 directive 2008 / 115 / ec of the european parliament and of the council of 16 december 2008 on common standards and procedures in member states for returning illegally staying third - country nationals . ### the return of third - country nationals who do not fulfil or no longer fulfil the conditions for entry , stay or residence in the member states , in full respect of fundamental rights , in particular of the principle of non - refoulement , and in compliance with the provisions of directive 2008 / 115 / ec of the european parliament and of the council9 , is an essential part of the comprehensive efforts to ensure the credibility , public confidence and proper and effective functioning of the union migration policies and to reduce and deter irregular migration . _________________ 9 directive 2008 / 115 / ec of the european parliament and of the council of 16 december 2008 on common standards and procedures in member states for returning illegally staying third - country nationals .


### the name , surname , date of birth , sex , nationality , distinguishing marks and , if known , the address in the third country of return of the third - country national ; ### the name , surname , date of birth , sex , nationality , distinguishing marks ;


### improving cooperation on return and readmission with the main countries of origin and transit of illegally staying third - country nationals is essential for increasing rates of return , which are unsatisfactory . ### improving cooperation on return and readmission with the main countries of origin and transit of third - country nationals whose stay on the territory of the union is illegal is essential for increasing rates of return , which are unsatisfactory .


### national authorities of the member states experience difficulties in returning illegally staying third - country nationals who possess no valid travel documents . ### national authorities of the member states experience difficulties in returning third - country nationals whose stay on the territory of the union is illegal and who lack valid travel documents .


### the efsi should target projects delivering high societal and economic value . in particular , the efsi should target projects that promote job creation , long - term growth and competitiveness . the efsi should support a wide range of financial products , including equity , debt or guarantees , to best accommodate the needs of the individual project . this wide range of products should allow the efsi to adapt to market needs whilst encouraging private investment in the projects . the efsi should not be a substitute for private market finance but should instead catalyse private finance by addressing market failures so as to ensure the most effective and strategic use of public money . the requirement for consistency with state aid principles should contribute to such effective and strategic use . ### the efsi should target projects delivering high societal , environmental and economic benefits . in particular , the efsi should target projects that promote job creation , long - term and sustainable growth , the efficient use of energy and competitiveness . the efsi should support a wide range of financial products , including equity , debt or guarantees , to best accommodate the needs of the individual project . this wide range of products should allow the efsi to adapt to market needs whilst encouraging private investment in the projects . the efsi should not be a substitute for private market finance but should instead catalyse private finance by addressing market failures so as to ensure the most effective and strategic use of public money . the requirement for consistency with state aid principles should contribute to such an effective and strategic use .


### many small and medium enterprises , as well as mid - cap companies , across the union require assistance to attract market financing , especially as regards investments that carry a greater degree of risk . the efsi should help these businesses to overcome capital shortages by allowing the eib and the european investment fund to provide direct and indirect equity injections , as well as to provide guarantees for high - quality securitisation of loans , and other products that are granted in pursuit of the aims of the efsi . ### many small and medium enterprises , as well as mid - cap companies , across the union require assistance to attract market financing , especially as regards investments that carry a greater degree of risk . this is particularly true of businesses in rural areas , where economic growth and measures to safeguard jobs are urgently needed . the efsi should help these businesses to overcome capital shortages by allowing the eib and the european investment fund to provide direct and indirect equity injections , as well as to provide guarantees for high - quality securitisation of loans , and other products that are granted in pursuit of the aims of the efsi .


### the eu guarantee and the payments and recoveries under it that are attributable to the general budget of the union shall be audited by the court of auditors . ### the external audit of the activities undertaken in accordance with the efsi regulation are carried out by the european court of auditors in accordance with the article 287 tfeu .


### the purpose of the efsi should be to help resolve the difficulties in financing and implementing productive investments in the union and to ensure increased access to financing . it is intended that increased access to financing should be of particular benefit to small and medium enterprises . it is also appropriate to extend the benefit of such increased access to financing to mid - cap companies , which are companies having up to 3000 employees . overcoming europe ' s current investment difficulties should contribute to strengthening the union ' s economic , social and territorial cohesion . ### the purpose of the efsi should be to help resolve the difficulties in financing and implementing productive investments in the union and to ensure increased access to financing . it is intended that increased access to financing should be of particular benefit to small and medium enterprises , small mid - cap companies , and mid - cap companies having up to 3000 employees , but should not be limited to these type of companies . overcoming europe ' s current investment difficulties should contribute to strengthening the union ' s economic , social and territorial cohesion .


### the efsi agreement shall provide that the efsi shall be governed by a steering board , which shall determine the strategic orientation , the strategic asset allocation and operating policies and procedures , including the investment policy of projects that efsi can support and the risk profile of the efsi , in conformity with the objectives under article 5 . the steering board shall elect one of its members to be chairperson . ### the efsi agreement shall provide that the efsi shall be governed by a steering board , which shall determine the strategic orientation , the strategic asset allocation and operating policies and procedures , including the risk profile of the efsi and the investment policy of projects that efsi can support , in order to ensure additionality of the efsi compared to normal eib operations , and conformity with the objectives under article 5 and the eu treaty ' s objectives of social , economic and territorial cohesion . the steering board shall elect one of its members to be chairperson .


### the efsi should be established within the eib in order to benefit from its experience and proven track record and in order for its operations to start to have a positive impact as quickly as possible . the work of the efsi on providing finance to small and medium enterprises and small mid - cap companies should be channelled through the european investment fund to benefit from its experience in these activities . ### the efsi should be established within the eib in order to benefit from its experience and proven track record and in order for its operations to start to have a positive impact as quickly as possible . the work of the efsi on providing finance to small and medium enterprises , particularly in rural areas , and small mid - cap companies should be channelled through the european investment fund to benefit from its experience in these activities .


### an assessment of the added value , the mobilisation of private sector resources , the estimated and actual outputs , outcomes and impact of eib financing and investment operations at an aggregated basis ; ### an assessment of the economical , social and environmental added value , including indicators that measure the efficient use of resources , the mobilisation of private sector resources , the estimated and actual outputs , outcomes and impact of eib financing and investment operations at an aggregated basis ;


### the efsi should target projects delivering high societal and economic value . in particular , the efsi should target projects that promote job creation , long - term growth and competitiveness . the efsi should support a wide range of financial products , including equity , debt or guarantees , to best accommodate the needs of the individual project . this wide range of products should allow the efsi to adapt to market needs whilst encouraging private investment in the projects . the efsi should not be a substitute for private market finance but should instead catalyse private finance by addressing market failures so as to ensure the most effective and strategic use of public money . the requirement for consistency with state aid principles should contribute to such effective and strategic use . ### the efsi should target projects delivering high societal and economic value . in particular , the efsi should target projects that promote job creation , long - term sustainable growth and competitiveness . the efsi should support a wide range of financial products , including equity , debt or guarantees , to best accommodate the needs of the individual project . this wide range of products should allow the efsi to adapt to market needs whilst encouraging private investment in the projects . the efsi should not be a substitute for private market finance but should instead catalyse private finance by addressing market failures so as to ensure the most effective and strategic use of public money . the requirement for consistency with state aid principles should contribute to such effective and strategic use .


### the purpose of the efsi shall be to support investments in the union and to ensure increased access to financing for companies having up to 3000 employees , with a particular focus on small and medium enterprises , through the supply of risk bearing capacity to the eib . ### the purpose of the efsi shall be to support environmentally sound and socially acceptable investments in the union and to ensure increased access to financing for companies having up to 3000 employees , with a particular focus on small and medium enterprises , through the supply of risk bearing capacity to the eib .


### the efsi should target projects delivering high societal and economic value . in particular , the efsi should target projects that promote job creation , long - term growth and competitiveness . the efsi should support a wide range of financial products , including equity , debt or guarantees , to best accommodate the needs of the individual project . this wide range of products should allow the efsi to adapt to market needs whilst encouraging private investment in the projects . the efsi should not be a substitute for private market finance but should instead catalyse private finance by addressing market failures so as to ensure the most effective and strategic use of public money . the requirement for consistency with state aid principles should contribute to such effective and strategic use . ### the efsi should target projects delivering high societal environmental and economic benefits . in particular , the efsi should target projects that promote job creation , long - term growth , sustainability , resource and energy efficiency and competitiveness . the efsi should support a wide range of financial products , including equity , debt or guarantees , to best accommodate the needs of the individual project . this wide range of products should allow the efsi to adapt to market needs whilst encouraging private investment in the projects . the efsi should not be a substitute for private market finance but should instead catalyse private finance by addressing market failures so as to ensure the most effective and strategic use of public money . the requirement for consistency with state aid principles should contribute to such effective and strategic use .


### the purpose of the efsi shall be to support investments in the union and to ensure increased access to financing for companies having up to 3000 employees , with a particular focus on small and medium enterprises , through the supply of risk bearing capacity to the eib . ### the purpose of the efsi shall be to support investments in the union , including projects between a member state and a third country , and to ensure increased access to financing for companies having up to 3000 employees , with a particular focus on small and medium enterprises , through the supply of risk bearing capacity to the eib .


### comprehensive action is required to reverse the vicious circle created by a lack of investment . structural reforms and fiscal responsibility are necessary preconditions for stimulating investment . along with a renewed impetus towards investment financing , these preconditions can contribute to establishing a virtuous circle , where investment projects help support employment and demand and lead to a sustained increase in growth potential . ### comprehensive action is required to reverse the vicious circle created by a lack of investment . structural reforms and fiscal responsibility are necessary preconditions for improving european competitiveness and stimulating investment . europe needs to focus on cutting red tape and reducing administrative burdens for business , open up the internal market for investments and to safeguard that financial markets can provide liquidity needed to finance private investments . along with a renewed impetus towards investment financing , these preconditions can contribute to establishing a virtuous circle , where investment projects help support employment and demand and lead to a sustained increase in growth potential .


### the efsi should target projects delivering high societal and economic value . in particular , the efsi should target projects that promote job creation , long - term growth and competitiveness . the efsi should support a wide range of financial products , including equity , debt or guarantees , to best accommodate the needs of the individual project . this wide range of products should allow the efsi to adapt to market needs whilst encouraging private investment in the projects . the efsi should not be a substitute for private market finance but should instead catalyse private finance by addressing market failures so as to ensure the most effective and strategic use of public money . the requirement for consistency with state aid principles should contribute to such effective and strategic use . ### the efsi should target projects delivering high societal and economic value . in particular , the efsi should target projects that promote quality job creation , inclusive and sustainable long - term growth and competitiveness . the efsi should support a wide range of financial products , including equity , debt or guarantees , to best accommodate the needs of the individual project . this wide range of products should allow the efsi to adapt to market needs whilst encouraging private investment in the projects . the efsi should not be a substitute for private market finance but should instead catalyse private finance by addressing market failures so as to ensure the most effective and strategic use of public money . the requirement for consistency with state aid principles should contribute to such effective and strategic use .


### the efsi should target projects with a higher risk - return profile than existing eib and union instruments to ensure additionality over existing operations . the efsi should finance projects across the union , including in the countries most affected by the financial crisis . the efsi should only be used where financing is not available from other sources on reasonable terms . ### the efsi should target projects with a higher risk - return profile than existing eib and union instruments to ensure additionality over existing operations . the efsi should finance projects across the union , while it should play a special investment - enabling role in the countries most affected by the financial crisis . the efsi should only be used where financing is not available from other sources on reasonable terms .


### development of infrastructure , including in the areas of transport , particularly in industrial centres ; energy , in particular energy interconnections ; and digital infrastructure ; ### development of infrastructure , especially in the areas of sustainable transport , in industrial centres and urban areas ; energy , when compatible with eu ' s climate and energy policy goals , in particular energy interconnections , and energy efficiency ; and digital infrastructure ;


### comprehensive action is required to reverse the vicious circle created by a lack of investment . structural reforms and fiscal responsibility are necessary preconditions for stimulating investment . along with a renewed impetus towards investment financing , these preconditions can contribute to establishing a virtuous circle , where investment projects help support employment and demand and lead to a sustained increase in growth potential . ### comprehensive action is required to reverse the vicious circle created by a lack of investment . structural reforms and fiscal responsibility are the predominant preconditions for stimulating investment . along with a renewed impetus towards investment financing , these preconditions can contribute to establishing a virtuous circle , where investment projects help support employment and demand and lead to a sustained increase in growth potential .


### the efsi should support strategic investments with high economic value added contributing to achieving union policy objectives . ### the efsi should support strategic investments with high economic , social and environmental value added contributing to achieving union policy objectives in an objective manner .


### throughout the economic and financial crisis , the union has made efforts to promote growth , in particular through initiatives set out in the europe 2020 strategy that put in place an approach for smart , sustainable and inclusive growth . the european investment bank has also strengthened its role in instigating and promoting investment within the union , partly by way of an increase in capital in january 2013 . further action is required to ensure that the investment needs of the union are addressed and that the liquidity available on the market is used efficiently and channelled towards the funding of viable investment projects . ### throughout the economic and financial crisis , the union has not made enough efforts to promote growth , despite initiatives set out in the europe 2020 strategy that put in place an approach for smart , sustainable and inclusive growth . the european investment bank strengthened its role in instigating and promoting investment within the union , partly by way of an increase in capital in january 2013 . further action is required to ensure that the investment needs of the union are addressed and that the liquidity available on the market is used efficiently and channelled towards the funding of viable investment projects .


### the efsi agreement shall provide for the creation of a european investment advisory hub within the eib . the eiah shall have as its objective to build upon existing eib and commission advisory services in order to provide advisory support for investment project identification , preparation and development and act as a single technical advisory hub for project financing within the union . this shall include support on the use of technical assistance for project structuring , use of innovative financial instruments , use of public - private partnerships and advice , as appropriate , on relevant issues of eu legislation . ### the efsi agreement shall provide for the creation of a european investment advisory hub within the eib , without , however , creating additional administrative burdens or other systems . the eiah shall have as its objective to build upon existing eib and commission advisory services in order to provide advisory support for investment project identification , preparation and development and act as a single technical advisory hub for project financing within the union . this shall include support on the use of technical assistance for project structuring , use of innovative financial instruments , use of public - private partnerships and advice , as appropriate , on relevant issues of eu legislation .


### to meet that objective , the eiah shall use the expertise of the eib , the commission , national promotional banks and the managing authorities of the european structural and investment funds . ### to meet that objective , the eiah shall use the expertise of the eib , the commission , national promotional banks and the managing authorities of the european structural and investment funds , building appropriate partnerships at member state level .


### to meet that objective , the eiah shall use the expertise of the eib , the commission , national promotional banks and the managing authorities of the european structural and investment funds . ### to meet that objective , the eiah shall use the expertise of the eib , the commission , national and regional promotional banks and the managing authorities of the european structural and investment funds .


### the efsi agreement shall provide for the creation of a european investment advisory hub within the eib . the eiah shall have as its objective to build upon existing eib and commission advisory services in order to provide advisory support for investment project identification , preparation and development and act as a single technical advisory hub for project financing within the union . this shall include support on the use of technical assistance for project structuring , use of innovative financial instruments , use of public - private partnerships and advice , as appropriate , on relevant issues of eu legislation . ### the efsi agreement shall provide for the creation of a european investment advisory hub within the eib . the eiah shall have as its objective to build upon existing eib and commission advisory services in order to provide advisory support for investment project identification , preparation and development and act as a single technical advisory hub for project financing within the union . this shall include support on the use of technical assistance for project structuring , use of innovative financial instruments , use of public - private partnerships and advice , as appropriate , on relevant issues of eu legislation . the eiah shall be structured in order to act as a facilitator addressing the procedural needs of smes .


### alongside the financing operations that will be conducted through the efsi , a european investment advisory hub should be created . the eiah should provide strengthened support for project development and preparation across the union , by building on the expertise of the commission , the eib , national promotional banks and the managing authorities of the european structural and investment funds . this should establish a single point of entry for questions related to technical assistance for investments within the union . ### alongside the financing operations that will be conducted through the efsi , a european investment advisory hub should be created . the eiah should provide strengthened support for project development and preparation across the union , by building on the expertise of the commission , the eib , national promotional banks and the managing authorities of the european structural and investment funds . this should establish a single point of entry for questions related to technical assistance for investments within the union and be suited especially to address the needs of smes .


### the commission and the eib , with support from the member states , shall promote the creation of a transparent pipeline of current and potential future investment projects in the union . the pipeline is without prejudice to the final projects selected for support according to article 3 . ### the commission and the eib , with support from the member states , shall promote the creation of a transparent pipeline of current and potential future investment projects in the union . the pipeline is without prejudice to the final projects selected for support according to article 3 but should indicate whether the proposed projects are eligible for the eu guarantee fund in accordance with the objectives and criteria laid down in article 5 .


### to partially finance the contribution from the union budget , the available envelopes of the horizon 2020 – the framework programme for research and innovation 2014 - 2020 , provided by regulation no 1291 / 2013 of the european parliament and of the council2 , and the connecting europe facility , provided by regulation no 1316 / 2013 of the european parliament and of the council3 , should be reduced . those programmes serve purposes that are not replicated by the efsi . however , the reduction of both programmes to finance the guarantee fund is expected to ensure a greater investment in certain areas of their respective mandates than is possible through the existing programmes . the efsi should be able to leverage the eu guarantee to multiply the financial effect within those areas of research , development and innovation and transport , telecommunications and energy infrastructure compared to if the resources had been spent via grants within the planned horizon 2020 and connecting europe facility programmes . it is , therefore , appropriate to redirect part of the funding presently envisaged for those programmes to the benefit of efsi . __________________ 3 regulation no 1316 / 2013 of the european parliament and of the council of 11 december 2013 establishing the connecting europe facility , amending regulation no 913 / 2010 and repealing regulations no 680 / 2007 and no 67 / 2010 . ### the contribution from the union budget will be progressively authorised by a decision of the european parliament and the council in the framework of the annual budgetary procedures up to 2020 , using in priority all provisions under council regulation n°1311 / 2013 laying down the multiannual financial framework for the years 2014 - 2020 , in particular its articles 5 , 11 , 13 and 14 , as well as any budgetary surplus entered into the general budget of the european union , and avoiding to affect programmes that already serve an investment purpose , are operational and contain a possibility to use innovative financial instruments . therefore , envelops of programmes under the sub - heading 1a of the multiannual financial framework could be reduced only if proved necessary and as a last resort solution . __________________ 3 regulation no 1316 / 2013 of the european parliament and of the council of 11 december 2013 establishing the connecting europe facility , amending regulation no 913 / 2010 and repealing regulations no 680 / 2007 and no 67 / 2010 .


### the efsi should target projects with a higher risk - return profile than existing eib and union instruments to ensure additionality over existing operations . the efsi should finance projects across the union , including in the countries most affected by the financial crisis . the efsi should only be used where financing is not available from other sources on reasonable terms . ### the efsi should target environmentally sound and socially acceptable projects with a higher risk - return profile than existing eib and union instruments to ensure additionality over existing operations . the efsi should finance projects across the union , including in the countries most affected by the financial crisis . the efsi should only be used where financing is not available from other sources on reasonable terms .


### for the reasons explained above , it is appropriate to set an obligation on member states to adopt open access policies with respect to publicly - funded research results and ensure that such policies are implemented by all research performing organisations and research funding organisations . open access policies typically allow for a range of exceptions from making scientific research results openly available . on 17 july 2012 , the commission adopted a recommendation on access to and preservation of scientific information , updated on 25 april 201834 , and describing , among other things , relevant elements of open access policies . additionally , the conditions , under which certain research results can be re - used , should be improved . for this reason , certain obligations stemming from this directive should be extended to research data resulting from scientific research activities subsidised by public funding or co - funded by public and private - sector entities . however , in this context , concerns in relation to privacy , protection of personal data , trade secrets , national security , legitimate commercial interests and to intellectual property rights of third parties should be duly taken into account . in order to avoid any administrative burden , such obligations should only apply to such research data that have already been made publicly available by researchers . other types of documents held by research performing organisations and research funding organisations should continue to be exempt from the scope of application of this directive . _________________ 34 c2375 ### for the reasons explained above , it is appropriate to set an obligation on member states to adopt open access policies with respect to publicly - funded research results and ensure that such policies are implemented by all research performing organisations and research funding organisations . open access policies typically allow for a range of exceptions from making scientific research results openly available . on 17 july 2012 , the commission adopted a recommendation on access to and preservation of scientific information , updated on 25 april 201834 , and describing , among other things , relevant elements of open access policies . additionally , the conditions , under which certain research results can be re - used , should be improved . for this reason , certain obligations stemming from this directive should be extended to research data resulting from scientific research activities subsidised by public funding or co - funded by public and private - sector entities . however , in this context , concerns in relation to privacy , confidentiality , protection of personal data , trade secrets , national security , legitimate commercial interests and to intellectual property rights of third parties should be duly taken into account . in order to avoid any administrative burden , such obligations should only apply to such research data that have already been made publicly available by researchers . other types of documents held by research performing organisations and research funding organisations should continue to be exempt from the scope of application of this directive . _________________ 34 c2375


### enhancing digital connectivity ; ### enhancing digital connectivity , with particular emphasis on digital connectivity in rural areas ;


### in addition , investments under the erdf should contribute to the development of a comprehensive high - speed digital infrastructure network , and to promoting clean and sustainable multimodal urban mobility . ### in addition , investments under the erdf should contribute to the development of a comprehensive high - speed digital infrastructure network , and to promoting clean and sustainable multimodal urban and rural mobility .


### ' travel authorisation ' means a decision issued in accordance with this regulation indicating that there are no factual indications or reasonable grounds to conclude that the presence of the person on the territory of the member states poses an irregular migration , security or public health risk and which is a requirement for third country nationals referred to in article 2 to fulfil the entry condition laid down in article 6 of regulation 2016 / 399 . ### ' travel authorisation ' means a decision issued in accordance with this regulation indicating that there are no factual indications or reasonable grounds to conclude that the presence of the person on the territory of the member states poses an illegal migration , security or public health risk and which is a requirement for third country nationals referred to in article 2 to fulfil the entry condition laid down in article 6 of regulation 2016 / 399 .


### in an exceptional case of urgency , where there is a need to immediately obtain personal data necessary for preventing the commission of a serious crime or for prosecuting its perpetrators , the central access point shall process the request immediately and without the independent verification provided in paragraph 2 . an ex post independent verification shall take place without undue delay after the processing of the request , including whether an exceptional case of urgency actually existed . ### in an exceptional case of urgency , where there is a need to immediately obtain personal data to prevent an imminent danger associated with a terrorist offence , the commission of a serious criminal offence or for the prosecution of its perpetrators , the central access point shall process the request immediately and without the independent verification provided in paragraph 2 . an ex post independent verification whether the conditions referred to in article 45 were fulfilled , including whether an exceptional case of urgency actually existed shall take place without undue delay and in any event no later than 48 hours after the processing of the request .


### the etias central system shall compare the relevant data referred to in article 15 , , and and the specific risk indicators referred to in article 28 . ### the etias central system shall compare the relevant data referred to in article 15 , , and and the specific risk indicators referred to in article 28 . the commission shall be empowered to adopt delegated acts in accordance with article 78 to amend the data categories to be compared with the etias central system in order to be consistent and proportional with the definition of the concrete risk , which remains to be established by the commission via delegated acts as referred to in article 28 .


### a travel authorisation shall be valid for five years or until the end of validity of the travel document registered during application , whichever comes first , and shall be valid for the territory of the member states . ### a travel authorisation shall be valid for three years or until the end of validity of the travel document registered during application , whichever comes first , and shall be valid for the territory of the member states . however , for categories of applicants exempt from paying the fee in accordance with article 16 , the travel authorisation shall be valid for a single entry .


### [ directive 2016 / 680 ] shall apply to the processing by member states designated authorities for the purposes of article 1 . ### [ directive 2016 / 680 ] shall apply to the processing of personal data by member states designated authorities for the purposes of article 1 .


### where a travel authorisation is amended by the etias central unit or an etias national unit during its validity period , the etias central system shall carry out the automated processing laid down in article 18 to determine whether the amended application file triggers a hit pursuant to article 18 to . where the automated processing does not report any hit , the etias central system shall issue an amended travel authorisation with the same validity of the original and notify the applicant . where the automated processing reports one or several hit , the etias national unit of the member state of first entry as declared by the applicant in accordance with article 15 shall assess the irregular migration , security or public health risk and shall decide whether to issue an amended travel authorisation or , where it concludes that the conditions for granting the travel authorisation are no longer met , revoke the travel authorisation . ### where a travel authorisation is amended following a request pursuant to in this paragraph by the etias central unit or an etias national unit during its validity period , the etias central system shall carry out the automated processing laid down in article 18 to determine whether the amended application file triggers a hit pursuant to article 18 to . where the automated processing does not report any hit , the etias central system shall issue an amended travel authorisation with the same validity of the original and notify the applicant . where the automated processing reports one or several hit , in accordance with article 22 , the etias national unit of the responsible member state shall assess the irregular migration , security or public health risk and shall decide whether to issue an amended travel authorisation or , where it concludes that the conditions for granting the travel authorisation are no longer met , revoke the travel authorisation .