### an act of preservation may require a reproduction of a work or other subject - matter in the collection of a cultural heritage institution and consequently the authorisation of the relevant rightholders . cultural heritage institutions are engaged in the preservation of their collections for future generations . digital technologies offer new ways to preserve the heritage contained in those collections but they also create new challenges . in view of these new challenges , it is necessary to adapt the current legal framework by providing a mandatory exception to the right of reproduction in order to allow those acts of preservation . ### an act of preservation may require a reproduction of a work or other subject - matter in the collection of a cultural heritage institution and consequently the authorisation of the relevant rightholders . cultural heritage institutions are engaged in the preservation of cultural heritage for future generations . digital technologies offer new ways to preserve the heritage contained in the collections of cultural heritage institutions , but they also create new challenges . one such challenge is the systematic collection and preservation of works which are not originally published by traditional analogue means , but originate in a digital form . whereas publishers in member states are typically obliged to provide a reference copy of each published work to certain cultural heritage institutions for archiving purposes , such obligations often do not apply to born - digital works . in the absence of the provision of reference copies by the authors or publishers of born - digital works , cultural heritage institutions should be allowed to make reproductions of born - digital works at their own initiative whenever they are openly available on the internet , in order to add them to their permanent collections . cultural heritage institutions also engage in making internal reproductions for many varying purposes including insurance , rights clearance , and loans . in view of these new challenges , it is necessary to adapt the current legal framework by providing a mandatory exception to the right of reproduction .


### this legal uncertainty should be addressed by providing for a mandatory exception to the right of reproduction and also to the right to prevent extraction from a database . the new exception should be without prejudice to the existing mandatory exception on temporary acts of reproduction laid down in article 5 of directive 2001 / 29 , which should continue to apply to text and data mining techniques which do not involve the making of copies going beyond the scope of that exception . research organisations should also benefit from the exception when they engage into public - private partnerships . ### this legal uncertainty should be addressed by providing for a mandatory exception to the right of reproduction and also to the right to prevent extraction from a database for the purposes of text and data mining , which should not be subject to compensation given that in view of the nature and scope of the exception the harm should be minimal . an additional mandatory exception should allow research organisations to have access to normalised information in a format that enables it to be text and data mined provided that that process is carried out by the research organisation . rightholders should not be able to seek compensation for this exception that goes beyond what is necessary and proportionate to the cost of the normalisation process . research organisations should also benefit from this exception when they engage in public - private partnerships . these new exceptions should be without prejudice to the existing mandatory exception on temporary acts of reproduction laid down in article 5 of directive 2001 / 29 , which should continue to apply to text and data mining techniques which do not involve the making of copies going beyond the scope of that exception .


### certain rightholders such as authors and performers need information to assess the economic value of their rights which are harmonised under union law . this is especially the case where such rightholders grant a licence or a transfer of rights in return for remuneration . as authors and performers tend to be in a weaker contractual position when they grant licences or transfer their rights , they need information to assess the continued economic value of their rights , compared to the remuneration received for their licence or transfer , but they often face a lack of transparency . therefore , the sharing of adequate information by their contractual counterparts or their successors in title is important for the transparency and balance in the system that governs the remuneration of authors and performers . ### certain rightholders such as authors and performers need information to assess the economic value of their rights which are harmonised under union law . this is especially the case where such rightholders grant a licence or a transfer of rights in return for remuneration . as authors and performers tend to be in a weaker contractual position when they grant licences or transfer their rights , they need information to assess the continued economic value of their rights , compared to the remuneration received for their licence or transfer , but they often face a lack of transparency . therefore , the regular sharing of information by their contractual counterparts or their successors in title is important for the transparency and balance in the system that governs the remuneration of authors and performers .


### different arrangements , based on the implementation of the exception provided for in directive 2001 / 29 / ec or on licensing agreements covering further uses , are in place in a number of member states in order to facilitate educational uses of works and other subject - matter . such arrangements have usually been developed taking account of the needs of educational establishments and different levels of education . whereas it is essential to harmonise the scope of the new mandatory exception or limitation in relation to digital uses and cross - border teaching activities , the modalities of implementation may differ from a member state to another , to the extent they do not hamper the effective application of the exception or limitation or cross - border uses . this should allow member states to build on the existing arrangements concluded at national level . in particular , member states could decide to subject the application of the exception or limitation , fully or partially , to the availability of adequate licences , covering at least the same uses as those allowed under the exception . this mechanism would , for example , allow giving precedence to licences for materials which are primarily intended for the educational market . in order to avoid that such mechanism results in legal uncertainty or administrative burden for educational establishments , member states adopting this approach should take concrete measures to ensure that licensing schemes allowing digital uses of works or other subject - matter for the purpose of illustration for teaching are easily available and that educational establishments are aware of the existence of such licensing schemes . ### different arrangements , based on the implementation of the exception provided for in directive 2001 / 29 / ec or on extended collective licensing agreements , are in place in a number of member states in order to facilitate educational uses of works and other subject - matter . such arrangements have usually been developed taking account of the constraints set by the closed list of voluntary exceptions at union level , the needs of educational establishments and different levels of education . whereas it is essential to harmonise the scope of the new mandatory exception or limitation in relation to offline and online uses and particularly cross - border teaching activities , the modalities of implementation may differ from a member state to another , to the extent they do not hamper the effective application of the exception or limitation or cross - border uses . this should allow member states to build on the existing extended collective licencing arrangements concluded at national level . in particular , member states may decide to subject the application of the exception or limitation , fully or partially , to the actual availability of adequate extended collective licencing agreements , covering at least the same uses as those allowed under the exception . in order to avoid that such mechanism results in legal uncertainty or administrative burden for educational establishments , member states adopting this approach should take concrete measures to ensure that extended collective licensing schemes allowing uses of works or other subject - matter for the purpose of illustration for teaching are easily available and affordable , covering all uses allowed under the exception , and that educational establishments are aware of the existence of such extended collective licensing schemes .


### member states shall ensure that authors and performers receive on a regular basis and taking into account the specificities of each sector , timely , adequate and sufficient information on the exploitation of their works and performances from those to whom they have licensed or transferred their rights , notably as regards modes of exploitation , revenues generated and remuneration due . ### member states shall ensure that authors and performers receive on a regular basis and taking into account the specificities of each sector , timely , and comprehensive information on the exploitation of their works and performances from those to whom their works are licensed or their rights are transferred , notably as regards modes of exploitation , revenues generated and remuneration due .


### the exception or limitation should cover digital uses of works and other subject - matter such as the use of parts or extracts of works to support , enrich or complement the teaching , including the related learning activities . the use of the works or other subject - matter under the exception or limitation should be only in the context of teaching and learning activities carried out under the responsibility of educational establishments , including during examinations , and be limited to what is necessary for the purpose of such activities . the exception or limitation should cover both uses through digital means in the classroom and online uses through the educational establishment ' s secure electronic network , the access to which should be protected , notably by authentication procedures . the exception or limitation should be understood as covering the specific accessibility needs of persons with a disability in the context of illustration for teaching . ### the exception or limitation should cover uses of works and other subject - matter such as the use of parts or extracts of works to support , enrich or complement the teaching , including the related learning activities . the use of the works or other subject - matter under the exception or limitation should be only in the context of teaching and learning activities , including during examinations , and be limited to what is necessary for the purpose of such activities . the exception or limitation should cover both offline uses such as uses in the classroom , and online uses . the exception or limitation should be understood as covering the specific accessibility needs of persons with a disability in the context of illustration for teaching .


### member states shall provide for an exception to the rights provided for in article 2 of directive 2001 / 29 / ec , articles 5 and 7 of directive 96 / 9 / ec , article 4 of directive 2009 / 24 / ec and article 11 of this directive , permitting cultural heritage institutions , to make copies of any works or other subject - matter that are permanently in their collections , in any format or medium , for the sole purpose of the preservation of such works or other subject - matter and to the extent necessary for such preservation . ### member states shall provide for an exception to the rights provided for in article 2 of directive 2001 / 29 / ec , articles 5 and 7 of directive 96 / 9 / ec , article 4 of directive 2009 / 24 / ec and article 11 of this directive , permitting cultural heritage institutions or educational establishments , to make copies of any works or other subject - matter that are permanently in their collections or publicly accessible on the internet , in any format or medium , to the extent necessary for such reproduction , for the purpose of , individually or collaboratively with others , carrying out their public interest mission in preservation , research , culture , education and teaching .


### new technologies enable the automated computational analysis of information in digital form , such as text , sounds , images or data , generally known as text and data mining . those technologies allow researchers to process large amounts of information to gain new knowledge and discover new trends . whilst text and data mining technologies are prevalent across the digital economy , there is widespread acknowledgment that text and data mining can in particular benefit the research community and in so doing encourage innovation . however , in the union , research organisations such as universities and research institutes are confronted with legal uncertainty as to the extent to which they can perform text and data mining of content . in certain instances , text and data mining may involve acts protected by copyright and / or by the sui generis database right , notably the reproduction of works or other subject - matter and / or the extraction of contents from a database . where there is no exception or limitation which applies , an authorisation to undertake such acts would be required from rightholders . text and data mining may also be carried out in relation to mere facts or data which are not protected by copyright and in such instances no authorisation would be required . ### new technologies enable the automated computational analysis of information in digital form , such as text , sounds , images or any other type of data , generally known as text and data mining . those technologies allow the processing of large amounts of information to gain new knowledge and discover new trends . whilst text and data mining technologies are prevalent across the digital economy , there is widespread acknowledgment that text and data mining can in particular benefit the research community and in so doing encourage innovation . however , in the union , individuals , public and private entities who have legal access to content are confronted with legal uncertainty as to the extent to which they can perform text and data mining of content . in certain instances , text and data mining may involve acts protected by copyright and / or by the sui generis database right , notably the reproduction of works or other subject - matter and / or the extraction of contents from a database . where there is no exception or limitation which applies , an authorisation to undertake such acts would be required from rightholders . text and data mining may also be carried out in relation to mere facts or data which are not protected by copyright and in such instances no authorisation would be required . the right to read is the right to mine .


### rapid technological developments continue to transform the way works and other subject - matter are created , produced , distributed and exploited . new business models and new actors continue to emerge . the objectives and the principles laid down by the union copyright framework remain sound . however , legal uncertainty remains , for both rightholders and users , as regards certain uses , including cross - border uses , of works and other subject - matter in the digital environment . as set out in the communication of the commission entitled ‘ towards a modern , more european copyright framework’26 , in some areas it is necessary to adapt and supplement the current union copyright framework . this directive provides for rules to adapt certain exceptions and limitations to digital and cross - border environments , as well as measures to facilitate certain licensing practices as regards the dissemination of out - of - commerce works and the online availability of audiovisual works on video - on - demand platforms with a view to ensuring wider access to content . in order to achieve a well - functioning marketplace for copyright , there should also be rules on rights in publications , on the use of works and other subject - matter by online service providers storing and giving access to user uploaded content and on the transparency of authors ' and performers ' contracts . _________________ 26 com 626 final . ### rapid technological developments continue to transform the way works and other subject - matter are created , produced , distributed and exploited . new business models and new actors continue to emerge . the objectives and the principles laid down by the union copyright framework remain sound . however , legal uncertainty remains , for both rightholders and users , as regards certain uses , including cross - border uses , of works and other subject - matter in the digital environment . as set out in the communication of the commission entitled ‘ towards a modern , more european copyright framework’26 , in some areas it is necessary to adapt and supplement the current union copyright framework . this directive provides for rules to adapt certain exceptions and limitations to digital and cross - border environments , as well as measures to facilitate certain licensing practices as regards the dissemination of out - of - commerce works and the online availability of audiovisual works on video - on - demand platforms with a view to ensuring wider access to content . in order to achieve a well - functioning marketplace for copyright , there should also be rules on the transparency of authors ' and performers ' contracts . _________________ 26 com 626 final .


### member states shall provide for an exception or limitation to the rights provided for in articles 2 and 3 of directive 2001 / 29 / ec , articles 5 and 7 of directive 96 / 9 / ec , article 4 of directive 2009 / 24 / ec and article 11 of this directive in order to allow for the digital use of works and other subject - matter for the sole purpose of illustration for teaching , to the extent justified by the non - commercial purpose to be achieved , provided that the use : ### member states shall provide for an exception or limitation to the rights provided for in articles 2 and 3 of directive 2001 / 29 / ec , articles 5 and 7 of directive 96 / 9 / ec , article 4 of directive 2009 / 24 / ec and article 11 of this directive in order to allow for the use of works and other subject - matter for the sole purpose of illustration for teaching , provided that the use is accompanied by the indication of the source , including the author ' s name , unless this turns out to be impossible .


### the obligation in paragraph 1 shall be proportionate and effective and shall ensure an appropriate level of transparency in every sector . however , in those cases where the administrative burden resulting from the obligation would be disproportionate in view of the revenues generated by the exploitation of the work or performance , member states may adjust the obligation in paragraph 1 , provided that the obligation remains effective and ensures an appropriate level of transparency . ### the obligation in paragraph 1 shall be proportionate and effective and shall ensure a high level of transparency in every sector .


### the use of works and other subject - matter for the sole purpose of illustration for teaching through secure electronic networks undertaken in compliance with the provisions of national law adopted pursuant to this article shall be deemed to occur solely in the member state where the educational establishment is established . ### the use of works and other subject - matter for the sole purpose of illustration for teaching online undertaken in compliance with the provisions of national law adopted pursuant to this article shall be deemed to occur solely in the member state from where the educational activity originates .


### new technologies enable the automated computational analysis of information in digital form , such as text , sounds , images or data , generally known as text and data mining . those technologies allow researchers to process large amounts of information to gain new knowledge and discover new trends . whilst text and data mining technologies are prevalent across the digital economy , there is widespread acknowledgment that text and data mining can in particular benefit the research community and in so doing encourage innovation . however , in the union , research organisations such as universities and research institutes are confronted with legal uncertainty as to the extent to which they can perform text and data mining of content . in certain instances , text and data mining may involve acts protected by copyright and / or by the sui generis database right , notably the reproduction of works or other subject - matter and / or the extraction of contents from a database . where there is no exception or limitation which applies , an authorisation to undertake such acts would be required from rightholders . text and data mining may also be carried out in relation to mere facts or data which are not protected by copyright and in such instances no authorisation would be required . ### new technologies enable the automated computational analysis of information in digital form , such as text , sounds , images or data , generally known as text and data mining . those technologies allow researchers to process large amounts of information to gain new knowledge and discover new trends . whilst text and data mining technologies are prevalent across the digital economy , there is widespread acknowledgment that text and data mining can in particular benefit the research community and in so doing encourage innovation . however , in the union , research organisations such as universities and research institutes are confronted with legal uncertainty as to the extent to which they can perform text and data mining of content . in certain instances , text and data mining may involve acts protected by copyright and / or by the sui generis database right , notably the reproduction of works or other subject - matter and / or the extraction of contents from a database . where there is no exception or limitation which applies , an authorisation to undertake such acts would be required from rightholders . no authorisation would be required in cases where text or data mining is carried out in relation to mere facts or data which are not protected by copyright .


### member states may provide that the exception adopted pursuant to paragraph 1 does not apply generally or as regards specific types of works or other subject - matter , to the extent that adequate licences authorising the acts described in paragraph 1 are easily available in the market . ### member states may provide that the exception adopted pursuant to paragraph 1 does not apply generally or as regards specific types of works or other subject - matter , to the extent that equivalent extended collective licencing agreements authorising at least the acts described in paragraph 1 are easily available and affordable .


### member states may provide for fair compensation for the harm incurred by the rightholders due to the use of their works or other subject - matter pursuant to paragraph 1 . ### member states shall ensure that the rightholders have the right to grant royalty - free licences authorising the acts described in paragraph 1 , generally or as regards specific types of works of other subject - matter that they may choose .


### research organisations across the union encompass a wide variety of entities the primary goal of which is to conduct scientific research or to do so together with the provision of educational services . due to the diversity of such entities , it is important to have a common understanding of the beneficiaries of the exception . despite different legal forms and structures , research organisations across member states generally have in common that they act either on a not for profit basis or in the context of a public - interest mission recognised by the state . such a public - interest mission may , for example , be reflected through public funding or through provisions in national laws or public contracts . at the same time , organisations upon which commercial undertakings have a decisive influence allowing them to exercise control because of structural situations such as their quality of shareholders or members , which may result in preferential access to the results of the research , should not be considered research organisations for the purposes of this directive . ### research organisations across the union encompass a wide variety and size of entities the primary goal of which is to conduct research or to do so together with the provision of educational services . taking into account the diversity of such entities , for instance small research organisations with only limited access to content , it is important that rightholders provide access to normalised datasets for the purpose of text and data mining . . despite different legal forms and structures , research organisations across member states generally have in common that they act either on a not for profit basis or in the context of a public - interest mission recognised by the state . such a public - interest mission may , for example , be reflected through public funding or through provisions in national laws or public contracts .


### union law already provides certain exceptions and limitations covering uses for scientific research purposes which may apply to acts of text and data mining . however , those exceptions and limitations are optional and not fully adapted to the use of technologies in scientific research . moreover , where researchers have lawful access to content , for example through subscriptions to publications or open access licences , the terms of the licences may exclude text and data mining . as research is increasingly carried out with the assistance of digital technology , there is a risk that the union ' s competitive position as a research area will suffer unless steps are taken to address the legal uncertainty for text and data mining . ### union law already provides certain exceptions and limitations covering uses for scientific research purposes which may apply to acts of text and data mining . however , those exceptions and limitations are optional and not fully adapted to the use of text and data mining technologies which are relevant far beyond the area of scientific research . moreover , where there is lawful access to content , for example through subscriptions to publications or open access licences , the terms of the licences may exclude text and data mining . as research is increasingly carried out with the assistance of digital technology , there is a risk that the union ' s competitive position as a research area and action lines envisaged in the european open science agenda will suffer unless steps are taken to address the legal uncertainty regarding text and data mining for all potential users . union law must acknowledge that text and data mining is increasingly used beyond formal research organisations and for purposes other than scientific research which nevertheless contribute to innovation , technology transfer and the public interest .


### over the last years , the functioning of the online content marketplace has gained in complexity . online services providing access to copyright protected content uploaded by their users without the involvement of right holders have flourished and have become main sources of access to content online . this affects rightholders ' possibilities to determine whether , and under which conditions , their work and other subject - matter are used as well as their possibilities to get an appropriate remuneration for it . ### over the last years , the functioning of the online content marketplace has gained in complexity . online services providing access to copyright protected content uploaded by their users without the involvement of right holders have flourished and have become important sources of access to content online allowing for diversity and ease of access to content but also generating challenges when copyright protected content is uploaded without prior authorisation from rightsholders .


### member states shall provide for an exception to the rights provided for in article 2 of directive 2001 / 29 / ec , articles 5 and 7 of directive 96 / 9 / ec and article 11 of this directive for reproductions and extractions made by research organisations in order to carry out text and data mining of works or other subject - matter to which they have lawful access for the purposes of scientific research . ### member states shall provide for an exception to the rights provided for in article 2 of directive 2001 / 29 / ec , articles 5 and 7 of directive 96 / 9 / ec and article 11 of this directive for reproductions and extractions made in order to carry out text and data mining of works or other subject - matter . this includes , for the sole purpose of text and data mining , the permission to extract contents of databases and to make reproductions .


### member states shall ensure that the service providers referred to in paragraph 1 put in place complaints and redress mechanisms that are available to users in case of disputes over the application of the measures referred to in paragraph 1 . ### member states shall ensure that national law provides users access to a court or other relevant authority for the purpose of asserting their right of use under an exception or limitation .


### use of works and other subject - matter in digital and cross - border teaching activities ### use of works and other subject - matter in teaching activities


### rightholders shall be allowed to apply measures to ensure the security and integrity of the networks and databases where the works or other subject - matter are hosted . such measures shall not go beyond what is necessary to achieve that objective . ### rightholders shall not be allowed to apply measures to prevent or hinder beneficiaries from benefiting from the exception provided for in paragraph 1 , unless such measures are to ensure the security and integrity of the networks and databases where the works or other subject - matter are hosted may be applied . such measures shall not exceed what is necessary to pursue the objective of ensuring the security of the system and should not undermine the effective application of the exception . these measures shall not prevent or unreasonably restrict the ability to text and data mine or the ability to develop text and data mining tools different from those offered by the rightholders as long as the security of the networks and databases are protected .


### member states shall provide for an exception or limitation to the rights provided for in articles 2 and 3 of directive 2001 / 29 / ec , articles 5 and 7 of directive 96 / 9 / ec , article 4 of directive 2009 / 24 / ec and article 11 of this directive in order to allow for the digital use of works and other subject - matter for the sole purpose of illustration for teaching , to the extent justified by the non - commercial purpose to be achieved , provided that the use : ### member states shall provide for an exception or limitation to the rights provided for in articles 2 and 3 of directive 2001 / 29 / ec , articles 5 and 7 of directive 96 / 9 / ec , article 4 of directive 2009 / 24 / ec and article 11 of this directive in order to allow for the use of works and other subject - matter for the sole purpose of illustration for teaching , learning and scientific research to the extent justified by the non - commercial purpose to be achieved , provided that the use :


### member states shall provide for an exception to the rights provided for in article 2 of directive 2001 / 29 / ec , articles 5 and 7 of directive 96 / 9 / ec , article 4 of directive 2009 / 24 / ec and article 11 of this directive , permitting cultural heritage institutions , to make copies of any works or other subject - matter that are permanently in their collections , in any format or medium , for the sole purpose of the preservation of such works or other subject - matter and to the extent necessary for such preservation . ### member states shall provide for an exception to the rights provided for in article 2 of directive 2001 / 29 / ec , articles 5 and 7 of directive 96 / 9 / ec , article 4 of directive 2009 / 24 / ec and article 11 of this directive , permitting cultural heritage institutions or educational establishments , to make copies of any works or other subject - matter that are permanently in their collections or publicly accessible on the internet , in any format or medium , to the extent necessary for such reproduction , for the purpose of , individually or collaboratively with others , carrying out their public interest mission in preservation , research , culture , education and teaching .


### information society service providers that store and provide to the public access to large amounts of works or other subject - matter uploaded by their users shall , in cooperation with rightholders , take measures to ensure the functioning of agreements concluded with rightholders for the use of their works or other subject - matter or to prevent the availability on their services of works or other subject - matter identified by rightholders through the cooperation with the service providers . those measures , such as the use of effective content recognition technologies , shall be appropriate and proportionate . the service providers shall provide rightholders with adequate information on the functioning and the deployment of the measures , as well as , when relevant , adequate reporting on the recognition and use of the works and other subject - matter . ### where information society service providers that store and provide to the public access to works or other subject - matter uploaded by their users conclude agreements with rightsholders , the implementation of such agreements shall respect the users ' fundamental rights and shall in particular not convey an obligation upon the information society service provider to monitor the information which they transmit or store , nor a general obligation actively to seek facts or circumstances indicating illegal activity . the service providers shall cooperate and work together with rightsholders to ensure that the functioning and implementation of such agreements are full and transparent towards the users .


### while distance learning and cross - border education programmes are mostly developed at higher education level , digital tools and resources are increasingly used at all education levels , in particular to improve and enrich the learning experience . the exception or limitation provided for in this directive should therefore benefit all educational establishments in primary , secondary , vocational and higher education to the extent they pursue their educational activity for a non - commercial purpose . the organisational structure and the means of funding of an educational establishment are not the decisive factors to determine the non - commercial nature of the activity . ### while distance learning and cross - border education programmes are mostly developed at higher education level , digital tools and resources are increasingly used at all education levels , in particular to improve and enrich the learning experience . the exception or limitation provided for in this directive should therefore benefit all educational activities , including in primary , secondary , vocational and higher education to the extent they pursue their educational activity .


### except in the cases referred to in article 6 , this directive shall leave intact and shall in no way affect existing rules laid down in the directives currently in force in this area , in particular directives 96 / 9 / ec , 2001 / 29 / ec , 2006 / 115 / ec , 2009 / 24 / ec , 2012 / 28 / eu and 2014 / 26 / eu . ### except in the cases referred to in article 6 , this directive shall leave intact and shall in no way affect existing rules laid down in the directives currently in force in this area , in particular directives 96 / 9 / ec , 2000 / 31 / ec , 2001 / 29 / ec , 2006 / 115 / ec , 2009 / 24 / ec , 2012 / 28 / eu and 2014 / 26 / eu .


### manufacturers respond to the energy label by creating ever more efficient products . this technological development leads to products populating mainly the highest classes of the energy label . further product differentiation may be necessary to allow customers a proper comparison , leading to the need to rescale labels . for the frequency of such rescaling a timescale of approximately ten years would be appropriate , taking into account the need to avoid over burdening manufacturers . this regulation should therefore lay down detailed arrangements for rescaling in order to maximise legal certainty for suppliers and dealers . a newly rescaled label should have empty top classes to encourage technological progress and enable ever more efficient products to be developed and recognised . when a label is rescaled , confusion to customers should be avoided by replacing all energy labels within a short timeframe . ### manufacturers respond to the energy label by creating ever more efficient products . this technological development leads to products populating mainly the highest classes of the energy label . further product differentiation is necessary to allow customers a proper comparison , leading to the need to rescale labels . the frequency of such rescaling shall be determined by technological development of the products and shall be consulted with the consultation forum in accordance of the article 10 of this regulation . this regulation should therefore lay down detailed arrangements for rescaling in order to maximise legal certainty for suppliers and dealers . a newly rescaled label should have top classes of only the best products available according to the latest information with the amount not exceeding a threshold of the available products determined by the consultation forum to encourage technological progress and enable ever more efficient products to be developed and recognised . when a label is rescaled , confusion to customers should be avoided by replacing all energy labels within a short timeframe and with information of the rescaling available for the customers .


### in order to facilitate the monitoring of compliance and to provide up - to - date market data for the regulatory process on revisions of product - specific labels and information sheets , suppliers should provide their product compliance information electronically in a database established by the commission . the information should be made publicly available to provide information for customers and to allow for alternative ways for dealers to receive labels . market surveillance authorities should have access to the information in the database . ### without prejudice to the member states ' market surveillance obligations , in order to facilitate the monitoring of compliance and to provide up - to - date market data for the regulatory process on revisions of product - specific labels and information sheets , suppliers should provide the required product compliance information electronically or in paper form to be incorporated in a database established and maintained by the commission . the information should be made publicly available in order to provide information to customers and to allow dealers to receive labels in alternative ways . market surveillance authorities should have access to the information in the database .


### labels introduced by delegated acts adopted in accordance with article 10 of directive 2010 / 30 / eu before the date of application of this regulation shall be considered as labels for the purposes of this regulation . the commission shall review those labels within five years of the entry into force of this regulation with a view to rescaling them . ### labels introduced by delegated acts adopted in accordance with article 10 of directive 2010 / 30 / eu before the date of application of this regulation shall be rescaled to a - g which shall apply no later than five years after the entry into force of the relevant delegated act or at the date of application of this regulation whichever comes last .


### this regulation lays down a framework on the indication by labelling and standard product information of the consumption of energy and other resources by energy - related products during use and supplementary information concerning energy - related products in order to allow customers to choose more efficient products . ### this regulation lays down a framework on the indication by labelling and standard product information of the consumption of energy under real - life conditions and other resources by energy - related products during use under real - life conditions and supplementary information concerning energy - related products , including the durability of products and the extent to which they can be repaired or recycled , in order to allow customers to choose more sustainable and efficient products .


### the provision of accurate , relevant and comparable information on the specific energy consumption of energy - related products facilitates the customer ' s choice in favour of those products which consume less energy and other essential resources during use . a standardised mandatory label is an effective mean to provide potential customers with comparable information on the energy consumption of energy - related products . it should be supplemented with a product information sheet . the label should be easily recognisable , simple and concise . to this end the existing dark green to red colour scale of the label should be retained as the basis to inform customers about the energy efficiency of products . a classification using letters from a to g has shown to be most effective for customers . in situations where because of ecodesign measures under directive 2009 / 125 / ec products can no longer fall into classes ' f ' or ' g ' , those classes should not be shown on the label . for exceptional cases this should also be extended to the ' d ' and ' e ' classes , although this situation is unlikely to occur given that the label would be rescaled once a majority of product models falls into the top two classes . ### the provision of accurate , relevant and comparable information on the specific energy consumption of energy - related products facilitates the customer ' s choice in favour of those products which consume less energy and other essential resources during use . a standardised mandatory label is an effective mean to provide potential customers with comparable information on the energy consumption of energy - related products . it should be supplemented with a product information sheet . the label should be easily recognisable , simple and concise . to this end the existing dark green to red colour scale of the label should be retained as the basis to inform customers about the energy efficiency of products . a classification using letters from a to g has shown to be most effective for customers . in situations where , because of ecodesign measures under directive 2009 / 125 / ec , products can no longer fall into certain classes , those classes should be shown on the label using a distinct format and colour .


### the provision of accurate , relevant and comparable information on the specific energy consumption of energy - related products facilitates the customer’s choice in favour of those products which consume less energy and other essential resources during use . a standardised mandatory label is an effective mean to provide potential customers with comparable information on the energy consumption of energy - related products . it should be supplemented with a product information sheet . the label should be easily recognisable , simple and concise . to this end the existing dark green to red colour scale of the label should be retained as the basis to inform customers about the energy efficiency of products . a classification using letters from a to g has shown to be most effective for customers . in situations where because of ecodesign measures under directive 2009 / 125 / ec products can no longer fall into classes ‘ f’ or ‘ g’ , those classes should not be shown on the label . for exceptional cases this should also be extended to the ‘ d’ and ‘ e’ classes , although this situation is unlikely to occur given that the label would be rescaled once a majority of product models falls into the top two classes . ### the provision of accurate , relevant and comparable information on the specific energy consumption of energy - related products facilitates the customer’s choice in favour of those products which consume less energy and other essential resources during use . a standardised mandatory label is an effective mean to provide potential customers with comparable information on the energy consumption of energy - related products . it should be supplemented with a product information sheet . the label should be easily recognisable , simple and concise . to this end the existing dark green to red colour scale of the label should be retained as the basis to inform customers about the energy efficiency of products . a classification using letters from a to g has shown to be most effective for customers . in situations where because of ecodesign measures under directive 2009 / 125 / ec products can no longer fall into classes ‘ e’ , ‘ f’ or ‘ g’ , those classes should not be shown on the label .


### the provision of accurate , relevant and comparable information on the specific energy consumption of energy - related products facilitates the customer ' s choice in favour of those products which consume less energy and other essential resources during use . a standardised mandatory label is an effective mean to provide potential customers with comparable information on the energy consumption of energy - related products . it should be supplemented with a product information sheet . the label should be easily recognisable , simple and concise . to this end the existing dark green to red colour scale of the label should be retained as the basis to inform customers about the energy efficiency of products . a classification using letters from a to g has shown to be most effective for customers . in situations where because of ecodesign measures under directive 2009 / 125 / ec products can no longer fall into classes ' f ' or ' g ' , those classes should not be shown on the label . for exceptional cases this should also be extended to the ' d ' and ' e ' classes , although this situation is unlikely to occur given that the label would be rescaled once a majority of product models falls into the top two classes . ### the provision of accurate , relevant and comparable information on the specific energy consumption of energy - related products facilitates the customer ' s choice in favour of those products which consume less energy and other essential resources during use . a standardised mandatory label is an effective mean to provide potential customers with comparable information on the energy consumption of energy - related products . it should be supplemented with a product information sheet . the label should be easily recognisable , simple and concise . to this end the existing dark green to red colour scale of the label should be retained as the basis to inform customers about the energy efficiency of products . a classification using letters from a to g has shown to be most effective for customers . in situations where because of ecodesign measures under directive 2009 / 125 / ec products can no longer fall into classes ' d ' , ' e ' , ' f ' or ' g ' , those classes should not be shown on the label .


### this regulation lays down a framework on the indication by labelling and standard product information of the consumption of energy and other resources by energy - related products during use and supplementary information concerning energy - related products in order to allow customers to choose more efficient products . ### this regulation lays down a framework on the indication by labelling and standard product information of the consumption of energy and other resources by energy - related products during use throughout their lifetime , and supplementary environmental and performance information concerning energy - related products in order to allow customers to choose more efficient and sustainable products .


### in order to assess the accuracy of the information contained in the draft terms of conversion and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed conversion constitutes an artificial arrangement , an independent expert report should be required to be prepared in order to assess the proposed cross - border conversion . in order to secure the independence of the expert , the expert should be appointed by the competent authority , following an application by the company . in this context , the expert report should present all relevant information to enable the competent authority in the departure member state to take an informed decision as to whether or not to issue the pre - conversion certificate . to this end , the expert should be able to obtain all the relevant company information and documents and carry out all necessary investigations in order to gather all the evidence required . the expert should use information , in particular net turnover and profit or loss , number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with union law and the law of member states . however , in order to protect any confidential information , including business secrets of the company , such information should not form part of the expert’s final report which itself would be publically available . ### in order to assess the accuracy of the information contained in the draft terms of conversion and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed conversion constitutes an artificial arrangement , an independent expert report should be required to be prepared in order to assess the proposed cross - border conversion . in order to secure the independence , the competent authority , following an application by the company , should appoint two experts from a pre - selected list , that have no past or current link with the company concerned and are paid a pre - set fee by the company . the experts should not work for the same firm and should together have expertise in the fields of company law , taxation and fiscal law , social security and workers’ rights . the independent experts should be appointed within one month following the application by the company and should deliver their report within two months after their appointment . in this context , the expert report should present all relevant information to enable the competent authority in the departure member state to take an informed decision as to whether or not to issue the pre - conversion certificate . to this end , the experts should be able to obtain all the relevant company information and documents , meet with employees and employee representatives , and carry out all necessary investigations in order to gather all the evidence required . the experts should use information , in particular net turnover and profit or loss , number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with union law and the law of member states .


### the competent authority shall appoint an independent expert within five working days of the application referred to in paragraph 1 and the receipt of the draft terms and reports . the expert shall be independent from the company being divided and may be a natural or a legal person depending upon the law of the member state concerned . member states shall take into account , in assessing the independence of the expert , the framework established in articles 22 and 22b of directive 2006 / 43 / ec . ### the competent authority shall start working on the application referred to in paragraph 1 within ten working days following the receipt of the draft terms and report .


### to ensure a proper allocation of tasks among member states and an efficient and effective ex - ante control of cross - border conversions , both the departure and the destination member states should designate the appropriate competent authorities . in particular , the competent authorities of the departure member states should have the power to issue a pre - conversion certificate without which the competent authorities in the destination member state should not be able to complete the cross - border conversion procedure . ### to ensure a proper allocation of tasks among member states and an efficient and effective ex - ante control of cross - border conversions , both the departure and the destination member states should designate the appropriate competent authorities . in particular , the competent authorities of the departure member states should have the power to issue a pre - conversion certificate without which the competent authorities in the destination member state should not be able to complete the cross - border conversion procedure . a list of national competent authorities in the member states shall be prepared and publish by the commission . member states’ competent authorities are expected to collaborate together in cases of cross - border conversions .


### a description of all factual elements necessary for the competent authority designated in accordance with article 160o , to carry out an in - depth assessment to determine whether the intended cross - border division constitutes an artificial arrangement in accordance with article 160p , at a minimum the following : the characteristics of the establishments in the member states concerned of the recipient companies , including the intent , the sector , the investment , the net turnover and profit or loss , number of employees , the composition of the balance sheet , the tax residence , the assets and their location , the habitual place of work of the employees and of specific groups of employees , the place where social contributions are due and the commercial risks assumed by the company being divided in the member states of the recipient companies . ### a description of all factual elements necessary for the competent authority designated in accordance with article 160o , to carry out an in - depth assessment to determine whether the intended cross - border division constitutes an artificial arrangement in accordance with article 160p , at a minimum the following : the characteristics of the establishment in the destination member state , including the intent , the sector , the investment , the net turnover and profit or loss , the number of employees working in the country of destination , the number of employees working in another country grouped according to the country of work , the number of employees posted or sent in the year prior to the conversion within the meanings of regulation no 883 / 2004 and directive 96 / 71 / ec , the number of employees working simultaneously in more than one member state within the meaning of regulation no 883 / 2004 , the tax residence , the assets and their location , the habitual place of work of the employees and of specific groups of employees , the places where social contributions are due ; the commercial risks assumed by the converted company in the destination member state and the departure member state , the composition of the balance sheet and of the financial statement in the destination member state and in all member states in which the company operates in the last two fiscal years .


### the right of companies to carry out a cross - border division may in certain circumstances be used for abusive purposes such as for the circumvention of labour standards , social security payments , tax obligations , creditors ' or members ' rights or rules on employees participation . in order to combat such abuses , as a general principle of union law , member states are required to ensure that companies do not use the cross - border division procedure in order to create artificial arrangements aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees , creditors or members . in so far as it constitutes a derogation from a fundamental freedom , the fight against abuses must be interpreted strictly and must be based on an individual assessment of all relevant circumstances . a procedural and substantive framework which describes the margin of discretion and allows for the diversity of approaches by member states whilst at the same time setting out the requirements to streamline the actions to be taken by national authorities to fight abuses in conformity with union law should be laid down . ### the right of companies to carry out a cross - border division may in certain circumstances be used for abusive purposes such as for the circumvention of labour standards , social security payments , tax obligations , creditors ' or members ' rights or rules on employees participation . in order to combat such abuses , as a general principle of union law , member states are required to ensure that companies do not use the cross - border division procedure in order to create artificial arrangements . the fight against abuses must be based on an individual assessment of all relevant circumstances . a common procedural and substantive framework which sets out the requirements to streamline the actions to be taken by national authorities to fight abuses in conformity with union law should be laid down , whilst describing , where strictly necessary , the margin of discretion allowed for member states .


### the first subparagraph of article 7 ; ### article 7 ;


### in order to ensure the accuracy of the information contained in the draft terms of division and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed division constitutes an artificial arrangement which could not be authorised , an independent expert report to assess the division plan should be required to be prepared . in order to secure the independence of the expert , the expert should be appointed by the competent authority , following an application by the company . in this context , the expert report should present all relevant information to enable the competent authority of the member state of the company being divided to take an informed decision as to whether or not to issue the pre - division certificate to this end , the expert should be able to obtain all the relevant company information and documents and carry out all necessary investigations in order to gather all the evidence required . the expert should use information , in particular net turnover and profit or loss , number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with union law and the law of member states . however , in order to protect any confidential information , including business secrets of the company , such information should not form part of the expert’s final report which itself would be publically available . ### in order to assess the accuracy of the information contained in the draft terms of division and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed division constitutes an artificial arrangement , an independent expert report should be required to be prepared in order to assess the proposed cross - border division . in order to secure the independence , the competent authority , following an application by the company , should appoint wo experts from a pre - selected list , that have no past or current link with the company concerned and are paid a pre - set fee by the company . the experts should not work for the same firm and should together have expertise in the fields of company law , taxation and fiscal law , social security and workers’ rights . the independent experts should be appointed within one month following the application by the company and should deliver their report within two months after their appointment . in this context , the expert report should present all relevant information to enable the competent authority in the departure member state to take an informed decision as to whether or not to issue the pre - division certificate . to this end , the experts should be able to obtain all the relevant company information and documents , meet with employees and employee representatives , and carry out all necessary investigations in order to gather all the evidence required . the experts should use information , in particular net turnover and profit or loss , number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with union law and the law of member states .


### the expert shall draw up a written report providing at least : ### the two experts shall draw up a written report within two months after their appointment , providing at least :


### the member state of the company being divided shall ensure that the competent authority shall not authorise the division when it determines , after an examination of the specific case and having regard to all relevant facts and circumstances , that it constitutes an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees , creditors or members . ### the member state of the company being divided shall ensure that the competent authority shall not authorise the division when it determines , after an examination of the specific case and having regard to all relevant facts and circumstances , that it constitutes an artificial arrangement or has a strong suspicion that it constitutes such an arrangement .


### member states shall ensure that this chapter does not apply to the company or companies where : ### member states shall ensure that where a company intends to carry out a cross - border merger , the member states concerned verify that the cross - border merger complies with the conditions laid down in this paragraph . a company shall not be entitled to carry out a cross - border merger in any of the following circumstances :


### the competent authority shall appoint an independent expert within five working days from the application referred to in paragraph 1 and the receipt of the draft terms and reports . the expert shall be independent from the company carrying out the cross - border conversion and may be a natural or a legal person depending upon the law of the departure member state . member states shall take into account , in assessing the independence of the expert , the framework established in articles 22 and 22b of directive 2006 / 43 / ec . ### the competent authority shall start working on the application referred to in paragraph 1 within ten working days following the receipt of the draft terms and report .


### these developments in the case - law have opened up new opportunities for companies and firms in the single market in order to foster economic growth , effective competition and productivity . at the same time , the objective of a single market without internal borders for companies must also be reconciled with other objectives of european integration such as social protection , the protection of creditors and the protection of shareholders . such objectives , in the absence of harmonised rules specifically regarding cross - border conversions , are pursued by member states through a number of multifarious legal provisions and administrative practices . as a result , whereas companies are already able to merge cross - border , they experience a number of legal and practical difficulties when wishing to perform a cross - border conversion . moreover , the national legislation of many member states provides for the procedure of domestic conversions without offering an equivalent procedure for converting cross - border . ### these developments in the case - law have opened up new opportunities for companies and firms in the single market in order to foster economic growth , effective competition and productivity . at the same time , in the absence of a level playing field in the form of coherent social and fiscal rules , these developments went hand - in - hand with the proliferation of letterbox companies and abusive practices , constituting artificial arrangements and circumventing fiscal and social security obligations as well as undercutting workers’ rights . the objective of a single market without internal borders for companies must be reconciled with other objectives of european integration such as social protection for all , the protection of workers’ rights , the protection of creditors and the protection of shareholders , as well as the fight against attacks on financial interests of the union via for example money laundering and tax evasion . in the absence of harmonised rules specifically regarding cross - border conversions , member states have developed a number of multifarious legal provisions and administrative practices . as a result , whereas companies are already able to merge cross - border , they experience a number of legal and practical difficulties when wishing to perform a cross - border conversion . moreover , the national legislation of many member states provides for the procedure of domestic conversions without offering an equivalent procedure for converting cross - border .


### a description of all factual elements necessary for the competent authority , designated in accordance with article 86m , to carry out an in - depth assessment to determine whether the intended cross - border conversion constitutes an artificial arrangement in accordance with article 86n , including at a minimum the following : the characteristics of the establishment in the destination member state , including the intent , the sector , the investment , the net turnover and profit or loss , number of employees , the composition of the balance sheet , the tax residence , the assets and their location , the habitual place of work of the employees and of specific groups of employees , the place where social contributions are due and the commercial risks assumed by the converted company in the destination member state and the departure member state . ### a description of all factual elements necessary for the competent authority , designated in accordance with article 86m , to carry out an in - depth assessment to determine whether the intended cross - border conversion constitutes an artificial arrangement in accordance with article 86n , including at a minimum the following : the characteristics of the establishment in the destination member state , including the intent , the sector , the investment , the net turnover and profit or loss , the number of employees working in the country of destination , the number of employees working in another country grouped according to the country of work , the number of employees posted or sent in the year prior to the conversion within the meanings of regulation no 883 / 2004 and directive96 / 71 / ec , the number of employees working simultaneously in more than one member state within the meaning of regulation no 883 / 2004 , the tax residence , the assets and their location , the habitual place of work of the employees and of specific groups of employees , the places where social contributions are due ; the commercial risks assumed by the converted company in the destination member state and the departure member state the composition of the balance sheet and of the financial statement in the destination member state and in all member states in which the company operates in the last two fiscal years .


### in addition to the official language of each member state of the merging companies , member states shall allow the merging companies to use a language customary in the sphere of international business and finance to draw up the common draft terms of a cross - border merger and all other related documents . member states shall specify which language will prevail in the case of discrepancies identified between the different linguistic versions of those documents . ; ### in addition to the official language of each member state of the merging companies , member states shall allow the merging companies to use a language customary in the sphere of international business and finance to draw up the common draft terms of a cross - border merger and all other related documents . member states shall specify which language will prevail in the case of discrepancies identified between the different linguistic versions of those documents . members , employees or creditors shall have the possibility to comment on these draft terms . the comments shall be included in the final report and be made public .


### member states shall ensure in order to assess whether the cross - border division constitutes an artificial arrangement within the meaning of article 160d of this directive , the competent authority of the company being divided shall carry out an in - depth assessment of all relevant facts and circumstances and shall take into account at a minimum the following : the characteristics of the establishment in the member states concerned , including the intent , the sector , the investment , the net turnover and profit or loss , number of employees , the composition of the balance sheet , the tax residence , the assets and their location , the habitual place of work of the employees and of specific groups of employees , the place where social contributions are due and the commercial risks assumed by the company being divided in the member state of that company and member states of recipient companies . ### member states shall ensure in order to assess whether the cross - border division constitutes an artificial arrangement within the meaning of this directive , the competent authority of the company being divided shall carry out an in - depth assessment of all relevant facts and circumstances and shall take into account at a minimum the following : the characteristics of the establishment in the member states concerned , including the sector , the investment , the net turnover and profit or loss , number of employees , the composition of the balance sheet , the tax residence , the assets and their location , the habitual place of work of the employees and of specific groups of employees , the place where social contributions are due and the commercial risks assumed by the company being divided in the member state of that company and member states of recipient companies .


### member states shall ensure in order to assess whether the cross - border division constitutes an artificial arrangement within the meaning of article 160d of this directive , the competent authority of the company being divided shall carry out an in - depth assessment of all relevant facts and circumstances and shall take into account at a minimum the following : the characteristics of the establishment in the member states concerned , including the intent , the sector , the investment , the net turnover and profit or loss , number of employees , the composition of the balance sheet , the tax residence , the assets and their location , the habitual place of work of the employees and of specific groups of employees , the place where social contributions are due and the commercial risks assumed by the company being divided in the member state of that company and member states of recipient companies . ### member states shall ensure in order to assess whether the cross - border division constitutes an artificial arrangement within the meaning of article 160d of this directive , the competent authority of the company being divided shall carry out an in - depth assessment of all relevant facts and circumstances and shall take into account at a minimum the following : the characteristics of the establishment in the destination member state , including the intent , the sector , the investment , the net turnover and profit or loss , the number of employees working in the country of destination , the number of employees working in another country grouped according to the country of work , the number of employees posted in the year prior to the conversion within the meanings of regulation no 883 / 2004and directive 96 / 71 / ec , the number of employees working simultaneously in more than one member state within the meaning of regulation no 883 / 2004 , the composition of the balance sheet , the tax residence , the assets and their location , the habitual place of work of the employees and of specific groups of employees , the places where social contributions are due , and the commercial risks assumed by the converted company in the destination member state and the departure member state . , and the composition of the balance sheet and of the financial statement in the destination member state and in all member states in which the company operates in the last two fiscal years .


### the right to convert an existing company formed in a member state into a company governed by another member state may in certain circumstances be used for abusive purposes such as for the circumvention of labour standards , social security payments , tax obligations , creditors ' , minority shareholders ' rights or rules on employees participation . in order to combat such possible abuses , a general principle of union law , member states are required to ensure that companies do not use the cross - border conversion procedure in order to create artificial arrangements aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees , creditors or members . in so far as it constitutes a derogation from a fundamental freedom , the fight against abuses must be interpreted strictly and be based on an individual assessment of all relevant circumstances . a procedural and substantive framework which describes the margin of discretion and allows for the diversity of approach by member states whilst at the same time setting out the requirements to streamline the actions to be taken by national authorities to fight abuses in conformity with union law should be laid down . ### the right to merge , divide or convert an existing company formed in a member state into a company governed by another member state should never be used for abusive purposes such as for the circumvention of labour standards , social security payments , tax obligations , creditors ' , minority shareholders ' rights or rules on employees participation , as this is the case for example of letterbox companies . in order to combat such possible abuses , a general principle of union law , member states are required to ensure that companies do not use the cross - border conversion , merger or division procedure in order to create artificial arrangements aimed , solely or partially , at obtaining tax or social security advantages or at prejudicing the legal or contractual rights of employees , creditors or members . the fight against abuses must be based on an individual assessment of all relevant circumstances . a common procedural and substantive framework which sets out the requirements to streamline the actions to be taken by national authorities to fight abuses in conformity with union law should be laid down , whilst describing , where strictly necessary , the margin of discretion allowed for member states .


### in addition to the official languages of the member states of the recipient companies and the one being divided , member states shall allow the company to use a language customary in the sphere of international business and finance in order to draw up the draft terms of cross - border division and all other related documents . member states shall specify which language will prevail in case of discrepancies among different linguistic versions of those documents . ### in addition to the official languages of the member states of the recipient companies and the one being divided , member states shall allow the company to use a language customary in the sphere of international business and finance in order to draw up the draft terms of cross - border division and all other related documents . member states shall specify which language will prevail in case of discrepancies among different linguistic versions of those documents . members , employees or creditors shall have the possibility to comment on these draft terms . the comments shall be included in the final report and be made public .


### in order to ensure that employee participation is not unduly prejudiced as a result of the cross - border conversion , where the company carrying out the cross - border conversion is operating under an employee participation system in the departure member state , the company should be obliged to take a legal form allowing for the exercise of such participation , including through the presence of representatives of the employees in the appropriate management or supervisory organ of the company in the destination member state . moreover , in such a case , a bona fide negotiation between the company and its employees should take place , along the lines of the procedure provided for in directive 2001 / 86 / ec , with a view to finding an amicable solution reconciling the right of the company to carry out a cross - border conversion with the employees ' rights of participation . as a result of those negotiations , either a bespoke and agreed solution or , in the absence of an agreement , the application of standard rules as set out in the annex to directive 2001 / 86 / ec should apply , mutatis mutandis . in order to protect either the agreed solution or the application of those standard rules , the company should not be able to remove the participation rights through carrying out subsequent domestic or cross - border conversion , merger or division within three years . ### in order to ensure that employee participation is not prejudiced as a result of the cross - border conversion , where the company carrying out the cross - border conversion is operating under an employee participation system in the departure member state , the company should be obliged to take a legal form allowing for the exercise of such participation , including through the presence of representatives of the employees in the appropriate management or supervisory organ of the company in the destination member state . moreover , in such a case , a bona fide negotiation between the company and its employees should take place , along the lines of the procedure provided for in directive2001 / 86 / ec , with a view to finding an amicable solution to ensure the employees ' rights of information , consultation and participation . the agreement should ensure that at least the same level of all elements of employee involvement as applicable in the company before the conversion , continues to apply . as a result of those negotiations , either a bespoke and agreed solution or , in the absence of an agreement , the application of standard rules should apply , mutatis mutandis . in order to protect either the agreed solution or the application of those standard rules , the company should not be able to remove the information , consultation and participation rights through carrying out subsequent domestic or cross - border conversion , merger or division within ten years .


### the issue of the pre - conversion certificate by the departure member state should be scrutinised to ensure the legality of the cross - border conversion of the company . the competent authority of the departure member state should decide on the issue of the pre - conversion certificate within one month of the application by the company , unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or unduly prejudicing the legal or contractual rights of employees , creditors or members . in such a case , the competent authority should carry out an in - depth assessment . however , this in - depth assessment should not be carried out systematically , but it should be conducted on a case - by - case basis , where there are serious concerns as to the existence of an artificial arrangement . for their assessment , competent authorities should take into account at least a number of factors laid down in this directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation . in order not to burden companies with an overly lengthy procedure , this in - depth assessment should in any event be concluded within two months of informing the company that the in - depth assessment will be carried out . ### the issue of the pre - conversion certificate by the departure member state should be scrutinised to ensure the legality of the cross - border conversion of the company . the competent authority of the departure member state should decide on the issue of the pre - conversion certificate within two months of the application by the company , unless it has concerns as to the existence of an artificial arrangement . in such a case , the competent authority should carry out an in - depth assessment . however , this in - depth assessment should not be carried out systematically , but it should only be conducted on a case - by - case basis , where there are concerns as to the existence of an artificial arrangement . for their assessment , competent authorities should take into account at least a number of factors laid down in this directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation . in order not to burden companies with an overly lengthy procedure , this in - depth assessment should in any event be concluded within three months of informing the company that the in - depth assessment will be carried out . the assessment by the departure member states , once final , shall be shared with the destination member state’s competent authority .


### the issue of the pre - division certificate by the member state of the company being divided should be scrutinised to ensure the legality of the cross - border division . the competent authority should decide whether to issue a pre - division certificate within one month of the application by the company has been submitted , unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees , creditors or members . in such a case , the competent authority should carry out an in - depth assessment . however , this in - depth assessment should not be carried out systematically but it should be conducted on a case - by - case basis where there are serious concerns as to the existence of an artificial arrangement . for their assessment , competent authorities should take into account at least a number of factors laid down in this directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation . in order not to burden companies with an overly lengthy procedure , this in - depth assessment should in any event be concluded within two months informing the company that the in - depth assessment will be carried out . ### the issue of the pre - division certificate by the member state of the company being divided should be scrutinised to ensure the legality of the cross - border division . the competent authority should decide whether to issue a pre - division certificate within one month of the date of receipt of the report by the independent expert , unless it has serious concerns as to the existence of an artificial arrangement aimed at obtaining undue tax advantages or at unduly prejudicing the legal or contractual rights of employees , creditors or members . in such a case , the competent authority should carry out an in - depth assessment . however , this in - depth assessment should not be carried out systematically but it should be conducted on a case - by - case basis where there are serious concerns as to the existence of an artificial arrangement . for their assessment , competent authorities should take into account at least a number of factors laid down in this directive which however should be only considered as indicative factors in the overall assessment and not be considered in isolation . in order not to burden companies with an overly lengthy procedure , this in - depth assessment should in any event be concluded within five months informing the company that the in - depth assessment will be carried out .


### shall ensure that the rules on participation that applied prior to the cross - border division continue to apply until the date of application of any subsequently agreed rules or in the absence of agreed rules until the application of default rules in accordance with point of part 3 of the annex . ### shall ensure that the rules on participation that applied prior to the cross - border division continue to apply until the date of application of any subsequently agreed rules or in the absence of agreed rules until the application of default rules in accordance with point of paragraph 3 .


### in order to ensure that employee participation is not unduly prejudiced as a result of the cross - border division where the company carrying out the cross - border division is operating under an employee participation system , the companies resulting from the division should be obliged to take a legal form allowing for the exercise of participation , including through the presence of representatives of the employees in the appropriate management or supervisory organs of the companies . moreover , in such a case , a bona fide negotiation between the company and its employees should take place , along the lines of the procedure provided for in directive 2001 / 86 / ec , with a view to finding an amicable solution reconciling the right of the company to carry out a cross - border division with the employees ' ' rights of participation . as a result of those negotiations , either a bespoke and agreed solution or , in the absence of an agreement , the application of standard rules as set out in the annex to directive 2001 / 86 / ec should apply mutatis mutandis . in order to protect either the agreed solution or the application of those standard rules , the company should not be able to remove the participation rights through carrying out subsequent domestic or cross - border conversions , mergers or divisions within 3 years . ### in order to ensure that employee participation is not prejudiced as a result of the cross - border division where the company carrying out the cross - border division is operating under an employee participation system , the companies resulting from the division should be obliged to take a legal form allowing for the exercise of participation , including through the presence of representatives of the employees in the appropriate management or supervisory organs of the companies . moreover , in such a case , a bona fide negotiation between the company and its employees should take place , along the lines of the procedure provided for in directive 2001 / 86 / ec , with a view to finding an amicable solution reconciling the right of the company to carry out a cross - border division with the employees ' ' rights of information , consultation and participation . the agreement should ensure that at least the same level of all elements of employee involvement as applicable in the company before the conversion , continues to apply . as a result of those negotiations , either a bespoke and agreed solution or , in the absence of an agreement , the application of standard rules should apply mutatis mutandis . in order to protect either the agreed solution or the application of those standard rules , the company should not be able to remove the information , consultation and participation rights through carrying out subsequent domestic or cross - border conversions , mergers or divisions within 10 years .


### to allow all stakeholders ' legitimate interests to be taken into account in the procedure governing a cross - border conversion , the company should disclose the draft terms of the cross - border conversion containing the most important information about the proposed cross - border conversion , including the envisaged new company form , the instrument of constitution and the proposed timetable for the conversion . members , creditors and employees of the company carrying out the cross - border conversion should be notified in order that they can submit comments with regard to the proposed conversion . ### to allow all stakeholders ' legitimate interests to be taken into account in the procedure governing a cross - border conversion , the company should disclose the draft terms of the cross - border conversion containing the information about the proposed cross - border conversion , including the envisaged new company form , the instrument of constitution and the proposed timetable for the conversion . members , creditors and employees of the company carrying out the cross - border conversion should be notified and be given this information in due time in order that they can submit comments with regard to the proposed conversion .


### in order to ensure the accuracy of the information contained in the draft terms of division and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed division constitutes an artificial arrangement which could not be authorised , an independent expert report to assess the division plan should be required to be prepared . in order to secure the independence of the expert , the expert should be appointed by the competent authority , following an application by the company . in this context , the expert report should present all relevant information to enable the competent authority of the member state of the company being divided to take an informed decision as to whether or not to issue the pre - division certificate to this end , the expert should be able to obtain all the relevant company information and documents and carry out all necessary investigations in order to gather all the evidence required . the expert should use information , in particular net turnover and profit or loss , number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with union law and the law of member states . however , in order to protect any confidential information , including business secrets of the company , such information should not form part of the expert’s final report which itself would be publically available . ### in order to ensure the accuracy of the information contained in the draft terms of division and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed division constitutes an artificial arrangement which could not be authorised , the competent authority should be required to assess the division plan . in this context , the report should present all relevant information to enable the competent authority of the member state of the company being divided to take an informed decision as to whether or not to issue the pre - division certificate . to this end , the competent authority should be able to obtain all the relevant company information and documents and carry out all necessary investigations in order to gather all the evidence required . the competent authority should use information , in particular net turnover and profit or loss , number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with union law and the law of member states . however , in order to protect any confidential information , including business secrets of the company , such information should not be made publically available , but should nevertheless be at the disposal , under confidentiality requirements , to the competent authority and where applicable under national law , to employee representatives .


### in order to assess the accuracy of the information contained in the draft terms of conversion and in the reports addressed to the members and employees and to provide factual elements necessary to assess whether the proposed conversion constitutes an artificial arrangement , an independent expert report should be required to be prepared in order to assess the proposed cross - border conversion . in order to secure the independence of the expert , the expert should be appointed by the competent authority , following an application by the company . in this context , the expert report should present all relevant information to enable the competent authority in the departure member state to take an informed decision as to whether or not to issue the pre - conversion certificate . to this end , the expert should be able to obtain all the relevant company information and documents and carry out all necessary investigations in order to gather all the evidence required . the expert should use information , in particular net turnover and profit or loss , number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with union law and the law of member states . however , in order to protect any confidential information , including business secrets of the company , such information should not form part of the expert’s final report which itself would be publically available . ### in order to assess the accuracy of the information contained in the draft terms of conversion and merger and in the report addressed to the members and employees and to provide factual elements necessary to assess whether the proposed conversion constitutes an artificial arrangement , the competent authority should be required to assess the proposed cross - border conversion and merger . in this context , the company should present all relevant information to enable the competent authority in the departure member state to take an informed decision as to whether or not to issue the pre - conversion certificate . to this end , the competent authority should be able to obtain all the relevant company information and documents and carry out all necessary investigations in order to gather all the evidence required . the competent authority of the departure member state may also in this regard ask questions to the competent authority in the member state of destination . the competent authority should use information , in particular net turnover and profit or loss , number of employees and the composition of balance sheet collected by the company in view of the preparation of financial statements in accordance with union law and the law of member states . however , in order to protect any confidential information , including business secrets of the company , such information should not be made publically available , but should nevertheless be at the disposal , under confidentiality requirements , to the competent authority and where applicable under national law , to employee representatives .


### the report shall be made available , at least electronically , to the members of each of the merging companies not less than one month before the date of the general meeting referred to in article 126 . the report shall also be made similarly available to the representatives of the employees of each of the merging companies , or where there are no such representatives , to the employees themselves . however , where the approval of the merger is not required by general meeting of the acquiring company in accordance with article 126 , the report shall be made available , at least one month before the date of the general meeting of the other merging company or companies . ### the report shall be made available , at least electronically , to the members of each of the merging companies not less than one month before the date of the general meeting referred to in article 126 . the report shall also be made similarly available to the representatives of the employees of each of the merging companies , or where there are no such representatives , to the employees themselves and to the european works council , where applicable . however , where the approval of the merger is not required by general meeting of the acquiring company in accordance with article 126 , the report shall be made available , at least one month before the date of the general meeting of the other merging company or companies .