### 1. applications for the registration of geographical indications shall only be submitted by a producer group of a product (‘applicant producer group’) , the name of which is proposed for registration. regional or local public entities may help in the preparation of the application and in the related procedure. ### 1. applications for the registration of geographical indications shall be submitted by a producer group (‘applicant producer group’) , the name of which is proposed for registration. regional or local public entities may help in the preparation of the application and in the related procedure.


### 2. an authority designated by a member state may be deemed to be an applicant producer group for the purposes of this title , if it is not feasible for the producers concerned to form a group by reason of their number , geographical location or organisational characteristics. where such representation takes place , the application referred to in article 11(3) shall state these reasons for such representation. ### 2. an authority designated by a member state or a territorial collectivity may be deemed to be an applicant producer group for the purposes of this title , if it is not feasible for the producers concerned to form a group by reason of their number , geographical location or organisational characteristics. where such representation takes place , the application referred to in article 11(3) shall state these reasons for such representation.


### the geographical area concerned is defined by natural features without reference to property boundaries and has characteristics which differ appreciably from those of neighbouring areas or the characteristics of the product are different from those produced in neighbouring areas. ### deleted


### 1. craft and industrial products the names of which are registered as a geographical indication shall comply with a product specification , which shall include at least: ### 1. in order for the name of a craft or industrial products to be registered as a geographical indication , the product shall comply with a product specification , which shall include at least:


### the name to be protected as geographical indication which may be either a geographical name of the place of production of a specific product , or a name used in trade or in common language to describe the specific product in the defined geographical area; ### the name to be protected as geographical indication which may be a geographical name of the place of production of a specific product , and a name used in trade or in common language to describe the specific product in the defined geographical area;


### other applicable requirements where provided for by member states or by a producer group , if applicable , having regard to the fact that such requirements must be objective , non-discriminatory and compatible with union law. ### other requirements where provided for by member states or by a producer group , as applicable , having regard to the fact that such requirements must be objective , non-discriminatory and compatible with union law.


### the name; ### the name to be protected as a geographical indication;


### (ii) a description of the product , including , where appropriate , specific rules concerning packaging and labelling , ### (ii) a description of the product , including , where appropriate , the raw materials and information concerning the packaging and labelling ,


### 1. the documentation accompanying the application for registration (‘accompanying documentation’) shall comprise: ### 1. the documentation accompanying the application for registration as referred in articles 11 and 17 (‘accompanying documentation’) shall comprise:


### 1. member states may charge a fee to cover the costs of managing the geographical indication system for craft and industrial products provided for in this regulation , including those incurred in processing applications , statements of opposition , applications for amendments and requests for cancellations. ### 1. member states may charge a fee to cover the costs of managing the geographical indication system for craft and industrial products provided for in this regulation , including those incurred in processing applications , statements of opposition , applications for amendments , requests for cancellations and appeals.


### 2. where a member state charges a fee , the level of the fees shall be reasonable , foster the competitiveness of the producers of the geographical indications and shall take into account the situation of micro , small and medium-sized enterprises. ### 2. any fee charged under this article shall be reasonable , foster the competitiveness of the producers of the geographical indications and shall take into account the situation of micro , small and medium-sized enterprises.


### the competent authority shall examine the application and shall check that the product complies with the requirements for geographical indications referred to in article 5 and provides the necessary information for registration referred to in articles 7 , 8 and 9. ### the competent authority shall examine the application and shall check that the product complies with the requirements for geographical indications referred to in article 5 and provides the necessary information and evidences for registration referred to in articles 7 , 8 and 9.


### 1. for geographical indications concerning products originating in the union , the union application for registration submitted by a member state to the office , shall comprise: ### 1. for geographical indications concerning products originating in the union , the union application for registration submitted by an applicant and/or a member state to the office , shall comprise:


### declaration by the member state to which the application was initially addressed , confirming that the application meets the conditions for registration under this regulation; ### declaration by the member state confirming that there is no objection at national level;


### 5. the joint application referred to in article 6(4) shall include , where relevant , the documents listed in paragraphs 1 and 2 of this article , from the member states or third countries concerned. the related national procedure for application , the examination and opposition procedure referred to in articles 11 , 12 and 13 shall be carried out in all the member states and third countries concerned. ### 5. the joint application referred to in article 6(4) shall include the documents listed in paragraphs 1 and 2 of this article , from the member states or third countries concerned. the related national procedure for application , the examination and opposition procedure referred to in articles 11 , 12 and 13 shall be carried out in all the member states and third countries concerned.


### the registration of the proposed geographical indication would be contrary to articles 37 , 38 or 39; ### the registration of the proposed geographical indication would be contrary to articles 35 , 37 , 38 or 39;


### 1. without prejudice to article 42 , at the time of registration , the office may decide to grant a transitional period of up to 5 years to enable , for products originating in a member state or a third country the designation of which consists of or contains a name that contravenes article 35 , the continued use of that designation , under which they were marketed , provided that an admissible and grounded opposition , under article 13 or article 21 , to the application for registration of the geographical indication whose protection is contravened shows that: ### 1. without prejudice to article 42 , at the time of registration , the office may decide to grant a transitional period of up to 3 years to enable , for products originating in a member state or a third country the designation of which consists of or contains a name that contravenes article 35 , the continued use of that designation , under which they were marketed , provided that an admissible and grounded opposition , under article 13 or article 21 , to the application for registration of the geographical indication whose protection is contravened shows that:


### 2. the office may decide to extend the transitional period granted under paragraph 1 up to 15 years , or allowing continued use for up to 15 years , provided it is additionally shown that: ### 2. the office may decide to extend the transitional period granted under paragraph 1 up to 5 years , or allowing continued use for up to 5 years , provided it is additionally shown that:


### 5. to overcome temporary difficulties with the long-term objective of ensuring that all producers of a product designated under a geographical indication in the area concerned comply with the related product specification , a member state may grant a transitional period for compliance , of up to 10 years , with effect from the date on which the application is lodged with the office , provided that the operators concerned have legally marketed the products in question , using the names concerned continuously for at least 5 years preceding the lodging of the application to the authorities of that member state and have referred to that fact in the national opposition procedure referred to in article 13. ### 5. to overcome temporary difficulties with the long-term objective of ensuring that all producers of a product designated under a geographical indication in the area concerned comply with the related product specification , a member state may grant a transitional period for compliance , of up to 5 years , with effect from the date on which the application is registered by the office , provided that the operators concerned have legally marketed the products in question , using the names concerned continuously for at least 5 years preceding the lodging of the application to the authorities of that member state and have referred to that fact in the national opposition procedure referred to in article 13.


### 2. where , on the basis of the information available to the office from the examination carried out pursuant to article 19 , the office considers that any of the requirements referred to in that article is not fulfilled , it shall adopt a decision rejecting the application for registration. ### 2. where , on the basis of the information available to the office from the examination carried out pursuant to article 19 , the office considers that any of the requirements referred to in that article is not fulfilled , it shall adopt a decision rejecting the application for registration. the office shall publish geographical indication application refusal.


### 7. decisions adopted by the office shall be published in the union register of geographical indications for craft and industrial products in all the official languages of the union. the reference to the name of the product , class of the product , indications of the country or countries of origin and the reference to the decision published in the union register of geographical indications for craft and industrial products shall be published in the official journal of the european union. ### 7. decisions adopted by the office shall be published in the union register of geographical indications for craft and industrial products in all the official languages of the union. the reference to the name of the product , type of product , indications of the country or countries of origin and the reference to the decision published in the union register of geographical indications for craft and industrial products shall be published in the official journal of the european union.


### the class of the product; ### the type of product;


### 7. the office shall retain documentation related to the registration of a geographical indication in digital or paper form for the period of validity of the geographical indication , and in case of cancellation for 10 years thereafter. ### 7. the office shall retain documentation related to the registration of a geographical indication in digital or paper form for the period of validity of the geographical indication , and in case of cancellation or refusal for 10 years thereafter.


### 1. the office shall ensure that any person is able to download an official extract from the union register of geographical indications for craft and industrial products that provides proof of registration of the geographical indication , and the relevant data including the date of application for the registration of the geographical indication or other priority date. the official extract may be used as an authentic certificate in legal proceedings , in a court of law , in a court of arbitration or similar body. ### 1. the office shall ensure that any person is able to download an official extract from the union register of geographical indications for craft and industrial products that provides proof of registration or refusal of the geographical indication , and the relevant data including the date of application for the registration of the geographical indication or other priority date. the official extract may be used as an authentic certificate in legal proceedings , in a court of law , in a court of arbitration or similar body.


### 2. the applicant producer group or where article 6(3) applies , the single producer shall be identified as the holder of the registration in the union register of geographical indications for craft and industrial products and in the official extract referred to in paragraph (1) of this article. ### 2. the applicant producer group or where article 6(2) or 6(3) applies , the authority designated by a member state or a territorial collectivity or the single producer shall be identified as the holder of the registration in the union register of geographical indications for craft and industrial products and in the official extract referred to in paragraph (1) of this article.


### 1. a producer group having a legitimate interest may apply for the approval of an amendment to the product specification of a registered geographical indication. ### 1. a producer group , a competent authority or a single producer having a legitimate interest may apply for the approval of an amendment to the product specification of a registered geographical indication.


### the amendment includes a change in the name , or in the use of the name , ### the amendment includes a change in the name


### 1. the office may , own its own initiative or on a duly substantiated request by a member state , a third country or any natural or legal person having a legitimate interest , decide to cancel the registration of a geographical indication in the following cases: ### 1. the office may , own its own initiative or on a duly substantiated request by a geographical indication producers group , a member state , a third country or any natural or legal person having a legitimate interest , decide to cancel the registration of a geographical indication in the following cases:


### 2. the office may , at the request of the producer group of the product marketed under the registered name , decide to cancel the corresponding registration. ### deleted


### 1. for domain names registered under a country-code top-level domain name , administered or managed by a registry established in the union , the office shall provide a domain name information and alert system. upon submission of an application for a geographical indication , the information and alert system shall inform applicants for a geographical indication about the availability of their geographical indication as a domain name , and on an optional basis once a domain name containing an identical or similar name with their geographical indication is registered (domain name alerts). ### 1. for domain names registered under a country-code top-level domain name , administered or managed by a registry established in the union , the office shall provide a domain name information and alert system. upon registration of the geographical indication , the information and alert system shall inform right holders of a geographical indication about the availability of their geographical indication as a domain name , and on an optional basis once a domain name containing an identical or similar name with their geographical indication is registered (domain name alerts).


### 2. opposition and cancellation decisions shall be taken by a panel of three members. at least one member shall be legally qualified. all other decisions of paragraph 1 shall be taken by a single member. ### 2. all decisions referred to in paragraph 1 shall be taken by a panel of at least three members. at least one member shall be legally qualified. all other decisions of paragraph 1 shall be taken by a single member.


### 2. opposition and cancellation decisions shall be taken by a panel of three members. at least one member shall be legally qualified. all other decisions of paragraph 1 shall be taken by a single member. ### 2. opposition and cancellation decisions shall be taken by a panel of three members. at least one member shall be legally qualified and/or technically qualified.


### 1. an advisory board is set up to deliver an opinion where provided for in this regulation. ### 1. an advisory board is set up to deliver an opinion where provided for in this regulation or if deemed as necessary by the commission and the office.


### 5. the advisory board shall be composed of one representative of each member state and one representatives of the commission and their respective alternates. ### 5. the advisory board shall be composed of one representative of each member state and one representatives of the commission and their respective alternates and any recognized expert in the field of gis or of the concerned product , including representatives of regions.


### 1. geographical indications entered in the union register of geographical indications for craft and industrial products shall be protected against: ### 1. geographical indications entered in the union register of geographical indications for craft and industrial products as well as geographical indication protected by international agreement in the union shall be protected against:


### any direct or indirect commercial use of the geographical indication in respect of products not covered by the registration , where those products are identical or similar to the products registered under that geographical indication or where use of the name exploits , weakens , dilutes , or is detrimental to the reputation of , the protected geographical indication; ### any direct or indirect commercial use of the geographical indication in respect of products not covered by the registration , where those products are identical or similar to the products registered under that geographical indication or where use of the name exploits , weakens , dilutes , or is detrimental to the reputation of , the protected geographical indication , including where those products are parts or components in manufactured products;


### any misuse , imitation or evocation , even if the true origin of the products or services is indicated or if the protected geographical indication is translated or accompanied by an expression such as ‘style’ , ‘type’ , ‘method’ , ‘as produced in’ , ‘imitation’ , ‘flavour’ , ‘like’ or similar; ### any misuse , imitation or evocation , even if the true origin of the products or services is indicated or if the protected geographical indication is translated , transcripted or transliterated , or accompanied by an expression such as ‘style’ , ‘type’ , ‘method’ , ‘as produced in’ , ‘imitation’ , ‘fragrance’ , ‘like’ or similar , including where those products are parts or components in manufactured products;


### any other false or misleading indication as to the provenance , origin , nature or essential qualities of the product that is used on the inner or outer packaging , advertising material , documents or information provided on websites relating to the products , and the packing of the products in a container liable to convey a false impression as to their origin; ### any other false or misleading indication as to the provenance , origin , nature or essential qualities of the product that is used on the inner or outer packaging , advertising material , documents or information provided on websites relating to the products , and the packing of the products or on domain names in a container liable to convey a false impression as to their origin;


### 1. article 35 is without prejudice to the use of a geographical indication by producers in conformity with article 43 to indicate that a manufactured product contains , as a part or component , a product designated by that geographical indication provided that such use is made in accordance with honest commercial practices and does not weaken , dilute , or is not detrimental to , the reputation of the geographical indication. ### 1. article 35 is without prejudice to the use of a protected geographical indication name indicating that a manufactured product contains or integrates , as a part or component , a product designated by that geographical indication provided that such use is made in accordance with honest commercial practices , is agreed with the geographical indication right holder and does not weaken , dilute , or is not detrimental to , the reputation of the geographical indication.


### 2. the geographical indication designating a product’s part or component shall not be used in the sales designation of the manufactured product , except in cases of agreement with a producer group or , in situations referred to in article 6(3) , a single producer. ### 2. the geographical indication designating a product’s part or component shall not be used in the sales designation of the manufactured product , except in cases of agreement with a geographical indication right holder.


### article 37 ### deleted


### article 39 ### deleted


### 1. member states shall verify that the producer group operates in a transparent and democratic manner and that all producers of the product designated by the geographical indication enjoy right of membership in the group. member states may provide that public officials , and other stakeholders such as consumer groups , retailers and suppliers , also participate in the work of the producer group. ### 1. member states or the office in case of direct application shall verify that the producer group operates in a transparent and democratic manner and that all producers of the product designated by the geographical indication enjoy right of membership in the group. member states may provide that public officials , and other stakeholders such as consumer groups , retailers and suppliers , also participate in the work of the producer group.


### develop the product specification and manage internal controls that ensure compliance of production steps of product designated by the geographical indication with that specification; ### develop , modify the product specification and manage internal controls that ensure compliance of production steps of product designated by the geographical indication with that specification;


### take legal action to ensure the protection of the geographical indication and of the intellectual property rights that are directly connected with it; ### take legal action and assert the right including enforcement actions , to ensure the protection of the geographical indication and of the intellectual property rights that are directly connected with it , and prevent or counter any measures which are , or risk being detrimental to the image of their products;


### 4. without prejudice to paragraph 2 of this article , a trade mark the use of which contravenes article 35 , which has been applied for , registered , or established by use in good faith within the territory of the union , if that possibility is provided for by the legislation concerned , before the date on which the application for registration of the geographical indication is submitted to the office , may continue to be used and renewed notwithstanding the registration of a geographical indication , provided that no grounds for invalidity or revocation of the trade mark exist under directive (eu) 2015/243632of the european parliament and of the council or regulation (eu) 2017/1001. in such cases , the use of the geographical indication and that of the relevant trade mark shall be permitted. ### deleted


### 2. in the case of craft and industrial products originating in the union that are marketed under a geographical indication , the union symbol referred to in paragraph 1 may appear on the labelling and advertising material. the geographical indication shall be in the same field of vision as the union symbol. ### 2. in the case of craft and industrial products originating in the union that are marketed under a geographical indication , the union symbol referred to in paragraph 1 shall appear on the labelling and advertising material. the geographical indication name shall be in the same field of vision as the union symbol.


### 3. the abbreviation ‘pgi’ corresponding to the indication ‘protected geographical indication’ may appear on the labelling of products designated by a geographical indication of craft and industrial products. ### 3. the abbreviation ‘pgi’ corresponding to the indication ‘protected geographical indication’ may appear on the labelling and advertising material of products designated by a geographical indication of craft and industrial products.


### 6. the union symbol indicating the protected geographical indication and the union indication ‘protected geographical indication’ and the abbreviation ‘pgi’ as relevant , may appear on the labelling only after the publication of the decision on registration in accordance with articles 24 and 25. ### 6. the union symbol indicating the protected geographical indication and the union indication ‘protected geographical indication’ and the abbreviation ‘pgi’ as relevant , shall appear on the labelling and advertising material only after the publication of the decision on registration in accordance with articles 24 and 25.


### article 49 ### deleted


### amendment ### amendment


### (3) deforestation and forest degradation contribute to the global climate crisis in multiple ways. most importantly , they increase greenhouse gas emissions through associated forest fires , permanently removing carbon sink capacities , decreasing climate change resilience of the affected area and substantially reducing its biodiversity. deforestation alone accounts for 11 % of greenhouse gas emissions20 . ### (3) deforestation and forest degradation , such as over-harvesting of timber , contribute to the global climate crisis in multiple ways. most importantly , they increase greenhouse gas emissions through associated forest fires , permanently removing carbon sink capacities , decreasing climate change resilience of the affected area and substantially reducing its biodiversity. deforestation alone accounts for 11 % of greenhouse gas emissions20 .


### (3) deforestation and forest degradation contribute to the global climate crisis in multiple ways. most importantly , they increase greenhouse gas emissions through associated forest fires , permanently removing carbon sink capacities , decreasing climate change resilience of the affected area and substantially reducing its biodiversity. deforestation alone accounts for 11 % of greenhouse gas emissions20 . ### (3) deforestation and forest degradation , such as overharvesting of timber , contribute to the global climate crisis in multiple ways. most importantly , they increase greenhouse gas emissions through associated forest fires , permanently removing carbon sink capacities , decreasing climate change resilience of the affected area and substantially reducing its biodiversity. deforestation alone accounts for 11 % of greenhouse gas emissions20 .


### (14) the union imported and consumed one third of the globally traded agricultural products associated with deforestation between 1990 and 2008. over that period , union consumption was responsible for 10% of worldwide deforestation associated with the production of goods or services. even if the relative share of eu consumption is decreasing , eu consumption is a disproportionally large driver of deforestation. the union should therefore take action to minimise global deforestation and forest degradation driven by its consumption of certain commodities and products and thereby seek to reduce its contribution to greenhouse gas emissions and global biodiversity loss as well as promote sustainable production and consumption patterns in the union and globally. to have the greatest impact , union policy should aim at influencing the global market , not only supply chains to the union. partnerships and efficient international cooperation with producer and consumer countries are fundamental in that respect. ### (14) the union imported and consumed one third of the globally traded agricultural products associated with deforestation between 1990 and 2008. over that period , union consumption was responsible for 10% of worldwide deforestation associated with the production of goods or services. even if the relative share of eu consumption is decreasing , eu consumption is a disproportionally large driver of deforestation. the union should therefore take action to minimise global deforestation and forest degradation driven by its consumption of certain commodities and products and thereby seek to reduce its contribution to greenhouse gas emissions and global biodiversity loss as well as promote sustainable production and consumption patterns in the union and globally. to have the greatest impact , union policy should aim at influencing the global market , not only supply chains to the union. multilateral and bilateral partnerships and efficient international cooperation with producer and consumer countries are fundamental in that respect , taking into account the inputs from all stakeholders , including small holders , civil society , smes , women , indigenous peoples , local communities. to be effective , such partnerships should ensure trade incentives and support for local livelihoods , as well as roadmaps of reforms to happen the partner country.


### (14) the union imported and consumed one third of the globally traded agricultural products associated with deforestation between 1990 and 2008. over that period , union consumption was responsible for 10% of worldwide deforestation associated with the production of goods or services. even if the relative share of eu consumption is decreasing , eu consumption is a disproportionally large driver of deforestation. the union should therefore take action to minimise global deforestation and forest degradation driven by its consumption of certain commodities and products and thereby seek to reduce its contribution to greenhouse gas emissions and global biodiversity loss as well as promote sustainable production and consumption patterns in the union and globally. to have the greatest impact , union policy should aim at influencing the global market , not only supply chains to the union. partnerships and efficient international cooperation with producer and consumer countries are fundamental in that respect. ### (14) the union imported and consumed one third of the globally traded agricultural products associated with deforestation between 1990 and 2008. over that period , union consumption was responsible for 10% of worldwide deforestation associated with the production of goods or services. even if the relative share of eu consumption is decreasing , eu consumption is a disproportionally large driver of deforestation. the union should therefore take action to minimise global deforestation and forest degradation driven by its consumption of certain commodities and products and thereby seek to reduce its contribution to greenhouse gas emissions and global biodiversity loss as well as promote sustainable production and consumption patterns in the union and globally. to have the greatest impact , union policy should aim at influencing the global market , not only supply chains to the union. multilateral and bilateral partnerships and efficient international cooperation with producer and consumer countries are fundamental in that respect and should take into account the inputs from all stakeholders , including small holders , civil society , smes , women , indigenous peoples and local communities. to be effective , such partnerships should ensure trade incentives and support for local livelihoods , as well as roadmaps for reforms to be carried out in partner countries.


### (18) as a member of world trade organisation (wto) , the union is committed to promoting a universal , rule-based , open , transparent , predictable , inclusive , non-discriminatory and equitable multilateral trading system under the wto , as well as an open , sustainable , and assertive trade policy. the scope of this regulation will therefore include both commodities and products produced within the union and commodities and products imported to the union. ### (18) as a member of world trade organisation (wto) , the union is committed to promoting a universal , rule-based , open , transparent , predictable , inclusive , non-discriminatory and equitable multilateral trading system under the wto , as well as an open , sustainable , and assertive trade policy. the scope of this regulation will therefore include both commodities and products produced within the union and commodities and products imported to the union. furthermore , the commission should assure that it will always move according to the principles of proportionality , non discrimination and objectivity in case it takes any measure that might affect trade flows.


### (21) the commission should continue to work in partnership with producer countries , and more generally in cooperation with international organisations and bodies , and should be reinforcing its support and incentives with regard to protecting forests and transition to deforestation-free production , acknowledging the role of indigenous people , improving governance and land tenure , increasing law enforcement and promoting sustainable forest management , climate-resilient agriculture , sustainable intensification and diversification , agro-ecology and agroforestry. in doing so it should acknowledge the role of indigenous people in protecting forests. building upon the experience and lessons learned in the context of the already existing initiatives , the union and the member states should work in partnership with producer countries , upon their request , to exploit the multi-functionalities of forest , support them in the transition to sustainable forest management , and address global challenges while meeting local needs and paying attention to the challenges faced by smallholders in line with the communication to stepping up action to protect and restore the world’s forests. the partnership approach should help producer countries in protecting , restoring and sustainably using forest , hence contributing to the objective of this regulation to reduce deforestation and forest degradation. ### (21) the commission should continue to work in partnership with producer countries , and more generally in cooperation with international organisations and bodies , on-the-ground stakeholders , or local communities , and should be reinforcing its support and incentives with regard to protecting forests and transition to deforestation-free production , acknowledging the role of indigenous people , improving governance and land tenure , increasing law enforcement and promoting sustainable forest management , climate-resilient agriculture , sustainable intensification and diversification , agro-ecology and agroforestry. in doing so it should acknowledge the role of indigenous people in protecting forests. building upon the experience and lessons learned in the context of the already existing initiatives , the union and the member states should work in partnership with producer countries , upon their request , to exploit the multi-functionalities of forest , support them in the transition to sustainable forest management , and address global challenges while meeting local needs and paying attention to the challenges faced by smallholders in line with the communication to stepping up action to protect and restore the world’s forests. the partnership approach should help producer countries in protecting , restoring and sustainably using forest , hence contributing to the objective of this regulation to reduce deforestation and forest degradation and support forest regeneration.


### (21) the commission should continue to work in partnership with producer countries , and more generally in cooperation with international organisations and bodies , and should be reinforcing its support and incentives with regard to protecting forests and transition to deforestation-free production , acknowledging the role of indigenous people , improving governance and land tenure , increasing law enforcement and promoting sustainable forest management , climate-resilient agriculture , sustainable intensification and diversification , agro-ecology and agroforestry. in doing so it should acknowledge the role of indigenous people in protecting forests. building upon the experience and lessons learned in the context of the already existing initiatives , the union and the member states should work in partnership with producer countries , upon their request , to exploit the multi-functionalities of forest , support them in the transition to sustainable forest management , and address global challenges while meeting local needs and paying attention to the challenges faced by smallholders in line with the communication to stepping up action to protect and restore the world’s forests. the partnership approach should help producer countries in protecting , restoring and sustainably using forest , hence contributing to the objective of this regulation to reduce deforestation and forest degradation. ### (21) the commission should continue to work in partnership with producer countries , and more generally in cooperation with international organisations and bodies , stakeholders on the ground and local communities , and should be reinforcing its support and incentives with regard to protecting forests and transition to deforestation-free production , acknowledging the role of indigenous people , improving governance and land tenure , increasing law enforcement and promoting sustainable forest management , climate-resilient agriculture , sustainable intensification and diversification , agro-ecology and agroforestry that respect human rights. in doing so it should acknowledge the role of indigenous people and local communities in protecting forests and natural ecosystems and maintaining of , socially and environmentally sustainable agricultural practices which do not make them exclusively dependent on commodity production for export but support a transition focused on agro-ecology. building upon the experience and lessons learned in the context of the already existing initiatives , the union and the member states should work in partnership with producer countries , upon their request , to exploit the multi-functionalities of forest , support them in the transition to sustainable forest management , and address global challenges while meeting local needs and paying attention to the challenges faced by smallholders in line with the communication to stepping up action to protect and restore the world’s forests. the partnership approach should help producer countries in protecting , restoring and sustainably using forest , hence contributing to the objective of this regulation to reduce deforestation and forest degradation and support forest regeneration , in line with the communication on stepping up action to protect and restore the world's forests.


### (22) another important action announced in the communication is the establishment of the eu observatory on deforestation , forest degradation , changes in the world’s forest cover and associated drivers (“eu observatory”) launched by the commission in order to better monitor changes in the world’s forest cover and related drivers. moreover , building on already existing monitoring tools , including copernicus products , the eu observatory will facilitate access to information on supply chains for public entities , consumers and business , providing easy-to-understand data and information linking deforestation , forest degradation , and changes in the world’s forest cover to eu demand/trade for commodities and products. the eu observatory will thus directly support the implementation of this regulation by providing scientific evidence in regard to global deforestation and forest degradation and related trade. the eu observatory will cooperate closely with relevant international organisations , research institutes , and third countries. ### (22) another important action announced in the communication is the establishment of the eu observatory on deforestation , forest degradation , changes in the world’s forest cover and associated drivers (“eu observatory”) launched by the commission in order to better monitor changes in the world’s forest cover and related drivers. moreover , building on already existing monitoring tools , including copernicus products , the eu observatory will facilitate access to information on supply chains for public entities , consumers and business , providing easy-to-understand data and information linking deforestation , forest degradation , and changes in the world’s forest cover to eu demand/trade for commodities and products. the eu observatory will thus directly support the implementation of this regulation by providing scientific evidence in regard to global deforestation and forest degradation and related trade. the commission should also examine how land rights can be integrated into monitoring under the eu observatory. the eu observatory will cooperate closely with relevant international organisations , research institutes non-governmental organisations , operators , indigenous communities and third countries at national , regional and local levels.


### (29) obligations concerning relevant commodities and products should be laid down by this regulation in order to effectively combat deforestation , forest degradation , and to promote deforestation-free supply chains. ### (29) obligations concerning relevant commodities and products should be laid down by this regulation in order to effectively combat deforestation and conversion of natural ecosystems , forest and ecosystems degradation , and to promote deforestation-free supply chains as well as to ensure the protection of human rights recognised under international law , in particular under treaties and other instruments ratified or endorsed by the country of production , and especially the rights of indigenous peoples and local communities.


### (32) to strengthen the union’s contribution to halting deforestation and forest degradation , and to ensure that commodities and products from supply chains related to deforestation and forest degradation are not placed on the union market , relevant commodities and products should not be placed or made available on the union market , nor exported from the union market unless they are deforestation-free and have been produced in accordance with the relevant legislation of the country of production. to confirm that this is the case , they should always be accompanied by a due diligence statement. ### (32) to strengthen the union’s contribution to halting deforestation , conversion of natural ecosystems and forest and ecosystems degradation , and to ensure that commodities and products from supply chains related to deforestation , conversion of natural ecosystems and forest and ecosystems degradation are not placed on the union market , relevant commodities and products should not be placed or made available on the union market , nor exported from the union market unless they are deforestation-free and have been produced in accordance with the relevant legislation of the country of production and comply with international standards in the field of human rights , and particularly the rights of indigenous peoples and local communities , to prevent any violation of those. to confirm that this is the case , they should always be accompanied by a due diligence statement , in order to prevent access to the eu market for products with a high risk of deforestation , conversion or ecosystem degradation.


### (34) operators should formally assume responsibility for the compliance of the relevant commodities or products that they intend to place on the union market or to export by making available due diligence statements. a template for such statements should be provided by this regulation. this is expected to facilitate enforcement of this regulation through competent authorities and courts as well as increase compliance by operators. ### (34) operators should formally assume responsibility for the compliance of the relevant commodities or products that they intend to place on the union market or to export by making available due diligence statements. a template for such statements should be provided by this regulation. this is expected to facilitate enforcement of this regulation through competent authorities and courts as well as increase compliance by operators. the template should be understandable , provided in all languages of the union and the member states , included in the web portal built and managed by the commission. the portal should be open to complaints and observations from all parties involved.


### (34) operators should formally assume responsibility for the compliance of the relevant commodities or products that they intend to place on the union market or to export by making available due diligence statements. a template for such statements should be provided by this regulation. this is expected to facilitate enforcement of this regulation through competent authorities and courts as well as increase compliance by operators. ### (34) operators placing a commodity or product concerned for the first time on the union market or exporting a product to a third country should formally assume responsibility for the compliance of the relevant commodities or products that they intend to place on the union market or to export by making available due diligence statements. a template for such statements should be provided by this regulation. this is expected to facilitate enforcement of this regulation through competent authorities and courts as well as increase compliance by operators. the template should be understandable , provided in all languages of the member states , included in the web portal managed by the commission. the portal should be open to complaints and observations from all stakeholders.


### (38) other eu legislative instruments that set out due diligence requirements in the value chain with regard to adverse human rights or environmental impacts should apply in so far as there are no specific provisions with the same objective , nature and effect in this regulation which may be adapted in the light of future legislative amendments. the existence of this regulation should not exclude the application of other eu legislative instruments that lay down requirements regarding value chain due diligence. where such other eu legislative instruments provide for more specific provisions or add requirements to the provisions laid down in this regulation , such provisions should be applied in conjunction with those of this regulation. furthermore , where this regulation contains more specific provisions , they should not be interpreted in a way that undermines the effective application of other eu legislative instruments on due diligence or the achievement of their general aim. ### (38) other eu legislative instruments that set out due diligence requirements in the value chain with regard to adverse human rights or environmental impacts should apply in so far as there are no specific provisions with the same objective , nature and effect in this regulation which may be adapted in the light of future legislative amendments. the existence of this regulation should not exclude the application of other eu legislative instruments that lay down requirements regarding value chain due diligence. where such other eu legislative instruments provide for more specific provisions or add requirements to the provisions laid down in this regulation , such provisions should be applied in conjunction with those of this regulation. furthermore , where this regulation contains more specific provisions , they should not be interpreted in a way that undermines the effective application of other eu legislative instruments on due diligence or the achievement of their general aim. the commission should ensure that the union's due diligence legal framework is harmonised and coherent.


### (38) other eu legislative instruments that set out due diligence requirements in the value chain with regard to adverse human rights or environmental impacts should apply in so far as there are no specific provisions with the same objective , nature and effect in this regulation which may be adapted in the light of future legislative amendments. the existence of this regulation should not exclude the application of other eu legislative instruments that lay down requirements regarding value chain due diligence. where such other eu legislative instruments provide for more specific provisions or add requirements to the provisions laid down in this regulation , such provisions should be applied in conjunction with those of this regulation. furthermore , where this regulation contains more specific provisions , they should not be interpreted in a way that undermines the effective application of other eu legislative instruments on due diligence or the achievement of their general aim. ### (38) other eu legislative instruments that set out due diligence requirements in the value chain with regard to adverse human rights or environmental impacts , such as regulation (eu) 2020/852 of the european parliament and of the council and the forthcoming directive on corporate sustainability due diligence should apply in so far as there are no specific provisions with the same objective , nature and effect in this regulation which may be adapted in the light of future legislative amendments. the existence of this commodity-specific regulation should not exclude the application of other eu legislative instruments that lay down requirements regarding value chain due diligence. where such other eu legislative instruments provide for more specific provisions or add requirements to the provisions laid down in this regulation , such provisions should be applied in conjunction with those of this regulation. furthermore , where this regulation contains more specific provisions , they should not be interpreted in a way that undermines the effective application of other eu legislative instruments on due diligence or the achievement of their general aim the commission will ensure that the union's due diligence legal framework will be harmonised and coherent.


### (47) for this reason , the commission should assess the deforestation and forest degradation risk at a level of a country or parts thereof based on a range of criteria that reflect both quantitative , objective and internationally recognised data , and indications that the countries are actively engaged in fighting deforestation and forest degradation. this benchmarking information should make it easier for operators in the union to exercise due diligence and for competent authorities to monitor and enforce compliance , while also providing an incentive for producer countries to increase the sustainability of their agricultural production systems and reduce their deforestation impact. this should help making supply chains more transparent and sustainable. this benchmarking system should be based on a three-tier classification of countries to be regarded as low , standard or high risk. in order to ensure appropriate transparency and clarity , the commission should in particular make publicly available the data being used for benchmarking , the reasons for the proposed change of classification and the reply of the country concerned. for relevant commodities and products from low risk countries or parts of countries identified as low-risk , operators should be allowed to apply a simplified due diligence , whilst competent authorities should be required to apply enhanced scrutiny on relevant commodities and products from high risk countries or parts of countries identified as high-risk. the commission should be empowered to adopt implementing measures to establish the countries or parts thereof that present a low or high risk of producing relevant commodities and products that are not compliant with this regulation. ### (47) for this reason , the commission should assess the deforestation and forest degradation risk at a level of a country or parts thereof based on a range of criteria that reflect both quantitative , objective and internationally recognised data , indications that the countries are actively engaged in fighting deforestation and forest degradation and information provided by third parties , including local communities , indigenous peoples and civil society organisations. this benchmarking information should make it easier for operators in the union to exercise due diligence and for competent authorities to monitor and enforce compliance , while also providing an incentive for producer countries to increase the sustainability of their agricultural production systems and reduce their deforestation impact. this should help making supply chains more transparent and sustainable. this benchmarking system should be based on a two-tier classification of countries to be regarded as standard or high risk. in order to ensure appropriate transparency and clarity , the commission should in particular make publicly available the data being used for benchmarking , the reasons for the proposed change of classification and the reply of the country concerned. the competent authorities should be required to apply enhanced scrutiny on relevant commodities and products from high risk countries or parts of countries identified as high-risk. the commission should be empowered to adopt implementing measures to establish the countries or parts thereof that present a high risk of producing relevant commodities and products that are not compliant with this regulation.


### (51) the plan for checks should be regularly updated on the basis of the results of its implementation. those operators showing a consistent track record of compliance should be subject to a reduced frequency of checks. ### (51) the plan for checks should be regularly updated on the basis of the results of its implementation. those operators showing a consistent track record of compliance should be subject to a reduced frequency of checks. for that to happen accordingly , the commission should ask the member state to duly enforce the control in line with this regulation.


### this regulation lays down rules regarding the placing and making available on the union market , as well as the export from the union market , of cattle , cocoa , coffee , oil palm , soya and wood (“relevant commodities”) and products , as listed in annex i , that contain , have been fed with or have been made using relevant commodities (“relevant products”) , with a view to ### this regulation lays down rules regarding the placing and making available on the union market , as well as the export from the union market , of cattle , pigs , poultry , cocoa , coffee , oil palm , soya , maize , rubber and wood (“relevant commodities”) and products , as listed in annex i , that contain , have been fed with or have been made using relevant commodities (“relevant products”) , with a view to


### minimising the union’s contribution to deforestation and forest degradation worldwide ### minimising the union’s contribution to all forms of deforestation and forest degradation worldwide


### (1) ‘deforestation’ means the conversion of forest to agricultural use , whether human-induced or not; ### (1) ‘deforestation’ means the conversion of forest to agricultural and to other land uses , whether human-induced or not;


### (2) ‘forest’ means land spanning more than 0 ,5 hectares with trees higher than 5 meters and a canopy cover of more than 10% , or trees able to reach those thresholds in situ , excluding agricultural plantations and land that is predominantly under agricultural or urban land use; ### (2) ‘forest’ means land spanning more than 0 ,5 hectares with trees higher than 5 meters and a canopy cover of more than 10% , or trees able to reach those thresholds in situ , excluding agricultural plantations and land that is predominantly under agricultural or urban land use as well as natural forests and plantations;


### (2) ‘forest’ means land spanning more than 0 ,5 hectares with trees higher than 5 meters and a canopy cover of more than 10% , or trees able to reach those thresholds in situ , excluding agricultural plantations and land that is predominantly under agricultural or urban land use; ### (2) ‘forest’ means land spanning more than 0 ,5 hectares with trees higher than 5 meters and a canopy cover of more than 10% , or trees able to reach those thresholds in situ , excluding agricultural plantations and land that is predominantly under agricultural or urban land use and including peatlands and ecosystems;


### (6) ‘forest degradation’ means harvesting operations that are not sustainable and cause a reduction or loss of the biological or economic productivity and complexity of forest ecosystems , resulting in the long-term reduction of the overall supply of benefits from forest , which includes wood , biodiversity and other products or services; ### (6) ‘forest degradation’ means management and harvesting operations that are not sustainable and cause a substantial reduction or loss of the biological wealth or the economic productivity and complexity of forest ecosystems , resulting in the long-term reduction of forests quality and of the overall supply of benefits from forest , which includes wood , biodiversity and other products or services;


### (6) ‘forest degradation’ means harvesting operations that are not sustainable and cause a reduction or loss of the biological or economic productivity and complexity of forest ecosystems , resulting in the long-term reduction of the overall supply of benefits from forest , which includes wood , biodiversity and other products or services; ### (6) ‘forest degradation’ means harvesting operations that are not sustainable and cause a reduction or loss of the biological or economic productivity and complexity of forest ecosystems , resulting in the long-term reduction of the overall supply of benefits from forest , which includes wood , biodiversity and other products or services , such as over-harvesting of timber;


### (6) ‘forest degradation’ means harvesting operations that are not sustainable and cause a reduction or loss of the biological or economic productivity and complexity of forest ecosystems , resulting in the long-term reduction of the overall supply of benefits from forest , which includes wood , biodiversity and other products or services; ### (6) ‘forest degradation’ means the changes within a natural ecosystem that significantly and negatively affect its species composition , structure , and/or function and reduce the ecosystem’s capacity to supply products , support biodiversity , and/or deliver ecosystem services;


### that the relevant commodities and products , including those used for or contained in relevant products , were produced on land that has not been subject to deforestation after december 31 , 2020 , and ### that the relevant commodities and products , including those used for or contained in relevant products , were produced on land that has not been subject to deforestation after december 31 , 2015 , and


### that the wood has been harvested from the forest without inducing forest degradation after december 31 , 2020; ### that the wood has been harvested from the forest without inducing forest degradation after december 31 , 2015;


### (28) ‘relevant legislation of the country of production’ means the rules applicable in the country of production concerning the legal status of the area of production in terms of land use rights , environmental protection , third parties’ rights and relevant trade and customs regulations under legislation framework applicable in the country of production; ### (28) ‘relevant legislation of the country of production’ means the rules applicable in the country of production concerning the legal status of the area of production in terms of land use rights , environmental protection , third parties’ rights and relevant trade and customs regulations under legislation framework applicable in the country of production and in compliance with international human rights law instruments ratified by the country of production , including specifically the respect for customary tenure rights and the principle of free , prior and informed consent of indigenous peoples;


### article 12 ### deleted


### 1. this regulation establishes a three-tier system for the assessment of countries or parts thereof. unless identified in accordance with this article as presenting a low or high risk , countries shall be considered as presenting a standard risk. the commission may identify countries or parts thereof that present a low or high risk of producing relevant commodities or products that are not compliant with article 3 , point (a). the list of the countries or parts thereof that present a low or high risk shall be published by means of implementing act(s) to be adopted in accordance with the examination procedure referred to in article 34(2). that list shall be updated as necessary in light of new evidence. ### 1. this regulation establishes a two-tier system for the assessment of countries or parts thereof. unless identified in accordance with this article as presenting a standard risk , countries shall be considered as presenting a high risk. the commission may identify countries or parts thereof that present a standard risk of producing relevant commodities or products that are not compliant with article 3 , point (a). the list of the countries or parts thereof that present a standard risk shall be published by means of implementing act(s) to be adopted in accordance with the examination procedure referred to in article 34(2). that list shall be updated as necessary in light of new evidence.


### 2. the identification of low and high risk countries or parts thereof pursuant to paragraph 1 shall take into account information provided by the country concerned and be based on the following assessment criteria: ### 2. the identification of standard risk countries or parts thereof pursuant to paragraph 1 shall take into account information provided by the country concerned and be based on the following assessment criteria:


### the consequences of its identification as a high or low risk country. ### the consequences of its identification as a standard or high risk country.


### 1. the commission shall engage with producer countries concerned by this regulation to develop partnerships and cooperation to jointly address deforestation and forest degradation. such partnerships and cooperation mechanisms will focus on the conservation , restoration and sustainable use of forests , deforestation , forest degradation and the transition to sustainable commodity production , consumption processing and trade methods. partnerships and cooperation mechanisms may include structured dialogues , support programmes and actions , administrative arrangements and provisions in existing agreements or agreements that enable producer countries to make the transition to an agricultural production that facilitates the compliance of relevant commodities and products with the requirements of this regulation. such agreements and their effective implementation will be taken into account as part of the benchmarking under article 27 of this regulation. ### 1. the commission shall engage with producer countries concerned by this regulation to develop partnerships and cooperation to jointly address deforestation and forest degradation. such partnerships and cooperation mechanisms will focus on the conservation , restoration and sustainable use of forests , deforestation , forest degradation and the transition to sustainable commodity production , consumption processing and trade methods. to be effective , such partnerships shall ensure trade incentives and support for local livelihoods , as well as roadmaps of reforms to happen the partner country. partnerships and cooperation mechanisms may include structured dialogues , support programmes and actions , administrative arrangements and provisions in existing agreements or agreements that enable producer countries to make the transition to an agricultural production that facilitates the compliance of relevant commodities and products with the requirements of this regulation. such agreements and their effective implementation will be taken into account as part of the benchmarking under article 27 of this regulation.


### 1. the commission shall engage with producer countries concerned by this regulation to develop partnerships and cooperation to jointly address deforestation and forest degradation. such partnerships and cooperation mechanisms will focus on the conservation , restoration and sustainable use of forests , deforestation , forest degradation and the transition to sustainable commodity production , consumption processing and trade methods. partnerships and cooperation mechanisms may include structured dialogues , support programmes and actions , administrative arrangements and provisions in existing agreements or agreements that enable producer countries to make the transition to an agricultural production that facilitates the compliance of relevant commodities and products with the requirements of this regulation. such agreements and their effective implementation will be taken into account as part of the benchmarking under article 27 of this regulation. ### 1. the commission shall engage with producer countries concerned by this regulation to develop partnerships and cooperation to jointly address deforestation and forest degradation. such partnerships and cooperation mechanisms will focus on the conservation , restoration and sustainable use of forests , deforestation , forest degradation , adoption of agro-ecological practices and production systems , that are free from forest and ecosystem destruction and which respect human rights , and the transition to sustainable commodity production , consumption processing and trade methods. partnerships and cooperation mechanisms may include structured dialogues , support programmes and actions , administrative arrangements and provisions in existing agreements or agreements that enable producer countries to make the transition to an agricultural production that facilitates the compliance of relevant commodities and products with the requirements of this regulation. such agreements and their effective implementation will be taken into account as part of the benchmarking under article 27 of this regulation.


### 2. partnerships and cooperation should allow the full participation of all stakeholders , including civil society , indigenous people , local communities and the private sector including , smes and smallholders. ### 2. partnerships and cooperation should allow the full participation of all stakeholders , including local environmental defenders and civil society , indigenous people , local communities and the private sector including , smes and smallholders.


### 3. partnerships and cooperation shall promote the development of integrated land use planning processes , relevant legislations , fiscal incentives and other pertinent tools to improve forest and biodiversity conservation , sustainable management and restoration of forests , tackle the conversion of forests and vulnerable ecosystems to other land uses , optimise gains for the landscape , tenure security , agriculture productivity and competitiveness , transparent supply chains , strengthen the rights of forest dependent communities including smallholders , indigenous peoples and local communities , and ensure public access to forest management documents and other relevant information. ### 3. partnerships and cooperation shall include a process to demarcate and recognise community tenure rights in line with the voluntary guidelines for the governance of tenure and promote the development of integrated land use planning processes , relevant legislations , fiscal incentives and other pertinent tools to improve forest and biodiversity conservation , sustainable management and restoration of forests , tackle the conversion of forests and vulnerable ecosystems to other land uses , optimise gains for the landscape , tenure security , agriculture productivity and competitiveness , transparent supply chains , strengthen the rights of forest dependent communities including smallholders , indigenous peoples and local communities and other groups with customary land rights , and ensure public access to forest management documents and other relevant information.


### 2. no later than five years after the entry into force and at least every five years thereafter , the commission shall carry out a general review of this regulation , and shall present a report to the european parliament and the council accompanied , if appropriate , by a legislative proposal. the first of the reports shall include in particular , based on specific studies , an evaluation of: ### 2. no later than three years after the entry into force and at least every five years there after , the commission shall carry out a general review of this regulation , and shall present a report to the european parliament and the council accompanied , if appropriate , by a legislative proposal. the first of the reports shall include in particular , based on specific studies , an evaluation of:


### (17) this regulation should also respond to the 2021 glasgow leaders’ declaration on forests and land use37 that recognises that “to meet our land use , climate , biodiversity and sustainable development goals , both globally and nationally , will require transformative further action in the interconnected areas of sustainable production and consumption; infrastructure development; trade , finance and investment; and support for smallholders , indigenous peoples , and local communities”. the signatories also stressed in that declaration that they will strengthen their shared efforts to facilitate trade and development policies , internationally and domestically , that promotes sustainable development and sustainable commodity production and consumption , that work to countries’ mutual benefit , and that do not drive deforestation and land degradation. ### (17) this regulation should also respond to the 2021 glasgow leaders’ declaration on forests and land use37 that recognises that “to meet our land use , climate , biodiversity and sustainable development goals , both globally and nationally , will require transformative further action in the interconnected areas of sustainable production and consumption; infrastructure development; trade , finance and investment; and support for smallholders , indigenous peoples , and local communities”. the signatories committed to halt and reverse forest loss and land degradation by 2030 and also stressed that they will strengthen their shared efforts to facilitate trade and development policies , internationally and domestically , that promotes sustainable development and sustainable commodity production and consumption , that work to countries’ mutual benefit , and that do not drive deforestation and land degradation.


### (46) the risk of non-compliant commodities and products being placed on the union market varies depending on the commodity and product as well as on its country of origin and production. operators sourcing commodities and products from countries or parts thereof that present a low risk of growing , harvesting or producing relevant commodities in violation of this regulation should be subject to fewer obligations , thereby reducing compliance costs and administrative burden. commodities and products from high-risk countries or parts thereof should be subject to enhanced scrutiny by the competent authorities. ### (46) the risk of non-compliant commodities and products being placed on the union market varies depending on the commodity and product as well as on its country of origin and production. operators sourcing commodities and products from countries or parts thereof that present a high-risk of growing , harvesting or producing relevant commodities in violation of this regulation should be subject to enhanced scrutiny by the competent authorities.


### 2. paragraph 1 shall not apply to eba beneficiary countries , nor shall it apply to countries with a share for the relevant products referred to in paragraph 1 not exceeding 6 % of total union imports of the same products. ### 2. paragraph 1 shall not apply to countries with a share for the relevant products referred to in paragraph 1 not exceeding 6 % of total union imports of the same products.


### (1) since 1971 , the community has granted trade preferences to developing countries under its generalised scheme of preferences (‘gsp’). ### (1) since 1971 , the community has granted trade preferences to developing countries under its generalised scheme of preferences (‘gsp’). since then , the gsp has covered more than 60 countries , especially developing nations , counting more than 1 ,7 billion people all over the world. the gsp is a key commercial instrument of the union to promote human rights , democracy , the rule of law , good governance , gender equality , and sustainable development.


### (2) the union's common commercial policy shall be guided by the principles and pursue the objectives set out in the general provisions on the union's external action , laid down in article 21 of the treaty on european union (teu). ### (2) the union's common commercial policy shall be guided by the principles and pursue the objectives set out in the general provisions on the union's external action , laid down in article 21 of the treaty on european union (teu). for that purpose , the union should ensure that its commercial policy is conducted in close coordination with other external policies , and that regular contact with partner countries foreseen in the framework of the various instruments of the external action duly follow up on the obligations and issues identified in the implementation of the union's trade relations and trade-related instruments.


### (2) the union's common commercial policy shall be guided by the principles and pursue the objectives set out in the general provisions on the union's external action , laid down in article 21 of the treaty on european union (teu). ### (2) the union's common commercial policy shall be guided by the principles and pursue the objectives set out in the general provisions on the union's external action , laid down in article 21 of the treaty on european union (teu). therefore , the union should safeguard its values and principles both inside and outside of its territories , be coherent , set standards , and prioritise full-fledged democracies respecting the rule of law when opening negotiations for any type of economic and trading partnership.


### (3) the union's common commercial policy is to be consistent with and to consolidate the objectives of the union policy in the field of development cooperation , laid down in article 208 of the treaty on the functioning of the european union (tfeu) , in particular the eradication of poverty and the promotion of sustainable economic , social , and environmental development and good governance in the developing countries. it is to comply with world trade organisation (‘wto’) requirements , in particular with the decision on differential and more favourable treatment , reciprocity and fuller participation of developing countries (the ‘enabling clause’) , adopted under the general agreement on tariffs and trade (‘gatt’) in 1979 , under which wto members may accord differential and more favourable treatment to developing countries. ### (3) the union's common commercial policy is to be consistent with and to consolidate the objectives of the union policy in the field of development cooperation , laid down in article 208 of the treaty on the functioning of the european union (tfeu) , in particular the eradication of poverty and the promotion of human rights , sustainable economic , social , and environmental development and good governance in the developing countries. it is to comply with world trade organisation (‘wto’) requirements , in particular with the decision on differential and more favourable treatment , reciprocity and fuller participation of developing countries (the ‘enabling clause’) , adopted under the general agreement on tariffs and trade (‘gatt’) in 1979 , under which wto members may accord differential and more favourable treatment to developing countries.


### (2) at the same time , undertakings might receive subsidies from third countries , that provide public funds which are then used , for instance , to finance economic activities in the internal market in any sector of the economy , such as participation in public procurement tenders , or acquisitions of undertakings , including those with strategic assets such as critical infrastructure and innovative technologies. such subsidies are currently not subject to union state aid rules. ### (2) at the same time , undertakings might receive subsidies from third countries , that provide public funds which are then used , for instance , to finance economic activities in the internal market in any sector of the economy , such as participation in public procurement tenders , or acquisitions of undertakings , including those with strategic assets such as critical infrastructure and innovative technologies. such subsidies are currently not subject to union state aid rules and , in the last decades , different third countries have increased this practice of giving out subsidies both with the objective to strengthen their respective national trading interests all over the world , as well as their geopolitical purposes.


### (3) foreign subsidies can distort the internal market and undermine the level playing field for various economic activities in the union. this could in particular occur in the context of concentrations entailing a change of control over union undertakings , where such concentrations are fully or partially financed through foreign subsidies , or if undertakings benefiting from foreign subsidies are awarded public contracts in the union. ### (3) therefore , foreign subsidies distort the internal market and undermine the level playing field for various economic activities in the union. this could in particular occur in the context of concentrations entailing a change of control over union undertakings , where such concentrations are fully or partially financed through foreign subsidies , or if undertakings benefiting from foreign subsidies are awarded public contracts in the union.


### (5) it is therefore necessary to complement existing union instruments with a new tool to effectively deal with distortions in the internal market caused by foreign subsidies and ensure a level playing field. in particular , the new tool complements union state aid rules which deal with distortions in the internal market caused by member state subsidies. ### (5) it is therefore necessary to complement existing union instruments with a new tool to effectively deal with distortions in the internal market caused by foreign subsidies and ensure a level playing field and the union's strategic autonomy. in particular , the new tool complements union state aid rules which deal with distortions in the internal market caused by member state subsidies.


### (7) to ensure a level playing field throughout the internal market and consistency in the application of this regulation , the commission should be the sole authority competent to apply this regulation. the commission should have the power to examine any foreign subsidy to the extent it is in the scope of this regulation in any sector of the economy on its own initiative relying on information from all available sources. to ensure effective control , in the specific case of large concentrations (mergers and acquisitions) and public procurement procedures above certain thresholds , the commission should have the power to review foreign subsidies based on a prior notification by the undertaking to the commission. ### (7) to ensure a level playing field throughout the internal market and consistency in the application of this regulation , the commission should be the sole authority competent to apply this regulation. the commission should have the power to examine any foreign subsidy to the extent it is in the scope of this regulation in any sector of the economy on its own initiative or at the request of the competent national authorities , and relying on information from all available sources. to ensure effective control , in the specific case of large concentrations (mergers and acquisitions) and public procurement procedures above certain thresholds , the commission should have the power to review foreign subsidies based on a prior notification by the undertaking to the commission.


### (7) to ensure a level playing field throughout the internal market and consistency in the application of this regulation , the commission should be the sole authority competent to apply this regulation. the commission should have the power to examine any foreign subsidy to the extent it is in the scope of this regulation in any sector of the economy on its own initiative relying on information from all available sources. to ensure effective control , in the specific case of large concentrations (mergers and acquisitions) and public procurement procedures above certain thresholds , the commission should have the power to review foreign subsidies based on a prior notification by the undertaking to the commission. ### (7) to ensure a level playing field throughout the internal market and consistency in the application of this regulation , the commission should be the sole authority competent to apply this regulation. the commission should have the power to examine any foreign subsidy to the extent it is in the scope of this regulation in any sector of the economy on its own initiative relying on information from all available sources. to ensure effective control , in the specific case of large concentrations (mergers and acquisitions) and public procurement procedures above certain thresholds , the commission should have the power to review foreign subsidies based on a prior notification by the undertaking to the commission. the commission should pay particular attention to money flows coming from tax havens , where the opacity of banks , companies and other subjects makes it impossible to establish the origin of funds coming into eu countries.


### (1) the commission has , in its communication on the european green deal31 , set out a new growth strategy that aims to transform the union into a fair and prosperous society , with a modern , resource-efficient and competitive economy , where there are no net emissions (emissions after deduction of removals) of greenhouse gases (‘ghg emissions’) in 2050 and where economic growth is decoupled from resource use. the european green deal also aims to protect , conserve and enhance the eu’s natural capital , and protect the health and well-being of citizens from environment-related risks and impacts. at the same time , that transformation must be just and inclusive , leaving no one behind. the commission also announced in its eu action plan: towards zero pollution for air , water and soil32 the promotion of relevant instruments and incentives to better implement the polluter pays principle as set out in article 191(2) of the treaty on the functioning of the european union (‘tfeu’) and thus complete the phasing out of ‘pollution for free’ with a view to maximising synergies between decarbonisation and the zero pollution ambition. ### (1) the commission has , in its communication on the european green deal31 , set out a new growth strategy that aims to transform the union into a fair and prosperous society , with a modern , , open , innovation-driven , resource-efficient and competitive economy , where there are no net emissions (emissions after deduction of removals) of greenhouse gases (‘ghg emissions’) in 2050 and where economic growth is decoupled from resource use. the european green deal also aims to protect , conserve and enhance the eu’s natural capital , and protect the health and well-being of citizens from environment-related risks and impacts. at the same time , that transformation must be just and inclusive , leaving no one behind. the commission also announced in its eu action plan: towards zero pollution for air , water and soil32 the promotion of relevant instruments and incentives to better implement the polluter pays principle as set out in article 191(2) of the treaty on the functioning of the european union (‘tfeu’) and thus complete the phasing out of ‘pollution for free’ with a view to maximising synergies between decarbonisation and the zero pollution ambition.


### (1) the commission has , in its communication on the european green deal31 , set out a new growth strategy that aims to transform the union into a fair and prosperous society , with a modern , resource-efficient and competitive economy , where there are no net emissions (emissions after deduction of removals) of greenhouse gases (‘ghg emissions’) in 2050 and where economic growth is decoupled from resource use. the european green deal also aims to protect , conserve and enhance the eu’s natural capital , and protect the health and well-being of citizens from environment-related risks and impacts. at the same time , that transformation must be just and inclusive , leaving no one behind. the commission also announced in its eu action plan: towards zero pollution for air , water and soil32 the promotion of relevant instruments and incentives to better implement the polluter pays principle as set out in article 191(2) of the treaty on the functioning of the european union (‘tfeu’) and thus complete the phasing out of ‘pollution for free’ with a view to maximising synergies between decarbonisation and the zero pollution ambition. ### (1) the commission has , in its communication on the european green deal31 , set out a new growth strategy that aims to transform the union into a fair and prosperous society , with a modern , resource-efficient and competitive economy , where there are no net emissions (emissions after deduction of removals) of greenhouse gases (‘ghg emissions’) in 2050 and where economic growth is decoupled from resource use. the european green deal also aims to protect , conserve and enhance the eu’s natural capital , and protect the health and well-being of citizens and future generations from environment-related risks and impacts. at the same time , that transformation must be just and inclusive , leaving no one behind. the commission also announced in its eu action plan: towards zero pollution for air , water and soil32 the promotion of relevant instruments and incentives to better implement the polluter pays principle as set out in article 191(2) of the treaty on the functioning of the european union (‘tfeu’) and thus complete the phasing out of ‘pollution for free’ with a view to maximising synergies between decarbonisation and the zero pollution ambition.


### (8) as long as a significant number of the union’s international partners have policy approaches that do not result in the same level of climate ambition , there is a risk of carbon leakage. carbon leakage occurs if , for reasons of costs related to climate policies , businesses in certain industry sectors or subsectors were to transfer production to other countries or imports from those countries would replace equivalent but less ghg emissions intensive products. that could lead to an increase in their total emissions globally , thus jeopardising the reduction of ghg emissions that is urgently needed if the world is to keep the global average temperature to well below 2 °c above pre-industrial levels. ### (8) as long as a significant number of the union’s international partners have policy approaches that do not achieve the same level of climate ambition , there is a risk of carbon leakage , which would undermine the union’s competitiveness. carbon leakage occurs if , for reasons of costs related to climate policies , businesses in certain industry sectors or subsectors were to transfer production to other countries or imports from those countries would replace equivalent but less ghg emissions intensive products on the internal market , as well as export markets , or investment into such sectors and subsectors would predominantly flow to such countries and not the union. that would lead to an increase in their total emissions globally , thus jeopardising the reduction of ghg emissions that is urgently needed if the world is to keep the global average temperature to well below 2 °c above pre-industrial levels.


### (8) as long as a significant number of the union’s international partners have policy approaches that do not result in the same level of climate ambition , there is a risk of carbon leakage. carbon leakage occurs if , for reasons of costs related to climate policies , businesses in certain industry sectors or subsectors were to transfer production to other countries or imports from those countries would replace equivalent but less ghg emissions intensive products. that could lead to an increase in their total emissions globally , thus jeopardising the reduction of ghg emissions that is urgently needed if the world is to keep the global average temperature to well below 2 °c above pre-industrial levels. ### (8) as long as a significant number of the union’s international partners have policy approaches that do not result in the same level of climate ambition and action in mitigating climate change , there is a risk of carbon leakage. carbon leakage occurs if , for reasons of costs related to climate policies , businesses in certain industry sectors or subsectors were to transfer production to other countries that do not tax ghg emissions or tax at a lower rate or imports from those countries would replace equivalent but less ghg emissions intensive products. that could lead to an increase in their total emissions globally , thus jeopardising the reduction of ghg emissions that is urgently needed if the world is to keep the global average temperature to well below 2 °c above pre-industrial levels. the risk of carbon leakage is particularly prevalent in trade-exposed and carbon-intensive industrial sectors.


### (9) the initiative for a carbon border adjustment mechanism (‘cbam’) is a part of the ‘fit for 55 package’. that mechanism is to serve as an essential element of the eu toolbox to meet the objective of a climate-neutral union by 2050 in line with the paris agreement by addressing risks of carbon leakage resulting from the increased union climate ambition. ### (9) the initiative for a carbon border adjustment mechanism (‘cbam’) is a part of the ‘fit for 55 package’. that mechanism is to serve as an essential element of the eu toolbox to meet the objective of a climate-neutral union by 2050 in line with the paris agreement by preventing risks of carbon leakage resulting from the increased union climate ambition on the internal market , export markets as well as investment leakage.


### (9) the initiative for a carbon border adjustment mechanism (‘cbam’) is a part of the ‘fit for 55 package’. that mechanism is to serve as an essential element of the eu toolbox to meet the objective of a climate-neutral union by 2050 in line with the paris agreement by addressing risks of carbon leakage resulting from the increased union climate ambition. ### (9) the initiative for a carbon border adjustment mechanism (‘cbam’) is a part of the ‘fit for 55 package’. that mechanism is to serve as an essential element of the eu toolbox to meet the objective of a climate-neutral union by 2050 in line with the paris agreement by addressing risks of carbon leakage resulting from the increased union climate ambition whilst ensuring a sustainable level playing field and by incentivising more ambitious climate action internationally.


### (10) existing mechanisms to address the risk of carbon leakage in sectors or sub-sectors at risk of carbon leakage are the transitional free allocation of eu ets allowances and financial measures to compensate for indirect emission costs incurred from ghg emission costs passed on in electricity prices respectively laid down in articles 10a(6) and 10b of directive 2003/87/ec. however , free allocation under the eu ets weakens the price signal that the system provides for the installations receiving it compared to full auctioning and thus affects the incentives for investment into further abatement of emissions. ### (10) existing mechanisms to address the risk of carbon leakage in sectors or sub-sectors at risk of carbon leakage are the transitional free allocation of eu ets allowances and financial measures to compensate for indirect emission costs incurred from ghg emission costs passed on in electricity prices respectively laid down in articles 10a(6) and 10b of directive 2003/87/ec.


### (11) the cbam seeks to replace these existing mechanisms by addressing the risk of carbon leakage in a different way , namely by ensuring equivalent carbon pricing for imports and domestic products. to ensure a gradual transition from the current system of free allowances to the cbam , the cbam should be progressively phased in while free allowances in sectors covered by the cbam are phased out. the combined and transitional application of eu ets allowances allocated free of charge and of the cbam should in no case result in more favourable treatment for union goods compared to goods imported into the customs territory of the union. ### (11) the cbam seeks to progressively replace these existing mechanisms by addressing the risk of carbon leakage in a different way , namely by ensuring equivalent carbon pricing for imports and domestic products. the legislative framework should cumulatively ensure that a mechanism is included to provide effective carbon leakage protection , also addressing export markets , as well as a net positive impact on global ghg emissions rather than eu emissions only. to ensure a gradual transition from the current system of free allowances to the cbam , the cbam should be progressively phased in while free allowances in sectors covered by the cbam are phased out , but this transition shall not start before 2030 and only after the ec has tested and verified the effectiveness of the cbam regulation in terms of protection from the risk of carbon leakage. the combined and transitional application of eu ets allowances allocated free of charge and of the cbam should in no case result in more favourable treatment for union goods compared to goods imported into the customs territory of the union.


### (11) the cbam seeks to replace these existing mechanisms by addressing the risk of carbon leakage in a different way , namely by ensuring equivalent carbon pricing for imports and domestic products. to ensure a gradual transition from the current system of free allowances to the cbam , the cbam should be progressively phased in while free allowances in sectors covered by the cbam are phased out. the combined and transitional application of eu ets allowances allocated free of charge and of the cbam should in no case result in more favourable treatment for union goods compared to goods imported into the customs territory of the union. ### (11) the cbam seeks to replace these existing mechanisms by addressing the risk of carbon leakage in a different way , namely by ensuring equivalent carbon pricing for imports and domestic products. to ensure a gradual transition from the current system of free allowances to the cbam , the cbam should be progressively phased in while free allowances in sectors covered by the cbam are phased out. the combined and transitional application of eu ets allowances allocated free of charge and of the cbam should in no case result in more favourable treatment for union goods compared to goods imported into the customs territory of the union. this gradual transition shall be supported by a review mechanism in which the commission assesses the gradual implementation of the instrument , including the need for its scope extension.


### (12) while the objective of the cbam is to prevent the risk of carbon leakage , this regulation would also encourage the use of more ghg emissions-efficient technologies by producers from third countries , so that less emissions per unit of output are generated. ### (12) while the objective of the cbam is to prevent the risk of carbon leakage , from the internal market , export markets , and investment leakage , this regulation would at the same time encourage the use of more ghg emissions-efficient technologies by producers from third countries , so that less emissions per unit of output are generated. encouraging emission reductions in third countries is the most effective way of avoiding the risk of carbon leakage.


### (12) while the objective of the cbam is to prevent the risk of carbon leakage , this regulation would also encourage the use of more ghg emissions-efficient technologies by producers from third countries , so that less emissions per unit of output are generated. ### (12) while the objective of the cbam is to prevent the risk of carbon leakage , this regulation would also encourage the deployment and use of more ghg emissions-efficient technologies by producers from third countries , so that less emissions per unit of output are generated.