### the objective of this directive is to remove obstacles to the exercise of fundamental freedoms , such as the free movement of capital and freedom of establishment , which result from differences between national laws and procedures on preventive restructuring , insolvency and second chance . this directive aims at removing such obstacles by ensuring that viable enterprises in financial difficulties have access to effective national preventive restructuring frameworks which enable them to continue operating ; that honest over indebted entrepreneurs have a second chance after a full discharge of debt after a reasonable period of time ; and that the effectiveness of restructuring , insolvency and discharge procedures is improved , in particular with a view to shortening their length . ### the objective of this directive is to remove obstacles to the exercise of fundamental freedoms , such as the free movement of capital and freedom of establishment , which result from differences between national laws and procedures on preventive restructuring , insolvency and second chance . this directive aims at removing such obstacles by ensuring that viable enterprises in financial difficulties have access to effective national preventive restructuring frameworks which enable them to continue operating ; that honest over indebted entrepreneurs have a second chance after a full discharge of debt after a reasonable period of time ; and that the effectiveness of restructuring , insolvency and discharge procedures is improved , in particular with a view to shortening their length . preventive solutions , sometimes called ' pre - pack ' , are a feature of a growing trend in modern insolvency law towards favouring approaches which , unlike the traditional approach of liquidating a business which is in crisis , have the aim of restoring it to health or at least salvaging those of its units that are still economically viable . that practice is praiseworthy and often helps to preserve jobs .


### restructuring should enable enterprises in financial difficulties to continue business in whole or in part , by changing the composition , conditions or structure of assets and liabilities or of their capital structure , including by sales of assets or parts of the business . preventive restructuring frameworks should above all enable the enterprises to restructure at an early stage and to avoid their insolvency . those frameworks should maximise the total value to creditors , owners and the economy as a whole and should prevent unnecessary job losses and losses of knowledge and skills . they should also prevent the build - up of non - performing loans . in the restructuring process the rights of all parties involved should be protected . at the same time , non - viable businesses with no prospect of survival should be liquidated as quickly as possible . ### restructuring should enable enterprises and consumers in financial difficulties to continue business in whole or in part , and ensure that they can maintain decent levels of subsistence , by changing the composition , conditions or structure of assets and liabilities or of their capital or property structure , including by sales of assets , property or parts of the business . preventive restructuring frameworks should above all enable the enterprises and individual consumers to restructure at an early stage and to avoid their insolvency . those frameworks should maximise the total value to creditors , owners and the economy as a whole and should prevent both unnecessary job losses and losses of knowledge and skills , and an increase in poverty and risk of exclusion among honest over - indebted consumers who are not entrepreneurs . they should also prevent the build - up of non - performing loans and debts . in the restructuring process the rights of all parties involved should be protected , especially those of particularly vulnerable individuals at risk of falling into poverty or social exclusion . at the same time , non - viable businesses with no prospect of survival should be liquidated as quickly as possible .


### restructuring should enable enterprises in financial difficulties to continue business in whole or in part , by changing the composition , conditions or structure of assets and liabilities or of their capital structure , including by sales of assets or parts of the business . preventive restructuring frameworks should above all enable the enterprises to restructure at an early stage and to avoid their insolvency . those frameworks should maximise the total value to creditors , owners and the economy as a whole and should prevent unnecessary job losses and losses of knowledge and skills . they should also prevent the build - up of non - performing loans . in the restructuring process the rights of all parties involved should be protected . at the same time , non - viable businesses with no prospect of survival should be liquidated as quickly as possible . ### restructuring should enable enterprises in financial difficulties to continue business in whole or in part , by changing the composition , conditions or structure of assets and liabilities or of their capital structure , including by sales of assets or parts of the business , if those operations , like the liquidation of assets , also contribute to the satisfaction of creditors’ claims . preventive restructuring frameworks should above all enable the enterprises to restructure at an early stage and to avoid their insolvency . those frameworks should even maximise the total value to creditors in comparison with that which they would receive in the event of the liquidation of assets , owners and the economy as a whole and should prevent unnecessary job losses and losses of operations , knowledge and skills . they should also prevent the build - up of non - performing loans . in the restructuring process the rights of all parties involved should be protected , including those of workers . at the same time , non - viable businesses with no prospect of survival should be liquidated as quickly as possible .


### in many member states it takes more than three years for bankrupt , but honest entrepreneurs to discharge their debts and make a fresh start . inefficient second chance frameworks result in entrepreneurs having to relocate in other jurisdictions in order to benefit from a fresh start in a reasonable period of time , at considerable additional costs to both their creditors and the debtors themselves . long disqualification orders which often accompany a procedure leading to discharge create obstacles to the freedom to take up and pursue a self - employed , entrepreneurial activity . ### in many member states it takes more than three years for bankrupt , but honest entrepreneurs or honest over - indebted consumers who are not entrepreneurs to discharge their debts and make a fresh start . inefficient second chance frameworks result in entrepreneurs having to relocate in other jurisdictions in order to benefit from a fresh start in a reasonable period of time , or consumers who are not entrepreneurs frequently being thrown into poverty and exclusion or facing living and subsistence conditions that are a violation of human rights and the right to maintain decent living standards . this all comes at considerable additional costs to both their creditors and the debtors themselves , and for society as a whole . long disqualification orders or eviction which often accompany a procedure leading to discharge create obstacles to the freedom to take up and pursue a self - employed , entrepreneurial activity and violate people’s dignity .


### excessive length of restructuring , insolvency and discharge procedures in several member states is an important factor triggering low recovery rates and deterring investors from making business in jurisdictions where procedures risk taking too long . ### excessive length of restructuring , insolvency and discharge procedures in several member states , or the virtual inexistence of these procedures in some cases , is an important factor triggering low business recovery rates , deterring investors from making business in the countries concerned and dramatically contributing to the increase in the number of citizens at risk of poverty or social and labour exclusion , undermining the social and economic resilience of society as a whole .


### in particular small and medium sized enterprises should benefit from a more coherent approach at union level , since they do not have the necessary resources to cope with high restructuring costs and to take advantage of the more efficient restructuring procedures in some member states . small and medium enterprises , especially when facing financial difficulties , often do not have the resources to hire professional advice , therefore early warning tools should be put in place to alert debtors to the urgency to act . in order to help such enterprises restructure at low cost , model restructuring plans should also be developed nationally and made available online . debtors should be able to use and adapt them to their own needs and to the specificities of their business . ### in particular small and medium sized enterprises and consumers who are not entrepreneurs should benefit from a more coherent approach at union level , since they do not have the necessary resources to cope with high restructuring costs and to take advantage of the more efficient restructuring procedures in some member states . small and medium enterprises , as well as consumers , especially when facing financial difficulties , often do not have the resources to hire professional advice , therefore early warning tools should be put in place to alert these debtors to the urgency to act . in order to help such enterprises and individuals restructure at low cost , model restructuring plans should also be developed nationally and made available online . debtors should be able to use and adapt them to their own needs and to the specificities of their business or the nature of their indebtedness as consumers who are not entrepreneurs .


### in particular small and medium sized enterprises should benefit from a more coherent approach at union level , since they do not have the necessary resources to cope with high restructuring costs and to take advantage of the more efficient restructuring procedures in some member states . small and medium enterprises , especially when facing financial difficulties , often do not have the resources to hire professional advice , therefore early warning tools should be put in place to alert debtors to the urgency to act . in order to help such enterprises restructure at low cost , model restructuring plans should also be developed nationally and made available online . debtors should be able to use and adapt them to their own needs and to the specificities of their business . ### in particular small and medium sized enterprises should benefit from a more coherent approach at union level , since they do not have the necessary resources to cope with high restructuring costs and to take advantage of the more efficient restructuring procedures in some member states . small and medium enterprises , especially when facing financial difficulties , often do not have the resources to hire professional advice , therefore early warning tools should be put in place to alert debtors to the urgency to act . in order to help such enterprises restructure at low cost , confidential procedures which minimise loss of value , jobs and creditors’ dividends should be possible . model restructuring plans should also be developed nationally and made available online . debtors should be able to use and adapt them to their own needs and to the specificities of their business .


### in particular small and medium sized enterprises should benefit from a more coherent approach at union level , since they do not have the necessary resources to cope with high restructuring costs and to take advantage of the more efficient restructuring procedures in some member states . small and medium enterprises , especially when facing financial difficulties , often do not have the resources to hire professional advice , therefore early warning tools should be put in place to alert debtors to the urgency to act . in order to help such enterprises restructure at low cost , model restructuring plans should also be developed nationally and made available online . debtors should be able to use and adapt them to their own needs and to the specificities of their business . ### in particular small and medium sized enterprises should benefit from a more coherent approach at union level , since they do not have the necessary resources to cope with high restructuring costs and to take advantage of the more efficient restructuring procedures in some member states . small and medium enterprises , especially when facing financial difficulties , often do not have the resources to hire professional advice , therefore early warning tools should be put in place to alert debtors to the urgency to act . in order to help such enterprises restructure at low cost , model restructuring plans should also be developed nationally and made available online . debtors should be able to use and adapt them to their own needs and to the specificities of their business . it should be possible for the debtor to find ad hoc and special solutions with third parties or creditors , either by reducing debts to all or most of the creditors or by surrendering whatever operations are viable , contributing to the satisfaction of creditors’ claims better than by means of the liquidation of assets , while preserving as many jobs as possible .


### to promote efficiency and reduce delays and costs , national preventive restructuring frameworks should include flexible procedures limiting the involvement of judicial or administrative authorities to where it is necessary and proportionate in order to safeguard the interests of creditors and other interested parties likely to be affected . to avoid unnecessary costs and reflect the early nature of the procedure , debtors should in principle be left in control of their assets and the day - to - day operation of their business . the appointment of a restructuring practitioner , whether a mediator supporting the negotiations of a restructuring plan or an insolvency practitioner supervising the actions of the debtor , should not be mandatory in every case , but made on a case - by - case basis depending on the circumstances of the case or on the debtor ' s specific needs . furthermore , there should not necessarily be a court order for the opening of the restructuring process which may be informal as long as the rights of third parties are not affected . nevertheless , a degree of supervision should be ensured when this is necessary to safeguard the legitimate interests of one or more creditors or another interested party . this may be the case , in particular , when a general stay of individual enforcement actions is granted by the judicial or administrative authority or where it appears necessary to impose a restructuring plan on dissenting classes of creditors . ### to promote efficiency and reduce delays and costs , national preventive restructuring frameworks should include flexible procedures limiting the involvement of judicial or administrative authorities to where it is necessary and proportionate in order to safeguard the interests of creditors and other interested parties likely to be affected . to avoid unnecessary costs and reflect the early nature of the procedure , debtors should in principle be left in control of their assets and the day - to - day operation of their business . the appointment of a restructuring practitioner , whether a mediator supporting the negotiations of a restructuring plan or an insolvency practitioner supervising the actions of the debtor , should not be mandatory in every case , but made on a case - by - case basis depending on the circumstances of the case or on the debtor ' s specific needs . furthermore , there should not necessarily be a court order for the opening of the restructuring process which may be informal as long as the rights of third parties are not affected . nevertheless , a degree of supervision should be ensured when this is necessary to safeguard the legitimate interests of one or more creditors or another interested party . this may be the case , in particular , when a general stay of individual enforcement actions is granted by the judicial or administrative authority or where it appears necessary to impose a restructuring plan on dissenting classes of creditors or if all or part of the business is transferred to another undertaking .


### throughout the preventive restructuring procedures , workers should enjoy full labour law protection . in particular , this directive is without prejudice to workers ' rights guaranteed by council directive 98 / 59 / ec68 , council directive 2001 / 23 / ec69 , directive 2002 / 14 / ec of the european parliament and of the council70 , directive 2008 / 94 / ec of the european parliament and of the council71 and directive 2009 / 38 / ec of the european parliament and of the council72 . the obligations concerning the information and consultation of workers under national law implementing the above - mentioned directives remain fully intact . this includes obligations to inform and consult workers ' representatives on the decision to have recourse to a preventive restructuring framework in accordance with directive 2002 / 14 / ec . given the need to ensure an appropriate level of protection of workers , member states should in principle exempt workers ' outstanding claims , as defined in directive 2008 / 94 / ec , from any stay of enforcement irrespective of the question whether these claims arise before or after the stay is granted . such a stay should be permissible only for the amounts and for the period that the payment of such claims is effectively guaranteed by other means under national law . where member states extend the cover of the guarantee of payment of workers ' outstanding claims established by directive 2008 / 94 / ec to preventive restructuring procedures set up by this directive , the exemption of workers ' claims from the stay of enforcement is no longer justified to the extent covered by that guarantee . where under national law there are limitations to the liability of guarantee institutions , either in terms of the length of the guarantee or the amount paid to workers , workers should be able to enforce their claims for any shortfall against the employer even during the stay of enforcement period . __________________ 68 council directive 98 / 59 / ec of 20 july 1998 on the approximation of the laws of the member states relating to collective redundancies , oj l 225 , 12 . 08 . 1998 , p . 16 . 69 council directive 2001 / 23 / ec of 12 march 2001 on the approximation of the laws of the member states relating to the safeguarding of employees ' rights in the event of transfers of undertakings , businesses or parts of undertakings or businesses , oj l 82 , 22 . 03 . 2001 , p . 16 . 70 directive 2002 / 14 / ec of the european parliament and of the council of 11 march 2002 establishing a general framework for informing and consulting employees in the european community , oj l 80 , 23 . 3 . 2002 , p . 29 . 71 directive 2008 / 94 / ec of the european parliament and of the council of 22 october 2008 on the protection of employees in the event of the insolvency of their employer , oj l 283 , 28 . 10 . 2008 , p . 36 . 72 directive 2009 / 38 / ec of the european parliament and of the council of 6 may 2009 on the establishment of a european works council or a procedure in community - scale undertakings and community - scale groups of undertakings for the purpose of informing and consulting employees , oj l 122 , 16 . 5 . 2009 , p . 28 . ### throughout the preventive restructuring procedures , workers should enjoy full labour law protection . if this directive is without prejudice to workers ' rights guaranteed by council directive 98 / 59 / ec68 , council directive 2001 / 23 / ec69 , directive 2002 / 14 / ec of the european parliament and of the council70 , directive 2008 / 94 / ec of the european parliament and of the council71 and directive 2009 / 38 / ec of the european parliament and of the council72 , it shall lay down arrangements for the exercise of these rights which make it possible to safeguard jobs and economic activity , in particular the confidentiality necessary for that purpose , whilst guaranteeing the effective exercise of those rights . the obligations concerning the information and consultation of workers under national law implementing the above - mentioned directives remain fully intact . this includes obligations to inform and consult workers ' representatives on the decision to have recourse to a preventive restructuring framework in accordance with directive 2002 / 14 / ec . given the need to ensure an appropriate level of protection of workers , member states should in principle exempt workers ' outstanding claims , as defined in directive 2008 / 94 / ec , from any stay of enforcement irrespective of the question whether these claims arise before or after the stay is granted . such a stay should be permissible only for the amounts and for the period that the payment of such claims is effectively guaranteed by other means under national law . where member states extend the cover of the guarantee of payment of workers ' outstanding claims established by directive 2008 / 94 / ec to preventive restructuring procedures set up by this directive , the exemption of workers ' claims from the stay of enforcement is no longer justified to the extent covered by that guarantee . where under national law there are limitations to the liability of guarantee institutions , either in terms of the length of the guarantee or the amount paid to workers , workers should be able to enforce their claims for any shortfall against the employer even during the stay of enforcement period . __________________ 68 council directive 98 / 59 / ec of 20 july 1998 on the approximation of the laws of the member states relating to collective redundancies , oj l 225 , 12 . 08 . 1998 , p . 16 . 69 council directive 2001 / 23 / ec of 12 march 2001 on the approximation of the laws of the member states relating to the safeguarding of employees ' rights in the event of transfers of undertakings , businesses or parts of undertakings or businesses , oj l 82 , 22 . 03 . 2001 , p . 16 . 70 directive 2002 / 14 / ec of the european parliament and of the council of 11 march 2002 establishing a general framework for informing and consulting employees in the european community , oj l 80 , 23 . 3 . 2002 , p . 29 . 71 directive 2008 / 94 / ec of the european parliament and of the council of 22 october 2008 on the protection of employees in the event of the insolvency of their employer , oj l 283 , 28 . 10 . 2008 , p . 36 . 72 directive 2009 / 38 / ec of the european parliament and of the council of 6 may 2009 on the establishment of a european works council or a procedure in community - scale undertakings and community - scale groups of undertakings for the purpose of informing and consulting employees , oj l 122 , 16 . 5 . 2009 , p . 28 .


### where a restructuring plan entails a transfer of part of undertaking or business , workers ' rights arising from a contract of employment or from an employment relationship , notably including the right to wages , should be safeguarded in accordance with articles 3 and 4 of directive 2001 / 23 / ec , without prejudice to the specific rules applying in the event of insolvency proceedings under article 5 of that directive and in particular the possibilities allowed by article 5 of that directive . furthermore , in addition and without prejudice to the rights to information and consultation , including on decisions likely to lead to substantial changes in work organisation or in contractual relations with a view to reaching an agreement on such decisions , which are guaranteed by directive 2002 / 14 / ec , under this directive workers who are affected by the restructuring plan should have the right to vote on the plan . for the purposes of voting on the restructuring plan , member states may decide to place workers in a class separate from other classes of creditors . ### where a restructuring plan entails a transfer of part of undertaking or business , workers ' rights arising from a contract of employment or from an employment relationship , notably including the right to wages , should be safeguarded in accordance with articles 3 and 4 of directive 2001 / 23 / ec , without prejudice to the specific rules applying in the event of insolvency proceedings under article 5 of that directive and in particular the possibilities allowed by article 5 of that directive . furthermore , in addition and without prejudice to the rights to information and consultation , including on decisions likely to lead to substantial changes in work organisation or in contractual relations with a view to reaching an agreement on such decisions , which are guaranteed by directive 2002 / 14 / ec , under this directive workers who are affected by the restructuring plan should have the right to vote on the plan . for the purposes of voting on the restructuring plan , member states may decide to place workers in a class separate from other classes of creditors . due account should be taken of the rulings handed down by the court of justice , as advocate - general mengozzi recently pointed out in his conclusions in case c - 126 / 16 .


### a full discharge or the end of disqualification after a short period of time are not appropriate in all circumstances , for instance in cases where the debtor is dishonest or has acted in bad faith . member states should provide clear guidance to judicial or administrative authorities on how to assess the honesty of the entrepreneur . for example , in establishing whether the debtor was dishonest , judicial or administrative authorities may take into account circumstances such as the nature and extent of the debts , the time when these were incurred , the efforts of the debtor to meet the debts and comply with legal obligations including public licensing requirements and proper bookkeeping , and actions on his or her part to frustrate recourse by creditors . disqualification orders may last longer or indefinitely in situations where the entrepreneur exercises certain professions which are considered sensitive in the member states or where he or she was convicted for criminal activities . in such cases it would be possible for entrepreneurs to benefit from a discharge of debt , but still be disqualified for a longer period of time or indefinitely from exercising a particular profession . ### a full discharge or the end of disqualification after a short period of time are not appropriate in all circumstances , for instance in cases where the debtor is dishonest or has acted in bad faith . member states should provide clear guidance and criteria to judicial or administrative authorities on the method for assessing the honesty of the entrepreneur . for example , in establishing whether the debtor was dishonest , judicial or administrative authorities may take into account circumstances such as the nature and extent of the debts , the time when these were incurred , the efforts of the debtor to meet the debts and comply with legal obligations including public licensing requirements and proper bookkeeping , and actions on his or her part to frustrate recourse by creditors . disqualification orders may last longer or indefinitely in situations where the entrepreneur exercises certain professions which are considered sensitive in the member states or where he or she was convicted for criminal activities . in such cases it would be possible for entrepreneurs to benefit from a discharge of debt , but still be disqualified for a longer period of time or indefinitely from exercising a particular profession .


### a full discharge or the end of disqualification after a short period of time are not appropriate in all circumstances , for instance in cases where the debtor is dishonest or has acted in bad faith . member states should provide clear guidance to judicial or administrative authorities on how to assess the honesty of the entrepreneur . for example , in establishing whether the debtor was dishonest , judicial or administrative authorities may take into account circumstances such as the nature and extent of the debts , the time when these were incurred , the efforts of the debtor to meet the debts and comply with legal obligations including public licensing requirements and proper bookkeeping , and actions on his or her part to frustrate recourse by creditors . disqualification orders may last longer or indefinitely in situations where the entrepreneur exercises certain professions which are considered sensitive in the member states or where he or she was convicted for criminal activities . in such cases it would be possible for entrepreneurs to benefit from a discharge of debt , but still be disqualified for a longer period of time or indefinitely from exercising a particular profession . ### a full discharge or the end of disqualification after a short period of time are not appropriate in all circumstances , for instance in cases where the debtor is dishonest or has acted in bad faith . member states should provide clear guidance to judicial or administrative authorities on how to assess the honesty of the entrepreneur or consumer . for example , in establishing whether the debtor was dishonest , judicial or administrative authorities may take into account circumstances such as the nature and extent of the debts , the time when these were incurred , the efforts of the debtor to meet the debts and comply with legal obligations including public licensing requirements and proper bookkeeping , and actions on his or her part to frustrate recourse by creditors . disqualification orders may last longer or indefinitely in situations where the entrepreneur exercises certain professions which are considered sensitive in the member states or where he or she was convicted for criminal activities . in such cases it would be possible for entrepreneurs to benefit from a discharge of debt , but still be disqualified for a longer period of time or indefinitely from exercising a particular profession .


### it is necessary to maintain and enhance the transparency and predictability of the procedures in delivering outcomes that are favourable for the preservation of businesses and for giving entrepreneurs a second chance or that permit the efficient liquidation of non - viable enterprises . it is also necessary to reduce the excessive length of insolvency procedures in many member states , which results in legal uncertainty for creditors and investors and low recovery rates . finally , given the enhanced cooperation mechanisms between courts and practitioners in cross - border cases set up by regulation 2015 / 848 , the professionalism of all actors involved needs to be brought to comparable high levels across the union . to achieve these objectives , member states should ensure that members of the judicial and administrative bodies are properly trained and have specialised knowledge and experience in insolvency matters . such specialisation of members of the judiciary should allow making decisions with potentially significant economic and social impacts within a short period of time and should not mean that members of the judiciary have to deal exclusively with restructuring , insolvency and second chance matters . for example , the creation of specialised courts or chambers in accordance with national law governing the organisation of the judicial system could be an efficient way of achieving these objectives . ### it is necessary to maintain and enhance the transparency and predictability of the procedures in delivering outcomes that are favourable for the preservation of businesses and for maintaining decent living conditions for citizens , and for giving entrepreneurs and consumers who are not entrepreneurs a second chance . it is also necessary to reduce the excessive length of insolvency procedures in many member states , which results in legal uncertainty for creditors and investors and low recovery rates , along with serious problems of poverty and the risk of social and labour exclusion . finally , given the enhanced cooperation mechanisms between courts and practitioners in cross - border cases set up by regulation 2015 / 848 , the professionalism of all actors involved needs to be brought to comparable high levels across the union . to achieve these objectives , member states should ensure that members of the judicial and administrative bodies are properly trained and have specialised knowledge and experience in insolvency matters in the case of both entrepreneurs and consumers who are not entrepreneurs . such specialisation of members of the judiciary should allow making decisions with potentially significant economic and social impacts within a short period of time and should not mean that members of the judiciary have to deal exclusively with restructuring , insolvency and second chance matters . for example , the creation of specialised courts or chambers in accordance with national law governing the organisation of the judicial system could be an efficient way of achieving these objectives .


### it is necessary to maintain and enhance the transparency and predictability of the procedures in delivering outcomes that are favourable for the preservation of businesses and for giving entrepreneurs a second chance or that permit the efficient liquidation of non - viable enterprises . it is also necessary to reduce the excessive length of insolvency procedures in many member states , which results in legal uncertainty for creditors and investors and low recovery rates . finally , given the enhanced cooperation mechanisms between courts and practitioners in cross - border cases set up by regulation 2015 / 848 , the professionalism of all actors involved needs to be brought to comparable high levels across the union . to achieve these objectives , member states should ensure that members of the judicial and administrative bodies are properly trained and have specialised knowledge and experience in insolvency matters . such specialisation of members of the judiciary should allow making decisions with potentially significant economic and social impacts within a short period of time and should not mean that members of the judiciary have to deal exclusively with restructuring , insolvency and second chance matters . for example , the creation of specialised courts or chambers in accordance with national law governing the organisation of the judicial system could be an efficient way of achieving these objectives . ### it is necessary to maintain and enhance the transparency and predictability of the procedures in delivering outcomes that are favourable for the preservation of businesses and for giving entrepreneurs a second chance or that permit the efficient liquidation of non - viable enterprises . it is also necessary to reduce the excessive length of insolvency procedures in many member states , which results in legal uncertainty for creditors and investors and low recovery rates . that reduction may in particular be secured by introducing , as a first step , confidential procedures which make it possible , in part by virtue of that confidentiality , to prepare the plan or the assignment without the loss of value which would occur if that intention were to be made public . finally , given the enhanced cooperation mechanisms between courts and practitioners in cross - border cases set up by regulation 2015 / 848 and applicable to public procedures , the professionalism of all actors involved needs to be brought to comparable high levels across the union . to achieve these objectives , member states should ensure that members of the judicial and administrative bodies are properly trained and have specialised knowledge and experience in insolvency matters . such specialisation of members of the judiciary should allow making decisions with potentially significant economic and social impacts within a short period of time and should not mean that members of the judiciary have to deal exclusively with restructuring , insolvency and second chance matters . for example , the creation of specialised courts or chambers in accordance with national law governing the organisation of the judicial system could be an efficient way of achieving these objectives .


### preventive restructuring procedures available for debtors in financial difficulty when there is a likelihood of insolvency ; ### preventive restructuring procedures available for debtors in financial difficulty when there is a likelihood of insolvency or where the procedures are being used to resolve a short - term problem , to reduce the amount owed to all or some of the creditors or to transfer all or part of the viable business to another enterprise on the basis of arrangements which afford creditors a dividend at least as large as that which they would have received in the event of liquidation ;


### to assist the debtor or the creditors in drafting or negotiating a restructuring plan ; ### to assist the debtor or the creditors in drafting or negotiating a viable restructuring or business wind - up plan ;


### to supervise the activity of the debtor during the negotiations on a restructuring plan and report to a judicial or administrative authority ; ### to supervise the activity of the debtor during the negotiations on a restructuring or business wind - up plan and report to a judicial or administrative authority ;


### member states shall ensure that debtors and entrepreneurs have access to early warning tools which can detect a deteriorating business development and signal to the debtor or the entrepreneur the need to act as a matter of urgency . ### member states shall ensure that debtors and entrepreneurs have access to early warning tools which can detect a deteriorating business development or worsening consumer indebtedness and signal to the debtor or the entrepreneur the need to act as a matter of urgency .


### member states shall ensure that debtors who are negotiating a restructuring plan with their creditors may benefit from a stay of individual enforcement actions if and to the extent such a stay is necessary to support the negotiations of a restructuring plan . ### member states shall ensure that debtors who are negotiating a restructuring plan with their creditors may benefit from a stay of individual enforcement actions , such as eviction , if and to the extent such a stay is necessary to support or make sustainable the negotiations of a restructuring plan .


### member states shall ensure that debtors who are negotiating a restructuring plan with their creditors may benefit from a stay of individual enforcement actions if and to the extent such a stay is necessary to support the negotiations of a restructuring plan . ### member states shall ensure that debtors who are negotiating a restructuring or business wind - up plan with their creditors may benefit from a stay of individual enforcement actions if and to the extent such a stay is necessary to support the negotiations of a restructuring plan .


### relevant progress has been made in the negotiations on the restructuring plan ; et ### relevant progress has been made in the negotiations on the restructuring plan or transfer of a going concern to another undertaking under the conditions laid down in this directive ; et


### member states may derogate from paragraph 1 where the debtor becomes illiquid and therefore unable to pay his debts as they fall due during the stay period . in that case , member states shall ensure that restructuring procedures are not automatically terminated and that , upon examining the prospects for achieving an agreement on a successful restructuring plan within the period of the stay , a judicial or administrative authority may decide to defer the opening of insolvency procedure and keep in place the benefit of the stay of individual enforcement actions . ### member states may derogate from paragraph 1 where the debtor becomes illiquid and therefore unable to pay his debts as they fall due during the stay period . in that case , member states shall ensure that restructuring procedures are not automatically terminated and that , upon examining the prospects for achieving an agreement on a successful restructuring or going concern transfer plan within the period of the stay , a judicial or administrative authority my decide to defer the opening of insolvency procedure and keep in place the benefit of the stay of individual enforcement actions .


### member states shall ensure that any affected creditors have a right to vote on the adoption of a restructuring plan . member states may also grant such voting rights to affected equity holders , in accordance with article 12 . ### member states shall ensure that any affected creditors have a right to an informed vote on the adoption of a restructuring plan . member states may also grant such voting rights to affected equity holders , in accordance with article 12 .


### member states shall ensure that any affected creditors have a right to vote on the adoption of a restructuring plan . member states may also grant such voting rights to affected equity holders , in accordance with article 12 . ### member states shall ensure that any affected creditors have a right to vote on the adoption of a restructuring plan , in full knowledge of the causes and consequences it will entail for each of them . member states may also grant such voting rights to affected equity holders , in accordance with article 12 .


### member states may stipulate that a vote on the adoption of a restructuring plan takes the form of a consultation and agreement of a requisite majority of affected parties in each class . ### member states may stipulate that a vote on the adoption of a restructuring plan takes the form of a consultation and agreement of a requisite majority of affected parties in each class , in accordance with national laws .


### member states shall ensure that judicial or administrative authorities may refuse to confirm a restructuring plan where that plan does not have a reasonable prospect of preventing the insolvency of the debtor and ensuring the viability of the business . ### member states shall ensure that judicial or administrative authorities may refuse to confirm a restructuring plan involving the waiver of claims where that plan does not have a reasonable prospect of preventing the insolvency of the debtor and ensuring the viability of the business or where the debtor’s obligations to workers under existing directives have not been fulfilled . member states shall ensure that judicial or administrative authorities may refuse to authorise a sale plan where that plan is such that creditors have no reasonable prospect of being paid a dividend at least equivalent to the amount which they would have received if assets had been sold following a bankruptcy procedure or where the business continuing as a going concern does not offer guarantees as to the viability of the operations transferred .


### member states shall ensure that where a judicial or administrative authority is required to confirm a restructuring plan in order for it to become binding , a decision is taken without undue delay after the request for confirmation has been filed and in any case no later than 30 days after the request is filed . ### member states shall ensure that where a judicial or administrative authority is required to confirm a restructuring plan or authorise a sale plan in order for it to become binding , a decision is taken without undue delay after the request for confirmation has been filed and in any case no later than 30 days after the request is filed .


### a liquidation value shall be determined by the judicial or administrative authority where a restructuring plan is challenged on the grounds of an alleged breach of the best interest of creditors test . ### a liquidation value shall be determined by the judicial or administrative authority where a restructuring plan or a sale plan is challenged on the grounds of an alleged breach of the best interest of creditors test .


### an enterprise value shall be determined by the judicial or administrative authority on the basis of the value of the enterprise as a going concern in the following cases : ### an enterprise value shall be determined by the judicial or administrative authority on the basis of the value of the enterprise as a going concern and the value of the proceeds from the sale of its assets by the insolvency practitioner in an insolvency procedure in the following cases :


### to take immediate steps to minimise the loss for creditors , workers , shareholders and other stakeholders ; ### to take immediate steps to minimise the loss for creditors , workers , shareholders and other stakeholders , including employment and the interests and rights of workers ;


### the commission should report on the implementation of this directive three years after its date of transposition , and every three years thereafter . in accordance with paragraphs 22 and 23 of the interinstitutional agreement on better law - making19 the commission should also carry out an evaluation of this directive on the basis of information collected through specific monitoring arrangements in order to assess the actual effects of the directive and the need for any further action . _________________ 19 interinstitutional agreement between the european parliament , the council of the european union and the european commission on better law - making of 13 april 2016 ; oj l 123 , 12 . 5 . 2016 , p . 1–14 . ### the commission should report on the implementation of this directive three years after its date of transposition , and every three years thereafter . this report shall also include an assessment of the need to ensure diagonal cooperation between financial intelligence units and competent authorities in different member states , and on the need to harmonise the organisation status and role of financial intelligence unites in national law . in accordance with paragraphs 22 and 23 of the interinstitutional agreement on better law - making19 the commission should also carry out an evaluation of this directive on the basis of information collected through specific monitoring arrangements in order to assess the actual effects of the directive and the need for any further action . _________________ 19 interinstitutional agreement between the european parliament , the council of the european union and the european commission on better law - making of 13 april 2016 ; oj l 123 , 12 . 5 . 2016 , p . 1–14 .


### each member state shall notify the commission its designated competent authorities in accordance with paragraphs and by [ 6 months from transposition date ] at the latest , and shall notify the commission of any amendment thereto . the commission shall publish the notifications and any amendment thereto in the official journal of the european union . ### each member state shall notify the commission its designated competent authorities in accordance with paragraphs and by [ 6 months from transposition date ] at the latest , and shall notify the commission of any amendment thereto . the commission shall publish the notifications and any amendment thereto in the official journal of the european union , as well as communicating this directly to member states ' designated competent authorities .


### when the anticipated or the effective duration of posting exceeds twenty - four months , the member state to whose territory a worker is posted shall be deemed to be the country in which his or her work is habitually carried out . ### when the effective duration of posting exceeds six months , or when the posting is not considered to be genuine under directive 2014 / 67 / eu , the terms and conditions of employment of the member state to whose territory a worker is posted and where the service is provided shall apply as long as they are more favourable for the worker than those pursuant to the law under which the individual employment contract was agreed .


### member states shall ensure that , whatever the law applicable to the employment relationship , the undertakings referred to in article 1 guarantee workers posted to their territory the terms and conditions of employment covering the following matters which , in the member state where the work is carried out , are laid down : ### member states shall ensure that , whatever the law applicable to the employment relationship , the undertakings referred to in article 1 guarantee workers posted to their territory at least the terms and conditions of employment which cover the following matters laid down in the member state where the work is carried out :


### further to a dialogue with the requesting member state , including in the context of the european semester , the commission should analyse the request , taking into account the principles of transparency , equal treatment and sound financial management and determine the support to be provided based on urgency , breadth and depth of the problems as identified , support needs in respect of the policy areas envisaged , analysis of socioeconomic indicators , and the general administrative capacity of the member state . the commission should also , in close cooperation with the member state concerned , identify the priority areas , the scope of the support measures to be provided and the global financial contribution for such support , taking into account the existing actions and measures financed by union funds or other union programmes . ### further to a dialogue with the requesting member state , including in the context of the european semester , the commission should analyse the request , taking into account the principles of transparency , subsidiarity , equal treatment , partnership and sound financial management and determine the support to be provided based on urgency , breadth and depth of the problems as identified , support needs in respect of the policy areas envisaged , analysis of socioeconomic indicators , and the general administrative capacity of the member state . the commission should also , in close cooperation with the member state concerned , identify the priority areas , the scope of the support measures to be provided and the global financial contribution for such support , taking into account the existing actions and measures financed by union funds or other union programmes ; in so doing , the commission and the member state concerned should take into account the current division of powers between the different levels of government – which often provides for an important role for local and regional authorities – as well as the fact that some country specific recommendations are addressed to local and regional authorities .


### the commission communications ‘ the eu budget review’13 and ‘ a budget for europe 2020’14 underline the importance of focusing funding on activities with clear european added value , i . e . where the union intervention can bring additional value compared to action of member states alone . against this background , the support actions carried out under the programme should ensure complementarity and synergy with other programmes and policies at national , union and international level . the actions under the programme should allow elaborating and implementing solutions that address national challenges which have impact on cross - border or union - wide challenges and achieve a consistent and coherent implementation of union law . in addition , they should contribute to further develop trust and promote cooperation with the commission and among member states . moreover , the union is in a better position than member states to provide a platform for the provision and sharing of good practices from peers as well as to mobilise expertise . __________________ 13 com700 of 19 october 2010 . 14 com500 final of 29 june 2011 . ### the commission communications ‘ the eu budget review’13 and ‘ a budget for europe 2020’14 underline the importance of focusing funding on actions and activities with clear european added value , i . e . where the union intervention can bring additional value compared to action of member states alone . against this background , the support actions and activities carried out under the programme should ensure complementarity and synergy with other programmes and policies at regional , national and union levels , as set out in the common strategic framework established under regulation no 1303 / 2013 of the european parliament and of the council , as well as the international level where appropriate . the actions and activities under the programme should allow elaborating and implementing solutions that address national challenges which have impact on cross - border or union - wide challenges and achieve a consistent and coherent implementation of union law . in addition , they should contribute to further develop trust and promote cooperation with the commission and among member states . moreover , the union is in a better position than member states to provide a platform for the provision and sharing of good practices from peers as well as to mobilise expertise . __________________ 13 com700 of 19 october 2010 . 14 com500 final of 29 june 2011 .


### in the event of unforeseen and duly justified grounds of urgency requiring immediate response , such as a serious disturbance in the economy or significant circumstances seriously affecting the economic or social conditions in a member state going beyond its control , upon request of a member state , the commission should be able to adopt special measures , for a limited proportion of the annual work programme , in accordance with objectives and actions eligible under the programme to support the national authorities in addressing the urgent needs . ### in the event of unforeseen and duly justified grounds of urgency requiring immediate response , such as a serious disturbance in the economy or significant circumstances seriously affecting the economic or social conditions in a member state going beyond its control , upon request of a member state wishing to receive support , the commission should be able to adopt special measures , for a limited proportion of the annual work programme and for a limited period of time of up to six months , in accordance with objectives and actions eligible under the programme to support the national authorities in addressing the urgent needs . the european parliament should be fully informed about the adoption of such special measures .


### in the event of unforeseen and duly justified grounds of urgency requiring immediate response , such as a serious disturbance in the economy or significant circumstances seriously affecting the economic or social conditions in a member state going beyond its control , upon request of a member state , the commission should be able to adopt special measures , for a limited proportion of the annual work programme , in accordance with objectives and actions eligible under the programme to support the national authorities in addressing the urgent needs . ### in the event of unforeseen and duly justified grounds of urgency requiring immediate response , such as a serious disturbance in the economy or significant circumstances seriously affecting the economic or social conditions in a member state , upon request of a member state , the commission and the member state should be able to agree on the adoption of special measures , for a limited proportion of the annual work programme , in accordance with objectives and actions eligible under the programme to support the national authorities in addressing the urgent needs .


### in the event of unforeseen and duly justified grounds of urgency requiring immediate response , such as a serious disturbance in the economy or significant circumstances seriously affecting the economic or social conditions in a member state going beyond its control , upon request of a member state , the commission should be able to adopt special measures , for a limited proportion of the annual work programme , in accordance with objectives and actions eligible under the programme to support the national authorities in addressing the urgent needs . ### in the event of unforeseen and duly justified grounds of urgency requiring immediate response , such as a serious disturbance in the economy or significant circumstances seriously affecting the economic or social conditions in a member state going beyond its control , upon request of a member state , the commission should , within a reasonable timeframe , be able to adopt special measures , for a limited proportion of the annual work programme , in accordance with objectives and actions eligible under the programme to support the national authorities in addressing the urgent needs .


### the programme shall finance actions with european added value . to that effect , the commission shall ensure that actions selected for funding are likely to produce results with european added value and shall monitor whether european added value is actually achieved . ### the programme shall finance actions and activities with european added value . to that effect , the commission shall ensure that actions and activities selected for funding are likely to produce results with european added value and shall monitor whether european added value is achieved .


### their complementarity and synergy with other union programmes and policies at national , union and international level ; ### their complementarity and synergy with other union programmes and policies at national , regional and union level as set out in the common strategic framework established under regulation no 1303 / 2013 , as well as at international level where appropriate ;


### their contribution to the consistent and coherent implementation of union law ; ### their contribution to the consistent and coherent implementation of union law and policies ;


### the general objective of the programme shall be to contribute to institutional , administrative and structural reforms in the member states by providing support to national authorities for measures aimed at reforming institutions , governance , administration , economic and social sectors in response to economic and social challenges with a view to enhancing competitiveness , growth , jobs , and investment , in particular in the context of economic governance processes , including through assistance for the efficient and effective use of the union funds . ### the general objective of the programme shall be to contribute to institutional , administrative and structural reforms in the member states by providing support to national authorities for measures aimed at reforming institutions , governance , administration , economic and social sectors in response to economic and social challenges with a view to enhancing economic , social and territorial cohesion , competitiveness , sustainable growth , jobs , and investment , in the context of economic governance processes , or through assistance for the efficient and effective use of the union funds , in particular the esi funds .


### to assist the initiatives of national authorities to design their reforms according to priorities , taking into account initial conditions and expected socio - economic impacts ; ### to assist the initiatives of national authorities to design their reforms according to priorities , taking into account initial conditions and expected socio - economic as well as territorial impacts ;


### to assist the initiatives of national authorities to design their reforms according to priorities , taking into account initial conditions and expected socio - economic impacts ; ### to assist the initiatives of national authorities to design their reforms in such a way that they promote growth and social well - being according to priorities , taking into account initial conditions and expected socio - economic impacts ;


### to support the national authorities to enhance their capacity to formulate , develop and implement reform policies and strategies and pursue an integrated approach ensuring consistency between goals and means across sectors ; ### to support the national authorities to enhance their capacity to formulate , develop and implement reform policies and strategies and pursue an integrated approach ensuring consistency between priorities at national level , goals and means across sectors ;


### expertise related to policy advice , policy change , and legislative , institutional , structural and administrative reforms ; ### expertise related to policy advice , policy change , and legislative , institutional , structural and administrative reforms at national and regional level ;


### institutional , administrative or sectoral capacity building and related supporting actions , notably : ### institutional , administrative or sectoral capacity building and related supporting actions , at all governance levels , notably :


### any other activity in support of the general and specific objectives set out in articles 4 and 5 . ### any other relevant activity in support of the general and specific objectives set out in articles 4 and 5 .


### communication projects : learning , cooperation , awareness raising , dissemination activities , and exchange of good practices ; organisation of awareness - raising and information campaigns , media campaigns and events , including corporate communication ; ### communication projects : learning , cooperation , awareness raising , dissemination activities , and exchange of good practices ; organisation of specific awareness - raising and information campaigns for various sections of the public , media campaigns and events , including corporate communication and communication through social networks ;


### a member state wishing to receive support under the programme shall submit a request for support to the commission , identifying the policy areas and the priorities for support within the scope of the programme as set out in article 5 . this request shall be submitted at the latest by 31 october of each calendar year . ### a member state wishing to receive support under the programme shall submit a request for support to the commission , identifying the policy areas and the priorities for support within the scope of the programme as set out in article 5 . this request shall be submitted by 31 october of each calendar year at the latest . the commission shall prepare guidance on the main elements to be featured in a request for support to be submitted by the member state .


### taking into account the principles of transparency , equal treatment and sound financial management , further to a dialogue with the member state , including in the context of the european semester , the commission shall analyse the request for support referred to in paragraph 1 based on the urgency , breadth and depth of the problems identified , support needs in respect of the policy areas concerned , analysis of socioeconomic indicators and general administrative capacity of the member state . taking into account the existing actions and measures financed by union funds or other union programmes , the commission in close cooperation with the member state concerned shall identify the priority areas for support , the scope of the support measures to be provided and the global financial contribution for such support . ### taking into account the principles of transparency , equal treatment and sound financial management , further to a dialogue with the member state , including in the context of the european semester , the commission shall analyse the request for support referred to in paragraph 1 of this article based on the urgency , breadth and depth of the problems identified , support needs in respect of the policy areas concerned , analysis of socioeconomic indicators and general administrative capacity of the member state . based on this analysis and taking into account the existing actions and activities financed by union funds or other union programmes , the commission shall come to an agreement with the member state concerned on the priority areas for support , the objectives , an indicative timeline , the scope of the support to be provided and the estimated global financial contribution for such support in a cooperation and support plan .


### the implementation of reforms in the context of economic governance processes , in particular of the relevant country specific recommendations issued in the context of the european semester or of relevant actions related to the implementation of union law ; ### the implementation of reforms in the context of economic governance processes , in particular of the relevant country specific recommendations issued in the context of the european semester or of relevant actions related to the implementation of union law ; the main objectives of the reforms shall be growth , stimulation of investment , the creation of good jobs and the promotion of high - quality education and social welfare , equal opportunities and action against poverty ;


### the beneficiary member state , in coordination with the commission , may enter into partnership with one or more other member states which shall act as reform partners in respect of specific areas of reform . a reform partner shall , in coordination with the commission , help formulate strategy , reform roadmaps , design high - quality assistance or oversee implementation of strategy and projects . ### the beneficiary member state , in coordination with the commission , may enter into partnership with one or more other member states which shall act as reform partners in respect of specific areas of reform . a reform partner shall , in coordination with the beneficiary member state and the commission , help formulate strategy , reform roadmaps , design high - quality assistance or oversee implementation of strategy and projects .


### organisation of support ### organisation of support and reform partners


### the beneficiary member state , in coordination with the commission , may enter into partnership with one or more other member states which shall act as reform partners in respect of specific areas of reform . a reform partner shall , in coordination with the commission , help formulate strategy , reform roadmaps , design high - quality assistance or oversee implementation of strategy and projects . ### the beneficiary member state , in coordination with the commission , may enter into partnership with one or more other member states which shall act as reform partners in respect of specific areas of reform . a reform partner shall , in coordination with the commission and on the basis of a mutual understanding with the beneficiary member state and the commission , help formulate strategy , reform roadmaps , design high - quality assistance or oversee implementation of strategy and projects . the commission shall keep the european parliament fully informed about the participation of a reform partner and its role in the cooperation and support plan .


### the beneficiary member state , in coordination with the commission , may enter into partnership with one or more other member states which shall act as reform partners in respect of specific areas of reform . a reform partner shall , in coordination with the commission , help formulate strategy , reform roadmaps , design high - quality assistance or oversee implementation of strategy and projects . ### the beneficiary member state , in coordination with the commission , may enter into partnership with one or more other member states which shall act as reform partners in respect of specific areas of reform on the basis of a reciprocal agreement . a reform partner shall , in coordination with the commission and the beneficiary member state , help formulate strategy , reform roadmaps , design high - quality assistance or oversee implementation of strategy and projects .


### the financial envelope for the implementation of the programme shall be up to eur 142 800 000 . ### the financial envelope for the implementation of the programme shall be up to eur 142 800 000 in current prices .


### reimbursement of costs incurred by external experts ; ### reimbursement of costs incurred by external experts , including experts of the national , regional or local authorities of member states providing support ;


### to ensure timely availability of resources , the annual work programme may indicate that in the event of unforeseen and duly justified grounds of urgency requiring an immediate response , including a serious disturbance in the economy or significant circumstances seriously affecting the economic or social conditions in a member state going beyond its control , the commission may , on request by a member state , adopt special measures in accordance with the objectives and actions defined in this regulation to support the national authorities in addressing urgent needs . such special measures may account only for a limited proportion of the annual work programme and shall not be subject to the conditions set out in article 7 . ### to ensure timely availability of resources , the annual work programme may indicate that in the event of unforeseen and duly justified grounds of urgency requiring an immediate response , including a serious disturbance in the economy or significant circumstances seriously affecting the economic or social conditions in a member state going beyond its control , the commission may , on request by a member state wishing to receive support , adopt special measures in accordance with the objectives and actions defined in this regulation to support the national authorities in addressing urgent needs . such special measures are interim in nature , may account only for a limited proportion of the annual work programme and shall not be subject to the conditions set out in article 7 . the special measures shall end within six months and may be replaced by support in accordance with the conditions set out in article 7 . the commission shall keep the european parliament fully informed on special measures adopted on the basis of this article .


### grants may be awarded to member states ' national authorities , the european investment bank group , international organisations , public and / or private bodies and entities legally established in any of the following : ### grants may be awarded to member states ' national authorities , the european investment bank group , international organisations , and public bodies and entities legally established in any of the following :


### ensure complementarity and synergy between different instruments at union and national levels , in particular in relation to measures financed by union funds , both in the planning phase and during implementation ; ### ensure complementarity and synergy between different instruments at union and national levels , in particular in relation to measures financed by union funds , both in the planning phase and during implementation , in particular in relation to the esi funds ;


### ensure close cooperation between those responsible for implementation at union and national level to deliver coherent and streamlined support actions . ### ensure close cooperation between those responsible for implementation at union , national and regional level to deliver coherent and streamlined support actions . the commission shall make its best effort to ensure complementarity and synergies with support provided by other relevant international organisations .


### the commission shall take appropriate measures ensuring that , when actions financed under this regulation are implemented , the financial interests of the union are protected by the application of preventive measures against fraud , corruption and any other illegal activities , by effective checks and , if irregularities are detected , by the recovery of the amounts wrongly paid and , where appropriate , by effective , proportionate and deterrent penalties . ### the commission shall take appropriate measures ensuring that , when actions financed under this regulation are implemented , the financial interests of the union are protected by the application of preventive measures against fraud , corruption and any other illegal activities , by effective checks and , if irregularities are detected , by the recovery of the amounts unduly paid or incorrectly used and , where appropriate , by effective , proportionate , administrative and financial penalties in accordance with regulation no 966 / 2012 .


### the commission shall monitor the implementation of the actions financed by the programme and measure the achievement of the specific objectives referred to in article 5 in accordance with indicators set out in the annex . ### the commission shall monitor the implementation of the actions financed by the programme and measure the achievement of the general objective in article 4 and the specific objectives referred to in article 5 in accordance with indicators set out in the annex .


### the commission shall provide the european parliament and the council with an interim evaluation report , by mid of 2019 , at the latest , and an ex - post evaluation report by end of december 2021 . ### the commission shall report annually to the european parliament and the council on the implementation of the programme and shall provide an ex - post evaluation report by end of december 2021 . the annual report shall include information on the achievement of the programme ' s objectives , a justification on any decision to grant or to refuse support to member states , the efficiency of the use of resources , the programme’s european added value and an assessment on whether funding in areas covered by the programme needs to be adapted or extended after 2020 . it shall also address the continued relevance of all objectives and actions . the ex - post evaluation report shall include information on the longer - term impact of the programme .


### a delegated act adopted pursuant to the second subparagraph of article 15 shall enter into force only if no objection has been expressed either by the european parliament or by the council within a period of two months of the notification of that act to the european parliament and the council or if , before the expiry of that period , the european parliament and the council have both informed the commission that they will not object . that period shall be extended by two months at the initiative of the european parliament or of the council . ### a delegated act adopted pursuant to article 12 and the second subparagraph of 15 shall enter into force only if no objection has been expressed either by the european parliament or by the council within a period of two months of the notification of that act to the european parliament and the council or if , before the expiry of that period , the european parliament and the council have both informed the commission that they will not object . that period shall be extended by two months at the initiative of the european parliament or of the council .


### in the european defence action plan , adopted on 30 november 2016 , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing defence capabilities to respond to security challenges , as well as to foster a competitive and innovative european defence industry . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund would support cooperation during the whole cycle of defence product and technology development . ### despite the&#160 ; union being the second largest global defence spender , the lack of economies of scale in the defence industry translates into a reduced quality and quantity of the defence output . 80% of defence procurement in europe is still done nationally . an integrated european defence market must cater for all the different security needs of all member states simultaneously and affordably . in the european defence action plan , adopted on 30 november 2016 , the commission committed to complement , leverage and consolidate collaborative efforts by member states in developing defence capabilities to respond to security challenges , as well as to foster a competitive and innovative european defence industry . it proposed in particular to launch a european defence fund to support investment in joint research and the joint development of defence equipment and technologies . the fund would support cooperation during the whole cycle of defence product and technology development .


### to better exploit economies of scale in the defence industry , the programme should support the cooperation between undertakings in the development of defence products and technologies . ### to better exploit economies of scale in the defence industry , the programme should support the cooperation between undertakings in the research and development of defence products and technologies , and a framework should be created that would also make it possible to quantify the gains and technological progress made in the field of defence in certain member states for the benefit of the entire european union .


### to better exploit economies of scale in the defence industry , the programme should support the cooperation between undertakings in the development of defence products and technologies . ### to better exploit economies of scale in the defence industry and reinforce the single market for defence , the programme should support the cooperation between undertakings in the development of defence products and technologies .


### cross - border collaboration in the development of defence products and technologies has often been hampered by the difficulty to agree on common technical specifications . the absence or limited level of common technical specifications have led to increased complexity , delays and inflated costs in the development phase . the agreement on common technical specifications should be a condition in order to benefit from the union ' s support under this programme . actions aiming at supporting the creation of a common definition of technical specifications should also be eligible for support under the programme . ### cross - border collaboration in the development of defence products and technologies has often been hampered by the difficulty to agree on common technical specifications and / or standards . the absence or limited level of common technical specifications and / or standards have led to increased complexity , delays and inflated costs in the development phase . the agreement on common technical specifications and / or standards should be a condition in order to benefit from the union ' s support under this programme . actions aiming at supporting the creation of a common definition of technical specifications and / or standards should also be eligible for support under the programme .


### the commission should establish a multiannual work programme in line with the objectives of the programme . the commission should be assisted in the establishment of the work programme by a committee of member states . in light of the union policy on small and medium enterprises as key to ensuring economic growth , innovation , job creation , and social integration in the union and the fact that the supported actions will typically require trans - national collaboration , it is of importance that the work programme will reflect and enable such cross - border participation of smes and that therefore a proportion of the overall budget will benefit such action . ### the commission should establish a multiannual work programme in line with the objectives of the programme . the commission should be assisted in the establishment of the work programme by a committee of member states . in light of the union policy on small and medium enterprises as key to ensuring economic growth , innovation , job creation , and social integration in the union and the fact that the supported actions will typically require trans - national collaboration , it is of importance that the work programme will reflect and enable such cross - border participation of smes and that therefore a proportion of at least 10% of the overall budget will benefit such action .


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


### to support and leverage the cooperation between undertakings , including small and medium - sized enterprises , in the development of technologies or products in line with defence capability priorities commonly agreed by member states within the union ; ### to support and leverage the cooperation between undertakings , including small and medium - sized enterprises , in the research and development of technologies or products in line with defence capability priorities commonly agreed by member states within the union ;


### the design of a defence product , tangible or intangible component or technology as well as the technical specifications on which such design has been developed ; ### the design of a defence product or a product supporting the undertakings ' aim to convert from military to civil production , tangible or intangible component or technology as well as the technical specifications on which such design has been developed ;


### the action shall be undertaken in a cooperation of at least three undertakings which are established in at least two different member states . the undertakings which are beneficiaries shall not effectively be controlled , directly or indirectly , by the same entity or shall not control each other . ### the action shall be undertaken in a cooperation of at least four undertakings which are established in at least three different member states . the undertakings which are beneficiaries shall not effectively be controlled , directly or indirectly , by the same entity or shall not control each other . this paragraph shall not apply to actions in support of conversion from military to civil production .


### for actions described in points to of article 6 , the contribution to the competitiveness of the european defence industry through the demonstration by the beneficiaries that member states have committed to jointly produce and procure the final product or technology in a coordinated way , including joint procurement where applicable . ### for actions described in points to of article 6 , the contribution to the competitiveness of the european defence industry and to the reinforcement of the european single market for defence through the demonstration by the beneficiaries that member states have committed to jointly produce and procure the final product or technology in a coordinated way , including joint procurement where applicable . in order to provide a more flexible , open and competitive procurement suitable for defence equipment and markets , it is imperative to better implement directive 2009 / 81 / ec on defence and security procurement ; the use of exemptions foreseen in that directive shall be duly justified ;


### the commission shall not own the products or technologies resulting from the action nor shall it have any ipr claim pertaining to the action . ### the union institutions , bodies , offices or agencies enjoy , for the duly justified purpose of developing , implementing and monitoring union policies or programmes , access rights solely to the results of a beneficiary that has received union funding . such access rights shall be limited to non - commercial and non - competitive use . such access shall be granted on a royalty - free basis . with regard to results which are generated by beneficiaries that have received funding under the programme , the agreement between the commission and the beneficiary shall provide that the commission may object to transfers of ownership or to grants of a licence to third parties established in a third country not associated with the programme , if it considers that the grant or transfer is inconsistent with ethical principles of the common position on arms exports or security considerations . where appropriate , the agreement between the commission and the beneficiary shall provide that the commission is to be notified at least six months in advance of any such transfer of ownership or grant of a licence . non - compliance with these provisions shall be subject to the measures stipulated in regulation no 966 / 2012 and regulation no 1268 / 2012 .


### the commission , by means of an implementing act , shall adopt multiannual a work programme for the duration of the programme . this implementing act shall be adopted in accordance with the examination procedure referred to in in article 16 . this work programme shall be in line with the objectives set out in article 2 ; ### the commission , shall be empowered to adopt delegated acts to establish a multiannual work programme for the duration of the programme . these delegated acts shall be adopted in accordance with the examination procedure referred to in in article 16 . this work programme shall be in line with the objectives set out in article 2 ;


### the commission shall regularly monitor the implementation of the programme and annually report on the progress made in accordance with article 38 of regulation 966 / 2012 . to this end , the commission shall put in place necessary monitoring arrangements . ### the commission shall regularly monitor and evaluate the implementation of the programme and annually report on the progress made in accordance with article 38 of regulation 966 / 2012 . to this end , the commission shall put in place necessary monitoring arrangements .


### to support greater efficiency and effectiveness of future union policy actions , the commission shall draw up a retrospective evaluation report and send it to the european parliament and to the council . the report - building on relevant consultations of member states and key stakeholders - shall notably assess the progress made towards the achievement of objectives set out in article 2 . it shall also analyse cross border participation of smes in projects implemented under the programme as well as the participation of smes to the global value chain . ### the commission shall draw up an annual monitoring report examining the efficiency and effectiveness of supported actions in terms of financial implementation , results , costs and , where possible , impact . to support greater efficiency and effectiveness of future union policy actions , the commission shall draw up an annual evaluation report and send it to the european parliament and to the council . the report - building on relevant consultations of member states and key stakeholders - shall notably assess the progress made towards the achievement of objectives set out in article 2 . it shall also analyse cross border participation of smes in projects implemented under the programme as well as the participation of smes to the global value chain .


### to support greater efficiency and effectiveness of future union policy actions , the commission shall draw up a retrospective evaluation report and send it to the european parliament and to the council . the report - building on relevant consultations of member states and key stakeholders - shall notably assess the progress made towards the achievement of objectives set out in article 2 . it shall also analyse cross border participation of smes in projects implemented under the programme as well as the participation of smes to the global value chain . ### to support greater efficiency and effectiveness of future union policy actions , the commission shall draw up an interim evaluation report after the first year of the programme and a retrospective evaluation report at the end of the programme . those reports shall be submitted to the european parliament and to the council within reasonable time . the reports - building on relevant consultations of member states and key stakeholders - shall notably assess the progress made towards the achievement of objectives set out in article 2 . it shall also analyse cross border participation of smes in projects implemented under the programme as well as the participation of smes to the global value chain .


### the substantial body of union legislation underpins the functioning of the internal market . this concerns , in particular , competitiveness , standardisation , consumer protection , market surveillance and food chain regulation but also rules concerning business , trade and financial transactions and the promotion of fair competition providing for a level playing field essential for the functioning of the internal market . ### the substantial body of union legislation underpins the functioning of the internal market . this concerns , in particular , competitiveness , standardisation , consumer protection , market surveillance and food chain regulation but also rules concerning business , trade and financial transactions and the promotion of fair competition providing for a level playing field essential for the functioning of the internal market with the aim of benefiting all eu citizens .


### the development , production and dissemination of european statistics are subject to a separate european statistical programme established by regulation no 99 / 2013 of the european parliament and of the council47 . in order to provide continuity of producing and disseminating european statistics , the new programme should also include activities covered by the european statistical programme by providing a framework for the development , production and dissemination of european statistics . the new programme should establish the financial framework for european statistics to provide high - quality , comparable and reliable statistics on europe in order to underpin the design , implementation , monitoring and evaluation of all union policies . _________________ 47 regulation no 99 / 2013 of the european parliament and of the council of 15 january 2013 on the european statistical programme 2013 - 17 . ### the development , production and dissemination of european statistics are subject to a separate european statistical programme established by regulation no 99 / 2013 of the european parliament and of the council47 . in order to provide continuity of producing and disseminating european statistics , the new programme should also include activities covered by the european statistical programme by providing a framework for the development , production and dissemination of european statistics . the new programme should establish the financial framework for european statistics to provide high - quality , comparable and reliable statistics on europe , as well as on pertinent issues that impact the internal market , such as those related to trade and migration , in order to underpin the design , implementation , monitoring and evaluation of all union policies . _________________ 47 regulation no 99 / 2013 of the european parliament and of the council of 15 january 2013 on the european statistical programme 2013 - 17 .


### the programme should support the design , implementation and enforcement of union legislation underpinning the proper functioning of the internal market . the programme should support the creation of the right conditions to empower all actors of the internal market : businesses , citizens including consumers , civil society and public authorities . to that end , the programme should aim to ensure the competitiveness of businesses , notably smes , but also supporting the enforcement of consumer protection and safety rules and by raising the awareness of businesses and individuals by providing them with the right tools , knowledge and competence to make informed decisions and strengthen their participation in union’s policy - making . furthermore , the programme should aim to enhance regulatory and administrative cooperation , notably through exchange of best practices , building of knowledge and competence bases , including the use of strategic public procurement . the programme should also aim to support the development of high - quality international standards that underpin the implementation of union legislation . this also includes standard setting in the field of financial reporting and audit , thereby contributing to the transparency and well - functioning of the union’s capital markets and to enhancing investor protection . the programme should support rulemaking and standard setting also by ensuring the broadest possible stakeholder involvement . the objective of the programme should also be to support the implementation and enforcement of union legislation providing for a high level of health for humans , animals and plants along the food chain and the improvement of the welfare of animals . ### the programme should support the design , implementation and enforcement of union legislation underpinning the proper functioning of the internal market . the programme should support the creation of the right conditions to empower all actors of the internal market : citizens including consumers , businesses , civil society and public authorities . to that end , the programme should aim to ensure the competitiveness of businesses based across all eu regions , notably smes , including in the tourism sector , and with that , supporting the enforcement of consumer protection and safety rules and by raising the awareness of businesses and individuals by providing them with the right tools , knowledge and competence to make informed decisions and strengthen their participation in union’s policy - making . furthermore , the programme should aim to enhance regulatory and administrative cooperation as well as capability , notably through exchange of best practices , building of knowledge and competence bases , including the use of strategic and transparent public procurement . the programme should also aim to support the development of high - quality international standards that underpin the implementation of union legislation . this also includes standard setting in the field of financial reporting and audit , thereby contributing to the transparency and well - functioning of the union’s capital markets and to enhancing investor protection . the programme should support rulemaking and standard setting also by ensuring the broadest possible stakeholder involvement , as well as through investment in market surveillance tools for member states . the objective of the programme should also be to support the implementation and enforcement of union legislation providing for a high level of health for humans , animals and plants along the food chain and the improvement of the welfare of animals .


### in order to meet the objectives of the programme and to facilitate the lives of citizens and businesses , high - quality user - centric public services need to be put in place . this implies that public administrations will need to start working in new ways , bring down silos between the different parts of their administrations , and to engage in the co - creation of these public services with citizens and businesses . moreover , the continuous and steady increase of cross - border activities in the internal market requires provision of up - to - date information on the rights of businesses and citizens , but also information explaining the administrative formalities . in addition , provision of legal advice and helping to solve problems which occur at cross national level becomes essential . furthermore , connecting national administrations in a simple and efficient manner as well as evaluating how the internal market works on the ground is necessary . the programme should therefore support the following existing internal market governance tools : the your europe portal which should be a backbone of the upcoming single digital gateway , your europe advice , solvit , the internal market information system and the single market scoreboard in order to improve citizens ' daily lives and businesses ' ability to trade across borders . ### in order to meet the objectives of the programme and to facilitate the lives of citizens and businesses , high - quality user - centric public services need to be put in place . this implies that public administrations will need to start working in new ways , bring down silos between the different parts of their administrations , and to engage in the co - creation of these public services with citizens and businesses . moreover , the continuous and steady increase of cross - border activities in the internal market requires provision of up - to - date information on the rights of citizens and businesses , but also information explaining the administrative formalities . in addition , provision of legal advice and helping to solve problems which occur at cross national level becomes essential . furthermore , connecting national administrations in a simple and efficient manner as well as evaluating how the internal market works on the ground is necessary . the programme should therefore support the following existing internal market governance tools : the your europe portal which should be a backbone of the upcoming single digital gateway , your europe advice , solvit , the internal market information system and the single market scoreboard in order to improve citizens ' daily lives and businesses ' ability to trade across borders .