### the movement of goods is accompanied by a large amount of information which is still exchanged in paper format , among businesses and between businesses and the public authorities . the use of paper documents represents a significant administrative burden for logistic operators . ### the movement of goods is accompanied by a large amount of information which is still exchanged in paper format , among businesses and between businesses and the public authorities . the use of paper documents represents an additional cost and a significant administrative burden for logistic operators , especially smes .


### before adopting a delegated act , the commission shall consult experts designated by each member state in accordance with the principles laid down in the interinstitutional agreement on better law - making of 13 april 2016 . ### delegated acts adopted in accordance with article 2 shall apply from one year after their entry into force .


### data is stored and accessible for an appropriate period of time , in accordance with the relevant regulatory information requirements ; ### data is stored and accessible for four years , in accordance with the relevant regulatory information requirements ;


### if pepp providers offer alternative investment options , at least one of them shall offer a cost - effective investment option to pepp savers . ### if pepp providers offer alternative investment options , all of them shall offer a cost - effective investment option to pepp savers .


### information on the identity of the applicant and its current and previous financial experience and history ; ### information on the identity of the applicant including full name , location , number of entry in the national commercial register , its share capital and its current and previous financial experience and history ;


### before taking a decision on the application , eiopa shall consult the competent authority of the applicant . ### before taking a decision on the application , eiopa shall consult the competent national authority of the applicant . the competent national authority may submit an objection regarding an applicant .


### eiopa shall monitor pension schemes established or distributed in the territory of the union to verify that they do not use the designation ‘ pepp’ or suggest that they are a pepp unless they are authorised under , and comply with , this regulation . ### eiopa shall monitor pension products established or distributed in the territory of the union to verify that they do not use the designation ‘ pepp’ or suggest that they are a pepp unless they are authorised under this regulation .


### the total fees and charges applied by the transferring pepp provider to the pepp saver for the closure of the pepp account held with it shall be limited to no more than 1 , 5 % of the positive balance to be transferred to the receiving pepp provider . ### switching pepp provider no more frequently than once every five years shall be free of charge for the retail investor . in case of more frequent switching , the total fees and charges applied by the transferring pepp provider to the pepp saver for the closure of the pepp account held with it shall be limited to no more than 0 , 5 % of the positive balance to be transferred to the receiving pepp provider .


### this regulation lays down uniform rules on the authorisation , manufacturing , distribution and supervision of personal pension products that are distributed in the union under the designation “pan - european personal pension product” or “pepp” . ### this regulation lays down uniform rules on the authorisation , its withdrawal , manufacturing , distribution and supervision of personal pension products that are distributed in the union under the designation “pan - european personal pension product” or “pepp” .


### information about the investment strategies , the risk profile and other characteristics of the pepp ; ### information about the investment strategies , the risk profile and other characteristics of the pepp , including the role played by environmental , social and governance factors in the investment process , as well as , the long - term impact and the externalities of the investment decision ;


### the default investment option should allow the pepp saver to recoup the invested capital . the pepp providers could in addition include an inflation indexation mechanism to at least partly cover inflation . ### the default investment option should allow the pepp saver to recoup the real invested capital before the accumulated fees and costs are deducted and after accounting for inflation .


### pepp providers should be allowed to make available to pepp savers a wide range of decumulation options . this approach would achieve the goal of enhanced take - up of the pepp through increased flexibility and choice for pepp savers . it would allow providers to design their pepps in the most cost - effective way . it is coherent with other eu policies and politically feasible , as it preserves enough flexibility for member states to decide about which decumulation options they wish to encourage . ### pepp providers should be allowed to make available to pepp savers a sufficient range of decumulation options . this approach would achieve the goal of enhanced take - up of the pepp through increased flexibility and choice for pepp savers . it is coherent with other eu policies and politically feasible , as it preserves enough flexibility for member states to decide about which decumulation options they wish to encourage .


### potential pepp savers shall also be provided with information on the past performance of investments related to the pepp scheme covering a minimum of five years , or , where the scheme has been operating for fewer than five years , covering all the years that the scheme has been operating , as well as with information on the structure of costs borne by pepp savers and pepp beneficiaries . ### potential pepp savers shall also be provided with information on the past performance of investments related to the pepp scheme covering a minimum of ten years , or , where the scheme has been operating for fewer than ten years , covering all the years that the scheme has been operating , as well as with information on the structure of costs borne by pepp savers and pepp beneficiaries free of charge .


### taking into account the nature of the pension scheme established and the administrative burden involved , pepp providers and distributors should provide clear and adequate information to potential pepp savers and pepp beneficiaries to support their decision - making about their retirement . for the same reason , pepp providers and distributors should equally ensure a high level of transparency throughout the various phases of a scheme comprising pre - enrolment , membership and post - retirement . in particular , information concerning accrued pension entitlements , projected levels of retirement benefits , risks and guarantees , and costs should be given . where projected levels of retirement benefits are based on economic scenarios , that information should also include an unfavourable scenario , which should be extreme but plausible . ### taking into account the nature of the pension scheme established and the administrative burden involved , pepp providers and distributors should provide clear and adequate information to potential pepp savers and pepp beneficiaries to support their decision - making about their retirement . for the same reason , pepp providers and distributors should equally ensure a high level of transparency throughout the various phases of a scheme comprising pre - enrolment , membership and post - retirement . in particular , information concerning accrued pension entitlements , projected levels of retirement benefits , risks and guarantees , including risks relating to environmental , social and governance factors and costs should be given . where projected levels of retirement benefits are based on economic scenarios , that information should also include an unfavourable scenario , which should be extreme but plausible .


### the pepp saver may switch pepp providers no more frequently than once every five years after conclusion of the pepp contract . ### the pepp saver may switch pepp providers free of charge once every five years after conclusion of the pepp contract . pepp providers and pepp savers may agree on more frequent switching . the terms for switching shall be written in the pepp contract .


### personal details of the pepp saver , name of the pepp provider , information on pension benefit projections , information on accrued entitlements or accumulated capital , contributions paid by the pepp saver or any third party and information on the funding level of the pepp scheme , for which article 39 , paragraphs 1 , , , , and of directive 2016 / 2341 / eu shall be applied , where the ' member ' means the pepp saver , the ' iorp ' means the pepp provider , the ' pension scheme ' means the pepp scheme and ' the sponsoring undertaking ' means any third party for the purposes of this regulation ; ### personal details of the pepp saver , name of the pepp provider , information on pension benefit projections , information on accrued entitlements or accumulated capital by compartment , contributions paid by the pepp saver or any third party and information on the funding level of the pepp scheme , for which article 39 , paragraphs 1 , , , , and of directive 2016 / 2341 / eu shall be applied , where the ' member ' means the pepp saver , the ' iorp ' means the pepp provider , the ' pension scheme ' means the pepp scheme and ' the sponsoring undertaking ' means any third party for the purposes of this regulation ;


### transparency of costs and fees is essential to develop pepp savers’ trust and allow them to make informed choices . accordingly , the use of non - transparent pricing methods should be prohibited . ### transparency and fairness of costs and fees are essential to develop pepp savers’ trust and allow them to make informed choices . accordingly , the use of non - transparent pricing methods should be prohibited .


### not later than three months following the reception of the request under paragraph 2 , the pepp provider shall provide the pepp saver with complete information free of charge and advice under chapter iv , sections ii and iii regarding the conditions applicable to the new compartment . ### not later than one month following the reception of the request under paragraph 2 , the pepp provider shall provide the pepp saver with complete information and advice free of charge under chapter iv , sections ii and iii regarding the conditions applicable to the new compartment .


### where a pepp provider or distributor referred to in article 19 of this regulation informs the pepp saver that it gives its advice on an independent basis , it shall give that advice on the basis of an analysis of a sufficiently large number of personal pension products available on the market to enable it to make a personal recommendation , in accordance with professional criteria , regarding which the pepp - related contract would be adequate to meet the pepp saver’s needs . such advice must not be limited to pepp - related contracts provided by the pepp provider or distributor itself , by entities having close links with the pepp provider or distributor or by other entities with which the pepp provider or distributor has close legal or economic relationships , including contractual relationships , as to pose a risk of impairing the independent basis of the advice provided . ### where a pepp provider or distributor referred to in article 19 of this regulation informs the pepp saver that it gives its advice on an independent basis , it shall give that advice on the basis of an analysis of a sufficiently large number of personal pension products available on the market to enable it to make a personal recommendation , in accordance with professional criteria , regarding which the pepp - related contract would be most adequate to meet the pepp saver’s needs . such advice must not be limited to pepp - related contracts provided by the pepp provider or distributor itself , by entities having close links with the pepp provider or distributor or by other entities with which the pepp provider or distributor has close legal or economic relationships , including contractual relationships , as to pose a risk of impairing the independent basis of the advice provided .


### eiopa may ask the competent authority of the financial undertaking applying for the authorisation for clarification and information as regards the documentation referred to in paragraph 2 . the competent authority shall reply to the request within 10 working days from the date on which it has received the request submitted by eiopa . ### eiopa shall consult the national competent authority of the applicant when it receives an application for authorisation of a pepp . eiopa may ask the competent authority of the financial undertaking applying for the authorisation for clarification and information as regards the documentation referred to in paragraph 2 . the competent authority shall reply to the request within 10 working days from the date on which it has received the request submitted by eiopa . the competent national authority may object the authorisation of an application .


### pepp providers should have access to the whole union market with one single product authorisation issued by the european insurance and occupational pensions authority , on the basis of a single set of rules . ### pepp providers should have access to the whole union market with one single product authorisation issued by the european insurance and occupational pensions authority , on the basis of a single set of rules and in cooperation with national competent authorities .


### three years at the latest after the entry into application of this regulation , each pepp shall offer national compartments for all member states upon request addressed to the pepp provider . ### five years at the latest after the entry into application of this regulation , each pepp shall offer national compartments for all member states upon request addressed to the pepp provider .


### without prejudice to the deadline under article 13 , immediately after being informed about the pepp saver ' s intention to exercise his right of mobility between member states , the pepp provider shall inform the pepp saver about the possibility to open a new compartment within the pepp saver ' s individual account and about the deadline within which such compartment could be opened . ### without prejudice to the deadline under article 13 , immediately after being informed about the pepp saver ' s intention to exercise his right of mobility between member states , the pepp provider shall inform the pepp saver about the possibility to open , free of charge , a new compartment within the pepp saver ' s individual account and about the deadline within which such compartment could be opened .


### in addition to the pepp key information document , pepp providers and pepp distributors shall provide potential pepp savers with references to any reports on the solvency and financial condition of the pepp provider , allowing them easy access to this information . ### in addition to the pepp key information document , pepp providers and pepp distributors shall provide potential pepp savers with references to any reports on the solvency and financial condition of the pepp provider , allowing them easy access to this information free of charge .


### all contractual arrangements for providing the portability service shall be notified by the pepp provider to the respective national authority exercising prudential supervision over it . ### all contractual arrangements for providing the portability service shall be notified by the pepp provider to eiopa .


### information on how the investment policy takes into account environmental , social and governance factors . ### information on how the investment policy takes into account environmental , social and governance factors , including the role they play in the investment process as well as the long - term impact and the externalities of the investment decisions .


### the total fees and charges applied by the transferring pepp provider to the pepp saver for the closure of the pepp account held with it shall be limited to no more than 1 , 5 % of the positive balance to be transferred to the receiving pepp provider . ### the total fees and charges applied by the transferring pepp provider to the pepp saver for the closure of the pepp account held with it shall be limited to the effectively incurred costs , but in any case no more than 0 , 5 % of the positive balance to be transferred to the receiving pepp provider .


### a breakdown of the costs deducted by the pepp provider at least over the last 12 months , indicating the costs of administration , costs of safekeeping of assets , costs related to portfolio transactions and other costs , as well as an estimation of the impact of the costs on the final benefits . ### the total costs charged to the retail investor over the past 12 months through the total expenses ratio , a breakdown of the costs deducted by the pepp provider over the last 12 months , indicating the costs of administration , costs of safekeeping of assets , costs related to portfolio transactions and other costs , as well as an estimation of the impact of the costs on the final benefits .


### in order to allow a smooth transition for pepp providers , the obligation of providing pepps comprising compartments for each member state will apply three years after the entry into force of this regulation . however , upon launching a pepp , the provider should provide information on which national compartments are immediately available , in order to avoid a possible misleading of consumers . ### in order to allow a smooth transition for pepp providers , the obligation of providing pepps comprising compartments for each member state or creating partnerships among authorised pepp providers to comply with this requirement will apply five years after the entry into force of this regulation . however , upon launching a pepp , the provider should provide information on which national compartments are immediately available , in order to avoid a possible misleading of consumers . moreover , when portability within a pepp from a provider or its partners is not yet available , the pepp saver should be allowed to switch free of charge to ensure portability .


### in order to allow a smooth transition for pepp providers , the obligation of providing pepps comprising compartments for each member state will apply three years after the entry into force of this regulation . however , upon launching a pepp , the provider should provide information on which national compartments are immediately available , in order to avoid a possible misleading of consumers . ### in order to allow a smooth transition for pepp providers , the obligation of providing pepps comprising compartments for each member state will apply five years after the entry into force of this regulation . pepp providers should be able to enter into compartment partnerships if they are to fulfil this requirement . however , upon launching a pepp , the provider should provide information on which national compartments are immediately available , in order to avoid a possible misleading of consumers .


### the default investment option should allow the pepp saver to recoup the invested capital . the pepp providers could in addition include an inflation indexation mechanism to at least partly cover inflation . ### the default investment option should allow the pepp saver to recoup the real invested capital before the accumulated fees and costs are deducted and after accounting for inflation .


### ‘ capital’ means aggregate capital contributions and uncalled committed capital , calculated on the basis of amounts investible after deduction of all fees , charges and expenses that are directly or indirectly borne by investors ; ### ‘ capital’ means aggregate capital contributions and uncalled committed capital , calculated on the basis of amounts investible before deduction of all fees , charges and expenses that are directly or indirectly borne by investors ;


### environmental , social and governance factors , as referred to in the united nations - supported principles for responsible investment , are important for the investment policy and risk management systems of pepp providers . pepp providers should be encouraged to consider such factors in investment decisions and to take into account how they form part of their risk management system . ### environmental , social and governance factors , as referred to in the united nations - supported principles for responsible investment , are important for the investment policy and risk management systems of pepp providers . pepp providers should be encouraged to consider such factors in investment decisions and to take into account how they form part of their risk management system . this risk assessment should also be made available to eiopa and to the competent authorities as well as to pepp savers . where relevant , it should also include risks related to climate change , use of resources , the environment , social risks , and risks related to the depreciation of assets due to regulatory change .


### the rule of law is one of the essential values upon which the union is founded . as recalled by article 2 of the treaty on european union , these values are common to the member states . ### the union is founded on the values of respect for human dignity , freedom , democracy , equality , the rule of law and respect for human rights , including the rights of persons belonging to minorities , enshrined in article 2 of the treaty on european union and in the criteria for union membership . as recalled by article 2 teu , those values are common to the member states .


### the identification of a generalised deficiency requires a qualitative assessment by the commission . that assessment could be based on the information from all available sources and recognized institutions , including judgments of the court of justice of the european union , reports of the court of auditors , and conclusions and recommendations of relevant international organisations and networks , such as the bodies of the council of europe and the european networks of supreme courts and councils for the judiciary . ### the identification of a generalised deficiency requires a thorough qualitative assessment by the commission . that assessment should be based on information from all relevant sources , taking into account the criteria used in the context of union accession negotiations , in particular the chapters of the acquis on judiciary and fundamental rights , on justice , freedom and security , on financial control and on taxation , as well as the guidelines used in the context of the cooperation and verification mechanism to track the progress of a member state , and from recognised institutions , including judgments of the court of justice of the european union , resolutions of the european parliament , reports of the court of auditors , and conclusions and recommendations of relevant international organisations , such as the bodies of the council of europe , including in particular the venice commission’s rule of law checklist , and of relevant international networks , such as the european networks of supreme courts and councils for the judiciary .


### the commission may take into account all relevant information , including decisions of the court of justice of the european union , reports of the court of auditors , and conclusions and recommendations of relevant international organisations . ### when assessing whether the conditions of article 3 are fulfilled , the commission shall take into account all relevant information , including decisions of the court of justice of the european union , resolutions of the european parliament , reports of the court of auditors , and conclusions and recommendations of relevant international organisations and networks , such as the bodies of the council of europe and the european networks of supreme courts and councils for the judiciary . the commission shall also take into account the criteria used in the context of union accession negotiations , in particular the chapters of the acquis on judiciary and fundamental rights , justice , freedom and security , financial control and taxation , as well as the guidelines used in the context of the cooperation and verification mechanism to track the progress of a member state .


### the commission shall take into account the information received and any observations made by the member state concerned , as well as the adequacy of any proposed remedial measures , when deciding whether or not to submit a proposal for a decision on the appropriate measures . ### the commission shall take into account the information received and any observations made by the member state concerned , as well as the adequacy of any proposed remedial measures , when deciding whether or not to adopt a decision on the appropriate measures . the commission shall decide on the follow - up to be given to the information received within an indicative time limit of one month , and in any case within a reasonable timeframe from the date of receipt of that information .


### in order to ensure uniform implementation of this regulation and in view of the importance of the financial effects of measures being imposed pursuant to this regulation , implementing powers should be conferred on the council which should act on the basis of a commission proposal . to facilitate the adoption of decisions which are required to protect the financial interests of the union , reversed qualified majority voting should be used . ### in order to ensure uniform implementation of this regulation and in view of the importance of the financial effects of measures being imposed pursuant to this regulation , implementing powers should be conferred on the commission .


### generalised deficiencies in the member states as regards the rule of law which affect in particular the proper functioning of public authorities and effective judicial review , can seriously harm the financial interests of the union . ### generalised deficiencies in the member states as regards the rule of law which affect in particular the proper functioning of public authorities and effective judicial review , can seriously harm the financial interests of the union . efficient investigations into such deficiencies , and the application of effective and proportionate measures when a generalised deficiency is established , are needed not only to secure the financial interests of the union , including the effective collection of revenue , but also to ensure public trust in the union and its institutions . only an independent judiciary that upholds the rule of law and legal certainty in all member states can ultimately guarantee that money from the eu budget is sufficiently protected .


### the commission shall assess the situation in the member state concerned . once the generalised deficiencies as regards the rule of law which on the grounds of which the appropriate measures were adopted cease to exist in full or in part , the commission shall submit to the council a proposal for a decision lifting those measures in full or in part . the procedure set out in paragraphs 2 , 4 , 5 , 6 and 7 of article 5 shall apply . ### the commission shall assess the situation in the member state concerned within an indicative time limit of one month , and in any case within a reasonable timeframe from the date of receipt of the formal notification . once the generalised deficiencies as regards the rule of law which on the grounds of which the appropriate measures were adopted cease to exist in full or in part , the commission shall , without delay , adopt a decision lifting those measures in full or in part . at the same time as it adopts its decision , the commission shall simultaneously submit to the european parliament and to the council a proposal to lift , in full or in part , the budgetary reserve referred to in article 5 . the procedure set out in paragraphs 2 , 4 , 5 , 6 , 6b and 6c of article 5 shall apply .


### the rule of law is a prerequisite for the protection of the other fundamental values on which the union is founded , such as freedom , democracy , equality and respect for human rights . respect for the rule of law is intrinsically linked to respect for democracy and for fundamental rights : there can be no democracy and respect for fundamental rights without respect for the rule of law and vice versa . ### the rule of law is a prerequisite for the protection of the other fundamental values on which the union is founded , such as freedom , democracy , equality and respect for human rights . respect for the rule of law is intrinsically linked to respect for democracy and for fundamental rights : there can be no democracy and respect for fundamental rights without respect for the rule of law and vice versa . coherence and consistency of internal and external democracy , rule of law and fundamental rights policy is key to the credibility of the union .


### respect for the rule of law is not only important for citizens of the union , but also for business initiatives , innovation , investment and the proper functioning of the internal market , which will flourish most where a solid legal and institutional framework is in place . ### respect for the rule of law is not only essential for citizens of the union , but also for business initiatives , innovation , investment and the proper functioning of the internal market , which will flourish sustainably only where a solid legal and institutional framework is in place .


### the possible measures to be adopted in the event of generalised deficiencies and the procedure to be followed to adopt them should be determined . those measures should include the suspension of payments and of commitments , a reduction of funding under existing commitments , and a prohibition to conclude new commitments with recipients . ### the measures to be adopted in the event of generalised deficiencies and the procedure to be followed to adopt them should be determined . those measures should include the suspension of payments and of commitments , a reduction of funding under existing commitments , and a prohibition to conclude new commitments with recipients .


### ' generalised deficiency as regards the rule of law ' means a widespread or recurrent practice or omission , or measure by public authorities which affects the rule of law ; ### ' generalised deficiency as regards the rule of law ' means a widespread or recurrent practice or omission , or measure by public authorities which affects the values of the respect for human dignity , freedom , democracy , equality , the rule of law and respect for human rights , including the rights of persons belonging to minorities ;


### the rule of law requires that all public powers act within the constraints set out by law , in accordance with the values of democracy and fundamental rights , and under the control of independent and impartial courts . it requires , in particular , that the principles of legality7 , legal certainty8 , prohibition of arbitrariness of the executive powers9 , separation of powers10 , and effective judicial protection by independent courts11 are respected12 . __________________ 7 judgment of the court of justice of 29 april 2004 , cas succhi di frutta , c - 496 / 99 pecli : eu : c : 2004 : 236 , paragraph 63 . 8 judgment of the court of justice of 12 november 1981 , amministrazione delle finanze dello stato v srl meridionale industria salumi and others ditta italo orlandi & figlio and ditta vincenzo divella v amministrazione delle finanze dello stato . joined cases 212 to 217 / 80 , ecli : eu : c : 1981 : 270 , paragraph 10 . 9 judgment of the court of justice of 21 september 1989 , hoechst , joined cases 46 / 87 and 227 / 88 , ecli : eu : c : 1989 : 337 , paragraph 19 . 10 judgment of the court of justice of 10 november 2016 , kovalkovas , c - 477 / 16 , ecli : eu : c : 2016 : 861 , paragraph 36 ; judgment of the court of justice of 10 november 2016 , ppu poltorak , c - 452 / 16 , ecli : eu : c : 2016 : 858 , paragraph 35 ; and judgment of the court of justice of 22 december 2010 , deb , c - 279 / 09 , ecli : eu : c : 2010 : 811 , paragraph 58 . 11 judgment of the court of justice of 27 february 2018 , associação sindical dos juízes portugueses v tribunal de contas c - 64 / 16 , ecli : eu : c : 2018 : 117 , paragraphs 31 , 40 - 41 . 12 communication from the commission ' a new eu framework to strengthen the rule of law ' , com 158 final , annex i . ### the rule of law requires that all public powers act within the constraints set out by law , in accordance with the values of democracy and fundamental rights , and under the control of independent and impartial courts . it requires , in particular , that the principles of legality7 , legal certainty8 , prohibition of arbitrariness of the executive powers9 , separation of powers10 , and effective judicial protection by independent courts11 are respected12 . those principles are reflected at the level of the venice commission of the council of europe and also on the basis of the relevant case law of the european court of human rights12a . __________________ 7 judgment of the court of justice of 29 april 2004 , cas succhi di frutta , c - 496 / 99 pecli : eu : c : 2004 : 236 , paragraph 63 . 8 judgment of the court of justice of 12 november 1981 , amministrazione delle finanze dello stato v srl meridionale industria salumi and others ditta italo orlandi & figlio and ditta vincenzo divella v amministrazione delle finanze dello stato . joined cases 212 to 217 / 80 , ecli : eu : c : 1981 : 270 , paragraph 10 . 9 judgment of the court of justice of 21 september 1989 , hoechst , joined cases 46 / 87 and 227 / 88 , ecli : eu : c : 1989 : 337 , paragraph 19 . 10 judgment of the court of justice of 10 november 2016 , kovalkovas , c - 477 / 16 , ecli : eu : c : 2016 : 861 , paragraph 36 ; judgment of the court of justice of 10 november 2016 , ppu poltorak , c - 452 / 16 , ecli : eu : c : 2016 : 858 , paragraph 35 ; and judgment of the court of justice of 22 december 2010 , deb , c - 279 / 09 , ecli : eu : c : 2010 : 811 , paragraph 58 . 11 judgment of the court of justice of 27 february 2018 , associação sindical dos juízes portugueses v tribunal de contas c - 64 / 16 , ecli : eu : c : 2018 : 117 , paragraphs 31 , 40 - 41 . 12 communication from the commission ' a new eu framework to strengthen the rule of law ' , com 158 final , annex i . 12a report of the venice commission of 4 april 2011 study no . 512 / 2009 003rev ) .


### before proposing the adoption of any measure pursuant to this regulation , the commission should inform the member state concerned why it considers that a generalised deficiency regarding the rule of law might exist in that member state . the member state should be allowed to submit its observations . the commission and the council should take those observations into account . ### before proposing the adoption of any measure pursuant to this regulation , the commission should inform the member state concerned why it considers that a generalised deficiency regarding the rule of law might exist in that member state . the commission should without delay inform the european parliament and the council about any such notification and its contents . the member state concerned should be allowed to submit its observations . the commission should take those observations into account .


### the member state concerned shall provide all required information and may make observations within a time limit specified by the commission , which shall not be less than 1 month from the date of notification of the finding . in its observations , the member state may propose the adoption of remedial measures . ### the member state concerned shall provide the required information and may make observations within a time limit specified by the commission , which shall not be less than one month nor more than three months from the date of notification of the finding . in its observations , the member state may propose the adoption of remedial measures .


### ' the rule of law ' refers to the union value enshrined in article 2 of the treaty on european union which includes the principles of legality , implying a transparent , accountable , democratic and pluralistic process for enacting laws ; legal certainty ; prohibition of arbitrariness of the executive powers ; effective judicial protection by independent courts , including of fundamental rights ; separation of powers and equality before the law ; ### ' the rule of law ' shall be understood having regard to the union values enshrined in article 2 of the treaty on european union and the copenhagen criteria ; it includes the principles of equality , implying a transparent , accountable , democratic and pluralistic process for enacting laws ; legal certainty ; prohibition of arbitrariness of the executive powers ; effective judicial protection by independent courts , including of fundamental rights ; separation of powers and equality before the law ;


### the rule of law requires that all public powers act within the constraints set out by law , in accordance with the values of democracy and fundamental rights , and under the control of independent and impartial courts . it requires , in particular , that the principles of legality7 , legal certainty8 , prohibition of arbitrariness of the executive powers9 , separation of powers10 , and effective judicial protection11 by independent courts are respected12 . _________________ 7 judgment of the court of justice of 29 april 2004 , cas succhi di frutta , c - 496 / 99 pecli : eu : c : 2004 : 236 , paragraph 63 . 8 judgment of the court of justice of 12 november 1981 , amministrazione delle finanze dello stato v srl meridionale industria salumi and others ditta italo orlandi & figlio and ditta vincenzo divella v amministrazione delle finanze dello stato . joined cases 212 to 217 / 80 , ecli : eu : c : 1981 : 270 , paragraph 10 . 9judgment of the court of justice of 21 september 1989 , hoechst , joined cases 46 / 87 and 227 / 88 , ecli : eu : c : 1989 : 337 , paragraph 19 . 10judgment of the court of justice of 10 november 2016 , kovalkovas , c - 477 / 16 , ecli : eu : c : 2016 : 861 , paragraph 36 ; judgment of the court of justice of 10 november 2016 , ppu poltorak , c - 452 / 16 , ecli : eu : c : 2016 : 858 , paragraph 35 ; and judgment of the court of justice of 22 december 2010 , deb , c - 279 / 09 , ecli : eu : c : 2010 : 811 , paragraph 58 . 11 judgment of the court of justice of 27 february 2018 , associação sindical dos juízes portugueses v tribunal de contas c - 64 / 16 , ecli : eu : c : 2018 : 117 , paragraphs 31 , 40 - 41 . 12 communication from the commission ' a new eu framework to strengthen the rule of law ' , com 158 final , annex i . ### the rule of law requires that all public powers act within the constraints set out by law , in accordance with the constitution of each member state , with the values of democracy and fundamental rights , and under the control of independent and impartial courts . it requires , in particular , that the principles of legality7 , legal certainty8 , prohibition of arbitrariness of the executive powers9 , separation of powers10 , and effective judicial protection11 by independent courts are respected12 . _________________ 7 judgment of the court of justice of 29 april 2004 , cas succhi di frutta , c - 496 / 99 pecli : eu : c : 2004 : 236 , paragraph 63 . 8 judgment of the court of justice of 12 november 1981 , amministrazione delle finanze dello stato v srl meridionale industria salumi and others ditta italo orlandi & figlio and ditta vincenzo divella v amministrazione delle finanze dello stato . joined cases 212 to 217 / 80 , ecli : eu : c : 1981 : 270 , paragraph 10 . 9judgment of the court of justice of 21 september 1989 , hoechst , joined cases 46 / 87 and 227 / 88 , ecli : eu : c : 1989 : 337 , paragraph 19 . 10judgment of the court of justice of 10 november 2016 , kovalkovas , c - 477 / 16 , ecli : eu : c : 2016 : 861 , paragraph 36 ; judgment of the court of justice of 10 november 2016 , ppu poltorak , c - 452 / 16 , ecli : eu : c : 2016 : 858 , paragraph 35 ; and judgment of the court of justice of 22 december 2010 , deb , c - 279 / 09 , ecli : eu : c : 2010 : 811 , paragraph 58 . 11 judgment of the court of justice of 27 february 2018 , associação sindical dos juízes portugueses v tribunal de contas c - 64 / 16 , ecli : eu : c : 2018 : 117 , paragraphs 31 , 40 - 41 . 12 communication from the commission ' a new eu framework to strengthen the rule of law ' , com 158 final , annex i .


### the council should lift measures with suspensive effect on a proposal from the commission , if the situation leading to the imposition of those measures has been sufficiently remedied . ### the commission should lift measures with suspensive effect and propose to the european parliament and the council to lift in full or in part the budgetary reserve of the measures in question , if the situation leading to the imposition of those measures has been sufficiently remedied .


### appropriate measures shall be taken where a generalised deficiency as regards the rule of law in a member state affects or risks affecting the principles of sound financial management or the protection of the financial interests of the union , in particular : ### appropriate balanced and proportionate measures shall be taken where a generalised deficiency as regards the rule of law in a member state under the constitution affects or risks affecting the principles of sound financial management or the protection of the financial interests of the union , in particular :


### the identification of a generalised deficiency requires a qualitative assessment by the commission . that assessment could be based on the information from all available sources and recognized institutions , including judgments of the court of justice of the european union , reports of the court of auditors , and conclusions and recommendations of relevant international organisations and networks , such as the bodies of the council of europe and the european networks of supreme courts and councils for the judiciary . ### the identification of a generalised deficiency requires a thorough qualitative assessment by the commission . that assessment should be based on information from all relevant sources , taking into account the criteria used in the context of union accession negotiations , in particular the chapters of the acquis on judiciary and fundamental rights , on justice , freedom and security , on financial control and on taxation , as well as the guidelines used in the context of the cooperation and verification mechanism to track the progress of a member state , and from recognised institutions , including judgments of the court of justice of the european union , resolutions of the european parliament , reports of the court of auditors , and conclusions and recommendations of relevant international organisations , such as the bodies of the council of europe , including in particular the venice commission’s rule of law checklist , and of relevant international networks , such as the european networks of supreme courts and councils for the judiciary .


### the proper functioning of the authorities of that member state implementing the union budget , in particular in the context of public procurement or grant procedures , and when carrying out monitoring and controls ; ### the proper functioning of the authorities of that member state implementing the union budget , in particular in the context of public procurement or grant procedures ;


### where measures concerning the suspension of the approval of one or more programmes or amendments thereof referred to in point of article 4 or the suspension of commitments referred to in point of article 4 are lifted , amounts corresponding to the suspended commitments shall be entered in the budget subject to article 7 of council regulation no xxxx . suspended commitments of year n may not be entered in the budget beyond year n + 2 . ### where measures concerning the suspension of the approval of one or more programmes or amendments thereof referred to in point of article 4 or the suspension of commitments referred to in point of article 4 are lifted , amounts corresponding to the suspended commitments shall be entered in the budget subject to article 7 of council regulation no xxxx . suspended commitments of year n may not be entered in the budget beyond year n + 2 . as from year n + 3 , an amount equivalent to the suspended commitments shall be entered in the union reserve for commitments provided for in article 12 of council regulation no xxxx .


### it is also necessary to indicate that actions and activities of the programme may support reforms that may help member states that wish to adopt the euro to prepare for participation in the euro area . ### bearing in mind the positive experience that the eu has had with the technical assistance offered to other countries that have already adopted the euro , it is also necessary to indicate that actions and activities of the programme may support reforms that may help member states which joined the union at a later date and that wish to adopt the euro to prepare for participation in the euro area .


### in order to meet the growing demand for support from member states , and in view of the need to support the implementation of structural reforms in member states whose currency is not the euro , the financial allocation for the programme should be increased to a sufficient level that allows the union to provide support that meets the needs of the requesting member states . ### in order to meet the growing demand for support from member states , and in view of the need to support the implementation of structural reforms in member states whose currency is not the euro , the financial allocation for the programme should be increased to a sufficient level that allows the union to provide support that meets the needs of the requesting member states . such an increase should not take place through redeployments of existing european structural and investment funds , but should be financed by the mobilisation of the special instruments as provided for in council regulation no 1311 / 2013 of 2 december 2013 laying down the multiannual financial framework for the years 2014 - 2020 . member states should not be obliged to transfer their national and regional esif allocations with a view to filling the financing gap of the programme .


### strengthening economic and social cohesion by reinforcing structural reforms is crucial for successful participation in the economic and monetary union . that is particularly important for member states whose currency is not the euro , in their preparation to join the euro area . ### strengthening economic , social and territorial cohesion by reinforcing structural reforms , which benefit the union and are in accordance with its principles and values , is crucial for successful participation in the economic and monetary union . that is particularly important for member states whose currency is not the euro , in their preparation to join the euro area .


### the general objective of the programme shall be to contribute to institutional , administrative and growth - sustaining structural reforms in the member states by providing support to national authorities for measures aimed at reforming and strengthening institutions , governance , public administration , and economic and social sectors in response to economic and social challenges , with a view to enhancing cohesion , competitiveness , productivity , sustainable growth , job creation , and investment , which will also prepare for participation in the euro area , in particular in the context of economic governance processes , including through assistance for the efficient , effective and transparent use of the union funds . ” ; ### the general objective of the programme shall be to provide support to national , regional and local authorities for administrative and economic reform and measures aimed at reforming and strengthening institutions , governance , public administration , economic and social sectors , and addressing economic and social challenges , with a view to promoting and enhancing sustainable growth , environmental sustainability , social protection , job creation and investment , competitiveness , productivity , territorial and social cohesion , convergence and shared prosperity , resilience to shocks . that support may include also assistance for the efficient , effective and transparent use of the union funds as well as for the correct and timely transposition and implementation of legal acts of the union . through these goals the programme will also prepare for participation in the euro area , in particular in the context of economic governance processes . ” ;


### strengthening economic and social cohesion by reinforcing structural reforms is crucial for successful participation in the economic and monetary union . that is particularly important for member states whose currency is not the euro , in their preparation to join the euro area . ### strengthening economic and social cohesion , including by reinforcing socially balanced , environmentally sustainable and growth - friendly structural reforms is crucial for successful participation in the economic and monetary union and its long - term stability and prosperity . that is particularly important for member states whose currency is not the euro , in their preparation to join the euro area .


### the financial envelope for the implementation of the programme is set at eur 222 800 000 in current prices . ; ### the financial envelope for the implementation of the programme is set at eur 222 800 000 in current prices , of which eur 80 000 000 shall be provided from the flexibility instrument under the council regulation no 1311 / 20131a ; _________________ 1a council regulation no 1311 / 2013 of 2 december 2013 laying down the multiannual financial framework for the years 2014 - 2020 .


### it is thus appropriate to stress in the general objective of the programme – within its contribution towards responding to economic and social challenges – that enhancing cohesion , competitiveness , productivity , sustainable growth , and job creation should also contribute to the preparations for future participation in the euro area by those member states whose currency is not the euro . ### it is thus appropriate to stress in the general objective of the programme – within its contribution towards responding to economic and social challenges – that enhancing cohesion , competitiveness , productivity , sustainable growth , job creation and reducing disparities between member states and regions should also contribute to the preparations for future participation in the euro area by those member states whose currency is not the euro .


### it is thus appropriate to stress in the general objective of the programme – within its contribution towards responding to economic and social challenges – that enhancing cohesion , competitiveness , productivity , sustainable growth , and job creation should also contribute to the preparations for future participation in the euro area by those member states whose currency is not the euro . ### it is thus appropriate to include in the general objective of the programme – within its contribution towards responding to economic and social challenges – that enhancing economic , social and territorial cohesion , social inclusion and the fight against poverty , competitiveness , productivity and sustainable and inclusive growth , job creation and investment should also contribute to the preparations for future participation in the euro area by those member states whose currency is not the euro as well as to convergence within and outside the euro area .


### the structural reform support programme was established with the objective of strengthening the capacity of member states to prepare and implement growth - sustaining administrative and structural reforms , including through assistance for the efficient and effective use of the union funds . support under the programme is provided by the commission , upon request by a member state , and can cover a wide range of policy areas . developing resilient economies built on strong economic and social structures , which allow member states to efficiently absorb shocks and swiftly recover from them , contributes to economic and social cohesion . the implementation of institutional , administrative and growth - sustaining structural reforms is an appropriate tool for achieving such a development . ### the structural reform support programme has the objective of strengthening the capacity of member states to prepare and implement economic and administrative reforms aimed at promoting robust and sustainable growth , quality job creation , social and territorial cohesion and convergence , competitiveness , productivity and shared prosperity , and enhanced resilience to shocks , including through assistance for the efficient and effective use of the union funds . support under the programme is provided by the commission , upon request by a member state , and can cover a wide range of policy areas in line with national reform programmes .


### strengthening economic and social cohesion by reinforcing structural reforms is crucial for successful participation in the economic and monetary union . that is particularly important for member states whose currency is not the euro , in their preparation to join the euro area . ### strengthening economic and social cohesion by reinforcing structural reforms throughout the whole reform process or at individual stages of that process is crucial for successful participation in the economic and monetary union . that is particularly important for member states which joined the union at a later date and whose currency is not the euro , in their preparation to join the euro area .


### heavy migratory pressure in third countries , including where persons in need of protection may be stranded due to political developments or conflicts , notably where it might have an impact on migration flows towards the eu . ### heavy migratory pressure in third countries , including where persons in need of protection may be stranded due to political developments or conflicts .


### measures in and in relation to third countries supported through the fund should complement other actions outside the union supported through the union’s external financing instruments . in particular , in implementing such actions , full coherence should be sought with the principles and general objectives of the union’s external action and foreign policy in respect of the country or region in question and the union international commitments . in relation to the external dimension , the fund should target support to enhance cooperation with third countries and to reinforce key aspects of migration management in areas of interest to the union ' s migration policy . ### measures taken under the fund in relation with third countries should be fully coherent with the principles and general objectives of the union’s external action and foreign policy in respect of the country or region in question and the union international commitments . cooperation with third countries should not be intended to support actions that are directly oriented towards development and should not undermine the principle of policy coherence for development , as set out in article 208 of the tfeu .


### the space sector’s development has historically been linked to security . in many cases , the equipment , components and instruments used in the space sector are dual - use goods . the possibilities that space offers for the security of the union and its member states should therefore be exploited . ### the space sector’s development has historically been linked to security . in many cases , the equipment , components and instruments used in the space sector are dual - use goods . the possibilities that space offers for the security and independence of the union and its member states should therefore be exploited .


### reflecting the importance of tackling climate change in line with the union ' s commitments to implement the paris agreement and the united nations sustainable development goals , this programme will contribute to mainstream climate actions and to the achievement of an overall target of 25 % of the eu budget expenditures supporting climate objectives . relevant actions will be identified during the programme ' s preparation and implementation , and reassessed in the context of the relevant evaluations and review processes . ### reflecting the importance of tackling climate change in line with the union ' s commitments to implementing the paris agreement and the united nations sustainable development goals as a front - runner , this programme will contribute to mainstreaming climate actions and to the swift achievement of an overall target of 30 % of the eu budget expenditures supporting climate objectives as well as to the mainstreaming of the sustainable development goals into all union policies . relevant actions will be identified during the programme ' s preparation and implementation , and reassessed in the context of the relevant evaluations and review processes .


### in the light of experience gained in past proceedings , it is appropriate to clarify the circumstances in which significant distortions affecting to a considerable extent free market forces may be deemed to exist . in particular , it is appropriate to clarify that this situation may be deemed to exist , inter alia , when reported prices or costs , including the costs of raw materials , are not the result of free market forces because they are affected by government intervention . it is further appropriate to clarify that in considering whether or not such a situation exists regard may be had , inter alia , to the potential impact of the following : the market in question is to a significant extent served by enterprises which operate under the ownership , control or policy supervision or guidance of the authorities of the exporting country ; state presence in firms allowing the state to interfere with respect to prices or costs ; public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces ; and access to finance granted by institutions implementing public policy objectives . it is further appropriate to provide that the commission services may issue a report describing the specific situation concerning these criteria in a certain country or a certain sector ; that such report and the evidence on which it is based may be placed on the file of any investigation relating to that country or sector ; and that interested parties should have ample opportunity to comment on the report and the evidence on which it is based in each investigation in which such report or evidence is used . ### in the light of experience gained in past proceedings , it is appropriate to clarify the circumstances in which significant distortions affecting to a considerable extent free market forces may be deemed to exist . in particular , it is appropriate to clarify that this situation may be deemed to exist , inter alia , when reported prices or costs , including the costs of raw materials and other factors of production , are not the result of free market forces because they are affected by government intervention . it is further appropriate to clarify that in considering whether or not such a situation exists regard should be had , inter alia , to the potential impact of the following : the market in question is to a significant extent served by enterprises which operate under the ownership , control or policy supervision or guidance of the authorities of the exporting country sacrificing of fact and law an adequate corporate governance ; state presence in firms allowing the state to interfere with respect to prices or costs ; public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces ; the lack of a transparent and effective functioning company law and a bankruptcy regime that prevents the exercise of property laws ; wage rates are not the result of free bargaining between labour and management ; the absence of a transparent set of laws produces discriminatory effects with regard to joint - ventures and other foreign investment and access to finance granted by institutions implementing public policy objectives and any other circumstance the commission considers appropriate in order to evaluate the existence of significant distortions . the existence of significant distortions in the economy as a whole or in sector of the economy of the exporting country should lead automatically to the use of undistorted international , third country or eu prices , costs or benchmarks for each factor of production in the construction of the normal value . however , if an exporting producer from a country that does not meet those conditions clearly demonstrates that its costs of one or more individual factors of production are not distorted , those costs should be used in the construction of its normal value . it is further appropriate to provide that the commission services issue a report describing the specific situation concerning these criteria in a certain country or a certain sector ; for those countries for which a substantial number of anti - dumping cases have been recorded , the report should be completed and adopted before the entry into force of this regulation . the union industry should be consulted during the report drafting process . such report and the evidence on which it is based may be placed on the file of any investigation relating to that country or sector ; and that interested parties should have ample opportunity to comment on the report and the evidence on which it is based in each investigation in which such report or evidence is used . in accordance with its role , the european parliament is to monitor the report drafting process . on the request of the european parliament or in the case of a change of circumstances in a specific country or sector , the commission shall update the report . in any event the european commission should carry out a review of the report every two years .


### when appropriate , the commission services may issue a report describing the specific situation concerning the criteria listed in point in a certain country or a certain sector . such report and the evidence on which it is based may be placed on the file of any investigation relating to that country or sector . interested parties shall have ample opportunity to supplement , comment or rely on the report and the evidence on which it is based in each investigation in which such report or evidence is used . the determinations made shall take into account all of the relevant evidence on the file . ### the commission services shall issue a detailed report describing the specific situation concerning the criteria listed in point in a certain country or a certain sector . for those countries for which a substantial number of anti - dumping cases have been opened , the report shall be completed and adopted before the entry into force of this regulation . the union industry shall be consulted during the report drafting process . such report and the evidence on which it is based may be placed on the file of any investigation relating to that country or sector . interested parties shall have ample opportunity to supplement , comment or rely on the report and the evidence on which it is based in each investigation in which such report or evidence is used . the determinations made shall take into account all of the relevant evidence on the file . in accordance with its role , the european parliament shall monitor the report drafting process . on the request of the european parliament or on the commission’s own initiative when the circumstances in a specific country or sector have changed , the commission shall update the report . in any event , the european commission shall carry out a review of the report every two years .


### when appropriate , the commission services may issue a report describing the specific situation concerning the criteria listed in point in a certain country or a certain sector . such report and the evidence on which it is based may be placed on the file of any investigation relating to that country or sector . interested parties shall have ample opportunity to supplement , comment or rely on the report and the evidence on which it is based in each investigation in which such report or evidence is used . the determinations made shall take into account all of the relevant evidence on the file . ### at their initiative or on the request of the european parliament , of a member state of or the union industry , the commission services shall issue a report describing the specific situation concerning the criteria listed in point in a certain country or a certain sector . for those countries for which a substantial number of anti - dumping cases have been opened , the report shall be completed three months before the entry into force of this regulation and adopted fifteen days within its entry into force . the union industry , including trade unions and smes , shall be consulted during the report drafting process . when drafting a report , the commission shall coordinate with the union ' s major trading partners . such report and the evidence on which it is based may be placed on the file of any investigation relating to that country or sector . interested parties shall have ample opportunity to supplement , comment or rely on the report and the evidence on which it is based in each investigation in which such report or evidence is used . the determinations made shall take into account all of the relevant evidence on the file . in accordance with its role , the european parliament shall monitor the report drafting process . on the request of the european parliament , of a member state , of union industry - including trade unions and smes - or on the commission ' s own initiative when the circumstances in a specific country or sector have changed , the commission shall adopt a specific report or update an existing one . in any event , the commission shall carry out a review of the report every two and a half years .


### it is further appropriate to recall that costs should normally be calculated on the basis of records kept by the exporter or producer under investigation . however , where there are significant distortions in the exporting country with the consequence that costs reflected in the records of the party concerned are artificially low , such costs may be adjusted or established on any reasonable basis , including information from other representative markets or from international prices or benchmarks . in the light of experience gained in past proceedings , it is appropriate to further clarify that , for the purposes of applying the provisions introduced by this regulation , due account should be taken of all relevant evidence , including relevant assessment reports regarding the circumstances prevailing on the domestic market of the exporting producers and the evidence on which they are based , which has been placed on the file , and upon which interested parties have had an opportunity to comment . ### it is further appropriate to recall that costs should normally be calculated on the basis of records kept by the exporter or producer under investigation . however , where there are one or more significant distortions in the exporting country with the consequence that costs reflected in the records of the party concerned are artificially low , such costs should be established on any reasonable basis , including information from other representative markets , from markets in the union or from undistorted international prices or benchmarks . in the light of experience gained in past proceedings , it is appropriate to further clarify that , for the purposes of applying the provisions introduced by this regulation , due account should be taken of all relevant evidence , including relevant assessment reports regarding the circumstances prevailing on the domestic market of the exporting producers and the evidence on which they are based , which has been placed on the file , and upon which interested parties have had an opportunity to comment . in applying the rules , it is essential , in order to maintain the balance of the rights and obligations which the wto and its agreements and protocols establish , that the union take account of how they are interpreted , and applied by the union ' s trading partners .


### significant distortions for the product concerned within the meaning of point may be deemed to exist , inter alia , when reported prices or costs , including the costs of raw materials , are not the result of free market forces as they are affected by government intervention . in considering whether or not significant distortions exist regard may be had , inter alia , to the potential impact of the following : the market in question is to a significant extent served by enterprises which operate under the ownership , control or policy supervision or guidance of the authorities of the exporting country ; state presence in firms allowing the state to interfere with respect to prices or costs ; public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces ; and access to finance granted by institutions implementing public policy objectives . ### significant distortions within the meaning of point may be deemed to exist , inter alia , when reported prices or costs , including the costs of raw materials and other factors of production , are not the result of free market forces as they are affected by government intervention . in considering whether or not significant distortions exist regard shall be had , inter alia , to the potential impact of the following : the market in question is to a significant extent served by enterprises which operate under the ownership , control or policy supervision or guidance of the authorities of the exporting country sacrificing of fact and law an adequate corporate governance ; state presence in firms allowing the state to interfere with respect to prices or costs ; public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces ; the lack of a transparent and effective functioning company law and a bankruptcy regime that prevents the exercise of property laws ; wage rates are not the result of free bargaining between labour and management ; the absence of a transparent set of laws produces discriminatory effects with regard to joint - ventures and others foreign investments ; access to finance granted by institutions implementing public policy objectives and any other circumstance the commission considers appropriate in order to evaluate the existence of significant distortions . the existence of significant distortions in the economy as a whole or in a sector of the economy of the exporting country shall lead automatically to the use of undistorted international , third country or eu prices , costs or benchmarks for each factor of production in the construction of the normal value . if an exporting producer from a country that does not meet those conditions clearly demonstrates that its costs of one or more individual factors of production are not distorted , those costs shall be used in the construction of its normal value .


### in case it is determined , when applying this provision or any other relevant provision of this regulation , that it is not appropriate to use domestic prices and costs in the exporting country due to the existence of significant distortions , the normal value shall be constructed on the basis of costs of production and sale reflecting undistorted prices or benchmarks . for this purpose , the sources that may be used include undistorted international prices , costs , or benchmarks , or corresponding costs of production and sale in an appropriate representative country with a similar level of economic development as the exporting country , provided the relevant cost data are readily available . the constructed normal value shall include a reasonable amount for administrative , selling and general costs and for profits . ### in case it is determined that it is not appropriate to use domestic prices and costs in the exporting country due to the existence of one or more significant distortions in the economy as a whole or in sector therein , the normal value shall be constructed on the basis of costs of production and sale reflecting undistorted prices or benchmarks . for this purpose , the sources that may be used include undistorted international prices , costs , or benchmarks for every factor of production , or corresponding costs of production and sale in an appropriate representative country including those in the union . the constructed normal value shall include an undistorted and reasonable amount for administrative , selling and general costs and for profits . the existence of one or more significant distortions in the economy as a whole or in the relevant sector of the economy of the exporting country shall lead automatically to the use of undistorted international , third country or union prices , costs and benchmarks for each factor of production in the construction of the normal value . if exporting producers from a country or a sector in which there exists one or more significant distortions clearly demonstrate that their industry as a whole is not directly or indirectly affected by any significant distortion , their costs shall be used in the construction of the normal value .


### the parties to the investigation shall be informed shortly after initiation about the relevant sources that the commission intends to use for the purpose of point and shall be given 10 days to comment . for this purpose , interested parties shall be given access to the file , including any evidence on which the investigating authority relies , without prejudice to article 19 . ### at the initiation of an investigation related to imports from a country or sector in which the commission has well - founded indications of the possible existence of significant distortions , the commission shall make a provisional determination as to the existence of significant distortions for that country or sectors and inform the parties to the investigation . the parties to the investigation shall be informed shortly after initiation about the relevant sources that the commission intends to use for the purpose of point and shall be given 10 days to comment . for this purpose , interested parties shall be given access to the file , including any evidence on which the investigating authority relies , without prejudice to article 19 . a determination that significant distortions exist in a given country or sector shall remain in effect until revoked , and revocation shall take place only if sufficient evidence has conclusively shown that that country or sector is no longer affected by significant distortions .


### it is further appropriate to recall that costs should normally be calculated on the basis of records kept by the exporter or producer under investigation . however , where there are significant distortions in the exporting country with the consequence that costs reflected in the records of the party concerned are artificially low , such costs may be adjusted or established on any reasonable basis , including information from other representative markets or from international prices or benchmarks . in the light of experience gained in past proceedings , it is appropriate to further clarify that , for the purposes of applying the provisions introduced by this regulation , due account should be taken of all relevant evidence , including relevant assessment reports regarding the circumstances prevailing on the domestic market of the exporting producers and the evidence on which they are based , which has been placed on the file , and upon which interested parties have had an opportunity to comment . ### it is further appropriate to recall that costs should normally be calculated on the basis of records kept by the exporter or producer under investigation . however , where there are significant distortions in the exporting country with the consequence that costs reflected in the records of the party concerned are artificially low , such costs should be established on any reasonable basis , including information from other representative markets , from international prices or benchmarks or from markets in the union . in the light of experience gained in past proceedings , it is appropriate to further clarify that , for the purposes of applying the provisions introduced by this regulation , due account should be taken of all relevant evidence , including relevant assessment reports regarding the circumstances prevailing on the domestic market of the exporting producers and the evidence on which they are based , which has been placed on the file , and upon which interested parties have had an opportunity to comment .


### articles 2 and 2 of regulation 2016 / 1036 stipulate the basis on which normal value should be determined in the case of imports from non - market economy countries . in view of developments with respect to certain countries that are members of the wto , it is appropriate that , for those countries , normal value should be determined on the basis of paragraphs 1 to 6a of article 2 of regulation 2016 / 1036 , with effect from the date on which this regulation enters into force , and subject to the provisions of this regulation . in the case of countries which are , at the date of initiation , not members of the wto and listed in annex i of regulation 2015 / 7552 , norma1 value should be determined on the basis of paragraph 7 of article 2 of regulation 2016 / 1036 , as amended by this regulation . this regulation should be without prejudice to establishing whether or not any wto member is a market economy . _________________ 2 regulation 2015 / 755 of the european parliament and of the council of 29 april 2015 on common rules for imports from certain third countries . ### articles 2 and 2 of regulation 2016 / 1036 stipulate the basis on which normal value should be determined in the case of imports from non - market economy countries . in view of developments with respect to certain countries that are members of the wto , it is appropriate that , for those countries , normal value should be determined on the basis of paragraphs 1 to 6a of article 2 of regulation 2016 / 1036 , with effect from the date on which this regulation enters into force , and subject to the provisions of this regulation . in the case of countries which are , at the date of initiation , not members of the wto and listed in annex i of regulation 2015 / 7552 , norma1 value should be determined on the basis of paragraph 7 of article 2 of regulation 2016 / 1036 , as amended by this regulation . this regulation should be without prejudice to establishing whether or not any wto member is a market economy . furthermore , it should be without prejudice to the terms and conditions set out in protocols and other instruments in accordance with which countries have acceded to the marrakesh agreement establishing the world trade organisation . _________________ 2 regulation 2015 / 755 of the european parliament and of the council of 29 april 2015 on common rules for imports from certain third countries .


### in the light of experience gained in past proceedings , it is appropriate to clarify the circumstances in which significant distortions affecting to a considerable extent free market forces may be deemed to exist . in particular , it is appropriate to clarify that this situation may be deemed to exist , inter alia , when reported prices or costs , including the costs of raw materials , are not the result of free market forces because they are affected by government intervention . it is further appropriate to clarify that in considering whether or not such a situation exists regard may be had , inter alia , to the potential impact of the following : the market in question is to a significant extent served by enterprises which operate under the ownership , control or policy supervision or guidance of the authorities of the exporting country ; state presence in firms allowing the state to interfere with respect to prices or costs ; public policies or measures discriminating in favour of domestic suppliers or otherwise influencing free market forces ; and access to finance granted by institutions implementing public policy objectives . it is further appropriate to provide that the commission services may issue a report describing the specific situation concerning these criteria in a certain country or a certain sector ; that such report and the evidence on which it is based may be placed on the file of any investigation relating to that country or sector ; and that interested parties should have ample opportunity to comment on the report and the evidence on which it is based in each investigation in which such report or evidence is used . ### in the light of experience gained in past proceedings , it is appropriate to clarify the circumstances in which significant distortions affecting to a considerable extent free market forces may be deemed to exist . in particular , it is appropriate to clarify that this situation may be deemed to exist , inter alia , when reported prices or costs , including the costs of raw materials and other factors of production , are not the result of free market forces because they are affected by government intervention , or when there is a situation of overcapacities 1a . it is further appropriate to clarify that in considering whether or not such a situation exists regard should be had , inter alia , to the potential impact of the following : government influence over the allocation of resources and decisions of enterprises , whether directly or indirectly , for example through the use of state - fixed prices , or discrimination in the tax , trade or currency regimes ; state - induced distortions in the operation of enterprises linked to privatisation and the use of non - market trading or compensation system ; the lack of a transparent and non - discriminatory company law which ensures adequate corporate governance ; the lack of a transparent and effective set of laws that prevents the respect of property rights and the operation of a functioning bankruptcy regime ; the lack of a genuine financial sector which operates independently from the state and which in law and practice is subject to sufficient guarantee provisions and adequate supervision ; wage rates are not the result of free bargaining between labour and management ; the absence of a transparent set of laws produces discriminatory effects with regards to joint - ventures and other foreign investments and access to finance granted by institutions implementing public policy objectives ; the lack of ratification and of correct implementation of core international labour organisation conventions and of multilateral environmental agreements to which the union is party ; the non - compliance with the relevant oecd recommendations pertaining to the field of taxation ; and any other circumstance the commission considers appropriate in order to evaluate the existence of significant distortions . for indicative purposes , a detailed list of the examples of significant distortions is available in the annex . that list should be updated after each case . the existence of one or more significant distortions in the economy as a whole or in one or several sectors of the economy of the exporting country should lead automatically to the use of undistorted third country , international or union prices , costs or benchmarks for each and every factor of production in the construction of the normal value , as well as to the disapplication of the lesser - duty rule for the calculation of the anti - dumping duty to be imposed on imports from exporting producers from that country . in the absence of undistorted third country or international costs or benchmarks , the commission should determine the normal value on any other reasonable basis , including on the basis of relevant prices and costs in the union . this is especially the case where a significant portion of the complaining industry is made up of smes . the reliability of the costs and prices of a given factor of production to be considered undistorted should be assessed , inter alia , by reference to the quantities involved , their proportion in relation to the total costs of that factor , and actual use in production . under this methodology , the burden of proving the absence of significant distortions on every factors of production falls on the exporting country ' s producers . if an exporting producer from a country where one of more significant distortions exist conclusively demonstrates at an early stage of the investigation that the costs of one or more of its factors of production are not distorted , those individual factors of production costs should be used in the construction of the normal value , without prejudice to the use of undistorted third country , union or international prices , costs or benchmarks for those individual factors of production that are significantly distorted . it is further appropriate to provide that the commission services should , at their own initiative or on the request of the european parliament , of a member state or of the union industry , issue a report describing the specific situation concerning these criteria in a certain country or a certain sector ; for those countries for which a substantial number of anti - dumping cases have been recorded , the report should be completed three months before the entry into force of this regulation and adopted fifteen days within its entry into force . union industry , including trade unions and smes , should be consulted during the report drafting process . when drafting a report , the commission shall coordinate with the union ' s major trading partners . such report and the evidence on which it is based may be placed on the file of any investigation relating to that country or sector ; interested parties should have ample opportunity to comment on the report and the evidence on which it is based in each investigation in which such report or evidence is used . in accordance with its role , the european parliament is to monitor the report drafting process . on the request of the european parliament , of a member state , of the union industry or in the case of a change of circumstances in a specific country or sector , the commission should adopt a specific report or update an existing one . in any event , the commission should carry out a review of the report every two and a half years . _________________ 1a overcapacities are defined when the commercial surpluses start being structural without any comparative advantage in the country , when domestic prices and costs are lower than the prices in the world market or when investments in new production capacities are realised in discordance with a growing commercial surplus


### the union industry may rely on the report referred to in point for the calculation of normal value when filing a complaint in accordance with article 5 or a request for a review in accordance with article 11 . ### the union industry and trade unions may rely on the report referred to in point for the calculation of normal value when filing a complaint in accordance with article 5 , request for a review in accordance with article 11 or request for a reinvestigation in accordance with article 12 . that report shall constitute sufficient evidence to justify the calculation of normal value in the complaint or request on the basis of the methodology specified in paragraph 6a . furthermore , where a significant portion of the complaining union industry is made up of smes , the normal value calculations in the complaint or request may be based on information related to costs of production in the union of the product concerned .


### it is further appropriate to recall that costs should normally be calculated on the basis of records kept by the exporter or producer under investigation . however , where there are significant distortions in the exporting country with the consequence that costs reflected in the records of the party concerned are artificially low , such costs may be adjusted or established on any reasonable basis , including information from other representative markets or from international prices or benchmarks . in the light of experience gained in past proceedings , it is appropriate to further clarify that , for the purposes of applying the provisions introduced by this regulation , due account should be taken of all relevant evidence , including relevant assessment reports regarding the circumstances prevailing on the domestic market of the exporting producers and the evidence on which they are based , which has been placed on the file , and upon which interested parties have had an opportunity to comment . ### it is further appropriate to recall that costs should normally be calculated on the basis of records kept by the exporter or producer under investigation . however , where there are significant distortions in the exporting country with the consequence that costs reflected in the records of the party concerned are artificially low and do not reflect actual market values , such costs should be adjusted or established on any reasonable basis , including information from other representative markets or from undistorted international prices or benchmarks , including union prices or benchmarks where appropriate . in the light of experience gained in past proceedings , it is appropriate to further clarify that , for the purposes of applying the provisions introduced by this regulation , due account should be taken of all relevant evidence , including relevant assessment reports regarding the circumstances prevailing on the domestic market of the exporting producers and the evidence on which they are based , which has been placed on the file , and upon which interested parties have had an opportunity to comment .


### subject matter ### subject matter and objectives


### currently , postal services are regulated by directive 97 / 67 / ec of the european parliament and of the council49 . this directive establishes common rules governing the provision of postal services and the universal postal service in the union . it focuses primarily , but not exclusively , on national universal services and does not address regulatory oversight of parcel delivery service providers , transparency of tariffs and terminal rates for certain cross - border parcel delivery services , the assessment of the affordability of tariffs for certain cross - border parcel delivery services and transparent and non - discriminatory access to certain cross - border parcel delivery services and / or infrastructure . this regulation therefore complements , insofar as cross - border parcel delivery services are concerned , the rules set out in directive 97 / 67 / ec . _________________ 49 directive 97 / 67 / ec of the european parliament and of the council of 15 december 1997 on common rules for the development of the internal market of community postal services and the improvement of quality of service . ### currently , postal services are regulated by directive 97 / 67 / ec of the european parliament and of the council49 . that directive establishes common rules governing the provision of postal services and the universal postal service in the union . this regulation therefore complements , insofar as cross - border parcel delivery services are concerned , the rules set out in directive 97 / 67 / ec . however , the provisions of this regulation are without prejudice to the rights and guarantees set out in that directive including in particular the continued provision of a universal postal service to users . _________________ 49 directive 97 / 67 / ec of the european parliament and of the council of 15 december 1997 on common rules for the development of the internal market of community postal services and the improvement of quality of service .


### the provider ' s general conditions of sale , including a detailed description of the complaints procedure . ### the parcel delivery service provider ' s general terms and conditions for parcel delivery services , including a detailed description of the complaints procedure for users .


### ' parcel delivery services ' means services involving the clearance , sorting , transport or distribution of postal items other than items of correspondence ; transport alone shall not be considered a parcel delivery service ; delivery of such items exceeding 31 , 5 kg shall not be considered a parcel delivery service ; ### ' parcel delivery services ' means services involving the clearance , sorting , transport or distribution of parcels , provided that those services do not consist of transport alone ;


### ' terminal rates ' means payments from the originating universal service provider to the destination universal service provider for the costs of cross - border parcel delivery services in the destination member state . ### ' terminal rates ' means payments performed being either terminal dues , inward land rates , or transfer prices by the parcel delivery services operator of the originating member state to the parcel delivery operator of the destination member state for the costs of distributing the cross - border items in the destination member state .


### ' terminal rates ' means payments from the originating universal service provider to the destination universal service provider for the costs of cross - border parcel delivery services in the destination member state . ### ' terminal rates ' means payments from the originating parcel delivery service provider to the destination parcel delivery service provider or intermediaries where applicable for the costs of cross - border parcel delivery services in the destination member state .


### universal service providers providing parcel delivery services may conclude multilateral and bilateral agreements on terminal rates and may set up other programmes to facilitate the interconnectivity of their delivery networks . for reasons of non - discrimination , competing parcel delivery service providers shall be granted equal access to the terminal rates applicable between parties under multilateral agreements . it may be justified that terminal rates payable by third - party parcel delivery service providers , in some cases , exceed those payable by universal service providers that are parties to such agreements . this may be the case where the parties to a multilateral agreement on terminal rates are able to demonstrate that the cost of setting up , operating and administering the agreement , the extra cost incurred by accepting and handling items from non - designated parcel delivery service providers and other such costs are not covered by the terminal rates payable by the third - party service provider in the originating member state . ### parcel delivery service providers providing parcel delivery services may conclude multilateral and bilateral agreements on terminal rates and may set up other programmes to facilitate the interconnectivity of their delivery networks . it is important that any practices in this respect that may be in breach of eu competition law principles and the provisions of directive 97 / 67 / ec are properly investigated and addressed by member states , national regulatory authorities and by the european commission in a timely and effective manner .


### the name of the provider , its legal status and form , registration number in a trade or similar register , vat number , the address of the establishment and a contact person ; ### the name of the parcel delivery service provider , its legal status and form , registration number in a trade or similar register , vat identification number , the address of the establishment and a contact person ;


### a parcel delivery service provider which employs fewer than 50 persons shall not be subject to the obligations under paragraph 1 and 2 , unless that provider is established in more than one member state . ### this article shall not apply to parcel delivery service providers which employed on average fewer than 50 persons over the course of the previous calendar year . the number of persons shall be calculated on the basis of the average annual number of full - time , part - time , temporary employees and self - employed , as well as persons working for sub - contracting companies in parcel delivery services . a breakdown of the calculations shall be made available upon request ;


### a parcel delivery service provider which employs fewer than 50 persons shall not be subject to the obligations under paragraph 1 and 2 , unless that provider is established in more than one member state . ### this article shall not apply to parcel delivery service providers and their subsidiaries , with less than 5% of the national market share , which employed on average fewer than 25 persons over the course of the previous calendar year . the number of persons shall be calculated on the basis of the average annual number of full - time , part - time , temporary employees and self - employed , as well as persons working for sub - contracting companies in parcel delivery services . a breakdown of the calculations shall be made available upon request .