# Official Journal C 75E/2009

| | ISSN 1725-2423 |
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| Official Journal
  of the European Union | C 75E |
| | |
| English edition | Information and Notices | Volume 5231 March 2009 |

ISSN 1725-2423

Official Journal

of the European Union

C 75E

English edition

Information and Notices

Volume 5231 March 2009

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| Notice No | Contents | page |
| --- | --- | --- |
| | III   Preparatory Acts |
| | COUNCIL |
| 2009/C 075E/01 | Common Position (EC) No 10/2009 of 9 January 2009 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council establishing an Agency for the Cooperation of Energy Regulators (
  1
  ) | 1 |
| 2009/C 075E/02 | Common Position (EC) No 11/2009 of 9 January 2009 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003 (
  1
  ) | 16 |
| 2009/C 075E/03 | Common Position (EC) No 12/2009 of 9 January 2009 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (
  1
  ) | 38 |
| 2009/C 075E/04 | Common Position (EC) No 13/2009 of 16 February 2009 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council on Community statistics relating to external trade with non-member countries and repealing Council Regulation (EC) No 1172/95 (
  1
  ) | 58 |
| 2009/C 075E/05 | Common Position (EC) No 14/2009 of 16 February 2009 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council establishing the Group of European Regulators in Telecoms (GERT) (
  1
  ) | 67 |

Notice No

Contents

page

III   Preparatory Acts

COUNCIL

2009/C 075E/01

Common Position (EC) No 10/2009 of 9 January 2009 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council establishing an Agency for the Cooperation of Energy Regulators (
  1
  )

1

1

2009/C 075E/02

Common Position (EC) No 11/2009 of 9 January 2009 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003 (
  1
  )

1

16

2009/C 075E/03

Common Position (EC) No 12/2009 of 9 January 2009 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (
  1
  )

1

38

2009/C 075E/04

Common Position (EC) No 13/2009 of 16 February 2009 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council on Community statistics relating to external trade with non-member countries and repealing Council Regulation (EC) No 1172/95 (
  1
  )

1

58

2009/C 075E/05

Common Position (EC) No 14/2009 of 16 February 2009 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council establishing the Group of European Regulators in Telecoms (GERT) (
  1
  )

1

67

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| | (1)   Text with EEA relevance |

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(1)   Text with EEA relevance

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EN

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III Preparatory Acts

COUNCIL

| 31.3.2009 | EN | Official Journal of the European Union | CE 75/1 |
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31.3.2009

EN

Official Journal of the European Union

CE 75/1

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COMMON POSITION (EC) No 10/2009

adopted by the Council on 9 January 2009

with a view to the adoption of Regulation (EC) No .../2009 of the European Parliament and of the Council of ... establishing an Agency for the Cooperation of Energy Regulators

(Text with EEA relevance)

(2009/C 75 E/01)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 95 thereof,

Having regard to the proposal from the Commission,

Having regard to the Opinion of the European Economic and Social Committee (1),

Having regard to the Opinion of the Committee of the Regions (2),

Acting in accordance with the procedure laid down in Article 251 of the Treaty (3),

Whereas:

| (1) | The Communication of the Commission of 10 January 2007 entitled ‘An Energy Policy for Europe’ highlighted the importance of completing the internal market in electricity and natural gas. Improving the regulatory framework at Community level was identified as a key measure to achieve that objective. |
| --- | --- |

(1)

The Communication of the Commission of 10 January 2007 entitled ‘An Energy Policy for Europe’ highlighted the importance of completing the internal market in electricity and natural gas. Improving the regulatory framework at Community level was identified as a key measure to achieve that objective.

| (2) | An independent advisory group on electricity and gas, called the European Regulators Group for Electricity and Gas (‘the ERGEG’) was established by Commission Decision 2003/796/EC (4) to facilitate consultation, coordination and cooperation between the regulatory bodies in Member States, and between those bodies and the Commission, with a view to consolidating the internal market in electricity and natural gas. That group is composed of representatives of the national regulatory authorities established pursuant to Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity (5) and Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas (6). |
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(2)

An independent advisory group on electricity and gas, called the European Regulators Group for Electricity and Gas (‘the ERGEG’) was established by Commission Decision 2003/796/EC (4) to facilitate consultation, coordination and cooperation between the regulatory bodies in Member States, and between those bodies and the Commission, with a view to consolidating the internal market in electricity and natural gas. That group is composed of representatives of the national regulatory authorities established pursuant to Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity (5) and Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas (6).

| (3) | The work undertaken by ERGEG since its establishment has made a positive contribution to the internal market in electricity and gas. However, it is widely recognised by the sector, and has been proposed by ERGEG itself, that voluntary cooperation between national regulatory authorities should now take place within a Community structure with clear competences and with the power to adopt individual regulatory decisions in a number of specific cases. |
| --- | --- |

(3)

The work undertaken by ERGEG since its establishment has made a positive contribution to the internal market in electricity and gas. However, it is widely recognised by the sector, and has been proposed by ERGEG itself, that voluntary cooperation between national regulatory authorities should now take place within a Community structure with clear competences and with the power to adopt individual regulatory decisions in a number of specific cases.

| (4) | The European Council of March 2007 invited the Commission to propose measures to set up an independent mechanism for national regulators to cooperate. |
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(4)

The European Council of March 2007 invited the Commission to propose measures to set up an independent mechanism for national regulators to cooperate.

| (5) | On the basis of the impact assessment of the resource requirements for a central entity, it was concluded that an independent central entity offered a number of long-term advantages over other options. An Agency for the Cooperation of Energy Regulators (‘the Agency’) should therefore be established. |
| --- | --- |

(5)

On the basis of the impact assessment of the resource requirements for a central entity, it was concluded that an independent central entity offered a number of long-term advantages over other options. An Agency for the Cooperation of Energy Regulators (‘the Agency’) should therefore be established.

| (6) | The Agency should ensure that regulatory functions performed by the national regulatory authorities in accordance with Directive 2009/.../EC of the European Parliament and of the Council of ... concerning common rules for the internal market in electricity (7) and Directive 2009/.../EC of the European Parliament and of the Council of ... concerning common rules for the internal market in natural gas (7) are properly coordinated and, where necessary, completed at the Community level. To that end, it is necessary to guarantee the independence of the Agency, its technical and regulatory capacities and its transparency and efficiency. |
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(6)

The Agency should ensure that regulatory functions performed by the national regulatory authorities in accordance with Directive 2009/.../EC of the European Parliament and of the Council of ... concerning common rules for the internal market in electricity (7) and Directive 2009/.../EC of the European Parliament and of the Council of ... concerning common rules for the internal market in natural gas (7) are properly coordinated and, where necessary, completed at the Community level. To that end, it is necessary to guarantee the independence of the Agency, its technical and regulatory capacities and its transparency and efficiency.

| (7) | The Agency should monitor regional cooperation between transmission system operators in the electricity and gas sectors as well as the execution of the tasks of the European Network of Transmission System Operators for Electricity (‘the ENTSO for Electricity’), and the European Network of Transmission System Operators for Gas (‘the ENTSO for Gas’). The involvement of the Agency is essential in order to ensure that the cooperation between transmission system operators proceeds in an efficient and transparent way for the benefit of the internal markets in electricity and natural gas. |
| --- | --- |

(7)

The Agency should monitor regional cooperation between transmission system operators in the electricity and gas sectors as well as the execution of the tasks of the European Network of Transmission System Operators for Electricity (‘the ENTSO for Electricity’), and the European Network of Transmission System Operators for Gas (‘the ENTSO for Gas’). The involvement of the Agency is essential in order to ensure that the cooperation between transmission system operators proceeds in an efficient and transparent way for the benefit of the internal markets in electricity and natural gas.

| (8) | The Agency has an important role in developing non-binding framework Guidelines with which network codes must be in line. It is also considered appropriate for the Agency, and consistent with its purpose, to have a role in reviewing network codes (both when created and upon modification) to ensure that they are in line with the non-binding framework Guidelines, before it may recommend them to the Commission for adoption. |
| --- | --- |

(8)

The Agency has an important role in developing non-binding framework Guidelines with which network codes must be in line. It is also considered appropriate for the Agency, and consistent with its purpose, to have a role in reviewing network codes (both when created and upon modification) to ensure that they are in line with the non-binding framework Guidelines, before it may recommend them to the Commission for adoption.

| (9) | It is appropriate to provide a framework within which national regulatory authorities are able to cooperate. That framework should facilitate the uniform application of the legislation on the internal market in electricity and gas throughout the Community. As regards situations concerning more than one Member State, the Agency should be granted the power to adopt individual decisions. That power should under certain conditions cover technical issues, the regulatory regime for electricity and gas infrastructure connecting or that might connect at least two Member States and, as a last resort, exemptions from the internal market rules for new electricity interconnectors and new gas infrastructure located in more than one Member State. |
| --- | --- |

(9)

It is appropriate to provide a framework within which national regulatory authorities are able to cooperate. That framework should facilitate the uniform application of the legislation on the internal market in electricity and gas throughout the Community. As regards situations concerning more than one Member State, the Agency should be granted the power to adopt individual decisions. That power should under certain conditions cover technical issues, the regulatory regime for electricity and gas infrastructure connecting or that might connect at least two Member States and, as a last resort, exemptions from the internal market rules for new electricity interconnectors and new gas infrastructure located in more than one Member State.

| (10) | Since the Agency has an overview of the national regulatory authorities, it should have an advisory role towards the Commission as regards market regulation issues. It should also be required to inform the Commission where it finds that the cooperation between transmission system operators does not produce the results which are needed or that a national regulatory authority whose decision is not in compliance with Guidelines does not adequately follow up the opinion of the Agency. |
| --- | --- |

(10)

Since the Agency has an overview of the national regulatory authorities, it should have an advisory role towards the Commission as regards market regulation issues. It should also be required to inform the Commission where it finds that the cooperation between transmission system operators does not produce the results which are needed or that a national regulatory authority whose decision is not in compliance with Guidelines does not adequately follow up the opinion of the Agency.

| (11) | The Agency should also be able to issue non-binding Guidelines to assist regulatory authorities and market players in sharing good practices. |
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(11)

The Agency should also be able to issue non-binding Guidelines to assist regulatory authorities and market players in sharing good practices.

| (12) | The structure of the Agency should be adapted to meet the specific needs of energy regulation. In particular, the specific role of the national regulatory authorities and their independence need to be taken fully into account. |
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(12)

The structure of the Agency should be adapted to meet the specific needs of energy regulation. In particular, the specific role of the national regulatory authorities and their independence need to be taken fully into account.

| (13) | The Administrative Board should have the necessary powers to establish the budget, check its implementation, draw up internal rules, adopt financial regulations and appoint the Director. A rotation system should be used for the renewal of the members of the Administrative Board who are appointed by the Council so as to ensure a balanced participation of Member States over time. |
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(13)

The Administrative Board should have the necessary powers to establish the budget, check its implementation, draw up internal rules, adopt financial regulations and appoint the Director. A rotation system should be used for the renewal of the members of the Administrative Board who are appointed by the Council so as to ensure a balanced participation of Member States over time.

| (14) | The Agency should have the necessary powers to perform the regulatory functions in an efficient and above all independent manner. The independence of regulatory authorities is not only a key principle of good governance but also a fundamental condition to ensure market confidence. Without prejudice to its members acting on behalf of their respective national authorities, the Board of Regulators should therefore act independently from any market interest and shall not seek or take instructions from any government of a Member State, the Commission or from any other public or private entity. |
| --- | --- |

(14)

The Agency should have the necessary powers to perform the regulatory functions in an efficient and above all independent manner. The independence of regulatory authorities is not only a key principle of good governance but also a fundamental condition to ensure market confidence. Without prejudice to its members acting on behalf of their respective national authorities, the Board of Regulators should therefore act independently from any market interest and shall not seek or take instructions from any government of a Member State, the Commission or from any other public or private entity.

| (15) | Where the Agency has decision-making powers, interested parties should, for reasons of procedural economy, be granted a right of appeal to a Board of Appeal, which should be part of the Agency, but independent from its administrative and regulatory structure. In the interest of continuity, the appointment or renewal of the members of the Board of Appeal should allow for partial replacement of that Board. |
| --- | --- |

(15)

Where the Agency has decision-making powers, interested parties should, for reasons of procedural economy, be granted a right of appeal to a Board of Appeal, which should be part of the Agency, but independent from its administrative and regulatory structure. In the interest of continuity, the appointment or renewal of the members of the Board of Appeal should allow for partial replacement of that Board.

| (16) | The Agency should be financed mainly from the general budget of the European Union, by fees and by voluntary contributions. In particular, the resources currently pooled by regulatory authorities for their cooperation at Community level should continue to be available to the Agency. The Community budgetary procedure should remain applicable as far as any subsidies chargeable to the general budget of the European Union are concerned. Moreover, the auditing of accounts should be undertaken by the Court of Auditors in accordance with Article 91 of Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (8). |
| --- | --- |

(16)

The Agency should be financed mainly from the general budget of the European Union, by fees and by voluntary contributions. In particular, the resources currently pooled by regulatory authorities for their cooperation at Community level should continue to be available to the Agency. The Community budgetary procedure should remain applicable as far as any subsidies chargeable to the general budget of the European Union are concerned. Moreover, the auditing of accounts should be undertaken by the Court of Auditors in accordance with Article 91 of Commission Regulation (EC, Euratom) No 2343/2002 of 19 November 2002 on the framework Financial Regulation for the bodies referred to in Article 185 of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (8).

| (17) | The Agency should have highly professional staff. In particular, it should benefit from the competence and experience of staff seconded by the national regulatory authorities, the Commission and the Member States. The Staff Regulations of Officials of the European Communities and the Conditions of employment of other servants of the European Communities, hereinafter referred to as ‘the Staff Regulations’ and ‘the Conditions of employment’ respectively, laid down in Regulation (EEC, Euratom, ECSC) No 259/68 (9) and the rules adopted jointly by the European Community institutions for the purpose of applying these regulations should apply to the staff of the Agency. The Administrative Board, in agreement with the Commission, should adopt the necessary implementing measures. |
| --- | --- |

(17)

The Agency should have highly professional staff. In particular, it should benefit from the competence and experience of staff seconded by the national regulatory authorities, the Commission and the Member States. The Staff Regulations of Officials of the European Communities and the Conditions of employment of other servants of the European Communities, hereinafter referred to as ‘the Staff Regulations’ and ‘the Conditions of employment’ respectively, laid down in Regulation (EEC, Euratom, ECSC) No 259/68 (9) and the rules adopted jointly by the European Community institutions for the purpose of applying these regulations should apply to the staff of the Agency. The Administrative Board, in agreement with the Commission, should adopt the necessary implementing measures.

| (18) | The Agency should apply the general rules regarding public access to documents held by Community bodies. The Administrative Board should establish the practical measures to protect commercially sensitive data and personal data. |
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(18)

The Agency should apply the general rules regarding public access to documents held by Community bodies. The Administrative Board should establish the practical measures to protect commercially sensitive data and personal data.

| (19) | Countries which are not members of the Community should be able to participate in the work of the Agency in accordance with appropriate agreements to be concluded by the Community. |
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(19)

Countries which are not members of the Community should be able to participate in the work of the Agency in accordance with appropriate agreements to be concluded by the Community.

| (20) | The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (10). |
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(20)

The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (10).

| (21) | In particular, the Commission should be empowered to adopt the Guidelines necessary in situations in which the Agency becomes competent to decide upon the terms and conditions for access to and operational security of cross-border infrastructure. Since those measures are of general scope and are designed to amend non-essential elements of this Regulation, by supplementing it with new non-essential elements, they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC. |
| --- | --- |

(21)

In particular, the Commission should be empowered to adopt the Guidelines necessary in situations in which the Agency becomes competent to decide upon the terms and conditions for access to and operational security of cross-border infrastructure. Since those measures are of general scope and are designed to amend non-essential elements of this Regulation, by supplementing it with new non-essential elements, they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC.

| (22) | Since the objective of this Regulation, cooperation of national regulatory authorities at Community level, cannot be sufficiently achieved by the Member States and can therefore be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective, |
| --- | --- |

(22)

Since the objective of this Regulation, cooperation of national regulatory authorities at Community level, cannot be sufficiently achieved by the Member States and can therefore be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective,

HAVE ADOPTED THIS REGULATION:

CHAPTER I

Establishment and legal status

Article 1

Establishment

1.   This Regulation establishes an Agency for the Cooperation of Energy Regulators (‘the Agency’).

2.   The purpose of the Agency shall be to assist the regulatory authorities referred to in Article 34 of Directive 2009/.../EC and Article 38 of Directive 2009/.../EC in exercising at Community level the regulatory tasks performed in the Member States and, where necessary, to coordinate their action.

3.   Until the premises of the Agency are ready, it will be hosted on Commission premises.

Article 2

Legal status

1.   The Agency shall be a Community body with legal personality.

2.   In each Member State, the Agency shall enjoy the most extensive legal capacity accorded to legal persons under national law. It may, in particular, acquire or dispose of movable and immovable property and be a party to legal proceedings.

3.   The Agency shall be represented by its Director.

Article 3

Composition

The Agency shall comprise:

| (a) | an Administrative Board, which shall exercise the tasks set out in Article 12; |
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(a)

an Administrative Board, which shall exercise the tasks set out in Article 12;

| (b) | a Board of Regulators, which shall exercise the tasks set out in Article 14; |
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(b)

a Board of Regulators, which shall exercise the tasks set out in Article 14;

| (c) | a Director, who shall exercise the tasks set out in Article 16; |
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(c)

a Director, who shall exercise the tasks set out in Article 16;

| (d) | a Board of Appeal, which shall exercise the tasks set out in Article 18. |
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(d)

a Board of Appeal, which shall exercise the tasks set out in Article 18.

Article 4

Type of acts of the Agency

The Agency may:

| (a) | issue opinions and recommendations addressed to transmission system operators; |
| --- | --- |

(a)

issue opinions and recommendations addressed to transmission system operators;

| (b) | issue opinions addressed to regulatory authorities; |
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(b)

issue opinions addressed to regulatory authorities;

| (c) | issue opinions and recommendations addressed to the Commission; |
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(c)

issue opinions and recommendations addressed to the Commission;

| (d) | take individual decisions in specific cases referred to in Articles 7, 8 and 9. |
| --- | --- |

(d)

take individual decisions in specific cases referred to in Articles 7, 8 and 9.

CHAPTER II

Tasks

Article 5

General tasks

The Agency may, upon a request from the Commission or on its own initiative, provide an opinion to the Commission on all issues related to the purpose for which it has been established.

Article 6

Tasks as regards the cooperation of transmission system operators

1.   The Agency shall provide an opinion to the Commission on the draft statutes, list of members and draft rules of procedure of the ENTSO for Electricity in accordance with Article 5(2) of Regulation (EC) No .../2009 of the European Parliament and of the Council of ... on conditions for access to the network for cross-border exchanges in electricity (7) and on those of the ENTSO for Gas in accordance with Article 5(2) of Regulation (EC) No .../2009 of the European Parliament and of the Council of ... on conditions for access to the natural gas transmission networks (7).

2.   The Agency shall monitor the execution of the tasks of the ENTSO for Electricity as provided for in Article 9 of Regulation (EC) No .../2009 and of the ENTSO for Gas as provided for Article 9 of Regulation (EC) No .../2009.

3.   The Agency may provide an opinion:

| (a) | to the ENTSO for Electricity as provided for in Article 8(2) of Regulation (EC) No .../2009 and to the ENTSO for Gas as provided for in Article 8(2) of Regulation (EC) No .../2009 on the network codes; and |
| --- | --- |

(a)

to the ENTSO for Electricity as provided for in Article 8(2) of Regulation (EC) No .../2009 and to the ENTSO for Gas as provided for in Article 8(2) of Regulation (EC) No .../2009 on the network codes; and

| (b) | to the ENTSO for Electricity as provided for in the first subparagraph of Article 9(2) of Regulation (EC) No .../2009 and to the ENTSO for Gas as provided for in the first subparagraph of Article 9(2) of Regulation (EC) No .../2009 on the draft annual work programme and the draft non-binding 10-year network development plan. |
| --- | --- |

(b)

to the ENTSO for Electricity as provided for in the first subparagraph of Article 9(2) of Regulation (EC) No .../2009 and to the ENTSO for Gas as provided for in the first subparagraph of Article 9(2) of Regulation (EC) No .../2009 on the draft annual work programme and the draft non-binding 10-year network development plan.

4.   The Agency shall provide a duly reasoned opinion as well as recommendations to the ENTSO for Electricity, the ENTSO for Gas and the Commission, where it considers that the draft annual work programme or the draft non-binding 10-year network development plan submitted to it in accordance with the second subparagraph of Article 9(2) of Regulation (EC) No .../2009 and the second subparagraph of Article 9(2) of Regulation (EC) No .../2009 do not contribute to non-discrimination, effective competition and the efficient functioning of the market or a sufficient level of cross-border interconnection open to third-party access.

The Agency shall submit a draft non-binding framework Guideline to the Commission where requested to do so under Article 6(2) of Regulation (EC) No .../2009 and Article 6(2) of Regulation (EC) No .../2009. The Agency shall review the draft non-binding framework Guideline and re-submit it to the Commission where requested to do so under Article 6(4) of Regulation (EC) No .../2009 and Article 6(4) of Regulation (EC) No .../2009.

The Agency shall provide a reasoned opinion to the ENTSO for Electricity and the ENTSO for Gas on the network code in accordance with Article 6(7) of Regulation (EC) No .../2009 and Article 6(7) of Regulation (EC) No .../2009.

The Agency shall submit the network code to the Commission and may recommend that it be adopted in accordance with Article 6(9) of Regulation (EC) No .../2009 and Article 6(9) of Regulation (EC) No ...8/2009. The Agency shall prepare and submit a draft network code to the Commission where requested to do so under Article 6(10) of Regulation (EC) No .../2009 and Article 6(10) of Regulation (EC) No .../2009.

5.   The Agency shall provide a duly reasoned opinion to the Commission, in accordance with Article 9(1) of Regulation (EC) No .../2009 and Article 9(1) of Regulation (EC) No .../2009, where the ENTSO for Electricity or the ENTSO for Gas has failed to implement a network code elaborated under Article 8(2) of Regulation (EC) No .../2009 and Article 8(2) of Regulation (EC) No .../2009 or a network code which has been established in accordance with Article 6(1) to (10) of those Regulations but which has not been adopted by the Commission under Article 6(11) of those Regulations.

6.   The Agency shall monitor and analyse the implementation of the network codes and the Guidelines adopted by the Commission as laid down in Article 6(11) of Regulation (EC) No .../2009 and in Article 6(11) of Regulation (EC) No .../2009, and their effect on the harmonisation of applicable rules aimed at facilitating market integration as well as on non-discrimination, effective competition and the efficient functioning of the market, and report to the Commission.

7.   The Agency shall monitor the regional cooperation of transmission system operators referred to in Article 12 of Regulation (EC) No .../2009 and Article 12 of Regulation (EC) No .../2009, and take due account of the outcome of this cooperation when formulating its opinions, recommendations and decisions.

Article 7

Tasks as regards the national regulatory authorities

1.   The Agency shall adopt individual decisions on technical issues where those decisions are provided for in Directive 2009/.../EC, Directive 2009/.../EC, Regulation (EC) No .../2009 or Regulation (EC) No .../2009.

2.   The Agency may, in accordance with its work programme or at the request of the Commission, adopt non-binding Guidelines to assist regulatory authorities and market players in sharing good practice.

3.   The Agency shall promote cooperation between the national regulatory authorities and between regulatory authorities at regional level, and take due account of the outcome of this cooperation when formulating its opinions, recommendations and decisions. Where the Agency considers that binding rules on such cooperation are required, it shall make the appropriate recommendations to the Commission.

4.   The Agency shall provide an opinion, at the request of any regulatory authority or of the Commission, on whether a decision taken by a regulatory authority complies with the Guidelines referred to in Directive 2009/.../EC, Directive 2009/.../EC, Regulation (EC) No .../2009 or Regulation (EC) No .../2009.

5.   Where a national regulatory authority does not adequately follow the opinion of the Agency as referred to in paragraph 4 within four months from the day of receipt, the Agency shall inform the Commission.

6.   When a national regulatory authority encounters, in a specific case, difficulties with the application of the Guidelines referred to in Directive 2009/.../EC, Directive 2009/.../EC, Regulation (EC) No .../2009 or Regulation (EC) No .../2009, it may request the Agency for an opinion. The Agency shall deliver its opinion, after consulting the Commission, within four months of receiving such request.

7.   The Agency shall decide on the terms and conditions for access to and operational security of electricity and gas infrastructure connecting or that might connect at least two Member States, hereinafter referred to as ‘cross-border infrastructure’, in accordance with Article 8.

Article 8

Tasks as regards terms and conditions for access to and operational security of cross-border infrastructure

1.   For cross-border infrastructure, the Agency shall decide upon those regulatory issues that fall within the competence of national regulatory authorities, which may include the terms and conditions for access and operational security, only:

| (a) | where the competent national regulatory authorities have not been able to reach an agreement within a period of six months from when the case was referred to the last of those regulatory authorities; or |
| --- | --- |

(a)

where the competent national regulatory authorities have not been able to reach an agreement within a period of six months from when the case was referred to the last of those regulatory authorities; or

| (b) | upon a joint request from the competent national regulatory authorities. |
| --- | --- |

(b)

upon a joint request from the competent national regulatory authorities.

The competent national regulatory authorities may jointly request that the period referred to in point (a) is extended by a period of up to six months.

When preparing its decision, the Agency shall consult the national regulatory authorities and the transmission system operators concerned and shall be informed of the proposals and observations of all the transmission system operators concerned.

2.   The terms and conditions for access to cross-border infrastructure shall include:

| (a) | procedure for capacity allocation; |
| --- | --- |

(a)

procedure for capacity allocation;

| (b) | time frames for allocation; |
| --- | --- |

(b)

time frames for allocation;

| (c) | sharing of congestion revenues; |
| --- | --- |

(c)

sharing of congestion revenues;

| (d) | charges levied on the users of the infrastructure referred to in Article 17(1)(d) of Regulation (EC) No .../2009 and Article 35(1)(d) of Directive 2009/.../EC. |
| --- | --- |

(d)

charges levied on the users of the infrastructure referred to in Article 17(1)(d) of Regulation (EC) No .../2009 and Article 35(1)(d) of Directive 2009/.../EC.

3.   Where a case has been referred to the Agency under paragraph 1, the Agency:

| (a) | shall provide its decision within a period of 6 months from the day of referral; |
| --- | --- |

(a)

shall provide its decision within a period of 6 months from the day of referral;

| (b) | may, if necessary, provide an interim decision to ensure that security of supply or operational security of the infrastructure in question is protected. |
| --- | --- |

(b)

may, if necessary, provide an interim decision to ensure that security of supply or operational security of the infrastructure in question is protected.

4.   The Commission may adopt Guidelines on the situations in which the Agency becomes competent to decide upon the terms and conditions for access to and operational security of cross-border infrastructure. Those measures, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 31(2) of this Regulation.

Article 9

Other tasks

1.   The Agency may, as a last resort, decide on exemptions, as provided for in Article 17(5) of Regulation (EC) No .../2009. The Agency may also decide on exemptions as provided for in Article 35(4) of Directive 2009/.../EC where the infrastructure concerned is located in the territory of more than one Member State.

2.   The Agency shall provide an opinion, upon request by the Commission in accordance with Article 3(1)(b) of Regulation (EC) No .../2009 or Article 3(1)(b) of Regulation (EC) No .../2009,on decisions of national regulatory authorities on certification.

Article 10

Consultations

In carrying out its tasks, the Agency shall consult extensively and at an early stage with market participants, transmission system operators, consumers, end-users and, where relevant, competition authorities, without prejudice to their respective competence, in an open and transparent manner, in particular when its tasks concern transmission system operators.

CHAPTER III

Organisation

Article 11

Administrative Board

1.   The Administrative Board shall be composed of six members. Each member shall have an alternate. One member and his alternate shall be appointed by the Commission, and five members and their alternates by the Council. The term of office shall be four years, renewable once. For the first mandate, the term of office shall be six years for half of the members and their alternates.

2.   The Administrative Board shall appoint its Chairman and its Vice-Chairman from among its members. The Vice-Chairman shall automatically replace the Chairman if the latter is not in a position to perform his duties. The term of office of the Chairman and of the Vice-Chairman shall be two years and shall be renewable once. In any event, however, the term of office of the Chairman and that of the Vice-Chairman shall expire when they cease to be members of the Administrative Board.

3.   Meetings of the Administrative Board shall be convened by its Chairman. The Chairman of the Board of Regulators, or the nominee of that Board, and the Director of the Agency shall participate in the deliberations unless the Administrative Board decides otherwise as regards the Director. The Administrative Board shall meet at least twice a year in ordinary session. It shall also meet at the initiative of its Chairman, at the request of the Commission or at the request of at least a third of its members. The Administrative Board may invite any person with a potentially relevant opinion to attend its meetings in the capacity of an observer. The members of the Administrative Board may, subject to the rules of procedure, be assisted by advisers or experts. The Administrative Board's secretarial services shall be provided by the Agency.

4.   Decisions of the Administrative Board shall be adopted on the basis of a two-thirds majority of the members present.

5.   Each member shall have one vote. The rules of procedure of the Administrative Board shall set out in greater detail:

| (a) | the arrangements governing voting, especially the conditions on the basis of which one member may act on behalf of another and also, where appropriate, the rules governing quorums; |
| --- | --- |

(a)

the arrangements governing voting, especially the conditions on the basis of which one member may act on behalf of another and also, where appropriate, the rules governing quorums;

| (b) | the arrangements governing the rotation applicable for the renewal of the members of the Board who are appointed by the Council so as to ensure a balanced participation of Member States over time. |
| --- | --- |

(b)

the arrangements governing the rotation applicable for the renewal of the members of the Board who are appointed by the Council so as to ensure a balanced participation of Member States over time.

6.   A member of the Administrative Board shall not be a member of the Board of Regulators.

7.   The members of the Administrative Board shall undertake to act independently in the public interest. For that purpose, each shall make a declaration of commitments and a declaration of interests indicating either the absence of any interest which may be considered prejudicial to his independence or any direct or indirect interest which might be considered prejudicial to his independence. Those declarations shall be made public annually and in writing.

Article 12

Tasks of the Administrative Board

1.   The Administrative Board shall, after having consulted the Board of Regulators and obtained its favourable opinion in accordance with Article 14(2), appoint the Director in accordance with Article 15(2).

2.   The Administrative Board shall formally appoint the members of the Board of Regulators in accordance with Article 13(1).

3.   The Administrative Board shall formally appoint the members of the Board of Appeal in accordance with Article 17(1).

4.   The Administrative Board shall ensure that the Agency carries out its mission and performs the tasks assigned to it in accordance with this Regulation.

5.   The Administrative Board shall adopt, before 30 September each year, after consulting the Commission and after approval by the Board of Regulators in accordance with Article 14(3), the work programme of the Agency for the coming year and shall transmit it to the European Parliament, the Council and the Commission. The work programme shall be adopted without prejudice to the annual budgetary procedure and shall be made public.

6.   The Administrative Board shall adopt and, if necessary, revise a multi-annual programme. That revision shall be based on an evaluation report, made by an independent external expert at the request of the Administrative Board. Those documents shall be made public.

7.   The Administrative Board shall exercise its budgetary powers in accordance with Articles 20 to 23.

8.   The Administrative Board shall decide, after having obtained the agreement of the Commission, whether to accept any legacies, donations or grants from other Community sources or any voluntary contribution from the Member States or from their regulatory authorities. The opinion that the Board shall deliver pursuant to Article 23(5) shall explicitly address the sources of funding listed in this paragraph.

9.   The Administrative Board, in consultation with the Board of Regulators, shall exercise disciplinary authority over the Director.

10.   The Administrative Board shall, where necessary, draw up the Agency's staff policy pursuant to Article 27(2).

11.   The Administrative Board shall adopt the special provisions on right of access to the documents of the Agency, in accordance with Article 29.

12.   The Administrative Board shall adopt and publish the annual report on the activities of the Agency, on the basis of the draft annual report referred to in Article 16(8), and shall transmit it to the European Parliament, the Council, the Commission, the Court of Auditors and the European Economic and Social Committee by 15 June. The annual report shall contain an independent section, approved by the Board of Regulators, concerning the regulatory activities of the Agency during the year considered.

13.   The Administrative Board shall adopt and publish its own rules of procedure.

Article 13

Board of Regulators

1.   The Board of Regulators shall be composed of:

| (a) | senior representatives of the regulatory authorities, as referred to in Article 34(1) of Directive 2009/.../EC and Article 38(1) of Directive 2009/.../EC, and one alternate per Member State from current senior staff of these authorities; |
| --- | --- |

(a)

senior representatives of the regulatory authorities, as referred to in Article 34(1) of Directive 2009/.../EC and Article 38(1) of Directive 2009/.../EC, and one alternate per Member State from current senior staff of these authorities;

| (b) | one non-voting representative of the Commission. |
| --- | --- |

(b)

one non-voting representative of the Commission.

2.   The Board of Regulators shall elect a Chairman and a Vice-Chairman from among its members. The Vice-Chairman shall replace the Chairman if the latter is not in a position to perform his duties. The term of office of the Chairman and of the Vice-Chairman shall be two-and-a-half years and shall be renewable. In any event, however, the term of office of the Chairman and that of the Vice-Chairman shall expire when they cease to be members of the Board of Regulators.

3.   The Board of Regulators shall act by a two-thirds majority of its members present. Each member or alternate shall have one vote.

4.   The Board of Regulators shall adopt and publish its Rules of procedure. The rules of procedure shall set out in greater detail the arrangements governing voting, especially the conditions whereby one member may act on behalf of another and also, where appropriate, the rules governing quorums. The rule of procedures may provide for specific working methods for the consideration of issues arising in the context of regional cooperation initiatives.

5.   When carrying out the tasks conferred upon it by this Regulation and without prejudice to its members acting on behalf of their respective regulatory authority, the Board of Regulators shall act independently and shall not seek or take instructions from any government of a Member State, from the Commission, or from any public or private entity.

6.   The Board of Regulators' secretarial services shall be provided by the Agency.

Article 14

Tasks of the Board of Regulators

1.   The Board of Regulators shall provide an opinion to the Director on the opinions, recommendations and decisions referred to in Articles 5, 6, 7, 8 and 9 that are considered for adoption. In addition, the Board of Regulators, within its field of competence, shall provide guidance to the Director in the execution of the Director's tasks.

2.   The Board of Regulators shall deliver an opinion to the Administrative Board on the candidate to be appointed as Director in accordance with Article 12(1) and Article 15(2). The Board of Regulators shall reach that decision on the basis of a three-quarters majority of its members.

3.   The Board of Regulators shall, in accordance with Article 12(5) and Article 16(6) and in line with the preliminary draft budget established according to Article 22(1), approve the work programme of the Agency for the coming year and present it before 1 September for adoption by the Administrative Board.

4.   The Board of Regulators shall approve the independent section on regulatory activities of the annual report, as provided for in Article 12(12) and Article 16(8).

Article 15

Director

1.   The Agency shall be managed by its Director, who shall act in accordance with the guidance referred to in the second sentence of Article 14(1) and, where provided for in this Regulation, the opinions of the Board of Regulators. Without prejudice to the respective roles of the Administrative Board and the Board of Regulators in relation to the tasks of the Director, the Director shall neither seek nor accept any instruction from any government, from the Commission, or from any other public or private entity.

2.   The Director shall be appointed by the Administrative Board following a favourable opinion of the Board of Regulators, on the basis of merit as well as skills and experience, from a list of at least three candidates proposed by the Commission, following a public call for expression of interest. Before appointment, the candidate selected by the Administrative Board may be invited to make a statement before the competent committee of the European Parliament and to answer questions put by its members.

3.   The Director's term of office shall be five years. In the course of the nine months preceding the end of this period, the Commission shall undertake an assessment addressing in particular:

| (a) | the performance of the Director; |
| --- | --- |

(a)

the performance of the Director;

| (b) | the Agency's duties and requirements in the coming years. |
| --- | --- |

(b)

the Agency's duties and requirements in the coming years.

The assessment concerning point (b) shall be carried out with the assistance of an independent external expert.

4.   The Administrative Board, acting on a proposal from the Commission, taking into account the assessment and the opinion of the Board of Regulators on this assessment and only in those cases where it can be justified by the duties and requirements of the Agency, may extend once the term of office of the Director for not more than three years.

5.   The Administrative Board shall inform the European Parliament of its intention to extend the Director's term of office. Within one month before the extension of his term of office, the Director may be invited to make a statement before the competent committee of the Parliament and to answer questions put by its members.

6.   If his term of office is not extended, the Director shall remain in office until the appointment of his successor.

7.   The Director may be removed from office only upon a decision of the Administrative Board, after having obtained a favourable opinion of the Board of Regulators. The Administrative Board shall reach this decision on the basis of a three-quarters majority of its members.

8.   The European Parliament and the Council may call upon the Director to submit a report on the performance of his duties.

Article 16

Tasks of the Director

1.   The Director shall be responsible for representing the Agency and shall be in charge of its management.

2.   The Director shall prepare the work of the Administrative Board. He shall participate, without having the right to vote, in the work of the Administrative Board.

3.   The Director shall adopt and publish the opinions, recommendations and decisions referred to in Articles 5, 6, 7, 8 and 9, that have received a favourable opinion of the Board of Regulators.

4.   The Director shall be responsible for implementing the annual work programme of the Agency under the guidance of the Board of Regulators and under the administrative control of the Administrative Board.

5.   The Director shall take the necessary measures, notably the adoption of internal administrative instructions and the publication of notices, to ensure the functioning of the Agency in accordance with this Regulation.

6.   Each year the Director shall prepare a draft work programme of the Agency for the following year, and submit it to the Board of Regulators and to the Commission by 30 June of that year.

7.   The Director shall draw up a preliminary draft budget of the Agency pursuant to Article 22(1) and shall implement the budget of the Agency pursuant to Article 23.

8.   Each year the Director shall prepare a draft annual report with an independent section on the regulatory activities of the Agency and a section on financial and administrative matters.

9.   With regard to the staff of the Agency, the Director shall exercise the powers provided for in Article 27(3).

Article 17

Board of Appeal

1.   The Board of Appeal shall be composed of six members and six alternates selected from among current or former senior staff of the national regulatory authorities, competition authorities or other national or Community institutions with relevant experience in the energy sector. The Board of Appeal designates its Chairman. The decisions of the Board of Appeal shall be adopted on the basis of a qualified majority of at least four of its six members. The Board of Appeal shall be convened when necessary.

2.   The members of the Board of Appeal shall be appointed by the Administrative Board, on a proposal from the Commission, following a public call for expression of interest, after consultation of the Board of Regulators.

3.   The term of office of the members of the Board of Appeal shall be five years. This term shall be renewable. The members of the Board of Appeal shall be independent in making their decisions. They shall not be bound by any instructions. They may not perform any other duties in the Agency, in its Administrative Board or in its Board of Regulators. A member of the Board of Appeal may not be removed during his term of office, unless he has been found guilty of serious misconduct, and the Administrative Board, after consulting the Board of Regulators, takes a decision to this effect.

4.   Members of the Board of Appeal may not take part in any appeal proceedings if they have any personal interest therein, or if they have previously been involved as representatives of one of the parties to the proceedings, or if they participated in the decision under appeal.

5.   If, for one of the reasons referred to in paragraph 4 or for any other reason, a member of a Board of Appeal considers that a fellow member should not take part in any appeal proceedings, the former member shall inform the Board of Appeal accordingly. Any party to the appeal proceedings may object to the participation of a member of the Board of Appeal on any of the grounds referred to in paragraph 4, or if suspected of bias. An objection may not be based on the nationality of members nor shall it be admissible if, while being aware of a reason for objecting, the party to the appeal proceedings has nonetheless taken a procedural step other than objecting to the composition of the Board of Appeal.

6.   The Board of Appeal shall decide on the action to be taken in the cases specified in paragraphs 4 and 5 without the participation of the member concerned. For the purpose of taking that decision, the member concerned shall be replaced on the Board of Appeal by his alternate, unless the alternate finds himself in a similar situation. Should this be the case, the Chairman shall designate a replacement from among the available alternates.

7.   The members of the Board of Appeal shall undertake to act independently in the public interest. For that purpose, they shall make a declaration of commitments and a declaration of interests indicating either the absence of any interest which may be considered prejudicial to their independence or any direct or indirect interest which might be considered prejudicial to their independence. Those declarations shall be made public annually and in writing.

Article 18

Appeals

1.   Any natural or legal person, including national regulatory authorities, may appeal against a decision referred to in Articles 7, 8 and/or 9 which is addressed to that person, or against a decision which, although in the form of a decision addressed to another person, is of direct and individual concern to that person.

2.   The appeal, together with the statement of grounds thereof, shall be filed in writing at the Agency within two months of the day of notification of the decision to the person concerned, or, in the absence thereof, of the day on which the Agency has published its decision. The Board of Appeal shall decide upon the appeal within two months after the appeal has been lodged.

3.   An appeal lodged pursuant to paragraph 1 shall not have suspensory effect. The Board of Appeal may, however, if it considers that circumstances so require, suspend the application of the contested decision.

4.   If the appeal is admissible, the Board of Appeal shall examine whether it is well-founded. It shall invite the parties as often as necessary to the appeal proceedings to file observations on notifications issued by itself or on communications from the other parties to the appeal proceedings, within specified time limits. Parties to the appeal proceedings shall be entitled to make an oral presentation.

5.   The Board of Appeal may, within the terms of this Article, exercise any power which lies within the competence of the Agency, or it may remit the case to the competent body of the Agency. The latter shall be bound by the decision of the Board of Appeal.

6.   The Board of Appeal shall adopt and publish its rules of procedure.

7.   The decisions taken by the Board of Appeal shall be published by the Agency.

Article 19

Actions before the Court of First Instance and the Court of Justice

1.   An action may be brought before the Court of First Instance or the Court of Justice, in accordance with Article 230 of the Treaty, contesting a decision taken by the Board of Appeal or, in cases where no right lies before the Board of Appeal, by the Agency.

2.   In the event that the Agency fails to take a decision, proceedings for failure to act may be brought before the Court of First Instance or the Court of Justice in accordance with Article 232 of the Treaty.

3.   The Agency shall be required to take the necessary measures to comply with the judgment of the Court of First Instance or the Court of Justice.

CHAPTER IV

Financial provisions

Article 20

Budget of the Agency

1.   The revenues of the Agency shall consist, in particular, of:

| (a) | a subsidy from the Community, entered in the general budget of the European Union (Commission Section); |
| --- | --- |

(a)

a subsidy from the Community, entered in the general budget of the European Union (Commission Section);

| (b) | the fees paid to the Agency pursuant to Article 21; |
| --- | --- |

(b)

the fees paid to the Agency pursuant to Article 21;

| (c) | any voluntary contribution from the Member States or from their regulatory authorities, as referred to in Article 12(8); |
| --- | --- |

(c)

any voluntary contribution from the Member States or from their regulatory authorities, as referred to in Article 12(8);

| (d) | any legacies, donations or grants as referred to in Article 12(8). |
| --- | --- |

(d)

any legacies, donations or grants as referred to in Article 12(8).

2.   The expenditure shall cover staff, administrative, infrastructure, and operational expenses.

3.   Revenue and expenditure shall be in balance.

4.   All Agency revenue and expenditure shall be the subject of forecasts for each financial year, coinciding with the calendar year, and shall be entered in its budget.

Article 21

Fees

1.   Fees shall be due to the Agency for requesting an exemption decision pursuant to Article 9(1).

2.   The fees referred to in paragraph 1 shall be set by the Commission.

Article 22

Establishment of the budget

1.   By 15 February each year, the Director shall draw up a preliminary draft budget covering the operational expenditure and the programme of work anticipated for the following financial year, and shall forward this preliminary draft budget to the Administrative Board, together with a list of provisional posts. Each year, the Administrative Board shall, on the basis of the preliminary draft budget prepared by the Director, make an estimate of revenue and expenditure of the Agency for the following financial year. That estimate, including a draft establishment plan, shall be transmitted by the Administrative Board to the Commission by 31 March. Prior to adoption of the estimate, the draft prepared by the Director shall be transmitted to the Board of Regulators, which may deliver an opinion on the draft.

2.   The estimate shall be transmitted by the Commission to the European Parliament and to the Council, hereinafter referred to as the ‘budgetary authority’, together with the preliminary draft general budget of the European Union.

3.   On the basis of the estimates, the Commission shall enter in the preliminary draft general budget of the European Union the forecasts it considers necessary in respect of the establishment plan and the amount of the grant to be charged to the general budget of the European Union in accordance with Article 272 of the Treaty.

4.   The budgetary authority shall adopt the establishment plan for the Agency.

5.   The budget of the Agency shall be drawn up by the Administrative Board. It shall become final after the final adoption of the general budget of the European Union. Where necessary, it shall be adjusted accordingly.

6.   The Administrative Board shall, without delay, notify the budgetary authority of its intention to implement any project which may have significant financial implications for the funding of its budget, in particular any project relating to property such as the rental or purchase of buildings. It shall inform the Commission thereof. If either branch of the budget authority intends to issue an opinion, it shall, within two weeks of receipt of the information on the building project, notify the Agency of its intention to issue such an opinion. In the absence of a reply, the agency may proceed with the planned operation.

Article 23

Implementation and control of the budget

1.   The Director shall act as authorising officer and shall implement the Agency's budget.

2.   By 1 March following the completion of each financial year, the Agency accounting officer shall forward to the Commission's accounting officer and the Court of Auditors the provisional accounts, accompanied by the report on budgetary and financial management over the financial year. The Agency accounting officer shall also send the report on budgetary and financial management to the European Parliament and the Council by 31 March of the following year. The Commission's accounting officer shall then consolidate the provisional accounts of the institutions and decentralised bodies in accordance with Article 128 of Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities (11) (‘the Financial Regulation’).

3.   By 31 March following the completion of each financial year, the Commission's accounting officer shall forward the provisional accounts of the Agency, accompanied by the report on budgetary and financial management over the financial year, to the Court of Auditors. The report on budgetary and financial management over the financial year shall also be forwarded to the European Parliament and the Council.

4.   After receiving the observations of the Court of Auditors on the provisional accounts of the Agency in accordance with the provisions of Article 129 of the Financial Regulation, the Director, acting on his own responsibility, shall draw up the final accounts of the Agency and transmit them, for opinion, to the Administrative Board.

5.   The Administrative Board shall deliver an opinion on the final accounts of the Agency.

6.   The Director shall transmit those final accounts, accompanied by the opinion of the Administrative Board, by 1 July following the completion of the financial year, to the European Parliament, the Council, the Commission and the Court of Justice.

7.   The final accounts shall be published.

8.   The Director shall send the Court of Auditors a reply to the latter's observations by 15 October. He shall also send a copy of this reply to the Administrative Board and the Commission.

9.   The Director shall submit to the European Parliament, at the latter's request and as provided for in Article 146(3) of the Financial Regulation, any information necessary for the smooth application of the discharge procedure for the financial year in question.

10.   The European Parliament, following a recommendation from the Council acting by qualified majority, shall, before 15 May of the year N + 2, grant a discharge to the Director for the implementation of the budget for the financial year N.

Article 24

Financial rules

The financial rules applicable to the Agency shall be drawn up by the Administrative Board after consulting the Commission. Those rules may deviate from Regulation (EC, Euratom) No 2343/2002 if the specific operational needs for the functioning of the Agency so require and only with the prior agreement of the Commission.

Article 25

Anti-fraud measures

1.   For the purposes of combating fraud, corruption and any other illegal activity, the provisions of Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) (12) shall apply to the Agency without any restriction.

2.   The Agency shall accede to the Interinstitutional Agreement of 25 May 1999 between the European Parliament, the Council of the European Union and the Commission of the European Communities concerning internal investigations by the European Anti-Fraud Office (OLAF) (13) and shall immediately adopt appropriate provisions for all staff of the Agency.

3.   The funding decisions and the agreements and the implementing instruments resulting from them shall explicitly stipulate that the Court of Auditors and OLAF may, if need be, carry out on-the-spot checks on the beneficiaries of monies disbursed by the Agency as well as on the staff responsible for allocating these monies.

CHAPTER V

General provisions

Article 26

Privileges and immunities

The Protocol on Privileges and Immunities of the European Communities shall apply to the Agency.

Article 27

Staff

1.   The Staff Regulations, the Conditions of employment and the rules adopted jointly by the European Community institutions for the purpose of applying the Staff Regulations and the Conditions of employment shall apply to the staff of the Agency, including its Director.

2.   The Administrative Board, in agreement with the Commission, shall adopt the necessary implementing measures, in accordance with the arrangements provided for in Article 110 of the Staff Regulations.

3.   In respect of its staff, the Agency shall exercise the powers conferred on the appointing authority by the Staff Regulations and on the authority entitled to conclude contracts by the Conditions of Employment.

4.   The Administrative Board may adopt provisions to allow national experts from Member States to be employed on secondment at the Agency.

Article 28

Liability of the Agency

1.   In the case of non-contractual liability, the Agency shall, in accordance with the general principles common to the laws of the Member States, make good any damage caused by it or by its staff in the performance of their duties. The Court of Justice shall have jurisdiction in any dispute over the remedying of such damage.

2.   The personal financial liability and disciplinary liability of Agency staff towards the Agency shall be governed by the relevant provisions applying to the staff of the Agency.

Article 29

Access to documents

1.   Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents (14) shall apply to documents held by the Agency.

2.   The Administrative Board shall adopt practical measures for applying Regulation (EC) No 1049/2001 by ... (15).

3.   Decisions taken by the Agency pursuant to Article 8 of Regulation (EC) No 1049/2001 may be the subject of a complaint to the Ombudsman or of proceedings before the Court of Justice, in accordance with the conditions laid down in Articles 195 and 230 of the Treaty respectively.

Article 30

Participation of third countries

1.   The Agency shall be open to the participation of third countries which have concluded agreements with the Community whereby they have adopted and are applying Community law in the field of energy and, if relevant, in the fields of environment and competitiveness.

2.   Under the relevant provisions of those agreements, arrangements shall be made specifying, in particular, the nature, scope and procedural aspects of the involvement of those countries in the work of the Agency, including provisions relating to financial contributions and to staff.

Article 31

Committee

1.   The Commission shall be assisted by a committee.

2.   Where reference is made to this paragraph, Article 5a(1) to (4) and Article 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.

Article 32

Language arrangements

1.   The provisions of Council Regulation No 1 of 15 April 1958 determining the languages to be used by the European Economic Community (16) shall apply to the Agency.

2.   The Administrative Board shall decide on the internal language arrangements for the Agency.

3.   The translation services required for the functioning of the Agency shall be provided by the Translation Centre for the Bodies of the European Union.

CHAPTER VI

Final provisions

Article 33

Evaluation

1.   The Commission, with the assistance of an independent external expert, shall carry out an evaluation of the activities of the Agency. This shall cover the results achieved by the Agency and its working methods, in relation with its objective, mandate and tasks defined in this Regulation and in its annual work programmes.

2.   The Board of Regulators shall receive the findings of the evaluation and issue recommendations regarding changes to this Regulation, the Agency and its working methods to the Commission, which may forward them, together with its own opinion as well as appropriate proposals, to the European Parliament and the Council.

3.   The first evaluation report shall be presented by the Commission to the European Parliament and the Council within four years after the first Director has taken up his duties. The Commission shall then present an evaluation report at least every five years.

Article 34

Entry into force and transitory measures

1.   This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

2.   Articles 5, 6, 7, 8, 9 and 10 shall apply from ... (17).

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at, Brussels, ...

For the European Parliament

The President

...

For the Council

The President

...

---

(1)  OJ C 211, 19.8.2008, p. 23.

1

(2)  OJ C 172, 5.7.2008, p. 55.

2

(3)  Opinion of the European Parliament of 18 June 2008 (not yet published in the Official Journal), Council Common Position of 9 January 2009 and Position of the European Parliament of ... (not yet published in the Official Journal).

3

(4)  OJ L 296, 14.11.2003, p. 34.

4

(5)  OJ L 176, 15.7.2003, p. 37.

5

(6)  OJ L 176, 15.7.2003, p. 57.

6

(7)  OJ L ...

7

(8)  OJ L 357, 31.12.2002, p. 72.

8

(9)  OJ L 56, 4.3.1968, p. 1.

9

(10)  OJ L 184, 17.7.1999, p. 23.

10

(11)  OJ L 248, 16.9.2002, p. 1.

11

(12)  OJ L 136, 31.5.1999, p. 1.

12

(13)  OJ L 136, 31.5.1999, p. 15.

13

(14)  OJ L 145, 31.5.2001, p. 43.

14

(15)  Six months from the date of entry into force of this Regulation.

15

(16)  OJ 17, 6.10.1958, p. 385.

16

(17)  18 months after entry into force of this Regulation.

17

---

STATEMENT OF THE COUNCIL'S REASONS

I.   INTRODUCTION

| 1. | On 19 September 2007, the Commission presented a proposal for a Regulation establishing an Agency for the Cooperation of Energy Regulators, based on Article 95 of the Treaty, together in a package with four other proposals concerning the internal energy market. |
| --- | --- |

1.

On 19 September 2007, the Commission presented a proposal for a Regulation establishing an Agency for the Cooperation of Energy Regulators, based on Article 95 of the Treaty, together in a package with four other proposals concerning the internal energy market.

| 2. | The Committee of the Regions and the European Economic and Social Committee delivered their opinions on the complete package on 10 (1) and 22 April 2008 (2) respectively. |
| --- | --- |

2.

The Committee of the Regions and the European Economic and Social Committee delivered their opinions on the complete package on 10 (1) and 22 April 2008 (2) respectively.

| 3. | The European Parliament adopted its Opinion (3) at first reading on 18 June 2008, approving 73 amendments. The Commission did not present a modified proposal. |
| --- | --- |

3.

The European Parliament adopted its Opinion (3) at first reading on 18 June 2008, approving 73 amendments. The Commission did not present a modified proposal.

| 4. | On 9 January 2009, the Council adopted its Common Position in accordance with Article 251 of the Treaty. |
| --- | --- |

4.

On 9 January 2009, the Council adopted its Common Position in accordance with Article 251 of the Treaty.

II.   OBJECTIVE OF THE PROPOSAL

| 5. | The proposal is part of the third internal energy market package, together with the Directive concerning common rules for the internal market in natural gas, the Regulation on conditions for access to the natural gas transmission networks, the Directive concerning common rules for the internal market in electricity and the Regulation on conditions for access to the network for cross-border exchanges in electricity. It contributes to putting in place the regulatory framework needed to make market opening fully effective and create a single gas and electricity market by establishing an Agency for the purpose of assisting regulatory authorities in exercising at Community level the regulatory tasks performed at national level, and where necessary to coordinate their action. |
| --- | --- |

5.

The proposal is part of the third internal energy market package, together with the Directive concerning common rules for the internal market in natural gas, the Regulation on conditions for access to the natural gas transmission networks, the Directive concerning common rules for the internal market in electricity and the Regulation on conditions for access to the network for cross-border exchanges in electricity. It contributes to putting in place the regulatory framework needed to make market opening fully effective and create a single gas and electricity market by establishing an Agency for the purpose of assisting regulatory authorities in exercising at Community level the regulatory tasks performed at national level, and where necessary to coordinate their action.

III.   ANALYSIS OF THE COMMON POSITION

6.   General Remarks

| 6.1. | The Commission has accepted all the changes introduced by the Council to its proposal. |
| --- | --- |

6.1.

The Commission has accepted all the changes introduced by the Council to its proposal.

| 6.2. | Concerning the 73 amendments adopted by the European Parliament, the Council has followed the Commission in






  — | accepting the following 25 amendments:






  — | fully (sometimes with redrafting): 9, 12, 45, 47, 48, 49, 53, 54, 58, 59 and 66 |
| --- | --- | --- | --- |

6.2.

Concerning the 73 amendments adopted by the European Parliament, the Council has followed the Commission in

—

accepting the following 25 amendments:

—

fully (sometimes with redrafting): 9, 12, 45, 47, 48, 49, 53, 54, 58, 59 and 66

| — | partly/in principle/in spirit: 3, 4, 11 (first part), 13, 15, 16, 40, 44, 51, 57, 61, 64, 68 and 76; and |
| --- | --- |

—

partly/in principle/in spirit: 3, 4, 11 (first part), 13, 15, 16, 40, 44, 51, 57, 61, 64, 68 and 76; and

| — | rejecting the following 25 amendments: 8, 17, 18, 20, 21, 22, 25, 29, 30, 34, 36, 37, 38, 46, 50, 52, 55, 56, 60, 62, 63, 67, 69, 71 and 73, on grounds of substance, form or consistency. |
| --- | --- |

—

rejecting the following 25 amendments: 8, 17, 18, 20, 21, 22, 25, 29, 30, 34, 36, 37, 38, 46, 50, 52, 55, 56, 60, 62, 63, 67, 69, 71 and 73, on grounds of substance, form or consistency.

| 6.3. | The Council has deviated from the Commission position in






  — | accepting in substance amendment 65 and |
| --- | --- | --- |

6.3.

The Council has deviated from the Commission position in

—

accepting in substance amendment 65 and

| — | rejecting the following 23 amendments: 5, 6, 7, 10, 11 (second part), 14, 19, 24, 26, 27, 28, 31, 32, 33, 35, 39, 41, 42, 43, 70, 72, 74 and 75. |
| --- | --- |

—

rejecting the following 23 amendments: 5, 6, 7, 10, 11 (second part), 14, 19, 24, 26, 27, 28, 31, 32, 33, 35, 39, 41, 42, 43, 70, 72, 74 and 75.

7.   Specific Remarks

| 7.1. | Regarding the EP amendments where the Council has deviated from the Commission position:






  a) | The Council has accepted amdt. 65 (in line with the Director having to act strictly in accordance with the Board of Regulators' instructions). |
| --- | --- | --- |

7.1.

Regarding the EP amendments where the Council has deviated from the Commission position:

a)

The Council has accepted amdt. 65 (in line with the Director having to act strictly in accordance with the Board of Regulators' instructions).

| b) | The Council has rejected the 23 amendments listed above (point 6.3.) on the following grounds:






  i) | amdt. 5: duplicates tasks already carried out by the Commission and is not in line with the tasks foreseen in the Commission proposal |
| --- | --- | --- |

b)

The Council has rejected the 23 amendments listed above (point 6.3.) on the following grounds:

i)

amdt. 5: duplicates tasks already carried out by the Commission and is not in line with the tasks foreseen in the Commission proposal

| ii) | amdt. 6: no added value and incorrect as cooperation of national regulators will continue to take place outside the framework provided by the Agency |
| --- | --- |

ii)

amdt. 6: no added value and incorrect as cooperation of national regulators will continue to take place outside the framework provided by the Agency

| iii) | amdt. 7: renders the Agency's scope unclear and contradicts the non-binding nature of some of its acts |
| --- | --- |

iii)

amdt. 7: renders the Agency's scope unclear and contradicts the non-binding nature of some of its acts

| iv) | amdt. 10: mixes up the independence of national regulators, provided for by the Electricity and Gas Directives, with that of the Agency's bodies. |
| --- | --- |

iv)

amdt. 10: mixes up the independence of national regulators, provided for by the Electricity and Gas Directives, with that of the Agency's bodies.

| v) | amdt. 11 (second part): no added value and not consistent with the Director's tasks |
| --- | --- |

v)

amdt. 11 (second part): no added value and not consistent with the Director's tasks

| vi) | amdt. 14: not in line with the operative provisions of the Regulation |
| --- | --- |

vi)

amdt. 14: not in line with the operative provisions of the Regulation

| vii) | amdt. 19: mixes up the acts of the Agency with its tasks as described in articles 5 to 10 |
| --- | --- |

vii)

amdt. 19: mixes up the acts of the Agency with its tasks as described in articles 5 to 10

| viii) | amdt. 24: Art. 30 (participation of third countries) suffices to ensure adequate involvement of third countries in the Agency's work |
| --- | --- |

viii)

amdt. 24: Art. 30 (participation of third countries) suffices to ensure adequate involvement of third countries in the Agency's work

| ix) | amdt. 26: the Council notes that the Commission could only accept this amdt. for individual decisions in specific cases under precisely defined conditions. Moreover the Council sees no basis to delegate the Commission's powers in these matters and further notes that the amendment would restrict the powers of the Agency to technical codes only while market codes should be covered as well by the Agency's opinions |
| --- | --- |

ix)

amdt. 26: the Council notes that the Commission could only accept this amdt. for individual decisions in specific cases under precisely defined conditions. Moreover the Council sees no basis to delegate the Commission's powers in these matters and further notes that the amendment would restrict the powers of the Agency to technical codes only while market codes should be covered as well by the Agency's opinions

| x) | amdt. 27 and 28: largely covered by Art. 6(6), 7(3) and 8(1) third sub-paragraph |
| --- | --- |

x)

amdt. 27 and 28: largely covered by Art. 6(6), 7(3) and 8(1) third sub-paragraph

| xi) | amdt. 31: the Agency cannot ensure cooperation between regulators |
| --- | --- |

xi)

amdt. 31: the Agency cannot ensure cooperation between regulators

| xii) | amdt. 32: and 33: these tasks normally fall under the Commission's remit |
| --- | --- |

xii)

amdt. 32: and 33: these tasks normally fall under the Commission's remit

| xiii) | amdt. 39: duplicates tasks foreseen under Directive 2004/67 on the security of natural gas supply and Directive 2005/89 on the security of electricity supply and infrastructure investment |
| --- | --- |

xiii)

amdt. 39: duplicates tasks foreseen under Directive 2004/67 on the security of natural gas supply and Directive 2005/89 on the security of electricity supply and infrastructure investment

| xiv) | amdt. 42: art. 7 of the proposal is directed at national regulators not at TSOs |
| --- | --- |

xiv)

amdt. 42: art. 7 of the proposal is directed at national regulators not at TSOs

| xv) | amdt. 35, 41 and 43: amdt. 35 and 41 duplicate each other and, as well as amdt. 43, duplicate tasks already carried out by the Commission pursuant to the Electricity and Gas Directives. |
| --- | --- |

xv)

amdt. 35, 41 and 43: amdt. 35 and 41 duplicate each other and, as well as amdt. 43, duplicate tasks already carried out by the Commission pursuant to the Electricity and Gas Directives.

| xvi) | amdt. 70: contrary (c) to the voluntary nature of national contributions and (ca) unworkable in practice |
| --- | --- |

xvi)

amdt. 70: contrary (c) to the voluntary nature of national contributions and (ca) unworkable in practice

| xvii) | amdt. 72: it could be left to the rules of procedures of the Regulatory Board how it should formulate its opinion |
| --- | --- |

xvii)

amdt. 72: it could be left to the rules of procedures of the Regulatory Board how it should formulate its opinion

| xviii) | amdt. 74: it should be left to the Commission to decide whether and how widely to consult when carrying out its evaluation |
| --- | --- |

xviii)

amdt. 74: it should be left to the Commission to decide whether and how widely to consult when carrying out its evaluation

| xix) | amdt. 75: the time period envisaged in this amendment is too short to allow for a meaningful evaluation. |
| --- | --- |

xix)

amdt. 75: the time period envisaged in this amendment is too short to allow for a meaningful evaluation.

| 7.2 | Concerning the Commission proposal, the Council has introduced certain other modifications (of substance and/or of form) so as to provide for a regulatory Agency, independent from the Member States and the Commission, with well circumscribed tasks that strictly reflects the tasks entrusted to the Agency by the Electricity and Gas Directives and Regulations. The Agency focuses on issues involving more than one Member State as far as binding decision-making is concerned; its involvement in technical matters (establishment of network codes) has been strengthened, but is still of an advisory nature. It generally allows for the national levels to play their parts (e.g. two-step approach for defining terms and conditions for access and operational security for cross-border infrastructure (Art. 8)). In all these tasks, market participants and authorities at national levels are duly consulted (Art. 8(1), 10) and due account is taken of the outcomes of regional cooperation between TSOs and between regulators (Art. 6(6) and 7(3)).
  The Common Position provides (Art. 13) for a strong Regulatory Board, composed of senior representatives of national regulators, and a Director of the Agency acting in accordance with the Regulatory Board. It also foresees a lean and efficient Administrative Board (Art. 11), consisting of 6 members (as suggested by the EP, amdt 44), five of them being appointed by the Council and one by the Commission, with partial rotation ensuring adequate participation of Member States over time. With a view to improving democratic accountability, transparency provisions have been significantly strengthened, e.g. on the interests of Board members (e.g. Art. 11(7))).
  With a view to adapting the Agency in the light of experience the Common Position introduces a review mechanism (Art. 33(2)) with a strong input from the Regulatory Board. |
| --- | --- |

7.2

Concerning the Commission proposal, the Council has introduced certain other modifications (of substance and/or of form) so as to provide for a regulatory Agency, independent from the Member States and the Commission, with well circumscribed tasks that strictly reflects the tasks entrusted to the Agency by the Electricity and Gas Directives and Regulations. The Agency focuses on issues involving more than one Member State as far as binding decision-making is concerned; its involvement in technical matters (establishment of network codes) has been strengthened, but is still of an advisory nature. It generally allows for the national levels to play their parts (e.g. two-step approach for defining terms and conditions for access and operational security for cross-border infrastructure (Art. 8)). In all these tasks, market participants and authorities at national levels are duly consulted (Art. 8(1), 10) and due account is taken of the outcomes of regional cooperation between TSOs and between regulators (Art. 6(6) and 7(3)).

The Common Position provides (Art. 13) for a strong Regulatory Board, composed of senior representatives of national regulators, and a Director of the Agency acting in accordance with the Regulatory Board. It also foresees a lean and efficient Administrative Board (Art. 11), consisting of 6 members (as suggested by the EP, amdt 44), five of them being appointed by the Council and one by the Commission, with partial rotation ensuring adequate participation of Member States over time. With a view to improving democratic accountability, transparency provisions have been significantly strengthened, e.g. on the interests of Board members (e.g. Art. 11(7))).

With a view to adapting the Agency in the light of experience the Common Position introduces a review mechanism (Art. 33(2)) with a strong input from the Regulatory Board.

---

(1)  OJ C 172, 5.7.2008, p. 55.

(2)  OJ C 211, 19.8.2008, p. 23.

(3)  Not yet published in the Official Journal.

---

| 31.3.2009 | EN | Official Journal of the European Union | CE 75/16 |
| --- | --- | --- | --- |

31.3.2009

EN

Official Journal of the European Union

CE 75/16

---

COMMON POSITION (EC) No 11/2009

adopted by the Council on 9 January 2009

with a view to the adoption of Regulation (EC) No .../2009 of the European Parliament and of the Council of ... on conditions for access to the network for cross-border exchanges in electricity and repealing Regulation (EC) No 1228/2003

(Text with EEA relevance)

(2009/C 75 E/02)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 95 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Economic and Social Committee (1),

Having regard to the opinion of the Committee of the Regions (2),

Acting in accordance with the procedure laid down in Article 251 of the Treaty (3),

Whereas:

| (1) | The internal market in electricity, which has been progressively implemented since 1999, aims at delivering real choice for all consumers in the Community, be they citizens or businesses, new business opportunities and more cross-border trade, so as to achieve efficiency gains, competitive prices, higher standards of service, and to contribute to security of supply and sustainability. |
| --- | --- |

(1)

The internal market in electricity, which has been progressively implemented since 1999, aims at delivering real choice for all consumers in the Community, be they citizens or businesses, new business opportunities and more cross-border trade, so as to achieve efficiency gains, competitive prices, higher standards of service, and to contribute to security of supply and sustainability.

| (2) | Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity (4) and Regulation (EC) No 1228/2003 of the European Parliament and of the Council of 26 June 2003 on conditions for access to the network for cross-border exchanges in electricity (5) have made significant contributions towards the creation of such an internal market in electricity. |
| --- | --- |

(2)

Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity (4) and Regulation (EC) No 1228/2003 of the European Parliament and of the Council of 26 June 2003 on conditions for access to the network for cross-border exchanges in electricity (5) have made significant contributions towards the creation of such an internal market in electricity.

| (3) | However, at present, there are obstacles to the sale of electricity on equal terms, without discrimination or disadvantage in the Community. In particular, non-discriminatory network access and an equally effective level of regulatory supervision do not yet exist in each Member State. |
| --- | --- |

(3)

However, at present, there are obstacles to the sale of electricity on equal terms, without discrimination or disadvantage in the Community. In particular, non-discriminatory network access and an equally effective level of regulatory supervision do not yet exist in each Member State.

| (4) | The Communication of the Commission of 10 January 2007 entitled ‘An Energy Policy for Europe’ highlighted the importance of completing the internal market in electricity and creating a level playing field for all electricity undertakings in the Community. The Communications of the Commission of 10 January 2007 entitled ‘Prospects for the internal gas and electricity market’ and ‘Inquiry pursuant to Article 17 of Regulation (EC) No 1/2003 into the European gas and electricity sectors (Final Report)’ showed that the present rules and measures do not provide the necessary framework to achieve the objective of a well-functioning internal market. |
| --- | --- |

(4)

The Communication of the Commission of 10 January 2007 entitled ‘An Energy Policy for Europe’ highlighted the importance of completing the internal market in electricity and creating a level playing field for all electricity undertakings in the Community. The Communications of the Commission of 10 January 2007 entitled ‘Prospects for the internal gas and electricity market’ and ‘Inquiry pursuant to Article 17 of Regulation (EC) No 1/2003 into the European gas and electricity sectors (Final Report)’ showed that the present rules and measures do not provide the necessary framework to achieve the objective of a well-functioning internal market.

| (5) | Besides thoroughly implementing the existing regulatory framework, the regulatory framework for the internal market in electricity set out in Regulation (EC) No 1228/2003 should be adapted in line with those communications. |
| --- | --- |

(5)

Besides thoroughly implementing the existing regulatory framework, the regulatory framework for the internal market in electricity set out in Regulation (EC) No 1228/2003 should be adapted in line with those communications.

| (6) | In particular, increased cooperation and coordination among transmission system operators is required to create network codes for providing and managing effective access to the transmission networks across borders, and to ensure coordinated and sufficiently forward-looking planning and sound technical evolution of the transmission system in the Community, with due regard to the environment. Those network codes should be in line with non-binding framework guidelines developed by the Agency for the Cooperation of Energy Regulators established by Regulation (EC) No .../... (6) of the European Parliament and of the Council (‘the Agency’). The Agency should have a role in reviewing draft network codes, including their compliance with non-binding framework guidelines, and it should be enabled to recommend them for adoption by the Commission. The Agency should assess proposed modifications to the network codes and it should be enabled to recommend them for adoption by the Commission. Transmission system operators should operate their networks in accordance with those network codes. |
| --- | --- |

(6)

In particular, increased cooperation and coordination among transmission system operators is required to create network codes for providing and managing effective access to the transmission networks across borders, and to ensure coordinated and sufficiently forward-looking planning and sound technical evolution of the transmission system in the Community, with due regard to the environment. Those network codes should be in line with non-binding framework guidelines developed by the Agency for the Cooperation of Energy Regulators established by Regulation (EC) No .../... (6) of the European Parliament and of the Council (‘the Agency’). The Agency should have a role in reviewing draft network codes, including their compliance with non-binding framework guidelines, and it should be enabled to recommend them for adoption by the Commission. The Agency should assess proposed modifications to the network codes and it should be enabled to recommend them for adoption by the Commission. Transmission system operators should operate their networks in accordance with those network codes.

| (7) | In order to ensure optimal management of the electricity transmission network and to allow trading and supplying electricity across borders in the Community, a European Network of Transmission System Operators for Electricity (‘the ENTSO for Electricity’), should be established. The tasks of the ENTSO for Electricity should be carried out in compliance with Community competition rules which remain applicable to the decisions of the ENTSO for Electricity. Its tasks should be well-defined and their working method should be such as to ensure efficiency, its representative nature and transparency. The network codes prepared by the ENTSO for Electricity are not intended to replace the necessary national network codes for non-cross-border issues. Given that more effective progress may be achieved through an approach at regional level, transmission system operators should set up regional structures within the overall cooperation structure, whilst ensuring that results at regional level are compatible with network codes and non-binding 10-year network development plans at Community level. Cooperation within such regional structures presupposes effective unbundling of network activities from production and supply activities. In the absence of such unbundling, regional cooperation between transmission system operators gives rise to a risk of anti-competitive conduct. |
| --- | --- |

(7)

In order to ensure optimal management of the electricity transmission network and to allow trading and supplying electricity across borders in the Community, a European Network of Transmission System Operators for Electricity (‘the ENTSO for Electricity’), should be established. The tasks of the ENTSO for Electricity should be carried out in compliance with Community competition rules which remain applicable to the decisions of the ENTSO for Electricity. Its tasks should be well-defined and their working method should be such as to ensure efficiency, its representative nature and transparency. The network codes prepared by the ENTSO for Electricity are not intended to replace the necessary national network codes for non-cross-border issues. Given that more effective progress may be achieved through an approach at regional level, transmission system operators should set up regional structures within the overall cooperation structure, whilst ensuring that results at regional level are compatible with network codes and non-binding 10-year network development plans at Community level. Cooperation within such regional structures presupposes effective unbundling of network activities from production and supply activities. In the absence of such unbundling, regional cooperation between transmission system operators gives rise to a risk of anti-competitive conduct.

| (8) | All market participants have an interest in the work expected of the ENTSO for Electricity. An effective consultation process is therefore essential and existing structures that are set up to facilitate and streamline the consultation process, such as the Union for the Coordination of Transmission of Electricity, national regulators or the Agency should play an important role. |
| --- | --- |

(8)

All market participants have an interest in the work expected of the ENTSO for Electricity. An effective consultation process is therefore essential and existing structures that are set up to facilitate and streamline the consultation process, such as the Union for the Coordination of Transmission of Electricity, national regulators or the Agency should play an important role.

| (9) | This Regulation should lay down basic principles with regard to tarification and capacity allocation, whilst providing for the adoption of guidelines detailing further relevant principles and methodologies, in order to allow rapid adaptation to changed circumstances. |
| --- | --- |

(9)

This Regulation should lay down basic principles with regard to tarification and capacity allocation, whilst providing for the adoption of guidelines detailing further relevant principles and methodologies, in order to allow rapid adaptation to changed circumstances.

| (10) | In an open, competitive market, transmission system operators should be compensated for costs incurred as a result of hosting cross-border flows of electricity on their networks by the operators of the transmission systems from which cross-border flows originate and the systems where those flows end. |
| --- | --- |

(10)

In an open, competitive market, transmission system operators should be compensated for costs incurred as a result of hosting cross-border flows of electricity on their networks by the operators of the transmission systems from which cross-border flows originate and the systems where those flows end.

| (11) | Payments and receipts resulting from compensation between transmission system operators should be taken into account when setting national network tariffs. |
| --- | --- |

(11)

Payments and receipts resulting from compensation between transmission system operators should be taken into account when setting national network tariffs.

| (12) | The actual amount payable for cross-border access to the system can vary considerably, depending on the transmission system operator involved and as a result of differences in the structure of the tarification systems applied in Member States. A certain degree of harmonisation is therefore necessary in order to avoid distortions of trade. |
| --- | --- |

(12)

The actual amount payable for cross-border access to the system can vary considerably, depending on the transmission system operator involved and as a result of differences in the structure of the tarification systems applied in Member States. A certain degree of harmonisation is therefore necessary in order to avoid distortions of trade.

| (13) | A proper system of long-term locational signals would be necessary, based on the principle that the level of the network access charges should reflect the balance between generation and consumption of the region concerned, on the basis of a differentiation of the network access charges on producers and/or consumers. |
| --- | --- |

(13)

A proper system of long-term locational signals would be necessary, based on the principle that the level of the network access charges should reflect the balance between generation and consumption of the region concerned, on the basis of a differentiation of the network access charges on producers and/or consumers.

| (14) | It would not be appropriate to apply distance-related tariffs or, provided appropriate locational signals are in place, a specific tariff to be paid only by exporters or importers in addition to the general charge for access to the national network. |
| --- | --- |

(14)

It would not be appropriate to apply distance-related tariffs or, provided appropriate locational signals are in place, a specific tariff to be paid only by exporters or importers in addition to the general charge for access to the national network.

| (15) | The precondition for effective competition in the internal market in electricity is non-discriminatory and transparent charges for network use including interconnecting lines in the transmission system. The available capacities of those lines should be set at the maximum levels consistent with the safety standards of secure network operation. |
| --- | --- |

(15)

The precondition for effective competition in the internal market in electricity is non-discriminatory and transparent charges for network use including interconnecting lines in the transmission system. The available capacities of those lines should be set at the maximum levels consistent with the safety standards of secure network operation.

| (16) | It is important to avoid distortion of competition resulting from the differing safety, operational and planning standards used by transmission system operators in Member States. Moreover, there should be transparency for market participants concerning available transfer capacities and the security, planning and operational standards that affect the available transfer capacities. |
| --- | --- |

(16)

It is important to avoid distortion of competition resulting from the differing safety, operational and planning standards used by transmission system operators in Member States. Moreover, there should be transparency for market participants concerning available transfer capacities and the security, planning and operational standards that affect the available transfer capacities.

| (17) | Market monitoring undertaken over recent years by the national regulatory authorities and by the Commission has shown that current transparency requirements and rules on access to infrastructure are not sufficient. |
| --- | --- |

(17)

Market monitoring undertaken over recent years by the national regulatory authorities and by the Commission has shown that current transparency requirements and rules on access to infrastructure are not sufficient.

| (18) | Equal access to information on the physical status of the system is necessary to enable all market participants to assess the overall demand and supply situation and identify the reasons for movements in the wholesale price. This includes more precise information on electricity generation, supply and demand including forecasts, network and interconnection capacity, flows and maintenance, balancing and reserve capacity. |
| --- | --- |

(18)

Equal access to information on the physical status of the system is necessary to enable all market participants to assess the overall demand and supply situation and identify the reasons for movements in the wholesale price. This includes more precise information on electricity generation, supply and demand including forecasts, network and interconnection capacity, flows and maintenance, balancing and reserve capacity.

| (19) | To enhance trust in the market, its participants need to be sure that those engaging in abusive behaviour can be subject to penalties. Competent authorities should be enabled to investigate effectively allegations of market abuse. Competent authorities therefore need access to data that provides information on operational decisions made by supply undertakings. In the electricity market, many relevant decisions are made by the generators, which should keep this information available to the competent authorities for a fixed period of time. Small generators with no real ability to distort the market should be exempt from that obligation. |
| --- | --- |

(19)

To enhance trust in the market, its participants need to be sure that those engaging in abusive behaviour can be subject to penalties. Competent authorities should be enabled to investigate effectively allegations of market abuse. Competent authorities therefore need access to data that provides information on operational decisions made by supply undertakings. In the electricity market, many relevant decisions are made by the generators, which should keep this information available to the competent authorities for a fixed period of time. Small generators with no real ability to distort the market should be exempt from that obligation.

| (20) | There should be rules on the use of revenues flowing from congestion-management procedures, unless the specific nature of the interconnector concerned justifies an exemption from those rules. |
| --- | --- |

(20)

There should be rules on the use of revenues flowing from congestion-management procedures, unless the specific nature of the interconnector concerned justifies an exemption from those rules.

| (21) | The management of congestion problems should provide correct economic signals to transmission system operators and market participants and should be based on market mechanisms. |
| --- | --- |

(21)

The management of congestion problems should provide correct economic signals to transmission system operators and market participants and should be based on market mechanisms.

| (22) | Investments in major new infrastructure should be promoted strongly while ensuring the proper functioning of the internal market in electricity. In order to enhance the positive effect of exempted direct current interconnectors on competition and security of supply, market interest during the project planning phase should be tested and congestion management rules should be adopted. Where direct current interconnectors are located in the territory of more than one Member State, the Agency should handle as a last resort the exemption request in order to take better account of its cross-border implications and to facilitate its administrative handling. Moreover, given the exceptional risk profile of constructing those exempt major infrastructure projects, undertakings with supply and production interests should be able to benefit from a temporary derogation from the full unbundling rules for the projects concerned. |
| --- | --- |

(22)

Investments in major new infrastructure should be promoted strongly while ensuring the proper functioning of the internal market in electricity. In order to enhance the positive effect of exempted direct current interconnectors on competition and security of supply, market interest during the project planning phase should be tested and congestion management rules should be adopted. Where direct current interconnectors are located in the territory of more than one Member State, the Agency should handle as a last resort the exemption request in order to take better account of its cross-border implications and to facilitate its administrative handling. Moreover, given the exceptional risk profile of constructing those exempt major infrastructure projects, undertakings with supply and production interests should be able to benefit from a temporary derogation from the full unbundling rules for the projects concerned.

| (23) | To ensure the smooth functioning of the internal market in electricity, provision should be made for procedures which allow the adoption of decisions and guidelines with regard, inter alia, to tarification and capacity allocation by the Commission whilst ensuring the involvement of Member States' regulatory authorities in that process, where appropriate through their European association. Regulatory authorities, together with other relevant authorities in the Member States, have an important role to play in contributing to the proper functioning of the internal market in electricity. |
| --- | --- |

(23)

To ensure the smooth functioning of the internal market in electricity, provision should be made for procedures which allow the adoption of decisions and guidelines with regard, inter alia, to tarification and capacity allocation by the Commission whilst ensuring the involvement of Member States' regulatory authorities in that process, where appropriate through their European association. Regulatory authorities, together with other relevant authorities in the Member States, have an important role to play in contributing to the proper functioning of the internal market in electricity.

| (24) | National regulatory authorities should ensure compliance with the rules contained in this Regulation and the guidelines adopted on the basis of this Regulation. |
| --- | --- |

(24)

National regulatory authorities should ensure compliance with the rules contained in this Regulation and the guidelines adopted on the basis of this Regulation.

| (25) | The Member States and the competent national authorities should be required to provide relevant information to the Commission. Such information should be treated confidentially by the Commission. Where necessary, the Commission should have an opportunity to request relevant information directly from undertakings concerned, provided that the competent national authorities are informed. |
| --- | --- |

(25)

The Member States and the competent national authorities should be required to provide relevant information to the Commission. Such information should be treated confidentially by the Commission. Where necessary, the Commission should have an opportunity to request relevant information directly from undertakings concerned, provided that the competent national authorities are informed.

| (26) | Member States should lay down rules on penalties applicable to infringements of the provisions of this Regulation and ensure that they are implemented. Those penalties must be effective, proportionate and dissuasive. |
| --- | --- |

(26)

Member States should lay down rules on penalties applicable to infringements of the provisions of this Regulation and ensure that they are implemented. Those penalties must be effective, proportionate and dissuasive.

| (27) | The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (7). |
| --- | --- |

(27)

The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (7).

| (28) | In particular, the Commission should be empowered to establish or adopt the guidelines necessary for providing the minimum degree of harmonisation required to achieve the aims of this Regulation. Since those measures are of general scope and are designed to amend non-essential elements of this Regulation, by supplementing it with new non-essential elements, they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC. |
| --- | --- |

(28)

In particular, the Commission should be empowered to establish or adopt the guidelines necessary for providing the minimum degree of harmonisation required to achieve the aims of this Regulation. Since those measures are of general scope and are designed to amend non-essential elements of this Regulation, by supplementing it with new non-essential elements, they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC.

| (29) | Since the objective of this Regulation, namely the provision of a harmonised framework for cross-border exchanges of electricity, cannot be sufficiently achieved by the Member States and can therefore be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective. |
| --- | --- |

(29)

Since the objective of this Regulation, namely the provision of a harmonised framework for cross-border exchanges of electricity, cannot be sufficiently achieved by the Member States and can therefore be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.

| (30) | Given the scope of the amendments that are being made herein to Regulation (EC) No 1228/2003, it is desirable, for reasons of clarity and rationalisation, that the provisions in question should be recast by bringing them all together in a single text in a new Regulation, |
| --- | --- |

(30)

Given the scope of the amendments that are being made herein to Regulation (EC) No 1228/2003, it is desirable, for reasons of clarity and rationalisation, that the provisions in question should be recast by bringing them all together in a single text in a new Regulation,

HAVE ADOPTED THIS REGULATION:

Article 1

Subject-matter and scope

This Regulation aims at:

| (a) | setting fair rules for cross-border exchanges in electricity, thus enhancing competition within the internal market in electricity, taking into account the particular characteristics of national and regional markets. This will involve the establishment of a compensation mechanism for cross-border flows of electricity and the setting of harmonised principles on cross-border transmission charges and the allocation of available capacities of interconnections between national transmission systems; |
| --- | --- |

(a)

setting fair rules for cross-border exchanges in electricity, thus enhancing competition within the internal market in electricity, taking into account the particular characteristics of national and regional markets. This will involve the establishment of a compensation mechanism for cross-border flows of electricity and the setting of harmonised principles on cross-border transmission charges and the allocation of available capacities of interconnections between national transmission systems;

| (b) | facilitating the emergence of a well-functioning and transparent wholesale market with a high level of security of supply in electricity. It provides mechanisms to harmonise the rules for cross-border exchanges in electricity. |
| --- | --- |

(b)

facilitating the emergence of a well-functioning and transparent wholesale market with a high level of security of supply in electricity. It provides mechanisms to harmonise the rules for cross-border exchanges in electricity.

Article 2

Definitions

1.   For the purpose of this Regulation, the definitions contained in Article 2 of Directive 2009/.../EC of the European Parliament and of the Council of ... concerning common rules for the internal market in electricity (6) apply, with the exception of the definition of ‘interconnector’ which shall be replaced by the following:

‘interconnector’ means a transmission line which crosses or spans a border between Member States and which connects the national transmission systems of the Member States.

2.   The following definitions shall apply:

| (a) | ‘regulatory authorities’ means the regulatory authorities referred to in Article 34(1) of Directive 2009/.../EC; |
| --- | --- |

(a)

‘regulatory authorities’ means the regulatory authorities referred to in Article 34(1) of Directive 2009/.../EC;

| (b) | ‘cross-border flow’ means a physical flow of electricity on a transmission network of a Member State that results from the impact of the activity of producers and/or consumers outside that Member State on its transmission network. If transmission networks of two or more Member States form part, in whole or in part, of a single control block, for the purpose of the inter-transmission system operator compensation mechanism referred to in Article 13 only, the control block as a whole shall be considered as forming part of the transmission network of one of the Member States concerned, in order to avoid flows within control blocks being considered as cross-border flows and giving rise to compensation payments under Article 13. The regulatory authorities of the Member States concerned may decide which of the Member States concerned shall be the one of which the control block as a whole shall be considered to form part; |
| --- | --- |

(b)

‘cross-border flow’ means a physical flow of electricity on a transmission network of a Member State that results from the impact of the activity of producers and/or consumers outside that Member State on its transmission network. If transmission networks of two or more Member States form part, in whole or in part, of a single control block, for the purpose of the inter-transmission system operator compensation mechanism referred to in Article 13 only, the control block as a whole shall be considered as forming part of the transmission network of one of the Member States concerned, in order to avoid flows within control blocks being considered as cross-border flows and giving rise to compensation payments under Article 13. The regulatory authorities of the Member States concerned may decide which of the Member States concerned shall be the one of which the control block as a whole shall be considered to form part;

| (c) | ‘congestion’ means a situation in which an interconnection linking national transmission networks cannot accommodate all physical flows resulting from international trade requested by market participants, because of a lack of capacity of the interconnectors and/or the national transmission systems concerned; |
| --- | --- |

(c)

‘congestion’ means a situation in which an interconnection linking national transmission networks cannot accommodate all physical flows resulting from international trade requested by market participants, because of a lack of capacity of the interconnectors and/or the national transmission systems concerned;

| (d) | ‘declared export’ means the dispatch of electricity in one Member State on the basis of an underlying contractual arrangement to the effect that the simultaneous corresponding take-up (declared import) of electricity will take place in another Member State or a third country; |
| --- | --- |

(d)

‘declared export’ means the dispatch of electricity in one Member State on the basis of an underlying contractual arrangement to the effect that the simultaneous corresponding take-up (declared import) of electricity will take place in another Member State or a third country;

| (e) | ‘declared transit’ means a circumstance where a declared export of electricity occurs and where the nominated path for the transaction involves a country in which neither the dispatch nor the simultaneous corresponding take-up of the electricity will take place; |
| --- | --- |

(e)

‘declared transit’ means a circumstance where a declared export of electricity occurs and where the nominated path for the transaction involves a country in which neither the dispatch nor the simultaneous corresponding take-up of the electricity will take place;

| (f) | ‘declared import’ means the take-up of electricity in a Member State or a third country simultaneously with the dispatch of electricity (declared export) in another Member State; |
| --- | --- |

(f)

‘declared import’ means the take-up of electricity in a Member State or a third country simultaneously with the dispatch of electricity (declared export) in another Member State;

| (g) | ‘new interconnector’ means an interconnector not completed by ... (8). |
| --- | --- |

(g)

‘new interconnector’ means an interconnector not completed by ... (8).

Article 3

Certification of transmission system operators

1.   The Commission shall examine any notification of a decision on the certification of a transmission system operator as laid down in Article 10(6) of Directive 2009/.../EC as soon as it is received. Within two months of the day of receipt of such notification, the Commission shall deliver its opinion to the relevant national regulatory authority as to its compatibility with Article 10(2) or Article 11, and Article 9 of Directive 2009/.../EC.

When preparing the opinion referred to in the first subparagraph, the Commission may request the Agency to provide its opinion on the national regulatory authority's decision. In such a case, the two-month period referred to in the first subparagraph shall be extended by two further months.

In the absence of an opinion by the Commission within the period referred to in the first and second subparagraphs, the Commission shall be deemed not to raise objections to the regulatory authority's decision.

2.   Upon receiving an opinion of the Commission, the national regulatory authority shall, within two months, adopt its final decision regarding the certification of the transmission system operator, taking the utmost account of that opinion. The regulatory authority's decision and the Commission's opinion shall be published together.

3.   At any time during the procedure, regulatory authorities and/or the Commission may request from a transmission system operator and/or an undertaking performing any of the functions of generation or supply any information relevant to the fulfilment of their tasks under this Article.

4.   Regulatory authorities and the Commission shall preserve the confidentiality of commercially sensitive information.

5.   The Commission may adopt guidelines setting out the details of the procedure to be followed for the application of paragraphs 1 and 2 of this Article. Those measures, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 23(2).

6.   Where the Commission has received notification of the certification of a transmission system operator under Article 9(10) of Directive 2009/.../EC, the Commission shall take a decision relating to certification. The regulatory authority shall comply with the Commission decision.

Article 4

European network of transmission system operators for electricity

All transmission system operators shall cooperate at Community level through the ENTSO for Electricity, in order to promote the completion of the internal market in electricity and to ensure the optimal management and sound technical evolution of the European electricity transmission network.

Article 5

Establishment of the ENTSO for Electricity

1.   By ... (9) the transmission system operators for electricity shall submit to the Commission and to the Agency the draft statutes, a list of members and draft rules of procedure, including the rules of procedures on the consultation of other stakeholders, of the ENTSO for Electricity to be established.

2.   Within two months of the day of receipt, the Agency, after consulting the organisations representing all stakeholders, shall provide an opinion to the Commission on the draft statutes, list of members and draft rules of procedure.

3.   The Commission shall deliver an opinion on the draft statutes, list of members and draft rules of procedures within three months from the day of receipt of the opinion of the Agency.

4.   Within three months from the day of receipt of the Commission's opinion, the transmission system operators shall establish the ENTSO for Electricity, adopt its statutes and rules of procedure and publish them.

Article 6

Establishment of network codes

1.   The Commission shall, after consulting the Agency, the ENTSO for Electricity and the other relevant stakeholders, establish an annual priority list identifying the areas set out in Article 8(6) to be included in the development of network codes.

2.   The Commission may request the Agency to submit to it within a reasonable period of time not exceeding six months a draft non-binding framework guideline setting out clear and objective principles, in accordance with Article 8(7), for the development of network codes relating to the areas identified in the priority list. Each draft non-binding framework guideline shall contribute to non-discrimination, effective competition and the efficient functioning of the market. Upon a reasoned request from the Agency, the Commission may extend that period.

3.   The Agency shall consult the ENTSO for Electricity and the other relevant stakeholders in regard to the draft non-binding framework guideline, during a period of no less than two months, in an open and transparent manner.

4.   If the Commission considers that the draft non-binding framework guideline does not contribute to non-discrimination, effective competition and the efficient functioning of the market, it may request the Agency to review the draft non-binding framework guideline within a reasonable period of time and re-submit it to the Commission.

5.   If the Agency fails to submit or re-submit a draft non-binding framework guideline within the period set by the Commission under paragraphs 2 or 4, the Commission shall elaborate the non-binding framework guideline in question.

6.   The Commission shall request the ENTSO for Electricity to submit a network code which is in line with the relevant non-binding framework guideline, to the Agency within a reasonable period of time not exceeding twelve months.

7.   Within a period of three months after the day of receipt of a network code, during which the Agency may formally consult the relevant stakeholders, the Agency shall provide a reasoned opinion to the ENTSO for Electricity on the network code.

8.   The ENTSO for Electricity may amend the network code in the light of the opinion of the Agency and re-submit it to the Agency.

9.   Once the Agency is satisfied that the network code is in line with the relevant non-binding framework guidelines, the Agency shall submit the network code to the Commission and may recommend that it be adopted.

10.   Where the ENTSO for Electricity has failed to develop a network code within the period of time set by the Commission under paragraph 6, the Commission may request the Agency to prepare a draft network code on the basis of the relevant non-binding framework guideline. The Agency may launch a further consultation in the course of preparing a draft network code under this paragraph. The Agency shall submit a draft network code prepared under this paragraph to the Commission and may recommend that it be adopted.

11.   The Commission may adopt, on its own initiative where the ENTSO for Electricity has failed to develop a network code, or the Agency has failed to develop a draft network code as referred to in paragraph 10 of this Article, or upon recommendation of the Agency under paragraph 9 of this Article, one or more network codes in the areas listed in Article 8(6).

Where the Commission proposes to adopt a network code on its own initiative, the Commission may consult the Agency, the ENTSO for Electricity and all relevant stakeholders in regard to the draft network code during a period of no less than two months.

Those measures, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 23(2).

12.   This Article shall be without prejudice to the Commission's right to adopt and amend guidelines as laid down in Article 18.

Article 7

Modification of Network Codes

1.   Draft modifications to any network code adopted under Article 6 may be proposed to the Agency by persons who are likely to have an interest in that network code, including the ENTSO for Electricity, transmission system operators, system users and consumers. The Agency may also propose modifications on its own initiative.

2.   The Agency shall establish, in its Rules of Procedure, efficient processes for assessment of and thorough consultation on draft modifications, including with the ENTSO for Electricity and system users. Following this process, the Agency may make reasoned proposals for modifications to the Commission, explaining how such proposals are consistent with the objectives of the network codes set out in Article 6(2).

3.   The Commission may adopt, taking account of the Agency's proposals, modifications to any network code adopted under Article 6. Those measures, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 23(2).

4.   Consideration of proposed modifications under the procedure set out in Article 23(2) shall be limited to consideration of the aspects related to the proposed modification. Those proposed modifications are without prejudice to other modifications which the Commission may propose.

Article 8

Tasks of the ENTSO for Electricity

1.   The ENTSO for Electricity shall elaborate network codes in the areas referred to in paragraph 6 of this Article upon a request addressed to it by the Commission in accordance with Article 6(6).

2.   ENTSO for Electricity may elaborate network codes in the areas set out in paragraph 6 where these codes do not relate to areas covered by a request addressed to it by the Commission. Those network codes shall be submitted to the Agency for an opinion.

3.   The ENTSO for Electricity shall adopt:

| (a) | common network operation tools, including a common incidents classification scale, and research plans; |
| --- | --- |

(a)

common network operation tools, including a common incidents classification scale, and research plans;

| (b) | a non-binding Community-wide 10-year network development plan, (‘network development plan’), including a European generation adequacy outlook, every two years; |
| --- | --- |

(b)

a non-binding Community-wide 10-year network development plan, (‘network development plan’), including a European generation adequacy outlook, every two years;

| (c) | an annual work programme; |
| --- | --- |

(c)

an annual work programme;

| (d) | an annual report; |
| --- | --- |

(d)

an annual report;

| (e) | annual summer and winter generation adequacy outlooks. |
| --- | --- |

(e)

annual summer and winter generation adequacy outlooks.

4.   The European generation adequacy outlook referred to in point (b) of paragraph 3 shall cover the overall adequacy of the electricity system to supply current and projected demands for electricity for the next five-year period as well as for the period between five and 15 years from the date of that outlook. The European generation adequacy outlook shall build on national generation adequacy outlooks prepared by each individual transmission system operator.

5.   The annual work programme referred to in point (c) of paragraph 3 shall contain a list and description of the network codes to be prepared, a plan on coordination of operation of the network, and research and development activities, to be realised in that year, and an indicative calendar.

6.   The network codes referred to in paragraphs 1 and 2 shall cover the following areas, taking into account, if appropriate, regional specificities:

| (a) | network security and reliability rules including rules for technical transmission reserve capacity for operational network security; |
| --- | --- |

(a)

network security and reliability rules including rules for technical transmission reserve capacity for operational network security;

| (b) | network connection rules; |
| --- | --- |

(b)

network connection rules;

| (c) | third-party access rules; |
| --- | --- |

(c)

third-party access rules;

| (d) | data exchange and settlement rules; |
| --- | --- |

(d)

data exchange and settlement rules;

| (e) | interoperability rules; |
| --- | --- |

(e)

interoperability rules;

| (f) | operational procedures in an emergency; |
| --- | --- |

(f)

operational procedures in an emergency;

| (g) | capacity allocation and congestion management rules; |
| --- | --- |

(g)

capacity allocation and congestion management rules;

| (h) | rules for trading related to technical and operational provision of network access services and system balancing; |
| --- | --- |

(h)

rules for trading related to technical and operational provision of network access services and system balancing;

| (i) | transparency rules; |
| --- | --- |

(i)

transparency rules;

| (j) | balancing rules including network-related reserve power rules; |
| --- | --- |

(j)

balancing rules including network-related reserve power rules;

| (k) | rules regarding harmonised transmission tariff structures including locational signals and inter-transmission system operator compensation rules; and |
| --- | --- |

(k)

rules regarding harmonised transmission tariff structures including locational signals and inter-transmission system operator compensation rules; and

| (l) | energy efficiency regarding electricity networks. |
| --- | --- |

(l)

energy efficiency regarding electricity networks.

7.   The network codes shall be developed only for cross-border network issues and shall be without prejudice to the Member States' right to establish national codes for non-cross-border issues.

8.   The ENTSO for Electricity shall monitor and analyse the implementation of the network codes and the guidelines adopted by the Commission in accordance with Article 6(11), and their effect on the harmonisation of applicable rules aimed at facilitating market integration. The ENTSO for Electricity shall report its findings to the Agency and include the results of the analysis in the annual report referred to in point (d) of paragraph 3 of this Article.

9.   The ENTSO for Electricity shall make available all information required by the Agency to fulfil its tasks under Article 9(1).

10.   The ENTSO for Electricity shall adopt and publish a network development plan every two years. The network development plan shall include the modelling of the integrated network, scenario development, a European generation adequacy outlook and an assessment of the resilience of the system.

The network development plan shall, in particular:

| (a) | build on national investment plans, regional investment plans as referred to in Article 12(1), and, if appropriate, on the guidelines for trans-European energy networks in accordance with Decision No 1364/2006/EC (10); |
| --- | --- |

(a)

build on national investment plans, regional investment plans as referred to in Article 12(1), and, if appropriate, on the guidelines for trans-European energy networks in accordance with Decision No 1364/2006/EC (10);

| (b) | regarding cross-border interconnections, also build on the reasonable needs of different system users and integrate long-term commitments from investors referred to in Article 8 and Articles 13 and 22 of Directive 2009/.../EC; |
| --- | --- |

(b)

regarding cross-border interconnections, also build on the reasonable needs of different system users and integrate long-term commitments from investors referred to in Article 8 and Articles 13 and 22 of Directive 2009/.../EC;

| (c) | identify investment gaps, notably with respect to cross-border capacities. |
| --- | --- |

(c)

identify investment gaps, notably with respect to cross-border capacities.

11.   Upon request of the Commission, the ENTSO for Electricity shall give its views to the Commission on the adoption of the guidelines as laid down in Article 18.

Article 9

Monitoring by the Agency

1.   The Agency shall monitor the execution of the tasks referred to in Article 8(1), (2) and (3) of the ENTSO for Electricity and report to the Commission.

The Agency shall monitor the implementation by the ENTSO for Electricity of network codes elaborated under Article 8(2) and network codes which have been developed in accordance with Article 6(1) to (10) but which have not been adopted by the Commission under Article 6(11). The Agency shall provide a duly reasoned opinion to the Commission where the ENTSO for Electricity has failed to implement any such network codes.

The Agency shall monitor and analyse the implementation of the network codes and the guidelines adopted by the Commission as laid down in Article 6(11), and their effect on the harmonisation of applicable rules aimed at facilitating market integration as well as on non-discrimination, effective competition and the efficient functioning of the market, and report to the Commission.

2.   The ENTSO for Electricity shall submit the draft network development plan and the draft annual work programme, including the information regarding the consultation process, to the Agency for its opinion.

Within a period of two months from the day of receipt, the Agency shall provide a duly reasoned opinion as well as recommendations to the ENTSO for Electricity and to the Commission where it considers that the draft annual work programme or the draft network development plan submitted by the ENTSO for Electricity do not contribute to non-discrimination, effective competition, the efficient functioning of the market or a sufficient level of cross-border interconnection open to third-party access.

Article 10

Consultations

1.   While preparing the network codes, the draft network development plan and the annual work programme referred to in Article 8(1), (2) and (3), the ENTSO for Electricity shall conduct an extensive consultation process, at an early stage and in an open and transparent manner, involving all relevant market participants, and, in particular, the organisations representing all stakeholders, in accordance with the rules of procedure referred to in Article 5(1). That consultation shall also involve national regulatory authorities and other national authorities, supply and generation undertakings, customers, system users, distribution system operators, including relevant industry associations, technical bodies and stakeholder platforms. It shall aim at identifying the views and proposals of all relevant parties during the decision-making process.

2.   All documents and minutes of meetings related to the consultations referred to in paragraph 1 shall be made public.

3.   Before adopting the annual work programme and the network codes referred to in Article 8(1), (2) and (3), the ENTSO for Electricity shall indicate how the observations received during the consultation have been taken into consideration. It shall provide reasons where observations have not been taken into account.

Article 11

Costs

The costs related to the activities of the ENTSO for Electricity referred to in Articles 4 to 12 shall be borne by the transmission system operators and shall be taken into account in the calculation of tariffs. Regulatory authorities shall approve those costs only if they are reasonable and proportionate.

Article 12

Regional cooperation of transmission system operators

1.   Transmission system operators shall establish regional cooperation within the ENTSO for Electricity to contribute to the activities referred to in Article 8(1), (2) and (3). In particular, they shall publish a regional investment plan every two years, and may take investment decisions based on that regional investment plan.

2.   Transmission system operators shall promote operational arrangements in order to ensure the optimum management of the network and shall promote the development of energy exchanges, the allocation of cross-border capacity through non-discriminatory market-based solutions, paying due attention to the specific merits of implicit auctions for short-term allocations, and the integration of balancing and reserve power mechanisms.

3.   The geographical area covered by each regional cooperation structure may be defined by the Commission, taking into account existing regional cooperation structures. Each Member State shall be allowed to promote cooperation in more than one geographical area. The measure referred to in the first sentence, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 23(2).

For that purpose, the Commission may consult the ENTSO for Electricity and the Agency.

Article 13

Inter-transmission system operator compensation mechanism

1.   Transmission system operators shall receive compensation for costs incurred as a result of hosting cross-border flows of electricity on their networks.

2.   The compensation referred to in paragraph 1 shall be paid by the operators of national transmission systems from which cross-border flows originate and the systems where those flows end.

3.   Compensation payments shall be made on a regular basis with regard to a given period of time in the past. Ex-post adjustments of compensation paid shall be made where necessary, to reflect costs actually incurred.

The first period of time for which compensation payments shall be made shall be determined in the guidelines referred to in Article 18.

4.   Acting in accordance with the procedure referred to in Article 23(2), the Commission shall decide on the amounts of compensation payments payable.

5.   The magnitude of cross-border flows hosted and the magnitude of cross-border flows designated as originating and/or ending in national transmission systems shall be determined on the basis of the physical flows of electricity actually measured during a given period of time.

6.   The costs incurred as a result of hosting cross-border flows shall be established on the basis of the forward-looking long-run average incremental costs, taking into account losses, investment in new infrastructure, and an appropriate proportion of the cost of existing infrastructure, in so far as such infrastructure is used for the transmission of cross-border flows, in particular taking into account the need to guarantee security of supply. When establishing the costs incurred, recognised standard-costing methodologies shall be used. Benefits that a network incurs as a result of hosting cross-border flows shall be taken into account to reduce the compensation received.

Article 14

Charges for access to networks

1.   Charges applied by network-operators for access to networks shall be transparent, take into account the need for network security and reflect actual costs incurred insofar as they correspond to those of an efficient and structurally comparable network operator and are applied in a non-discriminatory manner. Those charges shall not be distance-related.

2.   Producers and consumers (‘load’) may be charged for access to networks. The proportion of the total amount of the network charges borne by producers shall, subject to the need to provide appropriate and efficient locational signals, be lower than the proportion borne by consumers. Where appropriate, the level of the tariffs applied to producers and/or consumers shall provide locational signals at Community level, and take into account the amount of network losses and congestion caused, and investment costs for infrastructure. This shall not prevent Member States from providing locational signals within their territory or from applying mechanisms to ensure that network access charges borne by consumers (‘load’) are uniform throughout their territory.

3.   When setting the charges for network access, the following shall be taken into account:

| (a) | payments and receipts resulting from the inter-transmission system operator compensation mechanism; |
| --- | --- |

(a)

payments and receipts resulting from the inter-transmission system operator compensation mechanism;

| (b) | actual payments made and received as well as payments expected for future periods of time, estimated on the basis of past periods. |
| --- | --- |

(b)

actual payments made and received as well as payments expected for future periods of time, estimated on the basis of past periods.

4.   Providing that appropriate and efficient locational signals are in place, in accordance with paragraph 2, charges for access to networks applied to producers and consumers shall be applied regardless of the countries of destination and origin respectively, of the electricity, as specified in the underlying commercial arrangement. This shall be without prejudice to charges on declared exports and declared imports resulting from congestion management referred to in Article 16.

5.   There shall be no specific network charge on individual transactions for declared transits of electricity.

Article 15

Provision of information

1.   Transmission system operators shall put in place coordination and information exchange mechanisms to ensure the security of the networks in the context of congestion management.

2.   The safety, operational and planning standards used by transmission system operators shall be made public. The information published shall include a general scheme for the calculation of the total transfer capacity and the transmission reliability margin based upon the electrical and physical features of the network. Such schemes shall be subject to the approval of the regulatory authorities.

3.   Transmission system operators shall publish estimates of available transfer capacity for each day, indicating any available transfer capacity already reserved. Those publications shall be made at specified intervals before the day of transport and shall include, in any event, week-ahead and month-ahead estimates, as well as a quantitative indication of the expected reliability of the available capacity.

4.   Transmission system operators shall publish relevant data on aggregated forecast and actual demand, on availability and actual use of generation and load assets, on availability and use of the networks and interconnections, and on balancing power and reserve capacity. For availability and actual use of small generation and load units, aggregated estimate data may be used.

5.   The market participants concerned shall provide the transmission system operators with the relevant data.

6.   Generation undertakings which own or operate generation assets, where at least one generation asset has an installed capacity of at least 250 MW, shall keep at the disposal of the national regulatory authority, the national competition authority and the Commission, for five years all hourly data per plant that is necessary to verify all operational dispatching decisions and the bidding behaviour at power exchanges, interconnection auctions, reserve markets and over-the-counter-markets. The per-plant and per hour information to be stored shall include, but shall not be limited to, data on available generation capacity and committed reserves, including allocation of those committed reserves on a per-plant level, at the times the bidding is carried out and when production takes place.

Article 16

General principles of congestion management

1.   Network congestion problems shall be addressed with non-discriminatory market-based solutions which give efficient economic signals to the market participants and transmission system operators involved. Network congestion problems shall preferentially be solved with non-transaction based methods, i.e. methods that do not involve a selection between the contracts of individual market participants.

2.   Transaction curtailment procedures shall only be used in emergency situations where the transmission system operator must act in an expeditious manner and re-dispatching or countertrading is not possible. Any such procedure shall be applied in a non-discriminatory manner.

Except in cases of force-majeure, market participants who have been allocated capacity shall be compensated for any curtailment.

3.   The maximum capacity of the interconnections and/or the transmission networks affecting cross-border flows shall be made available to market participants, complying with safety standards of secure network operation.

4.   Market participants shall inform the transmission system operators concerned a reasonable time ahead of the relevant operational period whether they intend to use allocated capacity. Any allocated capacity that will not be used shall be reattributed to the market, in an open, transparent and non-discriminatory manner.

5.   Transmission system operators shall, as far as technically possible, net the capacity requirements of any power flows in opposite direction over the congested interconnection line in order to use that line to its maximum capacity. Having full regard to network security, transactions that relieve the congestion shall never be denied.

6.   Any revenues resulting from the allocation of interconnection shall be used for the following purposes:

| (a) | guaranteeing the actual availability of the allocated capacity; and/or |
| --- | --- |

(a)

guaranteeing the actual availability of the allocated capacity; and/or

| (b) | maintaining or increasing interconnection capacities through network investments, in particular in new interconnectors. |
| --- | --- |

(b)

maintaining or increasing interconnection capacities through network investments, in particular in new interconnectors.

If the revenues cannot be efficiently used for the purposes set out in points (a) and/or (b) of the first subparagraph, they may be used, subject to approval by the regulatory authorities of the Member States concerned, up to a maximum amount to be decided by those regulatory authorities, as income to be taken into account by the regulatory authorities when approving the methodology for calculating network tariffs and/or fixing network tariffs.

The rest of revenues shall be placed on a separate internal account line until such time as it can be spent on the purposes set out in points (a) and/or (b) of the first subparagraph.

Article 17

New interconnectors

1.   New direct current interconnectors may, upon request, be exempted, for a limited period of time, from the provisions of Article 16(6) of this Regulation and Articles 9, 31 and Article 36(6) and (8) of Directive 2009/.../EC under the following conditions:

| (a) | the investment must enhance competition in electricity supply; |
| --- | --- |

(a)

the investment must enhance competition in electricity supply;

| (b) | the level of risk attached to the investment is such that the investment would not take place unless an exemption is granted; |
| --- | --- |

(b)

the level of risk attached to the investment is such that the investment would not take place unless an exemption is granted;

| (c) | the interconnector must be owned by a natural or legal person which is separate at least in terms of its legal form from the system operators in whose systems that interconnector will be built; |
| --- | --- |

(c)

the interconnector must be owned by a natural or legal person which is separate at least in terms of its legal form from the system operators in whose systems that interconnector will be built;

| (d) | charges are levied on users of that interconnector; |
| --- | --- |

(d)

charges are levied on users of that interconnector;

| (e) | since the partial market opening referred to in Article 19 of Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity (11), no part of the capital or operating costs of the interconnector has been recovered from any component of charges made for the use of transmission or distribution systems linked by the interconnector; |
| --- | --- |

(e)

since the partial market opening referred to in Article 19 of Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 concerning common rules for the internal market in electricity (11), no part of the capital or operating costs of the interconnector has been recovered from any component of charges made for the use of transmission or distribution systems linked by the interconnector;

| (f) | the exemption must not be to the detriment of competition or the effective functioning of the internal market in electricity, or the efficient functioning of the regulated system to which the interconnector is linked. |
| --- | --- |

(f)

the exemption must not be to the detriment of competition or the effective functioning of the internal market in electricity, or the efficient functioning of the regulated system to which the interconnector is linked.

2.   Paragraph 1 shall also apply, in exceptional cases, to alternating current interconnectors provided that the costs and risks of the investment in question are particularly high when compared with the costs and risks normally incurred when connecting two neighbouring national transmission systems by an alternating current interconnector.

3.   Paragraph 1 shall also apply to significant increases of capacity in existing interconnectors.

4.   The decision on the exemption under paragraphs 1, 2 and 3 shall be taken on a case-by-case basis by the regulatory authorities of the Member States concerned. An exemption may cover all or part of the capacity of the new interconnector, or of the existing interconnector with significantly increased capacity.

In deciding to grant an exemption, consideration shall be given, on a case-by-case basis, to the need to impose conditions regarding the duration of the exemption and non-discriminatory access to the interconnector. When deciding those conditions, account shall, in particular, be taken of additional capacity to be built or the modification of existing capacity, the time-frame of the project and national circumstances.

Before granting an exemption, the regulatory authorities of the Member States concerned shall decide upon the rules and mechanisms for management and allocation of capacity. Congestion management rules shall include the obligation to offer unused capacity on the market and users of the facility shall be entitled to trade their contracted capacities on the secondary market. In the assessment of the criteria referred to in points (a), (b) and (f) of paragraph 1, the results of the capacity allocation procedure shall be taken into account.

The exemption decision, including any conditions referred to in the second subparagraph of this paragraph, shall be duly reasoned and published.

5.   The decisions referred to in paragraph 4 shall be taken by the Agency only

| (a) | where the regulatory authorities concerned have not been able to reach an agreement within six months from the date the exemption was requested before the last of these regulatory authorities; or |
| --- | --- |

(a)

where the regulatory authorities concerned have not been able to reach an agreement within six months from the date the exemption was requested before the last of these regulatory authorities; or

| (b) | upon a joint request from the regulatory authorities concerned. |
| --- | --- |

(b)

upon a joint request from the regulatory authorities concerned.

The Agency shall consult the regulatory authorities concerned.

6.   Notwithstanding paragraphs 4 and 5, Member States may provide for the regulatory authority or the Agency, as the case may be, to submit, for formal decision, to the relevant body in the Member State, its opinion on the request for an exemption. That opinion shall be published together with the decision.

7.   A copy of every request for exemption shall be transmitted for information without delay by the regulatory authorities to the Agency and to the Commission on receipt. The decision shall be notified, without delay, by the regulatory authorities concerned or by the Agency (‘notifying bodies’), to the Commission, together with all the relevant information with respect to the decision. That information may be submitted to the Commission in aggregate form, enabling the Commission to reach a well-founded decision. In particular, the information shall contain:

| (a) | the detailed reasons on the basis of which the exemption was granted, including the financial information justifying the need for the exemption; |
| --- | --- |

(a)

the detailed reasons on the basis of which the exemption was granted, including the financial information justifying the need for the exemption;

| (b) | the analysis undertaken of the effect on competition and the effective functioning of the internal market in electricity resulting from the grant of the exemption; |
| --- | --- |

(b)

the analysis undertaken of the effect on competition and the effective functioning of the internal market in electricity resulting from the grant of the exemption;

| (c) | the reasons for the time period and the share of the total capacity of the interconnector in question for which the exemption is granted; |
| --- | --- |

(c)

the reasons for the time period and the share of the total capacity of the interconnector in question for which the exemption is granted;

| (d) | the result of the consultation of the regulatory authorities concerned. |
| --- | --- |

(d)

the result of the consultation of the regulatory authorities concerned.

8.   Within a period of two months from the day following receipt of notification under paragraph 7, the Commission may take a decision requesting the notifying bodies to amend or withdraw the decision to grant an exemption. That two-month period may be extended by an additional period of two months where further information is sought by the Commission. That additional period shall begin on the day following receipt of the complete information. The initial two-month period may also be extended by consent of both the Commission and the notifying bodies.

When the requested information is not provided within the period set out in the request, the notification shall be deemed to be withdrawn unless, before the expiry of that period, either the period is extended by consent of both the Commission and the notifying bodies, or the notifying bodies, in a duly reasoned statement, inform the Commission that they consider the notification to be complete.

The notifying bodies shall comply with a Commission decision to amend or withdraw the exemption decision within one month and shall inform the Commission accordingly.

The Commission shall preserve the confidentiality of commercially sensitive information.

The Commission's approval of an exemption decision shall expire two years after the date of its adoption in the event that construction of the interconnector has not yet started by that date, and five years after the date of its adoption if the interconnector has not become operational by that date.

9.   The Commission may adopt guidelines for the application of the conditions laid down in paragraph 1 of this Article and set out the procedure to be followed for the application of paragraphs 4, 7 and 8 of this Article. Those measures, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 23(2).

Article 18

Guidelines

1.   Where appropriate, guidelines relating to the inter-transmission system operator compensation mechanism shall specify, in accordance with the principles set out in Articles 13 and 14:

| (a) | details of the procedure for determining which transmission system operators are liable to pay compensation for cross-border flows including as regards the split between the operators of national transmission systems from which cross-border flows originate and the systems where those flows end, in accordance with Article 13(2); |
| --- | --- |

(a)

details of the procedure for determining which transmission system operators are liable to pay compensation for cross-border flows including as regards the split between the operators of national transmission systems from which cross-border flows originate and the systems where those flows end, in accordance with Article 13(2);

| (b) | details of the payment procedure to be followed, including the determination of the first period for which compensation is to be paid, in accordance with the second subparagraph of Article 13(3); |
| --- | --- |

(b)

details of the payment procedure to be followed, including the determination of the first period for which compensation is to be paid, in accordance with the second subparagraph of Article 13(3);

| (c) | details of methodologies for determining the cross-border flows hosted for which compensation is to be paid under Article 13, in terms of both quantity and type of flows, and the designation of the magnitudes of such flows as originating and/or ending in transmission systems of individual Member States, in accordance with Article 13(5); |
| --- | --- |

(c)

details of methodologies for determining the cross-border flows hosted for which compensation is to be paid under Article 13, in terms of both quantity and type of flows, and the designation of the magnitudes of such flows as originating and/or ending in transmission systems of individual Member States, in accordance with Article 13(5);

| (d) | details of the methodology for determining the costs and benefits incurred as a result of hosting cross-border flows, in accordance with Article 13(6); |
| --- | --- |

(d)

details of the methodology for determining the costs and benefits incurred as a result of hosting cross-border flows, in accordance with Article 13(6);

| (e) | details of the treatment in the context of the inter-transmission system operator compensation mechanism of electricity flows originating or ending in countries outside the European Economic Area; |
| --- | --- |

(e)

details of the treatment in the context of the inter-transmission system operator compensation mechanism of electricity flows originating or ending in countries outside the European Economic Area;

| (f) | the participation of national systems which are interconnected through direct current lines, in accordance with Article 13. |
| --- | --- |

(f)

the participation of national systems which are interconnected through direct current lines, in accordance with Article 13.

2.   Guidelines may also determine appropriate rules leading to a progressive harmonisation of the underlying principles for the setting of charges applied to producers and consumers (load) under national tariff systems, including the reflection of the inter-transmission system operator compensation mechanism in national network charges and the provision of appropriate and efficient locational signals, in accordance with the principles set out in Article 14.

The guidelines shall make provision for appropriate and efficient harmonised locational signals at Community level.

Any harmonisation in this respect shall not prevent Member States from applying mechanisms to ensure that network access charges borne by consumers (load) are comparable throughout their territory.

3.   Where appropriate, guidelines providing the minimum degree of harmonisation required to achieve the aim of this Regulation shall also specify:

| (a) | details relating to provision of information, in accordance with the principles set out in Article 15; |
| --- | --- |

(a)

details relating to provision of information, in accordance with the principles set out in Article 15;

| (b) | details of rules for the trading of electricity; |
| --- | --- |

(b)

details of rules for the trading of electricity;

| (c) | details of investment incentive rules for interconnector capacity including locational signals; |
| --- | --- |

(c)

details of investment incentive rules for interconnector capacity including locational signals;

| (d) | details of the areas listed in Article 8(6). |
| --- | --- |

(d)

details of the areas listed in Article 8(6).

4.   Guidelines on the management and allocation of available transmission capacity of interconnections between national systems are laid down in Annex I.

5.   The Commission may adopt guidelines on the issues listed in paragraphs 1, 2 and 3 of this Article. It may amend the guidelines referred to in paragraph 4 of this Article, in accordance with the principles set out in Articles 15 and 16, in particular so as to include detailed guidelines on all capacity allocation methodologies applied in practice and to ensure that congestion management mechanisms evolve in a manner compatible with the objectives of the internal market. Where appropriate, in the course of such amendments common rules on minimum safety and operational standards for the use and operation of the network, as referred to in Article 15(2) shall be established.

Those measures, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 23(2).

When adopting or amending guidelines, the Commission shall ensure that they provide the minimum degree of harmonisation required to achieve the aims of this Regulation and do not go beyond what is necessary for that purpose.

When adopting or amending guidelines, the Commission shall indicate what actions it has taken with respect to the conformity of rules in third countries, which form part of the Community electricity system, with the guidelines in question.

When adopting these guidelines for the first time, the Commission shall ensure that they cover in a single draft measure at least the issues referred to in point (a) and (d) of paragraph 1 and paragraph 2.

Article 19

Regulatory authorities

The regulatory authorities, when carrying out their responsibilities, shall ensure compliance with this Regulation and the guidelines adopted pursuant to Article 18. Where appropriate to fulfil the aims of this Regulation they shall cooperate with each other, with the Commission and the Agency in compliance with Chapter IX of Directive 2009/.../EC.

Article 20

Provision of information and confidentiality

1.   Member States and the regulatory authorities shall, on request, provide to the Commission all information necessary for the purposes of Article 13(4) and Article 18.

In particular, for the purposes of Article 13(4) and (6), regulatory authorities shall, on a regular basis, provide information on the actual costs incurred by national transmission system operators, as well as data and all relevant information relating to the physical flows in transmission system operators' networks and the cost of the networks.

The Commission shall fix a reasonable time limit within which the information is to be provided, taking into account the complexity of the information required and the urgency with which the information is needed.

2.   If the Member State or the regulatory authority concerned does not provide that information within the given time-limit pursuant to paragraph 1 of this Article, the Commission may request all information necessary for the purpose of Article 13(4) and Article 18 directly from the undertakings concerned.

When sending a request for information to an undertaking, the Commission shall at the same time forward a copy of the request to the regulatory authorities of the Member State in whose territory the seat of the undertaking is situated.

3.   In its request for information, the Commission shall state the legal basis of the request, the time-limit within which the information is to be provided, the purpose of the request, and the penalties provided for in Article 22(2) for supplying incorrect, incomplete or misleading information. The Commission shall fix a reasonable time limit taking into account the complexity of the information required and the urgency with which the information is needed.

4.   The owners of the undertakings or their representatives and, in the case of legal persons, the persons authorised to represent them by law or by their instrument of incorporation, shall supply the information requested. Lawyers duly authorised so to act may supply the information on behalf of their clients, in which case the client shall remain fully responsible if the information supplied is incomplete, incorrect or misleading.

5.   Where an undertaking does not provide the information requested within the time-limit fixed by the Commission or supplies incomplete information, the Commission may by decision require the information to be provided. The decision shall specify what information is required and fix an appropriate time-limit within which it is to be supplied. It shall indicate the penalties provided for in Article 22(2). It shall also indicate the right to have the decision reviewed by the Court of Justice of the European Communities.

The Commission shall at the same time, send a copy of its decision to the regulatory authorities of the Member State within the territory of which the person is resident or the seat of the undertaking is situated.

6.   The information referred to in paragraphs 1 and 2 shall be used only for the purposes of Article 13(4) and Article 18.

The Commission shall not disclose information acquired pursuant to this Regulation of the kind covered by the obligation of professional secrecy.

Article 21

Right of Member States to provide for more detailed measures

This Regulation shall be without prejudice to the rights of Member States to maintain or introduce measures that contain more detailed provisions than those set out in this Regulation and the guidelines referred to in Article 18.

Article 22

Penalties

1.   Without prejudice to paragraph 2, the Member States shall lay down rules on penalties applicable to infringements of the provisions of this Regulation and shall take all measures necessary to ensure that those provisions are implemented. The penalties provided for must be effective, proportionate and dissuasive. The Member States shall notify those rules corresponding to the provisions laid down in Regulation (EC) No 1228/2003, to the Commission by 1 July 2004 and shall notify the Commission without delay of any subsequent amendment affecting them. They shall notify those rules not corresponding to the provisions laid down in Regulation (EC) No 1228/2003 to the Commission by ... (12) and shall notify the Commission without delay of any subsequent amendment affecting them.

2.   The Commission may, by decision, impose on undertakings fines not exceeding 1 % of the total turnover in the preceding business year where, intentionally or negligently, they supply incorrect, incomplete or misleading information in response to a request made pursuant to Article 20(3) or fail to supply information within the time-limit fixed by a decision adopted pursuant to the first subparagraph of Article 20(5).

In setting the amount of a fine, regard shall be had to the gravity of the failure to comply with the requirements of the first subparagraph.

3.   Penalties provided for pursuant to paragraph 1 and decisions taken pursuant to paragraph 2 shall not be of a criminal law nature.

Article 23

Committee procedure

1.   The Commission shall be assisted by the committee set up by Article 46 of Directive 2009/.../EC.

2.   Where reference is made to this paragraph, Article 5a(1) to (4), and Article 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.

Article 24

Commission report

The Commission shall monitor the implementation of this Regulation. In its report under Article 47(6) of Directive 2009/.../EC, the Commission shall also report on the experience gained in the application of this Regulation. In particular the report shall examine to what extent this Regulation has been successful in ensuring non-discriminatory and cost-reflective network access conditions for cross border exchanges of electricity in order to contribute to customer choice in a well functioning internal market in electricity and to long-term security of supply, as well as to what extent effective locational signals are in place. If necessary, the report shall be accompanied by appropriate proposals and/or recommendations.

Article 25

Repeal

Regulation (EC) No 1228/2003 shall be repealed from ... (13). References made to the repealed Regulation shall be construed as references to this Regulation and shall be read in accordance with the correlation table in Annex II.

Article 26

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

It shall apply from ... (13).

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at, ...

For the European Parliament

The President

...

For the Council

The President

...

---

(1)  OJ C 211, 19.8.2008, p. 23.

1

(2)  OJ C 172, 5.7.2008, p. 55.

2

(3)  Opinion of the European Parliament of 18 June 2008 (not yet published in the Official Journal), Council Common Position of 9 January 2009 and Position of the European Parliament of ... (not yet published in the Official Journal).

3

(4)  OJ L 176, 15.7.2003, p. 37.

4

(5)  OJ L 176, 15.7.2003, p. 1.

5

(6)  OJ L ...

6

(7)  OJ L 184, 17.7.1999, p. 23.

7

(8)  Date of entry into force of repealed Regulation (EC) No 1228/2003.

8

(9)  Date of application of this Regulation, i. e. 18 months after the entry into force of this Regulation.

9

(10)  Decision No 1364/2006/EC of the European Parliament and of the Council of 6 September 2006 laying down guidelines for trans-European energy networks (OJ L 262, 22.9.2006, p. 1).

10

(11)  OJ L 27, 30.1.1997, p. 20.

11

(12)  Date of application of this Regulation.

12

(13)  18 months after the entry into force of this Regulation.

13

---

ANNEX I

GUIDELINES ON THE MANAGEMENT AND ALLOCATION OF AVAILABLE TRANSFER CAPACITY OF INTERCONNECTIONS BETWEEN NATIONAL SYSTEMS

1.   General Provisions

| 1.1. | Transmission system operators (TSOs) shall endeavour to accept all commercial transactions, including those involving cross-border-trade. |
| --- | --- |

1.1.

Transmission system operators (TSOs) shall endeavour to accept all commercial transactions, including those involving cross-border-trade.

| 1.2. | When there is no congestion, there shall be no restriction of access to the interconnection. Where this is usually the case, there need be no permanent general allocation procedure for access to a cross-border transmission service. |
| --- | --- |

1.2.

When there is no congestion, there shall be no restriction of access to the interconnection. Where this is usually the case, there need be no permanent general allocation procedure for access to a cross-border transmission service.

| 1.3. | Where scheduled commercial transactions are not compatible with secure network operation, the TSOs shall alleviate congestion in compliance with the requirements of network operational security while endeavouring to ensure that any associated costs remain at an economically efficient level. Curative re-dispatching or countertrading shall be envisaged in case lower cost measures cannot be applied. |
| --- | --- |

1.3.

Where scheduled commercial transactions are not compatible with secure network operation, the TSOs shall alleviate congestion in compliance with the requirements of network operational security while endeavouring to ensure that any associated costs remain at an economically efficient level. Curative re-dispatching or countertrading shall be envisaged in case lower cost measures cannot be applied.

| 1.4. | If structural congestion appears, appropriate congestion management rules and arrangements defined and agreed upon in advance shall be implemented immediately by the TSOs. The congestion management methods shall ensure that the physical power flows associated with all allocated transmission capacity comply with network security standards. |
| --- | --- |

1.4.

If structural congestion appears, appropriate congestion management rules and arrangements defined and agreed upon in advance shall be implemented immediately by the TSOs. The congestion management methods shall ensure that the physical power flows associated with all allocated transmission capacity comply with network security standards.

| 1.5. | The methods adopted for congestion management shall give efficient economic signals to market participants and TSOs, promote competition and be suitable for regional and Community-wide application. |
| --- | --- |

1.5.

The methods adopted for congestion management shall give efficient economic signals to market participants and TSOs, promote competition and be suitable for regional and Community-wide application.

| 1.6. | No transaction-based distinction shall be applied in congestion management. A particular request for transmission service shall be denied only when the following cumulative conditions are fulfilled:






  (a) | the incremental physical power flows resulting from the acceptance of this request imply that secure operation of the power system may no longer be guaranteed, and |
| --- | --- | --- |

1.6.

No transaction-based distinction shall be applied in congestion management. A particular request for transmission service shall be denied only when the following cumulative conditions are fulfilled:

(a)

the incremental physical power flows resulting from the acceptance of this request imply that secure operation of the power system may no longer be guaranteed, and

| (b) | the value in monetary amount attached to the request in the congestion management procedure is lower than all other requests intended to be accepted for the same service and conditions. |
| --- | --- |

(b)

the value in monetary amount attached to the request in the congestion management procedure is lower than all other requests intended to be accepted for the same service and conditions.

| 1.7. | When defining appropriate network areas in and between which congestion management is to apply, TSOs shall be guided by the principles of cost-effectiveness and minimisation of negative impacts on the internal market in electricity. Specifically, TSOs shall not limit interconnection capacity in order to solve congestion inside their own control area, save for the above-mentioned reasons and reasons of operational security (1). If such a situation occurs, this shall be described and transparently presented by the TSOs to all the system users. Such a situation shall be tolerated only until a long-term solution is found. The methodology and projects for achieving the long-term solution shall be described and transparently presented by the TSOs to all the system users. |
| --- | --- |

1.7.

When defining appropriate network areas in and between which congestion management is to apply, TSOs shall be guided by the principles of cost-effectiveness and minimisation of negative impacts on the internal market in electricity. Specifically, TSOs shall not limit interconnection capacity in order to solve congestion inside their own control area, save for the above-mentioned reasons and reasons of operational security (1). If such a situation occurs, this shall be described and transparently presented by the TSOs to all the system users. Such a situation shall be tolerated only until a long-term solution is found. The methodology and projects for achieving the long-term solution shall be described and transparently presented by the TSOs to all the system users.

| 1.8. | When balancing the network inside the control area through operational measures in the network and through re-dispatching, the TSO shall take into account the effect of those measures on neighbouring control areas. |
| --- | --- |

1.8.

When balancing the network inside the control area through operational measures in the network and through re-dispatching, the TSO shall take into account the effect of those measures on neighbouring control areas.

| 1.9. | By 1 January 2008, mechanisms for the intra-day congestion management of interconnector capacity shall be established in a coordinated way and under secure operational conditions, in order to maximise opportunities for trade and to provide for cross-border balancing. |
| --- | --- |

1.9.

By 1 January 2008, mechanisms for the intra-day congestion management of interconnector capacity shall be established in a coordinated way and under secure operational conditions, in order to maximise opportunities for trade and to provide for cross-border balancing.

| 1.10. | The national regulatory authorities shall regularly evaluate the congestion management methods, paying particular attention to compliance with the principles and rules established in this Regulation and these guidelines and with the terms and conditions set by the regulatory authorities themselves under these principles and rules. Such evaluation shall include consultation of all market participants and dedicated studies. |
| --- | --- |

1.10.

The national regulatory authorities shall regularly evaluate the congestion management methods, paying particular attention to compliance with the principles and rules established in this Regulation and these guidelines and with the terms and conditions set by the regulatory authorities themselves under these principles and rules. Such evaluation shall include consultation of all market participants and dedicated studies.

2.   Congestion management methods

| 2.1. | Congestion management methods shall be market-based in order to facilitate efficient cross-border trade. For this purpose, capacity shall be allocated only by means of explicit (capacity) or implicit (capacity and energy) auctions. Both methods may coexist on the same interconnection. For intra-day trade continuous trading may be used. |
| --- | --- |

2.1.

Congestion management methods shall be market-based in order to facilitate efficient cross-border trade. For this purpose, capacity shall be allocated only by means of explicit (capacity) or implicit (capacity and energy) auctions. Both methods may coexist on the same interconnection. For intra-day trade continuous trading may be used.

| 2.2. | Depending on competition conditions, the congestion management mechanisms may need to allow for both long and short-term transmission capacity allocation. |
| --- | --- |

2.2.

Depending on competition conditions, the congestion management mechanisms may need to allow for both long and short-term transmission capacity allocation.

| 2.3. | Each capacity allocation procedure shall allocate a prescribed fraction of the available interconnection capacity plus any remaining capacity not previously allocated and any capacity released by capacity holders from previous allocations. |
| --- | --- |

2.3.

Each capacity allocation procedure shall allocate a prescribed fraction of the available interconnection capacity plus any remaining capacity not previously allocated and any capacity released by capacity holders from previous allocations.

| 2.4. | TSOs shall optimise the degree to which capacity is firm, taking into account the obligations and rights of the TSOs involved and the obligations and rights of market participants, in order to facilitate effective and efficient competition. A reasonable fraction of capacity may be offered to the market at a reduced degree of firmness, but the exact conditions for transport over cross-border lines shall, at all times, be made known to market participants. |
| --- | --- |

2.4.

TSOs shall optimise the degree to which capacity is firm, taking into account the obligations and rights of the TSOs involved and the obligations and rights of market participants, in order to facilitate effective and efficient competition. A reasonable fraction of capacity may be offered to the market at a reduced degree of firmness, but the exact conditions for transport over cross-border lines shall, at all times, be made known to market participants.

| 2.5. | The access rights for long and medium-term allocations shall be firm transmission capacity rights. They shall be subject to the use-it-or-lose-it or use-it-or-sell-it principles at the time of nomination. |
| --- | --- |

2.5.

The access rights for long and medium-term allocations shall be firm transmission capacity rights. They shall be subject to the use-it-or-lose-it or use-it-or-sell-it principles at the time of nomination.

| 2.6. | TSOs shall define an appropriate structure for the allocation of capacity between different timeframes. This may include an option for reserving a minimum percentage of interconnection capacity for daily or intra-daily allocation. Such an allocation structure shall be subject to review by the respective regulatory authorities. In drawing up their proposals, the TSOs shall take into account:






  (a) | the characteristics of the markets, |
| --- | --- | --- |

2.6.

TSOs shall define an appropriate structure for the allocation of capacity between different timeframes. This may include an option for reserving a minimum percentage of interconnection capacity for daily or intra-daily allocation. Such an allocation structure shall be subject to review by the respective regulatory authorities. In drawing up their proposals, the TSOs shall take into account:

(a)

the characteristics of the markets,

| (b) | the operational conditions, such as the implications of netting firmly declared schedules, |
| --- | --- |

(b)

the operational conditions, such as the implications of netting firmly declared schedules,

| (c) | the level of harmonisation of the percentages and timeframes adopted for the different capacity allocation mechanisms in place. |
| --- | --- |

(c)

the level of harmonisation of the percentages and timeframes adopted for the different capacity allocation mechanisms in place.

| 2.7. | Capacity allocation may not discriminate between market participants that wish to use their rights to make use of bilateral supply contracts or to bid into power exchanges. The highest value bids, whether implicit or explicit in a given timeframe, shall be successful. |
| --- | --- |

2.7.

Capacity allocation may not discriminate between market participants that wish to use their rights to make use of bilateral supply contracts or to bid into power exchanges. The highest value bids, whether implicit or explicit in a given timeframe, shall be successful.

| 2.8. | In regions where forward financial electricity markets are well developed and have shown their efficiency, all interconnection capacity may be allocated through implicit auctioning. |
| --- | --- |

2.8.

In regions where forward financial electricity markets are well developed and have shown their efficiency, all interconnection capacity may be allocated through implicit auctioning.

| 2.9. | Other than in the case of new interconnectors which benefit from an exemption under Article 7 of this Regulation, establishing reserve prices in capacity allocation methods shall not be allowed. |
| --- | --- |

2.9.

Other than in the case of new interconnectors which benefit from an exemption under Article 7 of this Regulation, establishing reserve prices in capacity allocation methods shall not be allowed.

| 2.10. | In principle, all potential market participants shall be permitted to participate in the allocation process without restriction. To avoid creating or aggravating problems related to the potential use of dominant position of any market player, the relevant regulatory and/or competition authorities, where appropriate, may impose restrictions in general or on an individual company on account of market dominance. |
| --- | --- |

2.10.

In principle, all potential market participants shall be permitted to participate in the allocation process without restriction. To avoid creating or aggravating problems related to the potential use of dominant position of any market player, the relevant regulatory and/or competition authorities, where appropriate, may impose restrictions in general or on an individual company on account of market dominance.

| 2.11. | Market participants shall firmly nominate their use of the capacity to the TSOs by a defined deadline for each timeframe. That deadline shall be such that TSOs are able to reassign unused capacity for reallocation in the next relevant timeframe — including intra-day sessions. |
| --- | --- |

2.11.

Market participants shall firmly nominate their use of the capacity to the TSOs by a defined deadline for each timeframe. That deadline shall be such that TSOs are able to reassign unused capacity for reallocation in the next relevant timeframe — including intra-day sessions.

| 2.12. | Capacity shall be freely tradable on a secondary basis, provided that the TSO is informed sufficiently in advance. Where a TSO refuses any secondary trade (transaction), this must be clearly and transparently communicated and explained to all the market participants by that TSO and notified to the regulatory authority. |
| --- | --- |

2.12.

Capacity shall be freely tradable on a secondary basis, provided that the TSO is informed sufficiently in advance. Where a TSO refuses any secondary trade (transaction), this must be clearly and transparently communicated and explained to all the market participants by that TSO and notified to the regulatory authority.

| 2.13. | The financial consequences of failure to honour obligations associated with the allocation of capacity shall be attributed to those who are responsible for such a failure. Where market participants fail to use the capacity that they have committed to use, or, in the case of explicitly auctioned capacity, fail to trade on a secondary basis or give the capacity back in due time, they shall lose the rights to such capacity and pay a cost-reflective charge. Any cost-reflective charges for the non-use of capacity shall be justified and proportionate. Likewise, if a TSO does not fulfil its obligation, it shall be liable to compensate the market participant for the loss of capacity rights. No consequential losses shall be taken into account for this purpose. The key concepts and methods for the determination of liabilities that accrue upon failure to honour obligations shall be set out in advance in respect of the financial consequences, and shall be subject to review by the relevant national regulatory authority or authorities. |
| --- | --- |

2.13.

The financial consequences of failure to honour obligations associated with the allocation of capacity shall be attributed to those who are responsible for such a failure. Where market participants fail to use the capacity that they have committed to use, or, in the case of explicitly auctioned capacity, fail to trade on a secondary basis or give the capacity back in due time, they shall lose the rights to such capacity and pay a cost-reflective charge. Any cost-reflective charges for the non-use of capacity shall be justified and proportionate. Likewise, if a TSO does not fulfil its obligation, it shall be liable to compensate the market participant for the loss of capacity rights. No consequential losses shall be taken into account for this purpose. The key concepts and methods for the determination of liabilities that accrue upon failure to honour obligations shall be set out in advance in respect of the financial consequences, and shall be subject to review by the relevant national regulatory authority or authorities.

3.   Coordination

| 3.1. | Capacity allocation at an interconnection shall be coordinated and implemented using common allocation procedures by the TSOs involved. In cases where commercial exchanges between two countries (TSOs) are expected to affect physical flow conditions in any third-country (TSO) significantly, congestion management methods shall be coordinated between all the TSOs so affected through a common congestion management procedure. National regulatory authorities and TSOs shall ensure that no congestion management procedure with significant effects on physical electric power flows in other networks is devised unilaterally. |
| --- | --- |

3.1.

Capacity allocation at an interconnection shall be coordinated and implemented using common allocation procedures by the TSOs involved. In cases where commercial exchanges between two countries (TSOs) are expected to affect physical flow conditions in any third-country (TSO) significantly, congestion management methods shall be coordinated between all the TSOs so affected through a common congestion management procedure. National regulatory authorities and TSOs shall ensure that no congestion management procedure with significant effects on physical electric power flows in other networks is devised unilaterally.

| 3.2. | A common coordinated congestion management method and procedure for the allocation of capacity to the market at least annually, monthly and day-ahead shall be applied by 1 January 2007 between countries in the following regions:






  (a) | Northern Europe (i.e. Denmark, Sweden, Finland, Germany and Poland), |
| --- | --- | --- |

3.2.

A common coordinated congestion management method and procedure for the allocation of capacity to the market at least annually, monthly and day-ahead shall be applied by 1 January 2007 between countries in the following regions:

(a)

Northern Europe (i.e. Denmark, Sweden, Finland, Germany and Poland),

| (b) | North-West Europe (i.e. Benelux, Germany and France), |
| --- | --- |

(b)

North-West Europe (i.e. Benelux, Germany and France),

| (c) | Italy (i.e. Italy, France, Germany, Austria, Slovenia and Greece), |
| --- | --- |

(c)

Italy (i.e. Italy, France, Germany, Austria, Slovenia and Greece),

| (d) | Central Eastern Europe (i.e. Germany, Poland, Czech Republic, Slovakia, Hungary, Austria and Slovenia), |
| --- | --- |

(d)

Central Eastern Europe (i.e. Germany, Poland, Czech Republic, Slovakia, Hungary, Austria and Slovenia),

| (e) | South-West Europe (i.e. Spain, Portugal and France), |
| --- | --- |

(e)

South-West Europe (i.e. Spain, Portugal and France),

| (f) | UK, Ireland and France, |
| --- | --- |

(f)

UK, Ireland and France,

| (g) | Baltic states (i.e. Estonia, Latvia and Lithuania). |
| --- | --- |

(g)

Baltic states (i.e. Estonia, Latvia and Lithuania).

At an interconnection involving countries belonging to more than one region, the congestion management method applied may differ in order to ensure the compatibility with the methods applied in the other regions to which these countries belong. In that case, the relevant TSOs shall propose the method which shall be subject to review by the relevant regulatory authorities.

| 3.3. | The regions referred to in point 2.8 may allocate all interconnection capacity through day-ahead allocation. |
| --- | --- |

3.3.

The regions referred to in point 2.8 may allocate all interconnection capacity through day-ahead allocation.

| 3.4. | Compatible congestion management procedures shall be defined in all these seven regions with a view to forming a truly integrated internal market in electricity. Market participants shall not be confronted with incompatible regional systems. |
| --- | --- |

3.4.

Compatible congestion management procedures shall be defined in all these seven regions with a view to forming a truly integrated internal market in electricity. Market participants shall not be confronted with incompatible regional systems.

| 3.5. | With a view to promoting fair and efficient competition and cross-border trade, coordination between TSOs within the regions set out in point 3.2 shall include all the steps from capacity calculation and optimisation of allocation to secure operation of the network, with clear assignments of responsibility. Such coordination shall include, in particular:






  (a) | the use of a common transmission model dealing efficiently with interdependent physical loop-flows and having regard to discrepancies between physical and commercial flows, |
| --- | --- | --- |

3.5.

With a view to promoting fair and efficient competition and cross-border trade, coordination between TSOs within the regions set out in point 3.2 shall include all the steps from capacity calculation and optimisation of allocation to secure operation of the network, with clear assignments of responsibility. Such coordination shall include, in particular:

(a)

the use of a common transmission model dealing efficiently with interdependent physical loop-flows and having regard to discrepancies between physical and commercial flows,

| (b) | allocation and nomination of capacity to deal efficiently with interdependent physical loop-flows, |
| --- | --- |

(b)

allocation and nomination of capacity to deal efficiently with interdependent physical loop-flows,

| (c) | identical obligations on capacity holders to provide information on their intended use of the capacity, i.e. nomination of capacity (for explicit auctions), |
| --- | --- |

(c)

identical obligations on capacity holders to provide information on their intended use of the capacity, i.e. nomination of capacity (for explicit auctions),

| (d) | identical timeframes and closing times, |
| --- | --- |

(d)

identical timeframes and closing times,

| (e) | identical structure for the allocation of capacity among different timeframes (e.g. 1 day, 3 hours, 1 week, etc.) and in terms of blocks of capacity sold (amount of power in MW, MWh, etc.), |
| --- | --- |

(e)

identical structure for the allocation of capacity among different timeframes (e.g. 1 day, 3 hours, 1 week, etc.) and in terms of blocks of capacity sold (amount of power in MW, MWh, etc.),

| (f) | consistent contractual framework with market participants, |
| --- | --- |

(f)

consistent contractual framework with market participants,

| (g) | verification of flows to comply with the network security requirements for operational planning and for real-time operation, |
| --- | --- |

(g)

verification of flows to comply with the network security requirements for operational planning and for real-time operation,

| (h) | accounting and settlement of congestion management actions. |
| --- | --- |

(h)

accounting and settlement of congestion management actions.

| 3.6. | Coordination shall also include the exchange of information between TSOs. The nature, time and frequency of information exchange shall be compatible with the activities set out in point 3.5 and the functioning of the electricity markets. That information exchange shall, in particular, enable the TSOs to make the best possible forecast of the global network situation in order to assess the flows in their network and the available interconnection capacities. Any TSO collecting information on behalf of other TSOs shall give back to the participating TSO the results of the collection of data. |
| --- | --- |

3.6.

Coordination shall also include the exchange of information between TSOs. The nature, time and frequency of information exchange shall be compatible with the activities set out in point 3.5 and the functioning of the electricity markets. That information exchange shall, in particular, enable the TSOs to make the best possible forecast of the global network situation in order to assess the flows in their network and the available interconnection capacities. Any TSO collecting information on behalf of other TSOs shall give back to the participating TSO the results of the collection of data.

4.   Timetable for market operations

| 4.1. | The allocation of the available transmission capacity shall take place sufficiently in advance. Prior to each allocation, the involved TSOs shall, jointly, publish the capacity to be allocated, taking into account where appropriate the capacity released from any firm transmission rights and, where relevant, associated netted nominations, along with any time periods during which the capacity will be reduced or not available (for the purpose of maintenance, for example). |
| --- | --- |

4.1.

The allocation of the available transmission capacity shall take place sufficiently in advance. Prior to each allocation, the involved TSOs shall, jointly, publish the capacity to be allocated, taking into account where appropriate the capacity released from any firm transmission rights and, where relevant, associated netted nominations, along with any time periods during which the capacity will be reduced or not available (for the purpose of maintenance, for example).

| 4.2. | Having full regard to network security, the nomination of transmission rights shall take place sufficiently in advance, before the day-ahead sessions of all the relevant organised markets and before the publication of the capacity to be allocated under the day-ahead or intra-day allocation mechanism. Nominations of transmission rights in the opposite direction shall be netted in order to make efficient use of the interconnection. |
| --- | --- |

4.2.

Having full regard to network security, the nomination of transmission rights shall take place sufficiently in advance, before the day-ahead sessions of all the relevant organised markets and before the publication of the capacity to be allocated under the day-ahead or intra-day allocation mechanism. Nominations of transmission rights in the opposite direction shall be netted in order to make efficient use of the interconnection.

| 4.3. | Successive intra-day allocations of available transmission capacity for day D shall take place on days D-1 and D, after the issuing of the indicated or actual day-ahead production schedules. |
| --- | --- |

4.3.

Successive intra-day allocations of available transmission capacity for day D shall take place on days D-1 and D, after the issuing of the indicated or actual day-ahead production schedules.

| 4.4. | When preparing day-ahead network operation, the TSOs shall exchange information with neighbouring TSOs, including their forecast network topology, the availability and forecasted production of generation units, and load flows in order to optimise the use of the overall network through operational measures in compliance with the rules for secure network operation. |
| --- | --- |

4.4.

When preparing day-ahead network operation, the TSOs shall exchange information with neighbouring TSOs, including their forecast network topology, the availability and forecasted production of generation units, and load flows in order to optimise the use of the overall network through operational measures in compliance with the rules for secure network operation.

5.   Transparency

| 5.1. | TSOs shall publish all relevant data related to network availability, network access and network use, including a report on where and why congestion exists, the methods applied for managing the congestion and the plans for its future management. |
| --- | --- |

5.1.

TSOs shall publish all relevant data related to network availability, network access and network use, including a report on where and why congestion exists, the methods applied for managing the congestion and the plans for its future management.

| 5.2. | TSOs shall publish a general description of the congestion management method applied under different circumstances for maximising the capacity available to the market, and a general scheme for the calculation of the interconnection capacity for the different timeframes, based upon the electrical and physical realities of the network. Such a scheme shall be subject to review by the regulatory authorities of the Member States concerned. |
| --- | --- |

5.2.

TSOs shall publish a general description of the congestion management method applied under different circumstances for maximising the capacity available to the market, and a general scheme for the calculation of the interconnection capacity for the different timeframes, based upon the electrical and physical realities of the network. Such a scheme shall be subject to review by the regulatory authorities of the Member States concerned.

| 5.3. | The congestion management and capacity allocation procedures in use, together with the times and procedures for applying for capacity, a description of the products offered and the obligations and rights of both the TSOs and the party obtaining the capacity, including the liabilities that accrue upon failure to honour obligations, shall be described in detail and made available in a transparent manner to all potential network users by TSOs. |
| --- | --- |

5.3.

The congestion management and capacity allocation procedures in use, together with the times and procedures for applying for capacity, a description of the products offered and the obligations and rights of both the TSOs and the party obtaining the capacity, including the liabilities that accrue upon failure to honour obligations, shall be described in detail and made available in a transparent manner to all potential network users by TSOs.

| 5.4. | The operational and planning security standards shall form an integral part of the information that TSOs publish in an open and public document. That document shall also be subject to review of the national regulatory authorities. |
| --- | --- |

5.4.

The operational and planning security standards shall form an integral part of the information that TSOs publish in an open and public document. That document shall also be subject to review of the national regulatory authorities.

| 5.5. | TSOs shall publish all relevant data concerning cross-border trade on the basis of the best possible forecast. In order to fulfil that obligation the market participants concerned shall provide the TSOs with the relevant data. The manner in which such information is published shall be subject to review by the regulatory authorities. TSOs shall publish at least:






  (a) | annually: information on the long-term evolution of the transmission infrastructure and its impact on cross-border transmission capacity; |
| --- | --- | --- |

5.5.

TSOs shall publish all relevant data concerning cross-border trade on the basis of the best possible forecast. In order to fulfil that obligation the market participants concerned shall provide the TSOs with the relevant data. The manner in which such information is published shall be subject to review by the regulatory authorities. TSOs shall publish at least:

(a)

annually: information on the long-term evolution of the transmission infrastructure and its impact on cross-border transmission capacity;

| (b) | monthly: month and year-ahead forecasts of the transmission capacity available to the market, taking into account all relevant information available to the TSO at the time of the forecast calculation (e.g. impact of summer and winter seasons on the capacity of lines, maintenance of the network, availability of production units, etc.); |
| --- | --- |

(b)

monthly: month and year-ahead forecasts of the transmission capacity available to the market, taking into account all relevant information available to the TSO at the time of the forecast calculation (e.g. impact of summer and winter seasons on the capacity of lines, maintenance of the network, availability of production units, etc.);

| (c) | weekly: week-ahead forecasts of the transmission capacity available to the market, taking into account all relevant information available to the TSOs at the time of calculation of the forecast, such as the weather forecast, planned network maintenance work, availability of production units, etc.; |
| --- | --- |

(c)

weekly: week-ahead forecasts of the transmission capacity available to the market, taking into account all relevant information available to the TSOs at the time of calculation of the forecast, such as the weather forecast, planned network maintenance work, availability of production units, etc.;

| (d) | daily: day-ahead and intra-day transmission capacity available to the market for each market time unit, taking into account all netted day-ahead nominations, day-ahead production schedules, demand forecasts and planned network maintenance work; |
| --- | --- |

(d)

daily: day-ahead and intra-day transmission capacity available to the market for each market time unit, taking into account all netted day-ahead nominations, day-ahead production schedules, demand forecasts and planned network maintenance work;

| (e) | total capacity already allocated, by market time unit, and all relevant conditions under which this capacity may be used (e.g. auction clearing price, obligations on how to use the capacity, etc.), so as to identify any remaining capacity; |
| --- | --- |

(e)

total capacity already allocated, by market time unit, and all relevant conditions under which this capacity may be used (e.g. auction clearing price, obligations on how to use the capacity, etc.), so as to identify any remaining capacity;

| (f) | allocated capacity as soon as possible after each allocation, as well as an indication of prices paid; |
| --- | --- |

(f)

allocated capacity as soon as possible after each allocation, as well as an indication of prices paid;

| (g) | total capacity used, by market time unit, immediately after nomination; |
| --- | --- |

(g)

total capacity used, by market time unit, immediately after nomination;

| (h) | as closely as possible to real time: aggregated realised commercial and physical flows, by market time unit, including a description of the effects of any corrective actions taken by the TSOs (such as curtailment) for solving network or system problems; |
| --- | --- |

(h)

as closely as possible to real time: aggregated realised commercial and physical flows, by market time unit, including a description of the effects of any corrective actions taken by the TSOs (such as curtailment) for solving network or system problems;

| (i) | ex-ante information on planned outages and ex-post information for the previous day on planned and unplanned outages of generation units larger than 100 MW. |
| --- | --- |

(i)

ex-ante information on planned outages and ex-post information for the previous day on planned and unplanned outages of generation units larger than 100 MW.

| 5.6. | All relevant information shall be available for the market in due time for the negotiation of all transactions (such as the time of negotiation of annual supply contracts for industrial customers or the time when bids have to be sent into organised markets). |
| --- | --- |

5.6.

All relevant information shall be available for the market in due time for the negotiation of all transactions (such as the time of negotiation of annual supply contracts for industrial customers or the time when bids have to be sent into organised markets).

| 5.7. | The TSO shall publish the relevant information on forecast demand and on generation according to the timeframes referred to in points 5.5 and 5.6. The TSO shall also publish the relevant information necessary for the cross-border balancing market. |
| --- | --- |

5.7.

The TSO shall publish the relevant information on forecast demand and on generation according to the timeframes referred to in points 5.5 and 5.6. The TSO shall also publish the relevant information necessary for the cross-border balancing market.

| 5.8. | When forecasts are published, the ex post realised values for the forecast information shall also be published in the time period following that to which the forecast applies or at the latest on the following day (D+1). |
| --- | --- |

5.8.

When forecasts are published, the ex post realised values for the forecast information shall also be published in the time period following that to which the forecast applies or at the latest on the following day (D+1).

| 5.9. | All information published by the TSOs shall be made freely available in an easily accessible form. All data shall also be accessible through adequate and standardised means of information exchange, to be defined in close cooperation with market participants. The data shall include information on past time periods with a minimum of two years, so that new market entrants may also have access to such data. |
| --- | --- |

5.9.

All information published by the TSOs shall be made freely available in an easily accessible form. All data shall also be accessible through adequate and standardised means of information exchange, to be defined in close cooperation with market participants. The data shall include information on past time periods with a minimum of two years, so that new market entrants may also have access to such data.

| 5.10. | TSOs shall exchange regularly a set of sufficiently accurate network and load flow data in order to enable load flow calculations for each TSO in their relevant area. The same set of data shall be made available to the regulatory authorities and to the Commission upon request. The regulatory authorities and the Commission shall ensure the confidential treatment of this set of data, by themselves and by any consultant carrying out analytical work for them on the basis of these data. |
| --- | --- |

5.10.

TSOs shall exchange regularly a set of sufficiently accurate network and load flow data in order to enable load flow calculations for each TSO in their relevant area. The same set of data shall be made available to the regulatory authorities and to the Commission upon request. The regulatory authorities and the Commission shall ensure the confidential treatment of this set of data, by themselves and by any consultant carrying out analytical work for them on the basis of these data.

6.   Use of congestion income

| 6.1. | Congestion management procedures associated with a pre-specified timeframe may generate revenue only in the event of congestion which arises for that timeframe, except in the case of new interconnectors which benefit from an exemption under Article 7 of this Regulation. The procedure for the distribution of these revenues shall be subject to review by the regulatory authorities and shall neither distort the allocation process in favour of any party requesting capacity or energy nor provide a disincentive to reduce congestion. |
| --- | --- |

6.1.

Congestion management procedures associated with a pre-specified timeframe may generate revenue only in the event of congestion which arises for that timeframe, except in the case of new interconnectors which benefit from an exemption under Article 7 of this Regulation. The procedure for the distribution of these revenues shall be subject to review by the regulatory authorities and shall neither distort the allocation process in favour of any party requesting capacity or energy nor provide a disincentive to reduce congestion.

| 6.2. | National regulatory authorities shall be transparent regarding the use of revenues resulting from the allocation of interconnection capacity. |
| --- | --- |

6.2.

National regulatory authorities shall be transparent regarding the use of revenues resulting from the allocation of interconnection capacity.

| 6.3. | The congestion income shall be shared among the TSOs involved in accordance with criteria agreed between the TSOs involved and reviewed by the respective regulatory authorities. |
| --- | --- |

6.3.

The congestion income shall be shared among the TSOs involved in accordance with criteria agreed between the TSOs involved and reviewed by the respective regulatory authorities.

| 6.4. | TSOs shall clearly establish beforehand the use they will make of any congestion income they may obtain and report on the actual use of this income. Regulatory authorities shall verify that such use complies with this Regulation and these guidelines and that the total amount of congestion income resulting from the allocation of interconnection capacity is devoted to one or more of the three purposes set out in Article 16(6) of this Regulation. |
| --- | --- |

6.4.

TSOs shall clearly establish beforehand the use they will make of any congestion income they may obtain and report on the actual use of this income. Regulatory authorities shall verify that such use complies with this Regulation and these guidelines and that the total amount of congestion income resulting from the allocation of interconnection capacity is devoted to one or more of the three purposes set out in Article 16(6) of this Regulation.

| 6.5. | On an annual basis, and by 31 July each year, the regulatory authorities shall publish a report setting out the amount of revenue collected for the 12-month period up to 30 June of the same year and the use made of the revenues in question, together with verification that this use complies with this Regulation and these guidelines and that the total amount of congestion income is devoted to one or more of the three prescribed purposes. |
| --- | --- |

6.5.

On an annual basis, and by 31 July each year, the regulatory authorities shall publish a report setting out the amount of revenue collected for the 12-month period up to 30 June of the same year and the use made of the revenues in question, together with verification that this use complies with this Regulation and these guidelines and that the total amount of congestion income is devoted to one or more of the three prescribed purposes.

| 6.6. | The use of congestion income for investment to maintain or increase interconnection capacity shall preferably be assigned to specific predefined projects which contribute to relieving the existing associated congestion and which may also be implemented within a reasonable time, particularly as regards the authorisation process. |
| --- | --- |

6.6.

The use of congestion income for investment to maintain or increase interconnection capacity shall preferably be assigned to specific predefined projects which contribute to relieving the existing associated congestion and which may also be implemented within a reasonable time, particularly as regards the authorisation process.

---

(1)  Operational security means ‘keeping the transmission system within agreed security limits’.

---

ANNEX II

CORRELATION TABLE

| Regulation (EC) No 1228/2003 | This Regulation |
| --- | --- |
| Article 1 | Article 1 |
| Article 2 | Article 2 |
| — | Article 3 |
| — | Article 4 |
| — | Article 5 |
| — | Article 6 |
| — | Article 7 |
| — | Article 8 |
| — | Article 9 |
| — | Article 10 |
| — | Article 11 |
| — | Article 12 |
| Article 3 | Article 13 |
| Article 4 | Article 14 |
| Article 5 | Article 15 |
| Article 6 | Article 16 |
| Article 7 | Article 17 |
| Article 8 | Article 18 |
| Article 9 | Article 19 |
| Article 10 | Article 20 |
| Article 11 | Article 21 |
| Article 12 | Article 22 |
| Article 13 | Article 23 |
| Article 14 | Article 24 |
| — | Article 25 |
| Article 15 | Article 26 |
| Annex | Annex I |

Regulation (EC) No 1228/2003

This Regulation

Article 1

Article 1

Article 2

Article 2

—

Article 3

—

Article 4

—

Article 5

—

Article 6

—

Article 7

—

Article 8

—

Article 9

—

Article 10

—

Article 11

—

Article 12

Article 3

Article 13

Article 4

Article 14

Article 5

Article 15

Article 6

Article 16

Article 7

Article 17

Article 8

Article 18

Article 9

Article 19

Article 10

Article 20

Article 11

Article 21

Article 12

Article 22

Article 13

Article 23

Article 14

Article 24

—

Article 25

Article 15

Article 26

Annex

Annex I

---

STATEMENT OF THE COUNCIL'S REASONS

I.   INTRODUCTION

| 1. | On 19 September 2007, the Commission presented a proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1228/2003 on conditions for access to the network of cross-border exchanges in electricity, based on Article 95 of the Treaty, together in a package with four other proposals concerning the internal energy market. |
| --- | --- |

1.

On 19 September 2007, the Commission presented a proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1228/2003 on conditions for access to the network of cross-border exchanges in electricity, based on Article 95 of the Treaty, together in a package with four other proposals concerning the internal energy market.

| 2. | The Committee of the Regions and the European Economic and Social Committee delivered their opinions on the complete package on 10 (1) and 22 April 2008 (2) respectively. |
| --- | --- |

2.

The Committee of the Regions and the European Economic and Social Committee delivered their opinions on the complete package on 10 (1) and 22 April 2008 (2) respectively.

| 3. | The European Parliament adopted its Opinion (3) at first reading on 18 June 2008, approving 32 amendments. The Commission did not present a modified proposal. |
| --- | --- |

3.

The European Parliament adopted its Opinion (3) at first reading on 18 June 2008, approving 32 amendments. The Commission did not present a modified proposal.

| 4. | On 9 January 2009, the Council adopted its Common Position in accordance with Article 251 of the Treaty, in the form of a recast Regulation. |
| --- | --- |

4.

On 9 January 2009, the Council adopted its Common Position in accordance with Article 251 of the Treaty, in the form of a recast Regulation.

II.   OBJECTIVE OF THE PROPOSAL

| 5. | The proposal is part of the third internal energy market package, together with the Directive concerning common rules for the internal market in electricity, the Regulation on conditions for access to the natural gas transmission networks, the Directive concerning common rules for the internal market in natural gas, and the Regulation establishing an Agency for the Cooperation of Energy Regulators. It aims at contributing to achieving the objective of a well functioning internal electricity market by introducing in particular:






  — | provisions aiming at an increased cooperation and coordination among transmission system operators, inter alia through the establishment of a European Network of the Transmission Operators for Electricity (ENTSO for Electricity); |
| --- | --- | --- |

5.

The proposal is part of the third internal energy market package, together with the Directive concerning common rules for the internal market in electricity, the Regulation on conditions for access to the natural gas transmission networks, the Directive concerning common rules for the internal market in natural gas, and the Regulation establishing an Agency for the Cooperation of Energy Regulators. It aims at contributing to achieving the objective of a well functioning internal electricity market by introducing in particular:

—

provisions aiming at an increased cooperation and coordination among transmission system operators, inter alia through the establishment of a European Network of the Transmission Operators for Electricity (ENTSO for Electricity);

| — | improved transparency requirements. |
| --- | --- |

—

improved transparency requirements.

III.   ANALYSIS OF THE COMMON POSITION

6.   General Remarks

| 6.1. | The Council has considered it more effective, more transparent and coherent with Regulation (EC) No 1228/2003 as well as more reader friendly to recast the provisions of the Regulation. However, in doing this, the Council has as a general principle fully respected the amending proposal of the Commission in the sense that it has not opened any other provision not being part of the Commission proposal, unless changes were necessary following from the changes introduced by the Council to the proposal, changed references resulting from the renumbering of the Articles etc. To the extent possible, the Council has followed the Commission's approach regarding an identical treatment of the electricity and gas sectors.
  The Commission has accepted all the changes introduced by the Council to its proposal. |
| --- | --- |

6.1.

The Council has considered it more effective, more transparent and coherent with Regulation (EC) No 1228/2003 as well as more reader friendly to recast the provisions of the Regulation. However, in doing this, the Council has as a general principle fully respected the amending proposal of the Commission in the sense that it has not opened any other provision not being part of the Commission proposal, unless changes were necessary following from the changes introduced by the Council to the proposal, changed references resulting from the renumbering of the Articles etc. To the extent possible, the Council has followed the Commission's approach regarding an identical treatment of the electricity and gas sectors.

The Commission has accepted all the changes introduced by the Council to its proposal.

| 6.2. | Concerning the 32 amendments adopted by the European Parliament including one oral amendment, the Council has followed the Commission in






  — | accepting the following seven amendments |
| --- | --- | --- |

6.2.

Concerning the 32 amendments adopted by the European Parliament including one oral amendment, the Council has followed the Commission in

—

accepting the following seven amendments

| — | fully: 12; |
| --- | --- |

—

fully: 12;

| — | partly/in principle: 11, 15, 18, 24, 29, and 32;
  and |
| --- | --- |

—

partly/in principle: 11, 15, 18, 24, 29, and 32;

and

| — | rejecting the following six amendments: 5, 13, 19, 26, 27 and 30, on grounds of substance, consistency or form. |
| --- | --- |

—

rejecting the following six amendments: 5, 13, 19, 26, 27 and 30, on grounds of substance, consistency or form.

| 6.3. | The Council has deviated from the Commission's position in






  — | accepting one amendment: 23 (partially)
  and |
| --- | --- | --- |

6.3.

The Council has deviated from the Commission's position in

—

accepting one amendment: 23 (partially)

and

| — | rejecting the following 18 amendments: 1, 2, 3, 4, 6, 7, 8, 9, 10, 14, 17, 20, 21, 22, 25, 28, 31, and the oral amendment. |
| --- | --- |

—

rejecting the following 18 amendments: 1, 2, 3, 4, 6, 7, 8, 9, 10, 14, 17, 20, 21, 22, 25, 28, 31, and the oral amendment.

7.   Specific Remarks

| 7.1. | Regarding the EP amendments where the Council has deviated from the Commission position:






  a) | The Council has accepted amdt 23 partially because it considers that on certain conditions and with certain limits, it should be possible to take congestion revenues into account when network tariffs are calculated. |
| --- | --- | --- |

7.1.

Regarding the EP amendments where the Council has deviated from the Commission position:

a)

The Council has accepted amdt 23 partially because it considers that on certain conditions and with certain limits, it should be possible to take congestion revenues into account when network tariffs are calculated.

| b) | The Council has rejected the 18 amendments listed above (point 6.3) on the following grounds:






  i) | The amendments are not necessary or do not have added value, mainly because the issues are partly/sufficiently covered by other parts of the text, or the wording as proposed by the Commission is sufficient: amdts 1, 2, 3, 4; amdts 7 and 8 are redundant; the issue of the oral amdt is already covered by Art. 8(8 + 9). |
| --- | --- | --- |

b)

The Council has rejected the 18 amendments listed above (point 6.3) on the following grounds:

i)

The amendments are not necessary or do not have added value, mainly because the issues are partly/sufficiently covered by other parts of the text, or the wording as proposed by the Commission is sufficient: amdts 1, 2, 3, 4; amdts 7 and 8 are redundant; the issue of the oral amdt is already covered by Art. 8(8 + 9).

| ii) | The amendment is introducing text which is not appropriate regarding the role of the regulatory authorities, i.a. because the tasks and powers of these authorities are set in the electricity Directive: amdt 9; amdt 10 (in addition, the Council has transferred the Article on retail markets to the electricity Directive); amdts 20, 31. |
| --- | --- |

ii)

The amendment is introducing text which is not appropriate regarding the role of the regulatory authorities, i.a. because the tasks and powers of these authorities are set in the electricity Directive: amdt 9; amdt 10 (in addition, the Council has transferred the Article on retail markets to the electricity Directive); amdts 20, 31.

| iii) | Amdt 6 because it is not for the Commission to draw up roadmaps regarding the transmission network. |
| --- | --- |

iii)

Amdt 6 because it is not for the Commission to draw up roadmaps regarding the transmission network.

| iv) | Amendments 14 and 21 introduce text which does not correspond to the role which the Council is giving to the Agency; moreover, it is, for legal reasons, not appropriate that the Agency adopts or approves network codes or takes decisions with a general scope. |
| --- | --- |

iv)

Amendments 14 and 21 introduce text which does not correspond to the role which the Council is giving to the Agency; moreover, it is, for legal reasons, not appropriate that the Agency adopts or approves network codes or takes decisions with a general scope.

| v) | Amdt 17 because the consultations (Art. 10) should be carried out by ENTSO; consultation which the Agency has to do is covered by Art. 6. |
| --- | --- |

v)

Amdt 17 because the consultations (Art. 10) should be carried out by ENTSO; consultation which the Agency has to do is covered by Art. 6.

| vi) | Amdt 22 is not appropriate because overregulation should be avoided. |
| --- | --- |

vi)

Amdt 22 is not appropriate because overregulation should be avoided.

| vi) | Amdt 25 because parallelism with the exemption procedure foreseen for gas (Art. 35 gas Directive) should be kept. |
| --- | --- |

vi)

Amdt 25 because parallelism with the exemption procedure foreseen for gas (Art. 35 gas Directive) should be kept.

| vii) | Amdt 28 goes beyond the scope of the Regulation and provides tasks for Member States which should be the task of TSOs. |
| --- | --- |

vii)

Amdt 28 goes beyond the scope of the Regulation and provides tasks for Member States which should be the task of TSOs.

| 7.2 | Concerning the Commission proposal, the Council has introduced certain other modifications (of substance and/or of form); the main ones are set out below.






  a) | Certification of TSOs

  The Council has considered it appropriate to transfer the part of the certification procedure which sets out the role of the Commission in this procedure from the electricity Directive to a new Article 3 of this Regulation. |
| --- | --- | --- |

7.2

Concerning the Commission proposal, the Council has introduced certain other modifications (of substance and/or of form); the main ones are set out below.

a)

Certification of TSOs

The Council has considered it appropriate to transfer the part of the certification procedure which sets out the role of the Commission in this procedure from the electricity Directive to a new Article 3 of this Regulation.

| b) | Establishment and modification of network codes

  The Council has considered it appropriate to set out more in detail the procedure for the establishment of network codes (Art. 6) and another — shorter — procedure for the modification of network codes (Art. 7). These Articles have replaced Art. 2e of the Commission proposal. The Council has given a clear role to the Agency which should develop non-binding framework guidelines as a basis for the network codes to be established by ENTSO, review the draft network codes and assess proposed modifications to the network codes. If necessary, the Commission may adopt those codes through the committee procedure in order to make them binding (see also recital 6). |
| --- | --- |

b)

Establishment and modification of network codes

The Council has considered it appropriate to set out more in detail the procedure for the establishment of network codes (Art. 6) and another — shorter — procedure for the modification of network codes (Art. 7). These Articles have replaced Art. 2e of the Commission proposal. The Council has given a clear role to the Agency which should develop non-binding framework guidelines as a basis for the network codes to be established by ENTSO, review the draft network codes and assess proposed modifications to the network codes. If necessary, the Commission may adopt those codes through the committee procedure in order to make them binding (see also recital 6).

| c) | Monitoring by the Agency

  The Council has introduced two paragraphs setting out the monitoring role of the Agency with respect to the implementation of the network codes by ENTSO (Art. 9(1)(subparas 2+3)). |
| --- | --- |

c)

Monitoring by the Agency

The Council has introduced two paragraphs setting out the monitoring role of the Agency with respect to the implementation of the network codes by ENTSO (Art. 9(1)(subparas 2+3)).

| d) | Exemptions for new interconnectors

  In regard to granting exemptions for new interconnectors between Member States (Art. 17), the Council has considered it appropriate to involve the Agency only in those cases where the national regulatory authorities concerned do not find an agreement or submit a joint request to the Agency (para. 5). Moreover, Member States should have the possibility to provide, if they so wish, that the formal decision on the exemption is taken by another relevant body of the Member State, on the basis of the opinion of the regulator (para 6). |
| --- | --- |

d)

Exemptions for new interconnectors

In regard to granting exemptions for new interconnectors between Member States (Art. 17), the Council has considered it appropriate to involve the Agency only in those cases where the national regulatory authorities concerned do not find an agreement or submit a joint request to the Agency (para. 5). Moreover, Member States should have the possibility to provide, if they so wish, that the formal decision on the exemption is taken by another relevant body of the Member State, on the basis of the opinion of the regulator (para 6).

| e) | Retail markets

  The Council has considered it appropriate to redraft the Article on retail markets, taking i.a. out the cross-border reference, and transfer it from the Regulation (Art. 7a of the Commission proposal) to the electricity Directive (new Article 40). |
| --- | --- |

e)

Retail markets

The Council has considered it appropriate to redraft the Article on retail markets, taking i.a. out the cross-border reference, and transfer it from the Regulation (Art. 7a of the Commission proposal) to the electricity Directive (new Article 40).

| f) | Other points







  — | The Council has considered it appropriate to use the term ‘network development plan’ instead of ‘investment plan’ and to clarify that these plans are of a non-binding nature (Art. 8(3)(b)). |
| --- | --- | --- |

f)

Other points

—

The Council has considered it appropriate to use the term ‘network development plan’ instead of ‘investment plan’ and to clarify that these plans are of a non-binding nature (Art. 8(3)(b)).

| — | In line with the recast format, the Council has introduced a new Article to repeal the current legislative act (Art. 25). |
| --- | --- |

—

In line with the recast format, the Council has introduced a new Article to repeal the current legislative act (Art. 25).

---

(1)  OJ C 172, 5.7.2008, p. 55.

(2)  OJ C 211, 19.8.2008, p. 23.

(3)  Not yet published in the Official Journal.

---

| 31.3.2009 | EN | Official Journal of the European Union | CE 75/38 |
| --- | --- | --- | --- |

31.3.2009

EN

Official Journal of the European Union

CE 75/38

---

COMMON POSITION (EC) No 12/2009

adopted by the Council on 9 January 2009

with a view to the adoption of Regulation (EC) No .../2009 of the European Parliament and of the Council of ... on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005

(Text with EEA relevance)

(2009/C 75 E/03)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 95 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Economic and Social Committee (1),

Having regard to the opinion of the Committee of the Regions (2),

Acting in accordance with the procedure laid down in Article 251 of the Treaty (3),

Whereas:

| (1) | The internal market in natural gas, which has been progressively implemented since 1999, aims at delivering real choice for all consumers in the Community, be they citizens or businesses, new business opportunities and more cross-border trade, so as to achieve efficiency gains, competitive prices, higher standards of service, and to contribute to security of supply and sustainability. |
| --- | --- |

(1)

The internal market in natural gas, which has been progressively implemented since 1999, aims at delivering real choice for all consumers in the Community, be they citizens or businesses, new business opportunities and more cross-border trade, so as to achieve efficiency gains, competitive prices, higher standards of service, and to contribute to security of supply and sustainability.

| (2) | Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas (4) and Regulation (EC) No 1775/2005 of the European Parliament and of the Council of 28 September 2005 on conditions for access to the natural gas transmission networks (5) have made significant contributions towards the creation of such an internal market in natural gas. |
| --- | --- |

(2)

Directive 2003/55/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in natural gas (4) and Regulation (EC) No 1775/2005 of the European Parliament and of the Council of 28 September 2005 on conditions for access to the natural gas transmission networks (5) have made significant contributions towards the creation of such an internal market in natural gas.

| (3) | Experience gained in the implementation and monitoring of a first set of Guidelines for Good Practice, adopted by the European Gas Regulatory Forum (‘the Madrid Forum’) in 2002, demonstrates that in order to ensure the full implementation of the rules set out in those guidelines in all Member States, and in order to provide a minimum guarantee of equal market access conditions in practice, it is necessary to provide for them to become legally enforceable. |
| --- | --- |

(3)

Experience gained in the implementation and monitoring of a first set of Guidelines for Good Practice, adopted by the European Gas Regulatory Forum (‘the Madrid Forum’) in 2002, demonstrates that in order to ensure the full implementation of the rules set out in those guidelines in all Member States, and in order to provide a minimum guarantee of equal market access conditions in practice, it is necessary to provide for them to become legally enforceable.

| (4) | A second set of common rules entitled ‘the Second Guidelines for Good Practice’ was adopted at the meeting of the Madrid Forum on 24 and 25 September 2003 and the purpose of this Regulation is to lay down, on the basis of those second guidelines, basic principles and rules regarding network access and third party access services, congestion management, transparency, balancing and the trading of capacity rights. |
| --- | --- |

(4)

A second set of common rules entitled ‘the Second Guidelines for Good Practice’ was adopted at the meeting of the Madrid Forum on 24 and 25 September 2003 and the purpose of this Regulation is to lay down, on the basis of those second guidelines, basic principles and rules regarding network access and third party access services, congestion management, transparency, balancing and the trading of capacity rights.

| (5) | Directive 2009/.../EC of the European Parliament and of the Council of ... concerning common rules for the internal market in natural gas (6) allows for a combined transmission and distribution system operator. Therefore, the rules set out in this Regulation do not require modification of the organisation of national transmission and distribution systems that are consistent with the relevant provisions of Directive 2009/.../EC. |
| --- | --- |

(5)

Directive 2009/.../EC of the European Parliament and of the Council of ... concerning common rules for the internal market in natural gas (6) allows for a combined transmission and distribution system operator. Therefore, the rules set out in this Regulation do not require modification of the organisation of national transmission and distribution systems that are consistent with the relevant provisions of Directive 2009/.../EC.

| (6) | High-pressure pipelines linking up local distributors to the gas network which are not primarily used in the context of local distribution are included in the scope of this Regulation. |
| --- | --- |

(6)

High-pressure pipelines linking up local distributors to the gas network which are not primarily used in the context of local distribution are included in the scope of this Regulation.

| (7) | It is necessary to specify the criteria according to which tariffs for access to the network are determined, in order to ensure that they fully comply with the principle of non-discrimination and the needs of a well-functioning internal market and take fully into account the need for system integrity and reflect the actual costs incurred, insofar as such costs correspond to those of an efficient and structurally comparable network operator and are transparent, whilst including appropriate return on investments, and where appropriate taking account of the benchmarking of tariffs by the regulatory authorities. |
| --- | --- |

(7)

It is necessary to specify the criteria according to which tariffs for access to the network are determined, in order to ensure that they fully comply with the principle of non-discrimination and the needs of a well-functioning internal market and take fully into account the need for system integrity and reflect the actual costs incurred, insofar as such costs correspond to those of an efficient and structurally comparable network operator and are transparent, whilst including appropriate return on investments, and where appropriate taking account of the benchmarking of tariffs by the regulatory authorities.

| (8) | In calculating tariffs for access to networks, it is important to take account of the actual costs incurred, insofar as such costs correspond to those of an efficient and structurally comparable network operator, and are transparent, as well as of the need to provide appropriate return on investments and incentives to construct new infrastructure. In this respect, and in particular if effective pipeline-to-pipeline competition exists, the benchmarking of tariffs by the regulatory authorities will be a relevant consideration. |
| --- | --- |

(8)

In calculating tariffs for access to networks, it is important to take account of the actual costs incurred, insofar as such costs correspond to those of an efficient and structurally comparable network operator, and are transparent, as well as of the need to provide appropriate return on investments and incentives to construct new infrastructure. In this respect, and in particular if effective pipeline-to-pipeline competition exists, the benchmarking of tariffs by the regulatory authorities will be a relevant consideration.

| (9) | The use of market-based arrangements, such as auctions, to determine tariffs has to be compatible with the provisions laid down in Directive 2009/.../EC. |
| --- | --- |

(9)

The use of market-based arrangements, such as auctions, to determine tariffs has to be compatible with the provisions laid down in Directive 2009/.../EC.

| (10) | A common minimum set of third-party access services is necessary to provide a common minimum standard of access in practice throughout the Community, to ensure that third party access services are sufficiently compatible and to allow the benefits accruing from a well-functioning internal market in natural gas to be exploited. |
| --- | --- |

(10)

A common minimum set of third-party access services is necessary to provide a common minimum standard of access in practice throughout the Community, to ensure that third party access services are sufficiently compatible and to allow the benefits accruing from a well-functioning internal market in natural gas to be exploited.

| (11) | At present, there are obstacles to the sale of gas on equal terms, without discrimination or disadvantage in the Community. In particular, non-discriminatory network access and an equally effective level of regulatory supervision do not yet exist in each Member State. |
| --- | --- |

(11)

At present, there are obstacles to the sale of gas on equal terms, without discrimination or disadvantage in the Community. In particular, non-discriminatory network access and an equally effective level of regulatory supervision do not yet exist in each Member State.

| (12) | The Communication of the Commission of 10 January 2007 entitled ‘An Energy Policy for Europe’ highlighted the importance of completing the internal market in natural gas and creating a level playing field for all natural gas undertakings in the Community. The Communications of the Commission of 10 January 2007 entitled ‘Prospects for the internal gas and electricity market’ and ‘Inquiry pursuant to Article 17 of Regulation (EC) No 1/2003 into the European gas and electricity sectors (Final Report)’ showed that the present rules and measures do not provide the necessary framework to achieve the objective of a well-functioning internal market. |
| --- | --- |

(12)

The Communication of the Commission of 10 January 2007 entitled ‘An Energy Policy for Europe’ highlighted the importance of completing the internal market in natural gas and creating a level playing field for all natural gas undertakings in the Community. The Communications of the Commission of 10 January 2007 entitled ‘Prospects for the internal gas and electricity market’ and ‘Inquiry pursuant to Article 17 of Regulation (EC) No 1/2003 into the European gas and electricity sectors (Final Report)’ showed that the present rules and measures do not provide the necessary framework to achieve the objective of a well-functioning internal market.

| (13) | Besides thoroughly implementing the existing regulatory framework, the regulatory framework for the internal market in natural gas set out in Regulation (EC) No 1775/2005 should be adapted in line with those communications. |
| --- | --- |

(13)

Besides thoroughly implementing the existing regulatory framework, the regulatory framework for the internal market in natural gas set out in Regulation (EC) No 1775/2005 should be adapted in line with those communications.

| (14) | In particular, increased cooperation and coordination among transmission system operators is required to ensure creation of network codes for providing and managing effective access to the transmission networks across borders, and to ensure coordinated and sufficiently forward looking planning and sound technical evolution of the transmission system in the Community, with due regard to the environment. The network codes should be in line with non-binding framework guidelines developed by the Agency for the Cooperation of Energy Regulators established by Regulation (EC) No .../2009 (6) of the European Parliament and of the Council (‘the Agency’). The Agency should have a role in reviewing draft network codes, including their compliance with non-binding framework guidelines, and it should be enabled to recommend them for adoption by the Commission. The Agency should assess proposed modifications to the network codes and it should be enabled to recommend them for adoption by the Commission. Transmission system operators should operate their networks in accordance with those network codes. |
| --- | --- |

(14)

In particular, increased cooperation and coordination among transmission system operators is required to ensure creation of network codes for providing and managing effective access to the transmission networks across borders, and to ensure coordinated and sufficiently forward looking planning and sound technical evolution of the transmission system in the Community, with due regard to the environment. The network codes should be in line with non-binding framework guidelines developed by the Agency for the Cooperation of Energy Regulators established by Regulation (EC) No .../2009 (6) of the European Parliament and of the Council (‘the Agency’). The Agency should have a role in reviewing draft network codes, including their compliance with non-binding framework guidelines, and it should be enabled to recommend them for adoption by the Commission. The Agency should assess proposed modifications to the network codes and it should be enabled to recommend them for adoption by the Commission. Transmission system operators should operate their networks in accordance with those network codes.

| (15) | In order to ensure optimal management of the gas transmission network in the Community a European Network of Transmission System Operators for Gas (‘the ENTSO for Gas’), should be established. The tasks of the ENTSO for Gas should be carried out in compliance with Community competition rules which remain applicable to the decisions of the ENTSO for Gas. The tasks of the ENTSO for Gas should be well-defined and their working method should be such as to ensure efficiency, its representative nature and transparency. The network codes prepared by the ENTSO for Gas are not intended to replace the necessary national network codes for non cross-border issues. Given that more effective progress may be achieved through an approach at regional level, transmission system operators should set up regional structures within the overall cooperation structure, whilst ensuring that results at regional level are compatible with network codes and non-binding 10-year network development plans at Community level. Cooperation within such regional structures presupposes effective unbundling of network activities from production and supply activities. In the absence of such unbundling, regional cooperation between transmission system operators gives rise to a risk of anti-competitive conduct. |
| --- | --- |

(15)

In order to ensure optimal management of the gas transmission network in the Community a European Network of Transmission System Operators for Gas (‘the ENTSO for Gas’), should be established. The tasks of the ENTSO for Gas should be carried out in compliance with Community competition rules which remain applicable to the decisions of the ENTSO for Gas. The tasks of the ENTSO for Gas should be well-defined and their working method should be such as to ensure efficiency, its representative nature and transparency. The network codes prepared by the ENTSO for Gas are not intended to replace the necessary national network codes for non cross-border issues. Given that more effective progress may be achieved through an approach at regional level, transmission system operators should set up regional structures within the overall cooperation structure, whilst ensuring that results at regional level are compatible with network codes and non-binding 10-year network development plans at Community level. Cooperation within such regional structures presupposes effective unbundling of network activities from production and supply activities. In the absence of such unbundling, regional cooperation between transmission system operators gives rise to a risk of anti-competitive conduct.

| (16) | All market participants have an interest in the work expected of the ENTSO for Gas. An effective consultation process is therefore essential and existing structures set up to facilitate and streamline the consultation process, such as the European Association for the Streamlining of Energy Exchange, national regulators or the Agency should play an important role. |
| --- | --- |

(16)

All market participants have an interest in the work expected of the ENTSO for Gas. An effective consultation process is therefore essential and existing structures set up to facilitate and streamline the consultation process, such as the European Association for the Streamlining of Energy Exchange, national regulators or the Agency should play an important role.

| (17) | To enhance competition through liquid wholesale markets for gas, it is vital that gas can be traded independently of its location in the system. The only way to do this is to give network users the freedom to book entry and exit capacity independently, thereby creating gas transport through zones instead of along contractual paths. The preference for entry-exit systems to facilitate the development of competition was already expressed by most stakeholders at the 6th Madrid Forum on 30 and 31 October 2002. Tariffs should not be dependent on the transport route; therefore the tariff set for one or more entry point(s) should not be related to the tariff set for one or more exit point(s), and vice versa. |
| --- | --- |

(17)

To enhance competition through liquid wholesale markets for gas, it is vital that gas can be traded independently of its location in the system. The only way to do this is to give network users the freedom to book entry and exit capacity independently, thereby creating gas transport through zones instead of along contractual paths. The preference for entry-exit systems to facilitate the development of competition was already expressed by most stakeholders at the 6th Madrid Forum on 30 and 31 October 2002. Tariffs should not be dependent on the transport route; therefore the tariff set for one or more entry point(s) should not be related to the tariff set for one or more exit point(s), and vice versa.

| (18) | References to harmonised transportation contracts in the context of non-discriminatory access to the network of transmission system operators do not mean that the terms and conditions of the transportation contracts of a particular system operator in a Member State must be the same as those of another transmission system operator in that Member State or in another Member State, unless minimum requirements are set which must be met by all transportation contracts. |
| --- | --- |

(18)

References to harmonised transportation contracts in the context of non-discriminatory access to the network of transmission system operators do not mean that the terms and conditions of the transportation contracts of a particular system operator in a Member State must be the same as those of another transmission system operator in that Member State or in another Member State, unless minimum requirements are set which must be met by all transportation contracts.

| (19) | There is substantial contractual congestion in the gas networks. The congestion management and capacity allocation principles for new or newly-negotiated contracts are therefore based on the freeing-up of unused capacity by enabling network users to sublet or resell their contracted capacities and the obligation of transmission system operators to offer unused capacity to the market, at least on a day-ahead and interruptible basis. Given the large proportion of existing contracts and the need to create a true level playing field between users of new and existing capacity these principles should be applied to all contracted capacity, including existing contracts. |
| --- | --- |

(19)

There is substantial contractual congestion in the gas networks. The congestion management and capacity allocation principles for new or newly-negotiated contracts are therefore based on the freeing-up of unused capacity by enabling network users to sublet or resell their contracted capacities and the obligation of transmission system operators to offer unused capacity to the market, at least on a day-ahead and interruptible basis. Given the large proportion of existing contracts and the need to create a true level playing field between users of new and existing capacity these principles should be applied to all contracted capacity, including existing contracts.

| (20) | Although physical congestion of networks is, at present, rarely a problem in the Community, it may become one in the future. It is important, therefore, to provide the basic principle for the allocation of congested capacity in such circumstances. |
| --- | --- |

(20)

Although physical congestion of networks is, at present, rarely a problem in the Community, it may become one in the future. It is important, therefore, to provide the basic principle for the allocation of congested capacity in such circumstances.

| (21) | Market monitoring undertaken over recent years by the national regulatory authorities and by the Commission has shown that current transparency requirements and rules on access to infrastructure are not sufficient. |
| --- | --- |

(21)

Market monitoring undertaken over recent years by the national regulatory authorities and by the Commission has shown that current transparency requirements and rules on access to infrastructure are not sufficient.

| (22) | Equal access to information on the physical status of the system is necessary to enable all market participants to assess the overall demand and supply situation and to identify the reasons for movements in the wholesale price. This includes more precise information on supply and demand, network capacity, flows and maintenance, balancing and availability and usage of storage. The importance of this information for the functioning of the market requires alleviating existing limitations to publication for confidentiality reasons. |
| --- | --- |

(22)

Equal access to information on the physical status of the system is necessary to enable all market participants to assess the overall demand and supply situation and to identify the reasons for movements in the wholesale price. This includes more precise information on supply and demand, network capacity, flows and maintenance, balancing and availability and usage of storage. The importance of this information for the functioning of the market requires alleviating existing limitations to publication for confidentiality reasons.

| (23) | Confidentiality requirements for commercially sensitive information are, however, particularly relevant where data of a commercially strategic nature for the company are concerned, where there is only one single user for a storage facility, or where data are concerned regarding exit points within a system or subsystem that is not connected to another transmission or distribution system but to a single industrial final customer, where the publication of such data would reveal confidential information as to the production process of this customer. |
| --- | --- |

(23)

Confidentiality requirements for commercially sensitive information are, however, particularly relevant where data of a commercially strategic nature for the company are concerned, where there is only one single user for a storage facility, or where data are concerned regarding exit points within a system or subsystem that is not connected to another transmission or distribution system but to a single industrial final customer, where the publication of such data would reveal confidential information as to the production process of this customer.

| (24) | To enhance trust in the market, its participants need to be sure that those engaging in abusive behaviour can be subjected to penalties. Competent authorities should be enabled to investigate effectively allegations of market abuse. Competent authorities therefore need access to data that provides information on operational decisions made by supply undertakings. In the gas market, all these decisions are communicated to the system operators in the form of capacity reservations, nominations and realised flows. System operators should keep this information available to the competent authorities for a fixed period of time. |
| --- | --- |

(24)

To enhance trust in the market, its participants need to be sure that those engaging in abusive behaviour can be subjected to penalties. Competent authorities should be enabled to investigate effectively allegations of market abuse. Competent authorities therefore need access to data that provides information on operational decisions made by supply undertakings. In the gas market, all these decisions are communicated to the system operators in the form of capacity reservations, nominations and realised flows. System operators should keep this information available to the competent authorities for a fixed period of time.

| (25) | Access to gas storage facilities and liquefied natural gas (‘LNG’) facilities is insufficient, and the relevant rules therefore need to be improved. Monitoring by the European Regulators' Group for Electricity and Gas concluded that the voluntary guidelines for good third-party access practice for storage system operators, agreed by all stakeholders at the Madrid Forum, are being insufficiently applied and therefore need to be made binding. |
| --- | --- |

(25)

Access to gas storage facilities and liquefied natural gas (‘LNG’) facilities is insufficient, and the relevant rules therefore need to be improved. Monitoring by the European Regulators' Group for Electricity and Gas concluded that the voluntary guidelines for good third-party access practice for storage system operators, agreed by all stakeholders at the Madrid Forum, are being insufficiently applied and therefore need to be made binding.

| (26) | Non-discriminatory and transparent balancing systems for gas, operated by transmission system operators, are important mechanisms, particularly for new market entrants which may have more difficulty balancing their overall sales portfolio than companies already established within a relevant market. It is therefore necessary to lay down rules to ensure that transmission system operators operate such mechanisms in a manner compatible with non-discriminatory, transparent and effective access conditions to the network. |
| --- | --- |

(26)

Non-discriminatory and transparent balancing systems for gas, operated by transmission system operators, are important mechanisms, particularly for new market entrants which may have more difficulty balancing their overall sales portfolio than companies already established within a relevant market. It is therefore necessary to lay down rules to ensure that transmission system operators operate such mechanisms in a manner compatible with non-discriminatory, transparent and effective access conditions to the network.

| (27) | The trading of primary capacity rights is an important part of developing a competitive market and creating liquidity. This Regulation should therefore lay down basic rules on such trading. |
| --- | --- |

(27)

The trading of primary capacity rights is an important part of developing a competitive market and creating liquidity. This Regulation should therefore lay down basic rules on such trading.

| (28) | National regulatory authorities should ensure compliance with the rules contained in this Regulation and the guidelines adopted pursuant to it. |
| --- | --- |

(28)

National regulatory authorities should ensure compliance with the rules contained in this Regulation and the guidelines adopted pursuant to it.

| (29) | In the guidelines annexed to this Regulation, specific detailed implementing rules are defined on the basis of the above-mentioned Second Guidelines for Good Practice. Where appropriate, those rules will evolve over time, taking into account the differences of national gas systems. |
| --- | --- |

(29)

In the guidelines annexed to this Regulation, specific detailed implementing rules are defined on the basis of the above-mentioned Second Guidelines for Good Practice. Where appropriate, those rules will evolve over time, taking into account the differences of national gas systems.

| (30) | When proposing to amend the guidelines annexed to this Regulation, the Commission should ensure prior consultation of all relevant parties concerned with the guidelines, represented by the professional organisations, and of the Member States within the Madrid Forum. |
| --- | --- |

(30)

When proposing to amend the guidelines annexed to this Regulation, the Commission should ensure prior consultation of all relevant parties concerned with the guidelines, represented by the professional organisations, and of the Member States within the Madrid Forum.

| (31) | The Member States and the competent national authorities should be required to provide relevant information to the Commission. Such information should be treated confidentially by the Commission. |
| --- | --- |

(31)

The Member States and the competent national authorities should be required to provide relevant information to the Commission. Such information should be treated confidentially by the Commission.

| (32) | This Regulation and the guidelines adopted in accordance with it are without prejudice to the application of the Community rules on competition. |
| --- | --- |

(32)

This Regulation and the guidelines adopted in accordance with it are without prejudice to the application of the Community rules on competition.

| (33) | The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (7). |
| --- | --- |

(33)

The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (7).

| (34) | In particular, the Commission should be empowered to establish or adopt the guidelines necessary for providing the minimum degree of harmonisation required to achieve the aims of this Regulation. Since those measures are of general scope and are designed to amend non-essential elements of this Regulation, inter alia by supplementing it with new non-essential elements, they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC. |
| --- | --- |

(34)

In particular, the Commission should be empowered to establish or adopt the guidelines necessary for providing the minimum degree of harmonisation required to achieve the aims of this Regulation. Since those measures are of general scope and are designed to amend non-essential elements of this Regulation, inter alia by supplementing it with new non-essential elements, they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC.

| (35) | Since the objective of this Regulation, namely the setting of fair rules for access conditions to natural gas transmission systems, storage and LNG facilities cannot be sufficiently achieved by the Member States and can therefore be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective. |
| --- | --- |

(35)

Since the objective of this Regulation, namely the setting of fair rules for access conditions to natural gas transmission systems, storage and LNG facilities cannot be sufficiently achieved by the Member States and can therefore be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.

| (36) | Given the scope of the amendments that are being made herein to Regulation (EC) No 1775/2005, it is desirable, for reasons of clarity and rationalisation, that the provisions in question should be recast by bringing them all together in a single text in a new Regulation, |
| --- | --- |

(36)

Given the scope of the amendments that are being made herein to Regulation (EC) No 1775/2005, it is desirable, for reasons of clarity and rationalisation, that the provisions in question should be recast by bringing them all together in a single text in a new Regulation,

HAVE ADOPTED THIS REGULATION:

Article 1

Subject matter and scope

This Regulation aims at:

| (a) | setting non-discriminatory rules for access conditions to natural gas transmission systems taking into account the special characteristics of national and regional markets with a view to ensuring the proper functioning of the internal market in gas; |
| --- | --- |

(a)

setting non-discriminatory rules for access conditions to natural gas transmission systems taking into account the special characteristics of national and regional markets with a view to ensuring the proper functioning of the internal market in gas;

| (b) | setting non-discriminatory rules for access conditions to LNG facilities and storage facilities taking into account the special characteristics of national and regional markets; and |
| --- | --- |

(b)

setting non-discriminatory rules for access conditions to LNG facilities and storage facilities taking into account the special characteristics of national and regional markets; and

| (c) | facilitating the emergence of a well-functioning and transparent wholesale market with a high level of security of supply in gas. It provides mechanisms to harmonise the rules for cross-border exchanges in gas. |
| --- | --- |

(c)

facilitating the emergence of a well-functioning and transparent wholesale market with a high level of security of supply in gas. It provides mechanisms to harmonise the rules for cross-border exchanges in gas.

The objectives referred to in the first subparagraph of this Article shall include the setting of harmonised principles for tariffs, or the methodologies underlying their calculation, for access to the network, but not to storage facilities, the establishment of third-party access services and harmonised principles for capacity allocation and congestion management, the determination of transparency requirements, balancing rules and imbalance charges, and the facilitation of capacity trading.

This Regulation, with the exception of Article 19(4), shall apply only to storage facilities falling under Article 32(3) or (4) of Directive 2009/.../EC.

The Member States may establish an entity or body set up in compliance with Directive 2009/.../EC for the purpose of carrying out one or more functions typically attributed to the transmission system operator, which shall be subject to the requirements of this Regulation. That entity or body shall be subject to certification in accordance with Article 3 of this Regulation and shall be subject to designation in accordance with Article 10 of Directive 2009/.../EC.

Article 2

Definitions

1.   For the purpose of this Regulation, the following definitions apply:

| (1) | ‘transmission’ means the transport of natural gas through a network, which mainly contains high-pressure pipelines, other than an upstream pipeline network and other than the part of high-pressure pipelines primarily used in the context of local distribution of natural gas, with a view to its delivery to customers, but not including supply; |
| --- | --- |

(1)

‘transmission’ means the transport of natural gas through a network, which mainly contains high-pressure pipelines, other than an upstream pipeline network and other than the part of high-pressure pipelines primarily used in the context of local distribution of natural gas, with a view to its delivery to customers, but not including supply;

| (2) | ‘transportation contract’ means a contract which the transmission system operator has concluded with a network user with a view to carrying out transmission; |
| --- | --- |

(2)

‘transportation contract’ means a contract which the transmission system operator has concluded with a network user with a view to carrying out transmission;

| (3) | ‘capacity’ means the maximum flow, expressed in normal cubic meters per time unit or in energy unit per time unit, to which the network user is entitled in accordance with the provisions of the transportation contract; |
| --- | --- |

(3)

‘capacity’ means the maximum flow, expressed in normal cubic meters per time unit or in energy unit per time unit, to which the network user is entitled in accordance with the provisions of the transportation contract;

| (4) | ‘unused capacity’ means firm capacity which a network user has acquired under a transportation contract but which that user has not nominated by the deadline specified in the contract; |
| --- | --- |

(4)

‘unused capacity’ means firm capacity which a network user has acquired under a transportation contract but which that user has not nominated by the deadline specified in the contract;

| (5) | ‘congestion management’ means management of the capacity portfolio of the transmission system operator with a view to optimal and maximum use of the technical capacity and the timely detection of future congestion and saturation points; |
| --- | --- |

(5)

‘congestion management’ means management of the capacity portfolio of the transmission system operator with a view to optimal and maximum use of the technical capacity and the timely detection of future congestion and saturation points;

| (6) | ‘secondary market’ means the market of the capacity traded otherwise than on the primary market; |
| --- | --- |

(6)

‘secondary market’ means the market of the capacity traded otherwise than on the primary market;

| (7) | ‘nomination’ means the prior reporting by the network user to the transmission system operator of the actual flow that the network user wishes to inject into or withdraw from the system; |
| --- | --- |

(7)

‘nomination’ means the prior reporting by the network user to the transmission system operator of the actual flow that the network user wishes to inject into or withdraw from the system;

| (8) | ‘re-nomination’ means the subsequent reporting of a corrected nomination; |
| --- | --- |

(8)

‘re-nomination’ means the subsequent reporting of a corrected nomination;

| (9) | ‘system integrity’ means any situation in respect of a transmission network including necessary transmission facilities in which the pressure and the quality of the natural gas remain within the minimum and maximum limits laid down by the transmission system operator, so that the transmission of natural gas is guaranteed from a technical standpoint; |
| --- | --- |

(9)

‘system integrity’ means any situation in respect of a transmission network including necessary transmission facilities in which the pressure and the quality of the natural gas remain within the minimum and maximum limits laid down by the transmission system operator, so that the transmission of natural gas is guaranteed from a technical standpoint;

| (10) | ‘balancing period’ means the period within which the off-take of an amount of natural gas, expressed in units of energy, must be offset by every network user by means of the injection of the same amount of natural gas into the transmission network in accordance with the transportation contract or the network code; |
| --- | --- |

(10)

‘balancing period’ means the period within which the off-take of an amount of natural gas, expressed in units of energy, must be offset by every network user by means of the injection of the same amount of natural gas into the transmission network in accordance with the transportation contract or the network code;

| (11) | ‘network user’ means a customer or a potential customer of a transmission system operator, and transmission system operators themselves in so far as it is necessary for them to carry out their functions in relation to transmission; |
| --- | --- |

(11)

‘network user’ means a customer or a potential customer of a transmission system operator, and transmission system operators themselves in so far as it is necessary for them to carry out their functions in relation to transmission;

| (12) | ‘interruptible services’ means services offered by the transmission system operator in relation to interruptible capacity; |
| --- | --- |

(12)

‘interruptible services’ means services offered by the transmission system operator in relation to interruptible capacity;

| (13) | ‘interruptible capacity’ means gas transmission capacity that may be interrupted by the transmission system operator in accordance with the conditions stipulated in the transportation contract; |
| --- | --- |

(13)

‘interruptible capacity’ means gas transmission capacity that may be interrupted by the transmission system operator in accordance with the conditions stipulated in the transportation contract;

| (14) | ‘long-term services’ means services offered by the transmission system operator with a duration of one year or more; |
| --- | --- |

(14)

‘long-term services’ means services offered by the transmission system operator with a duration of one year or more;

| (15) | ‘short-term services’ means services offered by the transmission system operator with a duration of less than one year; |
| --- | --- |

(15)

‘short-term services’ means services offered by the transmission system operator with a duration of less than one year;

| (16) | ‘firm capacity’ means gas transmission capacity contractually guaranteed as uninterruptible by the transmission system operator; |
| --- | --- |

(16)

‘firm capacity’ means gas transmission capacity contractually guaranteed as uninterruptible by the transmission system operator;

| (17) | ‘firm services’ mean services offered by the transmission system operator in relation to firm capacity; |
| --- | --- |

(17)

‘firm services’ mean services offered by the transmission system operator in relation to firm capacity;

| (18) | ‘technical capacity’ means the maximum firm capacity that the transmission system operator can offer to the network users, taking account of system integrity and the operational requirements of the transmission network; |
| --- | --- |

(18)

‘technical capacity’ means the maximum firm capacity that the transmission system operator can offer to the network users, taking account of system integrity and the operational requirements of the transmission network;

| (19) | ‘contracted capacity’ means capacity that the transmission system operator has allocated to a network user by means of a transportation contract; |
| --- | --- |

(19)

‘contracted capacity’ means capacity that the transmission system operator has allocated to a network user by means of a transportation contract;

| (20) | ‘available capacity’ means the part of the technical capacity that is not allocated and is still available to the system at that moment; |
| --- | --- |

(20)

‘available capacity’ means the part of the technical capacity that is not allocated and is still available to the system at that moment;

| (21) | ‘contractual congestion’ means a situation where the level of firm capacity demand exceeds the technical capacity; |
| --- | --- |

(21)

‘contractual congestion’ means a situation where the level of firm capacity demand exceeds the technical capacity;

| (22) | ‘primary market’ means the market of the capacity traded directly by the transmission system operator; |
| --- | --- |

(22)

‘primary market’ means the market of the capacity traded directly by the transmission system operator;

| (23) | ‘physical congestion’ means a situation where the level of demand for actual deliveries exceeds the technical capacity at some point in time; |
| --- | --- |

(23)

‘physical congestion’ means a situation where the level of demand for actual deliveries exceeds the technical capacity at some point in time;

| (24) | ‘LNG facility capacity’ means capacity at an LNG terminal for the liquefaction of natural gas or the importation, offloading, ancillary services, temporary storage and re-gasification of LNG; |
| --- | --- |

(24)

‘LNG facility capacity’ means capacity at an LNG terminal for the liquefaction of natural gas or the importation, offloading, ancillary services, temporary storage and re-gasification of LNG;

| (25) | ‘space’ means the volume of gas which a user of a storage facility is entitled to use for the storage of gas; |
| --- | --- |

(25)

‘space’ means the volume of gas which a user of a storage facility is entitled to use for the storage of gas;

| (26) | ‘deliverability’ means the rate at which the storage facility user is entitled to withdraw gas from the storage facility; |
| --- | --- |

(26)

‘deliverability’ means the rate at which the storage facility user is entitled to withdraw gas from the storage facility;

| (27) | ‘injectability’ means the rate at which the storage facility user is entitled to inject gas into the storage facility; |
| --- | --- |

(27)

‘injectability’ means the rate at which the storage facility user is entitled to inject gas into the storage facility;

| (28) | ‘storage capacity’ means any combination of space, injectability and deliverability. |
| --- | --- |

(28)

‘storage capacity’ means any combination of space, injectability and deliverability.

2.   Without prejudice to the definitions in paragraph 1 of this Article, the definitions contained in Article 2 of Directive 2009/.../EC, which are relevant for the application of this Regulation, also apply, with the exception of the definition of transmission in point 3 of that Article.

The definitions in points 3 to 23 of paragraph 1 of this Article in relation to transmission apply by analogy in relation to storage and LNG facilities.

Article 3

Certification of transmission system operators

1.   The Commission shall examine any notification of a decision on the certification of a transmission system operator as laid down in Article 10(6) of Directive 2009/.../EC as soon as it is received. Within two months of the day of receipt of such notification, the Commission shall deliver its opinion to the relevant national regulatory authority as to its compatibility with Article 10(2) or Article 11, and Article 9 of Directive 2009/.../EC.

When preparing the opinion referred to in the first subparagraph, the Commission may request the the Agency to provide its opinion on the national regulatory authority's decision. In such a case, the two-month period referred to in the first subparagraph shall be extended by two further months.

In the absence of an opinion by the Commission within the period referred to in the first and second subparagraphs, the Commission shall be deemed not to raise objections against the regulatory authority's decision.

2.   Upon receiving anopinion of the Commission, the national regulatory authority shall, within two months, adopt its final decision regarding the certification of the transmission system operator, taking the utmost account of that opinion. The regulatory authority's decision and the Commission's opinion shall be published together.

3.   At any time during the procedure regulatory authorities and/or the Commission may request from a transmission system operator and/or an undertaking performing any of the functions of production or supply any information relevant to the fulfillment of their tasks under this Article.

4.   Regulatory authorities and the Commission shall preserve the confidentiality of commercially sensitive information.

5.   The Commission may adopt guidelines setting out the details of the procedure to be followed for the application of paragraphs 1 and 2 of this Article. Those measures, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 28(2).

6.   Where the Commission has received notification of the certification of a transmission system operator under Article 9(10) of Directive 2009/.../EC, the Commission shall take a decision relating to certification. The regulatory authority shall comply with the Commission decision.

Article 4

European network of transmission system operators for gas

All transmission system operators shall cooperate at Community level through the ENTSO for Gas, in order to promote the completion of the internal market in natural gas and to ensure the optimal management and sound technical evolution of the natural gas transmission network.

Article 5

Establishment of the ENTSO for Gas

1.   By ... (8) the transmission system operators for gas shall submit to the Commission and to the Agency the draft statutes, a list of members and draft rules of procedure, including the rules of procedures on the consultation of other stakeholders, of the ENTSO for Gas to be established.

2.   Within two months of the day of the receipt, the Agency, after consulting the organisations representing all stakeholders, shall provide an opinion to the Commission on the draft statutes, list of members and draft rules of procedure.

3.   The Commission shall deliver an opinion on the draft statutes, list of members and draft rules of procedures within three months from the day of the receipt of the opinion of the Agency.

4.   Within three months from the day of the receipt of the Commission's opinion, the transmission system operators shall establish the ENTSO for Gas, adopt its statutes and rules of procedure and publish them.

Article 6

Establishment of network codes

1.   The Commission shall, after consulting the Agency, the ENTSO for Gas and the other relevant stakeholders establish an annual priority list identifying the areas set out in Article 8(6) to be included in the development of network codes.

2.   The Commission may request the Agency to submit to it within a reasonable period of time not exceeding six months a draft non-binding framework guideline setting out clear and objective principles, in accordance with Article 8(7), for the development of network codes relating to the areas identified in the priority list. Each draft non-binding framework guideline shall contribute to non-discrimination, effective competition and the efficient functioning of the market. Upon a reasoned request from the Agency, the Commission may extend that period.

3.   The Agency shall consult the ENTSO for Gas and the other relevant stakeholders in regard to the draft non-binding framework guideline, during a period of no less than two months, in an open and transparent manner.

4.   If the Commission considers that the draft non-binding framework guideline does not contribute to non-discrimination, effective competition and the efficient functioning of the market, it may request the Agency to review the draft non-binding framework guideline within a reasonable period of time and re-submit it to the Commission.

5.   If the Agency fails to submit or re-submit a draft non-binding framework guideline within the period set by the Commission under paragraphs 2 or 4, the Commission shall elaborate the non-binding framework guideline in question.

6.   The Commission shall request the ENTSO for Gas to submit a network code which is in line with the relevant non-binding framework guideline, to the Agency within a reasonable period of time not exceeding twelve months.

7.   Within a period of three months after the day of receipt of a network code, during which the Agency may formally consult the relevant stakeholders, the Agency shall provide a reasoned opinion to the ENTSO for Gas on the network code.

8.   The ENTSO for Gas may amend the network code in the light of the opinion of the Agency and re-submit it to the Agency.

9.   Once the Agency is satisfied that the network code is in line with the relevant non-binding framework guidelines, the Agency shall submit the network code to the Commission and may recommend that it be adopted.

10.   Where the ENTSO for Gas has failed to develop a network code within the period of time set by the Commission under paragraph 6, the Commission may request the Agency to prepare a draft network code on the basis of the relevant non-binding framework guideline. The Agency may launch a further consultation in the course of preparing a draft network code under this paragraph. The Agency shall submit a draft network code prepared under this paragraph to the Commission and may recommend that it be adopted.

11.   The Commission may adopt, on its own initiative where the ENTSO for Gas has failed to develop a network code, or the Agency has failed to develop a draft network code as referred to in paragraph 10 of this Article, or upon recommendation of the Agency under paragraphs 9 of this Article, one or more network codes in the areas listed in Article 8(6).

Where the Commission proposes to adopt a network code on its own initiative, the Commission may consult the Agency, the ENTSO for Gas and all relevant stakeholders in regard to the draft network code during a period of no less than two months.

Those measures, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 28(2).

12.   This Article shall be without prejudice to the Commission's right to adopt and amend guidelines as laid down in Article 23.

Article 7

Modification of network codes

1.   Draft modifications to any network code adopted under Article 6 may be proposed to the Agency by persons who are likely to have an interest in that network code, including the ENTSO for Gas, transmission system operators, network users and consumers. The Agency may also propose modifications of its own initiative.

2.   The Agency shall establish, in its Rules of Procedure, efficient processes for assessment of and thorough consultation on draft modifications, including with the ENTSO for Gas and network users. Following this process, the Agency may make reasoned proposals for modifications to the Commission, explaining how such proposals are consistent with the objectives of the network codes set out in Article 6(2).

3.   The Commission may adopt, taking account of the Agency's proposals, modifications to any network code adopted under Article 6. Those measures, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 28(2).

4.   Consideration of proposed modifications under the procedure set out in Article 28(2) shall be limited to consideration of the aspects related to the proposed modification. Those proposed modifications are without prejudice to other modifications which the Commission may propose.

Article 8

Tasks of the ENTSO for Gas

1.   The ENTSO for Gas shall elaborate network codes in the areas referred to in paragraph 6 of this Article upon a request addressed to it by the Commission in accordance with Article 6(6).

2.   The ENTSO for Gas may elaborate network codes in the areas set out in paragraph 6 where these codes do not relate to areas covered by a request addressed to it by the Commission. Those network codes shall be submitted to the Agency for an opinion.

3.   The ENTSO for Gas shall adopt:

| (a) | common network operation tools and research plans; |
| --- | --- |

(a)

common network operation tools and research plans;

| (b) | a non-binding Community-wide 10-year network development plan (‘network development plan’), including a European supply adequacy outlook, every two years; |
| --- | --- |

(b)

a non-binding Community-wide 10-year network development plan (‘network development plan’), including a European supply adequacy outlook, every two years;

| (c) | an annual work programme; |
| --- | --- |

(c)

an annual work programme;

| (d) | an annual report; |
| --- | --- |

(d)

an annual report;

| (e) | annual summer and winter supply outlooks. |
| --- | --- |

(e)

annual summer and winter supply outlooks.

4.   The European supply adequacy outlook referred to in point (b) of paragraph 3 shall cover the overall adequacy of the gas system to supply current and projected demands for gas for the next five-year period as well as for the period between five and 10 years from the date of that outlook. The European supply adequacy outlook shall build on national supply outlooks prepared by each individual transmission system operator.

5.   The annual work programme referred to in point (c) of paragraph 3 shall contain a list and description of the network codes to be prepared, a plan on coordination of operation of the network, and research and development activities, to be realised in that year, and an indicative calendar.

6.   The network codes referred to in paragraphs 1 and 2 shall cover the following areas, taking into account, if appropriate, regional special characteristics:

| (a) | network security and reliability rules; |
| --- | --- |

(a)

network security and reliability rules;

| (b) | network connection rules; |
| --- | --- |

(b)

network connection rules;

| (c) | third-party access rules; |
| --- | --- |

(c)

third-party access rules;

| (d) | data exchange and settlement rules; |
| --- | --- |

(d)

data exchange and settlement rules;

| (e) | interoperability rules; |
| --- | --- |

(e)

interoperability rules;

| (f) | operational procedures in an emergency; |
| --- | --- |

(f)

operational procedures in an emergency;

| (g) | capacity allocation and congestion management rules; |
| --- | --- |

(g)

capacity allocation and congestion management rules;

| (h) | rules for trading related to technical and operational provision of network access services and system balancing; |
| --- | --- |

(h)

rules for trading related to technical and operational provision of network access services and system balancing;

| (i) | transparency rules; |
| --- | --- |

(i)

transparency rules;

| (j) | balancing rules including network-related rules on nominations procedure, rules for imbalance charges and rules for operational balancing between transmission system operators' systems; |
| --- | --- |

(j)

balancing rules including network-related rules on nominations procedure, rules for imbalance charges and rules for operational balancing between transmission system operators' systems;

| (k) | rules regarding harmonised transmission tariff structures; and |
| --- | --- |

(k)

rules regarding harmonised transmission tariff structures; and

| (l) | energy efficiency regarding gas networks. |
| --- | --- |

(l)

energy efficiency regarding gas networks.

7.   The network codes shall be developed only for cross-border network issues and shall be without prejudice to the Member States' right to establish national codes for non-cross-border issues.

8.   The ENTSO for Gas shall monitor and analyse the implementation of the network codes and the guidelines adopted by the Commission in accordance with Article 6(11), and their effect on the harmonisation of applicable rules aimed at facilitating market integration. The ENTSO for Gas shall report its findings to the Agency and include the results of the analysis in the annual report referred to in point (d) of paragraph 3 of this Article.

9.   The ENTSO for Gas shall make available all information required by the Agency to fulfil its tasks under Article 9(1).

10.   The ENTSO for Gas shall adopt and publish a network development plan referred to in point (b) of paragraph 3 every two years. The network development plan shall include the modelling of the integrated network, scenario development, a European supply adequacy outlook and an assessment of the resilience of the system.

The network development plan shall, in particular:

| (a) | build on national investment plans, regional investment plans as referred to in Article 12(1), and, if appropriate, on the guidelines for trans-European energy networks in accordance with Decision No 1364/2006/EC (9); |
| --- | --- |

(a)

build on national investment plans, regional investment plans as referred to in Article 12(1), and, if appropriate, on the guidelines for trans-European energy networks in accordance with Decision No 1364/2006/EC (9);

| (b) | regarding cross-border interconnections, also build on the reasonable needs of different network users and integrate long-term commitments from investors referred to in Articles 14 and 22 of Directive 2009/.../EC; |
| --- | --- |

(b)

regarding cross-border interconnections, also build on the reasonable needs of different network users and integrate long-term commitments from investors referred to in Articles 14 and 22 of Directive 2009/.../EC;

| (c) | identify investment gaps, notably with respect to cross-border capacities. |
| --- | --- |

(c)

identify investment gaps, notably with respect to cross-border capacities.

11.   Upon request of the Commission, the ENTSO for Gas shall give its views to the Commission on the adoption of the guidelines referred to in Article 23.

Article 9

Monitoring by the Agency

1.   The Agency shall monitor the execution of the tasks referred to in Article 8(1), (2) and (3) of the ENTSO for Gas and report to the Commission.

The Agency shall monitor the implementation by the ENTSO for Gas of network codes elaborated under Article 8(2) and network codes which have been developed in accordance with Article 6(1) to (10) but which have not been adopted by the Commission under Article 6(11). The Agency shall provide a duly reasoned opinion to the Commission where the ENTSO for Gas has failed to implement any such network codes.

The Agency shall monitor and analyse the implementation of the network codes and the guidelines adopted by the Commission as laid down in Article 6(11), and their effect on the harmonisation of applicable rules aimed at facilitating market integration as well as on non-discrimination, effective competition and the efficient functioning of the market, and report to the Commission.

2.   The ENTSO for Gas shall submit the draft network development plan and the draft annual work programme, including the information regarding the consultation process, to the Agency for its opinion.

Within a period of two months from the day of receipt, the Agency shall provide a duly reasoned opinion as well as recommendations to the ENTSO for Gas and to the Commission where it considers that the draft annual work programme or the draft network development plan submitted by the ENTSO for Gas do not contribute to non-discrimination, effective competition, the efficient functioning of the market or a sufficient level of cross-border interconnection open to third-party access.

Article 10

Consultations

1.   While preparing the network codes, the draft network development plan and the annual work programme referred to in Article 8(1), (2) and (3), the ENTSO for Gas shall conduct an extensive consultation process, at an early stage and in an open and transparent manner, involving all relevant market participants, and, in particular, the organisations representing all stakeholders, in accordance with the rules of procedure referred to in Article 5(1). That consultation shall also involve national regulatory authorities and other national authorities, supply and production undertakings, customers, network users, distribution system operators, including relevant industry associations, technical bodies and stakeholder platforms. It shall aim at identifying the views and proposals of all relevant parties during the decision-making process.

2.   All documents and minutes of meetings related to the consultations referred to in paragraph 1 shall be made public.

3.   Before adopting the annual work programme and the network codes referred to in Article 8(1), (2) and (3), the ENTSO for Gas shall indicate how the observations received during the consultation have been taken into consideration. It shall provide reasons where observations have not been taken into account.

Article 11

Costs

The costs related with the activities of the ENTSO for Gas referred to in Articles 4 to 12 shall be borne by the transmission system operators and shall be taken into account in the calculation of tariffs. Regulatory authorities shall approve those costs only if they are reasonable and proportionate.

Article 12

Regional cooperation of transmission system operators

1.   Transmission system operators shall establish regional cooperation within the ENTSO for Gas to contribute to the tasks referred to in Article 8(1), (2) and (3). In particular, they shall publish a regional investment plan every two years, and may take investment decisions based on that regional investment plan.

2.   Transmission system operators shall promote operational arrangements in order to ensure the optimum management of the network and shall promote the development of energy exchanges, the allocation of cross-border capacity through non-discriminatory market-based solutions, paying due attention to the specific merits of implicit auctions for short-term allocations and the integration of balancing mechanisms.

3.   The geographical area covered by each regional cooperation structure may be defined by the Commission, taking into account existing regional cooperation structures. Each Member State shall be allowed to promote cooperation in more than one geographical area. The measure referred to in the first sentence, designed to amend non-essential elements of this Regulation by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 28(2).

For that purpose, the Commission may consult the ENTSO for Gas and the Agency.

Article 13

Tariffs for access to networks

1.   Tariffs, or the methodologies used to calculate them, applied by the transmission system operators and approved by the regulatory authorities pursuant to Article 40(6) of Directive 2009/.../EC, as well as tariffs published pursuant to Article 31(1) of that Directive, shall be transparent, take into account the need for system integrity and its improvement and reflect the actual costs incurred, insofar as such costs correspond to those of an efficient and structurally comparable network operator and are transparent, whilst including an appropriate return on investments, and, where appropriate, taking account of the benchmarking of tariffs by the regulatory authorities. Tariffs, or the methodologies used to calculate them, shall be applied in a non-discriminatory manner.

Member States may decide that tariffs may also be determined through market-based arrangements, such as auctions, provided that such arrangements and the revenues arising therefrom are approved by the regulatory authority.

Tariffs, or the methodologies used to calculate them, shall facilitate efficient gas trade and competition, while at the same time avoiding cross-subsidies between network users and providing incentives for investment and maintaining or creating interoperability for transmission networks.

Tariffs for network users shall be set separately for every entry point into or exit point out of the transmission system. Cost-allocation mechanisms and rate setting methodology regarding entry points and exit points shall be approved by the national regulatory authorities. The Member States shall ensure that, after a transitional period, by ... (10), network charges shall not be calculated on the basis of contract paths.

2.   Tariffs for network access shall neither restrict market liquidity nor distort trade across borders of different transmission systems. Where differences in tariff structures or balancing mechanisms would hamper trade across transmission systems, and notwithstanding Article 40(6) of Directive 2009/.../EC, transmission system operators shall, in close cooperation with the relevant national authorities, actively pursue convergence of tariff structures and charging principles, including in relation to balancing.

Article 14

Third-party access services concerning transmission system operators

1.   Transmission system operators shall:

| (a) | ensure that they offer services on a non-discriminatory basis to all network users. In particular, where a transmission system operator offers the same service to different customers, it shall do so under equivalent contractual terms and conditions, either using harmonised transportation contracts or a common network code approved by the competent authority in accordance with the procedure laid down in Article 40 of Directive 2009/.../EC; |
| --- | --- |

(a)

ensure that they offer services on a non-discriminatory basis to all network users. In particular, where a transmission system operator offers the same service to different customers, it shall do so under equivalent contractual terms and conditions, either using harmonised transportation contracts or a common network code approved by the competent authority in accordance with the procedure laid down in Article 40 of Directive 2009/.../EC;

| (b) | provide both firm and interruptible third-party access services. The price of interruptible capacity shall reflect the probability of interruption; |
| --- | --- |

(b)

provide both firm and interruptible third-party access services. The price of interruptible capacity shall reflect the probability of interruption;

| (c) | offer to network users both long and short-term services. |
| --- | --- |

(c)

offer to network users both long and short-term services.

2.   Transportation contracts signed with non-standard start dates or with a shorter duration than a standard annual transportation contract shall not result in arbitrarily higher or lower tariffs that do not reflect the market value of the service, in accordance with the principles laid down in Article 13(1).

3.   Where appropriate, third-party access services may be granted subject to appropriate guarantees from network users with respect to the creditworthiness of such users. Such guarantees must not constitute undue market-entry barriers and must be non-discriminatory, transparent and proportionate.

Article 15

Third-party access services concerning storage and LNG facilities

1.   Each LNG and storage system operator shall:

| (a) | offer services on a non-discriminatory basis to all network users that accommodate market demand; in particular, where an LNG or storage system operator offers the same service to different customers, it shall do so under equivalent contractual terms and conditions; |
| --- | --- |

(a)

offer services on a non-discriminatory basis to all network users that accommodate market demand; in particular, where an LNG or storage system operator offers the same service to different customers, it shall do so under equivalent contractual terms and conditions;

| (b) | offer services that are compatible with the use of the interconnected gas transportation systems and facilitate access through cooperation with the transmission system operator; and |
| --- | --- |

(b)

offer services that are compatible with the use of the interconnected gas transportation systems and facilitate access through cooperation with the transmission system operator; and

| (c) | make relevant information public, in particular data on the use and availability of services, in a time-frame compatible with the LNG or storage facility users' reasonable commercial needs. |
| --- | --- |

(c)

make relevant information public, in particular data on the use and availability of services, in a time-frame compatible with the LNG or storage facility users' reasonable commercial needs.

2.   Each storage system operator shall:

| (a) | provide both firm and interruptible third-party access services; the price of interruptible capacity shall reflect the probability of interruption; |
| --- | --- |

(a)

provide both firm and interruptible third-party access services; the price of interruptible capacity shall reflect the probability of interruption;

| (b) | offer to storage facility users both long and short-term services; |
| --- | --- |

(b)

offer to storage facility users both long and short-term services;

| (c) | offer to storage facility users both bundled and unbundled services of storage space, injectability and deliverability. |
| --- | --- |

(c)

offer to storage facility users both bundled and unbundled services of storage space, injectability and deliverability.

3.   LNG and storage facility contracts shall not result in arbitrarily higher tariffs in cases in which they are signed:

| (a) | outside a natural gas year with non-standard start dates; or |
| --- | --- |

(a)

outside a natural gas year with non-standard start dates; or

| (b) | with a shorter duration than a standard LNG and storage facility contract on an annual basis. |
| --- | --- |

(b)

with a shorter duration than a standard LNG and storage facility contract on an annual basis.

4.   Where appropriate, third-party access services may be granted subject to appropriate guarantees from network users with respect to the creditworthiness of such users. Such guarantees shall not constitute undue market-entry barriers and shall be non-discriminatory, transparent and proportionate.

5.   Contractual limits on the required minimum size of LNG facility capacity and storage capacity shall be justified on the basis of technical constrains and shall permit smaller storage users to gain access to storage services.

Article 16

Principles of capacity allocation mechanisms and congestion management procedures concerning transmission system operators

1.   The maximum capacity at all relevant points referred to in Article 18(3) shall be made available to market participants, taking into account system integrity and efficient network operation.

2.   The transmission system operator shall implement and publish non-discriminatory and transparent capacity-allocation mechanisms, which shall:

| (a) | provide appropriate economic signals for the efficient and maximum use of technical capacity and facilitate investment in new infrastructure; |
| --- | --- |

(a)

provide appropriate economic signals for the efficient and maximum use of technical capacity and facilitate investment in new infrastructure;

| (b) | be compatible with the market mechanisms including spot markets and trading hubs, while being flexible and capable of adapting to evolving market circumstances; |
| --- | --- |

(b)

be compatible with the market mechanisms including spot markets and trading hubs, while being flexible and capable of adapting to evolving market circumstances;

| (c) | be compatible with the network access systems of the Member States. |
| --- | --- |

(c)

be compatible with the network access systems of the Member States.

3.   The transmission system operator shall implement and publish non-discriminatory and transparent congestion management procedures which shall be based on the following principles:

| (a) | in the event of contractual congestion, the transmission system operator shall offer unused capacity on the primary market at least on a day-ahead and interruptible basis; |
| --- | --- |

(a)

in the event of contractual congestion, the transmission system operator shall offer unused capacity on the primary market at least on a day-ahead and interruptible basis;

| (b) | network users who wish to re-sell or sublet their unused contracted capacity on the secondary market shall be entitled to do so. A Member State may require notification or information of the transmission system operator by network users. |
| --- | --- |

(b)

network users who wish to re-sell or sublet their unused contracted capacity on the secondary market shall be entitled to do so. A Member State may require notification or information of the transmission system operator by network users.

4.   In the event that physical congestion exists, non-discriminatory, transparent capacity-allocation mechanisms shall be applied by the transmission system operator or, as appropriate, by the regulatory authorities.

5.   Transmission system operators shall regularly assess market demand for new investment. When planning new investments, transmission system operators shall assess market demand.

Article 17

Principles of capacity-allocation mechanisms and congestion-management procedures concerning storage and LNG facilities

1.   The maximum storage and LNG facility capacity shall be made available to market participants, taking into account system integrity and operation.

2.   Each LNG and storage system operator shall implement and publish non-discriminatory and transparent capacity allocation mechanisms which shall:

| (a) | provide appropriate economic signals for the efficient and maximum use of capacity and facilitate investment in new infrastructure; |
| --- | --- |

(a)

provide appropriate economic signals for the efficient and maximum use of capacity and facilitate investment in new infrastructure;

| (b) | be compatible with the market mechanism including spot markets and trading hubs, while being flexible and capable of adapting to evolving market circumstances; |
| --- | --- |

(b)

be compatible with the market mechanism including spot markets and trading hubs, while being flexible and capable of adapting to evolving market circumstances;

| (c) | be compatible with the connected network access systems. |
| --- | --- |

(c)

be compatible with the connected network access systems.

3.   LNG and storage facility contracts shall include measures to prevent capacity-hoarding, by taking into account the following principles, which shall apply in cases of contractual congestion:

| (a) | the system operator shall offer unused LNG facility and storage capacity on the primary market; for storage facilities this shall be at least on a day-ahead and interruptible basis; |
| --- | --- |

(a)

the system operator shall offer unused LNG facility and storage capacity on the primary market; for storage facilities this shall be at least on a day-ahead and interruptible basis;

| (b) | LNG and storage facility users who wish to re-sell their contracted capacity on the secondary market shall be entitled to do so. |
| --- | --- |

(b)

LNG and storage facility users who wish to re-sell their contracted capacity on the secondary market shall be entitled to do so.

Article 18

Transparency requirements concerning transmission system operators

1.   The transmission system operator shall make public detailed information regarding the services it offers and the relevant conditions applied, together with the technical information necessary for network users to gain effective network access.

2.   In order to ensure transparent, objective and non-discriminatory tariffs and facilitate efficient utilisation of the gas network, transmission system operators or relevant national authorities shall publish reasonably and sufficiently detailed information on tariff derivation, methodology and structure.

3.   For the services provided, each transmission system operator shall make public information on technical, contracted and available capacities on a numerical basis for all relevant points including entry and exit points on a regular and rolling basis and in a user-friendly and standardised manner.

4.   The relevant points of a transmission system on which the information must be made public shall be approved by the competent authorities after consultation with network users.

5.   The transmission system operator shall always disclose the information required by this Regulation in a meaningful, quantifiably clear and easily accessible manner and on a non-discriminatory basis.

6.   The transmission system operator shall make public ex-ante and ex-post supply and demand information, based on nominations, forecasts and realised flows in and out of the system. The level of detail of the information that is made public shall reflect the information available to the transmission system operator.

The transmission system operator shall make public measures taken as well as costs incurred and revenue generated to balance the system.

The market participants concerned shall provide the transmission system operator with the data referred to in this Article.

Article 19

Transparency requirements concerning storage facilities and LNG facilities

1.   Each LNG and storage system operator shall make public detailed information regarding the services it offers and the relevant conditions applied, together with the technical information necessary for LNG and storage facility users to gain effective access to the LNG and storage facilities.

2.   For the services provided, each LNG and storage system operator shall make public information on contracted and available storage and LNG facility capacities on a numerical basis on a regular and rolling basis and in a user-friendly standardised manner.

3.   Each LNG and storage system operator shall always disclose the information required by this Regulation in a meaningful, quantifiably clear and easily accessible way and on a non-discriminatory basis.

4.   Each LNG and storage system operator shall make public the amount of gas in each storage or LNG facility, or group of storage facilities if that corresponds to the way in which the access is offered to system users, inflows and outflows, and the available storage and LNG facility capacities, including for those facilities exempted from third-party access. That information shall also be communicated to the transmission system operator, which shall make it public on an aggregated level per system or subsystem defined by the relevant points. The information shall be updated at least every day.

In cases in which a storage system user is the only user of a storage facility, the storage system user may submit to the national regulatory authority a reasoned request for confidential treatment of the data referred to in the first subparagraph. Where the national regulatory authority comes to the conclusion that such a request is justified, taking into account in particular the need to balance the interest of legitimate protection of business secrets, the disclosure of which would negatively affect the overall commercial strategy of the storage user, with the objective of creating a competitive internal gas market, it may allow the storage system operator not to make public the data referred to in the first subparagraph, for a duration of up to one year. This subparagraph shall apply without prejudice to the obligations of communication to and publication by the transmission system operator referred to in the first subparagraph, unless the aggregated data are identical to the individual storage system data for which the national regulatory authority has approved non-publication.

Article 20

Record keeping by system operators

Transmission system operators, storage system operators and LNG system operators shall keep at the disposal of the national authorities, including the national regulatory authority, the national competition authority and the Commission, all information referred to in Articles 18 and 19, and in Part 3 of Annex I for a period of five years.

Article 21

Balancing rules and imbalance charges

1.   Balancing rules shall be designed in a fair, non-discriminatory and transparent manner and shall be based on objective criteria. Balancing rules shall reflect genuine system needs taking into account the resources available to the transmission system operator. Balancing rules shall be market-based.

2.   In order to enable network users to take timely corrective action, the transmission system operator shall provide sufficient, well-timed and reliable on-line based information on the balancing status of network users.

The information provided shall reflect the level of information available to the transmission system operator and the settlement period for which imbalance charges are calculated.

No charge shall be made for the provision of such information.

3.   Imbalance charges shall be cost-reflective to the extent possible, whilst providing appropriate incentives on network users to balance their input and off-take of gas. They shall avoid cross-subsidisation between network users and shall not hamper the entry of new market entrants.

Any calculation methodology for imbalance charges as well as the final tariffs shall be made public by the competent authorities or the transmission system operator, as appropriate.

4.   Member States shall ensure that transmission system operators endeavour to harmonise balancing regimes and streamline structures and levels of balancing charges in order to facilitate gas trade.

Article 22

Trading of capacity rights

Each transmission, storage and LNG system operator shall take reasonable steps to allow capacity rights to be freely tradable and to facilitate such trade. Each such operator shall develop harmonised transportation, LNG facility and storage contracts and procedures on the primary market to facilitate secondary trade of capacity and shall recognise the transfer of primary capacity rights where notified by system users.

The harmonised transportation, LNG facility and storage contracts and procedures shall be notified to the regulatory authorities.

Article 23

Guidelines

1.   Where appropriate, guidelines providing the minimum degree of harmonisation required to achieve the aims of this Regulation shall specify:

| (a) | details of third-party access services, including the character, duration and other requirements of these services, in accordance with Articles 14 and 15; |
| --- | --- |

(a)

details of third-party access services, including the character, duration and other requirements of these services, in accordance with Articles 14 and 15;

| (b) | details of the principles underlying capacity allocation mechanisms and on the application of congestion management procedures in the event of contractual congestion, in accordance with Articles 16 and 17; |
| --- | --- |

(b)

details of the principles underlying capacity allocation mechanisms and on the application of congestion management procedures in the event of contractual congestion, in accordance with Articles 16 and 17;

| (c) | details of the provision of information, definition of the technical information necessary for network users to gain effective access to the system and the definition of all relevant points for transparency requirements, including the information to be published at all relevant points and the time schedule for the publication of that information, in accordance with Articles 18 and 19; |
| --- | --- |

(c)

details of the provision of information, definition of the technical information necessary for network users to gain effective access to the system and the definition of all relevant points for transparency requirements, including the information to be published at all relevant points and the time schedule for the publication of that information, in accordance with Articles 18 and 19;

| (d) | details of tariff methodology related to cross-border trade of natural gas, in accordance with Article 13; |
| --- | --- |

(d)

details of tariff methodology related to cross-border trade of natural gas, in accordance with Article 13;

| (e) | details relating to the areas listed in Article 8(6). |
| --- | --- |

(e)

details relating to the areas listed in Article 8(6).

2.   Guidelines on the issues listed in points (a), (b) and (c) of paragraph 1 are laid down in Annex I with respect to transmission system operators.

The Commission may adopt guidelines on the issues listed in paragraph 1 of this Article and amend the guidelines referred to in points (a), (b) and (c) thereof. Those measures, designed to amend non-essential elements of this Regulation, inter alia by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 28(2).

3.   The application and amendment of guidelines adopted pursuant to this Regulation shall reflect differences between national gas systems, and shall, therefore, not require uniform detailed terms and conditions of third-party access at Community level. They may, however, set minimum requirements to be met to achieve non-discriminatory and transparent network access conditions necessary for an internal market in natural gas, which may then be applied in the light of differences between national gas systems.

Article 24

Regulatory authorities

When carrying out their responsibilities under this Regulation, the regulatory authorities shall ensure compliance with this Regulation and the guidelines adopted pursuant to Article 23.

Where appropriate, they shall cooperate with each other, with the Commission and the Agency in compliance with Chapter VIII of Directive 2009/.../EC.

Article 25

Provision of information

Member States and the regulatory authorities shall, on request, provide to the Commission all information necessary for the purposes of Article 23.

The Commission shall fix a reasonable time limit within which the information is to be provided, taking into account the complexity of the information required and the urgency with which the information is needed.

Article 26

Right of Member States to provide for more detailed measures

This Regulation shall be without prejudice to the rights of Member States to maintain or introduce measures that contain more detailed provisions than those set out in this Regulation and the guidelines referred to in Article 23.

Article 27

Penalties

1.   The Member States shall lay down rules on penalties applicable to infringements of the provisions of this Regulation and shall take all measures necessary to ensure that those provisions are implemented. The penalties provided for must be effective, proportionate and dissuasive. The Member States shall notify those rules corresponding to the provisions laid down in Regulation (EC) No 1775/2005 to the Commission by 1 July 2006 and shall notify the Commission without delay of any subsequent amendment affecting them. They shall notify those rules not corresponding to the provisions laid down in Regulation (EC) No 1775/2005 to the Commission by ... (11) and shall notify the Commission without delay of any subsequent amendment affecting them.

2.   Penalties provided for pursuant to paragraph 1 shall not be of a criminal law nature.

Article 28

Committee procedure

1.   The Commission shall be assisted by the committee set up by Article 50 of Directive 2009/.../EC.

2.   Where reference is made to this paragraph, Article 5a(1) to (4) and Article 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.

Article 29

Commission report

The Commission shall monitor the implementation of this Regulation. In its report under Article 51(6) of Directive 2009/.../EC, the Commission shall also report on the experience gained in the application of this Regulation. In particular, the report shall examine to what extent this Regulation has been successful in ensuring non-discriminatory and cost-reflective network access conditions for gas transmission networks in order to contribute to customer choice in a well functioning internal market and to long-term security of supply. If necessary, the report shall be accompanied by appropriate proposals and/or recommendations.

Article 30

Derogations and exemptions

This Regulation shall not apply to:

| (a) | natural gas transmission systems situated in Member States for the duration of derogations granted under Article 48 of Directive 2009/.../EC; Member States which have been granted derogations under Article 48 of Directive 2009/.../EC may apply to the Commission for a temporary derogation from the application of this Regulation, for a period of up to two years from the date on which the derogation referred to in this point expires; |
| --- | --- |

(a)

natural gas transmission systems situated in Member States for the duration of derogations granted under Article 48 of Directive 2009/.../EC; Member States which have been granted derogations under Article 48 of Directive 2009/.../EC may apply to the Commission for a temporary derogation from the application of this Regulation, for a period of up to two years from the date on which the derogation referred to in this point expires;

| (b) | major new infrastructure, i.e. interconnectors, LNG and storage facilities, and significant increases of capacity in existing infrastructure and modifications of such infrastructure which enable the development of new sources of gas supply referred to in Article 35(1) and (2) of Directive 2009/.../EC which are exempt from the provisions of Articles 9, 14, 31, 32, 33 or Article 40(6), (7) and (8) of that Directive as long as they are exempt from the provisions referred to in this subparagraph, with the exception of Article 19(4) of this Regulation; or |
| --- | --- |

(b)

major new infrastructure, i.e. interconnectors, LNG and storage facilities, and significant increases of capacity in existing infrastructure and modifications of such infrastructure which enable the development of new sources of gas supply referred to in Article 35(1) and (2) of Directive 2009/.../EC which are exempt from the provisions of Articles 9, 14, 31, 32, 33 or Article 40(6), (7) and (8) of that Directive as long as they are exempt from the provisions referred to in this subparagraph, with the exception of Article 19(4) of this Regulation; or

| (c) | natural gas transmission systems which have been granted derogations under Article 47 of Directive 2009/.../EC. |
| --- | --- |

(c)

natural gas transmission systems which have been granted derogations under Article 47 of Directive 2009/.../EC.

Article 31

Repeal

Regulation (EC) No 1775/2005 shall be repealed from ... (8). References made to the repealed Regulation shall be construed as references to this Regulation and shall be read in accordance with the correlation table in Annex II.

Article 32

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

It shall apply from ... (8).

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at ...,

For the European Parliament

The President

...

For the Council

The President

...

---

(1)  OJ C 211, 19.8.2008, p. 23.

1

(2)  OJ C 172, 5.7.2008, p. 55.

2

(3)  Opinion of the European Parliament of 9 July 2008 (not yet published in the Official Journal), Council Common Position of 9 January 2009 and Position of the European Parliament of ... (not yet published in the Official Journal).

3

(4)  OJ L 176, 15.7.2003, p. 57.

4

(5)  OJ L 289, 3.11.2005, p. 1.

5

(6)  OJ L ...

6

(7)  OJ L 184, 17.7.1999, p. 23.

7

(8)  18 months after the entry into force of this Regulation.

8

(9)  Decision No 1364/2006/EC of the European Parliament and of the Council of 6 September 2006 laying down guidelines for trans-European energy networks (OJ L 262, 22.9.2006, p. 1).

9

(10)  Two years after the entry into force of this Regulation.

10

(11)  Date of application of this Regulation.

11

---

ANNEX I

GUIDELINES ON

1.   THIRD PARTY ACCESS SERVICES CONCERNING TRANSMISSION SYSTEM OPERATORS

| 1. | Transmission system operators shall offer firm and interruptible services down to a minimum period of one day. |
| --- | --- |

1.

Transmission system operators shall offer firm and interruptible services down to a minimum period of one day.

| 2. | Harmonised transportation contracts and common network codes shall be designed in a manner that facilitates trading and re-utilisation of capacity contracted by network users without hampering capacity release. |
| --- | --- |

2.

Harmonised transportation contracts and common network codes shall be designed in a manner that facilitates trading and re-utilisation of capacity contracted by network users without hampering capacity release.

| 3. | Transmission system operators shall develop network codes and harmonised contracts following proper consultation with network users. |
| --- | --- |

3.

Transmission system operators shall develop network codes and harmonised contracts following proper consultation with network users.

| 4. | Transmission system operators shall implement standardised nomination and re-nomination procedures. They shall develop information systems and electronic communication means to provide adequate data to network users and to simplify transactions, such as nominations, capacity contracting and transfer of capacity rights between network users. |
| --- | --- |

4.

Transmission system operators shall implement standardised nomination and re-nomination procedures. They shall develop information systems and electronic communication means to provide adequate data to network users and to simplify transactions, such as nominations, capacity contracting and transfer of capacity rights between network users.

| 5. | Transmission system operators shall harmonise formalised request procedures and response times according to best industry practice with the aim of minimising response times. They shall provide for online screen-based capacity booking and confirmation systems and nomination and re-nomination procedures no later than 1 July 2006 after consultation with the relevant network users. |
| --- | --- |

5.

Transmission system operators shall harmonise formalised request procedures and response times according to best industry practice with the aim of minimising response times. They shall provide for online screen-based capacity booking and confirmation systems and nomination and re-nomination procedures no later than 1 July 2006 after consultation with the relevant network users.

| 6. | Transmission system operators shall not separately charge network users for information requests and transactions associated with their transportation contracts and which are carried out according to standard rules and procedures. |
| --- | --- |

6.

Transmission system operators shall not separately charge network users for information requests and transactions associated with their transportation contracts and which are carried out according to standard rules and procedures.

| 7. | Information requests that require extraordinary or excessive expenses such as feasibility studies may be charged separately, provided the charges can be duly substantiated. |
| --- | --- |

7.

Information requests that require extraordinary or excessive expenses such as feasibility studies may be charged separately, provided the charges can be duly substantiated.

| 8. | Transmission system operators shall cooperate with other transmission system operators in coordinating the maintenance of their respective networks in order to minimise any disruption of transmission services to network users and transmission system operators in other areas and in order to ensure equal benefits with respect to security of supply including in relation to transit. |
| --- | --- |

8.

Transmission system operators shall cooperate with other transmission system operators in coordinating the maintenance of their respective networks in order to minimise any disruption of transmission services to network users and transmission system operators in other areas and in order to ensure equal benefits with respect to security of supply including in relation to transit.

| 9. | Transmission system operators shall publish at least once a year, by a predetermined deadline, all planned maintenance periods that might affect network users' rights from transportation contracts and corresponding operational information with adequate advance notice. This shall include publishing on a prompt and non-discriminatory basis any changes to planned maintenance periods and notification of unplanned maintenance, as soon as that information becomes available to the transmission system operator. During maintenance periods, transmission system operators shall publish regularly updated information on the details of and expected duration and effect of the maintenance. |
| --- | --- |

9.

Transmission system operators shall publish at least once a year, by a predetermined deadline, all planned maintenance periods that might affect network users' rights from transportation contracts and corresponding operational information with adequate advance notice. This shall include publishing on a prompt and non-discriminatory basis any changes to planned maintenance periods and notification of unplanned maintenance, as soon as that information becomes available to the transmission system operator. During maintenance periods, transmission system operators shall publish regularly updated information on the details of and expected duration and effect of the maintenance.

| 10. | Transmission system operators shall maintain and make available to the competent authority upon request a daily log of the actual maintenance and flow disruptions that have occurred. Information shall also be made available on request to those affected by any disruption. |
| --- | --- |

10.

Transmission system operators shall maintain and make available to the competent authority upon request a daily log of the actual maintenance and flow disruptions that have occurred. Information shall also be made available on request to those affected by any disruption.

2.   PRINCIPLES OF CAPACITY ALLOCATION MECHANISMS AND CONGESTION MANAGEMENT PROCEDURES CONCERNING TRANSMISSION SYSTEM OPERATORS AND THEIR APPLICATION IN THE EVENT OF CONTRACTUAL CONGESTION

2.1.   PRINCIPLES OF CAPACITY ALLOCATION MECHANISMS AND CONGESTION MANAGEMENT PROCEDURES CONCERNING TRANSMISSION SYSTEM OPERATORS

| 1. | Capacity allocation mechanisms and congestion management procedures shall facilitate the development of competition and liquid trading of capacity and shall be compatible with market mechanisms including spot markets and trading hubs. They shall be flexible and capable of adapting to evolving market circumstances. |
| --- | --- |

1.

Capacity allocation mechanisms and congestion management procedures shall facilitate the development of competition and liquid trading of capacity and shall be compatible with market mechanisms including spot markets and trading hubs. They shall be flexible and capable of adapting to evolving market circumstances.

| 2. | These mechanisms and procedures shall take into account the integrity of the system concerned as well as security of supply. |
| --- | --- |

2.

These mechanisms and procedures shall take into account the integrity of the system concerned as well as security of supply.

| 3. | These mechanisms and procedures shall neither hamper the entry of new market participants nor create undue barriers to market entry. They shall not prevent market participants, including new market entrants and companies with a small market share, from competing effectively. |
| --- | --- |

3.

These mechanisms and procedures shall neither hamper the entry of new market participants nor create undue barriers to market entry. They shall not prevent market participants, including new market entrants and companies with a small market share, from competing effectively.

| 4. | These mechanisms and procedures shall provide appropriate economic signals for efficient and maximum use of technical capacity and facilitate investment in new infrastructure. |
| --- | --- |

4.

These mechanisms and procedures shall provide appropriate economic signals for efficient and maximum use of technical capacity and facilitate investment in new infrastructure.

| 5. | Network users shall be advised about the type of circumstance that could affect the availability of contracted capacity. Information on interruption should reflect the level of information available to the transmission system operator. |
| --- | --- |

5.

Network users shall be advised about the type of circumstance that could affect the availability of contracted capacity. Information on interruption should reflect the level of information available to the transmission system operator.

| 6. | Should difficulties in meeting contractual delivery obligations arise due to system integrity reasons, transmission system operators should notify network users and seek a non-discriminatory solution without delay.
  Transmission system operators shall consult network users regarding procedures prior to their implementation and agree them with the regulatory authority. |
| --- | --- |

6.

Should difficulties in meeting contractual delivery obligations arise due to system integrity reasons, transmission system operators should notify network users and seek a non-discriminatory solution without delay.

Transmission system operators shall consult network users regarding procedures prior to their implementation and agree them with the regulatory authority.

2.2.   CONGESTION MANAGEMENT PROCEDURES IN THE EVENT OF CONTRACTUAL CONGESTION

| 1. | In the event that contracted capacity goes unused, transmission system operators shall make this capacity available on the primary market on an interruptible basis via contracts of differing duration, as long as this capacity is not offered by the relevant network user on the secondary market at a reasonable price. |
| --- | --- |

1.

In the event that contracted capacity goes unused, transmission system operators shall make this capacity available on the primary market on an interruptible basis via contracts of differing duration, as long as this capacity is not offered by the relevant network user on the secondary market at a reasonable price.

| 2. | Revenues from released interruptible capacity shall be split according to rules laid down or approved by the relevant regulatory authority. These rules shall be compatible with the requirement of an effective and efficient use of the system. |
| --- | --- |

2.

Revenues from released interruptible capacity shall be split according to rules laid down or approved by the relevant regulatory authority. These rules shall be compatible with the requirement of an effective and efficient use of the system.

| 3. | A reasonable price for released interruptible capacity may be determined by the relevant regulatory authorities taking into account the specific circumstances prevailing. |
| --- | --- |

3.

A reasonable price for released interruptible capacity may be determined by the relevant regulatory authorities taking into account the specific circumstances prevailing.

| 4. | Where appropriate, transmission system operators shall make reasonable endeavours to offer at least parts of the unused capacity to the market as firm capacity. |
| --- | --- |

4.

Where appropriate, transmission system operators shall make reasonable endeavours to offer at least parts of the unused capacity to the market as firm capacity.

3.   DEFINITION OF THE TECHNICAL INFORMATION NECESSARY FOR NETWORK USERS TO GAIN EFFECTIVE ACCESS TO THE SYSTEM, THE DEFINITION OF ALL RELEVANT POINTS FOR TRANSPARENCY REQUIREMENTS AND THE INFORMATION TO BE PUBLISHED AT ALL RELEVANT POINTS AND THE TIME SCHEDULE ACCORDING TO WHICH THIS INFORMATION SHALL BE PUBLISHED

3.1.   DEFINITION OF THE TECHNICAL INFORMATION NECESSARY FOR NETWORK USERS TO GAIN EFFECTIVE ACCESS TO THE SYSTEM

Transmission system operators shall publish at least the following information about their systems and services:

| (a) | a detailed and comprehensive description of the different services offered and their charges; |
| --- | --- |

(a)

a detailed and comprehensive description of the different services offered and their charges;

| (b) | the different types of transportation contracts available for these services and, as applicable, the network code and/or the standard conditions outlining the rights and responsibilities of all network users including harmonised transportation contracts and other relevant documents; |
| --- | --- |

(b)

the different types of transportation contracts available for these services and, as applicable, the network code and/or the standard conditions outlining the rights and responsibilities of all network users including harmonised transportation contracts and other relevant documents;

| (c) | the harmonised procedures applied when using the transmission system, including the definition of key terms; |
| --- | --- |

(c)

the harmonised procedures applied when using the transmission system, including the definition of key terms;

| (d) | provisions on capacity allocation, congestion management and anti-hoarding and re-utilisation procedures; |
| --- | --- |

(d)

provisions on capacity allocation, congestion management and anti-hoarding and re-utilisation procedures;

| (e) | the rules applicable for capacity trade on the secondary market vis-à-vis the transmission system operator; |
| --- | --- |

(e)

the rules applicable for capacity trade on the secondary market vis-à-vis the transmission system operator;

| (f) | if applicable, the flexibility and tolerance levels included in transportation and other services without separate charge, as well as any flexibility offered in addition to this and the corresponding charges; |
| --- | --- |

(f)

if applicable, the flexibility and tolerance levels included in transportation and other services without separate charge, as well as any flexibility offered in addition to this and the corresponding charges;

| (g) | a detailed description of the gas system of the transmission system operator indicating all relevant points interconnecting its system with that of other transmission system operators and/or gas infrastructure such as liquefied natural gas (LNG) and infrastructure necessary for providing ancillary services as defined by Article 2(14) of Directive 2009/.../EC; |
| --- | --- |

(g)

a detailed description of the gas system of the transmission system operator indicating all relevant points interconnecting its system with that of other transmission system operators and/or gas infrastructure such as liquefied natural gas (LNG) and infrastructure necessary for providing ancillary services as defined by Article 2(14) of Directive 2009/.../EC;

| (h) | information on gas quality and pressure requirements; |
| --- | --- |

(h)

information on gas quality and pressure requirements;

| (i) | the rules applicable for connection to the system operated by the transmission system operator; |
| --- | --- |

(i)

the rules applicable for connection to the system operated by the transmission system operator;

| (j) | any information, in a timely manner, on proposed and/or actual changes to the services or conditions, including the items listed in points (a) to (i). |
| --- | --- |

(j)

any information, in a timely manner, on proposed and/or actual changes to the services or conditions, including the items listed in points (a) to (i).

3.2.   DEFINITION OF ALL RELEVANT POINTS FOR TRANSPARENCY REQUIREMENTS

Relevant points shall include at least:

| (a) | all entry points to a network operated by a transmission system operator; |
| --- | --- |

(a)

all entry points to a network operated by a transmission system operator;

| (b) | the most important exit points and exit zones covering at least 50 % of total exit capacity of the network of a given transmission system operator, including all exit points or exit zones covering more than 2 % of total exit capacity of the network; |
| --- | --- |

(b)

the most important exit points and exit zones covering at least 50 % of total exit capacity of the network of a given transmission system operator, including all exit points or exit zones covering more than 2 % of total exit capacity of the network;

| (c) | all points connecting different networks of transmission system operators; |
| --- | --- |

(c)

all points connecting different networks of transmission system operators;

| (d) | all points connecting the network of a transmission system operator with an LNG terminal; |
| --- | --- |

(d)

all points connecting the network of a transmission system operator with an LNG terminal;

| (e) | all essential points within the network of a given transmission system operator including points connecting to gas hubs. All points are considered essential which, based on experience, are likely to experience physical congestion; |
| --- | --- |

(e)

all essential points within the network of a given transmission system operator including points connecting to gas hubs. All points are considered essential which, based on experience, are likely to experience physical congestion;

| (f) | all points connecting the network of a given transmission system operator to infrastructure necessary for providing ancillary services as defined by Article 2(14) of Directive 2009/.../EC. |
| --- | --- |

(f)

all points connecting the network of a given transmission system operator to infrastructure necessary for providing ancillary services as defined by Article 2(14) of Directive 2009/.../EC.

3.3.   INFORMATION TO BE PUBLISHED AT ALL RELEVANT POINTS AND THE TIME SCHEDULE ACCORDING TO WHICH THIS INFORMATION SHOULD BE PUBLISHED

| 1. | At all relevant points, transmission system operators shall publish the following information about the capacity situation down to daily periods on the Internet on a regular/rolling basis and in a user-friendly standardised manner:






  (a) | the maximum technical capacity for flows in both directions; |
| --- | --- | --- |

1.

At all relevant points, transmission system operators shall publish the following information about the capacity situation down to daily periods on the Internet on a regular/rolling basis and in a user-friendly standardised manner:

(a)

the maximum technical capacity for flows in both directions;

| (b) | the total contracted and interruptible capacity; |
| --- | --- |

(b)

the total contracted and interruptible capacity;

| (c) | the available capacity. |
| --- | --- |

(c)

the available capacity.

| 2. | For all relevant points, transmission system operators shall publish available capacities for a period of at least 18 months ahead and shall update this information at least every month or more frequently, if new information becomes available. |
| --- | --- |

2.

For all relevant points, transmission system operators shall publish available capacities for a period of at least 18 months ahead and shall update this information at least every month or more frequently, if new information becomes available.

| 3. | Transmission system operators shall publish daily updates of availability of short-term services (day-ahead and week-ahead) based, inter alia, on nominations, prevailing contractual commitments and regular long-term forecasts of available capacities on an annual basis for up to ten years for all relevant points. |
| --- | --- |

3.

Transmission system operators shall publish daily updates of availability of short-term services (day-ahead and week-ahead) based, inter alia, on nominations, prevailing contractual commitments and regular long-term forecasts of available capacities on an annual basis for up to ten years for all relevant points.

| 4. | Transmission system operators shall publish historical maximum and minimum monthly capacity utilisation rates and annual average flows at all relevant points for the past three years on a rolling basis. |
| --- | --- |

4.

Transmission system operators shall publish historical maximum and minimum monthly capacity utilisation rates and annual average flows at all relevant points for the past three years on a rolling basis.

| 5. | Transmission system operators shall keep a daily log of actual aggregated flows for at least three months. |
| --- | --- |

5.

Transmission system operators shall keep a daily log of actual aggregated flows for at least three months.

| 6. | Transmission system operators shall keep effective records of all capacity contracts and all other relevant information in relation to calculating and providing access to available capacities, to which relevant national authorities shall have access to fulfil their duties. |
| --- | --- |

6.

Transmission system operators shall keep effective records of all capacity contracts and all other relevant information in relation to calculating and providing access to available capacities, to which relevant national authorities shall have access to fulfil their duties.

| 7. | Transmission system operators shall provide user-friendly instruments for calculating tariffs for the services available and for verifying on-line the capacity available. |
| --- | --- |

7.

Transmission system operators shall provide user-friendly instruments for calculating tariffs for the services available and for verifying on-line the capacity available.

| 8. | Where transmission system operators are unable to publish information in accordance with paragraphs 1, 3 and 7, they shall consult with their relevant national authorities and set up an Action Plan for implementation as soon as possible, but not later than 31 December 2006. |
| --- | --- |

8.

Where transmission system operators are unable to publish information in accordance with paragraphs 1, 3 and 7, they shall consult with their relevant national authorities and set up an Action Plan for implementation as soon as possible, but not later than 31 December 2006.

---

ANNEX II

CORRELATION TABLE

| Regulation (EC) No 1775/2005 | This Regulation |
| --- | --- |
| Article 1 | Article 1 |
| Article 2 | Article 2 |
| — | Article 3 |
| — | Article 4 |
| — | Article 5 |
| — | Article 6 |
| — | Article 7 |
| — | Article 8 |
| — | Article 9 |
| — | Article 10 |
| — | Article 11 |
| — | Article 12 |
| Article 3 | Article 13 |
| Article 4 | Article 14 |
| — | Article 15 |
| Article 5 | Article 16 |
| — | Article 17 |
| Article 6 | Article 18 |
| — | Article 19 |
| — | Article 20 |
| Article 7 | Article 21 |
| Article 8 | Article 22 |
| Article 9 | Article 23 |
| Article 10 | Article 24 |
| Article 11 | Article 25 |
| Article 12 | Article 26 |
| Article 13 | Article 27 |
| Article 14 | Article 28 |
| Article 15 | Article 29 |
| Article 16 | Article 30 |
| — | Article 31 |
| Article 17 | Article 32 |
| Annex | Annex I |

Regulation (EC) No 1775/2005

This Regulation

Article 1

Article 1

Article 2

Article 2

—

Article 3

—

Article 4

—

Article 5

—

Article 6

—

Article 7

—

Article 8

—

Article 9

—

Article 10

—

Article 11

—

Article 12

Article 3

Article 13

Article 4

Article 14

—

Article 15

Article 5

Article 16

—

Article 17

Article 6

Article 18

—

Article 19

—

Article 20

Article 7

Article 21

Article 8

Article 22

Article 9

Article 23

Article 10

Article 24

Article 11

Article 25

Article 12

Article 26

Article 13

Article 27

Article 14

Article 28

Article 15

Article 29

Article 16

Article 30

—

Article 31

Article 17

Article 32

Annex

Annex I

---

STATEMENT OF THE COUNCIL'S REASONS

I.   INTRODUCTION

| 1. | On 19 September 2007, the Commission presented a proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1775/2005 on conditions for access to the natural gas transmission networks, based on Article 95 of the Treaty, together in a package with four other proposals concerning the internal energy market. |
| --- | --- |

1.

On 19 September 2007, the Commission presented a proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1775/2005 on conditions for access to the natural gas transmission networks, based on Article 95 of the Treaty, together in a package with four other proposals concerning the internal energy market.

| 2. | The Committee of the Regions and the European Economic and Social Committee delivered their opinions on the complete package on 10 (1) and 22 April 2008 (2) respectively. |
| --- | --- |

2.

The Committee of the Regions and the European Economic and Social Committee delivered their opinions on the complete package on 10 (1) and 22 April 2008 (2) respectively.

| 3. | The European Parliament adopted its Opinion (3) at first reading on 9 July 2008, approving 47 amendments. The Commission did not present a modified proposal. |
| --- | --- |

3.

The European Parliament adopted its Opinion (3) at first reading on 9 July 2008, approving 47 amendments. The Commission did not present a modified proposal.

| 4. | On 9 January 2009, the Council adopted its Common Position in accordance with Article 251 of the Treaty, in the form of a recast Regulation. |
| --- | --- |

4.

On 9 January 2009, the Council adopted its Common Position in accordance with Article 251 of the Treaty, in the form of a recast Regulation.

II.   OBJECTIVE OF THE PROPOSAL

| 5. | The proposal is part of the third internal energy market package, together with the Directive concerning common rules for the internal market in natural gas, the Regulation on conditions for access to the network for cross-border exchanges in electricity, the Directive concerning common rules for the internal market in electricity, and the Regulation establishing an Agency for the Cooperation of Energy Regulators. It aims at contributing to achieving the objective of a well functioning internal gas market by introducing in particular:






  — | provisions aiming at an increased cooperation and coordination among transmission system operators, inter alia through the establishment of a European Network of the Transmission Operators for Gas (ENTSO for Gas); |
| --- | --- | --- |

5.

The proposal is part of the third internal energy market package, together with the Directive concerning common rules for the internal market in natural gas, the Regulation on conditions for access to the network for cross-border exchanges in electricity, the Directive concerning common rules for the internal market in electricity, and the Regulation establishing an Agency for the Cooperation of Energy Regulators. It aims at contributing to achieving the objective of a well functioning internal gas market by introducing in particular:

—

provisions aiming at an increased cooperation and coordination among transmission system operators, inter alia through the establishment of a European Network of the Transmission Operators for Gas (ENTSO for Gas);

| — | improved transparency requirements; |
| --- | --- |

—

improved transparency requirements;

| — | provisions aiming at improving access to gas storage and LNG facilities. |
| --- | --- |

—

provisions aiming at improving access to gas storage and LNG facilities.

III.   ANALYSIS OF THE COMMON POSITION

6.   General Remarks

| 6.1. | The Council has considered it more effective, more transparent and coherent with Regulation (EC) No 1775/2005 as well as more reader friendly to recast the provisions of the Regulation. However, in doing this, the Council has as a general principle fully respected the amending proposal of the Commission in the sense that it has not opened any other provision not being part of the Commission proposal, unless changes were necessary following from the changes introduced by the Council to the proposal, changed references resulting from the renumbering of the Articles etc. To the extent possible, the Council has followed the Commission's approach regarding an identical treatment of the electricity and gas sectors.
  The Commission has accepted all the changes introduced by the Council to its proposal. |
| --- | --- |

6.1.

The Council has considered it more effective, more transparent and coherent with Regulation (EC) No 1775/2005 as well as more reader friendly to recast the provisions of the Regulation. However, in doing this, the Council has as a general principle fully respected the amending proposal of the Commission in the sense that it has not opened any other provision not being part of the Commission proposal, unless changes were necessary following from the changes introduced by the Council to the proposal, changed references resulting from the renumbering of the Articles etc. To the extent possible, the Council has followed the Commission's approach regarding an identical treatment of the electricity and gas sectors.

The Commission has accepted all the changes introduced by the Council to its proposal.

| 6.2. | Concerning the 47 amendments adopted by the European Parliament, the Council has followed the Commission in






  — | accepting the following seven amendments partly/in principle: 12, 14, 16, 19, 50, 51, and 44;
  and |
| --- | --- | --- |

6.2.

Concerning the 47 amendments adopted by the European Parliament, the Council has followed the Commission in

—

accepting the following seven amendments partly/in principle: 12, 14, 16, 19, 50, 51, and 44;

and

| — | rejecting the following six amendments: 4, 7, 13, 15, 23 and 28, on grounds of substance and/or of form. |
| --- | --- |

—

rejecting the following six amendments: 4, 7, 13, 15, 23 and 28, on grounds of substance and/or of form.

| 6.3. | The Council has deviated from the Commission position in






  — | accepting three amendments: 40 (in principle), 42 (in spirit), and 45 (partially)
  and |
| --- | --- | --- |

6.3.

The Council has deviated from the Commission position in

—

accepting three amendments: 40 (in principle), 42 (in spirit), and 45 (partially)

and

| — | rejecting the following 31 amendments: 1-3, 5, 6, 8-11, 17, 18, 49, 22, 24-27, 29-31, 47, 33-39, 41, 43, and 46. |
| --- | --- |

—

rejecting the following 31 amendments: 1-3, 5, 6, 8-11, 17, 18, 49, 22, 24-27, 29-31, 47, 33-39, 41, 43, and 46.

7.   Specific Remarks

| 7.1. | Regarding the EP amendments where the Council has deviated from the Commission position:






  a) | The Council has accepted






  — | amdt 40 in principle because it considers that a reference to a ‘group of storage facilities’ is necessary, but that also a condition needs to be added; |
| --- | --- | --- | --- |

7.1.

Regarding the EP amendments where the Council has deviated from the Commission position:

a)

The Council has accepted

—

amdt 40 in principle because it considers that a reference to a ‘group of storage facilities’ is necessary, but that also a condition needs to be added;

| — | amdt 42 in spirit because it considers that on certain conditions and with certain limits, confidential treatment of data related to storage may be necessary; |
| --- | --- |

—

amdt 42 in spirit because it considers that on certain conditions and with certain limits, confidential treatment of data related to storage may be necessary;

| — | amdt 45 partially in deleting a limited number of issues for which the Commission had proposed the possibility of adopting guidelines through committee procedure. |
| --- | --- |

—

amdt 45 partially in deleting a limited number of issues for which the Commission had proposed the possibility of adopting guidelines through committee procedure.

| b) | The Council has rejected the 31 amendments listed above (point 6.3) on the following grounds:






  i) | The amendments concern provisions which are not part of the Commission proposal; those amendments have been rejected as a question of principle (see above under 6.1): amdts 24, 25, and 31. |
| --- | --- | --- |

b)

The Council has rejected the 31 amendments listed above (point 6.3) on the following grounds:

i)

The amendments concern provisions which are not part of the Commission proposal; those amendments have been rejected as a question of principle (see above under 6.1): amdts 24, 25, and 31.

| ii) | The amendments are not necessary or do not have added value, mainly because the issues are partly/sufficiently covered by other parts of the text: amdt 2; amdt 3 is sufficiently covered by recital 14; amdts 5, 6, 8, 11, 17; amdt 49 is covered by Art. 8(8 + 9); amdt 27 is sufficiently covered by Art. 13(1); amdt. 30; amdt 33 is sufficiently covered by Art. 1(c); amdt 34 is partly covered by Art. 16(5); amdts 36, 37 and 38 (first part); amdt 43: the principle is covered by Art. 1. |
| --- | --- |

ii)

The amendments are not necessary or do not have added value, mainly because the issues are partly/sufficiently covered by other parts of the text: amdt 2; amdt 3 is sufficiently covered by recital 14; amdts 5, 6, 8, 11, 17; amdt 49 is covered by Art. 8(8 + 9); amdt 27 is sufficiently covered by Art. 13(1); amdt. 30; amdt 33 is sufficiently covered by Art. 1(c); amdt 34 is partly covered by Art. 16(5); amdts 36, 37 and 38 (first part); amdt 43: the principle is covered by Art. 1.

| iii) | The amendments are not clear: amdts 1 and 29. |
| --- | --- |

iii)

The amendments are not clear: amdts 1 and 29.

| iv) | The amendment is introducing text which is not appropriate, i.a. because the tasks and powers of the regulatory authorities are set in the gas Directive: amdts 9, 10 (in addition, the Council has transferred the Article on retail markets to the gas Directive), 38 (2nd part), 39, 46. |
| --- | --- |

iv)

The amendment is introducing text which is not appropriate, i.a. because the tasks and powers of the regulatory authorities are set in the gas Directive: amdts 9, 10 (in addition, the Council has transferred the Article on retail markets to the gas Directive), 38 (2nd part), 39, 46.

| v) | The amendments are not appropriate: amdt 26 because Art. 13 is dealing with tariffs, not with access rules; amdt 47 in particular because of the deletion of point b of Art. 16(3). |
| --- | --- |

v)

The amendments are not appropriate: amdt 26 because Art. 13 is dealing with tariffs, not with access rules; amdt 47 in particular because of the deletion of point b of Art. 16(3).

| vi) | Amendment 18 introduces text which does not correspond to the role which the Council is giving to the Agency; it is, for legal reasons, not appropriate that the Agency adopts or approves network codes or takes decisions with a general scope. |
| --- | --- |

vi)

Amendment 18 introduces text which does not correspond to the role which the Council is giving to the Agency; it is, for legal reasons, not appropriate that the Agency adopts or approves network codes or takes decisions with a general scope.

| vii) | Amdt 22 because the consultations (Art. 10) should be carried out by ENTSO; consultation which the Agency has to do is covered by Art. 6. |
| --- | --- |

vii)

Amdt 22 because the consultations (Art. 10) should be carried out by ENTSO; consultation which the Agency has to do is covered by Art. 6.

| viii) | Amdt 35 is not appropriate because it could lead to overregulation, and the text introduced by amdt 41 is not necessary for the functioning of the Regulation. |
| --- | --- |

viii)

Amdt 35 is not appropriate because it could lead to overregulation, and the text introduced by amdt 41 is not necessary for the functioning of the Regulation.

| 7.2 | Concerning the Commission proposal, the Council has introduced certain other modifications (of substance and/or of form); the main ones are set out below.






  a) | Certification of TSOs

  The Council has considered it appropriate to transfer the part of the certification procedure which sets out the role of the Commission in this procedure from the gas Directive to a new Article 3 of this Regulation. |
| --- | --- | --- |

7.2

Concerning the Commission proposal, the Council has introduced certain other modifications (of substance and/or of form); the main ones are set out below.

a)

Certification of TSOs

The Council has considered it appropriate to transfer the part of the certification procedure which sets out the role of the Commission in this procedure from the gas Directive to a new Article 3 of this Regulation.

| b) | Establishment and modification of network codes

  The Council has considered it appropriate to set out more in detail the procedure for the establishment of network codes (Art. 6) and another — shorter — procedure for the modification of network codes (Art. 7). These Articles have replaced Art. 2e of the Commission proposal. The Council has given a clear role to the Agency which should develop non-binding framework guidelines as a basis for the network codes to be established by ENTSO, review the draft network codes and assess proposed modifications to the network codes. If necessary, the Commission may adopt those codes through the committee procedure in order to make them binding (see also recital 14). |
| --- | --- |

b)

Establishment and modification of network codes

The Council has considered it appropriate to set out more in detail the procedure for the establishment of network codes (Art. 6) and another — shorter — procedure for the modification of network codes (Art. 7). These Articles have replaced Art. 2e of the Commission proposal. The Council has given a clear role to the Agency which should develop non-binding framework guidelines as a basis for the network codes to be established by ENTSO, review the draft network codes and assess proposed modifications to the network codes. If necessary, the Commission may adopt those codes through the committee procedure in order to make them binding (see also recital 14).

| c) | Monitoring by the Agency

  The Council has introduced two paragraphs setting out the monitoring role of the Agency with respect to the implementation of the network codes by ENTSO (Art. 9(1) (subparas 2 + 3)) |
| --- | --- |

c)

Monitoring by the Agency

The Council has introduced two paragraphs setting out the monitoring role of the Agency with respect to the implementation of the network codes by ENTSO (Art. 9(1) (subparas 2 + 3))

| d) | Transparency/confidentiality requirements

  The Council considered it important that confidentiality for commercially sensitive data regarding storage can be ensured, subject to approval by the regulatory authority (recital 23 and Art. 19(4) (2nd subpara). |
| --- | --- |

d)

Transparency/confidentiality requirements

The Council considered it important that confidentiality for commercially sensitive data regarding storage can be ensured, subject to approval by the regulatory authority (recital 23 and Art. 19(4) (2nd subpara).

| e) | Retail markets

  The Council has considered it appropriate to redraft the Article on retail markets, taking i.a. out the cross border reference, and transfer it from the Regulation (Art. 8a of the Commission proposal) to the gas Directive (new Article 44). |
| --- | --- |

e)

Retail markets

The Council has considered it appropriate to redraft the Article on retail markets, taking i.a. out the cross border reference, and transfer it from the Regulation (Art. 8a of the Commission proposal) to the gas Directive (new Article 44).

| f) | Other points







  — | The Council has reinserted the last subparagraph of Article 1 which is stemming from the current gas Regulation and which is in line with the spirit of the Commission proposal. |
| --- | --- | --- |

f)

Other points

—

The Council has reinserted the last subparagraph of Article 1 which is stemming from the current gas Regulation and which is in line with the spirit of the Commission proposal.

| — | The Council has considered it appropriate to use the term ‘network development plan’ instead of ‘investment plan’ and to clarify that these plans are of a non-binding nature (Art. 8(3)(a)). |
| --- | --- |

—

The Council has considered it appropriate to use the term ‘network development plan’ instead of ‘investment plan’ and to clarify that these plans are of a non-binding nature (Art. 8(3)(a)).

| — | In line with the recast format, the Council has introduced a new Article to repeal the current legislative act (Art. 31). |
| --- | --- |

—

In line with the recast format, the Council has introduced a new Article to repeal the current legislative act (Art. 31).

---

(1)  OJ C 172, 5.7.2008, p. 55.

(2)  OJ C 211, 19.8.2008, p. 23.

(3)  Not yet published in the Official Journal.

---

| 31.3.2009 | EN | Official Journal of the European Union | CE 75/58 |
| --- | --- | --- | --- |

31.3.2009

EN

Official Journal of the European Union

CE 75/58

---

COMMON POSITION (EC) No 13/2009

adopted by the Council on 16 February 2009

with a view to the adoption of Regulation (EC) No .../2009 of the European Parliament and of the Council of ... on Community statistics relating to external trade with non-member countries and repealing Council Regulation (EC) No 1172/95

(Text with EEA relevance)

(2009/C 75 E/04)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 285(1) thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Central Bank (1),

Acting in accordance with the procedure laid down in Article 251 of the Treaty (2),

Whereas:

| (1) | The statistical information on Member States' trade flows with non-member countries is of essential importance for the Community's economic and trade policies and for analysing market developments for individual goods. The transparency of the statistical system should be improved to enable it to react to the changing administrative environment and to satisfy new user requirements. Council Regulation (EC) No 1172/95 of 22 May 1995 on the statistics relating to the trading of goods by the Community and its Member States with non-member countries (3) should therefore be replaced by a new Regulation in conformity with the requirements set out in Article 285(2) of the Treaty. |
| --- | --- |

(1)

The statistical information on Member States' trade flows with non-member countries is of essential importance for the Community's economic and trade policies and for analysing market developments for individual goods. The transparency of the statistical system should be improved to enable it to react to the changing administrative environment and to satisfy new user requirements. Council Regulation (EC) No 1172/95 of 22 May 1995 on the statistics relating to the trading of goods by the Community and its Member States with non-member countries (3) should therefore be replaced by a new Regulation in conformity with the requirements set out in Article 285(2) of the Treaty.

| (2) | External trade statistics are based on data obtained from customs declarations, as provided for in Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (4) (hereinafter referred to as the ‘Customs Code’). Progress in European integration and the resulting changes in customs clearance, including single authorisations for the use of the simplified declaration or the local clearance procedure, as well as centralised clearance, which will emanate from the current process of modernisation of the Customs Code as laid down in Regulation (EC) No 450/2008 of the European Parliament and of the Council of 23 April 2008 laying down the Community Customs Code (Modernised Customs Code) (5) (hereinafter referred to as the ‘Modernised Customs Code’) warrant a number of changes. In particular, they make it necessary to adjust the way external trade statistics are compiled, to reconsider the concept of the importing or exporting Member State, and to define more precisely the data source for compiling Community statistics. |
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(2)

External trade statistics are based on data obtained from customs declarations, as provided for in Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (4) (hereinafter referred to as the ‘Customs Code’). Progress in European integration and the resulting changes in customs clearance, including single authorisations for the use of the simplified declaration or the local clearance procedure, as well as centralised clearance, which will emanate from the current process of modernisation of the Customs Code as laid down in Regulation (EC) No 450/2008 of the European Parliament and of the Council of 23 April 2008 laying down the Community Customs Code (Modernised Customs Code) (5) (hereinafter referred to as the ‘Modernised Customs Code’) warrant a number of changes. In particular, they make it necessary to adjust the way external trade statistics are compiled, to reconsider the concept of the importing or exporting Member State, and to define more precisely the data source for compiling Community statistics.

| (3) | Simplifications of customs formalities and controls under the Modernised Customs Code can lead to customs declarations not being available. In order to keep the compilation of external trade statistics complete, measures should be adopted which ensure that those economic operators who benefit from the simplification provide statistical data. |
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(3)

Simplifications of customs formalities and controls under the Modernised Customs Code can lead to customs declarations not being available. In order to keep the compilation of external trade statistics complete, measures should be adopted which ensure that those economic operators who benefit from the simplification provide statistical data.

| (4) | Decision No 70/2008/EC of the European Parliament and of the Council of 15 January 2008 on a paperless environment for customs and trade (6) will set up an electronic customs system for the exchange of data contained in customs declarations. In order to record the physical trade flow of goods between Member States and non-member countries and to ensure that data on imports and exports is available in the Member State concerned, arrangements between customs and statistical authorities are necessary and should be specified. This includes rules on the exchange of data between Member States' administrations. This data exchange system should benefit as far as possible from the infrastructure established by the customs authorities. |
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(4)

Decision No 70/2008/EC of the European Parliament and of the Council of 15 January 2008 on a paperless environment for customs and trade (6) will set up an electronic customs system for the exchange of data contained in customs declarations. In order to record the physical trade flow of goods between Member States and non-member countries and to ensure that data on imports and exports is available in the Member State concerned, arrangements between customs and statistical authorities are necessary and should be specified. This includes rules on the exchange of data between Member States' administrations. This data exchange system should benefit as far as possible from the infrastructure established by the customs authorities.

| (5) | In order to allocate Community exports and imports to a given Member State, it is necessary to compile data on the ‘Member State of destination’, for imports, and the ‘Member State of actual export’, for exports. In the medium term, those Member States should become the importing and the exporting Member State for external trade statistics purposes. |
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(5)

In order to allocate Community exports and imports to a given Member State, it is necessary to compile data on the ‘Member State of destination’, for imports, and the ‘Member State of actual export’, for exports. In the medium term, those Member States should become the importing and the exporting Member State for external trade statistics purposes.

| (6) | For the purposes of this Regulation, goods for external trade purposes should be classified in accordance with the Combined Nomenclature established by Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (7) (hereinafter referred to as the ‘Combined Nomenclature’). |
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(6)

For the purposes of this Regulation, goods for external trade purposes should be classified in accordance with the Combined Nomenclature established by Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (7) (hereinafter referred to as the ‘Combined Nomenclature’).

| (7) | To meet the needs of the European Central Bank and of the Commission for information on the share of the euro in international trade in goods, the invoicing currency of exports and imports should be reported at an aggregated level. |
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(7)

To meet the needs of the European Central Bank and of the Commission for information on the share of the euro in international trade in goods, the invoicing currency of exports and imports should be reported at an aggregated level.

| (8) | For the purposes of trade negotiations and internal market management, the Commission should be provided with detailed information on the preferential treatment of goods imported into the Community. |
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(8)

For the purposes of trade negotiations and internal market management, the Commission should be provided with detailed information on the preferential treatment of goods imported into the Community.

| (9) | External trade statistics provide data for the compilation of balance of payments and national accounts. The characteristics which make it possible to adapt them to balance of payments purposes should become part of the mandatory and standard data set. |
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(9)

External trade statistics provide data for the compilation of balance of payments and national accounts. The characteristics which make it possible to adapt them to balance of payments purposes should become part of the mandatory and standard data set.

| (10) | Member States' statistics on customs warehouses and free zones are not the subject of harmonised provisions. However, the compilation for national purposes of these statistics remains optional. |
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(10)

Member States' statistics on customs warehouses and free zones are not the subject of harmonised provisions. However, the compilation for national purposes of these statistics remains optional.

| (11) | Member States should provide Eurostat with annual aggregated data on trade broken down by business characteristics, one of the uses of which is to facilitate the analysis of how European companies operate in the context of globalisation. The link between business and trade statistics is established by merging data on the importer and the exporter available on the customs declaration with data requested by Regulation (EC) No 177/2008 of the European Parliament and of the Council of 20 February 2008 establishing a common framework for business registers for statistical purposes (8). |
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(11)

Member States should provide Eurostat with annual aggregated data on trade broken down by business characteristics, one of the uses of which is to facilitate the analysis of how European companies operate in the context of globalisation. The link between business and trade statistics is established by merging data on the importer and the exporter available on the customs declaration with data requested by Regulation (EC) No 177/2008 of the European Parliament and of the Council of 20 February 2008 establishing a common framework for business registers for statistical purposes (8).

| (12) | Council Regulation (EC) No 322/97 of 17 February 1997 on Community Statistics (9) provides a reference framework for the provisions laid down in this Regulation. However, the very detailed level of information on trade in goods requires specific confidentiality rules if these statistics are to be relevant. |
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(12)

Council Regulation (EC) No 322/97 of 17 February 1997 on Community Statistics (9) provides a reference framework for the provisions laid down in this Regulation. However, the very detailed level of information on trade in goods requires specific confidentiality rules if these statistics are to be relevant.

| (13) | The transmission of data subject to statistical confidentiality is governed by the rules set out in Regulation (EC) No 322/97 and in Council Regulation (Euratom, EEC) No 1588/90 of 11 June 1990 on the transmission of data subject to statistical confidentiality to the Statistical Office of the European Communities (10). Measures which are taken in accordance with those Regulations ensure the physical and logical protection of confidential data and ensure that no unlawful disclosure and non-statistical use occur when Community statistics are produced and disseminated. |
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(13)

The transmission of data subject to statistical confidentiality is governed by the rules set out in Regulation (EC) No 322/97 and in Council Regulation (Euratom, EEC) No 1588/90 of 11 June 1990 on the transmission of data subject to statistical confidentiality to the Statistical Office of the European Communities (10). Measures which are taken in accordance with those Regulations ensure the physical and logical protection of confidential data and ensure that no unlawful disclosure and non-statistical use occur when Community statistics are produced and disseminated.

| (14) | In the production and dissemination of Community statistics under this Regulation, the national and Community statistical authorities should take account of the principles set out in the European Statistics Code of Practice, which was adopted by the Statistical Programme Committee on 24 February 2005 and appended to the Recommendation of the Commission of 25 May 2005 on the independence, integrity and accountability of the national and Community statistical authorities. |
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(14)

In the production and dissemination of Community statistics under this Regulation, the national and Community statistical authorities should take account of the principles set out in the European Statistics Code of Practice, which was adopted by the Statistical Programme Committee on 24 February 2005 and appended to the Recommendation of the Commission of 25 May 2005 on the independence, integrity and accountability of the national and Community statistical authorities.

| (15) | Specific provisions should be formulated to remain in force until such time as changes in customs legislation result in additional data on the customs declaration and until Community legislation requires the electronic exchange of customs data. |
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(15)

Specific provisions should be formulated to remain in force until such time as changes in customs legislation result in additional data on the customs declaration and until Community legislation requires the electronic exchange of customs data.

| (16) | Since the objective of this Regulation, namely establishing the common framework for the systematic production of Community external trade statistics, cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale and effects of the Regulation, be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective. |
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(16)

Since the objective of this Regulation, namely establishing the common framework for the systematic production of Community external trade statistics, cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale and effects of the Regulation, be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.

| (17) | The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (11). |
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(17)

The measures necessary for the implementation of this Regulation should be adopted in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (11).

| (18) | In particular, the Commission should be empowered to adapt the list of customs procedures or customs-approved treatment or use which determine an export or import for external trade statistics; to adopt different or specific rules for goods or movements which, for methodological reasons, call for specific provisions; to adapt the list of goods and movements excluded from external trade statistics; to specify the data sources other than the customs declaration for records on imports and exports of specific goods or movements; to specify the statistical data, including the codes to be used; to establish requirements for data related to specific goods or movements; to establish requirements on the compilation of statistics; to specify the characteristics of samples; to establish the reporting period and the level of aggregation for partner countries, goods and currencies; and also to adapt the deadline for transmitting statistics, content, coverage and revision conditions for statistics already transmitted; and to establish the deadline for transmitting statistics on trade by business characteristics and statistics on trade broken down by invoicing currency. Since those measures are of general scope and are designed to amend non-essential elements of this Regulation, inter alia by supplementing it with new non-essential elements, they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC, |
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(18)

In particular, the Commission should be empowered to adapt the list of customs procedures or customs-approved treatment or use which determine an export or import for external trade statistics; to adopt different or specific rules for goods or movements which, for methodological reasons, call for specific provisions; to adapt the list of goods and movements excluded from external trade statistics; to specify the data sources other than the customs declaration for records on imports and exports of specific goods or movements; to specify the statistical data, including the codes to be used; to establish requirements for data related to specific goods or movements; to establish requirements on the compilation of statistics; to specify the characteristics of samples; to establish the reporting period and the level of aggregation for partner countries, goods and currencies; and also to adapt the deadline for transmitting statistics, content, coverage and revision conditions for statistics already transmitted; and to establish the deadline for transmitting statistics on trade by business characteristics and statistics on trade broken down by invoicing currency. Since those measures are of general scope and are designed to amend non-essential elements of this Regulation, inter alia by supplementing it with new non-essential elements, they must be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of Decision 1999/468/EC,

HAVE ADOPTED THIS REGULATION:

Article 1

Subject-matter

This Regulation establishes a common framework for the systematic production of Community statistics relating to trade in goods with non-member countries (hereinafter referred to as ‘external trade statistics’).

Article 2

Definitions

For the purposes of this Regulation, the following definitions shall apply:

| (a) | ‘goods’ means all movable property, including electricity; |
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(a)

‘goods’ means all movable property, including electricity;

| (b) | ‘statistical territory of the Community’ means the ‘customs territory of the Community’ as defined in the Customs Code with the addition of the Island of Heligoland in the territory of the Federal Republic of Germany; |
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(b)

‘statistical territory of the Community’ means the ‘customs territory of the Community’ as defined in the Customs Code with the addition of the Island of Heligoland in the territory of the Federal Republic of Germany;

| (c) | ‘national statistical authorities’ means the national statistical institutes and other bodies responsible in each Member State for producing external trade statistics; |
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(c)

‘national statistical authorities’ means the national statistical institutes and other bodies responsible in each Member State for producing external trade statistics;

| (d) | ‘customs authorities’ means the ‘customs authorities’ as defined in the Customs Code; |
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(d)

‘customs authorities’ means the ‘customs authorities’ as defined in the Customs Code;

| (e) | ‘customs declaration’ means the ‘customs declaration’ as defined in the Customs Code; |
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(e)

‘customs declaration’ means the ‘customs declaration’ as defined in the Customs Code;

| (f) | ‘decision by customs’ means any official act by customs authorities relating to accepted customs declarations and having legal effect on one or more persons. |
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(f)

‘decision by customs’ means any official act by customs authorities relating to accepted customs declarations and having legal effect on one or more persons.

Article 3

Scope

1.   External trade statistics shall record imports and exports of goods.

An export shall be recorded by Member States in the event that goods leave the statistical territory of the Community in accordance with one of the following customs procedures or customs-approved treatment or use, laid down in the Customs Code:

| (a) | exportation; |
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(a)

exportation;

| (b) | outward processing; |
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(b)

outward processing;

| (c) | re-exportation following either inward processing or processing under customs control. |
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(c)

re-exportation following either inward processing or processing under customs control.

An import shall be recorded by Member States in the event that goods enter the statistical territory of the Community in accordance with one of the following customs procedures laid down in the Customs Code:

| (a) | release for free circulation; |
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(a)

release for free circulation;

| (b) | inward processing; |
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(b)

inward processing;

| (c) | processing under customs control. |
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(c)

processing under customs control.

2.   The measures designed to amend non-essential elements of this Regulation relating to the adaptation of the list of customs procedures or customs-approved treatment or use referred to in paragraph 1 in order to take into account changes in the Customs Code or provisions deriving from international conventions, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 11(3).

3.   For methodological reasons, certain goods or movements call for specific provisions. This concerns industrial plants, vessels and aircraft, sea products, goods delivered to vessels and aircraft, staggered consignments, military goods, goods to or from offshore installations, spacecraft, electricity and gas and waste products (hereinafter referred to as ‘specific goods or movements’).

The measures designed to amend non-essential elements of this Regulation, inter alia by supplementing it, relating to specific goods and movements and to different or specific provisions applicable to them, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 11(3).

4.   For methodological reasons, certain goods or movements shall be excluded from external trade statistics. This concerns monetary gold and means of payment which are legal tender; goods the intended use of which is diplomatic or similar nature; movements of goods between the importing and exporting Member State and their national armed forces stationed abroad as well as certain goods acquired and disposed of by foreign armed forces; particular goods which are not the subject of a commercial transaction; movements of satellite launchers before their launching; goods for and after repair; goods for or following temporary use; goods used as carriers of customised information and downloaded information; and goods declared orally to customs authorities which either are of a commercial nature, provided that their value does not exceed the statistical threshold of EUR 1 000 in value or 1 000 kilograms in net mass, or are of a non-commercial nature.

The measures designed to amend non-essential elements of this Regulation, inter alia by supplementing it, relating to the exclusion of goods or movements from external trade statistics, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 11(3).

Article 4

Data source

1.   The data source for records on the imports and exports of goods referred to in Article 3(1) shall be the customs declaration, including possible amendments or changes to statistical data resulting from decisions by customs pertaining to it.

2.   Where the further simplification of customs formalities and controls pursuant to Article 116 of the Modernised Customs Code results in records on the imports and exports of goods not being available at customs authorities, the economic operator to whom the simplification was granted shall provide the statistical data defined in Article 5 of this Regulation.

3.   Member States may continue to use other data sources for the compilation of their national statistics until the date of implementation of a mechanism for mutual data exchange by electronic means referred to in Article 7(2).

4.   For specific goods or movements as referred to in Article 3(3), data sources other than the customs declaration can be used.

5.   The measures designed to amend non-essential elements of this Regulation, inter alia by supplementing it, relating to the data collection according to paragraphs 2 and 4 of this Article, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 11(3). These measures shall take the utmost account of the necessity to set up an efficient system which would minimise the administrative burden on economic operators and administrations.

Article 5

Statistical data

1.   Member States shall obtain the following set of data from records on imports and exports referred to in Article 3(1):

| (a) | the trade flow (import, export); |
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(a)

the trade flow (import, export);

| (b) | the monthly reference period; |
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(b)

the monthly reference period;

| (c) | the statistical value of the goods at the national border of the importing or exporting Member States; |
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(c)

the statistical value of the goods at the national border of the importing or exporting Member States;

| (d) | the quantity expressed in net mass and in a supplementary unit if indicated on the customs declaration; |
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(d)

the quantity expressed in net mass and in a supplementary unit if indicated on the customs declaration;

| (e) | the trader, being the importer/consignee on import and the exporter/consignor on export; |
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(e)

the trader, being the importer/consignee on import and the exporter/consignor on export;

| (f) | the importing or exporting Member State, being the Member State where the customs declaration is lodged, if indicated on the customs declaration:






  (i) | on import, the Member State of destination; |
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(f)

the importing or exporting Member State, being the Member State where the customs declaration is lodged, if indicated on the customs declaration:

(i)

on import, the Member State of destination;

| (ii) | on export, the Member State of actual export; |
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(ii)

on export, the Member State of actual export;

| (g) | the partner countries, that is:






  (i) | on import, the country of origin and the country of consignment/dispatch; |
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(g)

the partner countries, that is:

(i)

on import, the country of origin and the country of consignment/dispatch;

| (ii) | on export, the country of last known destination; |
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(ii)

on export, the country of last known destination;

| (h) | the goods according to the Combined Nomenclature, being:






  (i) | on import, the goods code of the Taric subheading; |
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(h)

the goods according to the Combined Nomenclature, being:

(i)

on import, the goods code of the Taric subheading;

| (ii) | on export, the goods code of the Combined Nomenclature subheading; |
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(ii)

on export, the goods code of the Combined Nomenclature subheading;

| (i) | the customs procedure code to be used for determining the statistical procedure; |
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(i)

the customs procedure code to be used for determining the statistical procedure;

| (j) | the nature of the transaction if indicated on the customs declaration; |
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(j)

the nature of the transaction if indicated on the customs declaration;

| (k) | the preferential treatment on import where granted by customs authorities; |
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(k)

the preferential treatment on import where granted by customs authorities;

| (l) | the invoicing currency if indicated on the customs declaration; |
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(l)

the invoicing currency if indicated on the customs declaration;

| (m) | the mode of transport, detailing:






  (i) | the mode of transport at the frontier; |
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(m)

the mode of transport, detailing:

(i)

the mode of transport at the frontier;

| (ii) | the internal mode of transport; |
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(ii)

the internal mode of transport;

| (iii) | the container. |
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(iii)

the container.

2.   The measures designed to amend non-essential elements of this Regulation, by supplementing it, relating to further specification of the data referred to in paragraph 1 of this Article, including the codes to be used, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 11(3).

3.   Where not otherwise stated and without prejudice to customs legislation, the data shall be contained in the customs declaration.

4.   For specific goods or movements as referred to in Article 3(3) and data provided in accordance with Article 4(2), limited sets of data may be required.

The measures designed to amend non-essential elements of this Regulation, by supplementing it, relating to these limited sets of data, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 11(3).

Article 6

Compilation of external trade statistics

1.   Member States shall compile for each monthly reference period statistics on imports and exports of goods expressed in value and quantity by:

| (a) | goods code; |
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(a)

goods code;

| (b) | importing/exporting Member States; |
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(b)

importing/exporting Member States;

| (c) | partner countries; |
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(c)

partner countries;

| (d) | statistical procedure; |
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(d)

statistical procedure;

| (e) | nature of the transaction; |
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(e)

nature of the transaction;

| (f) | preferential treatment on import; |
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(f)

preferential treatment on import;

| (g) | mode of transport. |
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(g)

mode of transport.

Implementing provisions for compiling the statistics may be determined by the Commission in accordance with the procedure referred to in Article 11(2).

2.   Member States shall compile annual statistics on trade by business characteristics, namely the economic activity carried out by the enterprise according to the section or two-digit level of the common statistical classification of economic activities in the European Community (NACE) and size-class measured in terms of number of employees.

The statistics shall be compiled by linking data on business characteristics recorded according to Regulation (EC) No 177/2008 with the data recorded according to Article 5(1) of this Regulation on imports and exports. To this end, national customs authorities shall provide the relevant traders' identification number to national statistical authorities.

The measures designed to amend non-essential elements of this Regulation, by supplementing it, relating to the linking of the data and these statistics to be compiled, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 11(3).

3.   Every two years Member States shall compile statistics on trade broken down by invoicing currency.

Member States shall compile the statistics using a representative sample of records on imports and exports from customs declarations which contain the data on the invoicing currency. If the invoicing currency for exports is not available on the customs declaration, a survey shall be carried out to collect the required data.

The measures designed to amend non-essential elements of this Regulation, inter alia by supplementing it, relating to the characteristics of the sample, the reporting period and the level of aggregation for partner countries, goods and currencies, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 11(3).

4.   The compilation by Member States of additional statistics for national purposes may be determined where the data are available on the customs declaration.

5.   Member States shall not be obliged to compile and transmit to the Commission (Eurostat) external trade statistics on statistical data which, according to the Customs Code or to national instructions, are not yet recorded nor can be straightforwardly deduced from other data on the customs declaration lodged at their customs authorities. The transmission of the following data is therefore optional for Member States:

| (a) | on import, the Member State of destination; |
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(a)

on import, the Member State of destination;

| (b) | on export, the Member State of actual export; |
| --- | --- |

(b)

on export, the Member State of actual export;

| (c) | the nature of the transaction. |
| --- | --- |

(c)

the nature of the transaction.

Article 7

Data exchange

1.   Without delay and at the latest during the month following the month the customs declarations were accepted or were subject to decisions by customs pertaining to them, national statistical authorities shall obtain from customs authorities the records on imports and exports based on the declarations which are lodged with those authorities.

The records shall contain at least those statistical data listed in Article 5 which are, according to the Customs Code or to national instructions, available on the customs declaration.

2.   With effect from the date of implementation of a mechanism for mutual data exchange by electronic means, customs authorities shall ensure that records on imports and exports are transmitted to the national statistical authority of the Member State which is indicated on the record as:

| (a) | on import, the Member State of destination; |
| --- | --- |

(a)

on import, the Member State of destination;

| (b) | on export, the Member State of actual export. |
| --- | --- |

(b)

on export, the Member State of actual export.

The mechanism for mutual data exchange shall be implemented at the latest when Title 1, Chapter 2, Section 1 of the Modernised Customs Code is applicable.

3.   Implementing provisions for determining the transmission referred to in paragraph 2 of this Article may be determined in accordance with the procedure referred to in Article 11(2).

Article 8

Transmission of external trade statistics to the Commission (Eurostat)

1.   Member States shall transmit to the Commission (Eurostat) the statistics referred to in Article 6(1) no later than 40 days after the end of each monthly reference period.

Member States shall ensure that the statistics contain information on all imports and exports in the reference period in question, making adjustments where records are not available.

Member States shall transmit updated statistics when statistics already transmitted are subject to revisions.

Member States shall include in the results transmitted to the Commission (Eurostat) any statistical information which is confidential.

The measures designed to amend non-essential elements of this Regulation, inter alia by supplementing it, relating to the adaptation of the deadline for transmitting statistics, content, coverage and revision conditions for the statistics already transmitted, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 11(3).

2.   The measures designed to amend non-essential elements of this Regulation, by supplementing it, relating to the deadline for transmitting statistics on trade by business characteristics referred to in Article 6(2) and statistics on trade broken down by invoicing currency referred to in Article 6(3), shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 11(3).

3.   Member States shall transmit the statistics in electronic form, in accordance with an interchange standard. The practical arrangements for the transmission of the results may be determined in accordance with the procedure referred to in Article 11(2).

Article 9

Quality assessment

1.   For the purpose of this Regulation, the following quality dimensions shall apply to the statistics to be transmitted:

| (a) | ‘relevance’ refers to the degree to which statistics meet current and potential needs of the users; |
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(a)

‘relevance’ refers to the degree to which statistics meet current and potential needs of the users;

| (b) | ‘accuracy’ refers to the closeness of estimates to the unknown true values; |
| --- | --- |

(b)

‘accuracy’ refers to the closeness of estimates to the unknown true values;

| (c) | ‘timeliness’ refers to the delay between the availability of the information and the event or phenomenon it describes; |
| --- | --- |

(c)

‘timeliness’ refers to the delay between the availability of the information and the event or phenomenon it describes;

| (d) | ‘punctuality’ refers to the delay between the date of release of the data and the target date when it should have been delivered; |
| --- | --- |

(d)

‘punctuality’ refers to the delay between the date of release of the data and the target date when it should have been delivered;

| (e) | ‘accessibility’ and ‘clarity’ refer to the conditions and modalities by which users can obtain, use and interpret data; |
| --- | --- |

(e)

‘accessibility’ and ‘clarity’ refer to the conditions and modalities by which users can obtain, use and interpret data;

| (f) | ‘comparability’ refers to the measurement of the impact of differences in applied statistical concepts and measurement tools and procedures when statistics are compared between geographical areas, sectoral domains or over time; |
| --- | --- |

(f)

‘comparability’ refers to the measurement of the impact of differences in applied statistical concepts and measurement tools and procedures when statistics are compared between geographical areas, sectoral domains or over time;

| (g) | ‘coherence’ refers to the adequacy of the data to be reliably combined in different ways and for various uses. |
| --- | --- |

(g)

‘coherence’ refers to the adequacy of the data to be reliably combined in different ways and for various uses.

2.   Member States shall provide the Commission (Eurostat) with a report on the quality of the statistics transmitted every year.

3.   In applying the quality dimensions laid down in paragraph 1 of this Article to the statistics covered by this Regulation, the modalities and structure of the quality reports shall be defined in accordance with the procedure referred to in Article 11(2).

The Commission (Eurostat) shall assess the quality of the statistics transmitted.

Article 10

Dissemination of external trade statistics

1.   At Community level, external trade statistics compiled in accordance with Article 6(1) and transmitted by the Member States shall be disseminated by the Commission (Eurostat) by the Combined Nomenclature subheading at least.

Only where an importer or exporter so requests shall the national authorities of a given Member State decide whether the external trade statistics of that Member State which may make it possible to identify that importer or exporter are to be disseminated or are to be amended in such a way that their dissemination does not prejudice statistical confidentiality.

2.   Without prejudice to data dissemination at national level, detailed statistics by the Taric subheading and preferences shall not be disseminated by the Commission (Eurostat) if their disclosure would undermine the protection of the public interest as regards the commercial and agricultural policies of the Community.

Article 11

Committee procedure

1.   The Commission shall be assisted by the Committee on statistics relating to the trading of goods with non-member countries.

2.   Where reference is made to this paragraph, Articles 5 and 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.

The period laid down in Article 5(6) of Decision 1999/468/EC shall be set at three months.

3.   Where reference is made to this paragraph, Article 5a(1) to (4), and Article 7 of Decision 1999/468/EC shall apply, having regard to the provisions of Article 8 thereof.

Article 12

Repeal

Regulation (EC) No 1172/95 shall be repealed with effect from 1 January 2010.

It shall continue to apply to data pertaining to reference periods before 1 January 2010.

Article 13

Entry into force

This Regulation shall enter into force on the twentieth day following its publication in the Official Journal of the European Union.

It shall apply from 1 January 2010.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at, ...

For the European Parliament

The President

...

For the Council

The President

...

---

(1)  OJ C 70, 15.3.2008, p. 1.

1

(2)  Opinion of the European Parliament of 23 September 2008 (not yet published in the Official Journal) and Council Common Position of 16 February 2009.

2

(3)  OJ L 118, 25.5.1995, p. 10.

3

(4)  OJ L 302, 19.10.1992, p. 1.

4

(5)  OJ L 145, 4.6.2008, p. 1.

5

(6)  OJ L 23, 26.1.2008, p. 21.

6

(7)  OJ L 256, 7.9.1987, p. 1.

7

(8)  OJ L 61, 5.3.2008, p. 6.

8

(9)  OJ L 52, 22.2.1997, p. 1.

9

(10)  OJ L 151, 15.6.1990, p. 1.

10

(11)  OJ L 184, 17.7.1999, p. 23.

11

---

STATEMENT OF THE COUNCIL'S REASONS

I.   INTRODUCTION

The Commission submitted the above-mentioned proposal to the Council on 30 October 2007 (1).

The European Parliament delivered its Opinion at first reading on 23 September 2008, with 35 amendments (2) to the proposal.

Under the co-decision procedure (Article 251 TEC), on 16 February 2009 the Council, having regard to Parliament's first reading, adopted its Common Position on the draft Regulation.

II.   OBJECTIVE

The purpose of this proposal is to revise the current statistical system of trade in goods with non-member countries (Extrastat) in order to:

| — | make the legislation clearer, simpler and more transparent; |
| --- | --- |

—

make the legislation clearer, simpler and more transparent;

| — | adjust the system of extra-Community trade statistics to the changes to be introduced in the procedures regarding the customs declaration through the introduction of Single Authorisations for use of the simplified declaration or the local clearance procedure as well as through centralised clearance under the modernised Community Customs Code; |
| --- | --- |

—

adjust the system of extra-Community trade statistics to the changes to be introduced in the procedures regarding the customs declaration through the introduction of Single Authorisations for use of the simplified declaration or the local clearance procedure as well as through centralised clearance under the modernised Community Customs Code;

| — | reduce the ‘Rotterdam effect’ resulting






  (a) | in an over-representation in external trade statistics of Member States having a high level of customs clearance or export but playing only the role of transit countries to the detriment of the Member States of actual destination or dispatch of the goods and |
| --- | --- | --- |

—

reduce the ‘Rotterdam effect’ resulting

(a)

in an over-representation in external trade statistics of Member States having a high level of customs clearance or export but playing only the role of transit countries to the detriment of the Member States of actual destination or dispatch of the goods and

| (b) | in a double reporting of the same goods in Extrastat as non Community goods and then in Intrastat as Community goods coming from another MS, with a comparable situation at export; |
| --- | --- |

(b)

in a double reporting of the same goods in Extrastat as non Community goods and then in Intrastat as Community goods coming from another MS, with a comparable situation at export;

| — | increase the relevance, accuracy, timeliness and comparability of external trade statistics, and establish a system for quality assessment; |
| --- | --- |

—

increase the relevance, accuracy, timeliness and comparability of external trade statistics, and establish a system for quality assessment;

| — | support the linking of trade statistics with business statistics; |
| --- | --- |

—

support the linking of trade statistics with business statistics;

| — | respond to user needs by compiling additional trade statistics using information available in customs declarations; |
| --- | --- |

—

respond to user needs by compiling additional trade statistics using information available in customs declarations;

| — | control, in line with the European Statistics Code of Practice, the privileged access to sensitive external trade data. |
| --- | --- |

—

control, in line with the European Statistics Code of Practice, the privileged access to sensitive external trade data.

The proposal incorporates also the amendments provided for in the Regulation to improve the security and safety of goods crossing Community borders that the Council and Parliament adopted on 13 April 2005 (3).

III.   ANALYSIS OF THE COMMON POSITION

1.   General

The Council, in its Common Position, took on board a large majority of Parliament's amendments, adopting a text which is very similar to the position of the European Parliament in first reading. The Council fully shares the proposal's objective, which is to make the legislation simpler, to adjust the system of extra-Community trade statistics to the changes to be introduced in customs legislation and procedures and to reduce the ‘Rotterdam effect’. After a thorough examination of the proposal during the SI and FR Presidencies, and in the light of the practical implications of the implementation of the Modernised Customs Code, for national administrations, the Commission and trade, the Council made a number of changes, mostly of technical nature, an overview of which is provided in section 3.

2.   EP Amendments

2.1.   Amendments taken on board by the Council

The European Parliament adopted 27 amendments (4) to the proposal, out of which 24 have been taken on board, totally or in part, in the Council's Common Position. These are amendments 5, 6, 7, 9, 10, 11, 12 (in part), 13, 14 (in part), 15 (in part), 20, 21 (in part), 22, 23, 24, 25, 28, 29, 30, 31, 32 (in part) 33, 34 and 35.

2.2.   Amendments not or partially taken on board by the Council

Amendment 12

This amendment has been partially taken on board, albeit with a more precise wording that the Council considers more appropriate, concerning the description of the exemption regarding oral declarations of goods.

Amendment 14

This amendment has been partially taken on board. With regard to the provision on implementing measures (new paragraph 5 in the Council's text), the Council considers that the implementing powers should concern the collection of data in (new) paragraphs and paragraph 4: the specification of data sources other than the customs declaration, and also statistical data provided by the economic operator benefiting from further simplification of customs formalities and control. In addition, the Council has underlined the necessity of setting up an efficient system minimising the administrative burden.

Amendment 15

The Council can partly take on board this amendment. Other data sources may continue to be used by Member States for the compilation of their national statistics until the date of implementation of a mechanism for mutual data exchange, The reference to Article 7, paragraph 3 has been changed to Article 7 paragraph 2.

Amendment 18

The Council considers that a more precise wording would be more appropriate (see section 3).

Amendment 21

The Council considers that limited sets of data may also be required for data provided according to Article 4(2) (in the text of the Common Position).

Amendment 26

The Council considers that, with effect from the date of implementation of a mechanism for mutual data by electronic means, records on imports and exports should be transmitted to the national statistical authority of the Member State indicated on the record as the Member State of destination, at import, or the Member State of actual export, at export.

Amendment 27

The Council has not taken on board this amendment but has provided for an alternative solution under Article 4(2) (in the text of the Common Position — see section 3).

Amendment 32

The Council has partially taken this amendment on board, with a slight rewording (‘by Taric subheading and preferences’).

3.   New elements introduced by the Council

The present section provides an overview of the new elements introduced by the Council in its Common Position, in addition to the EP amendments taken on board. This overview deliberately leaves aside those new elements of a purely technical or drafting nature.

It should also be noted that the changes introduced by the Council have led to a restructuring of the proposal and a subsequent re-numbering of recitals and of paragraphs in some articles.

3.1   Recital 3

This recital explains that, following the introduction in the Modernised Customs Code of facilitations for operators, in the form of simplifications of formalities and controls, customs declarations might not be available; where such declarations are the source of statistical data on external trade, the Regulation must lay down measures that will ensure that data will be provided by operators which are granted facilitations.

3.2   Recital 4

This Recital makes a reference to the ‘e-customs’ Decision, on the basis of which an electronic customs system for the exchange of customs declaration data is being set-up. It is intended that the data exchange system used for statistics will benefit as far as possible from the infrastructure established by the Customs authorities.

3.3   Article 4(2)

This new paragraph lays down the principle that operators granted facilitations which might lead to the non availability of customs declarations and the pertaining statistical data should provide these statistical data.

3.4   Article 4(5)

The Council has added a sentence in view of making sure that the administrative burden on trade and administrations, arising from the data collection process, would be minimised.

3.5   Article 5(4)

The Council has added a reference to the data provided under Article 4(2).

3.6   Article 7(2)

The Council in its Common Position has not taken on board EP amendment No 26 (as explained under Section 2), as it considers that, from the date of implementation of the exchange data mechanism by electronic means, data should be transmitted by the customs authorities to the national statistical authority of the Member State (of destination or of actual export). In addition, the Council considers that the above mechanism should be implemented at the latest when the relevant section of the Modernised Customs Code will be applicable.

IV.   CONCLUSION

The Council considers that its Common Position, resulting from a thorough examination of the proposal during two Presidencies, and fully supported by the Commission, is entirely in line with the objectives of the proposal.

In addition, the Common Position takes on board the large majority of Parliament's amendments.

The new elements introduced by the Council reflect the need to adapt the text to the practical and technical realities and to better balance the requirements of the national administrations and the customs facilitations granted to trade.

---

(1)  OJ L 145 of 4.6.2008, p. 1.

(2)  8 amendments (No 1-4, 8, 16, 17 and 19) did not concern all linguistic versions and were therefore not put to vote.

(3)  Regulation (EC) No 648/2005 of the European Parliament and of the Council of 13 April 2005 amending Council Regulation (EEC) No 2913/92 establishing the Community Customs Code, OJ L 117, 4.5.2005, p. 13.

(4)  Cf. footnote 2.

---

| 31.3.2009 | EN | Official Journal of the European Union | CE 75/67 |
| --- | --- | --- | --- |

31.3.2009

EN

Official Journal of the European Union

CE 75/67

---

COMMON POSITION (EC) No 14/2009

adopted by the Council on 16 February 2009

with a view to the adoption of Regulation (EC) No .../2009 of the European Parliament and of the Council of ... establishing the Group of European Regulators in Telecoms (GERT)

(Text with EEA relevance)

(2009/C 75 E/05)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing, the European Community, and in particular Article 95 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Economic and Social Committee (1),

Having regard to the opinion of the Committee of the Regions (2),

Acting in accordance with the procedure laid down in Article 251 of the Treaty (3),

Whereas:

| (1) | Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) (4), Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive) (5), Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services (Authorisation Directive) (6), Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users' rights relating to electronic communications networks and services (Universal Service Directive) (7) and Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) (8) (together referred to as ‘the Framework Directive and the Specific Directives’) aim to create an internal market for electronic communications within the Community while ensuring a high level of investment, innovation and consumer protection through enhanced competition. |
| --- | --- |

(1)

Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) (4), Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on access to, and interconnection of, electronic communications networks and associated facilities (Access Directive) (5), Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services (Authorisation Directive) (6), Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users' rights relating to electronic communications networks and services (Universal Service Directive) (7) and Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) (8) (together referred to as ‘the Framework Directive and the Specific Directives’) aim to create an internal market for electronic communications within the Community while ensuring a high level of investment, innovation and consumer protection through enhanced competition.

| (2) | The need for the EU regulatory framework to be consistently applied in all Member States is essential for the successful development of an internal market for electronic communications networks and services. The EU regulatory framework sets out objectives to be achieved and provides a framework for action by national regulatory authorities (NRAs), whilst granting them flexibility in certain areas to apply the rules in the light of national conditions. |
| --- | --- |

(2)

The need for the EU regulatory framework to be consistently applied in all Member States is essential for the successful development of an internal market for electronic communications networks and services. The EU regulatory framework sets out objectives to be achieved and provides a framework for action by national regulatory authorities (NRAs), whilst granting them flexibility in certain areas to apply the rules in the light of national conditions.

| (3) | In view of the need to ensure the development of consistent regulatory practice and the consistent application of the EU regulatory framework, the Commission established the European Regulators Group (ERG) pursuant to Commission Decision 2002/627/EC of 29 July 2002 establishing the European Regulators Group for Electronic Communications Networks and Services (9) to advise and assist the Commission in the development of the internal market and, more generally, to provide an interface between NRAs and the Commission. |
| --- | --- |

(3)

In view of the need to ensure the development of consistent regulatory practice and the consistent application of the EU regulatory framework, the Commission established the European Regulators Group (ERG) pursuant to Commission Decision 2002/627/EC of 29 July 2002 establishing the European Regulators Group for Electronic Communications Networks and Services (9) to advise and assist the Commission in the development of the internal market and, more generally, to provide an interface between NRAs and the Commission.

| (4) | The ERG has made a positive contribution towards consistent regulatory practice by facilitating cooperation between NRAs, and between NRAs and the Commission. This approach to developing greater consistency among NRAs by exchanging information and knowledge on practical experience has proved successful in the short period following its deployment. Continued and intensified cooperation and coordination between NRAs will be required to develop further the internal market in electronic communication networks and services. |
| --- | --- |

(4)

The ERG has made a positive contribution towards consistent regulatory practice by facilitating cooperation between NRAs, and between NRAs and the Commission. This approach to developing greater consistency among NRAs by exchanging information and knowledge on practical experience has proved successful in the short period following its deployment. Continued and intensified cooperation and coordination between NRAs will be required to develop further the internal market in electronic communication networks and services.

| (5) | This calls for the strengthening of the ERG and its recognition in the EU regulatory framework as the Group of European Regulators in Telecoms (GERT). GERT should neither be a Community agency nor have legal personality. GERT should replace the ERG, provide expertise and establish confidence by virtue of its independence, the quality of its advice and information, the transparency of its procedures and methods of operation, and its diligence in performing its tasks. |
| --- | --- |

(5)

This calls for the strengthening of the ERG and its recognition in the EU regulatory framework as the Group of European Regulators in Telecoms (GERT). GERT should neither be a Community agency nor have legal personality. GERT should replace the ERG, provide expertise and establish confidence by virtue of its independence, the quality of its advice and information, the transparency of its procedures and methods of operation, and its diligence in performing its tasks.

| (6) | GERT should, through the pooling of expertise, assist NRAs without replacing the existing functions or duplicating work already being undertaken, and assist the Commission in the execution of its responsibilities. |
| --- | --- |

(6)

GERT should, through the pooling of expertise, assist NRAs without replacing the existing functions or duplicating work already being undertaken, and assist the Commission in the execution of its responsibilities.

| (7) | GERT should continue the work of the ERG, developing cooperation between NRAs, and between NRAs and the Commission, so as to ensure the consistent application in all Member States of the EU regulatory framework for electronic communications networks and services, and thereby contributing to the development of the internal market. |
| --- | --- |

(7)

GERT should continue the work of the ERG, developing cooperation between NRAs, and between NRAs and the Commission, so as to ensure the consistent application in all Member States of the EU regulatory framework for electronic communications networks and services, and thereby contributing to the development of the internal market.

| (8) | GERT should also serve as a body for reflection, debate and advice for the European Parliament, the Council and the Commission in the electronic communications field. GERT should accordingly advise the European Parliament, the Council and the Commission, at their request or on its own initiative. |
| --- | --- |

(8)

GERT should also serve as a body for reflection, debate and advice for the European Parliament, the Council and the Commission in the electronic communications field. GERT should accordingly advise the European Parliament, the Council and the Commission, at their request or on its own initiative.

| (9) | The work of GERT should focus on the ex ante regulation of electronic communications markets, in particular in the context of the market analysis procedure. GERT should pursue its tasks in cooperation with, and without prejudice to the role of, existing groups and committees such as the Communications Committee, established under the Directive 2002/21/EC (Framework Directive), the Radio Spectrum Committee established under Decision No 676/2002/EC of the European Parliament and Council of 7 March 2002 on a regulatory framework for radio spectrum policy in the European Community (Radio Spectrum Decision) (10), the Radio Spectrum Policy Group established under Commission Decision 2002/622/EC of 26 July 2002 establishing a Radio Spectrum Policy Group (11), and the Contact Committee established under Directive 97/36/EC of the European Parliament and of the Council of 30 June 1997 amending Council Directive 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities (12). |
| --- | --- |

(9)

The work of GERT should focus on the ex ante regulation of electronic communications markets, in particular in the context of the market analysis procedure. GERT should pursue its tasks in cooperation with, and without prejudice to the role of, existing groups and committees such as the Communications Committee, established under the Directive 2002/21/EC (Framework Directive), the Radio Spectrum Committee established under Decision No 676/2002/EC of the European Parliament and Council of 7 March 2002 on a regulatory framework for radio spectrum policy in the European Community (Radio Spectrum Decision) (10), the Radio Spectrum Policy Group established under Commission Decision 2002/622/EC of 26 July 2002 establishing a Radio Spectrum Policy Group (11), and the Contact Committee established under Directive 97/36/EC of the European Parliament and of the Council of 30 June 1997 amending Council Directive 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities (12).

| (10) | Since the objectives of the proposed action, namely the further development of consistent regulatory practice through intensified cooperation and coordination between NRAs, and between NRAs and the Commission by, inter alia, the exchange of information, in order to further develop the internal market in electronic communication networks and services, cannot be sufficiently achieved by the Member States in view of the EU-wide scope of this Regulation, and can therefore be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives, |
| --- | --- |

(10)

Since the objectives of the proposed action, namely the further development of consistent regulatory practice through intensified cooperation and coordination between NRAs, and between NRAs and the Commission by, inter alia, the exchange of information, in order to further develop the internal market in electronic communication networks and services, cannot be sufficiently achieved by the Member States in view of the EU-wide scope of this Regulation, and can therefore be better achieved at Community level, the Community may adopt measures, in accordance with the principle of subsidiarity, as set out in Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives,

HAVE ADOPTED THIS REGULATION:

CHAPTER I

Subject-matter, scope and tasks

Article 1

Subject matter, scope and aims

1.   An advisory group of the national regulatory authorities (NRAs) on electronic communications networks and services, referred to as the Group of European Regulators in Telecoms (GERT), is established.

2.   GERT shall act within the scope of Directive 2002/21/EC (Framework Directive) and Directives 2002/19/EC, 2002/20/EC, 2002/21/EC, 2002/22/EC and 2002/58/EC (Specific Directives), namely on matters regarding economic regulation of electronic communications markets.

3.   GERT shall carry out its tasks independently, impartially and transparently. In all its activities, GERT shall pursue the same objectives as those of the NRAs, as set out in Article 8 of Directive 2002/21/EC (Framework Directive). In particular, GERT shall contribute to the development and better functioning of the internal market for electronic communications networks and services, by aiming to ensure a consistent application of the EU regulatory framework for electronic communications.

4.   GERT shall promote cooperation between NRAs, and between NRAs and the Commission, and shall advise the European Parliament, the Council and the Commission.

Article 2

Role of GERT in the application of the EU regulatory framework

1.   GERT shall:

| (a) | develop and disseminate among NRAs regulatory best practice, such as common approaches, methodologies or guidelines on the implementation of the EU regulatory framework; |
| --- | --- |

(a)

develop and disseminate among NRAs regulatory best practice, such as common approaches, methodologies or guidelines on the implementation of the EU regulatory framework;

| (b) | on request, provide assistance to NRAs on regulatory issues, including by delivering opinions on cross-border disputes in accordance with Article 21 of Directive 2002/21/EC (Framework Directive) or by assisting NRAs in the context of the analysis of relevant markets in accordance with Article 16 of that Directive; |
| --- | --- |

(b)

on request, provide assistance to NRAs on regulatory issues, including by delivering opinions on cross-border disputes in accordance with Article 21 of Directive 2002/21/EC (Framework Directive) or by assisting NRAs in the context of the analysis of relevant markets in accordance with Article 16 of that Directive;

| (c) | deliver opinions on the draft decisions, recommendations and guidelines of the Commission, referred to in paragraph 2; |
| --- | --- |

(c)

deliver opinions on the draft decisions, recommendations and guidelines of the Commission, referred to in paragraph 2;

| (d) | issue reports or provide advice, at the request of the Commission or on its own initiative, and provide advice to the European Parliament and the Council, upon request or on its own initiative, on any matter regarding electronic communications within its competence; |
| --- | --- |

(d)

issue reports or provide advice, at the request of the Commission or on its own initiative, and provide advice to the European Parliament and the Council, upon request or on its own initiative, on any matter regarding electronic communications within its competence;

| (e) | on request, assist the European Parliament, the Council, the Commission and the NRAs in the dissemination of regulatory best practices to third countries. |
| --- | --- |

(e)

on request, assist the European Parliament, the Council, the Commission and the NRAs in the dissemination of regulatory best practices to third countries.

2.   The draft decisions, recommendations and guidelines referred to in paragraph 1(c) are:

| (a) | decisions and opinions on draft measures of NRAs concerning market definition, designation of undertakings with significant market power and imposition of remedies, in accordance with Article 7 of Directive 2002/21/EC (Framework Directive); |
| --- | --- |

(a)

decisions and opinions on draft measures of NRAs concerning market definition, designation of undertakings with significant market power and imposition of remedies, in accordance with Article 7 of Directive 2002/21/EC (Framework Directive);

| (b) | recommendations and guidelines on the form, content and level of details to be given in notifications, in accordance with Article 7a of Directive 2002/21/EC (Framework Directive); |
| --- | --- |

(b)

recommendations and guidelines on the form, content and level of details to be given in notifications, in accordance with Article 7a of Directive 2002/21/EC (Framework Directive);

| (c) | recommendations on relevant product and service markets, in accordance with Article 15 of Directive 2002/21/EC (Framework Directive); |
| --- | --- |

(c)

recommendations on relevant product and service markets, in accordance with Article 15 of Directive 2002/21/EC (Framework Directive);

| (d) | decisions on the identification of transnational markets, in accordance with Article 15 of Directive 2002/21/EC (Framework Directive); |
| --- | --- |

(d)

decisions on the identification of transnational markets, in accordance with Article 15 of Directive 2002/21/EC (Framework Directive);

| (e) | recommendations on harmonisation, in accordance with Article 19 of Directive 2002/21/EC (Framework Directive); |
| --- | --- |

(e)

recommendations on harmonisation, in accordance with Article 19 of Directive 2002/21/EC (Framework Directive);

| (f) | decisions authorising or preventing a NRA from taking exceptional measures, in accordance with Article 8 of Directive 2002/19/EC (Access Directive). |
| --- | --- |

(f)

decisions authorising or preventing a NRA from taking exceptional measures, in accordance with Article 8 of Directive 2002/19/EC (Access Directive).

3.   NRAs and the Commission shall take the utmost account of any opinion, advice or regulatory best practice adopted by GERT.

CHAPTER II

Organisation of the GERT

Article 3

Composition

1.   GERT shall be composed of the heads or high-level representatives of the NRA established in each Member State with primary responsibility for overseeing the day-to-day operation of the markets for electronic communications networks and services.

2.   There shall be one representative per Member State.

3.   The Commission shall have observer status and shall be represented at an appropriate level.

4.   NRAs from European Economic Area (EEA) States and from those states that are candidates for accession to the European Union shall have observer status and shall be represented at an appropriate level.

Article 4

Operational arrangements

1.   GERT shall adopt and make publicly available its rules of procedure.

2.   The opinions, regulatory best practice and reports of GERT shall be adopted on the basis of a two-third majority of the members. Each member shall have one vote.

The rules of procedure shall set out in greater detail the arrangements governing voting, including the conditions under which one member may act on behalf of another member, the rules governing quorums, and the notification deadlines for meetings. The rules of procedures may also set out urgent voting procedures.

Opinions, regulatory best practice and reports adopted by GERT shall be made public, and shall indicate the reservations of an NRA at its request.

3.   GERT shall elect its Chairperson and its Vice-Chairpersons from among its members, subject to the rules of procedure. The term of office of the Chairperson and Vice-Chairpersons shall be one year. The Chairperson and Vice-Chairpersons shall be responsible for representing GERT.

4.   Plenary meetings of GERT shall be convened by its Chairperson and shall occur at least four times a year in ordinary session. Extraordinary meetings shall also be convened at the initiative of the Chairperson, at the request of the Commission or at the request of at least one third of GERT's members. The agenda of the meeting shall be set by the Chairperson and made public.

5.   The work of GERT may be organised into expert working groups as appropriate.

6.   The Commission shall be invited to all plenary meetings of GERT and may be invited to attend meetings of its expert working groups.

7.   Experts from EEA States and those states that are candidates for accession to the European Union may participate as observers in the meetings of GERT. GERT may invite other experts and observers to attend its meetings.

CHAPTER III

General provisions

Article 5

Consultation

When appropriate, GERT shall, before adopting opinions, regulatory best practice or reports, consult interested parties and give them the opportunity to comment within a reasonable period. GERT shall, without prejudice to Article 8, make the results of the consultation procedure publicly available.

Article 6

Transparency and accountability

1.   GERT shall carry out its activities with a high level of transparency. GERT shall ensure that the public and any interested parties are given objective, reliable and easily accessible information, in particular in relation to the results of its work.

2.   GERT shall, annually, and after consulting the European Parliament, the Council and the Commission, adopt a work programme for the coming year, shall transmit it to the European Parliament, the Council and the Commission and make it publicly available. GERT shall also publish an annual report of its activities.

3.   The European Parliament and the Council may request the GERT to address them on relevant issues relating to GERT's activities.

Article 7

Provision of information to GERT

The Commission and NRAs shall provide information requested by GERT to enable it to perform its tasks. This information shall be managed in accordance with the rules set out in Article 5 of Directive 2002/21/EC (Framework Directive).

Article 8

Confidentiality

GERT shall not publish or disclose to third parties information that it processes or receives for which confidential treatment has been requested.

Where the advice requested or the question raised is of a confidential nature, members of GERT, observers, and any other person shall be under an obligation not to disclose information which has come to their knowledge through the work of GERT or its expert working groups.

Article 9

Entry into force

This Regulation shall enter into force on 31 December 2009.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, ...

For the European Parliament

The President

...

For the Council

The President

...

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(1)  OJ C 224, 30.8.2008, p. 50.

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(2)  OJ C 257, 9.10.2008, p. 51.

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(3)  Opinion of the European Parliament of 24 September 2008 (not yet published in the Official Journal), Council Common Position of 16 February 2009 and Position of the European Parliament of ...

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(4)  OJ L 108, 24.4.2002, p. 33.

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(5)  OJ L 108, 24.4.2002, p. 7.

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(6)  OJ L 108, 24.4.2002, p. 21.

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(7)  OJ L 108, 24.4.2002, p. 51.

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(8)  OJ L 201, 31.7.2002, p. 37.

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(9)  OJ L 200, 30.7.2002, p. 38.

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(10)  OJ L 108, 24.4.2002, p. 1.

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(11)  OJ L 198, 27.7.2002, p. 49.

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(12)  OJ L 202, 30.7.1997, p. 60.

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STATEMENT OF THE COUNCIL'S REASONS

I.   INTRODUCTION

On 16 November 2007 the Commission adopted its proposal for a Regulation of the European Parliament and of the Council establishing the European Electronic Communications Market Authority (1). The Council received the Commission proposal on 19 November 2007 (2).

The European Parliament adopted its opinion at first reading on 24 September 2008.

The Committee of the Regions adopted its opinion on 19 June 2008 (3).

The European Economic and Social Committee adopted its opinion on 29 May 2008 (4).

The Commission amended its proposal on 5 November 2008 (5).

The Council adopted its common position on 16 February 2009.

II.   OBJECTIVE

The proposed Regulation, which forms part of the EU regulatory framework for electronic communications submitted by the Commission in November 2007, seeks to set up a new Community body. Acting within the scope of the Framework Directive and the specific directives, the body would help to improve the functioning of the internal market for electronic communications networks and services, including in particular the development of cross-Community electronic communications. It would act as a centre of expertise for electronic communication networks and services at EU level, drawing upon the experience of the national regulatory authorities. The regulatory framework for electronic communications would thus be applied consistently, thereby improving competition and contributing to competitiveness.

III.   ANALYSIS OF THE COMMON POSITION

1.   General remarks

The Council has opted for a different type of legal act from that proposed by the Commission, but the common position incorporates most of the European Parliament's first-reading amendments either in full, in part or in essence.

It also contains some further changes designed to create an independent flexible body with a private-law support structure.

A number of amendments adopted by the European Parliament are not reflected in the common position because the Council deemed them superfluous or unacceptable or, in some cases, because provisions in the original Commission proposal were deleted or thoroughly recast.

In particular, the Council adopted its common position with the aim of improving and bolstering existing structures, notably the European Regulators Group (ERG). The proposed new body is intended to replace the ERG and improve its functioning so as to ensure greater transparency and efficiency in the decision-making process. The Council has opted to give the ERG formal status in a Community regulation by laying down a more precise definition of its tasks, its functioning and its relations with the Community Institutions. The new body, designated GERT (Group of European Regulators in Telecoms), would not be a Community agency and would not have legal personality. It would have a private-law support structure. GERT would be set up to operate as a flexible and efficient body, acting independently in line with its remit, notably within the scope of the Framework Directive and the specific directives.

The Council has added or amended a number of provisions to ensure that GERT's composition is clear, its internal organisation proportionate to its remit and its decision-making arrangements simple and efficient. The Council, in agreement with the European Parliament, considers it important that the new body's activities should be transparent and that it should be answerable to the European institutions.

2.   Specific observations

(a)   Subject matter, scope and aims

The Council agrees with the Commission and the European Parliament that a new body should be created as part of the internal market for electronic communications networks and services (amendments 7-13). The new body would have an advisory role and should assist the NRAs (national regulatory authorities) and help the Commission to carry out its tasks (amendment 12). The group should also serve as a body for reflection, debate and advice for the European Parliament, Council and Commission in the electronic communications field and advise them at their request or on its own initiative (amendments 17-18, 52). It should, in fact, replace the ERG (European Regulators' Group), which currently advises and assists the Commission in developing the internal market (amendment 13). The group should continue the work of the ERG, promoting cooperation between national regulatory authorities and between those authorities and the Commission, so as to ensure the consistent application in all Member States of the regulatory framework for electronic communications networks and services, and thereby contribute to the development of the internal market (amendments 11, 48-49, 53).

The Council shares the view of the Commission and the European Parliament that the new body's activities should come within the scope of the Framework Directive and the specific directives and should be clearly defined (amendments 47-50, 56-60, 64, 69, 75-78, 80, 85, 87, 91-92, 97, 98, 99, 105). Like the European Parliament, the Council considers that GERT should also draw up and disseminate among NRAs regulatory best practice, such as common approaches, methodologies or guidelines on implementation of the regulatory framework (amendment 53). It further agrees with both institutions that ENISA (European Network and Information Security Agency) should not form part of the new body, which should have no competence at European level in matters concerning network and information security (amendments 9-10, 24, 27, 36, 50, 56, 65, 89, 107(d), 143).

Unlike the European Parliament, the Council considers that the name GERT (Group of European Regulators in Telecoms) would be more appropriate for the new body than BERT (Body of the European Telecoms Regulators) (amendment 47). The Council agrees with the European Parliament that a more solid basis is required for setting up such a body (amendment 8), but it feels that GERT should neither have the characteristics of an agency nor legal personality (amendments 14, 51). Like the European Parliament, the Council considers that GERT would provide expertise and would establish confidence by virtue of its independence, the quality of the advice it delivers and the information it disseminates, the transparency of its procedures and methods of operation, and its diligence in performing tasks (amendment 12). Indeed, the Council feels that GERT should be set up by means of a Community regulation so as to ensure the further development of consistent regulatory practice through intensified cooperation and coordination between NRAs and between NRAs and the Commission, in order to strengthen the internal market in electronic communications services.

The proportionality principle would forbid going beyond what is necessary to attain the desired goal. The Council considers that this goal can be achieved by GERT, because it is less formal and bureaucratic than a Community agency.

Regarding GERT's assignments the Council, unlike the European Parliament, feels that the Group should focus on matters concerning economic regulation of electronic communications markets and avoid pursuing tasks which have not been clearly defined in advance (amendments 16, 19, 20, 22, 26, 28, 68, 70, 71, 79, 81-84, 86, 93, 95, 102, 103-104, 106). The Council does not share the European Parliament's view that GERT should also provide advice for market players (amendments 15, 54), on the grounds that GERT needs to be able to carry out its tasks independently without any conflict of interest. The Council thinks it is right that the Group should seek to carry out its tasks in cooperation with existing groups and committees, but does not feel that it should advise them (amendments 81-84, 88).

(b)   Composition and operational arrangements

The Council agrees with the European Parliament that the new body should be composed of the heads or high-level representatives from the NRA established in each Member State with primary responsibility for overseeing the day-to-day operation of the market for electronic communications networks and services and that it should include one member per Member State. It also agrees that the Commission should have observer status (amendment 108) and that the new body's Chairperson and Vice-Chairpersons should be elected from among its members (amendment 109). The Council agrees with the European Parliament that the new body should carry out its tasks independently, impartially and transparently (amendment 112) and take decisions on the basis of a two-thirds majority of the members (amendment 111). Like the European Parliament, the Council considers that the NRAs and the Commission should take the utmost account of opinions issued by GERT (amendment 72).

The Council agrees with the simplification of the new body's structure and tasks as proposed by the European Parliament, in particular compared with the structure proposed by the Commission (amendments 107(d) and (e), 115-117, 119-120, 122, 125, 129-130, 138, 143-147) and shares the European Parliament's opinion on some of the operational arrangements such as, for instance, adoption by the new body of rules of procedure (amendment 111) or the convening of meetings (amendment 110).

However, the Council favours a financial and organisational structure that is les unwieldy and bureaucratic than that proposed by the European Parliament. The Council does not consider it necessary to provide for a Board of Regulators or a Managing Director post to ensure proper execution of GERT's tasks (amendments 107, 108, 114, 126-127, 131, 133-139, 142). The Council considers that, in order to ensure GERT's independence, it should not be funded either fully or partly from the Community budget (amendments 37, 51, 168, 149-151, 153-154). The Coucil considers that, in order to ensure application of the principles of subsidiarity and proportionality, to opt for the form of a Community agency is neither necesary for, nor proportionate to, the tasks assigned to GERT (amendments 14, 51, 163, 168). Regarding the two-and-a-half-year terms of office of the Chairperson and of the Vice-Chairpersons, the Council considers a shorter, one-year term of office more appropriate (amendment 109).

(c)   Transparency and confidentiality

Like the European Parliament, the Council feels that, where appropriate, before issuing opinions, recommending better regulatory practice or drawing up reports, GERT should consult interested parties and give them the opportunity to comment within a reasonable period.

In principle, the results of the consultation procedure should be made public and indicate any reservations issued by an NRA at its request (amendment 156). The Council agrees with the European Parliament that GERT should carry out its activities with a high level of transparency (Amendment 31).

It further supports the principle that GERT should publish both its annual programme and an annual report on its activities and report to the European Parliament and the Council on its activities, even though the format of the operational arrangements proposed by the European Parliament differs from that of the Council (amendments 101,118, 124, 136, 139-142, 152). The Council agrees with the European Parliament that GERT should observe the confidentiality principle (amendments 39-40, 96). More specifically, the Council considers that GERT should not publish or divulge to third parties information that it processes or receives for which confidential treatment has been requested. Moreover, GERT's members as well as observers and any other person should be under an obligation not to disclose information which has come to their knowledge through the work of GERT or its expert groups.

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(1)  COM(2007) 699 final.

(2)  15408/07.

(3)  OJ C 257, 9.10.2008, p. 68.

(4)  TEN/327-329 — CESE 984/2008 — 2007/0247 (COD) — 2007/0248 (COD) — 2007/0249 (COD).

(5)  COM(2008) 720 final.

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