# Official Journal C 144E/14 J

| | ISSN 1725-2423 |
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| Official Journal
  of the European Union | C 144E |
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| English edition | Information and Notices | Volume 4814 June 2005 |

ISSN 1725-2423

Official Journal

of the European Union

C 144E

English edition

Information and Notices

Volume 4814 June 2005

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| Notice No | Contents | page |
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| | I   Information |
| | Council |
| 2005/C 144E/1 | Common Position (EC) No 19/2005 of 17 February 2005 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 adopting a Regulation of the European Parliament and of the Council on controls of cash entering or leaving the Community | 1 |
| 2005/C 144E/2 | Common Position (EC) No 20/2005 of 7 March 2005 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 adopting a Directive of the European Parliament and of the Council on the patentability of computer-implemented inventions | 9 |
| 2005/C 144E/3 | Common Position (EC) No 21/2005 of 8 March 2005 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 adopting a Regulation of the European Parliament and of the Council on the compilation of quarterly non-financial accounts by institutional sector | 16 |
| 2005/C 144E/4 | Common Position (EC) No 22/2005 of 4 April 2005 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 adopting a Directive of the European Parliament and of the Council amending for the 22nd time Council Directive 76/769/EEC on the approximation of the laws, regulations and administrative provisions of the Member States relating to restrictions on the marketing and use of certain dangerous substances and preparations (phthalates in toys and childcare articles) | 24 |

Notice No

Contents

page

I   Information

Council

2005/C 144E/1

Common Position (EC) No 19/2005 of 17 February 2005 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 adopting a Regulation of the European Parliament and of the Council on controls of cash entering or leaving the Community

1

2005/C 144E/2

Common Position (EC) No 20/2005 of 7 March 2005 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 adopting a Directive of the European Parliament and of the Council on the patentability of computer-implemented inventions

9

2005/C 144E/3

Common Position (EC) No 21/2005 of 8 March 2005 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 adopting a Regulation of the European Parliament and of the Council on the compilation of quarterly non-financial accounts by institutional sector

16

2005/C 144E/4

Common Position (EC) No 22/2005 of 4 April 2005 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 adopting a Directive of the European Parliament and of the Council amending for the 22nd time Council Directive 76/769/EEC on the approximation of the laws, regulations and administrative provisions of the Member States relating to restrictions on the marketing and use of certain dangerous substances and preparations (phthalates in toys and childcare articles)

24

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EN

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I Information

Council

| 14.6.2005 | EN | Official Journal of the European Union | CE 144/1 |
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14.6.2005

EN

Official Journal of the European Union

CE 144/1

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COMMON POSITION (EC) No 19/2005

adopted by the Council on 17 February 2005

with a view to the adoption of the Regulation (EC) No .../2005 of the European Parliament and of the Council of ... on controls of cash entering or leaving the Community

(2005/C 144 E/01)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 95 and 135 thereof,

Having regard to the proposal from the Commission (1),

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

Acting in accordance with the procedure referred to in Article 251 of the Treaty (2),

Whereas:

| (1) | One of the Community's tasks is to promote harmonious, balanced and sustainable development of economic activities throughout the Community by establishing a common market and an economic and monetary union. To that end the internal market comprises an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured. |
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(1)

One of the Community's tasks is to promote harmonious, balanced and sustainable development of economic activities throughout the Community by establishing a common market and an economic and monetary union. To that end the internal market comprises an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured.

| (2) | The introduction of the proceeds of illegal activities into the financial system and their investment after laundering are detrimental to sound and sustainable economic development. Accordingly, Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering (3) introduced a Community mechanism to prevent money laundering by monitoring transactions through credit and financial institutions and certain types of professions. As there is a risk that the application of that mechanism will lead to an increase in cash movements for illicit purposes, Directive 91/308/EEC should be supplemented by a control system on cash entering or leaving the Community. |
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(2)

The introduction of the proceeds of illegal activities into the financial system and their investment after laundering are detrimental to sound and sustainable economic development. Accordingly, Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering (3) introduced a Community mechanism to prevent money laundering by monitoring transactions through credit and financial institutions and certain types of professions. As there is a risk that the application of that mechanism will lead to an increase in cash movements for illicit purposes, Directive 91/308/EEC should be supplemented by a control system on cash entering or leaving the Community.

| (3) | At present such control systems are applied by only a few Member States, acting under national legislation. The disparities in legislation are detrimental to the proper functioning of the internal market. The basic elements should therefore be harmonised at Community level to ensure an equivalent level of control on movements of cash crossing the borders of the Community. Such harmonisation should not, however, affect the possibility for Member States to apply, in accordance with the existing provisions of the Treaty, national controls on movements of cash within the Community. |
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(3)

At present such control systems are applied by only a few Member States, acting under national legislation. The disparities in legislation are detrimental to the proper functioning of the internal market. The basic elements should therefore be harmonised at Community level to ensure an equivalent level of control on movements of cash crossing the borders of the Community. Such harmonisation should not, however, affect the possibility for Member States to apply, in accordance with the existing provisions of the Treaty, national controls on movements of cash within the Community.

| (4) | Account should also be taken of complementary activities carried out in other international fora, in particular of the Financial Action Task Force on Money Laundering (FATF) which was established by the G7 Summit held in Paris in 1989. Special Recommendation IX of 22 October 2004 of the FATF calls on governments to take measures to detect physical cash movements, including a declaration system or other disclosure obligation. |
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(4)

Account should also be taken of complementary activities carried out in other international fora, in particular of the Financial Action Task Force on Money Laundering (FATF) which was established by the G7 Summit held in Paris in 1989. Special Recommendation IX of 22 October 2004 of the FATF calls on governments to take measures to detect physical cash movements, including a declaration system or other disclosure obligation.

| (5) | Accordingly, cash carried by any natural person entering or leaving the Community should be subject to the principle of obligatory declaration. This principle would enable the customs authorities to gather information on such cash movements and, where appropriate, transmit that information to other authorities. Customs authorities are present at the borders of the Community, where controls are most effective, and some have already built up practical experience in the matter. Use should be made of Council Regulation (EC) No 515/97 of 13 March 1997 on mutual assistance between the administrative authorities of the Member States and cooperation between the latter and the Commission to ensure the correct application of the law on customs and agricultural matters (4). This mutual assistance should ensure both the correct application of cash controls and the transmission of information that might help to achieve the objectives of Directive 91/308/EEC. |
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(5)

Accordingly, cash carried by any natural person entering or leaving the Community should be subject to the principle of obligatory declaration. This principle would enable the customs authorities to gather information on such cash movements and, where appropriate, transmit that information to other authorities. Customs authorities are present at the borders of the Community, where controls are most effective, and some have already built up practical experience in the matter. Use should be made of Council Regulation (EC) No 515/97 of 13 March 1997 on mutual assistance between the administrative authorities of the Member States and cooperation between the latter and the Commission to ensure the correct application of the law on customs and agricultural matters (4). This mutual assistance should ensure both the correct application of cash controls and the transmission of information that might help to achieve the objectives of Directive 91/308/EEC.

| (6) | In view of its preventive purpose and deterrent character, the obligation to declare should be fulfilled upon entering or leaving the Community. However, in order to focus the authorities' action on significant movements of cash, only those movements of EUR 10 000 or more should be subject to such an obligation. Also, it should be specified that the obligation to declare applies to the natural person carrying the cash, regardless of whether that person is the owner. |
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(6)

In view of its preventive purpose and deterrent character, the obligation to declare should be fulfilled upon entering or leaving the Community. However, in order to focus the authorities' action on significant movements of cash, only those movements of EUR 10 000 or more should be subject to such an obligation. Also, it should be specified that the obligation to declare applies to the natural person carrying the cash, regardless of whether that person is the owner.

| (7) | Use should be made of a common standard for the information to be provided. This will enable competent authorities to exchange information more easily. |
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(7)

Use should be made of a common standard for the information to be provided. This will enable competent authorities to exchange information more easily.

| (8) | It is desirable to establish the definitions needed for a uniform interpretation of this Regulation. |
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(8)

It is desirable to establish the definitions needed for a uniform interpretation of this Regulation.

| (9) | Information gathered under this Regulation by the competent authorities should be passed on to the authorities referred to in Article 6(1) of Directive 91/308/EEC. |
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(9)

Information gathered under this Regulation by the competent authorities should be passed on to the authorities referred to in Article 6(1) of Directive 91/308/EEC.

| (10) | Where there are indications that the sums of cash are related to any illegal activity, associated with the movement of cash, as referred to in Directive 91/308/EEC, information gathered under this Regulation by the competent authorities may be passed on to competent authorities in other Member States and/or to the Commission. Similarly, provision should be made for certain information to be transmitted whenever there are indications of cash movements involving sums lower than the threshold laid down in this Regulation. |
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(10)

Where there are indications that the sums of cash are related to any illegal activity, associated with the movement of cash, as referred to in Directive 91/308/EEC, information gathered under this Regulation by the competent authorities may be passed on to competent authorities in other Member States and/or to the Commission. Similarly, provision should be made for certain information to be transmitted whenever there are indications of cash movements involving sums lower than the threshold laid down in this Regulation.

| (11) | Competent authorities should be vested with the powers needed to exercise effective control on movements of cash. |
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(11)

Competent authorities should be vested with the powers needed to exercise effective control on movements of cash.

| (12) | The powers of the competent authorities should be supplemented by the Member States' obligation to lay down penalties. However, penalties should only be imposed for failure to make a declaration in accordance with this Regulation. |
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(12)

The powers of the competent authorities should be supplemented by the Member States' obligation to lay down penalties. However, penalties should only be imposed for failure to make a declaration in accordance with this Regulation.

| (13) | Since the objective of this Regulation cannot be sufficiently achieved by the Member States and can therefore, by reason of the transnational scale of money-laundering in the internal market, 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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(13)

Since the objective of this Regulation cannot be sufficiently achieved by the Member States and can therefore, by reason of the transnational scale of money-laundering in the internal market, 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.

| (14) | This Regulation respects the fundamental rights and observes the principles recognised, in particular, by the Charter of Fundamental Rights of the European Union, |
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(14)

This Regulation respects the fundamental rights and observes the principles recognised, in particular, by the Charter of Fundamental Rights of the European Union,

HAVE ADOPTED THIS REGULATION:

Article 1

Objective

1.   This Regulation complements the provisions of Directive 91/308/EEC concerning transactions through financial and credit institutions and certain professions by laying down harmonised rules for the control, by the competent authorities, of cash entering or leaving the Community.

2.   This Regulation is without prejudice to national measures to control cash movements within the Community, where such measures are taken in accordance with Article 58 of the Treaty.

Article 2

Definitions

For the purposes of this Regulation:

| 1. | ‘competent authorities’ means the customs authorities of the Member States or any other authorities empowered by Member States to apply this Regulation; |
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1.

‘competent authorities’ means the customs authorities of the Member States or any other authorities empowered by Member States to apply this Regulation;

| 2. | ‘cash’ means:






  (a) | bearer negotiable instruments including monetary instruments in bearer form such as travellers cheques, negotiable instruments (including cheques, promissory notes and money orders) that are either in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title thereto passes upon delivery and incomplete instruments (including cheques, promissory notes and money orders) signed, but with the payee's name omitted; |
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2.

‘cash’ means:

(a)

bearer negotiable instruments including monetary instruments in bearer form such as travellers cheques, negotiable instruments (including cheques, promissory notes and money orders) that are either in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title thereto passes upon delivery and incomplete instruments (including cheques, promissory notes and money orders) signed, but with the payee's name omitted;

| (b) | currency (banknotes and coins that are in circulation as a medium of exchange). |
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(b)

currency (banknotes and coins that are in circulation as a medium of exchange).

Article 3

Obligation to declare

1.   Any natural person entering or leaving the Community and carrying cash of a value of EUR 10 000 or more shall declare that sum to the competent authorities of the Member State through which he is entering or leaving the Community in accordance with this Regulation. The obligation to declare shall not have been fulfilled if the information provided is incorrect or incomplete.

2.   The declaration referred to in paragraph 1 shall contain details of:

| (a) | the declarant, including full name, date and place of birth and nationality; |
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(a)

the declarant, including full name, date and place of birth and nationality;

| (b) | the owner of the cash; |
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(b)

the owner of the cash;

| (c) | the intended recipient of the cash; |
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(c)

the intended recipient of the cash;

| (d) | the amount and nature of the cash; |
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(d)

the amount and nature of the cash;

| (e) | the provenance and intended use of the cash; |
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(e)

the provenance and intended use of the cash;

| (f) | the transport route; |
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(f)

the transport route;

| (g) | the means of transport. |
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(g)

the means of transport.

3.   Information shall be provided in writing, orally or electronically, to be determined by the Member State referred to in paragraph 1. However, where the declarant so requests, he shall be entitled to provide the information in writing. Where a written declaration has been lodged, an endorsed copy shall be delivered to the declarant upon request.

Article 4

Powers of the competent authorities

1.   In order to check compliance with the obligation to declare laid down in Article 3, officials of the competent authorities shall be empowered, in accordance with the conditions laid down under national legislation, to control natural persons, their baggage and their means of transport.

2.   In the event of failure to comply with the obligation to declare laid down in Article 3, cash may be detained by administrative decision in accordance with the conditions laid down under national legislation.

Article 5

Recording and processing of information

1.   The information obtained under Article 3 and/or Article 4 shall be recorded and processed by the competent authorities of the Member State referred to in Article 3(1) and shall be made available to the authorities referred to in Article 6(1) of Directive 91/308/EEC of that Member State.

2.   Where it appears from the controls provided for in Article 4 that a natural person is entering or leaving the Community with sums of cash lower than the threshold fixed in Article 3 and where there are indications of illegal activities associated with the movement of cash, as referred to in Directive 91/308/EEC, that information, the full name, date and place of birth and nationality of that person and details of the means of transport used may also be recorded and processed by the competent authorities of the Member State referred to in Article 3(1) and be made available to the authorities referred to in Article 6(1) of Directive 91/308/EEC of that Member State.

Article 6

Exchange of information

1.   Where there are indications that the sums of cash are related to any illegal activity associated with the movement of cash, as referred to in Directive 91/308/EEC, the information obtained through the declaration provided for in Article 3 or the controls provided for in Article 4 may be transmitted to competent authorities in other Member States.

Regulation (EC) No 515/97 shall apply mutatis mutandis.

2.   Where there are indications that the sums of cash involve the proceeds of fraud or any other illegal activity adversely affecting the financial interests of the Community, the information shall also be transmitted to the Commission.

Article 7

Exchange of information with third countries

In the framework of mutual administrative assistance, the information obtained under this Regulation may be communicated by Member States or by the Commission to a third country, subject to the consent of the competent authorities which obtained the information pursuant to Article 3 and/or Article 4 and to compliance with the relevant national and Community provisions on the transfer of personal data to third countries. Member States shall notify the Commission of such exchanges of information where particularly relevant for the implementation of this Regulation.

Article 8

Penalties

1.   Each Member State shall introduce penalties to apply in the event of failure to comply with the obligation to declare laid down in Article 3. Such penalties must be effective, proportionate and dissuasive.

2.   Member States shall notify the Commission, at the latest by ... (5), of the penalties applicable in the event of failure to comply with the obligation to declare laid down in Article 3.

Article 9

Evaluation

Four years after its entry into force, the Commission shall submit to the European Parliament and the Council a report on the application of this Regulation.

Article 10

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 ... (6).

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 227 E, 24.9.2002, p. 574.

1

(2)  Opinion of the European Parliament of 15 May 2003 (OJ C 67 E, 17.3.2004, p. 259), Council Common Position of 17 February 2005 and Position of the European Parliament of ... (not yet published in the Official Journal).

2

(3)  OJ L 166, 28.6.1991, p. 77. Directive as amended by Directive 2001/97/EC of the European Parliament and of the Council (OJ L 344, 28.12.2001, p. 76).

3

(4)  OJ L 82, 22.3.1997, p. 1. Regulation as amended by Regulation (EC) No 807/2003 (OJ L 122, 16.5.2003, p. 36).

4

(5)  18 months after the entry into force of this Regulation.

5

(6)  18 months after the date of entry into force of this Regulation.

6

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STATEMENT OF THE COUNCIL'S REASONS

I.   INTRODUCTION

On 25 June 2002, the Commission submitted to the Council its Report on controls on cross-border cash movements together with a proposal for a Regulation of the European Parliament and the Council on the prevention of money laundering by means of customs cooperation, based on Article 135 of the Treaty (1)
   (2).

The European Parliament delivered its opinion at first reading on 15 May 2003 (3), adopting 23 amendments to the proposal.

The Commission presented to the Council on 3 July 2003 an amended proposal on the above subject (4).

On 17 February 2005, the Council adopted its common position in accordance with Article 251(2) of the Treaty.

II.   OBJECTIVE

The proposal aims to introduce an obligation for natural persons to declare cash movements above a specific threshold at the EU's external borders. In addition, the proposal aims at enhancing border controls of cash movements and at improving exchanges of information between the relevant authorities.

III.   ANALYSIS OF THE COMMON POSITION

1.   General

The Council's common position, in accordance with the Commission proposal, aims to introduce harmonized border controls of cash movements, thereby supplementing Directive 91/308/EEC (5) and ensuring the proper functioning of the internal market through the elimination of the current disparities in national legislation.

2.   Position of the Council in detail

The Council took the following positions on the amendments adopted by the European Parliament:

(a)   Legal basis

In line with the opinion of the European Parliament (amendment 2) the Council added Article 95 as a legal basis to the proposal. The Council considered that the main feature of the draft Regulation should not be the prevention of money laundering (for which a different legal basis would be required) but the introduction of harmonised border controls for cash movements, for which Article 95 of the Treaty, governing the approximation of laws, regulations and administrative provisions of the Member States in connection with the functioning of the internal market, constitutes the appropriate legal basis.

(b)   Transformation into a Directive

The Council could not accept the EP amendments linked to the transformation of the proposal into a Directive (amendments 1, 8, 9, 18, 20, 21, 22 and 23), considering that a sufficient degree of harmonisation in a relatively short period of time can only be achieved by means of a Regulation, which is generally applicable, binding in its entirety and directly applicable in all Member States.

(c)   Obligatory declaration

In its common position, the Council supported the Commission's proposal for a system of obligatory declaration. The Council did not favour the idea of allowing Member States to choose between a declaration or a disclosure system as suggested by the European Parliament (amendments 2, 3, 4, 5, 6, 7, 8, 12, 14, 18 and 19). Such a choice between two systems would be contrary to the uniform Community-wide application of the measures proposed. However, the Council introduced a degree of flexibility by leaving the choice to Member States to introduce an obligation for written, oral or electronic declarations. Consequently, the Council agreed to delete the declaration form contained in the Annex to the proposal and to insert a provision on the information to be provided by the written, oral or electronic declarations (see also below point 3.b)).

(d)   Threshold for declaration

The Council opted for a threshold of EUR 10 000 which is lower than the thresholds foreseen in the Commission proposal and in the European Parliament's Opinion (amendments 3 and 7). The lower threshold reflects the fact that many Member States' legislation currently foresees considerably lower thresholds and that the level initially proposed (EUR 15 000) would result in a severe decrease in the intensity of controls in those Member States.

The lower threshold also sends a clear signal at international level of the Council's willingness to adopt measures to monitor cash movements by introducing a strict and uniform limit throughout the Community, which is easy to implement and clearly recognizable by travellers entering or leaving the Community.

(e)   Powers of the competent authorities

Concerning the powers of the competent authorities, the Council agreed with the European Parliament (amendments 10 and 17) that this provision should be placed in a different context and therefore moved it to the Article immediately following the provision on the obligation to declare. As to the content of this provision, the Council considered that the empowerment of national authorities should be done in accordance with the conditions laid down under national legislation. In addition, national authorities should also be empowered to control the means of transport in order to check compliance with the obligation to declare. However, the Council did not maintain the maximum time period of three days for the detention of cash as foreseen in the proposal and supported in amendment 11, considering that such a limitation in time would not allow the necessary flexibility for authorities to carry out controls and subsequent investigations in order to determine whether a penal procedure needed to be opened in a specific case.

(f)   Definition of ‘cash’

The Financial Action Task Force on Money Laundering (FATF) adopted, on 22 October 2004, its Special Recommendation IX on cash couriers. This Recommendation, agreed at international level, contains a definition of ‘cash’, which the Council inserted in the present draft Regulation in order to guarantee the widest possible coherence of rules at Community and international levels. As requested in amendment 13, the text extends the definition of cash to cover a wider range of cheques than initially proposed.

(g)   Exchange of information

The Council clarified and restructured the provisions on exchange of information between authorities (amendment 15):

| — | firstly, it is clarified that the information obtained by declarations or controls shall be recorded and processed by the competent authorities of a Member State and, within that same Member State, be made available to the Financial Intelligence Unit (FIU), the latter point being also explicitly included in the FATF Special Recommendation IX. In the case of persons entering or leaving the Community with less than EUR 10 000 but where there are indications of illegal activities, certain information on this person may also be recorded and processed by the competent authorities within one Member State and be made available to that Member State's FIU, |
| --- | --- |

—

firstly, it is clarified that the information obtained by declarations or controls shall be recorded and processed by the competent authorities of a Member State and, within that same Member State, be made available to the Financial Intelligence Unit (FIU), the latter point being also explicitly included in the FATF Special Recommendation IX. In the case of persons entering or leaving the Community with less than EUR 10 000 but where there are indications of illegal activities, certain information on this person may also be recorded and processed by the competent authorities within one Member State and be made available to that Member State's FIU,

| — | secondly, information obtained by declarations or controls may be exchanged between Member States. For this exchange of information between Member States, Council Regulation (EC) No 515/97 of 13 March 1997 on mutual assistance between the administrative authorities of the Member States and cooperation between the latter and the Commission to ensure the correct application of the law on customs and agricultural matters applies mutatis mutandis, |
| --- | --- |

—

secondly, information obtained by declarations or controls may be exchanged between Member States. For this exchange of information between Member States, Council Regulation (EC) No 515/97 of 13 March 1997 on mutual assistance between the administrative authorities of the Member States and cooperation between the latter and the Commission to ensure the correct application of the law on customs and agricultural matters applies mutatis mutandis,

| — | finally, information may be exchanged with third countries, in the framework of a mutual administrative assistance agreement. However, the communication of information is subject to the consent of the authority that collected the information initially and to personal data protection provisions. The Commission should be notified of such exchanges of information where particularly relevant to the implementation of the Regulation. |
| --- | --- |

—

finally, information may be exchanged with third countries, in the framework of a mutual administrative assistance agreement. However, the communication of information is subject to the consent of the authority that collected the information initially and to personal data protection provisions. The Commission should be notified of such exchanges of information where particularly relevant to the implementation of the Regulation.

(h)   Joint database

The Council did not accept the idea of forwarding the information obtained to a database jointly administered by the Member States and held by the European Police Office (Europol) (amendment 16). The Council considered that such a provision would not be covered by the legal basis of the draft Regulation.

(i)   Report by the Commission

In its common position, the Council accepted the idea reflected in amendment 22 and introduced a provision requiring the Commission to submit a report to the European Parliament and the Council four years after the entry into force of the Regulation.

3.   New elements introduced by the Council

In addition to the items on which the European Parliament has delivered its opinion and on which the Council common position is reflected above, the Council inserted the following new elements into the proposal:

(a)   Scope of the Regulation

Intra-Community controls of cash may be maintained where these measures are in conformity with the Treaty.

In addition, the Council adapted the geographical coverage of the Regulation considering that, for the sake of transparency for travellers and in order to facilitate the application of the Regulation by the competent authorities, the control of cash movements should be carried out when a natural person is entering or leaving the Community territory. This solution would also ensure a parallel geographical application of Directive 91/308/EEC and the present draft Regulation.

(b)   Declaration form

The uniform declaration form proposed by the Commission was not accepted by the Council. Instead, the Council preferred to specify the data to be provided in the declaration. This intends to limit the administrative burden for the competent authorities to the strict minimum when collecting the information from travellers whilst ensuring that a minimum of information on cash movements is collected and, subsequently, is available for exchange with other authorities.

(c)   Copy of a written declaration

In the case of a written declaration by the declarant, the Council inserted a provision ensuring that the declarant shall be entitled to receive an endorsed copy of the declaration upon request.

(d)   Penalties

The Council simplified the provision on penalties aligning it with similar provisions in comparable legal acts (6). Member States should therefore introduce penalties of an effective, dissuasive and proportionate nature for infringements of the obligation to declare cash movements when crossing the external Community borders. The Council accepted amendment 19 concerning the extension of the time limit for notification of the applicable penalties to the Commission. It set a period of 18 months after the entry into force of the Regulation.

IV.   CONCLUSION

The objective of the proposed Regulation to introduce harmonized border controls of cash movements and to strengthen cooperation between competent authorities is supported by the Council's common position. As there is a risk that the application of tightened controls in the financial sector following the adoption of Directive 91/308/EEC will lead to an increase in cash movements for illicit purposes, the Community underlines its commitment to combating the problem of illegal cash movements through the introduction of an obligation for natural persons to declare cash movements above a threshold of EUR 10 000 at the Community borders, whilst avoiding possible negative effects on the functioning of the internal market by applying these measures, by way of a Regulation, in a harmonised way throughout the Community.

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(1)  OJ C 227 E, 24.9.2002, p. 574.

(2)  COM(2002) 328 final.

(3)  OJ C 67 E, 17.3.2004, p. 259.

(4)  Doc. 11151/03 UD 67 EF 35 ECOFIN 203 CRIMORG 51 CODEC 948.

(5)  Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering (OJ L 166, 28.6.1991, p. 77).

(6)  See, for example, Article 18 of Council Regulation (EC) No 1383/2003 of 22 July 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights (OJ L 196, 2.8.2003, p. 7).

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| 14.6.2005 | EN | Official Journal of the European Union | CE 144/9 |
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14.6.2005

EN

Official Journal of the European Union

CE 144/9

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COMMON POSITION (EC) No 20/2005

adopted by the Council on 7 March 2005

with a view to adopting Directive 2005/.../EC of the European Parliament and of the Council of ... on the patentability of computer-implemented inventions

(2005/C 144 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),

Acting in accordance with the procedure laid down in Article 251 of the Treaty (2),

Whereas:

| (1) | The realisation of the internal market implies the elimination of restrictions to free circulation and of distortions in competition, while creating an environment which is favourable to innovation and investment. In this context the protection of inventions by means of patents is an essential element for the success of the internal market. Effective, transparent and harmonised protection of computer-implemented inventions throughout the Member States is essential in order to maintain and encourage investment in this field. |
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(1)

The realisation of the internal market implies the elimination of restrictions to free circulation and of distortions in competition, while creating an environment which is favourable to innovation and investment. In this context the protection of inventions by means of patents is an essential element for the success of the internal market. Effective, transparent and harmonised protection of computer-implemented inventions throughout the Member States is essential in order to maintain and encourage investment in this field.

| (2) | Differences exist in the protection of computer-implemented inventions offered by the administrative practices and the case law of the different Member States. Such differences could create barriers to trade and hence impede the proper functioning of the internal market. |
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(2)

Differences exist in the protection of computer-implemented inventions offered by the administrative practices and the case law of the different Member States. Such differences could create barriers to trade and hence impede the proper functioning of the internal market.

| (3) | Such differences could become greater as Member States adopt new and different administrative practices, or where national case law interpreting the current legislation evolves differently. |
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(3)

Such differences could become greater as Member States adopt new and different administrative practices, or where national case law interpreting the current legislation evolves differently.

| (4) | The steady increase in the distribution and use of computer programs in all fields of technology and in their worldwide distribution via the Internet is a critical factor in technological innovation. It is therefore necessary to ensure that an optimum environment exists for developers and users of computer programs in the Community. |
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(4)

The steady increase in the distribution and use of computer programs in all fields of technology and in their worldwide distribution via the Internet is a critical factor in technological innovation. It is therefore necessary to ensure that an optimum environment exists for developers and users of computer programs in the Community.

| (5) | Therefore, the legal rules governing the patentability of computer-implemented inventions should be harmonised so as to ensure that the resulting legal certainty and the level of requirements demanded for patentability enable innovative enterprises to derive the maximum advantage from their inventive process and provide an incentive for investment and innovation. Legal certainty will also be secured by the fact that, in case of doubt as to the interpretation of this Directive, national courts may, and national courts of last instance must, seek a ruling from the Court of Justice. |
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(5)

Therefore, the legal rules governing the patentability of computer-implemented inventions should be harmonised so as to ensure that the resulting legal certainty and the level of requirements demanded for patentability enable innovative enterprises to derive the maximum advantage from their inventive process and provide an incentive for investment and innovation. Legal certainty will also be secured by the fact that, in case of doubt as to the interpretation of this Directive, national courts may, and national courts of last instance must, seek a ruling from the Court of Justice.

| (6) | The Community and its Member States are bound by the Agreement on trade-related aspects of intellectual property rights (TRIPS), approved by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986 to 1994) (3). Article 27(1) of TRIPS provides that patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. Moreover, according to that Article, patent rights should be available and patent rights enjoyable without discrimination as to the field of technology. These principles should accordingly apply to computer-implemented inventions. |
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(6)

The Community and its Member States are bound by the Agreement on trade-related aspects of intellectual property rights (TRIPS), approved by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986 to 1994) (3). Article 27(1) of TRIPS provides that patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. Moreover, according to that Article, patent rights should be available and patent rights enjoyable without discrimination as to the field of technology. These principles should accordingly apply to computer-implemented inventions.

| (7) | Under the Convention on the Grant of European Patents signed in Munich on 5 October 1973 (European Patent Convention) and the patent laws of the Member States, programs for computers together with discoveries, scientific theories, mathematical methods, aesthetic creations, schemes, rules and methods for performing mental acts, playing games or doing business, and presentations of information are expressly not regarded as inventions and are therefore excluded from patentability. This exception, however, applies and is justified only to the extent that a patent application or patent relates to the above subject-matter or activities as such, because the said subject-matter and activities as such do not belong to a field of technology. |
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(7)

Under the Convention on the Grant of European Patents signed in Munich on 5 October 1973 (European Patent Convention) and the patent laws of the Member States, programs for computers together with discoveries, scientific theories, mathematical methods, aesthetic creations, schemes, rules and methods for performing mental acts, playing games or doing business, and presentations of information are expressly not regarded as inventions and are therefore excluded from patentability. This exception, however, applies and is justified only to the extent that a patent application or patent relates to the above subject-matter or activities as such, because the said subject-matter and activities as such do not belong to a field of technology.

| (8) | The aim of this Directive is to prevent different interpretations of the provisions of the European Patent Convention concerning the limits to patentability. The consequent legal certainty should help to foster a climate conducive to investment and innovation in the field of software. |
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(8)

The aim of this Directive is to prevent different interpretations of the provisions of the European Patent Convention concerning the limits to patentability. The consequent legal certainty should help to foster a climate conducive to investment and innovation in the field of software.

| (9) | Patent protection allows innovators to benefit from their creativity. Patent rights protect innovation in the interests of society as a whole and should not be used in a manner which is anti-competitive. |
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(9)

Patent protection allows innovators to benefit from their creativity. Patent rights protect innovation in the interests of society as a whole and should not be used in a manner which is anti-competitive.

| (10) | In accordance with Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs (4), the expression in any form of an original computer program is protected by copyright as a literary work. However, ideas and principles which underlie any element of a computer program are not protected by copyright. |
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(10)

In accordance with Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs (4), the expression in any form of an original computer program is protected by copyright as a literary work. However, ideas and principles which underlie any element of a computer program are not protected by copyright.

| (11) | In order for any invention to be considered as patentable it should have a technical character, and thus belong to a field of technology. |
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(11)

In order for any invention to be considered as patentable it should have a technical character, and thus belong to a field of technology.

| (12) | It is a condition for inventions in general that, in order to involve an inventive step, they should make a technical contribution to the state of the art. |
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(12)

It is a condition for inventions in general that, in order to involve an inventive step, they should make a technical contribution to the state of the art.

| (13) | Accordingly, although a computer-implemented invention belongs to a field of technology, where it does not make a technical contribution to the state of the art, as would be the case, for example, where its specific contribution lacks a technical character, it will lack an inventive step and thus will not be patentable. |
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(13)

Accordingly, although a computer-implemented invention belongs to a field of technology, where it does not make a technical contribution to the state of the art, as would be the case, for example, where its specific contribution lacks a technical character, it will lack an inventive step and thus will not be patentable.

| (14) | The mere implementation of an otherwise unpatentable method on an apparatus such as a computer is not in itself sufficient to warrant a finding that a technical contribution is present. Accordingly, a computer-implemented business method, data processing method or other method, in which the only contribution to the state of the art is non-technical, cannot constitute a patentable invention. |
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(14)

The mere implementation of an otherwise unpatentable method on an apparatus such as a computer is not in itself sufficient to warrant a finding that a technical contribution is present. Accordingly, a computer-implemented business method, data processing method or other method, in which the only contribution to the state of the art is non-technical, cannot constitute a patentable invention.

| (15) | If the contribution to the state of the art relates solely to unpatentable matter, there can be no patentable invention irrespective of how the matter is presented in the claims. For example, the requirement for technical contribution cannot be circumvented merely by specifying technical means in the patent claims. |
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(15)

If the contribution to the state of the art relates solely to unpatentable matter, there can be no patentable invention irrespective of how the matter is presented in the claims. For example, the requirement for technical contribution cannot be circumvented merely by specifying technical means in the patent claims.

| (16) | Furthermore, an algorithm is inherently non-technical and therefore cannot constitute a technical invention. Nonetheless, a method involving the use of an algorithm might be patentable provided that the method is used to solve a technical problem. However, any patent granted for such a method should not monopolise the algorithm itself or its use in contexts not foreseen in the patent. |
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(16)

Furthermore, an algorithm is inherently non-technical and therefore cannot constitute a technical invention. Nonetheless, a method involving the use of an algorithm might be patentable provided that the method is used to solve a technical problem. However, any patent granted for such a method should not monopolise the algorithm itself or its use in contexts not foreseen in the patent.

| (17) | The scope of the exclusive rights conferred by any patent is defined by the claims, as interpreted with reference to the description and any drawings. Computer-implemented inventions should be claimed at least with reference to either a product such as a programmed apparatus, or to a process carried out in such an apparatus. Accordingly, where individual elements of software are used in contexts which do not involve the realisation of any validly claimed product or process, such use will not constitute patent infringement. |
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(17)

The scope of the exclusive rights conferred by any patent is defined by the claims, as interpreted with reference to the description and any drawings. Computer-implemented inventions should be claimed at least with reference to either a product such as a programmed apparatus, or to a process carried out in such an apparatus. Accordingly, where individual elements of software are used in contexts which do not involve the realisation of any validly claimed product or process, such use will not constitute patent infringement.

| (18) | The legal protection of computer-implemented inventions does not necessitate the creation of a separate body of law in place of the rules of national patent law. The rules of national patent law remain the essential basis for the legal protection of computer-implemented inventions. This Directive simply clarifies the present legal position with a view to securing legal certainty, transparency, and clarity of the law and avoiding any drift towards the patentability of unpatentable methods such as obvious or non-technical procedures and business methods. |
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(18)

The legal protection of computer-implemented inventions does not necessitate the creation of a separate body of law in place of the rules of national patent law. The rules of national patent law remain the essential basis for the legal protection of computer-implemented inventions. This Directive simply clarifies the present legal position with a view to securing legal certainty, transparency, and clarity of the law and avoiding any drift towards the patentability of unpatentable methods such as obvious or non-technical procedures and business methods.

| (19) | This Directive should be limited to laying down certain principles as they apply to the patentability of such inventions, such principles being intended in particular to ensure that inventions which belong to a field of technology and make a technical contribution are susceptible of protection, and conversely to ensure that those inventions which do not make a technical contribution are not susceptible of protection. |
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(19)

This Directive should be limited to laying down certain principles as they apply to the patentability of such inventions, such principles being intended in particular to ensure that inventions which belong to a field of technology and make a technical contribution are susceptible of protection, and conversely to ensure that those inventions which do not make a technical contribution are not susceptible of protection.

| (20) | The competitive position of Community industry in relation to its major trading partners will be improved if the current differences in the legal protection of computer-implemented inventions are eliminated and the legal situation is transparent. With the present trend for traditional manufacturing industry to shift their operations to low-cost economies outside the Community, the importance of intellectual property protection and in particular patent protection is self-evident. |
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(20)

The competitive position of Community industry in relation to its major trading partners will be improved if the current differences in the legal protection of computer-implemented inventions are eliminated and the legal situation is transparent. With the present trend for traditional manufacturing industry to shift their operations to low-cost economies outside the Community, the importance of intellectual property protection and in particular patent protection is self-evident.

| (21) | This Directive should be without prejudice to the application of Articles 81 and 82 of the Treaty, in particular where a dominant supplier refuses to allow the use of a patented technique which is needed for the sole purpose of ensuring conversion of the conventions used in two different computer systems or networks so as to allow communication and exchange of data content between them. |
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(21)

This Directive should be without prejudice to the application of Articles 81 and 82 of the Treaty, in particular where a dominant supplier refuses to allow the use of a patented technique which is needed for the sole purpose of ensuring conversion of the conventions used in two different computer systems or networks so as to allow communication and exchange of data content between them.

| (22) | The rights conferred by patents granted for inventions within the scope of this Directive should not affect acts permitted under Articles 5 and 6 of Directive 91/250/EEC, in particular under the provisions thereof in respect of decompilation and interoperability. In particular, acts which, under Articles 5 and 6 of Directive 91/250/EEC, do not require authorisation of the rightholder with respect to the rightholder's copyrights in or pertaining to a computer program, and which, but for those Articles, would require such authorisation, should not require authorisation of the rightholder with respect to the rightholder's patent rights in or pertaining to the computer program. |
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(22)

The rights conferred by patents granted for inventions within the scope of this Directive should not affect acts permitted under Articles 5 and 6 of Directive 91/250/EEC, in particular under the provisions thereof in respect of decompilation and interoperability. In particular, acts which, under Articles 5 and 6 of Directive 91/250/EEC, do not require authorisation of the rightholder with respect to the rightholder's copyrights in or pertaining to a computer program, and which, but for those Articles, would require such authorisation, should not require authorisation of the rightholder with respect to the rightholder's patent rights in or pertaining to the computer program.

| (23) | Since the objective of this Directive, namely to harmonise national rules on the patentability of computer-implemented inventions, 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 Directive does not go beyond what is necessary to achieve that objective, |
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(23)

Since the objective of this Directive, namely to harmonise national rules on the patentability of computer-implemented inventions, 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 Directive does not go beyond what is necessary to achieve that objective,

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Scope

This Directive lays down rules for the patentability of computer-implemented inventions.

Article 2

Definitions

For the purposes of this Directive the following definitions shall apply:

| (a) | ‘computer-implemented invention’ means any invention the performance of which involves the use of a computer, computer network or other programmable apparatus, the invention having one or more features which are realised wholly or partly by means of a computer program or computer programs; |
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(a)

‘computer-implemented invention’ means any invention the performance of which involves the use of a computer, computer network or other programmable apparatus, the invention having one or more features which are realised wholly or partly by means of a computer program or computer programs;

| (b) | ‘technical contribution’ means a contribution to the state of the art in a field of technology which is new and not obvious to a person skilled in the art. The technical contribution shall be assessed by consideration of the difference between the state of the art and the scope of the patent claim considered as a whole, which must comprise technical features, irrespective of whether or not these are accompanied by non-technical features. |
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(b)

‘technical contribution’ means a contribution to the state of the art in a field of technology which is new and not obvious to a person skilled in the art. The technical contribution shall be assessed by consideration of the difference between the state of the art and the scope of the patent claim considered as a whole, which must comprise technical features, irrespective of whether or not these are accompanied by non-technical features.

Article 3

Conditions for patentability

In order to be patentable, a computer-implemented invention must be susceptible to industrial application and new and must involve an inventive step. In order to involve an inventive step, a computer-implemented invention must make a technical contribution.

Article 4

Exclusions from patentability

1.   A computer program as such cannot constitute a patentable invention.

2.   A computer-implemented invention shall not be regarded as making a technical contribution merely because it involves the use of a computer, network or other programmable apparatus. Accordingly, inventions involving computer programs, whether expressed as source code, as object code or in any other form, which implement business, mathematical or other methods and do not produce any technical effects beyond the normal physical interactions between a program and the computer, network or other programmable apparatus in which it is run shall not be patentable.

Article 5

Form of claims

1.   Member States shall ensure that a computer-implemented invention may be claimed as a product, that is as a programmed computer, a programmed computer network or other programmed apparatus, or as a process carried out by such a computer, computer network or apparatus through the execution of software.

2.   A claim to a computer program, either on its own or on a carrier, shall not be allowed unless that program would, when loaded and executed in a programmable computer, programmable computer network or other programmable apparatus, put into force a product or process claimed in the same patent application in accordance with paragraph 1.

Article 6

Relationship with Directive 91/250/EEC

The rights conferred by patents granted for inventions within the scope of this Directive shall not affect acts permitted under Articles 5 and 6 of Directive 91/250/EEC, in particular under the provisions thereof in respect of decompilation and interoperability.

Article 7

Monitoring

The Commission shall monitor the impact of computer-implemented inventions on innovation and competition, both within Europe and internationally, on Community businesses, especially small and medium-sized enterprises, on the open-source community and on electronic commerce.

Article 8

Report on the effects of the Directive

The Commission shall report to the European Parliament and the Council by ... (5) on:

| (a) | the impact of patents for computer-implemented inventions on the factors referred to in Article 7; |
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(a)

the impact of patents for computer-implemented inventions on the factors referred to in Article 7;

| (b) | whether the rules governing the term of the patent and the determination of the patentability requirements, and more specifically novelty, inventive step and the proper scope of claims, are adequate, and whether it would be desirable and legally possible having regard to the Community's international obligations to make modifications to such rules; |
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(b)

whether the rules governing the term of the patent and the determination of the patentability requirements, and more specifically novelty, inventive step and the proper scope of claims, are adequate, and whether it would be desirable and legally possible having regard to the Community's international obligations to make modifications to such rules;

| (c) | whether difficulties have been experienced in respect of Member States where the requirements of novelty and inventive step are not examined prior to issuance of a patent, and if so, whether any measures are desirable to address such difficulties; |
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(c)

whether difficulties have been experienced in respect of Member States where the requirements of novelty and inventive step are not examined prior to issuance of a patent, and if so, whether any measures are desirable to address such difficulties;

| (d) | whether difficulties have been experienced in respect of the relationship between the protection by patent of computer-implemented inventions and the protection by copyright of computer programs as provided for in Directive 91/250/EEC and whether any abuse of the patent system has occurred in relation to computer-implemented inventions; |
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(d)

whether difficulties have been experienced in respect of the relationship between the protection by patent of computer-implemented inventions and the protection by copyright of computer programs as provided for in Directive 91/250/EEC and whether any abuse of the patent system has occurred in relation to computer-implemented inventions;

| (e) | how the requirements of this Directive have been taken into account in the practice of the European Patent Office and in its examination guidelines; |
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(e)

how the requirements of this Directive have been taken into account in the practice of the European Patent Office and in its examination guidelines;

| (f) | the aspects in respect of which it may be necessary to prepare for a diplomatic conference to revise the European Patent Convention; |
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(f)

the aspects in respect of which it may be necessary to prepare for a diplomatic conference to revise the European Patent Convention;

| (g) | the impact of patents for computer-implemented inventions on the development and commercialisation of interoperable computer programs and systems. |
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(g)

the impact of patents for computer-implemented inventions on the development and commercialisation of interoperable computer programs and systems.

Article 9

Impact review

In the light of the monitoring carried out pursuant to Article 7 and the report to be drawn up pursuant to Article 8, the Commission shall review the impact of this Directive and, where necessary, submit amending proposals to the European Parliament and the Council.

Article 10

Implementation

1.   Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by ... (6). They shall forthwith inform the Commission thereof.

When Member States adopt those measures, they shall contain a reference to this Directive or shall be accompanied by such a reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.

2.   Member States shall communicate to the Commission the text of the provisions of national law which they adopt in the field governed by this Directive.

Article 11

Entry into force

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

Article 12

Addressees

This Directive is addressed to the Member States.

Done at Brussels,

For the European Parliament

The President

...

For the Council

The President

...

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(1)  OJ C 61, 14.3.2003, p. 154.

1

(2)  Opinion of the European Parliament of 24 September 2003(OJ C 77 E, 26.3.2004, p. 230), Council Common Position of 7 March 2005 and Position of the European parliament of ... (not yet published in the Official Journal).

2

(3)  OJ L 336, 23.12.1994, p. 1.

3

(4)  OJ L 122, 17.5.1991 p. 42. Directive as amended by Directive 93/98/EEC (OJ L 290, 24.11.1993, p. 9).

4

(5)  Five years after the date of entry into force of this Directive.

5

(6)  Two years from the date of entry into force of this Directive.

6

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STATEMENT OF THE COUNCIL'S REASONS

I.   INTRODUCTION

| 1. | On 20 February 2002, the Commission submitted a proposal for a European Parliament and Council Directive on the patentability of computer-implemented inventions (1), based on Article 95 of the EC Treaty. |
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1.

On 20 February 2002, the Commission submitted a proposal for a European Parliament and Council Directive on the patentability of computer-implemented inventions (1), based on Article 95 of the EC Treaty.

| 2. | The Economic and Social Committee delivered its opinion on 19 September 2002 (2). |
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2.

The Economic and Social Committee delivered its opinion on 19 September 2002 (2).

| 3. | The European Parliament delivered its opinion at first reading on 24 September 2003 (3). |
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3.

The European Parliament delivered its opinion at first reading on 24 September 2003 (3).

| 4. | The Commission has not submitted an amended proposal. |
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4.

The Commission has not submitted an amended proposal.

| 5. | The Council adopted its common position according to Article 251 of the EC Treaty on 7 March 2005. |
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5.

The Council adopted its common position according to Article 251 of the EC Treaty on 7 March 2005.

II.   AIM

| 6. | The proposed Directive aims at harmonising national patent laws with respect to the patentability of computer-implemented inventions and at making the conditions of such patentability more transparent. |
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6.

The proposed Directive aims at harmonising national patent laws with respect to the patentability of computer-implemented inventions and at making the conditions of such patentability more transparent.

III.   COMMON POSITION

Recitals

| 7. | The Council has amended or merged a number of recitals appearing in the Commission's proposal and has adopted a few additional ones. In so doing, the Council has taken on board in full or in part, or following reformulation, the European Parliament's amendments 1, 2, 88, 3, 34, 115, 85, 7, 8, 9, 86, 11, 12 and 13. Reference to the main changes in the recitals is made below under the relevant Articles. |
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7.

The Council has amended or merged a number of recitals appearing in the Commission's proposal and has adopted a few additional ones. In so doing, the Council has taken on board in full or in part, or following reformulation, the European Parliament's amendments 1, 2, 88, 3, 34, 115, 85, 7, 8, 9, 86, 11, 12 and 13. Reference to the main changes in the recitals is made below under the relevant Articles.

Articles

Article 1 (Scope)

| 8. | Article 1 was accepted as in the Commission's proposal. The European Parliament has not suggested any amendments to this Article either. |
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8.

Article 1 was accepted as in the Commission's proposal. The European Parliament has not suggested any amendments to this Article either.

Article 2 (Definitions)

| 9. | On point (a), the Council has partly followed the European Parliament's amendments 36, 42 and 117 by deleting the words ‘one or more prima facie novel’ from the definition of ‘computer-implemented invention’, on the grounds that these are redundant and risk creating confusion as regards their relationship with the novelty test, which applies at the stage of the examination of the patentability of any invention. |
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9.

On point (a), the Council has partly followed the European Parliament's amendments 36, 42 and 117 by deleting the words ‘one or more prima facie novel’ from the definition of ‘computer-implemented invention’, on the grounds that these are redundant and risk creating confusion as regards their relationship with the novelty test, which applies at the stage of the examination of the patentability of any invention.

| 10. | On point (b), the Council:






  — | replaced ‘technical field’ with ‘field of technology’, which is the term commonly used in international agreements on patent law, such as the TRIPS Agreement; |
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10.

On point (b), the Council:

—

replaced ‘technical field’ with ‘field of technology’, which is the term commonly used in international agreements on patent law, such as the TRIPS Agreement;

| — | inserted the words ‘new and’, in order to clarify the criteria for ‘technical contribution’; |
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—

inserted the words ‘new and’, in order to clarify the criteria for ‘technical contribution’;

| — | added a second sentence, which is basically the provision of Article 4(3) of the Commission proposal slightly amended in order to clarify that even if non-technical features may be taken into consideration when assessing the technical contribution of a given computer-implemented invention, it is indispensable that any patent claim comprises technical features as well. This idea concurs with part of the European Parliament's amendments 16, 100, 57, 99, 110 and 70. |
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—

added a second sentence, which is basically the provision of Article 4(3) of the Commission proposal slightly amended in order to clarify that even if non-technical features may be taken into consideration when assessing the technical contribution of a given computer-implemented invention, it is indispensable that any patent claim comprises technical features as well. This idea concurs with part of the European Parliament's amendments 16, 100, 57, 99, 110 and 70.

Article 3 of the Commission proposal (Computer-implemented inventions as a field of technology)

| 11. | This Article imposed on Member States the obligation of ensuring in their national law that computer-implemented inventions are considered to belong to a field of technology. In accordance with the European Parliament's amendment 15, the Council has decided to delete Article 3, considering that a general obligation of this nature would be difficult to transpose into national law. In exchange, the Council has decided to reinforce in recital 13 the relevant statement contained in recital 11 of the Commission proposal. |
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11.

This Article imposed on Member States the obligation of ensuring in their national law that computer-implemented inventions are considered to belong to a field of technology. In accordance with the European Parliament's amendment 15, the Council has decided to delete Article 3, considering that a general obligation of this nature would be difficult to transpose into national law. In exchange, the Council has decided to reinforce in recital 13 the relevant statement contained in recital 11 of the Commission proposal.

Article 3 (Article 4 of the Commission proposal) (Conditions for patentability)

| 12. | The Council merged the first two paragraphs of Article 4 of the Commission proposal into a single paragraph, while introducing minor drafting amendments with a view to improving the clarity of the text. The new text follows word by word the wording of Article 4(1) as proposed in the European Parliament's amendment 16. |
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12.

The Council merged the first two paragraphs of Article 4 of the Commission proposal into a single paragraph, while introducing minor drafting amendments with a view to improving the clarity of the text. The new text follows word by word the wording of Article 4(1) as proposed in the European Parliament's amendment 16.

| 13. | As already mentioned, paragraph 3 of Article 4 of the Commission proposal has been incorporated in the definition of ‘technical contribution’; under Article 2(b), as it was felt that this belongs to the definitions rather than in an Article entitled ‘Conditions for patentability’. |
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13.

As already mentioned, paragraph 3 of Article 4 of the Commission proposal has been incorporated in the definition of ‘technical contribution’; under Article 2(b), as it was felt that this belongs to the definitions rather than in an Article entitled ‘Conditions for patentability’.

Article 4 (Exclusions from patentability)

| 14. | In order to avoid any misunderstanding, the Council has included in paragraph 1 of this Article a clear statement to the effect that a computer program as such cannot constitute a patentable invention. |
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14.

In order to avoid any misunderstanding, the Council has included in paragraph 1 of this Article a clear statement to the effect that a computer program as such cannot constitute a patentable invention.

| 15. | Paragraph 2, which corresponds to amendment 17 of the European Parliament, aims at clarifying the limits of what can be patentable under the present Directive and has to be read in conjunction with recitals 14 to 16, which correspond to the European Parliament's amendments 85, 7 and 8. The Council has however inserted the terms ‘whether expressed as source code, as object code or in any other form’ in order to clarify better what is meant by ‘invention involving computer programs’. |
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15.

Paragraph 2, which corresponds to amendment 17 of the European Parliament, aims at clarifying the limits of what can be patentable under the present Directive and has to be read in conjunction with recitals 14 to 16, which correspond to the European Parliament's amendments 85, 7 and 8. The Council has however inserted the terms ‘whether expressed as source code, as object code or in any other form’ in order to clarify better what is meant by ‘invention involving computer programs’.

Article 5 (Form of claims)

| 16. | Paragraph 1 was accepted as in the Commission's proposal. |
| --- | --- |

16.

Paragraph 1 was accepted as in the Commission's proposal.

| 17. | Paragraph 2 was added in order to clarify that in certain circumstances and under strict conditions a patent can cover a claim to a computer program, be it on its own or on a carrier. The Council considers that this would align the Directive on standard current practice both at the European Patent Office and in Member States. |
| --- | --- |

17.

Paragraph 2 was added in order to clarify that in certain circumstances and under strict conditions a patent can cover a claim to a computer program, be it on its own or on a carrier. The Council considers that this would align the Directive on standard current practice both at the European Patent Office and in Member States.

Article 6 (Relationship with Directive 91/250/EEC)

| 18. | The Council has taken on board the European Parliament's amendment 19, considering that this is clearer than the text of the Commission's proposal. It has removed references to provisions concerning semiconductor topographies or trade marks as these were considered as irrelevant in this context. |
| --- | --- |

18.

The Council has taken on board the European Parliament's amendment 19, considering that this is clearer than the text of the Commission's proposal. It has removed references to provisions concerning semiconductor topographies or trade marks as these were considered as irrelevant in this context.

| 19. | The Council did not take on board the European Parliament's amendment 76, considering that this was too open-ended and would be contrary to the TRIPS Agreement. The Council considered that the interoperability issue is already sufficiently covered by Article 6, as well as by the application of general competition rules. This is clearly explained in recitals 21 and 22 of the Council's common position. |
| --- | --- |

19.

The Council did not take on board the European Parliament's amendment 76, considering that this was too open-ended and would be contrary to the TRIPS Agreement. The Council considered that the interoperability issue is already sufficiently covered by Article 6, as well as by the application of general competition rules. This is clearly explained in recitals 21 and 22 of the Council's common position.

Article 7 (Monitoring)

| 20. | The Council has taken on board the European Parliament's amendment 71. |
| --- | --- |

20.

The Council has taken on board the European Parliament's amendment 71.

Article 8 (Report on the effects of the Directive)

| 21. | The Council has maintained the text of the Commission proposal and has inserted the following additional elements:






  — | point (b): the words ‘the term of the patent and’ have been added, as suggested by the European Parliament in amendment 92; furthermore, bearing in mind the European Parliament's amendment 25, the Council has introduced language relating to the Community's international obligations; |
| --- | --- | --- |

21.

The Council has maintained the text of the Commission proposal and has inserted the following additional elements:

—

point (b): the words ‘the term of the patent and’ have been added, as suggested by the European Parliament in amendment 92; furthermore, bearing in mind the European Parliament's amendment 25, the Council has introduced language relating to the Community's international obligations;

| — | point (d): the Council has taken on board the European Parliament's amendment 23; |
| --- | --- |

—

point (d): the Council has taken on board the European Parliament's amendment 23;

| — | point (e): the Council has taken on board the European Parliament's amendment 26; |
| --- | --- |

—

point (e): the Council has taken on board the European Parliament's amendment 26;

| — | point (f): the Council has taken on board the European Parliament's amendment 25, but has removed the reference to the Community patent, on the grounds that such a reference would be irrelevant in this context; |
| --- | --- |

—

point (f): the Council has taken on board the European Parliament's amendment 25, but has removed the reference to the Community patent, on the grounds that such a reference would be irrelevant in this context;

| — | point (g): the Council has taken on board the substance of the European Parliament's amendment 89, while opting for a clearer wording. |
| --- | --- |

—

point (g): the Council has taken on board the substance of the European Parliament's amendment 89, while opting for a clearer wording.

Article 9 of the Council common position (Impact assessment)

| 22. | The Council took on board European Parliament's amendment 27. |
| --- | --- |

22.

The Council took on board European Parliament's amendment 27.

Article 10 (Article 9 of the Commission proposal) (Implementation)

| 23. | Unlike the European Parliament, which has opted for an implementation period of 18 months (amendment 28), the Council has opted for an implementation period of 24 months. |
| --- | --- |

23.

Unlike the European Parliament, which has opted for an implementation period of 18 months (amendment 28), the Council has opted for an implementation period of 24 months.

Articles 11 (Entry into force) and 12 (Addressees) (Articles 10 and 11 of the Commission proposal)

| 24. | The Council has taken on board the text of the Commission's proposal. |
| --- | --- |

24.

The Council has taken on board the text of the Commission's proposal.

IV.   EUROPEAN PARLIAMENT AMENDMENTS NOT TAKEN ON BOARD

| 25. | After having given them full consideration, the Council has not been able to take on board European Parliament amendments 88 (first sentence), 31, 32, 112, 95, 84, 114, 125, 75, 36, 42, 117, 107, 69, 55/rev, 97, 108, 38, 44, 118, 45, 16, 100, 57, 99, 110, 70 (partly), 60, 102, 111, 72, 103, 119, 104, 120, 76, 24, 81, 93, 94 and 28. |
| --- | --- |

25.

After having given them full consideration, the Council has not been able to take on board European Parliament amendments 88 (first sentence), 31, 32, 112, 95, 84, 114, 125, 75, 36, 42, 117, 107, 69, 55/rev, 97, 108, 38, 44, 118, 45, 16, 100, 57, 99, 110, 70 (partly), 60, 102, 111, 72, 103, 119, 104, 120, 76, 24, 81, 93, 94 and 28.

| 26. | The Council considered that some of these amendments were superfluous (amendments 88 (first sentence), 31, 75, 94), unclear and potentially confusing (amendments 36, 42, 117, 72, 104, 120), had no direct link with the issues at stake (amendments 95, 24, 81), did not reflect established practice (amendments 32, 112, 16, 100, 57, 99, 110, 70, 102, 111), or would be contrary to the international obligations of the European Community and its Member States under the TRIPS Agreement as well as to the general principles of patent law (84, 114, 125, 107, 69, 55/rev, 97, 108, 38, 44, 118, 45, 60, 103, 119, 76, 93). |
| --- | --- |

26.

The Council considered that some of these amendments were superfluous (amendments 88 (first sentence), 31, 75, 94), unclear and potentially confusing (amendments 36, 42, 117, 72, 104, 120), had no direct link with the issues at stake (amendments 95, 24, 81), did not reflect established practice (amendments 32, 112, 16, 100, 57, 99, 110, 70, 102, 111), or would be contrary to the international obligations of the European Community and its Member States under the TRIPS Agreement as well as to the general principles of patent law (84, 114, 125, 107, 69, 55/rev, 97, 108, 38, 44, 118, 45, 60, 103, 119, 76, 93).

V.   CONCLUSIONS

| 27. | In its common position, the Council has taken over a considerable number of amendments proposed by the European Parliament. Throughout the common position, the Council has sought to strike a reasonable and workable balance between the interests of rightholders and those of other parties concerned. The overall balance of the Council's common position has been acknowledged by the Commission, which has accepted it as a satisfactory compromise package. |
| --- | --- |

27.

In its common position, the Council has taken over a considerable number of amendments proposed by the European Parliament. Throughout the common position, the Council has sought to strike a reasonable and workable balance between the interests of rightholders and those of other parties concerned. The overall balance of the Council's common position has been acknowledged by the Commission, which has accepted it as a satisfactory compromise package.

---

(1)  OJ C 151 E, 25.6.2002, p. 129.

(2)  OJ C 61, 14.3.2003, p. 154.

(3)  OJ C 77 E, 26.3.2004, p. 230.

---

| 14.6.2005 | EN | Official Journal of the European Union | CE 144/16 |
| --- | --- | --- | --- |

14.6.2005

EN

Official Journal of the European Union

CE 144/16

---

COMMON POSITION (EC) No 21/2005

adopted by the Council on 8 March 2005

with a view to adopting Regulation (EC) No .../2005 of the European Parliament and of the Council of ... on the compilation of quarterly non-financial accounts by institutional sector

(2005/C 144 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 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 Action Plan on Economic and Monetary Union (EMU) Statistical Requirements endorsed by the Ecofin Council in September 2000 specifies that a limited set of quarterly sector accounts is urgently needed, and that these should be available within 90 days of the end of the quarter concerned. |
| --- | --- |

(1)

The Action Plan on Economic and Monetary Union (EMU) Statistical Requirements endorsed by the Ecofin Council in September 2000 specifies that a limited set of quarterly sector accounts is urgently needed, and that these should be available within 90 days of the end of the quarter concerned.

| (2) | The Joint Report of the Ecofin Council and the Commission to the European Council on eurozone statistics and indicators, as adopted by the Ecofin Council on 18 February 2003, emphasises that high priority actions in several fields, including quarterly national accounts by institutional sector, should be fully implemented by 2005. |
| --- | --- |

(2)

The Joint Report of the Ecofin Council and the Commission to the European Council on eurozone statistics and indicators, as adopted by the Ecofin Council on 18 February 2003, emphasises that high priority actions in several fields, including quarterly national accounts by institutional sector, should be fully implemented by 2005.

| (3) | The analysis of cyclical movements in the European Union economy and the conduct of monetary policy within the EMU require macroeconomic statistics on the economic behaviour and the interrelationship of individual institutional sectors which are impossible to identify in data compiled at the level of the economy as a whole. There is, therefore, a need to produce quarterly accounts by institutional sector, for the European Union as a whole and for the euro area. |
| --- | --- |

(3)

The analysis of cyclical movements in the European Union economy and the conduct of monetary policy within the EMU require macroeconomic statistics on the economic behaviour and the interrelationship of individual institutional sectors which are impossible to identify in data compiled at the level of the economy as a whole. There is, therefore, a need to produce quarterly accounts by institutional sector, for the European Union as a whole and for the euro area.

| (4) | Production of these accounts is part of the overall aim to compile a system of annual and quarterly accounts for the European Union and for the euro area. The system includes the main macroeconomic aggregates and the financial and non-financial accounts by institutional sector. The aim is to achieve consistency across all these accounts and, with regard to the rest of the world accounts, between the balance of payments and the national accounts data. |
| --- | --- |

(4)

Production of these accounts is part of the overall aim to compile a system of annual and quarterly accounts for the European Union and for the euro area. The system includes the main macroeconomic aggregates and the financial and non-financial accounts by institutional sector. The aim is to achieve consistency across all these accounts and, with regard to the rest of the world accounts, between the balance of payments and the national accounts data.

| (5) | The compilation of European accounts by institutional sector, in accordance with the principles of the European system of national and regional accounts in the Community as set out in Council Regulation (EC) No 2223/96 (3), requires the transmission by Member States of quarterly national accounts by institutional sector. However, the European accounts must reflect the economy of the European area as a whole and may differ from the simple aggregation of Member States' accounts. In particular, the objective is to take account of the transactions of the institutions and bodies of the European Union in the accounts of the area concerned (the European Union or the euro-zone, whichever is applicable). |
| --- | --- |

(5)

The compilation of European accounts by institutional sector, in accordance with the principles of the European system of national and regional accounts in the Community as set out in Council Regulation (EC) No 2223/96 (3), requires the transmission by Member States of quarterly national accounts by institutional sector. However, the European accounts must reflect the economy of the European area as a whole and may differ from the simple aggregation of Member States' accounts. In particular, the objective is to take account of the transactions of the institutions and bodies of the European Union in the accounts of the area concerned (the European Union or the euro-zone, whichever is applicable).

| (6) | The production of specific Community statistics is governed by the rules set out in Council Regulation (EC) No 322/97 of 17 February 1997 on Community Statistics (4). |
| --- | --- |

(6)

The production of specific Community statistics is governed by the rules set out in Council Regulation (EC) No 322/97 of 17 February 1997 on Community Statistics (4).

| (7) | Since the objective of this Regulation, namely the compilation of quarterly non-financial accounts by institutional sector for the European Union and the euro area, cannot be achieved satisfactorily by the Member States and can therefore, by reason of the scale and effects of the action, 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 to achieve that objective. In particular, where Member States make a negligible contribution to the European totals, they should not be required to report the full detail of data. |
| --- | --- |

(7)

Since the objective of this Regulation, namely the compilation of quarterly non-financial accounts by institutional sector for the European Union and the euro area, cannot be achieved satisfactorily by the Member States and can therefore, by reason of the scale and effects of the action, 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 to achieve that objective. In particular, where Member States make a negligible contribution to the European totals, they should not be required to report the full detail of data.

| (8) | 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 (5). |
| --- | --- |

(8)

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 (5).

| (9) | The Statistical Programme Committee set up by Council Decision 89/382/EEC, Euratom (6) and the Committee on Monetary, Financial and Balance of Payments Statistics set up by Council Decision 91/115/EEC (7) have been consulted, |
| --- | --- |

(9)

The Statistical Programme Committee set up by Council Decision 89/382/EEC, Euratom (6) and the Committee on Monetary, Financial and Balance of Payments Statistics set up by Council Decision 91/115/EEC (7) have been consulted,

HAVE ADOPTED THIS REGULATION:

Article 1

Purpose

This Regulation provides a common framework for the contributions of the Member States to the compilation of quarterly European non-financial accounts by institutional sector.

Article 2

Transmission of quarterly non-financial accounts by institutional sector

1.   Member States shall transmit to the Commission quarterly non-financial accounts by institutional sector, as specified in the Annex, except, in the first instance, items P.1, P.2, D.42, D.43, D.44, D.45 and B.4G.

2.   A timetable for the transmission of items P.1, P.2, D.42, D.43, D.44, D.45 and B.4G, respectively, and any decision to require a breakdown of the transactions listed in the Annex by counterpart sector shall be adopted in accordance with the procedure referred to in Article 8(2). Any such decision shall not be adopted before the Commission has reported to the European Parliament and the Council on the implementation of this Regulation pursuant to Article 9.

3.   The quarterly data referred to in paragraph 1 shall be delivered to the Commission at the latest 90 calendar days after the end of the quarter to which the data relate. During a transitional period of three years from the entry into force of this Regulation the quarterly data referred to in paragraph 1 shall be delivered to the Commission at the latest 95 calendar days after the end of the quarter to which the data relate. Any revision of the data for previous quarters shall be transmitted at the same time.

4.   The time of transmission specified in paragraph 3 may be adjusted, by a maximum of five days, in accordance with the procedure referred to in Article 8(2).

5.   The first transmission of quarterly data shall relate to data for the third quarter of 2005. Member States shall deliver these data no later than 3 January 2006. This first transmission shall include back data for the periods from the first quarter of 1999.

Article 3

Reporting obligations

1.   All Member States shall transmit the data described in the Annex, with respect to the rest of the world sector (S.2) and the general government sector (S.13). A Member State for which gross domestic product at current prices normally represents more than 1 % of the corresponding Community total shall transmit the data described in the Annex for all institutional sectors.

2.   The Commission shall determine the percentage of Community total gross domestic product at current prices that a Member State's gross domestic product normally represents, as specified in paragraph 1, on the basis of the arithmetic mean of the latest three years' annual data transmitted by Member States.

3.   The proportion (1 %) of the Community total referred to in paragraph 1 may be adjusted in accordance with the procedures referred to in Article 8(2).

4.   Derogations from this Regulation may be accepted by the Commission if national statistical systems require major adaptation. Such derogations shall last not more than three years from the date of entry into force of this Regulation, or that of the implementing measures adopted in accordance with the procedure referred to in Article 8(2).

Article 4

Definitions and standards

The standards, definitions, classifications, and accounting rules for data transmitted for the purposes of this Regulation shall be those laid down in Regulation (EC) No 2223/96 (hereinafter referred to as the ESA Regulation).

Article 5

Data sources and consistency requirements

1.   Member States shall compile the information requested in this Regulation using all sources they consider relevant, giving priority to direct information such as administrative sources or surveys of enterprises and households.

When such direct information cannot be collected, in particular for the back data required under Article 2(5), best estimates may be transmitted.

2.   Data transmitted by Member States for the purposes of this Regulation shall be consistent with the quarterly non-financial accounts of the general government and the quarterly main aggregates of the total economy, transmitted to the Commission under the data transmission programme of the ESA Regulation.

3.   The quarterly data transmitted by Member States for the purposes of this Regulation shall be aligned with the corresponding annual data transmitted under the data transmission programme of the ESA Regulation.

Article 6

Quality standards and reports

1.   Member States shall take all measures necessary to ensure that the quality of the data transmitted improves over time to meet the common quality standards to be defined in accordance with the procedure referred to in Article 8(2).

2.   Member States shall supply the Commission with an up-to-date description of the sources, methods and statistical treatments used within a year of their first transmission of data.

3.   Member States shall inform the Commission of major methodological or other changes that would affect the data transmitted not later than three months after such change takes effect.

Article 7

Implementing measures

The implementing measures shall be laid down in accordance with the procedure referred to in Article 8(2). Such measures shall include:

| (a) | determining the timetable for the transmission of the items P.1, P.2, D.42, D.43, D.44, D.45 and B.4G pursuant to Article 2(2); |
| --- | --- |

(a)

determining the timetable for the transmission of the items P.1, P.2, D.42, D.43, D.44, D.45 and B.4G pursuant to Article 2(2);

| (b) | requiring the transactions shown in the Annex to be broken down by counterpart sector in accordance with Article 2(2); |
| --- | --- |

(b)

requiring the transactions shown in the Annex to be broken down by counterpart sector in accordance with Article 2(2);

| (c) | revising the timetable of quarterly transmissions pursuant to Article 2(4); |
| --- | --- |

(c)

revising the timetable of quarterly transmissions pursuant to Article 2(4);

| (d) | adjusting the proportion (1 %) of the Community total to determine the obligation to transmit data for all institutional sectors pursuant to Article 3(3); |
| --- | --- |

(d)

adjusting the proportion (1 %) of the Community total to determine the obligation to transmit data for all institutional sectors pursuant to Article 3(3);

| (e) | defining data quality standards in accordance with Article 6(1). |
| --- | --- |

(e)

defining data quality standards in accordance with Article 6(1).

Article 8

Committee procedure

1.   The Commission shall be assisted by the Statistical Programme Committee.

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 referred to in Article 5(6) of Decision 1999/468/EC shall be set at three months.

3.   The Committee shall adopt its rules of procedure.

Article 9

Report on implementation

Within five years of the entry into force of this Regulation, the Commission shall submit a report to the European Parliament and the Council on its implementation.

In particular, this report shall:

| (a) | provide information on the quality of the statistics produced; |
| --- | --- |

(a)

provide information on the quality of the statistics produced;

| (b) | assess the benefits accruing to the Community, the Member States and the providers and users of statistical information of the statistics produced in relation to their costs; |
| --- | --- |

(b)

assess the benefits accruing to the Community, the Member States and the providers and users of statistical information of the statistics produced in relation to their costs;

| (c) | identify areas for potential improvement and amendments considered necessary in light of the results obtained. |
| --- | --- |

(c)

identify areas for potential improvement and amendments considered necessary in light of the results obtained.

Article 10

Entry into force

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

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 42, 18.2.2004, p. 23.

1

(2)  Opinion of the European Parliament of 30 March 2004(OJ C 103 E, 29.4.2004, p. 141), Council Common Position of 8 March 2005 and Position of the European Parliament of ... (not yet published in the Official Journal).

2

(3)  OJ L 310, 30.11.1996, p. 1. Regulation as last amended by Regulation (EC) No 1267/2003 of the European Parliament and of the Council (OJ L 180, 18.7.2003, p. 1).

3

(4)  OJ L 52, 22.2.1997, p. 1. Regulation as amended by Regulation (EC) No 1882/2003 of the European Parliament and of the Council (OJ L 284, 31.10.2003, p. 1).

4

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

5

(6)  OJ L 181, 28.6.1989, p. 47.

6

(7)  OJ L 59, 6.3.1991, p. 19.

7

---

ANNEX

Data transmission

| | Uses | Resources |
| --- | --- | --- |
| S1 | S1N | S11 | S12 | S13 | S14-S15 | S2 | S1 | S1N | S11 | S12 | S13 | S14-S15 | S2 |
| Total economy | Unspecified total economy | Non-financial corporations | Financial corporations | General government | Households and NPISH | Rest of the world | Total economy | Unspecified total economy | Non-financial corporations | Financial corporations | General government | Households and NPISH | Rest of the world |
| P1 | Output | | | | | | | | X | | X | X | X | X | |
| P2 | Intermediate consumption | X | | X | X | X | X | | | | | | | | |
| P.3 | Final consumption expenditure | X | | | | X | X | | | | | | | | |
| P.31 | Individual consumption expenditure | X | | | | X | X | | | | | | | | |
| P.32 | Collective consumption expenditure | X | | | | X | | | | | | | | | |
| P.5 | Gross capital formation | X | | X | X | X | X | | | | | | | | |
| P.51 | Gross fixed capital formation | X | | X | X | X | X | | | | | | | | |
| P.5N | Changes in inventories and acquisitions less disposals of valuables | X | | X | X | X | X | | | | | | | | |
| P.6 | Exports of goods and services | | | | | | | X | | | | | | | |
| P.7 | Imports of goods and services | | | | | | | | | | | | | | X |
| D.1 | Compensation of employees | X | | X | X | X | X | X | X | | | | | X | X |
| D.2 | Taxes on production and imports | X | X | X | X | X | X | | X | | | | X | | X |
| D.21 | Taxes on products | X | X | | | | | | X | | | | X | | X |
| D.29 | Other taxes on production | X | | X | X | X | X | | X | | | | X | | X |
| D.3 | Subsidies | X | | | | X | | X | X | X | X | X | X | X | |
| D.31 | Subsidies on products | X | | | | X | | X | X | X | | | | | |
| D.39 | Other subsidies on production | X | | | | X | | X | X | | X | X | X | X | |
| D.21-D.31 | Taxes less subsidies (on products) | | | | | | | | X | X | | | | | |
| D.4 | Property income | X | | X | X | X | X | X | X | | X | X | X | X | X |
| D.41 | Interest | X | | X | X | X | X | X | X | | X | X | X | X | X |
| D.4N | Property income other than interest | X | | X | X | X | X | X | X | | X | X | X | X | X |
| D.42 | Distributed income of corporations | X | | X | X | | X | X | X | | X | X | X | X | X |
| D.43 | Reinvested earnings on F.D.I | X | | X | X | | | X | X | | X | X | X | X | X |
| D.44 | Property income att. to policy insurance holders | X | | X | X | | | X | X | | X | X | X | X | X |
| D.45 | Rents | X | | X | X | X | X | | X | | X | X | X | X | |
| D.5 | Current taxes on income, wealth, etc. | X | | X | X | X | X | X | X | | | | X | | X |
| D.6 | Social contributions and benefits | X | | X | X | X | X | X | X | | X | X | X | X | X |
| D.61 | Social contributions | X | | | | | X | X | X | | X | X | X | X | X |
| D.62 | Social benefits other than social transfers in kind | X | | X | X | X | X | X | X | | | | | X | X |
| D.63 | Social transfers in kind | X | | | | X | X | | X | | | | | X | |
| D.7 | Other current transfers | X | | X | X | X | X | X | X | | X | X | X | X | X |
| D.71 | Net non-life insurance premiums | X | | X | X | X | X | X | X | | | X | X | | X |
| D.72 | Non-life insurance claims | X | | | X | | | X | X | | X | X | X | X | X |
| D.7N | Other current transfers, n.e.c. | X | | X | X | X | X | X | X | | X | X | X | X | X |
| D.8 | Adjustment for the change in net equity of households in pension funds reserves | X | | X | X | X | X | X | X | | | | | X | X |
| D.9 | Capital transfers | X | | X | X | X | X | X | X | | X | X | X | X | X |
| D.91 | Capital taxes | X | | X | X | | X | X | X | | | | X | | |
| D.9N | Investment grants and other capital transfers | X | | X | X | X | X | X | X | | X | X | X | X | X |
| K.1 | Consumption of fixed capital | X | | X | X | X | X | | X | | X | X | X | X | |
| K.2 | Acqu. less disp. of non-fin. non-prod. assets | X | | X | X | X | X | X | | | | | | | |

Uses

Resources

S1

S1N

S11

S12

S13

S14-S15

S2

S1

S1N

S11

S12

S13

S14-S15

S2

Total economy

Unspecified total economy

Non-financial corporations

Financial corporations

General government

Households and NPISH

Rest of the world

Total economy

Unspecified total economy

Non-financial corporations

Financial corporations

General government

Households and NPISH

Rest of the world

P1

Output

X

X

X

X

X

P2

Intermediate consumption

X

X

X

X

X

P.3

Final consumption expenditure

X

X

X

P.31

Individual consumption expenditure

X

X

X

P.32

Collective consumption expenditure

X

X

P.5

Gross capital formation

X

X

X

X

X

P.51

Gross fixed capital formation

X

X

X

X

X

P.5N

Changes in inventories and acquisitions less disposals of valuables

X

X

X

X

X

P.6

Exports of goods and services

X

P.7

Imports of goods and services

X

D.1

Compensation of employees

X

X

X

X

X

X

X

X

X

D.2

Taxes on production and imports

X

X

X

X

X

X

X

X

X

D.21

Taxes on products

X

X

X

X

X

D.29

Other taxes on production

X

X

X

X

X

X

X

X

D.3

Subsidies

X

X

X

X

X

X

X

X

X

D.31

Subsidies on products

X

X

X

X

X

D.39

Other subsidies on production

X

X

X

X

X

X

X

X

D.21-D.31

Taxes less subsidies (on products)

X

X

D.4

Property income

X

X

X

X

X

X

X

X

X

X

X

X

D.41

Interest

X

X

X

X

X

X

X

X

X

X

X

X

D.4N

Property income other than interest

X

X

X

X

X

X

X

X

X

X

X

X

D.42

Distributed income of corporations

X

X

X

X

X

X

X

X

X

X

X

D.43

Reinvested earnings on F.D.I

X

X

X

X

X

X

X

X

X

X

D.44

Property income att. to policy insurance holders

X

X

X

X

X

X

X

X

X

X

D.45

Rents

X

X

X

X

X

X

X

X

X

X

D.5

Current taxes on income, wealth, etc.

X

X

X

X

X

X

X

X

X

D.6

Social contributions and benefits

X

X

X

X

X

X

X

X

X

X

X

X

D.61

Social contributions

X

X

X

X

X

X

X

X

X

D.62

Social benefits other than social transfers in kind

X

X

X

X

X

X

X

X

X

D.63

Social transfers in kind

X

X

X

X

X

D.7

Other current transfers

X

X

X

X

X

X

X

X

X

X

X

X

D.71

Net non-life insurance premiums

X

X

X

X

X

X

X

X

X

X

D.72

Non-life insurance claims

X

X

X

X

X

X

X

X

X

D.7N

Other current transfers, n.e.c.

X

X

X

X

X

X

X

X

X

X

X

X

D.8

Adjustment for the change in net equity of households in pension funds reserves

X

X

X

X

X

X

X

X

X

D.9

Capital transfers

X

X

X

X

X

X

X

X

X

X

X

X

D.91

Capital taxes

X

X

X

X

X

X

X

D.9N

Investment grants and other capital transfers

X

X

X

X

X

X

X

X

X

X

X

X

K.1

Consumption of fixed capital

X

X

X

X

X

X

X

X

X

X

K.2

Acqu. less disp. of non-fin. non-prod. assets

X

X

X

X

X

X

| | Balancing items |
| --- | --- |
| S1 | S1N | S11 | S12 | S13 | S14-S15 | S2 |
| Total economy | Unspecified total economy | Non-financial corporations | Financial corporations | General government | Households and NPISH | Rest of the world |
| B.1G | Gross value added | X | X | X | X | X | X | |
| B.1N | Net value added | X | X | X | X | X | X | |
| B.2G | Operating surplus (gross) | X | | X | X | X | X | |
| B.3G | Mixed income (gross) | X | | | | | X | |
| B.4G | Entrepreneurial income (gross) | X | | X | X | | X | |
| B.5G | Balance of primary incomes (gross) | X | | X | X | X | X | |
| B.6G | Disposable income (gross) | X | | X | X | X | X | |
| B.7G | Adjusted disposable income (gross) | X | | | | X | X | |
| B.8G | Saving (gross) | X | | X | X | X | X | |
| B.9 | Net lending/net borrowing | X | | X | X | X | X | X |
| B.11 | External balance of goods and services | | | | | | | X |
| B.12 | Current external balance | | | | | | | X |

Balancing items

S1

S1N

S11

S12

S13

S14-S15

S2

Total economy

Unspecified total economy

Non-financial corporations

Financial corporations

General government

Households and NPISH

Rest of the world

B.1G

Gross value added

X

X

X

X

X

X

B.1N

Net value added

X

X

X

X

X

X

B.2G

Operating surplus (gross)

X

X

X

X

X

B.3G

Mixed income (gross)

X

X

B.4G

Entrepreneurial income (gross)

X

X

X

X

B.5G

Balance of primary incomes (gross)

X

X

X

X

X

B.6G

Disposable income (gross)

X

X

X

X

X

B.7G

Adjusted disposable income (gross)

X

X

X

B.8G

Saving (gross)

X

X

X

X

X

B.9

Net lending/net borrowing

X

X

X

X

X

X

B.11

External balance of goods and services

X

B.12

Current external balance

X

---

STATEMENT OF THE COUNCIL'S REASONS

I.   INTRODUCTION

| 1. | On 17 December 2003, the Commission submitted a proposal for a Regulation of the European Parliament and of the Council on the compilation of quarterly non-financial accounts by institutional sector (1), based on Article 285 of the EC Treaty. |
| --- | --- |

1.

On 17 December 2003, the Commission submitted a proposal for a Regulation of the European Parliament and of the Council on the compilation of quarterly non-financial accounts by institutional sector (1), based on Article 285 of the EC Treaty.

| 2. | The European Central Bank delivered its opinion on 4 February 2004 (2). |
| --- | --- |

2.

The European Central Bank delivered its opinion on 4 February 2004 (2).

| 3. | The European Parliament delivered its opinion at first reading on 31 March 2004 (3). |
| --- | --- |

3.

The European Parliament delivered its opinion at first reading on 31 March 2004 (3).

| 4. | The Commission has not submitted an amended proposal. |
| --- | --- |

4.

The Commission has not submitted an amended proposal.

| 5. | The Council adopted its common position according to Article 251 of the EC Treaty on 8 March 2005 |
| --- | --- |

5.

The Council adopted its common position according to Article 251 of the EC Treaty on 8 March 2005

II.   AIM

| 6. | The aim of this proposal for a Regulation is to provide a common framework for the contributions of the Member States to the compilation of quarterly European accounts by institutional sector. |
| --- | --- |

6.

The aim of this proposal for a Regulation is to provide a common framework for the contributions of the Member States to the compilation of quarterly European accounts by institutional sector.

III.   COMMON POSITION

Recitals

| 7. | The Council has amended recital 5, by deleting the expression ‘when these are residents in the European area’ to take on board in full the European Parliament's single amendment. This recital has been changed in order to clarify that the scope of this regulation includes ‘the European Union or the eurozone, whichever is applicable’, instead of the ‘European area’. |
| --- | --- |

7.

The Council has amended recital 5, by deleting the expression ‘when these are residents in the European area’ to take on board in full the European Parliament's single amendment. This recital has been changed in order to clarify that the scope of this regulation includes ‘the European Union or the eurozone, whichever is applicable’, instead of the ‘European area’.

Articles

Article 1 (Purpose)

| 8. | Article 1 was accepted as in the Commission's proposal and the European Parliament did not suggest any amendments. |
| --- | --- |

8.

Article 1 was accepted as in the Commission's proposal and the European Parliament did not suggest any amendments.

Article 2 (Transmission of quarterly non-financial accounts by institutional sector)

| 9. | Paragraph 1 was accepted as in the Commission's proposal. |
| --- | --- |

9.

Paragraph 1 was accepted as in the Commission's proposal.

| 10. | On paragraph 2, the Council has added the sentence: ‘Any such decision shall not be adopted before the Commission has reported to the European Parliament and Council on the implementation of this Regulation pursuant to Article 9’. By introducing this amendment the Council established that the transmission of further data regarding further breakdown of transactions will not take place before the European Commission reports to the European Parliament and to the Council (within a maximum period of five years) on the implementation of this regulation. |
| --- | --- |

10.

On paragraph 2, the Council has added the sentence: ‘Any such decision shall not be adopted before the Commission has reported to the European Parliament and Council on the implementation of this Regulation pursuant to Article 9’. By introducing this amendment the Council established that the transmission of further data regarding further breakdown of transactions will not take place before the European Commission reports to the European Parliament and to the Council (within a maximum period of five years) on the implementation of this regulation.

| 11. | On paragraph 3, the Council has introduced a new sentence: ‘During a transitional period of three years from the entry into force of this Regulation the quarterly data referred to in paragraph 1 shall be delivered to the Commission at the latest 95 calendar days after the end of the quarter to which the data relate.’ to allow for a transitional period of three years during which Member States are required to deliver to the Commission the quarterly data referred to in paragraph 1 within a deadline of 95 days instead of the 90 days initially proposed by the Commission. |
| --- | --- |

11.

On paragraph 3, the Council has introduced a new sentence: ‘During a transitional period of three years from the entry into force of this Regulation the quarterly data referred to in paragraph 1 shall be delivered to the Commission at the latest 95 calendar days after the end of the quarter to which the data relate.’ to allow for a transitional period of three years during which Member States are required to deliver to the Commission the quarterly data referred to in paragraph 1 within a deadline of 95 days instead of the 90 days initially proposed by the Commission.

| 12. | Paragraph 4 was accepted as in the Commission's proposal. |
| --- | --- |

12.

Paragraph 4 was accepted as in the Commission's proposal.

| 13. | On paragraph 5, the Council replaced ‘first quarter’ by ‘third quarter’ and ‘30 June 2005’ by ‘3 January 2006’, moving forward by two quarters the first period to which the first transmission of quarterly data relates and moving forward by a half year the date for Member States to deliver these data. |
| --- | --- |

13.

On paragraph 5, the Council replaced ‘first quarter’ by ‘third quarter’ and ‘30 June 2005’ by ‘3 January 2006’, moving forward by two quarters the first period to which the first transmission of quarterly data relates and moving forward by a half year the date for Member States to deliver these data.

Articles 3 (Reporting obligations), 4 (Definitions and standards), 5 (Data sources and consistency requirements), 6 (Quality standards and reports), 7 (Implementing measures), 8 (Committee), 9 (Report on implementation) and 10 (Entry into force)

| 14. | These Articles were accepted as in the Commission's proposal and the European Parliament did not suggest any amendments to them. |
| --- | --- |

14.

These Articles were accepted as in the Commission's proposal and the European Parliament did not suggest any amendments to them.

IV.   EUROPEAN PARLIAMENT AMENDMENTS NOT TAKEN ON BOARD

| 15. | The sole amendment proposed by the European Parliament in its first reading has been accepted. |
| --- | --- |

15.

The sole amendment proposed by the European Parliament in its first reading has been accepted.

V.   CONCLUSIONS

| 16. | In its common position, the Council has taken over the amendment proposed by the European Parliament. The Council considers that the modifications introduced in its common position are fully in line with the objectives of the regulation. The overall balance of the Council's common position has been acknowledged by the Commission, which has accepted it as a satisfactory compromise package. |
| --- | --- |

16.

In its common position, the Council has taken over the amendment proposed by the European Parliament. The Council considers that the modifications introduced in its common position are fully in line with the objectives of the regulation. The overall balance of the Council's common position has been acknowledged by the Commission, which has accepted it as a satisfactory compromise package.

---

(1)  COM(2003) 0789 final.

(2)  OJ C 42, 18.2.2004, p. 23.

(3)  OJ C 103 E, 29.4.2004, p. 141.

---

| 14.6.2005 | EN | Official Journal of the European Union | CE 144/24 |
| --- | --- | --- | --- |

14.6.2005

EN

Official Journal of the European Union

CE 144/24

---

COMMON POSITION (EC) No 22/2005

adopted by the Council on 4 April 2005

with a view to adopting Directive 2005/.../EC of the European Parliament and of the Council of ... amending for the 22nd time Council Directive 76/769/EEC on the approximation of the laws, regulations and administrative provisions of the Member States relating to restrictions on the marketing and use of certain dangerous substances and preparations (phthalates in toys and childcare articles)

(2005/C 144 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 95 thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the European Economic and Social Committee (2),

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

Whereas:

| (1) | Article 14 of the Treaty establishes an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured. |
| --- | --- |

(1)

Article 14 of the Treaty establishes an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured.

| (2) | Work on the internal market should improve the quality of life, health protection and consumer safety. This Directive complies with the requirements of ensuring a high level of health protection and of consumer protection in the definition and implementation of all Community policies and activities. |
| --- | --- |

(2)

Work on the internal market should improve the quality of life, health protection and consumer safety. This Directive complies with the requirements of ensuring a high level of health protection and of consumer protection in the definition and implementation of all Community policies and activities.

| (3) | The use of certain phthalates in toys and childcare articles made of plasticised material or including parts made of plasticised material should be prohibited as the presence of certain phthalates presents or could potentially present risks related to the health of children. |
| --- | --- |

(3)

The use of certain phthalates in toys and childcare articles made of plasticised material or including parts made of plasticised material should be prohibited as the presence of certain phthalates presents or could potentially present risks related to the health of children.

| (4) | The Scientific Committee on Toxicity, Ecotoxicity and the Environment (SCTEE), after being consulted by the Commission, has delivered opinions on the health risks raised by these phthalates. |
| --- | --- |

(4)

The Scientific Committee on Toxicity, Ecotoxicity and the Environment (SCTEE), after being consulted by the Commission, has delivered opinions on the health risks raised by these phthalates.

| (5) | Commission Recommendation 98/485/EC of 1 July 1998 on childcare articles and toys intended to be placed in the mouth by children of less than three years of age, made of soft PVC containing certain phthalates (4), invited Member States to take measures to ensure a high level of child health protection with regard to these products. |
| --- | --- |

(5)

Commission Recommendation 98/485/EC of 1 July 1998 on childcare articles and toys intended to be placed in the mouth by children of less than three years of age, made of soft PVC containing certain phthalates (4), invited Member States to take measures to ensure a high level of child health protection with regard to these products.

| (6) | Since 1999, the use of six phthalates in toys and childcare articles intended to be placed in the mouth by children under the age of three is subject to a temporary ban at European Union level following the adoption of Commission Decision 1999/815/EC (5) in the framework of Council Directive 92/59/EEC of 29 June 1992 on general product safety (6). This Decision is being renewed regularly. |
| --- | --- |

(6)

Since 1999, the use of six phthalates in toys and childcare articles intended to be placed in the mouth by children under the age of three is subject to a temporary ban at European Union level following the adoption of Commission Decision 1999/815/EC (5) in the framework of Council Directive 92/59/EEC of 29 June 1992 on general product safety (6). This Decision is being renewed regularly.

| (7) | Limitations already adopted by certain Member States on the placing on the market of toys and childcare articles because of their phthalate content directly affect the completion and functioning of the internal market. It is therefore necessary to approximate the laws of the Member States in this field and consequently to amend Annex I to Council Directive 76/769/EEC (7). |
| --- | --- |

(7)

Limitations already adopted by certain Member States on the placing on the market of toys and childcare articles because of their phthalate content directly affect the completion and functioning of the internal market. It is therefore necessary to approximate the laws of the Member States in this field and consequently to amend Annex I to Council Directive 76/769/EEC (7).

| (8) | The precautionary principle should be applied where scientific evaluation does not allow the risk to be determined with sufficient certainty in order to ensure a high level of protection of health, in particular for children. |
| --- | --- |

(8)

The precautionary principle should be applied where scientific evaluation does not allow the risk to be determined with sufficient certainty in order to ensure a high level of protection of health, in particular for children.

| (9) | Children as developing organisms are particularly vulnerable to reprotoxic substances. Therefore, the exposure of children to all practically avoidable sources of emissions of these substances, especially from articles which are put into the mouth by children, should be reduced as far as possible. |
| --- | --- |

(9)

Children as developing organisms are particularly vulnerable to reprotoxic substances. Therefore, the exposure of children to all practically avoidable sources of emissions of these substances, especially from articles which are put into the mouth by children, should be reduced as far as possible.

| (10) | During risk assessments and/or within the framework of Council Directive 67/548/EEC of 27 June 1967 on the approximation of laws, regulations and administrative provisions relating to the classification, packaging and labelling of dangerous substances (8), DEHP, DBP and BBP have been identified as reprotoxic substances and have therefore been classified as reprotoxic, category 2. |
| --- | --- |

(10)

During risk assessments and/or within the framework of Council Directive 67/548/EEC of 27 June 1967 on the approximation of laws, regulations and administrative provisions relating to the classification, packaging and labelling of dangerous substances (8), DEHP, DBP and BBP have been identified as reprotoxic substances and have therefore been classified as reprotoxic, category 2.

| (11) | Scientific information regarding DINP, DIDP and DNOP is either lacking or conflicting, but it can not be excluded that they pose a potential risk if used in toys and childcare articles, which are by definition produced for children. |
| --- | --- |

(11)

Scientific information regarding DINP, DIDP and DNOP is either lacking or conflicting, but it can not be excluded that they pose a potential risk if used in toys and childcare articles, which are by definition produced for children.

| (12) | The uncertainties in the evaluation of exposure to these phthalates, such as mouthing times and exposure to emissions from other sources, require that precautionary considerations be taken into account. Therefore, restrictions on the use of these phthalates for toys and childcare articles and on the placing on the market of such articles should be introduced. However, the restrictions for DINP, DIDP and DNOP should be less severe than the ones proposed for DEHP, DBP and BBP for reasons of proportionality. |
| --- | --- |

(12)

The uncertainties in the evaluation of exposure to these phthalates, such as mouthing times and exposure to emissions from other sources, require that precautionary considerations be taken into account. Therefore, restrictions on the use of these phthalates for toys and childcare articles and on the placing on the market of such articles should be introduced. However, the restrictions for DINP, DIDP and DNOP should be less severe than the ones proposed for DEHP, DBP and BBP for reasons of proportionality.

| (13) | In line with the Commission Communication on the Precautionary Principle, the measures based on this principle should be subject to review in the light of new scientific information. |
| --- | --- |

(13)

In line with the Commission Communication on the Precautionary Principle, the measures based on this principle should be subject to review in the light of new scientific information.

| (14) | The Commission, in cooperation with the Member State authorities responsible for market surveillance and enforcement for toys and childcare articles, and in consultation with the relevant organisations of producers and importers, should monitor the use of phthalates and other substances as plasticisers in toys and childcare articles. |
| --- | --- |

(14)

The Commission, in cooperation with the Member State authorities responsible for market surveillance and enforcement for toys and childcare articles, and in consultation with the relevant organisations of producers and importers, should monitor the use of phthalates and other substances as plasticisers in toys and childcare articles.

| (15) | For the purpose of Directive 76/769/EEC, the term ‘childcare article’ should be defined. |
| --- | --- |

(15)

For the purpose of Directive 76/769/EEC, the term ‘childcare article’ should be defined.

| (16) | The Council, in accordance with paragraph 34 of the Interinstitutional agreement on better law-making (9), should encourage Member States to draw up, for themselves and in the interest of the Community, their own tables, which will, as far as possible, illustrate the correlation between this Directive and the transposition measures and to make them public. |
| --- | --- |

(16)

The Council, in accordance with paragraph 34 of the Interinstitutional agreement on better law-making (9), should encourage Member States to draw up, for themselves and in the interest of the Community, their own tables, which will, as far as possible, illustrate the correlation between this Directive and the transposition measures and to make them public.

| (17) | The Commission will review the use of the phthalates listed in Annex I to Directive 76/769/EEC in other products when the risk evaluation under Council Regulation (EEC) No 793/93 of 23 March 1993 on the evaluation and control of the risks of existing substances (10) will have been concluded. |
| --- | --- |

(17)

The Commission will review the use of the phthalates listed in Annex I to Directive 76/769/EEC in other products when the risk evaluation under Council Regulation (EEC) No 793/93 of 23 March 1993 on the evaluation and control of the risks of existing substances (10) will have been concluded.

| (18) | This Directive applies without prejudice to Community legislation laying down minimum requirements for the protection of workers contained in Council Directive 89/391/EEC of 12 June 1989 on the introduction of measures to encourage improvements in the safety and health of workers at work (11) and in individual directives based thereon, in particular Council Directive 90/394/EEC of 28 June 1990 on the protection of workers from the risks related to exposure to carcinogens at work (12) and Council Directive 98/24/EC of 7 April 1998 on protection of health and safety of workers from the risk related to chemical agents at work (13), |
| --- | --- |

(18)

This Directive applies without prejudice to Community legislation laying down minimum requirements for the protection of workers contained in Council Directive 89/391/EEC of 12 June 1989 on the introduction of measures to encourage improvements in the safety and health of workers at work (11) and in individual directives based thereon, in particular Council Directive 90/394/EEC of 28 June 1990 on the protection of workers from the risks related to exposure to carcinogens at work (12) and Council Directive 98/24/EC of 7 April 1998 on protection of health and safety of workers from the risk related to chemical agents at work (13),

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Directive 76/769/EEC is hereby amended as follows:

| 1. | The following subparagraph shall be added to Article 1(3):






  ‘(c) | “childcare article” means any product intended to facilitate sleep, relaxation, the feeding of children or sucking on the part of children.’ |
| --- | --- | --- |

1.

The following subparagraph shall be added to Article 1(3):

‘(c)

“childcare article” means any product intended to facilitate sleep, relaxation, the feeding of children or sucking on the part of children.’

| 2. | Annex I shall be amended as set out in the Annex to this Directive. |
| --- | --- |

2.

Annex I shall be amended as set out in the Annex to this Directive.

Article 2

The Commission shall re-evaluate, by ... (14) at the latest, the measures provided for in Directive 76/769/EEC as amended by this Directive in the light of new scientific information on substances described in the Annex to this Directive and their substitutes, and if justified, these measures shall be modified accordingly.

Article 3

1.   By ... (15) Member States shall adopt and publish the laws, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith inform the Commission thereof.

They shall apply these measures from ... (16).

When Member States adopt these measures, they shall contain a reference to this Directive or shall be accompanied by such reference on the occasion of their official publication. The methods of making such reference shall be laid down by the Member States.

2.   Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.

Article 4

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

Article 5

This Directive is addressed to the Member States.

Done at Brussels,

For the European Parliament

The President

...

For the Council

The President

...

---

(1)  OJ C 116 E, 26.4.2000, p. 14.

1

(2)  OJ C 117, 26.4.2000, p. 59.

2

(3)  Opinion of the European Parliament of 6 July 2000 (OJ C 121, 24.4.2001, p. 410), Council Common Position of 4 April 2005 and Position of the European Parliament of ... (not yet published in the Official Journal).

3

(4)  OJ L 217, 5.8.1998, p. 35.

4

(5)  OJ L 315, 9.12.1999, p. 46. Decision as last amended by Decision 2004/781/EC (OJ L 344, 20.11.2004, p. 35).

5

(6)  OJ L 228, 11.8.1992, p. 24. Directive repealed by Directive 2001/95/EC of the European Parliament and of the Council (OJ L 11, 15.1.2002, p. 4).

6

(7)  OJ L 262, 27.9.1976, p. 201. Directive as last amended by Commission Directive 2004/98/EC (OJ L 305, 1.10.2004, p. 63).

7

(8)  OJ 196, 16.8.1967, p. 1. Directive as last amended by Commission Directive 2004/73/EC (OJ L 152, 30.4.2004, p. 1).

8

(9)  OJ C 321, 31.12.2003, p. 1.

9

(10)  OJ L 84, 5.4.1993, p. 1. Regulation as amended by Regulation (EC) No 1882/2003 of the European Parliament and of the Council (OJ L 284, 31.10.2003, p. 1).

10

(11)  OJ L 183, 29.6.1989, p. 1. Directive as amended by Regulation (EC) No 1882/2003.

11

(12)  OJ L 196, 26.7.1990, p. 1. Directive repealed by Directive 2004/37/EC of the European Parliament and of the Council (OJ L 158, 30.4.2004, p. 50).

12

(13)  OJ L 131, 5.5. 1998, p. 11.

13

(14)  Four years after entry into force of this Directive.

14

(15)  Six months after entry into force of this Directive.

15

(16)  Twelve months after entry into force of this Directive.

16

---

ANNEX

The following points shall be added to Annex I to Directive 76/769/EEC:

| ‘(XX.) | The following phthalates (or other CAS- and Einecs numbers covering the substance):
  bis (2-ethylhexyl) phthalate (DEHP)
  CAS No 117-81-7
  Einecs No 204-211-0
  dibutyl phthalate (DBP)
  CAS No 84-74-2
  Einecs No 201-557-4
  benzyl butyl phthalate (BBP)
  CAS No 85-68-7
  Einecs No 201-622-7 |
| --- | --- |

‘(XX.)

The following phthalates (or other CAS- and Einecs numbers covering the substance):

bis (2-ethylhexyl) phthalate (DEHP)

CAS No 117-81-7

Einecs No 204-211-0

dibutyl phthalate (DBP)

CAS No 84-74-2

Einecs No 201-557-4

benzyl butyl phthalate (BBP)

CAS No 85-68-7

Einecs No 201-622-7

Shall not be used as substances or as constituents of preparations, at concentrations of greater than 0,1 % by mass of the plasticised material, in toys and childcare articles.

Such toys and childcare articles containing these phthalates in a concentration greater than the limit mentioned above shall not be placed on the market.

| (XXa.) | The following phthalates (or other CAS- and Einecs numbers covering the substance):
  di-“isononyl” phthalate (DINP)
  CAS No 28553-12-0 and 68515-48-0
  Einecs No 249-079-5 and 271-090-9
  di-“isodecyl” phthalate (DIDP)
  CAS No 26761-40-0 and 68515-49-1
  Einecs No 247-977-1 and 271-091-4
  di-n-octyl phthalate (DNOP)
  CAS No 117-84-0
  Einecs No 204-214-7 |
| --- | --- |

(XXa.)

The following phthalates (or other CAS- and Einecs numbers covering the substance):

di-“isononyl” phthalate (DINP)

CAS No 28553-12-0 and 68515-48-0

Einecs No 249-079-5 and 271-090-9

di-“isodecyl” phthalate (DIDP)

CAS No 26761-40-0 and 68515-49-1

Einecs No 247-977-1 and 271-091-4

di-n-octyl phthalate (DNOP)

CAS No 117-84-0

Einecs No 204-214-7

Shall not be used as substances or as constituents of preparations, at concentrations of greater than 0,1 % by mass of the plasticised material, in toys and childcare articles intended for children under three years of age and which can be placed in the mouth by them.

Such toys and childcare articles containing these phthalates in a concentration greater than the limit mentioned above shall not be placed on the market.’

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STATEMENT OF THE COUNCIL REASONS

I.   INTRODUCTION

The Commission submitted to the Council and to the European Parliament its proposal for amending for the 22nd time Directive 76/769/EEC on 24 November 1999 (1), based on Article 95 of the EC Treaty.

The European Economic and Social Committee delivered an opinion on 15 February 2000 (2).

The European Parliament completed its first reading and delivered an opinion on 6 July 2000 (3).

On 4 April 2005, the Council adopted its Common Position as set out in Document 5467/05.

II.   OBJECTIVE

The draft Directive relates to the marketing and use of toys and childcare articles containing phthalates. In its original form it foresaw prohibition of six different phthalates in toys and childcare articles containing PVC and intended to be put in the mouth by children under the age of three years.

The European Parliament, in its first reading, adopted a resolution on phthalates and toy safety proposing some amendments to the Commission proposal. The main amendments are the following:

| — | in the case of toys that contain phthalates and are intended for children between the ages of three and six, but which younger children could place in their mouths, warnings must be placed on the packaging and on the toy itself, |
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in the case of toys that contain phthalates and are intended for children between the ages of three and six, but which younger children could place in their mouths, warnings must be placed on the packaging and on the toy itself,

| — | the prohibition should apply to all phthalates and not only to the six contained in the Commission proposal, |
| --- | --- |

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the prohibition should apply to all phthalates and not only to the six contained in the Commission proposal,

| — | the ban should be extended to all toys, not just toys intended for children under three, and not only toys that are designed to be placed in the mouth. Toys which can be placed in the mouth by children may have concentrations no greater than 0.1 %, rather than 1 % as envisaged in the Commission proposal, |
| --- | --- |

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the ban should be extended to all toys, not just toys intended for children under three, and not only toys that are designed to be placed in the mouth. Toys which can be placed in the mouth by children may have concentrations no greater than 0.1 %, rather than 1 % as envisaged in the Commission proposal,

| — | fragrances may not be added to toys, containing phthalates, which a child can place in its mouth. |
| --- | --- |

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fragrances may not be added to toys, containing phthalates, which a child can place in its mouth.

On 25 May 2000, the Council examined the file but was not able to reach agreement on a common position.

Meanwhile, the results of new risk assessments had become available, and it seemed desirable to strengthen some of the original provisions, in line with what the European Parliament had concluded. On 24 September 2004, the Council reached a political agreement by unanimity on the draft Directive, amending for the 22nd time Directive 76/769/EEC, as set out in Annex I to Document 12469/04.

III.   ANALYSIS OF THE COMMON POSITION AS SET OUT IN DOCUMENT 5467/05

1.   General

Though not incorporating all amendments of the European Parliament, the common position broadens considerably the scope of the ban, by replacing labelling with an outright ban and ensures legal certainty by clearly defining the items which fall within the scope of the ban (a definition of childcare article, identical to the one contained in the Toys Decision (4), has been added).

Amendments 1, 3, 4, 6 and 8 have been accepted in principle, though redrafted.

Amendments 18, 2, 5, 11, 24, 7, 17/rev., 16 and 9 have not been deemed acceptable.

2.   New elements contained in the Common Position as compared with the Commission proposal

Recitals 3, 4 and 7 have undergone minor drafting changes, mostly of a legal nature. New recitals 6 and 9 to 15 have been added, to indicate that a temporary ban is already in force and to clarify the relationship between the phthalates to be banned, the precautionary principle and the risk assessment procedures.

The definition of 'childcare article' has been introduced in the new Article 1(1).

Article 2 has been redrafted to introduce the obligation for the Commission to review these measures within four years from their entry into force.

Article 3 has been redrafted to comply with the guidelines on drafting legislative texts, and to add the obligation for Member States to notify the transposition measures to the Commission.

In the Annex, the scope of the ban has been clarified, by extending it, for DEHP, DBP and BBP, to all toys and childcare articles; for DINP, DIDP and DNOP, the ban will cover toys and childcare articles intended for children under three years of age and which can be placed in the mouth by them. In both cases, it has been clarified that the concentration limit of 0,1 % of the mass applies to the plasticised material mass, so that in case of items which include both plasticised material and other components, it remains applicable in full to the plasticised part only.

IV.   CONCLUSION

The Council, through its Common Position, wishes to move forward in the same direction as the European Parliament, by significantly broadening the scope of the ban, replacing labelling with an outright ban. The Council believes that this will greatly assist towards adopting a permanent ban, subject to a continuous review, leading to an even broader ban, should new scientific evidence arise after its entry into force.

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(1)  OJ C 116 E, 26.4.2000, p. 14.

(2)  OJ C 117, 26.4.2000, p. 17.

(3)  OJ C 121, 24.4.2001, p. 410.

(4)  Commission Decision 1999/815/EC (OJ L 315, 9.12.1999, p. 46).

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