# Official Journal L 145/2011

| | ISSN 1725-2555
  doi:10.3000/17252555.L_2011.145.eng |
| --- | --- |
| Official Journal
  of the European Union | L 145 |
| | |
| English edition | Legislation | Volume 5431 May 2011 |

ISSN 1725-2555

doi:10.3000/17252555.L_2011.145.eng

Official Journal

of the European Union

L 145

English edition

Legislation

Volume 5431 May 2011

---

| Contents | | I   Legislative acts | page |
| --- | --- | --- | --- |
| | | REGULATIONS |
| | * | Regulation (EU) No 510/2011 of the European Parliament and of the Council of 11 May 2011 setting emission performance standards for new light commercial vehicles as part of the Union's integrated approach to reduce CO2 emissions from light-duty vehicles (
  1
  ) | 1 |
| | * | Regulation (EU) No 511/2011 of the European Parliament and of the Council of 11 May 2011 implementing the bilateral safeguard clause of the Free Trade Agreement between the European Union and its Member States and the Republic of Korea | 19 |
| | * | Regulation (EU) No 512/2011 of the European Parliament and of the Council of 11 May 2011 amending Council Regulation (EC) No 732/2008 applying a scheme of generalised tariff preferences for the period from 1 January 2009 to 31 December 2011 | 28 |
| | * | Regulation (EU) No 513/2011 of the European Parliament and of the Council of 11 May 2011 amending Regulation (EC) No 1060/2009 on credit rating agencies (
  1
  ) | 30 |

Contents

I   Legislative acts

page

REGULATIONS

*

Regulation (EU) No 510/2011 of the European Parliament and of the Council of 11 May 2011 setting emission performance standards for new light commercial vehicles as part of the Union's integrated approach to reduce CO2 emissions from light-duty vehicles (
  1
  )

2

1

1

*

Regulation (EU) No 511/2011 of the European Parliament and of the Council of 11 May 2011 implementing the bilateral safeguard clause of the Free Trade Agreement between the European Union and its Member States and the Republic of Korea

19

*

Regulation (EU) No 512/2011 of the European Parliament and of the Council of 11 May 2011 amending Council Regulation (EC) No 732/2008 applying a scheme of generalised tariff preferences for the period from 1 January 2009 to 31 December 2011

28

*

Regulation (EU) No 513/2011 of the European Parliament and of the Council of 11 May 2011 amending Regulation (EC) No 1060/2009 on credit rating agencies (
  1
  )

1

30

| | |
| --- | --- |
| | (1)   Text with EEA relevance |

---

(1)   Text with EEA relevance

1

| EN | Acts whose titles are printed in light type are those relating to day-to-day management of agricultural matters, and are generally valid for a limited period.
  The titles of all other Acts are printed in bold type and preceded by an asterisk. |
| --- | --- |

EN

Acts whose titles are printed in light type are those relating to day-to-day management of agricultural matters, and are generally valid for a limited period.

The titles of all other Acts are printed in bold type and preceded by an asterisk.

---

I Legislative acts

REGULATIONS

| 31.5.2011 | EN | Official Journal of the European Union | L 145/1 |
| --- | --- | --- | --- |

31.5.2011

EN

Official Journal of the European Union

L 145/1

---

REGULATION (EU) No 510/2011 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 11 May 2011

setting emission performance standards for new light commercial vehicles as part of the Union's integrated approach to reduce CO2 emissions from light-duty vehicles

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 192(1) thereof,

Having regard to the proposal from the European Commission,

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

After consulting the Committee of the Regions,

Acting in accordance with the ordinary legislative procedure (2),

Whereas:

| (1) | The United Nations Framework Convention on Climate Change, which was approved on behalf of the European Community by Council Decision 94/69/EC (3), seeks to stabilise greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. In order to meet this objective, the overall global annual mean surface temperature increase should not exceed 2 degrees Celsius above pre-industrial levels. The Intergovernmental Panel on Climate Change's (IPCC) fourth Assessment Report shows that in order to reach that objective, global emissions of greenhouse gases must peak by 2020. At its meeting of 8-9 March 2007, the European Council made a firm commitment to reduce the overall greenhouse gas emissions of the Community by at least 20 % compared to 1990 levels by 2020 and by 30 % provided that other developed countries commit themselves to comparable emission reductions and economically more advanced developing countries contribute according to their respective capabilities. |
| --- | --- |

(1)

The United Nations Framework Convention on Climate Change, which was approved on behalf of the European Community by Council Decision 94/69/EC (3), seeks to stabilise greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. In order to meet this objective, the overall global annual mean surface temperature increase should not exceed 2 degrees Celsius above pre-industrial levels. The Intergovernmental Panel on Climate Change's (IPCC) fourth Assessment Report shows that in order to reach that objective, global emissions of greenhouse gases must peak by 2020. At its meeting of 8-9 March 2007, the European Council made a firm commitment to reduce the overall greenhouse gas emissions of the Community by at least 20 % compared to 1990 levels by 2020 and by 30 % provided that other developed countries commit themselves to comparable emission reductions and economically more advanced developing countries contribute according to their respective capabilities.

| (2) | In 2009, the Commission completed a review of the Union's Sustainable Development Strategy focussing on the most pressing problems for sustainable development such as transport, climate change, public health and energy conservation. |
| --- | --- |

(2)

In 2009, the Commission completed a review of the Union's Sustainable Development Strategy focussing on the most pressing problems for sustainable development such as transport, climate change, public health and energy conservation.

| (3) | Policies and measures should be implemented at Member State and Union level across all sectors of the Union economy, and not only within the industrial and energy sectors, in order to achieve the necessary emissions reductions. Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community's greenhouse gas emission reduction commitments up to 2020 (4) provides for an average reduction of 10 % compared to 2005 levels in the sectors not covered by the EU Emissions Trading Scheme, established by Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community (5), including road transport. Road transport is the second largest greenhouse gas emitting sector in the Union and its emissions, including those from light commercial vehicles, continue to rise. If road transport emissions continue to increase, it will significantly undermine efforts made by other sectors to combat climate change. |
| --- | --- |

(3)

Policies and measures should be implemented at Member State and Union level across all sectors of the Union economy, and not only within the industrial and energy sectors, in order to achieve the necessary emissions reductions. Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community's greenhouse gas emission reduction commitments up to 2020 (4) provides for an average reduction of 10 % compared to 2005 levels in the sectors not covered by the EU Emissions Trading Scheme, established by Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community (5), including road transport. Road transport is the second largest greenhouse gas emitting sector in the Union and its emissions, including those from light commercial vehicles, continue to rise. If road transport emissions continue to increase, it will significantly undermine efforts made by other sectors to combat climate change.

| (4) | Union targets for new road vehicles provide manufacturers with more planning certainty and more flexibility to meet the CO2 reduction requirements than would be provided by separate national reduction targets. In setting emission performance standards, it is important to take into account the implications for markets and for the competitiveness of manufacturers, the direct and indirect costs imposed on business and the benefits that accrue in terms of stimulating innovation and reducing energy consumption and fuel costs. |
| --- | --- |

(4)

Union targets for new road vehicles provide manufacturers with more planning certainty and more flexibility to meet the CO2 reduction requirements than would be provided by separate national reduction targets. In setting emission performance standards, it is important to take into account the implications for markets and for the competitiveness of manufacturers, the direct and indirect costs imposed on business and the benefits that accrue in terms of stimulating innovation and reducing energy consumption and fuel costs.

| (5) | To enhance the competitiveness of the European automotive industry, incentive schemes such as the offsetting of eco-innovations and the award of super-credits should be used. |
| --- | --- |

(5)

To enhance the competitiveness of the European automotive industry, incentive schemes such as the offsetting of eco-innovations and the award of super-credits should be used.

| (6) | In its Communications of 7 February 2007 entitled ‘Results of the review of the Community Strategy to reduce CO2 emissions from passenger cars and light-commercial vehicles’ and ‘A Competitive Automotive Regulatory Framework for the 21st Century (CARS 21)’, the Commission underlined that the Community objective of average emissions for the new passenger car fleet of 120 g CO2/km would not be met by 2012 in the absence of additional measures. |
| --- | --- |

(6)

In its Communications of 7 February 2007 entitled ‘Results of the review of the Community Strategy to reduce CO2 emissions from passenger cars and light-commercial vehicles’ and ‘A Competitive Automotive Regulatory Framework for the 21st Century (CARS 21)’, the Commission underlined that the Community objective of average emissions for the new passenger car fleet of 120 g CO2/km would not be met by 2012 in the absence of additional measures.

| (7) | In those Communications an integrated approach was proposed with a view to reaching the Community target of average emissions of 120 g CO2/km from new passenger cars and light commercial vehicles registered in the Community by 2012 by focusing on mandatory reductions of emissions of CO2 to reach an objective of 130 g CO2/km for the average new car fleet by means of improvements in vehicle motor technology and a further reduction of 10 g CO2/km, or equivalent if technically necessary, by means of other technological improvements, including fuel efficiency progress in light commercial vehicles. |
| --- | --- |

(7)

In those Communications an integrated approach was proposed with a view to reaching the Community target of average emissions of 120 g CO2/km from new passenger cars and light commercial vehicles registered in the Community by 2012 by focusing on mandatory reductions of emissions of CO2 to reach an objective of 130 g CO2/km for the average new car fleet by means of improvements in vehicle motor technology and a further reduction of 10 g CO2/km, or equivalent if technically necessary, by means of other technological improvements, including fuel efficiency progress in light commercial vehicles.

| (8) | The provisions implementing the objective concerning emissions from light commercial vehicles should be consistent with the legislative framework for implementing the objectives concerning emissions from the new passenger car fleet set out in Regulation (EC) No 443/2009 of the European Parliament and of the Council of 23 April 2009 setting emission performance standards for new passenger cars as part of the Community's integrated approach to reduce CO2 emissions from light-duty vehicles (6). |
| --- | --- |

(8)

The provisions implementing the objective concerning emissions from light commercial vehicles should be consistent with the legislative framework for implementing the objectives concerning emissions from the new passenger car fleet set out in Regulation (EC) No 443/2009 of the European Parliament and of the Council of 23 April 2009 setting emission performance standards for new passenger cars as part of the Community's integrated approach to reduce CO2 emissions from light-duty vehicles (6).

| (9) | The legislative framework for achieving the fleet average emissions target for new light commercial vehicles should ensure that reduction targets are competitively neutral, socially equitable and sustainable and take account of the diversity of European automobile manufacturers and avoid any unjustified distortion of competition between them. The legislative framework should be compatible with the overall objective of reaching the Union's emission reduction targets and should be complemented by other more use-related instruments such as differentiated car and energy taxes or measures to limit the speed of light commercial vehicles. |
| --- | --- |

(9)

The legislative framework for achieving the fleet average emissions target for new light commercial vehicles should ensure that reduction targets are competitively neutral, socially equitable and sustainable and take account of the diversity of European automobile manufacturers and avoid any unjustified distortion of competition between them. The legislative framework should be compatible with the overall objective of reaching the Union's emission reduction targets and should be complemented by other more use-related instruments such as differentiated car and energy taxes or measures to limit the speed of light commercial vehicles.

| (10) | In order to maintain the diversity of the light commercial vehicle market and its ability to address different consumer needs, CO2 emission targets for light commercial vehicles should be defined according to the utility of the vehicle on a linear basis. Mass is an appropriate parameter to describe this utility as it provides a correlation with present emissions and therefore results in more realistic and competitively neutral targets. Moreover, data on mass is readily available. Data on alternative utility parameters such as footprint (average track width times wheelbase) and payload should be collected in order to facilitate longer-term evaluations of the utility-based approach. |
| --- | --- |

(10)

In order to maintain the diversity of the light commercial vehicle market and its ability to address different consumer needs, CO2 emission targets for light commercial vehicles should be defined according to the utility of the vehicle on a linear basis. Mass is an appropriate parameter to describe this utility as it provides a correlation with present emissions and therefore results in more realistic and competitively neutral targets. Moreover, data on mass is readily available. Data on alternative utility parameters such as footprint (average track width times wheelbase) and payload should be collected in order to facilitate longer-term evaluations of the utility-based approach.

| (11) | This Regulation actively promotes eco-innovation and takes into account future technological developments which can enhance the long-term competitiveness of the European automotive industry and create more high-quality jobs. As a means to assess systematically the emissions improvements of eco-innovations the Commission should consider the possibility of including eco-innovation measures in the review of test procedures pursuant to Article 14(3) of Regulation (EC) No 715/2007 of the European Parliament and of the Council of 20 June 2007 on type approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information (7), taking into consideration the technical and economic impacts of such inclusion. |
| --- | --- |

(11)

This Regulation actively promotes eco-innovation and takes into account future technological developments which can enhance the long-term competitiveness of the European automotive industry and create more high-quality jobs. As a means to assess systematically the emissions improvements of eco-innovations the Commission should consider the possibility of including eco-innovation measures in the review of test procedures pursuant to Article 14(3) of Regulation (EC) No 715/2007 of the European Parliament and of the Council of 20 June 2007 on type approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information (7), taking into consideration the technical and economic impacts of such inclusion.

| (12) | Directive 1999/94/EC of the European Parliament and of the Council of 13 December 1999 relating to the availability of consumer information on fuel economy and CO2 emissions in respect of the marketing of new passenger cars (8) already requires that promotional literature for cars provides end-users with the official CO2 emission data and the official fuel consumption of the vehicle. The Commission, in its Recommendation 2003/217/EC of 26 March 2003 on the application to other media of the provisions of Directive 1999/94/EC concerning promotional literature (9), has interpreted this as including advertising. The scope of Directive 1999/94/EC should therefore be extended to light commercial vehicles, so that advertisements for any light commercial vehicles should be required to provide end-users with the official CO2 emission data and official fuel consumption of the vehicle where energy- or price-related information is disclosed, at the latest by 2014. |
| --- | --- |

(12)

Directive 1999/94/EC of the European Parliament and of the Council of 13 December 1999 relating to the availability of consumer information on fuel economy and CO2 emissions in respect of the marketing of new passenger cars (8) already requires that promotional literature for cars provides end-users with the official CO2 emission data and the official fuel consumption of the vehicle. The Commission, in its Recommendation 2003/217/EC of 26 March 2003 on the application to other media of the provisions of Directive 1999/94/EC concerning promotional literature (9), has interpreted this as including advertising. The scope of Directive 1999/94/EC should therefore be extended to light commercial vehicles, so that advertisements for any light commercial vehicles should be required to provide end-users with the official CO2 emission data and official fuel consumption of the vehicle where energy- or price-related information is disclosed, at the latest by 2014.

| (13) | In recognition of the very high research and development and unit production costs of early generations of very low carbon vehicle technologies to be introduced into the marketplace following its entry into force, this Regulation seeks to accelerate and facilitate, on an interim basis, the process of introducing into the Union market ultra low carbon vehicles at their initial stages of commercialisation. |
| --- | --- |

(13)

In recognition of the very high research and development and unit production costs of early generations of very low carbon vehicle technologies to be introduced into the marketplace following its entry into force, this Regulation seeks to accelerate and facilitate, on an interim basis, the process of introducing into the Union market ultra low carbon vehicles at their initial stages of commercialisation.

| (14) | The use of certain alternative fuels can offer significant CO2 reductions in well-to-wheel terms. This Regulation therefore incorporates specific provisions aimed at promoting further deployment of certain alternative-fuel vehicles in the Union market. |
| --- | --- |

(14)

The use of certain alternative fuels can offer significant CO2 reductions in well-to-wheel terms. This Regulation therefore incorporates specific provisions aimed at promoting further deployment of certain alternative-fuel vehicles in the Union market.

| (15) | By 1 January 2012 at the latest and with a view to improving data gathering on and measurement of fuel consumption, the Commission should consider whether to amend the relevant legislation in order to include an obligation for manufacturers seeking type approval for vehicles of category N1 as defined in Annex II to Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007 establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles (10) to equip every vehicle with a fuel consumption meter. |
| --- | --- |

(15)

By 1 January 2012 at the latest and with a view to improving data gathering on and measurement of fuel consumption, the Commission should consider whether to amend the relevant legislation in order to include an obligation for manufacturers seeking type approval for vehicles of category N1 as defined in Annex II to Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007 establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles (10) to equip every vehicle with a fuel consumption meter.

| (16) | To ensure consistency with Regulation (EC) No 443/2009 and to avoid abuses, the target should be applied to new light commercial vehicles registered in the Union for the first time and that have not previously been registered outside the Union except for a limited period. |
| --- | --- |

(16)

To ensure consistency with Regulation (EC) No 443/2009 and to avoid abuses, the target should be applied to new light commercial vehicles registered in the Union for the first time and that have not previously been registered outside the Union except for a limited period.

| (17) | Directive 2007/46/EC establishes a harmonised framework containing the administrative provisions and general technical requirements for approval of all new vehicles within its scope. The entity responsible for complying with this Regulation should be the same as the entity responsible for all aspects of the type-approval process in accordance with Directive 2007/46/EC and for ensuring conformity of production. |
| --- | --- |

(17)

Directive 2007/46/EC establishes a harmonised framework containing the administrative provisions and general technical requirements for approval of all new vehicles within its scope. The entity responsible for complying with this Regulation should be the same as the entity responsible for all aspects of the type-approval process in accordance with Directive 2007/46/EC and for ensuring conformity of production.

| (18) | Manufacturers should have flexibility to decide how to meet their targets under this Regulation and should be allowed to average emissions over their new vehicle fleet rather than having to respect CO2 targets for each individual vehicle. Manufacturers should therefore be required to ensure that the average specific emission for all the new light commercial vehicles registered in the Union for which they are responsible does not exceed the average of the emissions targets for those vehicles. This requirement should be phased in between 2014 and 2017 in order to facilitate its introduction. This is consistent with the lead times given and the duration of the phase-in period set in Regulation (EC) No 443/2009. |
| --- | --- |

(18)

Manufacturers should have flexibility to decide how to meet their targets under this Regulation and should be allowed to average emissions over their new vehicle fleet rather than having to respect CO2 targets for each individual vehicle. Manufacturers should therefore be required to ensure that the average specific emission for all the new light commercial vehicles registered in the Union for which they are responsible does not exceed the average of the emissions targets for those vehicles. This requirement should be phased in between 2014 and 2017 in order to facilitate its introduction. This is consistent with the lead times given and the duration of the phase-in period set in Regulation (EC) No 443/2009.

| (19) | In order to ensure that targets reflect the particularities of small and niche manufacturers and are consistent with the manufacturer's reduction potential, alternative emission reduction targets should be set for such manufacturers, taking into account the technological potential of a given manufacturer's vehicles to reduce their specific emissions of CO2 and consistently with the characteristics of the market segments concerned. This derogation should be covered by the review of the specific emission targets in Annex I, to be completed by the beginning of 2013 at the latest. |
| --- | --- |

(19)

In order to ensure that targets reflect the particularities of small and niche manufacturers and are consistent with the manufacturer's reduction potential, alternative emission reduction targets should be set for such manufacturers, taking into account the technological potential of a given manufacturer's vehicles to reduce their specific emissions of CO2 and consistently with the characteristics of the market segments concerned. This derogation should be covered by the review of the specific emission targets in Annex I, to be completed by the beginning of 2013 at the latest.

| (20) | The Union strategy to reduce CO2 emissions from passenger cars and light commercial vehicles established an integrated approach with a view to reaching the Union target of 120 g CO2/km by 2012, while also presenting a longer-term vision of further emission reductions. Regulation (EC) No 443/2009 substantiates this longer-term view by setting a target of 95 g CO2/km as average emissions for the new car fleet. In order to ensure consistency with that approach and to provide planning certainty for the industry, a long-term target for the specific emissions of CO2 of light commercial vehicles in 2020 should be set. |
| --- | --- |

(20)

The Union strategy to reduce CO2 emissions from passenger cars and light commercial vehicles established an integrated approach with a view to reaching the Union target of 120 g CO2/km by 2012, while also presenting a longer-term vision of further emission reductions. Regulation (EC) No 443/2009 substantiates this longer-term view by setting a target of 95 g CO2/km as average emissions for the new car fleet. In order to ensure consistency with that approach and to provide planning certainty for the industry, a long-term target for the specific emissions of CO2 of light commercial vehicles in 2020 should be set.

| (21) | In order to provide flexibility for manufacturers in meeting their emission targets under this Regulation, manufacturers may agree to form a pool on an open, transparent and non-discriminatory basis. Where a pool is formed, individual manufacturer's targets should be replaced by a joint target for the pool which should be attained collectively by the members of the pool. |
| --- | --- |

(21)

In order to provide flexibility for manufacturers in meeting their emission targets under this Regulation, manufacturers may agree to form a pool on an open, transparent and non-discriminatory basis. Where a pool is formed, individual manufacturer's targets should be replaced by a joint target for the pool which should be attained collectively by the members of the pool.

| (22) | The specific emissions of CO2 of completed vehicles should be allocated to the manufacturer of the base vehicle. |
| --- | --- |

(22)

The specific emissions of CO2 of completed vehicles should be allocated to the manufacturer of the base vehicle.

| (23) | In order to ensure that the values of CO2 emissions and fuel efficiency of completed vehicles are representative, the Commission should come forward with a specific procedure and consider, where appropriate, reviewing the type-approval legislation. |
| --- | --- |

(23)

In order to ensure that the values of CO2 emissions and fuel efficiency of completed vehicles are representative, the Commission should come forward with a specific procedure and consider, where appropriate, reviewing the type-approval legislation.

| (24) | A robust compliance mechanism is necessary in order to ensure that the targets under this Regulation are met. |
| --- | --- |

(24)

A robust compliance mechanism is necessary in order to ensure that the targets under this Regulation are met.

| (25) | The specific emissions of CO2 from new light commercial vehicles are measured on a harmonised basis in the Union according to the methodology laid down in Regulation (EC) No 715/2007. To minimise the administrative burden of the scheme, the compliance should be measured by reference to data on registrations of new vehicles in the Union collected by Member States and reported to the Commission. To ensure the consistency of the data used to assess compliance, the rules for the collection and reporting of this data should be harmonised as far as possible. |
| --- | --- |

(25)

The specific emissions of CO2 from new light commercial vehicles are measured on a harmonised basis in the Union according to the methodology laid down in Regulation (EC) No 715/2007. To minimise the administrative burden of the scheme, the compliance should be measured by reference to data on registrations of new vehicles in the Union collected by Member States and reported to the Commission. To ensure the consistency of the data used to assess compliance, the rules for the collection and reporting of this data should be harmonised as far as possible.

| (26) | Directive 2007/46/EC requires that manufacturers issue a certificate of conformity for each new light commercial vehicle and that Member States permit the registration and entry into service of a new light commercial vehicle only if it is accompanied by a valid certificate of conformity. Data collected by Member States should be consistent with the certificate of conformity issued by the manufacturer of the light commercial vehicle and should be based on this document only. There should be a Union standard database for certificate of conformity data. It should be used as a single reference to enable Member Sates to maintain more easily their registration data when vehicles are newly registered. |
| --- | --- |

(26)

Directive 2007/46/EC requires that manufacturers issue a certificate of conformity for each new light commercial vehicle and that Member States permit the registration and entry into service of a new light commercial vehicle only if it is accompanied by a valid certificate of conformity. Data collected by Member States should be consistent with the certificate of conformity issued by the manufacturer of the light commercial vehicle and should be based on this document only. There should be a Union standard database for certificate of conformity data. It should be used as a single reference to enable Member Sates to maintain more easily their registration data when vehicles are newly registered.

| (27) | Manufacturers’ compliance with the targets under this Regulation should be assessed at Union level. Manufacturers whose average specific emissions of CO2 exceed those permitted under this Regulation should pay an excess emissions premium with respect to each calendar year from 1 January 2014. The premium should be modulated as a function of the extent to which manufacturers fail to comply with their target. In order to ensure consistency, the premium mechanism should be similar to the one set in Regulation (EC) No 443/2009. The amounts of the excess emissions premium should be considered as revenue for the general budget of the European Union. |
| --- | --- |

(27)

Manufacturers’ compliance with the targets under this Regulation should be assessed at Union level. Manufacturers whose average specific emissions of CO2 exceed those permitted under this Regulation should pay an excess emissions premium with respect to each calendar year from 1 January 2014. The premium should be modulated as a function of the extent to which manufacturers fail to comply with their target. In order to ensure consistency, the premium mechanism should be similar to the one set in Regulation (EC) No 443/2009. The amounts of the excess emissions premium should be considered as revenue for the general budget of the European Union.

| (28) | Any national measure that Member States may maintain or introduce in accordance with Article 193 of the Treaty on the Functioning of the European Union (TFEU) should not, in consideration of the purpose of and procedures established in this Regulation, impose additional or more stringent penalties on manufacturers who fail to meet their targets under this Regulation. |
| --- | --- |

(28)

Any national measure that Member States may maintain or introduce in accordance with Article 193 of the Treaty on the Functioning of the European Union (TFEU) should not, in consideration of the purpose of and procedures established in this Regulation, impose additional or more stringent penalties on manufacturers who fail to meet their targets under this Regulation.

| (29) | This Regulation should be without prejudice to the full application of Union competition rules. |
| --- | --- |

(29)

This Regulation should be without prejudice to the full application of Union competition rules.

| (30) | New modalities should be considered for reaching the long-term target, in particular the slope of the curve, the utility parameter and the excess emissions premium scheme. |
| --- | --- |

(30)

New modalities should be considered for reaching the long-term target, in particular the slope of the curve, the utility parameter and the excess emissions premium scheme.

| (31) | The speed of road vehicles has a strong influence on their fuel consumption and CO2 emissions. In addition, in the absence of speed limitation for light commercial vehicles, it is possible that there is an element of competition as regards top speed which could lead to oversized powertrains and associated inefficiencies in slower operating conditions. It is therefore appropriate to investigate the feasibility of extending the scope of Council Directive 92/6/EEC of 10 February 1992 on the installation and use of speed limitation devices for certain categories of motor vehicles in the Community (11), with the aim of including light commercial vehicles covered in this Regulation. |
| --- | --- |

(31)

The speed of road vehicles has a strong influence on their fuel consumption and CO2 emissions. In addition, in the absence of speed limitation for light commercial vehicles, it is possible that there is an element of competition as regards top speed which could lead to oversized powertrains and associated inefficiencies in slower operating conditions. It is therefore appropriate to investigate the feasibility of extending the scope of Council Directive 92/6/EEC of 10 February 1992 on the installation and use of speed limitation devices for certain categories of motor vehicles in the Community (11), with the aim of including light commercial vehicles covered in this Regulation.

| (32) | In order to ensure uniform conditions for the implementation of this Regulation, in particular for the adoption of detailed rules for the monitoring and reporting of average emissions, namely the collection, registration, presentation, transmission, calculation and communication of data on average emissions, and the application of the requirements set out in Annex II, as well as for the adoption of detailed arrangements for the collection of excess emissions premiums and of detailed provisions for the procedure to approve innovative technologies, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission's exercise of implementing powers (12). |
| --- | --- |

(32)

In order to ensure uniform conditions for the implementation of this Regulation, in particular for the adoption of detailed rules for the monitoring and reporting of average emissions, namely the collection, registration, presentation, transmission, calculation and communication of data on average emissions, and the application of the requirements set out in Annex II, as well as for the adoption of detailed arrangements for the collection of excess emissions premiums and of detailed provisions for the procedure to approve innovative technologies, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission's exercise of implementing powers (12).

| (33) | The Commission should be empowered to adopt delegated acts in accordance with Article 290 TFEU to amend the monitoring and reporting requirements laid down in Annex II in the light of the experience of the application of this Regulation, to adjust the figure of M0 referred to in Annex I to the average mass of new light commercial vehicles in the previous three calendar years, to establish rules regarding the interpretation of the eligibility criteria for derogations, on the content of applications for a derogation and on the content and assessment of programmes for the reduction of specific emissions of CO2, as well as to adapt the formulae set out in Annex I in order to reflect any change in the regulatory test procedure for the measurement of specific CO2 emissions. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level. |
| --- | --- |

(33)

The Commission should be empowered to adopt delegated acts in accordance with Article 290 TFEU to amend the monitoring and reporting requirements laid down in Annex II in the light of the experience of the application of this Regulation, to adjust the figure of M0 referred to in Annex I to the average mass of new light commercial vehicles in the previous three calendar years, to establish rules regarding the interpretation of the eligibility criteria for derogations, on the content of applications for a derogation and on the content and assessment of programmes for the reduction of specific emissions of CO2, as well as to adapt the formulae set out in Annex I in order to reflect any change in the regulatory test procedure for the measurement of specific CO2 emissions. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level.

| (34) | Since the objective of this Regulation, namely the establishment of CO2 emissions performance requirements for new light commercial vehicles, cannot be achieved by the Member States, and can therefore, by reason of its scale and effects, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. 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, |
| --- | --- |

(34)

Since the objective of this Regulation, namely the establishment of CO2 emissions performance requirements for new light commercial vehicles, cannot be achieved by the Member States, and can therefore, by reason of its scale and effects, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective,

HAVE ADOPTED THIS REGULATION:

Article 1

Subject matter and objectives

1.   This Regulation establishes CO2 emissions performance requirements for new light commercial vehicles. This Regulation sets the average CO2 emissions for new light commercial vehicles at 175 g CO2/km, by means of improvements in vehicle technology, as measured in accordance with Regulation (EC) No 715/2007 and its implementing measures, and innovative technologies.

2.   From 2020, this Regulation sets a target of 147 g CO2/km for the average emissions of new light commercial vehicles registered in the Union subject to confirmation of its feasibility, as specified in Article 13(1).

Article 2

Scope

1.   This Regulation shall apply to motor vehicles of category N1 as defined in Annex II to Directive 2007/46/EC with a reference mass not exceeding 2 610 kg and to vehicles of category N1 to which type-approval is extended in accordance with Article 2(2) of Regulation (EC) No 715/2007 (‘light commercial vehicles’) which are registered in the Union for the first time and which have not previously been registered outside the Union (‘new light commercial vehicles’).

2.   A previous registration outside the Union made less than three months before registration in the Union shall not be taken into account.

3.   This Regulation shall not apply to special purpose vehicles as defined in point 5 of Part A to Annex II to Directive 2007/46/EC.

Article 3

Definitions

1.   For the purposes of this Regulation, the following definitions shall apply:

| (a) | ‘average specific emissions of CO2’ means, in relation to a manufacturer, the average of the specific emissions of CO2 of all light commercial vehicles of which it is the manufacturer; |
| --- | --- |

(a)

‘average specific emissions of CO2’ means, in relation to a manufacturer, the average of the specific emissions of CO2 of all light commercial vehicles of which it is the manufacturer;

| (b) | ‘certificate of conformity’ means the certificate referred to in Article 18 of Directive 2007/46/EC; |
| --- | --- |

(b)

‘certificate of conformity’ means the certificate referred to in Article 18 of Directive 2007/46/EC;

| (c) | ‘completed vehicle’ means a vehicle where type-approval is granted following completion of a process of multi-stage type-approval in accordance with Directive 2007/46/EC; |
| --- | --- |

(c)

‘completed vehicle’ means a vehicle where type-approval is granted following completion of a process of multi-stage type-approval in accordance with Directive 2007/46/EC;

| (d) | ‘complete vehicle’ means any vehicle which does not need to be completed in order to meet the relevant technical requirements of Directive 2007/46/EC; |
| --- | --- |

(d)

‘complete vehicle’ means any vehicle which does not need to be completed in order to meet the relevant technical requirements of Directive 2007/46/EC;

| (e) | ‘base vehicle’ means any vehicle which is used at the initial stage of a multi-stage type-approval process; |
| --- | --- |

(e)

‘base vehicle’ means any vehicle which is used at the initial stage of a multi-stage type-approval process;

| (f) | ‘manufacturer’ means the person or body responsible to the approval authority for all aspects of the EC type-approval procedure in accordance with Directive 2007/46/EC and for ensuring conformity of production; |
| --- | --- |

(f)

‘manufacturer’ means the person or body responsible to the approval authority for all aspects of the EC type-approval procedure in accordance with Directive 2007/46/EC and for ensuring conformity of production;

| (g) | ‘mass’ means the mass of the vehicle with bodywork in running order as stated in the certificate of conformity and defined in Section 2.6 of Annex I to Directive 2007/46/EC; |
| --- | --- |

(g)

‘mass’ means the mass of the vehicle with bodywork in running order as stated in the certificate of conformity and defined in Section 2.6 of Annex I to Directive 2007/46/EC;

| (h) | ‘specific emissions of CO2’ means the emissions of a light commercial vehicle measured in accordance with Regulation (EC) No 715/2007 and specified as the CO2 mass emission (combined) in the certificate of conformity of the complete or completed vehicle; |
| --- | --- |

(h)

‘specific emissions of CO2’ means the emissions of a light commercial vehicle measured in accordance with Regulation (EC) No 715/2007 and specified as the CO2 mass emission (combined) in the certificate of conformity of the complete or completed vehicle;

| (i) | ‘specific emissions target’ means, in relation to a manufacturer, the average of the indicative specific emissions of CO2 determined in accordance with Annex I in respect of each new light commercial vehicle for which it is the manufacturer, or, if the manufacturer is granted a derogation in accordance with Article 11, the specific emissions target determined according to that derogation; |
| --- | --- |

(i)

‘specific emissions target’ means, in relation to a manufacturer, the average of the indicative specific emissions of CO2 determined in accordance with Annex I in respect of each new light commercial vehicle for which it is the manufacturer, or, if the manufacturer is granted a derogation in accordance with Article 11, the specific emissions target determined according to that derogation;

| (j) | ‘footprint’ means the average track width multiplied by the wheelbase as stated in the certificate of conformity and defined in Sections 2.1 and 2.3 of Annex I to Directive 2007/46/EC; |
| --- | --- |

(j)

‘footprint’ means the average track width multiplied by the wheelbase as stated in the certificate of conformity and defined in Sections 2.1 and 2.3 of Annex I to Directive 2007/46/EC;

| (k) | ‘payload’ means the difference between the technically permissible maximum laden mass pursuant to Annex II to Directive 2007/46/EC and the mass of the vehicle. |
| --- | --- |

(k)

‘payload’ means the difference between the technically permissible maximum laden mass pursuant to Annex II to Directive 2007/46/EC and the mass of the vehicle.

2.   For the purposes of this Regulation ‘a group of connected manufacturers’ means a manufacturer and its connected undertakings. In relation to a manufacturer, ‘connected undertakings’ means:

| (a) | undertakings in which the manufacturer has, directly or indirectly:






  (i) | the power to exercise more than half the voting rights; or |
| --- | --- | --- |

(a)

undertakings in which the manufacturer has, directly or indirectly:

(i)

the power to exercise more than half the voting rights; or

| (ii) | the power to appoint more than half the members of the supervisory board, board of management or bodies legally representing the undertaking; or |
| --- | --- |

(ii)

the power to appoint more than half the members of the supervisory board, board of management or bodies legally representing the undertaking; or

| (iii) | the right to manage the undertaking's affairs; |
| --- | --- |

(iii)

the right to manage the undertaking's affairs;

| (b) | undertakings which directly or indirectly have, over the manufacturer, the rights or powers listed in point (a); |
| --- | --- |

(b)

undertakings which directly or indirectly have, over the manufacturer, the rights or powers listed in point (a);

| (c) | undertakings in which an undertaking referred to in point (b) has, directly or indirectly, the rights or powers listed in point (a); |
| --- | --- |

(c)

undertakings in which an undertaking referred to in point (b) has, directly or indirectly, the rights or powers listed in point (a);

| (d) | undertakings in which the manufacturer together with one or more of the undertakings referred to in points (a), (b) or (c), or in which two or more of the latter undertakings, jointly have the rights or powers listed in point (a); |
| --- | --- |

(d)

undertakings in which the manufacturer together with one or more of the undertakings referred to in points (a), (b) or (c), or in which two or more of the latter undertakings, jointly have the rights or powers listed in point (a);

| (e) | undertakings in which the rights or the powers listed in point (a) are jointly held by the manufacturer or one or more of its connected undertakings referred to in points (a) to (d) and one or more third parties. |
| --- | --- |

(e)

undertakings in which the rights or the powers listed in point (a) are jointly held by the manufacturer or one or more of its connected undertakings referred to in points (a) to (d) and one or more third parties.

Article 4

Specific emissions targets

For the calendar year commencing 1 January 2014 and each subsequent calendar year, each manufacturer of light commercial vehicles shall ensure that its average specific emissions of CO2 do not exceed its specific emissions target determined in accordance with Annex I or, where a manufacturer is granted a derogation under Article 11, in accordance with that derogation.

Where the specific emissions of the completed vehicle are not available, the manufacturer of the base vehicle shall use the specific emissions of the base vehicle for determining its average specific emissions of CO2.

For the purpose of determining each manufacturer's average specific emissions of CO2, the following percentages of each manufacturer's new light commercial vehicles registered in the relevant year shall be taken into account:

| — | 70 % in 2014, |
| --- | --- |

—

70 % in 2014,

| — | 75 % in 2015, |
| --- | --- |

—

75 % in 2015,

| — | 80 % in 2016, |
| --- | --- |

—

80 % in 2016,

| — | 100 % from 2017 onwards. |
| --- | --- |

—

100 % from 2017 onwards.

Article 5

Super-credits

In calculating the average specific emissions of CO2, each new light commercial vehicle with specific emissions of CO2 of less than 50 g CO2/km shall be counted as:

| — | 3,5 light commercial vehicles in 2014, |
| --- | --- |

—

3,5 light commercial vehicles in 2014,

| — | 3,5 light commercial vehicles in 2015, |
| --- | --- |

—

3,5 light commercial vehicles in 2015,

| — | 2,5 light commercial vehicles in 2016, |
| --- | --- |

—

2,5 light commercial vehicles in 2016,

| — | 1,5 light commercial vehicles in 2017, |
| --- | --- |

—

1,5 light commercial vehicles in 2017,

| — | 1 light commercial vehicle from 2018. |
| --- | --- |

—

1 light commercial vehicle from 2018.

For the duration of the super-credits scheme, the maximum number of new light commercial vehicles, with specific emissions of CO2 of less than 50 g CO2/km, to be taken into account in the application of the multipliers set out in the first paragraph shall not exceed 25 000 light commercial vehicles per manufacturer.

Article 6

Specific emission target for alternative fuel light commercial vehicles

For the purpose of determining compliance by a manufacturer with its specific emissions target referred to in Article 4, the specific emissions of CO2 of each light commercial vehicle which is designed to be capable of running on a mixture of petrol with 85 % bioethanol (‘E85’), and which complies with relevant Union legislation or European technical standards, shall be reduced by 5 % by 31 December 2015 in recognition of the greater technological and emission reduction capability when running on biofuels. This reduction shall apply only where at least 30 % of the filling stations in the Member State in which the light commercial vehicle is registered provide this type of alternative fuel complying with the sustainability criteria for biofuels set out in relevant Union legislation.

Article 7

Pooling

1.   Manufacturers of new light commercial vehicles, other than manufacturers which have been granted a derogation under Article 11, may form a pool for the purposes of meeting their obligations under Article 4.

2.   An agreement to form a pool may relate to one or more calendar years, provided that the overall duration of each agreement does not exceed five calendar years, and must be entered into on or before 31 December in the first calendar year for which emissions are to be pooled. Manufacturers which form a pool shall file the following information with the Commission:

| (a) | the manufacturers who will be included in the pool; |
| --- | --- |

(a)

the manufacturers who will be included in the pool;

| (b) | the manufacturer nominated as the pool manager who will be the contact point for the pool and will be responsible for paying any excess emissions premium imposed on the pool in accordance with Article 9; |
| --- | --- |

(b)

the manufacturer nominated as the pool manager who will be the contact point for the pool and will be responsible for paying any excess emissions premium imposed on the pool in accordance with Article 9;

| (c) | evidence that the pool manager will be able to fulfil the obligations under point (b). |
| --- | --- |

(c)

evidence that the pool manager will be able to fulfil the obligations under point (b).

3.   Where the proposed pool manager fails to meet the requirement to pay any excess emissions premium imposed on the pool in accordance with Article 9, the Commission shall notify the manufacturers.

4.   Manufacturers included in a pool shall jointly inform the Commission of any change of pool manager or of its financial status, in so far as this may affect its ability to meet the requirement to pay any excess emissions premium imposed on the pool in accordance with Article 9 and of any changes to the membership of the pool or the dissolution of the pool.

5.   Manufacturers may enter into pooling arrangements provided that their agreements comply with Articles 101 and 102 TFEU and that they allow open, transparent and non-discriminatory participation on commercially reasonable terms by any manufacturer requesting membership of the pool. Without prejudice to the general applicability of Union competition rules to such pools, all members of a pool shall in particular ensure that neither data sharing nor information exchange may occur in the context of their pooling arrangement, except in respect of the following information:

| (a) | the average specific emissions of CO2; |
| --- | --- |

(a)

the average specific emissions of CO2;

| (b) | the specific emissions target; |
| --- | --- |

(b)

the specific emissions target;

| (c) | the total number of vehicles registered. |
| --- | --- |

(c)

the total number of vehicles registered.

6.   Paragraph 5 shall not apply where all the manufacturers included in the pool are part of the same group of connected manufacturers.

7.   Except where notification is given under paragraph 3, the manufacturers in a pool in respect of which information is filed with the Commission shall be considered as one manufacturer for the purposes of meeting their obligations under Article 4. Monitoring and reporting information in respect of individual manufacturers as well as any pools will be recorded, reported and made available in the central register referred to in Article 8(4).

Article 8

Monitoring and reporting of average emissions

1.   For the calendar year commencing 1 January 2012 and each subsequent calendar year, each Member State shall record information for each new light commercial vehicle registered in its territory in accordance with Part A of Annex II. This information shall be made available to the manufacturers and their designated importers or representatives in each Member State. Member States shall make every effort to ensure that reporting bodies operate in a transparent manner.

2.   By 28 February of each year, commencing in 2013, each Member State shall determine and transmit to the Commission the information listed in Part B of Annex II in respect of the preceding calendar year. The data shall be transmitted in accordance with the format specified in Part C of Annex II.

3.   On request from the Commission, a Member State shall also transmit the full set of data collected pursuant to paragraph 1.

4.   The Commission shall keep a central register of the data reported by Member States under this Article and this register shall be publicly available. By 30 June 2013 and each subsequent year, the Commission shall provisionally calculate for each manufacturer:

| (a) | the average specific emissions of CO2 in the preceding calendar year; |
| --- | --- |

(a)

the average specific emissions of CO2 in the preceding calendar year;

| (b) | the specific emissions target in the preceding calendar year; |
| --- | --- |

(b)

the specific emissions target in the preceding calendar year;

| (c) | the difference between its average specific emissions of CO2 in the preceding calendar year and its specific emissions target for that year. |
| --- | --- |

(c)

the difference between its average specific emissions of CO2 in the preceding calendar year and its specific emissions target for that year.

The Commission shall notify each manufacturer of its provisional calculation for that manufacturer. The notification shall include data per Member State on the number of new light commercial vehicles registered and their specific emissions of CO2.

5.   Manufacturers may, within three months of being notified of the provisional calculation under paragraph 4, notify the Commission of any errors in the data, specifying the Member State in which it considers that the error occurred.

6.   The Commission shall consider any notifications from manufacturers and shall, by 31 October, either confirm or amend the provisional calculations under paragraph 4.

7.   In relation to the calendar years 2012 and 2013 and on the basis of the calculations made pursuant to paragraph 5, the Commission shall notify a manufacturer where it appears to the Commission that the manufacturer's average specific emissions of CO2 exceed its specific emissions target.

8.   In each Member State, the competent authority for the collection and communication of the monitoring data in accordance with this Regulation shall be the one designated in accordance with Article 8(7) of Regulation (EC) No 443/2009.

9.   The Commission shall adopt detailed rules for the monitoring and reporting of data under this Article and for the application of Annex II. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 14(2).

In order to take account of experience gained from the application of this Regulation, the Commission may amend Annex II by means of delegated acts in accordance with Article 15, and subject to the conditions laid down in Articles 16 and 17.

10.   Member States shall also collect and report data, in accordance with this Article, on registrations of vehicles in categories M2 and N2 as defined in Annex II to Directive 2007/46/EC with a reference mass not exceeding 2 610 kg and vehicles to which type approval is extended in accordance with Article 2(2) of Regulation (EC) No 715/2007.

Article 9

Excess emissions premium

1.   In respect of the period from 1 January to 31 December 2014 and every calendar year thereafter, the Commission shall impose an excess emissions premium on a manufacturer or pool manager, as appropriate, where a manufacturer's average specific emissions of CO2 exceed its specific emissions target.

2.   The excess emissions premium under paragraph 1 shall be calculated using the following formulae:

| (a) | from 2014 until 2018:






  (i) | for excess emissions of more than 3 g CO2/km:
  ((Excess emissions – 3 g CO2/km) × EUR 95 + EUR 45) × number of new light commercial vehicles; |
| --- | --- | --- |

(a)

from 2014 until 2018:

(i)

for excess emissions of more than 3 g CO2/km:

((Excess emissions – 3 g CO2/km) × EUR 95 + EUR 45) × number of new light commercial vehicles;

| (ii) | for excess emissions of more than 2 g CO2/km but no more than 3 g CO2/km:
  ((Excess emissions – 2 g CO2/km) × EUR 25 + EUR 20) × number of new light commercial vehicles; |
| --- | --- |

(ii)

for excess emissions of more than 2 g CO2/km but no more than 3 g CO2/km:

((Excess emissions – 2 g CO2/km) × EUR 25 + EUR 20) × number of new light commercial vehicles;

| (iii) | for excess emissions of more than 1 g CO2/km but no more than 2 g CO2/km:
  ((Excess emissions – 1 g CO2/km) × EUR 15 + EUR 5) × number of new light commercial vehicles; |
| --- | --- |

(iii)

for excess emissions of more than 1 g CO2/km but no more than 2 g CO2/km:

((Excess emissions – 1 g CO2/km) × EUR 15 + EUR 5) × number of new light commercial vehicles;

| (iv) | for excess emissions of no more than 1 g CO2/km:
  (Excess emissions × EUR 5) × number of new light commercial vehicles; |
| --- | --- |

(iv)

for excess emissions of no more than 1 g CO2/km:

(Excess emissions × EUR 5) × number of new light commercial vehicles;

| (b) | from 2019:
  (Excess emissions × EUR 95) × number of new light commercial vehicles. |
| --- | --- |

(b)

from 2019:

(Excess emissions × EUR 95) × number of new light commercial vehicles.

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

| — | ‘excess emissions’ means the positive number of grams per kilometre by which a manufacturer's average specific emissions of CO2, taking into account CO2 emissions reductions due to innovative technologies approved in accordance with Article 12, exceeded its specific emissions target in the calendar year or part thereof to which the obligation under Article 4 applies, rounded to the nearest three decimal places, and |
| --- | --- |

—

‘excess emissions’ means the positive number of grams per kilometre by which a manufacturer's average specific emissions of CO2, taking into account CO2 emissions reductions due to innovative technologies approved in accordance with Article 12, exceeded its specific emissions target in the calendar year or part thereof to which the obligation under Article 4 applies, rounded to the nearest three decimal places, and

| — | ‘number of new light commercial vehicles’ means the number of new light commercial vehicles of which it is the manufacturer and which were registered in that period according to the phase-in criteria as set out in Article 4. |
| --- | --- |

—

‘number of new light commercial vehicles’ means the number of new light commercial vehicles of which it is the manufacturer and which were registered in that period according to the phase-in criteria as set out in Article 4.

3.   The Commission shall adopt detailed arrangements for the collection of excess emissions premiums under paragraph 1 of this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 14(2).

4.   The amounts of the excess emissions premium shall be considered as revenue for the general budget of the European Union.

Article 10

Publication of performance of manufacturers

1.   By 31 October 2013 and 31 October of each subsequent year, the Commission shall publish a list indicating, for each manufacturer:

| (a) | its specific emission target for the preceding calendar year; |
| --- | --- |

(a)

its specific emission target for the preceding calendar year;

| (b) | its average specific emissions of CO2 in the preceding calendar year; |
| --- | --- |

(b)

its average specific emissions of CO2 in the preceding calendar year;

| (c) | the difference between its average specific emissions of CO2 in the preceding calendar year and its specific emissions target in that year; |
| --- | --- |

(c)

the difference between its average specific emissions of CO2 in the preceding calendar year and its specific emissions target in that year;

| (d) | the average specific emissions of CO2 for all new light commercial vehicles registered in the Union in the previous calendar year; |
| --- | --- |

(d)

the average specific emissions of CO2 for all new light commercial vehicles registered in the Union in the previous calendar year;

| (e) | the average mass for all new light commercial vehicles registered in the Union in the preceding calendar year. |
| --- | --- |

(e)

the average mass for all new light commercial vehicles registered in the Union in the preceding calendar year.

2.   From 31 October 2015, the list published under paragraph 1 shall also indicate whether the manufacturer has complied with the requirements of Article 4 with respect to the preceding calendar year.

Article 11

Derogations for certain manufacturers

1.   An application for a derogation from the specific emissions target calculated in accordance with Annex I may be made by a manufacturer of fewer than 22 000 new light commercial vehicles registered in the Union per calendar year, and which:

| (a) | is not part of a group of connected manufacturers; or |
| --- | --- |

(a)

is not part of a group of connected manufacturers; or

| (b) | is part of a group of connected manufacturers that is responsible in total for fewer than 22 000 new light commercial vehicles registered in the Union per calendar year; or |
| --- | --- |

(b)

is part of a group of connected manufacturers that is responsible in total for fewer than 22 000 new light commercial vehicles registered in the Union per calendar year; or

| (c) | is part of a group of connected manufacturers but operates its own production facilities and design centre. |
| --- | --- |

(c)

is part of a group of connected manufacturers but operates its own production facilities and design centre.

2.   A derogation applied for under paragraph 1 may be granted for a maximum period of five calendar years. An application shall be made to the Commission and shall include:

| (a) | the name of, and contact person for, the manufacturer; |
| --- | --- |

(a)

the name of, and contact person for, the manufacturer;

| (b) | evidence that the manufacturer is eligible for a derogation under paragraph 1; |
| --- | --- |

(b)

evidence that the manufacturer is eligible for a derogation under paragraph 1;

| (c) | details of the light commercial vehicles which it manufactures including the mass and specific emissions of CO2 of those light commercial vehicles; and |
| --- | --- |

(c)

details of the light commercial vehicles which it manufactures including the mass and specific emissions of CO2 of those light commercial vehicles; and

| (d) | a specific emissions target consistent with its reduction potential, including the economic and technological potential to reduce its specific emissions of CO2 and taking into account the characteristics of the market for the type of light commercial vehicle manufactured. |
| --- | --- |

(d)

a specific emissions target consistent with its reduction potential, including the economic and technological potential to reduce its specific emissions of CO2 and taking into account the characteristics of the market for the type of light commercial vehicle manufactured.

3.   Where the Commission considers that the manufacturer is eligible for a derogation applied for under paragraph 1 and is satisfied that the specific emissions target proposed by the manufacturer is consistent with its reduction potential, including the economic and technological potential to reduce its specific emissions of CO2, and taking into account the characteristics of the market for the type of light commercial vehicle manufactured, the Commission shall grant a derogation to the manufacturer. The derogation shall apply from 1 January of the year following the date of granting of the derogation.

4.   A manufacturer which is subject to derogation in accordance with this Article shall notify the Commission immediately of any change which affects or may affect its eligibility for a derogation.

5.   Where the Commission considers, whether on the basis of a notification under paragraph 4 or otherwise, that a manufacturer is no longer eligible for the derogation, it shall revoke the derogation with effect from 1 January of the next calendar year and shall notify the manufacturer thereof.

6.   Where the manufacturer does not attain its specific emissions target, the Commission shall impose the excess emissions premium on the manufacturer, as set out in Article 9.

7.   The Commission shall adopt rules to supplement paragraphs 1 to 6 of this Article, inter alia, on the interpretation of the eligibility criteria for derogations, on the content of applications, and on the content and assessment of programmes for the reduction of specific emissions of CO2, by means of delegated acts in accordance with Article 15, and subject to the conditions laid down in Articles 16 and 17.

8.   Applications for a derogation, including the information supporting it, notifications under paragraph 4, revocations under paragraph 5 and any imposition of an excess emissions premium under paragraph 6 and acts adopted pursuant to paragraph 7, shall be made publicly available, subject to Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents (13).

Article 12

Eco-innovation

1.   Upon application by a supplier or a manufacturer, CO2 savings achieved through the use of innovative technologies shall be considered. The total contribution of those technologies to reducing the specific emissions target of a manufacturer may be up to 7 g CO2/km.

2.   The Commission shall adopt detailed provisions for a procedure to approve such innovative technologies by 31 December 2012. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 14(2) of this Regulation. Those detailed provisions shall be in accordance with the provisions established by Article 12(2) of Regulation (EC) No 443/2009, and be based on the following criteria for innovative technologies:

| (a) | the supplier or manufacturer must be accountable for the CO2 savings achieved through the use of the innovative technologies; |
| --- | --- |

(a)

the supplier or manufacturer must be accountable for the CO2 savings achieved through the use of the innovative technologies;

| (b) | the innovative technologies must make a verified contribution to CO2 reduction; |
| --- | --- |

(b)

the innovative technologies must make a verified contribution to CO2 reduction;

| (c) | the innovative technologies must not be covered by the standard test cycle CO2 measurement or by mandatory provisions due to complementary additional measures complying with the 10 g CO2/km reduction referred to in Article 1 of Regulation (EC) No 443/2009 or be mandatory under other provisions of Union law. |
| --- | --- |

(c)

the innovative technologies must not be covered by the standard test cycle CO2 measurement or by mandatory provisions due to complementary additional measures complying with the 10 g CO2/km reduction referred to in Article 1 of Regulation (EC) No 443/2009 or be mandatory under other provisions of Union law.

3.   A supplier or a manufacturer who applies for a measure to be approved as an innovative technology shall submit a report, including a verification report undertaken by an independent and certified body, to the Commission. In the event of a possible interaction of the measure with another innovative technology already approved, the report shall mention that interaction and the verification report shall evaluate to what extent that interaction modifies the reduction achieved by each measure.

4.   The Commission shall attest the reduction achieved on the basis of the criteria set out in paragraph 2.

Article 13

Review and report

1.   By 1 January 2013, the Commission shall complete a review of the specific emissions targets in Annex I and of the derogations in Article 11, with the aim of defining:

| — | subject to confirmation of its feasibility on the basis of updated impact assessment results, the modalities for reaching, by the year 2020, a long-term target of 147 g CO2/km in a cost-effective manner, and |
| --- | --- |

—

subject to confirmation of its feasibility on the basis of updated impact assessment results, the modalities for reaching, by the year 2020, a long-term target of 147 g CO2/km in a cost-effective manner, and

| — | the aspects of the implementation of that target, including the excess emissions premium. |
| --- | --- |

—

the aspects of the implementation of that target, including the excess emissions premium.

On the basis of such a review and its impact assessment, which includes an overall assessment of the impact on the car industry and its dependent industries, the Commission shall, if appropriate, make a proposal to amend this Regulation, in accordance with the ordinary legislative procedure, in a way which is as neutral as possible from the point of view of competition, and which is socially equitable and sustainable.

2.   The Commission shall, if appropriate, submit a proposal to the European Parliament and to the Council by 2014, to include in this Regulation vehicles in category N2 and M2 as defined in Annex II to Directive 2007/46/EC with a reference mass not exceeding 2 610 kg and vehicles to which type-approval is extended in accordance with Article 2(2) of Regulation (EC) No 715/2007, with a view to achieving the long-term target from 2020.

3.   The Commission shall by 2014, following an impact assessment, publish a report on the availability of data on footprint and payload and their use as utility parameters for determining specific emissions targets and, if appropriate, submit a proposal to the European Parliament and to the Council to amend Annex I in accordance with the ordinary legislative procedure.

4.   By 31 December 2011 the Commission shall set up a procedure to obtain representative values of CO2 emissions, fuel efficiency and mass of completed vehicles while ensuring that the manufacturer of the base vehicle has timely access to the mass and to the specific emissions of CO2 of the completed vehicle.

5.   By 31 October 2016, and every three years thereafter, the Commission shall amend Annex I by means of delegated acts in accordance with Article 15, and subject to the conditions laid down in Articles 16 and 17, to adjust the figure M0, referred to therein, to the average mass of new light commercial vehicles in the previous three calendar years.

Those adjustments shall take effect for the first time on 1 January 2018 and every three years thereafter.

6.   The Commission shall include light commercial vehicles in the review of the procedures for measuring CO2 emissions in accordance with Article 13(3) of Regulation (EC) No 443/2009.

From the date of application of the revised procedure for the measuring of CO2 emissions, innovative technologies shall no longer be approved under the procedure set out in Article 12.

The Commission shall include light commercial vehicles in the review of Directive 2007/46/EC in accordance with Article 13(4) of Regulation (EC) No 443/2009.

In order to reflect any change in the regulatory test procedure for the measurement of specific CO2 emissions, the Commission shall adapt the formulae set out in Annex I by means of delegated acts in accordance with Article 15, and subject to the conditions laid down in Articles 16 and 17.

Article 14

Committee procedure

1.   The Commission shall be assisted by the Climate Change Committee established by Article 9 of Decision No 280/2004/EC of the European Parliament and of the Council of 11 February 2004 concerning a mechanism for monitoring Community greenhouse gas emissions and for implementing the Kyoto Protocol (14). That committee is a committee within the meaning of Regulation (EU) No 182/2011.

2.   Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

Article 15

Exercise of the delegation

1.   The power to adopt delegated acts referred to in the second subparagraph of Article 8(9), Article 11(7), Article 13(5) and the fourth subparagraph of Article 13(6), shall be conferred on the Commission for a period of five years from 3 June 2011. The Commission shall draw up a report in respect of the delegated power at the latest six months before the end of the five-year period. The delegation of power shall be automatically extended for periods of an identical duration, unless the European Parliament or the Council revokes it in accordance with Article 16.

2.   As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

3.   The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in Articles 16 and 17.

Article 16

Revocation of the delegation

1.   The delegation of power referred to in the second subparagraph of Article 8(9), Article 11(7), Article 13(5) and the fourth subparagraph of Article 13(6) may be revoked at any time by the European Parliament or the Council.

2.   The institution which has commenced an internal procedure for deciding whether to revoke a delegation of power shall endeavour to inform the other institution and the Commission within a reasonable time before the final decision is taken, indicating the delegated power which could be subject to revocation and possible reasons for a revocation.

3.   The decision of revocation shall put an end to the delegation of the power specified in that decision. It shall take effect immediately or at a later date specified therein. It shall not affect the validity of the delegated acts already in force. It shall be published in the Official Journal of the European Union.

Article 17

Objections to delegated acts

1.   The European Parliament or the Council may object to a delegated act within a period of two months from the date of notification.

At the initiative of the European Parliament or the Council that period shall be extended by two months.

2.   If, on expiry of the period referred to in paragraph 1, neither the European Parliament nor the Council has objected to the delegated act, it shall be published in the Official Journal of the European Union and shall enter into force on the date stated therein.

The delegated act may be published in the Official Journal of the European Union and enter into force before the expiry of that period if the European Parliament and the Council have both informed the Commission of their intention not to raise objections.

3.   If either the European Parliament or the Council objects to the delegated act within the period referred to in paragraph 1, it shall not enter into force. The institution which objects shall state the reasons for objecting to the delegated act.

Article 18

Entry into force

This Regulation shall enter into force on the third 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 Strasbourg, 11 May 2011.

For the European Parliament

The President

J. BUZEK

For the Council

The President

GYŐRI E.

---

(1)  OJ C 44, 11.2.2011, p. 157.

1

(2)  Position of the European Parliament of 15 February 2011 (not yet published in the Official Journal) and decision of the Council of 31 March 2011.

2

(3)  OJ L 33, 7.2.1994, p. 11.

3

(4)  OJ L 140, 5.6.2009, p. 136.

4

(5)  OJ L 275, 25.10.2003, p. 32.

5

(6)  OJ L 140, 5.6.2009, p. 1.

6

(7)  OJ L 171, 29.6.2007, p. 1.

7

(8)  OJ L 12, 18.1.2000, p. 16.

8

(9)  OJ L 82, 29.3.2003, p. 33.

9

(10)  OJ L 263, 9.10.2007, p. 1.

10

(11)  OJ L 57, 2.3.1992, p. 27.

11

(12)  OJ L 55, 28.2.2011, p. 13.

12

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

13

(14)  OJ L 49, 19.2.2004, p. 1.

14

---

ANNEX I

SPECIFIC CO2 EMISSIONS TARGETS

| 1. | The indicative specific emissions of CO2 for each light commercial vehicle, measured in grams per kilometre, shall be determined in accordance with the following formulae:






  (a) | from 2014 to 2017:
  Indicative specific emissions of CO2 = 175 + a × (M – M0)
  where:







  M | = | mass of the vehicle in kilograms (kg) |
| --- | --- | --- | --- | --- |
| M0 | = | 1 706,0 |
| a | = | 0,093; |

1.

The indicative specific emissions of CO2 for each light commercial vehicle, measured in grams per kilometre, shall be determined in accordance with the following formulae:

(a)

from 2014 to 2017:

Indicative specific emissions of CO2 = 175 + a × (M – M0)

where:

M

=

mass of the vehicle in kilograms (kg)

M0

=

1 706,0

a

=

0,093;

| (b) | from 2018:
  Indicative specific emission of CO2 = 175 + a × (M – M0)
  where:







  M | = | mass of the vehicle in kilograms (kg) |
| --- | --- | --- | --- |
| M0 | = | the value adopted pursuant to Article 13(5) |
| a | = | 0,093. |

(b)

from 2018:

Indicative specific emission of CO2 = 175 + a × (M – M0)

where:

M

=

mass of the vehicle in kilograms (kg)

M0

=

the value adopted pursuant to Article 13(5)

a

=

0,093.

| 2. | The specific emissions target for a manufacturer in a calendar year shall be calculated as the average of the indicative specific emissions of CO2 of each new light commercial vehicle registered in that calendar year of which it is the manufacturer. |
| --- | --- |

2.

The specific emissions target for a manufacturer in a calendar year shall be calculated as the average of the indicative specific emissions of CO2 of each new light commercial vehicle registered in that calendar year of which it is the manufacturer.

---

ANNEX II

MONITORING AND REPORTING OF EMISSIONS

A.   Collection of data on light commercial vehicles and determination of CO2 monitoring information

| 1. | For the year commencing 1 January 2012 and each subsequent year, Member States shall record the following details for each new light commercial vehicle registered in its territory:






  (a) | the manufacturer; |
| --- | --- | --- |

1.

For the year commencing 1 January 2012 and each subsequent year, Member States shall record the following details for each new light commercial vehicle registered in its territory:

(a)

the manufacturer;

| (b) | its type, variant and version; |
| --- | --- |

(b)

its type, variant and version;

| (c) | its specific emissions of CO2 (g/km); |
| --- | --- |

(c)

its specific emissions of CO2 (g/km);

| (d) | its mass (kg); |
| --- | --- |

(d)

its mass (kg);

| (e) | its wheel base (mm); |
| --- | --- |

(e)

its wheel base (mm);

| (f) | its track widths of steering axle (mm) and other axle (mm); |
| --- | --- |

(f)

its track widths of steering axle (mm) and other axle (mm);

| (g) | its technically permissible maximum laden mass (in kg) pursuant to Annex III to Directive 2007/46/EC. |
| --- | --- |

(g)

its technically permissible maximum laden mass (in kg) pursuant to Annex III to Directive 2007/46/EC.

| 2. | The details referred to in point 1 shall be taken from the certificate of conformity for the relevant light commercial vehicle. Where the certificate of conformity specifies both a minimum and a maximum mass for a light commercial vehicle, the Member States shall use only the maximum figure for the purpose of this Regulation. In the case of bi-fuelled vehicles (petrol/gas) the certificates of conformity of which bear specific CO2 emission figures for both types of fuel, Member States shall use only the figure measured for gas. |
| --- | --- |

2.

The details referred to in point 1 shall be taken from the certificate of conformity for the relevant light commercial vehicle. Where the certificate of conformity specifies both a minimum and a maximum mass for a light commercial vehicle, the Member States shall use only the maximum figure for the purpose of this Regulation. In the case of bi-fuelled vehicles (petrol/gas) the certificates of conformity of which bear specific CO2 emission figures for both types of fuel, Member States shall use only the figure measured for gas.

| 3. | For the calendar year commencing 1 January 2012 and each subsequent calendar year, each Member State shall determine, in accordance with the methods set out in Part B of this Annex, for each manufacturer:






  (a) | the total number of new light commercial vehicles registered in its territory; |
| --- | --- | --- |

3.

For the calendar year commencing 1 January 2012 and each subsequent calendar year, each Member State shall determine, in accordance with the methods set out in Part B of this Annex, for each manufacturer:

(a)

the total number of new light commercial vehicles registered in its territory;

| (b) | the average specific emissions for CO2, as specified in point 2 of Part B of this Annex; |
| --- | --- |

(b)

the average specific emissions for CO2, as specified in point 2 of Part B of this Annex;

| (c) | the average mass, as specified in point 3 of Part B of this Annex; |
| --- | --- |

(c)

the average mass, as specified in point 3 of Part B of this Annex;

| (d) | for each version of each variant of each type of new light commercial vehicle:






  (i) | the total number of new light commercial vehicles registered in its territory, as specified in point 4 of Part B of this Annex; |
| --- | --- | --- |

(d)

for each version of each variant of each type of new light commercial vehicle:

(i)

the total number of new light commercial vehicles registered in its territory, as specified in point 4 of Part B of this Annex;

| (ii) | the specific emissions of CO2; |
| --- | --- |

(ii)

the specific emissions of CO2;

| (iii) | the mass; |
| --- | --- |

(iii)

the mass;

| (iv) | the footprint of the vehicle, as specified in point 5 of Part B of this Annex; |
| --- | --- |

(iv)

the footprint of the vehicle, as specified in point 5 of Part B of this Annex;

| (v) | the payload. |
| --- | --- |

(v)

the payload.

B.   Methodology for determining CO2 monitoring information for new light commercial vehicles

Monitoring information which Member States are required to determine in accordance with point 3 of Part A of this Annex shall be determined in accordance with the methodology in this Part.

1.   Number of new light commercial vehicles registered (N)

Member States shall determine the number of new light commercial vehicles registered within their territory in the respective monitoring year (N).

2.   Average specific CO2 emissions of new light commercial vehicles (Save)

The average specific CO2 emissions of all new light commercial vehicles newly registered in a Member State’s territory in the monitoring year (Save) is calculated by dividing the sum of the specific CO2 emissions of each individual new vehicle, S, by the number of new vehicles, N.

Save = (1/N) × Σ S.

3.   Average mass of new light commercial vehicles

The average mass of all new light commercial vehicles registered in a Member State’s territory in the monitoring year (Mave) is calculated by dividing the sum of the mass of each individual new vehicle, M, by the number of new vehicles, N.

Mave = (1/N) × Σ M.

4.   The distribution by version of new light commercial vehicles

For each version of each variant each type of new light commercial vehicle, the number of newly registered vehicles, the mass of the vehicles, the specific emissions of CO2, the wheelbase, track widths and technically permissible maximum laden mass of the vehicle are to be recorded.

5.   Footprint

The footprint of the vehicle shall be calculated by multiplying the wheelbase of the vehicle by the average track width of the vehicle.

6.   Payload

The payload of the vehicle shall be defined as the difference between the technically permissible maximum laden mass pursuant to Annex II to Directive 2007/46/EC and the mass of the vehicle.

7.   Completed vehicles

In the case of multi-stage vehicles, the specific emissions of CO2 of completed vehicles shall be allocated to the manufacturer of the base vehicle.

In order to ensure that the values of CO2 emissions, fuel efficiency and mass of completed vehicles are representative, without placing an excessive burden on the manufacturer of the base vehicle, the Commission shall come forward with a specific monitoring procedure and shall review and make the necessary amendments to the relevant type-approval legislation by 31 December 2011 at the latest.

When defining such a procedure, the Commission shall, if appropriate, determine how the mass and CO2 values are monitored, based on a table of CO2 values corresponding to different final inertia weight classes or based on only one CO2 value derived from the base vehicle mass plus a default added mass differentiated by N1 class. In the latter case, this mass would also be taken for Part C of this Annex.

The Commission shall also ensure that the manufacturer of the base vehicle has timely access to the mass and to the specific emissions of CO2 of the completed vehicle.

C.   Format for the transmission of data

For each manufacturer, for each year, Member States shall report the data described in point 3 of Part A of this Annex in the following formats:

Section 1 –   Aggregated monitoring data

| Member State (1): | |
| --- | --- |
| Year: | |
| Data source: | |

Member State (1):

Year:

Data source:

| Manufacturer | Total number of new light commercial vehicles registered | Number of new light commercial vehicles having an emission value | Number of new light commercial vehicles having a mass value | Number of new light commercial vehicles having a wheelbase value | Number of new light commercial vehicles having a steering axle track width value | Number of new light commercial vehicles having other axle track width value |
| --- | --- | --- | --- | --- | --- | --- |
| (Manufacturer 1) | ... | ... | ... | ... | ... | ... |
| (Manufacturer 2) | ... | ... | ... | ... | ... | ... |
| ... | ... | ... | ... | ... | ... | ... |
| Total all manufacturers | ... | ... | ... | ... | ... | ... |

Manufacturer

Total number of new light commercial vehicles registered

Number of new light commercial vehicles having an emission value

Number of new light commercial vehicles having a mass value

Number of new light commercial vehicles having a wheelbase value

Number of new light commercial vehicles having a steering axle track width value

Number of new light commercial vehicles having other axle track width value

(Manufacturer 1)

...

...

...

...

...

...

(Manufacturer 2)

...

...

...

...

...

...

...

...

...

...

...

...

...

Total all manufacturers

...

...

...

...

...

...

Section 2 –   Detailed monitoring data

| Manufacturer name
  EU standard denomination | Manufacturer name
  National standard denomination | Manufacturer name
  National Registry denomination | Type | Variant | Version | Make | Commercial name | Category of vehicle type approved | Category of vehicle registered | Total number of new registrations | Specific emissions of CO2

  (g/km) | Mass
  (kg) | Technically permissible maximum laden mass
  (kg) | Wheelbase
  (mm) | Track width steering axle
  (mm) | Track width other axle
  (mm) | Fuel type | Fuel mode | Capacity
  (cm3) | Electric energy consumption
  (Wh/km) | Innovative technology or group of innovative technologies code | Emissions reduction through innovative technologies |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Manuf. 1 | Manuf. 1 | Manuf. 1 | Type 1 | Variant 1 | Version 1 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 1 | Manuf. 1 | Manuf. 1 | Type 1 | Variant 1 | Version 2 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 1 | Manuf. 1 | Manuf. 1 | Type 1 | Variant 2 | Version 1 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 1 | Manuf. 1 | Manuf. 1 | Type 1 | Variant 2 | Version 2 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 1 | Manuf. 1 | Manuf. 1 | Type 2 | Variant 1 | Version 1 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 1 | Manuf. 1 | Manuf. 1 | Type 2 | Variant 1 | Version 2 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 1 | Manuf. 1 | Manuf. 1 | Type 2 | Variant 2 | Version 1 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 1 | Manuf. 1 | Manuf. 1 | Type 2 | Variant 2 | Version 2 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 1 | Manuf. 1 | Manuf. 1 | ... | ... | ... | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 2 | Manuf. 2 | Manuf. 2 | Type 1 | Variant 1 | Version 1 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 2 | Manuf. 2 | Manuf. 2 | Type 1 | Variant 1 | Version 2 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 2 | Manuf. 2 | Manuf. 2 | Type 1 | Variant 2 | Version 1 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 2 | Manuf. 2 | Manuf. 2 | Type 1 | Variant 2 | Version 2 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 2 | Manuf. 2 | Manuf. 2 | Type 2 | Variant 1 | Version 1 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 2 | Manuf. 2 | Manuf. 2 | Type 2 | Variant 1 | Version 2 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 2 | Manuf. 2 | Manuf. 2 | Type 2 | Variant 2 | Version 1 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 2 | Manuf. 2 | Manuf. 2 | Type 2 | Variant 2 | Version 2 | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |
| Manuf. 2 | Manuf. 2 | Manuf. 2 | ... | ... | ... | ... | ... | ... | ... | ... | ... | ... | | ... | ... | ... | ... | ... | ... | ... | ... | ... |

Manufacturer name

EU standard denomination

Manufacturer name

National standard denomination

Manufacturer name

National Registry denomination

Type

Variant

Version

Make

Commercial name

Category of vehicle type approved

Category of vehicle registered

Total number of new registrations

Specific emissions of CO2

(g/km)

Mass

(kg)

Technically permissible maximum laden mass

(kg)

Wheelbase

(mm)

Track width steering axle

(mm)

Track width other axle

(mm)

Fuel type

Fuel mode

Capacity

(cm3)

Electric energy consumption

(Wh/km)

Innovative technology or group of innovative technologies code

Emissions reduction through innovative technologies

Manuf. 1

Manuf. 1

Manuf. 1

Type 1

Variant 1

Version 1

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 1

Manuf. 1

Manuf. 1

Type 1

Variant 1

Version 2

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 1

Manuf. 1

Manuf. 1

Type 1

Variant 2

Version 1

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 1

Manuf. 1

Manuf. 1

Type 1

Variant 2

Version 2

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 1

Manuf. 1

Manuf. 1

Type 2

Variant 1

Version 1

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 1

Manuf. 1

Manuf. 1

Type 2

Variant 1

Version 2

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 1

Manuf. 1

Manuf. 1

Type 2

Variant 2

Version 1

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 1

Manuf. 1

Manuf. 1

Type 2

Variant 2

Version 2

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 1

Manuf. 1

Manuf. 1

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 2

Manuf. 2

Manuf. 2

Type 1

Variant 1

Version 1

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 2

Manuf. 2

Manuf. 2

Type 1

Variant 1

Version 2

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 2

Manuf. 2

Manuf. 2

Type 1

Variant 2

Version 1

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 2

Manuf. 2

Manuf. 2

Type 1

Variant 2

Version 2

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 2

Manuf. 2

Manuf. 2

Type 2

Variant 1

Version 1

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 2

Manuf. 2

Manuf. 2

Type 2

Variant 1

Version 2

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 2

Manuf. 2

Manuf. 2

Type 2

Variant 2

Version 1

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 2

Manuf. 2

Manuf. 2

Type 2

Variant 2

Version 2

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

Manuf. 2

Manuf. 2

Manuf. 2

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

...

---

(1)  ISO 3166 alpha-2 codes with the exception of Greece and the United Kingdom for which the codes are ‘EL’ and ‘UK’ respectively.

---

| 31.5.2011 | EN | Official Journal of the European Union | L 145/19 |
| --- | --- | --- | --- |

31.5.2011

EN

Official Journal of the European Union

L 145/19

---

REGULATION (EU) No 511/2011 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 11 May 2011

implementing the bilateral safeguard clause of the Free Trade Agreement between the European Union and its Member States and the Republic of Korea

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 207(2) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Acting in accordance with the ordinary legislative procedure (1),

Whereas:

| (1) | On 23 April 2007 the Council authorised the Commission to open negotiations for a free trade agreement with the Republic of Korea (‘Korea’) on behalf of the Union and its Member States. |
| --- | --- |

(1)

On 23 April 2007 the Council authorised the Commission to open negotiations for a free trade agreement with the Republic of Korea (‘Korea’) on behalf of the Union and its Member States.

| (2) | Those negotiations have been concluded and the Free Trade Agreement between the European Union and its Member States, of the one part, and the Republic of Korea, of the other part, (‘the Agreement’) was signed on 6 October 2010 (2), received the consent of the European Parliament on 17 February 2011 (3) and is to apply as provided for in Article 15.10 of the Agreement. |
| --- | --- |

(2)

Those negotiations have been concluded and the Free Trade Agreement between the European Union and its Member States, of the one part, and the Republic of Korea, of the other part, (‘the Agreement’) was signed on 6 October 2010 (2), received the consent of the European Parliament on 17 February 2011 (3) and is to apply as provided for in Article 15.10 of the Agreement.

| (3) | It is necessary to lay down the procedures for applying certain provisions of the Agreement which concern safeguards. |
| --- | --- |

(3)

It is necessary to lay down the procedures for applying certain provisions of the Agreement which concern safeguards.

| (4) | The terms ‘serious injury’, ‘threat of serious injury’ and ‘transition period’ as referred to in Article 3.5 of the Agreement should be defined. |
| --- | --- |

(4)

The terms ‘serious injury’, ‘threat of serious injury’ and ‘transition period’ as referred to in Article 3.5 of the Agreement should be defined.

| (5) | Safeguard measures may be considered only if the product in question is imported into the Union in such increased quantities and under such conditions as to cause, or threaten to cause, serious injury to Union producers of like or directly competitive products as laid down in Article 3.1 of the Agreement. |
| --- | --- |

(5)

Safeguard measures may be considered only if the product in question is imported into the Union in such increased quantities and under such conditions as to cause, or threaten to cause, serious injury to Union producers of like or directly competitive products as laid down in Article 3.1 of the Agreement.

| (6) | Safeguard measures should take one of the forms referred to in Article 3.1 of the Agreement. |
| --- | --- |

(6)

Safeguard measures should take one of the forms referred to in Article 3.1 of the Agreement.

| (7) | The tasks of following up and reviewing the Agreement and, if necessary, imposing safeguard measures should be carried out in the most transparent manner possible. |
| --- | --- |

(7)

The tasks of following up and reviewing the Agreement and, if necessary, imposing safeguard measures should be carried out in the most transparent manner possible.

| (8) | The Commission should submit a report once a year on the implementation of the Agreement and the application of the safeguard measures. |
| --- | --- |

(8)

The Commission should submit a report once a year on the implementation of the Agreement and the application of the safeguard measures.

| (9) | There should be detailed provisions on the initiation of proceedings. The Commission should receive information including available evidence from the Member States of any trends in imports which might call for the application of safeguard measures. |
| --- | --- |

(9)

There should be detailed provisions on the initiation of proceedings. The Commission should receive information including available evidence from the Member States of any trends in imports which might call for the application of safeguard measures.

| (10) | The reliability of statistics on all imports from Korea to the Union is therefore crucial to determining whether the conditions to apply safeguard measures are met. |
| --- | --- |

(10)

The reliability of statistics on all imports from Korea to the Union is therefore crucial to determining whether the conditions to apply safeguard measures are met.

| (11) | In some cases, an increase of imports concentrated in one or several Member States may cause or threaten to cause by itself serious injury to the Union industry. In the event that there is an increase of imports concentrated in one or several Member States, the Commission may introduce prior surveillance measures. The Commission will give full consideration to how the product subject to investigation, and consequently the Union industry producing the like product, can be defined in a manner which provides for an effective remedy, while fully respecting the criteria under this Regulation and the Agreement. |
| --- | --- |

(11)

In some cases, an increase of imports concentrated in one or several Member States may cause or threaten to cause by itself serious injury to the Union industry. In the event that there is an increase of imports concentrated in one or several Member States, the Commission may introduce prior surveillance measures. The Commission will give full consideration to how the product subject to investigation, and consequently the Union industry producing the like product, can be defined in a manner which provides for an effective remedy, while fully respecting the criteria under this Regulation and the Agreement.

| (12) | If there is sufficient prima facie evidence to justify the initiation of a proceeding the Commission should publish a notice as provided for in Article 3.2.2 of the Agreement in the Official Journal of the European Union. |
| --- | --- |

(12)

If there is sufficient prima facie evidence to justify the initiation of a proceeding the Commission should publish a notice as provided for in Article 3.2.2 of the Agreement in the Official Journal of the European Union.

| (13) | There should be detailed provisions on the initiation of investigations, access and inspections by interested parties to the information gathered, hearings for the parties involved and the opportunities for those parties to submit their views as provided for in Article 3.2.2 of the Agreement. |
| --- | --- |

(13)

There should be detailed provisions on the initiation of investigations, access and inspections by interested parties to the information gathered, hearings for the parties involved and the opportunities for those parties to submit their views as provided for in Article 3.2.2 of the Agreement.

| (14) | The Commission should notify Korea in writing of the initiation of an investigation and consult with Korea as provided for in Article 3.2.1 of the Agreement. |
| --- | --- |

(14)

The Commission should notify Korea in writing of the initiation of an investigation and consult with Korea as provided for in Article 3.2.1 of the Agreement.

| (15) | It is also necessary, pursuant to Articles 3.2 and 3.3 of the Agreement, to set time limits for the initiation of investigations and for determinations as to whether or not measures are appropriate, with a view to ensuring that such determinations are made quickly, in order to increase legal certainty for the economic operators concerned. |
| --- | --- |

(15)

It is also necessary, pursuant to Articles 3.2 and 3.3 of the Agreement, to set time limits for the initiation of investigations and for determinations as to whether or not measures are appropriate, with a view to ensuring that such determinations are made quickly, in order to increase legal certainty for the economic operators concerned.

| (16) | An investigation should precede the application of any safeguard measure, subject to the Commission being allowed to apply provisional measures in critical circumstances as referred to in Article 3.3 of the Agreement. |
| --- | --- |

(16)

An investigation should precede the application of any safeguard measure, subject to the Commission being allowed to apply provisional measures in critical circumstances as referred to in Article 3.3 of the Agreement.

| (17) | Safeguard measures should be applied only to the extent, and for such time, as may be necessary to prevent serious injury and to facilitate adjustment. The maximum duration of safeguard measures should be determined and specific provisions regarding extension and review of such measures should be laid down, as referred to in Article 3.2.5 of the Agreement. |
| --- | --- |

(17)

Safeguard measures should be applied only to the extent, and for such time, as may be necessary to prevent serious injury and to facilitate adjustment. The maximum duration of safeguard measures should be determined and specific provisions regarding extension and review of such measures should be laid down, as referred to in Article 3.2.5 of the Agreement.

| (18) | Close monitoring will facilitate any timely decision concerning the possible initiation of an investigation or the imposition of measures. Therefore the Commission should regularly monitor imports and exports in sensitive sectors from the date of application of the Agreement. |
| --- | --- |

(18)

Close monitoring will facilitate any timely decision concerning the possible initiation of an investigation or the imposition of measures. Therefore the Commission should regularly monitor imports and exports in sensitive sectors from the date of application of the Agreement.

| (19) | It is necessary to lay down certain procedures relating to the application of Article 14 (Drawback of, or Exemption from, Customs Duties) of the Protocol concerning the Definition of ‘Originating Products’ and Methods of Administrative Cooperation (‘the Rules of Origin Protocol’) of the Agreement in order to ensure the effective operation of the mechanisms provided for therein and to provide for a comprehensive exchange of information with relevant stakeholders. |
| --- | --- |

(19)

It is necessary to lay down certain procedures relating to the application of Article 14 (Drawback of, or Exemption from, Customs Duties) of the Protocol concerning the Definition of ‘Originating Products’ and Methods of Administrative Cooperation (‘the Rules of Origin Protocol’) of the Agreement in order to ensure the effective operation of the mechanisms provided for therein and to provide for a comprehensive exchange of information with relevant stakeholders.

| (20) | Because it will not be possible to limit customs duty drawback until 5 years after the Agreement enters into force, it may be necessary, on the basis of this Regulation, to impose safeguard measures in response to a serious injury or threat of serious injury to Union producers that is caused by imports benefiting from duty drawback or exemption from customs duty. In such a proceeding the Commission should evaluate all relevant factors having a bearing on the situation of the Union industry, including the conditions set out in Article 14.2.1 of the Rules of Origin Protocol. Therefore the Commission should monitor Korean statistics for sensitive sectors potentially affected by duty drawback from the date of application of the Agreement. |
| --- | --- |

(20)

Because it will not be possible to limit customs duty drawback until 5 years after the Agreement enters into force, it may be necessary, on the basis of this Regulation, to impose safeguard measures in response to a serious injury or threat of serious injury to Union producers that is caused by imports benefiting from duty drawback or exemption from customs duty. In such a proceeding the Commission should evaluate all relevant factors having a bearing on the situation of the Union industry, including the conditions set out in Article 14.2.1 of the Rules of Origin Protocol. Therefore the Commission should monitor Korean statistics for sensitive sectors potentially affected by duty drawback from the date of application of the Agreement.

| (21) | From the date of application of the Agreement, the Commission should also monitor particularly closely, especially in sensitive sectors, the statistics showing the evolution of imports into and exports from Korea. |
| --- | --- |

(21)

From the date of application of the Agreement, the Commission should also monitor particularly closely, especially in sensitive sectors, the statistics showing the evolution of imports into and exports from Korea.

| (22) | Definitive safeguard measures adopted pursuant to this Regulation may be referred to by Member States in applications for financial contributions under Regulation (EC) No 1927/2006 of the European Parliament and of the Council of 20 December 2006 on establishing the European Globalisation Adjustment Fund (4). |
| --- | --- |

(22)

Definitive safeguard measures adopted pursuant to this Regulation may be referred to by Member States in applications for financial contributions under Regulation (EC) No 1927/2006 of the European Parliament and of the Council of 20 December 2006 on establishing the European Globalisation Adjustment Fund (4).

| (23) | The implementation of the bilateral safeguard clause of the Agreement requires uniform conditions for the adoption of provisional and definitive safeguard measures, for the imposition of prior surveillance measures, and for the termination of an investigation without measures. Those measures should be adopted by the Commission in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (5). |
| --- | --- |

(23)

The implementation of the bilateral safeguard clause of the Agreement requires uniform conditions for the adoption of provisional and definitive safeguard measures, for the imposition of prior surveillance measures, and for the termination of an investigation without measures. Those measures should be adopted by the Commission in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (5).

| (24) | It is appropriate that the advisory procedure be used for the adoption of surveillance and provisional measures given the effects of these measures and their sequential logic in relation to the adoption of definitive safeguard measures. Where a delay in the imposition of measures would cause damage which would be difficult to repair it is necessary to allow the Commission to adopt immediately applicable provisional measures. |
| --- | --- |

(24)

It is appropriate that the advisory procedure be used for the adoption of surveillance and provisional measures given the effects of these measures and their sequential logic in relation to the adoption of definitive safeguard measures. Where a delay in the imposition of measures would cause damage which would be difficult to repair it is necessary to allow the Commission to adopt immediately applicable provisional measures.

| (25) | This Regulation should apply only to products originating in the Union or Korea, |
| --- | --- |

(25)

This Regulation should apply only to products originating in the Union or Korea,

HAVE ADOPTED THIS REGULATION:

Article 1

Definitions

For the purposes of this Regulation:

| (a) | ‘products’ means goods originating in the Union or Korea. A product subject to an investigation may cover one or several tariff lines or a subsegment thereof depending on the specific market circumstances, or any product segmentation commonly applied in the Union industry; |
| --- | --- |

(a)

‘products’ means goods originating in the Union or Korea. A product subject to an investigation may cover one or several tariff lines or a subsegment thereof depending on the specific market circumstances, or any product segmentation commonly applied in the Union industry;

| (b) | ‘interested parties’ means parties affected by the imports of the product in question; |
| --- | --- |

(b)

‘interested parties’ means parties affected by the imports of the product in question;

| (c) | ‘Union industry’ means the Union producers as a whole of the like or directly competitive products, operating within the territory of the Union, or those Union producers whose collective output of the like or directly competitive products constitutes a major proportion of the total Union production of those products. In cases where the like or directly competitive product is only one of several products that are made by the producers constituting the Union industry, the industry shall be defined as the specific operations that are involved in the production of the like or directly competitive product; |
| --- | --- |

(c)

‘Union industry’ means the Union producers as a whole of the like or directly competitive products, operating within the territory of the Union, or those Union producers whose collective output of the like or directly competitive products constitutes a major proportion of the total Union production of those products. In cases where the like or directly competitive product is only one of several products that are made by the producers constituting the Union industry, the industry shall be defined as the specific operations that are involved in the production of the like or directly competitive product;

| (d) | ‘serious injury’ means a significant overall impairment in the position of Union producers; |
| --- | --- |

(d)

‘serious injury’ means a significant overall impairment in the position of Union producers;

| (e) | ‘threat of serious injury’ means serious injury that is clearly imminent. A determination of the existence of a threat of serious injury shall be based on verifiable facts and not merely on allegation, conjecture or remote possibility. Forecasts, estimations and analyses made on the basis of factors referred to in Article 5(5), should, inter alia, be taken into account in order to determine the existence of a threat of serious injury; |
| --- | --- |

(e)

‘threat of serious injury’ means serious injury that is clearly imminent. A determination of the existence of a threat of serious injury shall be based on verifiable facts and not merely on allegation, conjecture or remote possibility. Forecasts, estimations and analyses made on the basis of factors referred to in Article 5(5), should, inter alia, be taken into account in order to determine the existence of a threat of serious injury;

| (f) | ‘transition period’ means, for a product, the period from the date of application of the Agreement, as provided for in Article 15.10 thereof, until 10 years from the date of completion of tariff elimination or reduction, as the case may be for each product. |
| --- | --- |

(f)

‘transition period’ means, for a product, the period from the date of application of the Agreement, as provided for in Article 15.10 thereof, until 10 years from the date of completion of tariff elimination or reduction, as the case may be for each product.

Article 2

Principles

1.   A safeguard measure may be imposed in accordance with this Regulation where a product originating in Korea is, as a result of the reduction or the elimination of the customs duties on that product, being imported into the Union in such increased quantities, in absolute terms or relative to Union production, and under such conditions as to cause or threaten to cause serious injury to the Union industry producing a like or directly competitive product.

2.   Safeguard measures may take one of the following forms:

| (a) | suspension of further reduction of the rate of customs duty on the product concerned provided for under the Agreement; or |
| --- | --- |

(a)

suspension of further reduction of the rate of customs duty on the product concerned provided for under the Agreement; or

| (b) | increase in the rate of customs duty on the product to a level which does not exceed the lesser of:






  — | the most-favoured-nation (‘MFN’) applied rate of customs duty on the product in effect at the time the measure is taken, or |
| --- | --- | --- |

(b)

increase in the rate of customs duty on the product to a level which does not exceed the lesser of:

—

the most-favoured-nation (‘MFN’) applied rate of customs duty on the product in effect at the time the measure is taken, or

| — | the base rate of customs duty specified in the Schedules in Annex 2-A to the Agreement pursuant to Article 2.5.2 of the Agreement. |
| --- | --- |

—

the base rate of customs duty specified in the Schedules in Annex 2-A to the Agreement pursuant to Article 2.5.2 of the Agreement.

Article 3

Monitoring

1.   The Commission shall monitor the evolution of import and export statistics of Korean products in sensitive sectors potentially affected by duty drawback from the date of application of the Agreement and shall cooperate and exchange data on a regular basis with Member States and the Union industry.

2.   Upon a duly justified request by the industries concerned, the Commission may consider extending the scope of the monitoring to other sectors.

3.   The Commission shall present an annual monitoring report to the European Parliament and the Council on updated statistics on imports from Korea of products in the sensitive sectors and those sectors to which monitoring has been extended.

4.   For a period of 5 years following the date of application of the Agreement and upon a duly reasoned request from the Union industry, the Commission shall pay particular attention to any increase in the import of finished sensitive products originating in Korea into the Union where such an increase is attributable to increased use of parts or components imported into Korea from third countries which have not concluded a free trade agreement with the Union and which are covered by the provisions on customs duty drawback or exemption from customs duty.

5.   For the purposes of paragraph 4, at least the following products shall be considered as falling within the category of sensitive products: textiles and clothing (HS 2007 headings 5204, 5205, 5206, 5207, 5408, 5508, 5509, 5510, 5511), consumer electronics (HS 2007 headings 8521, 8528), passenger cars (HS 2007 headings 870321, 870322, 870323, 870324, 870331, 870332, 870333) and also those included in the additional list drawn up in accordance with Article 11.

Article 4

Initiation of proceedings

1.   An investigation shall be initiated upon request by a Member State, by any legal person or any association not having legal personality, acting on behalf of the Union industry, or on the Commission’s own initiative if it is apparent to the Commission that there is sufficient prima facie evidence, as determined on the basis of factors referred to in Article 5(5), to justify such initiation.

2.   The request to initiate an investigation shall contain evidence that the conditions for imposing the safeguard measure set out in Article 2(1) are met. The request shall generally contain the following information: the rate and amount of the increase in imports of the product concerned in absolute and relative terms, the share of the domestic market taken by increased imports, changes in the level of sales, production, productivity, capacity utilisation, profits and losses, and employment.

An investigation may also be initiated in the event that there is a surge of imports concentrated in one or several Member States, provided that there is sufficient prima facie evidence that the conditions for initiation are met, as determined on the basis of factors referred to in Article 5(5).

3.   A Member State shall inform the Commission if trends in imports from Korea appear to call for safeguard measures. That information shall include the evidence available as determined on the basis of factors referred to in Article 5(5). The Commission shall pass that information on to all Member States.

4.   The Commission shall consult Member States forthwith if a request is received pursuant to paragraph 1 or if the Commission considers initiation of an investigation on its own initiative. Consultation with the Member States shall take place within 8 working days of the Commission sending the request or information, as provided for in paragraphs 1 and 3 of this Article respectively, within the Committee referred to in Article 14. Where, after consultation, it is apparent that there is sufficient prima facie evidence as determined on the basis of factors referred to in Article 5(5) to justify the initiation of a proceeding the Commission shall publish a notice in the Official Journal of the European Union. Initiation shall take place within 1 month of the request received pursuant to paragraph 1.

5.   The notice referred to in paragraph 4 shall:

| (a) | give a summary of the information received, and require that all relevant information be communicated to the Commission; |
| --- | --- |

(a)

give a summary of the information received, and require that all relevant information be communicated to the Commission;

| (b) | state the period within which interested parties may make known their views in writing and submit information, if such views and information are to be taken into account during the investigation; |
| --- | --- |

(b)

state the period within which interested parties may make known their views in writing and submit information, if such views and information are to be taken into account during the investigation;

| (c) | state the period within which interested parties may apply to be heard orally by the Commission in accordance with Article 5(9). |
| --- | --- |

(c)

state the period within which interested parties may apply to be heard orally by the Commission in accordance with Article 5(9).

6.   Evidence collected for the purpose of initiating proceedings in accordance with Article 14.2 of the Rules of Origin Protocol may also be used for investigations with a view to the imposition of safeguard measures where the conditions stipulated in this Article are met, in particular during the first 5-year period following the date of application of the Agreement.

Article 5

The investigation

1.   Following the initiation of the proceeding, the Commission shall commence an investigation. The period as set out in paragraph 3 shall start on the day the decision to initiate the investigation is published in the Official Journal of the European Union.

2.   The Commission may request Member States to supply information and Member States shall take whatever steps are necessary in order to give effect to any such request. If that information is of general interest and is not confidential within the meaning of Article 12, it shall be added to the non-confidential files as provided for in paragraph 8.

3.   The investigation shall, whenever possible, be concluded within 6 months of its initiation. That time limit may be extended by a further period of 3 months in exceptional circumstances such as the involvement of an unusually high number of parties, or complex market situations. The Commission shall notify all interested parties of any such extension and explain the reasons which have led to this extension.

4.   The Commission shall seek all information it considers necessary to make a determination with regard to the conditions set out in Article 2(1), and, where it considers it appropriate, endeavour to verify that information.

5.   In the investigation the Commission shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of the Union industry, in particular, the rate and amount of the increase in imports of the product concerned in absolute and relative terms, the share of the domestic market taken by increased imports, changes in the level of sales, production, productivity, capacity utilisation, profits and losses, and employment. This list is not exhaustive and other relevant factors may also be taken into consideration by the Commission for its determination of the existence of serious injury or threat of serious injury, such as stocks, prices, return on capital employed, cash flow, and other factors which are causing or may have caused serious injury, or threaten to cause serious injury to the Union industry.

6.   Interested parties who have come forward pursuant to Article 4(5)(b) and representatives of Korea may, upon written request, inspect all information made available to the Commission in connection with the investigation other than internal documents prepared by the Union authorities or those of the Member States, provided that that information is relevant to the presentation of their case and not confidential within the meaning of Article 12 and that it is used by the Commission in the investigation. Interested parties who have come forward may communicate their views on the information to the Commission. Those views shall be taken into consideration where they are backed by sufficient prima facie evidence.

7.   The Commission shall ensure that all data and statistics which are used for the investigation are available, comprehensible, transparent and verifiable.

8.   The Commission shall, as soon as the necessary technical framework is in place, ensure password-protected online access to the non-confidential file (‘online platform’), which it shall manage and through which all information which is relevant and is not confidential within the meaning of Article 12 shall be disseminated. Interested parties to the investigation as well as Member States and the European Parliament shall be granted access to this online platform.

9.   The Commission shall hear the interested parties, in particular where they have made a written application within the period laid down in the notice published in the Official Journal of the European Union, showing that they are actually likely to be affected by the outcome of the investigation and that there are special reasons for them to be heard orally.

The Commission shall hear such parties on further occasions if there are special reasons for them to be heard again.

10.   When information is not supplied within the time limits set by the Commission, or the investigation is significantly impeded, findings may be made on the basis of the facts available. Where the Commission finds that any interested party or third party has supplied it with false or misleading information, it shall disregard that information and may make use of the facts available.

11.   The Commission shall notify Korea in writing of the initiation of an investigation and consult with Korea as far in advance of applying a safeguard measure as practicable, with a view to reviewing the information arising from the investigation and exchanging views on the measure.

Article 6

Prior surveillance measures

1.   Where the trend in imports of a product originating in Korea is such that it could lead to one of the situations referred to in Articles 2 and 3, imports of that product may be subject to prior surveillance measures.

2.   In the event that there is a surge of imports of products falling into sensitive sectors concentrated in one or several Member States, the Commission may introduce prior surveillance measures.

3.   Prior surveillance measures shall be adopted by the Commission in accordance with the advisory procedure referred to in Article 14(2).

4.   Prior surveillance measures shall have a limited period of validity. Unless otherwise provided, they shall cease to be valid at the end of the second 6-month period following the first 6 months after the measures were introduced.

Article 7

Imposition of provisional safeguard measures

1.   Provisional safeguard measures shall be applied in critical circumstances where a delay would cause damage which would be difficult to repair, pursuant to a preliminary determination on the basis of the factors referred to in Article 5(5) that there is sufficient prima facie evidence that imports of a product originating in Korea have increased as the result of the reduction or elimination of a customs duty under the Agreement, and such imports cause serious injury, or threat thereof, to the Union industry.

Provisional measures shall be adopted by the Commission in accordance with the advisory procedure referred to in Article 14(2). In cases of imperative grounds of urgency, including the case referred to in paragraph 2, the Commission shall adopt immediately applicable provisional safeguard measures in accordance with the procedure referred to in Article 14(4).

2.   Where a Member State requests immediate intervention by the Commission and where the conditions set out in paragraph 1 are met, the Commission shall take a decision within 5 working days of receiving the request.

3.   Provisional measures shall not apply for more than 200 days.

4.   Should the provisional safeguard measures be repealed because the investigation shows that the conditions set out in Article 2(1) are not met, any customs duty collected as a result of those provisional measures shall be refunded automatically.

5.   The measures referred to in this Article shall apply to every product which is put into free circulation after their entry into force. However, such measures shall not prevent the release for free circulation of products already on their way to the Union provided that the destination of such products cannot be changed.

Article 8

Termination of investigation and proceeding without measures

1.   Where the facts as finally established show that the conditions set out in Article 2(1) are not met, the Commission shall adopt a decision terminating the investigation and proceeding in accordance with the examination procedure referred to in Article 14(3).

2.   The Commission shall make public, with due regard to the protection of confidential information within the meaning of Article 12, a report setting forth its findings and reasoned conclusions reached on all pertinent issues of fact and law.

Article 9

Imposition of definitive measures

1.   Where the facts as finally established show that the conditions set out in Article 2(1) are met, the Commission shall adopt a decision imposing definitive safeguard measures in accordance with the examination procedure referred to in Article 14(3).

2.   The Commission shall make public, with due regard to the protection of confidential information within the meaning of Article 12, a report containing a summary of the material facts and considerations relevant to the determination.

Article 10

Duration and review of safeguard measures

1.   A safeguard measure shall remain in force only for such period of time as may be necessary to prevent or remedy the serious injury and to facilitate adjustment. That period shall not exceed 2 years, unless it is extended under paragraph 3.

2.   A safeguard measure shall remain in force, pending the outcome of the review, during any extension period.

3.   The initial period of duration of a safeguard measure may exceptionally be extended by up to 2 years provided it is determined that the safeguard measure continues to be necessary to prevent or remedy serious injury and to facilitate adjustment and that there is evidence that the Union industry is adjusting.

4.   Extensions shall be adopted in accordance with the procedures of this Regulation applying to investigations and using the same procedures as for the initial measures.

The total duration of a safeguard measure may not exceed 4 years, including any provisional measure.

5.   A safeguard measure shall not be applied beyond the expiry of the transition period, except with the consent of Korea.

Article 11

Procedure for the application of Article 14 of the Rules of Origin Protocol

1.   For the purpose of applying Article 14 of the Rules of Origin Protocol, the Commission shall monitor closely the evolution of relevant import and export statistics both in value and as appropriate in quantities and regularly share these data with, and report its findings to, the European Parliament, the Council and the Union industries concerned. Monitoring shall start from the date of application of the Agreement and data shall be shared on a bimonthly basis.

In addition to the tariff lines included in Article 14.1 of the Rules of Origin Protocol, the Commission shall draw up, in cooperation with the Union industry, a list of key tariff lines that are not specific to the automotive sector, but are important for car manufacturing and other related sectors. Specific monitoring shall be carried out as laid down in Article 14.1 of the Rules of Origin Protocol.

2.   Upon request of a Member State or on its own initiative the Commission shall immediately examine whether the conditions for invoking Article 14 of the Rules of Origin Protocol are met and report its findings within 10 working days of the request. Following consultations in the framework of the special committee referred to in the third subparagraph of Article 207(3) of the Treaty on the Functioning of the European Union the Commission shall request consultations with Korea whenever the conditions of Article 14 of the Rules of Origin Protocol are met. The Commission shall consider that the conditions are met, inter alia, when the thresholds mentioned in paragraph 3 of this Article are reached.

3.   A difference of 10 percentage points shall be considered as ‘significant’ for the purposes of application of paragraph 2.1(a) of Article 14 of the Rules of Origin Protocol when assessing the increased rate of imports of parts or components into Korea as compared with the increased rate of exports from Korea to the Union of finished products. An increase of 10 % shall be considered as ‘significant’ for the purposes of application of paragraph 2.1(b) of Article 14 of the Rules of Origin Protocol when assessing the increase of exports from Korea to the Union of finished products in absolute terms, or relative to Union production. Increases below these thresholds may also be considered as ‘significant’ on a case-by-case basis.

Article 12

Confidentiality

1.   Information received pursuant to this Regulation shall be used only for the purpose for which it was requested.

2.   No information of a confidential nature nor any information provided on a confidential basis received pursuant to this Regulation shall be disclosed without specific permission from the supplier of such information.

3.   Each request for confidentiality shall state the reasons why the information is confidential. However, if the supplier of the information wishes neither to make it public nor to authorise its disclosure in general terms or in the form of a summary and if it appears that the request for confidentiality is unjustified, the information concerned may be disregarded.

4.   Information shall in any case be considered to be confidential if its disclosure is likely to have a significantly adverse effect upon the supplier or the source of such information.

5.   Paragraphs 1 to 4 shall not preclude reference by the Union authorities to general information and in particular to reasons on which decisions taken pursuant to this Regulation are based. Those authorities shall, however, take into account the legitimate interest of natural and legal persons concerned that their business secrets should not be divulged.

Article 13

Report

1.   The Commission shall make public an annual report on the application and implementation of the Agreement. The report shall include information about the activities of the various bodies responsible for monitoring the implementation of the Agreement and fulfilment of the obligations arising therefrom, including obligations concerning barriers to trade.

2.   Special sections of the report shall deal with the fulfilment of obligations under Chapter 13 of the Agreement and with the activities of the Domestic Advisory Group and the Civil Society Forum.

3.   The report shall also present a summary of the statistics and the evolution of trade with Korea. Specific mention shall be made of the results of the monitoring of duty drawback.

4.   The report shall include information on the implementation of this Regulation.

5.   The European Parliament may, within 1 month from the Commission making public the report, invite the Commission to an ad hoc meeting of its responsible committee to present and explain any issues related to the implementation of the Agreement.

Article 14

Committee procedure

1.   The Commission shall be assisted by the Committee established by Article 4(1) of Council Regulation (EC) No 260/2009 of 26 February 2009 on the common rules for imports (6). That Committee shall be a Committee within the meaning of Regulation (EU) No 182/2011.

2.   Where reference is made to this paragraph, Article 4 of Regulation (EU) No 182/2011 shall apply.

3.   Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

4.   Where reference is made to this paragraph, Article 8 of Regulation (EU) No 182/2011, in conjunction with Article 4 thereof, shall apply.

5.   Paragraphs 2, 3 and 4 do not prejudice in any way the exercise by the European Parliament and the Council of the power established in Article 11 of Regulation (EU) No 182/2011.

Article 15

Entry into force

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

It shall apply from the date of application of the Agreement as provided for in Article 15.10 thereof. A notice shall be published in the Official Journal of the European Union specifying the date of application of the Agreement.

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

Done at Strasbourg, 11 May 2011.

For the European Parliament

The President

J. BUZEK

For the Council

The President

GYŐRI E.

---

(1)  Position of the European Parliament of 17 February 2011 (not yet published in the Official Journal) and decision of the Council of 11 April 2011.

1

(2)  Not yet published in the Official Journal.

2

(3)  Not yet published in the Official Journal.

3

(4)  OJ L 406, 30.12.2006, p. 1.

4

(5)  OJ L 55, 28.2.2011, p. 13.

5

(6)  OJ L 84, 31.3.2009, p. 1.

6

---

ANNEX I

COMMISSION STATEMENT

The Commission welcomes the first reading agreement between the European Parliament and the Council on the Safeguards Regulation.

As envisaged in the Regulation, the Commission will present a yearly report to the European Parliament and the Council on the implementation of the EU-Korea FTA and will be ready to discuss with the responsible committee of the European Parliament any issues arising from the implementation of the Agreement.

In this connection, the Commission wishes to note the following:

| (a) | The Commission will monitor closely the implementation by Korea of its commitments on regulatory issues, including in particular the commitments relating to technical regulations in the car sector. The monitoring shall include all aspects of non-tariff barriers and its results shall be documented and reported to the European Parliament and the Council. |
| --- | --- |

(a)

The Commission will monitor closely the implementation by Korea of its commitments on regulatory issues, including in particular the commitments relating to technical regulations in the car sector. The monitoring shall include all aspects of non-tariff barriers and its results shall be documented and reported to the European Parliament and the Council.

| (b) | The Commission will also attach particular importance to the effective implementation of commitments on labour and environment of Chapter 13 of the FTA (Trade and Sustainable Development). In this connection, the Commission will seek the advice of the Domestic Advisory Group, which will include representatives of business organisations, trade unions and non-governmental organisations. The implementation of Chapter 13 of the FTA shall be duly documented and reported to the European Parliament and the Council. |
| --- | --- |

(b)

The Commission will also attach particular importance to the effective implementation of commitments on labour and environment of Chapter 13 of the FTA (Trade and Sustainable Development). In this connection, the Commission will seek the advice of the Domestic Advisory Group, which will include representatives of business organisations, trade unions and non-governmental organisations. The implementation of Chapter 13 of the FTA shall be duly documented and reported to the European Parliament and the Council.

The Commission agrees also on the importance of providing effective protection in the case of sudden surges of imports in sensitive sectors, including small cars. Monitoring of sensitive sectors shall include cars, textiles and consumer electronics. In this connection, the Commission notes that the small car sector can be considered a relevant market for the purpose of a safeguard investigation.

The Commission notes that the designation of outward processing zones in the Korean Peninsula, in accordance with the provisions of Article 12 of the Protocol of Rules of Origin, would require an international agreement between the Parties to which the European Parliament would have to give its consent. The Commission will keep the Parliament fully informed of the deliberations by the Committee on outward Processing Zones in the Korean Peninsula.

Finally, the Commission also notes that if due to exceptional circumstances it decides to extend the duration of the investigation pursuant to Article 5(3), it will ensure that such an extended timing does not go beyond the expiry date of any provisional measures introduced pursuant to Article 7.

---

ANNEX II

JOINT DECLARATION

The Commission and the European Parliament agree on the importance of close cooperation in monitoring the implementation of the EU-Korea Free Trade Agreement (FTA) and the Safeguard Regulation. Towards this end they agree on the following:

| — | In case the European Parliament adopts a recommendation to initiate a safeguard investigation, the Commission will carefully examine whether the conditions under the Regulation for ex-officio initiation are fulfilled. In case the Commission considers that the conditions are not fulfilled, it will present a report to the responsible committee of the European Parliament including an explanation of all the factors relevant to the initiation of such an investigation. |
| --- | --- |

—

In case the European Parliament adopts a recommendation to initiate a safeguard investigation, the Commission will carefully examine whether the conditions under the Regulation for ex-officio initiation are fulfilled. In case the Commission considers that the conditions are not fulfilled, it will present a report to the responsible committee of the European Parliament including an explanation of all the factors relevant to the initiation of such an investigation.

| — | Upon request by the responsible committee of the European Parliament, the Commission shall report to it on any specific concerns relating to the implementation by Korea of its commitments on non-tariff measures or on Chapter 13 (Trade and Sustainable Development) of the FTA. |
| --- | --- |

—

Upon request by the responsible committee of the European Parliament, the Commission shall report to it on any specific concerns relating to the implementation by Korea of its commitments on non-tariff measures or on Chapter 13 (Trade and Sustainable Development) of the FTA.

---

| 31.5.2011 | EN | Official Journal of the European Union | L 145/28 |
| --- | --- | --- | --- |

31.5.2011

EN

Official Journal of the European Union

L 145/28

---

REGULATION (EU) No 512/2011 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 11 May 2011

amending Council Regulation (EC) No 732/2008 applying a scheme of generalised tariff preferences for the period from 1 January 2009 to 31 December 2011

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 207(2) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Acting in accordance with the ordinary legislative procedure (1),

Whereas:

| (1) | Since 1971, the Union has granted trade preferences to developing countries in the framework of its Generalised Scheme of Preferences (‘GSP’). The GSP has been implemented through successive Regulations applying a scheme of generalised tariff preferences (‘the scheme’) with periods of application usually of three years at a time. |
| --- | --- |

(1)

Since 1971, the Union has granted trade preferences to developing countries in the framework of its Generalised Scheme of Preferences (‘GSP’). The GSP has been implemented through successive Regulations applying a scheme of generalised tariff preferences (‘the scheme’) with periods of application usually of three years at a time.

| (2) | The current scheme was established by Council Regulation (EC) No 732/2008 (2) and applies until 31 December 2011. This Regulation should ensure that the operation of the scheme continues to apply after that date. |
| --- | --- |

(2)

The current scheme was established by Council Regulation (EC) No 732/2008 (2) and applies until 31 December 2011. This Regulation should ensure that the operation of the scheme continues to apply after that date.

| (3) | Future improvements to the scheme should be based on a Commission proposal for a new regulation (‘the next Regulation’) which should take into account relevant considerations relating to the effectiveness of Regulation (EC) No 732/2008 in achieving the objectives of the scheme. The next Regulation should include the necessary amendments to ensure the ongoing effectiveness of the scheme. It is also essential that the Commission’s proposal take into account statistical trade data, which only became available in July 2010, on imports covered by the scheme for the period including 2009, a year marked by a sharp fall in global trade including that of developing countries. It is equally important to ensure that economic operators and beneficiary countries be given adequate notice of the changes to be brought about by the next Regulation. For those reasons, the remaining period of application of Regulation (EC) No 732/2008 is insufficient to allow for the Commission to draw up a proposal and the subsequent adoption of the next Regulation in accordance with the ordinary legislative procedure. It is however desirable to ensure continuity in the operation of the scheme beyond 31 December 2011 until such time as the next Regulation is adopted and applies. |
| --- | --- |

(3)

Future improvements to the scheme should be based on a Commission proposal for a new regulation (‘the next Regulation’) which should take into account relevant considerations relating to the effectiveness of Regulation (EC) No 732/2008 in achieving the objectives of the scheme. The next Regulation should include the necessary amendments to ensure the ongoing effectiveness of the scheme. It is also essential that the Commission’s proposal take into account statistical trade data, which only became available in July 2010, on imports covered by the scheme for the period including 2009, a year marked by a sharp fall in global trade including that of developing countries. It is equally important to ensure that economic operators and beneficiary countries be given adequate notice of the changes to be brought about by the next Regulation. For those reasons, the remaining period of application of Regulation (EC) No 732/2008 is insufficient to allow for the Commission to draw up a proposal and the subsequent adoption of the next Regulation in accordance with the ordinary legislative procedure. It is however desirable to ensure continuity in the operation of the scheme beyond 31 December 2011 until such time as the next Regulation is adopted and applies.

| (4) | The period of extension of Regulation (EC) No 732/2008 should not be open-ended. Consequently, and in order to provide the time needed for the legislative procedure for the adoption of the new scheme, the period of application of that Regulation should be extended until 31 December 2013. In case the next Regulation becomes applicable before that date, the period of extension should be correspondingly shortened. |
| --- | --- |

(4)

The period of extension of Regulation (EC) No 732/2008 should not be open-ended. Consequently, and in order to provide the time needed for the legislative procedure for the adoption of the new scheme, the period of application of that Regulation should be extended until 31 December 2013. In case the next Regulation becomes applicable before that date, the period of extension should be correspondingly shortened.

| (5) | Some technical amendments to Regulation (EC) No 732/2008 are necessary to ensure coherence and continuity in the operation of the scheme. |
| --- | --- |

(5)

Some technical amendments to Regulation (EC) No 732/2008 are necessary to ensure coherence and continuity in the operation of the scheme.

| (6) | Developing countries which fulfil the criteria for being eligible for the special incentive arrangement for sustainable development and good governance (GSP+) should be able to benefit from the additional tariff preferences under that arrangement if, upon their request by 31 October 2011 or 30 April 2013, the Commission decides to grant them the special incentive arrangement by 15 December 2011 or 15 June 2013 respectively. Developing countries which have already been granted benefits under the special incentive arrangement as a result of Commission Decisions 2008/938/EC of 9 December 2008 on the list of the beneficiary countries which qualify for the special incentive arrangement for sustainable development and good governance, provided for in Council Regulation (EC) No 732/2008 (3), and 2010/318/EU of 9 June 2010 on the beneficiary countries which qualify for the special incentive arrangement for sustainable development and good governance for the period from 1 July 2010 to 31 December 2011, as provided in Council Regulation (EC) No 732/2008 (4) should retain that status during the extension of the current scheme. |
| --- | --- |

(6)

Developing countries which fulfil the criteria for being eligible for the special incentive arrangement for sustainable development and good governance (GSP+) should be able to benefit from the additional tariff preferences under that arrangement if, upon their request by 31 October 2011 or 30 April 2013, the Commission decides to grant them the special incentive arrangement by 15 December 2011 or 15 June 2013 respectively. Developing countries which have already been granted benefits under the special incentive arrangement as a result of Commission Decisions 2008/938/EC of 9 December 2008 on the list of the beneficiary countries which qualify for the special incentive arrangement for sustainable development and good governance, provided for in Council Regulation (EC) No 732/2008 (3), and 2010/318/EU of 9 June 2010 on the beneficiary countries which qualify for the special incentive arrangement for sustainable development and good governance for the period from 1 July 2010 to 31 December 2011, as provided in Council Regulation (EC) No 732/2008 (4) should retain that status during the extension of the current scheme.

| (7) | Regulation (EC) No 732/2008 should therefore be amended accordingly, |
| --- | --- |

(7)

Regulation (EC) No 732/2008 should therefore be amended accordingly,

HAVE ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 732/2008 is hereby amended as follows:

| (1) | the title is replaced by the following: |
| --- | --- |

(1)

the title is replaced by the following:

| (2) | in the second subparagraph of Article 8(2) the following points are added:






  ‘(c) | for the purpose of Article 9(1)(a)(iii) — those available on 1 September 2010, as an annual average over three consecutive years; |
| --- | --- | --- |

(2)

in the second subparagraph of Article 8(2) the following points are added:

‘(c)

for the purpose of Article 9(1)(a)(iii) — those available on 1 September 2010, as an annual average over three consecutive years;

| (d) | for the purpose of Article 9(1)(a)(iv) — those available on 1 September 2012, as an annual average over three consecutive years.’; |
| --- | --- |

(d)

for the purpose of Article 9(1)(a)(iv) — those available on 1 September 2012, as an annual average over three consecutive years.’;

| (3) | Article 9 is amended as follows:






  (a) | in point (a) of paragraph 1, the following is inserted after point (ii):
  ‘or






  (iii) | by 31 October 2011, to be granted the special incentive arrangement as from 1 January 2012;
  or |
| --- | --- | --- | --- |

(3)

Article 9 is amended as follows:

(a)

in point (a) of paragraph 1, the following is inserted after point (ii):

‘or

(iii)

by 31 October 2011, to be granted the special incentive arrangement as from 1 January 2012;

or

| (iv) | by 30 April 2013, to be granted the special incentive arrangement as from 1 July 2013;’; |
| --- | --- |

(iv)

by 30 April 2013, to be granted the special incentive arrangement as from 1 July 2013;’;

| (b) | paragraph 3 is amended as follows:






  (i) | the second sentence is replaced by the following:
  ‘Countries granted the special incentive arrangement for sustainable development and good governance on the basis of a request under paragraph 1(a)(i) shall not be required to submit a request under paragraph 1(a)(ii), 1(a)(iii) or 1(a)(iv).’; |
| --- | --- | --- |

(b)

paragraph 3 is amended as follows:

(i)

the second sentence is replaced by the following:

‘Countries granted the special incentive arrangement for sustainable development and good governance on the basis of a request under paragraph 1(a)(i) shall not be required to submit a request under paragraph 1(a)(ii), 1(a)(iii) or 1(a)(iv).’;

| (ii) | the following subparagraph is added:
  ‘Countries granted the special incentive arrangement for sustainable development and good governance on the basis of a request under paragraph 1(a)(ii) shall not be required to submit a request under paragraph 1(a)(iii) or paragraph 1(a)(iv). Countries granted the special incentive arrangement for sustainable development and good governance on the basis of a request under paragraph 1(a)(iii) shall not be required to submit a request under paragraph 1(a)(iv).’; |
| --- | --- |

(ii)

the following subparagraph is added:

‘Countries granted the special incentive arrangement for sustainable development and good governance on the basis of a request under paragraph 1(a)(ii) shall not be required to submit a request under paragraph 1(a)(iii) or paragraph 1(a)(iv). Countries granted the special incentive arrangement for sustainable development and good governance on the basis of a request under paragraph 1(a)(iii) shall not be required to submit a request under paragraph 1(a)(iv).’;

| (4) | Article 10(3) is amended as follows:






  (a) | the word ‘or’ is added at the end of point (b); |
| --- | --- | --- |

(4)

Article 10(3) is amended as follows:

(a)

the word ‘or’ is added at the end of point (b);

| (b) | the following points are added:






  ‘(c) | by 15 December 2011 for a request under Article 9(1)(a)(iii); or |
| --- | --- | --- |

(b)

the following points are added:

‘(c)

by 15 December 2011 for a request under Article 9(1)(a)(iii); or

| (d) | by 15 June 2013 for a request under Article 9(1)(a)(iv).’; |
| --- | --- |

(d)

by 15 June 2013 for a request under Article 9(1)(a)(iv).’;

| (5) | in Article 32(2), the words ‘31 December 2011’ are replaced by the words: ‘31 December 2013 or until a date laid down by the next Regulation, whichever is the earlier’. |
| --- | --- |

(5)

in Article 32(2), the words ‘31 December 2011’ are replaced by the words: ‘31 December 2013 or until a date laid down by the next Regulation, whichever is the earlier’.

Article 2

This Regulation shall enter into force on the 20th 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 Strasbourg, 11 May 2011.

For the European Parliament

The President

J. BUZEK

For the Council

The President

GYŐRI E.

---

(1)  Position of the European Parliament of 24 March 2011 (not yet published in the Official Journal) and decision of the Council of 14 April 2011.

1

(2)  OJ L 211, 6.8.2008, p. 1.

2

(3)  OJ L 334, 12.12.2008, p. 90.

3

(4)  OJ L 142, 10.6.2010, p. 10.

4

---

| 31.5.2011 | EN | Official Journal of the European Union | L 145/30 |
| --- | --- | --- | --- |

31.5.2011

EN

Official Journal of the European Union

L 145/30

---

REGULATION (EU) No 513/2011 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 11 May 2011

amending Regulation (EC) No 1060/2009 on credit rating agencies

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Central Bank (1),

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

Acting in accordance with the ordinary legislative procedure (3),

Whereas:

| (1) | The final report, published on 25 February 2009, of a High-Level group of experts chaired by Jacques de Larosière under a mandate of the Commission concluded that the supervisory framework of the financial sector within the European Union needed to be strengthened to reduce the risk and severity of future financial crises. It recommended far-reaching reforms to the supervisory structure. The group of experts also concluded that a European System of Financial Supervisors (ESFS) should be created, comprising three European Supervisory Authorities – one for the banking sector, one for the insurance and occupational pensions sector and one for the securities and markets sector – and recommended the creation of a European Systemic Risk Council. |
| --- | --- |

(1)

The final report, published on 25 February 2009, of a High-Level group of experts chaired by Jacques de Larosière under a mandate of the Commission concluded that the supervisory framework of the financial sector within the European Union needed to be strengthened to reduce the risk and severity of future financial crises. It recommended far-reaching reforms to the supervisory structure. The group of experts also concluded that a European System of Financial Supervisors (ESFS) should be created, comprising three European Supervisory Authorities – one for the banking sector, one for the insurance and occupational pensions sector and one for the securities and markets sector – and recommended the creation of a European Systemic Risk Council.

| (2) | In its Communication of 4 March 2009 entitled ‘Driving European Recovery’, the Commission proposed to put forward draft legislation creating the ESFS, and in its Communication of 27 May 2009 entitled ‘European Financial Supervision’, it provided more detail about the possible architecture of such a new supervisory framework, highlighting the specificity of the supervision of credit rating agencies. |
| --- | --- |

(2)

In its Communication of 4 March 2009 entitled ‘Driving European Recovery’, the Commission proposed to put forward draft legislation creating the ESFS, and in its Communication of 27 May 2009 entitled ‘European Financial Supervision’, it provided more detail about the possible architecture of such a new supervisory framework, highlighting the specificity of the supervision of credit rating agencies.

| (3) | The European Council, in its conclusions of 19 June 2009, recommended that the ESFS, consisting of a network of national financial supervisors working in tandem with three new European Supervisory Authorities, be established. The ESFS should be aimed at upgrading the quality and consistency of national supervision, strengthening oversight of cross-border groups through the setting up of supervisory colleges and establishing a European single rule book applicable to all financial market participants in the internal market. The European Council stressed that a European securities and markets authority should have supervisory powers over credit rating agencies. Further, the Commission should retain its competence to enforce the Treaties, in particular Chapter I of Title VII of the Treaty on the Functioning of the European Union (TFEU) regarding the common rules on competition in accordance with the provisions adopted for the implementation of those rules. |
| --- | --- |

(3)

The European Council, in its conclusions of 19 June 2009, recommended that the ESFS, consisting of a network of national financial supervisors working in tandem with three new European Supervisory Authorities, be established. The ESFS should be aimed at upgrading the quality and consistency of national supervision, strengthening oversight of cross-border groups through the setting up of supervisory colleges and establishing a European single rule book applicable to all financial market participants in the internal market. The European Council stressed that a European securities and markets authority should have supervisory powers over credit rating agencies. Further, the Commission should retain its competence to enforce the Treaties, in particular Chapter I of Title VII of the Treaty on the Functioning of the European Union (TFEU) regarding the common rules on competition in accordance with the provisions adopted for the implementation of those rules.

| (4) | Regulation (EU) No 1095/2010 of the European Parliament and of the Council (4) established the European Supervisory Authority (European Securities and Markets Authority) (ESMA). |
| --- | --- |

(4)

Regulation (EU) No 1095/2010 of the European Parliament and of the Council (4) established the European Supervisory Authority (European Securities and Markets Authority) (ESMA).

| (5) | The scope of competence of ESMA should be clearly defined so that financial market participants can identify the authority competent in the field of activity of credit rating agencies. ESMA should be given general competence under Regulation (EC) No 1060/2009 of the European Parliament and of the Council (5) regarding matters relating to the registration and ongoing supervision of registered credit rating agencies. |
| --- | --- |

(5)

The scope of competence of ESMA should be clearly defined so that financial market participants can identify the authority competent in the field of activity of credit rating agencies. ESMA should be given general competence under Regulation (EC) No 1060/2009 of the European Parliament and of the Council (5) regarding matters relating to the registration and ongoing supervision of registered credit rating agencies.

| (6) | ESMA should be exclusively responsible for the registration and supervision of credit rating agencies in the Union. Where ESMA delegates specific tasks to competent authorities, ESMA should continue to be legally responsible. The heads and other staff of competent authorities should be involved in the decision-making process within ESMA in accordance with Regulation (EU) No 1095/2010, acting as members of ESMA bodies, such as its board of supervisors or its internal panels. ESMA should have the exclusive power to conclude cooperation agreements on information exchange with the supervisory authorities of third countries. To the extent that competent authorities participate in the decision-making process within ESMA or when executing tasks on behalf of ESMA, they should be covered by those cooperation agreements. |
| --- | --- |

(6)

ESMA should be exclusively responsible for the registration and supervision of credit rating agencies in the Union. Where ESMA delegates specific tasks to competent authorities, ESMA should continue to be legally responsible. The heads and other staff of competent authorities should be involved in the decision-making process within ESMA in accordance with Regulation (EU) No 1095/2010, acting as members of ESMA bodies, such as its board of supervisors or its internal panels. ESMA should have the exclusive power to conclude cooperation agreements on information exchange with the supervisory authorities of third countries. To the extent that competent authorities participate in the decision-making process within ESMA or when executing tasks on behalf of ESMA, they should be covered by those cooperation agreements.

| (7) | Transparency of information given by the issuer of a rated financial instrument to the appointed credit rating agency could have much potential added value for the functioning of the market and investor protection. Consideration should therefore be given on how best to extend the transparency of information underlying the ratings of all financial instruments. First, disclosing that information to other registered or certified credit rating agencies is likely to reinforce the competition between credit rating agencies, because it could lead, in particular, to an increase in the number of unsolicited ratings. The issuing of such unsolicited ratings should promote the use of more than one rating per financial instrument. This is also likely to help avoid possible conflicts of interest, especially under the issuer-pays model, and should enhance the quality of the ratings. Second, disclosing that information to the whole market could also increase the ability of investors to develop their own risk analyses by basing their due diligence on that additional information. Such disclosure could also lead to decreasing reliance on credit ratings issued by credit rating agencies. In order to achieve those fundamental objectives, the Commission should assess those issues in greater depth by giving further consideration to the appropriate scope of the disclosure obligation, having regard to the impact on local securitisation markets, further dialogue with interested parties, the monitoring of market and regulatory developments, and experience gained by other jurisdictions. In the light of that assessment, the Commission should put forward appropriate legislative proposals. The Commission's assessment and proposals should allow the definition of new transparency obligations in the manner most appropriate to meet the public interest, and most consistent with the protection of investors. |
| --- | --- |

(7)

Transparency of information given by the issuer of a rated financial instrument to the appointed credit rating agency could have much potential added value for the functioning of the market and investor protection. Consideration should therefore be given on how best to extend the transparency of information underlying the ratings of all financial instruments. First, disclosing that information to other registered or certified credit rating agencies is likely to reinforce the competition between credit rating agencies, because it could lead, in particular, to an increase in the number of unsolicited ratings. The issuing of such unsolicited ratings should promote the use of more than one rating per financial instrument. This is also likely to help avoid possible conflicts of interest, especially under the issuer-pays model, and should enhance the quality of the ratings. Second, disclosing that information to the whole market could also increase the ability of investors to develop their own risk analyses by basing their due diligence on that additional information. Such disclosure could also lead to decreasing reliance on credit ratings issued by credit rating agencies. In order to achieve those fundamental objectives, the Commission should assess those issues in greater depth by giving further consideration to the appropriate scope of the disclosure obligation, having regard to the impact on local securitisation markets, further dialogue with interested parties, the monitoring of market and regulatory developments, and experience gained by other jurisdictions. In the light of that assessment, the Commission should put forward appropriate legislative proposals. The Commission's assessment and proposals should allow the definition of new transparency obligations in the manner most appropriate to meet the public interest, and most consistent with the protection of investors.

| (8) | As credit ratings are used throughout the Union, the traditional distinction between the home competent authority and the other competent authorities and the use of supervisory coordination by colleges are not the most appropriate structure for supervising credit rating agencies. Following the establishment of ESMA, it is no longer necessary to maintain such a structure. The registration process should therefore be streamlined and the time limits should be reduced accordingly. |
| --- | --- |

(8)

As credit ratings are used throughout the Union, the traditional distinction between the home competent authority and the other competent authorities and the use of supervisory coordination by colleges are not the most appropriate structure for supervising credit rating agencies. Following the establishment of ESMA, it is no longer necessary to maintain such a structure. The registration process should therefore be streamlined and the time limits should be reduced accordingly.

| (9) | ESMA should be responsible for the registration and ongoing supervision of credit rating agencies, but not for the oversight of the users of credit ratings. Competent authorities designated under the relevant sectoral legislation for the supervision of credit institutions, investment firms, insurance undertakings, assurance undertakings, reinsurance undertakings, undertakings for collective investment in transferable securities (UCITS), institutions for occupational retirement provision and alternative investment funds should therefore remain responsible for the supervision of the use of credit ratings by those financial institutions and entities which are supervised at national level in the context and for the purpose of the application of other financial services directives, and of the use of credit ratings in prospectuses. |
| --- | --- |

(9)

ESMA should be responsible for the registration and ongoing supervision of credit rating agencies, but not for the oversight of the users of credit ratings. Competent authorities designated under the relevant sectoral legislation for the supervision of credit institutions, investment firms, insurance undertakings, assurance undertakings, reinsurance undertakings, undertakings for collective investment in transferable securities (UCITS), institutions for occupational retirement provision and alternative investment funds should therefore remain responsible for the supervision of the use of credit ratings by those financial institutions and entities which are supervised at national level in the context and for the purpose of the application of other financial services directives, and of the use of credit ratings in prospectuses.

| (10) | There is a need for an effective instrument to establish harmonised regulatory technical standards to facilitate the application of Regulation (EC) No 1060/2009 in day-to-day practice and to ensure a level playing field and the adequate protection of investors and consumers across the Union. As a body with highly specialised expertise, it is efficient and appropriate to entrust ESMA with the development of draft regulatory technical standards. |
| --- | --- |

(10)

There is a need for an effective instrument to establish harmonised regulatory technical standards to facilitate the application of Regulation (EC) No 1060/2009 in day-to-day practice and to ensure a level playing field and the adequate protection of investors and consumers across the Union. As a body with highly specialised expertise, it is efficient and appropriate to entrust ESMA with the development of draft regulatory technical standards.

| (11) | In the field of credit rating agencies, ESMA should submit to the Commission draft regulatory technical standards concerning the information to be provided by a credit rating agency in its application for registration, the information that a credit rating agency must provide for the application for certification and for an assessment of its systemic importance to the financial stability or integrity of financial markets, the presentation of the information, including structure, format, method and period of reporting, that a credit rating agency must disclose, concerning the assessment of compliance of credit rating methodologies with the requirements set out in Regulation (EC) No 1060/2009, and the content and format of ratings data periodic reporting to be requested from a credit rating agency for the purpose of ongoing supervision by ESMA. In accordance with Regulation (EU) No 1095/2010, those draft regulatory technical standards should be endorsed by the Commission to give them binding legal effect. In developing its draft regulatory technical standards, ESMA should consider and, if appropriate and necessary, update the guidelines already issued by the Committee of European Securities Regulators regarding the content of Regulation (EC) No 1060/2009. |
| --- | --- |

(11)

In the field of credit rating agencies, ESMA should submit to the Commission draft regulatory technical standards concerning the information to be provided by a credit rating agency in its application for registration, the information that a credit rating agency must provide for the application for certification and for an assessment of its systemic importance to the financial stability or integrity of financial markets, the presentation of the information, including structure, format, method and period of reporting, that a credit rating agency must disclose, concerning the assessment of compliance of credit rating methodologies with the requirements set out in Regulation (EC) No 1060/2009, and the content and format of ratings data periodic reporting to be requested from a credit rating agency for the purpose of ongoing supervision by ESMA. In accordance with Regulation (EU) No 1095/2010, those draft regulatory technical standards should be endorsed by the Commission to give them binding legal effect. In developing its draft regulatory technical standards, ESMA should consider and, if appropriate and necessary, update the guidelines already issued by the Committee of European Securities Regulators regarding the content of Regulation (EC) No 1060/2009.

| (12) | In areas not covered by regulatory technical standards, ESMA should have the power to issue and update non-binding guidelines on issues related to the application of Regulation (EC) No 1060/2009. |
| --- | --- |

(12)

In areas not covered by regulatory technical standards, ESMA should have the power to issue and update non-binding guidelines on issues related to the application of Regulation (EC) No 1060/2009.

| (13) | In order to carry out its duties effectively, ESMA should be able to require, by simple request or by decision, all necessary information from credit rating agencies, persons involved in credit rating activities, rated entities and related third parties, third parties to whom the credit rating agencies have outsourced operational functions and persons otherwise closely and substantially related or connected to credit rating agencies or credit rating activities. The latter group of persons should cover, for instance, the staff of a credit rating agency who are not directly involved in rating activities but who, due to their function within the credit rating agency, may hold important information on a specific case. Firms which have provided services to the credit rating agency may also fall into that category. Undertakings using the credit ratings should not fall into that category. If ESMA requires such information by simple request, the addressee is not obliged to provide the information but, in the event that it does so voluntarily, the information provided should not be incorrect or misleading. Such information should be made available without delay. |
| --- | --- |

(13)

In order to carry out its duties effectively, ESMA should be able to require, by simple request or by decision, all necessary information from credit rating agencies, persons involved in credit rating activities, rated entities and related third parties, third parties to whom the credit rating agencies have outsourced operational functions and persons otherwise closely and substantially related or connected to credit rating agencies or credit rating activities. The latter group of persons should cover, for instance, the staff of a credit rating agency who are not directly involved in rating activities but who, due to their function within the credit rating agency, may hold important information on a specific case. Firms which have provided services to the credit rating agency may also fall into that category. Undertakings using the credit ratings should not fall into that category. If ESMA requires such information by simple request, the addressee is not obliged to provide the information but, in the event that it does so voluntarily, the information provided should not be incorrect or misleading. Such information should be made available without delay.

| (14) | In order to exercise its supervisory powers effectively, ESMA should be able to conduct investigations and on-site inspections. |
| --- | --- |

(14)

In order to exercise its supervisory powers effectively, ESMA should be able to conduct investigations and on-site inspections.

| (15) | The competent authorities should communicate any information required pursuant to Regulation (EC) No 1060/2009 and assist and cooperate with ESMA. ESMA and the competent authorities should also cooperate closely with the sectoral competent authorities responsible for supervision of the undertakings referred to in Article 4(1) of Regulation (EC) No 1060/2009. ESMA should be able to delegate specific supervisory tasks to the competent authority of a Member State, for instance where a supervisory task requires knowledge and experience with respect to local conditions, which are more easily available at national level. The kind of tasks that it should be possible to delegate include the carrying out of specific investigatory tasks and on-site inspections. Prior to the delegation of tasks, ESMA should consult the relevant competent authority about the detailed conditions relating to such delegation of tasks, including the scope of the task to be delegated, the timetable for the performance of the task, and the transmission of necessary information by and to ESMA. ESMA should compensate the competent authorities for carrying out a delegated task in accordance with a regulation on fees to be adopted by the Commission by means of a delegated act. ESMA should not be able to delegate the power to adopt decisions on registration. |
| --- | --- |

(15)

The competent authorities should communicate any information required pursuant to Regulation (EC) No 1060/2009 and assist and cooperate with ESMA. ESMA and the competent authorities should also cooperate closely with the sectoral competent authorities responsible for supervision of the undertakings referred to in Article 4(1) of Regulation (EC) No 1060/2009. ESMA should be able to delegate specific supervisory tasks to the competent authority of a Member State, for instance where a supervisory task requires knowledge and experience with respect to local conditions, which are more easily available at national level. The kind of tasks that it should be possible to delegate include the carrying out of specific investigatory tasks and on-site inspections. Prior to the delegation of tasks, ESMA should consult the relevant competent authority about the detailed conditions relating to such delegation of tasks, including the scope of the task to be delegated, the timetable for the performance of the task, and the transmission of necessary information by and to ESMA. ESMA should compensate the competent authorities for carrying out a delegated task in accordance with a regulation on fees to be adopted by the Commission by means of a delegated act. ESMA should not be able to delegate the power to adopt decisions on registration.

| (16) | It is necessary to ensure that competent authorities are able to request that ESMA examine whether the conditions for withdrawal of a credit rating agency's registration are met and to request that ESMA suspend the use of ratings where a credit rating agency is considered to be in a serious and persistent breach of Regulation (EC) No 1060/2009. ESMA should assess such requests and take any appropriate measures. |
| --- | --- |

(16)

It is necessary to ensure that competent authorities are able to request that ESMA examine whether the conditions for withdrawal of a credit rating agency's registration are met and to request that ESMA suspend the use of ratings where a credit rating agency is considered to be in a serious and persistent breach of Regulation (EC) No 1060/2009. ESMA should assess such requests and take any appropriate measures.

| (17) | ESMA should be able to impose periodic penalty payments to compel credit rating agencies to put an end to an infringement, to supply complete information required by ESMA or to submit to an investigation or on-site inspection. |
| --- | --- |

(17)

ESMA should be able to impose periodic penalty payments to compel credit rating agencies to put an end to an infringement, to supply complete information required by ESMA or to submit to an investigation or on-site inspection.

| (18) | ESMA should also be able to impose fines on credit rating agencies, where it finds that they have committed, intentionally or negligently, an infringement of Regulation (EC) No 1060/2009. Fines should be imposed according to the level of seriousness of the infringements. The infringements should be divided into different groups for which specific fines should be allocated. In order to calculate the fine related to a specific infringement, ESMA should use a two-step methodology consisting of setting a basic amount and adjusting that basic amount, if necessary, by certain coefficients. The basic amount should be established by taking into account the annual turnover of the credit rating agency concerned and the adjustments should be made by increasing or decreasing the basic amount through the application of the relevant coefficients in accordance with this Regulation. |
| --- | --- |

(18)

ESMA should also be able to impose fines on credit rating agencies, where it finds that they have committed, intentionally or negligently, an infringement of Regulation (EC) No 1060/2009. Fines should be imposed according to the level of seriousness of the infringements. The infringements should be divided into different groups for which specific fines should be allocated. In order to calculate the fine related to a specific infringement, ESMA should use a two-step methodology consisting of setting a basic amount and adjusting that basic amount, if necessary, by certain coefficients. The basic amount should be established by taking into account the annual turnover of the credit rating agency concerned and the adjustments should be made by increasing or decreasing the basic amount through the application of the relevant coefficients in accordance with this Regulation.

| (19) | This Regulation establishes coefficients linked to aggravating and mitigating circumstances in order to give the necessary tools to ESMA to decide on a fine which is proportionate to the seriousness of an infringement committed by a credit rating agency, taking into account the circumstances under which that infringement was committed. |
| --- | --- |

(19)

This Regulation establishes coefficients linked to aggravating and mitigating circumstances in order to give the necessary tools to ESMA to decide on a fine which is proportionate to the seriousness of an infringement committed by a credit rating agency, taking into account the circumstances under which that infringement was committed.

| (20) | Before taking a decision to impose fines or periodic penalty payments, ESMA should give the persons subject to the proceedings the opportunity to be heard in order to respect their rights of defence. |
| --- | --- |

(20)

Before taking a decision to impose fines or periodic penalty payments, ESMA should give the persons subject to the proceedings the opportunity to be heard in order to respect their rights of defence.

| (21) | Member States should remain competent to lay down and implement the rules on penalties applicable to the infringement of the obligation on financial institutions and other entities to use, for regulatory purposes, only credit ratings issued by credit rating agencies registered in accordance with Regulation (EC) No 1060/2009. |
| --- | --- |

(21)

Member States should remain competent to lay down and implement the rules on penalties applicable to the infringement of the obligation on financial institutions and other entities to use, for regulatory purposes, only credit ratings issued by credit rating agencies registered in accordance with Regulation (EC) No 1060/2009.

| (22) | This Regulation should not create a precedent for the imposition of financial or non-financial penalties by European Supervisory Authorities on financial market participants or other undertakings in relation to other types of activity. |
| --- | --- |

(22)

This Regulation should not create a precedent for the imposition of financial or non-financial penalties by European Supervisory Authorities on financial market participants or other undertakings in relation to other types of activity.

| (23) | ESMA should refrain from imposing fines or periodic penalty payments where a prior acquittal or conviction arising from identical facts, or from facts which are substantially the same, has acquired the force of res judicata as the result of criminal proceedings under national law. |
| --- | --- |

(23)

ESMA should refrain from imposing fines or periodic penalty payments where a prior acquittal or conviction arising from identical facts, or from facts which are substantially the same, has acquired the force of res judicata as the result of criminal proceedings under national law.

| (24) | ESMA decisions imposing fines and periodic penalty payments should be enforceable and their enforcement should be governed by the rules of civil procedure which are in force in the State in the territory of which it is carried out. Rules of civil procedure should not include criminal procedural rules but it should be possible that they include administrative procedural rules. |
| --- | --- |

(24)

ESMA decisions imposing fines and periodic penalty payments should be enforceable and their enforcement should be governed by the rules of civil procedure which are in force in the State in the territory of which it is carried out. Rules of civil procedure should not include criminal procedural rules but it should be possible that they include administrative procedural rules.

| (25) | In the case of an infringement committed by a credit rating agency, ESMA should be empowered to take a range of supervisory measures, including, but not limited to, requiring the credit rating agency to bring the infringement to an end, suspending the use of credit ratings for regulatory purposes, temporarily prohibiting the credit rating agency from issuing credit ratings and, as a last resort, withdrawing the registration when the credit rating agency has seriously or repeatedly infringed Regulation (EC) No 1060/2009. The supervisory measures should be applied by ESMA taking into account the nature and seriousness of the infringement and should respect the principle of proportionality. Before taking a decision on supervisory measures, ESMA should give the persons subject to the proceedings the opportunity to be heard in order to respect their rights of defence. |
| --- | --- |

(25)

In the case of an infringement committed by a credit rating agency, ESMA should be empowered to take a range of supervisory measures, including, but not limited to, requiring the credit rating agency to bring the infringement to an end, suspending the use of credit ratings for regulatory purposes, temporarily prohibiting the credit rating agency from issuing credit ratings and, as a last resort, withdrawing the registration when the credit rating agency has seriously or repeatedly infringed Regulation (EC) No 1060/2009. The supervisory measures should be applied by ESMA taking into account the nature and seriousness of the infringement and should respect the principle of proportionality. Before taking a decision on supervisory measures, ESMA should give the persons subject to the proceedings the opportunity to be heard in order to respect their rights of defence.

| (26) | This Regulation respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union, and by the constitutional traditions in the Member States. Accordingly, this Regulation should be interpreted and applied in accordance with those rights and principles, including those relating to freedom of the press and freedom of expression in the media, and the right to interpretation and translation for those who do not speak or understand the language of the proceedings as part of the general right to a fair trial. |
| --- | --- |

(26)

This Regulation respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union, and by the constitutional traditions in the Member States. Accordingly, this Regulation should be interpreted and applied in accordance with those rights and principles, including those relating to freedom of the press and freedom of expression in the media, and the right to interpretation and translation for those who do not speak or understand the language of the proceedings as part of the general right to a fair trial.

| (27) | For reasons of legal certainty, it is appropriate to establish clear transitional measures for the transmission of files and working documents from the competent authorities to ESMA. |
| --- | --- |

(27)

For reasons of legal certainty, it is appropriate to establish clear transitional measures for the transmission of files and working documents from the competent authorities to ESMA.

| (28) | The registration of a credit rating agency granted by a competent authority should remain valid throughout the Union after the transition of supervisory powers from the competent authorities to ESMA. |
| --- | --- |

(28)

The registration of a credit rating agency granted by a competent authority should remain valid throughout the Union after the transition of supervisory powers from the competent authorities to ESMA.

| (29) | The Commission should be empowered to adopt delegated acts in accordance with Article 290 TFEU in order to specify further or amend the criteria for assessing the equivalence of the regulatory and supervisory framework of a third country in order to take into account developments on financial markets, to adopt a regulation on fees and detailed rules concerning fines and periodic penalty payments, and to amend the Annexes to Regulation (EC) No 1060/2009. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level. |
| --- | --- |

(29)

The Commission should be empowered to adopt delegated acts in accordance with Article 290 TFEU in order to specify further or amend the criteria for assessing the equivalence of the regulatory and supervisory framework of a third country in order to take into account developments on financial markets, to adopt a regulation on fees and detailed rules concerning fines and periodic penalty payments, and to amend the Annexes to Regulation (EC) No 1060/2009. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level.

| (30) | When preparing and drawing up delegated acts, the Commission should ensure the early and ongoing transmission of information on relevant documents to the European Parliament and the Council. |
| --- | --- |

(30)

When preparing and drawing up delegated acts, the Commission should ensure the early and ongoing transmission of information on relevant documents to the European Parliament and the Council.

| (31) | The European Parliament and the Council should have three months from the date of notification to object to a delegated act. On the initiative of the European Parliament or the Council, it should be possible to prolong that period by three months in regard to significant areas of concern. It should also be possible for the European Parliament and the Council to inform the other institutions of their intention not to raise objections. Such early approval of delegated acts is particularly appropriate when deadlines need to be met, for example where there are timetables in the basic act for the Commission to adopt delegated acts. |
| --- | --- |

(31)

The European Parliament and the Council should have three months from the date of notification to object to a delegated act. On the initiative of the European Parliament or the Council, it should be possible to prolong that period by three months in regard to significant areas of concern. It should also be possible for the European Parliament and the Council to inform the other institutions of their intention not to raise objections. Such early approval of delegated acts is particularly appropriate when deadlines need to be met, for example where there are timetables in the basic act for the Commission to adopt delegated acts.

| (32) | In the Declaration on Article 290 of the Treaty on the Functioning of the European Union, annexed to the Final Act of the Intergovernmental Conference which adopted the Treaty of Lisbon, the Conference took note of the Commission's intention to continue to consult experts appointed by the Member States in the preparation of draft delegated acts in the financial services area, in accordance with its established practice. |
| --- | --- |

(32)

In the Declaration on Article 290 of the Treaty on the Functioning of the European Union, annexed to the Final Act of the Intergovernmental Conference which adopted the Treaty of Lisbon, the Conference took note of the Commission's intention to continue to consult experts appointed by the Member States in the preparation of draft delegated acts in the financial services area, in accordance with its established practice.

| (33) | Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (6) applies to the processing of personal data for the purposes of Regulation (EC) No 1060/2009. |
| --- | --- |

(33)

Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (6) applies to the processing of personal data for the purposes of Regulation (EC) No 1060/2009.

| (34) | Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data (7) is fully applicable to the processing of personal data for the purposes of Regulation (EC) No 1060/2009. |
| --- | --- |

(34)

Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data (7) is fully applicable to the processing of personal data for the purposes of Regulation (EC) No 1060/2009.

| (35) | Since the objectives of this Regulation, namely setting up an efficient and effective supervisory framework for credit rating agencies by entrusting a single supervisory authority with the supervision of credit rating activities in the Union, providing a single point of contact for credit rating agencies and ensuring the consistent application of the rules for credit rating agencies, cannot be sufficiently achieved at the Member State level and can therefore, by reason of the pan-Union structure and impact of the credit rating activities to be supervised, be better achieved at the Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives. |
| --- | --- |

(35)

Since the objectives of this Regulation, namely setting up an efficient and effective supervisory framework for credit rating agencies by entrusting a single supervisory authority with the supervision of credit rating activities in the Union, providing a single point of contact for credit rating agencies and ensuring the consistent application of the rules for credit rating agencies, cannot be sufficiently achieved at the Member State level and can therefore, by reason of the pan-Union structure and impact of the credit rating activities to be supervised, be better achieved at the Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.

| (36) | Regulation (EC) No 1060/2009 should therefore be amended accordingly, |
| --- | --- |

(36)

Regulation (EC) No 1060/2009 should therefore be amended accordingly,

HAVE ADOPTED THIS REGULATION:

Article 1

Amendments

Regulation (EC) No 1060/2009 is hereby amended as follows:

| (1) | in Article 3(1), the following points are added:






  ‘(p) | “competent authorities” means the authorities designated by each Member State in accordance with Article 22; |
| --- | --- | --- |

(1)

in Article 3(1), the following points are added:

‘(p)

“competent authorities” means the authorities designated by each Member State in accordance with Article 22;

| (q) | “sectoral legislation” means the legal acts of the Union referred to in the first subparagraph of Article 4(1); |
| --- | --- |

(q)

“sectoral legislation” means the legal acts of the Union referred to in the first subparagraph of Article 4(1);

| (r) | “sectoral competent authorities” means the national competent authorities designated under the relevant sectoral legislation for the supervision of credit institutions, investment firms, insurance undertakings, assurance undertakings, reinsurance undertakings, undertakings for collective investment in transferable securities (UCITS), institutions for occupational retirement provision and alternative investment funds.’; |
| --- | --- |

(r)

“sectoral competent authorities” means the national competent authorities designated under the relevant sectoral legislation for the supervision of credit institutions, investment firms, insurance undertakings, assurance undertakings, reinsurance undertakings, undertakings for collective investment in transferable securities (UCITS), institutions for occupational retirement provision and alternative investment funds.’;

| (2) | Article 4 is amended as follows:






  (a) | in paragraph 1, the first subparagraph is replaced by the following:
  ‘1.   Credit institutions as defined in Directive 2006/48/EC, investment firms as defined in Directive 2004/39/EC, insurance undertakings subject to the First Council Directive 73/239/EEC of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance (8), assurance undertakings as defined in Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance (9), reinsurance undertakings as defined in Directive 2005/68/EC of the European Parliament and of the Council of 16 November 2005 on reinsurance (10), UCITS as defined in Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (11), institutions for occupational retirement provision as defined in Directive 2003/41/EC and alternative investment funds may use credit ratings for regulatory purposes only if they are issued by credit rating agencies established in the Union and registered in accordance with this Regulation. |
| --- | --- | --- |

(2)

Article 4 is amended as follows:

(a)

in paragraph 1, the first subparagraph is replaced by the following:

‘1.   Credit institutions as defined in Directive 2006/48/EC, investment firms as defined in Directive 2004/39/EC, insurance undertakings subject to the First Council Directive 73/239/EEC of 24 July 1973 on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance (8), assurance undertakings as defined in Directive 2002/83/EC of the European Parliament and of the Council of 5 November 2002 concerning life assurance (9), reinsurance undertakings as defined in Directive 2005/68/EC of the European Parliament and of the Council of 16 November 2005 on reinsurance (10), UCITS as defined in Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (11), institutions for occupational retirement provision as defined in Directive 2003/41/EC and alternative investment funds may use credit ratings for regulatory purposes only if they are issued by credit rating agencies established in the Union and registered in accordance with this Regulation.

| (b) | paragraph 3 is amended as follows:






  (i) | points (b), (c) and (d) are replaced by the following:






  ‘(b) | the credit rating agency has verified and is able to demonstrate on an ongoing basis to the European Supervisory Authority (European Securities and Markets Authority) established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council (12) (ESMA), that the conduct of credit rating activities by the third-country credit rating agency resulting in the issuing of the credit rating to be endorsed fulfils requirements which are at least as stringent as the requirements set out in Articles 6 to 12; |
| --- | --- | --- | --- |

(b)

paragraph 3 is amended as follows:

(i)

points (b), (c) and (d) are replaced by the following:

‘(b)

the credit rating agency has verified and is able to demonstrate on an ongoing basis to the European Supervisory Authority (European Securities and Markets Authority) established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council (12) (ESMA), that the conduct of credit rating activities by the third-country credit rating agency resulting in the issuing of the credit rating to be endorsed fulfils requirements which are at least as stringent as the requirements set out in Articles 6 to 12;

| (c) | the ability of ESMA to assess and monitor the compliance of the credit rating agency established in the third country with the requirements referred to in point (b) is not limited; |
| --- | --- |

(c)

the ability of ESMA to assess and monitor the compliance of the credit rating agency established in the third country with the requirements referred to in point (b) is not limited;

| (d) | the credit rating agency makes available on request to ESMA all the information necessary to enable ESMA to supervise on an ongoing basis the compliance with the requirements of this Regulation; |
| --- | --- |

(d)

the credit rating agency makes available on request to ESMA all the information necessary to enable ESMA to supervise on an ongoing basis the compliance with the requirements of this Regulation;

| (ii) | point (h) is replaced by the following:






  ‘(h) | there is an appropriate cooperation arrangement between ESMA and the relevant supervisory authority of the credit rating agency established in a third country. ESMA shall ensure that such a cooperation arrangement shall specify at least:






  (i) | the mechanism for the exchange of information between ESMA and the relevant supervisory authority of the credit rating agency established in a third country; and |
| --- | --- | --- | --- |

(ii)

point (h) is replaced by the following:

‘(h)

there is an appropriate cooperation arrangement between ESMA and the relevant supervisory authority of the credit rating agency established in a third country. ESMA shall ensure that such a cooperation arrangement shall specify at least:

(i)

the mechanism for the exchange of information between ESMA and the relevant supervisory authority of the credit rating agency established in a third country; and

| (ii) | the procedures concerning the coordination of supervisory activities in order to enable ESMA to monitor credit rating activities resulting in the issuing of the endorsed credit rating on an ongoing basis.’; |
| --- | --- |

(ii)

the procedures concerning the coordination of supervisory activities in order to enable ESMA to monitor credit rating activities resulting in the issuing of the endorsed credit rating on an ongoing basis.’;

| (3) | Article 5 is amended as follows:






  (a) | paragraph 2 is replaced by the following:
  ‘2.   The credit rating agency referred to in paragraph 1 may apply for certification. The application shall be submitted to ESMA in accordance with the relevant provisions of Article 15.’; |
| --- | --- | --- |

(3)

Article 5 is amended as follows:

(a)

paragraph 2 is replaced by the following:

‘2.   The credit rating agency referred to in paragraph 1 may apply for certification. The application shall be submitted to ESMA in accordance with the relevant provisions of Article 15.’;

| (b) | in paragraph 3, the first subparagraph is replaced by the following:
  ‘3.   ESMA shall examine and decide on the application for certification in accordance with the procedure set out in Article 16. The certification decision shall be based on the criteria set out in points (a) to (d) of paragraph 1 of this Article.’; |
| --- | --- |

(b)

in paragraph 3, the first subparagraph is replaced by the following:

‘3.   ESMA shall examine and decide on the application for certification in accordance with the procedure set out in Article 16. The certification decision shall be based on the criteria set out in points (a) to (d) of paragraph 1 of this Article.’;

| (c) | paragraph 4 is replaced by the following:
  ‘4.   The credit rating agency referred to in paragraph 1 may also apply to be exempted:






  (a) | on a case-by-case basis from complying with some or all of the requirements set out in Section A of Annex I and Article 7(4) if the credit rating agency is able to demonstrate that the requirements are not proportionate in view of the nature, scale and complexity of its business and the nature and range of its issuing of credit ratings; |
| --- | --- | --- |

(c)

paragraph 4 is replaced by the following:

‘4.   The credit rating agency referred to in paragraph 1 may also apply to be exempted:

(a)

on a case-by-case basis from complying with some or all of the requirements set out in Section A of Annex I and Article 7(4) if the credit rating agency is able to demonstrate that the requirements are not proportionate in view of the nature, scale and complexity of its business and the nature and range of its issuing of credit ratings;

| (b) | from the requirement of physical presence in the Union where such a requirement would be too burdensome and disproportionate in view of the nature, scale and complexity of its business and the nature and range of its issuing of credit ratings. |
| --- | --- |

(b)

from the requirement of physical presence in the Union where such a requirement would be too burdensome and disproportionate in view of the nature, scale and complexity of its business and the nature and range of its issuing of credit ratings.

An application for an exemption under point (a) or (b) of the first subparagraph shall be submitted by the credit rating agency together with the application for certification. When assessing such an application, ESMA shall take into consideration the size of the credit rating agency referred to in paragraph 1, having regard to the nature, scale and complexity of its business and the nature and range of its issuing of credit ratings, as well as the impact of the credit ratings issued by the credit rating agency on the financial stability and integrity of the financial markets of one or more Member States. On the basis of those considerations, ESMA may grant such exemption to the credit rating agency referred to in paragraph 1.’;

| (d) | paragraph 5 is deleted; |
| --- | --- |

(d)

paragraph 5 is deleted;

| (e) | in paragraph 6, the third subparagraph is replaced by the following:
  ‘In order to take account of developments on financial markets, the Commission shall adopt, by means of delegated acts in accordance with Article 38a, and subject to the conditions of Articles 38b and 38c, measures to specify further or amend the criteria set out in points (a), (b) and (c) of the second subparagraph of this paragraph.’; |
| --- | --- |

(e)

in paragraph 6, the third subparagraph is replaced by the following:

‘In order to take account of developments on financial markets, the Commission shall adopt, by means of delegated acts in accordance with Article 38a, and subject to the conditions of Articles 38b and 38c, measures to specify further or amend the criteria set out in points (a), (b) and (c) of the second subparagraph of this paragraph.’;

| (f) | paragraphs 7 and 8 are replaced by the following:
  ‘7.   ESMA shall establish cooperation agreements with the relevant supervisory authorities of third countries whose legal and supervisory frameworks have been considered equivalent to this Regulation in accordance with paragraph 6. Such arrangements shall specify at least:






  (a) | the mechanism for the exchange of information between ESMA and the relevant supervisory authorities of the third countries concerned; and |
| --- | --- | --- |

(f)

paragraphs 7 and 8 are replaced by the following:

‘7.   ESMA shall establish cooperation agreements with the relevant supervisory authorities of third countries whose legal and supervisory frameworks have been considered equivalent to this Regulation in accordance with paragraph 6. Such arrangements shall specify at least:

(a)

the mechanism for the exchange of information between ESMA and the relevant supervisory authorities of the third countries concerned; and

| (b) | the procedures concerning the coordination of supervisory activities. |
| --- | --- |

(b)

the procedures concerning the coordination of supervisory activities.

8.   Articles 20 and 24 shall apply mutatis mutandis to certified credit rating agencies and to credit ratings issued by them.’;

| (4) | in Article 6, paragraph 3 is amended as follows:






  (a) | in the first subparagraph, the introductory part is replaced by the following:
  ‘3.   At the request of a credit rating agency, ESMA may exempt a credit rating agency from complying with the requirements of points 2, 5 and 6 of Section A of Annex I and Article 7(4) if the credit rating agency is able to demonstrate that those requirements are not proportionate in view of the nature, scale and complexity of its business and the nature and range of issue of credit ratings and that:’; |
| --- | --- | --- |

(4)

in Article 6, paragraph 3 is amended as follows:

(a)

in the first subparagraph, the introductory part is replaced by the following:

‘3.   At the request of a credit rating agency, ESMA may exempt a credit rating agency from complying with the requirements of points 2, 5 and 6 of Section A of Annex I and Article 7(4) if the credit rating agency is able to demonstrate that those requirements are not proportionate in view of the nature, scale and complexity of its business and the nature and range of issue of credit ratings and that:’;

| (b) | the second subparagraph is replaced by the following:
  ‘In the case of a group of credit rating agencies, ESMA shall ensure that at least one of the credit rating agencies in the group is not exempted from complying with the requirements of points 2, 5 and 6 of Section A of Annex I and Article 7(4).’; |
| --- | --- |

(b)

the second subparagraph is replaced by the following:

‘In the case of a group of credit rating agencies, ESMA shall ensure that at least one of the credit rating agencies in the group is not exempted from complying with the requirements of points 2, 5 and 6 of Section A of Annex I and Article 7(4).’;

| (5) | Article 9 is replaced by the following:
  ‘Article 9
  Outsourcing
  Outsourcing of important operational functions shall not be undertaken in such a way as to impair materially the quality of the credit rating agency's internal control and the ability of ESMA to supervise the credit rating agency's compliance with obligations under this Regulation.’; |
| --- | --- |

(5)

Article 9 is replaced by the following:

‘Article 9

Outsourcing

Outsourcing of important operational functions shall not be undertaken in such a way as to impair materially the quality of the credit rating agency's internal control and the ability of ESMA to supervise the credit rating agency's compliance with obligations under this Regulation.’;

| (6) | in Article 10, paragraph 6 is replaced by the following:
  ‘6.   A credit rating agency shall not use the name of ESMA or any competent authority in such a way that would indicate or suggest endorsement or approval by ESMA or any competent authority of the credit ratings or any credit rating activities of the credit rating agency.’; |
| --- | --- |

(6)

in Article 10, paragraph 6 is replaced by the following:

‘6.   A credit rating agency shall not use the name of ESMA or any competent authority in such a way that would indicate or suggest endorsement or approval by ESMA or any competent authority of the credit ratings or any credit rating activities of the credit rating agency.’;

| (7) | in Article 11, paragraphs 2 and 3 are replaced by the following:
  ‘2.   A credit rating agency shall make available in a central repository established by ESMA information on its historical performance data including the ratings transition frequency and information about credit ratings issued in the past and on their changes. A credit rating agency shall provide information to that repository on a standard form as provided for by ESMA. ESMA shall make that information accessible to the public and shall publish summary information on the main developments observed on an annual basis.
  3.   A credit rating agency shall provide annually, by 31 March, to ESMA information relating to matters set out in point 2 of Part II of Section E of Annex I.’; |
| --- | --- |

(7)

in Article 11, paragraphs 2 and 3 are replaced by the following:

‘2.   A credit rating agency shall make available in a central repository established by ESMA information on its historical performance data including the ratings transition frequency and information about credit ratings issued in the past and on their changes. A credit rating agency shall provide information to that repository on a standard form as provided for by ESMA. ESMA shall make that information accessible to the public and shall publish summary information on the main developments observed on an annual basis.

3.   A credit rating agency shall provide annually, by 31 March, to ESMA information relating to matters set out in point 2 of Part II of Section E of Annex I.’;

| (8) | Article 14 is amended as follows:






  (a) | paragraph 2 is replaced by the following:
  ‘2.   The registration shall be effective for the entire territory of the Union once the decision to register a credit rating agency adopted by ESMA as referred to in Article 16(3) or Article 17(3) has taken effect.’; |
| --- | --- | --- |

(8)

Article 14 is amended as follows:

(a)

paragraph 2 is replaced by the following:

‘2.   The registration shall be effective for the entire territory of the Union once the decision to register a credit rating agency adopted by ESMA as referred to in Article 16(3) or Article 17(3) has taken effect.’;

| (b) | in paragraph 3, the second subparagraph is replaced by the following:
  ‘A credit rating agency shall, without undue delay, notify ESMA of any material changes to the conditions for initial registration, including any opening or closing of a branch within the Union.’; |
| --- | --- |

(b)

in paragraph 3, the second subparagraph is replaced by the following:

‘A credit rating agency shall, without undue delay, notify ESMA of any material changes to the conditions for initial registration, including any opening or closing of a branch within the Union.’;

| (c) | paragraphs 4 and 5 are replaced by the following:
  ‘4.   Without prejudice to Article 16 or 17, ESMA shall register the credit rating agency if it concludes from the examination of the application that the credit rating agency complies with the conditions for the issuing of credit ratings set out in this Regulation, taking into consideration Articles 4 and 6.
  5.   ESMA shall not impose requirements regarding registration which are not provided for in this Regulation.’; |
| --- | --- |

(c)

paragraphs 4 and 5 are replaced by the following:

‘4.   Without prejudice to Article 16 or 17, ESMA shall register the credit rating agency if it concludes from the examination of the application that the credit rating agency complies with the conditions for the issuing of credit ratings set out in this Regulation, taking into consideration Articles 4 and 6.

5.   ESMA shall not impose requirements regarding registration which are not provided for in this Regulation.’;

| (9) | Articles 15 to 21 are replaced by the following:
  ‘Article 15
  Application for registration
  1.   The credit rating agency shall submit an application for registration to ESMA. The application shall contain information on the matters set out in Annex II.
  2.   Where a group of credit rating agencies applies for registration, the members of the group shall mandate one of their number to submit all the applications to ESMA on behalf of the group. The mandated credit rating agency shall provide the information on the matters set out in Annex II for each member of the group.
  3.   A credit rating agency shall submit its application in any of the official languages of the institutions of the Union. The provisions of Regulation No 1 of 15 April 1958 determining the languages to be used by the European Economic Community (13) shall apply mutatis mutandis to any other communication between ESMA and the credit rating agencies and their staff.
  4.   Within 20 working days of receipt of the application, ESMA shall assess whether the application is complete. If the application is not complete, ESMA shall set a deadline by which the credit rating agency is to provide additional information.
  After assessing an application as complete, ESMA shall notify the credit rating agency accordingly.
  Article 16
  Examination of the application for registration of a credit rating agency by ESMA
  1.   ESMA shall, within 45 working days of the notification referred to in the second subparagraph of Article 15(4), examine the application for registration of a credit rating agency based on the compliance of the credit rating agency with the conditions set out in this Regulation.
  2.   ESMA may extend the period of examination by 15 working days, in particular if the credit rating agency:






  (a) | envisages endorsing credit ratings as referred to in Article 4(3); |
| --- | --- | --- |

(9)

Articles 15 to 21 are replaced by the following:

‘Article 15

Application for registration

1.   The credit rating agency shall submit an application for registration to ESMA. The application shall contain information on the matters set out in Annex II.

2.   Where a group of credit rating agencies applies for registration, the members of the group shall mandate one of their number to submit all the applications to ESMA on behalf of the group. The mandated credit rating agency shall provide the information on the matters set out in Annex II for each member of the group.

3.   A credit rating agency shall submit its application in any of the official languages of the institutions of the Union. The provisions of Regulation No 1 of 15 April 1958 determining the languages to be used by the European Economic Community (13) shall apply mutatis mutandis to any other communication between ESMA and the credit rating agencies and their staff.

4.   Within 20 working days of receipt of the application, ESMA shall assess whether the application is complete. If the application is not complete, ESMA shall set a deadline by which the credit rating agency is to provide additional information.

After assessing an application as complete, ESMA shall notify the credit rating agency accordingly.

Article 16

Examination of the application for registration of a credit rating agency by ESMA

1.   ESMA shall, within 45 working days of the notification referred to in the second subparagraph of Article 15(4), examine the application for registration of a credit rating agency based on the compliance of the credit rating agency with the conditions set out in this Regulation.

2.   ESMA may extend the period of examination by 15 working days, in particular if the credit rating agency:

(a)

envisages endorsing credit ratings as referred to in Article 4(3);

| (b) | envisages using outsourcing; or |
| --- | --- |

(b)

envisages using outsourcing; or

| (c) | requests exemption from compliance in accordance with Article 6(3). |
| --- | --- |

(c)

requests exemption from compliance in accordance with Article 6(3).

3.   Within 45 working days of the notification referred to in the second subparagraph of Article 15(4), or within 60 working days thereof where paragraph 2 of this Article applies, ESMA shall adopt a fully reasoned decision to register or refuse registration.

4.   The decision adopted by ESMA pursuant to paragraph 3 shall take effect on the fifth working day following its adoption.

Article 17

Examination of the applications for registration of a group of credit rating agencies by ESMA

1.   ESMA shall, within 55 working days of the notification referred to in the second subparagraph of Article 15(4), examine the applications for registration of a group of credit rating agencies based on the compliance of those credit rating agencies with the conditions set out in this Regulation.

2.   ESMA may extend the period of examination by 15 working days, in particular if any of the credit rating agencies in the group:

| (a) | envisages endorsing credit ratings as referred to in Article 4(3); |
| --- | --- |

(a)

envisages endorsing credit ratings as referred to in Article 4(3);

| (b) | envisages using outsourcing; or |
| --- | --- |

(b)

envisages using outsourcing; or

| (c) | requests exemption from compliance in accordance with Article 6(3). |
| --- | --- |

(c)

requests exemption from compliance in accordance with Article 6(3).

3.   Within 55 working days of the notification as referred to in the second subparagraph of Article 15(4), or within 70 working days thereof where paragraph 2 of this Article applies, ESMA shall adopt a fully reasoned individual decision to register or refuse registration for each credit rating agency of the group.

4.   The decision adopted by ESMA pursuant to paragraph 3 shall take effect on the fifth working day following its adoption.

Article 18

Notification of a decision to register, refuse or withdraw registration, and publication of the list of registered credit rating agencies

1.   Within five working days of the adoption of a decision under Article 16, 17 or 20 ESMA shall notify its decision to the credit rating agency concerned. Where ESMA refuses to register the credit rating agency or withdraws the registration of the credit rating agency, it shall provide full reasons in its decision.

2.   ESMA shall communicate to the Commission, the European Supervisory Authority (European Banking Authority) established by Regulation (EU) No 1093/2010 of the European Parliament and of the Council (14) (EBA), the European Supervisory Authority (European Insurance and Occupational Pensions Authority) established by Regulation (EU) No 1094/2010 of the European Parliament and of the Council (15) (EIOPA), the competent authorities and the sectoral competent authorities, any decision under Article 16, 17 or 20.

3.   ESMA shall publish on its website a list of credit rating agencies registered in accordance with this Regulation. That list shall be updated within five working days following the adoption of a decision under Article 16, 17 or 20. The Commission shall publish that updated list in the Official Journal of the European Union within 30 days following such update.

Article 19

Registration and supervisory fees

1.   ESMA shall charge fees to the credit rating agencies in accordance with this Regulation and the regulation on fees referred to in paragraph 2. Those fees shall fully cover ESMA's necessary expenditure relating to the registration and supervision of credit rating agencies and the reimbursement of any costs that the competent authorities may incur carrying out work pursuant to this Regulation, in particular as a result of any delegation of tasks in accordance with Article 30.

2.   The Commission shall adopt a regulation on fees. That regulation shall determine in particular the type of fees and the matters for which fees are due, the amount of the fees, the way in which they are to be paid and the way in which ESMA is to reimburse competent authorities in respect of any costs that they may incur carrying out work pursuant to this Regulation, in particular as a result of any delegation of tasks in accordance with Article 30.

The amount of a fee charged to a credit rating agency shall cover all administrative costs and be proportionate to the turnover of the credit rating agency concerned.

The Commission shall adopt the regulation on fees referred to in the first subparagraph by means of a delegated act in accordance with Article 38a and subject to the conditions of Articles 38b and 38c.

Article 20

Withdrawal of registration

1.   Without prejudice to Article 24, ESMA shall withdraw the registration of a credit rating agency where the credit rating agency:

| (a) | expressly renounces the registration or has provided no credit ratings for the preceding six months; |
| --- | --- |

(a)

expressly renounces the registration or has provided no credit ratings for the preceding six months;

| (b) | obtained the registration by making false statements or by any other irregular means; or |
| --- | --- |

(b)

obtained the registration by making false statements or by any other irregular means; or

| (c) | no longer meets the conditions under which it was registered. |
| --- | --- |

(c)

no longer meets the conditions under which it was registered.

2.   The competent authority of a Member State in which credit ratings issued by the credit rating agency concerned are used and which considers that one of the conditions referred to in paragraph 1 has been met may request that ESMA examine whether the conditions for the withdrawal of the registration of the credit rating agency concerned are met. If ESMA decides not to withdraw the registration of the credit rating agency concerned, it shall provide full reasons.

3.   The decision on the withdrawal of registration shall take immediate effect throughout the Union, subject to the transitional period for the use of credit ratings referred to in Article 24(4).

CHAPTER II

SUPERVISION BY ESMA

Article 21

ESMA

1.   Without prejudice to Article 25a, ESMA shall ensure that this Regulation is applied.

2.   In accordance with Article 16 of Regulation (EU) No 1095/2010, ESMA shall issue and update guidelines on the cooperation between ESMA, the competent authorities and the sectoral competent authorities for the purposes of this Regulation and for those of the relevant sectoral legislation, including the procedures and detailed conditions relating to the delegation of tasks.

3.   In accordance with Article 16 of Regulation (EU) No 1095/2010, ESMA shall, in cooperation with EBA and EIOPA, issue and update guidelines on the application of the endorsement regime under Article 4(3) of this Regulation by 7 June 2011.

4.   By 2 January 2012 ESMA shall submit draft regulatory technical standards for endorsement by the Commission in accordance with Article 10 of Regulation (EU) No 1095/2010 on:

| (a) | the information to be provided by a credit rating agency in its application for registration as set out in Annex II; |
| --- | --- |

(a)

the information to be provided by a credit rating agency in its application for registration as set out in Annex II;

| (b) | information that the credit rating agency must provide for the application for certification and for the assessment of its systemic importance to the financial stability or integrity of financial markets referred to in Article 5; |
| --- | --- |

(b)

information that the credit rating agency must provide for the application for certification and for the assessment of its systemic importance to the financial stability or integrity of financial markets referred to in Article 5;

| (c) | the presentation of the information, including structure, format, method and period of reporting, that credit rating agencies shall disclose in accordance with Article 11(2) and point 1 of Part II of Section E of Annex I; |
| --- | --- |

(c)

the presentation of the information, including structure, format, method and period of reporting, that credit rating agencies shall disclose in accordance with Article 11(2) and point 1 of Part II of Section E of Annex I;

| (d) | the assessment of compliance of credit rating methodologies with the requirements set out in Article 8(3); |
| --- | --- |

(d)

the assessment of compliance of credit rating methodologies with the requirements set out in Article 8(3);

| (e) | the content and format of ratings data periodic reporting to be requested from the credit rating agencies for the purpose of ongoing supervision by ESMA. |
| --- | --- |

(e)

the content and format of ratings data periodic reporting to be requested from the credit rating agencies for the purpose of ongoing supervision by ESMA.

5.   ESMA shall publish, annually and for the first time by 1 January 2012, a report on the application of this Regulation. That report shall contain, in particular, an assessment of the implementation of Annex I by the credit rating agencies registered under this Regulation.

6.   ESMA shall present annually to the European Parliament, the Council and the Commission a report on supervisory measures taken and penalties imposed by ESMA under this Regulation, including fines and periodic penalty payments.

7.   ESMA shall cooperate with EBA and EIOPA in performing its tasks and shall consult EBA and EIOPA before issuing and updating guidelines and submitting draft regulatory technical standards referred to in paragraphs 2, 3 and 4.

| (10) | the following Article is inserted:
  ‘Article 22a
  Examination of compliance with the back-testing obligation
  1.   In the exercise of its ongoing supervision of credit rating agencies registered under this Regulation, ESMA shall examine regularly compliance with Article 8(3).
  2.   Without prejudice to Article 23, ESMA shall also in the framework of the examination referred to in paragraph 1:






  (a) | verify the execution of back-testing by credit rating agencies; |
| --- | --- | --- |

(10)

the following Article is inserted:

‘Article 22a

Examination of compliance with the back-testing obligation

1.   In the exercise of its ongoing supervision of credit rating agencies registered under this Regulation, ESMA shall examine regularly compliance with Article 8(3).

2.   Without prejudice to Article 23, ESMA shall also in the framework of the examination referred to in paragraph 1:

(a)

verify the execution of back-testing by credit rating agencies;

| (b) | analyse the results of that back-testing; and |
| --- | --- |

(b)

analyse the results of that back-testing; and

| (c) | verify that the credit rating agencies have processes in place to take into account the results of the back-testing in their rating methodologies.’; |
| --- | --- |

(c)

verify that the credit rating agencies have processes in place to take into account the results of the back-testing in their rating methodologies.’;

| (11) | Articles 23 to 27 are replaced by the following:
  ‘Article 23
  Non-interference with content of ratings or methodologies
  In carrying out their duties under this Regulation, ESMA, the Commission or any public authorities of a Member State shall not interfere with the content of credit ratings or methodologies.
  Article 23a
  Exercise of the powers referred to in Articles 23b to 23d
  The powers conferred on ESMA or any official of or other person authorised by ESMA by Articles 23b to 23d shall not be used to require the disclosure of information or documents which are subject to legal privilege.
  Article 23b
  Requests for information
  1.   ESMA may by simple request or by decision require credit rating agencies, persons involved in credit rating activities, rated entities and related third parties, third parties to whom the credit rating agencies have outsourced operational functions or activities and persons otherwise closely and substantially related or connected to credit rating agencies or credit rating activities to provide all information that is necessary in order to carry out its duties under this Regulation.
  2.   When sending a simple request for information under paragraph 1, ESMA shall:






  (a) | refer to this Article as the legal basis for the request; |
| --- | --- | --- |

(11)

Articles 23 to 27 are replaced by the following:

‘Article 23

Non-interference with content of ratings or methodologies

In carrying out their duties under this Regulation, ESMA, the Commission or any public authorities of a Member State shall not interfere with the content of credit ratings or methodologies.

Article 23a

Exercise of the powers referred to in Articles 23b to 23d

The powers conferred on ESMA or any official of or other person authorised by ESMA by Articles 23b to 23d shall not be used to require the disclosure of information or documents which are subject to legal privilege.

Article 23b

Requests for information

1.   ESMA may by simple request or by decision require credit rating agencies, persons involved in credit rating activities, rated entities and related third parties, third parties to whom the credit rating agencies have outsourced operational functions or activities and persons otherwise closely and substantially related or connected to credit rating agencies or credit rating activities to provide all information that is necessary in order to carry out its duties under this Regulation.

2.   When sending a simple request for information under paragraph 1, ESMA shall:

(a)

refer to this Article as the legal basis for the request;

| (b) | state the purpose of the request; |
| --- | --- |

(b)

state the purpose of the request;

| (c) | specify what information is required; |
| --- | --- |

(c)

specify what information is required;

| (d) | set a time-limit within which the information is to be provided; |
| --- | --- |

(d)

set a time-limit within which the information is to be provided;

| (e) | inform the person from whom the information is requested that there is no obligation to provide the information but that any reply to the request for information must not be incorrect or misleading; |
| --- | --- |

(e)

inform the person from whom the information is requested that there is no obligation to provide the information but that any reply to the request for information must not be incorrect or misleading;

| (f) | indicate the fine provided for in Article 36a, in conjunction with point 7 of Section II of Annex III, where the answers to questions asked are incorrect or misleading. |
| --- | --- |

(f)

indicate the fine provided for in Article 36a, in conjunction with point 7 of Section II of Annex III, where the answers to questions asked are incorrect or misleading.

3.   When requiring the supply of information under paragraph 1 by decision, ESMA shall:

| (a) | refer to this Article as the legal basis for the request; |
| --- | --- |

(a)

refer to this Article as the legal basis for the request;

| (b) | state the purpose of the request; |
| --- | --- |

(b)

state the purpose of the request;

| (c) | specify what information is required; |
| --- | --- |

(c)

specify what information is required;

| (d) | set a time-limit within which the information is to be provided; |
| --- | --- |

(d)

set a time-limit within which the information is to be provided;

| (e) | indicate the periodic penalty payments provided for in Article 36b where the production of the required information is incomplete; |
| --- | --- |

(e)

indicate the periodic penalty payments provided for in Article 36b where the production of the required information is incomplete;

| (f) | indicate the fine provided for in Article 36a, in conjunction with point 7 of Section II of Annex III, where the answers to questions asked are incorrect or misleading; and |
| --- | --- |

(f)

indicate the fine provided for in Article 36a, in conjunction with point 7 of Section II of Annex III, where the answers to questions asked are incorrect or misleading; and

| (g) | indicate the right to appeal the decision before the Board of Appeal and to have the decision reviewed by the Court of Justice of the European Union in accordance with Articles 60 and 61 of Regulation (EU) No 1095/2010. |
| --- | --- |

(g)

indicate the right to appeal the decision before the Board of Appeal and to have the decision reviewed by the Court of Justice of the European Union in accordance with Articles 60 and 61 of Regulation (EU) No 1095/2010.

4.   The persons referred to in paragraph 1 or their representatives and, in the case of legal persons or associations having no legal personality, the persons authorised to represent them by law or by their constitution, shall supply the information requested. Lawyers duly authorised to act may supply the information on behalf of their clients. The latter shall remain fully responsible if the information supplied is incomplete, incorrect or misleading.

5.   ESMA shall, without delay, send a copy of the simple request or of its decision to the competent authority of the Member State where the persons referred to in paragraph 1 who are concerned by the request for information are domiciled or established.

Article 23c

General investigations

1.   In order to carry out its duties under this Regulation, ESMA may conduct all necessary investigations of persons referred to in Article 23b(1). To that end, the officials of and other persons authorised by ESMA shall be empowered to:

| (a) | examine any records, data, procedures and any other material relevant to the execution of its tasks irrespective of the medium on which they are stored; |
| --- | --- |

(a)

examine any records, data, procedures and any other material relevant to the execution of its tasks irrespective of the medium on which they are stored;

| (b) | take or obtain certified copies of or extracts from such records, data, procedures and other material; |
| --- | --- |

(b)

take or obtain certified copies of or extracts from such records, data, procedures and other material;

| (c) | summon and ask any person referred to in Article 23b(1) or their representatives or staff for oral or written explanations on facts or documents related to the subject matter and purpose of the inspection and to record the answers; |
| --- | --- |

(c)

summon and ask any person referred to in Article 23b(1) or their representatives or staff for oral or written explanations on facts or documents related to the subject matter and purpose of the inspection and to record the answers;

| (d) | interview any other natural or legal person who consents to be interviewed for the purpose of collecting information relating to the subject matter of an investigation; |
| --- | --- |

(d)

interview any other natural or legal person who consents to be interviewed for the purpose of collecting information relating to the subject matter of an investigation;

| (e) | request records of telephone and data traffic. |
| --- | --- |

(e)

request records of telephone and data traffic.

2.   The officials of and other persons authorised by ESMA for the purposes of the investigations referred to in paragraph 1 shall exercise their powers upon production of a written authorisation specifying the subject matter and purpose of the investigation. That authorisation shall also indicate the periodic penalty payments provided for in Article 36b where the production of the required records, data, procedures or any other material, or the answers to questions asked of the persons referred to in Article 23b(1) are not provided or are incomplete, and the fines provided for in Article 36a, in conjunction with point 8 of Section II of Annex III, where the answers to questions asked of the persons referred to in Article 23b(1) are incorrect or misleading.

3.   The persons referred to in Article 23b(1) shall submit to investigations launched on the basis of a decision of ESMA. The decision shall specify the subject matter and purpose of the investigation, the periodic penalty payments provided for in Article 36b, the legal remedies available under Regulation (EU) No 1095/2010 and the right to have the decision reviewed by the Court of Justice of the European Union.

4.   In good time before the investigation, ESMA shall inform the competent authority of the Member State where the investigation is to be carried out of the investigation and of the identity of the authorised persons. Officials of the competent authority concerned shall, upon the request of ESMA, assist those authorised persons in carrying out their duties. Officials of the competent authority concerned may also attend the investigations upon request.

5.   If a request for records of telephone or data traffic referred to in point (e) of paragraph 1 requires authorisation from a judicial authority according to national rules, such authorisation shall be applied for. Such authorisation may also be applied for as a precautionary measure.

6.   Where authorisation as referred to in paragraph 5 is applied for, the national judicial authority shall control that the decision of ESMA is authentic and that the coercive measures envisaged are neither arbitrary nor excessive having regard to the subject matter of the investigations. In its control of the proportionality of the coercive measures, the national judicial authority may ask ESMA for detailed explanations, in particular relating to the grounds ESMA has for suspecting that an infringement of this Regulation has taken place and the seriousness of the suspected infringement and the nature of the involvement of the person subject to the coercive measures. However, the national judicial authority shall not review the necessity for the investigation or demand that it be provided with the information on ESMA's file. The lawfulness of ESMA's decision shall be subject to review only by the Court of Justice of the European Union following the procedure set out in Regulation (EU) No 1095/2010.

Article 23d

On-site inspections

1.   In order to carry out its duties under this Regulation, ESMA may conduct all necessary on-site inspections at the business premises of the legal persons referred to in Article 23b(1). Where the proper conduct and efficiency of the inspection so require, ESMA may carry out the on-site inspection without prior announcement.

2.   The officials of and other persons authorised by ESMA to conduct an on-site inspection may enter any business premises and land of the legal persons subject to an investigation decision adopted by ESMA and shall have all the powers stipulated in Article 23c(1). They shall also have the power to seal any business premises and books or records for the period of, and to the extent necessary for, the inspection.

3.   The officials of and other persons authorised by ESMA to conduct an on-site inspection shall exercise their powers upon production of a written authorisation specifying the subject matter and purpose of the inspection, and the periodic penalty payments provided for in Article 36b where the persons concerned do not submit to the inspection. In good time before the inspection, ESMA shall give notice of the inspection to the competent authority of the Member State where it is to be conducted.

4.   The persons referred to in Article 23b(1) shall submit to on-site inspections ordered by decision of ESMA. The decision shall specify the subject matter and purpose of the inspection, specify the date on which it is to begin and indicate the periodic penalty payments provided for in Article 36b, the legal remedies available under Regulation (EU) No 1095/2010 as well as the right to have the decision reviewed by the Court of Justice of the European Union. ESMA shall take such decisions after consulting the competent authority of the Member State where the inspection is to be conducted.

5.   Officials of, as well as those authorised or appointed by, the competent authority of the Member State where the inspection is to be conducted shall, upon the request of ESMA, actively assist the officials of and other persons authorised by ESMA. To that end, they shall enjoy the powers set out in paragraph 2. Officials of the competent authority of the Member State concerned may also attend the on-site inspections upon request.

6.   ESMA may also require competent authorities to carry out specific investigatory tasks and on-site inspections as provided for in this Article and in Article 23c(1) on its behalf. To that end, competent authorities shall enjoy the same powers as ESMA as set out in this Article and in Article 23c(1).

7.   Where the officials of and other accompanying persons authorised by ESMA find that a person opposes an inspection ordered pursuant to this Article, the competent authority of the Member State concerned shall afford them the necessary assistance, requesting, where appropriate, the assistance of the police or of an equivalent enforcement authority, so as to enable them to conduct their on-site inspection.

8.   If the on-site inspection provided for in paragraph 1 or the assistance provided for in paragraph 7 requires authorisation by a judicial authority according to national rules, such authorisation shall be applied for. Such authorisation may also be applied for as a precautionary measure.

9.   Where authorisation as referred to in paragraph 8 is applied for, the national judicial authority shall control that the decision of ESMA is authentic and that the coercive measures envisaged are neither arbitrary nor excessive having regard to the subject matter of the inspection. In its control of the proportionality of the coercive measures, the national judicial authority may ask ESMA for detailed explanations, in particular relating to the grounds ESMA has for suspecting that an infringement of this Regulation has taken place and the seriousness of the suspected infringement and the nature of the involvement of the person subject to the coercive measures. However, the national judicial authority shall not review the necessity for the inspection or demand to be provided with the information on ESMA's file. The lawfulness of ESMA's decision shall be subject to review only by the Court of Justice of the European Union following the procedure set out in Regulation (EU) No 1095/2010.

Article 23e

Procedural rules for taking supervisory measures and imposing fines

1.   Where, in carrying out its duties under this Regulation, ESMA finds that there are serious indications of the possible existence of facts liable to constitute one or more of the infringements listed in Annex III, ESMA shall appoint an independent investigating officer within ESMA to investigate the matter. The investigating officer shall not be involved or have been involved in the direct or indirect supervision or registration process of the credit rating agency concerned and shall perform his functions independently from ESMA's Board of Supervisors.

2.   The investigating officer shall investigate the alleged infringements, taking into account any comments submitted by the persons subject to investigation, and shall submit a complete file with his findings to ESMA's Board of Supervisors.

In order to carry out his tasks, the investigating officer may exercise the power to require information in accordance with Article 23b and to conduct investigations and on-site inspections in accordance with Articles 23c and 23d. When using those powers, the investigating officer shall comply with Article 23a.

Where carrying out his tasks, the investigating officer shall have access to all documents and information gathered by ESMA in its supervisory activities.

3.   Upon completion of his investigation and before submitting the file with his findings to ESMA's Board of Supervisors, the investigating officer shall give the persons subject to investigation the opportunity to be heard on the matters being investigated. The investigating officer shall base his findings only on facts on which the persons subject to investigation have had the opportunity to comment.

The rights of defence of the persons concerned shall be fully respected during investigations under this Article.

4.   When submitting the file with his findings to ESMA's Board of Supervisors, the investigating officer shall notify that fact to the persons subject to investigation. The persons subject to investigation shall be entitled to have access to the file, subject to the legitimate interest of other persons in the protection of their business secrets. The right of access to the file shall not extend to confidential information affecting third parties.

5.   On the basis of the file containing the investigating officer's findings and, when requested by the persons concerned, after having heard the persons subject to investigation in accordance with Articles 25 and 36c, ESMA's Board of Supervisors shall decide if one or more of the infringements listed in Annex III has been committed by the persons who have been subject to investigation, and in such case, shall take a supervisory measure in accordance with Article 24 and impose a fine in accordance with Article 36a.

6.   The investigating officer shall not participate in the deliberations of ESMA's Board of Supervisors or in any other way intervene in the decision-making process of ESMA's Board of Supervisors.

7.   The Commission shall adopt further rules of procedure for the exercise of the power to impose fines or periodic penalty payments, including provisions on rights of defence, temporal provisions, and the collection of fines or periodic penalty payments, and shall adopt detailed rules on the limitation periods for the imposition and enforcement of penalties.

The rules referred to in the first subparagraph shall be adopted by means of delegated acts in accordance with Article 38a and subject to the conditions of Articles 38b and 38c.

8.   ESMA shall refer matters for criminal prosecution to the relevant national authorities where, in carrying out its duties under this Regulation, it finds that there are serious indications of the possible existence of facts liable to constitute criminal offences. In addition, ESMA shall refrain from imposing fines or periodic penalty payments where a prior acquittal or conviction arising from identical facts, or from facts which are substantially the same, has acquired the force of res judicata as the result of criminal proceedings under national law.

Article 24

Supervisory measures by ESMA

1.   Where, in accordance with Article 23e(5), ESMA's Board of Supervisors finds that a credit rating agency has committed one of the infringements listed in Annex III, it shall take one or more of the following decisions:

| (a) | withdraw the registration of the credit rating agency; |
| --- | --- |

(a)

withdraw the registration of the credit rating agency;

| (b) | temporarily prohibit the credit rating agency from issuing credit ratings with effect throughout the Union, until the infringement has been brought to an end; |
| --- | --- |

(b)

temporarily prohibit the credit rating agency from issuing credit ratings with effect throughout the Union, until the infringement has been brought to an end;

| (c) | suspend the use, for regulatory purposes, of the credit ratings issued by the credit rating agency with effect throughout the Union, until the infringement has been brought to an end; |
| --- | --- |

(c)

suspend the use, for regulatory purposes, of the credit ratings issued by the credit rating agency with effect throughout the Union, until the infringement has been brought to an end;

| (d) | require the credit rating agency to bring the infringement to an end; |
| --- | --- |

(d)

require the credit rating agency to bring the infringement to an end;

| (e) | issue public notices. |
| --- | --- |

(e)

issue public notices.

2.   When taking the decisions referred to in paragraph 1, ESMA's Board of Supervisors shall take into account the nature and seriousness of the infringement, having regard to the following criteria:

| (a) | the duration and frequency of the infringement; |
| --- | --- |

(a)

the duration and frequency of the infringement;

| (b) | whether the infringement has revealed serious or systemic weaknesses in the undertaking's procedures or in its management systems or internal controls; |
| --- | --- |

(b)

whether the infringement has revealed serious or systemic weaknesses in the undertaking's procedures or in its management systems or internal controls;

| (c) | whether financial crime was facilitated, occasioned or otherwise attributable to the infringement; |
| --- | --- |

(c)

whether financial crime was facilitated, occasioned or otherwise attributable to the infringement;

| (d) | whether the infringement has been committed intentionally or negligently. |
| --- | --- |

(d)

whether the infringement has been committed intentionally or negligently.

3.   Before taking the decisions referred to in points (a), (b) and (c) of paragraph 1, ESMA's Board of Supervisors shall inform EBA and EIOPA thereof.

4.   Credit ratings may continue to be used for regulatory purposes following the adoption of the decisions referred to in points (a) and (c) of paragraph 1 during a period not exceeding:

| (a) | 10 working days from the date ESMA's decision is made public under paragraph 5 if there are credit ratings of the same financial instrument or entity issued by other credit rating agencies registered under this Regulation; or |
| --- | --- |

(a)

10 working days from the date ESMA's decision is made public under paragraph 5 if there are credit ratings of the same financial instrument or entity issued by other credit rating agencies registered under this Regulation; or

| (b) | three months from the date ESMA's decision is made public under paragraph 5 if there are no credit ratings of the same financial instrument or entity issued by other credit rating agencies registered under this Regulation. |
| --- | --- |

(b)

three months from the date ESMA's decision is made public under paragraph 5 if there are no credit ratings of the same financial instrument or entity issued by other credit rating agencies registered under this Regulation.

ESMA's Board of Supervisors may extend, including following a request by EBA or EIOPA, the period referred to in point (b) of the first subparagraph by three months in exceptional circumstances relating to the potential for market disruption or financial instability.

5.   Without undue delay, ESMA's Board of Supervisors shall notify any decision adopted pursuant to paragraph 1 to the credit rating agency concerned and shall communicate any such decision to the competent authorities and the sectoral competent authorities, the Commission, EBA and EIOPA. It shall make public any such decision on its website within 10 working days from the date when it was adopted.

When making public its decision as referred to in the first subparagraph, ESMA's Board of Supervisors shall also make public the right for the credit rating agency concerned to appeal the decision, the fact, where relevant, that such an appeal has been lodged, specifying that such an appeal does not have suspensive effect, and the fact that it is possible for the Board of Appeal to suspend the application of the contested decision in accordance with Article 60(3) of Regulation (EU) No 1095/2010.

Article 25

Hearing of the persons concerned

1.   Before taking any decision under Article 24(1), ESMA's Board of Supervisors shall give the persons subject to the proceedings the opportunity to be heard on ESMA's findings. ESMA's Board of Supervisors shall base its decisions only on findings on which the persons subject to the proceedings have had the opportunity to comment.

The first subparagraph shall not apply if urgent action is needed in order to prevent significant and imminent damage to the financial system. In such a case ESMA's Board of Supervisors may adopt an interim decision and shall give the persons concerned the opportunity to be heard as soon as possible after taking its decision.

2.   The rights of defence of the persons subject to the proceedings shall be fully respected during the proceedings. They shall be entitled to have access to ESMA's file, subject to the legitimate interest of other persons in the protection of their business secrets. The right of access to the file shall not extend to confidential information.

Article 25a

Sectoral competent authorities responsible for the supervision and enforcement of Article 4(1) (the use of credit ratings)

The sectoral competent authorities shall be responsible for the supervision and enforcement of Article 4(1) in accordance with the relevant sectoral legislation.

CHAPTER III

COOPERATION BETWEEN ESMA, COMPETENT AUTHORITIES AND SECTORAL COMPETENT AUTHORITIES

Article 26

Obligation to cooperate

ESMA, EBA, EIOPA, the competent authorities and the sectoral competent authorities shall cooperate where it is necessary for the purposes of this Regulation and for those of the relevant sectoral legislation.

Article 27

Exchange of information

1.   ESMA, the competent authorities, and the sectoral competent authorities shall, without undue delay, supply each other with the information required for the purposes of carrying out their duties under this Regulation and under the relevant sectoral legislation.

2.   ESMA may transmit to the central banks, the European System of Central Banks and the European Central Bank, in their capacity as monetary authorities, to the European Systemic Risk Board and, where appropriate, to other public authorities responsible for overseeing payment and settlement systems, confidential information intended for the performance of their tasks. Similarly, such authorities or bodies shall not be prevented from communicating to ESMA information that ESMA may need in order to carry out its duties under this Regulation.’;

| (12) | Articles 28 and 29 are deleted; |
| --- | --- |

(12)

Articles 28 and 29 are deleted;

| (13) | Articles 30, 31 and 32 are replaced by the following:
  ‘Article 30
  Delegation of tasks by ESMA to competent authorities
  1.   Where it is necessary for the proper performance of a supervisory task, ESMA may delegate specific supervisory tasks to the competent authority of a Member State in accordance with the guidelines issued by ESMA pursuant to Article 21(2). Such specific supervisory tasks may, in particular, include the power to request information in accordance with Article 23b and to conduct investigations and on-site inspections in accordance with Article 23d(6).
  2.   Prior to the delegation of a task, ESMA shall consult the relevant competent authority. Such consultation shall concern:






  (a) | the scope of the task to be delegated; |
| --- | --- | --- |

(13)

Articles 30, 31 and 32 are replaced by the following:

‘Article 30

Delegation of tasks by ESMA to competent authorities

1.   Where it is necessary for the proper performance of a supervisory task, ESMA may delegate specific supervisory tasks to the competent authority of a Member State in accordance with the guidelines issued by ESMA pursuant to Article 21(2). Such specific supervisory tasks may, in particular, include the power to request information in accordance with Article 23b and to conduct investigations and on-site inspections in accordance with Article 23d(6).

2.   Prior to the delegation of a task, ESMA shall consult the relevant competent authority. Such consultation shall concern:

(a)

the scope of the task to be delegated;

| (b) | the timetable for the performance of the task to be delegated; and |
| --- | --- |

(b)

the timetable for the performance of the task to be delegated; and

| (c) | the transmission of necessary information by and to ESMA. |
| --- | --- |

(c)

the transmission of necessary information by and to ESMA.

3.   In accordance with the regulation on fees to be adopted by the Commission pursuant to Article 19(2), ESMA shall reimburse a competent authority for the costs incurred as a result of carrying out delegated tasks.

4.   ESMA shall review the delegation referred to in paragraph 1 at appropriate intervals. A delegation of tasks may be revoked at any time.

A delegation of tasks shall not affect the responsibility of ESMA and shall not limit ESMA's ability to conduct and oversee the delegated activity. Supervisory responsibilities under this Regulation, including registration decisions, final assessments and follow-up decisions concerning infringements, shall not be delegated.

Article 31

Notifications and suspension requests by competent authorities

1.   Where a competent authority of a Member State finds that acts contrary to this Regulation are being, or have been, carried out on the territory of its own or of another Member State, it shall give notice of that fact in as specific a manner as possible to ESMA. Where the competent authority considers it appropriate for investigatory purposes, the competent authority may also suggest to ESMA that it assess the need to use the powers under Articles 23b and 23c in relation to the credit rating agency involved in those acts.

ESMA shall take appropriate action. It shall inform the notifying competent authority of the outcome and, as far as possible, of any significant interim developments.

2.   Without prejudice to the duty to notify set out in paragraph 1, where the notifying competent authority of a Member State considers that a registered credit rating agency, whose credit ratings are used within the territory of that Member State, breaches the obligations arising from this Regulation and the infringements are sufficiently serious and persistent to have a significant impact on the protection of investors or on the stability of the financial system in that Member State, the notifying competent authority may request that ESMA suspend the use, for regulatory purposes, of credit ratings of the credit rating agency concerned by the financial institutions and other entities referred to in Article 4(1). The notifying competent authority shall provide ESMA with full reasons for its request.

Where ESMA considers that the request is not justified, it shall inform the notifying competent authority in writing, setting out the reasons. Where ESMA considers that the request is justified, it shall take the appropriate measures to resolve the issue.

Article 32

Professional secrecy

1.   The obligation of professional secrecy shall apply to ESMA, the competent authorities, and all persons who work or who have worked for ESMA, for the competent authorities or for any other person to whom ESMA has delegated tasks, including auditors and experts contracted by ESMA. Information covered by professional secrecy shall not be disclosed to another person or authority except where such disclosure is necessary for legal proceedings.

2.   All the information that, under this Regulation, is acquired by, or exchanged between, ESMA, the competent authorities, the sectoral competent authorities or other authorities and bodies referred to in Article 27(2), shall be considered confidential, except where ESMA or the competent authority or other authority or body concerned states at the time of communication that such information may be disclosed or where such disclosure is necessary for legal proceedings.’;

| (14) | Article 33 is deleted; |
| --- | --- |

(14)

Article 33 is deleted;

| (15) | Articles 34 and 35 are replaced by the following:
  ‘Article 34
  Agreement on exchange of information
  ESMA may conclude cooperation agreements on exchange of information with the supervisory authorities of third countries only if the information disclosed is subject to guarantees of professional secrecy which are at least equivalent to those set out in Article 32.
  Such exchange of information shall be intended for the performance of the tasks of ESMA or those supervisory authorities.
  With regard to transfer of personal data to a third country, ESMA shall apply Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data (16).
  Article 35
  Disclosure of information from third countries
  ESMA may disclose the information received from supervisory authorities of third countries only if ESMA or a competent authority has obtained the express agreement of the supervisory authority that has transmitted the information and, where applicable, the information is disclosed only for the purposes for which that supervisory authority gave its agreement or where such disclosure is necessary for legal proceedings. |
| --- | --- |

(15)

Articles 34 and 35 are replaced by the following:

‘Article 34

Agreement on exchange of information

ESMA may conclude cooperation agreements on exchange of information with the supervisory authorities of third countries only if the information disclosed is subject to guarantees of professional secrecy which are at least equivalent to those set out in Article 32.

Such exchange of information shall be intended for the performance of the tasks of ESMA or those supervisory authorities.

With regard to transfer of personal data to a third country, ESMA shall apply Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data (16).

Article 35

Disclosure of information from third countries

ESMA may disclose the information received from supervisory authorities of third countries only if ESMA or a competent authority has obtained the express agreement of the supervisory authority that has transmitted the information and, where applicable, the information is disclosed only for the purposes for which that supervisory authority gave its agreement or where such disclosure is necessary for legal proceedings.

| (16) | the heading of Chapter I of Title IV ‘Penalties, committee procedure and reporting’ is replaced by the heading ‘Penalties, fines, periodic penalty payments, committee procedure, delegated powers and reporting’; |
| --- | --- |

(16)

the heading of Chapter I of Title IV ‘Penalties, committee procedure and reporting’ is replaced by the heading ‘Penalties, fines, periodic penalty payments, committee procedure, delegated powers and reporting’;

| (17) | in Article 36, the first and second paragraphs are replaced by the following:
  ‘Member States shall lay down the rules on penalties applicable to infringements of Article 4(1) and shall take all measures necessary to ensure that they are implemented. The penalties provided for shall be effective, proportionate and dissuasive.
  Member States shall ensure that the sectoral competent authority disclose to the public every penalty that has been imposed for infringements of Article 4(1), unless such disclosure would seriously jeopardise the financial markets or cause disproportionate damage to the parties involved.’; |
| --- | --- |

(17)

in Article 36, the first and second paragraphs are replaced by the following:

‘Member States shall lay down the rules on penalties applicable to infringements of Article 4(1) and shall take all measures necessary to ensure that they are implemented. The penalties provided for shall be effective, proportionate and dissuasive.

Member States shall ensure that the sectoral competent authority disclose to the public every penalty that has been imposed for infringements of Article 4(1), unless such disclosure would seriously jeopardise the financial markets or cause disproportionate damage to the parties involved.’;

| (18) | the following Articles are inserted:
  ‘Article 36a
  Fines
  1.   Where, in accordance with Article 23e(5), ESMA's Board of Supervisors finds that a credit rating agency has, intentionally or negligently, committed one of the infringements listed in Annex III, it shall adopt a decision imposing a fine in accordance with paragraph 2.
  An infringement by a credit rating agency shall be considered to have been committed intentionally if ESMA finds objective factors which demonstrate that the credit rating agency or its senior management acted deliberately to commit the infringement.
  2.   The basic amount of the fines referred to in paragraph 1 shall be included within the following limits:






  (a) | for infringements referred to in points 1 to 5, 11 to 15, 19, 20, 23, 28, 30, 32, 33, 35, 41, 43, 50 and 51 of Section I of Annex III, the fines shall amount to at least EUR 500 000 and shall not exceed EUR 750 000; |
| --- | --- | --- |

(18)

the following Articles are inserted:

‘Article 36a

Fines

1.   Where, in accordance with Article 23e(5), ESMA's Board of Supervisors finds that a credit rating agency has, intentionally or negligently, committed one of the infringements listed in Annex III, it shall adopt a decision imposing a fine in accordance with paragraph 2.

An infringement by a credit rating agency shall be considered to have been committed intentionally if ESMA finds objective factors which demonstrate that the credit rating agency or its senior management acted deliberately to commit the infringement.

2.   The basic amount of the fines referred to in paragraph 1 shall be included within the following limits:

(a)

for infringements referred to in points 1 to 5, 11 to 15, 19, 20, 23, 28, 30, 32, 33, 35, 41, 43, 50 and 51 of Section I of Annex III, the fines shall amount to at least EUR 500 000 and shall not exceed EUR 750 000;

| (b) | for the infringements referred to in points 6 to 8, 16 to 18, 21, 22, 24, 25, 27, 29, 31, 34, 37 to 40, 42, 45 to 47, 48, 49, 52 and 54 of Section I of Annex III, the fines shall amount to at least EUR 300 000 and shall not exceed EUR 450 000; |
| --- | --- |

(b)

for the infringements referred to in points 6 to 8, 16 to 18, 21, 22, 24, 25, 27, 29, 31, 34, 37 to 40, 42, 45 to 47, 48, 49, 52 and 54 of Section I of Annex III, the fines shall amount to at least EUR 300 000 and shall not exceed EUR 450 000;

| (c) | for the infringements referred to in points 9, 10, 26, 36, 44 and 53 of Section I of Annex III, the fines shall amount to at least EUR 100 000 and shall not exceed EUR 200 000; |
| --- | --- |

(c)

for the infringements referred to in points 9, 10, 26, 36, 44 and 53 of Section I of Annex III, the fines shall amount to at least EUR 100 000 and shall not exceed EUR 200 000;

| (d) | for the infringements referred to in points 1, 6, 7 and 8 of Section II of Annex III, the fines shall amount to at least EUR 50 000 and shall not exceed EUR 150 000; |
| --- | --- |

(d)

for the infringements referred to in points 1, 6, 7 and 8 of Section II of Annex III, the fines shall amount to at least EUR 50 000 and shall not exceed EUR 150 000;

| (e) | for the infringements referred to in points 2, 4 and 5 of Section II of Annex III, the fines shall amount to at least EUR 25 000 and shall not exceed EUR 75 000; |
| --- | --- |

(e)

for the infringements referred to in points 2, 4 and 5 of Section II of Annex III, the fines shall amount to at least EUR 25 000 and shall not exceed EUR 75 000;

| (f) | for the infringements referred to in point 3 of Section II of Annex III, the fines shall amount to at least EUR 10 000 and shall not exceed EUR 50 000; |
| --- | --- |

(f)

for the infringements referred to in point 3 of Section II of Annex III, the fines shall amount to at least EUR 10 000 and shall not exceed EUR 50 000;

| (g) | for the infringements referred to in points 1 to 3 and 11 of Section III of Annex III, the fines shall amount to at least EUR 150 000 and shall not exceed EUR 300 000; |
| --- | --- |

(g)

for the infringements referred to in points 1 to 3 and 11 of Section III of Annex III, the fines shall amount to at least EUR 150 000 and shall not exceed EUR 300 000;

| (h) | for the infringements referred to in points 4, 6, 8 and 10 of Section III of Annex III, the fines shall amount to at least EUR 90 000 and shall not exceed EUR 200 000; |
| --- | --- |

(h)

for the infringements referred to in points 4, 6, 8 and 10 of Section III of Annex III, the fines shall amount to at least EUR 90 000 and shall not exceed EUR 200 000;

| (i) | for the infringements referred to in points 5, 7 and 9 of Section III of Annex III, the fines shall amount to at least EUR 40 000 and shall not exceed EUR 100 000. |
| --- | --- |

(i)

for the infringements referred to in points 5, 7 and 9 of Section III of Annex III, the fines shall amount to at least EUR 40 000 and shall not exceed EUR 100 000.

In order to decide whether the basic amount of the fines should be set at the lower, the middle or the higher end of the limits set out in the first subparagraph, ESMA shall have regard to the annual turnover in the preceding business year of the credit rating agency concerned. The basic amount shall be at the lower end of the limit for credit rating agencies whose annual turnover is below EUR 10 million, the middle of the limit for the credit rating agencies whose annual turnover is between EUR 10 and 50 million and the higher end of the limit for the credit rating agencies whose annual turnover is higher than EUR 50 million.

3.   The basic amounts defined within the limits set out in paragraph 2 shall be adjusted, if need be, by taking into account aggravating or mitigating factors in accordance with the relevant coefficients set out in Annex IV.

The relevant aggravating coefficient shall be applied one by one to the basic amount. If more than one aggravating coefficient is applicable, the difference between the basic amount and the amount resulting from the application of each individual aggravating coefficient shall be added to the basic amount.

The relevant mitigating coefficient shall be applied one by one to the basic amount. If more than one mitigating coefficient is applicable, the difference between the basic amount and the amount resulting from the application of each individual mitigating coefficient shall be subtracted from the basic amount.

4.   Notwithstanding paragraphs 2 and 3, the fine shall not exceed 20 % of the annual turnover of the credit rating agency concerned in the preceding business year and, where the credit rating agency has directly or indirectly benefitted financially from the infringement, the fine shall be at least equal to that financial benefit.

Where an act or omission of a credit rating agency constitutes more than one infringement listed in Annex III, only the higher fine calculated in accordance with paragraphs 2 and 3 and related to one of those infringements shall apply.

Article 36b

Periodic penalty payments

1.   ESMA's Board of Supervisors shall by decision impose a periodic penalty payment in order to compel:

| (a) | a credit rating agency to put an end to an infringement, in accordance with a decision taken pursuant to point (d) of Article 24(1); |
| --- | --- |

(a)

a credit rating agency to put an end to an infringement, in accordance with a decision taken pursuant to point (d) of Article 24(1);

| (b) | a person referred to in Article 23b(1) to supply complete information which has been required by a decision pursuant to Article 23b; |
| --- | --- |

(b)

a person referred to in Article 23b(1) to supply complete information which has been required by a decision pursuant to Article 23b;

| (c) | a person referred to in Article 23b(1) to submit to an investigation and in particular to produce complete records, data, procedures or any other material required and to complete and correct other information provided in an investigation launched by a decision taken pursuant to Article 23c; |
| --- | --- |

(c)

a person referred to in Article 23b(1) to submit to an investigation and in particular to produce complete records, data, procedures or any other material required and to complete and correct other information provided in an investigation launched by a decision taken pursuant to Article 23c;

| (d) | a person referred to in Article 23b(1) to submit to an on-site inspection ordered by a decision taken pursuant to Article 23d. |
| --- | --- |

(d)

a person referred to in Article 23b(1) to submit to an on-site inspection ordered by a decision taken pursuant to Article 23d.

2.   A periodic penalty payment shall be effective and proportionate. The periodic penalty payment shall be imposed on a daily basis until the credit rating agency or person concerned complies with the relevant decision referred to in paragraph 1.

3.   Notwithstanding paragraph 2, the amount of a periodic penalty payment shall be 3 % of the average daily turnover in the preceding business year or, in the case of natural persons, 2 % of the average daily income in the preceding calendar year. It shall be calculated from the date stipulated in the decision imposing the periodic penalty payment.

4.   A periodic penalty payment may be imposed for a period of no more than six months following the notification of ESMA's decision.

Article 36c

Hearing of the persons subject to the proceedings

1.   Before taking any decision imposing a fine and/or periodic penalty payment under Article 36a or points (a) to (d) of Article 36b(1), ESMA's Board of Supervisors shall give the persons subject to the proceedings the opportunity to be heard on ESMA's findings. ESMA's Board of Supervisors shall base its decisions only on findings on which the persons subject to the proceedings have had the opportunity to comment.

2.   The rights of defence of the persons subject to the proceedings shall be fully respected during the proceedings. They shall be entitled to have access to ESMA's file, subject to the legitimate interest of other persons in the protection of their business secrets. The right of access to the file shall not extend to confidential information or internal preparatory documents of ESMA.

Article 36d

Disclosure, nature, enforcement and allocation of fines and periodic penalty payments

1.   ESMA shall disclose to the public every fine and periodic penalty payment that has been imposed pursuant to Articles 36a and 36b, unless such disclosure to the public would seriously jeopardise the financial markets or cause disproportionate damage to the parties involved.

2.   Fines and periodic penalty payments imposed pursuant to Articles 36a and 36b shall be of an administrative nature.

3.   Fines and periodic penalty payments imposed pursuant to Articles 36a and 36b shall be enforceable.

Enforcement shall be governed by the rules of civil procedure in force in the State in the territory of which it is carried out. The order for its enforcement shall be appended to the decision without other formality than verification of the authenticity of the decision by the authority which the government of each Member State shall designate for that purpose and shall make known to ESMA and to the Court of Justice of the European Union.

When those formalities have been completed on application by the party concerned, the latter may proceed to enforcement in accordance with the national law, by bringing the matter directly before the competent body.

Enforcement may be suspended only by a decision of the Court of Justice of the European Union. However, the courts of the Member State concerned shall have jurisdiction over complaints that enforcement is being carried out in an irregular manner.

4.   The amounts of the fines and periodic penalty payments shall be allocated to the general budget of the European Union.

Article 36e

Review by the Court of Justice of the European Union

The Court of Justice of the European Union shall have unlimited jurisdiction to review decisions whereby ESMA has imposed a fine or a periodic penalty payment. It may annul, reduce or increase the fine or periodic penalty payment imposed.’;

| (19) | Article 37 is replaced by the following:
  ‘Article 37
  Amendments to Annexes
  In order to take account of developments, including international developments, on financial markets, in particular in relation to new financial instruments, the Commission may adopt, by means of delegated acts in accordance with Article 38a and subject to the conditions of Articles 38b and 38c, measures to amend the Annexes, excluding Annex III.’; |
| --- | --- |

(19)

Article 37 is replaced by the following:

‘Article 37

Amendments to Annexes

In order to take account of developments, including international developments, on financial markets, in particular in relation to new financial instruments, the Commission may adopt, by means of delegated acts in accordance with Article 38a and subject to the conditions of Articles 38b and 38c, measures to amend the Annexes, excluding Annex III.’;

| (20) | in Article 38, paragraph 2 is deleted; |
| --- | --- |

(20)

in Article 38, paragraph 2 is deleted;

| (21) | the following Articles are inserted:
  ‘Article 38a
  Exercise of the delegation
  1.   The power to adopt delegated acts referred to in the third subparagraph of Article 5(6), Article 19(2), Article 23e(7) and Article 37 shall be conferred on the Commission for a period of four years from 1 June 2011. The Commission shall draw up a report in respect of the delegated power at the latest six months before the end of the four-year period. The delegation of power shall be automatically extended for periods of an identical duration, unless the European Parliament or the Council revokes it in accordance with Article 38b.
  2.   As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.
  3.   The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in Articles 38b and 38c.
  Article 38b
  Revocation of the delegation
  1.   The delegation of power referred to in the third subparagraph of Article 5(6), Article 19(2), Article 23e(7) and Article 37 may be revoked at any time by the European Parliament or by the Council.
  2.   The institution which has commenced an internal procedure for deciding whether to revoke the delegation of power shall endeavour to inform the other institution and the Commission within a reasonable time before the final decision is taken, indicating the delegated power which could be subject to revocation.
  3.   The decision of revocation shall put an end to the delegation of the power specified in that decision. It shall take effect immediately or at a later date specified therein. It shall not affect the validity of the delegated acts already in force. It shall be published in the Official Journal of the European Union.
  Article 38c
  Objections to delegated acts
  1.   The European Parliament or the Council may object to a delegated act within a period of three months from the date of notification.
  At the initiative of the European Parliament or the Council that period shall be extended by three months.
  2.   If, on expiry of the period referred to in paragraph 1, neither the European Parliament nor the Council has objected to the delegated act, it shall be published in the Official Journal of the European Union and shall enter into force on the date stated therein.
  The delegated act may be published in the Official Journal of the European Union and enter into force before the expiry of that period if the European Parliament and the Council have both informed the Commission of their intention not to raise objections.
  3.   If either the European Parliament or the Council objects to the delegated act within the period referred to in paragraph 1, it shall not enter into force. In accordance with Article 296 of the Treaty on the Functioning of the European Union, the institution which objects shall state the reasons for objecting to the delegated act.’; |
| --- | --- |

(21)

the following Articles are inserted:

‘Article 38a

Exercise of the delegation

1.   The power to adopt delegated acts referred to in the third subparagraph of Article 5(6), Article 19(2), Article 23e(7) and Article 37 shall be conferred on the Commission for a period of four years from 1 June 2011. The Commission shall draw up a report in respect of the delegated power at the latest six months before the end of the four-year period. The delegation of power shall be automatically extended for periods of an identical duration, unless the European Parliament or the Council revokes it in accordance with Article 38b.

2.   As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

3.   The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in Articles 38b and 38c.

Article 38b

Revocation of the delegation

1.   The delegation of power referred to in the third subparagraph of Article 5(6), Article 19(2), Article 23e(7) and Article 37 may be revoked at any time by the European Parliament or by the Council.

2.   The institution which has commenced an internal procedure for deciding whether to revoke the delegation of power shall endeavour to inform the other institution and the Commission within a reasonable time before the final decision is taken, indicating the delegated power which could be subject to revocation.

3.   The decision of revocation shall put an end to the delegation of the power specified in that decision. It shall take effect immediately or at a later date specified therein. It shall not affect the validity of the delegated acts already in force. It shall be published in the Official Journal of the European Union.

Article 38c

Objections to delegated acts

1.   The European Parliament or the Council may object to a delegated act within a period of three months from the date of notification.

At the initiative of the European Parliament or the Council that period shall be extended by three months.

2.   If, on expiry of the period referred to in paragraph 1, neither the European Parliament nor the Council has objected to the delegated act, it shall be published in the Official Journal of the European Union and shall enter into force on the date stated therein.

The delegated act may be published in the Official Journal of the European Union and enter into force before the expiry of that period if the European Parliament and the Council have both informed the Commission of their intention not to raise objections.

3.   If either the European Parliament or the Council objects to the delegated act within the period referred to in paragraph 1, it shall not enter into force. In accordance with Article 296 of the Treaty on the Functioning of the European Union, the institution which objects shall state the reasons for objecting to the delegated act.’;

| (22) | Article 39 is amended as follows:






  (a) | paragraph 2 is deleted; |
| --- | --- | --- |

(22)

Article 39 is amended as follows:

(a)

paragraph 2 is deleted;

| (b) | paragraph 3 is replaced by the following:
  ‘3.   By 1 July 2011, the Commission shall, in the light of developments in the regulatory and supervisory framework for credit rating agencies in third countries, present a report to the European Parliament and to the Council concerning the effects of those developments and of the transitional provisions referred to in Article 40 on the stability of financial markets in the Union.’; |
| --- | --- |

(b)

paragraph 3 is replaced by the following:

‘3.   By 1 July 2011, the Commission shall, in the light of developments in the regulatory and supervisory framework for credit rating agencies in third countries, present a report to the European Parliament and to the Council concerning the effects of those developments and of the transitional provisions referred to in Article 40 on the stability of financial markets in the Union.’;

| (23) | the following Article is inserted:
  ‘Article 39a
  Report by ESMA
  By 31 December 2011, ESMA shall assess the staffing and resources needs arising from the assumption of its powers and duties in accordance with this Regulation and submit a report to the European Parliament, the Council and the Commission.’; |
| --- | --- |

(23)

the following Article is inserted:

‘Article 39a

Report by ESMA

By 31 December 2011, ESMA shall assess the staffing and resources needs arising from the assumption of its powers and duties in accordance with this Regulation and submit a report to the European Parliament, the Council and the Commission.’;

| (24) | in Article 40, the third paragraph is replaced by the following:
  ‘Existing credit rating agencies may continue issuing credit ratings which may be used for regulatory purposes by the financial institutions and other entities referred to in Article 4(1) unless registration is refused. Where registration is refused, Article 24(4) and (5) shall apply.’; |
| --- | --- |

(24)

in Article 40, the third paragraph is replaced by the following:

‘Existing credit rating agencies may continue issuing credit ratings which may be used for regulatory purposes by the financial institutions and other entities referred to in Article 4(1) unless registration is refused. Where registration is refused, Article 24(4) and (5) shall apply.’;

| (25) | the following Article is inserted:
  ‘Article 40a
  Transitional measures related to ESMA
  1.   All competences and duties related to the supervisory and enforcement activity in the field of credit rating agencies, which were conferred on the competent authorities, whether acting as competent authorities of the home Member State or not, and on colleges where those have been established, shall be terminated on 1 July 2011.
  However, an application for registration that has been received by the competent authorities of the home Member State or the relevant college by 7 September 2010 shall not be transferred to ESMA, and the decision to register or refuse registration shall be taken by those authorities and the relevant college.
  2.   Without prejudice to the second subparagraph of paragraph 1, any files and working documents related to the supervisory and enforcement activity in the field of credit rating agencies, including any ongoing examinations and enforcement actions, or certified copies thereof, shall be taken over by ESMA on the date as referred to in paragraph 1.
  3.   The competent authorities and colleges referred to in paragraph 1 shall ensure that any existing records and working papers, or certified copies thereof, shall be transferred to ESMA as soon as possible and in any event by 1 July 2011. Those competent authorities and colleges shall also render all necessary assistance and advice to ESMA to facilitate effective and efficient transfer and taking-up of supervisory and enforcement activity in the field of credit rating agencies.
  4.   ESMA shall act as the legal successor of the competent authorities and colleges referred to in paragraph 1 in any administrative or judicial proceedings that result from supervisory and enforcement activity pursued by those competent authorities and colleges in relation to matters that fall under this Regulation.
  5.   Any registration of a credit rating agency, in accordance with Chapter I of Title III, by a competent authority referred to in paragraph 1 of this Article shall remain valid after the transfer of competences to ESMA.
  6.   By 1 July 2014 and within the scope of its ongoing supervision, ESMA shall conduct at least one verification of all credit rating agencies falling under its supervisory competences.’; |
| --- | --- |

(25)

the following Article is inserted:

‘Article 40a

Transitional measures related to ESMA

1.   All competences and duties related to the supervisory and enforcement activity in the field of credit rating agencies, which were conferred on the competent authorities, whether acting as competent authorities of the home Member State or not, and on colleges where those have been established, shall be terminated on 1 July 2011.

However, an application for registration that has been received by the competent authorities of the home Member State or the relevant college by 7 September 2010 shall not be transferred to ESMA, and the decision to register or refuse registration shall be taken by those authorities and the relevant college.

2.   Without prejudice to the second subparagraph of paragraph 1, any files and working documents related to the supervisory and enforcement activity in the field of credit rating agencies, including any ongoing examinations and enforcement actions, or certified copies thereof, shall be taken over by ESMA on the date as referred to in paragraph 1.

3.   The competent authorities and colleges referred to in paragraph 1 shall ensure that any existing records and working papers, or certified copies thereof, shall be transferred to ESMA as soon as possible and in any event by 1 July 2011. Those competent authorities and colleges shall also render all necessary assistance and advice to ESMA to facilitate effective and efficient transfer and taking-up of supervisory and enforcement activity in the field of credit rating agencies.

4.   ESMA shall act as the legal successor of the competent authorities and colleges referred to in paragraph 1 in any administrative or judicial proceedings that result from supervisory and enforcement activity pursued by those competent authorities and colleges in relation to matters that fall under this Regulation.

5.   Any registration of a credit rating agency, in accordance with Chapter I of Title III, by a competent authority referred to in paragraph 1 of this Article shall remain valid after the transfer of competences to ESMA.

6.   By 1 July 2014 and within the scope of its ongoing supervision, ESMA shall conduct at least one verification of all credit rating agencies falling under its supervisory competences.’;

| (26) | Annex I is hereby amended in accordance with Annex I to this Regulation; |
| --- | --- |

(26)

Annex I is hereby amended in accordance with Annex I to this Regulation;

| (27) | the Annexes set out in Annex II hereto are added. |
| --- | --- |

(27)

the Annexes set out in Annex II hereto are added.

Article 2

Entry into force

This Regulation shall enter into force on the 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 Strasbourg, 11 May 2011.

For the European Parliament

The President

J. BUZEK

For the Council

The President

GYŐRI E.

---

(1)  OJ C 337, 14.12.2010, p. 1.

1

(2)  OJ C 54, 19.2.2011, p. 37.

2

(3)  Position of the European Parliament of 15 December 2010 (not yet published in the Official Journal) and decision of the Council of 11 April 2011.

3

(4)  OJ L 331, 15.12.2010, p. 84.

4

(5)  OJ L 302, 17.11.2009, p. 1.

5

(6)  OJ L 281, 23.11.1995, p. 31.

6

(7)  OJ L 8, 12.1.2001, p. 1.

7

(8)  OJ L 228, 16.8.1973, p. 3.

8

(9)  OJ L 345, 19.12.2002, p. 1.

9

(10)  OJ L 323, 9.12.2005, p. 1.

10

(11)  OJ L 302, 17.11.2009, p. 32.’;

11

(12)  OJ L 331, 15.12.2010, p. 84.’;

12

(13)  OJ 17, 6.10.1958, p. 385/58.

13

(14)  OJ L 331, 15.12.2010, p. 12.

14

(15)  OJ L 331, 15.12.2010, p. 48.’;

15

(16)  OJ L 8, 12.1.2001, p. 1.’;

16

---

ANNEX I

Annex I to Regulation (EC) No 1060/2009 is amended as follows:

| (1) | in point 2 of Section A, the last paragraph is replaced by the following:
  ‘Opinions of the independent members of administrative or supervisory board issued on the matters referred to in points (a) to (d) shall be presented to the board periodically and shall be made available to ESMA on request.’; |
| --- | --- |

(1)

in point 2 of Section A, the last paragraph is replaced by the following:

‘Opinions of the independent members of administrative or supervisory board issued on the matters referred to in points (a) to (d) shall be presented to the board periodically and shall be made available to ESMA on request.’;

| (2) | in point 8 of Section B, the first paragraph is replaced by the following:






  ‘8. | Records and audit trails referred to in point 7 shall be kept at the premises of the registered credit rating agency for at least five years and be made available upon request to ESMA.’; |
| --- | --- | --- |

(2)

in point 8 of Section B, the first paragraph is replaced by the following:

‘8.

Records and audit trails referred to in point 7 shall be kept at the premises of the registered credit rating agency for at least five years and be made available upon request to ESMA.’;

| (3) | in point 2 of Part II of Section E, the first paragraph is replaced by the following:






  ‘2. | annually, the following information:






  (a) | a list of the largest 20 clients of the credit rating agency by revenue generated from them; |
| --- | --- | --- | --- |

(3)

in point 2 of Part II of Section E, the first paragraph is replaced by the following:

‘2.

annually, the following information:

(a)

a list of the largest 20 clients of the credit rating agency by revenue generated from them;

| (b) | a list of those clients of the credit rating agency whose contribution to the growth rate in the generation of revenue of the credit rating agency in the previous financial year exceeded the growth rate in the total revenues of the credit rating agency in that year by a factor of more than 1,5 times. Any such client shall be included on the list only where, in that year, it accounted for more than 0,25 % of the worldwide total revenues of the credit rating agency at global level; and |
| --- | --- |

(b)

a list of those clients of the credit rating agency whose contribution to the growth rate in the generation of revenue of the credit rating agency in the previous financial year exceeded the growth rate in the total revenues of the credit rating agency in that year by a factor of more than 1,5 times. Any such client shall be included on the list only where, in that year, it accounted for more than 0,25 % of the worldwide total revenues of the credit rating agency at global level; and

| (c) | a list of credit ratings issued during the year, indicating the proportion of unsolicited credit ratings among them.’. |
| --- | --- |

(c)

a list of credit ratings issued during the year, indicating the proportion of unsolicited credit ratings among them.’.

---

ANNEX II

The following Annexes are added to Regulation (EC) No 1060/2009:

ANNEX III

List of infringements referred to in Article 24(1) and Article 36a(1)

I.   Infringements related to conflicts of interest, organisational or operational requirements

| 1. | The credit rating agency infringes Article 4(3) by endorsing a credit rating issued in a third country without complying with the conditions set out in that paragraph, unless the reason for that infringement is outside the credit rating agency's knowledge or control. |
| --- | --- |

1.

The credit rating agency infringes Article 4(3) by endorsing a credit rating issued in a third country without complying with the conditions set out in that paragraph, unless the reason for that infringement is outside the credit rating agency's knowledge or control.

| 2. | The credit rating agency infringes the second subparagraph of Article 4(4) by using the endorsement of a credit rating issued in a third country with the intention of avoiding the requirements of this Regulation. |
| --- | --- |

2.

The credit rating agency infringes the second subparagraph of Article 4(4) by using the endorsement of a credit rating issued in a third country with the intention of avoiding the requirements of this Regulation.

| 3. | The credit rating agency infringes Article 6(2), in conjunction with point 1 of Section A of Annex I, by not establishing an administrative or a supervisory board. |
| --- | --- |

3.

The credit rating agency infringes Article 6(2), in conjunction with point 1 of Section A of Annex I, by not establishing an administrative or a supervisory board.

| 4. | The credit rating agency infringes Article 6(2), in conjunction with the first paragraph of point 2 of Section A of Annex I, by not ensuring that its business interest does not impair the independence or accuracy of the credit rating activities. |
| --- | --- |

4.

The credit rating agency infringes Article 6(2), in conjunction with the first paragraph of point 2 of Section A of Annex I, by not ensuring that its business interest does not impair the independence or accuracy of the credit rating activities.

| 5. | The credit rating agency infringes Article 6(2), in conjunction with the second paragraph of point 2 of Section A of Annex I, by appointing senior management which are not of good repute, sufficiently skilled or experienced, or cannot ensure the sound and prudent management of the credit rating agency. |
| --- | --- |

5.

The credit rating agency infringes Article 6(2), in conjunction with the second paragraph of point 2 of Section A of Annex I, by appointing senior management which are not of good repute, sufficiently skilled or experienced, or cannot ensure the sound and prudent management of the credit rating agency.

| 6. | The credit rating agency infringes Article 6(2), in conjunction with the third paragraph of point 2 of Section A of Annex I, by not appointing the required number of independent members of its administrative or supervisory board. |
| --- | --- |

6.

The credit rating agency infringes Article 6(2), in conjunction with the third paragraph of point 2 of Section A of Annex I, by not appointing the required number of independent members of its administrative or supervisory board.

| 7. | The credit rating agency infringes Article 6(2), in conjunction with the fourth paragraph of point 2 of Section A of Annex I, by setting up a compensation system for the independent members of its administrative or supervisory board which is linked to the business performance of the credit rating agency or is not arranged to ensure the independence of their judgment; or by setting a term of office for the independent members of its administrative or supervisory board for a period exceeding five years or for a renewable term; or by dismissing an independent member of the administrative or supervisory board other than in the case of misconduct or professional underperformance. |
| --- | --- |

7.

The credit rating agency infringes Article 6(2), in conjunction with the fourth paragraph of point 2 of Section A of Annex I, by setting up a compensation system for the independent members of its administrative or supervisory board which is linked to the business performance of the credit rating agency or is not arranged to ensure the independence of their judgment; or by setting a term of office for the independent members of its administrative or supervisory board for a period exceeding five years or for a renewable term; or by dismissing an independent member of the administrative or supervisory board other than in the case of misconduct or professional underperformance.

| 8. | The credit rating agency infringes Article 6(2), in conjunction with the fifth paragraph of point 2 of Section A of Annex I, by appointing members of the administrative or supervisory board that do not have sufficient expertise in financial services; or, where the credit rating agency issues credit ratings of structured finance instruments, by not appointing at least one independent member and one other member of the board who has in-depth knowledge and experience at senior level of the markets in structured finance instruments. |
| --- | --- |

8.

The credit rating agency infringes Article 6(2), in conjunction with the fifth paragraph of point 2 of Section A of Annex I, by appointing members of the administrative or supervisory board that do not have sufficient expertise in financial services; or, where the credit rating agency issues credit ratings of structured finance instruments, by not appointing at least one independent member and one other member of the board who has in-depth knowledge and experience at senior level of the markets in structured finance instruments.

| 9. | The credit rating agency infringes Article 6(2), in conjunction with the sixth paragraph of point 2 of Section A of Annex I, by not ensuring that the independent members of the administrative or supervisory board perform the tasks of monitoring any of the matters referred to in the sixth paragraph of that point. |
| --- | --- |

9.

The credit rating agency infringes Article 6(2), in conjunction with the sixth paragraph of point 2 of Section A of Annex I, by not ensuring that the independent members of the administrative or supervisory board perform the tasks of monitoring any of the matters referred to in the sixth paragraph of that point.

| 10. | The credit rating agency infringes Article 6(2), in conjunction with the seventh paragraph of point 2 of Section A of Annex I, by not ensuring that the independent members of the administrative or supervisory board present their opinions on the matters referred to in the sixth paragraph of that point to the board periodically or make those opinions available to ESMA on request. |
| --- | --- |

10.

The credit rating agency infringes Article 6(2), in conjunction with the seventh paragraph of point 2 of Section A of Annex I, by not ensuring that the independent members of the administrative or supervisory board present their opinions on the matters referred to in the sixth paragraph of that point to the board periodically or make those opinions available to ESMA on request.

| 11. | The credit rating agency infringes Article 6(2), in conjunction with point 3 of Section A of Annex I, by not establishing adequate policies or procedures to ensure compliance with its obligations under this Regulation. |
| --- | --- |

11.

The credit rating agency infringes Article 6(2), in conjunction with point 3 of Section A of Annex I, by not establishing adequate policies or procedures to ensure compliance with its obligations under this Regulation.

| 12. | The credit rating agency infringes Article 6(2), in conjunction with point 4 of Section A of Annex I, by not having sound administrative or accounting procedures, internal control mechanisms, effective procedures for risk assessment, or effective control or safeguard arrangements for information processing systems; or by not implementing or maintaining decision-making procedures or organisational structures as required by that point. |
| --- | --- |

12.

The credit rating agency infringes Article 6(2), in conjunction with point 4 of Section A of Annex I, by not having sound administrative or accounting procedures, internal control mechanisms, effective procedures for risk assessment, or effective control or safeguard arrangements for information processing systems; or by not implementing or maintaining decision-making procedures or organisational structures as required by that point.

| 13. | The credit rating agency infringes Article 6(2), in conjunction with point 5 of Section A of Annex I, by not establishing or maintaining a permanent and effective compliance function department (compliance function) which operates independently. |
| --- | --- |

13.

The credit rating agency infringes Article 6(2), in conjunction with point 5 of Section A of Annex I, by not establishing or maintaining a permanent and effective compliance function department (compliance function) which operates independently.

| 14. | The credit rating agency infringes Article 6(2), in conjunction with the first paragraph of point 6 of Section A of Annex I, by not ensuring that the conditions enabling the compliance function to discharge its responsibilities properly or independently, as set out in the first paragraph of that point, are satisfied. |
| --- | --- |

14.

The credit rating agency infringes Article 6(2), in conjunction with the first paragraph of point 6 of Section A of Annex I, by not ensuring that the conditions enabling the compliance function to discharge its responsibilities properly or independently, as set out in the first paragraph of that point, are satisfied.

| 15. | The credit rating agency infringes Article 6(2), in conjunction with point 7 of Section A of Annex I, by not establishing appropriate and effective organisational or administrative arrangements to prevent, identify, eliminate or manage and disclose any conflicts of interest referred to in point 1 of Section B of Annex I, or by not arranging for records to be kept of all significant threats to the independence of the credit rating activities, including those to the rules on rating analysts referred to in Section C of Annex I, as well as the safeguards applied to mitigate those threats. |
| --- | --- |

15.

The credit rating agency infringes Article 6(2), in conjunction with point 7 of Section A of Annex I, by not establishing appropriate and effective organisational or administrative arrangements to prevent, identify, eliminate or manage and disclose any conflicts of interest referred to in point 1 of Section B of Annex I, or by not arranging for records to be kept of all significant threats to the independence of the credit rating activities, including those to the rules on rating analysts referred to in Section C of Annex I, as well as the safeguards applied to mitigate those threats.

| 16. | The credit rating agency infringes Article 6(2), in conjunction with point 8 of Section A of Annex I, by not employing appropriate systems, resources or procedures to ensure continuity and regularity in the performance of its credit rating activities. |
| --- | --- |

16.

The credit rating agency infringes Article 6(2), in conjunction with point 8 of Section A of Annex I, by not employing appropriate systems, resources or procedures to ensure continuity and regularity in the performance of its credit rating activities.

| 17. | The credit rating agency infringes Article 6(2), in conjunction with point 9 of Section A of Annex I, by not establishing a review function that:






  (a) | is responsible for periodically reviewing its methodologies, models and key rating assumptions or any significant changes or modifications thereto, or the appropriateness of those methodologies, models or key rating assumptions where they are used or intended to be used for the assessment of new financial instruments; |
| --- | --- | --- |

17.

The credit rating agency infringes Article 6(2), in conjunction with point 9 of Section A of Annex I, by not establishing a review function that:

(a)

is responsible for periodically reviewing its methodologies, models and key rating assumptions or any significant changes or modifications thereto, or the appropriateness of those methodologies, models or key rating assumptions where they are used or intended to be used for the assessment of new financial instruments;

| (b) | is independent of the business lines which are responsible for credit rating activities; or |
| --- | --- |

(b)

is independent of the business lines which are responsible for credit rating activities; or

| (c) | reports to the members of the administrative or supervisory board. |
| --- | --- |

(c)

reports to the members of the administrative or supervisory board.

| 18. | The credit rating agency infringes Article 6(2), in conjunction with point 10 of Section A of Annex I, by not monitoring or evaluating the adequacy and effectiveness of its systems, internal control mechanisms and arrangements established in accordance with this Regulation or by not taking appropriate measures to address any deficiencies. |
| --- | --- |

18.

The credit rating agency infringes Article 6(2), in conjunction with point 10 of Section A of Annex I, by not monitoring or evaluating the adequacy and effectiveness of its systems, internal control mechanisms and arrangements established in accordance with this Regulation or by not taking appropriate measures to address any deficiencies.

| 19. | The credit rating agency infringes Article 6(2), in conjunction with point 1 of Section B of Annex I, by not identifying, eliminating or managing and disclosing, clearly or prominently, any actual or potential conflicts of interest that may influence the analyses or judgments of its rating analysts, employees, or any other natural person whose services are placed at the disposal or under the control of the credit rating agency and who are directly involved in the issuing of a credit rating or persons approving credit ratings. |
| --- | --- |

19.

The credit rating agency infringes Article 6(2), in conjunction with point 1 of Section B of Annex I, by not identifying, eliminating or managing and disclosing, clearly or prominently, any actual or potential conflicts of interest that may influence the analyses or judgments of its rating analysts, employees, or any other natural person whose services are placed at the disposal or under the control of the credit rating agency and who are directly involved in the issuing of a credit rating or persons approving credit ratings.

| 20. | The credit rating agency infringes Article 6(2), in conjunction with the first paragraph of point 3 of Section B of Annex I, by issuing a credit rating in any of the circumstances set out in the first paragraph of that point or, in the case of an existing credit rating, by not disclosing immediately that the credit rating is potentially affected by those circumstances. |
| --- | --- |

20.

The credit rating agency infringes Article 6(2), in conjunction with the first paragraph of point 3 of Section B of Annex I, by issuing a credit rating in any of the circumstances set out in the first paragraph of that point or, in the case of an existing credit rating, by not disclosing immediately that the credit rating is potentially affected by those circumstances.

| 21. | The credit rating agency infringes Article 6(2), in conjunction with the second paragraph of point 3 of Section B of Annex I, by not immediately assessing whether there are grounds for re-rating or withdrawing an existing credit rating. |
| --- | --- |

21.

The credit rating agency infringes Article 6(2), in conjunction with the second paragraph of point 3 of Section B of Annex I, by not immediately assessing whether there are grounds for re-rating or withdrawing an existing credit rating.

| 22. | The credit rating agency infringes Article 6(2), in conjunction with the first paragraph of point 4 of Section B of Annex I, by providing consultancy or advisory services to the rated entity or a related third party regarding the corporate or legal structure, assets, liabilities or activities of that rated entity or related third party. |
| --- | --- |

22.

The credit rating agency infringes Article 6(2), in conjunction with the first paragraph of point 4 of Section B of Annex I, by providing consultancy or advisory services to the rated entity or a related third party regarding the corporate or legal structure, assets, liabilities or activities of that rated entity or related third party.

| 23. | The credit rating agency infringes Article 6(2), in conjunction with the first part of the third paragraph of point 4 of Section B of Annex I, by not ensuring that the provision of an ancillary service does not present a conflict of interest with its credit rating activity. |
| --- | --- |

23.

The credit rating agency infringes Article 6(2), in conjunction with the first part of the third paragraph of point 4 of Section B of Annex I, by not ensuring that the provision of an ancillary service does not present a conflict of interest with its credit rating activity.

| 24. | The credit rating agency infringes Article 6(2), in conjunction with point 5 of Section B of Annex I, by not ensuring that rating analysts or persons who approve ratings do not make proposals or recommendations regarding the design of structured finance instruments on which the credit rating agency is expected to issue a credit rating. |
| --- | --- |

24.

The credit rating agency infringes Article 6(2), in conjunction with point 5 of Section B of Annex I, by not ensuring that rating analysts or persons who approve ratings do not make proposals or recommendations regarding the design of structured finance instruments on which the credit rating agency is expected to issue a credit rating.

| 25. | The credit rating agency infringes Article 6(2), in conjunction with point 6 of Section B of Annex I, by not designing its reporting or communication channels so as to ensure the independence of the persons referred to in point 1 of Section B from the other activities of the credit rating agency carried out on a commercial basis. |
| --- | --- |

25.

The credit rating agency infringes Article 6(2), in conjunction with point 6 of Section B of Annex I, by not designing its reporting or communication channels so as to ensure the independence of the persons referred to in point 1 of Section B from the other activities of the credit rating agency carried out on a commercial basis.

| 26. | The credit rating agency infringes Article 6(2), in conjunction with the second paragraph of point 8 of Section B of Annex I, by not keeping the records for a term of at least three years once its registration is withdrawn. |
| --- | --- |

26.

The credit rating agency infringes Article 6(2), in conjunction with the second paragraph of point 8 of Section B of Annex I, by not keeping the records for a term of at least three years once its registration is withdrawn.

| 27. | The credit rating agency infringes Article 7(1) by not ensuring that rating analysts, its employees or any other natural person whose services are placed at its disposal or under its control and who are directly involved in credit rating activities have appropriate knowledge and experience for the duties assigned. |
| --- | --- |

27.

The credit rating agency infringes Article 7(1) by not ensuring that rating analysts, its employees or any other natural person whose services are placed at its disposal or under its control and who are directly involved in credit rating activities have appropriate knowledge and experience for the duties assigned.

| 28. | The credit rating agency infringes Article 7(2) by not ensuring that a person referred to in Article 7(1) does not initiate or participate in negotiations regarding fees or payments with any rated entity, related third party or any person directly or indirectly linked to the rated entity by control. |
| --- | --- |

28.

The credit rating agency infringes Article 7(2) by not ensuring that a person referred to in Article 7(1) does not initiate or participate in negotiations regarding fees or payments with any rated entity, related third party or any person directly or indirectly linked to the rated entity by control.

| 29. | The credit rating agency infringes Article 7(3), in conjunction with point 3(a) of Section C of Annex I, by not ensuring that a person referred to in point 1 of that Section takes all reasonable measures to protect property or records in possession of the credit rating agency from fraud, theft or misuse, taking into account the nature, scale and complexity of its business and the nature and range of its credit rating activities. |
| --- | --- |

29.

The credit rating agency infringes Article 7(3), in conjunction with point 3(a) of Section C of Annex I, by not ensuring that a person referred to in point 1 of that Section takes all reasonable measures to protect property or records in possession of the credit rating agency from fraud, theft or misuse, taking into account the nature, scale and complexity of its business and the nature and range of its credit rating activities.

| 30. | The credit rating agency infringes Article 7(3), in conjunction with point 5 of Section C of Annex I, by imposing negative consequences on a person referred to in point 1 of that Section where that person reports information to the compliance officer to the effect that another person as referred to in point 1 of that Section has engaged in conduct that he or she considers to be illegal. |
| --- | --- |

30.

The credit rating agency infringes Article 7(3), in conjunction with point 5 of Section C of Annex I, by imposing negative consequences on a person referred to in point 1 of that Section where that person reports information to the compliance officer to the effect that another person as referred to in point 1 of that Section has engaged in conduct that he or she considers to be illegal.

| 31. | The credit rating agency infringes Article 7(3), in conjunction with point 6 of Section C of Annex I, by not reviewing the relevant work of a rating analyst over two years preceding his or her departure, where the rating analyst terminates his or her employment and joins a rated entity which he or she has been involved in rating or a financial firm, with which he or she has had dealings as part of his or her duties at the credit rating agency. |
| --- | --- |

31.

The credit rating agency infringes Article 7(3), in conjunction with point 6 of Section C of Annex I, by not reviewing the relevant work of a rating analyst over two years preceding his or her departure, where the rating analyst terminates his or her employment and joins a rated entity which he or she has been involved in rating or a financial firm, with which he or she has had dealings as part of his or her duties at the credit rating agency.

| 32. | The credit rating agency infringes Article 7(3), in conjunction with point 1 of Section C of Annex I, by not ensuring that a person referred to in that point does not buy, sell or engage in a transaction in any financial instrument referred to in that point. |
| --- | --- |

32.

The credit rating agency infringes Article 7(3), in conjunction with point 1 of Section C of Annex I, by not ensuring that a person referred to in that point does not buy, sell or engage in a transaction in any financial instrument referred to in that point.

| 33. | The credit rating agency infringes Article 7(3), in conjunction with point 2 of Section C of Annex I, by not ensuring that a person referred to in point 1 of that Section does not participate in or otherwise influence the determination of a credit rating as set out in point 2 of that Section. |
| --- | --- |

33.

The credit rating agency infringes Article 7(3), in conjunction with point 2 of Section C of Annex I, by not ensuring that a person referred to in point 1 of that Section does not participate in or otherwise influence the determination of a credit rating as set out in point 2 of that Section.

| 34. | The credit rating agency infringes Article 7(3), in conjunction with points (b), (c) and (d) of point 3 of Section C of Annex I, by not ensuring that a person referred to in point 1 of that Section does not disclose or use or share information, as referred to in those points. |
| --- | --- |

34.

The credit rating agency infringes Article 7(3), in conjunction with points (b), (c) and (d) of point 3 of Section C of Annex I, by not ensuring that a person referred to in point 1 of that Section does not disclose or use or share information, as referred to in those points.

| 35. | The credit rating agency infringes Article 7(3), in conjunction with point 4 of Section C of Annex I, by not ensuring that a person referred to in point 1 of that Section does not solicit or accept money, gifts or favours from anyone with whom the credit rating agency does business. |
| --- | --- |

35.

The credit rating agency infringes Article 7(3), in conjunction with point 4 of Section C of Annex I, by not ensuring that a person referred to in point 1 of that Section does not solicit or accept money, gifts or favours from anyone with whom the credit rating agency does business.

| 36. | The credit rating agency infringes Article 7(3), in conjunction with point 7 of Section C of Annex I, by not ensuring that a person referred to in point 1 of that Section does not take up a key management position with the rated entity or its related third party within six months of the credit rating. |
| --- | --- |

36.

The credit rating agency infringes Article 7(3), in conjunction with point 7 of Section C of Annex I, by not ensuring that a person referred to in point 1 of that Section does not take up a key management position with the rated entity or its related third party within six months of the credit rating.

| 37. | The credit rating agency infringes Article 7(4), in conjunction with point (a) of the first paragraph of point 8 of Section C of Annex I, by not ensuring that the lead rating analyst is not involved in credit rating activities related to the same rated entity or its related third parties for a period exceeding four years. |
| --- | --- |

37.

The credit rating agency infringes Article 7(4), in conjunction with point (a) of the first paragraph of point 8 of Section C of Annex I, by not ensuring that the lead rating analyst is not involved in credit rating activities related to the same rated entity or its related third parties for a period exceeding four years.

| 38. | The credit rating agency infringes Article 7(4), in conjunction with point (b) of the first paragraph of point 8 Section C of Annex I, by not ensuring that a rating analyst is not involved in credit rating activities related to the same rated entity or its related third parties for a period exceeding five years. |
| --- | --- |

38.

The credit rating agency infringes Article 7(4), in conjunction with point (b) of the first paragraph of point 8 Section C of Annex I, by not ensuring that a rating analyst is not involved in credit rating activities related to the same rated entity or its related third parties for a period exceeding five years.

| 39. | The credit rating agency infringes Article 7(4), in conjunction with point (c) of the first paragraph of point 8 of Section C of Annex I, by not ensuring that a person approving credit ratings is not involved in credit rating activities related to the same rated entity or its related third parties for a period exceeding seven years. |
| --- | --- |

39.

The credit rating agency infringes Article 7(4), in conjunction with point (c) of the first paragraph of point 8 of Section C of Annex I, by not ensuring that a person approving credit ratings is not involved in credit rating activities related to the same rated entity or its related third parties for a period exceeding seven years.

| 40. | The credit rating agency infringes Article 7(4), in conjunction with the second paragraph of point 8 of Section C of Annex I, by not ensuring that a person referred to in points (a), (b) and (c) of the first paragraph of that point is not involved in credit rating activities related to the rated entity or related third parties referred to in those points within two years of the end of the periods set out in those points. |
| --- | --- |

40.

The credit rating agency infringes Article 7(4), in conjunction with the second paragraph of point 8 of Section C of Annex I, by not ensuring that a person referred to in points (a), (b) and (c) of the first paragraph of that point is not involved in credit rating activities related to the rated entity or related third parties referred to in those points within two years of the end of the periods set out in those points.

| 41. | The credit rating agency infringes Article 7(5) by introducing compensation or performance evaluation contingent on the amount of revenue that the credit rating agency derives from the rated entities or related third parties. |
| --- | --- |

41.

The credit rating agency infringes Article 7(5) by introducing compensation or performance evaluation contingent on the amount of revenue that the credit rating agency derives from the rated entities or related third parties.

| 42. | The credit rating agency infringes Article 8(2) by not adopting, implementing or enforcing adequate measures to ensure that the credit ratings it issues are based on a thorough analysis of all the information that is available to it and that is relevant to its analysis according to its rating methodologies. |
| --- | --- |

42.

The credit rating agency infringes Article 8(2) by not adopting, implementing or enforcing adequate measures to ensure that the credit ratings it issues are based on a thorough analysis of all the information that is available to it and that is relevant to its analysis according to its rating methodologies.

| 43. | The credit rating agency infringes Article 8(3) by not using rating methodologies that are rigorous, systematic, continuous and subject to validation based on historical experience, including back-testing. |
| --- | --- |

43.

The credit rating agency infringes Article 8(3) by not using rating methodologies that are rigorous, systematic, continuous and subject to validation based on historical experience, including back-testing.

| 44. | The credit rating agency infringes the first subparagraph of Article 8(4) by refusing to issue a credit rating of an entity or a financial instrument because a portion of the entity or the financial instrument had been previously rated by another credit rating agency. |
| --- | --- |

44.

The credit rating agency infringes the first subparagraph of Article 8(4) by refusing to issue a credit rating of an entity or a financial instrument because a portion of the entity or the financial instrument had been previously rated by another credit rating agency.

| 45. | The credit rating agency infringes the second subparagraph of Article 8(4) by not recording all instances where in its credit rating process it departs from existing credit ratings prepared by another credit rating agency with respect to underlying assets or structured finance instruments or by not providing a justification for the differing assessment. |
| --- | --- |

45.

The credit rating agency infringes the second subparagraph of Article 8(4) by not recording all instances where in its credit rating process it departs from existing credit ratings prepared by another credit rating agency with respect to underlying assets or structured finance instruments or by not providing a justification for the differing assessment.

| 46. | The credit rating agency infringes the first sentence of Article 8(5) by not monitoring its credit ratings or by not reviewing its credit ratings or methodologies on an ongoing basis and at least annually. |
| --- | --- |

46.

The credit rating agency infringes the first sentence of Article 8(5) by not monitoring its credit ratings or by not reviewing its credit ratings or methodologies on an ongoing basis and at least annually.

| 47. | The credit rating agency infringes the second sentence of Article 8(5) by not establishing internal arrangements to monitor the impact of changes in macroeconomic or financial market conditions on credit ratings. |
| --- | --- |

47.

The credit rating agency infringes the second sentence of Article 8(5) by not establishing internal arrangements to monitor the impact of changes in macroeconomic or financial market conditions on credit ratings.

| 48. | The credit rating agency infringes point (b) of Article 8(6), where methodologies, models or key rating assumptions used in credit rating activities are changed, by not reviewing the affected credit ratings in accordance with that point, or by not placing those ratings under observation in the meantime. |
| --- | --- |

48.

The credit rating agency infringes point (b) of Article 8(6), where methodologies, models or key rating assumptions used in credit rating activities are changed, by not reviewing the affected credit ratings in accordance with that point, or by not placing those ratings under observation in the meantime.

| 49. | The credit rating agency infringes point (c) of Article 8(6) by not re-rating a credit rating that has been based on methodologies, models or key rating assumptions that are changed where the overall combined effect of those changes affects that credit rating. |
| --- | --- |

49.

The credit rating agency infringes point (c) of Article 8(6) by not re-rating a credit rating that has been based on methodologies, models or key rating assumptions that are changed where the overall combined effect of those changes affects that credit rating.

| 50. | The credit rating agency infringes Article 9 by undertaking the outsourcing of important operational functions in such a way as to impair materially the quality of the credit rating agency's internal control or the ability of ESMA to supervise the credit rating agency's compliance with obligations under this Regulation. |
| --- | --- |

50.

The credit rating agency infringes Article 9 by undertaking the outsourcing of important operational functions in such a way as to impair materially the quality of the credit rating agency's internal control or the ability of ESMA to supervise the credit rating agency's compliance with obligations under this Regulation.

| 51. | The credit rating agency infringes Article 10(2), in conjunction with the second paragraph of point 4 of Part I of Section D of Annex I, by issuing a credit rating or not withdrawing an existing rating in a case where the lack of reliable data or the complexity of the structure of a new type of financial instrument or the quality of information available is not satisfactory or raises serious questions as to whether the credit rating agency can provide a credible credit rating. |
| --- | --- |

51.

The credit rating agency infringes Article 10(2), in conjunction with the second paragraph of point 4 of Part I of Section D of Annex I, by issuing a credit rating or not withdrawing an existing rating in a case where the lack of reliable data or the complexity of the structure of a new type of financial instrument or the quality of information available is not satisfactory or raises serious questions as to whether the credit rating agency can provide a credible credit rating.

| 52. | The credit rating agency infringes Article 10(6) by using the name of ESMA or any competent authority in such a way that would indicate or suggest endorsement or approval by ESMA or any competent authority of the credit ratings or any credit rating activities of the credit rating agency. |
| --- | --- |

52.

The credit rating agency infringes Article 10(6) by using the name of ESMA or any competent authority in such a way that would indicate or suggest endorsement or approval by ESMA or any competent authority of the credit ratings or any credit rating activities of the credit rating agency.

| 53. | The credit rating agency infringes Article 13 by charging a fee for the information provided in accordance with Articles 8 to 12. |
| --- | --- |

53.

The credit rating agency infringes Article 13 by charging a fee for the information provided in accordance with Articles 8 to 12.

| 54. | The credit rating agency, where it is a legal person established in the Union, infringes Article 14(1) by not applying for registration for the purposes of Article 2(1). |
| --- | --- |

54.

The credit rating agency, where it is a legal person established in the Union, infringes Article 14(1) by not applying for registration for the purposes of Article 2(1).

II.   Infringements related to obstacles to the supervisory activities

| 1. | The credit rating agency infringes Article 6(2), in conjunction with point 7 of Section B of Annex I, by not arranging for records or audit trails of its credit rating activities as required by those provisions. |
| --- | --- |

1.

The credit rating agency infringes Article 6(2), in conjunction with point 7 of Section B of Annex I, by not arranging for records or audit trails of its credit rating activities as required by those provisions.

| 2. | The credit rating agency infringes Article 6(2), in conjunction with the first paragraph of point 8 of Section B of Annex I, by not keeping the records or audit trails referred to in point 7 of that Section at its premises for at least five years or by not making available those records or audit trails to ESMA upon request. |
| --- | --- |

2.

The credit rating agency infringes Article 6(2), in conjunction with the first paragraph of point 8 of Section B of Annex I, by not keeping the records or audit trails referred to in point 7 of that Section at its premises for at least five years or by not making available those records or audit trails to ESMA upon request.

| 3. | The credit rating agency infringes Article 6(2), in conjunction with point 9 of Section B of Annex I, by not retaining records which set out the respective rights and obligations of the credit rating agency or the rated entity or its related third parties under an agreement to provide credit rating services for the duration of the relationship with that rated entity or its related third party. |
| --- | --- |

3.

The credit rating agency infringes Article 6(2), in conjunction with point 9 of Section B of Annex I, by not retaining records which set out the respective rights and obligations of the credit rating agency or the rated entity or its related third parties under an agreement to provide credit rating services for the duration of the relationship with that rated entity or its related third party.

| 4. | The credit rating agency infringes Article 11(2) by not making available the required information or by not providing that information in the required format as referred to in that paragraph. |
| --- | --- |

4.

The credit rating agency infringes Article 11(2) by not making available the required information or by not providing that information in the required format as referred to in that paragraph.

| 5. | The credit rating agency infringes Article 11(3), in conjunction with point 2 of Part I of Section E of Annex I, by not providing to ESMA a list of its ancillary services. |
| --- | --- |

5.

The credit rating agency infringes Article 11(3), in conjunction with point 2 of Part I of Section E of Annex I, by not providing to ESMA a list of its ancillary services.

| 6. | The credit rating agency infringes the second subparagraph of Article 14(3) by not notifying ESMA of any material changes to the conditions for initial registration in accordance with that subparagraph. |
| --- | --- |

6.

The credit rating agency infringes the second subparagraph of Article 14(3) by not notifying ESMA of any material changes to the conditions for initial registration in accordance with that subparagraph.

| 7. | The credit rating agency infringes Article 23b(1) by providing incorrect or misleading information in response to a simple request for information pursuant to Article 23b(2) or in response to a decision requiring for information pursuant to Article 23b(3). |
| --- | --- |

7.

The credit rating agency infringes Article 23b(1) by providing incorrect or misleading information in response to a simple request for information pursuant to Article 23b(2) or in response to a decision requiring for information pursuant to Article 23b(3).

| 8. | The credit rating agency infringes point (c) of Article 23c(1) by providing incorrect or misleading answers to questions asked pursuant to that point. |
| --- | --- |

8.

The credit rating agency infringes point (c) of Article 23c(1) by providing incorrect or misleading answers to questions asked pursuant to that point.

III.   Infringements related to disclosure provisions

| 1. | The credit rating agency infringes Article 6(2), in conjunction with point 2 of Section B of Annex I, by not disclosing to the public the names of the rated entities or related third parties from which it receives more than 5 % of its annual revenue. |
| --- | --- |

1.

The credit rating agency infringes Article 6(2), in conjunction with point 2 of Section B of Annex I, by not disclosing to the public the names of the rated entities or related third parties from which it receives more than 5 % of its annual revenue.

| 2. | The credit rating agency infringes Article 6(2), in conjunction with the second part of the third paragraph of point 4 of Section B of Annex I, by not disclosing in the final rating report an ancillary service provided for the rated entity or any related third party. |
| --- | --- |

2.

The credit rating agency infringes Article 6(2), in conjunction with the second part of the third paragraph of point 4 of Section B of Annex I, by not disclosing in the final rating report an ancillary service provided for the rated entity or any related third party.

| 3. | The credit rating agency infringes Article 8(1) by not disclosing to the public the methodologies, models or key rating assumptions it uses in its credit rating activities as described in point 5 of Part I of Section E of Annex I. |
| --- | --- |

3.

The credit rating agency infringes Article 8(1) by not disclosing to the public the methodologies, models or key rating assumptions it uses in its credit rating activities as described in point 5 of Part I of Section E of Annex I.

| 4. | The credit rating agency infringes point (a) of Article 8(6), where methodologies, models or key rating assumptions used in credit rating activities are changed, by not disclosing immediately, or by disclosing and not using the same means of communication as used for the distribution of the affected credit ratings, the likely scope of affected credit ratings. |
| --- | --- |

4.

The credit rating agency infringes point (a) of Article 8(6), where methodologies, models or key rating assumptions used in credit rating activities are changed, by not disclosing immediately, or by disclosing and not using the same means of communication as used for the distribution of the affected credit ratings, the likely scope of affected credit ratings.

| 5. | The credit rating agency infringes Article 10(1) by not disclosing on a non-selective basis or in a timely manner a decision to discontinue a credit rating, including full reasons for the decision. |
| --- | --- |

5.

The credit rating agency infringes Article 10(1) by not disclosing on a non-selective basis or in a timely manner a decision to discontinue a credit rating, including full reasons for the decision.

| 6. | The credit rating agency infringes Article 10(2), in conjunction with point 1 or 2, the first paragraph of point 4 or point 5, of Part I of Section D of Annex I, or Part II of Section D of Annex I, by not providing the information as required by those provisions when presenting a rating. |
| --- | --- |

6.

The credit rating agency infringes Article 10(2), in conjunction with point 1 or 2, the first paragraph of point 4 or point 5, of Part I of Section D of Annex I, or Part II of Section D of Annex I, by not providing the information as required by those provisions when presenting a rating.

| 7. | The credit rating agency infringes Article 10(2), in conjunction with point 3 of Part I of Section D of Annex I, by not informing the rated entity at least 12 hours before publication of the credit rating. |
| --- | --- |

7.

The credit rating agency infringes Article 10(2), in conjunction with point 3 of Part I of Section D of Annex I, by not informing the rated entity at least 12 hours before publication of the credit rating.

| 8. | The credit rating agency infringes Article 10(3) by not ensuring that rating categories that are attributed to structured finance instruments are clearly differentiated using an additional symbol which distinguishes them from rating categories used for any other entities, financial instruments or financial obligations. |
| --- | --- |

8.

The credit rating agency infringes Article 10(3) by not ensuring that rating categories that are attributed to structured finance instruments are clearly differentiated using an additional symbol which distinguishes them from rating categories used for any other entities, financial instruments or financial obligations.

| 9. | The credit rating agency infringes Article 10(4) by not disclosing its policies or procedures regarding unsolicited credit ratings. |
| --- | --- |

9.

The credit rating agency infringes Article 10(4) by not disclosing its policies or procedures regarding unsolicited credit ratings.

| 10. | The credit rating agency infringes Article 10(5) by not providing the information as required by that paragraph when issuing an unsolicited credit rating or by not identifying an unsolicited credit rating as such. |
| --- | --- |

10.

The credit rating agency infringes Article 10(5) by not providing the information as required by that paragraph when issuing an unsolicited credit rating or by not identifying an unsolicited credit rating as such.

| 11. | The credit rating agency infringes Article 11(1) by not fully disclosing or immediately updating information relating to the matters set out in Part I of Section E of Annex I. |
| --- | --- |

11.

The credit rating agency infringes Article 11(1) by not fully disclosing or immediately updating information relating to the matters set out in Part I of Section E of Annex I.

ANNEX IV

List of the coefficients linked to aggravating and mitigating factors for the application of Article 36a(3)

The following coefficients shall be applicable in a cumulative way to the basic amounts referred to in Article 36a(2) on the basis of each of the following aggravating and mitigating factors:

I.   Adjustment coefficients linked to aggravating factors

| 1. | If the infringement has been committed repeatedly, for every time it has been repeated, an additional coefficient of 1,1 shall apply. |
| --- | --- |

1.

If the infringement has been committed repeatedly, for every time it has been repeated, an additional coefficient of 1,1 shall apply.

| 2. | If the infringement has been committed for more than six months, a coefficient of 1,5 shall apply. |
| --- | --- |

2.

If the infringement has been committed for more than six months, a coefficient of 1,5 shall apply.

| 3. | If the infringement has revealed systemic weaknesses in the organisation of the credit rating agency, in particular in its procedures, management systems or internal controls, a coefficient of 2,2 shall apply. |
| --- | --- |

3.

If the infringement has revealed systemic weaknesses in the organisation of the credit rating agency, in particular in its procedures, management systems or internal controls, a coefficient of 2,2 shall apply.

| 4. | If the infringement has had a negative impact on the quality of the ratings rated by the credit rating agency concerned, a coefficient of 1,5 shall apply. |
| --- | --- |

4.

If the infringement has had a negative impact on the quality of the ratings rated by the credit rating agency concerned, a coefficient of 1,5 shall apply.

| 5. | If the infringement has been committed intentionally, a coefficient of 2 shall apply. |
| --- | --- |

5.

If the infringement has been committed intentionally, a coefficient of 2 shall apply.

| 6. | If no remedial action has been taken since the breach has been identified, a coefficient of 1,7 shall apply. |
| --- | --- |

6.

If no remedial action has been taken since the breach has been identified, a coefficient of 1,7 shall apply.

| 7. | If the credit rating agency’s senior management has not cooperated with ESMA in carrying out its investigations, a coefficient of 1,5 shall apply. |
| --- | --- |

7.

If the credit rating agency’s senior management has not cooperated with ESMA in carrying out its investigations, a coefficient of 1,5 shall apply.

II.   Adjustment coefficients linked to mitigating factors

| 1. | If the infringement relates to a breach listed in Section II or III of Annex III and has been committed for fewer than 10 working days, a coefficient of 0,9 shall apply. |
| --- | --- |

1.

If the infringement relates to a breach listed in Section II or III of Annex III and has been committed for fewer than 10 working days, a coefficient of 0,9 shall apply.

| 2. | If the credit rating agency’s senior management can demonstrate that they have taken all the necessary measures to prevent the infringement, a coefficient of 0,7 shall apply. |
| --- | --- |

2.

If the credit rating agency’s senior management can demonstrate that they have taken all the necessary measures to prevent the infringement, a coefficient of 0,7 shall apply.

| 3. | If the credit rating agency has brought quickly, effectively and completely the infringement to ESMA’s attention, a coefficient of 0,4 shall apply. |
| --- | --- |

3.

If the credit rating agency has brought quickly, effectively and completely the infringement to ESMA’s attention, a coefficient of 0,4 shall apply.

| 4. | If the credit rating agency has voluntarily taken measures to ensure that similar infringement cannot be committed in the future, a coefficient of 0,6 shall apply. |
| --- | --- |

4.

If the credit rating agency has voluntarily taken measures to ensure that similar infringement cannot be committed in the future, a coefficient of 0,6 shall apply.

---