EUROPEAN COMMISSION Brussels, 14.3.2018 SWD(2018) 77 final COMMISSION STAFF WORKING DOCUMENT



IMPACT ASSESSMENT

Accompanying the document PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EC) No 810/2009 establishing a Community Code on Visas

(Visa Code) {COM(2018) 252 final}

{SWD(2018) 78 final}



Table of contents 1.Introduction: Political and legal context 1.1.EU common visa policy 1.2.Legislative package 2014 1.3.Broader policy context 1.4.Consequences for the common visa policy 1.5.Scope of the initiative 2.Problem definition 2.1.What are the problems? 2.1.1. Insufficient financial resources to support visa processing 2.1.2. Repeated visa procedures for regular travellers 2.1.3. Insufficient levels of return of irregular migrants to some countries of origin 2.2.What are the problem drivers? 2.2.1. Insufficient financial resources 2.2.2. Repeated visa procedures 2.2.3. Return of irregular migrants 2.3.How will the problem evolve? 2.3.1. Insufficient financial resources 2.3.2. Repeated visa procedures

2.3.3. Return of irregular migrants 3.Why should the EU act? 3.1.Legal basis 3.2.Subsidiarity: Necessity of EU action 3.3.Subsidiarity: Added value of EU action 4.Objectives: What is to be achieved? 4.1.General objectives 4.2.Specific objectives 5.What are the available policy options? 5.1.What is the baseline from which options are assessed? 5.1.1. Insufficient financial resources 5.1.2. Repeated visa procedures 5.1.3. Return of irregular migrants 5.2.Description of the policy options 5.2.1. Insufficient financial resources 5.2.2. Repeated visa procedures 5.2.3. Return of irregular migrants 5.3.Options discarded at an early stage 6.What are the impacts of the policy options? 6.1.Methodology

6.1.1. Possible impacts 6.1.2. Available data 6.1.3. Qualitative assessment method 6.2.Assessment of policy options 6.2.1. Insufficient financial resources 6.2.2. Repeated visa procedures 6.2.3. Return of irregular migrants 6.3.Sensitivity analysis 7.How do the options compare? 7.1.Insufficient financial resources 7.2.Repeated visa procedures 7.3.Return of irregular migrants 8.Preferred options 8.1.Insufficient financial resources 8.2.Repeated visa procedures 8.3.Return of irregular migrants 8.4.REFIT (simplification and improved efficiency) 9.How will actual impacts be monitored and evaluated? Annex 1: Procedural information Annex 2: Stakeholder consultation

Annex 3: Who is affected and how? Annex 4: Update on the implementation of the Visa Code Annex 5: Visa fee Annex 6: Inbound tourism to the EU/Schengen countries Annex 7: Elements carried over from the 2014 proposal Annex 8: Sensitivity analysis of MCA Glossary Term or acronym Meaning or definition EES Entry-Exit System ESP external service provider (contracted by Member States to assist consulates with certain tasks in the visa application procedure, notably the collection of applications, of the visa fee and of biometric identifiers as well as the return of travel documents to visa applicants) ETIAS European Travel Information and Authorisation System eu-LISA European Agency for the operational management of large-scale IT systems in the area of freedom, security and justice LSC Local Schengen Cooperation (regular meetings of Member States' consuls in a certain location, chaired by EU Delegation) MEV multiple-entry visa (short-stay visa allowing for an unlimited number of entries to the Schengen area during its period of validity and respecting the overall maximum period of stay, i.e. 90 days in any 180-day period) MEV cascade agreed approach of how many previous visas/trips the applicant has to prove to qualify for a long-validity MEV and how the length of validity for each subsequent visa would increase Schengen evaluation periodical evaluations of Member States on the application of the Schengen acquis in the field of the common visa policy, in accordance with Council Regulation (EU) No 1053/2013 Schengen States EU Member States applying the common visa policy in full (all EU Member States with the exception of Bulgaria, Croatia, Cyprus, Ireland, Romania and the United Kingdom) as well as the Schengen associated countries: Iceland, Liechtenstein, Norway and Switzerland SEV single-entry visa service fee fee paid to the ESP for collecting the application and biometric identifiers SIS Schengen Information System TCN third-country national TFEU Treaty on the Functioning of the European Union VAC visa application centre (operated by an ESP) VFA Visa Facilitation Agreement VIS Visa Information System (database of all visa applications and decisions on those applications, including photograph and fingerprints of applicants) visa short-stay visa as defined in Article 2 (2)(a) of the Visa Code (authorising its holder to stay in the Schengen area for up to 90 days within any 180-day period) visa fee fee paid to the consulate for processing the visa application VIS Regulation Regulation (EC) No 767/2008 of the European Parliament and the Council of 9 July 2008 concerning the Visa Information System (VIS) and the exchange of data between Member States on short-stay visas (VIS Regulation) Visa Code Regulation (EC) No 810/2009 of the European Parliament and the Council of 13 July 2009 establishing a Community Code on Visas (Visa Code) Visa Code recast proposal 2014 proposal to recast the Visa Code (COM(2014) 164 final) Visa Regulation Council Regulation (EC) No 539/2001 of 15 March 2001 listing the third countries whose nationals must be in possession of visas when crossing the external borders and those whose nationals are exempt from that requirement VWA Visa Waiver Agreement 2014 Impact Assessment Impact Assessment accompanying the Visa Code recast proposal (SWD(2014) 68 final)



1.Introduction: Political and legal context 1.1.EU common visa policy The abolition of checks at internal borders of the states forming part of the Schengen area is one of the most valued achievements of EU integration. The common visa policy for short-stay visas is one of the Schengen area's "flanking measures" (together with the harmonisation of the external border controls, enhanced cross-border police cooperation, and the creation of the Schengen Information System (SIS)) accompanying the establishment of a common area without checks at internal borders. The visa policy serves various objectives, in particular preventing irregular immigration as well as safeguarding public order and security. In general a visa requirement is accepted worldwide as a tool for countries (or groups of countries such as the EU) to tackle different kinds of migration and security risks. That is the reason why the EU will maintain visa requirements for citizens of a number of third countries. At the same time the visa policy also aims at facilitating travel to the EU for legitimate and bona fide travellers, notably by exempting nationals of countries with lower migratory or security risks from the visa requirement and by easing visa procedures wherever possible. In that respect the visa policy also plays a role in supporting tourism and trade, and thus boosting growth in the EU. The common visa policy is a set of harmonised rules governing different aspects: -the Visa Regulation (539/2001) laying down the common "visa lists" of countries whose nationals require a visa to travel to the EU and those who are exempt from that requirement; -the Visa Code (Regulation 810/2009) establishing the procedures and conditions for issuing short-stay visas;

-Regulation 1683/95 laying down a uniform format for the visa sticker; and -the VIS Regulation (767/2008) setting up the Visa Information System (VIS), in which all visa applications and Member States' decisions are recorded, including applicants personal data, photographs and fingerprints. Moreover the EU has concluded a number of Visa Facilitation Agreements (VFA) and Visa Waiver Agreements (VWA) with third countries which implement or derogate from those common rules. This set of rules allows the Schengen States to mutually recognise visas issued by each of them. The decision to issue a visa is a decision taken by national authorities, which should take into account not only their own interest but that of all Schengen States. Therefore, the holder of a visa issued by Schengen States' individual consulates, as a general rule, is entitled to circulate in the entire Schengen area. Visas are in principle not issued at the external borders or within the Schengen area but visa applications have to be lodged before travelling to the EU at one of the Member States' consulates in third countries. Rules of competence define which Member State is entitled to examine and decide those applications, namely the Member State which is the applicant's only or main destination. 1.2.Legislative package 2014 The Visa Code is a core element of the common visa policy: it establishes harmonised procedures and conditions for processing visa applications and issuing visas. It entered into force on 5 April 2010, with the overarching objectives of facilitating legitimate travel and tackling irregular immigration, enhancing transparency and legal certainty, strengthening procedural guarantees and reinforcing equal treatment of visa applicants. The Visa Code required the Commission to submit the European Parliament and the Council an evaluation of its application two years after all the provisions of the Regulation have become applicable. On the basis of that evaluation, an in-depth impact assessment was carried out, focussing on three broad problem areas: 1.the lengthy, costly and cumbersome nature of visa procedures for applicants; 2.the insufficient geographical coverage in visa processing; 3.the lack of a visa allowing travellers to stay more than 90 days in the Schengen area. On 1 April 2014 the Commission adopted two legislative proposals: the Visa Code recast proposal addressing the first two problem areas and the touring visa proposal addressing the third one. The overall aims of this package were to foster travel to the EU through facilitations in the visa policy – and thereby to contribute to tourism, trade, growth and employment in the EU – and to harmonise implementation of the common rules. As regards the visa procedures, the Visa Code recast proposal included a number of substantial facilitations for applicants: longer timeframe to lodge an application, abolition of the requirement to present a travel medical insurance, shorter decision deadlines as well as less documentation and easier access to multiple-entry visas (MEV) for frequent travellers. Some of those facilitations were largely accepted by the co-legislators while others were watered down or rejected in the course of negotiations by the co-legislators. As regards the geographical coverage the Commission proposed that the Member State(s) present in one location would mandatorily represent all Member States not present, if no representation agreements were entered into. This proposal, while supported by the European Parliament, was widely rejected by Member States, arguing that it would put disproportionate burden on Member States with a large consular network while other Member States would be tempted to close smaller consular sections relying on others. In the meantime the number of representation agreements (voluntarily) concluded between Member States has further increased and Member States have opened visa application centres (VAC) in locations where they were not present. Therefore this problem is less pressing today than it was in 2014, and will not be dealt with in this impact assessment. Negotiations between the European Parliament and the Council on the Visa Code recast proposal ended in a deadlock by end 2016. On the one hand, the Council generally maintained a very restrictive approach during the negotiations by rejecting essential parts intended to modernise and facilitate the visa application procedure whereas the European Parliament was overall quite supportive of the Commission's proposal with regard to the procedural facilitations. On the other hand and more importantly, both institutions presented amendments that went far beyond the Commission's proposal: the Council introduced a link between third countries' cooperation on readmission and visa facilitation, while the EP proposed to create a "humanitarian visa" in the Visa Code. This latter suggestion was opposed by both the Council and the Commission as the Visa Code covers visas for short stays only, a position which was confirmed by the ECJ ruling of 7 March 2017. This stalemate blocked all further attempts to make progress, prompting the Commission to announce withdrawal of the proposal in the Commission Work programme for 2018. As regards the lack of a visa for longer stays, the Commission's touring visa proposal was meant to fill the legal gap between short-stay visas and long-stay residence and encountered support in the European Parliament and some Member States, but did not gather a qualified majority in Council. Some Member States rejected the proposal, expressing doubts about its necessity and legal basis and fearing possible abuse. The Commission has therefore also announced the withdrawal of the proposal in the Commission Work Programme for 2018, as there currently does not seem to be sufficient political willingness to address the problem. 1.3.Broader policy context In the past four years (since the Commission proposed the Visa Code recast), the EU has experienced unprecedented levels of refugees and irregular migration into the EU and increased threats to its internal security, including a number of terror attacks. This led the EU to launch a fundamental overhaul of its migration and security policies. Many of these new initiatives have been successfully adopted or implemented and others are currently in the legislative procedure. As a result the EU information systems for border management and security have been considerably strengthened and new ones are being developed. In particular the co-legislators have decided to introduce an Entry-Exit System (EES) to better manage and facilitate third-country nationals' crossing the Schengen area's external borders. Among other objectives, it will allow Member States to monitor irregular stays in the EU and identify overstayers. This will contribute to strengthening the common visa policy, as it will enable consulates to better assess applicants' lawful use of previous visas. The Commission also proposed a European Travel Information and Authorisation System (ETIAS) which will screen visa-exempt third-country nationals against security and migration risks before they start their travel to the EU. This initiative is expected to be adopted in the coming months. Contrary to the current visa application procedure, this check will entirely rely on digital solutions, notably allowing applicants to apply online at an EU portal.

Finally the Commission has recently adopted the so-called interoperability proposal to better link the various EU information systems for security, border and migration management and improve their use by border guards, migration and asylum officials and police officers to ensure they have the right information at the right time. In the past years the EU also stepped up its activities to support Member States in returning irregular migrants to their countries of origin, including by overcoming third countries' reluctance to cooperate with Member States in readmitting their own citizens. The 2015 Action Plan on Return called for all relevant policies to be used as incentives for the partner country's willingness to cooperate on readmission, and for further exploration of visa policy as an important leverage in that context. In June 2016 the Commission adopted the Partnership Framework Communication in which it stated that the visa policy can be a very powerful element in the discussions with third countries about cooperation on migration. The European Council conclusions of 22 and 23 June 2017 called for further efforts to achieve real progress in return and readmission policy, using all possible levers, including by reassessing visa policy towards third countries. 1.4.Consequences for the common visa policy In the last years, apart from the strengthening of the visa waiver suspension mechanism (allowing the EU to react quickly to substantial increases of migratory or security risks resulting from visa-free travel by temporarily suspending the visa exemption for one or several nationalities) and the exemption from the visa requirement to the citizens of certain third countries, the common visa policy has not been subject to a fundamental review or overhaul. The overall integrity of the visa processing by Member States has not been fundamentally called in question in the past few years. Yet there is a growing need to ensure that visa policy matches the present and future challenges and can make a more important contribution to the objectives of the EU's migration and security policies. The Commission, in its Communication on the Delivery of the European Agenda on Migration, announced that it would come forward with its ideas on how to modernise the EU's common visa policy for both the short and longer term. The main objectives of this review are to bring the visa policy up to speed with the development of new border management systems, to better use visa policy in its cooperation with third countries, and to ensure a better balance between migration and security concerns, economic considerations and general external relations. The Commission Work Programme 2018 confirmed the Commission's intention to withdraw the current Visa Code recast and touring visa proposals and to propose a targeted revision of the Visa Code. The further development of the Visa Information System (VIS) and the alignment of the visa policy's legal framework with developments on border management instruments and interoperability objectives will be the subject of a separate proposal and impact assessment. 1.5.Scope of the initiative While migration and security related objectives have become more important than in the past, one should not lose sight of the fact that the vast majority of visa applicants are not posing any security and/or migratory threat to the EU. Some of the elements of the first problem area (linked to the visa procedure) tackled by the recast proposal and the 2014 Impact Assessment remain valid in the current migratory and security context. The stakeholder and open public consultations carried out for this Impact Assessment have confirmed the importance of those issues for stakeholders and visa applicants. The targeted revision of the Visa Code will have a twofold purpose: 1.Firstly it should preserve some of the elements of the 2014 recast proposal which remain relevant in the current context and on which compromise seems possible. These elements are either linked to the facilitation of visa procedures or to clarification and streamlining of existing provisions. Most of them concern rather procedural matters which do not leave much room for considering different policy options and do therefore not need to be examined in detail in this impact assessment. The items that will be carried over are listed in annex 7, together with a short description of their expected impacts as well as their potential for simplification and cost reduction. The most important element of facilitation in the 2014 proposal was the proposed rules on the increased issuing of multiple-entry visas with long validity to regular travellers. As different approaches are possible and were discussed during the legislative procedure and the stakeholder consultations, it is useful to examine the problem and different policy options in a more detailed analysis in this report. 2.Secondly it should address new elements that have come up in the negotiations between the co-legislators on the Visa Code recast proposal and have been highlighted in the Commission's Communication on the Delivery of the European Agenda on Migration as well as in the consultations carried out by the Commission. This concerns the amount of the visa fee and the financing of Member States' visa processing activities, as well as the question of establishing a legal link between visa policy and third countries' cooperation on readmission of irregular migrants. This Impact Assessment report will therefore focus on the following problem areas: -the need for sufficient financial resources to support Member States' visa processing; -the divergent practices among Member States in issuing multiple-entry visas and the resulting repeated visa procedures for regular travellers; -the role that visa policy can play as leverage in the EU's readmission policy. The third area differs from the two others in that the source of the problem originates in the area of return, and not in visa policy, and the affected groups and stakeholders as well as the consequences of the problem are very different. Nevertheless the two policy areas both have a strong external relations dimension and can be considered as foreign policy tools. A link can be established to obtain better leverage vis-à-vis third countries, as shown below in the baseline scenario (section 5.1.3) and the policy options (section 5.2.3). A number of issues raised in the stakeholder consultation (or the 2014 evaluation) are not addressed in this report, such as the use and monitoring of external service providers (ESP), new IT solutions for a full digitalisation of the visa application process, and the current differentiation between visa-free and visa-required countries. The scope of stakeholder consultation was deliberately broader, as it was also supposed to feed into the policy communication that will accompany this initiative. Some issues, such as lodging and decision-making deadlines as well as monitoring of ESP, are covered by the carry-overs from the 2014 proposal (see annex 7). Issues regarding visa requirements concern the Visa Regulation (539/2001) and will be addressed in the communication. On full digitalisation of visa procedures the communication will announce the launch of feasibility studies that could feed in future legislative initiatives. 2.Problem definition 2.1.What are the problems? 2.1.1.Insufficient financial resources to support visa processing

The number of visa applications processed by Member States has increased considerably over the last eight years since the Visa Code entered into force. While Member States processed 10.2 million visa applications worldwide in 2009, this figure rose by almost 70% to a peak of 17.3 million in 2013, and then dropped to 15.2 in 2016, which still represents an increase by more than 50% over 2009. According to preliminary figures it is estimated that in 2017 the number of visa applications will have increased again to around 16 million. At the same time the financial resources available to Member States' visa authorities and consulates for visa processing (per application) have remained static or even diminished due to budget cuts following the economic crisis. The visa fee of EUR 60 defined by the Visa Code should be the main financial source to cover the costs of visa processing. However, in a 2016 questionnaire survey as well as in the stakeholder consultation many Member States have affirmed (and some have presented calculations showing) that the current fee does not cover their administrative expenses, notably in terms of staffing (both expatriate and locally hired staff), premises, equipment, development and maintenance of IT systems, printing and secure management of visa stickers. This means that Member States have to cover the funding gap from their general administrative budget. Scarce resources for visa processing have prompted Member States to use outsourcing of certain tasks to ESPs to alleviate the workload for their consulates. However, due to increasing volumes of applications outsourcing did not lead to sufficient cost savings. Member States were forced to take more drastic measures, such as cutting staff in consulates, reducing training and shifting more tasks from expatriate to local staff. As shown by several recent Schengen evaluation reports and LSC reports, understaffing (especially as regards expatriate staff which is by far more costly) and lack of appropriate training are recurrent problems. Consulates often lack well-trained experts with specific knowledge (e.g. document security experts). Staff shortages in consulates' visa sections directly affect the quality and integrity of the examination of visa applications and thus put at risk the screening function of visa procedures, with possible negative consequences for migratory and security threats. Some Member States have, as a result of short financial resources, started closing consular/visa sections or refusing representation of other Member States in certain locations. Those measures create problems for visa applicants, as it means that they have to travel to other countries (than those they live in) to apply for a visa. Insufficient financial and human resources also lead to long waiting times and deadlines in processing the visa applications, especially in peak seasons when Member States do not always have the necessary resources to dispatch temporary staff reinforcements. This is confirmed by many complaints received by the Commission as well as the open stakeholder consultation. The fact the length of the procedure was rated by respondents in the open consultation as the most difficult aspect of the visa procedure (32.6% selected it as the most difficult, 27.5% as the second most difficult element). The 2013 European Commission's study on the economic impact of short stay visa facilitation highlights that the most important source markets are late-booking markets. The lengthy visa procedures therefore deter tourist from travelling to Europe in the first place, leading to considerable revenue losses for the European tourism industry. According to a European Tour Operators Association (ETOA) report, it is estimated that 21% of potential tourists from emerging markets abandon their plans to travel to Europe due to slow processing of visas. The lack of sufficient revenues supporting visa processing thus undermines the integrity of the visa processing as well as the objective of providing fast and client-friendly procedures to visa applicants. 2.1.2.Repeated visa procedures for regular travellers One of the main problems already identified in great detail in the 2014 Impact Assessment is the lengthy and cumbersome visa procedure. This is particularly true for regular travellers who visit the EU at least once a year for business trips, to attend conferences, to meet family or friends, or as tourists. In the stakeholder consultation, associations representing business travellers, maritime transport, performing arts and tourism were particularly in favour of reducing administrative burdens for frequent visitors. In the open public consultation 84% of individual respondents who travel to the Schengen area at least twice per year stated that they had not received any facilitations during the visa application process despite repeated visa applications. The Visa Code allows the issuing of multiple-entry visas (MEV) with a validity of up to five years. However, experience gathered in Schengen evaluations and in LSC since the start of application of the Visa Code shows that this possibility is rarely used. Member States (at central or consulate level) have a restrictive policy for issuing visas with a long validity; as a maximum many consulates are willing to issue a visa with a validity of one year, with a few rare exceptions. There are several reasons for the reluctance to Member States to issue MEV with a long validity: long-established practices to issue visas mainly for the planned trip; consulates' apprehension that visas with long validity increase migratory risk; national requirements for consulates to consult central authorities before issuing visas with long validity; and the unclear legal basis (see below, section 2.2.2). Moreover, there are also wide variations between Member States' practices when it comes to the length of validity of these MEV. The table below shows the MEV-issuing practice of three Schengen consulates in China visited as part of Schengen evaluations in 2016 and 2017. It shows, in two of the three cases, the very low share of MEV with a validity of one year or more among the total of visas issued (between 1 and 1.5%). At the same time it shows the wide variety of practices among Member States. These figures should be read against the background of the rapidly improving socio-economic situation of Chinese applicants and the rather low migratory risk from China, compared with other third countries. Share of total visas issued Member State 1 Member State 2 Member State 3 MEV 1 year 0.99% 15.4% 0.87% MEV 2 years 0.24% 0.57% 0.09% MEV 3 years 0.19% 0.64% 0.00% MEV 4 years - 0.68% - MEV 5 years 0.04% 2.13% - Total MEV 1 year or more 1.45% 19.4% 0.97% By way of comparison, the standard validity of visitor visas issued by the United States and Canada in China is 10 years (unless the passport validity is shorter than that, in which case the visa validity is adapted to that of the passport). These countries argue that the risk of irregular migration and overstay does not increase by issuing visas with longer validity, while security checks in databases can continuously be performed by the systems during the validity of the visa (leading to its revocation where appropriate). The low share of long-validity MEV – combined with cumbersome and costly visa procedures – affect the EU's economy negatively. It prevents spontaneous business or leisure travel by affluent travellers notably from countries such as China, India, or the Gulf region, who tend to increasingly take last-minute decisions on travel. Such persons who have not yet been granted a MEV with long validity after one or two trips to the EU with single-entry visas might turn their attention towards countries which are more ready to grant them visitor visas with long validity (e.g. United States, Canada, New Zealand). Business people, tourists as well as people travelling for medical treatment will thus direct their investment and spending to countries outside of the EU. That will carry negative consequences for the EU's tourism industry, retail trade, the health sector and the economy as a whole. While it is very difficult to estimate the overall scale of the economic loss to the EU as a result from heavy and repetitive visa procedures, the fact as such was confirmed by stakeholders during the targeted and the open public consultations. The tourism industry associations highlighted the role of outbound travel agencies, who have considerable influence in steering business towards markets where visa procedures are perceived to be less cumbersome. In the open consultation 22% of individual respondents who offered an answer stated they would be deterred from visiting the Schengen area again due to their experience with the visa procedure. The EU Member States are among the world's leading tourist destinations and the tourism and travel industry plays a key role in the European economy. Currently it contributes approximately 10% to the EU's GDP and it contributed to the labour market by 11.6% in 2016. Visa-required countries include those with the highest increase in international tourism expenditure in the first half of 2017 (China: +19%, Russia: + 27% after some years of declines, Thailand: +8%). However, the low share of MEV among the total number of visas issued unnecessarily restrains further growth of the industry and limits its global competitiveness. Another consequence of the low volume of MEV with long validity is that frequent travellers have to apply over and over again which represents an administrative burden not only for the applicants, but also for the consulates in particular in locations with very high volumes of applications. This constitutes a strain for the consulates' human resources which are already stretched as a result of the limited financial resources (see above, section 2.1.1). Finally, the varying practices of Member States with regard to issuing MEV with long validity encourage applicants to disregard the rules of Member States' competence for issuing visas and apply with those Member States where they expect the most favourable outcome (so called "visa shopping"). This means that applicants are more likely to provide fraudulent information or documents with regard to their travel destination and/or purpose. Visa shopping is a form of fraud, and even though it is difficult to determine the extent of the phenomenon, Member States confirm that visa shopping is a serious issue and occurs frequently. Online fora in third countries show a vivid exchange among applicants on which consulates issue visas with a long validity. Divergence in issuing long-validity MEV is one of the strongest factor for visa shopping and also leads to accusations against some Member States of "unfair competition" to attract tourists and businesspeople and of not respecting the common rules. 2.1.3.Insufficient levels of return of irregular migrants to some countries of origin

In the wake of the migration crisis of 2015 the numbers of irregular migrants in the EU expected to return to their home country has grown considerably. These numbers comprise people found to be staying illegally in the EU, persons having received negative asylum decisions as well as those for whom return decisions were issued. According to Eurostat data, between 2011 and 2016 over 5 million third country nationals were found to be illegally present in the territory of the EU Member States, out of which just over 3 million in 2015 and 2016 alone. As regards asylum seekers, in 2015 and 2016 a total of 718 665 third country nationals received first-instance negative asylum decisions, with an additional 412 330 having received negative decisions in the first three quarters of 2017. In the six-year period of 2011-2016, 2 891 260 persons were ordered to leave, out of which 1 118 385 were returned to third countries. This means that 1 772 875 persons were not returned, out of which 600 925 in 2015-2016 alone. It can be assumed that the majority of these persons continue to remain in the territory of the EU Member States. Irregular migrants staying in the territory of the Member States and waiting for return to their home country – whether refused asylum seekers, overstayers or other third-country nationals who do not (or no longer) fulfil the conditions of entry and stay – remain in legal limbo: not having an authorisation to stay, they do not have the right to work legally, and thus do not benefit from the rights and legal protection available to legal migrants having access to employment. They cause high costs for Member States in terms of housing, food, medical expenses and related expenses, as well as administrative costs. When return is not immediately possible, certain basic rights are provided under the Return Directive, such as emergency healthcare and access to education for children. Many Member States go beyond the basic requirements and continue to provide housing, healthcare, as well as adult education even after a return decision has been taken, to reduce the likelihood of absconding. Irregular migrants can easily become prey of human traffickers, as well as be subject to exploitation. Irregular migrants who pose a risk of absconding can be detained by the EU Member States pending preparation of return for up to 18 months. Detention of irregular migrants is not only a serious restriction of freedom for the migrants themselves, but also very costly for the Member States. Due to high judicial requirements and the limited detention capacity in the Member States, the threshold for detention of irregular migrants is set very high. Alternatives to detention, such as reporting obligations, seizing travel documents and/or valuables, requirement to reside at a specified location, are known to be inefficient in preventing absconding. This increases the risk of secondary movements of irregular migrants and abuse of Member States' immigration systems. Secondary movements increase the administrative burden of Member States in terms of identification of apprehended irregular migrants, administrative and/or judicial proceedings necessary to reach a decision on the right to stay in a given Member State, appeal procedures, possible detention, preparation of return etc. Finally the failure to efficiently return migrants to their home country is also an incentive for further irregular migration. The dangers along the road to Europe are often disregarded by irregular migrants because they know that the risk of being returned once in Europe is rather low. Migrants would reconsider whether it is worthwhile to invest their own and/or family savings to enter Europe if the likelihood of being returned was significant. 2.2.What are the problem drivers? 2.2.1.Insufficient financial resources One of the main drivers for the insufficient financial resources for the purpose of visa processing is that the standard visa fee of EUR 60 has not changed since 2006, i.e. even before the entry into force of the Visa Code in 2009. While the Visa Code provides that it "shall be revised regularly in order to reflect the administrative costs", it does not define a specific procedure for revising the fee. Currently the only possibility to change it is to amend the Visa Code. During the negotiations on the Visa Code recast proposal several Member States were in favour of reviewing urgently the visa fee. This issue was brought up to Coreper in September 2015, which invited the Commission to carry out an assessment of administrative costs of the processing of visa applications. Following up this request, the Commission carried out a survey among Member States to assess the cost of processing a visa application and what methodology should be followed to make such a calculation. In the stakeholder consultation, almost all Member States were of the view that the cost of processing a visa application exceeds the amount of the fee and that the visa fee should be increased. However, they differed on the precise amount and whether it should be differentiated by location or validity of the issued visa. Some argued that rather than linking the visa fee to the administrative costs, a political decision should be taken to set it at a certain level. A few Member States, however, recalled that travellers' spending during their stay compensates for low revenues from the visa fee. This point of view is shared by stakeholders in the tourism and travel business, who argue that the visa fee should be seen as a marketing cost that is overcompensated not only indirectly by the economic benefit of travel and tourism to the Schengen area, but directly by the additional tax revenue that Member States derive from visitors' spending in the Schengen area. In comparison with many other countries' fees for comparable visitor visas, the EU visa fee is rather low. 2.2.2.Repeated visa procedures The main driver for and underlying cause of the repetitive visa procedures for frequent travellers and the low share of long-validity MEV is the unclear legal basis for issuing such MEVs and Member States' diverging interpretation of it. Some Member States require their consulates to consult central authorities before granting long-validity MEVs, which represents an additional burden and thus a disincentive for consulates to do so. While the Visa Code provides for the – in principle mandatory – issuing of MEV with long validity between six months and five years to bona fide regular travellers who have proven their integrity and reliability by lawfully using previous visas, this formulation of the provision allows for different interpretations. The legal basis is not very clear with regard to the conditions for issuing of long-validity MEV, the personal scope of the provision and the precise length of validity MEVs to be issued. For instance there are diverging views on how applicants are to prove the need to travel frequently or regularly (which in theory implies concrete planning and evidence of future trips), to what extent previous trips to other comparable countries (e.g. UK, US, Canada, Australia, New Zealand, Japan) can be taken into account and whether certain categories of travellers such as tourists can benefit from the provision, as they are not explicitly mentioned. Moreover there are no rules on the number of previous visas/trips that would entitle the applicant to a long-validity MEV and how fast the length of validity for each subsequent visa would increase (so called "MEV cascade"). Some Member States at central level or in individual consulates have developed such cascades (e.g. the so-called "decision protocols" of one Member State's Ministry of Foreign Affairs) leading to individual practices which only aggravate the lack of harmonisation. Additionally, it has been observed in Schengen evaluations that Member States do not always take account of visas issued by other Member States for the purpose of considering applicants as frequent travellers. The guidance provided by legislation to consulates on the issuing of MEV with long validity is therefore insufficient in several aspects. 2.2.3.Return of irregular migrants Readmission of own nationals is an obligation under international customary law, hence cooperation on return is not something that is at the will of a government. Nevertheless many third country governments are reluctant to readmit their own nationals. In the case of 80 third countries the return rates (i.e. the share of persons return to their country out of those ordered to leave EU territory) fall below the EU average return rate (46.4% in 2016). Around 700 000 persons of those found to be illegally present in the territory of EU Member States in 2016 and nearly 300 000 persons of those ordered to leave originated from countries that lie below that average return rate. The return rate as such does not fully reflect the level of cooperation with third countries, as the discrepancy between the number of persons ordered to leave and those effectively returned can also be attributed to Member States' own legal or administrative obstacles to return. Nevertheless, a comparison between the return rates to various third countries is a solid indicator of the differences in the level of cooperation on return and readmission. Return of an irregular migrant can only be enforced on condition of possession of a valid travel document. If such a document is available, no formalities or procedures with authorities of the third country of origin are necessary. A third country's cooperation is necessary, however, when no valid travel document is available to Member State's authorities and consequently the nationality of the irregular migrant has to be confirmed and a travel document issued by third country authorities. This is a widespread situation as many irregular migrants conceal or destroy their passport to prevent their return. In general, based on Member States' reports, cooperation in the return process is difficult with most third countries of origin. The authorities in the third countries concerned are not willing to cooperate efficiently in this process, hence procedures are delayed, obstacles are created, and eventually removal is postponed or avoided. The most recurrent obstacles reported were:

-requiring additional information, such as criminal records or identification documents; -requests to identify the person, as opposed to establishing his/her nationality; -failure to accept the return decision as the outcome of national procedures, and the request to reconsider the grounds for stay of the third-country nationals concerned; -lack of competence of the embassies to establish nationality and identity; -lack of capacity/willingness at the consular sections of embassies to conduct interviews with alleged nationals; -refusal to issue travel documents; -refusal to accept return flights, in particular charter flights. As regards the reasons for the lack of third countries' cooperation on return, most third countries do not provide formal/public justification, given the sensitivity of the topic. However the experience in negotiations with third countries on readmission, at EU and Member States level identified these main reasons: -public opinion in third countries remaining very hostile to cooperation on readmission with the EU; -protecting the interests of own nationals who have migrated to Member States, whether they had done so regularly or irregularly; -pressure from the diaspora – in some cases embassies/consulates have been reported to become subject to pressures, bribes or even threats by the migrants' families urging them to prevent return; -fear of the loss of remittances from migrants, which in many third countries constitute a substantial share of the GDP (even though irregular migrants represent only a fraction of the diaspora and are unlikely to be able to send significant amounts given their precarious status). 2.3.How will the problem evolve? 2.3.1.Insufficient financial resources Without any change to the current visa fee, it is very likely that the lack of financial resources will lead to further cuts to Member States' budgets for visa processing, resulting in staff shortages and the closing of visa sections. The consequences of these tendencies have been described in section 2.1.1. 2.3.2.Repeated visa procedures While some Member States have recognised the problem and have started taking action (mostly at central level) to encourage consulates to issue more long-validity visas, the awareness and the perceived need for action is not shared equally among Member States. In the absence of clear harmonised rules on the issuing of visas to regular travellers, Member States and their consulates are likely to continue to determining their own approach. Many are likely to continue to be reluctant to issue MEV with long validity, while others might continue to adopt a more open approach, depending either on economic interests and general relations with the host country or on consuls' individual assessments. Especially consulates of smaller Member States with no capacity problems because of limited numbers of applications or those who do not attract tourists do not feel the same level of pressure from central authorities, host countries, applicants, the tourism industry and business in general to issue more long-validity MEV, first because the volume of visa applications in their consulates is lower and secondly because they are less likely to be the main destination of repeated trips of the same applicant. It is therefore likely that the gap between the practices of more forthcoming and more restrictive Member States will further increase. 2.3.3.Return of irregular migrants Given the peak in asylum applications in 2015 and 2016 and the length of asylum and appeal procedures, it can be assumed with certainty that the number of migrants expected to return to their countries (and thus the scope of the problem) will grow in the coming years. On the basis of Eurostat figures it can be extrapolated that about 1.2 million refused asylum seekers will be progressively receiving enforceable return decisions in 2018-2019. Out of the 2 583 735 asylum applications made in 2015-2016, 884 655 were still pending in 2017 and could result in a high number of return decisions. The political pressure to enforce return decisions in practice will grow accordingly.

3.Why should the EU act? 3.1.Legal basis The legal basis for the common visa policy is Article 77(2)(a) TFEU. This Article empowers the Union to adopt measures concerning "the common policy on visas and other short stay residence permits". The existing Visa Code and other legislation in the field of the common visa policy have been adopted on that legal basis. 3.2.Subsidiarity: Necessity of EU action The abolition of checks at internal borders in the Schengen area requires, among other measures, a common policy on visas. The common visa lists (of countries whose nationals require visas and of those whose nationals are exempted from the visa requirement), and uniform conditions and harmonised procedures for issuing visas are pre-conditions for enabling mutual recognition of visas which allows third-country nationals legally present in one Schengen State to travel to the other Schengen State without requiring checks at internal borders. No stakeholders have so far called in question this principle. The conditions and procedures for issuing short-stay visas are established by a regulation that is directly applicable in all Member States, namely the Visa Code. The problems elaborated in the previous sections are unlikely to disappear in the near future and they are directly related to the current provisions of the Visa Code. Amendments of the Visa Code are only possible at EU level. The initiative will further develop and improve the rules in the Visa Code. The short-stay visa in principle allows its holder to circulate freely in the Schengen area, which implies the highest degree of harmonised rules that cannot be solved by Member States acting alone and can only be addressed at EU level. 3.3.Subsidiarity: Added value of EU action As described in the baseline scenario below, the continued application of the current legal framework is not going to lead to resolving these problems. As regards the financing of visa processing, it is possible for Member States to increase their national budget for consulates and central visa authorities; however that possibility is considerably limited by national budget constraints which exist in most Member States. Moreover, the Visa Code stipulates that the visa fee should reflect the administrative costs of visa issuing. Furthermore, it is legally not possible for Member States to charge additional or higher fees from visa applicants for visa processing; such action can only be taken at EU level. As regards the issuing of long-validity MEVs for regular travellers, the Visa Code currently leaves rather broad discretion to Member States. However, as argued above, national action in this field is likely to be very uneven and therefore to aggravate the problem, as it can lead to visa shopping as well as complaints by some Member States and mutual accusations. EU action is therefore warranted to achieve a more harmonised development and implementation of current rules. National action is possible and desirable to try to obtain better cooperation of third countries on matters of return of irregular migrants. Many Member States have developed activities in that field, with varying success. However, it is unlikely that any of such activities will achieve the same leverage towards reluctant third countries to cooperate as concerted action by all Member States, e.g. in the framework of the common visa policy. 4.Objectives: What is to be achieved? This section lists the general and specific objectives any initiative should have to address the above-mentioned problems faced by Member States and visa applicants. 4.1.General objectives The general objective of the initiative is to strengthen the common visa policy while addressing migration and security concerns on one hand and taking into account economic considerations and general external relations on the other hand. 4.2.Specific objectives In order to achieve the general objective, the following specific objectives should be addressed: 1.ensure sufficient financial resources to Member States in order to safeguard the quality and integrity of visa processing; 2.ensure more systematic and harmonised issuing of multiple-entry visas with long validity to bona fide regular travellers;

3.advance the EU's interests in the area of return and readmission by increasing leverage vis-à-vis non-cooperative third countries in the area of visa policy. 5.What are the available policy options? 5.1.What is the baseline from which options are assessed? 5.1.1.Insufficient financial resources The standard visa fee will remain unchanged at EUR 60 (and EUR 35 for children between 6 and 12 years of age) despite the Visa Code provision requiring its regular revision. Member States' visa authorities will continue to experience the same difficulties in obtaining sufficient financial resources to fund visa processing in consulates, leading possibly to further closings of visa sections and staff shortages, which affect the level of service provided to visa applicants and may put at risk the integrity of the visa examination procedure. 5.1.2.Repeated visa procedures The existing provision on issuing MEV with long validity (Article 24(2) Visa Code) will continue to apply and will be interpreted and implemented very differently. Many consulates will continue to be rather restrictive in issuing such MEV, thereby requiring frequent travellers to go through repeated visa procedures resulting in increased costs and administrative burden for applicants and a high workload for applicants. The potential for additional unplanned trips to the Member States by holders of MEV will not be exploited. 5.1.3.Return of irregular migrants Currently there is no legal basis for making visa procedures conditional on a third country's willingness to cooperate with Member States on return and readmission of irregular migrants. However, in parallel to Council's proposed amendments to the Visa Code recast proposal to provide for a legal framework for using visa policy as leverage for enhancing cooperation on readmission, Council decided in June 2017 to develop a Coreper-led coordination mechanism ("visa policy toolbox"). This mechanism would be applied on an ad-hoc basis within the existing legal framework, using the limited margin of manoeuvre given to Member States in the Visa Code. On the basis of a set of agreed indicators measuring the level of cooperation of a given third country, Coreper would give guidance, on a case-by-case basis and using an incremental approach, and recommend the coordinated application by Member States of a series of measures related to the visa procedure. The measures are to be coordinated by Local Schengen Coordination and regularly monitored by Coreper. The Commission supported this "toolbox" approach as "pragmatic and efficiency-oriented" and not affecting the Commission's institutional role and responsibilities, as the measures covered fell within Member States' margins of manoeuvre with regard to the implementation of the Visa Code. To date a decision leading to a set of measures being agreed on has been made with regard to only one third country in September 2017. The mere launch of the process proved successful in negotiations on a return arrangement and it was decided not to implement the agreed measures pending signals of improvement of cooperation on readmission. Therefore the baseline therefore has to be considered as a dynamic one, as no experiences in the effective implementation of the "toolbox approach" and its impact have been gathered yet. 5.2. Description of the policy options 5.2.1.Insufficient financial resources There is wide consensus that the visa fee paid by applicants should cover the costs of Member States in processing visa applications, as far as possible. The principle that the visa fee should reflect the administrative costs is set in the Visa Code itself (Article 16(3)). It is fully in line with Member States' administrative rules providing that their own citizens have to cover the costs of certain administrative activities, such as the issuing of passports, ID cards and driving licences. In 2016 the Commission conducted a questionnaire survey among Member States on administrative costs and the calculation of the visa fee. It emerged in the survey and the subsequent discussions in the Visa Committee that it is virtually impossible to calculate the level of a common visa fee on the basis of national administrative costs. On the one hand, costs levels (in particular for staff) are very different among Member States. On the other hand, there were different views on factors that should be taken into account. There was also no agreement on whether the fee should remain a "flat rate" or whether there should be differentiated fees, depending on the length of validity of the visa or on the place of application. In the survey some Member States presented their own calculations of costs and/or came up with suggestions what the visa fee should be, as shown in this table: Member State Calculation of administrative costs per visa application (in €) Suggested visa fee (in €) Austria 120 Belgium 80-90 Denmark 143 (at consulates) Latvia 69.92 (at consulates) Luxembourg 99.06 Malta 65 The Netherlands 120 (not counting VFAs) Slovenia 100 Sweden 90-100 In the stakeholder consultation, the tourism industry associations favoured decoupling the visa fee from administrative costs and proposed setting it with regard to the practice of 'competing' countries. While stakeholders cautioned against raising the visa fee, several conceded that the indirect costs of a visa application (travelling to the consulate/ESP, obtaining the travel medical insurance and all supporting documents, legalisations, etc.) can be equally or more important than the visa fee.

On this basis the following options will be examined: Policy option 1A: Status quo Unchanged common visa fee (EUR 60, children aged 6-11: EUR 35). Policy option 1B: National visa fees based on administrative costs Abolish the EU visa fee and allow Member States to set their visa fee nationally, based on real administrative costs (and a common calculation model defining the administrative costs that should be taken into account and the calculation method). Policy option 1C: Increase of common visa fee Increase the common visa fee and establish a mechanism to adjust it periodically (e.g. every two years, most probably through delegated acts, on the basis of criteria defined in the regulation). -Sub-option 1C1: EUR 80 (children aged 6-11: EUR 40). -Sub-option 1C2: EUR 100 (children aged 6-11: EUR 50). -Sub-option 1C3: EUR 120 (children aged 6-11: EUR 60). -Sub-option 1C4: SEV/MEV up to 6 months: EUR 80, MEV 1-5 years: EUR 120. 5.2.2.Repeated visa procedures Policy options to address this problem area should ensure more systematic and harmonised issuing of MEV with long validity to bona fide regular travellers, to avoid repeated and unnecessary visa procedures both for applicants and consulates. The following options will be examined: Policy option 2A: Status quo Leave Member States / individual consulates to determine their general approach to issuing MEV with long validity (based on the current provision in the Visa Code). Policy option 2B: Recommended best practice Suggest a non-binding approach to issuing MEV with long validity in the Visa Code Handbook, including a general MEV cascade. Policy option 2C: Common MEV cascades Define (legally binding) MEV cascade(s) in the Visa Code and/or Commission implementing decisions. -Sub-option 2C1 (general MEV cascade): Visa Code defines a "one-size-fits-all" MEV cascade: after 2 visas in last 12 months, applicant obtains 3-year MEV, then 5-year MEV (based on Visa Code recast proposal).

-Sub-option 2C2 (general and country MEV cascades): Visa Code defines a less generous "one-size-fits-all" MEV cascade: after 3 visas in last 2 years, applicant obtains 1-year MEV, then 2-year MEV, then 5-year MEV; and provides for the possibility of more favourable cascades for specific countries (based on assessment in LSC and limited to countries cooperating on readmission). -Sub-option 2C3 (country MEV cascades): Visa Code provides for possibility to adopt MEV cascades for specific countries, based on assessment in LSC. Policy option 2D: Standard MEV with 2- or 5-year validity Define MEV with long validity (e.g. 2 or 5 years) as the new standard visa in the Visa Code, while allowing Member States to derogate from the rule and issue visas with shorter validity in individual cases. 5.2.3.Return of irregular migrants Visa policy can play an important role to obtain better leverage vis-à-vis third countries on readmission of irregular migrants. However, it is also clear that better cooperation on readmission with reluctant third countries cannot be obtained through visa policy measures alone. Instead a policy mix of positive and negative incentives in various areas (in particular development cooperation, trade, investments, education) would be necessary to sway a country's attitude. Measures in the visa policy area would therefore be one tool among others in the EU's hands to achieve better cooperation. All other tools (as coordinated notably in the Partnership Framework) will remain equally important. For the purpose of this report, however, only policy options in the area of visa policy will be considered: Policy option 3A: Status quo Continue the Coreper-led "toolbox approach" (using the existing flexibility of Visa Code) to put pressure on third countries not cooperating on readmission of irregular migrants. No legislative amendments. Policy option 3B: Positive incentives Amend the Visa Code to create a legal basis for positive incentives for cooperation on readmission, such as lower visa fees and a favourable MEV cascade, to be applied in countries that cooperate or improve their cooperation with Member States. Policy option 3C: Negative incentives Amend the Visa Code to create a legal basis for negative incentives for cooperation on readmission. -Sub-option 3C1 (maximum approach): negative incentives on various aspects of the visa procedure, to be defined in the regulation (e.g. higher visa fee, more supporting documents, maximum processing time, limited length of MEVs), applicable to all holders of passports. -Sub-option 3C2 (targeted approach): negative incentives as above, applicable in two separate phases: 1) holders of diplomatic and service passports, 2) holders of ordinary passports. It would also be possible to conceive of a combination of both positive and negative incentives. While this possibility should not be discarded outright and should be considered seriously on the basis of the options proposed, its impacts will not need to be assessed separately. 5.3.Options discarded at an early stage For the first problem area (financial resources), the lowering or even abolition of common visa fee could be a possible option, but will be discarded at this stage as it would not contribute to reaching the objective. Some stakeholders in the tourism industry argue that a reduction in the visa fee should be seen as a marketing cost and would be recovered indirectly through additional income in the national economy and the resulting tax revenue. However, it is not clear where the necessary financial resources would come from: Member States are not ready to subsidise visa issuing even further, and a tax on the tourism industry to fund visa issuing would encounter strong opposition and seem disproportionate. Moreover, reducing or abolishing the visa fee would also carry certain risks, as it could encourage potential irregular migrants to just "try their luck" lodging a visa application without any or at low cost. 6.What are the impacts of the policy options? 6.1.Methodology 6.1.1.Possible impacts

The EU's visa procedures concern most directly two types of actors: visa applicants and Member States' authorities. Any options modifying the common visa policy will have the most immediate impact on those two groups. Other groups of (mostly economic) actors will be affected indirectly by changes of behaviour of the directly affected groups. These impacts in turn can have broader consequences for the societies of EU Member States and the EU's external relations. The first group which is directly affected are visa applicants, i.e. third-country nationals who are under the visa requirement and who apply for a short-stay visa at one of the Schengen consulates. Applicants will directly experience any change in the visa fees, as it will affect the costs involved in the visa procedure and might influence their travel plans, particularly for tourism purposes. Any change in the issuing of MEV with long validity will also affect visa applicants, as it might reduce the number of times they have to apply for a visa and thus their financial and "hassle" costs, and increase their flexibility to travel spontaneously. Finally, if any (positive and negative) change of the visa procedure is applied in order to obtain a third country's cooperation on readmission, this change will also positively or negatively affect visa applicants and their travel behaviour. The second group directly affected are Member States' authorities, first and foremost consulates in third countries as the visa-issuing authorities. They will be directly concerned by any change in the visa fee which will influence the financial resources available for visa processing. Changes in the approach to issuing MEV will affect the number of visa applications to be processed. Any increased leverage on third countries' cooperation on readmission will impact on the public authorities dealing with refused asylum applicants and irregular migrants, namely migration, asylum and police authorities. Groups indirectly affected by the visa policy are economic actors in the EU having visa holders as clients or employees, such as the tourism industry (travel agencies, hotels, restaurants etc.), airlines and other transport companies, the retail sector, enterprises engaged in international trade (export/import, trade fairs), the health industry (clinics) and the shipping industry (employing seafarers). Any changes in travel behaviour by visa applicants/holders (caused by modifications to visa fees or MEV issuing rules) will indirectly affect these actors' revenues and competitiveness. The EU Member States' economies and societies will feel the impact of changes in visa policy. Economic activity in the above-mentioned sectors influences growth and employment rates. Visa policy is one of the tools for controlling irregular migration and preserving the Schengen area's integrity and security. Financial resources available to visa-issuing authorities will impact the quality of their work, the integrity of the visa processing and consequently the security of the Schengen area. Similarly, increased leverage for the EU readmission policy and better return rates will improve migration management, as well as people's acceptance of the EU's migration policy. Increased or reduced travel as a result of the changes in the EU's visa policy will influence people-to-people contacts and cultural exchange between populations in Europe and other continents and it will have an effect on emission of greenhouse gases and thus climate change. As many people travel to the EU to visit their family members, the protection of family life will also be indirectly affected by increased or reduced possibilities for travel. Finally changes in the visa policy, through their effect on third country nationals' opportunities, will have direct positive or negative impact on the EU's relations with third countries and the EU's image in the world. This is particularly relevant regarding the link between visa policy and readmission policy. The following table summarises the possible impacts of the policy options: Economic impacts ·costs for public authorities (visa authorities/consulates): -direct (staff, premises, equipment etc.) -indirect (enforcement costs) ·benefits for public authorities (visa/asylum/police authorities): -income -cost savings ·costs for third country citizens (applicants): -direct (fees) -indirect (non-monetisable, such as "hassle costs") ·benefits for third country citizens (applicants): -direct (cost savings) -indirect (non-monetisable, such as more flexible travel) ·competitiveness of EU tourism industry and trade sector Social impacts ·employment in EU (tourism/trade sectors) ·integrity and security of Schengen area ·people-to-people contacts ·external relations/image of EU Environmental impacts ·emission of greenhouse gases (as result of increased/reduced travel) Fundamental rights impacts ·protection of the family The different possible interventions in the three problem areas are not likely to all have noteworthy impacts in all of the above-mentioned areas. Therefore the assessment for each problem area is focused on the fields where the different policy options are likely to have significant impacts. A selection of the most relevant impacts will be established for each problem area. 6.1.2.Available data The Commission collects yearly visa statistics from Member States which include the number of visa applications by Member State and by location (i.e. consulate), the number of visas issued and the number of visas refused (with which the refusal rate can be calculated). These statistics also include the share of MEV issued, but not their length of validity. The Visa Code recast proposal included a more detailed collection of visa statistics, including the length of validity of visas issued, nationality of applicant, visas issued in representation and number of appeals. The current EU legislation does not provide the possibility for the statistics on visas to be produced centrally from information available in the VIS; however the upcoming revision of the VIS legal base will entrust eu-LISA with the task of producing such statistics. In the current absence of an entry/exit system, no data on the use of visas are available, such as the number of trips to the EU by holders of MEV. In general there are only limited data on travellers to the EU (compared with other destinations), especially on details such as their nationality, the frequency of travel, costs and expenditure. There are no statistics on the costs of visa processing or on budgetary resources available to Member States' foreign ministries / visa authorities for that purpose. The Commission services conducted a questionnaire survey among Member States in 2016 to collect information on the costs of visa processing and the methodology to calculate them. These costs cover a variety of items (human resources, premises, equipment, IT development and maintenance, printing and secure dispatch of visa stickers) of which many are not exclusively used for visas, but also other consular tasks (e.g. issuing of national passports). On the basis of the replies to the survey, it became clear that these costs are difficult to estimate. A few Member States shared their estimates of the costs of visa processing, but they were calculated differently and resulted in wide variations. This fragmentary evidence will be used where possible. Little evidence is available as regards the costs and benefits of policy options for visa applicants/holders. There is no stakeholder organisation, such as an NGO or association directly representing visa applicants that could provide reliable data. In the public consultation evidence was gathered on third-country nationals' experience with the Schengen visa procedure, allowing for certain conclusions to be drawn on the costs and benefits in these individual cases. As respondents to the consultation are self-selected, however, these responses are not necessarily representative of all visa applicants. In the absence of a survey of a statistically relevant number of visa applicants in a representative number of third countries, it is very difficult to assess the impact which changes in the visa fee or the issuing of MEV will have on third-country nationals' travel behaviour. This can only be estimated on the basis of anecdotal evidence or general assumptions. Consequently the same is true for the knock-on effects of changes in travel behaviour on economic or social outcomes. Therefore the existing data on inbound tourism in the EU is of limited value for assessing impact of specific policy options. Available data regarding readmission of irregular migrants are limited to available Eurostat statistics (including by nationality) on the number of return decisions taken by Member States and the number of effective returns. With those two indicators, the return rate can be calculated. However, even those figures have to be taken with some caution as they do not reflect exclusively the willingness of third countries to cooperate on returns. Those statistical data need therefore to be complemented by more qualitative information, resulting from Member States' experience in cooperation with those third countries. Furthermore, implementation of the Return Directive varies between the Member States, which results in different interpretation of statistical indicators. Member States either do not have or are reluctant to share data on the costs of lodging and detention of irregular migrants before they can be returned, nor on the costs of returns. Finally – apart from anecdotal experience in the EU with regard to one third country – there is no hard evidence on how visa leverage can translate into better cooperation of third countries on readmission. The ample experience gathered by the Commission services in monitoring Member States' implementation of the visa policy, notably through the Schengen evaluations, was exploited wherever possible. In this context the Commission services have visited, since the beginning of 2015, 32 consulates of 16 Schengen States all over the world, thus generating hands-on and in-depth knowledge of Member States' visa-issuing practices. 6.1.3.Qualitative assessment method The scarcity of data does not allow for a quantitative assessment of the different policy options, such as could be done in a cost-benefit analysis. Instead a qualitative method will have to be used. Given the widely spread impacts that the policy options are likely to have, it seems most judicious to conduct a multi-criteria analysis (MCA). It is a technique to reach a judgment based on an explicit set of objectives and associated criteria and is particularly useful in case of complex interventions with diverse quantified and/or qualitative impacts (in particular factors which cannot be expressed in monetary terms). An MCA is used to assess and rank alternative options in an impact assessment.

This method will be applied as follows: 1.For each problem area a number of impact criteria are established, based on the selection of most relevant impacts (see above). 2.The weight of each criterion (e.g. 20%) will have to be defined as a measure of its overall importance compared with other impacts. 3.The performance of each policy option for each criterion will be ranked on a scale from 0 to 3, based on a qualitative assessment of the impacts (compared with the status quo option which by definition will be 0). 4.This ranking will include the direction, i.e. whether it is positive or better than the status quo (+) or negative or worse than the status quo (-). 5.The performance score, including the direction (+ or -), will be multiplied by the weight factor and added to the performance scores of all other criteria, resulting in an aggregate impact score for each policy option. These scores will already make it possible to compare and rank the policy options. 6.However, as in the absence of hard data those scores will largely be based on estimations and assumptions, it is useful to assess and compare them on a number of general principles (ranging from - - - for the most negative to + + + for the most positive): -effectiveness (with regard to policy objectives), -proportionality, -feasibility (legal and practical) and coherence with other policies. 7.The preferred option will be determined through a comparison on the basis of the aggregate impact score and the other criteria. 6.2.Assessment of policy options 6.2.1.Insufficient financial resources Relevant impacts, criteria and relative weight For Member States a change of the visa fee has direct impact on the financial resources available for visa processing. Even in Member States where the visa fee income ends up in the general state budget, higher revenues give the visa authorities a stronger stand in their budget negotiations with the finance ministry. Sufficient financial resources are essential for the staffing of consulates, training and the quality of visa processing. As argued above, these factors have a bearing on the integrity and security of the Schengen area, which is influenced not only by the amount of the financial resources available, but also possibly by the fee model (common EU or national). Therefore this will have to be assessed separately. The reverse side of additional income for Member States through increased visa fees are additional direct costs for visa applicants. It will have to be assessed whether the different policy options are likely to influence their decisions to travel to the EU and how. Changes in travel behaviour will – as argued above – have influence on certain economic sectors and therefore on employment and growth in the EU. It will also impact people-to-people contacts, the protection of the family and the EU's image worldwide, and it will have an effect on carbon emissions. As all these indirect impacts are a consequence of the travel behaviour, they will not be assessed separately. Overall reduced travel will be assessed as negative (despite the positive effects on climate gas emissions, which will however be outweighed by the other negative effects). The following weighting will be attached to the three impact criteria. Changes in travel behaviour can affect the EU's economy and will therefore be weighted equally to increases in financial resources. As the integrity and security of the Schengen area is already influenced by the amount of financial resources available, the second criterion just rates the additional impact of the fee model chosen (national / common visa fee) and will therefore be weighted less. Financial resources 40% Integrity / security of Schengen area 20% Changes in travel behaviour 40%

Qualitative assessment of impacts Policy option 1A (status quo) would not produce any change. The performance is therefore ranked +/-0 on all three criteria. Impacts of policy option 1B (national visa fees based on administrative costs) will depend on how Member States would adapt their visa fees. While evidence gathered in the survey suggests that most Member States have higher costs than the current EUR 60 per visa application, it is far from certain that all of them would raise the fees. Some with a strong interest to attract tourists might even be tempted to lower their fees in order to be more 'competitive' (similarly as has been witnessed with reduced processing time and other unilateral 'facilitations' in some locations). Others might be reluctant to raise the fee before other Member States do it. It can therefore be assumed that the increase in financial resources will be weak, if at all (+1). What can be expected is that the resulting divergence in visa fees would strongly encourage visa shopping and presentation of fraudulent documents to obtain a visa at low cost; combined with the risk of one or several Member States engaging in 'disloyal competition'. This would raise threats to the integrity and security of the Schengen area (-1). Overall travel behaviour is uncertain to predict, but would probably remain neutral (+/-0). Policy options 1C1, 1C2, 1C3 and 1C4 (increase of the common visa fee) will have a direct positive impact on financial resources, depending on the scale of the increase under the various sub-options: Visa fee revenue in € Increase by Rating Current visa fee revenue all Member States worldwide 792 million Additional revenue for option 1C1 (EUR 80) 205 million 26% +1 Additional revenue for option 1C2 (EUR 100) 412 million 52% +2 Additional revenue for option 1C3 (EUR 120) 619 million 78% +3 Additional revenue for option 1C4 (EUR 80/120) 267 million 34% +1 Parallel positive effects can be expected as a result for the security of the Schengen area, provided the additional revenues are fully invested into additional staff for visa processing as well as IT tools and training and would therefore contribute to a more thorough examination of applications (same rating for options). As regards impact on travel behaviour, it can be assumed that an increase of the visa fee by EUR 20 will not yet cause noticeable changes, given the overall costs involved in visa procedures and in travelling to Europe from visa-required countries in Africa, Asia or Latin America (+/-0); the same is true if MEV of one year or more would be charged EUR 120, as this would be regarded as 'fair' by most visa applicants. Similarly an increase by EUR 40 would only cause a weak change in travel behaviour (-1). Given comparable countries' visa fees and the lack of alternatives, even a visa fee of EUR 120 would very likely only lead to a moderate reduction of travel to the EU (-2). Overview Impact criteria Weight Options 1A 1B 1C1 1C2 1C3 1C4 Financial resources 40% 0 +1 +1 +2 +3 +1 Integrity / security of Schengen area 20% 0 -1 +1 +2 +3 +1 Changes in travel behaviour 40% 0 0 0 -1 -2 0 Aggregate impact score 100% 0 +0.2 +0.6 +0.8 +1.0 +0.6 6.2.2.Repeated visa procedures Relevant impacts, criteria and relative weight Changing the approach to issuing MEV with long validity will have impacts on Member States' costs for issuing visas. A more generous issuing of visas with a validity of one year and above will mean that frequent travellers will have to apply less frequently for visas. This in turn means less work for consulates, but also less revenue from visa fees. As the administrative costs for most Member States lie above the current visa fee (and are likely to continue to do so), issuing more long-validity MEV will lead to net cost savings for Member States, though of limited scale. A higher share of MEV also means cost savings for frequent travellers, both on direct costs (for visa fees, ESP service fees, costs for obtaining supporting documents, travel to the ESP/consulate, courier fees etc.) as well as indirect "hassle costs" (mainly the time loss involved in visa procedures). More long-validity MEV also have a direct positive impact on travel behaviour. Holders of MEV of one year or more are more flexible in planning their trips to the EU and will be able to travel more spontaneously. In the public consultation, respondents who had received MEV reported taking on average 4.25 additional trips to the EU during the validity period of their visa, which had not been initially planned at the time of application. It is therefore likely that a higher share of MEV will also increase travel to the EU with the positive knock-on effects (described above) on EU economic actors, employment and growth, people-to-people contacts and cultural exchange, family life and the EU's external image (as well as negative effects for climate gas emissions). As explained above, increased travel will be assessed positively. It is assumed that more MEV with long validity will have no impact on the integrity and security of the Schengen area. The migratory risk of visa applicants is checked before the visa is issued, and generally frequent travel is an indicator of low migratory risks. As regards security risks, the regular SIS check will be performed at each entry in the Schengen area. The following weighting will be attached to the three impact criteria. The cost savings for Member States and applicants respectively are rated lower than the change in travel behaviour as the related monetary and non-monetisable benefits of increased issuing of MEV are likely to be greater for the wider economy and society than for the applicants and consulates themselves. Cost savings for Member States 20% Cost savings for frequent travellers 20% Changes in travel behaviour 60%

Qualitative assessment of impacts Policy option 2A (status quo) would not produce any change. The performance is therefore ranked +/-0 on all three criteria. Policy option 2B (recommended best practice in the Visa Code Handbook) might prompt a few Member States to improve their practice on issuing MEV with long validity. However, falling short of a concerted action, it is unlikely to have tangible effects as regards cost savings for Member States (+/-0) and only limited positive impact for frequent travellers' cost savings and increased travel (both +1). Policy options 2C1, 2C2 and 2C3 (MEV cascades at central and/or country level), are likely to have greater impact due to their legally binding nature, but it will vary for individual travellers. The 'once-size-fits-all' MEV cascade in option 2C1 is more generous than the 'fall-back' MEV cascade in option 2C2. A business person who travels to the EU three times a year would have to apply – over a period of five years – for four visas in option 2C1, but six times in option 2C2. The cost savings both for Member States and for applicants could therefore be greater in option 2C1 than in option 2C2. In the latter option however, there is a good chance that a more favourable MEV cascade would be established for countries with low migratory risk which are important for Member States economically, be it as business partners or countries of importance for inbound tourism, such as China, India or the Gulf countries. This possibility would compensate for the less favourable 'fall-back cascade'. Cost savings for both options are therefore assumed to be largely equally positive (+2 for Member States and +3 for frequent travellers). In both options, the traveller would hold a MEV with a long validity (one year or more) from the second or third year onwards, so the potential for spontaneous additional trips would be similarly positive (+3). In option 2C3 the country MEV cascades would take some time to be agreed locally and established by Commission implementing decision and the approach would be more patchy while no 'fall-back' cascade would apply, leading to a slower and weaker positive impact on all three criteria (+1, +2 and +2 respectively). For parents who visit their son or daughter in the EU only once a year, none of those options would bring any advantages. This would change in policy option 2D (standard MEV with 2- or 5-year validity). As all travellers, including first-time applicants, would be issued an MEV with a long-validity, the number of visa applications worldwide would drop considerably and lead to the greatest cost savings for Member States (+4) and applicants (+5). Equally the potentially for additional travel and business opportunities for the EU would increase most (+4). This option would correspond to the current US and Canadian standard practice of issuing visas with a validity of ten years, even to first time applicants. According to those countries' reasoning the length of validity of a visa does not affect the migratory risk presented by the applicant, while the security risk can be controlled by regularly checking visa holders against security databases. Overview Impact criteria Weight Options 2A 2B 2C1 2C2 2C3 2D Cost savings for Member States 20% 0 0 +2 +2 +1 +4 Cost savings for frequent travellers 20% 0 +1 +3 +3 +2 +5 Changes in travel behaviour 60% 0 +1 +3 +3 +2 +4 Aggregate impact score 100% 0 +0.8 +2.8 +2.8 +1.8 +4.2 6.2.3.Return of irregular migrants Relevant impacts, criteria and relative weight The policy options in this problem area could have impacts on two different levels, namely both in the readmission area and in the visa area. Firstly, if the (positive or negative) incentive measures work, third countries' cooperation on readmission will improve and greater number of irregular migrants or refused asylum applicants can be returned to their countries of origin. These improved return rates would have positive impacts in terms of cost savings for Member States' public authorities (for housing, food, administration and related expenses), higher security, better acceptance of the EU migration policy and a deterrent effect on potential future irregular migrants. These impacts (which are all a consequence of change in return rates) will be assessed jointly. Secondly, the positive or negative incentives – if ever applied – might have effects in the visa area. Changes in visa fees, visa procedures or issuing of MEV with long validity will have an influence on costs for visa applicants and ultimately their travel behaviour (with related consequences for employment and growth in the EU, as argued in more detail above). Finally, a relaxing or tightening of visa policy as a result of linking it with third countries' cooperation on readmission will have positive or negative impacts on the EU's and Member States' relations with third countries and the EU's image in the world. The following weighting will be attached to the three impact criteria. The greatest weight is given to improved return rates, as these are most directly linked to the policy objective. Changes in travel behaviour will not be given a strong weight, as only few third countries are likely to be affected. Any possible impact on external relations will also be duly taken into consideration, but will be given less weight than the main objective. Improved return rates 60% Changes in travel behaviour 10% External relations / image of EU 30% Qualitative assessment of impacts

The "toolbox" approach (policy option 3A: status quo) is an internal Council instrument developed for the purpose of reinforcing the link between readmission and visa, in particular in the context of ongoing negotiations with third countries. The measures in the toolbox were developed within the limits of the current rules (Visa Code). A specific set of visa measures that would be applied, on a case-by-case basis, with regard to a given third country after a political commitment to implement them has been taken. As the status quo option the performance is ranked +/-0 on all three criteria. The effect of policy option 3B (positive incentives) on return rates is likely to be weak and could be counterproductive. The scope of visa facilitations that can be offered to countries with high migratory risk without putting at risk the integrity of visa procedures and the security of the Schengen area is by definition limited and therefore rather unlikely to overcome governments' reluctance in cooperating with Member States with readmission procedures in many cases. This is corroborated by the EU's recent experience in combining the negotiations on readmission agreements with visa facilitation agreements. Moreover, offering such facilitations to previously non-cooperative third countries might even have a counterproductive effect on already cooperative countries which could consider unfair that they are not being offered any facilitations and might be encouraged to cease their cooperation with a view to being offered similar advantages. Therefore the limited positive impact such positive incentives will have on return rates is likely to be neutralised (+/-0). As visa facilitations are not likely to materialise for many third countries, any positive impact on travel behaviour will be negligible (+/-0). This option is therefore not likely to have any positive (or negative) effects for external relations and the EU's image in the world either (+/-0). Policy options 3C1 ('maximum' negative incentives) and 3C2 ('targeted' negative incentives) are likely to have a stronger impact on return rates. The negative incentives, in particular the increase of the visa fee and the decision not to issue MEV anymore, would have a deterrent effect on third countries' governments, even before those 'sanctions' would be applied. The possibility of imposing negative incentives in the visa area as a credible measure would already provide substantial leverage in discussions with a third country government on readmission. While it is unlikely that measures in the visa area alone will have sufficient influence, it can be assumed that – in conjunction with other incentives in the area of development cooperation and/or external trade – they can contribute to encouraging governments to better cooperate with Member States and lead to higher rates of return of irregular migrants (+2). As it can be expected that the negative incentives will have a deterrent effect and will thus be applied in a limited number of cases, it is not likely that there will be strong consequences for the amount of overall travel to the EU from visa-required countries. Therefore it can be considered that the overall impact on travel behaviour and the knock-on effects on employment and growth will be weak (-1). The linking of readmission policy with negative incentives as regards the issuing of visas could have negative consequences for the EU's and/or Member States' relations with those countries and the EU's image in the world. In that context it can be assumed that option 3C1 which would target the entire population from the beginning with a wide range of measures would be seen more negatively (-2) than the targeted and gradual approach in option 3C2 which would have a limited scope of measures and would first target the government employees (-1). Overview Impact criteria Weight Options 3A 3B 3C1 3C2 Improved return rates 60% 0 0 +2 +2 Changes in travel behaviour 10% 0 0 -1 -1 External relations / image of EU 30% 0 0 -2 -1 Aggregate impact score 100% 0 0 +0.5 +0.8 6.3.Sensitivity analysis Given the scarcity of quantitative data to assess the economic, social and other impacts of the various policy options, both the weighting of impact criteria and the performance score of policy options are in most cases the result of a qualitative assessment based on the best assumptions and estimations available. Even though the multi-criteria analysis (MCA) has been substantiated by facts and arguments, it cannot be guaranteed that the results are devoid of possible errors of judgment, and they should be taken with the necessary caution. A sensitivity analysis has been conducted to verify to what extent a change of the weighting would influence the results of the MCA. Instead of giving different weights to the most important impact criteria identified, the same weight would be attached to all criteria. For the first and second problem areas (insufficient financial resources, repeated visa procedures), the comparative ranking of policy options would not change. For the third problem area (return of irregular migrants), the ranking would be affected by a different weighting of the impact criteria. The best-ranking option (3C2, targeted negative incentives) in the assessment above would get the same score as the status quo option (3A) and the positive incentives (3B); only the maximum negative incentives (option 3C1) would score worse. This change of ranking is due to higher weight given to negative effects on travel behaviour – which is, however, unjustified, given the small number of countries and persons that are likely to be affected. 7.How do the options compare? 7.1.Insufficient financial resources The best-rated policy option in the aggregate impact score is option 1C3 (common visa fee of EUR 120), followed by options 1C2 (EUR 100) and then 1C1 (EUR 80) and 1C4 (EUR 80 for SEV and MEV up to 6 months, EUR 120 for MEV of 1-5 years). Effectiveness As argued above, an increase of the EU's common visa fee would clearly be more effective in reaching the policy objective of ensuring that the level of the visa provides sufficient financial resources to Member States in order to safeguard the quality and integrity of visa processing, than a re-nationalisation of the visa fee (option 1B), which might even be counter-productive (-). Options 1C1 to 1C4 are all effective in making positive contributions to the objective of ensuring sufficient financial resources for visa processing. The effectiveness increases proportionally to the rise in the visa fee: nine Member States have provided calculations of administrative costs or otherwise suggested a visa fee (see section 5.2.1). The level calculated or suggested by three Member States would be met by a visa fee of EUR 80 (option 1C1 and 1C4) (+), for six of them a visa fee of EUR 100 (option 1C2) would sufficient (++), and a visa fee of EUR 120 (option 1C3) would meet (or exceed) the costs of eight of those Member States (+++). Proportionality Even though the visa fee has not been raised since 2006, the most proportionate option seems to be an increase by 33% to EUR 80 (++). Had the visa fee been increased each year since 2006 on the basis of the general EU-wide inflation rate, it would stand today at around EUR 73.85. Also the lowest estimate of actual visa-processing costs provided by a Member State is EUR 69. Higher increases (by 67% or 100%) seem increasingly difficult to justify towards third countries and applicants are therefore deemed disproportionate (- and - - respectively). Intermediary solutions would be a general visa fee of EUR 80 with higher fees for long-validity MEV (++) or national fees based on actual administrative costs (++). Feasibility and coherence Re-nationalising the visa fee has neither been supported by any stakeholder nor is it coherent with the goal of a harmonised visa policy flanking the common area without internal borders. In practice it would be difficult to get all Member States to apply the same calculation of real administrative costs, and there is a serious risk of visa shopping with all negative consequences involved (- - -).

A moderate increase of the visa fee would seem the most coherent and feasible option (+++), with feasibility declining with higher increases (++ and + respectively). The option of a moderate increase of the general visa fee, combined with a higher increase for long-validity MEV seems to be 'fair' at first sight and has been supported by three Member States in the targeted consultation. However, it would create problems in practice, as neither the applicant nor the ESP / consulate collecting the visa fee would know at the outset the final amount of the visa fee – which would depend on the outcome of the examination and decision by the visa officer. In some cases part of the fee would have to be reimbursed (or paid in addition) after the decision has been taken, creating an additional procedural step and considerable administrative burden, taking into account more than 15 million visa applications yearly. Therefore most Member States have rejected this option, and the practical feasibility is assessed negatively (-). Overview Impact criteria Options 1A 1B 1C1 1C2 1C3 1C4 Aggregate impact score 0 +0.2 +0.6 +0.8 +1.0 +0.6 Effectiveness 0 - + ++ +++ + Proportionality 0 ++ ++ - - - ++ Feasibility / coherence 0 - - - +++ ++ + - 7.2.Repeated visa procedures The best-rated policy option in the aggregate impact score is option 2D (standard MEV with 2 or 5-year validity), followed by options 2C1 (general MEV cascade) and 2C2 (general and country MEV cascades). Effectiveness Option 2D (standard MEV with long validity) clearly would be the most effective in meeting the policy objective of ensuring more systematic and harmonised issuing of multiple-entry visas with long validity to bona fide regular travellers (+++). It would be followed by the two options (2C1 and 2C2) providing for a "one-size-fits-all" MEV cascade at EU level or a "fall-back" MEV cascade combined with country cascades (both ++) and then option 2C3 providing for MEV casca