EUROPEAN COMMISSION Strasbourg, 12.6.2018 COM(2018) 390 final 2018/0210(COD) Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the European Maritime and Fisheries Fund and repealing Regulation (EU) No 508/2014 of the European Parliament and of the Council

{SEC(2018) 276 final}

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EXPLANATORY MEMORANDUM 1.CONTEXT OF THE PROPOSAL This proposal provides for a date of application as of 1 January 2021 and is presented for a Union of 27 Member States, in line with the notification by the United Kingdom of its intention to withdraw from the European Union and Euratom, based on Article 50 of the Treaty on the European Union, received by the European Council on 29 March 2017. •Reasons for and objectives of the proposal The purpose of this proposal is the establishment of the European Maritime and Fisheries Fund (EMFF) for the 2021-2027 period. That fund aims to target funding from the Union budget to support the Common Fisheries Policy (CFP), the Union's maritime policy and the Union's international commitments in the field of ocean governance, especially in the context of the 2030 Agenda for Sustainable Development Such funding is a key enabler for sustainable fisheries and the conservation of marine biological resources, for food security through the supply of seafood products, for the growth of a sustainable blue economy and for healthy, safe, secure, clean and sustainably managed seas and oceans. As a global ocean actor and the world's fifth largest producer of seafood, the Union has a strong responsibility to protect, conserve and sustainably use the oceans and their resources. Preserving seas and oceans is indeed vital for a rapidly growing world population. It is also of socio-economic interest for the Union: a sustainable blue economy boosts investments, jobs and growth, fosters research and innovation and contributes to energy security through ocean energy. Moreover, safe and secure seas and oceans are essential for an efficient border control and for the global fight against maritime crime, thereby addressing citizens' security concerns. These priorities require Union financial support through the EMFF. Such support will be complemented by specific funding for the European Fisheries Control Agency, the sustainable fisheries partnership agreements (SFPAs) and the Union's membership to regional fisheries management organisations (RFMOs) and other international organisations, which also contribute to the enforcement of the Union's policies in the fisheries and maritime sectors. •Consistency with existing policy provisions in the policy area This proposal aims to support the achievement of the objectives of the CFP, to foster the implementation of the Union's maritime policy and to strenghten international ocean governance. Conscious that the challenges and opportunities of the ocean space are interrelated and need to be considered as a whole, those areas should be closely interlinked. The Commission's proposal for the multiannual financial framework (MFF) 2021-2027 adopted on 02 May 2018 has set the budgetary framework for the funding of the CFP and the maritime policy. Further, the Commission adopted on 29 May 2018 a proposal for a 'Common Provisions' Regulation in order to improve the coordination and harmonise the implementation of support under Funds in shared management ('the Funds'), with the main aim of simplifying policy delivery in a coherent way. Those common provisions apply to the part of the EMFF under shared management. The Funds pursue complementary objectives and share the same management mode. Therefore the Common Provisions Regulation sets out a series of common general objectives and general principles such as partnership and multi-level governance. It also contains the common elements of strategic planning and programming, including provisions on the Partnership Agreement to be concluded with each Member State, and sets out a common approach to the performance orientation of the Funds. Accordingly, it includes enabling conditions, a performance review and arrangements for monitoring, reporting and evaluation. Common provisions are also set out with regard to eligibility rules, and special arrangements are defined for financial instruments, use of InvestEU, community-led local development and financial management. Some management and control arrangements are also common to all Funds. •Consistency with other Union policies The proposal and its objectives are consistent with the Union's policies, especially environmental, climate, cohesion, social, market and trade policies. Complementarities between the Funds, including the EMFF, and other Union programmes will be described in the Partnership Agreement, in accordance with the Common Provisions Regulation. Under direct management, the EMFF will develop synergies and complementarities with other relevant Union funds and programmes. It will also allow financing in the form of financial instruments within blending operations implemented in accordance with the InvestEU Regulation. Support under the EMFF should be used to address market failures or sub-optimal investment situations, in a proportionate manner, without duplicating or crowding out private financing, and have a clear European added value. This will ensure consistency between the actions of the EMFF and Union State aid rules, avoiding undue distortions of competition in the internal market. 2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY •Legal basis

Articles 42, 43(2), 91(1), 100(2), 173(3), 175, 188, 192(1), 194(2), 195(2) and 349 of the Treaty on the Functioning of the European Union. •Subsidiarity (for non-exclusive competence) Provisions of the proposal are implemented within the frameworks of shared management, direct management and indirect management, in accordance with the Financial Regulation. •Proportionality The proposed provisions comply with the proportionality principle as they are appropriate, necessary and no other less restrictive measures are available to obtain the desired policy objectives. •Choice of the instrument Proposed instrument: Regulation of the European Parliament and of the Council. 3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS •Ex-post evaluations/fitness checks of existing legislation The results of the Ex Post Evaluation of the European Fisheries Fund (EFF) 2007-2013 were taken into account as key element of the Impact Assessment to assess the possibility to continue financial support for the fisheries sector after 2020. The Ex Post Evaluation is based on the stakeholder consultation that took place between February and May 2016, aiming to examine the general public opinion concerning the effectiveness and efficiency of the EFF. Its main recommendations for post-2020 were to improve the link between funding and policy objectives, the sustainable exploitation of fisheries as well as the protection and enhancement of the environment and natural resources by minimising the negative impacts on the marine environment. It also stressed the need to take a more strategic approach for making aquaculture more competitive and increasing production and to take better account of the specific challenges faced by small-scale coastal fisheries. •Stakeholder consultations For the post-2020 programming period, the major consultation activity was the EMFF stakeholder conference entitled 'Beyond 2020: Supporting Europe's Coastal Communities' that was held in Tallinn in October 2017. With 70 speakers and more than 300 participants, the event allowed stakeholders to contribute to the assessment of the financial support the EMFF provides to the CFP and Union maritime policy over the 2014-2020 programming period. It also allowed them to anticipate the form this support could take after 2020. A variety of stakeholders was covered by the EMFF conference. Out of the 300 participants, there were more than 50% of representatives of public authorities, 12% industry, 11% NGOs, 14% fishing associations and organisations and 7% of academia. Two opportunities were also given to the Members of the EMFF Expert Group (Member State administrations) to contribute to this debate and provide input into the reflection process. These meetings took place respectively on 06 November 2017 and 15 January 2018. The debates in EMFF Expert Groups were supported by discussion papers and orientation questions provided by the Commission in advance to the meetings. Written contributions were also received from the Member States. Moreover, letters were sent to Advisory Councils, NGOs and European Social Partners requesting their input on post-2020 Union funding for fisheries and maritime sectors. Individual meetings with Social Partners were organised for the purposes of the consultation. Contributions were also received from the Conference of Peripheral Maritime Regions (CPMR), such as the Technical paper from December 2017 on the 'Future of the EMFF post-2020: Elements of analysis and possible scenarios', and the CPMR notes on the EMFF post-2020 from October 2017 and March 2017. The final Policy Position on the future of the EMFF was adopted by the CPMR Political Bureau in March 2018. A number of other workshops and reports provided input to the assessment, such as the Policy session during the European Association of Fisheries Economists conference (April 2017) and the Stakeholder Workshop on support to Maritime Policy during the European Maritime Days (May 2017). The outcome of the consultation can be summarised as follows: –Strong call by almost all stakeholders for continuity and clear need for a dedicated funding instrument in the future for fisheries and the maritime policy, continuing to achieve the CFP objectives and taking advantage of opportunities from the blue economy. –Member States agreed that the objectives of the post-2020 fund should support environmental, economic and social sustainability. The achievement of CFP objectives was noted by the stakeholders as a priority for the next fund.

–As a result of the consultations, an agreement was reached between stakeholders that one of the biggest shortcomings of the 2014-2020 EMFF was its slow take up and the late implementation of the Operational Programmes which was essentially due to the late approval of the legislative framework. This, coupled with too prescriptive Union level legislation, the rigidity and inflexibility in interpretation and too much focus on eligibility rather than on reaching objectives and targets, represent the challenge Member States have to face. In this regard, a strong call for less legal complexity with a simpler legal framework was put forward by the majority of stakeholders. –A large consensus could be observed between the stakeholders calling for a certain level of stability, notably through a greater simplification at all levels (both Union and national) regarding the implementation of the EMFF. However, diverging views were observed as on how to find the right balance between a greater emphasis on result orientation and reducing the administrative burden for beneficiaries and administrations whilst assuring correct spending. –In their contributions, Member States noted that the monitoring and evaluation system has a key role to demonstrate the effectiveness of the fund as it provides information on the causalities behind the development of the fisheries and blue economy sectors. –A polarisation of opinion concerning the support to fishing fleets could be observed, with stakeholders split nearly equally between those in favour and those against the continuation of fleet measures. –Regarding the aquaculture sector, all stakeholders agreed that more work needs to be done on administrative and legal simplification in order to reduce the length of licencing procedures but without compromising on the high environmental, consumer protection and animal health standards enshrined in Union law. They reaffirmed that the administrative burdens remain the main barrier to the development of the sector, together with procedural requirements (for both licencing and access to funding) which are too complex. Also, a strong support from a group of 11 Member States was expressed to the continuation of the current Union support to aquaculture in the next fund, in particular to freshwater aquaculture. –As regards small-scale coastal fisheries and fisheries in the outermost regions, Member States were in favour of applying more targeted and tailor-made support and continue having a higher support rate and possibility of more favourable handling through advanced payments. Preferential financial treatment to small-scale coastal fisheries, including inland fisheries, should be kept after 2020 according to some Member States. Stakeholders also acknowledged the need for flexibility to reflect local specificities and for facilitating the generational renewal in an ageing workforce. –All Member States and stakeholders considered that the support to data collection, fisheries control and enforcement and support to producer organisations should remain part of the fisheries fund under shared management. –Strengthening of Union action through the EMFF in various areas under the maritime policy (training, maritime spatial planning, maritime safety and surveillance, financing of innovative projects, etc.) was considered as added value for Europe and for the regions by a number of stakeholders. Taking into account that the blue economy is developed in a very complex environment, complementarity between various instruments should be further ensured, in order to avoid duplication and fragmentation. –A majority of stakeholders also recognized the important role played by Community Led Local Development (CLLD) for coastal communities to adopt local solutions for local problems and recognised it as a valuable opportunity for the fisheries and aquaculture sectors to play an active role in local government and governance issues. Many stakeholders would like to see CLLD playing a wider role in the development of the blue economy at local level. •Collection and use of expertise The Impact Assessment was drafted by the Commission services. For the assessment made in relation to monitoring and evaluating performance, input was provided by external expertise. This input covers a proposal for a monitoring and evaluation framework post-2020 based on the system developed for the 2014-2020 period, together with a limited number of result indicators including an assessment of data collection needs, sources and availability. •Impact assessment The Impact Assessment develops the main overall general objectives of the programme together with specific objectives. The objectives include the cross-cutting MFF objectives of flexibility, coherence and synergies, simplification and focus on performance. The Impact Assessment identifies and explains the main challenges and problems to be addressed by the future programme based on findings of evaluations of previous programming periods and consultation activities, cross-cutting objectives of the new MFF and new political priorities and emerging problems needing Union intervention. Based on experience of previous programmes, the Impact Assessment broadly prioritises the actions which might be funded (in respect of achieving the objectives above) given that the budget allocation was not known at the time of preparing the Impact Assessment. The subsidiarity (Union added value/necessity for Union action) and proportionality dimensions of funding priorities were assessed. Changes in the scope and structure of the programme were analysed too. •Regulatory fitness and simplification Although this proposal is not linked to REFIT, it aims to alleviate the regulatory burdens and simplifying the delivery of the fund. It also grants a preferential treatment to small beneficiaries with a higher aid intensity rate and specific forms of support for beneficiaries from small-scale coastal fisheries. •Fundamental rights

Respect for the rule of law is an essential precondition for sound financial management and effective Union funding. Rules are laid down in the Regulation on the protection of the Union's budget in case of generalised deficiencies as regards the rule of law in the Member States. An enabling condition is introduced in the Common Provisions Regulation to ensure the respect of the Charter of Fundamental Rights. It is applicable to the EMFF. 4.BUDGETARY IMPLICATIONS The multiannual financial framework provides that the Union budget must continue to support fisheries and maritime policies. The proposed EMFF budget amounts, in current prices, to EUR 6 140 000 000. EMFF resources are split between shared, direct and indirect management. EUR 5 311 000 000 is allocated to support under shared management and EUR 829 000 000 to support under direct and indirect management. Details on the financial impact of the EMFF are set out in the financial statement accompanying the proposal. 5.OTHER ELEMENTS •Implementation plans and monitoring, evaluation and reporting arrangements The proposal is linked to the monitoring, evaluation and reporting arrangements of the Common Provisions Regulation. These arrangements are implemented through a monitoring and evaluation framework established in the proposal. The evaluations will be carried out in line with paragraphs 22 and 23 of the Interinstitutional Agreement of 13 April 2016, where the three institutions confirmed that evaluations of existing legislation and policy should provide the basis for impact assessments of options for further action. The evaluations will assess the programme's effects on the ground based on the programme's indicators and targets and a detailed analysis of the degree to which the programme can be deemed relevant, effective, efficient, provides enough Union added value and is coherent with other Union policies. They will include lessons learnt to identify any lacks and problems or any potential to further improve the actions or their results and to help maximise their exploitation and impact. •Explanatory documents (for directives) No applicable •Detailed explanation of the specific provisions of the proposal Objectives This proposal for a Regulation on the EMFF aims to support the achievement of the environmental, economic, social and employment objectives of the CFP, to foster the implementation of the Union's maritime policy and to support the Union's international commitments in the field of ocean governance. It is based on the following four priorities, which reflect the relevant policy objectives set out in the Common Provisions Regulation and aim to maximise the Union's contribution to the development of a sustainable blue economy: (1)Fostering sustainable fisheries and the conservation of marine biological resources; (2)Contributing to food security in the Union through competitive and sustainable aquaculture and markets; (3)Enabling the growth of a sustainable blue economy and fostering prosperous coastal communities; (4)Strengthening international ocean governance and enabling safe, secure, clean and sustainably managed seas and oceans. Europe's maritime sector employs over 5 million jobs generating almost EUR 500 billion a year, with a potential to create many more jobs. The output of the global ocean economy is estimated at EUR 1.3 trillion today and this could more than double by 2030 (The Ocean Economy in 2030, OECD report). The need to meet CO2 emissions targets, increase resource efficiency and reduce the environmental footprint of the blue economy has been a significant driving force for innovation in other sectors such as marine equipment, shipbuilding, ocean observation, dredging, coastal protection and marine construction. Investment in the maritime economy has been provided by Union structural funds, in particular the European Regional Development Fund (ERDF) and the European Maritime and Fisheries Fund (EMFF). New investment tools such as InvestEU must be utilised to meet the growth potential of the sector. The Commission's proposal for the 2021-2027 multiannual financial framework sets a more ambitious goal for climate mainstreaming across all Union programmes, with an overall target of 25% of Union expenditures contributing to climate objectives. The contribution of the EMFF to the achievement of this overall target will be tracked through a Union climate marker system at an appropriate level of disaggregation, including the use of more precise methodologies where these are available. The Commission will continue to present the information annually in terms of commitment appropriations in the context of the annual draft budget. To support the full utilisation of the potential of the EMFF to contribute to climate objectives, the Commission will seek to identify relevant actions throughout the preparation, implementation, review and evaluation processes. The EMFF will also contribute to the environmental objectives of the Union. This contribution will be tracked through the application of Union environmental markers and reported regularly in the context of evaluations and the annual performance report. Simplification

The proposal aims to simplify the delivery of the EMFF compared to the very complex architecture under the 2014-2020 period. The 2014-2020 EMFF is indeed based on a precise and rigid description of financing possibilities and eligibility rules ('measures'), which has complicated the implementation for Member States and beneficiaries. Therefore, the EMFF beyond 2020 will move towards a simplified architecture along the following elements: –4 priorities – These priorities describe the scope of support of the EMFF in line with the objectives of the CFP, of the maritime policy and of the international ocean governance actions. –Areas of support – The articles of the Regulation do not lay down prescriptive measures but describe the different areas of support under each priority, providing a flexible framework for implementation. –No predefined measures or eligibility rules at Union level – Under shared management, it is up to Member States to draw up their programme indicating therein the most appropriate means for achieving the priorities of the EMFF. They will be granted flexibility in the setting of the eligibility rules. A variety of measures identified by the Member States in the programmes may be supported under the rules set out in the EMFF and in the Common Provisions Regulation, provided they are covered by the areas of support. –Conditions and restrictions for certain areas – It is necessary to set out a list of ineligible operations so as to avoid detrimental impacts in terms of fisheries conservation, for example a general prohibition of investments enhancing fishing capacity. Moreover, investments and compensations for the fishing fleet (permanent cessation of fishing activities, extraordinary cessation of fishing activities, acquisition of a vessel, engine replacement) will be strictly conditional upon their consistency with the conservation objectives of the CFP. This is key for ensuring that financial support is targeted to the achievement of those objectives. –Result indicators – The performance of EMFF support will be assessed on the basis of indicators. Member States will report on progress towards established milestones and targets and the Commission will carry out an annual performance review based on annual performance reports prepared by Member States, allowing for early detection of potential implementation issues and corrective actions. A monitoring and evaluation framework will be established for that purpose. Instead of listing the measures selected from a menu of eligible actions as currently, the national programmes should focus on the strategic priorities chosen by each Member State. This architecture will optimise programme implementation towards policy objectives on the basis of performance, in the context of an on-going dialogue between the Commission and Member States on the achievement of results. Flexibility, result-orientation and mutual trust between the Commission and Member States are thus the three principles of an effective simplification. Under shared management, programmes will be prepared by Member States and approved by the Commission. In the context of regionalisation and with a view to encouraging Member States to have a more strategic approach during the preparation of programmes, the Commission will develop an analysis for each sea basin indicating the common strengths and weaknesses with regard to the achievement of the objectives of the CFP. That analysis will guide both the Member States and the Commission in negotiating each programme taking into account regional challenges and needs. When assessing the programmes, the Commission will take into account the environmental and socio-economic challenges of the CFP, the socio-economic performance of the sustainable blue economy, the challenges at sea basin level, the conservation and restoration of marine ecosystems, the reduction of marine litter and climate change mitigation and adaptation. Simplification will also be achieved through the Common Provisions Regulation, where most provisions related to implementation, monitoring and control are set out. Allocation of resources The EMFF will be implemented under two delivery systems: –under shared management by Member States through EMFF programmes based on national strategies, –directly by the Commission under direct management. The proposal is to preserve the 2014-2020 share of resources between shared management and direct management. In this context, it is proposed that EUR 5 311 000 000 is allocated to shared management (86.5%) and EUR 829 000 000 to direct management (13.5%). Such an allocation allows maintaining an appropriate balance between shared and directly managed resources. Concerning shared management, after having deducted the value of the UK programme (EUR 243 million), Member States would retain, in nominal terms, 96.5% of their 2014-2020 allocation. In order to ensure stability in particular with regard to the achievement of the objectives of the CFP, the definition of national allocations will be based on the 2014-2020 shares. It is also proposed that amounts for certain areas of support under shared management are ring-fenced: –control and enforcement and collection and processing of data for fisheries management and scientific purposes (minimum 15% of the financial support allocated per Member State, except for land-locked countries), –the outermost regions (ring-fenced amount covering both a compensation regime for additional costs and structural support). Conditionality

The United Nations 2030 Agenda for Sustainable Development identified conservation and sustainable use of oceans as one of the 17 Sustainable Development Goals (SDG 14). The Union is fully committed to that goal and its implementation. In that context, it has committed to promote a sustainable blue economy which is consistent with maritime spatial planning, the conservation of biological resources and the achievement of good environmental status, to prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, to eliminate subsidies that contribute to illegal, unreported and unregulated fishing and to refrain from introducing new such subsidies. This outcome should be reached by 2020 and result from the World Trade Organisation fisheries subsidies negotiation. In addition, in the course of World Trade Organisation negotiations at the 2002 World Summit of Sustainable Development and at the 2012 United Nations Conference on Sustainable Development (Rio+20), the Union has committed to eliminate subsidies contributing to fisheries overcapacity and overfishing. Moreover, Article 42 of the CFP Regulation provides that Union financial assistance under the EMFF must be conditional upon compliance with the rules of the CFP. Therefore, applications from beneficiaries that do not comply with the applicable rules of the CFP will not be admissible. In addition, the Commission will be granted powers to act against Member States that do not comply with the rules of the CFP. Fostering sustainable fisheries and the conservation of marine biological resources The CFP shall ensure that fishing and aquaculture activities are environmentally sustainable in the long-term and are managed in a way that is consistent with the objectives of achieving economic, social and employment benefits, and of contributing to the availability of food supplies. It shall aim to ensure that exploitation of living marine biological resources restores and maintains populations of harvested species above levels which can produce the maximum sustainable yield (MSY). It shall also ensure that negative impacts of fishing activities on the marine ecosystem are minimised, and that aquaculture and fisheries activities avoid the degradation of the marine environment (Article 2 of the CFP Regulation). Much has been achieved over the last few years in bringing fish stocks back to healthy levels, in increasing the profitability of the Union's fishing industry and in conserving marine ecosystems. However, substantial challenges remain to achieve the socio-economic and environmental objectives of CFP. This requires continued support beyond 2020, notably in sea basins where progress has been slower. Fisheries are vital to the livelihood and cultural heritage of many coastal communities in the Union, in particular where small-scale coastal fishing plays an important role. With the average age in many fishing communities being over 50, generational renewal and diversification of activities remain a challenge. Support under Priority 1 aims to achieve the environmental, economic, social and employment objectives of the CFP, as defined in Article 2 of the CFP Regulation. Such support should ensure that fishing activities are environmentally sustainable in the long-term and managed in a way that is consistent with the objectives of achieving economic, social and employment benefits, and of contributing to the availability of food supplies. In particular, support from the EMFF will aim to achieve and maintain sustainable fishing based on the MSY and to minimise the negative impacts of fishing activities on the marine ecosystem. That support will include innovation and investments in low-impact, climate resilient and low-carbon fishing practices and techniques. The landing obligation is one of the main challenges of the CFP. It has implied significant changes in fishing practices for the sector, sometimes with an important financial cost. The EMFF will therefore support innovation and investments that contribute to the implementation of the landing obligation, with a higher aid intensity rate than the one that applies to other operations, like investments in selective fishing gears, in the improvement of port infrastructures and in the marketing of unwanted catches. It will also grant a maximum aid intensity of 100% to the design, development, monitoring, evaluation and management of transparent systems for exchanging fishing opportunities between Member States ('quota swaps'), in order to mitigate the 'choke species' effect caused by the landing obligation. Support under Priority 1 may also cover innovation and investments on board fishing vessels in order to improve health, safety and working conditions, energy efficiency and the quality of catches. Such support should, however, not lead to an increase of fishing capacity or ability to find fish and should not be granted simply for complying with requirements that are obligatory under Union or national law. With regard to health, safety and working conditions on board fishing vessels, a higher aid intensity rate than the one that applies to other operations will be allowed. Fisheries control is of utmost importance for the implementation of the CFP. Therefore, under shared management, the EMFF will support the development and implementation of a Union fisheries control system, as specified in the Control Regulation. Certain obligations foreseen by the revision of the Control Regulation (vessel tracking and electronic reporting systems, remote electronic monitoring systems, continuous measurement and recording of propulsive engine power) justify a specific support for a quick and efficient enforcement by Member States and fishers. In addition, investments by Member States in control assets could also be used for the purpose of maritime surveillance and cooperation on coastguard functions. The success of the CFP is also dependent on the availability of scientific advice for the management of fisheries, and hence on the availability of data on fisheries. In the light of the challenges and costs to obtain reliable and complete data, it is necessary to support Member States' actions to collect and process data in line with the Data Collection Framework Regulation and to contribute to the best available scientific advice. That support will allow synergies with the collection and processing of other types of marine data. The EMFF will also support an effective knowledge-based implementation and governance of the CFP under direct and indirect management through the provision of scientific advice, the development and implementation of a Union fisheries control system, the functioning of Advisory Councils and voluntary contributions to international organisations. Targeting fleet management to conservation objectives Given the challenges to achieve a sustainable exploitation of marine biological resources in line with the conservation objectives of the CFP, the EMFF will support the management of fisheries and fishing fleets. In this context, support for fleet adaptation remains sometimes necessary with regard to certain fleet segments and sea basins. Such support should be tightly targeted to the conservation and sustainable exploitation of marine biological resources and aimed to achieve balance between the fishing capacity and the available fishing opportunities. Therefore, the EMFF may support the permanent cessation of fishing activities in fleet segments where the fishing capacity is not balanced with the available fishing opportunities. Such support will be a tool of the action plans for the adjustment of fleet segments with identified structural overcapacity, as provided for in Article 22(4) of the CFP Regulation, and will be implemented either through the scrapping of the fishing vessel or through its decommissioning and retrofitting for other activities. Where the retrofitting would lead to an increased pressure of recreational fishing on the marine ecosystem, support will only be granted if in line with the CFP and the objectives of the relevant multiannual plans. In the past, support for the permanent cessation of fishing activities was not sufficiently targeted and did not efficiently address the structural unbalances of the fishing fleet. In order to ensure the consistency of fleet structural adaptation with conservation objectives, such support will be strictly conditional and linked to the achievement of results. It is therefore proposed to implement it only by 'financing not linked to costs', as provided for in the Common Provisions Regulation. Under that mechanism, Member States will not be reimbursed by the Commission for permanent cessation of fishing activities on the basis of real costs incurred but on the basis of the fulfilment of conditions and of the achievement of results. For this purpose, the Commission will establish in a delegated act such conditions, which will relate to the achievement of the conservation objectives of the CFP. Compensation for the extraordinary cessation of fishing activities Given the high level of unpredictability of fishing activities, extraordinary circumstances may cause significant economic losses to fishers. In order to mitigate those consequences, the EMFF may support a compensation for the extraordinary cessation of fishing activities caused by the implementation of certain conservation measures (i.e. multiannual plans, targets for the conservation and sustainable exploitation of stocks, measures to adapt the fishing capacity of fishing vessels to available fishing opportunities and technical measures), by emergency measures (e.g. the closure of a fishery), by the interruption, due to reasons of force majeure, of the application of a sustainable fisheries partnership agreement, by a natural disaster or by an environmental incident. Such support will be granted only if impact on fishers of such circumstances is significant, i.e. if the commercial activities of the vessel concerned are stopped during at least 90 consecutive days and if the economic losses resulting from the cessation amount to more than 30% of the average annual turnover of the business concerned during a specified period of time. Preferential treatment for small scale coastal fishing and outermost regions

Small-scale coastal fishing is carried out by fishing vessels below 12 metres and not using towed fishing gears. That sector represents nearly 75% of all fishing vessels registered in the Union and nearly half of all employment in the fishery sector. Operators from small-scale coastal fisheries are particularly dependant on healthy fish stocks for their main source of income. The EMFF will therefore give them a preferential treatment through a 100% aid intensity rate, with the aim of encouraging their sustainable fishing practices. In addition, certain areas of support will be reserved for small-scale fishing in fleet segment where the fishing capacity is balanced with the available fishing opportunities, i.e. the acquisition of a second-hand vessel and the replacement or modernisation of a vessel's engine. Furthermore, Member States will include in their programme an action plan for small-scale coastal fishing, which will be monitored on the basis of indicators for which milestones and targets will be set. The outermost regions, as outlined in the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank of 24 October 2017 entitled 'A stronger and renewed strategic partnership with the EU's outermost regions', face specific challenges linked to their remoteness, topography and climate as referred to in Article 349 of the Treaty and also have specific assets on which to develop a sustainable blue economy. Therefore, for each outermost region, an action plan for the sustainable development of sustainable blue economy sectors, including the sustainable exploitation of fisheries and aquaculture, will be attached to the programme of the concerned Member States and a financial allocation will be reserved to support the implementation of those action plans. The EMFF may also support a compensation of the additional costs the outermost regions face due to their location and insularity. That support will be capped as a percentage of this overall financial allocation. In addition, a higher aid intensity rate than the one that applies to other operations will be applied in the outermost regions. Protection and restoration of marine biodiversity and ecosystems The protection and restoration of marine and coastal biodiversity and ecosystems is a key challenge for achieving healthy seas and oceans. Under shared management, the EMFF will contribute to this objective through support for the collection by fishers of lost fishing gears and marine litter from the sea and for investments in ports to provide adequate reception facilities for lost fishing gears and marine litter. It will also support actions to achieve or maintain a good environmental status in the marine environment as set out in the Maritime Strategy Framework Directive, for the implementation of spatial protection measures established pursuant to that Directive, for the management, restoration and monitoring of NATURA 2000 areas and for the protection of species under the 'Habitats' and 'Birds' Directives Under direct management, the EMFF will contribute to the promotion of clean and healthy seas and to the implementation of the European Strategy for Plastics in a Circular Economy developed in the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 16 January 2016, in coherence with the objective of achieving or maintaining a good environmental status in the marine environment. Contributing to food security in the Union Fisheries and aquaculture contribute to food security and nutrition. However, the Union currently imports more than 60% of its supply of fishery products and is therefore highly dependent on third countries. An important challenge is to encourage the consumption of fish protein produced in the Union with high quality standards and available for consumers at affordable prices. In this context, aquaculture has a role to play. The EMFF may therefore support the promotion and the sustainable development of aquaculture, including freshwater aquaculture, for the farming of aquatic animals and plants for the production of food and other raw material. Complex administrative procedures in some Member States remain in place, such as difficult access to space and burdensome licensing procedures, which make it difficult for the sector to improve the image and competitiveness of farmed products. Support should be consistent with the multiannual national strategic plans for aquaculture developed on the basis of the CFP Regulation. In particular, support for environmental sustainability, productive investments, innovation, acquisition of professional skills, improvement of working conditions, compensatory measures providing critical land and nature management services will be eligible. Public health actions, aquaculture stock insurance schemes and animal health and welfare actions will also be eligible. However, in the case of productive investments support will be provided only through financial instruments and through InvestEU, which offer a higher leverage on markets and are therefore more relevant than grants to address the financing challenges of the sector. Food security also relies on efficient and well-organised markets, which improve the transparency, stability, quality and diversity of the supply chain, as well as consumer information. For that purpose, the EMFF may support the marketing of fishery and aquaculture products, in line with the objectives of the Common Market Organisation (CMO). It may in particular support the creation of producer organisations, the implementation of production and marketing plans, the promotion of new market outlets and the development and dissemination of market intelligence. The processing industry also plays a role in the availability and quality of fishery and aquaculture products. The EMFF may support targeted investments in that industry, provided they contribute to the achievement of the objectives of the CMO. The latest data show a healthy performance for the Union processing sector, therefore support will be provided only through financial instruments and through InvestEU and not through grants. Large-scale investments may be supported by the European Regional Development Fund (ERDF). Enabling the growth of a sustainable blue economy and fostering prosperous coastal communities Job creation in coastal regions relies on a locally driven development of a sustainable blue economy that revives the social fabric of those regions. Ocean industries and services are likely to outperform the growth of the global economy and make an important contribution to employment and growth by 2030. To be sustainable, blue growth depends on innovation and investment in new maritime businesses and in the bio-economy, including sustainable tourism models, ocean-based renewable energy, innovative high-end shipbuilding and new port service, which can create jobs and at the same time enhance local development. Whilst public investment in the sustainable blue economy should be mainstreamed throughout the Union budget, the EMFF will specifically concentrate on enabling conditions for the development of the sustainable blue economy and on removing bottlenecks to facilitate investment and the development of new markets and technologies or services. The development of a sustainable blue economy strongly relies on partnerships between local stakeholders that contribute to the vitality of coastal and inland communities and economies. The EMFF will provide tools to foster such partnerships. For that purpose, it will support community-led local development (CLLD) under shared management. CLLD has been a very successful instrument during the 2014-2020 period. Such strategies indeed boost economic diversification in a local context through the development of coastal and inland fisheries, aquaculture and a sustainable blue economy. They should ensure that local communities better exploit and benefit from the opportunities offered by the sustainable blue economy, capitalising on and strengthening environmental, cultural, social and human resources. Compared to the 2014-2020 period, the scope of CLLD strategies supported by the EMFF will be extended: every local partnership should reflect the main focus of its strategy by ensuring a balanced involvement and representation of all relevant stakeholders from the local sustainable blue economy. Under shared management, the EMFF will also support a sustainable blue economy through the collection, management and use of data to improve the knowledge on the state of the marine environment. That support should aim to fulfil requirements under the Habitats and Birds Directives, to support maritime spatial planning and to increase data quality and sharing through the European marine observation and data network. Under direct and indirect management, the EMFF will focus on the enabling conditions for a sustainable blue economy through the promotion of an integrated governance and management of the maritime policy, the enhancement of the transfer and uptake of research, innovation and technology in the sustainable blue economy, the improvement of maritime skills, ocean literacy and sharing of socio-economic data on the sustainable blue economy, the promotion of a low-carbon and climate resilient sustainable blue economy and the development of project pipelines and innovative financing instruments. Strengthening international ocean governance and enabling safe, secure, clean and sustainably managed seas and oceans 60% of the oceans are beyond the borders of national jurisdiction. This implies a shared international responsibility. Most problems facing the oceans are transboundary in nature such as overexploitation, climate change, acidification, pollution and declining biodiversity, and therefore require a shared response. Under the United Nations Convention on the Law of the Sea, to which the Union is a Party, many jurisdictional rights, institutions and specific frameworks have been set up to regulate and manage human activity in the oceans. In recent years, a global consensus has emerged that the marine environment and maritime human activities should be managed more effectively to address the increasing pressures on the oceans. As a global actor, the Union is strongly committed to promoting international ocean governance, in accordance with the Joint Communication to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions of 10 November 2016 entitled 'International Ocean Governance: and agenda for the future of our oceans'. The Union's ocean governance policy is a new policy that covers the oceans in an integrated manner. International ocean governance is not only core to achieve the 2030 Agenda for Sustainable Development, and in particular Sustainable Development Goal 14 ('Conserve and sustainably use the oceans, seas and marine resources for sustainable development'), but also to guarantee safe, secure, clean and sustainably managed seas and oceans for future generations. The Union needs to deliver on those international commitments and be a driving force for better international ocean governance at bilateral, regional and multilateral levels, including to prevent, deter and eliminate illegal, unreported and unregulated fishing, to improve the international ocean governance framework, to reduce pressures on oceans and seas, to create the conditions for a sustainable blue economy and to strengthen international ocean research and data. The EMFF will support those international commitments and objectives under direct management. Actions promoting international ocean governance under the EMFF are to improve the overarching framework of international and regional processes, agreements, rules and institutions to regulate and manage human activity in the oceans. The EMFF will fund international arrangements that the Union has concluded in areas not covered by the Sustainable Fisheries Partnership Agreements (SFPAs) established with various third countries as well as the Union's legal membership contribution to regional fisheries management organisations (RFMOs). SFPAs and RFMOs will continue to be funded under different strands of the Union budget. With regard to security and defence, improved border protection and maritime surveillance are essential. Under the European Union Maritime Security Strategy adopted by the Council of the European Union on 24 June 2014 and its Action Plan adopted on 16 December 2016, information sharing and the European Border and Coast Guard cooperation between the European Fisheries Control Agency, the European Maritime Safety Agency and the European Border and Coast Guard Agency are key to deliver on those objectives. The EMFF will therefore support maritime surveillance and coastguard cooperation under both shared and direct management, including by purchasing assets for multipurpose maritime operations. It will also allow the relevant agencies to implement support in the field of maritime surveillance and security under indirect management.

2018/0210 (COD) Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the European Maritime and Fisheries Fund and repealing Regulation (EU) No 508/2014 of the European Parliament and of the Council

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 42, Article 43(2), Article 91(1), Article 100(2), Article 173(3), Article 175, Article 188, Article 192(1), Article 194(2), Article 195(2) and Article 349 thereof, Having regard to the proposal from the European Commission, After transmission of the draft legislative act to the national parliaments, Having regard to the opinion of the European Economic and Social Committee, Having regard to the opinion of the Committee of the Regions, Acting in accordance with the ordinary legislative procedure, Whereas: (1)It is necessary to establish a European Maritime and Fisheries Fund (EMFF) for the 2021-2027 period. That fund should aim to target funding from the Union budget to support the Common Fisheries Policy (CFP), the Union's maritime policy and the Union's international commitments in the field of ocean governance. Such funding is a key enabler for sustainable fisheries and the conservation of marine biological resources, for food security through the supply of seafood products, for the growth of a sustainable blue economy and for healthy, safe, secure, clean and sustainably managed seas and oceans. (2)As a global ocean actor and the world's fifth largest producer of seafood, the Union has a strong responsibility to protect, conserve and sustainably use the oceans and their resources. Preserving seas and oceans is indeed vital for a rapidly growing world population. It is also of socio-economic interest for the Union: a sustainable blue economy boosts investments, jobs and growth, fosters research and innovation and contributes to energy security through ocean energy. Moreover, safe and secure seas and oceans are essential for an efficient border control and for the global fight against maritime crime, thereby addressing citizens' security concerns. (3)Regulation (EU) xx/xx of the European Parliament and of the Council [Regulation laying down Common Provisions] ('Common Provisions Regulation') has been adopted in order to improve the coordination and harmonise the implementation of support under Funds in shared management (the 'Funds'), with the main aim of simplifying policy delivery in a coherent way. Those common provisions apply to the part of the EMFF under shared management. The Funds pursue complementary objectives and share the same management mode. Therefore Regulation (EU) No [Regulation laying down Common Provisions] sets out a series of common general objectives and general principles such as partnership and multi-level governance. It also contains the common elements of strategic planning and programming, including provisions on the Partnership Agreement to be concluded with each Member State, and sets out a common approach to the performance orientation of the Funds. Accordingly, it includes enabling conditions, a performance review and arrangements for monitoring, reporting and evaluation. Common provisions are also set out with regard to eligibility rules, and special arrangements are defined for financial instruments, use of InvestEU, community-led local development and financial management. Some management and control arrangements are also common to all Funds. Complementarities between the Funds, including the EMFF, and other Union programmes should be described in the Partnership Agreement, in accordance with Regulation (EU) No [Regulation laying down Common Provisions]. (4)Horizontal financial rules adopted by the European Parliament and the Council on the basis of Article 322 of the Treaty on the Functioning of the European Union apply to this Regulation. These rules are laid down in Regulation (EU) xx/xx of the European Parliament and of the Council [Regulation on the financial rules applicable to the general budget of the Union] (‘Financial Regulation’) and determine in particular the procedure for establishing and implementing the budget through grants, procurement, prizes, indirect implementation, and provide for checks on the responsibility of financial actors. Rules adopted on the basis of Article 322 of the Treaty also concern the protection of the Union's budget in case of generalised deficiencies as regards the rule of law in the Member States, as the respect for the rule of law is an essential precondition for sound financial management and effective Union funding. (5)Under direct management, the EMFF should develop synergies and complementarities with other relevant Union funds and programmes. It should also allow financing in the form of financial instruments within blending operations implemented in accordance with Regulation (EU) xx/xx of the European Parliament and of the Council [Regulation on InvestEU]. (6)Support under the EMFF should be used to address market failures or sub-optimal investment situations, in a proportionate manner, and should not duplicate or crowd out private financing or distort competition in the internal market. Support should have a clear European added value. (7)The types of financing and the methods of implementation under this Regulation should be chosen on the basis of their ability to achieve the priorities set for the actions and to deliver results, taking into account, in particular, the costs of controls, the administrative burden, and the expected risk of non-compliance. This should include consideration of the use of lump sums, flat rates and unit costs, as well as financing not linked to costs as referred to in Article 125(1) of Regulation (EU) No [Regulation on the financial rules applicable to the general budget of the Union]. (8)The multiannual financial framework set out in Regulation (EU) xx/xx provides that the Union budget must continue to support fisheries and maritime policies. The EMFF budget should amount, in current prices, to EUR 6 140 000 000. EMFF resources should be split between shared, direct and indirect management. EUR 5 311 000 000 should be allocated to support under shared management and EUR 829 000 000 to support under direct and indirect management. In order to ensure stability in particular with regard to the achievement of the objectives of the CFP, the definition of national allocations under shared management for the 2021-2027 programming period should be based on the EMFF 2014-2020 shares. Specific amounts should be reserved for the outermost regions, control and enforcement and collection and processing of data for fisheries management and scientific purposes, while amounts for permanent cessation and extraordinary cessation of fishing activities should be capped.

(9)Europe's maritime sector employs over 5 million jobs generating almost EUR 500 billion a year, with a potential to create many more jobs. The output of the global ocean economy is estimated at EUR 1.3 trillion today and this could more than double by 2030. The need to meet CO2 emissions targets, increase resource efficiency and reduce the environmental footprint of the blue economy has been a significant driving force for innovation in other sectors such as marine equipment, shipbuilding, ocean observation, dredging, coastal protection and marine construction. Investment in the maritime economy has been provided by Union structural funds, in particular the European Regional Development Fund (ERDF) and the EMFF. New investment tools such as InvestEU must be utilised to meet the growth potential of the sector. (10)The EMFF should be based on four priorities: fostering sustainable fisheries and the conservation of marine biological resources; contributing to food security in the Union through competitive and sustainable aquaculture and markets; enabling the growth of a sustainable blue economy and fostering prosperous coastal communities; strengthening international ocean governance and enabling safe, secure, clean and sustainably managed seas and oceans. Those priorities should be pursued through shared, direct and indirect management. (11)The EMFF beyond 2020 should be based on a simplified architecture without predefining measures and detailed eligibility rules at Union level in an overly prescriptive manner. Instead, broad areas of support should be described under each priority. Member States should thus draw up their programme indicating therein the most appropriate means for achieving the priorities. A variety of measures identified by the Member States in those programmes might be supported under the rules set out in this Regulation and in Regulation (EU) No [Regulation laying down Common Provisions], provided they are covered by the areas of support identified in this Regulation. However, it is necessary to set out a list of ineligible operations so as to avoid detrimental impacts in terms of fisheries conservation, for example a general prohibition of investments enhancing fishing capacity. Moreover, investments and compensations for the fleet should be strictly conditional on their consistency with the conservation objectives of the CFP. (12)The United nations 2030 Agenda for Sustainable Development identified conservation and sustainable use of oceans as one of the 17 Sustainable Development Goals (SDG 14). The Union is fully committed to that goal and its implementation. In that context, it has committed to promote a sustainable blue economy which is consistent with maritime spatial planning, the conservation of biological resources and the achievement of good environmental status, to prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, to eliminate subsidies that contribute to illegal, unreported and unregulated fishing and to refrain from introducing new such subsidies. This outcome should result from the World Trade Organisation fisheries subsidies negotiation. In addition, in the course of World Trade Organisation negotiations at the 2002 World Summit of Sustainable Development and at the 2012 United Nations Conference on Sustainable Development (Rio+20), the Union has committed to eliminate subsidies contributing to fisheries overcapacity and overfishing. (13)Reflecting the importance of tackling climate change in line with the Union's commitments to implement the Paris Agreement and the United Nations Sustainable Development Goals, this Regulation should contribute to mainstream climate actions and to the achievement of an overall target of 25% of the Union budget expenditures supporting climate objectives. Actions under this Regulation are expected to contribute to 30% of the overall financial envelope of the EMFF to climate objectives. Relevant actions will be identified during the preparation and implementation of the EMFF, and reassessed in the context of the relevant evaluations and review processes. (14)The EMFF should contribute to the achievement of the environmental objectives of the Union. This contribution should be tracked through the application of Union environmental markers and reported regularly in the context of evaluations and annual performance reports. (15)In accordance with Article 42 of Regulation (EU) No 1380/2013 of the European Parliament and of the Council ('CFP Regulation'), Union financial assistance under the EMFF should be conditional upon compliance with the rules of the CFP. Applications from beneficiaries that do not comply with the applicable rules of the CFP should not be admissible. (16)In order to address the specific conditions of the CFP referred to in Regulation (EU) No 1380/2013 and to contribute to the compliance with the rules of the CFP, provisions additional to the rules on interruption, suspension and financial corrections as set out in Regulation (EU) No [Regulation laying down Common Provisions] should be laid down. Where a Member State or a beneficiary has failed to comply with its obligations under the CFP, or where the Commission has evidence that suggests such a lack of compliance, the Commission should, as a precautionary measure, be allowed to interrupt payment deadlines. In addition to the possibility of interruption of the payment deadline, and in order to avoid an evident risk of paying out ineligible expenditure, the Commission should be allowed to suspend payments and impose financial corrections in cases of serious non-compliance with rules of the CFP by a Member State. (17)Much has been achieved over the last few years by the CFP in bringing fish stocks back to healthy levels, in increasing the profitability of the Union's fishing industry and in conserving marine ecosystems. However, substantial challenges remain to achieve the socio-economic and environmental objectives of CFP. This requires continued support beyond 2020, notably in sea basins where progress has been slower. (18)Fisheries are vital to the livelihood and cultural heritage of many coastal communities in the Union, in particular where small-scale coastal fishing plays an important role. With the average age in many fishing communities being over 50, generational renewal and diversification of activities remain a challenge. (19)The EMFF should aim to achieve the environmental, economic, social and employment objectives of the CFP, as defined in Article 2 of Regulation (EU) No 1380/2013. Such support should ensure that fishing activities are environmentally sustainable in the long-term and managed in a way that is consistent with the objectives of achieving economic, social and employment benefits, and of contributing to the availability of food supplies. (20)Support from the EMFF should aim to achieve and maintain sustainable fishing based on the maximum sustainable yield (MSY) and to minimise the negative impacts of fishing activities on the marine ecosystem. That support should include innovation and investments in low-impact, climate resilient and low-carbon fishing practices and techniques. (21)The landing obligation is one of the main challenges of the CFP. It has implied significant changes in fishing practices for the sector, sometimes with an important financial cost. It should therefore be possible for the EMFF to support innovation and investments that contribute to the implementation of the landing obligation, with a higher aid intensity rate than the one that applies to other operations, like investments in selective fishing gears, in the improvement of port infrastructures and in the marketing of unwanted catches. It should also grant a maximum aid intensity rate of 100% to the design, development, monitoring, evaluation and management of transparent systems for exchanging fishing opportunities between Member States ('quota swaps'), in order to mitigate the 'choke species' effect caused by the landing obligation. (22)It should be possible for the EMFF to support innovation and investments on board fishing vessels in order to improve health, safety and working conditions, energy efficiency and the quality of catches. Such support should, however, not lead to an increase of fishing capacity or ability to find fish and should not be granted simply for complying with requirements that are obligatory under Union or national law. Under the architecture with no prescriptive measures, it should be up to Member States to define the precise eligibility rules for those investments. With regard to health, safety and working conditions on board fishing vessels, a higher aid intensity rate than the one that applies to other operations should be allowed. (23)Fisheries control is of utmost importance for the implementation of the CFP. Therefore, the EMFF should support under shared management the development and implementation of a Union fisheries control system as specified in Council Regulation (EC) No 1224/2009 ('Control Regulation'). Certain obligations foreseen by the revision of the Control Regulation justify a specific support from the EMFF, i.e. the compulsory vessel tracking and electronic reporting systems in the case of small-scale coastal fishing vessels, the compulsory remote electronic monitoring systems and the compulsory continuous measurement and recording of propulsive engine power. In addition, investments by Member States in control assets could also be used for the purpose of maritime surveillance and cooperation on coastguard functions. (24)The success of the CFP is dependent on the availability of scientific advice for the management of fisheries, and hence on the availability of data on fisheries. In the light of the challenges and costs to obtain reliable and complete data, it is necessary to support Member States' actions to collect and process data in line with Regulation (EU) No 2017/1004 of the European Parliament and of the Council ('Data Collection Framework Regulation') and to contribute to the best available scientific advice. This support should allow synergies with the collection and processing of other types of marine data. (25)The EMFF should support an effective knowledge-based implementation and governance of the CFP under direct and indirect management through the provision of scientific advice, the development and implementation of a Union fisheries control system, the functioning of Advisory Councils and voluntary contributions to international organisations. (26)Given the challenges to achieve the conservation objectives of the CFP, it should be possible for the EMFF to support actions for the management of fisheries and fishing fleets. In this context, support for fleet adaptation remains sometimes necessary with regard to certain fleet segments and sea basins. Such support should be tightly targeted to the conservation and sustainable exploitation of marine biological resources and aimed to achieve balance between the fishing capacity and the available fishing opportunities. Therefore, it should be possible for the EMFF to support the permanent cessation of fishing activities in fleet segments where the fishing capacity is not balanced with the available fishing opportunities. Such support should be a tool of the action plans for the adjustment of fleet segments with identified structural overcapacity, as provided for in Article 22(4) of Regulation (EU) No 1380/2013, and should be implemented either through the scrapping of the fishing vessel or through its decommissioning and retrofitting for other activities. Where the retrofitting would lead to an increased pressure of recreational fishing on the marine ecosystem, support should only be granted if in line with the CFP and the objectives of the relevant multiannual plans. In order to ensure the consistency of fleet structural adaptation with conservation objectives, support for the permanent cessation of fishing activities should be strictly conditional and linked to the achievement of results. It should therefore be implemented only by financing not linked to costs, as provided for in Regulation (EU) No [Regulation laying down Common Provisions]. Under that mechanism, Member States should not be reimbursed by the Commission for permanent cessation of fishing activities on the basis of real costs incurred but on the basis of the fulfilment of conditions and of the achievement of results. For this purpose, the Commission should establish in a delegated act such conditions, which should relate to the achievement of the conservation objectives of the CFP. (27)Given the high level of unpredictability of fishing activities, exceptional circumstances may cause significant economic losses to fishers. In order to mitigate those consequences, it should be possible for the EMFF to support a compensation for the extraordinary cessation of fishing activities caused by the implementation of certain conservation measures, i.e. multiannual plans, targets for the conservation and sustainable exploitation of stocks, measures to adapt the fishing capacity of fishing vessels to available fishing opportunities and technical measures, by the implementation of emergency measures, by the interruption, due to reasons of force majeure, of the application of a sustainable fisheries partnership agreement, by a natural disaster or by an environmental incident. Support should be granted only if the impact on fishers of such circumstances is significant, i.e. if the commercial activities of the vessel concerned are stopped during at least 90 consecutive days and if the economic losses resulting from the cessation amount to more than 30% of the average annual turnover of the business concerned during a specified period of time. The specificities of eel fisheries should be taken into account in the conditions for granting such support. (28)Small-scale coastal fishing is carried out by fishing vessels below 12 metres and not using towed fishing gears. That sector represents nearly 75% of all fishing vessels registered in the Union and nearly half of all employment in the fishery sector. Operators from small-scale coastal fisheries are particularly dependant on healthy fish stocks for their main source of income. The EMFF should therefore give them a preferential treatment through a 100% aid intensity rate, including for operations related to control and enforcement, with the aim of encouraging sustainable fishing practices. In addition, certain areas of support should be reserved for small-scale fishing in fleet segment where the fishing capacity is balanced with the available fishing opportunities, i.e. support for the acquisition of a second-hand vessel and for engine replacement or modernisation. Furthermore, Member States should include in their programme an action plan for small-scale coastal fishing, which should be monitored on the basis of indicators for which milestones and targets should be set.

(29)The outermost regions, as outlined in the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank of 24 October 2017 entitled 'A stronger and renewed strategic partnership with the EU's outermost regions', face specific challenges linked to their remoteness, topography and climate as referred to in Article 349 of the Treaty and also have specific assets on which to develop a sustainable blue economy. Therefore, for each outermost region, an action plan for the development of sustainable blue economy sectors, including the sustainable exploitation of fisheries and aquaculture, should be attached to the programme of the concerned Member States and a financial allocation should be reserved to support the implementation of those action plans. It should also be possible for the EMFF to support a compensation of the additional costs the outermost regions face due to their location and insularity. That support should be capped as a percentage of this overall financial allocation. In addition, a higher aid intensity rate than the one that applies to other operations should be applied in the outermost regions. (30)Under shared management, it should be possible for the EMFF to support the protection and restoration of marine and coastal biodiversity and ecosystems. For that purpose, support should be available to compensate the collection by fishers of lost fishing gears and marine litter from the sea and for investments in ports to provide adequate reception facilities for lost fishing gears and marine litter. Support should also be available for actions to achieve or maintain a good environmental status in the marine environment as set out in Directive 2008/56/EC of the European Parliament and of the Council ('Maritime Strategy Framework Directive'), for the implementation of spatial protection measures established pursuant to that Directive and, in accordance with the prioritised action frameworks established pursuant to Council Directive 92/43/EEC ('Habitats Directive'), for the management, restoration and monitoring of NATURA 2000 areas as well as for the protection of species under Directive 92/43/EEC and Directive 2009/147/EC of the European Parliament and of the Council ('Birds Directive'). Under direct management, the EMFF should support the promotion of clean and healthy seas and the implementation of the European Strategy for Plastics in a Circular Economy developed in the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 16 January 2016, in coherence with the objective of achieving or maintaining a good environmental status in the marine environment. (31)Fisheries and aquaculture contribute to food security and nutrition. However, the Union currently imports more than 60% of its supply of fishery products and is therefore highly dependent on third countries. An important challenge is to encourage the consumption of fish protein produced in the Union with high quality standards and available for consumers at affordable prices. (32)It should be possible for the EMFF to support the promotion and the sustainable development of aquaculture, including freshwater aquaculture, for the farming of aquatic animals and plants for the production of food and other raw material. Complex administrative procedures in some Member States remain in place, such as difficult access to space and burdensome licensing procedures, which make it difficult for the sector to improve the image and competitiveness of farmed products. Support should be consistent with the multiannual national strategic plans for aquaculture developed on the basis of Regulation (EU) No 1380/2013. In particular, support for environmental sustainability, productive investments, innovation, acquisition of professional skills, improvement of working conditions, compensatory measures providing critical land and nature management services should be eligible. Public health actions, aquaculture stock insurance schemes and animal health and welfare actions should also be eligible. However, in the case of productive investments support should be provided only through financial instruments and through InvestEU, which offer a higher leverage on markets and are therefore more relevant than grants to address the financing challenges of the sector. (33)Food security relies on efficient and well-organised markets, which improve the transparency, stability, quality and diversity of the supply chain, as well as consumer information. For that purpose, it should be possible for the EMFF to support the marketing of fishery and aquaculture products, in line with the objectives of Regulation (EU) No 1379/2013 of the European Parliament and of the Council ('CMO Regulation'). In particular, support should be available for the creation of producer organisations, the implementation of production and marketing plans, the promotion of new market outlets and the development and dissemination of market intelligence. (34)The processing industry plays a role in the availability and quality of fishery and aquaculture products. It should be possible for the EMFF to support targeted investments in that industry, provided they contribute to the achievement of the objectives of the CMO. Such support should be provided only through financial instruments and through InvestEU and not through grants. (35)Job creation in coastal regions relies on a locally driven development of a sustainable blue economy that revives the social fabric of those regions. Ocean industries and services are likely to outperform the growth of the global economy and make an important contribution to employment and growth by 2030. To be sustainable, blue growth depends on innovation and investment in new maritime businesses and in the bio-economy, including sustainable tourism models, ocean-based renewable energy, innovative high-end shipbuilding and new port service, which can create jobs and at the same time enhance local development. Whilst public investment in the sustainable blue economy should be mainstreamed throughout the Union budget, the EMFF should specifically concentrate on enabling conditions for the development of the sustainable blue economy and on removing bottlenecks to facilitate investment and the development of new markets and technologies or services. Support for the development of the sustainable blue economy should be delivered through shared, direct and indirect management. (36)The development of a sustainable blue economy strongly relies on partnerships between local stakeholders that contribute to the vitality of coastal and inland communities and economies. The EMFF should provide tools to foster such partnerships. For that purpose, support for community-led local development (CLLD) should be available under shared management. That approach should boost economic diversification in a local context through the development of coastal and inland fisheries, aquaculture and a sustainable blue economy. CLLD strategies should ensure that local communities better exploit and benefit from the opportunities offered by the sustainable blue economy, capitalising on and strengthening environmental, cultural, social and human resources. Every local partnership should therefore reflect the main focus of its strategy by ensuring a balanced involvement and representation of all relevant stakeholders from the local sustainable blue economy. (37)Under shared management, it should be possible for the EMFF to support the sustainable blue economy through the collection, management and use of data to improve the knowledge on the state of the marine environment. That support should aim to fulfil requirements under Directive 92/43/EEC and Directive 2009/147/EC, to support maritime spatial planning and to increase data quality and sharing through the European marine observation and data network. (38)Under direct and indirect management, the EMFF should focus on the enabling conditions for a sustainable blue economy through the promotion of an integrated governance and management of the maritime policy, the enhancement of the transfer and uptake of research, innovation and technology in the sustainable blue economy, the improvement of maritime skills, ocean literacy and sharing of socio-economic data on the sustainable blue economy, the promotion of a low-carbon and climate resilient sustainable blue economy and the development of project pipelines and innovative financing instruments. Due consideration to the outermost regions' specific situation should be given in relation to the above mentioned fields. (39)60% of the oceans are beyond the borders of national jurisdiction. This implies a shared international responsibility. Most problems facing the oceans are transboundary in nature such as overexploitation, climate change, acidification, pollution and declining biodiversity, and therefore require a shared response. Under the United Nations Convention on the Law of the Sea, to which the Union is a Party under Council Decision 98/392/EC, many jurisdictional rights, institutions and specific frameworks have been set up to regulate and manage human activity in the oceans. In recent years, a global consensus has emerged that the marine environment and maritime human activities should be managed more effectively to address the increasing pressures on the oceans. (40)As a global actor, the Union is strongly committed to promoting international ocean governance, in accordance with the Joint Communication to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions of 10 November 2016 entitled 'International Ocean Governance: and agenda for the future of our oceans'. The Union's ocean governance policy is a new policy that covers the oceans in an integrated manner. International ocean governance is not only core to achieve the 2030 Agenda for Sustainable Development, and in particular Sustainable Development Goal 14 ('Conserve and sustainably use the oceans, seas and marine resources for sustainable development'), but also to guarantee safe, secure, clean and sustainably managed seas and oceans for future generations. The Union needs to deliver on those international commitments and be a driving force for better international ocean governance at bilateral, regional and multilateral levels, including to prevent, deter and eliminate illegal, unreported and unregulated fishing, to improve the international ocean governance framework, to reduce pressures on oceans and seas, to create the conditions for a sustainable blue economy and to strengthen international ocean research and data. (41)Actions promoting international ocean governance under the EMFF are to improve the overarching framework of international and regional processes, agreements, rules and institutions to regulate and manage human activity in the oceans. The EMFF should fund international arrangements that the Union has concluded in areas not covered by the Sustainable Fisheries Partnership Agreements (SFPAs) established with various third countries as well as the Union's legal membership contribution to regional fisheries management organisations (RFMOs). SFPAs and RFMOs will continue to be funded under different strands of the Union budget. (42)With regard to security and defence, improved border protection and maritime security are essential. Under the European Union Maritime Security Strategy adopted by the Council of the European Union on 24 June 2014 and its Action Plan adopted on 16 December 2014, information sharing and the European Border and Coast Guard cooperation between the European Fisheries Control Agency, the European Maritime Safety Agency and the European Border and Coast Guard Agency are key to deliver on those objectives. The EMFF should therefore support maritime surveillance and coastguard cooperation under both shared and direct management, including by purchasing items for multipurpose maritime operations. It should also allow the relevant agencies to implement support in the field of maritime surveillance and security through indirect management. (43)Under shared management, each Member States should prepare one single programme that should be approved by the Commission. In the context of regionalisation and with a view to encouraging Member States to have a more strategic approach during the preparation of programmes, the Commission should develop an analysis for each sea basin indicating the common strengths and weaknesses with regard to the achievement of the objectives of the CFP. That analysis should guide both the Member States and the Commission in negotiating each programme taking into account regional challenges and needs. When assessing the programmes, the Commission should take into account the environmental and socio-economic challenges of the CFP, the socio-economic performance of the sustainable blue economy, the challenges at sea basin level, the conservation and restoration of marine ecosystems, the reduction of marine litter and climate change mitigation and adaptation. (44)Performance of EMFF support in Member States should be assessed on the basis of indicators. Member States should report on progress towards established milestones and targets and the Commission should carry out a performance review based on annual performance reports prepared by Member States, allowing for early detection of potential implementation issues and corrective actions. A monitoring and evaluation framework should be established for that purpose. (45)Pursuant to paragraphs 22 and 23 of the Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission of 13 April 2016 on Better Law-Making, there is a need to evaluate the EMFF on the basis of information collected through specific monitoring requirements, while avoiding overregulation and administrative burdens, in particular on Member States. These requirements, where appropriate, can include measurable indicators, as a basis for evaluating the effects of the EMFF on the ground. (46)The Commission should implement information and communication actions relating to the EMFF, and its actions and results. Financial resources allocated to the EMFF should also contribute to the corporate communication of the political priorities of the Union, as far as they are related to the priorities of the EMFF. (47)In accordance with Regulation (EU) No [Regulation on the financial rules applicable to the general budget of the Union], Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council, Council Regulation (Euratom, EC) No 2988/95, Council Regulation (Euratom, EC) No 2185/96 and Council Regulation (EU) 2017/1939, the financial interests of the Union are to be protected through proportionate measures, including the prevention, detection, correction and investigation of irregularities, including fraud, the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, the imposition of administrative sanctions. In particular, in accordance with Regulation (EU, Euratom) No 883/2013 and Regulation (Euratom, EC) No 2185/96, the European Anti-Fraud Office (OLAF) might carry out investigations, including on-the-spot checks and inspections, with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union. In accordance with Council Regulation (EU) 2017/1939, the European Public Prosecutor's Office (EPPO) might investigate and prosecute fraud and other criminal offences affecting the financial interests of the Union as provided for in Directive (EU) 2017/1371 of the European Parliament and of the Council. In accordance with Regulation (EU) No [Regulation on the financial rules applicable to the general budget of the Union], any person or entity receiving Union funds is to fully cooperate in the protection of the Union’s financial interests, to grant the necessary rights and access to the Commission, OLAF, the EPPO and the European Court of Auditors (ECA) and to ensure that any third parties involved in the implementation of Union funds grant equivalent rights. Member States should ensure that in the management and implementation of the EMFF, the financial interests of the Union are protected, in accordance with Regulation (EU) No [Regulation on the financial rules applicable to the general budget of the Union] and Regulation (EU) No [Regulation laying down Common Provisions]. (48)In order to enhance transparency regarding the use of Union funds and their sound financial management, in particular reinforcing public control of the money used, certain information on the operations funded under the EMFF should be published on a website of Member State in accordance with Regulation (EU) No [Regulation laying down Common Provisions]. When a Member State publishes information on operations funded under EMFF, the rules on the protection of personal data set out in Regulation (EU) No 2016/679 of the European Parliament and of the Council are to be complied with.

(49)In order to supplement and amend certain non-essential elements of this Regulation, the power to adopt delegated acts in accordance with Article 290 of the Treaty should be delegated to the Commission in respect of the identification of the threshold triggering and the length of period of time of inadmissibility with regard to the admissibility criteria of applications, the definition of conditions related to the implementation of conservation measures for financing not linked to costs with regard to the permanent cessation of fishing activities, the definition of criteria for the calculation of the additional costs resulting from the specific handicaps of the outermost regions, the definition of the cases of non-compliance by Member States which can trigger interruption of the payment deadline, the definition of the cases of serious non-compliance by Member States which can trigger suspension of payments, the definition of the criteria for establishing the level of financial corrections to be applied and the criteria for applying flat rates or extrapolated financial corrections, the amendment of Annex I and the establishment of a monitoring and evaluation framework. In order to facilitate a smooth transition from the scheme established by Regulation (EU) No 508/2014 of the European Parliament and of the Council to the scheme established by this Regulation, the power to adopt delegated acts in accordance with Article 290 of the Treaty should also be delegated to the Commission in respect of establishing transitional conditions. (50)In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred to the Commission in respect of the approval and amendment of the operational programmes, the approval and amendment of the national work plans for data collection, the suspension of payments and financial corrections. (51)In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred to the Commission in respect of the procedures, format and timetables for the submission of the national work plans for data collection and the presentation of the annual performance reports. HAVE ADOPTED THIS REGULATION: TITLE I: GENERAL FRAMEWORK CHAPTER I General provisions Article 1 Subject-matter This Regulation establishes the European Maritime and Fisheries Fund (EMFF). It lays down the priorities of the EMFF, the budget for the period 2021-2027, the forms of Union funding and the specific rules for providing such funding, complementing the general rules applying to the EMFF under Regulation (EU) No [Regulation laying down Common Provisions]. Article 2 Geographical scope This Regulation shall apply to operations carried out in the territory of the Union, unless otherwise provided for in this Regulation. Article 3 Definitions 1.For the purpose of this Regulation and without prejudice to paragraph 2, the definitions referred to in Article 4 of Regulation (EU) No 1380/2013, Article 5 of Regulation (EU) No 1379/2013, Article 4 of Regulation (EC) No 1224/2009 and Article 2 of Regulation (EU) No [Regulation laying down Common Provisions] shall apply. 2.For the purpose of this Regulation, the following definitions apply: (1)'blending operation' means actions supported by the Union budget, including within blending facilities pursuant to Article 2(6) of Regulation (EU) No [Regulation on the financial rules applicable to the general budget of the Union], combining non-repayable forms of support and/or financial instruments from the Union budget with repayable forms of support from development or other public finance institutions, as well as from commercial finance institutions and investors; (2)'common information sharing environment’ (CISE) means an environment of systems developed to support the exchange of information between authorities involved in maritime surveillance, across sectors and borders, in order to improve their awareness of activities at sea; (3)‘coastguard’ means national authorities performing coastguard functions, which encompass maritime safety, maritime security, maritime customs, prevention and suppression of trafficking and smuggling, connected maritime law enforcement, maritime border control, maritime surveillance, protection of the marine environment, search and rescue, accident and disaster response, fisheries control and other activities related to those functions;

(4)'European marine observation and data network' (EMODnet) means a partnership assembling marine data and metadata in order to make these fragmented resources more available and usable by public and private users by offering quality-assured, interoperable and harmonised marine data; (5)'exploratory fishing' means fishing for stocks that have not been subject to fishing or have not been subject to fishing by a particular gear type or technique in the previous ten years; (6)‘fisher’ means any natural person engaging in commercial fishing activities, as recognised by the relevant Member State; (7)‘inland fishing’ means fishing activities carried out for commercial purposes in inland waters by vessels or other devices, including those used for ice fishing; (8)'international ocean governance' means a Union initiative to improve the overarching framework encompassing international and regional processes, agreements, arrangements, rules and institutions through a coherent cross-sectoral and rules-based approach to ensure that oceans are healthy, safe, secure, clean and sustainably managed; (9)‘maritime policy’ means the Union policy that aims to foster integrated and coherent decision-making to maximise the sustainable development, economic growth and social cohesion of the Union, notably of the coastal and insular areas and of the outermost regions, and of the sustainable blue economy sectors, through coherent maritime-related policies and relevant international cooperation; (10)'maritime security and surveillance' means the activities to understand, prevent wherever applicable and manage in a comprehensive way all the events and actions related to the maritime domain which would impact the areas of maritime safety and security, law enforcement, defence, border control, protection of the marine environment, fisheries control, trade and economic interest of the Union; (11)‘maritime spatial planning’ means a process by which the relevant Member State’s authorities analyse and organise human activities in marine areas to achieve ecological, economic and social objectives; (12)'productive aquaculture investments' means investments in the construction, extension, modernisation or in the equipment of facilities for aquaculture production; (13)'sea basin strategy' means an integrated framework to address common marine and maritime challenges faced by Member States, and where appropriate third countries, in a sea basin or in one or more sub-sea basins, and promote cooperation and coordination in order to achieve economic, social and territorial cohesion; it is developed by the Commission in cooperation with the countries concerned, their regions and other stakeholders as appropriate; (14)‘small-scale coastal fishing’ means fishing carried out by fishing vessels of an overall length of less than 12 metres and not using towed gear as listed in Article 2(1) of Council Regulation (EC) No 1967/2006; (15)‘sustainable blue economy’ means all sectoral and cross-sectoral economic activities throughout the single market related to oceans, seas, coasts and inland waters, covering the Union's outermost regions and landlocked countries, including emerging sectors and non-market goods and services and being consistent with Union environmental legislation. Article 4 Priorities The EMFF shall contribute to the implementation of the CFP and of the maritime policy. It shall pursue the following priorities: (1)Fostering sustainable fisheries and the conservation of marine biological resources; (2)Contributing to food security in the Union through competitive and sustainable aquaculture and markets; (3)Enabling the growth of a sustainable blue economy and fostering prosperous coastal communities; (4)Strengthening international ocean governance and enabling safe, secure, clean and sustainably managed seas and oceans.

Support under the EMFF shall contribute to the achievement of the environmental and climate change mitigation and adaptation objectives of the Union. That contribution shall be tracked in accordance with the methodology set out in Annex IV. CHAPTER II Financial framework Article 5 Budget 1.The financial envelope for the implementation of the EMFF for the period 2021-2027 shall be EUR 6 140 000 000 in current prices. 2.The part of the financial envelope allocated to the EMFF under Title II shall be implemented in shared management in accordance with Regulation (EU) No [Regulation laying down Common Provisions] and Article 63 of Regulation (EU) No [Regulation on the financial rules applicable to the general budget of the Union]. 3.The part of the financial envelope allocated to the EMFF under Title III shall be implemented either directly by the Commission in accordance with Article 62(1)(a) of Regulation (EU) No [Regulation on the financial rules applicable to the general budget of the Union] or within the framework of indirect management in accordance with Article 62(1)(c) of that Regulation. Article 6 Budgetary resources under shared management 1.The part of the financial envelope under shared management as specified in Title II shall be EUR 5 311 000 000 in current prices in accordance with the annual breakdown set out in Annex V. 2.For operations located in the outermost regions, each Member State concerned shall allocate, within its Union financial support set out in Annex V, at least: (a)EUR 102 000 000 for the Azores and Madeira; (b)EUR 82 000 000 for the Canary Islands; (c)EUR 131 000 000 for Guadeloupe, French Guiana, Martinique, Mayotte, Réunion and Saint-Martin. 3.The compensation referred to in Article 21 shall not exceed 50% of each of the allocations referred to in points (a), (b) and (c) of paragraph 2. 4.At least 15% of the Union financial support allocated per Member State shall be allocated to the areas of support r