EUROPEAN COMMISSION Brussels, 27.10.2022 SWD(2022) 298 final COMMISSION STAFF WORKING DOCUMENT



IMPACT ASSESSMENT REPORT

Accompanying the document Proposal for a Regulation of the European Parliament and the Council on import, export and transit measures for firearms, their essential components and ammunition, implementing Article 10 of the United Nations' Protocol against the illicit manufacturing of and trafficking in firearms, their parts and components and ammunition, supplementing the United Nations Convention against Transnational Organised Crime (UN Firearms Protocol) (recast) {COM(2022) 480 final} - {SEC(2022) 330 final} - {SWD(2022) 299 final}



Table of contents 1.Introduction: Political and legal context 2.Problem definition 2.1 Problem I: Lack of data 2.2 Problem II: firearms trafficking into and from the EU 2.3 Problem III: administrative burden for the legal movement of civilian firearms 3.Why should the EU act? 3.1 Legal basis 3.2 Subsidiarity: Necessity and added value of EU action 4.Objectives: What is to be achieved? 4.1 General objectives 4.2 Specific objectives 5.What are the available policy options? 5.1.What is the baseline from which options are assessed? 5.2.Description of the policy options 5.2.1.Option 1: soft-law approach 5.2.2.Option 2: clarification of the existing legal framework 5.2.3.Option 3: new legislative provisions 5.2.4.Option 3 bis: new provisions without change to the interplay with the Common position

5.3.Elements discarded at an early stage 6.What are the impacts of the policy options? 6.1.Methodology 6.2.Social impacts 6.2.1.Impacts on citizens 6.2.2.Security impacts 6.3.Impact on digitalisation 6.4.Economic impact 6.4.1.Impacts on the overall economic activity 6.4.2.Impact on SMEs and competitiveness 6.4.3.Impacts on national and EU administrations 6.5.Impact on the environment 6.6.Impact on fundamental rights 7.How do options compare? 7.1.Necessity / Added value 7.2.Effectiveness 7.3.Proportionality / efficiency 7.4.Coherence 7.5.Feasability 7.6.Economic impact

8.Preferred option 8.1.Option 3: new legislative provisions 8.2.REFIT (simplification and improved efficiency) 8.3.Application of the ‘one in, one out’ approach 9.How will actual impacts be monitored and evaluated? Annex 1: Procedural information 1Lead DG, Decide Planning/CWP references 2Organisation and timing 3Consultation of the RSB 4Evidence, sources and quality Annex 2: Stakeholder consultation (Synopsis report) 1.Consultation strategy 1.1.Mapping of stakeholders 1.2.Methods and forms of consultation 2.Consultation activities 2.1.The Inception Impact Assessment 2.2.The public consultation 2.3.Data collection 2.4.Confidential survey 2.5.Meetings

Annex 3: Who is affected and how? 1.Practical implications of the initiative 2.Summary of costs and benefits 3.Relevant sustainable development goals Annex 4: Analytical methods Annex 5: Case studies Annex 6: Traceability check-list Annex 7: Public consultation and confidential consultation



Glossary Term or acronym Meaning or definition AEO Authorised Economic Operator CN Combined Nomenclature: EU customs classification of goods COARM Council Working Group on Conventional Arms Exports / Conventional arms export control information system CRMS EU Common Risk Management System DUeS Dual-Use electronic System: the EU electronic system to exchange information on refusals to grant export authorisations for dual-use goods ECRIS European Criminal Record Information exchange System EU CSW-CERTEX EU Customs Single Window Certificates Exchange System HS Harmonised System: customs classification of goods of the World Customs Organisation ICS Import Control System SIENA Secure Information Exchange Network Application SIS Schengen Information System Surveillance TARIC TARif Intégré Communautaire: the EU Customs Tariff UNODC United Nations Office on Drugs and Crime WCO World Customs Organisation



1.Introduction: Political and legal context Regulation (EU) No 258/2012 establishing export authorisation, and import and transit measures for firearms, their parts and components and ammunition was adopted to enable the ratification by the EU of the United Nations Protocol on the illicit manufacturing of and trafficking in firearms, their parts, components and ammunition. It is part of the EU international responsibility to properly regulate the trade of firearms in order to prevent trafficking of firearms. Regulation (EU) No 258/2012 implements article 10 of the United Nations Protocol which provides for general requirements for export, import and transit licensing or authorisation systems. The Regulation makes it compulsory to grant export authorisations only if the countries of transit or destination authorized the import. It lists out the information required for the tracing of firearms, establishing simplified export procedures (notably with no prior authorisation for hunters or sport shooters with a European Firearms Pass and the possibility for Member States to establish additional simplifications). The Regulation also provides that authorisations should not be granted to those who have a criminal record and provides for compulsory mutual exchanges of information between national authorities about exporters whose application for an authorisation is refused. The Regulation does not apply to military firearms (such as assault rifles), to weapons which were prohibited inside the EU when the Regulation was adopted, or to deactivated firearms. With respect to firearms which are “specially designed for military use”, export controls are subject to the 2008 Council Common Position on exports of military technology and equipment. This Decision applies to items mentioned in the EU Common Military List. The Regulation complements for imports and exports the intra-EU rules of the Firearms Directive. While the Directive was revised in 2017 (and consolidated in a new legal instrument in 2021), the revision of the Regulation was announced in the EU Action Plan against firearms trafficking 2020-2025. This revision was included in the Commission Work Programme 2021 annex II.

The evaluation report of the application of Regulation (EU) No 258/2012 identified loopholes due to a lack of homogeneous implementation. In particular, the evaluation stressed that the Regulation’s added value was limited by the absence of a genuine harmonisation of national rules and processes. The Regulation was ineffective in distinguishing between military and civilian firearms, in ensuring the full traceability of weapons, and in ensuring proper exchanges of information (notably of refusals to grant export authorisations). The Regulation was also inefficient in terms of reduction of administrative costs for companies. The Regulation was considered to lack consistency with other legislation, notably the revised Firearms Directive and the EU Common Position on the export of military technologies. The evaluation was followed in April 2018 by a Recommendation calling for strengthening the implementation of EU rules to improve traceability and the security of export and import control procedures of firearms and the cooperation between authorities in the fight against firearms trafficking. 2.Problem definition As a general principle, the Regulation seeks to balance the security risk associated with the circumvention of export and import rules of firearms, their components and ammunition with the need to protect both the commercial interests of legitimate producers and traders and the rights of users who legally acquire firearms for legitimate purposes such as hunting or sport shooting. This initiative focuses on the risks of diversion or smuggling and difficulties linked to non-commercial movements and transactions between civilians. Risks and difficulties linked to sales to the armed forces or public authorities, or government-to-government transactions, are not addressed by this initiative due to their geopolitical specificities and relations to the common foreign and security policy. Problems Specific drivers Specific objectives Problem I: Lack of data -Sensitivity of data -Absence centralised data collection at national level Objective I Systematise data collection about international movements of firearms for civilian use, as well as seizure data Problem II (security): Existing rules on firearms are circumvented which leads to firearms being smuggled and diverted into the EU. These illicit firearms are a means to conduct criminal offences including terrorism. At export, there is a risk of diversion of firearms, which fuels global illicit firearms trafficking and contributes to instability and organised crime worldwide. -lack of exchange of information on intelligence, seizures, transit of firearms, refusals to grant export authorisations -lack of control and risk assessment to discover security problems and trends, and to ascertain the proper end-use of exported firearms -insufficient cooperation between customs and licensing authorities to check convertible or deactivated weapons, to prevent diversion and check the validity of authorisations -unclear legal framework creating inconsistencies, differences of interpretation by competent authorities Objective II Improve controls, risk assessments and traceability measures to prevent smuggling and diversion of firearms into and from the EU Problem III (market concern): Economic operators continue to face administrative burden in the imports and exports of civilian firearms -unclear legal framework, which leaves room for divergent national interpretations and rules. -lack of harmonization between Regulation (EU) No 258/2012 and other EU and national firearms legislation -insufficient cooperation between customs and licensing authorities creating administrative burden for legitimate producers and traders Objective III Simplify procedures to limit the administrative burden, by creating unified processes and control mechanisms 1 2.1Problem I: Lack of data 2 2.1 2.1.1 What is the problem? In order to create a consistent policy on firearms trafficking, it is important to have precise data. Quantifying the problem constitutes major limitation, as the absence of accurate, reliable data is itself part of the problem. All studies and research papers in the field of firearms point to the impossibility to collect accurate, comprehensive and comparable data on trafficking of firearms. In addition, traffickers of firearms make no distinction between firearms initially sold to the armed forces or firearms sold to civilians, so that trafficking of firearms extends well beyond civilian firearms only. The best estimate available accounts for 35 million illicit firearms owned by civilians in the EU in 2017. This would correspond to 56% of the estimated total of firearms . In order to prevent the trafficking of firearms, it is important to keep track of all firearms. Therefore, qualitative data is needed on imported firearms. The recommendations issued by the Commission on 17 April 2018 requests, among other things, that "by 1st July each year, Member States should collect detailed statistics of the preceding year”. When the Commission asked for the data on the number of authorisations, refusals, the quantities and values of firearms exports and imports, by origin or destination, only 10 Member States sent data, and only one Member State sent all data asked. Annex 4 contains a comparison between the data received from the Member States and the available data in the Eurostat international trade database. The discrepancies between the two datasets demonstrate the bad quality and unreliability of available statistics. Furthermore, as there are no technical specificities that enable to distinguish military firearms from civilian firearms, there is an overlap between both, since some Member States account firearms as military, while others will categorise the same weapons as civilian ones. Establishing statistics of the respective shares of military and civilian firearms markets is therefore impossible. 3 2.1 2.11 2.1.2 What are the problem drivers? One of the main problem drivers is the absence of centralised data at national level. Member States have been requested to send data on import and export of civilian firearms multiple times and the 2018 recommendations included a provision on this statistical data, with only one Member State which sent all requested data for the year 2020. It is possible that the lack of uptake of these requests and the 2018 recommendations is linked to its non-mandatory nature. However, it would have also involved additional work and a change of administrative habits. Authorisations for import and export are not always managed centrally or the data is not stored in a central database. Therefore, the lack of data can result from a weak administrative capacity to collect the data.

Another of the main drivers is the lack of transparency due to the sensitivity of the data. Member States are especially reluctant to share data on the export and import of military firearms, as this data is defence-related. Without this data, it is impossible to know the total amount of firearms in the EU. Furthermore, as there are no technical differences between some of the military and civilian firearms, it is difficult to distinguish between then to collect the correct data. The Council does gather yearly data on military weapons and publishes this in the Annual report on Council Common Position 2008/944/CFSP. However, this data is fragmented, incomplete and differs from one Member State to another. Annex 4 provides an estimate of the data. The data in the report does not correspond to the data on exports that can be found in the Eurostat international trade database. Furthermore, it has also proven difficult to obtain reliable and concrete data from the firearms industry. Although several stakeholders complained on the high administrative burden of the current procedures, the industry never provided concrete data. Furthermore, data on transactions, size of shipments etc. was considered as sensitive and confidential business information. Additionally, data on firearms seizures are an important indicator to estimate the scale of firearms trafficking. Information on seizures is also important to create targeted policies for specific regions and treats. However, the data on seizures is currently fragmented and often not accessible for policy makers. Despite an obligation of Member States subject to the Schengen acquis to provide statistics of firearms seizures pursuant to the 1999 Decision of the Executive Committee on the illegal trade in firearms, the Commission was never a recipient of such information. 2.1.3 How will the problem evolve without intervention? Even though Member States have been repeatedly asked to provide statistical data on import and export of civilian firearms, this data is still not available. Furthermore, the argument that some of this data is too sensitive to share will not change either. Therefore, without intervention the lack of data will continue to hinder the development of targeted policies and research in the field of firearms trafficking, without a complete intelligence picture of the risks. 2.2Problem II: firearms trafficking into and from the EU The import, export and transit of firearms, their parts and components and ammunition bring risks of diversion to the illicit market. At import, the main risks are linked to the circumvention of unclear rules that enable the import of “semi-finished” firearms and components, as well of alarm and signal weapons convertible into lethal firearms. At export, the main risk lies in the diversion of civilian firearms shipped to a non-EU country and being re-exported to countries subject to embargoes or sold to criminals and armed forces due to lack of controls and supervision before and after the export process. Once diverted, those firearms may contribute to destabilisation near the EU borders, or be eventually smuggled back into the EU. The circumvention of rules and diversion of firearms contribute to the trafficking of firearms, their parts and components and ammunition, which is a global problem and a serious threat to the security of European citizens. Firearms trafficking facilitates violent crimes and the criminal activities of Organised Crime Groups (OCGs) as the demand for firearms “is largely driven by criminals”. According to a study published in 2018, firearms were the lethal means in more than 50% of all homicides in 49 of 195 countries in 2016; 251,000 people died globally from firearm injuries in 2016 (excluding deaths from armed conflicts, terrorism and at hands of police),and the majority of firearm injury deaths were homicides (an estimated 64%, corresponding to some 161,000 deaths). The negative effect of firearms trafficking on stability and development has been internationally acknowledged in the new United Nations Agenda for Sustainable Development, whose Target 16.4 commits states to significantly reduce illicit arms flows by 2030. Moreover, over recent years, firearms trafficking contributed to providing terrorists with the means to perpetrate their acts of terror, w . Although the lack of data does not support a precise quantification of the phenomenon, recent studies on firearms trafficking in Europe highlighted the preponderance of firearms supposedly made for civilian use vis-à-vis military-grade weapons, whose availability remains more limited. However, it is impossible to make a clear distinction based on technical characteristics between civilian and military firearms, since many of them can indistinctly be used by civilian and the military (inside the EU, civilians may in exceptional circumstances acquire, possess and trade military-grade firearms, such as automatic rifles or pistols). This is reflected in the latest version of Directive (EU) 2021/555 (the Firearms Directive), which in exceptional cases allows civilians to acquire prohibited firearms (e.g. for sport shooting competitions or for the protection of critical infrastructure). Besides, some manufacturers produce firearms for the civilian market, which on purpose look like military assault rifles. Handguns (pistols and revolvers) are the type of firearm most commonly available on the criminal markets, as they are portable and easier to use and to conceal relative to long guns. It is estimated that more than half of the firearms in civilian hands in Europe are illegally held. 2.2.1 What is the problem? Europol’s Serious and Organised Crime Threat Assessment 2021 pointed out that illegal firearms originate from within the EU but also from weapon stocks outside the EU. The project “Studying the Acquisition of illicit Firearms by Terrorists in Europe” (SAFTE) stated that in the EU, external supply channels are more important than internal supply channels in fuelling illicit firearms markets. In particular, cross-border smuggling of firearms from non-EU countries was considered the most important supply mechanism. The durability of firearms means that, once smuggled into a Member State, weapons can remain inside the EU for many years and easily circulate across borders. A recent study from UNODC showed that the traditional closed character of the illicit firearms market in the EU is eroding due to continuing cross-border smuggling of firearms into the EU from post-conflict countries, the increased availability of easily reactivated or converted weapons and increased access to firearms through online markets. As a result, various types of firearms have become more easily available for criminals, including terrorists with the right criminal connections. With respect to imports, the Operational Action Plan for Firearms 2022 states that “the import from some non-EU countries of semi-finished essential components (usually 80% finished polymer frames of handguns or 80% finished metal barrel of long firearms)” is an identified threat. “They are not declared as essential components of firearms and usually enter the European Union via fast parcel and carrier services. They are accompanied with instructions on how to complete their transformation into firearms with ordinary tools.” The action plan also stresses that “homemade conversion of alarm and signal weapons into firearms […] into more lethal, live-firing firearms is increasingly sophisticated,” which is major concern as those weapons were traditionally manufactured outside of the EU and are imported into the EU. As regards exports, according to UNODC, Europe (in particular the EU) is reported as the main region of manufacturing of firearms seized across the world. This means that legally EU-manufactured firearms were at some point diverted into the illegal market, which could be exploited for criminal purposes (e.g. gang violence, terrorist attacks, and other serious crimes). The 2017 evaluation study had noted that “international trafficking of firearms remains a major concern.” The EU therefore has a particular responsibility to fight this threat through its own legislation, and notably to control exported firearms. Furthermore, research has shown that exported firearms from the EU have ended up in the arsenals of various non-State armed groups across the globe. The EU has issued a number of arms embargos; the diversion of firearms supports the circumvention of these embargos. Back in 2016, several reports documented transfers of large quantities of firearms to the Middle East, which were re-exported to armed groups in Syria. The fact that many firearms can indistinctly be classified as civilian or military means that there is also a high risk of diversion of civilian weapons, as demonstrated by the recent case of German-manufactured (non-specifically military) handguns used by armed forces in Belarus. More recently, during the third EU-Mexico High Level Dialogue on Justice and Security, Mexican authorities estimated that more than 230,000 weapons entered illegally through Mexico’s northern border each year. Overall, 30% of illicit firearms seized in Mexico were traced to European manufacturers. Case-study: EU firearms in Mexico The diversion of civilian firearms during authorised international transfers can take place at different stages of the firearms transfer chain. Diversion techniques include the use of forged or falsified documentation (e.g. shipping documents, commodity descriptions, personal information about the shipper and the recipient) or the creation of shell companies and straw purchaser to hide the real identities of the parties involved in a transaction. Specific diversion risks arise in relation to each stage of the transfer chain. 2.2.2 What are the problem drivers? Most of the drivers are common to both imports and exports, in particular when it comes to the lack of coordination between licensing authorities, and between licencing and law enforcement authorities (including customs). The circulation of firearms is facilitated by the fact that law enforcement authorities across the EU still do not operate as one, and that exchanges of information and intelligence amongst them is not sufficient. However and despite its name, the Regulation does not create common rules and procedures for import authorisations. The 2017 evaluation report stressed that “the Regulation does not establish a harmonised licensing system for imports and therefore has little relevance in this respect.”

At import Save for a few generic provisions (recital 11 and the definition of illicit trafficking in article 2, both referring to the rules of the Firearms Directive), the Regulation does not regulate import authorisations. Insufficient exchange of information and uncoordinated controls and risk assessments of firearms imports lead to ineffective risk profiling between customs and between import licensing authorities, as the Regulation does not establish the conditions for such cooperation and does not include any provision in relation to imports. Risk profiling is critical to prevent firearms from being smuggled into the EU. However, there is currently no systematic sharing of intelligence at EU level and there is a lack of available data on past firearms seizures and their follow-up investigations, which would enable evidence-based detection of trends, both at import and export. The Regulation does not include any provision to that effect. Existing systems (such as the EU’s Customs Risk Management System –CRMS- or Europol’s Secure Information Exchange Network Application –SIENA-) are not interconnected (and cannot be under the current framework), and law enforcement authorities are under no obligation, or do not have the possibility, to systematically use them (customs typically do not rely on SIENA-based information and police does not feed into, or rely on the CRMS). When they are, national authorities do not always include sufficient information to compare data. Finally, information gathered during the follow-up investigation under the authority of the judiciary is typically not shared through those channels for future risk assessments. Moreover, firearms can be smuggled into the EU through the misdeclaration of goods. Such misdeclaration result from different ways to interpret current EU law, due to its lack of precision. Even though firearms parts and components are subject to administrative control, the EU faces the unchecked import of semi-finished “80%” components. These can be used to replace elements of firearms, but also to (illegally) modify weapons and even to assemble firearms in their entirety. The fact that they are still imported into the EU shows that there is an unclear legal framework. In the confidential consultation of national competent authorities, 13% of respondents concerned by import declared that such elements need to be declared as firearms parts (CN code 9305) but not marked, and 13% that they are not even considered as firearms parts and are not subject to declaration. This means that in 26% of cases, traceability of those semi-finished products is not ensured. At the moment, even when such semi-finished components are declared as firearms for customs purposes, they are not automatically considered as such by licencing authorities, which can enable the import of such elements by non-authorised individuals. Recital 11 of the Regulation states that firearms, their parts and essential components and ammunition, when imported from third countries, are subject to Union law and, in particular, to the requirements of Directive 91/477/EEC (codified by Directive (EU) 2021/555). As a result, convertible alarm and signal weapons need to be declared and classified as firearms. Nevertheless, since 2010, those converted foreign-made blank-firing weapons have been seized in the European Union, which shows that they had not been imported and declared as firearms as they should have been. Despite recent changes in the legislation of the main producing country of those weapons, they are still considered as being easily convertible into firearms. These weapons are commonly used in gun crime across Europe. The current legal framework does not provide a legal basis to ensure a uniform approach to certifying the compliance of these weapons with EU standards on non-convertibility. Consequently, customs or licensing authorities of different Member States may treat differently imported alarm and signal weapons, with some considering that they are convertible into firearms, and others that they comply with EU-level standards. Finally, it appears that existing customs simplifications can easily be used to avoid customs checks. The reduced dataset used for e-commerce and the low quality of data provided by postal operators severely affects the traceability of imported firearms and components. Besides, under customs simplifications (Simplified Declarations, Entry in the Declarants Record), the full customs declarations are only submitted after a month and controls can only be performed ex-posts and most probably be only documentary controls. As a consequence, the room for diversion of imported firearms is very high. At export At export, problems directly stem from the vagueness of the regulation, rather than issues of enforcement. Similarly, controls and risk assessments when exporting firearms from the EU vary in nature and quality from one Member State to another – they are in any case insufficiently shared and coordinated between Member States, as the 2017 evaluation of the Regulation identified. This aspect is not governed by the Regulation and left to the discretion of Member States. An exporter does not always need to provide evidence of import in the country of destination, end-user certificates are often not requested and there is currently no systematic post-shipment controls. This leaves room for the diversion of firearms between the export and the arrival at the destination country, as well as to re-export or unauthorized used after arrival in the destination country. This appears as the main source of the problem, since “in the overwhelming majority of known cases, these firearms were legally transferred from the European Union to the intended recipient in another part of the world and subsequently diverted in the destination countries or retransferred to other countries without the approval of the exporting European Union Member State.” Furthermore, the different interpretations of the vaguely worded export control procedures in the Regulation, and the existence of inconsistencies between the Regulation and other pieces of EU legislation concerning firearms such as the EU Firearms Directive (2021/555), leave room for potential security loopholes. For instance, the Regulation merely states that Member States must refuse to grant an export authorisation if the applicant has a criminal record concerning an offence covered by the rules on the European Arrest Warrant (money laundering, corruption, trafficking of human beings, murder etc.). How and when criminal records are checked currently remains completely subject to national legislation and practice. The absence of detailed provisions on what document to check before granting an export licence has led to persisting differences across Member States in performing background checks on non-residents (in the confidential consultation of competent authorities, 68,76% of respondents concerned indicated they only request or check their own national criminal record, not necessarily that of other countries). This might enable an applicant with relevant criminal records in a Member State to obtain an export license from another Member State. Additionally, the rules are not sufficiently clear to ensure that customs or licensing authorities perform the checks of the non-convertibility of alarm and signal weapons, and ensure that firearms are not wrongly declared as alarm and signal weapons to avoid export authorisations and customs checks. This is particularly the case for exports from Member States, which do not subject the acquisition and possession of alarm and signal weapons to any authorisation. The reactivation of deactivated firearms is also a known threat, which leads to the diversion of firearms. Because deactivated firearms fall outside of the scope of the Regulation, these weapons can be exported without the proper marking that is needed to improve the traceability of firearms. As a consequence, in the confidential consultation of national competent authorities, 3 Member States indicated that neither export licensing authorities nor customs authorities have to control the effective deactivation of firearms. This was noted by the 2017 evaluation of the regulation, which stressed that “the absence of any provisions for export markings in the case of deactivated weapons or alarm weapons makes traceability impossible”. Problems are also linked to the insufficient exchange of information and cooperation between licensing authorities. The Regulation created the obligation to exchange information on the refusals of export authorisations. However, the Regulation did not specify via which channels this information needs to be exchanged. The most widely used – and single available – platform is the online system of the Council’s Working Party on Conventional Arms Exports (COARM). The 2017 evaluation of the Regulation stressed that its “provisions have proved insufficient to meet the objective pursued.” Currently, the fact that some denials are not uploaded on COARM and different channels are used to exchange information on denials creates the risk that export authorisation decisions are taken on an incomplete evidence base. The Commission observed in its report on the implementation of the Regulation that “43 % of national authorities report having already granted an export authorisation to exporters for essentially identical transactions which had been refused by another Member State.” Moreover, it increases the risk of undercutting of decisions taken by other Member States and eventually increase the security risks related to the circulation of firearms consignment for unlawful purposes. In other words, information asymmetry that is not addressed through timely and effective information exchange leaves room for the risk that suspect or problematic export operations are authorised. External-transit Besides, Regulation (EU) No 258/2012 does not regulate the traceability of shipments of firearms coming from, or destined to third countries during transit operations through the customs territory of the Union (external transit). This absence of EU rules on the matter result in a lack of tracing and lack of communication between customs authorities to ensure efficient checks. A 2017 analysis of the Commission services underlined that “there is a systemic tendency to treat a consignment of firearms as any other consignment in transit, with no special measures related to the nature of these particular goods.” Shipments of firearms are managed as any other cargo in transit, rather than as sensitive consignments. Therefore, Member States have no specific obligation to notify the Member States of transit that the goods in transit are firearms, that the consignment has arrived at destination, or that the procedure is closed. This leaves the transit vulnerable for the diversion of firearms. The Commission highlights that practices related to the place, time and nature of the customs controls vary significantly from one Member State to another, thus leaving room for potential security issues. This results directly from the absence of any provision in that respect in the regulation. The analysis found that “some MS are making controls only at destination, some at entry, some at unloading but there is no common approach about the type (documentary, physical) and moment of the controls. Some Member States make controls systematically for firearms, some based on risks.” This was reflected in the 2017 evaluation of the regulation, which stressed that “the traceability of the consignments is not guaranteed during transit operations through the customs territory of the European Union.” It was confirmed by the 2022 Council Report on firearms trafficking, which stressed that “little information was shared on domestic transhipments.” 2.2.3. How will the problem evolve without intervention? Without a targeted and limited intervention, an increasing number of illicit firearms risk being smuggled into the EU, in particular semi-finished firearms and convertible weapons. This is confirmed by general view of stakeholders consulted during the public consultation on the overall future evolution of trafficking. 47% of respondents considered that without further EU intervention, there would be an increase of smuggling of firearms, their components, and convertible weapons into the EU and increased exports (or diversion) of firearms to conflict zones and authoritarian regimes. Among the 12 business representatives which had an opinion, 50% also considered the situation would deteriorate (50% had no opinion). This view was shared by law enforcement authorities: during the confidential consultation of competent authorities, one third of customs and police respondents considered that the situation would deteriorate (26% had no opinion and 20% considered that it would remain unchanged). Firearms are extremely durable products, and illicit firearms imported in the EU can therefore circulate in the Member States for decades. As EU law enforcement authorities do not operate as one, there is a high risk that they will fail to fully prevent the illicit movements of firearms from one Member State to another, once they have been smuggled into the EU territory. Trafficking of firearms is a source of major concern for the security of European citizens. By fuelling violence and organised crime and providing terrorists with the means to conduct attacks on European soil, illicit firearms pose a serious threat to internal security. The risks of diversion of exported firearms would at the very least remain the same, and the appetite for EU-made firearms or the need to circumvent embargoes will probably increase the threat. This risk has already materialised, since the media recently reported diversion cases of firearms exported in 2020 from the EU to Moldova, from which the weapons were immediately re-exported to Russia and Belarus, two countries subject to arms embargoes. This is confirmed by the Operational Action Plan for Firearms 2022, which states that “firearms are also trafficked from the EU towards Ukraine and Libya.” 2.3 Problem III: administrative burden for the legal movement of civilian firearms 2.3.1 What is the problem?

Economic operators continue to face different national rules, procedures and practices when trying to obtain an export or import authorisation. This means that EU businesses are subject to different requirements and administrative procedures, and therefore bear different costs, depending on the Member State in which they operate. They are notably faced with burdensome paper-based procedures. According to the results of the survey conducted during the 2019 study on improvement of the EU rules on imports and export of firearms, each enterprise employs from 4 to 12 hours each month to deal with the export authorisation processes. Consequently, despite a degree of harmonisation brought by the introduction of the Regulation with respect to exports, EU producers, exporters and importers do not yet operate in a truly unified control environment with a level playing field, especially as the regulation does not provide for common rules with respect to imports. 2.3.2. What are the problem drivers? The main problem driver is an unclear legal framework. One of the main original objectives of Regulation (EU) No 258/2012 was to ensure a harmonised implementation of the provisions across all Member States, in line with Article 10 of the United Nations Firearms Protocol. The 2017 evaluation report of Regulation (EU) No 258/2012 highlighted the existence of areas of inconsistent and heterogeneous application that lead to obstacles to international trade, and movement of civilian firearms. Such areas relate to the vagueness of the Regulation (e.g. no definition or specifications on simplified procedures, the general nature of the provisions governing information exchanges and administrative cooperation, controls for refusals of essentially identical transactions, check of the criminal record), which does not enable a unified implementation by Member States. The regulation also includes many optional provisions (e.g. the adoption of a single procedure for military and non-military firearms, or whether or not to assume the tacit agreement of third countries of transit) and references to national provisions (e.g. confirmation of receipt). The evaluation report therefore stated that “allowing the competent authorities to choose is a weakness of the Regulation, whose implementation and interpretation should in principle be uniform.” Because the Regulation does not indicate specific procedures or systems to manage applications for and issuance of export and import licenses, each Member State is free to decide on the adoption of an electronic or paper-based procedure, and on the application of a fee for such procedure, according to national practice. Therefore, channels used for the application and licensing process (and related costs) differ across Member States. Besides, the Regulation currently mainly focuses on export controls, thus leaving import-related processes to national legislation. It notably harmonises deadlines to national authorities to reply to applications only for export authorisations and not for import authorisations. Additionally, the Regulation sought to harmonise pre-existing rules on prior authorisation of transit of firearms in third countries. The evaluation of the Regulation revealed that transit-related provisions have a relatively large impact on costs. More specifically, economic operators reported difficulties in identifying who the competent authority is in the country of transit to file their request. Resulting delays increase the time for obtaining an export authorisation and the costs borne by economic operators (e.g. the storage of firearm shipments blocked in airports). Regulation (EU) No 258/2012 aimed to mitigate the possible negative impact of the transit measures required by the United Nations Firearms Protocol by introducing the possibility for Member States to apply the principle of implied consent, thereby assuming approval of the third country of transit if no objections to the transit are received within 20 days. This optional provision aimed at balancing the business interest in speeding up the process with the security interest of ensuring an adequate deadline for the transit states to react to the exporter’s request. Despite this opportunity, not all Member States apply the principle of implied consent, thus creating an uneven playing field. Furthermore, the complex articulation between Regulation (EU) No 258/2012 and other EU and national firearms legislation creates confusion, which enhances the inconsistencies. The definitions and categories of firearms (prohibited, subject to authorisation, subject to declaration) were initially the same in the Firearms Directive and in the Regulation. The Firearms Directive 91/477/EEC was revised in 2017 and codified in March 2021 by Directive (EU) 2021/555. The revision of the Firearms Directive led to inconsistencies specifically in the scope and definitions (e.g. removal of the definition of ‘part’ and the modification of the definition of ‘essential component’). The revision of the Firearms Directive significantly modified the firearms categories, in particular by introducing new items (notably bringing deactivated firearms and firearms converted into blank-firing, salute and acoustic weapons into scope) and moving certain types of weapons (such as certain semi-automatic firearms) to a more stringent regime of possession. Furthermore, some players (notably collectors, museums and brokers), previously excluded, are now included in the scope of the Firearms Directive. Therefore the Regulation currently has a more limited scope than the Directive: it does not regulate exports by collectors, by museums, the activities of brokers, the exports of deactivated firearms, or the exports of category A firearms even when they are legally owned by sport shooters or arms dealers in the EU. Moreover, there exists a “grey area” of overlap between the scope of Regulation (EU) No 258/2012 and the scope of the Common Position 2008/944/CFSP, leaving room for divergent interpretations and inconsistencies in the application of the correct (military or civilian) export regime to items that fall in this area. While the Regulation excludes from its scope only “specially designed for military use and, in any case, firearms of the fully automatic firing type”, it nevertheless provides for the possibility for Member States to “use a single procedure to carry out the obligations imposed on them by this Regulation and by that Common Position.” This opening has been interpreted by some Member States as a possibility to subject to the Common Position all weapons falling under the Common military list, even if they are not specially designed for military use. The evaluation of the Regulation revealed that Member States tend to interpret the scope of such overlaps differently. The main problem is the lack of clear objective criteria set in legislation to establish whether firearms or ammunition are military or civilian. When requested to provide data on imports and exports of civilian firearms, many Member States proved unable to distinguish them from military weapons, and sent statistics covering both military and civilian firearms. Besides, the customs tariff classification includes categories of firearms, which can be either military or non-military. This is most often the case for types of short firearms and semi-automatic firearms, and related ammunitions. Additionally, the civilian and military-grade export control regimes fall under the remit of different national administrations in most of the Member States. Furthermore, the possibility to apply a single procedure results in some Member States applying an identical procedure and identical criteria to all exports of weapons (both civil and military). Consequently, transactions regarding substantially the same items can be treated differently across the EU, as some Member States might decide to apply the export licensing procedure for civilian firearms, while others might adopt the single procedure. 2.3.3. How will the problem evolve without intervention? In the public consultation, 53% of all respondents considered that without further EU intervention, the situation will deteriorate, with economic operators and legitimate firearms owners likely to be faced with increasingly heterogeneous national rules and procedures. In this consultation, the replies of the 12 businesses and business representatives were inconclusive, with one third having no opinion, 25% considering that the situation will improve, 16% that it would remain unchanged and 25% that it would deteriorate. In any event, the inconsistencies between the scope of Regulation (EU) No 258/2012, the Firearms Directive (EU) 2021/555 and the overlap with the Common Position 2008/944/CFSP will not be solved without intervention. Without clear descriptions and agreed upon procedures, divergent national requirements and administrative procedures will stay in place and continue to be an obstacle to the establishment of a unified export and import regime for civilian firearms within the EU Customs Union. This will result in an uneven playing field between EU importers and lead to divergent costs for firearms export companies. National differences in the procedures will continue to be an obstacle to the establishment of a uniform export and import regime for civilian firearms, and will go against the objectives pursued within the EU Customs Union where customs procedures are already centralised. In particular, national non-harmonised licencing systems will not be able to connect to the EU Single Window Environment for customs, thus preventing economic operators from making use of this tool to complete all border formalities in a single portal. 3.Why should the EU act? 3.1 Legal basis The legal basis for acting in this area is Article 207 of the Treaty on the Functioning of the European Union (TFEU) on the common commercial policy. Provisions adopted in this area fall under the exclusive competence of the EU. This was also the legal basis for Regulation (EU) 258/2012. All firearms covered by the EU Customs tariff fall under the exclusive competence of the European Union. The differences in export, import and transit authorisation procedures and controls across Member States are at odds with the very concept of exclusive EU competence in external trade. As an area without internal borders in which goods and persons circulate freely, having common rules on the import and export of firearms, their parts and components and ammunition is of tantamount importance. Addressing the issues mentioned can only be done at EU level, as Member States may not exercise this external competence, since this would directly affect the effectiveness and uniform interpretation of internal EU law (the Firearms Directive), irrespective of whether the firearms are designed for military or for civilian use. It would also create regulatory divergences and legal loopholes which criminals could avail themselves of. The description of the problems and their drivers (in particular problem 2 linked to the administrative burden) demonstrate the need for harmonised EU rules on imports and exports of firearms for civilian use. Besides, considering the need to address extensively aspects of exchanges of information and cooperation between customs authorities, between customs and competent licencing authorities, and between those authorities and the Commission, the legal basis of this initiative should also include article 33 TFEU. 3.2 Subsidiarity: Necessity and added value of EU action A subsidiarity check is not required in an area of EU exclusive competence; however, the need for EU action is clear. The objective of the legislation is to ensure that no legal loophole in EU import, export and transit legislation concerning firearms, their parts and components and ammunition facilitates this diversion. The UN Firearms Protocol provides for a framework for States to control and regulate licit arms and arms flows, prevent their diversion into the illegal circuit, facilitate the investigation and prosecution of related offences without hampering legitimate transfers. By adopting the Regulation in 2012, the EU was able to ratify the Firearms Protocol in 2013. It is therefore up to the EU to keep fighting and preventing the diversion of firearms, especially as the EU is a key manufacturing region. Once a firearm is diverted, it remains a threat for decades. During the public consultation, respondents clearly stressed the need for EU action. Almost 70% of respondents (75% of business representatives) considered important or very important to have common EU rules on imports of civilian firearms from outside of the EU and on exports of civilian firearms to non-EU countries. 62% considered that there is a need for EU intervention on current rules on import, export and transit of civilian firearms and 59,5% considered that there is need for new tools to improve current rules on import, export and transit of civilian firearms. National authorities themselves expressed an even higher support. During the closed and confidential consultation of competent and law enforcement authorities, 76,66% of respondents considered it important or very important to have common EU rules on imports of civilian firearms from outside of the EU and 83,3% on exports of civilian firearms to non-EU countries. The analysis of the free text contributions shows an overwhelming request for uniform EU rules rather than addition of national procedures.

During the public consultation, many stakeholders (mostly individual firearms users such as hunters and sport shooters) considered in the free text contributions that EU intervention was not necessary because smugglers and traffickers do not declare their activities, and that consequently EU legislation would only harm legitimate traders and would continue to be disregarded by criminals. This argument ignores the fact that, except for home-made firearms, firearms used in criminal acts were initially legally manufactured and sold, and were diverted at some point of their life cycle. 4.Objectives: What is to be achieved? 4.1 General objectives The strategic objective of this initiative is to close legal loopholes that can facilitate the circumvention of rules, smuggling and the trafficking of firearms for civilian use by ensuring a uniform application of the rules on imports and exports of firearms the UN Firearms protocol. It is essentially a trade policy initiative aiming at better regulating import and export controls for firearms, their components and ammunitions. Due to their specificities in relation to defence, national security and the implementation of the common foreign and security policy, this initiative does not address sales to the armed forces or public authorities, or government-to-government transactions. Export controls of firearms for military use should remain addressed by the Council Common Position 2008/944/CFSP, governing exports of all military technology and equipment. 4.2Specific objectives To achieve the strategic objective, based on the evaluation of the Regulation, on the public consultation as well as targeted consultations with stakeholders, the Commission identified three specific objectives: The first objective is to improve the systematise data collection about international movements of firearms for civilian use, as well as seizure data. This implies receiving annual data by Member States on the number of authorisations, refusals, the quantities and values of civilian firearms exports and imports, by origin or destination. Furthermore, receiving seizure data will allow targeted policies to prevent and tackle firearms trafficking. The second objective is to enable coordinated controls and risk assessments. This implies first to ensure the traceability of firearms. Tracing, according to article 2(16) of the Regulation, “means the systematic tracking of firearms and, where possible, their parts and essential components and ammunition from manufacturer to purchaser for the purpose of assisting the competent authorities of Member States in detecting, investigating and analysing illicit manufacturing and trafficking.” Both at import and at export, the current framework needs to be improved in that respect, since loopholes have been identified in both inwards and outwards movements. This applies notably to the proper recording of firearms-related information and to the need to improve the work of customs authorities in detecting, while at export it concerns more the work of export licencing authorities. For both types of movements, the cooperation between law enforcement authorities (including customs) and licensing authorities should be improved. The third specific objective is to ensure a level playing field and reducing the administrative burden placed on economic operators and firearms users. Here, the focus is on ensuring a uniform application of EU law and of the UN Firearms Protocol, instead of the current situation with economic operators being faced with 27 different types of rules and lack of legal certainty despite the application of the regulation currently in force. These objectives are fully compatible with other EU policies and with the Charter of Fundamental Rights. They are notably fully aligned with the EU commitment to “continue to promote responsible and effective arms export control in the EU’s neighbourhood, in accordance with Common Position 2008/944/CFSP for military-grade weapons and Regulation (EU) No 258/2012 for civilian firearms.” They are also in line with the approach taken in the modernisation of the export control mechanism for dual-use goods under Regulation (EU) 2021/821. Intervention logic 5.What are the available policy options? 5.1.What is the baseline from which options are assessed?

In the baseline scenario, the current regulatory framework would remain unchanged, as described essentially in the evaluation report of the application of Regulation (EU) No 258/2012 of December 2017. Consequently, the problem description would also be unaffected. With respect to semi-finished firearms and essential components, Rule 2(a) of the World Customs Organisation’s General rules for the interpretation of the harmonized system (i.e. the world-wide customs classification of goods) already apply and customs must already treat semi-finished receivers as essential components of firearms, as according to this rule “any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article.” This provision would continue to be unevenly applied, with many semi-finished firearms and components being declared as other types of goods. As mentioned in the above-mentioned report, some Member States will continue to apply the rules and procedures of the Regulation to weapons, which are currently excluded from its scope (deactivated firearms, alarm and signal weapons). The overlap with the Common Position would continue, and each Member State would continue to have its own rules and procedures regarding firearms that are legally owned and acquired by civilians but which they consider as “military”. National competent authorities will continue facing difficulties in determining the civilian or military nature of firearms (in particular as regards weapons in category ML1) based on their technical characteristics. 15 Member States opted for a single procedure (see section 2.1.2) to issue export authorisations, the arrangements for which vary greatly from one Member State to another. The methods for submitting authorisation requests will remain in the hands of the Member States, with burdensome paper-based procedures remaining a majority. In application of article 55 of the implementing provision of the Union Customs Code, the Commission collects data regarding the import and export of firearms in the Customs Surveillance System (Military shipments are not subject to submitting declarations and therefore are not subject to customs Surveillance). The data collected could be used at aggregated level (without personal data), for the development of an EU-level analysis of the licit flows of civilian firearms to and from the European Union, which would facilitate a better knowledge of the threat and contribute to more efficient risk profiles and targeting of checks. However, as mentioned in section 2.1.2, customs data do not enable a distinction between military and civilian firearms; or between the different categories (prohibited, subject to authorisation, subject to declaration) of firearms according to the Regulation. Publicly available data are not comparable and different sources contradict one another (see below section 6.1 and annex 4). The following issues would remain unresolved in a “no action” scenario. The absence of any provisions in the Regulation for export markings in the case of deactivated weapons or alarm weapons makes traceability impossible. Moreover, the traceability of the consignments is not guaranteed during transit operations through the customs territory of the European Union. The disparate practices in national records (no single national register) adversely affect traceability. Similarly, the absence of interconnectivity between intra-EU transfer files and files for export licences complicates the full reconstitution of movements of firearms. Data about trade, authorisations, denials and enforcement would continue to be gathered in an uncoordinated way. An extract from the criminal record is not systematically requested when submitting an application for an export authorisation, as it is not expressly required by the regulation. There is no indication that the existence of a crime or an infringement justifying the refusal of the authorisation is always checked either in the national criminal records, or a fortiori in the criminal records of the other Member States. Many national authorities will continue to grant export authorisations even when identical transactions have been refused by another Member State. During the confidential consultation of national authorities, only 12% of respondents (three replies) mentioned that they check the criminal record of the applicant in European Criminal Records Information System before granting an authorisation or that they request the applicant to submit a copy of the national criminal record of another relevant country. The baseline scenario therefore maintains a major security gap. As mentioned in the 2017 evaluation report of the Commission, the regulatory and administrative landscape will also remain disparate because of the lack of clarity of some provisions, complex articulations with other instruments, the leeway given to the Member States in their administrative procedures, in evaluating authorisation requests and in whether or not to recognise the tacit agreement of third countries of transit, and the general nature of the provisions governing information exchanges and administrative cooperation. As the Commission is not an addressee of the information exchanges on authorisation refusals, it will remain unable to monitor the situation at European level and alert the competent authorities in cases where their respective approaches diverge. In the baseline scenario, imports procedures and authorisation processes will remain completely out of the scope of the Regulation, although this is an exclusive competence of the EU, which Member States are in principle precluded to regulate. It is likely that the 2018 Recommendation of the Commission on immediate steps to improve security of export, import and transit measures for firearms, their parts and essential components and ammunition will continue to be ignored by Member States, as it has been so far. The main reason for the lack of uptake of the 2018 Recommendation is likely to be its non-mandatory nature. In addition, implementation of the recommendation would have involved additional work and a change of administrative habits. This is particularly the case for the lack of provision of statistical data, which can result from a conjunction of both a difficulty in distinguishing military from civilian firearms and a weak administrative capacities to collect the data. The Recommendation was in any case not sufficiently specific to address the disparate practices between Member States. As a result, exporters will continue to face a non-unified import and export control mechanism for firearms. With respect to seizures of firearms, it is unlikely that Member States subject to the Schengen acquis would substantially improve their provision of statistics pursuant to the 1999 Decision of the Executive Committee on the illegal trade in firearms, since the Commission is not aware of such communications. In the baseline scenario, since 15 March 2021, customs authorities will have a better oversight of firearms and firearms parts imported in the EU through fast parcel shipment, since relevant operators are now under the obligation to issue a summary entry declaration in the EU’s Import Control System (ICS)2 for all goods shipped to the EU. 5.2.Description of the policy options 5.2.1.Option 1: soft-law approach Option 1 is based on a soft-law approach, which would focus on complementing the 2018 Recommendation of the Commission on immediate steps to improve security of export, import and transit measures for firearms, their parts and essential components and ammunition, with additional more detailed guidance and stepping up enforcement of the already applicable legislation. Import With respect to traceability of firearms the 2018 Recommendation notably encourages Member States, in addition to the unique marking required by the Firearms Directive, to make an additional and simple marking with the identification of the country of import and year of import, as required by the UN Firearms Protocol. With respect to semi-finished firearms and essential components, the Commission would provide guidance building on Rule 2(a) of the World Customs Organisation’s General rules for the interpretation of the harmonized system. The Guidance would build on those principles specifically in relation to firearms, by providing a working definition of semi-finished firearms and components, and requesting Member States to report on how they implement those principles. The Guidance would include detailed criteria for the correct customs classification of weapons either as alarm and signal weapons or as firearms. Export The Recommendation also calls on Member States to verify systematically that all firearms, which are deactivated in the EU and are exported to third countries as deactivated firearms, are marked and that owners are issued a deactivation certificate in accordance with EU law. In addition, Member States would be encouraged to apply the standards of non-convertibility of alarm and signal weapons to exported alarm and signal weapons, in addition to their existing obligation to check imported alarm and signal weapons pursuant to Implementing Directive 2019/69.

This option would include more specific guidance, listing out the particulars that firearms licensing authorities should trace and record at export (notably the name of the manufacturer or the brand, the country or place of manufacture, the serial number and year of manufacture and if possible the model). Improved cooperation and exchanges of information between competent authorities With respect to law enforcement cooperation and exchange of information, this option would complement the 2018 Recommendation: -with more detailed templates for the provision of annual statistics about the number of authorisations, refusals, the quantities and values of firearms exports and imports, by origin or destination, in order to develop a better picture of the movements; -by asking them to report on the use of the European Criminal Records Information Exchange System (ECRIS) when checking the criminal background of applicants; -by asking them to report on the type of inspection systems and processes to check whether the conditions for granting an export authorisation continue to be met; -by upgrading and improving the COARM System, in order to adapt it to civilian firearms, and ensure that Regulation (EU) No 258/2012 is correctly mentioned as the legal basis in the system, and asking Member States to report on checks and notifications in COARM; In addition to the new guidance, the Commission would step up exchanges of information through the meetings of the Firearms Export coordination group by requesting Member States to report in that context -on exchange risk information related to the movement of firearms through the customs risk management system; -on exchange of information about the classification of imported alarm and signal weapons To improve the implementation of the 1999 Decision of the Executive Committee on the illegal trade in firearms, the Commission would provide an update of the categories and type of information about seizures to be reported annually. It would also call on Member States to share those data annually according to an updated template with Europol. With respect to the coordination of risk assessment and customs controls, in view of the future releases of the Import Control System 2 (ICS2), the Commission would review the Common Risk Criteria and standards (CRC) for pre-arrival and improve the targeting of firearms trafficked in commercial shipments, including postal and express consignments, with criteria aimed at prohibited and restricted items. The new set of CRC would be applied to the Entry Summary Declarations submitted by the economic operators to the customs office of first entry, for all goods entering the EU external borders. Moreover, new analytics capabilities (Safety and Security Analytics – SSA) to complement and enhance the risk analysis will be introduced as per Release 2 of ICS2. Under Horizon 2020, the Commission will fund activities to improve notably the detection of weapons, with non-intrusive inspection of cargo or packages and Artificial intelligence image recognition. Administrative simplifications Under this option, the Commission would also facilitate the activities of economic operators by publishing a non-binding list of competent authorities in non-EU countries, that would help them determine who to reach out to in order to get the required import or transit authorisations. Furthermore, the new guidance of the Commission would include recommendations, based on best practices of Member States, on the use of simplified procedures. This would notably concern temporary imports and temporary exports currently not covered by the Regulation. It could also include specific guidance for facilitations in favour of Authorised Economic Operators with the Safety and Security element (AEO-S or AEO-F), subject to integration in TARIC. Such new guidance would also include the use of systematic e-licencing procedure. Besides, the Commission would provide for Member States a free-of charge voluntary e-licensing procedure, building on and expanding the e-licensing platform (currently dedicated to exports of dual-use goods) to cover imports and exports of firearms. This e-licensing platform could also support the data collection. 5.2.2.Option 2: clarification of the existing legal framework Option 2 provides for a legislative clarification, which would remove ambiguities in the interpretation of the applicable legislation (e.g. type of information to be recorded, classification of certain weapons and components as firearms), an express legal basis to require competent authorities to use existing systems to exchange information, harmonising existing simplified procedures, aligning deadlines, clarifying roles of importers and exporters, and aligning the scope of the Regulation with the Firearms Directive. This option would essentially translate most of the measures mentioned in option 1 in the text of the Regulation. Import

With respect to imported alarm and signal weapons, it would fill a gap resulting from the unclear legal framework and the ensuing lack of proper import controls, which could not be addressed by the Commission Implementing Directive (EU) 2019/69 because of the limitation of the delegation of power. It would provide for a compulsory classification as firearms of alarm and signal weapons not complying with the Firearms Directive and the implementing directive, as early as the stage of the customs declaration. Member States would also have to designate the authorities in charge of checking compliance with the implementing directive before the release into free circulation, if it differs from the authorities designated under the implementing directive. Export To support national licensing authorities in ensuring the tracing of exported firearms, this option includes an explicit reference to the possibility to use the opportunities of the tools for administrative and investigative cooperation in third countries, provided by article 20 of the 1997 Regulation on mutual assistance. Improved cooperation and exchanges of information between competent authorities This option would provide for a compulsory check of criminal records in ECRIS and provide for exchange of risk information related to the movement of firearms by using the customs risk management system. It would also make it compulsory to notify refusals in a common electronic system and check for refusals issued by other Member States before granting an authorisation. This system could either be COARM or an extension of the Dual-Use electronic System (DUeS) to cover not only exports of dual-use goods but also imports and exports of firearms. The Commission would have delegated powers to determine such a system. The relevant provision could be similar to that of articles 4(7) and 23(6) of the dual-use regulation.This digitalisation and compulsory checks of a common electronic system would contribute to the collection of some data. However, this option would not oblidge Member States to gather and send in any additional data regarding the export and import authorisations, their value and destination. In addition, this option would create a legal basis to enable export licensing authorities to check, in case of suspicion (e.g. when the firearm was not previously registered in the national data-filing system or was not just recently manufactured) whether an exported firearm has been reported lost or stolen in another Member State by checking the Schengen Information System before granting an export authorisation. Under this option, the Regulation would also make applicable the whistle-blower-protection regime put in place with Directive (EU) No 2019/1937 to persons who report breaches of the Regulation. The Regulation was not included in the list of Union act to which the Directive applies because of an incompatibility between the legal bases, which would be solved by a specific provision in the Regulation. Besides, in order to clarify the legal framework, it would complement the definition of trafficking of article 2 (15) of the regulation with an additional provision in article 16 (devoted to sanctions), establishing an express incrimination of arms trafficking. Administrative simplifications The revised regulation would clarify definitions and categories of firearms to bring them in line with those of Directive (EU) 2021/555. It would for instance apply to brokers and collectors. The list of prohibited weapons to which the Regulation currently does not apply would be expanded to include the whole category A of the most dangerous firearms. The overlap between the Regulation and the Common Position would be solved by building on the logic of the current Regulation – and actually further restricting its scope, thus subjecting the firearms that have been prohibited inside the EU since the amendment to the Firearms Directive in 2017 only to the Council Common Position 2008/944/CFSP. This would mean that many weapons currently in the “grey zone” would only be subject to the Common Position. To harmonise administrative procedures and provide economic operators with a unified, simpler, regulatory environment, the Regulation would include new provisions clarifying the roles and responsibilities of importers and exporters, similar to those currently in force with respect to market surveillance and compliance of products under article 4 of Regulation (EU) 2019/1020 (making sure the right marking is applied to imported firearms, duty of cooperation with competent authority, duty to inform authorities in case of suspected violation of the rules, etc.). The Regulation would align deadlines for granting import authorisations to deadlines for export authorisations (60 days and exceptionally 90 days). It would establish harmonised simplified procedures for temporary exports not currently covered by the Regulation (such as exhibitions or repairs). It would repeal the possibility for a global authorisation, which is almost never used. Finally, the Regulation would turn the current option for Member States to assume implied consent of the third country of transit (if it has not replied within 20 days) into the default option. Member States would have to expressly notify the requirement of an express agreement of the third country of transit. 5.2.3.Option 3: new legislative provisions Option 3 would build on and complement option 2, and add to it new legislative provisions to ensure the full traceability of imported and exported firearms (e.g. compulsory import marking, limiting imports of semi-finished components to dealers, computerised data-filing, post-shipment checks), for national authorities to share statistics and improve exchanges of information between licencing and customs authorities, to establish new simplifications (temporary imports, general export authorisation, e-procedures), and to remove the scope overlaps with Common Position 2008/944/CFSP by applying exclusively to all civilian-to-civilian transactions. Import At import, the Regulation would establish a clearer rule than under the current Directive (EU) 2021/555, providing that no firearm or essential component could be released into free circulation or placed on the market without the unique marking required by the Directive (under the Directive, marking must take place “without delay after import”). To avoid that unmarked firearms end up in the wrong hands in third country, such unmarked firearms would have to be destroyed. To avoid diverging analyses from one Member State to another, the Regulation would establish an EU-level mechanism to ensure that a given model of alarm and signal weapon is classified under the same position of the customs combined nomenclature throughout the EU. For imported alarm and signal weapons, the regulation could also establish a list of non-convertible alarm and signal weapons that are compliant with implementing directive 2019/69, thus ensuring that the import authorisation of such weapons would be automatically recognised throughout the EU. Under this option, the Regulation would provide a common definition of semi-finished firearms and essential components and limit their import to licensed arms dealers; such semi-finished products would therefore not be available anymore to private individuals. Finally, in order to avoid any legal loopholes facilitating misdeclaration of goods, the Regulation would provide that customs simplifications are not applicable to firearms and their essential components.

Export To ensure full traceability at export, the Regulation would make it compulsory for exporters to provide evidence of final import in the country of destination. It would also provide a legal basis enabling Member States to entitle third parties to conduct post-shipment controls in their name, notably through the implementation of Council Decision (CFSP) 2019/2191. In order to take into account the need to ensure full traceability of firearms which could also be used for military purposes or for internal repression, and to compensate for removal of the overlap with Council Common Position 2008/944/CFSP (see below – administrative simplifications), the Regulation would create for weapons prohibited (category A) and subject to authorisation (category B) an obligation for the exporter to provide an end-user certificate. The Regulation would include the particulars and characteristics of such an end-user certificate. To limit the administrative burden, and in line with the User's Guide to Council Common Position 2008/944/CFSP defining common rules governing the control of exports of military technology and equipment, only the actual importer of civilian firearms (i.e. the arms dealer) in the third country would be considered as the end-user. The end-user certificate would include a commitment not to re-export firearms without prior approval of the EU licensing authority and not to sell it to non-civilian users. Improved cooperation and exchanges of information between competent authorities To ensure proper record-keeping, the Regulation would require Member States to establish computerised data-filing systems for import and export authorisations. This would effectively create digital continuity with internal data-filing systems, which are already computerised pursuant to the Firearms Directive. Furthermore, this would facilitate the systematic data collection of the Member States. In this option, the Regulation would include detailed provisions on the exchange of information between licensing authorities and customs authorities, to clarify their respective roles and responsibilities, and ensure good coordination especially when the customs office of entry or of exit is in a different Member State than the import or export licensing authority. The Regulation would notably clarify the roles of customs authorities in the case of external transit of firearms, including in the case of transit (i.e. movements of non-EU goods). Except for temporary imports and exports, where the declaration would include the particulars of individual firearms or components (see below), the role of customs would limit itself to the traceability of shipments. The Regulation would only provide for customs checks based on risk assessment. Until e-licences and the full inter-connection with the EU Single Window Environment for Customs are rolled out, it would notably apply to the Regulation article 25 of Regulation (EU) 1020/2019 on market surveillance with respect to controls on products entering the Union market. It would also draw inspiration from the rules proposed by: the 2021 proposal for a Regulation on deforestation: ·article 24 in relation to the organisation of controls, in particular the check by customs of the relevant import or export licence before release for free circulation or export; the 2021 proposal for a Regulation on shipments of waste: ·article 35, paragraph 3, points a) to e) with respect to transit of firearms between the customs office of entry and the customs office of import or the customs office of export and the customs office of exit; ·article 54 with respect to firearms shipped through Member States from and to third countries The Regulation would provide a legal basis for the sharing of intelligence by licensing authorities with customs authorities. To improve the knowledge of trends and exchanges of information between licencing and customs authorities, Member States would be required to submit annually their statistics on the number of authorisations, refusals, as well as value, amounts, countries of origin and of destination of imports and exports to the Commission. Besides, the obligation currently stemming from the 1999 Decision of the Schengen Executive Committee on the illegal trade in firearms to “submit each year their national annual data for the preceding year on illegal trade in firearms” would be enshrined in the Regulation, thus applying to all EU Member States and EFTA countries. The digitalisation of the different procedures should support the Member States in this task. Administrative simplifications The Regulation would provide a legal basis to use the EU Single Window Environment for customs, enabling a connection between customs systems and import and export e-licensing systems through an EU database via the EU Single Window Environment for customs via the EU Customs Single Window Certificates Exchange System (EU CSW-CERTEX). To further simplify authorisation procedures for economic operators, systematic e-procedures (electronic licensing system) would be made compulsory (as a complement to the e-licensing system provided by the Commission under option 1). In order to provide economic operators and competent authorities with a simpler, unified regulatory framework, this option would address one of the most-mentioned problems, namely the grey zone between the civilian firearms of the Regulation and the firearms “specially designed for military use” subject to the procedures of the Common Position 2008/944/CFSP. Under this option, the scope of the Regulation would be fully aligned with the scope of the Firearms Directive (including the category A of most dangerous firearms). As mentioned in section 4.1 above, State-to-State (i.e. government-to-government) transactions, as well as direct sales to the armed forces, the police, or public authorities would still be excluded from the scope of this initiative, and would continue to be subject to Common Position 2008/944/CFSP. All other transactions would be considered of civilian nature, and be subject only to the rules and procedure of this Regulation. To summarize, the new Regulation would: 1.regulate all civilian transactions (the Common position would not apply to them any more) 2.establish for prohibited firearms and firearms subject to authorisation substantive rules that are similar to those of the Common Position.

Under this option, the Regulation would also set out harmonised simplifications for temporary imports and exports (for repairs, expertise or exhibition), as well as re-imports following temporary export or re-exports following temporary imports. In this option, the mere release of the goods by customs authorities would amount to an import or export authorisation. The Commission would have the power to adopt delegated acts establishing a general export authorisation for arms dealers which are Authorised Economic Operators with the Safety and Security element (AEO-S or AEO-F) under customs rules. This would essentially replace the global authorisation repealed in option 2. The exact scope of the authorisation would be defined in the delegated act. As an illustration, it could be limited to intra-group movements (i.e. exports of firearms to a subsidiary of an EU-based company in a third country), or it could cover exports to authorised economic operators in third countries recognised by the Member State in application of an agreement of mutual recognition. In this option, fees for authorisations and transit (except escorting) would be prohibited, thus alleviating the financial burden on economic operators. 5.2.4.Option 3 bis: new provisions without change to the interplay with the Common position Option 3 bis would be substantially similar to option 3, with one exception: instead of following the logic of the Firearms Directive for the distinction between military and civilian transaction, the Regulation would maintain the reference to “firearms specially designed for military use”. Under this option, avoiding the overlap between the Regulation and the Council Common Position 2008/944/CFSP would require the establishment of the technical characteristics which would define whether the firearms owned by civilians must be considered as military or civilian ones. Currently this assessment is done at national level on a case by case basis. Under this option, the Commission would adopt an implementing or a delegated act listing out the characteristics of the firearms, and could even issue Decisions to classify a given firearm model into either the civilian or military category. 5.3.Elements discarded at an early stage Considering their wide range and realistic nature, no option could be discarded as a whole at an early stage. However, the Commission considers that some individual elements of the options should in any case not be implemented. They were therefore excluded from the assessment of the options. The UN Firearms provides that State parties establish import marking with the marking of the first country of import and the year of import. Such a measure would concretely not genuinely improve the traceability of firearms imported in the EU. Within the EU customs union, traceability is already ensured by the existence of the unique marking provided by the Firearms Directive and the registration in national computerised data-filing systems, effectively enabling the full traceability of firearms as required by the Firearms Protocol. When a weapon is seized and cannot be traced back in the national system of the country of seizure, national law enforcement authorities will send a tracing request to relevant countries of suspicion, in connection with the case (based on the visible markings of the weapons, the country of the nationality of the perpetrator or any relevant contextual element). If that does not yield any result, a search in the Schengen Information System will show whether the firearm was lost or stolen elsewhere in the EU. Finally, a last resort option is to send a tracing request to all Member States through Europol’s Secure Information Exchange Network. A search in Interpol’s iArms database may also determine whether the firearm was lost or stolen outside of the EU. In most cases, the tracing is ensured in the two first options and do not require additional information such as the country or year of import. Besides, firearms imported into the EU are unlikely to be re-exported and diverted outside of the EU, thus making such import marking unnecessary for traceability purposes. Neither the UNODC Global Firearms Study nor any other case studies point to any weapons imported into the EU, which were then re-exported and diverted, and for which the import marking would have made a difference. In fact, most firearms exported from the EU have been manufactured in the EU and therefore would in any case not bear an import marking. As 19 Member States already require import markings, the additional costs of imposing such marking on the remaining Member States would amount to 2,4 million euro per year. Consequently the administrative and economic burden of imposing additional import marking would be out of proportion with the security advantages it would provide in terms of traceability or with the role-model that the EU could play at international level. The idea to request an entry summary declaration even in personal luggage was considered a disproportionate burden. To avoid the risk of smuggling of firearms in personal luggage, the Regulation would have made compulsory an Entry Summary Declaration for firearms in line with article 127 of the Union Customs Code, effectively disapplying the exemption of article 104 of Delegated Regulation 2015/2446. Such an option would have required prior customs declaration before the arrival on the EU customs territory. It would not have provided a specific benefit compared to the current obligation to declare the firearms at arrival, and would in any case have been easily circumvented by fraudsters, who would have continued to smuggle firearms and essential components through that channel. 6.What are the impacts of the policy options? 6.1.Methodology Annex 4 describes the methodological constraints faced during this impact assessment in the collection of governmental and company data. The main issue that has been encountered consistently since 2017 is the lack of reliable and consistent data that would enable a quantification of the problems and of the impact of options. This is due to inadequate data collection at national level (several Member States do not collect centrally data on import or export authorisations, or are unable to distinguish between civilian and military firearms, the statistics about the latter being sometimes confidential) and the reluctance of economic operators to share data about what they consider is sensitive information, despite the Commission recommendation to share such data in 2018. Besides, available business statistics relate only to EU arms manufacturers but not all arms dealers, which are the most relevant ones when it comes to imports into the EU. The Commission (and its contractor) repeatedly attempted to collect accurate information during the 2017 evaluation of the Regulation, during the 2019 study on improvement of the EU rules on imports and export of firearms, during the 2021 consultation of stakeholders and the consultation of Member States (official letters of August 2021 and February 2022, targeted questionnaires, face-to-face interviews). This notwithstanding, the data collection is not comprehensive. As a consequence, much of the statistics and figures had to be extrapolated from the scant available data, or based on a median figure on a range. For instance, the analysis assumes that the stakeholders concerned by exports are the 1000 EU-based firearms manufacturers, although not all manufacturers carry out exports, and some retailers of firearms or individual users may also export firearms. The analysis assumes that the stakeholders concerned by imports are the estimated 20.000 arms dealers in the EU (based on an estimation of industry associations since no official data is available, annex 4 gives more information). As not all such arms dealers carry out imports from non-EU countries, the costs of the measures introduced are bound to be an over-estimation. 6.2.Social impacts 6.2.1.Impacts on citizens Individual citizens will be primarily affected in their capacity of firearms users, be they hunters, sport shooters, or collectors. The vast majority of them only operate within the EU, and will therefore not be affected by EU rules on exports and imports. In the public consultation, several respondents used the free text questions to explain that import and export procedures are currently so burdensome that they do not engage in such operations. The vast majority of respondents (90% being individual citizens) considered that they would benefit from a genuinely unified export and import control system for firearms, which was confirmed in replies to the free text questions. Establishing unified EU rules for administrative simplifications for temporary exports and reimports (and temporary imports and re-exports) is a strong request.

Option 1 would have the lowest impact on citizens, as it would not change the legal framework. The current rules on the use of the European Firearms Pass for temporary exports of hunters and sport shooters would continue to apply, and those firearms users would not be affected by the new requirement to provide an end-user certificate at export under option 3. This would in any case not apply to firearms subject to mere declaration (category C). Option 2 and 3 would only marginally affect individual citizens, as they already benefit from the simplifications linked to the European Firearms pass. They would only be affected by the prohibition to import semi-finished firearms and essential components, and would not be able to import convertible alarm and signal weapons as easily as they used to. Citizens would benefit from the clarity of harmonised EU rules (deadlines, harmonised simplifications, e.g. for exhibitions). Option 3 bis could potentially affect individual citizens more. Especially if those citizens received an exception to own a prohibited firearm (Category A). Multiple of these weapons could fall exclusively under the scope of the Common Position, which increases the difficulty of the procedure to import and export these weapons. 6.2.2.Security impacts All options would have positive security impacts, although those of option 1 would be dependent on whether or not Member States fully implement the detailed guidelines. As they already failed to implement the 2018 Recommendation of the Commission in any substantive way, it is unclear to which extent option 1 would have a major impact. New written, more comprehensive guidance, combined with a more intensive use of the Firearms export coordination group to exchange information, the provision of a non-compulsory e-licensing tool and the development of Common Risk Criteria and standards (CRC) for pre-arrival, supported by more harmonised data collection of seizures, would nevertheless provide noticeable added-value compared to even a “dynamic” baseline. Options 2 and 3 would have more noticeable impacts, as they would address existing legal loopholes, including by turning into law many of the elements of the guidelines in option 1. They would notably ensure a unified approach of customs authorities with regard to imported alarm and signal weapons, making sure that they are duly declared as firearms when they should. The express classification of semi-finished firearms and essential components as the finished product – and even more the prohibition made to others than arms dealers to import such semi-finished components – would close a major legal loophole, which so far enabled criminals and extremist groups to legally import such products in order to manufacture unmarked firearms. They would also substantially improve exchanges of information between licencing authorities and between licencing authorities and customs, in particular across borders. This will have a very positive impact on sharing of intelligence and on risk assessments for individual import and export procedures. Extending the whistle-blower protection regime to persons who report breaches of the Regulation would encourage the fight against smuggling and diversion of firearms, as it would encourage employees of the company to provide information to law-enforcement authorities. 6.3.Impact on digitalisation Responding to an overwhelming support of stakeholders in the public consultation and in the confidential consultation of competent authorities, the digitalisation of import and export authorisations of the preferred option will have a major impact on stakeholders and public administrations, which often (more than half of the respondents in the confidential consultation) still operate with paper authorisations. Digitalisation will enable full digital integration of the whole import and export cycle, in connection with the ongoing digitalisation of customs processes through the Single Window environment for customs. It will also enable the connection with the computerised data-filing systems for firearms registers, which are being established by Member States as part of the implementation of Directive (EU) 2021/555 on the acquisition and possession of weapons. This digitalisation will also facilitate the systematic data collection by the Member States. The following authorisations/certificates may be put in scope of the EU Single Window Environment for Customs: ·Import authorisations ·Export authorisations Any document, which is meant to be checked by customs as a precondition for customs clearance via the Single window, shall be available in a central Union database to be established by the Commission. The technical developments that might be required at national level could be offset by the availability of a single e-licencing portal provided free of charge by the European Commission. 6.4.Economic impact 6.4.1.Impacts on the overall economic activity Evaluating the impact on the overall economic activity is a sensitive exercise, due to the limitations explained in the methodology section (6.1) and in annex 4. Only figures about firearms manufacturers are available, but not data about arms dealers in the EU, which are the main importers of weapons. In addition, not all firearms manufacturers export their production, and they also import weapon parts. Besides, it is currently not possible to quantify actual exports or imports of civilian firearms, due to the lack or inconsistency of data provided by Member States. However, the EU sold production of civilian firearms, alarm and signal weapons, their parts and components, and ammunition accounts for (only) 0.09% of the EU27 total sold production value. Furthermore, firearms represent only 0,027% of the total value of imports into the EU and 0,069% of the total value of the export out of the EU. Therefore, the impact of the initiative on the overall economic activity is bound to be negligible. During the public consultation and the targeted interviews of business stakeholders, a clear consensus emerged in favour of a more uniform EU import and export control system for civilian firearms. Therefore, the economic impact of the options is expected to be positive, as it would meet the expectations of businesses in terms of simplification. In particular, common rules on temporary exports and imports would facilitate work of firearms manufacturers in their daily operations (repairs). The main positive impact would be linked to digitalisation (see above) and to the clarification of the legal framework with respect to the scope of applicable rules. The clarification of roles and responsibilities of importers and exporters, along the lines of those currently in force with respect to market surveillance and compliance of products under article 4 of Regulation (EU) 2019/1020, would not create new obligations, since it would reflect obligations they already meet under national legislation when applying for an authorisation.

6.4.2.Impact on SMEs and competitiveness The various options are particular