EUROPEAN COMMISSION Strasbourg, 19.5.2015 SWD(2015) 111 final COMMISSION STAFF WORKING DOCUMENT Better Regulation Guidelines {COM(2015) 215 final}

{SWD(2015) 110 final}



Table of Contents Table of Contents Chapter I Better Regulation in the Commission 1.Introduction 2.What is Better Regulation? 3.How to Regulate Better? - The Essentials 4.The structure of the guidelines Chapter II Guidelines on Planning 1.When Can Policy Preparation Begin? 2.Who is involved in the validation process? 3.What needs to be validated? Chapter III Guidelines on Impact Assessment 1.Introduction 2.The key questions and principles of Impact assessment 3.Summing it all up: the impact assessment report 4.From impact assessment to policy-making Chapter IV Guidelines on preparing proposals, implementation, and transposition 1.Introduction 2.Anticipate implementation problems and facilitate transposition: Implementation plans

3.Better drafting of legal acts 4.the link between EU Law and Member State transposing measures: explanatory documents 5.Monitoring implementation Chapter V Guidelines on monitoring 1.Introduction 2.The key questions and principles of Monitoring Chapter VI Guidelines on evaluation and Fitness Checks 1.Introduction 2.Key principles and concepts 3.Key questions an Evaluation must answer 4.Summing it all up: the evaluation staff working document 5.Using the evaluation results Chapter VII Guidelines on Stakeholder Consultation 1.Introduction 2.Scope and definition of stakeholder consultation 3.General principles and minimum standards for stakeholder consultation 4.When is stakeholder consultation required? 5.Who in the Commission services is responsible to set up consultation activities? 6.How to prepare and conduct a Consultation - Three interacting phases 7.Quality control

Chapter VIII The content of the Better Regulation Toolbox Glossary Chapter I

Better Regulation in the Commission 1.Introduction European policies and legislation impact the lives of the Union’s 500 million inhabitants and its millions of companies. A substantial body of legislation now exists and this legislation must continue to keep pace with evolving political, societal and technological developments. The European Commission has a key role in this regard given its right to initiate new legislation and its responsibility to ensure the correct application of Union law. EU action must lead to a simple, clear, stable and predictable regulatory framework for businesses, workers and citizens that continue to add value as problems evolve, new solutions emerge and political priorities change. The European Commission is determined, therefore, to ensure that its proposals meet policy goals at minimum cost and deliver maximum benefits to citizens, businesses and workers while avoiding all unnecessary regulatory burdens. This is key to support growth and job creation – allowing the EU to ensure its competitiveness in the global economy - while maintaining social and environmental sustainability. Determining when and how EU action should be undertaken, reviewed or repealed is ultimately a political choice. The quality of these choices, however, can be improved if "better regulation" principles and practices are followed when preparing, implementing and evaluating policies and measures. Box 1. How to apply these guidelines ·The guidelines and associated Better Regulation "Toolbox" should be applied in a proportionate manner using common sense bearing in mind that the aim is not to respect procedural requirements per se but to ensure that the Commission is equipped with relevant information on which to base its decisions in a timely manner. Similarly, the depth of analysis should also reflect the significance of the impacts or effects of the initiative or intervention. ·The main guidelines set out the mandatory requirements and obligations for each step in the policy cycle while the Toolbox provides additional guidance and advice which is not binding unless expressly stated to be so. ·There may be cases where it may not be possible or most appropriate to follow each step in the guidelines. For example, a special regime applies to the Commission's proposals for a Council decision to implement social partners' agreements under Article 155 TFEU due to the role and autonomy entrusted by the Treaty to the social partners. In other case, there may be a political imperative to move ahead quickly, an emergency that requires a rapid response or a need to abide to specific timeframes set in legislation which cannot be simply respected on the basis of proper planning. In such well justified cases it may, for instance, be necessary to combine evaluation and impact assessment, adopt ad hoc consultation strategies etc. Such cases (and the related approach) should be discussed as early as possible in the planning phase with the Secretariat General and, whenever relevant, spelled out in the draft Roadmap which informs the political validation of each initiative. Whenever needed, the agreed approach should be externally communicated together with a justification and an explanation of the efforts made to respect the spirit of the guidelines (typically through the final roadmap). ·To avoid undue delays and to maximize the quality of outputs, the efficient application of these guidelines requires a constructive and timely collaboration between the lead service, the Secretariat General and those services included in interservice groups. ·The Secretariat General will attentively monitor the impact of the introduction of new procedural requirements. It will review their implementation and propose, if needed, how to eliminate any source of administrative burden or undue procedural delay thus identified by 2017. Any such review will not endanger the respect of the better regulation principles identified in these guidelines and in the Commission Communication 'Better regulation for better results – An EU agenda'. These guidelines explain what Better Regulation is and how it should be applied in the day to day practices of Commission officials preparing new initiatives and proposals or managing existing policies and legislation. The guidelines should be read by all officials involved in Better Regulation activities and managers who are responsible for quality control and the allocation of resources within Commission departments. Better Regulation cannot be implemented without dedicated financial and human resources and DGs must ensure that appropriate centres of expertise (or functions) and training are available to support the various aspects of Better Regulation. 2.What is Better Regulation? "Better Regulation" means designing EU policies and laws so that they achieve their objectives at minimum cost. Better Regulation is not about regulating or deregulating. It is a way of working to ensure that political decisions are prepared in an open, transparent manner, informed by the best available evidence and backed by the comprehensive involvement of stakeholders. This is necessary to ensure that the Union's interventions respect the overarching principles of subsidiary and proportionality i.e. acting only where necessary and in a way that does not go beyond what is needed to resolve the problem. Better Regulation covers the whole policy cycle – policy design and preparation, adoption; implementation (transposition, complementary non-regulatory actions), application (including enforcement), evaluation and revision. For each phase of the policy cycle, there are a number of Better Regulation principles, objectives, tools and procedures to make sure that the EU has the best regulation possible. These relate to planning, impact assessment, stakeholder consultation, implementation and evaluation. Figure 1. The EU Policy cycle The different phases are closely interrelated and to recognise better the connections and to ensure greater coherence the previously separate guidance documents have been brought together into a single streamlined and integrated Better Regulation guide. These guidelines replace the previous standalone guidelines which addressed separately impact assessment, evaluation, implementation and also include new guidance on planning and stakeholder consultation . 3.How to Regulate Better? - The Essentials

3.1.Forward planning and political validation Good regulation starts with good planning. Work should focus on the Commission's priorities as reflected in the President's political guidelines and the Commission's annual work programmes. Good planning covers the initial consideration of an initiative within the Commission and the organisation of the supporting processes – the evaluation of policies already in place, the assessment of problems and alternative solutions and the active engagement with stakeholders. These take time and require resources to deliver timely results. The first step in the planning process is to define the scope of the planned initiative and seek political validation to develop the idea further. The main planning tools used in this process are Agenda Planning and Roadmaps. The details on which initiatives must be uploaded in Agenda Planning are provided in the instructions of the Secretary General which complement the Working Methods of the European Commission 2014-2019 and outlined in detail in Chapter II on Planning. Box 2. Scoping, political validation and interservice work ·Major initiatives must be accompanied by a Roadmap and entered into Agenda Planning as soon as preparatory work starts - at least 12 months prior to adoption by the College. They must be validated by the lead Commissioner, relevant Vice-President and the First Vice-President before being accepted to be included into the Commissions' planning. The political validation must be understood as giving the green light to proceed with further preparatory work. It should not be interpreted as a decision on a particular initiative or course of action that prejudges the outcome of any impact assessment process, stakeholder consultation or later political discussion in the College. ·Roadmaps explain what the Commission is considering. A Roadmap describes the problem to be tackled and the objectives to be achieved. It sets out why EU action may be needed and its value added. The policy options being considered are outlined. The Roadmap also justifies the absence of an impact assessment. It also announces the details of the stakeholder consultation strategy (see later chapter). A (different) Roadmap is also prepared for each evaluation and Fitness Check. This specifies the scope of the evaluation and presents the evaluation questions to be answered. · An Inception Impact Assessment is a Roadmap for initiatives subject to an IA that sets out in greater detail the description of the problem, issues related to subsidiarity, the policy objectives and options as well as the likely impacts of each option. ·All Roadmaps and Inception Impact Assessments are published by the Secretariat-General on the Commission's website so that stakeholders are informed and can provide initial feedback (including data and information they may possess) on all aspects of the intended initiative and impact assessment. ·Evaluations, impact assessments, stakeholder consultations, policy proposals and implementation plans must be prepared collectively by the services within an interservice group. It is important that all services with an interest participate actively in the interservice work from the outset, particularly those DGs with specific expertise (e.g. competitiveness, SME impacts, social impacts, environmental impacts and scientific/analytical). 3.2. Stakeholder consultation Stakeholder consultation is an essential element of policy preparation and review. Good policy development is built on openness. Stakeholder inputs provide feedback and evidence for all types of evaluation, impact assessments and political decisions. Planning stakeholder consultation is good practice, and should be reflected in a simple, concise consultation strategy that identifies and targets relevant stakeholders in order to collect all relevant evidence (comprising data/information) and views. It is important to consult as early and as widely as possible in order to maximise the usefulness of the consultation and to promote an inclusive approach where all interested parties have the opportunity to contribute to the timely development of effective policies. At the same time, consultation is an ongoing process and consulting stakeholders throughout the whole policy cycle remains key. Consultation should allow for reasonable time limits to stimulate informed and effective feedback from all relevant stakeholder groups, and should ensure that feedback is given to respondents about how their information and views were used. Open public consultation is essential for impact assessments, evaluations and Fitness Checks. 3.3.Evaluation/Fitness Checks Policy preparation should be supported by both retrospective performance evaluations and forward looking impact assessments. Both look at how a problem is, or should be, addressed (and its underlying causes) to achieve the desired objectives taking account of costs and benefits. Both are based on an integrated approach that addresses impacts across the environmental, social and economic pillars of sustainable development and so contribute to the mainstreaming of sustainability in policy making at the Union level. Evaluations gather evidence to assess how well a specific intervention has performed (or is working), taking account of earlier predictions made in the context of an impact assessment and whether there were unintended/unexpected effects which were not anticipated by the impact assessment or the act agreed by the Legislator. An evaluation also draws conclusions on whether the EU intervention continues to be justified or should be modified to improve its effectiveness, relevance and coherence or to eliminate excessive burdens or inconsistencies or simply be repealed. A Fitness Check is a comprehensive evaluation of a policy area that usually addresses how several related legislative acts have contributed (or otherwise) to the attainment of policy objectives. Fitness Checks are particularly well-suited to identify overlaps, inconsistencies synergies and the cumulative impacts of regulation. Box 2. Regulatory Fitness Programme (REFIT) Given their focus, evaluations and Fitness Checks are particularly important in the context of the tools that are used to implement the Regulatory Fitness and Performance programme (REFIT): a rolling programme to keep the entire stock of EU legislation under review and ensure that it is 'fit for purpose', that regulatory burdens are minimised and that all simplification options are identified and applied. Evaluations and Fitness Checks always consider efficiency and effectiveness and identify any overly burdensome and complex aspects of EU legislation and its implementation in the Member States as well as any subsequent implementing or delegated legislation adopted by the Commission. It is important to monitor the impacts flowing from the implementation and application of the legislation in order to allow both Member States and the Commission to undertake a meaningful evaluation of the intervention at a future point in time. If there is no useful monitoring information, it will be difficult to evaluate the intervention appropriately and to rectify any problems or improve the delivery of desired results. 3.4.Impact assessment Impact assessments collect evidence (including results from evaluations) to assess if future legislative or non-legislative EU action is justified and how such action can best be designed to achieve desired policy objectives. An impact assessment must identify and describe the problem to be tackled, establish objectives, formulate policy options and assess the impacts of these options. The Commission's impact assessment system follows an integrated approach that assesses the environmental, social and economic impacts of a range of policy options thereby mainstreaming sustainability into Union policy making. 3.5.Quality control Staff working documents are required to present the results of all impact assessments and evaluations/Fitness Checks. The quality of these staff working documents is checked by the Regulatory Scrutiny Board (RSB) who will assess all impact assessments and all major evaluations and Fitness Checks. The Board issues opinions based on the requirements of these guidelines. DGs are expected to modify their reports to reflect the Board's opinion. In the case of impact assessments, and according to the Commission Working Methods, a positive opinion from the Board is necessary before a formal interservice consultation can be launched. The formal interservice consultation should check how the Board's comments have been integrated and should also check the quality of the drafting of the initiative/legal proposal (see Chapter IV). 3.6.Implementation support and monitoring The full benefits of an EU intervention will only be delivered if the policy is implemented and applied appropriately. Similarly, burdens for business may be increased beyond what is foreseen by the legislation if the Member States impose unjustified additional obligations (so-called "gold-plating") or implement the legislation inefficiently. That is why it is essential to take into account implementation and enforcement issues when designing an EU intervention including the impact assessment process and associated stakeholder consultation. It is also important to identify ways to assist Member States in the transposition phase (aligning national legislation with EU legislation) by preparing so-called 'implementation plans' (in the form of SWD) which should also be subject to interservice consultation together with the impact assessment and the proposed intervention. Checks on transposition and assessments of compliance are also key tools used to monitor the correct application of EU legislation.

4.The structure of the guidelines The Better Regulation guidelines are structured into separate chapters which cover ·Chapter II: Planning ·Chapter III: Impact Assessment; ·Chapter IV: Implementation; ·Chapter V: Monitoring; ·Chapter VI: Evaluation and Fitness Checks; ·Chapter VII: Stakeholder consultation; and ·Chapter VIII: A description of the web-based Toolbox which contains more detailed guidance on: ·Principles of Better Regulation; ·How to carry out an impact assessment; ·How to carry out an evaluation/Fitness Checks; ·How to consult; ·How to assess sectorial impacts; and ·Methods, models and costs and benefits. The Secretariat-General is responsible for the preparation of the Better regulation guidelines. Questions about their interpretation or application can be obtained from the following units in the SG using the associated functional mailboxes. ·SG-C1: Evaluation, Fitness Checks: SG EVALUATION AND SIMPLIFICATION ·SG-C2: Impact Assessment: SG IMPACT ASSESSMENT GUIDELINES ·SG-C3: Implementation: SG IMPLEMENTATION PLANS; SG INFRACTIONS ·SG-C4: Planning & stakeholder consultation: SG PLANNING; SG STAKEHOLDER CONSULTATION

Individual DGs and services with particular expertise in the field of Better Regulation may also make additional materials available to those preparing evaluations, Fitness Checks, Impact Assessments and stakeholder consultations via their respective web sites. Chapter II

Guidelines on Planning Key requirements ·Work may only start and the necessary resources attributed if an initiative has received political validation at the appropriate level and a valid entry exists in Agenda Planning, where applicable (cf. point 3 below). ·"Major" new initiatives have to be accompanied by a Roadmap or Inception IA and require political validation from the lead Commissioner, Vice-President and First Vice President. ·A valid agenda planning entry is needed in order to launch an interservice consultation. 1.When Can Policy Preparation Begin? The identification and delivery of the political priorities of the Commission are carried out in the context of the Strategic Planning and Programming cycle and on the basis of the political priorities of the Commission President and the Commission Work Programme (CWP) . Effective and quality EU action starts with good and timely planning. New initiatives including evaluation work must receive political validation before concrete work can start and resources are allocated. Policy planning and implementation are always steered by the political level. The political validation must be understood as giving the green light to proceed with further preparatory work. It should not be interpreted as a decision on a particular initiative or course of action that prejudges the outcome of any impact assessment process or later political discussion in the College. For each initiative or evaluation/Fitness Check you need to ·Categorize the future initiative; and ·Identify the level of political validation required (see point 3). To obtain validation you should, via the Agenda Planning entry and, if applicable, via the Roadmap/ Inception IA: ·Explain why you consider it necessary to work on a particular initiative (e.g. an identified policy problem, a legal obligation, implementation concerns, evaluation recommendations, political commitment, request by other institutions, citizens' initiative etc.); ·Explain why action may be needed at EU level; ·Describe how the initiative would contribute to established political priorities. The scope and format of evaluation roadmaps are further explained in the toolbox. Work may start and the necessary resources may be attributed only if political validation has been obtained from the appropriate level. Good planning also implies taking into account from the very beginning the various procedural requirement and their duration, including translations. Once validation obtained, translations should be factored in as soon as possible, so as to ensure the highest possible quality of documents translated. 2.Who is involved in the validation process?

The lead DG encodes new initiatives in Agenda Planning and seeks the necessary political validation by the responsible Commissioner(s) and (if major) Vice-President(s). New initiatives can be encoded and validated throughout the year. The Secretariat-General coordinates a comprehensive screening process for all initiatives that have received political validation and is responsible for seeking the political validation for major items from the First Vice-President, who acts in close cooperation with the President's Cabinet. The Secretariat-General is also in charge of publishing approved Roadmaps/Inception IA on the Commission website and compiling and publishing regular reports to other institutions about planned initiatives. Figure 2: Prioritisation and political validation levels

3.What needs to be validated? The instructions implementing the working methods of the Commission focus on the use of the Agenda Planning application, which is designed to help the Commission screen and manage the flow of initiatives in line with the Political Guidelines. The Agenda Planning entry and the accompanying Roadmap, where applicable, provide a first outline of the initiative and are essential for the political validation. All 'major initiatives' need to be entered into Agenda Planning at the latest 12 months before their planned adoption date and be accompanied by a Roadmap or an Inception IA. The implementing instructions identify certain types of acts as being per definition 'major'. However, any other Commission initiative that is sensitive or important should also be considered as 'major'. It is the responsibility of each DG to consider carefully aspects such as the political importance and sensitivity, the magnitude of the expected impacts; importance for other policy areas and prior knowledge about divergent or sensitive stakeholder views. Different initiatives and validation requirements Major initiatives 'Other' initiatives DG internal work plan Which acts? ·Initiatives included in the CWP ·REFIT items ·New legislative proposals ·Recommendations for the negotiation of international agreements and proposals for their conclusion ·Policy communications ·Delegated and implementing acts having significant impacts ·Financing decisions having significant impacts ·Other Commission initiatives that are sensitive or important ·Delegated and implementing acts not having significant impacts ·Commission reports except for Evaluations or Fitness Checks Non-major evaluations and Fitness Checks ·Commission decisions of administrative and routine nature ·Intermediate legislative acts ·Implementing decisions under International Treaties ·Financing decision of a routine nature ·Information notes for the Commission ·Decisions granting delegated powers (empowerment and delegations) ·Infringement, competition and state aid cases, trade defence cases, enforcement action under international trade rules ·Emergency procedures (duly justified) ·Any other initiative AP entry? Mandatory Mandatory Mandatory Not required Roadmap/ Inception IA needed? Mandatory, signed off by the Commissioner(s). For initiatives that will undergo impact assessment, the Roadmap should be presented in the form of an Inception IA. Not required Mandatory, signed off by the Director General Not required Political validation by Commissioner(s), VP(s) and the First VP, in close cooperation with President's Cabinet Commissioner Director General through the Management Plan endorsement Commissioner ISG required Yes (Important/sensitive cases chaired by SG) No Yes No Conditions to launch ISC ·Only if complete AP entry exists ·If impact assessment: positive opinion of the RSB ·Validation by the Commissioner(s), VP(s) and the First VP ·Only if complete AP entry exists ·Validation by Commissioner(s), VP(s) and the First VP ·Validation by the Commissioner If preparatory work for a possibly important or sensitive initiative is carried out only at internal DG level and outside of Agenda Planning, the launch of the ISC may not be validated at political level, or the initiative may be blocked by any DG at the ISC stage, due to the lack of transparency and non-compliance with the implementing instructions. Methodological advice regarding the selection of the appropriate type of act can be asked via SG HELPDESK PROCEDURES and concerning the inclusion of an initiative in Agenda Planning, either as "major" or "other" initiative, via SG PLANNING. GoPro and the Agenda Planning website also provide useful information in this regard. Chapter III

Guidelines on Impact Assessment Key requirements ·IAs must set out the logical reasoning that links the problem (including subsidiarity issues), its underlying drivers, the objectives and a range of policy options to tackle the problem. They must present the likely impacts of the options, who will be affected by them and how. ·Stakeholders must be able to provide feedback on the basis of an Inception Impact Assessment which describes the problem, subsidiarity related issues, objectives, policy options and an initial consideration of relevant impacts of these policy options. ·A 12-week internet-based public consultation covering all of the main elements of the IA as part of a broader consultation strategy to target relevant stakeholders and evidence. ·IAs must compare the policy options on the basis of their economic, social and environmental impacts (quantified as far as possible) and present these in the IA Report. ·Certain elements must be included in the final IA Report. These include: (i) a description of the environmental, social and economic impacts and an explicit statement if any of these are not considered significant; (ii) a clear description of who will be affected by the initiative and how; (iii) impacts on SMEs; (iv) impacts on competitiveness; and (v) a detailed description of the consultation strategy and the results obtained from it. ·The draft IA Report must be presented to the Regulatory Scrutiny Board for its scrutiny. A positive opinion of the Board is necessary before an interservice consultation can proceed. ·The IA report must be complemented by a 2-page executive summary sheet available in all languages. 1.Introduction Who Should Read These Guidelines? All officials involved in the preparation of an impact assessment (IA) should read these guidelines including officials and managers who are responsible for ensuring the quality of impact assessments in the lead DG. More detailed guidance is also available in a separate "tool box" which accompanies this guide. This is aimed at those directly involved in preparing the various elements of an IA. These "tools" contain important guidance on specific issues such as when an IA is necessary, on the identification of the various social, environmental and economic impacts, including on SMEs and competitiveness, and many other aspects regarding methodological or other aspects in the preparation of an impact assessment. What is Impact Assessment and when is it required?

Impact assessment is about gathering and analysing evidence to support policy making. In this process, it verifies the existence of a problem, identifies its underlying causes, assesses whether EU action is needed, and analyses the advantages and disadvantages of available solutions. IA promotes more informed decision-making and contributes to Better Regulation which delivers the full benefits of policies at minimum cost while respecting the principles of subsidiarity and proportionality. However, IA is only an aid to policy-making/decision-making and not a substitute for it. An IA is required for Commission initiatives that are likely to have significant economic, environmental or social impacts. Provided that the above conditions are fulfilled, impact assessments should be carried out for both legislative and non-legislative initiatives as well as delegated acts and implementing measures, taking into account the principle of proportionate analysis. When the above conditions are not met, no impact assessment is needed regardless of the nature of the initiative. What are the procedural steps? The IA work is led by the Directorate-General(s) responsible for the relevant policy initiative. DGs should establish as early as possible in the policy planning/political validation process whether an IA is required on the basis of the associated Roadmap. If it is established that an IA will be carried out, the Roadmap should be developed and presented as an Inception IA. The Inception IA provides a first description of the problem and possible policy options along with an overview of the different planned stages in the development of the initiative, including foreseen impact assessment work and consultation of stakeholders. If an impact assessment will not be carried out, this should equally be explained in the regular Roadmap. The subsequent preparation of an IA involves the following main steps: (1)The creation of an interservice group (ISG) which will steer the IA process and collectively prepare the IA report. For those initiatives in the Commission's work programme (or other important/sensitive initiatives), the ISG will be established and chaired by the Secretariat-General; (2)Finalisation of the Inception IA by the ISG and publication on the Commission's website, allowing stakeholders to be informed and to provide feedback and evidence in relation to the problem, possible policy options and their likely impacts and subsidiarity considerations; (3)The preparation of a consultation strategy by the ISG including a mandatory 12-week internet-based open public consultation. The consultation strategy should ensure that stakeholders' views are sought on all key impact assessment questions; (4)The collection and analysis of all relevant evidence, including data, scientific advice, other expert views, stakeholder input, etc; (5)Drafting of the IA Report; (6)Submission of the draft IA report to the Regulatory Scrutiny Board for quality review, followed by revision to take account of its recommendations for improvement; (7)Subject to a positive opinion by the Board, submission of the IA report to inter-service consultation together with the accompanying policy initiative. The IA should begin as early as possible during the process of policy-development subject to the political validation requirements. The time needed to prepare an IA will vary from case to case. It should also be remembered that there is close link with ex-post evaluations or Fitness Checks of existing policy frameworks and programmes, whose results should be ready in time to feed meaningfully into the IA of a new proposal. The timing of the two processes may need to be carefully planned therefore. An Impact Assessment Report presents the final results of the IA process and accompanies the draft proposal through the Commission decision-making process. The Commission's Regulatory Scrutiny Board (RSB) scrutinises the quality of all draft IAs and issues an opinion on the draft IA Report. A positive opinion by the RSB is required before an initiative can proceed. Following adoption, the final IA Report is published and transmitted to the co-legislators together with a 2-page executive summary sheet and the adopted initiative. 2.The key questions and principles of Impact assessment IA is a tool to help structure reflection and conduct analyses informing policy design. It is not a list of tasks to tick off. There is no recipe for the perfect IA. Given the widely differing nature of Commission initiatives, the best way to carry out an IA and present its results will vary from case to case.

However, all impact assessments must answer a set of key questions and respect a number of principles. An impact assessment should comprehensive, proportionate, evidence-based, open to stakeholders' views, unbiased, prepared collectively with relevant Commission services, embedded in the policy cycle, transparent and of a high quality. The Questions An Impact Assessment Should Answer 1. What is the problem and why is it a problem? 2. Why should the EU act? 3. What should be achieved? 4. What are the various options to achieve the objectives? 5. What are their economic, social and environmental impacts and who will be affected? 6. How do the different options compare in terms of their effectiveness and efficiency (benefits and costs)? 7. How will monitoring and subsequent retrospective evaluation be organised? The process of finding answers to these questions is necessarily iterative. The IA process should start from broad definitions of the problem, the objectives and the possible solutions and then narrow them down to what is most relevant. The questions are also interrelated. Compliance with subsidiary and proportionality, for example, can only be fully verified once objectives are set and the impacts of alternative options assessed. The following should guide the IA process: (1)When making choices about the focus and depth of the analysis, the IA should concentrate on what is relevant to inform decision-making, leaving out what is not. (2)The results of any relevant evaluations of the existing policy framework should be used as the starting point for the IA. The expertise of other services in the Commission should also feed into the IA in order to consider and properly assess all relevant issues. (3)The most appropriate methods should be identified to collect data and analyse impacts. Where necessary, external studies may be contracted out to provide input on specific elements. (4)A consultation strategy should be designed, keeping in mind the need to consult on all key IA issues. The IA Report should corroborate the conclusions of the analysis with stakeholder views and justify any significant differences. The synopsis report summarising the results of stakeholder consultation should be integrated into the IA Report as a mandatory annex. (5)Throughout the IA Report, conclusions should be substantiated with evidence (e.g. data, estimations, scientific findings) together with appropriate citations and, if this is not possible, it should be explained why. Stakeholder views should also be referred to. 2.1.Question 1: What is the problem and why is it a problem? An IA starts by verifying the existence of a problem, identifying who is affected, estimating the problem's scale, analysing its causes and consequences, and assessing its likelihood to persist in the absence of (further) EU policy intervention. The answer to this question should give policy-makers the information needed to decide whether there is a problem for which a policy response may be warranted. Better regulation is about regulating only when necessary and in a proportionate manner. High quality policy proposals are built on a clear problem definition and understanding of the underlying factors and behaviours (so-called “problem drivers”). The first step of an IA, therefore, is to (i) verify the existence of a problem and identify who is affected; (ii) estimate the problem's scale and analyse its underlying causes and consequences; and (iii) identify the EU-dimension and assess the likelihood that the problem will persist. A key input to this assessment should be relevant evaluations or Fitness Checks of existing policy frameworks as well as stakeholder feed-back. A problem can be caused by several factors, such as the existence of market failures, behavioural biases, regulatory inefficiencies or the need to ensure respect of fundamental rights. It may already have negative consequences or simply present a risk of negative occurrences. Developing a clear understanding of these underlying factors is important, using relevant internal and external expertise including scientific advice. It is equally important to make clear in in the analysis how individuals, enterprises or other actors are affected by the problem: ·How much does the "problem" affect their daily life? ·Whose behaviour would have to change for the situation to improve? Addressing these questions will ensure that the analysis stays concrete, focused, close to stakeholders' concerns and mindful of the practical implications of any initiative. This will facilitate the subsequent identification of proportionate policy alternatives and analysis of impacts. The problem description in the IA Report should be clear and specific. It should focus on the issues to be addressed by the initiative under consideration, avoiding lengthy presentations of general issues and/or Commission objectives in the relevant policy area. 2.2. Question 2:Why should the EU act? Having established the existence of a problem, its scale and the causes, the IA analysis should verify whether Member States alone could resolve it sufficiently and whether the EU has the competence to act (i.e. a legal basis), and would be best placed to do so. The answer to this question should give policy-makers the information needed to decide whether a policy response at the EU level is needed. The fact that the Union has the competence to address a problem (i.e. that there is a legal basis for it) does not automatically mean the EU is best placed to solve it. In areas that fall outside its exclusive competence, the Union must act in accordance with the principle of subsidiarity , i.e. act only where Union action would be more effective than action taken by the Member States at central, regional or local level.

The IA should verify whether EU action in areas outside its exclusive competence is compatible with the principle of subsidiarity. This is not to be taken for granted and it is important to remember that, pursuant to the Treaty of Lisbon, the respect of the principle of subsidiarity is closely scrutinised by the other EU institutions and by national Parliaments and that Union acts can be annulled by the Court for non-respect of the principle . When assessing whether or not the subsidiarity principle is respected the following key questions should be reviewed: whether the problem addressed has transnational aspects which cannot be adequately addressed by action by Member States and whether action at EU level would produce greater benefits compared with action at the level of Member States due to its scale or effectiveness. This assessment is likely to be an iterative process. Preliminary analyses in the Inception IA and early in the IA process should clarify the legal basis and indicate whether advancing further at EU level would make sense. A final verification of compliance with the subsidiarity principle will only be possible once all relevant information is collected and the analysis of impacts is completed. In addition, the assessment of whether an initiative is proportionate is clearly linked to the assessment of subsidiarity and the need to match the nature and intensity of a given measure to the identified problem. Assessing subsidiarity necessarily involves elements of political judgement, particularly when evidence is inconclusive and/or stakeholder views diverge. All elements should, therefore, be presented objectively in the IA Report, providing the basis for a political appreciation by the College. General statements and circular reasoning should be avoided in favour of concrete arguments, specific to the issues being analysed and substantiated with qualitative, and where possible, quantitative evidence. 2.3.Question 3: What should be achieved? The IA should set out what EU policy should achieve. The objectives of policy action should be clearly identified, including the level of policy ambition and the criteria against which alternative policy options would be compared and the success of any initiative assessed. For reasons of transparency and accountability, any EU policy intervention should have clear objectives. These should help in: ·Establishing the logical chain between the identified problems and the solutions considered; ·Clarifying the relationship between an initiative's specific goals and any horizontal EU objectives and any other agreed political goals in the area; ·Highlighting any trade-off between policy goals; ·Setting out the criteria for comparing the different policy options; ·Defining indicators to measure performance and progress towards the declared objectives; ·Establishing the operational monitoring and evaluation framework for the implemented policy measure. Objectives should be as S.M.A.R.T. as possible. Providing general objectives is important to put the proposed initiative into the overall context of the Union's policies and to assess later if and how the initiative has contributed. However, the IA Report should focus on the presentation of the more specific and operational objectives (for the preferred option) the proposed initiative aims to achieve. For non-legislative policy initiatives, it may be sufficient to set out the general and specific objectives, leaving the definition of more detailed operational objectives to the relevant follow-up initiatives. 2.4. Question 4:What are the various options to achieve the objectives? There are different ways to achieve policy objectives. The IA should allow for an informed decision about which one to pursue. To do so, available options should be identified and screened with a view to selecting the most relevant ones for further analysis and comparison. At the end of this process, the most relevant alternative policy options should have been identified for further examination in the impact analysis stage. It is important to consult widely about alternatives, think outside the box and give due consideration to all different options. This is one of the key functions of an impact assessment process. When well done, this is perhaps the impact assessment component most appreciated by external stakeholders. When badly done, it tends to be the most criticised and significantly undermines the credibility of the whole exercise and its usefulness for political decision making. Keeping an open mind is important even if, in many cases, the IA analysis may start from an idea, stakeholder view or political statement, about what a policy proposal may look like. Often there is already an existing policy framework in place in the area under analysis and this affects the breadth of choices realistically available but initial ideas should be comprehensively tested in the IA process. However, existing policies may have fallen short of their objectives, proved too costly or no longer be fit for purpose. Also, views on the best policy typically differ (among stakeholders, Member States, policy-makers, Commission services and experts). In addition, a solid justification should be given for any relevant option that is discarded early on. This should be done through an iterative process: (1)Start by considering the widest range of policy alternatives both in terms of content and instruments. Consider regulatory and non-regulatory means, less or more prescriptive measures, actions at national, EU and international level.

When identifying options, the guiding principle should be whether and how a certain measure could influence the drivers of the problem and change the relevant behaviours in a way that would lead towards the desired objectives. The IA Report will need to show that there is a clear logic between the problems, objectives and policy interventions under consideration. When designing the policy options, always consider: ·The option of changing nothing (also known as the "baseline"): The “baseline scenario” should always be developed and used as the benchmark against which the alternative options should be compared. As such, it should take account of both national and EU policies in place and reflect possible developments of these in the absence of new EU-level action. It should also try to anticipate important technological or societal developments such as the pervasive role of the internet and other ICTs; ·The option of improving implementation and enforcement of existing legislation; or doing less / simplifying existing legislation; ·Options that take account of new technological developments. All new initiatives should be "digital and internet ready" and operate effectively both in the digital and the physical worlds; ·Alternative policy approaches: e.g. different policy content / approaches to reach the objective; ·Alternative policy instruments: e.g. non-regulatory alternatives; self- or co-regulation ; market-based solutions, regulatory alternatives; international standards , and their mix; ·Alternative scope: for instance, is the "think small first" principle taken into account; are micro-enterprises excluded from the scope of any proposed legislation . Consider options which have been proposed by stakeholders and/or are likely to be proposed during the legislative process but do not discard a priori options with little support or facing strong opposition . (2)Screen the previously identified policy alternatives. In many cases, little analysis will be needed to justify discarding some alternatives (e.g. those not technically feasible, not legally viable, difficult to implement, disrespecting fundamental rights or with other unacceptable or disproportionate impacts). Options that clearly restrict the scope for national decision making over what is needed to achieve the objectives satisfactorily should also be abandoned early on (as they would fail to respect the principle of proportionality). (3)Having screened the options, the most relevant ones should be retained, together with the baseline, for further detailed examination. ·"Straw man" options (i.e. clearly more costly or less effective alternatives retained only to highlight the benefits of the preferred option) should be avoided. They do not strengthen the argument for any preferred option but rather undermine the credibility of the IA; ·If it is difficult to identify at least two credible alternatives on top of the baseline, make an extra effort to think 'outside of the box' (e.g. have all choices been considered?). If there are no other alternatives, the focus of the subsequent analysis should be on determining the detailed design of the retained option, for example, by considering alternative "sub-options" for some of the individual elements of the proposal or different implementation modes; ·After a first assessment of impacts, it may be necessary to go back to the drawing board and experiment with modifications to the original alternatives to further improve them. This will typically be the case when options fail to meet the objectives in a satisfactory way or when they are likely to lead to disproportionate negative effects (of any type, for instance, on fundamental rights, SMEs, competitiveness, trade partners, regions, developing countries, etc.). An option should not be judged inferior before having reviewed possible improvements and/or mitigating measures to reduce its negative impacts. The IA Report does not need to describe this process in detail. It should, however, demonstrate that all relevant options have been considered, taking into account stakeholders’ views and justifying why some options were discarded without a full assessment of their impacts. A sufficiently detailed description of the alternatives retained should be provided. A particularly strong justification should be provided when, exceptionally, only one option is retained for full assessment against the baseline. 2.5. Question 5: What are the impacts of the different policy options and who will be affected? Once a set of policy options is selected, a robust assessment should be carried out of their economic, social and environmental impacts and of who will be affected. At the end of this process, policy-makers should know to what extent different policy options would meet their objectives, with what benefits, at what cost, with what implications for different stakeholders, and at what risk of unintended consequences. To support policy decisions that deliver the best balance between benefits and costs, the IA analysis must assess all the relevant advantages and disadvantages of the retained policy alternatives ("the options") against the reference of the baseline. Once again, it is best to do this through an iterative process that starts with a wide reach and then focusses, and deepens, the analysis on the most relevant impacts, being ready to go back and improve the retained options before finalizing. Using internal and external expertise along with stakeholders' knowledge is particularly helpful when analysing impacts. The consultation strategy, any external studies and the ISG work should be organised in a manner which allows views to be collected and results tested with regard to all elements of the impact analysis.

2.5.1.Identify all potential impacts of the options. For all retained options, the impact assessment should specify how they would tackle the identified problems and meet the policy objectives. To do this, there is a need first to identify the changes that a proposal would imply for those affected, notably those who would have to comply with any new legislative requirement, those who would have to implement and enforce it and those who are expected to be the final beneficiaries: ·What actions and measures would affected parties need to take (to comply or to enforce compliance)?; ·Would these realistically be taken (balance between compliance costs and costs for public authorities involved in ensuring compliance)?; ·Would this allow the objectives to be reached? Answering these questions at the very beginning of the analysis is important to ensure that the technical assessment of the impacts remains concrete and closely related to the practical implications of the various policy options. Answering such questions will also highlight how different options can trigger different changes and thus have different types of impacts. A wide range of possible impacts should be reviewed across the economic, social and environmental policy areas, going beyond the most obvious consequences of the proposed policy. All potentially important impacts should be identified regardless of whether or not it will be possible to assess them precisely. It is important not to "miss" a significant impact as this may affect the overall comparison of options or weaken the case for the Commission's proposal later on. The impact assessments should, in particular, examine the impact of the different options on fundamental rights, when such an assessment is relevant and address the potential exposure to fraud in the context of spending programmes. Potentially important indirect impacts should also be considered, i.e. positive or negative consequences that are incidental to the main purpose of the initiative (such as those stemming from an increase in the accumulated costs borne by a party, evasive behaviour by those who need to comply, or positive spill-overs from one affected sector to another). Both positive impacts (i.e. the benefits) as well as negative impacts (i.e. the costs or adverse environmental and social impacts) should be identified. A positive impact for one party can be negative for another. It is therefore important to identify who would be specifically affected by each impact. It is also likely that a policy option will require some sort of IT system or network to automate business processes, publish/exchange information, deliver online services via web-based Portals, etc. It means that the impact related to the implementation of new or the adaptation of existing ICT solutions should be assessed. The possibility of re-using what exists already and not "reinvent the wheel" should not be overlooked. A "digital screening" and possible further ICT impact analysis may be needed (see the tool on ICT impacts in the BR toolbox). " At the end of this analysis, all potential impacts– positive or negative - should be mapped out according to their expected magnitude and likelihood and to the specific parties that would be affected. The following classifications can be used when describing identified impacts: ·Broad nature: economic, social and environmental. ·Specific nature, for instance: increases (or decreases) in compliance costs, i.e. those costs incurred by the relevant parties (businesses, citizens etc.) to comply with any new legislative requirement, their sub-components (administrative burdens, labour costs; equipment costs etc.) and the administration and enforcement costs incurred by the responsible authorities; gains (or falls) in market efficiency, competitiveness, innovation; impacts on health, quality of the environment, combating climate change, levels of education and training, fundamental rights, employment and skills, social inclusion, poverty etc.; ·Relation with the underlying initiative: direct impacts are those directly generated by a policy measure. Indirect (or second-round) impacts arise as a result of the behavioural changes prompted by the direct impacts and often affect third parties and can be just as significant as direct impacts. ·Affected parties, groups or regions: businesses of different sizes (SMEs or not), citizens, workers, learners, consumers, public administrations, third country actors, developing countries, different territories and regions (less developed or prosperous regions, cities, rural areas, border regions, overseas territories etc.); ·Frequency and certainty: long/short term, one-off, recurrent; certain or likely (risks). While all of the above classifications are useful in principle, each analysis should use the categories that are most appropriate for the initiative at hand. Importantly, the IA Report should always be transparent about the methodological choices made to assess impacts, the underlying reasons particularly where non-standard approaches are deployed). 2.5.2.Select the significant impacts. The choice of impacts to be retained for deeper assessment should be clearly justified, taking account of their:

·Expected overall magnitude; ·Relevance for specific stakeholders (enterprises and in particular SMEs, trading partners, economic sectors, consumers, learners, workers, public administrations, regions, developing countries etc.); ·Importance for Commission horizontal objectives and policies. The expected significance of impacts should be assessed in terms of changes relative to the baseline. In making the selection, the principle of proportionate analysis should be applied. However, it is important not to leave out anything that is of relevance for political decision-making. The choice should take account of stakeholders' views and relevant expertise, including within the Interservice Group. 2.5.3.Assess the most significant impacts. All relevant impacts should be assessed quantitatively, if possible , as well as qualitatively. Similarly, impacts should be monetized whenever possible. When quantifying, spurious precision should be avoided and ranges provided, complemented by qualitative comments. In many cases, quantification will rely on a given set of assumptions. These should be clearly presented. Whenever an assumption is particularly important or uncertain, sensitivity analysis should be used to check whether changing it would lead to significantly different results . There are several methods to quantify impacts, both in terms of overall methodological approach and specific techniques for individual types of impacts. For each case, the most appropriate method should be used. The choice of method should be clearly justified and explained in the IA Report. There is no best method which would apply to all possible Commission initiatives. There is, however, an obligation to make the most sensible methodological choice given the specificities of the case at hand, the availability of data and the requirement to carry out a proportionate analysis. In all cases, methodological complexity is not an excuse for not presenting the practical implications of different options for affected parties. Similarly, the fact that it may not be possible to monetize, or quantify, some impacts does not mean they should not be taken into due account. All significant impacts should be analysed regardless of the nature of the available methodology to do so. When quantitative analysis is not possible or proportionate, impacts should be assessed qualitatively. Also the qualitative analysis should be rigorous and thorough, focussing on the practical implications for affected parties. As for quantitative assessments, important underlying assumptions will have to be stated. The conclusions should rely on available theory and evidence , including on illustrative examples, while also referring to stakeholder views. They should acknowledge limits and clearly distinguish between facts, expert opinions and stakeholder views. If a broad order of magnitudes cannot be given, a qualitative reasoning should be provided of why one option is considered likely to have larger (or smaller) impacts than another. In the case of both quantitative and qualitative analysis, it is important to remember that: ·Changes should be assessed relative to the baseline scenario. Normally, this will evolve overtime (for instance as a result of on-going policies). Therefore, changes should not simply be determined relative to the current situation but to how the latter would evolve in the absence of a new planned initiative; ·Different impacts are likely to occur at different times (with costs often being incurred early on and benefits emerging only later). This should be reflected in the assessment, discounting monetized estimates as appropriate when these are available; ·Impacts should be assessed from the point of view of society as a whole although distributional effects and cumulative burdens on individual parties should also be proportionately assessed and considered. Whenever impacts are aggregated, you should make sure you avoid any double-counting (for instance, businesses transferring increased compliance costs on consumer prices, public authorities imposing fees to cover for the costs of enforcing a regulation). Assessing impacts can be particularly challenging at the EU level. First, data across the EU may not be available or comparable. Secondly, final impacts will often depend on Member States' choices at the implementation stage (or on future delegated and implementing acts). It is often difficult, therefore, to provide accurate estimates, at the Commission proposal stage, even of direct impacts such as compliance or implementation costs. Nevertheless, "known unknowns" should not be cast aside in the analysis. On the contrary, they should be readily acknowledged. In case of lack of data or uncertainties, the qualitative assessment needs to be strengthened (e.g. based on theoretical approaches), while being transparent about the impact that such uncertainties may have on the comparison of options. At the end of this analysis, there should be a solid understanding of the extent to which each option achieves the objectives, with what benefits and at what costs at the aggregate level and for affected parties. Potentially disproportionate impacts (e.g. on fundamental rights, SMEs, competitiveness, specific communities, workers' health and safety, employment, poverty, regions or Member States, developing countries etc.) should have been identified along with any significant risk of unintended consequences. This will help compare the options in terms of their coherence with horizontal EU objectives as well as to identify potential mitigating measures for any preferred option. The IA Report should summarize the results of the impact analysis in an accessible manner. It should be clear and transparent about any limitations (e.g. data, methodological) and risks of unintended consequences. While the more technical aspects of the assessment are important, the final concrete impacts for individuals, enterprises or public administrations, and where possible the societal or geographical distribution of such impacts, should be kept at the forefront of the analysis and the IA Report. Aggregated costs and benefits should be clearly distinguished from distributional impacts and transfers. The choices made in the selection of relevant impacts and in the analytical methods should be clearly justified in the annexes. Data sources should be provided and underlying assumptions illustrated in relation to any quantification. 2.6. Question 6:How do the options compare? Based on the assessment of the various impacts and their distribution across affected stakeholders, the IA should compare the different options with regard to their effectiveness, efficiency and coherence, as well as their compliance with the proportionality principle. At the end of this process, the IA should present the relevant information for policy-makers to make a choice and, where appropriate, suggest a preferred option. Having assessed the likely economic, social and environmental impacts, as well as their distribution across stakeholders, the IA analysis should bring together the results in a clear comparison of the options. This should facilitate the identification of the preferred option.

Cost-benefit analysis, cost-effectiveness analysis, compliance cost analysis and multi-criteria analysis are the most commonly used methods to do this. Choosing one (or a mix of them) depends on several factors including the number and nature of impacts and objectives, the extent to which benefits and costs can be monetized (or quantified) and the relevance of distributional concerns. The IA does not need to identify a preferred option, but it should attempt objectively to compare the options against common criteria, in particular: ·The extent to which different options would achieve the objectives (effectiveness); ·The benefits versus the costs (efficiency); ·The coherence of each option with the overarching objectives of EU policies (coherence). The compliance of the options with the proportionality principle, and in particular of any preferred option, should also be considered by answering additional questions such as: ·Whether the option goes beyond what is necessary to achieve the objectives satisfactorily?; ·Whether the scope of the option is limited to those aspects that Member States cannot achieve satisfactorily on their own, and where the Union can do better?; ·Whether costs for the Union, national governments, regional or local authorities, economic operators or citizens, are minimised in relation to the objective to be achieved?; ·Whether the form of action (choice of instrument) is as simple as possible, and coherent with satisfactory achievement of the objective and effective enforcement? When comparing the options, the underlying analysis and hypotheses should be kept in mind: the robustness of the comparison should be verified, sensitivities and limitations of the analysis highlighted, trade-offs between objectives flagged and uncertainties that could significantly affect the result of the comparison referred to. The IA Report should present the results of this comparison in an accessible manner, for example in a summary table, clearly flowing from the previous analysis. When no preferred option is indicated, this should be clearly stated. In case the IA leads to the conclusion that no proposal is warranted, this should be communicated in the IA Report that should still be published. 2.7.Question 7:How would actual impacts be monitored and evaluated? Having the entire policy cycle in mind, the IA should identify monitoring and ex-post evaluation arrangements to track whether the policy measure actually delivers the intended results and to inform any future revisions of the policy. At the end of this process, policy-makers should know how the policy will be monitored and evaluated, allowing for future policy-adjustments whenever needed. Policy makers and stakeholders need to be able to check if policy implementation is ‘on track’, and the extent to which it is achieving its objectives, at what costs and with what benefits. To do so, one should start from a clear idea of how the situation should look like in the future if the initiative is successful. What will be different and for whom after a few years of implementation? How can this be verified? Actual results are likely to differ from those estimated or desired, regardless of the quality of the IA and the proposed initiative. However, when a policy is not achieving its objectives, or the costs and negative impacts are more significant than expected, it is important to know if this is the result of unexpected exogenous factors, problems with the design of the policy, amendments introduced during the legislative process (if relevant) or poor implementation. Monitoring and evaluation arrangements (including the definition of a set of indicators), provide valuable information in this regard. The IA should outline, therefore, what these arrangements will be. Core indicators should be defined for the main policy objectives in relation to the preferred option where one is stated. Where no preferred option is presented in the IA Report, monitoring and indicators should refer to the specific objectives of the initiative. Indicators must allow measuring to what extent the objectives of the policy have been achieved (and on potential negative impacts). Indicators on transposition, implementation and enforcement in Member States might also be useful. Underlying data should be easily available and the cost of data collection, proportionate. If lack of data was a significant concern for the IA, the IA Report should sketch out how this issue will be addressed for the future policy evaluation. According to the Commission's evaluation rules, all its activities have to be evaluated on a regular basis. For spending programmes evaluation is compulsory (including anti-fraud measures) and many other policy instruments also contain a review clause. Where, such a review is requested it should be based on an evaluation of the existing policy framework. Evaluations should be announced and described in advance, with a clear indication of the timing, the main focus and purpose, who will be responsible for carrying them out, and to whom the results will be addressed.

The IA Report should sketch out core indicators relating to the operational objectives and the main monitoring and evaluation provisions of the preferred option (including any relevant data collection aspects). 3.Summing it all up: the impact assessment report The Impact Assessment Report should summarise and present the final results of the IA analysis. Annexes should be used for the more detailed / technical parts of the analysis. The Report should be presented as a Staff Working Document. As the previous pages have made clear, the IA Report is not the IA. The IA is an iterative process supporting the design of a policy proposal. The IA Report is a document through which you communicate the results of this process to policy makers to inform their decision and to stakeholders, to show the evidence basis on which a Commission has taken a decision. The IA Report should be transparent, objective and balanced. While IA analysis can be complex, the IA Report should be written with non-expert readers in mind. In most cases, a main report of some 30-40 pages of text, accompanied by annexes for the more detailed technical parts of the analysis, should be sufficient. A reader should easily be able to understand what the problem being addressed is, why EU level action is appropriate, what the pros and cons of different courses of action are and who would be affected. Stakeholder views and how these have been considered should be transparently referred to throughout the IA Report. All external material used (studies, reports, scientific findings etc.) should also be systematically referenced. Certain elements must be included in the final IA Report. These include (i) a description of the environmental, social and economic impacts and an explicit statement if any of these are not considered significant; (ii) a clear description of who will be affected by the initiative and how; (iii) impacts on SMEs; (iv) impacts on competitiveness; and (v) a detailed description of the consultation strategy and the results obtained from it. To allow for an easily accessible overview of the main findings of the IA, an executive summary sheet of a maximum of 2 pages should also be prepared. It should be presented as a separate Staff Working Document and be translated into all EU languages. 4.From impact assessment to policy-making The IA process should have allowed for the identification of one (or more) preferred options. When developing the proposal, it is useful to double-check a number of key questions to ensure that the final proposal linked to the IA is fit for purpose and in line with better regulation principles. Policy-makers should cross-check that the final proposal would contribute positively to regulatory fitness in the EU. It is useful to test the preferred option for its regulatory fitness at the end of the process. This is not necessary when the impact assessment indicates no (further) EU policy response is needed. However, it should always be done when a legislative option has been chosen. Verifying regulatory fitness for a proposal requires checking issues some of which will have already been touched upon during the impact assessment process: ·Does the draft (legal) text fully comply with subsidiarity?; ·Is the proposal proportionate?; ·Is it in line with the Charter of Fundamental Rights?; ·Are the draft legal provisions as simple and clear as possible? Do they avoid unnecessary deviations from international standards? Can they be made easier to implement?; ·Has the "Think Small First" principle been applied? Could microenterprises be exempted from the scope of the initiative, and if not, why?; ·Do the draft legal provisions take into account the challenges and opportunities offered by developments in ICTs (e.g. simplified monitoring and information reporting)?; ·Without affecting the overall achievement of the objectives, is there scope to modify some of the legal provisions so as to reduce:

·Expected compliance costs for SMEs and any other relevant stakeholder; ·Any negative impact on sectoral EU competitiveness; ·Any potential negative impacts on international trade, developing countries etc.; ·Impact on human rights in the partner country in relation to its obligations arising from international treaties (for proposals with an external dimension); ·Any other impact (including social, environment, or those on specific groups, territorial areas, Member States, innovation, etc.). ·Without affecting the overall cost of the proposal, are there still ways to modify some of the proposed legal provision so as to increase the effectiveness and coherence of the proposed text? For legislative initiatives, the Commission's political appreciation of its final proposal is set out in the Explanatory Memorandum, which describes how the proposal conforms to the subsidiarity, proportionality and better regulation principles. After Commission adoption of the concerned policy initiative, the IA is transmitted to the European Parliament and to the Council who are likely to discuss its content and quality. The European Parliament and the Council have made commitments to provide additional analyses to support any substantive amendments they propose. Chapter IV

Guidelines on preparing proposals, implementation, and transposition Key requirements ·Implementation Plans (SWD) must accompany proposals for major Directives and should describe implementation challenges and relevant support actions to be taken by the Commission. ·Use available guidance to prepare high quality legal text and explanatory memorandum. The need for Explanatory Documents relating to major Directives must be justified in the proposal. ·A compliance assessment of EU Directives must be carried out in two stages: (1) timely and systematic check whether Member States have transposed Union law; (2) a timely and systematic conformity check of national transposing measures against the relevant Union legislation. 1.Introduction Who Should Read these Guidelines? All officials involved in the preparation of an initiative and its subsequent implementation/application should read these guidelines. Why is good implementation important? Effective application of EU law is essential if the European Union is to meet its policy objectives. While Member States are responsible for the timely and accurate transposition of directives as well as the correct application of the entire acquis, the Commission has to monitor the Member States’ efforts and ensure that their legislation complies with Union law. The Commission has three important roles: First, during the preparation of a new initiative where issues and problems related to implementation and application should be anticipated and taken into account. Second, the Commission should prepare well-drafted, high quality legal texts that are easy to understand and implement. Third, the Commission needs to have thorough and consistent information on implementation/application in the Member States. It needs rigorously to examine national implementing measures to ensure that the laws of the Member States are fully compliant with the Union acquis. The following aims to assist services to take implementation aspects better into account when preparing new initiatives and to help them in identifying ways to check the implementation of EU law. This chapter complements the subsequent chapter which deals with how to monitor the application/effects of Union policies. 2.Anticipate implementation problems and facilitate transposition: Implementation plans

Good implementation starts with a good impact assessment and stakeholder consultation. For each policy option, the analysis should explicitly address any clearly identifiable problems or issues which are likely to be encountered with its implementation and application by the Member States or other local or regional authorities or enforcement agencies. A key issue will be to assess the balance between the efforts of those who are will be directly regulated or obliged to comply with a new initiative and the efforts of public authorities who will be responsible for enforcement in terms of costs and other resource implications. The analysis should also build on any relevant evaluation that may have identified implementation problems associated with existing legislation. Box 1. Regulatory costs versus Enforcment costs for public authorities ·Legal rules have to be monitored and enforced to be effective. Depending on the policy option chosen, enforcement may be very cheap or costly for public authorities. ·Abolishing business reporting obligations on health and safety measures does not remove the desirability of monitoring health and safety at the workplace. This will likely lead to more monitoring and inspection by public authorities; ·Speed limits enforced via police officers will be more costly than by using centralised speed cameras (entailing one-off capital costs and recurring maintenance costs and centralised administration issuance of fines); ·Enabling private actions for antitrust damages creates greater demand (and backlogs) and costs for the use of the legal system which falls on public authorities. In parallel, the consultation strategy should ensure that it targets the views of those public authorities who will ultimately be responsible for the effective application of the initiative and associated enforcement activities. This will ensure that relevant implementation experience and expertise is collected and built into the initiative. The Commission should also support Member States in their transposition and implementation efforts by preparing implementation plans (IPs) for certain directives and regulations. The preparation of an IP aims at facilitating the timely and effective application of law, fully recognising the responsibility for the latter rests with the Member States . When is an implementation plan needed? An IP should be prepared when the implementation of the legal act concerned, because of its nature or complexity, could benefit or be facilitated by supportive measures. IPs would normally be required for framework directives; directives with a large scope containing a large number of legal obligations; directives aimed at the full harmonisation of a policy area, and directives having a significant impact on or amending various branches of the national legal order. In contrast, IPs would normally not be required for directives with a limited or very technical scope or which do not require transposition measures, directives containing only one or a very limited number of legal obligations and directives amending only one or a very limited number of legal obligations of an existing directive. Concerning regulations, an IP would be recommended in case the implementation requirements are similar to those of a directive and supporting measures to facilitate the application by Member States would be beneficial. The DGs are responsible for identifying where an IP for regulations concerning their particular sectors would be necessary. Inter-service Consultation on the implementation plan The preparation of an IP should be flagged in agenda planning before launching an ISC. If no IP is planned, this should be justified in Agenda Planning. The SG will verify and if necessary discuss justifications. The IP should be prepared as a staff working document and accompany the proposal in inter-service consultation and as background to the discussions in the institutions. If the proposal evolves significantly in the legislative process, the IP will need to be updated. More guidance is provided in the Toolbox. What should an implementation plan contain? The preparation of the Implementation Plan should start with an assessment of the challenges which the Member States will face in applying the legislation. On the basis of the assessment, The IP should set out the various types of support which the Commission services will provide to the Member States to assist them in their implementation of the legislation. It should also set out the monitoring arrangements designed to ensure the availability of strong data and other evidence to track progress and report on the performance of the measure. A template for such an implementation is provided in the tool box. 3.Better drafting of legal acts Union legislation should be well drafted in order to ensure it adequately reflects the intention of the legislator and can achieve its regulatory aim. Respect for the requirements of legislative drafting plays an important role in achieving the goal of legal certainty. If legislation is clear it can be implemented effectively, citizens and economic actors can know their rights and obligations and the courts can enforce them. Where can legislative drafting rules be found? The importance of good legislative drafting has been recognised for many years in the different institutions. The Interinstitutional Agreements on the quality of drafting of legislation and on the use of codification and recast techniques have established a common approach. The Joint Practical Guide for persons involved in the drafting of European Union legislation builds upon the agreed principles. In addition, the Quality of Legislation team in the Legal Service has developed the Drafters' Assistance Package (DAP) which offers guidance, step by step, on how to draft legal acts and is based on the Joint Practical Guide. It even provides useful links and suggested wording. In practice, if your draft is of high quality it is less likely to be altered later in the legislative procedure. DAP only covers the legal act itself and does not deal with other related documents, such as the impact assessment or the explanatory memorandum. DAP is integrated into the Legiswrite models but can also be accessed as a stand-alone wiki. Box 1. How to prepare a good quality legal act – some important steps ·Use the correct LegisWrite model whenever you draft a legal act; ·Follow the rules in the Joint Practical Guide and check in DAP whenever you have questions as to how a provision should be drafted; ·Bear in mind that your text may need to be translated into other languages; ·Check that references are accurate.

What is the Recast technique? Recast is a tool for the simplification of Union legislation. It is a technique which makes it possible to amend an earlier act (which itself may have already been amended) while immediately codifying the new amendments with the existing provisions of the earlier act. It results in a new legal act which incorporates both the amendments and the unchanged provisions. The new legal act replaces the earlier one which is repealed. The recast of legislative acts is governed by specific rules laid down in the Interinstitutional Agreement on a more structured use of the recasting technique for legal acts. The Agreement sets the "rules of the game" necessary for preserving both the right of initiative of the Commission and the right of the legislator to make amendments to the Commission's proposal in a recast exercise. Advice should always be sought from the Legal Service when determining whether recast is appropriate in a given case. In particular, the Quality of Legislation Team can offer guidance and practical assistance and should be contacted at an early stage. More information is also available in DAP. What is Codification? Codification brings together all of the provisions of an existing legal act and all of its amendments in a new legal act replacing the earlier one, which is repealed. It is governed by the Interinstitutional Agreement on an accelerated working method for official codification of legislative texts. Codification – which passes through the full legislative process - should not be confused with the unofficial consolidation carried out by the Publications Office which results in texts which are not legally binding. Codification is carried out on the basis of initiatives undertaken in cooperation between the Legal Service and the operational DGs, with the Legal Service acting as lead DG. The Legal Service is therefore responsible for the preparation of the proposal for a codification and for following up the procedure leading to the adoption of the new, codified act. The distinctive feature of codification is that, in contrast to recast, no substantive changes may be made to the earlier act. Other issues to consider when preparing proposals for legislation The Commission is committed to the use of common commencement dates for EU regulations and decisions affecting businesses generally. Proposed Decisions, Regulations and delegated regulations should, where possible, stipulate a commencement date of 1 January or 1 July in a given year to help simplify the actions of affected parties. Sunset clauses may be used to prevent obsolete legal provisions from remaining in force. They terminate or repeal some or all provisions of a legal text after a specific date unless further legislative action is taken to extend them. As such, they can be used to direct an assessment of the continuing need for legislation and may be particularly relevant where "emergency" legislation is adopted, for example, in respond to a particular crisis or unexpected issue etc. Box 2. Example of a sunset clauses ·The EU Agency on Network and Information security was initially established with a time limited mandate. Legislative proposals should also foresee when, how and on what basis legislation will be evaluated in the future. The next chapter describes how monitoring arrangements should be conceived at the design stage of a new initiative in order to support such evaluations. The explanatory memorandum The purpose of the explanatory memorandum is to explain the Commission's proposal. It is required for all legislative proposals non-legislative proposals for adoption by the Council or by the EP and the Council. It is transmitted to the other Institutions together with the accompanying proposal and is available to the public. The explanatory memorandum is, however, not published in the Official Journal and will not become part of the act to be adopted. The explanatory memorandum should be used to communicate the following issues which are important for the Commission's Better Regulation Agenda: ·Legal basis: Explain the legal basis of the proposal. Where several feasible options exist, justify the choice on the basis of objective criteria. ·Subsidiarity (for non-exclusive competence): Explain the Union dimension of the problem. Describe why the objectives of the proposal cannot be adequately achieved by the Member States (necessity test). Explain why action at EU level, by reason of its scale or effects, would produce clear benefits as opposed to action at Member State level (effectiveness test). ·Proportionality: Explain the scope of the proposal and why it is considered proportionate (i.e. not going beyond what it necessary to achieve the objectives). Explain the choice of instrument and why it is considered the most suitable act for achieving the objective.

·Summarise results of any ex-post evaluations/Fitness Checks and clarify the link to the identified problem(s) addressed by the proposal. ·Describe the results of the stakeholder consultations undertaken including the views of respondents and how these were taken into account in the proposal. ·A short summary on the external expertise on which the Commission has relied upon (approach, range, advice received and used, public available information). ·Impact assessment: ·Where the initiative is not supported by an impact assessment, explain the reasons why with reference to the associated Roadmap and toolbox. ·In addition, a justification must be given where the impact assessment is not supported by a positive opinion from the Regulatory Scrutiny Board. ·Explain which policy alternatives were examined, how they compare and why the final proposal was considered to be the preferred policy choice. ·Describe the main economic, social and environmental impacts of the preferred option, who would be affected and how; ·Where the final policy proposal deviates from the options assessed in the IA, clarify the likely impacts of such a change. ·Regulatory fitness and simplification: ·Mention, with quantified estimates wherever possible, the extent to which the proposal will reduce regulatory burden or simplify the existing legal framework. ·Outline whether and how the proposal exempts micro-enterprises (and reasons if no exemption is proposed) or provides a lighter regulatory regime for SMEs generally including how it minimizes compliance costs for SMEs. ·The possible negative impacts on sectoral EU competitiveness or international trade should also be specified; ·Explain how the initiative is "digital and internet ready" so that initiatives are appropriate for both the digital and physical worlds (see the tool on ICT impacts in the BR toolbox). ·Implementation plans, monitoring, evaluation and reporting arrangements: Refer to the implementation planning associated with the measure, including to the monitoring, evaluation and reporting framework to be applied to assist with its implementation and application and to report on its performance. ·Explanatory documents (for directives): Explain if the proposal requires Explanatory Documents on the transposition and why (see later section). 4.the link between EU Law and Member State transposing measures: explanatory documents Why is it important to make the link between EU law and national transposition measures? The Commission is the guardian of the Treaties. That means that it has to monitor the application of EU law and should be able to identify clearly how Member State measures link with EU legislation. The European institutions have agreed on a set of joint political declarations, which indicate how the Commission can be provided with this information on the transposition of directives. The Member States undertake to accompany the notification of transposition measures with one or more so-called 'explanatory documents', which can take the form of correlation tables or other documents serving the same purpose. The Commission must first justify the need for, and the proportionality of, providing such documents on a case by case basis, when presenting its proposals.

When is it justified to ask for explanatory documents? The Commission lead service should justify the request for explanatory documents. The key question to be answered is whether the document is necessary for the Commission to carry out its task of overseeing the transposition of directives. The Commission should weigh up the following: ·The complexity of the directive concerned – the more complex, the more likely an explanatory document is needed; ·The complexity of the area concerned in view of its transposition into the legal order of the member States; ·Possible additional administrative burden – is the request proportionate to the legislative imitative being prepared? The Commission must be sure that the document is essential in order for it to carry out its task of overseeing the application of Union law. To facilitate this assessment, the Commission services should consider the following. Explanatory documents would normally not be required if the notification of individual transposition measures itself is largely self-explanatory. This usually applies to: ·Directives containing only one or a very limited number of legal obligations; ·Directives amending only one or a very limited number of legal obligations of an existing Directive; ·Directives concerning well delimited and not heavily regulated domains at national level. By contrast, explanatory documents are usually needed for: ·Framework directives; ·Directives with a large scope containing a large number of legal obligations; ·Directives aimed at full harmonisation of a policy area; ·Directives having a significant impact or amending various branches of the national legal order. It should be noted that the Commission has also committed itself vis-à-vis the European Parliament to justify also all cases in which it will not request explanatory documents (in addition to the scenario of positive requests as contained in the political declarations). Although such justification may be shorter than those requiring explanatory documents, they should also be based on the considerations as mentioned above. Justification for Explanatory Documents in Commission Proposals For all new proposals for Directives, including delegated acts, a justification should be prepared as part of the explanatory memorandum. In cases where the services propose to request explanatory documents, a standard recital should directly be included in the proposed directive:

"In accordance with the Joint Political Declaration of Member States and the Commission on explanatory documents of 28 September 2011, Member States have undertaken to accompany, in justified cases, the notification of their transposition measures with one or more documents explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments." For all directives to be adopted through comitology, the justification for explanatory documents should be provided orally to the Member States during committee discussions (this can then be reflected in the summary record of the committee meeting). 5.Monitoring implementation Compliance assessment The Commission is committed to more systematic monitoring of the implementation of directives. This is done, inter alia, by conducting compliance assessments of both transposition and conformity. Compliance assessment is two-staged: First, the services carry out a transposition check, assessing the status of the transposition of the directive concerned. If directives are not completely transposed, services propose to launch an infringement procedure under Article 258 or, where a legislative Directive is concerned, in conjunction with Article 260(3) TFEU . Once the transposition check is finalised and once possible ensuing infringement procedures for failure to communicate transposition measures have been closed, services should immediately start the second stage of the compliance assessment, the conformity check without excluding the possibility of launching conformity checks on parts of the Directive that have already been transposed completely. This check aims at getting a meaningful picture of the conformity of the legislation of the Member State with the Directive. Monitoring application Good implementation also involves the monitoring of the application of legislation on the ground. This is to ensure that the intervention performs as intended and to provide information so that corrective action can be taken if it is not performing or if there have been unintended consequences etc. The Commission may decide that a "soft" policy instrument is preferable to a pure legislative approach (although thiese may be combined). This may include voluntary agreements or other forms of self-co-regulatory action which are described more fully in the tool on policy instruments. In such cases, there will also be a need to monitor the performance of such approaches against the policy/legislative principles underpinning them25, the commitments made by the parties and the objectives of the initiative. The next chapter deals in more detail with monitoring the effects over time associated with a given intervention. Chapter V

Guidelines on monitoring Key requirements ·Make sure it will be possible to assess the performance of an initiative while avoiding unnecessary or duplicative requests for data and information. ·Impact assessment to set out the future monitoring and evaluation arrangements which should identify data needs and data. ·Establish monitoring arrangements and indicators that will generate the necessary information for subsequent evaluation of the performance of the intervention while minimising data collection costs. ·Ensure that monitoring arrangements initially sketched out in the impact assessment are updated to reflect the actual proposal presented by the Commission and what is finally agreed by the Legislator. 1.Introduction Who Should Read These Guidelines? All officials involved in the preparation of an impact assessment (IA) and related Commission proposals and Implementing Plans should read these guidelines including officials and managers who are responsible for ensuring the quality of monitoring systems in place in the lead DG. The guidelines are recommended also to those involved in the Strategic Planning and Programming cycle, in particular those who prepare Management Plans, and those involved in subsequent evaluations to allow them to understand how a monitoring system is set up. This chapter concentrates on monitoring during the application of the intervention on the ground. More detailed guidance is also available in the separate "toolbox" which accompanies this guide. What is monitoring and when is it required? Monitoring generates evidence on an intervention’s activities and impacts over time in a continuous and systematic way. A monitoring system is a necessary and integral part of Better Regulation helping to:

·Identify whether a policy is being applied on the ground as expected; ·Addressing any implementation problems of an intervention; and/or ·Identifying whether further action is required to ensure that it can achieve its intended objectives. Good monitoring generates factual data to improve the quality of future evaluation and impact assessment. It provides time series data that, under normal circumstances, will be more reliable in explaining behavior than one-off data collection exercises. The monitoring (and evaluation) arrangements should first be outlined in the impact assessment and revised, if necessary, following adoption of the intervention by the Co-legislator. This will allow more efficient evidence gathering to be integrated into the intervention and permit the maximum exploitation of existing sources thereby minimising costs for those involved in providing, collecting, storing and disseminating evidence. In principle, part of the evaluation should assess the adequacy of the monitoring system in place. 2.The key questions and principles of Monitoring Monitoring needs to consider the objectives of the intervention and what evidence need to be collected to track its progress and performance. This is linked to understanding both the logic of the intervention and how the evidence collected will be used. Consideration needs to be given to the frequency and method of collection, different sources of evidence taking into account what is already available and cost for different parties involved. This leads to a series of questions. The key questions a monitoring system must address 1 What evidence needs to be collected? 2 When and how should evidence be collected? 3 Who will collect the evidence and from whom? In answering these questions several governing principles need to be followed. Governing principles Comprehensive: the monitoring system put in place must cover the objectives of the intervention. Whilst high level monitoring of key indicators linked to general objectives is likely to exist already, new monitoring arrangements may need to be identified for specific or operational objectives. Although monit