POSITION (EU) No 9/2021 OF THE COUNCIL AT FIRST READING

with a view to the adoption of a Regulation of the European Parliament and of the Council establishing a programme for the internal market, competitiveness of enterprises, including small and medium-sized enterprises, the area of plants, animals, food and feed, and European statistics (Single Market Programme) and repealing Regulations (EU) No 99/2013, (EU) No 1287/2013, (EU) No 254/2014 and (EU) No 652/2014

Adopted by the Council on 13 April 2021

(Text with EEA relevance)

(2021/C 151/01)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 43(2), Article 114, Article 168(4)(b) and Articles 173 and 338 thereof,

Having regard to the proposal from the European Commission,

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

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

Having regard to the opinion of the Committee of the Regions (2),

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

Whereas:

(1) The internal market is a cornerstone of the Union. Since its inception, it has proved a major contributor to growth, competitiveness and employment and it should continue benefitting all citizens and businesses equally. It has generated new opportunities and economies of scale for Union businesses, notably micro, small and medium sized enterprises (SMEs), and has strengthened their industrial competitiveness. The internal market has contributed to the creation of jobs and has offered greater choice of high-quality products and services at lower prices for consumers. It continues to be an engine for building a more integrated market and a stronger, more balanced and fairer economy. It is one of the Union’s major achievements and its best asset in an increasingly global world, as well as being a core element in achieving the green and digital transformation towards a sustainable economy, in response to the increasing pressures of climate change.

(2) It is necessary for the internal market to adapt continuously to a rapidly changing environment of digital revolution and globalisation. The new era of digital innovation continues to provide opportunities for businesses and individuals, creates new products, services, processes and business models, and opportunities for the efficient production of high-quality statistics. It equally constitutes a challenge to regulation, enforcement, consumer protection and safety.

(3) A substantial body of Union law underpins the functioning of the internal market. It concerns, in particular, competitiveness, standardisation, mutual recognition, conformity assessment, consumer protection and market surveillance. It also consists of rules on business, trade and financial transactions, on the plant, animal, food and feed area, on the production of European statistics and on the promotion of fair competition. That substantial body of Union law provides for the level playing field that is essential for the functioning of the internal market for the benefit of consumers and businesses.

(4) Nevertheless, discriminatory, unjustified or disproportionate barriers to the proper functioning of the internal market remain and new obstacles emerge. Adopting rules is only a first step and making them work is as important. Current challenges connected with the enforcement of existing rules, barriers to free movement of goods and services, and low levels of cross-border public procurement limit the opportunities for businesses and consumers. Addressing such obstacles is ultimately a matter of citizens’ trust in the Union, as well as in its capacity to deliver and its ability to create jobs and growth while protecting the public interest.

(5) Previously, there have been separate programmes for Union action in the fields of competitiveness of enterprises, especially SMEs, consumer protection, customers and end-users in financial services, policymaking in financial services and in the plant, animal, food and feed area. Some additional activities have been financed directly under the internal market budget lines. It is now necessary to streamline and exploit synergies between various actions and provide for a more flexible, transparent, simplified and agile framework to finance activities aiming to achieve a well-functioning sustainable internal market. Therefore, a new programme should be established bringing together activities financed previously under those other programmes and other relevant budget lines. That programme should also include new initiatives which aim to improve the functioning of the internal market, while avoiding duplication with related Union programmes and actions.

(6) The development, production and dissemination of European statistics pursuant to Regulation (EC) No 223/2009 of the European Parliament and of the Council (4) have been subject to a separate European Statistical Programme established by Regulation (EU) No 99/2013 of the European Parliament and of the Council (5). In order to provide continuity of production and dissemination of European statistics, the new programme should also include activities covered by the previous European Statistical Programme by providing a framework for the development, production and dissemination of European statistics pursuant to Regulation (EC) No 223/2009. The new programme should establish the financial framework for European statistics to provide high-quality, comparable and reliable European statistics, in order to underpin the design, implementation, monitoring and evaluation of all Union policies. Professional independence is a necessary prerequisite for the development, production and dissemination of European statistics.

(7) It is therefore appropriate to establish a programme for improving the functioning of the internal market, the competitiveness and sustainability of enterprises, especially SMEs, standardisation, market surveillance and consumer protection, for the area of plants, animals, food and feed, and for European statistics (Single Market Programme) (the ‘Programme’). The Programme should be established for a period of seven years to align its duration with that of the multiannual financial framework for the years 2021 to 2027 laid down in Council Regulation (EU, Euratom) 2020/2093 (6).

(8) The Programme should support the design, implementation and enforcement of Union legislation underpinning the proper functioning of the internal market. The Programme should support the creation of the right conditions to empower all actors of the internal market, including businesses, citizens, including consumers, and employees, representatives of civil society and public authorities. To that end, the Programme should aim to foster the competitiveness, capacity building and sustainability of enterprises, especially SMEs, including those operating in the tourism sector. The sustainability of enterprises is important to maintain their long-term competitiveness and contributes to the transition to a more economically, environmentally and socially sustainable Union, which should go hand in hand with digitalisation and engagement in sustainable business practices. The Programme should also support the enforcement of consumer protection and safety rules. It should also raise the awareness of businesses and individuals of their rights by providing them with the right tools, appropriate information and assistance, to make informed decisions and strengthen their participation in Union policy-making. Furthermore, the Programme should aim to enhance regulatory and administrative cooperation, notably through training programmes, the exchange of best practices and the building of knowledge and competence bases, including the use of strategic public procurement. The Programme should also aim to support the development of high-quality Union and international standards and rule-making, including through broad stakeholder involvement, which underpin the implementation of Union legislation. This should cover the field of financial reporting and audit, thereby contributing to the transparency and good-functioning of the Union’s capital markets and to the enhancement of investor protection. The objective of the Programme should also be to support the implementation and enforcement of Union legislation providing for a high level of health for humans, animals and plants, protection of the well-being of people and the welfare of animals, food and feed safety whilst respecting the principles of sustainable development and ensuring a high level of consumer protection. Furthermore, the Programme should support the production of high-quality European statistics in accordance with the statistical principles set out in Regulation (EC) No 223/2009 and further elaborated in the European Statistics Code of Practice.

(9) A modern internal market that is based on principles of fairness, transparency and mutual trust promotes competition and benefits consumers, businesses and employees. Making better use of the ever evolving internal market in services should help Union businesses create jobs and grow across borders, offer a wider choice of services at better prices, and maintain high standards for consumers and workers. To achieve this, the Programme should contribute to the better monitoring of internal market developments, as well as to the identification and the removal of remaining discriminatory, unjustified or disproportionate barriers, and ensure that the regulatory framework can accommodate all forms of innovation, including new technological developments and processes, service innovation business models, collaborative and social economy models, social innovation and non-technological innovation.

(10) Regulatory obstacles in the internal market have been removed for many industrial products through prevention mechanisms, the adoption of common rules and, where no such Union rules exist, through the principle of mutual recognition. In areas where no Union legislation exists, the principle of mutual recognition applies, with the result that goods that are lawfully marketed in one Member State enjoy the right to free movement and can be sold in another Member State. Where the Member State concerned has grounds to oppose the marketing of the goods, it may impose a restriction, provided that such a restriction is non-discriminatory, justified by legitimate public interest objectives, as set out in Article 36 of the Treaty on the Functioning of the European Union (TFEU), or recognised by the case-law of the Court of Justice of the European Union as an overriding reason of public interest, and proportionate to the aim pursued. The inadequate application of the principle of mutual recognition, consisting, for example, in imposing unjustified or disproportionate restrictions, makes it harder for companies to access markets in other Member States. Despite the high degree of market integration in the area of goods, that situation leads to lost opportunities for the economy at large. The adoption of Regulation (EU) 2019/515 of the European Parliament and of the Council (7), is expected to boost the economic benefits in this area. The Programme should therefore aim to improve the application of the principle of mutual recognition in the area of goods, realising its full potential. It should also aim to reduce the number of illegal and non-compliant goods entering the market through targeted awareness raising and training, support for Product Contact Points referred to in Regulation (EU) 2019/515 and better cooperation among competent authorities for mutual recognition.

(11) There are new regulatory and enforcement challenges relating to the rapidly changing environment of the digital revolution and concerning issues such as cybersecurity, data protection and privacy, internet of things or artificial intelligence and related ethical standards. Stringent rules on product safety and clarity with regard to liability are essential to ensure that Union citizens, including consumers, and businesses are able to benefit from appropriate protection in the event of damage. The Programme should therefore contribute to the rapid adaptation and better enforcement of a Union product liability regime which fosters innovation whilst ensuring the safety and security of users.

(12) The placing on the market of products that are not compliant with Union law, including products imported from third countries, puts Union citizens, including consumers, as well as other end-users, at risk. Economic operators selling compliant products by traditional or electronic means face distorted competition from those who do not comply with the rules due to lack of knowledge, intentionally in order to gain a competitive advantage or as a result of the fragmentation of market surveillance across the Union. Market surveillance authorities are often underfunded and constrained by national boundaries, while entrepreneurs trade at Union or even global level. In particular, in the case of e-commerce, market surveillance authorities have great difficulties in tracing non-compliant products imported from third countries in order to identify the responsible economic operators within their jurisdiction. They also have great difficulties in conducting risk assessments and tests due to the lack of physical access to products. The Programme should therefore seek to strengthen compliance of products by raising awareness of applicable Union product safety rules, by intensifying compliance checks in line with Regulation (EU) 2019/1020 of the European Parliament and of the Council (8) and by promoting closer cross-border cooperation among enforcement authorities. The Programme should also contribute to the consolidation of the existing framework for market surveillance activities, encourage joint actions of market surveillance authorities from different Member States, improve the exchange of information and promote convergence and closer integration of market surveillance activities. The Programme should do this in particular by ensuring that the new requirements introduced by Regulation (EU) 2019/1020 are strictly enforced so as to prevent the sale of non-compliant products to consumers, as well as other end-users. The Programme should therefore strengthen the capacity of market surveillance authorities across the Union, contribute to greater homogeneity in the enforcement of rules between Member States and enable Member States to benefit equally from the internal market in terms of economic growth and sustainability.

(13) While the Programme does not include objectives and actions supporting the protection of intellectual property rights, it should nevertheless be borne in mind that often counterfeit products do not comply with the requirements set out in the Union legislation on product safety and consumer protection, and present risks to the health and safety of consumers, particularly when such products are purchased online. The Programme should therefore increase synergies with other Union programmes in the field of the protection of intellectual property rights programmes, in particular the Customs Control Equipment Instrument, established under a Regulation of the European Parliament and of the Council establishing, as part of the Integrated Border Management Fund, the instrument for financial support for customs control equipment.

(14) To facilitate the compliance of categories of harmonised products with higher inherent risk, the Union has put in place a system of accreditation for conformity assessment bodies, verifying their competence, impartiality and independence. It is essential that the conformity assessment bodies are reliable and competent, since they verify whether products meet the safety requirements before they are placed on the market. The main challenge now is to ensure that the accreditation system continues to represent the state of the art and that it is applied with the same stringency across the Union. The Programme should therefore support measures to ensure that conformity assessment bodies continue to fulfill their regulatory requirements, such as impartiality and independence, especially through the use of accreditation. Likewise, the Programme should also support measures to enhance the European accreditation system, in particular in new policy areas, by supporting the European cooperation for accreditation referred to in Regulation (EC) No 765/2008 of the European Parliament and of the Council (9).

(15) Since, with the development of online trade and travel services, consumer markets recognise no borders, it is important to ensure that consumers residing in the Union can benefit from the same high level of protection when goods and services are imported from economic operators based in third countries, including when they are sold online. It should therefore be possible for the Programme, where necessary, to support cooperation with relevant bodies located in third countries, for example, with regard to the exchange of information on non-compliant products.

(16) Public procurement is used by public authorities to ensure good value for the public money spent and to contribute to a more innovative, sustainable, inclusive and competitive internal market. This includes the application of evaluation criteria that not only identify the most economic advantageous offer, but also the most advantageous offer in terms of the greatest public value delivered when awarding tenders according to the ‘best price-quality ratio’. Where this is in accordance with applicable Union law, environmental, fair trade and social aspects should be taken into account and a division of tenders into lots should be promoted for large infrastructure projects. Directives 2014/23/EU (10), 2014/24/EU (11) and 2014/25/EU of the European Parliament and of the Council (12) provide the legal framework for the integration and effective functioning of the public procurement markets representing 14 % of the Union’s gross domestic product, for the benefit of public authorities, businesses and citizens, including consumers. Properly implemented public procurement rules are a crucial tool for strengthening the internal market and for boosting the growth of Union companies and Union jobs. The Programme should therefore support measures to ensure a wider uptake of strategic public procurement, the professionalisation of public buyers, the facilitation and improvement of access to procurement markets for SMEs, in particular through advisory services and training, an increase in transparency, integrity and better data, the boosting of the digital transformation of procurement and the promotion of joint procurement, through strengthening a partnership approach with the Member States, the improvement of data gathering and data analysis, including through the development of dedicated IT tools, as well as to ensure support for the exchange of experiences and good practices, the referencing of European and international standards, the provision of guidance, the pursuit of beneficial trade agreements, the strengthening of cooperation among national authorities and the launching of pilot projects.

(17) In order to meet the objectives of the Programme and to facilitate the lives of citizens and businesses, increasingly-digitalised and fully-accessible, high-quality, user-centric public services need to be put in place. E-administration and e-government efforts also need to be boosted, while ensuring appropriate data protection and privacy. That implies that public administrations will need to engage in the co-creation of those public services with citizens and businesses. Moreover, the continuous and steady increase of cross-border activities in the internal market requires up-to-date, accurate and easy to understand information on the rights of businesses and citizens to be available. This means that simplified information explaining the administrative formalities should be displayed. In addition, providing legal advice and helping to solve problems which occur at a cross-national level is essential. Furthermore, public authorities should be supported in their efforts to achieve those objectives, for example by connecting national administrations in a simple and efficient manner, as well as by providing information and facilitating an exchange of information explaining how the internal market works on the ground. The existing internal market governance tools already play an important role in that respect and their quality, visibility, transparency and reliability should be further enhanced. The Programme should therefore support the following, existing, internal market governance tools: the Your Europe Portal which should become a backbone of the upcoming Single Digital Gateway, the Your Europe Advice, SOLVIT, the Internal Market Information System and the Single Market Scoreboard.

(18) The Programme should support the development of the Union regulatory framework in the areas of company law and corporate governance, and contract law, with a view to making businesses, especially SMEs, more efficient and competitive, while providing protection for stakeholders affected by company operations, and with a view to reacting to emerging policy challenges. It should also ensure the appropriate evaluation, implementation and enforcement of the relevant acquis, inform and assist stakeholders and promote information exchange in the area. The Programme should further support the Commission’s initiatives in support of a clear and well-adapted legal framework for the data economy and innovation. Those initiatives are necessary to enhance legal certainty with regard to contractual and extra contractual obligations, in particular with regard to liability, security, ethics and privacy in the context of emerging technologies, such as the internet of things, artificial intelligence, robotics and 3D printing. The Programme should aim to stimulate the development of data-driven business, as such business will be decisive for the performance of the Union economy in global competition.

(19) The Programme should also promote the correct and full implementation and application by the Member States of the Union legal framework for anti-money laundering and countering terrorism financing and the development of future policies to address new challenges in those fields. It should also support relevant activities of international organisations of European interest, such as the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism of the Council of Europe.

(20) The objective of implementing and developing the internal market in the area of financial services, financial stability and the Capital Markets Union, including sustainable finance, is highly dependent on the evidence-based policy measures taken by the Union. The Commission should play an active role in achieving that objective, by constantly monitoring financial markets and financial stability, assessing the implementation of Union legislation by Member States, evaluating whether the existing legislation is fit for purpose and, when new risks emerge, identifying potential areas of action, all with the continuous involvement of stakeholders, throughout the policy cycle. Such activities rely on the production of analyses, studies, training materials, surveys, conformity assessments, evaluations and high-quality statistics and are supported by IT systems and communication tools.

(21) The TFEU includes a system of rules ensuring that competition is not distorted in the internal market. The Programme should contribute to the Union’s competition policy, including by improving and reinforcing the cooperation with networks, and with national authorities and courts, and by strengthening international cooperation, as well as by ensuring an outreach to a wider group of stakeholders in communicating and explaining the rights, benefits and obligations of the Union’s competition policy. The Programme should also help to enhance the analysis and assessment of market developments, including through the use of sector inquiries and other market investigation tools, as well as by systematic sharing of information and best practices within the European Competition Network. This should contribute to fair competition and a level playing field, including at global level, and empower businesses, especially SMEs, and consumers to reap the benefits of the internal market.

(22) The Programme needs, in particular, to tackle the radical implications for competition and the functioning of the internal market resulting from the ongoing green and digital transition of the economy and business environment, in particular through the exponential growth in the amount and use of data, taking account of the increasing recourse to artificial intelligence, big data algorithms and other IT tools and expertise by companies. It is also essential that the Programme supports networks and fosters a wider and deeper cooperation with Member States and their authorities and courts, since undistorted competition and the functioning of the internal market depend critically on action by those entities. In view of the particular role of competition policy in preventing harm to the internal market resulting from anti-competitive conduct beyond the Union’s border, the Programme should also support cooperation with third country authorities, as appropriate. Finally, widening outreach activities is necessary in order to allow more citizens and businesses to reap the full benefits of fair competition in the internal market. This should support efforts to better demonstrate the benefits of the Union’s competition policy to Union citizens, including through engagement with representatives of civil society groups and relevant stakeholders. Flexibility is expected to be needed in the implementation of the competition part of the Programme to respond to evolving needs that are affected by dynamic and rapid developments in the conditions of competition in the internal market the pace and magnitude of which are difficult to estimate. Those developments relate in particular to digitalisation, artificial intelligence, algorithms, big data, cybersecurity and forensic technology.

(23) Strengthening the competitiveness and sustainability of Union enterprises while ensuring an effective level playing field and an open and competitive internal market is of the utmost importance. SMEs are the engine of the Union economy. They make up 99,8 % of all businesses in the Union, provide two thirds of jobs, and contribute substantially to the creation of new quality jobs in all sectors with a regional and local dimension, and hence to the creation of social cohesion. SMEs are instrumental in the modernisation of industry and in the green and digital transformation of the economy, including the achievement of climate neutrality. The Programme should therefore support their efforts to increase resource-efficiency and to develop environmentally friendly high-quality products and services. In doing so, the Programme should also contribute to improve SMEs competitiveness on the global market.

(24) SMEs share common challenges that do not affect larger firms to the same extent. Those common challenges include obtaining finance, recruiting a skilled work force, alleviating their administrative burden, taking up creativity and innovation, inter alia through public procurement, and accessing global markets and value chains in order to develop their internationalisation activities. The Programme should address such market failures proportionally, while not unduly distorting competition in the internal market. The Programme should also take account of the particular needs of specific types of SMEs, such as micro enterprises, SMEs engaged in services and SMEs engaged in craft activities, as well as SMEs consisting of the self-employed, members of the liberal professions and social economy enterprises. Social economy enterprises in the Union include different types of enterprises and entities falling within the social economy, such as cooperatives, mutual societies, non-profit associations, foundations, social enterprises and other forms of enterprises. Since their primary focus is on creating shared value and social impact for people rather than on realising profits, they are able to act as an engine of social innovation, transparent governance and solidarity, by reinvesting the majority of their profits or surpluses in their objectives. Attention should also be paid to the particular needs of potential new entrepreneurs, such as young and female entrepreneurs, older people and persons with disabilities.

(25) The Programme should take into account SMEs, as defined in Commission Recommendation 2003/361/EC (13). When applying this Regulation in respect of SMEs, the Commission should consult all relevant stakeholders, including the public and private organisations representing SMEs and the Trade Promotion Organisations of the Member States.

(26) The programme should support and promote a culture of innovation, developing industrial ecosystems capable of encouraging business start-ups and SME growth, focusing on all SMEs able to meet the challenges of the green and digital transition and of an increasingly competitive and fast-moving environment. The Programme should seek to support the innovation uptake process by promoting new collaborative business models, networking and the sharing of knowledge and resources, including across European partnerships of clusters and business network organisations.

(27) When establishing work programmes for providing support to SMEs, the strategic provisions of the SME strategy and the Small Business Act as well as the context in which SMEs operate, as described in the SME performance review, should be taken into account. Attention should also be paid to the SME Envoy Network.

(28) Many of the Union’s competitiveness problems involve SMEs’ difficulties in obtaining access to finance. Those difficulties arise because SMEs struggle to demonstrate their credit-worthiness and have insufficient assets as security for lenders (i.e. collateral/guarantees), or because they lack awareness of the mechanisms to support their activities that already exist at Union, national or local level. Additional financing challenges arise from SMEs’ need to stay competitive by engaging inter alia in innovation uptake activities, digitalisation and internationalisation, as well as in the up- and re-skilling of their workforce. Limited access to finance has a negative effect on businesses creation, growth and survival rates, as well as on the readiness of new entrepreneurs to take over viable companies in the context of a business succession.

(29) The lack of skills is a major obstacle to the growth of enterprise in the Union. To foster entrepreneurship in the Union and support the growth of SMEs and their digital and green transition, the Programme should promote and facilitate access to skills and mentoring schemes for SMEs, and in particular the development of technological, entrepreneurial and managerial skills. In doing so, the Commission should coordinate with initiatives undertaken in other Union, national and regional programmes to increase synergies and avoid duplication.

(30) To overcome the market failures and to ensure that SMEs, including start-ups and scale-ups, continue to play their role as the foundation of the competitiveness of the Union’s economy, SMEs need extra support in the form of debt and equity instruments established under the SME policy window of the InvestEU Fund established by Regulation (EU) 2021/… of the European Parliament and of the Council (14) (1). Its loan guarantee facility, first put in place under Regulation (EU) No 1287/2013 of the European Parliament and of the Council (15), is of proven added value and is expected to make a positive contribution to at least 500 000 SMEs. More attention could be paid to increasing awareness, on the part of potential beneficiaries, of the availability of the InvestEU Programme for SMEs.

(31) Actions under the Programme should seek to achieve its policy objectives not only through grants, but also through faciliating acess to financial instruments and budgetary guarantees established under the SME policy window of the InvestEU Fund and should enhance synergies with other Union programmes. All actions should have clear Union added value.

(32) The Programme should provide effective support for SMEs throughout their life-cycle, providing assistance ranging from helping SMEs to find partners for joint projects to commercialisation and access to the market, capacity-building and encouraging the cooperation along clusters and business network organisations. It should also support the green and digital transition of SMEs and build on the unique knowledge and expertise developed with regard to SMEs, as well as on long experience working with Union, national and regional stakeholders. That support should build on the experience of the Enterprise Europe Network (EEN) as a ‘one-stop shop’ to improve the competitiveness of SMEs and to develop their business in the internal market and beyond. The EEN continues to deliver services on behalf of other Union programmes, notably Horizon Europe established by Regulation (EU) 2021/… of the European Parliament and of the Council (16) (2), using the financial resources of those programmes. The EEN should also facilitate enhanced participation of SMEs in the development of internal market policy initiatives, such as public procurement and standardisation processes. The EEN should improve cooperation with European Digital Innovation Hubs under the Digital Europe Programme established by Regulation (EU) 2021/… of the European Parliament and of the Council (17) (3) and the InvestEU Advisory Hub. In addition, the successful mentoring scheme – Erasmus for Young Entrepreneurs – should remain the tool to enable new or aspiring entrepreneurs to gain business and managerial experience by being matched with and by learning from an experienced entrepreneur from another country, thereby strengthening their entrepreneurial talents. The Programme should extend its geographical coverage and offer a wider range of matching possibilities to entrepreneurs in complementarity with other Union initiatives where relevant.

(33) Additional efforts should be made to reduce the administrative burden and to make the initiatives of the Programme more accessible by reducing the costs to SMEs of complicated application processes and participation requirements. In that context, the EEN should be the main information point for SMEs interested in accessing Union funds, functioning as a ‘one-stop shop’, and providing them with tailored guidance. It is important to build on the experiences of the existing measures supporting SMEs, whilst remaining open to adapting them in the light of the changing conditions for SMEs in the internal market, especially those regarding digitalisation and the regulatory burden.

(34) Since clusters offer favourable and resilient business environments, they are a strategic tool for supporting the competitiveness and scaling-up of SMEs. They can facilitate the green and digital transition of industry, including services, and strengthen the economic development of regions through the creation of growth and jobs. It is important that Joint Cluster Initiatives achieve critical mass since this will accelerate the growth of SMEs. By connecting specialised industrial eco-systems, clusters create new business opportunities for SMEs and integrate them better in Union and global strategic value chains. Support should be provided for the development of transnational and interregional partnership strategies and the implementation of joint activities, supported by the European Cluster Collaboration Platform and its European Resource-Efficiency Knowledge Centre. Support should also include helping SMEs to team up with SMEs from third countries. Sustainable partnering should be encouraged by providing continuation funding if performance and participation milestones are reached. Direct support to SMEs should be channelled through cluster organisations for the following: promoting the uptake of advanced technologies, new business models, low-carbon and resource-efficient solutions, creativity and design, the upgrading of skills, the attraction of talent, the acceleration of entrepreneurship, and internationalisation. Other specialised SME support actors should be associated with that direct support to SMEs in order to facilitate industrial transformation and the implementation of smart specialisation strategies. The Programme should therefore contribute to and build links with the Union’s innovation hubs, in particular its digital innovation hubs, and investments made under Cohesion Policy and Horizon Europe. Synergies with the Erasmus+ programme established by Regulation (EU) 2021/… of the European Parliament and of the Council (18) (4) could also be explored.

(35) The Programme should help to strengthen the relationship between businesses, especially SMEs, and universities, research centres and other institutions involved in knowledge creation and dissemination. This relationship could help improve the ability of businesses to tackle the strategic challenges posed by the new international context.

(36) SMEs, owing to their smaller size, face specific obstacles to growth. It is particularly difficult for them to grow and scale up some of their business activities. Based on the success of, and the lessons learned, and experiences from the SME Instrument and the Union cluster projects for new industrial value chains under Horizon 2020, established by Regulation (EU) No 1291/2013 of the European Parliament and of the Council (19), the Programme should provide support for scaling-up activities by SMEs at all crucial stages in their development, including support for internationalisation, the uptake of innovation and commercialisation activities. That support would complement support from the European Innovation Council under Horizon Europe, which will mainly focus on breakthrough and disruptive innovation, and therefore on innovative SMEs, targeting especially market-creating innovation, while also supporting all types of innovation, including incremental innovation.

(37) Creativity and all forms of innovation, including innovation in pursuit of enhanced resource and energy efficiency, are crucial for the competitiveness of the Union’s industrial value chains. They represent catalysts for the modernisation of the business and industry sectors and contribute to smart, inclusive sustainable growth. However, uptake by SMEs is still lagging behind. The Programme should therefore support targeted actions, networks and partnerships for creativity-driven innovation to enable SMEs to master the green and digital transition throughout the industrial value chains and ecosystems.

(38) European standards play an important role in the internal market. They are of vital interest for the competitiveness of undertakings and especially SMEs. European standards are also a crucial tool for supporting Union legislation and policies in a number of key areas that aim to foster the green and digital transition, such as energy, climate change and environmental protection, information and communication technology, sustainable use and recycling of resources, innovation, product safety, consumer protection, worker’s safety and working conditions and ageing population, thereby positively contributing to the society as a whole. In order to maximise their contribution, experience has shown that the speed and timeliness of the elaboration of standards need to be improved and more effort needs to be made to better involve all relevant stakeholders, including those representing consumers.

(39) European standardisation activities are governed by Regulation (EU) No 1025/2012 of the European Parliament and of the Council (20) and implemented through a long-standing public-private-partnership that is fundamental to achieving the objectives set in that Regulation, as well as those contained in general and sectorial Union standardisation policies.

(40) A well-functioning common financial and non-financial reporting framework is essential for the internal market, for the effective functioning of the financial markets and for the realisation of the integrated market for financial services in the context of the Banking Union and the Capital Markets Union.

(41) In accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council (21), International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board and related interpretations from the IFRS Interpretations Committee are to be incorporated into Union law in order to be applied by companies with securities listed on a regulated market in the Union only if IFRS meet the requirements set out in that Regulation, including the requirement that accounts give a ‘true and fair view’ as provided for in Directive 2013/34/EU of the European Parliament and of the Council (22) and that they are conducive to the European public good. Such international accounting standards need to be developed in a transparent and democratically accountable way. IFRS therefore play a major role in the functioning of the internal market and the Union therefore has a direct interest in ensuring that the process by which IFRS are developed and approved results in standards that are consistent with the requirements of the legal framework of the internal market. It is therefore important to establish in the Programme appropriate funding arrangements for the IFRS Foundation.

(42) Taking into account the European Financial Reporting Advisory Group’s (EFRAG) role in assessing whether IFRS comply with the requirement of Union law and policy, as laid down in Regulation (EC) No 1606/2002, it is also necessary for the Union to ensure that the funding of EFRAG is stable and therefore to contribute to that funding via the Programme. The technical work of EFRAG should focus on providing the Commission with technical advice on the endorsement of IFRS as well as on the appropriate level of Union participation in the process of developing those IFRS, and should ensure that the interests of the Union are adequately taken into account in the international standard-setting process. Those interests should include the notion of ‘prudence’, the maintenance of the requirement of a ‘true and fair view’, as laid down in Directive 2013/34/EU, and of the European public good, as laid down in Regulation (EC) No 1606/2002, taking into account the impact of IFRS on financial stability and the economy. The European Corporate Reporting Lab has been established as part of EFRAG, to promote innovation and the development of best practices in corporate reporting. It provides a forum in which companies and investors can share best practices, notably in the field of non-financial and sustainability reporting. Building on this work, EFRAG should also contribute to the development of non-financial reporting standards.

(43) In the field of statutory audit, the Public Interest Oversight Board (PIOB) was created in 2005 by the Monitoring Group, an international organisation responsible for monitoring the governance reform of the International Federation of Accountants (IFAC). The role of the PIOB is to oversee the process leading to the adoption of International Standards on Auditing (ISAs) and other public interest activities of the IFAC. It is possible for ISAs to be adopted for application in the Union provided, in particular, that they have been developed in accordance with due process, public oversight and transparency, as required under Article 26 of Directive 2006/43/EC of the European Parliament and of the Council (23). Considering the introduction of ISAs in the Union and the key role of the PIOB in ensuring that they fulfil the requirements laid down in Directive 2006/43/EC, it is therefore important to establish in the Programme appropriate funding arrangements for the PIOB.

(44) The Union contributes to ensuring a high level of consumer protection, empowering consumers and putting them at the heart of the internal market by supporting and complementing Member States’ policies in seeking to ensure that citizens when acting as consumers can fully reap the benefits of the internal market and that, in so doing, their safety and legal and economic interests are properly protected by means of concrete actions. It is also necessary for the Union to ensure that consumer and product safety laws are properly and equally enforced on the ground and that businesses enjoy a level playing field and therefore that competition in the internal market is fair. Moreover, it is necessary to empower, encourage and assist consumers to make sustainable and informed choices, thus contributing to a sustainable, energy and resource efficient and circular economy.

(45) The Programme should aim to raise awareness, on the part of consumers, businesses, representatives of civil society and authorities, of Union consumer and safety laws. It should also empower consumers and their representative organisations at national level and at Union level. It should do this in particular by supporting the European consumer organisation BEUC (Bureau Européen des Unions de Consommateurs), which is a long-established and well-recognised non-governmental organisation representing the interests of consumers in relation to all relevant Union policies, which has enabled that organisation to build enhanced synergies to strengthen consumer advocacy. It also should do that in particular by supporting the European Association for the Co-ordination of Consumer Representation in Standardisation (ANEC), which represents consumers interest in relation to standardisation issues. In doing so, particular attention should be paid to new market needs regarding the promotion of sustainable consumption by targeting in particular actions combatting those planned obsolescence practices that are misleading and other misleading practices such as false environmental claims, by informing consumers better about product durability and reparability. Particular attention should also be paid to preventing the vulnerabilities and to meeting the challenges created by the digitalisation of the economy, in relation to, for example, connected products, the internet of things, artificial intelligence and the use of algorithms, and the development of new consumption patterns and business models. The Programme should support actions for the development of relevant information on markets, including the publication of the Union consumer scoreboards.

(46) The Programme should support national competent authorities, including those responsible for monitoring product safety, which cooperate notably via the Union’s rapid alert system for dangerous products. It should also support the enforcement of Directive 2001/95/EC of the European Parliament and of the Council (24) and Regulation (EC) No 765/2008 regarding consumer protection and product safety, and the Consumer Protection Cooperation Network and international cooperation between the relevant authorities in third countries and in the Union. The Programme should also aim to ensure access for all consumers and traders to quality out-of-court dispute resolution, online dispute resolution and information on the process for participating in actions seeking redress.

(47) The Programme should also support the European Consumer Centres Network, which assists consumers to obtain the benefit of their Union consumer rights when they purchase goods and services cross-border in the internal market and European Economic Area, either on-line or when travelling. The network, which is 29 centres strong and which has been jointly funded by the Union consumer programmes for more than 15 years, has proven its added value in relation to strengthening consumers’ and traders’ trust in the internal market. It deals with more than 120 000 consumers’ requests per year and reaches millions of citizens via its press and online information activities. It is one of the most valued citizens’ assistance networks in the Union and most of its centres host contact points offering advice on aspects of internal market law, such as the Directive 2006/123/EC of the European Parliament and of the Council (25). Evaluations have stressed the importance of the centres continuing their operations. The European Consumer Centres Network can also be an important source of information about challenges and problems that consumers encounter at local level, which are relevant for Union policy-making and for the protection of consumers interests. There are also plans for the network to develop reciprocity arrangements with similar bodies in third countries.

(48) Directives 98/6/EC (26), 2005/29/EC (27), 2011/83/EU (28), (EU) 2019/2161 (29) and (EU) 2020/1828 (30) of the European Parliament and of the Council have been adopted to ensure, inter alia, the equal treatment of consumers across the internal market in relation to cross-border issues, such as sales of non-compliant products in the motor vehicles sector, dual quality standards for products, or the problems experienced by passengers in the event of flight cancellations or long flight delays. They also aim to strengthen the enforcement capacities of Member States, enhance product safety and increase international cooperation and new possibilities for redress notably through representative actions by qualified entities. In May 2017, the Commission carried out a fitness check of Union consumer and marketing law, which exposed the need to better enforce rules and facilitate redress when consumers have been harmed by breaches to consumer laws. In view of that fitness check, supporting the full implementation of those Directives and actions and promoting their cross-border enforcement should therefore be a priority.

(49) Citizens are particularly affected by the functioning of financial markets and should, therefore, be further informed about relevant rights, risks and benefits. Financial markets are a key component of the internal market and require a solid framework for regulation and supervision that ensures not only financial stability and a sustainable economy, but also provides a high level of protection to consumers and other financial services end-users, including retail investors, savers, insurance policyholders, pension fund members and beneficiaries, individual shareholders, borrowers and SMEs. The Programme should contribute to enhancing the capacity of consumers and other financial services end-users to participate in policymaking, including through the production and dissemination of clear, complete and user-friendly information about products provided in the financial markets.

(50) The Programme should therefore continue to support the specific activities covered by the 2017-2020 Capacity-Building Programme enhancing the involvement of consumers and other financial services end-users in Union policy-making, as set out in Regulation (EU) 2017/826 of the European Parliament and of the Council (31), which continued the pilot project and preparatory action of the years 2012-2017. This is necessary in order to ensure that policy-makers are aware of the views of stakeholders other than financial sector professionals and to ensure a better representation of the interests of consumers and other financial services end-users. The Programme should continuously develop its methodology and best practices on how to increase the engagement of consumers and financial services end-users in order to identify issues relevant for Union policy-making and ensure that the interests of consumers in the area of financial services are protected. This should improve financial services policies, especially those that aim to foster better public understanding of the issues at stake in financial regulation and enhanced financial literacy.

(51) In the context of the pilot project and preparatory action of the years 2012-2017, the Commission awarded grants to two organisations following an annual open call for proposals. The two organisations are Finance Watch, set up with Union grants in 2011 as an international non-profit association under Belgian law, and Better Finance, which is the outcome of successive re-organisations and rebrandings of pre-existing European federations of investors and shareholders since 2009. The Capacity-Building Programme established under Regulation (EU) 2017/826, identifies those same two organisations as sole beneficiaries. It is therefore necessary to continue to co-finance those organisations in the context of the Programme. However, this financing should be subject to a thorough evaluation of the effectiveness and impact achieved towards fulfilling the objectives pursued. In this respect, if other potential beneficiaries emerge that have among their primary objectives and activities representing the interests of consumers and end-users at Union level, and that have, through their membership, a broad geographical coverage and range of interests, a call for applicants proposals should be open to them.

(52) A high level of health protection in the area of plants, animals, food and feed is necessary to protect consumers as well as to allow the internal market to operate efficiently. A safe and sustainable food supply chain is a prerequisite for society and the internal market to function. Preventing cross-border health crises and food scares is of the utmost importance, since they disrupt the functioning of the internal market by limiting the movements of persons and goods and disrupting production and consumption. Therefore, the Programme should support concrete actions, such as establishing emergency measures in the event of crisis situations affecting animal and plant health.

(53) The general objective of Union law in the area of plants, animals, food and feed is to safeguard a high level of health for humans, animals and plants along the food chain, to support the improvement of the welfare of animals, to contribute to a high level of protection and information for consumers and a high level of protection of the environment, including for the preservation of biodiversity and taking into account situations caused by potential climate change impacts in the Member States, while improving the sustainability of food and feed production and contributing to food security and affordable prices, cutting food waste, increasing the quality standards of products across the Union, and enhancing the competitiveness of the Union food and feed industry and the creation of jobs, including by stimulating research and innovation.

(54) In view of the specific nature of the actions concerning a high level of health for humans, animals and plants, special eligibility criteria concerning provision of grants and use of public procurement need to be laid down in this Regulation. In particular, by way of exception to the principle of non-retroactivity in Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council (32) (the ‘Financial Regulation’), the costs for the emergency measures, due to their urgent and unforeseeable nature, should be eligible, including costs incurred as a result of a suspected occurrence of a disease or pest, provided that the occurrence is subsequently confirmed and notified to the Commission. The corresponding budgetary commitments and the payment of eligible expenditure should be made by the Commission, after signature of the legal commitments and after assessment of the payment applications submitted by the Member States. Costs should also be eligible for surveillance, prevention and protection measures taken in the case of a direct threat to the health status of the Union as a result of the occurrence or development, in the territory of a third country, a Member State or its overseas countries and territories, of certain animal diseases and zoonoses as well as for protection measures taken or other relevant activities carried out in support of the health status of plants in the Union.

(55) In view of the increasing globalisation of the plant, animal, food and feed area, official controls carried out by the Member States are an essential tool for verifying and monitoring that relevant Union requirements are being implemented, complied with and enforced, including in respect of imports. The effectiveness and efficiency of official control systems is vital for maintaining a high level of safety along the food chain, as well as consumer confidence, whilst ensuring a high level of protection of the environment and of animal welfare. Union financial support should be made available for such control measures. In particular, a financial contribution should be available to European Union reference laboratories in order to help them bear the costs arising from the implementation of work programmes approved by the Commission, and may be available to national plant and animal health reference laboratories, which according to Regulation (EU) 2017/625 of the European Parliament and of the Council (33) are to benefit from adequate financial resources provided by Member States, on condition that it can be clearly shown that the actions carried out represent Union added value and that sufficient funding is available under the Programme to support those actions. Moreover, since the effectiveness of official controls also depends on the availability to the control authorities of well trained staff with an appropriate knowledge of Union law, the Union should be able to contribute to their training and relevant exchange programmes organised by competent authorities.

(56) Anti-microbial resistance is a growing health problem in the Union and worldwide. Therefore, it should be possible to co-finance measures to support the fight against anti-microbial resistance under the Programme.

(57) High-quality European statistics developed, produced and disseminated under the Programme pursuant to Regulation (EC) No 223/2009 are essential for evidence-based decision-making. European statistics should be available in a timely manner and should contribute to the implementation of Union policies referred to in TFEU, notably strengthened and integrated economic governance, social, economic and territorial cohesion, sustainable development, agricultural policy, the social dimension of Europe and globalisation.

(58) European statistics are indispensable for Union decision-making and for measuring the performance and impact of Union initiatives. Therefore, it is important to ensure the continued provision and development of European statistics, taking a Union-wide approach and going beyond an internal market perspective in order to cover all Union activities and policy areas, including empowering businesses and citizens to take informed decisions.

(59) In view of its horizontal character, the framework for the development, production and dissemination of European statistics within the meaning of Regulation (EC) No 223/2009 is subject to specific requirements, and in particular those laid down in that Regulation, with regard to respect for statistical principles, as well as the functioning of the European statistical system and its governance, including the role and tasks assigned to the European statistical system committee and to the Commission (Eurostat), the establishment and implementation of the programming of the statistical activities.

(60) The draft part of the Programme regarding the framework for the development, production and dissemination of European statistics has been submitted for prior examination to the European Statistical System Committee in accordance with Regulation (EC) No 223/2009.

(61) The Union and Member States are committed to being frontrunners in implementing the United Nations 2030 Agenda for Sustainable Development. By contributing to the achievement of the 2030 Agenda, the Union and Member States will foster a stronger, more sustainable, inclusive, secure and prosperous Europe. The Programme should contribute to the implementation of the 2030 Agenda, including by balancing the economic, social and environmental dimensions of sustainable development, and, to that end, giving a clear and visible commitment to the mainstreaming of the United Nations Sustainable Development Goals.

(62) Reflecting the importance of tackling climate change in line with the Union’s commitments to implement the Paris Agreement adopted under the United Nations Framework Convention on Climate Change and the United Nations Sustainable Development Goals, this Programme is intended to contribute to mainstreaming climate actions and to the achievement of the overall target of 30 % of Union budget expenditure supporting climate objectives. Relevant actions will be identified during the Programme’s preparation and implementation, and reassessed in the context of the relevant evaluations and review processes. In this context the Programme should support activities that respect the climate and environmental standards and priorities of the Union, and would do no significant harm to environmental objectives within the meaning of Regulation (EU) 2020/852 of the European Parliament and of the Council (34).

(63) This Regulation lays down a financial envelope for the Programme which is to constitute the prime reference amount, within the meaning of point 18 of the Interinstitutional Agreement of 16 December 2020 between the European Parliament, the Council of the European Union and the European Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management, as well as on new own resources, including a roadmap towards the introduction of new own resources (35), for the European Parliament and the Council during the annual budgetary procedure.

(64) The Agreement on the European Economic Area (36) provides for cooperation in the fields subject to the Programme between the Union and its Member States, on the one hand, and the countries of the European Free Trade Association participating in the European Economic Area (EEA), on the other. It should also be possible to open the Programme to participation by acceding countries, candidate countries and potential candidates, European Neighbourhood Policy countries and other third countries. In addition, in the field of European statistics, the Programme should be open to Switzerland in accordance with the Agreement between the European Community and the Swiss Confederation on cooperation in the field of statistics (37).

(65) Third countries which are members of the EEA may participate in Union programmes in the framework of the cooperation established under the Agreement on the European Economic Area, which provides for the implementation of the programmes on the basis of a decision under that Agreement. Third countries may also participate on the basis of other legal instruments. A specific provision should be introduced in this Regulation requiring third countries to grant the necessary rights and access required for the authorising officer responsible, the European Anti-Fraud Office (OLAF) and the Court of Auditors to comprehensively exercise their respective competences.

(66) The Financial Regulation applies to this Programme. The Financial Regulation lays down rules on the implementation of the Union budget, including rules on grants, prizes, procurement, indirect management, financial instruments, budgetary guarantees, financial assistance and the reimbursement of external experts.

(67) The actions implemented under the predecessor programmes and budget lines have proven to be adequate and should be retained. The new actions introduced under the Programme aim in particular to reinforce the well-functioning internal market. In order to provide more simplicity and flexibility in the execution of the Programme and thereby to better deliver on its objectives, the actions should be defined only in terms of overall, generic categories. Lists of indicative activities concerning specific objectives in the areas of competitiveness and consumer protection, or specific activities stemming from regulatory requirements, such as specific activities in the areas of standardisation, market surveillance, the plant, animal, food and feed area and European statistics should also be included in the Programme.

(68) It is necessary to specify certain categories of entities eligible for funding as well as those entities which should be eligible for funding without a call for proposals.

(69) Considering the increasing interconnectivity and digitalisation of the global economy, the Programme should continue to offer the possibility of involving external experts, such as officials of third countries, representatives of international organisations or economic operators in certain activities.

(70) It is necessary to indicate specific criteria concerning co-financing rules and eligible costs. Since, for some of the specific objectives, it might be necessary to finance eligible costs in full, it should be possible to derogate from Article 190 of the Financial Regulation.

(71) Pursuant to Article 193(2), second subparagraph, point (a) of the Financial Regulation, a grant may be awarded for an action which has already begun, provided that the applicant can demonstrate the need for starting the action prior to signature of the grant agreement. While in such cases the costs incurred prior to the date of submission of the grant application would in principle not be eligible, this should exceptionally be possible taking into account the delayed entry into force of this Programme and in order to avoid any disruption in Union support, which could be prejudicial to the Union’s interests. Therefore, where this is necessary to ensure continuity and during a limited period of time at the beginning of the multi-annual financial framework 2021-2027, costs in respect of an action which has already begun should be eligible from 1 January 2021, even if those costs were incurred prior to the date of submission of the grant application. For the same reasons and under the same conditions and as a derogation from Article 193(4) of the Financial Regulation the costs incurred prior to the date of submission of the grant application should be eligible in the case of operating grants.

(72) In line with the Commission’s commitment, set out in its Communication of 19 October 2010 entitled ‘The EU Budget Review’, and in order to provide for coherence and simplification of funding programmes, resources should be shared with other Union funding instruments if the envisaged actions under the Programme pursue objectives which are common to various funding instruments, excluding however double financing.

(73) The Programme should contribute to the overall support addressing specific needs of outermost regions and their integration in the internal market, as recently reconfirmed in the Commission’s Communication ‘A stronger and renewed strategic partnership with the EU’s outermost regions’.

(74) The Programme should promote synergies, while avoiding duplication with related Union programmes and actions. The actions under the Programme should be complementary to those of the Customs and Fiscalis Programmes established by Regulation (EU) 2021/… of the European Parliament and of the Council (38) (5) and a Regulation of the European Parliament and of the Council establishing the ‘Fiscalis’ programme for cooperation in the field of taxation respectively, which also aim towards supporting and improving the functioning of the internal market.

(75) The Programme should promote synergies, complementarities and additionality with respect to the SMEs and entrepreneurship support under the European Regional Development Fund established by a Regulation of the European Parliament and of the Council on the European Regional Development Fund and on the Cohesion Fund. Moreover, the SME policy window of the InvestEU Fund will guarantee debt and equity support to enhance access and availability of finance for SMEs. The Programme should also seek synergies with the Space Programme established by Regulation (EU) 2021/… of the European Parliament and of the Council (39) (6) in respect of encouraging SMEs to benefit from breakthrough innovation and other solutions developed under that programme.

(76) The Programme should promote synergies with Horizon Europe, which aims to promote research and innovation. This should concern in particular complementarity with the actions of the future European Innovation Council for innovative companies, as well as the support of services for SMEs, in particular via the EEN.

(77) The Programme should promote synergies and complementarities with respect to the Digital Europe Programme which aims to promote the digitalisation of the Union economy and the public sector while increasing cybersecurity.

(78) In addition, the Programme should also seek synergies with the Justice Programme established by Regulation (EU) 2021/… of the European Parliament and of the Council (40) (7) which aims to support the further development of a European area of justice for the effectiveness of national justice systems, since this is key to enabling the creation of a fair and cost effective Union economy.

(79) The Programme should promote synergies with Erasmus+ programme, the European Solidarity Corps Programme established by Regulation (EU) 2021/… of the European Parliament and of the Council (41) (8) and the European Social Fund Plus established by a Regulation of the European Parliament and of the Council on the European Social Fund Plus (ESF+) in the area of labour and youth mobility, which is essential for the well-functioning internal market.

(80) Finally, actions such as veterinary and phytosanitary measures in case of animal and plant health crises could be complemented by market based interventions from the Union’s Common Agriculture Policy programming.

(81) The actions implemented under the Programme should represent clear Union added value and be used to address market failures, or sub-optimal investment situations in a proportionate manner, without duplicating or crowding out private financing.

(82) In order to ensure uniform conditions for the implementation of this Regulation, implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council (42). The advisory procedure should be used for the adoption of work programmes implementing the actions contributing to the empowerment of consumers. The examination procedure should be used respectively for the adoption of implementing acts related to the actions contributing to the competitiveness of SMEs and for the adoption of implementing acts related to the work programmes implementing the actions contributing to a high level of health for humans, animals, and plants and for establishing lower co-financing rates where that is necessary for actions concerning veterinary and phytosanitary emergency measures and the annual and multiannual national veterinary and phytosanitary programmes as well as for the adoption of implementing acts related to the work programmes implementing the actions contributing to food and feed safety.

(83) Where synergies between specific objectives of the Programme can be achieved, the necessary provisions could be implemented in a joint work programme.

(84) The forms of Union funding and the methods of implementation of the Programme should be chosen on the basis of their ability to achieve the specific objectives of the actions and to deliver results, taking into account, in particular, the Union added value, the costs of controls, the administrative burden and the expected risk of non-compliance. This should include considering the use of lump sums, flat rates and unit costs, as well as financing not linked to costs as referred to in Article 125(1) of the Financial Regulation.

(85) To ensure regular monitoring and reporting on the progress achieved and on the effectiveness and efficiency of the Programme, a proper framework for monitoring the actions and results of the Programme should be put in place from the very beginning. Such monitoring and reporting should be based on indicators that measure the effects of the actions under the Programme against pre-defined baselines.

(86) Pursuant to paragraph 22 and 23 of the Interinstitutional Agreement of 13 April 2016 on Better Law-Making (43), this Programme should be evaluated on the basis of information collected in accordance with specific monitoring requirements, while avoiding an administrative burden, in particular on Member States, and overregulation. Those requirements, where appropriate, should include measurable indicators as a basis for evaluating the effects of the Programme on the ground. The Commission should draw up an interim evaluation report on the achievement of the objectives of the actions supported under the Programme, on the results and impacts, on the efficiency of the use of resources and on its Union added value, as well as a final evaluation report on the longer impact, the results and the sustainability of the actions, and the synergies with other Programmes.

(87) To monitor the support to SMEs, the Programme should use measurable performance indicators. Subject to the availability of information and where relevant, those indicators should measure results and impact achieved by the Programme in respect of its specific objectives and specific target groups (for example women, youth and seniors). In particular, when monitoring, it is important to measure the support given to the green and digital transition, internationalisation and innovation. In addition, monitoring should take into account contextual indicators, which do not measure the performance of the Programme, but which afford an overview of the environment in which SMEs operate.

(88) A non-exhaustive list of animal diseases and zoonoses which qualify for funding under emergency measures and for funding under the eradication, control and surveillance programmes should be established on the basis of animal diseases referred to in Regulation (EC) No 999/2001 of the European Parliament and of the Council (44), Regulation (EC) No 2160/2003 of the European Parliament and of the Council (45), Directive 2003/99/EC of the European Parliament and of the Council (46) and Regulation (EU) 2016/429 of the European Parliament and of the Council (47).

(89) In order to take account of situations that are brought about by animal diseases that have a significant impact on livestock production or trade, the development of zoonoses which pose a threat to humans, or new scientific or epidemiological developments, as well as animal diseases, which are likely to constitute a new threat for the Union, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of amending the list of animal diseases and zoonoses. In order to take account of future developments concerning the entities which may be awarded a grant under the Programme in relation to the representation of consumer interest at the Union level, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of amending the list of those entitites. In order to ensure effective assessment of progress of the Programme towards the achievement of its objectives, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of amending, where necessary, the list of indicators used to measure the achievement of the specific objectives as well as supplementing this Regulation by establishing a monitoring and evaluation framework. It is of particular importance that the Commission carries out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. Stakeholders and consumer associations should also be consulted. To ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(90) Pursuant to Council Decision 2013/755/EU (48), individuals and entities established in overseas countries or territories are eligible for funding subject to the rules and objectives of the Programme and possible arrangements applicable to the Member State to which the relevant overseas country or territory is linked.

(91) In accordance with the Financial Regulation, Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council (49) and Council Regulations (EC, Euratom) No 2988/95 (50), (Euratom, EC) No 2185/96 (51) and (EU) 2017/1939 (52), the financial interests of the Union are to be protected by means of proportionate measures, including measures relating to the prevention, detection, correction and investigation of irregularities, including fraud, to the recovery of funds lost, wrongly paid or incorrectly used, and, where appropriate, to the imposition of administrative penalties. In particular, in accordance with Regulations (Euratom, EC) No 2185/96 and (EU, Euratom) No 883/2013, OLAF has the power to carry out administrative investigations, including on-the-spot checks and inspections, with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union. The European Public Prosecutor’s Office (EPPO) is empowered, in accordance with Regulation (EU) 2017/1939 to investigate and prosecute criminal offences affecting the financial interests of the Union as provided for in Directive (EU) 2017/1371 of the European Parliament and of the Council (53). In accordance with the Financial Regulation, any person or entity receiving Union funds is to fully cooperate in the protection of the financial interests of the Union, grant the necessary rights and access to the Commission, OLAF, the Court of Auditors and, in respect of those Member States participating in enhanced cooperation pursuant to Regulation (EU) 2017/1939, the EPPO, and ensure that any third parties involved in the implementation of Union funds grant equivalent rights.

(92) Horizontal financial rules adopted by the European Parliament and the Council on the basis of Article 322 TFEU apply to this Regulation. Those rules are laid down in the Financial Regulation and determine in particular the procedure for establishing and implementing the budget through grants, prizes, indirect management, financial instruments, budgetary guarantees, financial assistance and the reimbursement of external experts, and provide for checks on the responsibility of financial actors. Rules adopted on the basis of Article 322 TFEU also include a general regime of conditionality for the protection of the Union budget.

(93) Regulation (EU) 2016/679 of the European Parliament and of the Council (54) governs the processing of personal data carried out in the Member States in the context of this Regulation and under the supervision of the Member States competent authorities. Regulation (EU) 2018/1725 of the European Parliament and of the Council (55) governs the processing of personal data carried out by the Commission within the framework of this Regulation and under the supervision of the European Data Protection Supervisor. Any exchange or transmission of information by competent authorities is to comply with the rules on the transfer of personal data as laid down in Regulation (EU) 2016/679, any exchange or transmission of information by the Commission is to comply with the rules on the transfer of personal data as laid down in Regulation (EU) 2018/1725.

(94) Regulation (EC) No 223/2009 establishes the rules of producing statistics in accordance with the principle of statistical confidentiality and stipulates that the National Statistical Institutes, other national authorities and the Commission (Eurostat) are to take all necessary measures to ensure the alignment of principles and guidelines with regard to the physical and logical protection of confidential data.

(95) Since the objective of this Regulation, namely establishing a programme for improving the functioning of the internal market, the competitiveness and sustainability of enterprises, especially SMEs, and consumer protection, for the area of plants, animals, food and feed, and for the programming and financing framework for the development, production and dissemination of European statistics for the period 2021-2027, cannot be sufficiently achieved by the Member States due to the cross-border nature of the issues involved, but can rather, by reason of the greater potential of Union action, be better achieved at Union level, the Union may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective.

(96) The Programme should also ensure greater visibility and coherence of the Union’s internal market, competitiveness and sustainability of enterprises, especially SMEs, and European statistics actions towards Union citizens, businesses and administrations.

(97) Since amending provisions of legal acts exhaust their effects at the moment of their entry into force and the amendments they introduce in other legal acts thus become part of those legal acts at that same moment, the repeal of Regulation (EU) No 652/2014 of the European Parliament and of the Council (56) has no effect on the amendments already introduced by its amending provisions in other legal acts, and in particular in Regulation (EC) No 178/2002 of the European Parliament and of the Council (57) and Council Directive 2008/90/EC (58) with regard to the setting up of the Standing Committee on Plants, Animals, Food and Feed, which remains in force notwithstanding the repeal of Regulation (EU) No 652/2014.

(98) In order to ensure continuity in the provision of support between the 2014-2020 programmes in the fields of competitiveness and sustainability of enterprises, especially SMEs, consumer protection, customers and end-users in financial services, policymaking in financial services, plants, animals, food and feed, and European statistics, established by Regulation (EU) No 1287/2013, Regulation (EU) No 254/2014 of the European Parliament and of the Council (59), Regulation (EU) 2017/826, Regulation (EU) No 258/2014 of the European Parliament and of the Council (60), Regulation (EU) No 652/2014, Regulation (EU) No 99/2013 and this Programme, in particular with regard to the continuation of multiannual measures and to the evaluation of the previous programmes’ successes, and to allow implementation to start from the beginning of the multi-annual financial framework 2021-2027, this Regulation should enter into force as a matter of urgency and should apply, with retroactive effect, from 1 January 2021. As of 1 January 2028, the technical and administrative assistance appropriations should cover, if necessary, the expenditure related to the management of actions not completed by the end of the Programme.

(99) Due to the delayed entry into force of this Regulation, it is not possible to respect the deadlines for the adoption of the work programmes in the plant, animal, food and feed area and for the submission by the Member States of their 2021 and 2022 veterinary and phyto-sanitary programmes, nor is it possible for the Commission to respect the deadlines for approving those programmes. In order to ensure the proper implementation of the actions in the plant, animal, food and feed area in 2021 and 2022, those deadlines should not apply for the years 2021 and 2022.

(100) Regulations (EU) No 99/2013, (EU) No 1287/2013, (EU) No 254/2014 and (EU) No 652/2014 should therefore be repealed with effect from 1 January 2021,

HAVE ADOPTED THIS REGULATION:

CHAPTER I

GENERAL PROVISIONS

Article 1 Subject matter This Regulation establishes a programme for improving the functioning of the internal market, the competitiveness and sustainability of enterprises, especially micro, small and medium-sized enterprises, and consumer protection, for the management of expenditure in the area of plants, animals, food and feed, and for the programming and financing framework used for the development, production and dissemination of European statistics within the meaning of Article 13 of Regulation (EC) No 223/2009 (Single Market Programme) (the ‘Programme’) for the period from 1 January 2021 to 31 December 2027. The duration of the Programme is aligned to the duration of the multiannual financial framework. This Regulation also lays down the objectives of the Programme and the eligible actions for implementing those objectives, the budget for the period 2021 to 2027, the forms of Union funding and the rules for providing such funding, and the system of governance of the Programme.

Article 2 Definitions For the purposes of this Regulation, the following definitions apply: (1) ‘blending operation’ means an action supported by the Union budget, including within a blending facility or platform as defined in Article 2(6) of the Financial Regulation, that combines non-repayable forms of support or financial instruments from the Union budget with repayable forms of support from development or other public finance institutions, as well as from commercial finance institutions and investors; (2) ‘European statistics’ means statistics developed, produced and disseminated in accordance with Regulation (EC) No 223/2009; (3) ‘legal entity’ means a natural person, or a legal person created and recognised as such under Union, national or international law, which has legal personality and the capacity to act in its own name, exercise rights and be subject to obligations, or an entity which does not have legal personality as referred to in Article 197(2)(c) of the Financial Regulation; (4) ‘micro, small and medium-sized enterprises’ or ‘SMEs’ means micro, small and medium-sized enterprises as defined in Recommendation 2003/361/EC; (5) ‘clusters and business network organisations’ means structures or organised groups of independent parties in the form of organisations that support the enhancement of collaboration, networking and learning of groups of enterprises that are designed to provide or channel specialised and customised business support services, especially for SMEs, in order to stimulate inter alia innovation and internationalisation activities, including by promoting the sharing of facilities and the exchange of knowledge and expertise.

Article 3 Programme objectives 1. The general objectives of the Programme are the following: (a) to improve the functioning of the internal market, and especially to protect and empower citizens, consumers and businesses, in particular SMEs, by enforcing Union law, facilitating market access, setting standards and promoting human, animal and plant health and animal welfare, whilst respecting the principles of sustainable development and ensuring a high level of consumer protection, as well as by enhancing cooperation between the competent authorities of Member States and between the competent authorities of Member States and the Commission and the decentralised Union agencies; (b) to develop, produce and disseminate high-quality, comparable, timely and reliable European statistics which underpin the design, monitoring and evaluation of all Union policies and help citizens, policy makers, authorities, businesses, academia and the media to make informed decisions and to actively participate in the democratic process. 2. The specific objectives of the Programme are the following: (a) making the internal market more effective, inter alia in the light of the digital transformation, by: (i) facilitating the prevention and removal of discriminatory, unjustified or disproportionate obstacles and supporting the development, implementation and enforcement of Union law in the areas of the internal market for goods and services, including by improving the application of the principle of mutual recognition, of public procurement rules, of company law, of contract and extra-contractual law, of anti-money laundering rules, of the free movement of capital and of financial services and competition rules, including by developing user-centric governance tools; (ii) supporting effective market surveillance throughout the Union, with a view to ensuring that only safe and compliant products offering a high level of protection of consumers and other end-users are made available on the Union market, including products sold online, as well as with a view to achieving greater homogeneity among, and increasing the capacity of, the market surveillance authorities across the Union; (b) strengthening the competitiveness and sustainability of SMEs and achieving additionality at Union level through measures that: (i) provide various forms of support to SMEs as well as clusters and business network organisations, including in the tourism sector, thereby fostering the growth, scale-up and creation of SMEs; (ii) facilitate access to markets including through the internationalisation of SMEs; (iii) promote entrepreneurship and the acquisition of entrepreneurial skills; (iv) promote a favourable business environment for SMEs, support the digital transformation of SMEs and promote new business opportunities for SMEs, including those that are social economy enterprises and those with innovative business models; (v) support the competitiveness of industrial ecosystems and sectors, as well as the development of industrial value chains; (vi) promote the modernisation of industry, contributing to a green, digital and resilient economy; (c) ensuring the effective functioning of the internal market through standardisation processes that: (i) enable the financing of European standardisation and the participation of all relevant stakeholders in setting up European standards; (ii) support the development of high-quality international financial and non-financial reporting and auditing standards, facilitate their integration into the Union law, and promote the innovation and development of best practices in corporate reporting; (d) promoting the interests of consumers and ensuring a high level of consumer protection and product safety by: (i) in respect of consumers: — empowering, assisting and educating consumers, businesses and representatives of civil society in particular concerning consumer’s rights under Union law; — ensuring a high level of consumer protection, sustainable consumption and product safety in particular for the most vulnerable consumers in order to enhance fairness, transparency and trust in the internal market; — ensuring that the interests of consumers in the digital world are duly taken into consideration; — supporting competent enforcement authorities and consumer representative organisations and actions which enhance the cooperation between competent authorities, with particular emphasis on issues raised by existing and emerging technologies; — contributing to improving the quality and availability of standards across the Union; efficiently addressing unfair commercial practices; — ensuring that all consumers have access to efficient redress mechanisms and are provided with adequate information on markets and consumers rights, and promoting sustainable consumption, in particular through raising awareness about specific characteristics and the environmental impact of goods and services; (ii) in respect of consumers and other financial services end-users: — enhancing the participation of consumers, other financial services end-users and representatives of civil society in financial services policy-making; — promoting a better understanding of the financial sector and of the different categories of commercialised financial products; — ensuring that the interests of consumers in the area of retail financial services are protected; (e) contributing to a high level of health and safety for humans, animals and plants in plant, animal, food and feed areas, inter alia by preventing, detecting and eradicating animal diseases and plant pests, including by means of emergency measures that are taken in the event of large-scale crisis situations and unforeseeable events affecting animal or plant health, and by supporting the improvement of the welfare of animals, the fight against antimicrobial resistance and the development of sustainable food production and consumption, as well as by stimulating the exchange of best practices between stakeholders in those fields; (f) developing, producing, disseminating and communicating high-quality European statistics in line with the quality criteria laid down in Article 12(1) of Regulation (EC) No 223/2009, in a timely, impartial and cost-efficient manner, through a strengthened European Statistical System, referred to in Article 4 of Regulation (EC) No 223/2009, and enhanced partnerships within that system and with all relevant external parties, using multiple data sources, advanced data analytics methods, smart systems and digital technologies, and providing a national and, where possible, regional breakdown.

Article 4 Budget 1. The financial envelope for the implementation of the Programme for the period from 1 January 2021 to 31 December 2027 shall be EUR 4 208 041 000 in current prices. 2. Within the amount referred to in paragraph 1 the following indicative amounts shall be allocated to the following objectives: (a) EUR 451 569 500 to the objective referred to in Article 3(2)(a)(i); (b) EUR 105 461 000 to the objective referred to in Article 3(2)(a)(ii); (c) EUR 1 000 000 000 to the objective referred to in Article 3(2)(b); (d) EUR 220 510 500 to the objective referred to in Article 3(2)(c); (e) EUR 198 500 000 to the objective referred to in Article 3(2)(d); (f) EUR 1 680 000 000 to the objective referred to in Article 3(2)(e); (g) EUR 552 000 000 to the objective referred to in Article 3(2)(f). 3. The amount referred to in paragraph 1 may be used for technical and administrative assistance for the implementation of the Programme, concerning in particular preparatory, monitoring, control, audit and evaluation activities, the use of information technology networks focusing on information processing and exchange, and the use and development of corporate information technology tools. In order to ensure maximum availability of the Programme to finance actions covered by the objectives of the Programme, the total costs of administrative and technical support shall not exceed 5 % of the value of the financial envelope referred to in paragraph 1. 4. Budgetary commitments extending over more than one financial year may be broken down over several years into annual instalments. 5. By way of derogation from Article 111(2) of the Financial Regulation, the Commission shall make the budgetary commitment for the grant awarded for veterinary and phytosanitary emergency measures under the specific objective referred to in Article 3(2)(e) of this Regulation after the payment applications submitted by Member States have been assessed. 6. Resources allocated to Member States under shared management may, at the request of the Member State concerned, be transferred to the Programme subject to the conditions set out in Article 26 o a Regulation of the European Parliament and of the Council laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the instrument for financial support for border management and visa (the ‘Common Provisions Regulation for 2021-2027’). The Commission shall implement those resources directly in accordance with Article 62(1), first subparagraph, point (a), of the Financial Regulation or indirectly in accordance with Article 62(1), first subparagraph, point (c), of that Regulation. Those resources shall be used for the benefit of the Member State concerned. 7. Where the Commission has not entered into a legal commitment under direct or indirect management for resources transferred in accordance with paragraph 6 of this Article, the corresponding uncommitted resources may be transferred back to the Fund from which they have been initially transferred, at the request of the Member State, in accordance with the conditions set out in Article 26 of the Common Provisions Regulation for 2021-2027.

Article 5 Third countries associated to the Programme The Programme shall be open to the participation of the following third countries: (a) members of the European Free Trade Association which are members of the European Economic Area, in accordance with the conditions laid down in the Agreement on the European Economic Area; (b) acceding countries, candidate countries and potential candidates, in accordance with the general principles and general terms and conditions for the participation of those countries in Union programmes established in the respective framework agreements and Association Council decisions, or in similar agreements, and in accordance with the specific conditions laid down in agreements between the Union and those countries; (c) European Neighbourhood Policy countries, in accordance with the general principles and general terms and conditions for the participation of those countries in Union programmes established in the respective framework agreements and Association Council decisions or in similar agreements, and in accordance with the specific conditions laid down in agreements between the Union and those countries; (d) other third countries, in accordance with the conditions laid down in a specific agreement covering the participation of the third country to any Union programme, provided that the agreement: (i) ensures a fair balance as regards the contributions and benefits of the third country participating in the Union programmes; (ii) lays down the conditions of participation in the programmes, including the calculation of financial contributions to individual programmes, and their administrative costs; (iii) does not confer on the third country any decision-making power in respect of the Union programme; (iv) guarantees the rights of the Union to ensure sound financial management and to protect its financial interests. The contributions referred to in point (d)(ii) of the first paragraph shall constitute assigned revenues in accordance with Article 21(5) of the Financial Regulation.

Article 6 Implementation and forms of Union funding 1. The Prog