EUROPEAN COMMISSION Strasbourg, 17.4.2018 COM(2018) 211 final COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE EUROPEAN COUNCIL AND THE COUNCIL Fourteenth progress report towards an effective and genuine Security Union



I. INTRODUCTION This is the fourteenth Progress Report on the progress made towards building an effective and genuine Security Union and covers developments under two main pillars: tackling terrorism and organised crime and the means that support them; and strengthening our defences and building resilience against those threats. The brutal attacks in Trèbes and Carcassonne, France, on 23 March 2018 are a reminder that the threat from terrorism remains high in the EU. As part of continued efforts in the Security Union to counter this threat, the Commission presented, together with this Progress Report, a new security package with measures to close down the space in which terrorists and other criminals operate, making it more difficult for them to plan and execute their heinous acts. It includes legislative proposals to improve cross-border gathering of electronic evidence and access to financial information for investigations and prosecution, in particular for serious crimes, also strengthening cooperation between Financial Intelligence Units and law enforcement authorities. The package also includes operational measures to prevent the access of terrorists and other criminals to imported firearms and explosives precursors that can be misused to make homemade explosives, as experienced in several recent attacks. Finally, a legislative proposal to improve the security of national identity cards and residence documents will make it more difficult for terrorists and other criminals to misuse or falsify such documents to enter or move within the EU. The 4 March 2018 attack in Salisbury has given a shocking example of the genuine threat chemical substances can pose to collective security. The 22-23 March 2018 European Council condemned the attack in the strongest possible terms. It underlined that, as part of the response, the EU must step up its resilience to chemical, biological, radiological and nuclear-related risks. This Progress Report sets out the measures that are being taken to that end, implementing the October 2017 Action Plan to enhance preparedness against these security risks. This Progress Report also provides an update on the implementation of other priority files in the Security Union, covering efforts to counter radicalisation online, to enhance information sharing, to support the protection of public spaces and to counter cyber threats. II. CLOSING DOWN THE SPACE IN WHICH TERRORISTS AND CRIMINALS OPERATE 1.New tools to gather electronic evidence in criminal proceedings Electronic evidence has become relevant in a large majority of criminal investigations and increasingly often, judicial authorities need to make a request in another jurisdiction in order to obtain necessary evidence from service providers. Making it easier and quicker to obtain this evidence across borders is therefore of crucial importance for investigating and prosecuting crime, including terrorism or cybercrime. To this end, the Commission presented, together with this Progress Report, two legislative proposals to improve the cross-border gathering of electronic evidence for criminal proceedings, namely a proposal for a Regulation on European Production and Preservation Orders for electronic evidence in criminal matters and a proposal for a Directive laying down harmonised rules on the appointment of legal representatives for the purpose of gathering evidence in criminal proceedings . The proposed Regulation and Directive will provide competent law enforcement and judicial authorities with new tools to obtain electronic evidence for the investigation and prosecution of crimes, including terrorism and cybercrime. With these proposals, the Commission is responding to calls from the European Parliament and the Council to put forward a legislative framework at EU level for measures to obtain electronic evidence across borders, along with robust safeguards to protect the rights and freedoms of individuals. The proposed Regulation provides for a European Production Order and a European Preservation Order. These Orders will allow competent authorities from one Member State to directly compel service providers (providers of electronic communications services and specific providers of information society services) established or represented in another Member State to preserve or produce existing electronic data for the investigation and prosecution of crimes falling within the scope of the Regulation, in a way that is proportionate and necessary in the individual case. In order to ensure compliance with these orders, the proposed Directive obliges service providers to designate at least one legal representative in the Union. In view of the borderless nature of the internet, the proposals cover relevant service providers that offer services in one or more Member States, irrespective of the location of their headquarters, their infrastructure or the storage of the information. The proposed Regulation provides strong safeguards to ensure full compliance with fundamental rights, such as the ex-ante involvement of judicial authorities and additional requirements for obtaining certain data categories. Moreover, since the Orders can only be issued in the framework of criminal proceedings and if provided for in comparable national situations, all criminal law procedural safeguards apply. In addition, the Regulation provides specific rules for effective remedies for individuals affected. The Regulation also includes a right for the service provider to request review in the issuing Member State or, if the Order is transmitted for enforcement, in the host Member State, on the basis of defined grounds. This includes cases where it is apparent that the Order was not issued or validated by a competent authority, is incomplete, manifestly violates the Charter of Fundamental Rights of the European Union or is manifestly abusive. In addition, the Regulation provides for mechanisms to avoid and mitigate potential conflicts with obligations that service providers may have under third countries' laws. The legislative proposals are based on a thorough impact assessment and have been informed by a two-year consultation process that has involved practitioners, citizens, service providers, governmental and non-governmental organisations and academics. The Commission has also participated in related discussions in the Council of Europe and has closely followed developments in non-EU countries, including the recent adoption by the United States Congress of the Clarifying Lawful Overseas Use of Data Act (CLOUD Act). The proposals adopted together with this Progress Report provide a basis for a coordinated and coherent approach both within the EU and by the EU at international level, with due regard to EU rules, including on non-discrimination between EU Member States and their nationals. The Commission also continues to participate actively in the discussions within the framework of the Council of Europe Convention on cybercrime. The Commission calls on the co-legislators to examine this proposed legislation, which is included in the Joint Declaration on the EU's legislative priorities for 2018-2019, without delay with a view to reaching swift agreement. In parallel to the legislative proposals, the Commission continues to work on practical measures to improve judicial cooperation based on Mutual Legal Assistance and the Directive on a European Investigation Order as well as the cooperation between authorities and service providers within the existing legal framework. These measures include training for authorities, fostering the use of single points of contact at national level and creating an online platform for the secure exchange of European Investigation Order requests and responses based on an electronic version of the European Investigation Order forms. The Commission is working closely with relevant EU Agencies and stakeholders to ensure their swift implementation. 2.Facilitating the use of financial information for the prevention, detection, investigation or prosecution of serious criminal offences Criminals and terrorists operate across different Member States and are able to transfer funds between different bank accounts in a matter of hours to prepare their acts or to move and launder proceeds of crime. Investigations into serious crimes and terrorism may come to a dead end because of failure to secure timely, accurate and comprehensive access to the relevant financial data. Given the importance of financial information for investigations, it is crucial to step up the cooperation between the authorities responsible for combating serious crime and terrorism and enhance their access to and use of financial information, in full respect of fundamental rights and the applicable procedural safeguards. To that end, the Commission adopted together with this Progress Report a proposal for a Directive to facilitate the use of financial and other information for the prevention, detection, investigation or prosecution of serious criminal offences. The proposal, based on a thorough impact assessment, gives designated law enforcement authorities and Asset Recovery Offices direct access to bank account information held in national centralised bank account registries and data retrieval systems as established under the Anti-Money Laundering Directive. Such access will be granted on a case-by-case basis for the purposes of combating serious crime. This will also considerably decrease the administrative burden on financial institutions which will no longer have to respond to blanket requests for information from law enforcement authorities. The proposal further strengthens cooperation between national Financial Intelligence Units and law enforcement authorities, as well as between Financial Intelligence Units in different Member States. In addition, Member States will need to ensure that their Europol National Unit replies to requests by Europol for information contained in centralised bank account registries and for financial information and financial analyses. Requests made by Europol will have to be duly justified and provided on a case-by-case basis, within the limits of Europol's responsibilities and for the performance of its tasks. Better access by law enforcement authorities to financial data and better cooperation with Financial Intelligence Units will speed up investigations and enable the authorities to combat cross-border crime more effectively. Europol will also be able to enhance its support to Member States in fighting criminal offences falling within Europol’s competence. In order to comply with the fundamental rights to the protection of personal data and to privacy, the proposal for a Directive provides for strict safeguards for the processing of personal data. The Commission calls on the co-legislators to examine the proposal, which is included in the Joint Declaration on the EU's legislative priorities for 2018-2019, without delay in order to reach swift agreement. The Commission also reiterates the importance of fully implementing and applying the Fourth Anti-money Laundering Directive and the tools it provides to counter money laundering and terrorist financing. This includes the need to provide Financial Intelligence Units with adequate resources to fulfil their tasks. Moreover, the amendment to the Fourth Anti-money Laundering Directive – politically agreed by the co-legislators in December 2017 – requires the Commission to submit, by June 2020, a report to the European Parliament and to the Council assessing the possible future interconnection of centralised bank account registries. The Commission is carrying out a study to that end and will present its findings by mid-2019. 3.Strengthened rules against explosives precursors used for homemade explosives Terrorists and criminals have used homemade explosives in many attacks in the EU, including those in Madrid (2004), London (2005), Paris (2015), Brussels (2016), Manchester (2017) and Parsons Green (2017). An even higher number of failed and foiled attacks also involved the attempted use of homemade explosives. These attacks underline the need to restrict as much as possible terrorists' access to and use of explosives precursors that can be misused to make homemade explosives. To that end, the Commission adopted, together with this Progress Report, a proposal to revise and strengthen the existing restrictions of Regulation 98/2013 on the marketing and use of explosives precursors. This follows up on the Commission Recommendation of October 2017 that set out immediate actions to prevent misuse of explosives precursors on the basis of existing rules. The proposal is based on a number of consultations of different stakeholder groups and a thorough impact assessment. Under the 2013 Regulation, the making available, introduction, possession and use of certain explosives precursors is restricted and suspicious transactions need to be reported. Although these restrictions and controls have helped to decrease the amount of explosives precursors available to the general public and led to an increase in the number of reports on suspicious transactions, they have proven to be insufficient to prevent the misuse of these substances by terrorists and criminals to produce explosives.

The Commission's proposal will help to close these security gaps and to strengthen and clarify the legal framework. The proposed Regulation (that will replace the previous Regulation of 2013) will aim to further restrict access to dangerous explosives precursors for the general public through a number of measures. It will add two additional substances to the list of restricted explosive precursors, limit the possibility to apply for a licence to fewer substances, and reinforce mandatory checks of the applicant's criminal records. The registration system of the 2013 Regulation will be discontinued given that it provides less security. Moreover, the proposal clarifies that rules applicable to economic operators will also fully apply to online sales. The proposed Regulation will improve enforcement by the competent authorities and the transmission of information along the supply chain. In doing so, the proposed Regulation will make it significantly more difficult for terrorists to produce home-made explosives. The Commission invites the co-legislators to examine the legislative proposal without delay in order to reach swift agreement. 4.Improved security of identity cards and residence documents to prevent document fraud and the use of false identities As demonstrated by the European Border and Coast Guard Agency's statistics on fraudulent documents, national identity cards with weak security features are the most often fraudulently used travel documents within the EU. As part of the European response to travel document fraud set out in the December 2016 Action Plan, the Commission adopted together with this Progress Report a proposal for a Regulation to strengthen the security of identity cards issued to Union citizens and of residence documents issued to Union citizens and their family members. In accordance with EU free movement law, EU citizens can use national identity cards as travel documents, both when travelling within the EU and when crossing the EU external borders to return to the EU. In certain cases, EU citizens can use national identity cards in order to enter third countries. Residence cards of non-EU family members used together with a passport grant the right to enter the EU without a visa when accompanying an EU citizen. EU law already provides for standards for security features and biometrics (facial image and fingerprints) in passports and travel documents issued by Member States. Enhancing the security features of identity cards and residence documents will make it more difficult for criminals to misuse or falsify such documents to move within the EU or cross the EU external borders. More secure identity documents will contribute to strengthening EU external border management (including as regards the challenge of returning foreign terrorist fighters and their family members), while at the same time, more secure and reliable documents will make it easier or EU citizens to exercise their free movement rights. The Commission proposal, based on a thorough impact assessment and public consultation, therefore sets out minimum document security standards for national identity cards, including in particular a biometric photo and fingerprints to be stored in a chip on the identity card. The proposal also foresees minimum information to be provided on the residence documents issued to mobile EU citizens, as well as full harmonisation of the residence cards of non-EU family members. The Commission calls on the co-legislators to examine the legislative proposal without delay in order to reach swift agreement. 5.Improving controls on firearms import and export to prevent illegal firearms trafficking The Commission has taken a range of actions to restrict the supply of firearms available to criminals and terrorists. To complement action against firearms trafficking and the May 2017 revision of the Directive on the control of the acquisition and possession of firearms, the Commission adopted together with this Progress Report a Recommendation calling for immediate steps to improve the security of export, import and transit measures for firearms for civilian use, their parts and essential components and ammunition. The Recommendation calls for action on the part of EU Member States to improve the traceability and security of export and import control procedures for firearms and the cooperation between authorities in the fight against firearms trafficking. This Recommendation follows up on the December 2017 Commission report on the implementation of Regulation No 258/2012 on firearms exports and imports. The report concluded that it is necessary to strengthen the system of export and import authorisations on firearms to control the conditions for legal trade and therefore better fight illegal firearm trafficking. The Commission will monitor the result of this Recommendation which will feed into the overall monitoring of the implementation of Regulation No 258/2012. III. IMPLEMENTATION OF OTHER PRIORITY FILES ON SECURITY 1.Countering terrorist content online As set out in the Commission Work Programme for 2018 and in previous Security Union Progress Reports, the Commission is promoting and stepping up cooperation with internet platforms to detect and remove terrorist and other illegal content online. On 1 March 2018, the Commission took another important step to tackle the urgent and serious issue of terrorist content online, with the adoption of a Recommendation on measures to be taken by online service providers and Member States to enhance efforts in relation to illegal content online, including in particular terrorist content. Building on the September 2017 Communication on tackling illegal content online, the Recommendation urges online service providers to ensure faster detection and removal of illegal content online, to reinforce co-operation between online service providers, trusted flaggers and EU law enforcement authorities, to increase the transparency of reporting to public authorities and to ensure safeguards for the fundamental rights of citizens. The Recommendation provides operational guidance to online service providers to take down terrorist content more quickly and to cooperate better with law enforcement. Given that terrorist content is typically most harmful in the first hour of its appearance online, and given the specific expertise and responsibilities of competent authorities and Europol, the Recommendation stresses that content identified in referrals should be assessed by online service providers and that, where appropriate, they should remove or disable access to it within one hour, as a general rule. It also recommends to platforms to be proactive and use automated tools to detect and identify terrorist content, and calls on them to use available technological tools to ensure that such content is not re-uploaded on other platforms. A reporting exercise is now underway to allow for the monitoring of the effects given to the Recommendation. The information expected to be received from online service providers by early May 2018 will help the Commission decide whether the current approach is sufficient, or whether additional measures are needed, in order to ensure the swift and proactive detection and removal of illegal content online, including possible legislative measures to complement the existing regulatory framework. 2.Towards the interoperability of information systems and improved information exchange Working towards stronger and smarter information systems for security, border and migration management, the EU is addressing shortcomings in EU information management and sharing as a matter of urgency and as a top priority. All related legislative proposals are included in the Joint Declaration on the EU's legislative priorities for 2018-2019. Discussions between the co-legislators on the legislative proposals on the interoperability of EU information systems are advancing. Following the Justice and Home Affairs Council of 8 March 2018 where Member States expressed broad support for the interoperability components as proposed by the Commission, the Council aims to reach a general approach by June 2018. Technical discussions are also advancing swiftly at the European Parliament, with a view to entering into trilogue discussions with the co-legislators by July 2018 and reaching an agreement before the end of the year. For that, and as announced in December 2017, it is necessary to present relevant amendments to the interoperability proposals relating to those legal instruments that are currently under negotiations by the co-legislators. Given the shared objective of reaching agreement on the interoperability proposals before the end of 2018 as set out in the Joint Declaration on the EU's legislative priorities for 2018-19, this in turn requires reaching swift agreement on those files that are still under negotiation. In any case, the Commission will present, by mid-June 2018, all necessary amendments to its interoperability proposals to allow trilogues to commence by July 2018. The interinstitutional negotiations on establishing a European Travel Information and Authorisation System (ETIAS) are in their final stages and the adoption should take place in the coming weeks. Intensive work is undertaken to advance trilogue negotiations between the co-legislators on the three legislative proposals to strengthen the Schengen Information System (SIS), in view of reaching a political agreement. The Commission calls on the co-legislators to reach agreement on the proposals by the end of May 2018. In parallel to this legislative work, the Automated Fingerprint Search (AFIS) functionality was launched on 5 March 2018 to strengthen the Schengen Information System in its current form. This technical improvement brings immediate and significant added-value to the work of border guards and law enforcement officers as it allows them to search the system by fingerprints to identify those entering or moving within the Schengen area. This constitutes a major milestone for security in the Schengen area as criminals using multiple or fraudulent identities will be more easily identified. As of this date, each newly created fingerprint record is checked against all existing SIS records to detect multiple identities. Moreover, the eleven Schengen States participating in the first phase of this project now carry out searches with fingerprints. The new legal framework for SIS as proposed by the Commission, builds on the AFIS functionality, as it will provide for mandatory fingerprint checks if the identity of the person cannot be ascertained otherwise. The Commission calls on all remaining Member States to take the necessary steps to use the new functionality for primary checks at border crossings as well as for police checks within the territory. As another step to strengthen the use of the Schengen Information System, the Commission adopted together with this Progress Report a new version of the existing catalogue of recommendations and best practices emerging from Schengen evaluations in 2016 and 2017. Trilogue negotiations between the co-legislators also continue on the proposals to facilitate the exchange of criminal records of third-country nationals in the EU through the European Criminal Records Information System and to strengthen the Agency for the operational management of large-scale IT systems in the area of freedom, security and justice (eu-LISA). As part of the work to strengthen existing information systems and their interoperability, the Commission will present later in spring 2018, based on technical studies and an impact assessment, a proposal for the revision of the Visa Information System (VIS) to contribute to enhanced security at the external borders and within the Schengen area. The upcoming revision of the VIS legal framework will include specific interoperability measures to increase the efficiency of visa processing and is also planned to address other issues identified in the 2016 evaluation of the VIS.