EUROPEAN COMMISSION Brussels, 20.11.2015 COM(2015) 581 final 2015/0266(NLE) Proposal for a COUNCIL DECISION on the position to be taken on behalf of the European Union in the Association Council established by the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Moldova, of the other part



EXPLANATORY MEMORANDUM 1.CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal The attached proposal constitutes the legal instrument for establishing the Union position to be adopted on its behalf in a body set up by the Association Agreement between the European Union and the European Atomic Energy Comminuty and their Member States, of the one part, and the Republic of Moldova, of the other part ("the Agreement"). The Agreement was signed on 27 June 2014, and is provisionally applied, pending ratification by the Member States, since 1 September 2014. Council decision 2014/492/EU of 16 June 2014 approved the signing of the Agreement, on behalf of the European Union and the European Atomic Energy Community and their Member States, and the provisional application of certain provisions thereof. The Agreement established the Association Council, which is to supervise and monitor the application and implementation, as well as periodically review the functioning of the Agreement in light of its objectives. The Association Council is to adopt a decision on when the full implementation and enforcement of the Agreement is ensured on the entire territory of the Republic of Moldova. Consistency with existing policy provisions in the policy area This proposal implements the Union’s common commercial policy toward an Eastern Partner country, based on the provisions of the above-mentioned Agreement. It aims to ensure that the economic benefits of the Deep and Comprehensiev Free Trade Area apply to the entire territory of the Republic of Moldova. Consistency with other Union policies This proposal is consistent with and complements the other external policies of the Union, notably the European Neighbourhood Policy and the development cooperation policy in relation to the Republic of Moldova. 2.Legal basis, subsidiarity and proportionality Legal basis The legal basis for establishing the Union position to be taken in the bodies set up by the Agreement between the Union and the Republic of Moldova is the Treaty on the Functioning of the European Union, and in particular its Article 207(4) in conjunction with Article 218(9) thereof. Subsidiarity (for non-exclusive competence) The common commercial policy, in accordance with Article 3 of the TFEU, is defined as an exclusive Union competence. Therefore, the subsidiarity principle does not apply. Proportionality This proposal is necessary in order to implement the Union’s international commitments set out in the Agreement with the Republic of Moldova. Choice of instrument This proposal is in accordance with Article 218(9) TFEU, which envisages the adoption by Council of decisions. There exists no other legal instrument that could be used in order to achieve the objective expressed in this proposal.

3.RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS Ex-post evaluations/fitness checks of existing legislation Not applicable. Stakeholder consultations Stakeholder consultations are not applicable to this proposal. •Collection and use of expertise The Commission has taken into account the views of external experts and bodies assisting the Union in the implementation of the neighbourhood policy. Impact assessment The proposal relates to the implementation of the Agreement on the entire territory of the Republic of Moldova, which has been subject to ex-ante impact assessment in 2009, followed by the Commission DG Trade's Trade Sustainability Impact Assessment of 2012, which fed into the DCFTA negotiation process. Regulatory fitness and simplification The Agreement between the Union and the Republic of Moldova is not subject to REFIT procedures. Fundamental rights The proposal does not have negative consequences for the protection of fundamental rights. 4.BUDGETARY IMPLICATIONS Not applicable. 5.OTHER ELEMENTS Implementation plans and monitoring, evaluation and reporting arrangements The implementation of the Agreement is regularly reviewed by the EU-Republic of Moldova Association Council. The European Commission also committed to report annually on the implementation of Title V (Trade and trade-related matters) of the Agreement, to the European Parliament. Explanatory documents (for directives) Not applicable.

Detailed explanation of the specific provisions of the proposal The proposal aims to adopt a Union position in relation to the application of Title V (Trade and trade-related matters) of the Agreement on the entire territory of the Republic of Moldova. Article 462(2) of the Agreement provides that the application of Title V of the Agreement or of the entire Agreement on the entire territory of the Republic of Moldova is to start once the Republic of Moldova ensures full implementation and enforcement of Title V or of the Agrement in the areas over which the Government of the Republic of Moldova does not exercise effective control. The Republic of Moldova has informed the European Commission that it can ensure full implementation and enforcement of Title V of the Agreement starting on 1 January 2016. Accordingly, it is proposed that the Association Council adopts a decision as provided in Article 462(3) of the Agreement. 2015/0266 (NLE) Proposal for a COUNCIL DECISION on the position to be taken on behalf of the European Union in the Association Council established by the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Moldova, of the other part THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular the first paragraph of Article 207(4) in conjunction with Article 218(9) thereof, Having regard to the proposal from the European Commission, Whereas: (1)Article 464(3) and (4) of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Moldova, of the other part, ('the Agreement') provide for provisional application of the Agreement in part. (2)Article 3 of Council Decision 2014/492/EU of 16 June 2014 specifies the provisions of the Agreement to be applied provisionally, including the provisions of Title V (Trade and trade-related matters) of the Agreement. (3)Article 462 of the Agreement provides that the application of Title V of the Agreement in relation to those areas of the Republic of Moldova over which the Government of the Republic of Moldova does not exercise effective control is to commence once the Republic of Moldova ensures the full implementation and enforcement of Title V on its entire territory. (4)Article 462 of the Agreement further provides that the Association Council is to adopt a decision on when the full implementation and enforcement of Title V of the Agreement on the entire territory of the Republic of Moldova is ensured. (5)The Republic of Moldova has informed the European Commission that it can ensure full implementation and enforcement of Title V of the Agreement on its entire territory as of 1 January 2016. (6)It is necessary to monitor and regularly review the application of Title V of the Agreement to the entire territory of the Republic of Moldova. (7)It is therefore appropriate to determine the Union position in relation to the application of Title V of the Agreement on the entire territory of the Republic of Moldova, HAS ADOPTED THIS DECISION: Article 1 1.The position to be taken by the Union within the Association Council established by Article 434 of the Association Agreement between the European Union and the European Atomic Energy Community and their Member States, of the one part, and the Republic of Moldova, of the other part, in relation to the full implementation and enforcement and to the application of Title V (Trade and Trade-related matters) of the Agreement on the entire territory of the Republic of Moldova shall be based on the draft Decision of the Association Council attached to this Decision.