EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal

The European Medicines Agency has been established by Regulation (EEC) No 2309/93, which has been replaced by Regulation (EC) No 726/2004. In accordance with Article 1 of Decision of 29 October 1993 taken by common agreement between the representatives of the governments of the Member States, meeting at Head of State and Government level, on the location of the seats of certain bodies and departments of the European Communities and of Europol, the European Medicines Agency has its seat in London, United Kingdom.

On 29 March 2017 the United Kingdom notified to the European Council its intention to leave the Union, pursuant to Article 50 of the Treaty on European Union. On 20 November 2017, the 27 remaining Member States, in the margins of the General Affairs Council (Art. 50), selected Amsterdam, the Netherlands, as the new seat of the European Medicines Agency.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

The act to be amended being based on Articles 114 and 168(4)(c) of the Treaty on the Functioning of the European Union ("TFEU"), the amending act should be founded on that basis.

•Choice of the instrument

This proposal seeks the amendment of Regulation (EC) No 726/2004. The corresponding amendment is therefore proposed as an amending Regulation.

•Subsidiarity and Proportionality

The issue of the location of the seat of the Agency falls within the exclusive competence of the Union. The measure is proportionate to the purpose of the proposed Regulation, namely to confirm the new seat of the Agency within Regulation (EC) No 726/2004.

4.BUDGETARY IMPLICATIONS

The relocation of the European Medicines Agency will have budgetary implications, in particular in view of the costs related to the early termination of its current rental contract in London as a consequence of the withdrawal, the costs related to the move itself and the costs related to the installation in the new premises in Amsterdam. As set out in the negotiation directives of the Council of 22 May 2017 for the negotiation of an agreement with the United Kingdom setting out the arrangements for its withdrawal from the European Union, the United Kingdom should fully cover the specific costs related to the withdrawal process, such as the relocation of the agencies based in the United Kingdom.

Some of the relocation costs may have to be pre-financed by the EU budget, prior to the financial settlement. In this respect, the Commission will assess possible additional funding needs to be channelled through the EU budget in cooperation with the European Medicines Agency. As necessary, the Commission will present relevant proposals to the European Parliament and the Council in the context of the annual budgetary procedure for 2019, and if necessary for 2018. This concerns for instance the costs related to the move itself. In addition, the costs related to the installation in the new premises will also be presented in the context of the building procedure set out in Article 203 of the Financial Regulation, which requires prior approval from the European Parliament and the Council before contracts related to building projects are concluded. This procedure is expected to be launched as soon as possible (at the latest in early 2018).

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2017/0328 (COD)