TABLE OF CONTENTS

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Lead DG Home Affairs.............................................................................................................. 7

1........... Background and policy context.................................................................................... 7

1.1........ Legal context................................................................................................................ 7

1.2........ Broader context / contextual drivers of the review...................................................... 8

1.3........ Procedural issues and consultation of interested parties.............................................. 9

1.3.1..... Consultation and expertise........................................................................................... 9

1.3.2..... The Impact Assessment Board................................................................................... 10

1.4........ Disclaimer on the data used by the IA....................................................................... 11

2........... Problem definition...................................................................................................... 12

2.1........ Outcome of the evaluation......................................................................................... 12

2.2........ Problem drivers........................................................................................................... 13

2.3........ What are the main issues that may require action?..................................................... 15

2.3.1..... Problem area 1: The overall length and costs (direct and indirect) as well as the cumbersome nature of the procedures................................................................................................................... 15

2.3.1.1.. The overall length of the procedure............................................................................ 15

2.3.1.2.. The cumbersome nature of the procedure................................................................... 16

2.3.1.3.. The overall cost of the visa procedure for applicants and consulates......................... 18

2.3.2..... Problem area 2: Insufficient geographical coverage in visa processing...................... 19

2.3.3..... Problem area 3: Lack of visa or other authorisation allowing travellers to stay more than 90 days in any 180-day period in the Schengen area................................................................................. 21

2.4........ Main consequences of the problems........................................................................... 23

2.5........ The problem tree......................................................................................................... 24

2.6........ Who is affected?......................................................................................................... 26

2.7........ International outlook.................................................................................................. 26

2.8........ How would the problems evolve without any action? (The baseline scenario).......... 27

2.8.1..... Drivers........................................................................................................................ 27

2.8.2..... Problems..................................................................................................................... 29

2.8.3..... On the security and economic growth........................................................................ 30

2.9........ Does the EU have the power to act? (Legal basis and the principle of subsidiarity). 31

3........... Objectives................................................................................................................... 32

4........... Policy options............................................................................................................. 32

4.1........ Discarded options....................................................................................................... 32

4.2........ Presentation of the policy options.............................................................................. 34

4.3........ Further explanation of the policy options related to problem area 1.......................... 39

5........... Analysis of the impacts of the policy options............................................................. 40

5.1........ Status quo (0).............................................................................................................. 41

5.2........ Non-regulatory package (A)....................................................................................... 41

5.3........ Minimum regulatory package (B)............................................................................... 42

5.4........ Intermediate regulatory package (C).......................................................................... 44

5.5........ Maximum regulatory package (D).............................................................................. 47

6........... Comparing the policy options..................................................................................... 49

6.1........ Conclusion.................................................................................................................. 51

7........... Evaluation and monitoring......................................................................................... 51

ANNEX 1: Abbreviations........................................................................................................ 54

ANNEX 2: Visa Glossary......................................................................................................... 55

ANNEX 3: Short overview of main visa statistics................................................................... 58

ANNEX 4: Summary of the public consultation...................................................................... 66

ANNEX 5: Summary of the stakeholder consultations carried out in the framework of the IA Study 69

ANNEX 6: Short overview of the visa processing of certain non-Schengen countries........... 71

ANNEX 7: Practices to overcome the 90 days in any 180-day period 'limitation'.................. 74

ANNEX 8: The nature of economic benefits and the approach to the estimates of financial and economic impacts of the policy options...................................................................................................................... 76

Executive Summary Sheet

Impact assessment on the proposal for a Regulation of the European Parliament and of the Council on a Union Code on Visas (Visa Code) (recast)

A. Need for action

Why? What is the problem being addressed?

Visa applicants and several interest and advocacy groups claim that the Schengen visa application process deters third-country nationals from travelling to the Schengen area, which ultimately leads to considerable economic loss for Schengen States. Further analysis of this claim led to the identification of two main problem areas: (1) the overall length and cost as well as the cumbersome nature of the procedure (2) the lack of access to consulates (or external service providers) to lodge the visa application because the competent Schengen visa issuing entity is not present in the third country poses a costly and time-consuming barrier. Finally, a third and specific problem has also been identified and dealt with in the Impact Assessment (IA): lack of authorisation for third-country nationals (TCNs) – whether visa requiring or visa exempted - who have a legitimate reason and need for travelling in the Schengen area for more than 90 days in any 180-day period without being considered as "immigrants".

What is this initiative expected to achieve?

The general policy objectives of the proposal are: to foster economic growth in the EU; to ensure more coherence with other EU policies and to maintain the security of the Schengen area. The specific objectives are: to move towards a truly harmonised, genuinely common visa policy; to tailor visa procedures more to the needs of legitimate travellers; and to make the visa procedure more efficient by streamlining the rules. The operational objectives are: to provide mandatory procedural facilitations for "well-known" travellers by making use of the possibilities offered by the Visa Information System (VIS); to increase and rationalise the visa collecting/processing presence in third countries; - to provide the possibility of stays exceeding 90 days in a 180-day period in the Schengen area.

What is the value added of action at the EU level?

The problems described in the IA are unlikely to disappear in the future and they have a negative impact on the EU. Some progress can be achieved by enforcing correct implementation of the Visa Code. However, introducing procedural facilitations in a harmonised manner for travellers with the aim of fostering economic growth and achieving more coherence with other EU policies as well as reaching considerable progress in increasing the geographical coverage in visa processing requires EU action, i.e. a review of the Visa Code. As regards establishing a new authorisation the need and value added for intervention at EU level is equally clear: any authorisation which would be valid in all of the Schengen States can only be introduced at EU level.

B. Solutions

What legislative and non-legislative policy options have been considered? Is there a preferred choice or not? Why?

Both non-regulatory and regulatory options have been considered for all three problem areas. The non-regulatory package envisages guidelines and best practices regarding problem areas 1 and 2. Problem area 3 cannot be tackled with non-regulatory measures, since the problem driver is a legislative gap. The regulatory options were organised into three different packages – minimum, intermediate and maximum - according to the level of ambition/feasibility of the options. As regards problem area 1, the underlying logic of the proposals in all regulatory packages is to distinguish - on the basis of objective criteria - between unknown applicants and those with a positive visa record in the VIS and to make the issuing of multiple-entry visas (MEVs) with a long period of validity and procedural facilitations mandatory for the second category. The IA is inconclusive with regard to whether the proposal in the intermediate package or in the maximum package should be the preferred option. This is because the very high potential economic impact of the proposal in the maximum package is associated with a potentially higher security risk. The proposal in the intermediate package is associated with a low security risk, but its potential economic impact is also estimated to be less. With regard to problem areas 2 and 3 the options identified in the intermediate package are the preferred ones: introduction of the concept of the "Schengen Visa Centre" plus "mandatory" representation and the establishment of a new legal framework authorising stays for a period longer than 90 days for all TCNs.

Who supports which option?

Many Schengen States are looking in principle favourably upon harmonising procedural facilitations and agree that boosting the issuing of MEVs with long(er) validity is good for both the applicants and Schengen States. However, the larger the scope of facilitations and beneficiaries, the lower their support. Their support for the options which seek to address the issue of geographical coverage appears not to be high, but they do support the revision of the definition of co-location and common application centres. Finally, regarding the introduction of a new type of authorisation, the majority of them are not convinced of the need to act given the limited group of applicants it would concern. Visa applicants, NGOs, interest groups, business and professional organisations support the mandatory issuing of MEVs with long(er) validity and the introduction of procedural facilitations. The broader the beneficiaries and scope are defined, the better for these stakeholders. They are in favour of any measure which leads to better geographical coverage in visa collecting/processing and they welcome the introduction of a new type of authorisation.

C. Impacts of the preferred option

What are the benefits of the preferred option (if any, otherwise main ones)?

Irrespective of the fact that there is no preferred option regarding problem area 1, it is clear that the procedural facilitations and in particular increasing the issuing of MEVs with long validity has the potential to lessen the administrative burden of consulates and at the same they provide a very important facilitation to travellers. By making the Schengen area an even more attractive destination, the options would increase the overall number of trips of visa-obliged TCNs whose spending would have a positive impact on the EU economy. As regards problem area 2, the concept of “mandatory representation” would considerably increase the visa issuing presence in third countries. It would secure consular coverage in any third country where there is at least one consulate processing visa applications. This concerns some 900 'blanks spots' and could have a positive impact on some 100 000 applicants who would be able to lodge the applications in their country of residence instead of having to travel to a country where the competent Schengen State is present or represented. Finally, the introduction of a new authorisation for stays for a period exceeding 90 days for all TCNs would affect some 120 000 travellers, which at most could lead to an estimated EUR 1 billion additional income to the Schengen area.

What are the costs of the preferred option (if any, otherwise main ones)?

In principle, neither the preferred policy options nor the ones about the issuing of MEVs with long(er) validity have considerable cost implications. In fact, one of the driving forces behind these options is to generate savings for both the Schengen States/consulates and the visa applicants. Schengen States can be expected to lose some money on visa revenues (fees) due to the declining number of visa applications generated by the issuing of MEVs with long validity, but this would also lower the costs as less visa applications would need to be processed. The financial impact of the "mandatory representation" and the introduction of the new type of authorisation are expected not to be significant.

How will businesses, SMEs and micro-enterprises be affected?

Businesses, in particular in the tourism and hospitality sector, will be affected due to the increase of international travellers/trips of TCNs. A large part of the expenditure of the visitors generated by the measures to be introduced will be used to purchase accommodation, food, drink and transport services. Some European companies, SMEs, etc. having visa-obliged TCN business partners could be positively affected, as their business partners would have an easier and facilitated access to the Schengen area.

Will there be significant impacts on national budgets and administrations?

No. (Cf. the reply to the costs.)

Will there be other significant impacts?

Increasing people-to-people contacts have a positive impact on socio-economic and political relations with third countries; it promotes mutual understanding and strengthens civil society. None of the policy options have an impact on fundamental rights.

D. Follow up

When will the policy be reviewed?

Three years after the entry into force of the revised Visa Code, the Commission will present an evaluation report.

Lead DG: Home Affairs

1. Background and policy context

1.1. Legal context

The abolition of checks at internal borders of the states forming part of the Schengen area[1] (hereinafter: Schengen States[2]) is one of the most valued achievements of EU integration and the common visa policy for short-stay (so-called Schengen) visas[3] - up to 90 days in any 180-day period - was a fundamental pre-condition for the creation of this common area. It has been developed as one of the "flanking measures" (together with e.g. a harmonisation of the external border controls, enhanced cross-border police cooperation, and the creation of the Schengen Information System) that should counter-balance risks that might flow from the establishment of an area without internal borders.

The visa policy serves various objectives, in particular preventing irregular immigration as well as safeguarding public order and security. Until now, it is generally accepted – both by Schengen States and citizens - that as a result of these flanking measures a high level of security is ensured in the Schengen area.

In general, a visa requirement is accepted worldwide as a tool for States or groups of States such as the EU, to tackle different kinds of security threats. That is also the reason why the EU, as long as it is a destination for irregular migrants and subject to security threats, will maintain a visa requirement for citizens of a series of third countries.

The harmonised rules governing the common visa policy (i.e. Regulation 539/2001 establishing the common "visa lists"[4]; Regulation 810/2009, the Visa Code establishing the procedures and conditions for issuing short-stay visas[5] /hereinafter: the Visa Code/; Regulation 1683/95 laying down a uniform format for the visa sticker[6] and Regulation 767/2008 establishing the Visa Information System[7]) allow the Schengen States to mutually recognise visas issued by other Schengen States. The decision to issue a visa is a decision taken by national authorities however taking into account the interest not only of the Schengen State in question but of all Schengen States who have abolished internal border control. Therefore, the holder of a visa issued by Schengen States' individual consulates, as a general rule, is entitled to circulate in the entire Schengen area.

In other words, the visa acquis[8] has not introduced a "truly" EU/Schengen visa per se, which would be issued by EU/Schengen visa offices, but mutual recognition of each other's visas. In general, the conditions for issuing visas are based on the entry conditions set out in Article 5 of Regulation (EC) No 562/2006[9] (hereinafter: Schengen Borders Code). Annex 2 provides a glossary regarding the main components and instruments of the common visa policy.

The Visa Code[10] is a core element of the common visa policy: it establishes harmonised procedures and conditions for processing visa applications and issuing visas. It entered into force on 5 April 2010, with the overarching objectives of facilitating legitimate travel and tackling irregular immigration as well as reinforcing the coherence of the common visa policy, enhancing transparency and legal certainty, strengthening procedural guarantees and reinforcing equal treatment of visa applicants.

The Visa Code (Article 57) requires the Commission to send the European Parliament and the Council an evaluation of its application two years after all the provisions of the Regulation have become applicable[11]. On the basis of the evaluation, the Commission may submit, if necessary, appropriate proposals with a view to amending the Visa Code. The present Impact Assessment (hereinafter: IA) is based on that evaluation report.[12] It further examines certain key problem areas and identifies appropriate policy options and assesses their impacts with a view to a proposal amending the Visa Code.

1.2. Broader context / contextual drivers of the review

The number of third-country nationals (hereinafter: TCNs) – including TCNs from countries whose nationals must be in possession of a visa - who can afford and wish or need to travel to the Schengen area is increasing: the number of travellers from Russia for instance has more than doubled in recent years and traveller flows from China and India are increasing rapidly, too.

This can be clearly seen from the visa statistics. The number of Schengen visas applied for has increased steadily over the last years: from ca. 10 million visas applied for in 2009 to more than 15 million applications in 2012 which represents an increase of 50% and makes the Schengen area the world's biggest visa processing "entity". Detailed statistics can be found in Annex 3. The increasing number of applications would require an increase in the visa processing capacity of consulates. However, given the pressure to restrain public expenditure, Schengen States reported that in many third countries they are not able to increase their visa processing capacity proportionally to the increase of the number of applications.

The World Travel Market Ministers’ Summit in London noted in November 2012 that visa procedures still present barriers to travel, while research by Tourism Economics reveals that "visa facilitation"[13] has historically increased international tourist arrivals of affected markets by 5-25% following the implementation of policy changes[14]. Tourism generates income and has an immediate and direct effect on employment. Therefore, when considering any changes in the common visa policy, it is important to keep in mind the economic interests of the EU and the growth objectives of the Europe 2020 strategy.

Facilitating people-to-people contacts by introducing procedural facilitations for travellers would result in achieving more coherence between the visa policy and the EU policies in other areas such as tourism, trade, external relations, education and culture[15]. Increasing mobility is an important component of strengthening ties with the neighbours of the EU and strategic partners; the revised European Neighbourhood Policy explicitly foresees increased mobility and underlines that "mobility and people-to-people contacts are fundamental to promoting mutual understanding and economic development"[16].

Important economic benefits derive, for example, from the numerous European festivals and from flagship European initiatives like the European Capitals of Culture that, as a rule, include TCNs in their programmes. These events raise the international profile of European cities and boost tourism. Visa processing delays or difficulties sometimes result in the cancellation of performances and severe financial losses for the artists themselves and for the European inviting organisations/venues.

In conclusion, the common visa policy can foster economic growth by making the Schengen area an even more attractive destination for TCNs by facilitating their travel while maintaining the high level of security of the area. The full roll-out of the Visa Information System (hereinafter: VIS), meaning collection and storage of visa applicants' data, including fingerprints, and the setting up of the Entry/Exit System proposed by the Commission in February 2013[17] (hereinafter: EES) will provide an additional layer of security, while the proposed Registered Traveller Programme[18] (hereinafter: RTP) once implemented will contribute to making the Schengen area a more open, visitor-friendly destination by facilitating the crossing of external borders.

The revision of the Visa Code should also contribute to these objectives by translating them into concrete legislative measures.

1.3. Procedural issues and consultation of interested parties

1.3.1. Consultation and expertise

The IA is based on a series of studies, reports, consultations and workshops of which only the most relevant ones are highlighted below.

An on-line public consultation on the implementation of the Visa Code seen from the applicants' point of view ran for 12 weeks[19]. Interest groups, advocacy groups and professional organisations were invited to send their contributions while individual travellers were invited to respond to a detailed questionnaire. In total, 1084 responses were received to the questionnaire and almost 40 contributions from a wide range of stakeholders, such as artists, youth, seafarers, business associations and academics[20]. The main results of the consultation are summarised in Annex 4.

External studies were also carried out, one of which was specifically commissioned for the purposes of the review of the Visa Code (hereinafter: IA Study[21]). A summary of the stakeholder consultation carried out in this framework is provided in Annex 5. DG Enterprise ordered a study focusing on the economic impact of visa facilitation on the tourism industry and on the economies of Schengen States (hereinafter: Economic Impact Study[22]). Finally, a separate study has been looking at the provision to providing information to the general public on visa application procedure.

Account has also been taken of several discussions with Schengen States' delegates in the Council Visa Working Party and in the Visa Committee as well as of findings of experts in the Schengen evaluation missions. Consulates of the Schengen States in third countries were also consulted via EU Delegations.

A thematic seminar on artists' mobility and visas organised by DG Education and Culture under the Council Work Plan for Culture 2011-2014 was held on 23 April 2013 in Brussels. Account has also been taken of the findings of surveys carried out by the OECD on the impact of visa facilitations on tourist flows. In the framework of the Joint Committees set up under the various Visa Facilitation Agreements between the EU and third countries (hereinafter: VFAs) the third countries concerned have expressed their views also on the implementation of the Visa Code. In general, third countries have also used various meetings with the EU/the Commission to raise issues with regard to the visa application process, e.g. in the context of the ACP-EU framework or in JLS Subcommittees with regard to ENP partner countries.

Finally, an Inter-Service Steering Group was convened involving 15 Services[23] of the Commission and the European External Action Service in view of contributing to the IA. Meetings took place on 19 February, 19 April, 17 June and 8 July 2013. The feedback received from the services involved has been taken into account during the preparation of the report.

1.3.2. The Impact Assessment Board

The Commission’s Impact Assessment Board (IAB) was consulted on the draft final IA report and issued its opinion on 9 September 2013.[24] The IAB issued a positive opinion but also formulated a number of recommendations, which have been taken into account in this report. The main recommendations were: (1) recall the overall objective of the visa policy and further specify and substantiate the concrete problems; (2) strengthen the baseline scenario by outlining how security and economic growth will develop in case of no further action, including a robust outlook of the effects of on-going policy developments such VIS, EES or the RTP; (3) better justify discarding potentially feasible policy options from the outset (e.g. increasing visa application fees or the introduction of a fast-track premium system); (4) better explain the methodology underpinning the comparison of options and the underlying calculations of economic benefits; (5) more clearly indicate the views of Member States and stakeholders.

1.4. Disclaimer on the data used by the IA

Serious efforts have been made in order to collect hard data, facts and figures in order to build a robust baseline as well as to quantify the volume of the problems and potential impacts of the policy options. It must be acknowledged however that data are missing with regard to many issues. Even basic ones that might be assumed to be easily available are not, such as how many visas were applied for different travel purposes (e.g. tourism, business, family visits), statistics based on the nationality of the applicants or the length of validity of multiple-entry visas (hereinafter: MEVs). With regard to the issues of costs and length of the procedure and on the subject of administrative burdens for the Schengen States, even less reliable data is available. The Visa Code does not require Schengen States to collect such data and many of them do not have them easily available.

There are several reasons behind the lack of reliable data, one of which is that until recently the security related objectives were the focus of the legislative procedure, i.e. fight against irregular immigration by harmonising the conditions and procedures of processing visas. Before the economic crisis, the financial and economic impacts of the initiatives, the issue of costs and administrative burden were considered secondary. Even for security, the legislation in force does not foresee appropriate indicators to be collected from the Schengen States or from other sources. It is internationally acknowledged that it is very difficult to determine quantifiable indicators in this area. Many times, common sense and instincts should apply.

It must be noted that there are 26 Schengen States having more than 2000 Schengen visa issuing consulates in approx. 170 countries. Operating costs differ from Schengen State to Schengen State, third country to third country and consulate to consulate. The most important cost components relate to the premises, personnel, operating and security-related equipment. It is very difficult to separate the visa processing from other tasks carried out by embassies/consulates. The visa section is usually located in the building of the embassy/consulate general; even if it is physically separate, the personnel carries out many other tasks not related to Schengen visa processing, such as consular assistance, classical administrative services for own nationals, processing of long-stay (D-type) visas, residence permits, etc. At smaller missions, consular staff also carries out diplomatic duties. Similarly, the equipment is not only used for issuing visas but also for managing other tasks, reception of own nationals, issuing of passports. The data gathered are not representative and vary considerably between Schengen States which means that the method of cost calculation (if any) also varies between Schengen States. A similar explanation applies to the costs on the applicants' side, which also depends on many factors such as the place of residence (i.e. distance to the competent consulate), the purpose and length of the intended trip, the visa history of the applicant, etc.

That is why it is rather difficult, if not impossible, to set "Schengen averages" regarding the overall length of the procedure, the cost of processing a visa for the Schengen States, or the "average" indirect costs to be borne by applicants. Most Schengen States do not even have specific statistics, only estimations regarding the revenues from the visa fee.

Finally, although the visa requirement and the additional "burdens" (whether real or perceived) of the visa process can indeed influence travel flows, providing quantifiable evidence to what extent there is such an impact is even more challenging than calculating the above mentioned "averages". There are many other factors influencing the destination choice, such as travelling costs, security and safety issues, available services in the country to be visited, exchange rates, etc.[25] Recent studies and researches only revealed little empirical evidence on this issue. Therefore it has been difficult to reliably estimate and quantify the scale of effects of certain proposals (particularly the economic and financial impacts).

2. Problem definition

2.1. Outcome of the evaluation

The main and overarching objectives of the Visa Code are facilitating legitimate travel and tackling irregular immigration (i.e. ensuring a high level of security in the Schengen area) through further harmonisation of the rules on processing visas. These objectives shall remain entirely valid today.

During the stakeholder consultation none of the stakeholders claimed that the level of security should be increased, let alone brought up evidence which would suggest that the current provisions of the Visa Code or their implementation induce security problems. Therefore, the IA does not analyse how to improve security and does not envisage policy options in this regard. The real issue at stake is to make sure that the current level of security – even if it is hardly possible to quantify it - is maintained when proposing any further actions.

As regards facilitating legitimate travel, while the increasing number of visa applications cannot be (solely) attributed to the changes brought by the Visa Code, it is fair to say that despite diverging practices and criticism, the situation is better now than before 2010. This has been confirmed by the Communication from the Commission to the Council and the European Parliament on the Implementation and development of the common visa policy to spur growth in the EU[26].

The evaluation report of the Visa Code concludes that the Visa Code clarifies and simplifies the legal framework for the common visa policy. It has greatly modernised and standardised the visa procedures and contains, if correctly implemented, the means to address many problems. However, the implementation of the legal provisions has not been optimal. This can be largely explained by the fact that in most cases the flexibilities are formulated as options ("may" clauses) rather than mandatory rules.

Whereas the provisions of the Visa Code that aimed at preserving the security of the external borders have proven to be consistent and effective and are still relevant, the provisions intended to offer procedural facilitations to specific categories of persons, and in the end would also ease the administrative burden for Schengen States' consulates, have not had the expected impact. The result is unsatisfactory not only for legitimate travellers but also for the Schengen States, and has impacted negatively on the general image of the common visa policy.

The Visa Code applies universally and its provisions apply to all persons who are nationals of countries subject to the visa requirement. Therefore, adaptation of certain provisions to match local circumstances is essential but the legal framework has never really been embraced at local level and only in very few locations has sustainable and continued cooperation been created, whereas in others certain legal obligations have sometimes simply been ignored. Despite the "common" visa policy, Schengen States still seem reluctant to cooperate and still seem to lack mutual trust.

For the purpose of the IA the main issues identified by the evaluation report can be grouped as follows:

(1) the overall length and costs as well as the cumbersome nature of the procedures;

(2) insufficient geographical coverage in visa processing;

(3) lack of visa or other authorisation allowing travellers to stay more than 90 days in any 180-day period in the Schengen area.

Stakeholder consultations and researches that were carried out during the preparatory works of the IA confirmed the relevance of these issues and have not revealed others which would require changes that would have measurable and considerable social, economic, administrative, etc. impact.

The evaluation report suggests that a number of minor and rather technical and/or editorial issues should also be addressed in a revision of the Visa Code. These concern several articles where adjustments are needed to ensure legal clarity and harmonised application taking account of the experience gained over the past three years. The IA does not cover these issues because the envisaged changes are not going to have considerable budgetary, social, economic, etc. implications; most of the initiatives shall only clarify or adjust/complement certain provisions without altering their essential elements. Nevertheless, several of these changes go in the direction of providing facilitations/clarifications for applicants, including "first time" applicants with no record in the VIS. Examples of this are lack of precise information to the public on the visa application procedure (including on procedures for appealing negative decisions) and unclear rules on the determination of the competent Schengen State.

2.2. Problem drivers

The most important driver of the costly, lengthy and cumbersome nature of the visa procedure, both for the applicant and for the consulates, is the fact that the same procedures are applied to all applicants, irrespective of their country of origin or of their individual situation. While putting even more emphasis on the presumption of risk associated with the applicant's nationality does not seem to be the way forward (cf. the opposite political signal in the Stockholm Programme[27] in particular), the Visa Code already provides a legal basis to apply procedural facilitations for applicants known by the consulates. However Schengen States do not make sufficient distinction between unknown applicants and those who have a positive visa record.

According to the Visa Code applicants known to the consulates for their 'integrity' and 'reliability' may benefit from certain procedural facilitations (waiving of the requirement to lodge the application in person and to submit certain/all supporting documents) and shall be issued MEVs (with a validity of up to 5 years), provided in the latter case that they also prove their need or intention to travel frequently and/or regularly.

Due to the extensive use of cooperation with external service providers[28] (hereinafter: ESPs) in many places the possibility of putting such distinction into practice is simply impossible because assessing the applicant's situation against rather vague notions such as 'integrity' and 'reliability' which cannot be done by ESPs. Even for the consulates, these provisions lack clarity and give too much margin of appreciation.

The provisions with regard to procedural facilitations are rarely applied by the consulates and their implementation is hardly enforceable. According to the result of the public consultation, 91% of frequent travellers claimed that they never have been offered any facilitation.

As regards the issuance of MEVs although there is a growing number of MEVs (42% of the visas issued in 2012), but the length of validity of the MEVs usually remains 6 months/1 year; practices are very restrictive when it comes to issuing MEVs for longer than that[29]. The outcome of the public consultation shows that the last visa received by ca. 65% of respondents was a MEV, 84% of these visas had validity shorter than 1 year (and 43% – shorter than 6 months). Less than 5% of MEVs issued exceeded the validity of 2 years.

Excerpt from a complaint letter received by the Commission:

"As an example, below is a listing of my Schengen Visas over the past 10 years:

[…]

Ten visas over a period of ten years are far too many. […] I fail to see the logic and value of issuing short term visas, if one repeatedly demonstrates that he/she has a stable life in his/her home country, has the means to cover travel expenses, has returned home within the stipulated duration, and in no way poses a security risk. […] I also applied to UK and USA visas in 2006 and 2010 respectively; and in both cases was issued 10 year multiple entry visas, as apparently I was able to satisfy whatever criteria these two countries were looking for. So I don’t have to worry about applying again for 10 years and this is what I would also expect in the case of Schengen States."

In addition to the regulatory problem mentioned above (cooperation with ESPs versus subjective conditions), granting of the procedural facilitations remains optional for the consulates ('may' clause) as far as the waiver of the requirement to lodge the application in person and the waiver of providing certain supporting documents is concerned. In particular, regular and frequent travellers are considered as the primary "victims" of the rare application of procedural facilitations.

Diverging interpretations and implementation by consulates exist regarding the above mentioned issues, even though clarification is already provided in the (legally non-binding) Handbook for the processing of visa applications[30] (hereinafter: Visa Code Handbook). Diverging implementation is a particular problem in relation to the documentary requirements, too. E.g. a survey of applicants in Ukraine[31] indicated that there are large differences between the number of supporting documents required by each consulate for the same purpose of travel (from 9-16 different documents).

Providing accurate and up to date information on the procedure can considerably facilitate the life of the applicants and consulates while the lack of easily accessible, precise information is a deterrent from the outset for potential travellers and create additional workload for consulates that should respond to many individual queries. The evaluation report shows that in general, precise and complete information regarding the procedure and in particular the supporting documents required by the consulates and the possibility for the applicants to apply for MEVs are rarely available.

2.3. What are the main issues that may require action?

2.3.1. Problem area 1: The overall length and costs (direct and indirect) as well as the cumbersome nature of the procedures

The issues related to the overall length, cost and the cumbersome nature of the procedure have been considered as one problem block as there is a considerable degree of overlap between them and certain policy options can have a positive effect on more than one of them.

2.3.1.1. The overall length of the procedure

When applicants claim that the visa application process is too lengthy, in the first place, they do not refer to the 15 calendar days deadline for taking a decision by the consulate but rather to the overall length of the application, including the preparation of the application file, the waiting time for receiving an appointment for lodging the application, the time for submission of the missing supporting documents (if there is a request from the consulate in this regard), the time for taking a decision as well as the time lapse between the decision and the receipt of the passport with or without the visa. The result of the public consultation shows that the time that lapsed between the first contact with the consulate/ESP and the moment the applicants could collect their passport was more than 10 days in 42% of the cases and exceeded 1 month in the case of almost one-fifth of the respondents.

More and more tourists tend to be late-bookers[32] which means that they apply for a visa just shortly before the intended trip. In addition, more and more travellers would like to go on several shorter trips rather than a long yearly holiday. According to travel agencies and tour operators many trips have to be cancelled because visas are not issued in time[33]. That is why it is not a surprise that the overall length of the procedure is considered one of the most important obstacles and subject of much criticism by visa applicants.

The survey carried out in the framework of the Economic Impact Study and the result of the public consultation show that the majority of the travellers (over 60%) considered the length of the procedure a problem to some or to a high degree. Certain groups (artists and culture professionals, business people[34]) referring to their "specific" situation (e.g. last minute invitations, replacements due to accidents or illness, as is frequently the case for touring artists) claim fast-track and/or urgency procedures. Despite the reasonable progress made by the Visa Code and the VFAs by setting deadlines[35], applicants prefer even shorter deadlines, while the Schengen States already find the existing ones very tight enough and have problems respecting them.

Peak seasons in visa applications present an additional challenge for several consulates as well as for visa applicants.

The length of the procedure depends to a high degree on the capacity of the consulates. In the first place it means personnel capacity but sometimes also the capacity of premises. According to Article 38(1) of the Visa Code, Schengen States shall deploy appropriate staff in sufficient numbers to carry out the tasks relating to examining applications, in such a way as to ensure reasonable and harmonised quality of service to the public. In times of budgetary constraints only few Schengen States are able to increase the consular staff proportionally to the increase of the number of applications and indeed are often compelled to cut personnel or even close consulates. In Germany for instance, while the number of visa applications increased by ca. 14 % between 2009 and 2012, there was a 6% decrease of consular staff processing visa applications[36]. While data is not available from other Schengen States, it is reasonable to assume similar trends.

Although, according to the Economic Impact Study, 86% of the 101 consulates interviewed process the application in compliance with the deadlines set in the Visa Code (in the majority of cases a decision is taken within 7 working days[37]), this does not exclude whatsoever that the overall length of the procedure on the applicants' side is considerably longer. Particularly the two weeks deadline for providing an appointment is a problem at several consulates. Almost 30% of the respondents to the public consultation noted that they did not get an appointment within that deadline.

During the stakeholder consultations carried out in the framework of the IA Study[38], all stakeholders acknowledged that probably the main problem of visa processing relates to the lengthiness of the procedure. NGOs, interest groups, business and professional organisations argued that applicants experience difficulties in getting an appointment to lodge a visa application, whilst Schengen States/consulates underlined that the examination and decision-making process is time-consuming and incurs high administrative costs. In this respect, both referred to external factors as well as internal (organisational) challenges. Externally, Schengen States/consulates are confronted with financial constraints following the economic crisis, which pose internal organisational challenges in relation to hiring (sufficient) staff resources. They acknowledge that inherently time-consuming procedures, a lack of sufficient staff and an increasing number of applications, contribute to lengthy visa processing procedures. The gravity of the problem differs from Schengen State to Schengen State since the number of visa applications do differ, too (cf. Annex 3).

2.3.1.2. The cumbersome nature of the procedure

Almost 60% of the respondents to the public consultation spent at least 5 days in total on applying for their latest visa. Bearing in mind that the majority of the respondents consider themselves frequent travellers, 5 days seem to be a lot and is a clear illustration of the cumbersome nature of the procedure. The most important time components are the time needed to collect the necessary supporting documents and the travelling time to the consulate/ESP to lodge the application in person.

As regards the documentary requirements, the Visa Code introduced new provisions for the harmonisation of documents to be submitted when lodging an application, and the Commission has already adopted several implementing decisions[39] establishing the harmonised lists of supporting documents to be presented by visa applicants in various third countries. Moreover, according to Article 14(6) of the Visa Code, consulates may waive one or more supporting documents in the case of an applicant known to them for his 'integrity' and 'reliability', in particular based on the lawful use of previous visas, if there is no doubt that he will fulfil the entry conditions. As mentioned earlier, in particular, due to the widespread use of outsourcing and cooperation with commercial intermediaries, the implementation of this provision is practically impossible in many places.

The survey carried out in the framework of the Economic Impact Study and the result of the public consultation confirms that the current requirements are still very burdensome. 45% of the respondents to the public consultation considered that they have been asked for a supporting document which seemed irrelevant or unnecessary for the purpose of assessing the application. Although it is not for the applicant to make a final judgment on this issue, sometimes even the consulates have difficulties in explaining why they request a specific document ("because it must be in the file"). In addition, only 9,4% of respondents considering themselves as frequent travellers have experienced facilitations regarding documentary evidence.

The lack of information on the precise list of supporting documents to be submitted has also been criticised by applicants. Should there be some missing documents, the consulate is not obliged by the Visa Code to call the applicant to submit them. In such cases, since one or more of the entry conditions were not met, a visa can be refused.

Some stakeholders in particular frequent and regular travellers, not only call into question the necessity of a specific document, but also the need and/or added value to pre-check all the time the accommodation, the purpose of the journey or even the will to return in general. This is particularly the case when a MEV is applied for by well-known applicants and the decisive factor is often the lawful use of previous visas and the stable socio-economic situation in the country of residence.

The requirement to lodge the application in person[40] – which further complicates the life of applicants according to several stakeholders - is also a problem. Approx. 70% of the respondents to the public consultation considered this obligation as a burden. For many of them, reaching the nearest consulate/ESP requires a considerable amount of time and/or money. This issue is therefore closely linked to the issue of cost as well as the problem of consular coverage and is further discussed under section 2.3.2.

All stakeholders agreed that the supporting documentary requirements present significant problems, contributing to the lengthiness of visa applications and processing. NGOs, interest groups, business and professional organisations underline that applicants complain about the extensive list of supporting documents, the collection of which requires a lot of time. Interest groups, but also some consulates argue that some of these documents are considered unnecessary (e.g. hotel and flight reservations), whereas others present particular problems (proof of sufficient means of subsistence for artists for instance). More than 20% of the consulates covered in the Economic Impact Study have pointed at the issue of supporting documents as an area where rules could indeed be simplified. All stakeholders acknowledged that there is still a lack of harmonisation concerning documentary requirements between consulates. Moreover, different rules apply to the acceptance of supporting documents, copies/faxes, and translation. Interest and advocacy groups confirmed that the problems presented by the heavy documentary requirements and lack of harmonisation are exacerbated by the lack of information provided to the general public.

2.3.1.3. The overall cost of the visa procedure for applicants and consulates

According to the public consultation and the results of the Economic Impact Study the cost of the visa procedure is also considered a problem by the majority (70%) of the applicants.

When applicants claim that the visa application process is too expensive they do not refer to the visa fee as such but rather to the overall costs related to the application (including the costs related to travelling to the consulate/ESP, the supporting documents, the service fee to be paid to the ESP, etc.). Most stakeholders agree that the indirect costs for visa applications present greater problems than the direct costs (visa fee). Business associations and other interest groups criticised that the visa fee and accompanying indirect costs are not refundable in case the visa is refused. Certain categories of applicants (e.g. business people) would be willing to pay a higher visa fee, provided that the application would be processed faster, while most respondents to the public consultation (73%) consider that the visa fee is already high enough. In fact, the EUR 60 (general) Schengen visa fee can be considered rather low in international comparison to the tourist/visitor visa fees applied by Australia, US or UK[41], not to mention the fee reductions and waivers introduced by the Visa Code and VFAs. At the same time, the IA Study estimates the "average" indirect costs at approx. EUR 150 per visa application which is considerable knowing the average salaries in those countries where Schengen consulates receive most of the applications (e.g. Ukraine, India or even Turkey or Russia).

Schengen States, on their side, claim that processing visa applications in a speedy, client-friendly manner and fully in line with the provisions of the Visa Code (and in particular the deadlines imposed) would in many places require additional investments (in particular staffing). This is not only due to the costs of the establishment of the VIS and the "loss" of visa revenues linked to the mandatory visa fee waiver under the Visa Code and the general visa fee reduction (EUR 35 instead of 60) provided in nearly all VFAs[42] but mainly the increasing number of applications. However, as mentioned earlier, in times of budgetary constraints most Schengen States are not able to invest more in visa processing. This causes bottlenecks in the visa processing, e.g. keeping the 2 weeks deadline of providing an appointment for the lodging of an application. Moreover, during the stakeholder consultation some Schengen States (e.g. AT, BE, DK, SWI)[43] affirmed that their administrative costs of processing visa applications are not covered by the current visa fees.

Schengen States/consulates emphasized that visa processing also presents significant costs for consulates. Some of them stated that a direct link between work conducted by consulates and visa revenues does not always exist as revenues go straight to either the Ministry of Foreign Affairs budget or the treasury. Other factors contributing to high costs mentioned by Schengen States relate to staff; usually (expatriate) civil servants, who need to be extensively trained; infrastructure, tools (VIS or other IT systems), and other issues (e.g. visa stickers, stamps, paperwork, etc.).

2.3.2. Problem area 2: Insufficient geographical coverage in visa processing

According to the Visa Code, each Schengen State shall be responsible for organising the procedures relating to applications. Schengen States shall notify to the Commission how they intend to organise the procedures relating to applications in each consular location. It is then made available to the general public. Annex 28 of the Visa Code Handbook[44] provides an overview of the geographical coverage in collecting/processing of visa applications. The Commission is not empowered to deal with organisational matters: Schengen States decide on their own to open or close a visa section, conclude representation arrangements, set up a common application centre (hereinafter: CAC) or to cooperate with ESPs. The Visa Code "only" requires cooperation (and not "actions") from the Schengen States to prevent a situation in which an application cannot be examined and decided on because the Schengen State that is competent[45] for processing the application is neither present nor represented in the third country where the applicant resides (cf. Article 5(4)).

Acknowledging that in the past years there has been progress in increasing the geographical coverage in collecting/processing of visa applications (mostly by concluding representation arrangements and cooperating with ESPs), but also the fact that travelling to the consulates/ESPs to lodge the visa application can be rather costly and can require a lot of time for the applicants, there is still a considerable room for increasing the geographical coverage. It should be also borne in mind that as a consequence of the roll-out of the VIS there are more and more "first time" applicants whose fingerprints should be taken (which requires appearance in person at the consulate or ESP). In particular the number of cases when applicants have to travel abroad to lodge the application because the competent Schengen State does not have a consulate or is not represented in the applicant's country of residence should be reduced. There are some 900 "blank spots" like that. E.g. Hungary is neither present nor represented in Cambodia, so the TCN whose sole/main destination is Hungary should go to the Hungarian consulate in Bangkok or Hanoi for instance to lodge his/her application[46].

Excerpt from a response to the public consultation:

"Me and my relatives find very complicated and bureaucratic process to apply for Schengen visa to Denmark. So, some of my relatives reside in Uzbekistan and some reside in Denmark. There is no way to apply for Schengen visa for them in Uzbekistan, there is no any embassies in Uzbekistan responsible for DK. Yes, it was possible 3 years ago, via German embassy in Tashkent. But now, all have to travel first to Moscow, apply there for Schengen visa in Danish embassy, wait for couple of weeks there."

Access to the consulate/ESP can be also challenging, costly and time consuming in third countries where all or most of the Schengen States are present in the capital but many applicants still need to travel long distances to reach them. This is the case in the emerging tourism market countries such as Russia, China and India. Both representation arrangements and cooperation with ESPs is already widespread in these countries. However, the "visa collecting presence"[47] is concentrated in the capitals and few big cities only.

In Russia, China and India both representation arrangements and cooperation with ESPs is already widespread. Still, in Russia, 53% of the total "visa collecting presence" is concentrated in two cities and 82% in five cities (out of the eleven cities where there are consulates and/or ESPs present). In China, similarly, although all Schengen States are present or represented in Beijing, there are several consulates out of the capital, some representation arrangements and several outsourcing arrangements (in total: 104), they cover nine cities "only". 91 are concentrated in just four cities (87.5%). Out of these nine cities, four are on the south-east coast, three in the centre-east and two in the north-east, while none are in the centre or west of the country. Finally, in India the number of "visa collecting presence" is 83 in a total of eight cities. 46 (55%) are in two cities and 66 in four cities (79.5%). It must be also seen that in many places Schengen States use outsourcing for the purpose of reducing the workload of their consulates rather than increasing their "visa collecting presence" (i.e. when the cooperation with ESPs is taking place in cities where the Schengen State is having a consulate, e.g. in Algiers, Moscow or Kiev).

Finally, there are still some third countries[48] whose nationals are subject to the visa obligation where no chengen States are present for the purpose of collecting/processing visa applications. It would be highly desirable to ensure visa issuing presence in their capitals.

With a view to increasing geographical coverage in processing visas in a cost efficient way, Article 41 of the Visa Code envisages certain forms of cooperation between Schengen States, such as co-location and CAC. These forms of cooperation are hardly used, although the Commission has actively promoted the setting up of CACs in particular. Millions of euros have been made available for developing consular cooperation projects under the Community Actions of the External Borders Fund (EBF)[49]. Yet, there are only two projects funded from the EBF Community Actions: the "Schengen House" in Kinshasa, Democratic Republic of Congo and the "Centro Comum de Vistos" in Praia, Cape Verde. Other projects having the "CAC" label (e.g. the "CAC" in Chisinau, Moldova), in legal terms do not correspond to the definition of CAC set out in Article 41 of the Visa Code. They should be considered as representation since they do not only receive the applications but also examine and decide on them.

One of the main reasons for not having more "common centres" is that Schengen States consider representation arrangements and outsourcing as the cheapest and most easy form of cooperation, but it can be also noted that outsourcing allows Schengen States to retain sole responsibility for the procedure which still seems to be important for some of them. However, there is a regulatory problem as well. Schengen States rightly claim that co-location and CAC as defined in Article 41 of the Visa Code do not provide the necessary flexibility for establishing operational structures on the spot, but, in principle, these forms are the ones that are eligible for EU funding.

As the evaluation report noted, no information on co-location has been communicated to the Commission. Nevertheless, the setting up of such cooperation is considered cumbersome by the Schengen States in particular if the purpose is only to collect applications while maintaining consular premises equipped fully to carry out the examination of visa applications, which includes connection to central databases. The costs potentially saved by sharing facilities to receive applicants and equipment to collect biometric data are likely to be spent on additional costs linked to transferral of data, files and staff from the "co-location" to the "back office".

In legal terms, the CAC for instance is a form of cooperation where staff of the consulates of two or more Schengen States is pooled in one building (other than their own) in order for applicants to lodge applications. As its name suggests, it is 'just' an application centre; the decision on the applications should be made by the consulates of the respective Schengen States. Practice shows that it is much easier to have another Schengen State carry out the entire procedure (full representation) than just a certain part of it. In the case of a CAC, the secure and speedy transfer of the application files from the CAC to the decision making consulate should be ensured. This takes time, money and requires personnel. Moreover, the definition implies that the building to be used should not be the consulate of one of the participating Schengen States (otherwise, in legal terms the project should be rather considered as co-location). The definition also requires that project partners should deploy their own consular staff to the CAC, which Schengen States will not do unless the volume of the number of "their own" visa application would be high enough. Finally, a CAC also requires a "lead" State to manage and run the centre and Schengen States are reluctant to volunteer to take that lead. With these in mind, Schengen States claim that the legal and financial framework should be flexible enough to allow establishing and financing the most appropriate cooperation structures in light of local circumstances.

As regards the stakeholders' position, in general, it can be noted that Schengen States/consulates do not see this issue as a very big problem. They reported progress by greater use of representation agreements and outsourcing and confirmed that more flexible definitions would be needed regarding co-location arrangements and CACs. Overall, the number of consulates seems to have decreased resulting in limited geographical coverage posing problems to applicants as emphasized by NGOs, interest groups and even some Schengen States/consulates. All stakeholders confirmed that consulates increasingly make use of ESPs. Opinions of stakeholders are generally positive towards the use of ESPs, although some of them (business and artists associations) also highlight certain problems such as waiting time to get an appointment and inefficient working methods. The advantages mentioned include proximity to applicants, comprehensive list of services, faster procedures, use of on-line appointment system.

2.3.3. Problem area 3: Lack of visa or other authorisation allowing travellers to stay more than 90 days in any 180-day period in the Schengen area

The Commission has been receiving many complaints from visa requiring and even more visa exempted TCNs who have a legitimate reason and need for travelling in the Schengen area for more than 90 days in a given 180-day period without being considered as "immigrants". The current legal framework does not provide an authorisation that would correspond to these travellers' needs/itinerary (as the complainants often say, "long-stay Schengen visa"). The problems of these categories of visa applicants cannot be addressed by MEVs with a validity of up to five years, because such visas are still short-stay visas (i.e. entitle its holder to stay no more than 90 days in any given 180-day in the whole Schengen area). Finally, many of the TCNs who wish or need to circulate in the Schengen area for longer than 90 days are in fact visa-free (e.g. US citizens).

The main characteristic of these travellers is that they "tour around" Europe/the Schengen area. They intend to stay longer than 90 days (in any 180 days) in the Schengen area, therefore in by legislation – should they be nationals of third-countries under visa obligation - they cannot apply for a short-stay, Schengen visa. Similarly, visa-free TCNs, as a general rule, irrespective of the fact that they have all the necessary financial means to stay longer than 90 days, are not entitled to do so. At the same time, in very many cases, they do not intend to stay for more than 90 days in any Schengen State; therefore they are not eligible for a "national" long-stay (D) visa, or residence permit.

In particular, associations and interest groups of live performing artists emphasise that they often experience difficulties in organising tours in Europe due to the 'limitation' of stay described above. Touring companies are frequently unable to meet the residency requirements to be able to obtain national long-stay visas for artists/specialty staff/families. As the staff of artists groups are often highly specialised and trained, it is not always possible to replace an entire cast, as this would be costly, highly disruptive or simply impossible.

Travel agencies and several queries addressed to the Commission indicate that "individual" travellers (students, researchers, trainees, young people participating in youth exchanges, artists and culture professionals, pensioners, business people) also have a strong interest in being allowed to stay longer than 90 days in any 180-day period.

Excerpt from a complaint letter received by the Commission:

"We have worked and saved a lifetime to travel Europe when we retired in a motorhome. Now we find out we only have 90 days, then have to leave for 90 days because of the Schengen laws, hardly enough time to begin to see the Continent. We have our own finances, health and travel insurance, etc. Is there any exception or special visa for people like us who just want to travel, pumping money into the local economies?"

This legal gap between the Schengen acquis and the rules on admission of TCNs to individual Schengen States equally leads to considerable economic loss for Schengen States and companies. According to examples provided by the European Circus Association (ECA) the loss of revenue per engagement (i.e. per city where a well-known group performs) was ca. EUR 380,000 in one example and ca. EUR 920,000 in another one (local employment for ushers, concession, cleaning teams, etc., arena/site rental, taxes and fees, local suppliers, printers, marketing, services, hotel/restaurant, local transport services, wages/salaries paid in each city). The ECA also reported cases when a company had to substitute/rotate cast and crew in order to comply with the 'limitation' of stay. In one case the replacement of 36 staff members cost ca. EUR 110,000 for the company. According to the Performing Arts Employers Associations League Europe (Pearle*), the lack of an "alternative" authorization represents, an estimated economic loss of between EUR 500 million and 1 billion. The Commission has received similar examples, but it is not possible to estimate the potential loss to the EU economy as a result of the legal gap in a reliable manner.

According to the IA Study, the number of TCNs affected by this problem is limited, ca. 120 thousand per year. This is a rather small number bearing in mind that there were more than 15 million "Schengen" visa applications in 2012 and the number of applications is constantly rising. At the same time, these travellers are considered to be 'big spenders', not least because they stay long(er) in the Schengen area.

In addition, the legal gap can also encourage making use of certain legal instruments which are not designed for "extending" the authorized stay in the Schengen area in cases discussed under this point (making use of Article 20[50] of the Convention Implementing the Schengen Agreement[51] or issuing of limited territorial validity visas (hereinafter: LTV visas) by using Article 25(1)(b) of the Visa Code[52]). Further information is provided in Annex 7 about these practices.

Whereas interest groups – in particular artists associations – confirm that the gap in the current legal framework is a problem, the majority of the Schengen States do not see the necessity to act in view of the limited group of applicants it would concern, and also state that national legal frameworks would be more appropriate to offer solutions for such categories of travellers.

2.4. Main consequences of the problems

Although from the legal point of view, the Visa Code has streamlined the rules and conditions for issuing visas and established important procedural safeguards for applicants, the public consultation carried out by the Commission shows a lack of satisfaction of visa applicants with the procedure which in several third countries can considerably affect the EU's positive and welcoming image and possibly the travel flows. 45% of the frequent traveller respondents to the public consultation have not experienced any changes in the procedure in the past years and what is even more worrying is that 37% of them considered that the situation has got even worse. Almost 50% of the respondents noted that their experience may deter them from travelling to the Schengen area again. It may lead to a detrimental effect on the EU economy. However it is extremely difficult to estimate the possible economic loss linked to the above mentioned issues.

According to the Economic Impact Study the majority of the travellers responded to the survey stated that they would travel more or even a lot more to the Schengen area if visa facilitations would be in place. The survey among travel agents also confirmed this. However, travel agents' assessments of how much more TCNs would travel to the Schengen area and accordingly how many more trips travel agents would sell if certain facilitations would be in place differ considerably[53]. As far as the six countries under the scope of that study is concerned (China, India, Saudi Arabia, South Africa, Russia and Ukraine, "representing" more than 60% of the visa applications in 2012) the total number of "lost" travellers[54] is 6,6 million per year. Based on average spending figures, according to that Study, this means that the tourism industry in the Schengen area loses out on a potential EUR 5.5 billion in direct contribution to GDP every year, adding up to approximately 113 thousand jobs in the tourism industry and related sectors.

The stakeholder consultation confirmed these findings. NGOs, interest groups, business and professional organisations stated that a feeling predominates amongst travellers that the EU is unfriendly and unwelcoming. Business associations and international organisations emphasized that travellers wanting to make last-minute reservations are prevented from travelling and some travellers who do not receive their visa on time have to cancel their trip. Other interest groups emphasized the loss of business and financial revenues for the Schengen area due to a loss of potential travellers who are deterred from applying for a visa. Reliable estimations were not made available though. Schengen States acknowledge that visa and entry procedures have an impact on travel flows, but in the first place they underline the need to maintaining the high level of security and in addition they question the reliability of the existing assessments that quantify the impact of procedural facilitations.

2.5. The problem tree

The problem tree below illustrates the main drivers, problems and their consequences as introduced in the previous sections in a schematic way.

2.6. Who is affected?

Persons applying for a visa (and regarding the last problem, a considerable number of visa-free TCNs) and the authorities of Schengen States in charge of processing visas are directly affected.

Visa applicants need greater clarity and transparency about the application procedures and many of them call for procedural facilitations, e.g. issuing MEVs, waiving the requirement of appearing in person to lodge the application, limiting the number of supporting documents, fast-track procedures, etc.

– As far as problem area no 1 is concerned, regular and frequent travellers have been identified as a specific category of applicants, who find it particularly difficult to understand why they should always undergo the same, stringent checks with all their implications to the time and money spent for the visa during each application.

– As to problem area 2 and 3, "first time" applicants are equally concerned as frequent/regular travellers. Therefore, they are also within the scope of the envisaged policy proposals, directly or indirectly (with regard to problem area 1).

The visa issuing authorities need a clear set of rules to work with, allowing them to work more efficiently so that they can cope with the increasing number of applications without compromising the security of the Schengen area.

Facilitated visa procedures are important for many sectors, e.g. trade, tourism industry, cruise industry, business, research, education, cultural sector, etc. There is a strong competition in these areas between the EU and other regions in the world and in order to remain attractive in these fields, the EU needs to provide a welcoming environment for TCNs to travel to and stay in the EU also for short stays. For that sake, some of these sectors ask for sector specific initiatives in the field of visa policy. Nevertheless, the result of the evaluation of the Visa Code and the stakeholder consultation show that the "clients" of the above mentioned sectors, are in fact facing rather similar if not identical problems (last minute invitations, long list of supporting documents, etc.).

Indirectly, individual EU citizens are also affected because they want it to be easier for their visa-obliged non-EU family members, friends, business partners, etc. to visit the EU.

2.7. International outlook

The Commission closely follows the development of the visa policies of certain non-Schengen countries, e.g. Australia, Canada, the United Kingdom or the United States. In the context of this IA, information has been collected regarding several aspects of their visa procedures. Some of these countries, such as Canada, the UK and the US are also reviewing their visa policies in order to introduce facilitations to boost tourism and economic growth.

It is difficult to draw a general conclusion whether the existing EU rules are "competitive" or not in comparison to non-Schengen states' visa policies. There are no international benchmarks in this regard. E.g. the visa fee is higher for a US "tourist" visa, and conducting an interview is a general practice by them, but the validity of their visas issued is quite often much longer than the validity of the Schengen MEVs.

A short overview of the certain provisions and practices of Australia, Canada, Japan, the UK or the US, such as the maximum length of the validity of the visa, the visa fee(s), processing times, etc. is provided in Annex 6.

It is worth to mention that some of these countries are also facing challenges described in point 1.4 (Disclaimer on the data used by the IA) in assessing the various impacts of visa processing. For instance, a recently conducted evaluation[55] of the Canadian Visitor Visa Program recommends that the Citizenship and Immigration Canada "should develop strategy and assessment tools to measure the impact of the various facilitative mechanisms, in terms of their objectives and effectiveness in managing processing demands". They should also "explore other, more effective methods of collecting data on irregular migration, such as overstays, to better inform policy-makers […]".

2.8. How would the problems evolve without any action? (The baseline scenario)

The baseline scenario below largely follows the structure of the problem tree under section 2.5. and links the expected results of the proposed instruments and on-going initiatives (VFAs, VIS, EES, RTP, etc.) to the corresponding element(s) of the problem tree.

The VIS and the RTP have the potential to facilitate travel of third-country nationals by speeding up the visa issuance and the border crossings, but at the same time, they also generate some additional "burden" for the applicants and/or for the consulates. If no EU action is taken which aims at reducing the already existing heavy workload of the consulates, the additional work related to the VIS and RTP would pose problems for several consulates/Schengen States. It is safe to say, that operating these systems does not substitute the actions identified in the IA. In fact, if no EU action is taken, for instance, the inherent positive impact of the VIS on the applicants would not be utilised to the full.

Expectations should not be high as regards the on-going (and any future) modification of the Visa Code Handbook either. The scope of the current modification is limited to rather technical issues, among others, it is necessary to align the Handbook to the latest amendment of the Schengen Borders Code. It should also be reminded that the Handbook is a legally non-binding instrument, and the evaluation report pointed out that the knowledge at operational level (consulates) of the Handbook is not satisfactory.

2.8.1. Drivers

The costs of international travel, though likely to increase in real terms (from their recent low levels), will be affordable for larger numbers of TCNs. Outbound travel from emerging tourism markets such as China, India, Russia or the Middle East will continue to grow at a fast pace.

The numbers of visitors to the Schengen area are anticipated to increase. There will be an increase in the number of visa applicants. Taking into account the trends in the past years, according to a rather conservative estimation by the IA Study, the number of visa applications will be around 18 million in 2015. Visa liberalisation dialogues[56] aiming at (reciprocal) visa waiver will continue to be carried out with a growing number of third countries. The speed of these processes depends on the attitude of the third countries concerned as well as the time needed for the co-legislators to take the necessary decisions.

The economic motivation for the Schengen States to encourage visitors for leisure, business, educational, research and cultural purposes is currently high and likely to remain so for the foreseeable future. For leisure travel, in particular, there is and will be increasingly, global (and intra-EU) competition to attract visitors. There will be an increasing political demand to position the Schengen area as a welcoming, open place for legitimate travellers.

Budgetary constraints will make Schengen States less likely to allocate additional resources to consulates to process visas in a faster, more client-friendly manner. From 2019 the processing of RTP applications will be a new task of the consulates, which can noticeably increase their workload in several third countries[57]. At the same time, the external borders and visa component of the Internal Security Fund (hereinafter: ISF)[58] will support actions related to infrastructure, buildings and operating equipment (including the maintenance of the VIS) required for the processing of visa applications and training. More importantly, under the operating support of the ISF, staffing of consulates will be also eligible for financing which will be a very important new element in EU funding in this area.

The expectations of visa applicants towards a fast, client-friendly procedure and the tendency that there are more and more travellers preferring several shorter trips rather than a long yearly holiday, late bookers and travellers, e.g. business people or artists and cultural professionals with a need to get the visa speedily are likely to grow. Once implemented, all TCNs would be eligible to apply for access to the RTP and after a vetting and pre-screening process would be able to benefit from using automated border control systems (i.e. automated gates) at major border crossing points such as airports. As a result, border checks of registered travellers would be much faster than nowadays. This might further increase the expectations regarding the visa procedure.

Visa facilitation agreements with an increasing number of third countries will continue to provide important procedural facilitations for many visa applicants (e.g. reduction of the visa fee, reduction of documents to be presented to prove the purpose of stay, shorter processing times and mandatory issuance of MEVs with long validity). Nevertheless tourists for instance, in principle will not benefit from the agreements[59]. The application of procedural facilitations provided by the Visa Code should therefore continue to play an important role and it is likely that consulates will make increasingly use of these facilitations[60], but in terms of the numbers of applicants affected their application would still remain low and uneven across Schengen States.

The non-harmonised application of the facilitations might increasingly lead to cases when applicants choose one of the faster and more generous consulates[61], contrary to the provisions of the Visa Code, according to which the Schengen State whose territory constitutes the sole/main destination of the visit shall examine and decide on an application. Consular officials will spend considerable efforts to tackle this phenomenon instead of devoting their capacities to speed up the procedure and focus on difficult applications.

2.8.2. Problems

In any case, the main elements of the identified problem blocks will remain. There will not be reductions in the length of time taken to process visa applications: indeed, the contrary is most likely. The rising number of applicants will increase the workload and unless the number of consular staff is increased proportionally, the procedure will slow down. This will be partly counterbalanced by the fully rolled-out VIS which has the potential to speed up the processing of applications since the visa history of an increasing number of applicants can be retrieved easily from the system. The EES, once implemented, will facilitate the verification of the entry conditions and in particular the lawful use of previous visas at the consulates as well.

The situation regarding the harmonisation of the required supporting documents will be slightly better: in more and more third countries Commission implementing decisions will establish the harmonised list of supporting documents to be presented by visa applicants[62], so applicants in the same jurisdiction will be requested to present the same set of documents irrespectively of which consulate is responsible for processing the application. However the number of documents required will likely remain the same. The majority of visa applicants would continue to be confronted with heavy requirements for supporting documents[63].

The high indirect costs for those TCNs not living close to a consulate and having to attend in person to lodge the application will continue to exist, but the VFAs will increase the number of applicants who can benefit from fee waivers or reduction. This is obviously a loss of revenue on the Schengen States' side. Still, the direct processing unit costs for consulates are anticipated to remain broadly at current levels, though the full roll-out of VIS may increase costs (in particular personnel and reorganisation of visa sections) before efficiency gains accrue.

Under the specific actions provision of the ISF, Schengen States can get top-up money, in addition to their national allocations, for consular cooperation[64]. If the projects submitted by Schengen States are retained, they will be co-financed at 90% of the total cost. However, the budgetary pressures and the increasing number of applications and not least the requirement of capturing the fingerprints of "first time" applicants will be the main driving force of enhancing consular cooperation. Representation will still be used as a main form of cooperation and Schengen States are likely to make an even greater use of ESPs which means that applicants pay a service fee on top of the visa fee. The use of the other forms of cooperation (co-location, CAC) will remain dependent on the lead of Schengen States and the number of new centres is expected to remain very small. In any case the overall situation in terms of "visa collecting presence" will be slightly better, but Schengen States are not expected to focus on those 900 "blank spots" mentioned in point 2.3.2.

The 90 days in any 180-day period 'limitation' will continue to make travel arrangements for individuals and 'touring groups' problematic. Travellers will continue to look for "alternative solutions" to stay longer in the Schengen area[65].

In conclusion, the application of the Visa Code will continue to be perceived as incoherent by visa applicants and the proportion of visa applicants considering the visa process as a fast, client-friendly procedure is likely to remain low and declining.

2.8.3. On the security and economic growth

By the time of the entry into force of the revised Visa Code, the VIS is expected to be up and running in all third-countries. The gradual roll-out will be finished and the system will strengthen the security of the Schengen area. It enables border guards to verify that a person presenting a visa is its rightful holder and to identify persons found in the Schengen area with no or fraudulent documents. Using biometric data to confirm a visa holder's identity allows for faster, more accurate and more secure checks. It helps in fighting and preventing fraudulent behaviors, such as "visa shopping". In addition, the VIS makes it easier to determine which State is responsible for examining an asylum application. As from September 2013, VIS data are available to Europol and national law enforcement authorities for preventing, detecting and investigating terrorist offences and other serious criminal offences[66].

The new 'smart borders' systems, EES and RTP are likely to start operations in 2019. The EES will record the time and place of entry and exit of TCNs travelling to the Schengen area. The system will calculate electronically the length of the authorised short-stay and issue an alert to national authorities when there is no exit record by the expiry time. In general, the EES will enhance border control, prevent irregular immigration and facilitate the management of migration flows, and it will also be of crucial assistance in addressing the issue of people overstaying their visa. Until the start of operations of the system the lawful use of previous visas can only be determined on the basis of the entry and exit stamps in the passport. The EES – once implemented – will considerably facilitate this check. As such, it will be an important tool for consulates when they assess visa applications, and in particular implement any of the envisaged policy option related to problem area no 1 (cf. point 4.3. in particular).

It is to be noted that the IT systems are not intended to generate economic growth although the RTP has the potential to generate more trips and thus increased revenues. As regards the identified problems, and as far as the VIS, EES and RTP are concerned, it can be said that the (full) implementation of these systems will not solve the identified problems. It can also be seen that actions taken at national level would not lead to the reduction of economic loss/generating economic growth.

In conclusion, it is to be expected that the security of the Schengen area will not only be maintained but will be increased; nevertheless the potential economic loss ascribed to the current visa procedures will not be reduced.

2.9. Does the EU have the power to act? (Legal basis and the principle of subsidiarity)

The abolition of checks at internal borders requires, among other things, a common policy on visas. Common visa lists (of countries whose nationals require visas and of those whose nationals are exempted from the visa requirement), and uniform conditions and harmonised procedures for issuing visas are pre-conditions for enabling mutual recognition of visas which allows TCNs legally present in one Schengen State to travel to the other Schengen State without requiring checks at internal borders. No one calls in question this principle and similarly no one calls in question the need of visas per se to regulate flows of TCNs and to maintain the security of the Schengen area.

Under Article 77(2)(a) of the TFEU, the EU has the power – and even the obligation - to adopt measures relating to the common policy on visas and other short-stay residence permits. The rules for processing short-stay visas are already regulated by a regulation that is directly applicable, i.e. the Visa Code.

The problems elaborated in the previous sections are unlikely to disappear in the near future and they are directly related to the current provisions of the Visa Code. By enforcement of the correct implementation progress can be achieved with regard to several issues, such as the time limit for granting an appointment, correct implementation of the provisions on supporting documents, information provided to the general public, etc. However, as explained in the previous sections there are several 'may' clauses and provisions leaving a considerable margin for appreciation for the consulates, in particular with regard to providing procedural facilitations for well-known/regular travellers. In addition, due to the widespread use of ESPs and commercial intermediaries, these provisions simply cannot be put in practice in many places. The issue of organising the visa collecting/processing network (geographical coverage) is the responsibility of the Schengen States; the Visa Code calls for "cooperation" between Schengen States (e.g. Article 5(4) which is introduced in section 2.3.2.) but the provisions in this area are not enforceable.

As described under the baseline scenario, the continuation of the application of the current legal framework and the already envisaged initiatives is not going to lead to resolving these problems.

Introducing procedural facilitations in a harmonised manner for travellers with the aim of further developing the common visa policy in order to foster economic growth and to achieve more coherence between the visa policy and other EU policies can only be taken at EU level.

As regards the issue of stays exceeding 90 days in a given 180-day period (creation of a new type of authorisation) it must be noted that the TFEU – contrary to Article 62(3) of the Treaty establishing the European Community which was the legal basis for the visa policy before the entry into force of the Lisbon Treaty - no longer limits the "short-stay" to 3 months; it does not specify its duration. According to Article 77(2) of the TFEU, the European Parliament and the Council, among others, shall adopt measures concerning the common policy on visas and other short-stay residence permits and the conditions under which nationals of third countries shall have the freedom to travel within the Union for a short period. Article 77 of the TFEU could therefore serve as a legal basis, provided that situations falling under Article 79 (admission for more than 3 months to the territory of an EU Member State) are clearly excluded[67].

3. Objectives

This section lists the general, specific and operational policy objectives meant to address the problems faced by visa applicants and consulates with regard to the implementation of the Visa Code. The revision of the Visa Code needs to address the following:

General policy objectives:

1. To foster economic growth in the EU.

2. To ensure more coherence with other EU policies such as trade, tourism, external relations education, research, youth and culture.

3. To maintain the security of the Schengen area.

Specific objectives:

1. To move towards a truly harmonised, genuinely common visa policy.

2. To tailor visa procedures more to the needs of legitimate travellers.

3. To make the visa procedure more efficient by streamlining the rules.

Operational objectives:

1. To provide mandatory procedural facilitations for "well-known" travellers by making use of the possibilities offered by the VIS.

2. To increase and rationalise the visa collecting/processing presence in third countries.

3. To provide the possibility of stays exceeding 90 days in a 180-day period in the Schengen area.

4. Policy options

4.1. Discarded options

The scope of the review is intended to remain within the scope of the Visa Code which defines the procedures and conditions for issuing visas. Obviously the most effective 'facilitation', is the waiving of the visa requirement by transferring third countries from the so-called "negative list" (visa required countries) to the so-called "positive list" (visa exempted countries) attached to Regulation 539/2001. Such transfer has traditionally been based on a case-by-case assessment of a variety of criteria relating inter alia to irregular immigration, public policy and security, and to the European Union's external relations with third countries, consideration also being given to the implications of regional coherence and reciprocity. In the future, the economic impact of visa policy has to be taken into account as well. The review of the list takes place on a regular basis. Moreover, so-called visa liberalisation dialogues have been launched or will be launched with certain third countries. The Commission attaches utmost importance to the methodology of the modification of Regulation 539/2001 as well as to the visa liberalisation dialogues and considers those processes very distinct to the review of the Visa Code. Therefore, the visa waiver for one or more third countries was not considered as a valid policy option while working on this IA. As long as there are risks for irregular immigration or security threats for the Schengen area, a "negative visa list" – even if shortened – will continue to exist. However, for the citizens of the third countries remaining on this negative list, the present exercise is fully justified, i.e. the visa application process should be facilitated in order to promote their mobility.

Visa issuance at the border is often described as a feasible and useful facilitation for travellers and it is in place in several third countries, e.g. Indonesia, Thailand and until recently Turkey. According to the current Schengen acquis, visa issuance at the border is possible only in exceptional cases[68]. The reason why issuing visas at the borders shall not be a general rule is that consulates in the country of residence of the applicant are better placed to assess possible risks posed by the applicant for irregular immigration and for security, primarily because there is lot more time during the visa processing to verify the conditions and consular officials have more means to assess the socio-economic situation of the applicants. Shifting the visa issuance from the consulates to the border would imply weakening the possibility to assess possible risks. Moreover, even an instantaneous and automatic visa issuance at the border on the basis of a valid passport and without in-depth verification of entry conditions would pose a great challenge for the border guards and would require serious preparations, reinforcement of staff, IT developments, etc. Bearing in mind the fundamental objectives/reasons of having a visa requirement in place for nationals of certain third countries, issuance at the border, as a general rule, can never be a valid alternative in the current Schengen framework.

Increasing or decreasing the general – EUR 60 - visa fee has been also discarded from the outset. One of the main reasons is that visa applicants and Schengen States have conflicting interests in this regard: problems had been identified with regard to costs both for visa applicants (overall costs are already too high) and Schengen States (for some of them the visa revenues do not cover the processing costs). Therefore, it was considered desirable to leave aside certain options from which only the applicants or Schengen States would benefit, as long as more appropriate win-win solutions seem to be available.

Certain stakeholders (in particular business associations) indicated that some applicants would be willing to pay more in order to get the visa faster (fast-track, premium service). At the same time, the results of the public consultation also showed that 73% of the respondents already find the visa procedure too expensive. Ensuring equal treatment of the applicants is an important principle and it does not seem desirable to provide a premium procedure for the rich. In addition, it is reasonable to assume that those applicants who would be willing to pay more for a "premium" service are already beneficiaries of certain facilitations due to their frequent/regular travels. They either have MEVs or a fast-track service is provided for them without an extra charge because the consulate is aware that the speedy "access" of these (mostly) business people to the Schengen visas is also important for the business partners in the Schengen States. Against this backdrop, this idea has been discarded, too.

Finally, with regard to the issue of consular coverage it can be recalled that the establishment of "common EU visa issuing offices" was already mentioned in the Tampere Programme in 1999. The Stockholm Programme adopted 10 years later also envisages some sort of "common European issuing mechanism for short term visas". Establishing common offices which would issue truly common visas (i.e. switching from the mutual recognition of "national" Schengen visas issued by Schengen States' consulates to "real" Schengen visas issued by a "Schengen authority") in the first place requires a fully harmonised and integrated procedure. The review of the Visa