EUROPEAN COMMISSION Brussels, 30.5.2018 SWD(2018) 280 final COMMISSION STAFF WORKING DOCUMENT



IMPACT ASSESSMENT

Accompanying the document PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL Amending Council Regulation (EC) No 1224/2009, and amending Council Regulations (EC) No 768/2005, (EC) No 1967/2006, (EC) No 1005/2008, and Regulation (EU) No 2016/1139 of the European Parliament and of the Council as regards fisheries controls {COM(2018) 368 final}

{SEC(2018) 267 final}

{SWD(2018) 279 final}



Table of contents Glossary ACRONYMS 1.Introduction: Political and legal context 1.1.The Common Fisheries Policy 1.2.The Fisheries Control System 1.2.1. The Control Regulation 1.2.2. EFCA Founding Regulation 1.2.3. The IUU Regulation 1.2.4. Other fisheries legislative acts with control provisions 1.3.Other relevant fisheries policy elements: EMFF and CMO 1.4.Other relevant EU policies 1.4.1. EU environmental legislation 1.4.2. Food and feed safety 1.4.3. Digital Single Market Strategy 1.4.4. International Ocean Governance Agenda 1.4.5. Strategic partnership with the EU's outermost regions 2.Problem definition 2.1.What is/are the problems?

2.2.What are the problem drivers? 2.2.1. Lack of measures to control new provisions of the reformed CFP and lack of synergies with other policies 2.2.2. Complexity of the legislative framework and ambiguity of legal provisions 2.2.3. Inadequate provisions for fisheries data 2.2.4. Enforcement rules not deterrent enough 2.3.How will the problem evolve? 3.Why should the EU act? 3.1.Legal basis 3.2.Subsidiarity: Necessity of EU action 3.3.Subsidiarity: Added value of EU action 4.Objectives: What is to be achieved? 4.1.General objectives 4.2.Specific objectives 5.What are the available policy options? 5.1.What is the baseline from which options are assessed? 5.1.1. Environmental impacts 5.1.2. Economic impacts 5.1.3. Social impacts 5.1.4. Administrative burden 5.2.Description of the policy options

5.2.1. Option 1: Targeted amendments of the Fisheries Control Regulation 5.2.2. Option 2: Targeted amendments of the Fisheries Control System 5.3.Options discarded at an early stage 6.What are the impacts of the policy options? 6.1.OPTION 1 "Amendment of the Fisheries Control Regulation" 6.1.1. Environmental impacts 6.1.2. Economic impacts 6.1.3. Social impacts 6.1.4. Administrative burden 6.2.OPTION 2. Amendment of the Fisheries Control System 6.2.1. Environmental impacts 6.2.2. Economic impacts 6.2.3. Social impacts 6.2.4. Administrative burden 7.How do the options compare? 7.1.Effectiveness 7.2.Efficiency 7.3.Coherence 7.4.Acceptability 7.4.1. Stakeholders' view

7.4.2. Proportionality 7.5.Recommendations of other EU institutions and bodies 8.Preferred option 8.1.General overview 8.2.REFIT (simplification and improved efficiency) 9.How will actual impacts be monitored and evaluated? 9.1.Monitoring 9.1.Evaluation Annex 1: Procedural information 10.Lead DG, Decide Planning/CWP references 11.Organisation and timing 12.Consultation of the RSB 13.Evidence, sources and quality Annex 2: Stakeholder consultation Annex 3: Who is affected and how? 14.Practical implications of the initiative 15.Summary of costs and benefits Annex 4: Analytical methods Annex 5: Specific sub-options of the retained policy options Annex 6: Discarded technical sub-options

Annex 7: Specific measures of the Control Regulation Annex 8: Stakeholders' description Annex 9: Recommendations from the European Commission, other European Institutions and Bodies on the evolution of the Fisheries Control System Annex 10: List of stakeholders who sent written contributions Glossary Discards Legal unwanted catches returned to the sea during fishing operations, either dead or alive. Fishing activities Fishing capacity A vessel’s tonnage in GT (gross tonnage) and its power in kW (kilowatt) as defined in Articles 4 and 5 of Council Regulation (EEC) No 2930/86. Fishing effort The product of the capacity and the activity of a fishing vessel; for a group of fishing vessels, it is the sum of the fishing effort of all vessels in the group; also the amount of fishing gear of a specific type used on the fishing grounds over a given unit of time (e.g. hours trawled per day, number of hooks set per day, or number of hauls of a seine per day). Fishing mortality An expression of the rate at which fish are removed from a stock by fishing (including fish discarded). It is approximately the stock annual removal expressed in percentage. Fish stock A marine biological resource that occurs in a given management area; also the living resources in the community or population from which catches are taken in a fishery. Use of the term fish stock usually implies that the particular population is more or less isolated from other stocks of the same species and hence self-sustaining. Landing obligation The obligation to land all catches in the respective fishery in accordance with Article 15 of Regulation (EU) 1380/2013 on the Common Fisheries Policy. Maximum sustainable

yield (MSY) The highest theoretical equilibrium yield that can be continuously taken on average from a stock under existing average environmental conditions without significantly affecting the reproduction process. Overfishing A situation where a stock is subjected to a rate or level of fishing mortality that jeopardises the stock’s capacity to produce the MSY on a continuing basis. Regionalisation The process by which Member States with a direct management interest for fisheries in a given geographical region organise themselves with the aim of agreeing on common conservation measures within EU waters (Article 18 of the CFP). Spawning stock biomass The total weight of all fish (both males and females) in the population that contribute to reproduction. Often defined as the biomass of all individuals beyond ‘age/size at first maturity’. Stock assessment Quantitative study that leads to predictions of how stocks will respond under various management actions. Traceability



ACRONYMS Term or acronym Meaning or definition ACs Advisory Councils BFT Bluefin Tuna CCTV Closed-Circuit Television CFP Common Fisheries Policy CIR Control Implementing Regulation CMO Common Organisation of the Market in fishery and aquaculture products CR Control Regulation EFCA European Fisheries Control Agency EMFF European Maritime and Fisheries Fund ERS Electronic Reporting System EU European Union FCS Fisheries Control System FTE Full-time equivalent GVA Gross value added ICT Information and communications technology IUU Illegal, Unregulated and Unreported (Fishing) LD Landing declaration LO Landing obligation MCA Multi-Criteria Analysis MS Member States NGO Non-governmental organisation REM Remote electronic monitoring technology RFMOs Regional fisheries management organisations SN Sales notes TD Transport document VMS Vessel Monitoring System 1.Introduction: Political and legal context Rules only work if they are properly enforced. This also applies to the Common Fisheries Policy (CFP). Its ambitious objectives for healthy fish and eco-systems, a profitable industry, viable coastal communities and food security can only be achieved if Member States and the EU as a whole have a proper control and enforcement system in place that ensures that reliable, accurate and complete fisheries data are supplied on time, that Member States have the full control of their fleet, that measures are in place to allow effective controls of fisheries products in the supply chain and that ultimately a widespread culture of compliance allow fishing operators to compete fairly. A first-rate control and enforcement system is also essential for the sake of the reputation of the EU fleet and of the EU as a whole globally. As a global ocean actor and the world's fifth largest producer of seafood, the European Union has a compelling responsibility to protect, conserve and sustainably use the oceans and their resources. This is only possible if appropriate control rules exist and are correctly implemented and enforced. A recent Commission REFIT evaluation, a special report of the European Court of Auditors and a Resolution by the European Parliament have all shown that the Fisheries Control System has its deficiencies and is overall not fit for purpose. Several discussions and exchanges of view have taken place in the Council, in the Parliament, in the Administrative Board of the European Fisheries Control Agency(EFCA), with Member States and with stakeholders since the publication of all these documents. Those discussions confirmed that there is unanimous agreement among the European Institutions and among direct stakeholders that the Fisheries Control System is not effective and efficient and that, as such, it is not entirely fit for purpose to sustain the achievements of the CFP objectives. Furthermore, shortcomings in the current regulatory framework were also identified by the REFIT Platform in June 2017 in its opinion on the submission by the Finnish Government Stakeholder survey on the control of EU fisheries. Therefore, taking into account the multiple requests from other Institutions, Member States, EFCA and stakeholders, in June 2017 the Commission launched an initiative to revise the Fisheries Control System, with a view to ensure the proper functioning and implementation of the CFP. The initiative is also intended to provide the necessary legal basis to implement commitments recently taken by the Commission, and concerning in particular the fight against illegal fishing in the Joint Communication on Ocean Governance, as well as to complement and support the implementation of the European Strategy for Plastics in a Circular Economy the Digital Single Market strategy and the stronger and renewed strategic partnership with the EU's outermost regions. A brief description of the CFP and its relation with the Fisheries Control System (FCS) is presented in Section 1.1, while Section 1.2 presents the FCS in detail, with particular emphasis on the Regulations covered by this Impact Assessment and that may be subject to amendments. To clarify possible synergies of this initiative with other policies areas, those are briefly presented in Section 1.3 and Section 1.4. This impact assessment outlines the problems of the current framework, including their drivers and consequences, and sets the objectives. It also presents the main policy options and examines the potential impacts of these options from an environmental, social, economic and administrative viewpoint. The ultimate goal is to ensure that the policy decision is prepared in an open, transparent manner and with the best available knowledge. This impact assessment fulfils the requirements of the Better Regulation Guidelines of May 2015. 1.1.The Common Fisheries Policy

Fishing resources and fishing activities are regulated in the EU through the CFP. Designed to manage a common resource, the CFP gives all European fishing fleets equal access to EU waters and fishing grounds and allows fishermen to compete fairly. At the same time, it aims to ensure that fishing and aquaculture are environmentally, economically and socially sustainable, that they provide a source of healthy food for EU citizens and that fishing practices do not harm the ability of fish populations to reproduce. While the CFP sets the principles and objectives for conserving marine biological resources and for managing European fishing fleets, its implementation is achieved through other legislative acts emanating from the CFP, which lay down conservation measures for specific stocks, fisheries or sea-basins (e.g. Multiannual Managements Plans for certain stocks or regions, gear restrictions, definition of maximum allowable catches or fishing efforts). The CFP and its conservation measures are supported by the FCS, to ensure that rules are properly followed and enforced and to promote a culture of compliance across the EU. A schematic of the FCS and the relations between conservation and control measures is provided in Figure 1. The CFP was first introduced in the 1970s and went through successive updates, the most recent of which led to the adoption of Regulation of the European Parliament and of the Council (EU) No 1380/2013, also referred to as "reformed CFP". To this end, the reformed CFP stipulates that fish stocks should be managed in a way that allows them to reproduce at healthy levels in the long term. It seeks to make fishing fleets more selective in what they catch, and to phase out the wasteful practice of discarding unwanted fish. This was achieved through the introduction of a so-called "landing obligation" (LO) or "discard ban", which entered into force in 2015 with gradual phasing in of stocks and full coverage in place by 1 January 2019. The landing obligation introduced by the reformed CFP represents a fundamental shift in the management approach to EU fisheries, which also requires a behavioural shift from the industry and a novel control perspective from the competent authorities to be successful. The 2013 reform also introduced for the first time objectives and provisions for the promotion of the CFP principles at international level (so-called external dimension of the CFP). Figure 1: relations between the CFP, conservation measures and control measures 1.2.The Fisheries Control System The FCS in place today is the result of a thorough reform prompted by a special report issued by the Court of Auditors in 2007, leading to the adoption or review of the following Regulations: ·Regulation establishing a Union control system for ensuring compliance with the rules of the CFP (Council Regulation (EC) No 1224/2009) – hereafter "the Control Regulation"; ·Regulation on Illegal, Unregulated and Unreported (IUU) Fishing (Council Regulation (EC) No 1005/2009)- hereafter "the IUU Regulation"; ·Regulation for on the sustainable management of external fleet (Regulation (EU) No 2017/2403); hereafter "the SMEF Regulation" ·Regulation establishing the European Fisheries Agency (Council Regulation (EC) No 768/2005). It should be noted that while these Regulations represent the four pillars of the Fisheries Control System, other control provisions are still nowadays present in a number of other legislative acts. A brief description of the Control Regulation, of the IUU and EFCA Regulation as well as other legislative acts containing control provisions and which will be affected by this initiative is provided below. 1.2.1.The Control Regulation The Control Regulation is the result of an in-depth reform that was completed in 2009, and which led to amending twelve Regulations and repealing another three. This Regulation lays down in its 134 Articles a very extensive set of rules, the objective of which is to ensure overall compliance with the CFP and its conservation measures. The Regulation provides obligations addressed to private operators (vessel owners, vessel masters, buyers, transporters), to Member States and to the Commission. The ultimate goals are to: 1) allow Member States to keep the fishing activities of their fleets and of third country fleets fishing in their waters under control; 2) ensure appropriate controls of fishery products in the supply chain, from the first sale to the retail sale; 3) make sure that each Member State puts in place a risk-based system for inspections and takes appropriate enforcement measures, such as sanctions and the assignment of points for serious infringements, to ensure compliance with the CFP ; 4) allow the Commission to keep the use by Member States of their fishing quotas under control and to take appropriate measures in case of non-compliance by Member States; 5) ensure that appropriate fisheries data are collected, recorded, validated and analysed, that they are available to the relevant users, not only for mere control purposes, but also to provide scientists with the necessary data sets for better and more reliable stock assessments. The Regulation also empowers the Commission to conduct inspections, verifications and audits in the Member States to control and evaluate their application of the CFP and of the control rules. The Control Regulation does not address the control of the landing obligation required by the reformed CFP. The Commission Implementing Regulation (EU) No 404/2011 lays down further detailed rules for the implementation of the Control Regulation.

1.2.2.EFCA Founding Regulation EFCA was created in 2005 with the primary objective of organising coordination and cooperation between national control and inspection activities and authorities so that the rules of the CFP and its control system are respected and applied effectively. To this end, the Agency organises the deployment of national human and material means of control and inspection pooled by Member States in Union and international waters as well as on land. EFCA can also carry out inspections, limited to international waters. EFCA also supports the European Union in the international dimension of the Common Fisheries Policy (CFP) through a series of activities encompassing training and support to the Commission in the fight against IUU activities and in international multilateral fora. The Agency, in cooperation with the European Border and Coast Guard Agency and the European Maritime Safety Agency, each within its mandate, supports the national authorities carrying out coast guard functions. 1.2.3.The IUU Regulation This Regulation establishes an EU system to prevent, deter and eliminate IUU fishing in EU and international waters. In order to achieve this goal, the Regulation introduced a "Catch Certification Scheme" to prohibit trade with the EU of fishery products stemming from IUU fishing, as well as a number of tools to facilitate communication and cooperation between the EU, Member States and third countries and to inspect third country fishing vessels in EU ports. The Regulation also works alongside the Control Regulation for the prosecution of serious infringements committed by EU and by third country fishing vessels. 1.2.4.Other fisheries legislative acts with control provisions Despite the consolidation that took place with the 2009 reform, specific control provisions remain to date outside the legislative acts referred to above as "EU fisheries control system". This is particularly the case for Regulation (EC) No 1967/2006 concerning management measures for the sustainable exploitation of fishery resources in the Mediterranean Sea (Mediterranean Regulation) and for Regulation (EU) No 2016/1139 establishing a multiannual plan for certain stocks in the Baltic Sea (Baltic Regulation). While the Mediterranean Regulation contains provisions that are obsolete or are already partially covered by the Control Regulation, thus leading to difficult reading/interpretation, the Baltic Regulation introduced a number of derogations to the Control Regulation that would become obsolete in the context of the revision exercise as presented in this impact assessment. Targeted amendments to these Regulations are therefore presented in this initiative. 1.3.Other relevant fisheries policy elements: EMFF and CMO The European Maritime and Fisheries Fund (EMFF) and the Common Organisation of the Market commonly referred to as "CMO" are the main fisheries legislative acts with direct links with the FCS. As they will be mentioned throughout this document they are for completeness also briefly presented. The EMFF is the main supporting financial instrument to the CFP. It seeks to improve the social, economic and environmental sustainability of Europe’s seas and coasts by supporting local projects, businesses and communities on the ground. The EMFF allocated 580 M€ for control and enforcement in the period 2014-2020. Projects eligible for funding include data validation systems, purchase of control means (e.g. devices for the measurement of engine power), purchase, installation and development of technology, including computer hardware and software (e.g. CCTVs, ICT networks), catch certification schemes, tracking of vessels and electronic reporting systems, traceability and implementation of specific control and inspection programmes coordinated by the EFCA. The post-2020 EMFF is currently under development. The CMO is the basis for managing the market in fishery and aquaculture products. It regulates the organisation of the sector (producer organisations), marketing standards, consumer information rules, competition rules and market intelligence. The Control Regulation is relevant for the correct application of the CMO, insofar as it lays down a series of provisions for controls in the supply chain, including traceability provisions that are essential for fulfilling consumer information requirements. 1.4.Other relevant EU policies As already mentioned in Section 1, the FCS is directly or indirectly related to other EU policies, such as environment and food and feed law, as well as recently adopted strategies such as the European Strategy for Plastics in a Circular Economy, the Digital Single Market strategy, the International Ocean Governance and the stronger and renewed strategic partnership with the EU's outermost regions. For clarity reasons a brief summary of those policies and their links with fisheries is given below. A detailed analysis on links and issues between these policies and the FCS is presented in Section 2.2. 1.4.1.EU environmental legislation The Marine Strategy Framework Directive aims to achieve or maintain a good environmental status in the marine environment by 2020. One of the measures to be implemented is the use of "spatial protection measures" contributing to the creation of coherent and representative networks of "marine protected areas". Those areas cover among others the so-called Natura 2000 network of protected marine territories established under the Habitats and Birds Directives. Marine Natura 2000 areas address pressures from fisheries and other activities, including by establishing the necessary fishery management measures, such as fishing restrictions, in order to meet the conservation objectives of the areas. The European Strategy for Plastics in a Circular Economy aims at limiting plastic litter and better recycling it. Fishing gears lost or abandoned at sea are one of the sources of marine litter and through the Strategy the European Commission committed to develop measures for reducing the loss or abandonment of fishing gear at sea. The Control Regulation sets rules on gear retrieval and as such its revision can contribute to better reaching the objectives of the Strategy. 1.4.2.Food and feed safety The general principles of food and feed law are outlined in the General Food Law Regulation . They form a horizontal framework underpinning all Union and national measures relating to food and feed. They cover all stages of the production, processing and distribution of food and feed. The Food Law establishes that only safe food and feed can be placed on the Union market or fed to food-producing animals. It also establishes basic criteria for establishing whether a food or feed is safe. To this end, the Regulation defines traceability provisions throughout the food chain and operators' responsibilities. 1.4.3.Digital Single Market Strategy One of the Commission's ten priorities put forward by President Juncker is to remove barriers to a digital single market in Europe. A Digital Single Market Strategy was therefore published by the European Commission in 2015 to reduce existing barriers which presently limit businesses and governments from fully benefit from digital tools. The Commission also undertook steps to promote interoperable electronic technologies, by adopting an Implementation Strategy for a European Interoperability Framework. The good functioning of the FCS is based on the collection, recording, transmission, processing and exchange of large volumes of data. However the current system is still largely paper-based, thus not taking advantage of new and more efficient digital solutions. The exchange of data among the various actors is thus sub-optimal, calling for better integration and new interoperable solutions. 1.4.4.International Ocean Governance Agenda

The Joint Communication on international ocean governance builds on a widely shared understanding that the ocean governance framework needs to be strengthened, that pressures on the oceans need to be reduced and that the world's oceans must be used sustainably. It also stresses that a better understanding about the oceans is necessary to achieve these objectives. The Communication lays down a series of actions, among which action 7 'Fighting illegal fishing and strengthening the sustainable management of ocean food resources globally', through which the Commission committed to strengthen action on IUU fishing by improving current systems and supporting Member States in ensuring efficient controls through the development of electronic tools. 1.4.5.Strategic partnership with the EU's outermost regions Despite the progress that they have made over the years, the outermost regions continue to face serious challenges, which are further amplified by globalisation and by climate change. Their development is fragile. In 2017 the Commission committed to pursue its efforts and further maximise the potential of the outermost regions, including on the so-called blue economy, and called the Member States to step up the collection of scientific data concerning fisheries and adopt possible conservation measures and restrictions. Given the fisheries data stemming from the Control Regulation are a critical source of input for scientists and that control underpins the effective implementation of conservation measures, the revision of the FCS is also relevant in the context of this strategic partnership. Figure 2 below summarises the links between the policies described above and the Fisheries Control System, relevant issues are further presented in Section 2. Figure 2: Links between recently adopted EU policies versus the FCS and relevant issues. 2.Problem definition 2.1.What is/are the problems? An effective and efficient fisheries control system, which is able to address and prevent instances of IUU fishing and to enhance a culture of compliance across the EU, its Member States and fleets, is essential for the fulfilment of the CFP principles and its objectives. It is also essential for the credibility of the EU and of its fisheries policy at international level. Two main problems have been identified: 1.The current EU FCS was designed prior to the reformed CFP and as such it is not coherent with it. Notably, the "landing obligation" introduced by the reformed CFP, requiring fishermen to phase out the wasteful practice of discards at sea, has not yet been complemented by corresponding EU measures to ensure its control and enforcement. The lack of effective control provisions on this essential pillar of the CFP is putting at risk the effective implementation of the whole EU Fisheries Policy; 2.The current FCS reflects control strategies, methodologies and challenges of more than 10 years ago, and it is not equipped to effectively address current and future needs in terms of fisheries data and fleet control, to match the constant evolution of fishing practices and techniques and to take advantage of modern and more cost-effective control technologies and data exchange systems. The current system also does not reflect new and modern EU policies recently adopted, such as the plastic strategy, the digital single market strategy, and the international ocean governance. The existing numerous derogations and exemptions at national level are not only an obstacle to effective controls but also constitute a burden for fishermen and supply chain businesses operating in different Member States. Last but not least, the current system does not effectively promote a culture of compliance and significant loopholes have emerged in the implementation of current enforcement rules, which warrant their revision. As a result of the above, the current system lacks effectiveness and efficiency. As already stated in Section 1, this was broadly highlighted by the four European Institutions (the European Commission, the Council, the European Parliament, and the Court of Auditors), which recently published a series of reports, evaluations and conclusions pointing at the need to revise the framework. Member States and stakeholders also repeatedly called for action, recognising that the current system is not fit for purpose. The drivers of the problems mentioned above are analysed in detail in Section 2. For simplicity of presentation they have been grouped as follows: ·Lack of measures to control new provisions of the reformed CFP and lack of synergies with other policies; ·Complexity of the legislative framework and ambiguity of legal provisions; ·Inadequate provisions for fisheries data; ·Enforcement rules not deterrent enough. 2.2.What are the problem drivers?

2.2.1.Lack of measures to control new provisions of the reformed CFP and lack of synergies with other policies Both the Control and the EFCA Founding Regulations were adopted before the current CFP and have never been aligned to its new principles and key provisions. As mentioned in Section 1.1 one of the most important elements introduced for the first time in 2013 in the reformed CFP to reduce overfishing and promote innovation and more selectivity is the LO. A summary of the volume of catches covered by the LO as per 2017 is provided in Table 1. Table 1 Stocks covered by the landing obligation in 2017 In this respect, the main shortcoming identified in the Control Regulation by the REFIT evaluation is the absence of measures empowering Member States to effectively control the LO. The level of proof required to prosecute beyond reasonable doubt suspected or observed discarding events is practically impossible to obtain using traditional means of control, such as aerial surveillance, inspections at sea or inspections at landing. Remote electronic monitoring technology (REM) incorporating closed-circuit television (CCTV) have demonstrated the potential to be an effective means to ensure control and enforcement of the landing obligation and provide a deterrent to illegal discarding. However, for those measures to be applied, Member States would require targeted mandatory provisions to be laid down in the Control Regulation. The CFP also sets so-called fishing capacity ceilings for Member States by limiting both the total engine power and the gross tonnage of their fleets. The Control Regulation lays down a series of provisions to ensure that those parameters are checked, but experience showed that current verifications do not prevent possible manipulations of the engines, resulting in potential under-reporting of fishing capacity and thus in Member States possibly exceeding their capacity ceilings in the CFP. Concerning EFCA's Founding Regulation, the recent second five-year external evaluation of the Agency highlighted important mismatches between the mandate of the Agency and the new CFP priorities and objectives. This led EFCA's Administrative Board to issue a number of recommendations in June last year, calling for the Commission to align the Agency's mandate with the new CFP, and notably the landing obligation and the external dimension of the CFP. Also, the EFCA's founding act is not aligned with the Common approach on decentralised agencies. Critical lacks of synergies with other policies were also identified by the REFIT evaluation, and highlighted by stakeholders. First, the Control Regulation does not allow Member States to effectively control fishing activities in marine protected areas under the Natura 2000 network and in other spatial conservation areas such as those established under Article 11 of the CFP and Article 4 of the Mediterranean Regulation. The number and extension of those areas has been increasing over recent years and this positive trend is expected to continue. It is therefore important to urgently address the lack of measures available to Member States to properly monitor and control fishing activities in areas subject to special conditions for environmental concerns. Also the Control Regulation could support the new European Strategy for Plastics with improved measures regarding the retrieval of fishing gears. Secondly, the Control Regulation is not aligned with the general principles (traceability, cooperation rules, responsibility of operators) laid down in the food law. This creates confusion and poses problems to the authorities when enforcing the fishery and the food control legislations. The current FCS remains a complex and cumbersome system, still largely based on paper-data, and as such not in line with the Digital Single Market Strategy. Last, but not least, another major issue is constituted by the provisions in the IUU Regulation on the so-called "Catch Certificate". The EU depends heavily on imports of fish products to satisfy its demand, as they provide about two thirds of the supply to the EU market (2015). Products imported into the EU market have to be accompanied by a paper Catch Certificate. This document only accompanies the product until customs, where it is used to clear the consignment and to allow it to be placed on the EU market. The transmission of the Catch Certificate is only made between operators on a voluntary basis, when further steps in the supply chain request this document or information included therein. The risk that products sold on the EU market stem from IUU fishing activities is a growing concern in the supply chain. On top of depleting stocks, IUU fishing causes reputational damage in the eye of consumers that affects all economic operators, regardless of whether they are engaged in these activities or supply their products from IUU sources or not. Thus, the possibility that products stemming from IUU fishing may enter the EU market poses a reputational risk for all actors involved in the EU supply chain for fish products, even more so given the high EU dependency on imports. The current Catch Certificate is based on an inefficient and obsolete paper-based system, which not only prevents efficient fraud detection but results in a huge administrative burden for national competent authorities, for EFCA and for the Commission. Digitising the catch certificate would require a targeted modification of the IUU Regulation and would have multiple benefits in terms of the capacity to provide assurance on imports, notably: –it would allow the information to be integrated within the EU traceability system required by the Control Regulation, thus making sure that information would be readily available at all stages of the supply chain thereby speeding up transactions between economic operators; –it would reduce the risk of fraudulent information being entered at the source or of document falsification; –it would allow customs authorities to exchange information on imports in a more effective manner, thereby strengthening the EU control capacity. These benefits would have trickle down effects on the EU market. The risk of IUU products entering the EU market would be drastically reduced, thereby reducing the reputational risk for economic operators in the sector and allowing them to maintain the high level of consumer trust they enjoy at present. It should be also noted that digitising the catch certificate will allow implementation of the Action 7 'Fighting illegal fishing and strengthening the sustainable management of ocean food resources globally' as stated in the International ocean governance agenda, and reported in Section 1. 2.2.2.Complexity of the legislative framework and ambiguity of legal provisions

The current Control Regulation is the result of a thorough reform, which consolidated in one single legal act control provisions which were previously scattered among 23 different Regulations. Although this exercise constituted an important step forward towards simplification, harmonisation and better coherence, the system remains complex and provisions are often unclear and open to different interpretations. This negatively affects the effective enforcement of rules by the control and judicial authorities of Member States. It also impacts operators, in that they do not have certainty and predictability as to the legal consequences of their actions. Furthermore, despite the consolidation attempt of the 2009 reform, a number of control provisions remain scattered in various Regulations, namely the Mediterranean Regulation and the Multiannual Plan for the Baltic Sea. Some of those provisions are obsolete, while others derogate from the Control Regulation provisions in the sea-basin where they apply. This creates unbalanced and discriminatory treatment of fishermen across the EU, which is contrary to the spirit and raison-d'être of an EU Fisheries Control System. Supply chain operators and fishermen also complained about the rigidity of the current legal framework and about certain rules that do not correspond to the current state-of-the-art methods of control, while Member States pointed at the unnecessary administrative burden created by multiple reporting obligations (as Flag State, Coastal State, State of sale) and by sometimes unnecessary reporting provisions. The control of fishing activities at EU level requires substantial and continuous data and information exchange among the different players (operators to Member States, between Member States, the Commission, and EFCA). The exchange of all this data remains cumbersome and inefficient, often requiring multiple reporting and ICT systems to be used. While the Commission is developing an integrated Fisheries Data Management programme, which takes a holistic approach replacing the existing patchwork of data management methods by a coherent and efficient new concept, its effectiveness is hampered by the obsolete provisions in the Control Regulation imposing direct exchange of data between Member States. According to current practices the central node of the Commission is used simply as a system for dispatching messages coming from Member States, while no retention of data is legally possible. To obtain such data the Commission has to address a specific query to the Members State or it is given the possibility to download them manually or automatically from Member States databases. An example of the complexity of data exchange requirements for a typical case of fisheries activities is presented in Figure 3. Such a system not only results in excessive administrative burden for the Member States and the Commission, but also represents a waste of tax-payers' money for the development and use of multiple ICT tools. Figure 3: Example of a workflow fishing activity report. Dutch vessel fishing in English, French, and Spanish waters and landing in Portugal. The current control system also requires the co-existence of various national electronic databases (such as, for instance, the electronic database for inspection and surveillance reports, the electronic database containing the list of all fishing licences and fishing authorisations, the vessel monitoring system computer files recorded by its fisheries monitoring centre). While the Commission should have permanent access to those databases, de facto it was only provided with such access by a few Member States. Again the Commission has to make specific queries to obtain information. This situation is not only inefficient and creating unnecessary administrative burden, but it also lacks effectiveness insofar as it does not allow the Commission to have a clear picture on the status of fisheries control in the various Member States. The Control Regulation contains provisions for the full traceability of fisheries and aquaculture products from catch to the retail stage. Stakeholders and Member States consider that traceability is not effective, and the REFIT evaluation confirmed that implementation across Member States is inconsistent. The Control Regulation introduced the obligation to ensure traceability for all fishery and aquaculture products sold in the EU market, leaving to each Member State the task of defining its set-up, but without ensuring interoperability between Member States' systems. The seamless circulation of goods within the internal market is particularly important in the case of fish products, since intra-EU exchanges make up for half of overall EU trade of this commodity, despite the EU's heavy reliance on imports. This means that the flows within the EU market tend to add value to the raw material, and thereby to create economic benefits. By removing the barriers that an incomplete, non-interoperable traceability system poses, an EU-wide traceability system will therefore help to strengthen the internal market and increase economic prosperity within the EU. Other problems for the effective control of the supply chain are the lack of clarity on responsibilities and accountability of business operators, the lack of legal basis for electronic traceability systems and the fact that the current system is exclusively designed for EU fishery products, and does not allow the use of certain data on imported fishery products from third countries (Figure 4).

Figure 4: Documentation requirements for the trade of fisheries products and controls in the supply chain. 2.2.3.Inadequate provisions for fisheries data Fisheries data, and in particular catch data, are the metric by which fishery managers monitor the progression of a fishery. Accurate, effective and timely reporting mechanisms are critical to support this monitoring process. Catch data are needed to make informed management adjustments, such as adjusting catch limits, quotas, granting or withdrawing licences or closing the fishery as needed, to prevent exceeding catch limits. Flaws in the data reporting process also erodes the quality of the fish stock assessment and hence of the scientific advice for the management of the fishery. Compromised scientific advice may impede the effective management of the resource and jeopardise future harvest and thus fleets profitability. Proper fisheries data backing a sound scientific advice is of great importance especially in the Mediterranean, where currently the status of the majority of stocks remains unknown, with only 35 fish stocks currently subject to scientific advice, and where even the total number of fish stock is today unknown. Fisheries data recording, monitoring and submission as provided for in the Control Regulation are affected by several drawbacks and important limitations, which inevitably affect the quality of those data and ultimately compromise sound management decisions at national, EU and also international level. The main drivers are to be found in the numerous exemptions and derogations, notably for certain categories of vessels, as well as for recreational fisheries, which are currently exempted from providing fisheries data. In addition, there is no obligation to report catches below 50 kg for all vessels. Only this derogation, mostly relevant for small vessels, could leave unaccounted today up to 350.000 t of fish.. Since the small scale coastal fleet in the Mediterranean represent 57% of the total small scale coastal fleet, accounting for 63% of the fishing effort and 22% of the value of landings., up to 180,000 t might remain undeclared in the Mediterranean, i.e. over 4 times the reported ones. Provisions for the submission of fisheries data for vessels below 10 m have proved to be highly ineffective and catch data for this category of vessels are largely unaccounted for. Furthermore, reporting for small vessels between 10 and 12 m is still largely paper based, as provided by current derogations, despite the existence and accessibility of more modern and cost-efficient electronic reporting tools. This has a huge impact on national authorities as data received from paper sources must be entered into their databases manually and subsequently transmitted to the European Commission for monitoring the quota consumptions. Furthermore, manual typing increases the chances of mistakes, which, together with the exemptions for vessels below 10 m, seriously undermine the completeness and accuracy of fisheries data at EU level. The lack of minimum control measures for recreational fisheries is the root cause of what can be considered today a considerable and unacceptable information gap, both on the exact pool of participants in those fisheries (number of vessels, number of fishermen) and on relevant catch data. Recreational fishing has been on the rise in EU Member States. There are an estimated 8 to 10 million recreational fishermen in Europe spread across the various Member States and sea basins, with the UK, France, Italy and Norway showing the largest numbers (750,000-1.5 million). This number has grown throughout the years and is likely continue to do so. The growing number of recreational fishermen is a matter of concern as it has a direct and increasing impact on fish stocks, including on commercial ones subject to catch limits. Although there is generally a lack of data when it comes to recreational fishing, recent studies and estimates show large numbers of catches for certain important stocks. For example, scientists estimated that for 2017 the volume of catches for seabass in the Atlantic by EU recreational fishermen largely exceeds that of commercial ones. The situation for Eastern Baltic cod is similar, while data are lacking on several other stocks and sea basins. From the point of view of the health of stocks whether catches are for commercial or recreational purposes is irrelevant, as both amount to removing fish from the sea, which increases fishing mortality and reduces biomass for reproduction. However, because catches from recreational fisheries are largely unaccounted for, their exclusion slows down environmental recovery and delays achieving the full economic and social benefits from a situation of generalised fishing at sustainable levels. Finally, due to exemptions and derogations related to weighing of catches after landing, each quantity of each species landed is not always correctly accounted for and the results are not always recorded in mandatory catch registration documents. This not only undermines the legality of the fishing activities but also jeopardises quota uptake monitoring. 2.2.4.Enforcement rules not deterrent enough The whole enforcement system is to a large extent unclear, with provisions scattered between the Control Regulation and the IUU Regulation. This is a major drawback and source of confusion for the Member States, who strongly called for a more streamlined system. In addition, the lack of clear and harmonised rules on sanctions for infringements of the CFP rules led to a situation where not only the levels of sanctions are substantially different from one Member State to another, but where the same type of infringement can be punished in very different ways (e.g. administrative fines, withdrawal of licence, points assigned or even criminal proceedings), depending on the Member State identifying it. In certain cases, whereas in one Member State the same infringement can lead to prosecution, it will not be prosecuted at all in another Member State. Some of those divergences in handling are down to the inevitable differences in the national judicial systems. Others are due to the fact that current rules are so designed that unequal treatment of fishermen across the EU will continue to perpetrate. Such inequality of treatment runs counter to the very raison d'être of the CFP and undermines the basis for establishing a solid culture of compliance across the EU. Furthermore, when the sanction does not ensure that, as a minimum, the perpetrator is deprived of the economic benefits of the illegal activity, recidivism is significant, resulting in a negative impact on the environmental resources and ultimately on the society. Also, the point system for serious infringements is not uniformly applied by Member States. This is due to the lack of standard definitions of serious offences to the rules of the CFP, and to the fact that the criteria for defining serious infringements are to a large extent at the discretion of Member States. The rules on the point system also lack clarity on several aspects: e.g. it is not clear whether points are applicable to the licence holder in a case where the serious infringement concerns an obligation addressed to the master of the vessel. The scope of application of the point system for masters is not clear either, and, unlike the point systems for licence holders, the definition of this system - including the number of points to be attributed - is left entirely to Member States. The penalty points system introduced for serious infringements was supposed to lead to a better and more harmonised enforcement of the CFP rules. However, it is now apparent that the system in place, which was designed more than 10 year ago, is not fit for purpose. Since the point system is not applied with equal criteria by Member States, fishermen are allocated different points for the same infringement depending on where this is committed, exacerbating unfair competition and inequality between fishermen. Another critical problem is the fact that Member States, but also the Commission, have no direct access to infringements identified and prosecuted in other Member States. This is a serious drawback for the effective management and control of Member States' fleets (e.g. a typical case is that of a Member State where the catch is landed detecting an infringement for a vessel flying the flag of another Member State, the latter however not always being informed). This is due to the fact that the transmission of information relating to inspections and infringements between Member States is not mandatory. Figure 5 below provides a schematic overview of the existing problem, their drivers and consequences, which are presented in greater detail in the following paragraphs.

Figure 5: Schematic overview of the existing problems (red box), their drivers (yellow boxes) and consequences (orange boxes) in fisheries control. 2.3.How will the problem evolve? Without addressing the regulatory failures which characterise the current legal framework, little can be done to improve the effectiveness and the efficiency of the current system. Both the REFIT evaluation carried out by the Commission and the recent recommendations of the European Court of Auditors are clear in this respect and there was broad consensus among stakeholders. By fully implementing existing rules, including derogations and exemptions, most issues could be only partially addressed. However, this would require imposing on Member States to pursue the implementation of provisions which are often obsolete and largely inefficient, which are neither aligned with current available technologies nor state-of-the-art (e.g. digital systems for data recording and transmission) and which will eventually entail major investments without bringing the expected benefits. The main negative outcomes of not properly addressing the problems identified would encompass the following areas: ·Compliance with the CFP and fulfilment of CFP objectives: If the current control system is not adapted to the reformed CFP and is not properly modernised, there is a very high risk of undermining the objectives of the CFP itself and its very raison d'être. Notably, the landing obligation introduced by the reformed CFP would remain without proper control means and provisions. If compliance with the CFP is not ensured, the international reputation and credibility of the EU will also be affected in bilateral and multilateral fora. ·Administrative burden and costs: The complexity of the current system will continue to be a serious issue. Administrative procedures and requirements that are largely inefficient and often useless, that could be replaced by more effective and efficient means, would remain in place as required by the legislation. Once more, this will have negative repercussions as costs will be borne by Member States, tax-payers and operators. It will also negatively impact the image and credibility of the European Institutions, which would be seen as responsible for imposing obsolete, burdensome and anachronistic provisions. ·Fisheries Data: The current limitations in the recording, transmission, sharing and processing of fisheries data can only be overcome to a limited extent. Major investments and efforts will be necessary to possibly improve the quantity of data for small vessels, but their quality and reliability will remain weak. Data from recreational fisheries will remain largely unavailable, if not totally unknown, to the detriment of scientific advice and of decision-making for more sustainable fish stocks. Member States will continue to experience major hurdles in the exchange of data for their vessels and operators and would not benefit from centralised systems for the sharing of data and of information. Overall, this will have a negative impact on the ability of Member States to take action, to ensure better controls and to enforce the rules. ·Culture of compliance and equal treatment of fishermen: One of the main objectives of having a common control system at EU level is to ensure that fishermen and operators are treated fairly and equally. This is yet to be achieved and current rules, even if their implementation is stretched to the maximum, contain structural and important limitations which hinder the achievement of a level-playing field. This has in turn negative implications for an accrued culture of compliance which will be difficult to promote if equal treatment is not ensured and if conditions for unfair competition are not redressed. 3.Why should the EU act? 3.1.Legal basis The legal basis for this initiative is provided in Article 3(d) of the Treaty. 3.2.Subsidiarity: Necessity of EU action The CFP and its control is an area of exclusive EU competence pursuant to Article 3(d) of the Treaty and therefore the subsidiarity principle does not apply. 3.3.Subsidiarity: Added value of EU action The EU added value of the policy intervention is recognised by all stakeholders, as well as by the European Institutions and Member States, which strongly agreed that EU intervention is essential in adding value compared to possible diversified national approaches and in guaranteeing a proper control and management of shared resources. In prescribing a harmonised and common framework for the control of CFP measures, and in defining harmonised inspection and control standards, the Control Regulation contributes to create a level playing field across the EU and hence to improve the culture of compliance with CFP rules. 4.Objectives: What is to be achieved? 4.1.General objectives The main objectives of this initiative are making the Union fisheries control system more effective and efficient and ensuring full compliance with the reformed CFP.

The objectives of the CFP are listed in Article 2 of Regulation (EU) No 1380/2013, and are reported below for clarity: ·The CFP shall ensure that fishing […] activities are environmentally sustainable in the long-term and are managed in a way that is consistent with the objectives of achieving economic, social and employment benefits, and of contributing to the availability of food supplies. ·The CFP shall apply the precautionary approach to fisheries management, and shall aim to ensure that exploitation of living marine biological resources restores and maintains populations of harvested species above levels which can produce the maximum sustainable yield […] by 2015 where possible and, on a progressive, incremental basis at the latest by 2020 for all stocks. ·The CFP shall contribute to the collection of scientific data. ·The CFP shall: ogradually eliminate discards […] by avoiding and reducing, as far as possible, unwanted catches, and by gradually ensuring that catches are landed; oprovide conditions for economically viable and competitive fishing capture industry; oprovide for measures to adjust the fishing capacity of the fleets to levels of fishing opportunities […]; ocontribute to an efficient and transparent internal market for fisheries and aquaculture products and contribute to ensuring a level–playing field for fisheries and aquaculture products marketed in the Union; opromote coastal fishing activities, taking into account socio- economic aspects; obe coherent with the Union environmental legislation […], as well as with other Union policies. 4.2.Specific objectives The specific objectives of this initiative are as follows: ·Remove obstacles that hinder the development of a culture of compliance and the equitable treatment of operators within and across Member States; ·Simplify the legislative framework and reduce administrative burden; ·Improve availability, reliability and completeness of fisheries data and information, in particular of catch data, which are key to monitor and deliver on the CFP objectives and allow exchange and sharing of information; ·Bridge the gaps with the CFP and with other EU policies. The general and specific objectives and their relation with the identified problems are presented in Figure 6. Figure 6: Schematic overview of the existing problems and general and specific objectives of this initiative.

5.What are the available policy options? Following the results of REFIT evaluation different policy options that would allow tackling the shortcoming identified and achieve the objectives set in Section 4 were discussed. Five policy options were considered: (Baseline) No policy change but full enforcement of current rules; (1) Targeted amendments of the Fisheries Control Regulation; (2) Targeted amendments of the Fisheries Control System; (3) Complete revision of the Fisheries Control System; (4) Repeal of the Control Regulation and introduction of relevant measures in multiannual management plans at regional level. The third and fourth options were discarded at an early stage. The other three most relevant policy options have been retained for further analysis and comparison. 5.1.What is the baseline from which options are assessed? The baseline for assessing the impacts of the other options proposed is the current legislative framework, i.e. no policy change but full enforcement of current rules. The REFIT exercise concluded that, while the main provisions of the Control Regulation are implemented, full compliance is yet to be met and a number of improvements could be achieved by a reinforced implementation and enforcement by Member States. The main areas affected by these shortcomings are linked to enforcement, data availability, quality and sharing, the control of the landing obligation, synergies with other policies and legislation. Since those areas are also tackled by policy Options 1 and 2, the impact of full enforcement of the current provisions in those areas are explicitly presented in the Sections 5.1.1 to 5.1.4. 5.1.1.Environmental impacts Over the past few years there has been significant progress achieving environmental sustainability. Overall, overexploitation has declined drastically across all areas (with the exception of the Mediterranean and the Black Sea) and the number of stocks with MSY assessment increased. Fleet capacity reductions over 2008 to 2016, conservation measures, and the implementation of the Control Regulation contributed to it. It should be noted however that the situation in the North-East Atlantic and in the Mediterranean are quite different. It has been estimated that in the Mediterranean the average fish biomass declined by 20% between 2003 and 2014. By contrast, it registered a 35% increase in the North-East Atlantic, although still around 30% of stocks in this sea basin remain overfished and not within the expected biological limits. So overall, despite the improvements in the environmental status of stocks in recent years, there remain significant regional differences, and there is still considerable room for improvements in performance. As explained in Section 1 the main tools to reduce overfishing are conservation measures (e.g. fishing quotas, regional management plans, fishing restricted areas, and technical measures –which set where, when and to how to fish). Control measures are essential in supporting reduction in overfishing insofar as they allow keeping under control fishing activities and ultimately ensure that conservation measures are respected. Although a number of additional elements have to be factored in the whole equation (e.g. externalities in the form of climate change and natural stock fluctuations' impact on environmental indicators) it is therefore indisputable that an effective and efficient control system contributes to the positive environmental status of stocks. In the attempt to quantify such positive contribution, despite the lack of targeted data, a number of case studies were conducted. These studies compared fisheries targeting the same species with and without specific and reinforced control actions. The main results of the first case study comparing the sole fishery in the North Sea and in the Bay of Biscay was that the recovery of the fish stocks to sustainable biological limits is likely to be attained more quickly if tighter control and monitoring of fishing activities are deployed. The rebuilding of the spawning stock biomass is also faster in case of tighter control measures. A second case study on Bluefin Tuna (BFT) fishery shows that increased compliance with conservation and management rules from 2008, and in particular catch limits, as a consequence of a strengthened control scheme, supported the rebuilding of the stock, which was almost on the verge of collapse. As a result, the fleet was allowed to considerably increase fishing quotas from 2015 onwards. A third case study of the Northern hake stock shows that with improved control from 2008, the stock could exceed sustainable biological levels beyond the CFP requirements. By contrast, a review of the situation of the EU fishing fleet operating in the Mediterranean shows that lack of monitoring, control and enforcement can have detrimental impacts. In the Mediterranean, it is estimated that over 90% of stocks are overexploited without any tangible indications of recovery. Some commercially important stocks cannot be assessed, or are assessed only with a great degree of uncertainty, because of a lack of relevant data, in particular from small-scale fishing vessels and recreational fishermen both of which are particularly numerous in this sea basin. A more detailed assessment of the environmental impacts that a full enforcement of the provisions in the current legislative framework was also carried out and led to the following conclusions: Enforcement (sanctioning systems) - A study commissioned by the European Commission in 2000 analysed the short term economic benefits of fraud, including the perception of fishermen of control measures and offences, likely impact of increased surveillance, likelihood of being identified, economic reward of fraud and additional value added. The results show that net benefits deriving from illegal activities in Europe could amount to up 200M€ and that a robust, deterrent, and enforced control system increases the culture of compliance of fishermen with the CFP. In the Baseline, the level of consistency between Member States on the application of sanctions for infringements would remain weak, and the differences between national systems would not be eliminated. This might de facto induce a culture of non-compliance with CFP rules among fishermen, including overfishing, therefore strongly hindering the achievement of good biological status of fish stocks. Data availability, quality and sharing - Reporting of data from small vessels could be improved through full enforcement of specific control measures (e.g. those recently introduced in the Baltic Regulation) and better implementation of the sampling plans used by Member States to control vessels below 10m. The estimated benefits however would not substantially increase, as the vessels covered by direct reporting of catches thanks to Baltic Regulation would increase only by 1.2% of the total EU fleet, with still significant data gaps of information needed for the assessment of resource status, especially in the Mediterranean. The lack of EU control for recreational fisheries would also continue to hinder the quality of catch data. Weaknesses would remain in the weighing practices at landing. This would perpetuate shortcomings in quota uptake monitoring, and undermine environmental sustainability. Problems would also remain in correctly establishing/certifying engine power at MS level against capacity ceilings, which are so important in ensuring environmental sustainability of fish stocks. Exchange of fisheries data between Member States, and access of the Commission to control-related data would also remain unsatisfactory, impacting on the enforcement of regulations designed to ensure CFP objectives of environmental sustainability. Landing obligation - Control tools available to Member States would only cover a very small proportion of the fishing fleet on a real-time basis by seagoing inspection activities, and would still provide considerable opportunity for discarding by fishermen without detection. Average discard rates for selected fisheries and gear types in the EU are estimated to be significant. Under a scenario of full enforcement of the current legislative framework these rates would not be expected to significantly decline. In addition, budgetary limitations in Member States and the high at-sea costs would not prevent discarding, with associated negative environmental impacts. Synergy with other policies and legislation - As presented in Section 2.2.1 Article 50 of the Control Regulation provides for control of fishing restricted areas adopted by the EU Council, but not for all marine protected areas defined by Member States under Natura 2000 network of the Habitat Directive. As a result, not all marine protected areas are explicitly covered by the remit of the Control Regulation and no further environmental improvement can be gained under the Baseline. As regards lost fishing gears, current rules on reporting are burdensome and inefficient, and do not take advantage of other existing reporting tools. As a result they are hardly used. In addition, certain categories of vessels are currently exempted from carrying on board equipment to retrieve lost gears. Also synergies with market and in particular positive indirect environmental impacts attributable to traceability of fishery products would remain compromised under this option, threatening an effective and consistent control from ‘net to plate’.

5.1.2.Economic impacts Studies published in scientific journals suggest that exploiting EU fish stocks in compliance with the CFP would result in high economic benefits for the EU fishing communities. The benefit for the EU fishing fleet could be as high as an extra €4.54 billion operating profit per year. This represents a maximum economic gain 3.5 times higher than the current operating profits of the EU fleet. This is consistent with the fact that, with the implementation of the CFP, the overall economic situation of the EU fleet in the period 2008-2015 has been regularly improving at a significant rate (see Figure 7). These improvements coincide with the improved environmental performance achieved thanks to the current legislation (resulting in improved fishing opportunities) and are also driven by a steep decline to low stable fuel prices as from 2014 and lower fuel usage in recent years, and by improvements in some first-sale fish prices. Economic performance at EU level however varies considerably between regions, Member States and fisheries. Generally, economic performance trends are better in the North Sea, North-East Atlantic and Baltic fleets than those fleets fishing in the Mediterranean and Black seas fleets, although the latest economic data in the Baltic Sea suggests a poorer economic performance among certain fleets. The economic situation of certain small-scale coastal fleets, in particular in the Mediterranean, continues to be of concern, in contrast with the overall improvement in the EU large-scale and distant-water fleets. For the EU small-scale coastal fleet, all indicators show a decline in performance over the period 2008-2013, but with improvements in 2014 and 2015 and predicted declines between 2016 and 2017. Figure 7. Trends in economic performance of the EU fleet Source: STECF, 2017 (STECF 17-12) The small scale coastal fleet (so prevalent in the Mediterranean compared to other areas) is exempted from numerous reporting and monitoring obligations by the Control Regulation. Under the Baseline further improvements in economic performance over subsequent years are still to be expected, driven by the improvements in environmental performance (stocks conservation). However, considering the existing inertia and the fact that full implementation of the current legislative framework will anyway not be able to tackle major identified shortcomings, no major differences in impacts are expected compared to the current situation. In particular, in geographical areas where environmental and thus economic performance has been poor e.g. the Mediterranean and the Black Sea, the limited positive environmental impacts would be unlikely to bring about any meaningful positive changes in economic performance. Overall, achieving the full economic potential of fishing stocks at biological sustainable limits will be hampered by the continuation of existing problems and shortcomings. The economic benefits gained by those fishermen that do not comply with the rules would continue, partly due to the failure of the sanctioning system. This represents an economic cost to compliant fishermen, as direct competitors to the non-compliant ones. The economic benefits gained by non-compliant fishermen would also represent a direct negative environmental impact, as well as an indirect cost to society from the negative impact of illegal fishing behaviour on stocks. The case studies referred in Section 5.1.1 allowed estimating the economic impacts of the Fisheries Control System under the Baseline scenario. The results clearly show that quicker recovery of the stocks, linked to better controls, is also associated with higher economic performance indicators. In the case of sole fishery in the North Sea, reinforced controls supported a GVA increase by 8% per year on average over the 2008-2015 period, compared to the 2% per year for the Bay of Biscay (no reinforced control). In the North Sea fishing vessel profitability indicators increased by 2% on average per year, while they remained fairly stable for the Bay of Biscay sole fishery. The assessment of control costs, compared to the benefits in terms of GVA, supports the conclusion that improved control would result in positive economic impacts for the EU fleet with a clear positive cost-benefit ratio (i.e. costs of control vs economic benefits); the case study of sole fishery suggests that the cost-benefit is positive with 1 € invested in control supporting the creation of 3.7 € for the EU economy (GVA estimates do not include economic benefits for ancillary industries, so in reality, the cost-benefit ratio is probably higher). Unfortunately the relative lack of economic data on some EU fishing fleet segments targeting BFT prevents a detailed economic analysis for this fishery. In addition, the BFT market is especially exposed to external factors outside the remit of the EU (i.e. economic and societal situation in Japan). Nonetheless, the economic performance of the EU fishing fleet targeting BFT substantially improved on average over the past five years and GVA increased at an average of 2.4 € million per year, while vessel profitability indicators increased by 4-5% per year. Therefore, also this case study supports the view that improved control would be likely to generate positive economic impacts and with a positive cost-benefit ratio (with 1 € invested in control supporting creation of 2 € for the EU economy). The Northern hake fishery benefitted from a clear economic improvement over the 2008-2015 period. Income doubled over the period, the gross value increased threefold and the gross profit increased sixfold. Correspondingly, fishing fleet profitability ratios also increased over the period with average annual increase rates of about 2%. As in the previous cases, the benefit/cost of control appears also positive with 1 € invested in control supporting creation of 2.2 € for the EU economy. In contrast, economic (and social) indicators in the Mediterranean have been deteriorating over the past few years for the whole EU fleet, with some important fishing fleet segments nearing a situation of economic collapse and some Member States fishing fleets consistently operating with negative economic results. 5.1.3.Social impacts Positive social impacts resulting from an enhanced control system are not so evident in some cases; in particular as regards job creation, mainly because the fisheries sector, as with most other sectors of the EU economy, sees a process of replacing labour by capital. Hence, better economic results could mean higher capital investments resulting in more technologically intensive vessels. Additional factors like the reduced fleet capacity and reduced fishing quotas in line with the CFP also contributed also to the decline in employment. Both the case studies on sole and Northern hake fisheries did not show any clear trend in the number of full time equivalent. Nevertheless, the evolution of crew remuneration tells a different story: average wages per crew member on fleet segments targeting sole increased by 50% more per year in the case of tightened control, lending weight to the argument that improvements in control supported social benefits in the form of quality of employment over the longer-term. Also the average wage for hake fishermen shows a positive evolution with average yearly wage almost doubling over the period, reflecting the increased profitability of the vessels concerned. In the case of BFT, the significant quota increases supported a rise in the number of jobs, which can be again indirectly attributable to tighter control measures on the fleet. The full enforcement of the current Control Regulation would therefore bring some limited positive social impacts for the EU fleet in terms of wages, but –as for the economic impacts- only in the longer term, especially due to better enforcement and compliance with the landing obligation. However, in geographical areas where environmental and thus social performance has been poor e.g. the Mediterranean, the limited positive environmental impacts of full enforcement of the current Control Regulation would be unlikely to bring about any meaningful positive changes in social performance. The Baseline, again for the failure of addressing systematic shortcomings of the sanctioning system, is also not considered to bring any fundamental change in the social behaviour of fishermen towards greater compliance.

5.1.4.Administrative burden The REFIT evaluation shows that the Control Regulation is very complex and a number of provisions require legal clarification. In addition, as some obligations can be interpreted and thus applied very differently by Member States, the Commission is often requested to provide guidance to avoid multiple interpretations. While the use of modern technologies and the development of electronic fisheries information systems allowed for a decrease of the administrative burden for both operators and public administration, the analysis showed that the Control Regulation has potential for further decreasing administrative burden, for instance by promoting the use of digital and interoperable systems. The full implementation of the current legislative framework is expected to dramatically increase the administrative burden of businesses (90.3M€ over a 5 year period) and public authorities (71.0M€) due to the better enforcement of monitoring and control of vessels below 12m. Also the full implementation regarding current rules on sharing of information, e.g. on the establishment and maintenance of national databases and specific queries or manual download of data from the European Commission to access Member States data, are assumed to increase the costs compared to the Baseline, and notably by 4.6M€ for the public administrations in Member States and by 2.0M€ for the European Commission. A total increase of 167.9 M€ over a five year period is therefore expected for this option. A summary of the administrative burden for the Baseline is provided in Table 3 in (Section 7.2) 5.2.Description of the policy options 5.2.1.Option 1: Targeted amendments of the Fisheries Control Regulation This option considers targeted amendments of the Fisheries Control Regulation (hereinafter "Control Regulation") limited to the following thematic areas: i) Enforcement, including sanctions, point system and follow-up of infringements; ii) Data availability, quality and sharing, with particular regard to better reporting and tracking for vessels below 12m, data on recreational fisheries, weighing procedures and data, monitoring of the fishing capacity, and data management and sharing at EU level; iii) Control of the landing obligation; and iv) Synergies with other policies, in particular with the environment, market, food and feed policies and with the policy on the fight against IUU fishing. The amendments in these areas will among other things clarify provisions currently prone to different interpretations and leading to disparate implementation by Member States and address numerous derogations that hinder the level playing field among EU fishermen. Overall, the legislative framework will be simplified and unnecessary administrative burden will be reduced by either removing reporting obligations or by streamlining them. Full digitisation of control data, setting the conditions for integrated EU information systems and databases and promoting the use of harmonised and/or interoperable ICT tools will be instrumental in this respect. Last but not least, the Regulation will be aligned with the Lisbon Treaty. The core assumptions for this option are summarised below: ·Rules on enforcement are clarified and strengthened; ·Requirements established are all duly justified by a purpose, easily understandable and technically enforceable (simplification); ·All vessels are tracked and electronically report their catches (electronic reporting is introduced for vessels below 12 m, replacing the current paper-based system, with an easy and cost-effective system, making use of easy and affordable electronic devices such as mobile phones); ·Control measures for recreational fisheries are introduced; ·Weighing, transport and sales procedures are clarified and simplified to ensure that all catches are taken into account and reported; ·The responsibilities and accountability of operators at all process stages are clarified;

·The information and reporting systems are fully digitised and where possible streamlined; ·Data exchange and sharing among relevant actors is ensured; ·Control of the landing obligation is regulated; ·Interoperability of traceability systems is promoted; ·Control of fisheries in marine protected areas is ensured; ·When the CFP can contribute to reaching the objective of other EU policies, and respectively when other, non-fisheries, policies can support CFP objectives, bridges are set up so as to ensure synergies and coordination. It should be noted that under this Option, the choice of amending only some of the provisions in the areas that show shortcomings but not all of them (for instance amending the provisions on the enforcement but not data availability, quality and sharing) was early discarded as it would not have allowed achieving the objectives set. In addition, following the publication of the Inception Impact Assessment, various technical sub-options were identified for tackling the identified shortcomings in each area. In this impact assessment, however, only those sub-options prone to achieve the set objectives with minimal administrative burden and that found support from the majority of stakeholders were fully investigated. A list of the technical sub-options discarded and related motivations is provided in Annex 6, while Annex 5 gives specific details on the retained sub-options. 5.2.2.Option 2: Targeted amendments of the Fisheries Control System Policy Option 2 builds upon policy Option 1. It considers all the actions proposed in the policy Option 1 plus i) amendment of the EFCA founding Regulation and ii) of the IUU Regulation as regards enforcement and the catch certificate; and iii) any related amendments of specific provisions in relevant legislation (i.e. the Mediterranean Regulation and the Baltic Regulation). The core assumptions for this option are all those of Option 1, complemented by the following: ·Enforcement rules in the Control Regulation and IUU Regulation are consolidated; ·Control provisions that are currently spread across other legal texts are concentrated in one legal instrument or, if not up-to-date or consistent with other provisions, repealed; ·An electronic IUU catch certificate is introduced (currently paper based system); ·The EFCA missions and tasks are fully aligned to the CFP; ·The EFCA procedures and working practices are adapted to take into account the Common Approach on decentralised agencies as adopted in the 2012 Joint Statement of the European Parliament the Council of the EU and the European Commission. Specific details on amendments proposed to ensure the achievement of those actions are presented in detail in Annex 5. 5.3.Options discarded at an early stage Two policy options were discarded at an early stage: the full revision of the Fisheries Control System and the repeal of the Control Regulation, followed by incorporation of control rules into fisheries management plans at regional level.

The full revision of the fisheries control system aimed at radically changing the approach in the control policy, by deviating from current principles and priorities and fully re-designing the current system at national and EU level. This option was not well received by stakeholders, the majority of which supported an evolution rather than a revolution of the current system. A complete change in the control approach would not ensure the return on the investments made so far and allow the achievement of the anticipated benefits on the long term. The majority of stakeholders agree that the principles embedded in the current Control Regulation tackle issues that have in the past led to extensive overfishing and poor compliance and as such should not be changed but rather some of the provisions for their implementation should be amended where it was found that they are obsolete or of difficult application. The repeal of the Control Regulation envisaged a radical change, by repealing the harmonised control measures set in the Control Regulation and rather adopt tailored control solutions in the framework of multiannual management plans at regional level. However, this approach was discarded early for several reasons. First, such an approach would be against the principles for a Union fisheries control system as laid down in the CFP (Article 36), which shall be based on a global, integrated and common approach and on a Union framework for controls, inspections and enforcement. Secondly, such an approach would not create the conditions for ensuring a level playing field among the operators as it would increase inequalities and ultimately lead to discriminatory treatments not only among operators, but also among fishery products placed on the EU market. Thirdly, multiannual management plans are being progressively adopted at regional level, but they do not and will not necessarily cover all regions and all fisheries, thus leaving entire areas and species entirely unprotected by control and enforcement measures. 6.What are the impacts of the policy options? This section presents the environmental, social, and economic impacts assessed for the retained policy options, as well the administrative burden and other impacts against the Baseline. Details on the methodology are presented in Annex 4. 6.1.OPTION 1 "Amendment of the Fisheries Control Regulation" 6.1.1.Environmental impacts Under Option 1, the proposed amendments would serve to support and contribute to a range of positive environmental impacts in all sea basins, with particularly significant environmental improvements expected in the Mediterranean. The contribution of the amendments proposed in the Control Regulation for the four different thematic areas that would be affected are presented in detail below. Enforcement (sanctions systems): The level of consistency between Member States on the application of sanctions for infringements would improve, and sanctions would be better set at a level to act as a deterrent to infringements. Earlier studies have shown how the level at which sanctions are set, coupled with the likelihood of being inspected and of infringements being detected, is a critical factor in affecting compliance with regulations intended to ensure environmental sustainability. The harmonisation of the sanctioning system is therefore expected to result in considerable improvements on enforcement of the CFP rules, with expected large positive returns for the environment. Data availability, quality and sharing: The number of vessels below 12m tracked and reporting catches electronically would rise from 1.2% of the total fleet under the Baseline, to 100% under Option 1. The improved control would result in increased quality and availability of data required for resource assessments, and thus in net positive environmental impacts (better and more reliable stock assessment). Given the large proportion of small vessels in the Mediterranean, this means that significant environmental improvements would be likely in this basin. The improved control at regional level of recreational fisheries, especially the ones having a significant and consistent impact on fish stocks, would provide the basis for additional management measures on those types of fisheries, resulting in turn on better stock assessment. The digitisation of the data information system will also significantly enhance availability and exchange of data, contributing therefore to improved enforcement of regulations designed to ensure the CFP objective of environmental sustainability. In terms of weighing of catches, the actions specified under Option 1 would remove exemptions and close current loopholes, again leading to improved data for the monitoring of quota uptake, and in turn supporting more accurate assessment of fishing mortality to feed into stock assessments. Improved data on engine power would contribute to positive environmental impacts through enhanced ability to ensure a balance between fishing capacity and fishing effort in compliance with capacity ceilings as set out by the CFP. Increased environmental benefits could have been achieved with tighter control measures, as for instance imposing to recreational fisheries the same rules as commercial fisheries. This sub-option however was discarded (see Annex 6) as the estimated extra benefits would not have been proportional to the imposed additional costs and administrative burden and as such also not supported by certain groups of stakeholders (in particular in general Member States did not support extending the current control rules to recreational fisheries at EU level). Landing obligation: The introduction of CCTV systems on vessels identified as being at high risk of discarding would significantly increase the effectiveness and efficiency of control and compliance. The extent of the positive environmental impacts generated from catch data used in stock assessments being a more accurate reflection of fishing mortality, would depend on the number of vessels considered by Member States as required to have CCTV systems, and their levels of discards in the absence of CCTV. Also in this case additional environmental benefits could have been achieved through tighter rules, as for instance requiring the presence of observers on board of fishing vessels or impose the mandatory use of remote continuous electronic monitoring tools (e.g. CCTV) on board of all vessels. Again, however, the extra benefits would not have been proportional to the estimated costs and therefore were discarded. In addition, the stakeholder consultation revealed that businesses did not support full coverage of all fishing vessels with CCTVs or even 100% coverage for certain pre-defined categories of vessels (see Annex 6). An approach based on risk was therefore considered more appropriate, as it would possibly reward compliant operators and would also require the authorities to regularly update their control strategies. Synergy with other policies and legislation: The actions foreseen in Option 1 to increase synergies with environmental legislation would result in an additional 510.451 km2 of marine protected areas being fully covered by the remit of the Control Regulation compared to the Baseline. This impact would be particularly beneficial in the Mediterranean, where the activities of recreational fleets, the increased use of spatial restrictions and the potential impact of non-EU fleets on marine protected areas' integrity are particularly relevant. 6.1.2.Economic impacts The proposed amendments under Option 1, will result in a series of positive economic impacts for the business, most of which stems from the positive environmental impacts and in particular the better status of the stocks. As previously described in the introduction to this section, case studies provide quantitative estimates on economic impacts of improved control. Collectively they show that the positive economic impacts of an improved control system can be realised in the medium- to longer-term, and in periods of less than five years. The case studies show that, as a consequence of quicker stock recovery, supported by a reinforced control scheme, an improved control system would potentially assist in achieving higher economic performance indicators. The higher performance could therefore support the view that Option 1 would help in achieving the ideal status of generalised fishing at sustainable levels quicker and at a reasonable cost. The positive economic impacts on EU fleets could generate positive indirect economic impacts in the downstream processing and marketing sectors (i.e. for the 3 454 processing sector firms in the EU), in the medium- to longer-term, to the extent that processors rely on EU catches as opposed to imports of raw material from outside the EU. Under Option 1 increased availability of fish would be expected for the processing sector, both from any improvements in stocks that would result from the positive environmental impacts of this Option, but also specifically from the reduced levels of discards which Option 1 would contribute to through its actions related to the landing obligation. However, these additions are not expected to be of such a magnitude as to reduce significantly the dependency of the EU processing sector on imports of raw materials. Furthermore, profitability gains are not to be expected either, unless the increased availability of local products and the preference of consumers for such products would support using them as a market differentiation tool supporting higher prices and hence increased profit margins. Also potentially of considerable importance to the small scale fleet is that this fleet typically does not have historical data, which they would need if quotas are introduced to demonstrate historical record. Improving data on catches for the under the 12m fleet segment under Option 1 would assist with generating historical time series of ‘track record’, and thus potentially longer-term economic benefits if catch restrictions were to be introduced at some stage in the future. Direct economic positive impacts are expected for small scale fleets thanks to the reinforced control of recreational fishermen. In fact, despite the ban to sell catches from recreational activities, there are concerns that this might not always be the case, resulting in unfair competition for professional fishermen. While it was not possible to quantify the economic benefits, it was however possible to calculate the costs to ensure compliance with the landing obligation and the control of fishing capacity. Those costs have been estimated to be about 7.2M€ for public authorities to monitor the landing obligation, and 5.1M€ for businesses to comply with the new provisions on monitoring of power engine, which will be however counterbalanced by a reduction in costs to public authorities by 4.2 M€ (a summary of the compliance costs is provided in Table 3 in Section 7.2). It should also be noted that the above-mentioned compliance costs which would be incurred both by businesses and public administrations would be eligible for refund under the EMFF (see section 1.3). 6.1.3.Social impacts

Under Option 1, the increased consistency and clarity of the sanctioning systems, together with its robustness is expected to have a significant and positive impact on the social behaviour of fishermen in the short-term and thereafter, providing support for a stronger culture of compliance and leading to fewer infringements. Social impacts would also include a more consistent and equal treatment of fishing operators. As already stated, whereas it is unlikely that significant numbers of new jobs among fishermen are to be created, further increases in wages seem to be quite likely to happen, which will result in better quality jobs and improve the attractiveness of the sector to younger generations. Furthermore, as regards smaller vessels, the potential economic benefits resulting from the allocation of fishing quotas and thus of increased fishing opportunities, would also result in a social positive impact. However, the digitisation of the Control System and the introduction of new ICT will boost innovation, providing new avenues for job creation and creating new opportunities for small and medium-sized enterprises (SMEs). 6.1.4.Administrative burden The actions and amendments foreseen under Option 1 would strongly support the reduction in unnecessary administrative burden for the public authorities and, considering that most of the new costs are associated with ICT development and one-off investments, also in the long term for the whole EU. The actions foreseen under enforcement and data availability, quality and sharing are especially prone to reduce administrative burden and their impacts have been monetised for businesses, national and EU administrations, including the Commission and EFCA. The amendments proposed under enforcement, and in particular the establishment of the electronic inspection report system (currently paper based) is expected to decrease the administrative burden for public authorities by 19M€ over a 5-year period, with an associated 3.3M€ of costs due to ICT investments, for a total net decrease of 15.7M€ over the same years. The digitisation of reporting for small vessels (i.e. the introduction of tracking and electronic reporting for vessels below 12m and the removal of exemptions from the VMS and ERS for the vessels 12-15m) are estimated to reduce the costs related to reporting by 19.7 M€ for businesses and by 83.6M€ for Member States, counterbalanced by 127M€ investments in ICT development and equipment for vessels. The modification associated to the exchange of information such as digitisation of data systems (i.e. the inspection report system), paving the way for a future centralisation at EU level of the now national databases, is associated to savings of about 8.5M€ over a 5-year period, to which however 2.3M€ should be added for Member States and 2.0M€ for the EU as ICT investment. Also the measures would result in increased costs of 3.5M€ for the EU for ICT development and maintenance. It should be noted that, as for the compliance costs mentioned in section 6.2.2, costs associated to ICT developments would also be eligible for funding under the EMFF, with therefore a very limited real impact on businesses and administrations. A summary of the estimated impacts on administrative burden for Option 1 is presented in Table 2. On top of the estimated cost savings presented in Table 2, more cost savings are expected at European level: savings would be mostly attributable to Member States, resulting from rationalisation of data exchange and increased interoperability of the traceability systems, and to the Commission, thanks to the direct access to information data of the Member States. Unfortunately at this stage it was not possible to quantify them. Impact administrative burden Option 1 (most likely costs in M€ over a 5 year period) Businesses Administrations EU One-off* Recurrent One-off* Recurrent One-off* Recurrent Enforcement 3.3 -19.0 Reporting and tracking of vessels below 12m and vessels between 12m-15m 127 -19.7 -83.6 Exchange of information 2.3 -8.5 2.0 3.5 Total costs 7.3 Total Investment in ICT** 134.6 Total recurrent cost savings thanks to ICT*** 127.3 * One-off costs for ICT technologies are here intended as hardware investment costs and transmission costs. ** Costs reimbursable to Member States under EMFF. *** Corresponds to annual savings of 26M€, savings that will continue beyond the 5year period. Table 2: Impacts administrative burden Option 1 compared to the current situation 6.2.OPTION 2. Amendment of the Fisheries Control System 6.2.1.Environmental impacts Option 2 includes some specific policy actions that would generate marginal, but important, improvements in environmental impacts, in addition to those mentioned under Option 1. With regard to enforcement (sanctioning systems) Option 2 includes additional measures compared to Option 1 that would considerably improve consistency in the approach to infringement follow-up and sanctions to address the currently uneven enforcement landscape across the Member States. The requirement to treat infringements of the CFP under administrative law, and the setting of common rules for sanctions would further increase compliance with the control system compared to Option 1, thus supporting additional positive environmental impacts on the stocks that the CFP requires to be sustainably exploited. With regard to EFCA, Option 2 includes amendments to its Founding Regulation, which would further support the achievement of the general objective of ensuring full compliance with the reformed CFP. The clarification of EFCA's objective regarding the CFP and its external dimension and the extension of the geographical coverage for its inspections , would support positive environmental impacts by allowing EFCA to carry out inspections also in EU waters, in addition to international waters, and resulting in better control of Member State fleets, better controlling of possible illegal activities and thus limiting overfishing, with positive knock-on effects on fish stocks. The digitisation of the IUU Catch Certificate woul