REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the follow-up to the discharge for the 2014 financial year (Summary)
Date: 2016-10-17
Institutions: Directorate-General for Budget, European Commission
Subjects: EU control, EU expenditure, audit, budgetary control, budgetary discharge, financial control, financial year, general budget (EU), management audit

EUROPEAN 
COMMISSION 

Brussels, 17.10.2016  
COM(2016) 674 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on the follow-up to the discharge for the 2014 financial year (Summary) 

{SWD(2016) 338 final} 
{SWD(2016) 339 final} 

EN 

   EN 

 
 
 
 
  
 
REPORT ON THE FOLLOW-UP TO THE REQUESTS MADE BY THE EUROPEAN PARLIAMENT IN 
ITS DISCHARGE RESOLUTIONS AND THE COUNCIL IN ITS DISCHARGE RECOMMENDATION FOR 
THE FINANCIAL YEAR 20141  

INTRODUCTION 

The discharge for the financial year 2014 was marked by the alignment of the most involved 
European  Institutions  –  European  Parliament  (EP),  Council,  European  Court  of  Auditors 
(ECA), Commission - on the importance of focusing on the performance of the EU budget. In 
the  discharge  proceedings,  a  new  balance  was  thus  struck  between  issues  relating  to  the 
results delivered by the EU budget and issues concerning the formal compliance with rules.  

The Commission welcomes this new approach which is in line with the commitment made by 
the Juncker Commission, at the start of its mandate, to strengthen the performance culture in 
relation to the EU budget. The commitment was followed up in 2015 with the launch of the 
'Budget  Focused  on  Results'  (BFOR)  initiative  which  covers  a  broad  range  of  activities, 
including  simplification  of  rules,  improving  information  on  performance  of  policies  and 
ensuring cost-effective controls.  

In  2015,  progress  was  made  on  the  BFOR  initiative  in  relation  to  inter  alia  developing  a 
conceptual  framework,  reinforcing  programme  statements  in  the  annual  budget,  and 
upgrading the Commission's Strategic Planning and Programming cycle. The work continues 
in  2016  with  e.g.  meetings  of  the  expert  group  on  performance  based  budgeting,  a 
streamlining  of  reporting  on  both  performance  and  compliance  issues  in  the  new  Annual 
Management and Performance Report, and the review of the Financial Regulation. 

Also the ECA stressed the need for a revised balance between performance and compliance 
issues, calling for a 'wholly new approach to investment and spending' when it published its 
Annual  report  concerning  the  2014  financial  year.  It  invited  EU  decision-makers,  EU 
legislators  and  financial  managers  to  ensure  that  EU  funds  are  spent  in  line  with  strategic 
priorities and achieve the intended results.  

These issues were discussed extensively during the discharge proceedings in the EP as well as 
in the Council.  

In  particular  the  EP's  rapporteur  for  the  discharge  of  the  Commission,  Mrs  Dlabajová, 
emphasised  the  need  to  ensure  "continuity  and  innovation"  in  the  discharge.  In  addition  to 
increasing the focus on performance issues, the rapporteur also reacted to the Commission's 
follow-up  of  requests  made  by  the  EP  in  past  discharge  proceedings.  Vice-President 
Georgieva supported this approach and stated that: "We should learn from the past to secure a 
better future, and discharge is fantastic in this regard"2. 
In  the  letters  from  Vice-President  Georgieva  to  the  EP  during  the  discharge  proceedings3, 
evidence was given of the Commission's formal commitments to implement fully and timely a 
series of actions and measures related to the issues identified. 

The present report takes into account these commitments whilst updating, where relevant, the 
situation by providing an overview of further actions taken up to now. It is accompanied by 

The 

discharge 

1 Pursuant to Article 319(3) of the Treaty on the Functioning of the European Union (TFEU) and Article 166 of the Financial 
Regulation. 
on 
the 
http://www.europarl.europa.eu/committees/en/cont/discharge-2014.html 
2 Statement made by Vice-President Georgieva during the plenary debate in the EP (27.4.2016). 
3 Ares(2016)899463 (22.02.2016), ARES(2016)1254065 (11.03.2016) 

Recommendation 

resolutions 

available 

Council 

and 

are 

1 

 
 
 
 
                                                 
two  Commission  Staff  Working  Documents  containing  replies  to  350  EP  and  57  Council 
specific discharge requests. 

The Commission agrees to start new actions on 100 requests (88 from the EP and 12 from the 
Council). It considers that for requests 272 (227 from the EP and 45 from the Council), the 
required action has already been taken or is on-going, though in some cases the results of the 
actions  will  need  to  be  assessed.  Finally,  for  reasons  related  to  the  existing  legal  and 
budgetary framework or its institutional role or prerogatives, the Commission cannot accept 
354  requests  from  the  EP.  A  detailed  justification  is  provided  in  the  attached  Commission 
Staff Working Document5. 

1. 

COMMISSION COMMITMENTS WITH REGARD TO DISCHARGE PRIORITIES  

During  the  discharge  proceedings,  the  discharge  rapporteur  and  other  Members  of  the 
Budgetary Control Committee raised a number of issues which are reflected in requests made 
in the EP's discharge resolution. 

Some of these issues were also raised during the discharge proceedings in the Council. 

In  the  letters  by  Vice-President  Georgieva,  evidence  was  given  of  the  Commission's  formal 
commitment to implement fully and timely a series of actions and measures relating to these 
issues and in particular: 

-How to reconcile long term political objectives with the Multi-annual Financial Framework 
(MFF).  The  Commission  is  firmly  committed  to  seeking  a  financial  programming  with 
adequate  budgetary  means  for  longer  term  policy  priorities,  such  as  growth  and  jobs,  while 
maintaining sufficient flexibility so as to be able to address new challenges with the support 
of the EP and the Council in their roles as budgetary and legislative authority. The mid-term 
review examines the functioning of the current MFF, and includes proposals to improve the 
delivery on EU priorities, including on its ability to respond to the major challenges facing the 
EU. This revision of the 2014-2020 MFF provides an opportunity for a discussion at political 
level on how best to balance budgetary means with political priorities. 

-How  to  ensure  a  stronger  link  between  Union  level  objectives,  partnership  agreements  and 
operational  programmes.  The  Commission  is  firmly  committed  to  implement  the  legislative 
framework put in place by the EP and the Council in order to fulfil its reporting obligations 
with regard to the contribution of the European Structural and Investment Funds (ESI funds) 
to the achievement of the Union Strategy for smart, sustainable and inclusive growth. 

-DG AGRI's reporting on the distribution of direct support  to  farmers.  DG AGRI  envisages 
developing  reporting  progressively  over  the  next  years  to  gauge  the  effects  of  the  2013 
Common Agricultural Policy (CAP) reform. Such reporting would offer a solid basis for any 
future political decisions. The Commission committed to start reporting on the distribution of 
CAP support already in DG AGRI's 2015 Annual Activity Report. 

-The approach for revisions of Gross National Income. The Commission has created two Task 
Forces in the field of revisions of Gross National Income balances. One Task Force was set 
up  by  the  Directors  of  Macroeconomic  Statistics  and  is  focussing  on  Benchmark  Revision 
Policy.  The  second  was  set  up  by  the  Committee  on  Monetary,  Financial  and  Balance  of 
Payments Statistics and is charged with looking into a harmonised European revision policy. 
The objective is to develop common European guidelines before the end of 2016. 

4 See §§ 3, 15, 16, 34, 35, 39, 40, 46, 48, 75, 76, 79, 80, 83, 125, 142, 148, 150-152, 154, 156-158, 164, 176, 
185, 195, 205, 233, 241, 282, 309, 335, 336 of the CSWD on the EP resolutions. 
5  

2 

 
 
 
                                                 
-A  long-term  cash  flow  forecast  for  the  EU  budget.  In  its  communication  on  the  mid-term 
review  of  the  MFF,  the  Commission  has  presented  a  payment  forecast  assessing  the 
sustainability  of  the  current  ceilings  and  including  the  estimate  of  de-commitments  and  the 
evolution of RAL until the end of the current MFF. 

-Review of the Code of Conduct of Commissioners. The Commission is committed to lead by 
example  and  to  ensure  that  its  Code  is  up  to  highest  standard.  As  regards  post  mandate 
activities  of  the  former  Members,  the  Code  of  Conduct  foresees,  during  a  period  of  18 
months, both the obligation to notify envisaged activities and the prohibition of lobbying or 
advocacy for Members of the Commission on matters for which they have been responsible 
during  their  mandate. Furthermore,  Article  245  al  2  of  the  TFEU  stipulates  that  the 
obligations of integrity and discretion continue beyond their term of office. 

-The European Schools' follow-up of recommendations made by the ECA. The Commission 
will continue to be proactive in supporting the European Schools, while respecting their full 
autonomy.  The  Commission  will  not  hesitate  to  vote  in  the  Board  of  Governors  of  the 
European Schools against the discharge to the Schools if it considers that actions proposed are 
insufficient to mitigate risks. 

-Publication by the DGs concerned in their Annual Activity Reports on their contribution to 
the Country Specific Recommendations (CSRs) adopted in the European Semester. The DGs 
concerned  will  continue  to  report  on  their  contribution  to  the  European  Semester  CSRs  in 
their Annual Activity Reports in the 2015 and consecutive exercises. 

-Working  arrangement  between  OLAF  and  its  Supervisory  Committee.  The  Commission 
presented its proposal to the co-legislators on 4 March 2016. 

-Tobacco agreements (specific comments are provided under item 5.3 below). 

-Asylum  and  migration.  Commissioner  Avramopoulos  appeared  before  the  EP  budgetary 
control  committee  on  13  July  2016  presenting  the  state  of  play  of  the  financing  and 
implementation of the measures taken by the Union in this field with particular focus on the 
control and reporting systems. 

The  Commission  has  also  followed  up  on  the  EP's  specific  request  not  to  adopt  the  new 
framework  for  Commission  expert  groups  until  a  meeting  of  First  Vice-President 
Timmermans, the European Ombudsman, key members of the EP and civil society has taken 
place.  The  Commission  confirms  that  the  First  Vice-President  and  his  cabinet  have  been 
meeting with all relevant actors as referred to in the EP's resolution, in the preparation of the 
new rules, in different formats and on different occasions, and more meetings at political level 
have been proposed. The Commission therefore considers that it has fulfilled this request by 
the EP. 

2. PERFORMANCE AS A SECOND PILLAR IN THE DISCHARGE  

The EP and the Council both support the introduction of performance as a second pillar in the 
discharge, complementing the "traditional pillar" of compliance issues. This new approach is 
consequently reflected in the key requests made by the two institutions concerning the 2014 
discharge. 

The EP has put forward two main requests concerning respectively the reconciliation of the 
MFF  and  the  political  programming  periods  and  a  stronger  link  between  Europe  2020 
objectives and the partnership agreements and operational programmes. 

In her letters earlier mentioned, Vice-President Georgieva underlined that the Commission is 
firmly committed to: a) seeking a financial programming with adequate budgetary means for 
longer term policy priorities; and b) implement the legislative framework put in place by the 

3 

 
 
 
EP and the Council in order to improve reporting on the contribution of the ESI Funds to the 
achievement of the Union's strategy for smart, sustainable and inclusive growth. 

Furthermore,  the  EP  requests  the  Commission  to  make  fuller  use  of  the  scope  afforded  by 
existing  legislation  with  regard  to  the  performance  reserve.  The  Commission  will  indeed 
implement  the  possibilities  offered  by  the  legal  basis  and  considers  that  the  present  legal 
framework  already  gives  sufficient  incentive  to  Member  States  to  enhance  performance.  If 
further  strengthening  of  the  performance  reserve  rules  is  needed,  it  will  be  taken  up  in  the 
preparation of the post-2020 period. 

The  EP  calls  on  the  Commission  to  improve  its  reporting  on  performance  issues.  The 
Commission  has  presented  the  new  Annual  Management  and  Performance  Report  for  the 
2015 EU Budget6 combining two former reports: the Annual Evaluation Report produced in 
accordance with Article 318 of the TFEU and the Synthesis Report required by Article 66 (9) 
of  the  Financial  Regulation.  Bringing  together  information  on  the  performance  and 
management of the EU budget, this report provides a comprehensive overview of how the EU 
budget supports the Union's political priorities and the role the Commission plays in fostering 
a  culture  of  performance  as  well  as  in  ensuring  and  promoting  the  highest  standards  of 
budgetary  management.  The  report  is  an  important  contribution  by  the  Commission  to  the 
annual budgetary discharge process.  

"Focus, speed and results" are the guiding principles of a number of initiatives, which fall into 
four  different  areas  as  illustrated  in  the  new  Annual  Management  and  Performance  Report. 
This  approach  shows  the  Commission's  commitment  to  streamline  reporting  on  the 
performance of the budget. 

The BFOR initiative strives for continuous progress in this area. Specific improvements were 
already  introduced  during  2015  in  the  Commission’s  Strategic  Planning  and  Programming 
cycle  as  well  as  in  the  budgetary  procedure.  These  changes  enhance  performance  planning, 
monitoring and reporting for all programmes. 

3. 

ADDRESSING THE LEVEL OF ERROR  

The  EP  and  the  Council  have  made  requests  concerning  compliance  issues  based  on  the 
ECA's  findings  set  out  in  its  2014  annual  report  as  well  as  information  provided  by  the 
Commission  in  discharge-related  reports  such  as  the  Synthesis  Report  of  the  Commission's 
management  achievements  in  2014,  and  the  Communication  on  the  Protection  of  the  EU 
budget to end 2014. 

In response to the request by both the EP and the Council to apply strictly Article 32(5) of the 
Financial  Regulation,  the  Commission  will  carry  out  analyses  of  “areas  of  persistently  high 
levels of errors” and report on the root causes and on measures taken to address them, while 
ensuring cost-effectiveness of controls. 

In this respect, the Commission is committed to continue close coordination with the Member 
States and other entities entrusted with the implementation of the EU budget, to identify areas 
where concerted action is necessary or is considered likely to be beneficial. Preventive action 
such as providing guidance to Member States or suspending/interrupting funds will be taken 
when appropriate. 

As requested by the EP and the Council, the Commission, in cooperation with Member States, 
will continue to use all information available to prevent, detect and correct possible errors. It 
is also committed to further simplify rules as part of the review of the Financial Regulation, 

6 COM(2016)446final 

4 

 
 
 
                                                 
and  it  will  follow  up  on  the  simplification  exercise  for  the  CAP  launched  by  Commission 
Hogan  as  well  as  the  conclusions  and  recommendations  from  the  High  Level  Group 
monitoring simplification for beneficiaries of ESI Funds.  

The  EP  has  requested  the  Commission  to  assess  for  each  policy  domain  and  for  the  Union 
budget  as  a  whole,  the  level  of  error  remaining  after  corrective  measures,  while  taking  into 
account  the  multi-annual  nature  of  programmes.  It  has  also  requested  the  Commission  to 
revise the method of calculating the corrective capacity in time for the 2015 discharge. 

The  Commission  has  followed  up  on  both  requests  in  its  Annual  Management  and 
Performance Report for the 2015 EU budget by presenting its best estimate of the so-called 
"amount at risk at closure" for each policy area and for the budget as a whole. The amount at 
risk  at  closure  is  the  Commission  management's  estimate  for  the  level  of  error  after  all 
corrective measures have been implemented at the close of the programmes7 and is calculated 
on the basis of all relevant data and using professional judgement. It appropriately reflects the 
fact  that  the  control  cycle  is  multiannual  and  that  further  corrective  measures  will  be 
implemented after errors have been identified. The intention is not to replace the assessment 
of the ECA but to provide a complementary view. 

The  EP  has  requested  the  Commission  to  work  closely  with  Member  States  to  guarantee 
comprehensive, exact and reliable data keeping in mind the goal of full implementation of the 
Single Audit approach.  

The  Commission  carries  out  consistency  checks  on  Member  States'  data  such  as  control 
statistics  for  CAP  spending,  and  the  annual  financial  corrections  statements  for  all  Member 
States  and  operational  programmes  in  the  areas  of  Cohesion  policy.  In  addition,  through  its 
annual risk assessment the Commission identifies targeted audit missions and follows up any 
weaknesses identified. The results of the audit work lead to corrections in the reporting from 
national  authorities  and  improve  the  basis  for  the  estimation  of  the  level  of  error.  More 
information on these issues are available in the Annual Activity Report of the relevant DGs.  

For  agricultural  spending,  from  financial  year  2015  Certification  Bodies  in  Member  States 
have to sample and re-verify the controls initially made by Paying Agencies. The Commission 
developed  detailed  guidelines  in  order  to  support  and  guide  the  Certification  Bodies  in  this 
new role. 

For Cohesion, during the implementation of the 2014-2020 programming period, the accuracy 
of  the  information  on  financial  corrections  will  be  covered  by  the  audit  authorities'  annual 
opinion on the accounts. 

4. 

PRESSURE ON THE BUDGET  

The  EP  requests  to  assess  all  flexibility  provisions  of  the  MFF  and  propose  measures  for 
overcoming insufficient absorption capacity. As already mentioned, in its communication on 
the mid-term review of the MFF, the Commission has presented a payment forecast assessing 
the  sustainability  of  the  current  ceilings  and  including  the  estimate  of  de-commitments  and 
the evolution of RAL until the end of the current MFF. 

Furthermore,  the  Commission  is  fully  taking  into  account  the  ECA  recommendations 
concerning capacity constraints in some Member States, especially in the area of ESI Funds. 

7  For  annual  programmes,  this  refers  to  the  moment  in time  in which  all corrective  controls  have  been  implemented. This 
typically takes place several years after the payment, depending on the modalities of the programme. 

5 

 
 
 
                                                 
As for the CAP, the EAFRD8 provides Member States with pre-financing for implementation 
of  their  2014-2020  programmes.  For  the  programming  period  2014-2020,  the  Commission 
increased  by  one  year  the  time  period  during  which  Member  States  have  to  implement 
budgetary  commitments.  Currently,  the  N+3  rule  applies,  which  means  that  Member  States 
have 4 years to implement EAFRD funds. This new rule will enhance utilisation of funds by 
Member States. 

Concerning  Cohesion  Policy,  the  Commission  took  the  initiative  to  tackle  absorption 
problems  in  a  flexible  way,  creating  the  Task  Force  for  Better  Implementation.  This  Task 
Force has agreed action plans, ensuring an exchange of experience and good practices. It has 
supported  some  Member  States  into  looking  at  the  situation  of  their  programmes  and  into 
actively searching for solutions to some of the challenges faced, while continuing to ensure 
strict compliance with the applicable rules. 

The Commission will be able to assess the full impact of the Task Force on Member States' 
use of the 2007-2013 budgetary allocations after the closure of all relevant programmes. For 
the  2014-2020  period,  all  national  authorities  are  strongly  encouraged  to  jump  start 
programme implementation. 

5. 

SPECIFIC ISSUES 

5.1.  

GLOBAL EUROPE - EXTERNAL ASSISTANCE MANAGEMENT REPORTS (EAMR)  

Several  requests  have  been  addressed  to  the  Commission  in  relation  to  the  EAMRs  reports, 
such  as  monitoring  system  of  ongoing  projects  and  up-to-date  report,  corrective  action 
concerning problems related to projects. 

The  Commission  points  out  that  project  assessment  in  the  EAMRs  is  a  snapshot  of  the 
situation of each project at the end of the year. Red and orange traffic lights highlight risks 
identified  by  project  managers  with  regards  to  the  implementation  of  the  activities  or  the 
achievement  of  the  objectives  at  the  end  of  the  year.  This  system  alerts  the  hierarchy  in 
Delegation  and  Headquarters,  so  that  necessary  corrective  measures  are  taken.  The  actual 
impact  of  the  identified  difficulties  can  only  be  assessed  by  the  end  of  the  project.  The 
financial  impact  of  the  difficulties  and  delay  encountered  during  the  implementation  of  the 
projects should be measured cautiously. 

Following  up  on  the  EP's  request  to  provide  a  report  on  the  state  of  projects  including  the 
neighbourhood  policy  aid  programmes,  DG  NEAR  intends  to  introduce  this  assessment  for 
2016. 

The  EP  also  calls  for  the  implementation  of  internal  control  procedures  to  ensure  that  pre-
financing is cleared on the basis of actual incurred expenditure and not on the basis of legal 
commitments.  In  response  to  this  request,  the  Commission  has  further  clarified  the  relevant 
rules. 

As  from  January  2016,  EU  Delegations  and  DEVCO  operational  services  have  to  complete 
and  update  a  "Monitoring  and  Evaluation  Plan"  with  respect  to  the  management  of  their 
portfolios, including key monitoring events and activities, on an annual basis for monitoring 
and on a multi-annual basis for evaluations. The planning should be based on a risk analysis 
carried out by the EU Delegation or the operational unit in the Headquarters concerning the 
overall  portfolio  of  projects  and  programmes.  Methodological  guidance  with  respect  to  risk 
management  has  been  provided  in  the  2012  Budget  support  guidelines.  With  respect  to 

8 European Agricultural Fund for Rural Development. 

6 

 
 
 
 
                                                 
Project modality, the guidance is to be provided in the guidelines for Project and Programme 
Cycle Management. 

In  the  enlargement  and  neighbourhood  countries,  a  key  priority  continues  to  be  the  need  to 
address  the  effects  of  the  refugees  and  migration  crisis.  The  Commission  has  increased 
funding and flexibility for this priority to allow a rapid and well-targeted response. 

Moreover, in order to respond to the fast changing priorities, the Commission is also ensuring 
the  ability  to  reallocate  funds  within  Instrument  for  Pre-accession  Assistance  II  to  allow  in 
2016 the rapid funding of interventions to address the migration issue including a contribution 
to  the  Syria  Trust  Fund  to  support  the  creation  of  reception  facilities  for  refugees  in  the 
Western Balkans. 

Finally, the Commission is requested to provide the EP every year with a global assessment of 
the  EAMRs  and  report  in  the  Annual  Activity  Reports  of  DG  DEVCO  and  DG  NEAR  on 
measures taken to redress the situation in the delegations with implementation problems. 

Action plans for 22 DEVCO Delegations that achieve less than 60% of their Key Performance 
Indicators  (KPI)  in  2014  were  transmitted  officially  to  the  EP  on  5  November  2015. 
Furthermore, detailed analysis of KPI results for financial year 2015 is included in the Annual 
Activity Report of DG DEVCO. 

As  far  as  DG  NEAR  is  concerned,  EAMRs  have  been  introduced  in  2015.  KPIs  relating  to 
project assessment will be introduced in the 2016 EAMRs and will be further analysed in the 
context of the 2016 Annual Activity Report. 

5.2. 

OLAF  

As regards the EP's requests concerning OLAF's implementation of the recommendations of 
its  Supervisory  Committee,  OLAF  points  out  that  it  has  always  followed  up  on  the 
Supervisory Committee's recommendations. All recommendations issued by the Supervisory 
Committee have been carefully assessed and discussed across OLAF and implemented where 
possible. The replies of OLAF are publicly available on its website.  

As  regards  the  access  of  the  Supervisory  Committee  to  OLAF  documents,  the  Commission 
considers  that  the  Supervisory  Committee  should  be  given  such  access  in  line  with  the 
applicable legal framework. As there are differences in interpretation of the legal provisions 
by OLAF and the Supervisory Committee, the Legal Services of the EP, the Council and the 
Commission  are  working  together  to  clarify  the  interpretation  to  be  given  to  the  provisions 
concerning the Supervisory Committee's access to OLAF's documents. 

As  regards  the  request  for  OLAF  to  draw  up  internal  rules  on  whistleblowing,  the 
Commission  considers  that  appropriate  measures  are  already  in  place.  The  Commission 
Guidelines  on  Whistleblowing9  apply  to  OLAF.  They  cover  confidentiality,  reporting 
procedures,  protection of  whistle-blowers, feedback to the whistle-blower and guidance and 
support  to  the  whistle-blower.  In  addition  to  this,  OLAF  has  adopted  on  27  July  2015  a 
specific procedure in the context of EU staff members reporting in accordance with Articles 
22a  and  22b  of  the  Staff  Regulations.  On  this  basis,  OLAF's  internal  procedure  (including 
confidentiality), protection against retaliation and the role of the ethics officer were clarified. 

Finally, concerning the request that OLAF should provide in its annual report information on 
the  type  of  investigations  and  results  in  all  sectors,  OLAF  strives  to  ensure  that  the 
information in its report is relevant to the needs of readers and will consider ways to include 

9 SEC(2012) 679. 

7 

 
 
 
                                                 
the  data  requested  in  its  following  annual  reports  building  on  the  evidence  presented  in  the 
OLAF Report 2015 published on 31 May 2016. 

5.3. 

TOBACCO AGREEMENTS  

After  the  expiry  of  the  agreement  with  Philip  Morris  International  (PMI),  the  Commission 
will  continue  the  effort  to  fight  against  illegal  tobacco  trade,  by  concentrating  on  cheap 
whites, strict law enforcement and strengthened international cooperation and implementation 
of  the  Protocol  to  Eliminate  Illicit  Trade  in  Tobacco  Products  to  the  WHO  Framework 
Convention on Tobacco Control (FCTC Protocol). 

The  EP  calls  for  an  action  plan  setting  out  new  measures  to  address  illicit  tobacco  trade 
("cheap  whites”).  The  Commission  is  aware  of  the  growing  problem  of  so-called  'cheap 
whites'  on  the  illicit  tobacco  market  in  the  EU.  This  issue  also  featured  prominently  in  the 
Commission's 2013 Strategy Paper on Stepping up the fight against cigarette smuggling and 
other forms of illicit trade in tobacco products10. The Commission is due to present a report 
on the implementation of the 2013 Strategy later this year.  

On  the  EP's  call  to  bring  forward  a  new  additional  regulation  establishing  an  independent 
track-and trace-system and applying provisions to raw cut tobacco, filters and papers used by 
the  tobacco  industry,  the  Commission  considers  that  the  focus  should  be,  in  particular,  the 
implementation  of  the  new  Tobacco  Products  Directive  and  its  provisions  on  tracking  and 
tracing which will apply from May 2019 (for cigarettes and roll-your-own tobacco) and from 
May 2024 (for other tobacco products). The Commission is currently analysing ways, which 
are legally viable and practically feasible, to follow up the EPs request regarding the tracking 
and tracing of PMI tobacco products after the expiry of the PMI agreement. 

Concerning  the  assessment  of  tobacco  agreements,  the  Commissions  recalls  that  the 
assessment  of  the  PMI  tobacco  agreement  was  published  on  24  February  201611  and 
transmitted to the EP. 

Finally,  as  regards  the  implementation  of  Article  5.3  of  the  WHO  FCTC,  as  well  as  the 
publication  of  the  "assessment  agreements"  with  tobacco  companies  and  an  impact 
assessment of the implementation of the WHO FCTC, the Commission points out that the EU 
and  all  Member  States  are  parties  to  the  WHO  FCTC  and  implement  it  according  to  their 
respective  competence  areas.  An  impact  assessment  of  the  FCTC  implementation  is  not 
foreseen. 

* * * 

8 

10 COM(2013) 324 final. 
11 SWD(2016) 44 final.