Amendments adopted by the European Parliament on 17 January 2019 on the proposal for a regulation of the European Parliament and of the Council on the protection of the Union's budget in case of generalised deficiencies as regards the rule of law in the Member States (COM(2018)0324 — C8-0178/2018 — 2018/0136(COD))
Date: 2019-01-17
Institutions: Committee on Budgetary Control, Committee on Budgets, European Parliament
Subjects: EU Member State, budget policy, budgetary resources, democracy, distribution of EU funding, financial management, general budget (EU), implementation of the budget, rule of law




C_2020411EN.01057401.xml










27.11.2020   


EN


Official Journal of the European Union


C 411/574






P8_TA(2019)0038
Protection of the Union's budget in case of generalised deficiencies as regards the rule of law in the Member States ***I
Amendments adopted by the European Parliament on 17 January 2019 on the proposal for a regulation of the European Parliament and of the Council on the protection of the Union's budget in case of generalised deficiencies as regards the rule of law in the Member States (COM(2018)0324 — C8-0178/2018 — 2018/0136(COD)) (1)

(Ordinary legislative procedure: first reading)
(2020/C 411/49)

Amendment 1


Proposal for a regulation


Recital 1








Text proposed by the Commission




Amendment











(1)




The rule of law is one of the essential values upon which
 the Union is founded. As recalled by Article 2 of the Treaty on European Union, 
these
 values are common to the Member States.












(1)


The Union is founded 
on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities, enshrined in
 Article 2 of the Treaty on European Union 
(TEU) and in the criteria for Union membership.
 As recalled by Article 2 
TEU
, 
those
 values are common to the Member States 
in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail
.









Amendment 2


Proposal for a regulation


Recital 1 a (new)








Text proposed by the Commission




Amendment





 










(1a)






Member States should uphold their obligations and set an example by genuinely fulfilling them and move towards a shared culture of the rule of law as a universal value to be applied by all concerned even-handedly. Full respect for and promotion of those principles is an essential prerequisite for the legitimacy of the European project as a whole and a basic condition for building citizens' trust in the Union and ensuring the effective implementation of its policies.











Amendment 3


Proposal for a regulation


Recital 1 b (new)








Text proposed by the Commission




Amendment





 










(1b)






In accordance with Article 2, Article 3(1) and Article 7 TEU, the Union has the possibility to act in order to protect its constitutional core and the common values on which it was founded, including its budgetary principles. Member States, Union institutions, bodies, offices and agencies, and candidate countries are obliged to respect, protect and promote those principles and values, and they have a duty of sincere cooperation.











Amendment 4


Proposal for a regulation


Recital 2








Text proposed by the Commission




Amendment











(2)


The rule of law requires that all public powers act within the constraints set out by law, in accordance with the values of democracy and fundamental rights, and under the control of independent and impartial courts. It requires, in particular, that the principles of legality (7), legal certainty (8), prohibition of arbitrariness of the executive powers (9), separation of powers (10), and effective judicial protection 
by
 independent courts (11) are respected (12).












(2)


The rule of law requires that all public powers act within the constraints set out by law, in accordance with the values of democracy and 
respect for
 fundamental rights, and under the control of independent and impartial courts. It requires, in particular, that the principles of legality (7)

, including a transparent, accountable and democratic process for enacting law
, legal certainty (8), prohibition of arbitrariness of the executive powers (9), separation of powers (10), 
access to justice
 and effective judicial protection 
before
 independent 
and impartial
 courts (11) are respected (12). 
Those principles are reflected inter alia at the level of the Venice Commission of the Council of Europe and also on the basis of the relevant case law of the European Court of Human Rights

 (12a)

.











Amendment 5


Proposal for a regulation


Recital 2 a (new)








Text proposed by the Commission




Amendment





 










(2a)






The accession criteria, or Copenhagen criteria, established by the Copenhagen European Council in 1993 and strengthened by the Madrid European Council in 1995, are the essential conditions that all candidate countries must satisfy to become a Member State. Those criteria include the stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities; a functioning market economy and the capacity to cope with competition and market forces; and the ability to meet the obligations of Union membership.











Amendment 6


Proposal for a regulation


Recital 2 b (new)








Text proposed by the Commission




Amendment





 










(2b)






The failure of a candidate country to meet the required standards, values and democratic principles results in that country’s accession to the Union being delayed until it fully meets those standards. The obligations incumbent on candidate countries under the Copenhagen criteria continue to apply to Member States after joining the Union by virtue of Article 2 TEU and the principle of sincere cooperation enshrined in Article 4 TEU. Member States should therefore be assessed on a regular basis in order to verify that their laws and practices continue to comply with those criteria and the common values on which the Union is founded, thereby providing a sound legal and administrative framework for the implementation of Union policies.











Amendment 7


Proposal for a regulation


Recital 3








Text proposed by the Commission




Amendment











(3)


The rule of law is 
a prerequisite
 for the protection of the other fundamental values on which the Union is founded, such as freedom, democracy, equality and respect for human rights. Respect for the rule of law is intrinsically linked to respect for democracy and for fundamental rights: there can be no democracy and respect for fundamental rights without respect for the rule of law and vice versa.












(3)




While there is no hierarchy among Union values, respect for
 the rule of law is 
essential
 for the protection of the other fundamental values on which the Union is founded, such as freedom, democracy, equality and respect for human rights. Respect for the rule of law is intrinsically linked to respect for democracy and for fundamental rights: there can be no democracy and respect for fundamental rights without respect for the rule of law and vice versa. 
Coherence and consistency of internal and external democracy, rule of law and fundamental rights policy is key to the credibility of the Union.











Amendment 8


Proposal for a regulation


Recital 6








Text proposed by the Commission




Amendment











(6)




Judicial bodies
 should 
act independently and impartially
 and investigation and prosecution services should be able to properly execute their function. 
They
 should be endowed with sufficient resources and procedures to act effectively and in full respect of the right to a fair trial. These conditions are required as a minimum guarantee against unlawful and arbitrary decisions by public authorities that could harm the financial interests of the Union.












(6)




Independence and impartiality of the judiciary
 should 
always be guaranteed
 and investigation and prosecution services should be able to properly execute their function. They should be endowed with sufficient resources and procedures to act effectively and in full respect of the right to a fair trial. These conditions are required as a minimum guarantee against unlawful and arbitrary decisions by public authorities that could 
impair these fundamental principles and
 harm the financial interests of the Union.









Amendment 9


Proposal for a regulation


Recital 7 a (new)








Text proposed by the Commission




Amendment





 










(7a)






The independence of the prosecution and the judiciary comprises both the formal (de jure) and actual (de facto) independence of the prosecution and the judiciary and the individual prosecutors and judges.











Amendment 10


Proposal for a regulation


Recital 8








Text proposed by the Commission




Amendment











(8)


Respect for the rule of law is not only 
important
 for citizens of the Union, but also for business initiatives, innovation, investment and the proper functioning of the internal market, which will flourish 
most
 where a solid legal and institutional framework is in place.












(8)


Respect for the rule of law is not only 
essential
 for citizens of the Union, but also for business initiatives, innovation, investment
, economic, social and territorial cohesion
 and the proper functioning of the internal market, which will flourish 
sustainably only
 where a solid legal and institutional framework is in place.









Amendment 11


Proposal for a regulation


Recital 8 a (new)








Text proposed by the Commission




Amendment





 










(8a)






Integrating existing Union monitoring mechanisms, such as the Cooperation and Verification Mechanism, the Justice Scoreboard and the Anti-Corruption reports, into a broader rule of law monitoring framework could provide more efficient and effective control mechanisms for the protection of the financial interest of the Union.











Amendment 12


Proposal for a regulation


Recital 8 b (new)








Text proposed by the Commission




Amendment





 










(8b)






Lack of transparency, arbitrary discrimination, distortion of competition and an uneven playing field within and outside the internal market, impact on the integrity of the single market and on the fairness, stability and legitimacy of the tax system, increased economic inequalities, unfair competition between states, social dissatisfaction, mistrust and democratic deficit are some of the negative effects of harmful tax practices.











Amendment 13


Proposal for a regulation


Recital 10 a (new)








Text proposed by the Commission




Amendment





 










(10a)






The Union has at its disposal a multitude of instruments and processes for ensuring full and proper application of the principles and values laid down in the TEU, but there is currently no swift, effective response coming from the Union institutions, in particular to ensure sound financial management. The existing instruments should be enforced, evaluated and complemented in the framework of a rule of law mechanism to be adequate and effective.











Amendment 14


Proposal for a regulation


Recital 11








Text proposed by the Commission




Amendment











(11)


Generalised deficiencies in the Member States as regards the rule of law which affect in particular the proper functioning of public authorities and effective judicial review, can seriously harm the financial interests of the Union.












(11)


Generalised deficiencies in the Member States as regards the rule of law which affect in particular the proper functioning of public authorities and effective judicial review, can seriously harm the financial interests of the Union. 
Efficient investigations into such deficiencies, and the application of effective and proportionate measures when a generalised deficiency is established, are needed not only to secure the financial interests of the Union, including the effective collection of revenue, but also to ensure public trust in the Union and its institutions. Only an independent judiciary that upholds the rule of law and legal certainty in all Member States can ultimately guarantee that money from the Union budget is sufficiently protected.











Amendment 15


Proposal for a regulation


Recital 11 a (new)








Text proposed by the Commission




Amendment





 










(11a)






The scale of tax evasion and avoidance is estimated by the Commission to be up to EUR 1 trillion a year. The negative impacts of such practices on the Member States' and Union budgets and on citizens are evident and could undermine trust in democracy.











Amendment 16


Proposal for a regulation


Recital 11 b (new)








Text proposed by the Commission




Amendment





 










(11b)






Corporate tax avoidance has a direct impact on Member States’ and Union budgets and on the breakdown of the tax effort between categories of tax payers as well as between economic factors.











Amendment 17


Proposal for a regulation


Recital 11 c (new)








Text proposed by the Commission




Amendment





 










(11c)






Member States should fully apply the principle of sincere cooperation in matters of tax competition.











Amendment 18


Proposal for a regulation


Recital 11 d (new)








Text proposed by the Commission




Amendment





 










(11d)





The Commission, as the guardian of the Treaties, should ensure that Union law and the principle of sincere cooperation between Member States are fully complied with.










Amendment 19


Proposal for a regulation


Recital 11 e (new)








Text proposed by the Commission




Amendment





 










(11e)






Assessing and monitoring Member States' tax policies at Union level would ensure that no new harmful tax measures are implemented in Member States. Monitoring compliance of Member States, their jurisdictions, regions or other administrative structures with the common Union list of non-cooperative jurisdictions would safeguard the single market and ensure its proper and coherent functioning.











Amendment 20


Proposal for a regulation


Recital 12








Text proposed by the Commission




Amendment











(12)


The identification of a generalised deficiency requires a qualitative assessment by the Commission. That assessment 
could
 be based on 
the
 information from all 
available
 sources and 
recognized
 institutions, including judgments of the Court of Justice of the European Union, reports of the Court of Auditors, and conclusions and recommendations of relevant international organisations 
and networks
, such as the bodies of the Council of Europe 
and
 the European networks of supreme courts and councils for the judiciary.












(12)


The identification of a generalised deficiency requires a 
thorough
 qualitative assessment by the Commission. That assessment 
should be objective, impartial and transparent and
 be based on information from all 
relevant
 sources
, taking into account the criteria used in the context of Union accession negotiations, in particular the chapters of the acquis on judiciary and fundamental rights, on justice, freedom and security, on financial control and on taxation, as well as the guidelines used in the context of the Cooperation and Verification Mechanism to track the progress of a Member State,
 and 
from recognised
 institutions, including judgments of the Court of Justice of the European Union 
and the European Court of Human Rights, resolutions of the European Parliament
, reports of the Court of Auditors, and conclusions and recommendations of relevant international organisations, such as the bodies of the Council of Europe
, including in particular the Venice Commission’s Rule of Law Checklist, and of relevant international networks, such as
 the European networks of supreme courts and councils for the judiciary.









Amendment 21


Proposal for a regulation


Recital 12 a (new)








Text proposed by the Commission




Amendment





 










(12a)






An advisory panel of independent experts in constitutional law and financial and budgetary matters should be established with the objective to assist the Commission in its assessment of generalised deficiencies. That panel should undertake an independent annual assessment of the issues as regards the rule of law in all Member States that affect or risk affecting the sound financial management or the protection of the financial interests of the Union, taking into account information from all relevant sources and recognised institutions. The Commission, when taking a decision about adopting or lifting of possible measures, should take relevant opinions expressed by that panel into account.











Amendment 22


Proposal for a regulation


Recital 13








Text proposed by the Commission




Amendment











(13)


The 
possible
 measures to be adopted in the event of generalised deficiencies and the procedure to be followed to adopt them should be determined. Those measures should include the suspension of payments and of commitments, a reduction of funding under existing commitments, and a prohibition to conclude new commitments with recipients.












(13)


The measures to be adopted in the event of generalised deficiencies and the procedure to be followed to adopt them should be determined. Those measures should include the suspension of payments and of commitments, a reduction of funding under existing commitments, and a prohibition to conclude new commitments with recipients.









Amendment 23


Proposal for a regulation


Recital 14 a (new)








Text proposed by the Commission




Amendment





 










(14a)






It is essential that the legitimate interests of final recipients and beneficiaries are properly safeguarded when measures are adopted in the event of generalised deficiencies. When considering the adoption of measures, the Commission should take into account their potential impact on final recipients and beneficiaries. To strengthen the protection of the final recipients or beneficiaries, the Commission should provide information and guidance via a website or internet portal, together with adequate tools to inform the Commission about any breach of the legal obligation of government entities and Member States to continue making payments after measures on the basis of this Regulation are adopted. Where necessary, in order to ensure that any amount due by government entities or Member States is effectively paid to final recipients or beneficiaries, the Commission should be able to recover payments made to those entities, or, as appropriate, to make a financial correction by reducing support to a programme, and to transfer an equivalent amount to the Union reserve to be used for the benefit of final recipients or beneficiaries.











Amendment 24


Proposal for a regulation


Recital 15








Text proposed by the Commission




Amendment











(15)


In order to ensure uniform implementation of this Regulation and in view of the importance of the financial effects of measures being imposed pursuant to this Regulation, implementing powers should be conferred on the 
Council which should act on the basis of a
 Commission 
proposal
. 
To facilitate the adoption of decisions which are required to protect the financial interests of the Union, reversed qualified majority voting should be used.














(15)


In order to ensure uniform implementation of this Regulation and in view of the importance of the financial effects of measures being imposed pursuant to this Regulation, implementing powers should be conferred on the Commission.









Amendment 25


Proposal for a regulation


Recital 15 a (new)








Text proposed by the Commission




Amendment





 










(15a)






In view of their effect on the Union budget, measures imposed pursuant to this Regulation should only enter into force after the European Parliament and the Council have approved a transfer to a budgetary reserve of an amount equivalent to the value of the measures adopted. To facilitate the adoption of decisions which are required to protect the financial interests of the Union, such transfers should be considered to be approved unless, within a set period, the European Parliament or the Council, the latter acting by qualified majority, amend or reject them.











Amendment 26


Proposal for a regulation


Recital 16








Text proposed by the Commission




Amendment











(16)


Before proposing the adoption of any measure pursuant to this Regulation, the Commission should inform the Member State concerned why it considers that a generalised deficiency regarding the rule of law might exist in that Member State. The Member State should be allowed to submit its observations. The Commission 
and the Council
 should take those observations into account.












(16)


Before proposing the adoption of any measure pursuant to this Regulation, the Commission should inform the Member State concerned why it considers that a generalised deficiency regarding the rule of law might exist in that Member State. 
The Commission should without delay inform the European Parliament and the Council about any such notification and its contents.
 The Member State 
concerned
 should be allowed to submit its observations. The Commission should take those observations into account.









Amendment 27


Proposal for a regulation


Recital 17








Text proposed by the Commission




Amendment











(17)


The 
Council
 should lift measures with suspensive effect 
on a proposal from the Commission
, if the situation leading to the imposition of those measures has been sufficiently remedied.












(17)


The 
Commission
 should lift measures with suspensive effect 
and propose to the European Parliament and the Council to lift in full or in part the budgetary reserve of the measures in question
, if the situation leading to the imposition of those measures has been sufficiently remedied.









Amendment 28


Proposal for a regulation


Recital 18








Text proposed by the Commission




Amendment













(18)






The Commission should keep the European Parliament informed of any measures proposed and adopted pursuant to this Regulation,










deleted







Amendment 29


Proposal for a regulation


Article 2 — paragraph 1 — point a








Text proposed by the Commission




Amendment











(a)


‘the rule of law’
refers
 to the Union 
value
 enshrined in Article 2 
of the Treaty on European
 Union 
which
 includes the principles of legality, implying a transparent, accountable, democratic and pluralistic process for enacting 
laws
; legal certainty; prohibition of arbitrariness of the executive powers; effective judicial protection 
by
 independent courts, including of fundamental rights; separation of powers and equality before the law;












(a)


‘the rule of law’
shall be understood having regard
 to the Union 
values
 enshrined in Article 2 
TEU and in the criteria for
 Union 
membership referred to in Article 49 TEU; it
 includes the principles of legality, implying a transparent, accountable, democratic and pluralistic process for enacting 
law
; legal certainty; prohibition of arbitrariness of the executive powers; 
access to justice and
 effective judicial protection 
before
 independent 
and impartial
 courts, including of fundamental rights 
as stipulated in the Charter of Fundamental Rights of the European Union and in international human rights treaties
; separation of powers
; non-discrimination
 and equality before the law;









Amendment 30


Proposal for a regulation


Article 2 — paragraph 1 — point b








Text proposed by the Commission




Amendment











(b)


‘generalised deficiency as regards the rule of law’ means a widespread or recurrent practice or omission, or measure by public authorities which affects the rule of law;












(b)


‘generalised deficiency as regards the rule of law’ means a widespread or recurrent practice or omission, or measure by public authorities which affects the rule of law
, where it affects or risks affecting the principles of sound financial management or the protection of the financial interests of the Union
; 
a generalised deficiency as regards the rule of law may also be the consequence of a systemic threat to the Union values enshrined in Article 2 TEU that affects or risks affecting the principles of sound financial management or the protection of the financial interests of the Union;











Amendment 31


Proposal for a regulation


Article 2 — paragraph 1 — point c








Text proposed by the Commission




Amendment











(c)


‘government entity’ means 
all public
 authorities at all levels of government, including national, regional and local authorities, as well as Member State organisations within the meaning of [point 42 of Article 2] of Regulation (EU, Euratom) 
No […]
 (the ‘Financial Regulation’).












(c)


‘government entity’ means 
any
 public 
authority
 at all levels of government, including national, regional and local authorities, as well as Member State organisations within the meaning of point 42 of Article 2 of Regulation (EU, Euratom) 
2018/1046 of the European Parliament and of the Council

 (1a) (the ‘Financial Regulation’).









Amendment 32


Proposal for a regulation


Article 2 a (new)








Text proposed by the Commission




Amendment





 




Article 2 a






 




Generalised deficiencies






 




The following shall, in particular, be considered generalised deficiencies as regards the rule of law where they affect or risk affecting the principles of sound financial management or the protection of the financial interests of the Union:






 










(a)






endangering the independence of judiciary, including setting any limitations on the ability to exercise judicial functions autonomously by externally intervening in guarantees of independence, by constraining judgement under external order, by arbitrarily revising rules on the appointment or terms of service of judicial personnel, by influencing judicial staff in any way that jeopardises their impartiality or by interfering with the independence of attorneyship;










 










(b)






failing to prevent, correct and sanction arbitrary or unlawful decisions by public authorities, including by law enforcement authorities, withholding financial and human resources affecting their proper functioning or failing to ensure the absence of conflicts of interests;










 










(c)






limiting the availability and effectiveness of legal remedies, including through restrictive procedural rules, lack of implementation of judgments, or limiting the effective investigation, prosecution or sanctioning of breaches of law;










 










(d)






endangering the administrative capacity of a Member State to respect the obligations of Union membership, including the capacity to effectively implement the rules, standards and policies that make up the body of Union law;










 










(e)






measures that weaken the protection of the confidential communication between lawyer and client.











Amendment 33


Proposal for a regulation


Article 3 — title








Text proposed by the Commission




Amendment







Measures






Risks for the financial interests of the Union







Amendment 34


Proposal for a regulation


Article 3 — paragraph 1 — introductory part








Text proposed by the Commission




Amendment






1.   
Appropriate measures shall be taken where
 a generalised deficiency as regards the rule of law in a Member State 
affects or risks affecting the principles of sound financial management or the protection
 of the 
financial interests of the Union
, in particular:




1.   A generalised deficiency as regards the rule of law in a Member State 
may be established when one or more
 of the 
following
, in particular
, are affected or risk being affected
:






Amendment 35


Proposal for a regulation


Article 3 — paragraph 1 — point a








Text proposed by the Commission




Amendment











(a)


the proper functioning of the authorities of that Member State implementing the Union budget, in particular in the context of public procurement or grant procedures
, and when carrying out monitoring and controls
;












(a)


the proper functioning of the authorities of that Member State implementing the Union budget, in particular in the context of public procurement or grant procedures;









Amendment 36


Proposal for a regulation


Article 3 — paragraph 1 — point a a (new)








Text proposed by the Commission




Amendment





 










(aa)






the proper functioning of the market economy, thereby respecting competition and market forces in the Union as well as implementing effectively the obligations of membership, including adherence to the aim of political, economic and monetary union;











Amendment 37


Proposal for a regulation


Article 3 — paragraph 1 — point a b (new)








Text proposed by the Commission




Amendment





 










(ab)






the proper functioning of the authorities carrying out financial control, monitoring and internal and external audits, and the proper functioning of effective and transparent financial management and accountability systems;











Amendment 38


Proposal for a regulation


Article 3 — paragraph 1 — point b








Text proposed by the Commission




Amendment











(b)


the proper functioning of investigation and public prosecution services in relation to the prosecution of fraud, corruption or other breaches of Union law relating to the implementation of the Union budget;












(b)


the proper functioning of investigation and public prosecution services in relation to the prosecution of fraud, 
including tax fraud,
 corruption or other breaches of Union law relating to the implementation of the Union budget;









Amendment 39


Proposal for a regulation


Article 3 — paragraph 1 — point c








Text proposed by the Commission




Amendment











(c)


the effective judicial review by independent courts of actions or omissions by the authorities referred to in points (a) and 
b)
;












(c)


the effective judicial review by independent courts of actions or omissions by the authorities referred to in points (a)
, (a b)
 and 
(b)
;









Amendment 40


Proposal for a regulation


Article 3 — paragraph 1 — point d








Text proposed by the Commission




Amendment











(d)


the prevention and sanctioning of fraud, corruption or other breaches of Union law relating to the implementation of the Union budget, and the imposition of effective and dissuasive penalties on recipients by national courts or by administrative authorities;












(d)


the prevention and sanctioning of fraud, 
including tax fraud,
 corruption or other breaches of Union law relating to the implementation of the Union budget, and the imposition of effective and dissuasive penalties on recipients by national courts or by administrative authorities;









Amendment 41


Proposal for a regulation


Article 3 — paragraph 1 — point e a (new)








Text proposed by the Commission




Amendment





 










(ea)






the prevention and sanctioning of tax evasion and tax competition and the proper functioning of authorities contributing to administrative cooperation in tax matters;











Amendment 42


Proposal for a regulation


Article 3 — paragraph 1 — point f








Text proposed by the Commission




Amendment











(f)


the effective and timely cooperation with the European Anti-fraud Office and with the European Public Prosecutor’s Office in their investigations or prosecutions pursuant to their respective legal acts and to the principle of loyal cooperation.












(f)


the effective and timely cooperation with the European Anti-fraud Office and
, subject to the participation of the Member State concerned,
 with the European Public Prosecutor’s Office in their investigations or prosecutions pursuant to their respective legal acts and to the principle of loyal cooperation;









Amendment 43


Proposal for a regulation


Article 3 — paragraph 1 — point f a (new)








Text proposed by the Commission




Amendment





 










(fa)






the proper implementation of the Union budget following a systemic violation of fundamental rights.











Amendment 44


Proposal for a regulation


Article 3 — paragraph 2








Text proposed by the Commission




Amendment








2.
   
The following may, in particular, be considered generalised deficiencies as regards the rule of law,







deleted














(a)






endangering the independence of judiciary;








 












(b)






failing to prevent, correct and sanction arbitrary or unlawful decisions by public authorities, including by law enforcement authorities, withholding financial and human resources affecting their proper functioning or failing to ensure the absence of conflicts of interests;








 












(c)






limiting the availability and effectiveness of legal remedies, including through restrictive procedural rules, lack of implementation of judgments, or limiting the effective investigation, prosecution or sanctioning of breaches of law.








 





Amendment 45


Proposal for a regulation


Article 3 a (new)








Text proposed by the Commission




Amendment





 




Article 3 a






 




Panel of independent experts






 





1.
   
The Commission shall establish a panel of independent experts (‘the Panel’).







 




The Panel shall be composed of independent experts in constitutional law and financial and budgetary matters. One expert shall be appointed by the national parliament of each Member State and five experts shall be appointed by the European Parliament. The composition of the Panel shall ensure gender balance.






 




Whenever appropriate, representatives of relevant organisations and networks, such as the European Federation of Academies of Sciences and Humanities, the European Network of National Human Rights Institutions, the bodies of the Council of Europe, the European Commission for the efficiency of justice, the Council of Bars and Law Societies of Europe, the Tax Justice Network, the United Nations, the Organization for Security and Co-operation in Europe and the Organisation for Economic Co-operation and Development, may be invited as observers to the Panel in accordance with the rules of procedures referred to in paragraph 6.






 





2.
   
The advisory tasks of the Panel shall have as their objective to assist the Commission in identifying generalised deficiencies as regards the rule of law in a Member State that affect or risk affecting the principles of sound financial management or the protection of the financial interests of the Union.







 




The Panel shall assess the situation in all Member States annually on the basis of quantitative and qualitative criteria and information, having due regard to the information and guidance referred to in Article 5(2).






 





3.
   
Each year the Panel shall make public a summary of its findings.







 





4.
   
As part of its advisory task and taking into account the outcome of the considerations under paragraph 2, the Panel may express an opinion about a generalised deficiency as regards the rule of law in a Member State.







 




When expressing an opinion the Panel shall endeavour to reach a consensus. If no such consensus can be reached, the Panel shall express its opinion by a simple majority of its members.






 





5.
   
When adopting implementing acts pursuant to Article 5(6) and Article 6(2), the Commission shall take into account any relevant opinion expressed by the Panel in accordance with paragraph 4 of this Article.







 





6.
   
The Panel shall elect its chairperson from among its members. The Panel shall establish its rules of procedure.








Amendment 46


Proposal for a regulation


Article 4 — title








Text proposed by the Commission




Amendment







Content of
 measures


Measures 
for the protection of the Union budget







Amendment 47


Proposal for a regulation


Article 4 — paragraph 1 — introductory part








Text proposed by the Commission




Amendment






1.   One or more of the following 
appropriate
 measures may be adopted




1.   
When the conditions of Article 3 are fulfilled,
 one or more of the following measures may be adopted:






Amendment 48


Proposal for a regulation


Article 4 — paragraph 3








Text proposed by the Commission




Amendment






3.   The measures taken shall be proportionate to the nature, gravity and scope of the generalised deficiency as regards the rule of law. They shall, insofar as possible, target the Union actions affected or potentially affected by that deficiency.




3.   The measures taken shall be proportionate to the nature, gravity
, duration
 and scope of the generalised deficiency as regards the rule of law. They shall, insofar as possible, target the Union actions affected or potentially affected by that deficiency.






Amendment 49


Proposal for a regulation


Article 4 — paragraph 3 a (new)








Text proposed by the Commission




Amendment





 





3a.
   
The Commission shall provide information and guidance for the benefit of final recipients or beneficiaries on the obligations by Member States referred to in paragraph 2 via a website or internet portal.







 




The Commission shall also provide, on the same website or portal, adequate tools for final recipients or beneficiaries to inform the Commission about any breach of these obligations that, in the view of these final recipients or beneficiaries, directly affects them. This paragraph shall be applied in a manner that ensures protection of persons reporting on breaches of Union law, in line with the principles set out in Directive XXX (Directive on the protection of persons reporting on breaches of Union law). Information provided by final recipients or beneficiaries in accordance with this paragraph may only be taken into account by the Commission if accompanied by a proof that the concerned final recipient or beneficiary has lodged a formal complaint to the competent authority.







Amendment 50


Proposal for a regulation


Article 4 — paragraph 3 b (new)








Text proposed by the Commission




Amendment





 





3b.
   
Based on the information provided by the final recipients or beneficiaries in accordance with paragraph 3 a, the Commission shall ensure that any amount due by government entities or Member States in accordance with paragraph 2 is effectively paid to final recipients or beneficiaries.




Where necessary:







 










(a)






with reference to funds from the Union budget managed in accordance with Article 62(1)(c) of the Financial Regulation, the Commission shall:










 








 










(i)






recover the payment made to any of the bodies referred to in points (v) to (vii) of Article 62(1)(c) of the Financial Regulation for an amount equivalent to the amount not paid to final recipients or beneficiaries, in breach of paragraph 2 of this Article;














 








 










(ii)






transfer an amount equivalent to the amount referred to in the previous point to the Union reserve referred to in Article 12 of Council Regulation XXX (MFF Regulation). Such amount shall be considered margin left available within the meaning of point (a) of Article 12(1) of Council Regulation XXX (MFF Regulation) and shall be mobilised in accordance with Article 12(2) of Council Regulation XXX (MFF Regulation), for the benefit, to the possible extent, of the final recipients or beneficiaries referred to in paragraph 2 of this Article;














 










(b)






with reference to funds from the Union budget managed in accordance with Article 62(1)(b) of the Financial Regulation:










 








 










(i)






the obligation of government authorities or of Member States referred to in paragraph 2 of this Article shall be considered an obligation of Member States within the meaning of [Article 63] of Regulation XXX (CPR Regulation). Any breach of such obligation shall be treated in accordance with [Article 98] of Regulation XXX (CPR Regulation);














 








 










(ii)






The amount resulting from reduced support from the Funds to a programme, in application of [Article 98] of Regulation XXX (CPR Regulation) shall be transferred by the Commission to the Union reserve referred to in Article 12 of Council Regulation XXX (MFF Regulation). Such amount shall be considered margin left available within the meaning of point a) of Article 12(1) of Council Regulation XXX (MFF Regulation) and shall be mobilised in accordance with paragraph 2 of Article 12 of Council Regulation XXC (MFF Regulation), for the benefit, to the possible extent, of the final recipients or beneficiaries referred to in paragraph 2 of this Article.















Amendment 51


Proposal for a regulation


Article 5 — paragraph 1








Text proposed by the Commission




Amendment






1.   Where the Commission finds that it has reasonable grounds to believe that the conditions of Article 3 are fulfilled, it shall send a written notification to that Member State, setting out the grounds on which it based its finding




1.   Where the Commission
, taking into account any opinions of the Panel,
 finds that it has reasonable grounds to believe that the conditions of Article 3 are fulfilled, it shall send a written notification to that Member State, setting out the grounds on which it based its finding
. The Commission shall without delay inform the European Parliament and the Council of such notification and its contents.








Amendment 52


Proposal for a regulation


Article 5 — paragraph 2








Text proposed by the Commission




Amendment






2.   The Commission 
may
 take into account all relevant information, including decisions of the Court of Justice of the European Union, reports of the Court of Auditors, and conclusions and recommendations of relevant international organisations.




2.   
When assessing whether the conditions of Article 3 are fulfilled,
 the Commission 
shall
 take into account all relevant information, including 
opinions of the Panel,
 decisions of the Court of Justice of the European Union, 
resolutions of the European Parliament,
 reports of the Court of Auditors, and conclusions and recommendations of relevant international organisations 
and networks
. 
The Commission shall also take into account the criteria used in the context of Union accession negotiations, in particular the chapters of the acquis on judiciary and fundamental rights, justice, freedom and security, financial control and taxation, as well as the guidelines used in the context of the Cooperation and Verification Mechanism to track the progress of a Member State.








Amendment 53


Proposal for a regulation


Article 5 — paragraph 4








Text proposed by the Commission




Amendment






4.   The Member State concerned shall provide 
all
 required information and may make observations within a time limit specified by the Commission, which shall not be less than 
1
 month from the date of notification of the finding. In its observations, the Member State may propose the adoption of remedial measures.




4.   The Member State concerned shall provide 
the
 required information and may make observations within a time limit specified by the Commission, which shall not be less than 
one
 month 
nor more than three months
 from the date of notification of the finding. In its observations, the Member State may propose the adoption of remedial measures.






Amendment 54


Proposal for a regulation


Article 5 — paragraph 5








Text proposed by the Commission




Amendment






5.   The Commission shall take into account the information received and any observations made by the Member State concerned, as well as the adequacy of any proposed remedial measures, when deciding whether or not to 
submit a proposal for
 a decision on 
the appropriate
 measures.




5.   The Commission shall take into account the information received and any observations made by the Member State concerned, as well as the adequacy of any proposed remedial measures, when deciding whether or not to 
adopt
 a decision on 
any
 measures 
referred to in Article 4
. 
The Commission shall decide on the follow-up to be given to the information received within an indicative time limit of one month, and in any case within a reasonable timeframe from the date of receipt of that information.








Amendment 55


Proposal for a regulation


Article 5 — paragraph 5 a (new)








Text proposed by the Commission




Amendment





 





5a.
   
When assessing the proportionality of the measures to be imposed, the Commission shall have due regard to the information and guidance referred to in paragraph 2.








Amendment 56


Proposal for a regulation


Article 5 — paragraph 6








Text proposed by the Commission




Amendment






6.   Where the Commission considers that the generalised deficiency as regards the rule of law is established, it shall 
submit a proposal for an implementing act
 on the 
appropriate
 measures 
to the Council
.




6.   Where the Commission considers that the generalised deficiency as regards the rule of law is established, it shall 
adopt a decision
 on the measures 
referred to in Article 4 by means of an implementing act
.






Amendment 57


Proposal for a regulation


Article 5 — paragraph 6 a (new)








Text proposed by the Commission




Amendment





 





6a.
   
At the same time as it adopts its decision, the Commission shall simultaneously submit to the European Parliament and to the Council a proposal to transfer to a budgetary reserve an amount equivalent to the value of the measures adopted.








Amendment 58


Proposal for a regulation


Article 5 — paragraph 6 b (new)








Text proposed by the Commission




Amendment





 





6b.
   
By way of derogation from Article 31(4) and (6) of the Financial Regulation, the European Parliament and the Council shall deliberate upon the transfer proposal within four weeks of its receipt by both institutions. The transfer proposal shall be considered to be approved unless, within the four-week period, the European Parliament, acting by majority of the votes cast, or the Council, acting by qualified majority, amend or reject it. If the European Parliament or the Council amend the transfer proposal, Article 31(8) of the Financial Regulation shall apply.








Amendment 59


Proposal for a regulation


Article 5 — paragraph 6 c (new)








Text proposed by the Commission




Amendment





 





6c.
   
The decision referred to in paragraph 6 shall enter into force if neither the European Parliament nor the Council reject the transfer proposal within the period referred to in paragraph 6b.








Amendment 60


Proposal for a regulation


Article 5 — paragraph 7








Text proposed by the Commission




Amendment








7.
   
The decision shall be deemed to have been adopted by the Council, unless it decides, by qualified majority, to reject the Commission proposal within one month of its adoption by the Commission.







Deleted







Amendment 61


Proposal for a regulation


Article 5 — paragraph 8








Text proposed by the Commission




Amendment








8.
   
The Council, acting by a qualified majority, may amend the Commission’s proposal and adopt the amended text as a Council decision.







deleted







Amendment 62


Proposal for a regulation


Article 6 — paragraph 1








Text proposed by the Commission




Amendment






1.   The Member State concerned may, at any time, submit to the Commission evidence to show that the generalised deficiency as regards the rule of law has been remedied or has ceased to exist.




1.   The Member State concerned may, at any time, submit to the Commission 
a formal notification including
 evidence to show that the generalised deficiency as regards the rule of law has been remedied or has ceased to exist.






Amendment 63


Proposal for a regulation


Article 6 — paragraph 2








Text proposed by the Commission




Amendment






2.   The Commission shall assess the situation in the Member State concerned. Once the generalised deficiencies as regards the rule of law which on the grounds of which the 
appropriate
 measures were adopted cease to exist in full or in part, the Commission shall 
submit to the Council a proposal for
 a decision lifting those measures in full or in part. The procedure set out in paragraphs 2, 4, 5, 6 
and 7
 of Article 5 shall apply.




2.   
At the request of the Member State concerned or on its own initiative,
 the Commission
, taking into account any opinions of the Panel,
 shall assess the situation in the Member State concerned 
within an indicative time limit of one month, and in any case within a reasonable timeframe from the date of receipt of the formal notification
. Once the generalised deficiencies as regards the rule of law which on the grounds of which the measures 
referred to in Article 4
 were adopted cease to exist in full or in part, the Commission shall
, without delay, adopt
 a decision lifting those measures in full or in part. 
At the same time as it adopts its decision, the Commission shall simultaneously submit to the European Parliament and to the Council a proposal to lift, in full or in part, the budgetary reserve referred to in Article 5(6a).
 The procedure set out in paragraphs 2, 4, 5, 6
, 6b and 6c
 of Article 5 shall apply.






Amendment 64


Proposal for a regulation


Article 6 — paragraph 3








Text proposed by the Commission




Amendment






3.   Where measures concerning the suspension of the approval of one or more programmes or amendments thereof referred to in point (i) of Article 4(2)(b) or the suspension of commitments referred to in point (ii) of Article 4(2)(b) are lifted, amounts corresponding to the suspended commitments shall be entered in the budget subject to Article 7 of Council Regulation (EU, Euratom) No XXXX (MFF Regulation). Suspended commitments of year n may not be entered in the budget beyond year n+2.




3.   Where measures concerning the suspension of the approval of one or more programmes or amendments thereof referred to in point (i) of Article 4(2)(b) or the suspension of commitments referred to in point (ii) of Article 4(2)(b) are lifted, amounts corresponding to the suspended commitments shall be entered in the budget subject to Article 7 of Council Regulation (EU, Euratom) No XXXX (MFF Regulation). Suspended commitments of year n may not be entered in the budget beyond year n+2. 
As from year n+3, an amount equivalent to the suspended commitments shall be entered in the Union Reserve for Commitments provided for in Article 12 of Council Regulation (EU, Euratom) No XXXX (MFF Regulation).








Amendment 65


Proposal for a regulation


Article 7








Text proposed by the Commission




Amendment







Article 7






deleted








Information of the European Parliament




 






The Commission shall immediately inform the European Parliament of any measures proposed or adopted pursuant to Articles 4 and 5




 





Amendment 66


Proposal for a regulation


Article 7 a (new)








Text proposed by the Commission




Amendment





 





Article 7a




Reporting




The Commission shall report to the European Parliament and the Council on the application of this Regulation, in particular on the effectiveness of the measures adopted, if any, at the latest five years after its entry into force.




The report shall be accompanied where necessary by appropriate proposals.








Amendment 67


Proposal for a regulation


Article 8 — paragraph 1








Text proposed by the Commission




Amendment





This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. 
It shall apply from 1 January 2021.




This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.





Amendment 68


Proposal for a regulation


Article 8 a (new)








Text proposed by the Commission




Amendment





 





Article 8 a




Inclusion in the Financial Regulation




The contents of this Regulation shall be inserted into the Financial Regulation upon its next revision.









(1)  The matter was referred back for interinstitutional negotiations to the committees responsible, pursuant to Rule 59(4), fourth subparagraph (A8-0469/2018).

(7)  Judgment of the Court of Justice of 29 April 2004, CAS Succhi di Frutta, C-496/99 PECLI:EU:C:2004:236, paragraph 63.

(8)  Judgment of the Court of Justice of 12 November 1981, Amministrazione delle finanze dello Stato v Srl Meridionale Industria Salumi and others Ditta Italo Orlandi & Figlio and Ditta Vincenzo Divella v Amministrazione delle finanze dello Stato. Joined cases 212 to 217/80, ECLI:EU:C:1981:270, paragraph 10.

(9)  Judgment of the Court of Justice of 21 September 1989, Hoechst, Joined cases 46/87 and 227/88, ECLI:EU:C:1989:337, paragraph 19.

(10)  Judgment of the Court of Justice of 10 November 2016, Kovalkovas, C-477/16, ECLI:EU:C:2016:861, paragraph 36; Judgment of the Court of Justice of 10 November 2016, PPU Poltorak, C-452/16, ECLI:EU:C:2016:858, paragraph 35; and Judgment of the Court of Justice of 22 December 2010, DEB, C-279/09, ECLI:EU:C:2010:811, paragraph 58.

(11)  Judgment of the Court of Justice of 27 February 2018, Associação Sindical dos Juízes Portugueses v Tribunal de Contas C-64/16, ECLI:EU:C:2018:117, paragraphs 31, 40-41.

(12)  Communication from the Commission ‘A new EU Framework to strengthen the Rule of Law’, COM(2014)0158, Annex I.

(7)  Judgment of the Court of Justice of 29 April 2004, CAS Succhi di Frutta, C-496/99 PECLI:EU:C:2004:236, paragraph 63.

(8)  Judgment of the Court of Justice of 12 November 1981, Amministrazione delle finanze dello Stato v Srl Meridionale Industria Salumi and others Ditta Italo Orlandi & Figlio and Ditta Vincenzo Divella v Amministrazione delle finanze dello Stato. Joined cases 212 to 217/80, ECLI:EU:C:1981:270, paragraph 10.

(9)  Judgment of the Court of Justice of 21 September 1989, Hoechst, Joined cases 46/87 and 227/88, ECLI:EU:C:1989:337, paragraph 19.

(10)  Judgment of the Court of Justice of 10 November 2016, Kovalkovas, C-477/16, ECLI:EU:C:2016:861, paragraph 36; Judgment of the Court of Justice of 10 November 2016, PPU Poltorak, C-452/16, ECLI:EU:C:2016:858, paragraph 35; and Judgment of the Court of Justice of 22 December 2010, DEB, C-279/09, ECLI:EU:C:2010:811, paragraph 58.

(11)  Judgment of the Court of Justice of 27 February 2018, Associação Sindical dos Juízes Portugueses v Tribunal de Contas C-64/16, ECLI:EU:C:2018:117, paragraphs 31, 40-41
; judgment of the Court of Justice of 25 July 2018, LM, C-216/18 PPU, ECLI:EU:C:2018:586, paragraphs 63-67
.

(12)  Communication from the Commission ‘A new EU Framework to strengthen the Rule of Law’, COM(2014)0158, Annex I.

(12a)  
Report of the Venice Commission of 4 April 2011 Study No. 512/2009 (CDL-AD(2011)003rev).



(1a)  
Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1).