CELEX: 52013PC0312
Language: en
Date: 2013-05-29
Title: Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing the Copernicus Programme and repealing Regulation (EU) No 911/2010

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		52013PC0312
		
			Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing the Copernicus Programme and repealing Regulation (EU) No 911/2010 /* COM/2013/0312 final - 2013/0164 (COD) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
1.           CONTEXT OF THE PROPOSAL
Copernicus is the new name of the European
Earth Observation Programme, GMES (Global Monitoring for Environment and
Security). Copernicus or rather its predecessor was established as an EU
programme by the GMES Regulation (EU) No 911/2010. It covers all the activities
for ensuring an uninterrupted provision of accurate and reliable data and
information on environmental issues and security matters to users in charge of
policy making, implementation and monitoring, in the EU and its Member States.
Copernicus aims at providing Europe with a continuous, independent and reliable
access to observation data and information. The EU investment aims at filling
the observation gaps, providing access to existing assets and developing
operational services.
Copernicus is structured in six Services:
Marine, Atmosphere, Land and Climate change monitoring as well as support to
Emergency and Security. Copernicus uses data from satellites and in-situ
sensors such as buoys, balloons or air sensors to provide timely and reliable added-value
information and forecasting to support for example, agriculture and fisheries,
land use and urban planning, the fight against forest fires, disaster response,
maritime transport or air pollution monitoring.
Copernicus also contributes to economic
stability and growth by boosting commercial applications (the so-called
downstream services) in many different sectors through a full and open access
to Copernicus observation data and information products. It is one of the
programmes to be delivered under the Europe 2020 strategy for smart,
sustainable and inclusive growth and it was included in the industrial policy
initiative of Europe 2020, given its benefits to a wide range of Union
policies.
Responsibility for funding the exploitation
and the renewal of space infrastructure developed with EU and intergovernmental
funds cannot be optimally achieved by individual Member States because of the
costs incurred. In the field of space-based observation for operational
meteorology, European States have pooled their resources to develop and exploit
meteorological satellites in the framework of the European Organisation for the
Exploitation of Meteorological Satellites (EUMETSAT). European States also
developed demonstrators of environmental satellites either through the European
Space Agency (ESA) or through national space agencies. They could not, however,
find a way to co-operate with regard to the funding of sustained operational
programmes in the field of environmental monitoring. The need for continuing
such observations is becoming critical, considering the increasing political
pressure on public authorities to take informed decisions in the field of
environment, security and climate change and the need to respect international
agreements.
For the services with a pan-European and a
global coverage, Member States cannot sufficiently achieve the objectives of
the proposed action, as the inputs from different Member States have to be
aggregated at European level. The provision of other services (e.g. emergency
maps or thematic land monitoring maps of a more limited geographical scope) can
be better achieved at EU level for two reasons. First, a more coherent and
centralised management of input data, from space based or in-situ sensors will
allow for economies of scale.
Secondly, a coordinated provision of Earth
monitoring services at Member State level helps to avoid duplications and
enhances the monitoring of the implementation of EU environmental legislation
on the basis of transparent and objective criteria. Only comparable information
produced at Member State level will make it possible to ascertain an effective
implementation of environmental legislation which in many cases addresses truly
borderless and therefore international problems.
Moreover, action at European level will
create economies of scale leading to a better value for public money. Action at
EU level thus leads to a clear added value.
Since the beginning the overall funding
allocated to its development by the EU and ESA has reached over €3.2 billion. A
large part of the GMES budget was dedicated to the development of observation
satellites: the Sentinels. This was done through a contribution from the
Commission of € 738 Mio to the ESA’s GMES Space Component programme (GSC).
Until the end of 2013, Copernicus is funded
by the FP7 Space theme and the GMES and its Initial Operations programme. As
Copernicus will be ready to enter in its operational phase, a new Regulation is
required from 2014 onwards. In line with the objectives of the Communication “A
Simplification Agenda for the MFF 2014-2020”[1],
this new Regulation will better define the governance of the programme, in
particular the role of the Commission, the objectives of the programme and indicators
which will allow an effective monitoring of its implementation and ensure a
smooth transition from the current activities. The proposed Regulation includes
as well provisions for the establishment of proportionate financial procedures
in particular for the large part of the programme to be implemented indirectly.
In the context of simplification and “smart regulation”, it should be noted
that Copernicus aims at enhancing the quality of legislation by providing
evidence-based monitoring tools.
In its Communication entitled “A Budget for
Europe 2020”, (COM (2011) 500 final of 29.06.2011) the Commission indicated
that given the limits of the EU budget, it was proposed to fund GMES outside
the multi-annual financial framework in the period from 2014 to 2020. This
proposal was rejected by the Parliament in its resolution P7_TA(2012)0062 of 16
February 2012. The European Council conclusions of 7-8 February 2013 on the
Multi-annual Financial Framework (MFF) foresee that the programme should be
financed under sub-heading 1a of the financial framework, with a maximum level
of commitments of EUR 3,786 million (2011 prices) to be laid down in the MFF
Regulation. 
2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS
Since the creation of the European
Commission's GMES Bureau in 2006 a rolling process of stakeholders'
consultation has been in place on GMES. This consultation process, launched
with the Communication entitled “GMES: from concept to reality”[2], led firstly to the adoption of
the 2008 Communication entitled "GMES: we care for a safer Planet"[3]. Further consultation was
carried out in order to prepare the Commission proposal for a Regulation on the
European Earth monitoring programme (GMES) and its initial operations
(2011-2013)[4]
and the Communication entitled "Global Monitoring for Environment and
Security (GMES): Challenges and Next Steps for the Space Component"[5]. 
Since the entry into force of the GMES
Regulation in 2010, the consultation of Member States and users has continued
through the new governance bodies set up by the Regulation itself: the GMES
Committee and the User Forum composed of public user representatives.
The consultation has confirmed the interest
and need for the Copernicus Programme and – now that it is indeed becoming an
EU programme – it now focuses on different design options, in particular for
the Copernicus Services. Stakeholders have indicated that the uninterrupted and
guaranteed availability of the information coming from the Copernicus Services
is the cornerstone for the success of the programme and for its benefits to
fully materialise.
An impact assessment was made in 2011 and
the main conclusions were published in Document SEC (2011) 867 final of
28.06.2011, which accompanied the Commission's proposal on the Multiannual
Financial Framework, COM (2011) 500. The impact assessment has now been adapted
and the recommendations of the Impact Assessment Board have been taken into
account. What has changed since 2011 is the political consideration of the usefulness
of funding the Copernicus programme in the MFF. The Commission therefore
considers that it is now time to make a formal proposal.
It should be noted, however, that this
proposal had to be readjusted to the amount agreed under the ceiling of
Multiannual Financial Framework, which cut the initial proposal of the
Commission by over 2 billion EUR. In order to preserve the service delivery,
the Commission had to cut new developments in the space component to renew and
modernise the observation capacity. ESA will take over responsibility for the
development of the next generation of the Sentinels.
The question of ownership of the Copernicus
space component assets is important and cannot be considered in isolation from
the rights and responsibilities that such ownership confers upon the owner. The
owner has the fullest possible rights including the right of use, transfer and
disposal. 
In determining whether to accept ownership
of the space component assets, two phases need to be distinguished: During the
first phase, i.e. the present Multi-Annual Financial Framework, the EU was only
a contributor to an ESA programme at a rate of some 30% and was lacking the
funds to assume a leading role in shaping the space component of Copernicus.
Moreover, the EU funds were largely FP7 appropriations and were not designed to
fund an operational programme on a permanent basis. The EU was therefore unable
to assume ownership during this phase. The second phase will begin with the
next Multi-Annual Financial Framework. It brings about a fundamental change in
that the EU will now be able to fund 100% of most parts of the Copernicus space
component, including the ground segment and the cost of operations of the
satellites. 
In this new context, as referred to in
Article 19, the ownership of the satellites will need to be reviewed. The
Regulation foresees the option that the EU or a specifically designated body or
fund could take over the ownership from ESA. In view of an ownership transfer,
options will need to be assessed, taking account relevant factors including the
operation of the satellites; legal ownership of the data; data access
conditions; and the value of the assets. These options will only be considered
if disadvantages of EU ownership seem to outweigh its advantages. The transfer
of ownership from the EU could only be exercised by means of a delegated act. 
The option of a data purchase scheme could
also be considered.
3.           LEGAL ELEMENTS OF THE PROPOSAL
Having regard to Article 189 of the Treaty
on the Functioning of the European Union, the proposal is for a new Regulation
of the European Parliament and the Council establishing the Copernicus
Programme. It focuses on the following main aspects
(1)                   
Change of name into Copernicus;
(2)                   
Governance of GMES in its operational phase, with
a view to allowing the Commission to delegate activities to a number of
operators;
(3)                   
Funding over 2014-2020.
4.           BUDGETARY IMPLICATION 
The financial statement accompanying this
proposal for a Regulation sets out indicative budget appropriations, which are
compatible with the multiannual financial framework 2014 – 2020, with a maximum
level of commitments of EUR 3,786 million, in 2011 prices, equivalent to EUR
4,291 million in current prices.
5.           OPTIONAL ELEMENTS 
The Commission may adopt delegated acts in order
to achieve certain objectives set out in the proposal.
2013/0164 (COD)
Proposal for a
REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL
establishing the Copernicus Programme and
repealing Regulation (EU) No 911/2010
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 189(2) thereof,
Having regard to the proposal from the
European Commission,
After transmission of the draft legislative
act to the national Parliaments,
Having regard to the opinion of the
European Economic and Social Committee[6],

Having regard to the opinion of the
Committee of the Regions[7],

Acting in accordance with the ordinary
legislative procedure,
Whereas:
(1)       Global Monitoring for
Environment and Security (GMES) was an Earth monitoring initiative led by the
Union and carried out in partnership with the Member States and the European
Space Agency (ESA) The origin of GMES date back to May 1998, when institutions
involved in the development of space activities in Europe made a joint
declaration known as the "Baveno Manifesto". The Manifesto called for
a long-term commitment to the development of space-based environmental
monitoring services, making use of, and further developing, European skills,
and technologies. In 2005, the Union made the strategic choice of developing an
independent European Earth observation capacity to deliver services in the
environmental and security fields[8],
which resulted ultimately in Regulation (EU) No 911/2010 of the European
Parliament and of the Council of 22 September 2010 on the European Earth
monitoring programme (GMES) and its initial operations (2011 to 2013)[9].
(2)       Copernicus should be
considered as a European contribution to building the Global Earth Observation
System of Systems (GEOSS) developed within the framework of the Group on Earth
Observations (GEO).
(3)       Based on the results of
that initiative, Regulation (EU) No 911/2010 established the European Earth monitoring
programme (GMES) and the rules for the implementation of its initial operations.

(4)       While the programme set up
under Regulation (EU) No 911/2010 should continue under the new multiannual
financial framework, the acronym 'GMES' should be changed to 'Copernicus' in
order to facilitate the communication with the public at large. The Commission
has registered the trademark so that it can be used by the Union institutions
and licensed to other interested users, in particular the providers of core
services.
(5)       The objectives of the
Copernicus programme are to provide accurate and reliable information in the
field of the environment and security, tailored to the needs of users and
supporting other Union’s policies, in particular relating to the internal
market, transport, environment, energy, civil protection, cooperation with
third countries and humanitarian aid. It builds on capabilities existing in
Europe, complemented by new assets developed in common.
(6)       The Copernicus programme
should be implemented consistently with other relevant Union instruments and
action, in particular with environmental and climate change actions, and
instruments in the field of security, protection of personal data, competitiveness
and innovation, cohesion, research, transport, competition and international
cooperation, with the European Global Navigation Satellite Systems (GNSS)
programme. Copernicus data should maintain coherence with Member States’
spatial reference data and support the development of the infrastructure for
spatial information in the Union established by Directive 2007/2/EC of the
European Parliament and of the Council of 14 March 2007 establishing an
Infrastructure for Spatial Information in the European Community (INSPIRE)[10]. Copernicus should also complement
the Shared Environmental Information System (SEIS) and Union activities in the
field of emergency response.
(7)       Copernicus is a programme
to be delivered under the Europe 2020 strategy for smart, sustainable and
inclusive growth. It is to benefit a wide range of Union policies and contribute
to reaching the objectives of Europe 2020, in particular by developing an
effective space policy to provide the tools to address some of the key global
challenges and meet the targets on climate change and energy sustainability. 
(8)       The Copernicus programme
stands to benefit from the results provided by Horizon 2020, the Union's
Framework Programme for Research and Innovation 2014‑2020, in particular
through its activities in research and innovation for future Earth Observation
technologies and applications using remote sensing, airborne and in-situ
technologies and data to respond to the grand societal challenges.
(9)       In order to attain its
objectives, the Copernicus programme should rely on an autonomous Union’s capacity
for space‑borne observations and provide operational services in the
field of environment, civil protection and security. It should also make use of
the available in‑situ data provided, namely, by the Member States. The provision
of operational services depends on the well‑functioning and safety of the
Copernicus space component. The increasing risk of collision with other
satellites and space debris is the most serious threat to the Copernicus space
component. Therefore, the Copernicus programme should support actions aimed at
reducing such risks, in particular by contributing to the programme established
by Decision [XXX] of the European Parliament and the Council establishing a
Space Surveillance and Tracking Support Programme[11].
(10)     The maximum financial
envelope needed for the Copernicus actions (2014-2020) is EUR 3 786 million in
2011 prices, allotted in a separate budget chapter under Title 2 of Heading 1a of
the Union's General Budget. Staff and administrative expenditures incurred by
the Commission in the coordination of the Copernicus programme should be funded
from the budget of the Union.
(11)     With a view to improving
the implementation of Copernicus and its long-term planning, the Commission
should adopt the annual work programme in line with the priorities, objectives
and strategies of a multi-annual plan, 
(12)     Copernicus should be user
driven, thus requiring the continuous, effective involvement of users,
particularly regarding the definition and validation of service requirements. 
(13)     The international dimension
of Copernicus is of particular relevance in the exchange of data and
information, as well as in access to observation infra-structure. Such an
exchange system is more cost-efficient than data-buy schemes and strengthens
the global dimension of the programme.
(14)     The EEA Agreement and the
Framework Agreements with candidate and potential candidate countries provide
for participation by those countries in Union programmes. Participation by
other third countries and international organisations should be made possible
by the conclusion of international agreements to that effect.
(15)     Member States, third
countries and international organisations should be free to contribute to the
programmes on the basis of appropriate agreements.
(16)     The Commission should have the
overall responsibility for the Copernicus programme. It should define its
priorities and objectives and ensure the overall coordination and supervision
of the programme.
(17)     Taking into account the
partnership dimension of Copernicus and in order to avoid duplication of
technical expertise, the implementation of the programme should be delegated to
entities with the appropriate technical and professional capacity. 
(18)     In the implementation of
the Copernicus programme, the Commission may rely, where appropriate, on
competent Union agencies, such as the European Environment Agency (EEA), the
European Agency for the Management of Operational Cooperation at the External
Borders of the Member States of the European Union (FRONTEX), the European
Maritime Safety Agency (EMSA) and the European Union Satellite Centre (EUSC) or
any relevant body potentially eligible for a delegation according to Article 58
of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the
Council of 25 October 2012 on the financial rules applicable to the annual
budget of the Union[12].
(19)     Pursuant to Article 61(2)
of Regulation (EU, Euratom) No 966/2012, the selection of entities (the
“operators”) to whom the Commission may entrust implementation tasks, should
follow a transparent procedure based on justified on objective grounds and
shall not give rise to a conflict of interests. Given the particular nature of
the tasks involved, an ad-hoc procedure based on a call for expression of interest
was chosen to identify the potential operators best suited to be entrusted with
indirect management of the Copernicus programme.
(20)     The operators of the
Copernicus programme should be subject to supervision by the Commission, whilst
enjoying the necessary autonomy to implement the tasks they were entrusted
with. They should submit an annual work programme to the Commission with an
annual implementation report.
(21)     It is important that, in
order to meet its obligations under Article 317 TFEU, the Commission has the
necessary means at its disposal to supervise the acts of the entities to which
it entrusts implementation tasks under the Copernicus programme. This includes
not just the powers already conferred to it by Regulation (EU, Euratom) No
966/2012, but also the possibility to give instructions to the operator and
conduct inspections. In particular, in the case of urgency or of unforeseeable
events, and in every situation where the operator is unable to carry out those
tasks, the Commission should be able to call back the delegation and act in
lieu of the operator. The exercise of this faculty should be proportional to
the goals to be attained and therefore the delegation agreement should be
suspended for the time needed to perform the required acts.
(22)     In order to achieve the
objective of Copernicus on a sustainable basis, it is necessary to coordinate
the activities of the various partners involved in Copernicus, and to develop,
establish and operate a service and observation capacity meeting the demands of
users. In this context, a committee should assist the Commission in ensuring
the coordination of contributions to Copernicus by the Union, the Member States
and inter-governmental agencies, making the best use of existing capacities and
identifying gaps to be addressed at Union level. It should also assist the
Commission in monitoring the coherent implementation of Copernicus.
(23)     The work of the operators
to whom the Commission has delegated tasks should also be measured against
performance indicators. This would provide the European Parliament and the
Council with an indication of the progress of the Copernicus operations and
programme implementation.
(24)     The data and information
produced in the framework of the Copernicus programme should be made available
to the users on a full, open and free-of-charge basis, in order to promote
their use and sharing, and to strengthen Earth observation markets in Europe,
in particular the downstream sector, thereby enabling growth and job creation.
(25)     Wherever the access or use
of Copernicus or third party data and information may endanger
the security of the Union and its Member States or threaten their external
relations, the Commission should restrict their availability or limit the
licences awarded.
(26)     The question of ownership
of the Copernicus space component assets is important and cannot be considered
in isolation from the rights and responsibilities that such ownership confers
upon the owner. In order to have the right of use, transfer and disposal, the
Union should become the owner. In the case of the Sentinel satellites,
ownership implies in particular the right to decide upon the data policy and to
manage its implementation, to choose the exploitation model and the operator of
the Sentinels, and to conclude international agreements with third countries
on, among other, sharing satellite data.
(27)     The financial interests of
the Union should be protected through proportionate measures throughout the
expenditure cycle, including the prevention, detection and investigation of
irregularities, the recovery of funds lost, wrongly paid or incorrectly used
and, where appropriate, administrative and financial penalties in accordance
with Regulation (EU, Euratom) No 966/2012.
(28)     In order to increase the value
of Copernicus to users, the Commission should be assisted by representatives of
mid and end-users, experts from Member States including from relevant national
agencies or by independent experts.
(29)     In order to ensure uniform
conditions for the implementation of this Regulation as regards the adoption of
the annual work programme, the multi annual plan for the period 2014-2020 and
the measures to promote the convergence of Member States in the use of
Copernicus data and information and their access to the technology and
development in Earth Observation, implementing powers should be conferred on
the Commission. Those powers should be exercised in accordance with Regulation
(EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011
laying down the rules and general principles concerning mechanisms for control
by the Member States of the Commission's exercise of implementing powers[13].
(30)     So as to inform Member
States and respect the impartiality in the decision-making, the advisory
procedure should be used for the adoption of measures to promote the
convergence of Member States in the use of Copernicus data and information and
their access to the technology and development in Earth Observation. The
examination procedure should be used for the adoption of the annual work
programme and the multi-annual plan for the period 2014-2020 given that that
act relates to a programme with substantial implications.
(31)     In order to take into
account possible security risks as well as bandwidth and other technical
limitations, the power to adopt acts in accordance with Article 290 of the
Treaty on the Functioning of the European Union should be delegated to the
Commission in respect of the data requirements necessary for the operational services,
the conditions and procedures regarding access to, registration and use of
Copernicus data and information, the conditions and procedures for the
transmission and use of satellite data transmitted to receiving stations not
part of the Copernicus programme and for the archiving of Copernicus data and
information, the specific technical criteria necessary to prevent he disruption
of the Copernicus data and information system and the criteria for the restriction
of dissemination of Copernicus data and information due to conflicting rights
or security interests, as well as the criteria for the performance of the
security assessment. It is of particular importance that the Commission carry
out appropriate consultations during its preparatory work, including at expert
level. The Commission, when preparing and drawing up delegated acts, should
ensure a simultaneous, timely and appropriate transmission of relevant
documents to the European Parliament and to the Council.
(32)     The actions financed under
this Regulation should be monitored and evaluated in order to allow for
readjustments and new evolutions.
(33)     Since the objective of this
Regulation, namely the establishment of the programme Copernicus, cannot be
sufficiently achieved by the Member States because it will also comprise
pan-European capacity and depend on the coordinated provision of services
throughout the Member States that needs to be coordinated at Union level and
can therefore, by reason of the scale of the action, be better achieved at
Union level, the Union may adopt measures, in accordance with the principle of
subsidiarity as set out in Article 5 of the Treaty on European Union. In
accordance with the principle of proportionality, as set out in that Article,
this Regulation does not go beyond what is necessary in order to achieve that
objective.
(34)     It is therefore necessary
to repeal Regulation (EU) No 911/2010 in order to establish an appropriate
framework for governance and funding and to ensure a fully operational
Copernicus programme from 2014 onwards, 
HAVE ADOPTED THIS REGULATION:
Article 1
Subject‑matter
This Regulation establishes the Union Earth
observation programme called Copernicus and lays down the rules for its execution.
Article 2
General objectives
1.           The Copernicus programme
shall contribute to the following general objectives:
(a)         
protection of the environment and provision of
support to civil protection and security efforts;
(b)         
support of the Europe 2020 growth strategy by
contributing to the objectives of smart, sustainable and inclusive growth; in
particular, it shall contribute to economic stability and growth by boosting
commercial applications. 
2.           The original data and
information produced from space-borne observations, as well as from available
in-situ data (‘Copernicus data and information’) shall be accurate and
reliable, supplied on a long term and sustainable basis and respond to the
requirements of Copernicus user communities. The access to those data shall be full,
open and free of charge, subject to the conditions defined in or on the basis
of this Regulation.
3.           For the purpose of
paragraph 2, the Copernicus user communities are defined as those comprising
the European national, regional or local bodies entrusted with the definition,
implementation, enforcement or monitoring of a public service or policy in
areas referred to in point (1) of Article 4.
4.           The achievement of the
objectives referred to in paragraph 1 shall be measured by the following result
indicators: 
(a)         
data and information made available in
accordance with the respective service-level delivery requirements for
environment, civil protection and security;
(b)         
market penetration and competitiveness of the
European downstream operators.
Article 3
Specific objectives
1.           In order to attain the
general objectives described in Article 2, the Copernicus programme shall address
user needs and deliver the operational services referred to in point (1) of
Article 4. This objective shall be measured by the use of data and information
measured by the progression in number of users, by the volume of accessed data
and added-value information, and by the widening of distribution across Member
States;
2.           The Copernicus programme
shall provide a sustainable and reliable access to space-borne observations from
an autonomous Union's Earth Observation capacity, and build on existing assets
and capabilities, complementing them whenever necessary. This objective shall
be measured by the accomplishment of the space infrastructure in terms of
satellites deployed and data it produces.
Article 4
Scope of the Copernicus services
The Copernicus services, as referred to in point
(1) of Article 3 shall include:
1.           Operational services:
(a)         
The atmosphere monitoring service shall provide
information on air quality on a European scale and of the chemical composition
of the atmosphere on a global scale. It shall in particular provide information
for air quality monitoring systems at the local to national scales, and should
contribute to the monitoring of atmospheric chemistry climate variables;
(b)         
The marine monitoring service shall provide
information on the state and dynamics of physical ocean and marine ecosystems
for the global ocean and the European regional areas;
(c)         
The land monitoring service shall provide information
in support of the global-to-local environmental monitoring of biodiversity,
soil, water, forests and natural resources, as well as in general
implementation of environment, agriculture, development, energy, urban
planning, infrastructure and transport policies;
(d)         
The climate change monitoring service shall
provide information to increase the knowledge base to support adaptation and
mitigation policies. It shall in particular contribute to the provision of
Essential Climate Variables (ECVs), climate analyses and projections at
temporal and spatial scales relevant to adaptation and mitigation strategies
for the various Union’s sectorial and societal benefit areas;
(e)         
The emergency response service shall provide
information for emergency response in relation to different types of disasters,
including meteorological hazards, geophysical hazards, deliberate and
accidental man-made disasters and other humanitarian disasters, as well as the
prevention, preparedness, response and recovery activities;
(f)           
The security service shall provide information
in support of the security challenges of Europe improving crisis prevention,
preparedness and response capacities, in particular for border and maritime
surveillance, but also support for the Union’s external action, through detection
and monitoring of trans‑regional security threats, risk assessment and
early warning systems, mapping and monitoring of border areas;
2.           Development activities
consisting in improving the quality and performance of operational services,
including their evolution and adaptation, and in avoiding or mitigating the
operational risks;
3.           Support activities
consisting in measures to promote the use of operational services by users and
downstream applications, as well as communication and dissemination activities.
Article 5
Space component
The Copernicus space component shall
provide space‑borne observations to meet the objectives referred to in Articles
2 and 3, serving primarily the operational services referred to in point (1) of
Article 4. The Copernicus space component shall include the following
activities:
(a)         
Provision of space-borne observations, including:
–              
operation of the Copernicus space
infrastructure, including tasking of the satellites, monitoring and control of
the satellites, reception and processing, archiving and dissemination of data,
and permanent calibration and validation;
–              
provision of in-situ data for calibration and
validation of    space‑borne observations;
–              
provision, archiving and dissemination of third‑party
space‑borne  mission data complementing the Copernicus space
infrastructure;
–              
maintenance of the Copernicus space
infrastructure
(b)         
Activities in response to evolving needs of the
users, including:
–              
identification of observation gaps and the
specification of new space missions on the basis of user requirements.
–              
developments aiming at modernising and
complementing the Copernicus space component, including design and procurement
of new elements of the space infrastructure;
(c)         
Contribution to the protection of satellites
against the risk of collision.
Article 6
In-situ component
The in‑situ component of the
Copernicus programme shall include the following activities:
(a)         
coordination and harmonisation of the collection
and provision of in-situ data, provision of in-situ data to the operational
services, including third party in-situ data at international level;
(b)         
technical assistance to the Commission on the
service requirements for in‑situ observation data;
(c)         
cooperation with in-situ operators to promote
the consistency of development activities related to the in-situ observation
infrastructure and networks.
Article 7
Funding
1.           The financial envelope
allocated to the Copernicus programme for the period 2014 – 2020 has a maximum
amount of EUR 3 786 million in 2011 prices.
2.           Appropriations shall be
authorised annually by the budgetary authority within the limits laid down in
the multiannual financial framework. Budgetary commitments for activities
extending over more than one financial year may be broken down over several
years into annual instalments.
3.           The financial allocation
for the Copernicus programme may also cover expenses relating to preparatory,
monitoring, control, audit and evaluation activities which are required
directly for the management of the Copernicus programme and the achievement of
its objectives, and in particular studies, meetings, information and
communication actions, as well as expenses linked to IT networks focusing on
information processing and exchange of data. The resources allocated to
communication actions under this Regulation may also contribute proportionally
to covering the institutional communication of the political priorities of the
Union.
4.           Tasks entrusted to other
bodies shall be subject to the procedure referred to in Articles 164 and 165 of
Regulation (EU, Euratom) No 966/2012.
Article 8
Work programme of the Commission
The Commission shall adopt, for each year
of the implementation of the Copernicus programme a work programme pursuant to
Article 84 of the Regulation (EU, Euratom) No 966/2012. That implementing act
shall be adopted in accordance with the examination procedure referred to in point
(3) of Article 21 of this Regulation. 
Article 9
Cooperation with Member States
1.           The Commission shall
co-operate with Member States in order to improve the exchange of data and
information between them and increase the volume of the data and information
made available to the Copernicus programme
2.           The Commission may adopt
measures to promote the convergence of Member States in the use of Copernicus
data and information and their access to the technology and development in
Earth Observation. Such measures shall not have the effect to distort free
competition. Those implementing acts shall be adopted in accordance with the
advisory procedure referred to in point (2) of Article 21.
Article 10
International cooperation
1.           The Union, represented by
the Commission, may enter into agreements with the following third countries:
(a)         
European Free Trade Association (EFTA) countries
which are Contracting Parties to the EEA Agreement in accordance with the
conditions laid down in the EEA Agreement;
(b)         
the candidate countries, as well as potential
candidate countries in accordance with the respective Framework Agreements or a
Protocol to an Association Agreement establishing the general principles and
conditions for the participation of those countries in Union programmes;
(c)         
Switzerland, other third countries not referred
to in points (a) and (b), and international organisations, in accordance with
agreements concluded by the Union with such third countries or international
organisations pursuant to Article 218 TFEU, which shall lay down the conditions
and detailed rules for their involvement.
2.           Third countries or
international organisations may provide financial support or contributions in
kind to the programme. The financial support shall be treated as external
assigned revenue, in accordance with point 2 of Article 21 of Regulation (EU,
Euratom) No 966/2012. Financial support and contributions in kind shall be
admissible under the terms and conditions of the agreement concluded with the
respective third country or international organisation.
Article 11
Role of the Commission
1.           The Commission shall have
the overall responsibility for the programme. It shall define the priorities
and objectives of the programme and oversee its implementation, in particular
with respect to the cost, schedule and performance. 
2.           The Commission shall
manage, on behalf of the Union and in its field of competence, relationships
with third countries and international organisations, ensuring the coordination
of the Copernicus programme with activities at national, Union and
international levels.
3.           The Commission shall
coordinate the contributions of Member States aiming at the operational
delivery of services and the long-term availability of the data from observation
infrastructures needed to operate the services.
4.           The Commission shall
ensure the complementarity and consistency of the Copernicus programme with
other relevant Union policies, instruments, programmes and actions.
5.           The Commission shall
maintain a transparent and regular user involvement and consultation, enabling
identification of user requirements at Union and national levels.
6.           The Commission shall adopt
delegated acts in accordance with Article 22 concerning the establishment of
the data requirements necessary for the operational services, making provision
for their evolution. 
7.           The Commission shall make
the financial resources available for the funding of the Copernicus programme. 
Article 12
Operators 
1.           The Commission may
entrust, in part or in full, where duly justified by the special nature of the
action and specific expertise of the Union body the implementation tasks
described in Article 4 to competent Union bodies. Among such agencies are:
(a)         
the European Environment Agency (EEA);
(b)         
the European Agency for the Management of
Operational Cooperation at the External Borders of the Member States of the
European Union (FRONTEX);
(c)         
the European Maritime Safety Agency (EMSA);
(d)         
the European Union Satellite Centre (EUSC).
2.           The choice of the Union
body shall take due account of the cost efficiency of entrusting those tasks
and the impact on the body's governance structure and on its financial and
human resources.
3.           Budget implementation
tasks entrusted exceptionally to competent Union bodies under this Article
shall be included in the work programme of such Union body for information
purposes.
4.           The Commission may entrust,
in part or in full, to the European Space Agency (ESA) the development tasks of
the space component described in point (b) of Article 5.
5.           The Commission may entrust,
in part or in full, the operational tasks of the space component described in point
(a) of Article 5 to ESA and the European Organisation for the Exploitation of
Meteorological Satellites (EUMETSAT). 
6.           The Commission may
entrust, in part or in full, the activities of the in-situ component described
in Article 6 to the operators of the services described in Article 4.
Article 13
Selection of operators 
1.           With the exception of
operators identified in Article 12, the Commission shall select the operators
to whom it shall delegate the tasks to be implemented in accordance with the
procedure described in paragraphs 2, 3 and 4 of this Article. 
2.           The Commission shall
publish a call of expression of interest to potential operators. That call
shall include the exclusion and selection criteria in accordance with the
procedure set out below.
3.           The Commission shall open
a dialogue with the entities that satisfy the selection criteria in a
transparent and objective manner and without giving rise to a conflict of
interest. After the dialogue the Commission shall sign delegation agreements
with the entity or entities that have proven experience and the operational and
financial capacity.
4.           The Commission may enter
into direct negotiations before signing delegation agreements with the entities
listed in Article 12, or in duly justified and properly documented exceptional
cases, in particular where:
(a)         
no suitable proposals were submitted following a
call of expression of interest to potential operators;
(b)         
the tasks to be implemented have specific
characteristics that require a particular operator on account of its technical
competence, its high degree of specialisation or its administrative power;
(c)         
for reasons of extreme urgency brought about by
unforeseeable events not attributable to the Union, compliance with the
procedure referred to in paragraphs 2 and 3 would unduly compromise the
execution of the tasks to be implemented.
Article 14
Supervision of operators
1.           Additional tasks not
provided for in the delegation agreement shall be carried out by the operators
only upon authorisation by the Commission. The operator may not claim any
indemnity or compensation for the additional or supplemental tasks other than
the reimbursement of costs.
2.           The Commission shall
ensure that the operators shall allow for full disclosure of their accounts and
all relevant documents and information. The Commission may conduct any
inspection, including on-site, required to verify the compliance with the
present Regulation and the relevant delegation agreements.
3.           Whenever urgency or
unforeseeable events so warrant, or upon justified request by the operator, the
Commission may act in lieu of the operator and suspend the delegation agreement
for the time and acts needed to perform the required acts.
4.           Complaints on the award of
contracts and grants by operators in the execution of the delegation agreement
or the work programme may be submitted to the Commission. Nonetheless, such
complaints may concern only deliberate wrongdoing, gross negligence or fraud
and be submitted only after all means of recourse before the operator have been
exhausted. 
Article 15
Copernicus Data and Information Policy
1.           Copernicus data and
information shall be made available on a full, open and free-of-charge basis,
subject to the following limitations:
(a)         
licensing conditions attached third party data
and information;
(b)         
dissemination formats, characteristics and
distribution means;
(c)         
security interests and external relations of the
Union or its Member States;
(d)         
risk of disruption, for safety or technical
reasons, of the system producing Copernicus data and information.
Article 16
Limitations and conditions of access and use
1.           The Commission may adopt
delegated acts in accordance with Article 22 concerning: 
(a)         
the conditions and procedures as regards access
to, registration and use of Copernicus data and information, including the
formats, characteristic and dissemination means; 
(b)         
the conditions and procedures for the
transmission and use of satellite data transmitted to receiving stations not
part of the Copernicus programme;
(c)         
the conditions and procedures for the archiving
of Copernicus data and information;
(d)         
the specific technical criteria necessary to
prevent the disruption of the Copernicus data and information system, including
priority of access; 
(e)         
the criteria for the restriction of
dissemination of Copernicus data and information due to conflicting rights or
security interests;
(f)           
the criteria for the performance of the security
assessment.
2.           The Commission shall
establish the relevant licenses for Copernicus and third party data and
information, and the download of satellite data to reception stations not part
of the Copernicus programme in compliance with this Regulation and the
delegated acts referred to in paragraph 1. 
Article 17
Protection of security interests
1.           The Commission shall
perform a prior security assessment on the Copernicus data and information to
identify data and information which are vital for the protection of the
interests of Union or national security.
2.           Member States and third
countries participating in the Copernicus programme under Article 10 may
request the Commission to perform a new security assessment when security
developments warrant such a new assessment. 
3.           Where the prior security
assessment is not possible in the time frame of the Copernicus data and
information collection and production, the Commission may perform an
on-the-spot security assessment.
4.           The Commission shall issue
instructions on the restrictions of the dissemination of Copernicus data and
information in individual cases based on the criteria adopted pursuant to point
(1), subparagraph (f) of Article 16. In case of urgency, the Commission instructions
shall be adopted in a timeframe as short as necessary to be effective. The Commission
shall take the least disruptive measure in view of the objectives of the
Copernicus programme and the Copernicus data and information policy. Its instructions
shall be proportionate, including as regards timeliness and territorial scope,
and weigh the protection of the security interest at stake against the
availability of data and information from other sources.           
Article 18
Protection of the financial interests of the Union
1.           The Commission shall take
appropriate measures ensuring that, when actions financed under this Programme
are implemented, the financial interests of the Union are protected by the
application of preventive measures against fraud, corruption and any other
illegal activities, by effective checks and, if irregularities are detected, by
the recovery of the amounts wrongly paid and, where appropriate, by effective,
proportionate and dissuasive administrative and financial penalties.
2.           The Commission or its
representatives and the Court of Auditors shall have the power of audit, on the
basis of documents and on the spot, over all grant beneficiaries, contractors
and subcontractors who have received Union funds under the Programme.
3.           The European Anti-Fraud
Office (OLAF) may carry out investigations, including on-the-spot checks and
inspections, in accordance with the provisions and procedures laid down in
Regulation (EC) No 1073/1999 of the European Parliament and of the Council of
25 May 1999 concerning investigations conducted by the European Anti-Fraud
Office (OLAF) and Council Regulation (Euratom, EC) No 2185/96 of 11 November
1996 concerning on-the-spot checks and inspections carried out by the
Commission in order to protect the European Communities' financial interests
against fraud and other irregularities with a view to establishing whether
there has been fraud, corruption or any other illegal activity affecting the
financial interests of the Union in connection with a grant agreement or grant
decision or a contract funded under the Programme.
4.           Without prejudice to
paragraphs 1, 2 and 3, cooperation agreements with third countries and with
international organisations, contracts, grant agreements and grant decisions,
resulting from the implementation of this Programme shall contain provisions
expressly empowering the Commission, the Court of Auditors and OLAF to conduct
such audits and investigations, according to their respective competences.
Article 19
Ownership
1.           The Union or a
specifically designated body or fund shall be the owner of all tangible and
intangible assets created or developed under the Copernicus programme subject
to agreements concluded with third parties, wherever appropriate, with regard
to existing ownership rights. 
2.           The terms and conditions
relating to the transfer of ownership to the Union shall be laid down in the
agreements referred to in paragraph 1.
3.           The Commission shall adopt
delegated acts in accordance with Article 22 to establish the terms and
conditions of any subsequent transfer of ownership from the Union. The delegated
act shall designate the subsequent body or fund on the basis of transparent and
objective grounds, which shall not give rise to a conflict of interests.
Article 20
Assistance to the Commission
1.           The Commission may be
assisted by representatives of end users, independent experts, in particular on
security issues, and by representatives of the relevant national agencies, in particular
national space agencies, to provide it with the necessary technical and
scientific expertise and user feedback.
Article 21
Committee procedure
1.           The Commission shall be
assisted by a committee (the "Copernicus Committee"). That committee
shall be a committee within the meaning of Regulation (EU) No 182/2011.
2.           Where reference is made to
this paragraph, Article 4 of Regulation (EU) No 182/2011 shall apply.
3.           Where reference is made to
this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply. 
Article 22
Exercise of the delegation 
1.           The power to adopt
delegated acts is conferred on the Commission subject to the conditions laid
down in this Article. 
2.           The power to adopt
delegated acts referred to in point (1) of Article 16 and point (3) of Article
19 shall be conferred on the Commission for an indeterminate period from 1
January 2014. 
3.           The delegation of power
may be revoked at any time by the European Parliament or by the Council. A
decision to revoke shall put an end to the delegation of the power specified in
that decision. The revocation shall take effect the day following the
publication of the decision in the Official Journal of the European Union
or at a later date specified therein. It shall not affect the validity of any
delegated acts already in force. 
4.           As soon as it adopts a
delegated act, the Commission shall notify it simultaneously to the European
Parliament and to the Council. 
5.           Delegated acts adopted
pursuant to point (1) of Article 16 and point (3) of Article 19 shall enter
into force only if no objection has been expressed either by the European
Parliament or the Council within a period of two months of notification of that
act to the European Parliament and the Council or if, before the expiry of that
period, the European Parliament and the Council have both informed the
Commission that they will not object. That period shall be extended by two
months at the initiative of the European Parliament or the Council. 
Article 23
Evaluation
1.           By 30 June 2018 at the
latest, an evaluation report shall be established by the Commission on the
achievement of the objectives of all the tasks financed by the Copernicus
programme at the level of their results and impacts, their European added value
and on the efficiency of the use of resources. In particular, the evaluation
shall address the continued relevance of all objectives, as well as the contribution
of the measures to the objectives described in Articles 2 and 3.
2.           The Commission shall carry
out the evaluation referred to in paragraph 1 in close cooperation with the
operators and the user communities of the Copernicus programme shall examine the
effectiveness and efficiency of the Copernicus programme and its contribution
to the objectives referred to in Articles 2 and 3. The Commission shall
communicate the result of these evaluations to the European Parliament, the
Council, the European Economic and Social Committee and the Committee of the
Regions.
3.           The Commission may,
whenever necessary, be assisted by independent entities, undertake an
evaluation of the methods of carrying out projects as well as the impact of
their implementation, in order to assess whether the objectives, including
those relating to environmental protection, have been attained.
4.           The Commission may request
a Member State to provide a specific evaluation of the actions and the linked
projects financed under this Regulation or, where appropriate, to supply it
with the information and assistance required to undertake an evaluation of such
projects.
Article 24
Repeal
Regulation (EU) No
911/2010 is repealed. 
References to the
repealed Regulation shall be construed as references to this Regulation.
Article 25
Entry into force
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 the 1 January 2014.
This Regulation shall be binding
in its entirety and directly applicable in all Member States.
Done at Brussels, 
For the European Parliament                       For
the Council
The President                                                 The
President
LEGISLATIVE FINANCIAL STATEMENT
1.           FRAMEWORK OF THE PROPOSAL
              1.1.    Title of the proposal 
              1.2.    Policy
area concerned in the ABM/ABB structure
              1.3.    Nature
of the proposal 
              1.4.    Objectives

              1.5.    Grounds
for the proposal
              1.6.    Duration
and financial impact 
              1.7.    Management
methods envisaged 
2.           MANAGEMENT MEASURES 
              2.1.    Monitoring
and reporting rules 
              2.2.    Management
and control system 
              2.3.    Measures
to prevent fraud and irregularities 
3.           ESTIMATED FINANCIAL IMPACT OF THE
PROPOSAL/INITIATIVE 
              3.1.    Heading(s)
of the multiannual financial framework and expenditure budget line(s) affected 
              3.2.    Estimated
impact on expenditure 
              3.2.1. Summary of estimated impact on expenditure 
              3.2.2. Estimated
impact on operational appropriations 
              3.2.3. Estimated
impact on appropriations of an administrative nature
              3.2.4. Compatibility
with the current multiannual financial framework
              3.2.5. Third-party
participation in financing 
              3.3.    Estimated impact on revenue
LEGISLATIVE FINANCIAL STATEMENT FOR PROPOSALS
1.           FRAMEWORK OF THE PROPOSAL
1.1.        Title of the proposal
Proposal for a Regulation of the European Parliament and the Council
on establishing the European Earth Observation Programme (Copernicus)
1.2.        Policy area concerned in
the ABM/ABB structure[14] 
Title 02: Enterprise
Chapter 02 06: Copernicus
1.3.        Nature of the proposal 
¨ The
proposal/initiative relates to a new action 
¨ The
proposal/initiative relates to a new action following a pilot
project/preparatory action[15]

þ The
proposal/initiative relates to the extension of an existing action 
¨ The
proposal/initiative relates to an action redirected towards a new action 
1.4.        Objectives
Copernicus is the new name of the European
Earth Observation Programme, GMES (Global Monitoring for Environment and
Security). It covers all the activities for ensuring an uninterrupted provision
of accurate and reliable data and information on environmental issues and
security matters to users in charge of policy making, implementation and
monitoring, in the EU and its Member States. Copernicus aims at providing
Europe with a continuous, independent and reliable access to observation data
and information. 
Copernicus is a programme to be delivered
under the Europe 2020 strategy for smart, sustainable and inclusive growth. Its
contribution to growth and economic stability, to be obtained by boosting
value-added commercial applications, makes it a component of the industrial
policy flagship in the wake of the Europe 2020 strategy[16]. 
Copernicus shall contribute to the
following general objectives:
(a)         
protection of the environment and provision of
support to civil protection and security efforts;
(b)         
support of the Europe 2020 growth strategy by
contributing to the objectives of smart, sustainable and inclusive growth; in
particular, it shall contribute to economic stability and growth by boosting
commercial applications. 
The Copernicus user communities are defined
as those comprising the European national, regional or local bodies entrusted
with the definition, implementation, enforcement or monitoring of a public
service or policy in areas referred to in Article 4(1) of the Regulation. The
most affected groups will include:
–                        
public authorities at European, national,
regional and local levels (as users and contributors), including in third
countries (such as participating countries and those benefiting from e.g. the
GMES and Africa initiative);
–                        
downstream industry, in particular SMEs; and
–                        
the final users (regional and local authorities,
public institutions including universities, research centres, even single
citizens using public services facilitated through Copernicus), customers of
the downstream sector.
1.4.1.     The Commission's
multiannual strategic objectives targeted by the proposal 
Copernicus aims to contribute to the Europe
2020 objectives in the following ways:
–                        
« a more resource efficient, greener
economy », i.e. in particular the preservation
and management of environmental resources and ecosystems and biodiversity;
achieving efficiency gains as a result of better enforcement of EU policies
such as transport, by e.g. monitoring the ice allowing an improvement of the
ships routes; agriculture, by e.g. supporting smart farming reducing the
needs of entrants; energy, by measuring the solar radiation necessary for
photovoltaic energy production; 
–                        
« a more competitive economy », as a flagship on industrial and space policies, Copernicus aims to
foster the competitiveness of EU industry and its technological edge in space
and beyond; it specifically aims to create business potential for SMEs by
boosting innovation in the downstream sector, developing new services relying
on Copernicus information;
–                        
« an economy based on knowledge », Copernicus aims to contribute to a better understanding of global
challenges, it supports the development of research/science by the provision of
critical data;
–                        
« an economy based on innovation »,
Copernicus allows the emergence of highly
innovative downstream services. It aims to create partnerships between research
and business communities and can set benchmarks for transfer of research and
development into business;
–                        
« a high-employment economy », Copernicus creates additional potential for new jobs by boosting
additional demand for highly-skilled workers;
–                        
« economic, social and territorial
cohesion », i.e. need for new ground
infrastructure in particular in the EU-12; creating new business potential for
SMEs in all EU Member States Copernicus will give an impetus to those countries
lagging behind in land or emergency services and will therefore contribute to
the objective of an increased cohesion among the Member States. Copernicus
services are by definition pan-European and respond to European requirements.
1.4.2.     Specific objectives and
ABM/ABB activities concerned 
The Copernicus programme comprises the
following specific objectives: 
Specific objective No. 1: Copernicus
Services
The Copernicus land monitoring service will
focus on a Periodic Land Cover mapping service on the European, regional and
national level, and dynamic Land monitoring activities.
The Copernicus marine environment monitoring
service will provide information on the state of physical oceans and marine
ecosystems for the global ocean and the European regional areas. The
application areas of the Copernicus marine services include maritime safety,
the marine environment and coastal regions, marine resources as well as
seasonal meteorological forecasting and climate monitoring.
The Copernicus atmosphere environmental
service will ensure the monitoring of air quality on a European scale and of
the chemical composition of the atmosphere on a global scale. It shall in
particular provide information for air quality monitoring systems at the local
to national scales, and should contribute to the monitoring of atmospheric
chemistry climate variables.
The Copernicus climate change monitoring
service will allow for the adaptation and mitigation of its effects. It should
in particular contribute to the provision of ECVs (Essential Climate
Variables), climate analyses and projections on a scale relevant to adaptation
and mitigation and relevant service delivery. 
The Copernicus emergency response service
will offer a combination of maps and/or various levels of pre-processed data
produced to support emergency response players at international, European,
national or regional levels in disasters such as storms, fires floods,
earthquakes, volcanic eruptions, deliberate or man-made disasters or other
humanitarian disasters. The service can address all the crisis management
cycle: prevention, preparedness, response or recovery activities.
The Copernicus security service will provide
information in support of the challenges which Europe is facing in the security
field, notably border control, maritime surveillance and support for EU
external actions.
The Copernicus in-situ component will ensure
observations through airborne, seaborne and ground-based installations for the
service areas. The access to reference data is necessary for operating the
services. While this is mainly a responsibility of the Member States, the
programme may contribute to cross border harmonisation of in-situ data within
the EU and additional collection of in-situ data outside the EU. Activities
will be entrusted to entities responsible for the Services.
Horizontal activities are included as well,
supporting the overall management of the funds allocated under this Regulation,
overseeing the implementation of all the programme activities, in particular
with respect to the cost, schedule and performance, the establishment of
appropriate instruments and structural measures necessary to identify, control,
mitigate and monitor the risks associated with the programme; the relationships
with third countries and international organisations; reporting activities to
Member States; the coordination with activities at national, Union and
international levels, notably GEOSS; the coordination of voluntary contributions
of Member States; ensuring the complementarity and consistency of the programme
with other relevant Union policies, instruments and actions; the establishment
of user needs and the monitoring of their implementation.
Specific objective No. 2: Space observation
The Copernicus space component will ensure
sustainable space‑borne observations for the Copernicus services.
It includes the operations of the dedicated
space infrastructure (i.e. the Sentinel satellites); access to third party
missions; distribution of data; technical assistance to the Commission for
federating service data requirements, identifying observation gaps,
contributing to the specification of new space missions.
Development activities include design and
procurement of new elements of the space infrastructure; provision of technical
support to the Commission for the translation of service requirements into
specifications of new space missions with the support of space infrastructure
operators; coordination of the development of space activities, including
developments aiming at modernising and complementing the Copernicus Space
Component.
1.4.3.     Expected results and impact
The development of services for ensuring
the long term sustainability of the system and for covering new users' needs
not expressed so far is foreseen. The advantage is that Copernicus remains able
in a sustainable way to consistently respond to users' needs, thereby
increasing users' up-take and downstream market development.
Economic impact: the development of new products and new services will stimulate
product and process innovation and hence have a long term impact on the
European industry. The full continuity of Copernicus services would
significantly improve the boost to the industry's competitiveness and the emergence
of commercially viable businesses.
Environmental impact: Availability of long term Copernicus Services supports the objective
for Europe to be a key player in climate change. It will insure as well a real
partnership in GEOSS.
Social impact: new jobs would be created, not only in the satellite industry and
in R&D, but also in businesses linked to the development of new techniques
for Earth observation and related industries and services. More important, the
sustainable commitment will facilitate the development of the downstream
services where the impact in terms of employment would be significant. 
1.4.4.     Indicators of results and
impact 
The achievement of the objectives will be
measured by the following indicators:
(a)         
data and added-value information made available
in accordance with the service-level delivery requirements;
(b)         
use of data and information measured by the progression
in number of users, by the volume of accessed data and added-value information,
and by the widening of distribution across Member States;
(c)         
market penetration and competitiveness of the
European downstream operators.
Specific tools will be put in place for
measuring regularly those parameters, in particular by including specific
requirements in the delegation agreements and/or contracts to be established
with operators. Ad hoc studies will be procured at several milestones of the
programme to measure the degree of satisfaction of the (potential) users, as
well market penetration and the effect of Copernicus in the competitiveness of
the downstream sector.
In addition, it is expected that a large
part of programme implementation will be delegated to third parties. Delegation
agreements will include objectives and indicators to allow monitoring the
performance of the operators. Those indicators will serve as well for the
overall monitoring of the programme. They include:
–                        
the establishment at operational level of the 6
services, all six services being in place operationally by 2017;
–                        
the delivery within budget and planning of
service information as established in the delegation agreements and/or
contracts with operators;
–                        
the number of users of services and their degree
of satisfaction;
–                        
the development of the downstream sector using
Copernicus data and information.
–                        
the launch and exploitation of the planned
satellites or instruments, including the timely delivery of observation data in
the adequate format to the identified users, according to the planning to be
agreed in the Long Term Scenario document for the space component;
–                        
the definition and development within budget and
planning of new satellites and respective ground segment, as defined in the
Long Term Scenario and in the delegation agreement to be established with ESA;
1.5.        Grounds for the
proposal/initiative 
1.5.1.     Requirement(s) to be met in
the short or long term 
Insufficiently reliable information on
the state of the earth to public users 
In the last thirty years, substantial
R&D efforts in the field of Earth observation have been made by the EU, the
European Space Agency (ESA) and their respective Member States, with a view to
developing infrastructure and pre-operational Earth observation services.
However, many of the existing Earth observation services in Europe are
insufficient due to infrastructural gaps and lack of guarantees on their
availability in the long term. Data provided through the currently existing
services either do not cover all the parameters needed by policy makers[17] or are not provided on a
continuous and sustainable basis, in particular because the lifetime of the
service or the underlying observation infrastructure is limited due to
budgetary and/or technical constraints. Failure to address this problem will
have major short and long term consequences. For example, in the short term, no
maps will be available for civil protection in the event of natural disasters
and in the longer term, vital climate change data will not be available for
decision makers.
Downstream investments at risk
The Copernicus programme based on the
Initial Operation Regulation finances, during the period 2011 – 2013, a set of
operational activities. With the existing programme, covering the initial
operations, a first step has been made towards an Earth observation system.
However, it is still limited in time (i.e. 2011-2013).
This risk of disruption represents a major
concern for final users like public authorities, but also for downstream
service providers, as they are not likely to invest significantly in
non-mature, risky markets and will face additional difficulties in raising capital.

Innovation potential at risk
Disruption would also imply that R&D
investments are not translated into innovation. Therefore the potential to
unleash the innovation capacity linked to Copernicus, which is mainly a service
related innovation, will not be exploited. This would be regrettable especially
taking into account that the EU innovation policy should be more targeted to
the services sector, as different studies show[18].
Impact on employment
Finally, satellite application systems are
the main source of income for the European space industry (3.1 billion euro),
and are the main domain of exports (with 1.13 billion euro).[19] One of the two most
significant segments in terms of income is Earth observation (e.g. Copernicus
Sentinels). Currently, Earth observation systems account for around 30 % of the
total income for the European space industry. Besides this direct impact on
industry sales, Copernicus has a significant impact on the competitiveness and
the profitability of the European space manufacturing industry. Export and
trade vastly depend on the relative competitive position of the sector. For
these reasons, Copernicus impact on employment in the sector would be
significant with an estimated 35,000 jobs over the period 2015-2030. 
1.5.2.     Added value of EU
involvement
The legal basis for a European Earth
observation programme (Copernicus) is Article 189 of the TFEU, which allows the
EU to develop its own space programme. Article 2 of the Regulation 911/2010 on
the European Earth Monitoring programme (GMES) and its initial operations
already lists activities included in the programme. Moreover, the delivery of
Copernicus is a strategic objective of Europe 2020. 
Responsibility for funding the exploitation
and the renewal of space infrastructure developed with EU and intergovernmental
funds cannot be optimally achieved by individual Member States because of the
costs incurred. In the field of space-based observation for operational
meteorology, European States have pooled their resources to develop and exploit
meteorological satellites in the framework of the European Organisation for the
Exploitation of Meteorological Satellites (EUMETSAT). European States also
developed demonstrators of environmental satellites either through ESA or
through national space agencies. They could, not however, find a way to
co-operate with regard to the funding of sustained operational programmes in
the field of environmental monitoring similar to those in meteorology. The need
for continuing such observations is becoming critical, considering the
increasing political pressure on public authorities to take informed decisions
in the field of environment, security and climate change and the need to
respect international agreements.
For the services with a pan-European or
global coverage, Member States cannot sufficiently achieve the objectives of
the proposed action, as the inputs from different Member States have to be
aggregated at European level. The provision of other services (e.g. emergency
maps or thematic land monitoring maps of a more limited geographical scope) can
be better achieved at EU level for two reasons. First, a more coherent and
centralised management of input data, from space based or in situ sensors will
allow for economies of scale. Secondly, an uncoordinated provision of Earth
observation services at Member State level would lead to duplications and would
render the monitoring of the implementation of EU environmental legislation on
the basis of transparent and objective criteria difficult or even impossible.
If information produced at Member State level is not comparable, it will not be
possible for the Commission to ascertain whether environmental legislation has
been implemented correctly in all Member States. Moreover, action at European
level will create economies of scale leading to a better value for public
money. Action at EU level thus leads to a clear added value.
1.5.3.     Lessons learned from
similar experiences in the past
This proposal builds on the experience
acquired during development of Copernicus as a research initiative over the
last twelve years and the initial operations phase in 2011-2013. This
experience proves that, while funding for research is still necessary to
continue the development of Copernicus, it has become necessary to support delivery
of Earth observation services and operations of satellites in order to reap the
full benefits of the investments made so far and to respond to the needs
identified above.
1.5.4.     Coherence and possible
synergy with other relevant instruments
In the operational phase Copernicus will be
able to deliver information to policy makers, public authorities, businesses
and European citizens. This means that Copernicus, as an EU autonomous source
of information, aims to support all relevant Union policies, instruments and
actions, where understanding the way our planet changes is paramount.
Examples of Copernicus' contribution to
other EU policies are the following:
·                        
International cooperation policies: extending
Copernicus services to Africa represents a concrete contribution to EU
development policies. Satellite Earth Observation, for instance, allows the
monitoring of crop conditions during the agriculture season and the development
of a Food Security Early Warning System for at-risk regions worldwide. In addition
some applications of Copernicus could provide policy makers with information on
natural resources in Africa.
·                        
Transport policy: by optimising ship routing
Copernicus Marine service can minimise fuel consumption and emissions. 
·                        
Environmental policies: the Copernicus services
provide systematic or periodic information at various scales which are
necessary for monitoring on a continuous basis the state of the Marine,
Atmosphere and Land environment. In this context environmental images collected
through Copernicus could provide the basis to monitor the targets of the new
European biodiversity strategy, or as a tool to monitor the efficient use of
resources such a wood, water, minerals, land, air (quality) and many others at
European and global scale.
·                        
Humanitarian aid: Copernicus services play also
an important role in emergency response activities inside and outside EU,
providing up-to-date information which is crucial for decision makers,
operation planners and field teams.
·                        
Energy: Copernicus can provide Europe with a
reliable source of information on solar energy and can contribute to the
monitoring of nuclear proliferation or decommissioning of nuclear sites.
·                        
Regional policy: at Pan-EU level the Copernicus
Land Service provides harmonised land cover and land cover change products.
This information is essential for land use and urban policies purposes.
·                        
Climate change policy: there are several
Copernicus services that touch upon climate-related issues such as forest
monitoring and land carbon information, monitoring sea and ice level, analysis
of green-house gases and fluxes.
·                        
Security: Copernicus can contribute to border
surveillance and maritime surveillance. In this framework since 2008, DG ENTR
and DG HOME have established a close cooperation. 
·                        
Agriculture: Copernicus could contribute to the
improvement of the timely and accurate monitoring of agricultural land use and
its changes at European, national and regional levels by providing common
methodologies and indicators covering various temporal, spatial and thematic
scales. The common agriculture policy could use Copernicus in order to monitor
the ‘set-aside’ policy. 
·                        
Marine related policies: Copernicus allows
understanding the ocean, its dynamic and its impact on climate change.
Applications in this domain include: Maritime Security, Oil Spill, Marine
Resources management, Climate Change, Seasonal Forecast, Coastal Activities,
Ice Survey and Water Quality.
1.6.        Duration and financial
impact 
þ Proposal/initiative of limited
duration 
–     
þ  Proposal/initiative in effect from 2014 to 2020
–     
þ  Financial impact from 2014 to 2020
¨ Proposal/initiative of unlimited
duration
–     
Implementation with a start-up period from YYYY
to YYYY,
–     
followed by full-scale operation.
1.7.        Management modes envisaged[20] 
þ Direct management by the Commission 
þ Indirect management with the delegation of implementation tasks
–     
¨  executive agencies 
–     
þ  bodies set up by the Communities[21]

–     
þ  national public-sector bodies/bodies with public-service mission 
–     
¨  persons entrusted with the implementation of specific actions
pursuant to Title V of the Treaty on European Union and identified in the
relevant basic act within the meaning of Article 49 of the Financial Regulation

¨ Shared management with the Member States 
¨ Decentralised management with third countries 
þ      International organisations
If more than one
management mode is indicated, please provide details in the
"Comments" section.
Comments:
Copernicus builds on capabilities existing
in Europe, avoiding unnecessary duplication and, to the contrary, looking for
synergies among existing national or international capabilities. In addition,
it is considered that the Commission has neither the internal workforce nor the
expertise to manage alone this highly complex operational system of systems.
This is why, in line with the objectives of simplification and of improving the
performance of EU spending programmes, it is proposed to implement large parts
of the programme indirectly, in the meaning Article 58 of the Financial
Regulation, delegating implementing powers to a number of relevant bodies, in
their field of expertise. With delegation agreements, the Commission will
remain responsible for the programme but will transfer implementation
responsibilities to a number of operators. The Commission, supported by the
committee and independent experts, will focus on defining the high level
programmatic decisions and on monitoring their implementation. Operators will
be requested to submit annual Work Programmes and Annual Activity Reports
together with audit certificates.
Until 2013, the development of the Space
component was co-funded by the EU and ESA through a contribution of the FP7
Space theme and the GMES and its initial operations Regulation to the ESA’s
GMES Space Component programme. The Commission, on behalf of the EU,
contributed by one third to the overall budget of the GSC programme, i.e. circa
780 million out of € 2.4 billion, To that aim, a delegation agreement was
established in 2008 between the EU, represented by the Commission, and ESA.
This agreement was established under the framework agreement between the EU and
ESA. Recognising that ESA has a unique expertise and is the only agency for
research and development activities of space related programmes at European
level, it is proposed to continue entrusting it the development activities,
i.e. design, construction and procurement of satellites and related ground
segment, of Copernicus. It is considered that ESA can continue co-funding the
development activities, and in particular developments of a new generation of
satellites, to be opposed to the procurement of recurrent units replicating the
design of the already developed units. 
It is proposed as well to entrust the
operations of the developed infrastructure to both ESA and EUMETSAT. ESA will
be responsible for the operations of Sentinels 1, 2 and of the processing of
the Land part of Sentinel 3. Having design and coordinated the design and
procurement of the ground segment, acknowledging its expertise acquired on the
operations of many scientific missions, ESA is well placed to manage these
tasks. EUMETSAT will be entrusted with the operations of satellites and
instruments particularly relevant for the atmosphere and marine communities,
which are very close, often identical, to its own domain of competences. It
should be recalled that Sentinels 4 and 5 are instruments carried on EUMETSAT
own satellites. In addition, reception, treatment and distribution of data will
mostly be done using multi-mission capacities of EUMETSAT. Both organisations
will be responsible for the access and delivery of observations from
contributing missions, in their respective domains of expertise.
One of the key products of the Land service
is a comprehensive and timely assessment of land cover and land cover change. Corine
Land Cover (CLC) datasets have provided a time series of land cover and land
use information over the European continent since 1990. These allow for
monitoring changes to the earth’s surface that result from the interaction of
both natural processes and human activities. Since 1994, Corine is implemented
by the European Environment Agency. The EEA is an agency of the European Union
which task is to provide sound, independent information on the environment to those
involved in developing, adopting, implementing and evaluating environmental
policy, and also the general public. EEA is also responsible for coordinating
the European environment information and observation network (Eionet) in which
national experts contribute to the collection and validation of environmental
data. During the GMES initial operations (2011-2013), the coordination of the
pan-European and local components of the Land service were entrusted to the EEA
and implemented through centralized implementation, with procurement via
framework and service contracts to service providers; and decentralized
implementation, using grant agreements to national agencies that are the EEA’s
direct stakeholders. In addition, it should be noted that the Land service
relies strongly on in-situ measurements and geographical reference data. EEA is
well placed to arrange their furniture by national environmental and/or mapping
agencies. This is why, acknowledging the obvious synergies possible between
Copernicus and EEA’s core responsibilities, and the unique position of the EEA,
as coordinator of the Eionet, vis-à-vis Copernicus stakeholders that are the
national environmental agencies, it is proposed to continue delegating the
implementation of these two components of the Land service to the EEA.
Since 2008, work has been on-going to
establish a European Border Surveillance System (EUROSUR) to reinforce the
control of the Schengen external border, especially the southern maritime and
eastern land borders. EUROSUR will provide Member States with a common technical
(infrastructure) and operational framework (workflow) in order to increase the
situational awareness at their external borders and improve the reaction
capabilities of their national authorities surveying the EU borders. One of the
objectives agreed is to set up a common application of surveillance tools
(satellites, UAVs, aerostats, etc), Frontex acting as a facilitator. Frontex is
the European Agency for the Management of Operational Cooperation at the
External Borders of the Member States of the European Union. It promotes,
coordinates and develops European border management. For the strand on border
control of the Security service, the active cooperation of Frontex is
instrumental. Frontex was involved in all FP7 projects preparing the strand, as
well as other related projects of the FP7 Security theme. It can be noted that
the need for Frontex to rely on GMES/Copernicus for those activities is
recognised in the Commission’ proposal for the EUROSUR Regulation[22]. It is thus proposed to
delegate the implementation of this strand to Frontex.
As for the Security strand on maritime
surveillance, it is proposed to delegate its implementation to EMSA, the
European Maritime Safety Agency. Indeed, EMSA’s mandate includes some
responsibilities in maritime security and an obligation to assist the
Commission in related activities. EMSA has a widely recognised expertise in the
implementation of CLEANSeaNET, a maritime safety operational programme relying
on Earth observations. It is also actively involved in several R&D projects
preparing for the Copernicus Security service.
2.           MANAGEMENT MEASURES 
2.1.        Monitoring and reporting
rules 
A monitoring system will be put in place to
ensure the highest quality outputs and most efficient use of resources.
Monitoring will run throughout the life of the programme. It will build on
regular reports from the implementing partners.
2.2.        Management and control
system 
2.2.1.     Risk(s) identified 
All the risks relating to the programme
will be recorded centrally in a register listing. Each risk will be allocated a
degree of probability and an impact rating. The risk register will also include
a list of measures intended to reduce the probability of a risk materialising.
The risks are classified as follows:
·                        
Technological risks: e.g. satellite uses
leading-edge technology which has yet to be validated and the specifications of
which are constantly evolving.
·                        
Industrial risks: establishing the
infrastructure involves many industrial players, in a number of countries,
whose work has to be coordinated effectively in order to arrive at systems
which are reliable and fully integrated, particularly with regard to security.
·                        
Market risk: what has to be avoided is a
technical performance that is inferior to that promised having a negative
effect among users, and the infrastructure not being used as a result.
·                        
Timetable risk: any delay in the implementation
would jeopardize the window of opportunity.
·                        
Governance risk: governance of the programmes
requires various bodies to work together, and an appropriate degree of
stability and organisation has to be guaranteed. Moreover, differences of
opinion between the various parties involved have to be taken into account on
several major issues. In this context the sharing of some risks, including
financial and security-related risks, among those players who are best placed
to cope with them, should be considered.
Moreover, the budget of the Programme will
be implemented, for the most part, in indirect management, through delegation
agreements, and, in a marginal part, in centralised mode, where the Commission
will make use of grants and public procurement. The risks are different for
each of these different types of expenditure. Audits carried out by the
European Court of Auditors and by the Commission’s own ex-post audits have
identified the following main risks which remain potentially valid for this
Programme:
For delegation agreements: The main risks
identified refer to eligibility of the operators (the entity with whom the
Commission concludes a delegation agreement), contractual compliance
(transposal of the Commission's requirements into the contractual
documentation), process compliance (non-observance of processes prescribed by
the Commission) and performance (non-achievement of pre-defined
targets/objectives).
These risk types will be addressed taking
account of the following factors:
·                        
Significant aspects of the management and
control process are carried out by the operators. 
·                        
The Commission has to rely to a significant
extent on the operators' management control systems.
·                        
It is important to ensure the appropriate level
of controls along the implementation chain with clear responsibilities for all
the involved partners.
For grants: The complex cost eligibility
rules and the relatively limited financial management expertise of certain
beneficiaries could result in a high risk of incorrectly declared costs (e.g.
overheads and equipment costs). 
The lack of a complete database with
information about beneficiaries, projects and declared costs could make the
detection of risky beneficiaries and of possible duplicate charging of costs or
other irregularities difficult and thus result in ineffective antifraud
activity. 
For public procurement: Undetected errors
or uncorrected imprecisions in tenders or tender specifications could lead to
bad contract execution.
2.2.2.     Control method(s) envisaged

Different control methods are envisaged to
address the different risks identified above
2.2.2.1.  Delegation Agreements 
Information on the internal control
system set-up
A management and control system based on
the following measures should be established:
·                        
ex-ante assessment of the operator
·                        
risk based monitoring, included on the basis of
standardised reporting,
·                        
preventive action through the design of
appropriate eligibility, contractual compliance, process compliance and
performance requirements;
·                        
contractual remedies allowing for corrective
action in case of implementation error regarding eligibility, contractual
compliance, process compliance and performance requirements;
·                        
ex-ante controls on payments from the DG to the
trust account of the operator;
·                        
alignment of interest measures;
·                        
participation in governance
·                        
audit access rights concerning operators,
affiliated entitites and final beneficiaries; 
·                        
a full audit trail covering the implementation
chain; 
·                        
compliance and performance audits by
Commission's agents 
·                        
integrated assurance building taking account of
the system of internal controls and internal auditing maintained by operators
and affiliated entitites addressing eligibility, contractual compliance,
process compliance and performance requirements; 
·                        
financial statements audited by external
auditors;
·                        
statements of assurance provided by operators on
an annual basis.
The verification that processes are working
as designed will be ensured through several information channels:
management's knowledge about the state of
the DG's internal control systems, gathered through the day-to-day work and
experiences;
the DG’s formal supervision, follow-up and
monitoring arrangements;
·                        
the results from the annual ICS review (‘full
compliance with baseline requirements’);
·                        
the results of the Risk Assessment exercise;
·                        
the ex-ante and ex-post controls, including
reports of exceptions and/or internal control weaknesses;
·                        
the results from the DG’s external financial
audits;
·                        
the audit and consultancy work performed by the
DG's Internal Audit Capability;
evaluations of the Programmes carried out
by external evaluators.
Auditing by the IAC, the IAS or the ECA
will provide further feedback on the adequacy of the control system.
Estimation of the costs and benefits of
the controls implied by the control system
Controls envisaged have been considered in
a broad sense in line with the COSO model definition of internal control
defined as "a process designed to provide reasonable assurance regarding
the achievement of objectives in effectiveness and efficiency of operations,
reliability of financial reporting, and compliance with applicable laws and
regulations". The costs of controls are estimated on a comprehensive basis
covering any activities which are directly or indirectly related with the
verification of the rights of operators and the regularity of the expenditure.
Where possible they are detailed along the various management stages, and in
line with the description of the control system envisaged.
Adjustments to take account of the expected
changes of the new proposal include data for the alignment of interest measures
and further contractual remedies allowing for corrective action in case of
implementation error regarding requirements.
Assessment of the expected level of risk
of non-compliance with the applicable rules
Under the envisaged control system, the
expected level of risk of non-compliance (defined as the expected risk of error
of legality and regularity occurring at the level of transactions) will be kept
below 2% on a multi-annual basis, however with a lower cost due to risk
frequency and risk impact mitigation, stemming from the additional measures
introduced.
The error rate is expected to drop due to
the clarification of the applicable rules including SMART requirements, due to
further reinforcement of contractual remedies and due to the increased
alignment of interest.
It is envisaged that a minor part of this
Programme's budget might be implemented under centralised direct management
(see below) through grants and public procurement.
2.2.2.2.  Grants 
Information on the internal control
system set-up
The current internal control framework is
built on the implementation of the Commission's Internal Control Standards,
procedures for selecting the best projects and translating them into legal
instruments, project and contract management throughout the project lifecycle,
ex-ante checks on claims, including receipt of audit certificates, ex-ante
certification of cost methodologies, ex post audits and corrections, and
evaluation. 
The documentation of calls for proposal
contains detailed guidance about eligibility rules and notably about the most
frequent errors in relation to staff costs. Beneficiaries are invited to
provide already when making a proposal sufficient details about the envisaged
costs allowing ex-ante verification and detection of possible errors or
misunderstandings and where necessary changes of the implementation or
adaptation of the grant agreement. This will significantly increase the legal
certainty of beneficiaries and decrease the risk of error.
Ex-post controls will be carried out in
order to determine the representative average error rate that will remain
despite of training, ex-ante checks and corrections. The
ex-post audit strategy for expenditure under the
Programme will be based on the financial audit of
transactions defined by Monetary Unit Sampling, complemented by a risk-based
sample. The ex-post audit strategy regarding legality and regularity will be
complemented by reinforced operational evaluation and the anti-fraud strategy.
Estimation of the costs and benefits of
the controls implied by the control system
A balance will have to be found between, on
the one hand, increasing the attractiveness of the Programme by reducing the
control burden for the beneficiaries (increased trust and risk taking using
more flat rates, lump sums and scales of unit) and, on the other hand, ensuring
that the rate of un-corrected errors stays as low as reasonably feasible.
DG ENTR will establish a cost-effective
internal control system that will give reasonable assurance that the risk of
error, over the course of the multiannual expenditure period is, on a annual
basis,, is within the range of 2-5%; with the ultimate aim to achieve a
residual level of error as close as possible to 2% at the closure of the
multiannual programmes, once the financial impact of all audits, correction and
recovery measures have been taken into account. 
The audit strategy shall aim at providing a
fair and reliable representation of the risk of error and at effectively and
efficiently examining indications of fraud. The ex-ante checks of proposals
before signature of the grant agreement and clarification of eligibility rules should
not significantly increase the time to contract. The authorising officers by
delegation shall report annually about the costs and benefits of control and
the Commission shall report to the legislative authority in the framework of
the Mid-Term Review about the level of non compliance that could be achieved.
Assessment of the expected level of risk
of non-compliance with the applicable rules
A. Current sources of error
Based on results so
far, recurring errors have been identified in relation to the following:
·                        
personnel costs:
charging average or budgeted costs (rather than actual costs), failure to keep
adequate records of time spent on the programme, charging of ineligible items
(SME owner-manager costs).
·                        
other direct costs: regular errors identified are subcontracting without prior
authorization, or without respecting the rules of value for money, etc.
·                        
indirect costs:
in a number of cases the indirect costs are a flat rate percentage of direct
costs, and so the error in indirect costs is proportional to the error in
direct costs.
B. Proposed simplification opportunities
The program will benefit from the
simplification measures included in the triennial review of the Financial
Regulation. In this framework the Commission will use the possibility to adopt
simplification measures as for example scales of unit cost for SME owner
managers or the use of standard rates for staff costs in line with the
beneficiaries usual account principles.
C. Contribution of control changes to the
reduction of the expected level of non­compliance
The starting point is the status quo, based
on FP7 grant audits carried out so far. Based on the
assumptions that:
·                        
the beneficiaries of grants under the future
Copernicus programme are similar to those who participated in FP7, and that
·                        
one third of the sources of errors are estimated
to be those listed under point B above,
the simplification measures included in the
Financial Regulation are expected to lead to a reduction of the error rate.
Another reduction of errors is expected from the ex-ante clarification of the
eligibility rules.
Conclusion: taken all measures referred to
above together, the ultimate aim is to achieve a residual level of error as
close as possible to 2% by the end of the lifecycle.
This scenario is based on the assumption
that the measures of simplification are not subject to substantial
modifications in the decision making process.
2.2.2.3.  Public Procurement
The internal control framework built on the
implementation of the Commission's Internal Control Standards, public
procurement procedures for selecting the best proposals and for contract
management throughout the project / contract, and ex-ante checks on invoices
and payments shall avoid residual errors being above 2%.
2.3.      Measures
to prevent fraud and irregularities 
Specify existing or envisaged prevention
and protection measures.
In the framework of the Commission's
Anti-Fraud Strategy (CAFS)[23] and with the assistance of OLAF through consultation and
participation in the OLAF Fraud Prevention and Detection Network (FPDNet) DG
ENTR has developed its own draft Anti Fraud Strategy (AFS) covering measures
for the prevention and detection of fraud and irregularities both internally
and towards beneficiaries and contractors. The AFS will be updated annually.
In particular for grants, the DG ENTR AFS
Action Plan foresees the creation of a central register of all its
beneficiaries (coordinators, partners, subcontractors and other actors) and
projects (reports and cost declarations). This database, in combination with the
planned acquisition of powerful data analysis tools for the detection of fraud
indicators or 'red flags' will significantly improve its control functions and
audit capabilities.
In order to increase the knowledge and
capacity for performing preventive and effective controls, the DG ENTR AFS
Action Plan foresees the offer of specific training courses and guidance
material. Furthermore, a control strategy for the evaluation of the financial
and technical capacity of beneficiaries will be developed and implemented as
well as a risk-categorisation of beneficiaries based on fraud-indicators,
registration in IT tools and flagging for ex ante / ex post audits.
In addition, audit procedures and guidance
for risk-based ex post audits will be developed focussed on possible fraud
cases and irregularities. This AFS will also be better aligned to the internal
control standards, in particular with the risk assessment exercise, and to the
AFS of other DGs and sub-delegated entities.
3.           ESTIMATED FINANCIAL IMPACT
OF THE PROPOSAL/INITIATIVE 
3.1.        Heading(s) of the
multiannual financial framework and expenditure budget line(s) affected 
Existing expenditure budget lines requested

In order of multiannual financial framework
headings and budget lines.
 Heading of multiannual financial framework || Budget line || Type of expenditure || Contribution 
 Number [Heading……………………………………..] || Diff./non-diff. || from EFTA countries || from candidate countries || from third countries || within the meaning of Article 21(2)(b) of the Financial Regulation 
 [1] || 02010404 – Support expenditure for European Earth observation programme (Copernicus) || Non Diff || YES || NO || YES || NO 
 [1] || 020601 - Operational services (Copernicus) || Diff || YES || NO || YES || NO 
 [1] || 020602 – Space-borne observations (Copernicus) || Diff || YES || NO || YES || NO 
3.2.        Estimated impact on
expenditure 
3.2.1.     Summary
of estimated impact on expenditure 
EUR million (to 3 decimal
places)
 Heading of multiannual financial framework: || 1 || Smart and inclusive growth 
 DG Enterprise ||   ||   || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021 || TOTAL 
  Operational appropriations ||   ||   ||   ||   ||   ||   ||   ||   ||   
 020601 || Commitments || (1) || 58,500 || 179,721 || 189,426 || 197,952 || 208,610 || 283,691 || 210,291 ||   || 1,328,191 
 Payments || (2) || 29,215 || 195,417 || 188,779 || 197,673 || 207,871 || 266,906 || 231,030 || 11,300 || 1,328,191 
 020602 || Commitments || (1) || 301,933 || 373,949 || 394,141 || 411,880 || 434,051 || 590,279 || 437,566 ||   || 2,943,799 
 Payments || (2) || 150,785 || 406,608 || 392,796 || 412,159 || 434,790 || 555,362 || 480,717 || 110,582 || 2,943,799 
 Appropriations of an administrative nature financed from the envelope for specific programmes[24] ||   ||   ||   ||   ||   ||   ||   ||   ||   
 02010404 ||   || (3) || 2,500 || 2,700 || 2,700 || 2,800 || 2,900 || 2,900 || 3,000 ||   || 19,500 
 TOTAL appropriations for DG Enterprise || Commitments || =1+1a +3 || 362,933 || 556,370 || 586,267 || 612,632 || 645,561 || 876,870 || 650,847 ||   || 4.291,480 
 Payments || =2+2a+3 || 182,500 || 604,725 || 584,275 || 612,632 || 645,561 || 825,168 || 714,737 || 121,882 || 4.291,480 
 Heading of multiannual financial framework: || 5 || " Administrative expenditure " 
EUR million (to 3 decimal
places)
   ||   ||   || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL 
 DG: Enterprise || 
  Human resources || 4,497 || 5,259 || 5,894 || 5,894 || 5,894 || 5,894 || 5,894 || 39,226 
  Other administrative expenditure || 0,343 || 0,343 || 0,343 || 0,343 || 0,343 || 0,343 || 0,343 || 2,401 
 TOTAL DG ENTERPRISE || Appropriations || 4,840 || 5,602 || 6,237 || 6,237 || 6,237 || 6,237 || 6,237 || 41,627 
 TOTAL appropriations under HEADING 5 of the multiannual financial framework || (Total commitments = Total payments) || 4,840 || 5,602 || 6,237 || 6,237 || 6,237 || 6,237 || 6,237 || 41,627 
EUR million (to 3 decimal
places)
   ||   ||   || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || Year 2021 || TOTAL 
 TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework || Commitments || 367,773 || 561,972 || 592,504 || 618,869 || 651,798 || 883,107 || 657,084 ||   || 4.333,107 
 Payments || 187,340 || 610,327 || 590,512 || 618,869 || 651,798 || 831,405 || 720,974 || 121,882 || 4,333,107 
3.2.2.     Estimated impact on
operational appropriations 
–                        
¨ The proposal/initiative does not require the use of operational
appropriations 
–                        
þ The proposal/initiative requires the use of operational
appropriations, as explained below:
Commitment appropriations
in EUR million (to 3 decimal places)
 Objectives || YEAR 2014 || YEAR 2015 || YEAR 2016 || YEAR 2017 || YEAR 2018 || YEAR 2019 || YEAR 2020 || TOTAL 
 SPECIFIC OBJECTIVE No 1 Services || 58,500 || 179,721 || 189,426 || 197,952 || 208,610 || 283,691 || 210,291 || 1,328,191 
 SPECIFIC OBJECTIVE No 2 Space || 301,933 || 373,949 || 394,141 || 411,880 || 434,051 || 590,279 || 437,566 || 2,943,799 
 TOTAL COSTS || 360,433 || 553,670 || 583,567 || 609,832 || 642,661 || 873,970 || 647,857 || 4.271,990 
                
3.2.3.     Estimated impact on
appropriations of an administrative nature
3.2.3.1.  Summary 
¨ The proposal/initiative does not require the use of administrative
appropriations 
þ The proposal/initiative requires the use of administrative
appropriations, as explained below:
EUR million (to 3 decimal
places)
   || Year 2014 || Year 2015 || Year 2016 || Year 2017 || Year 2018 || Year 2019 || Year 2020 || TOTAL 
 HEADING 5 of the multiannual financial framework ||   ||   ||   ||   ||   ||   ||   ||   
 Human resources || 4,497 || 5,259 || 5,894 || 5,894 || 5,894 || 5,894 || 5,894 || 39,226 
 Other administrative expenditure || 0,343 || 0,343 || 0,343 || 0,343 || 0,343 || 0,343 || 0,343 || 2,401 
 Subtotal HEADING 5 of the multiannual financial framework || 4,840 || 5,602 || 6,237 || 6,237 || 6,237 || 6,237 || 6,237 || 41,627 
   ||   ||   ||   ||   ||   ||   ||   ||   
 Outside HEADING 5[25] of the multiannual financial framework ||   ||   ||   ||   ||   ||   ||   ||   
 Human resources ||   ||   ||   ||   ||   ||   ||   ||   
 Other expenditure of an administrative nature || 2,500 || 2,700 || 2,700 || 2,800 || 2,900 || 2,900 || 3,000 || 19,500 
 Subtotal outside HEADING 5 of the multiannual financial framework ||   ||   ||   ||   ||   ||   ||   ||   
   ||   ||   ||   ||   ||   ||   ||   ||   
 TOTAL || 7,340 || 8,302 || 8,937 || 9,037 || 9,137 || 9,137 || 9,237 || 61,127 
3.2.3.2.  Estimated requirements of
human resources 
–                        
¨ The proposal/initiative does not require the use of human resources

–                        
þ The proposal/initiative requires the use of human resources, as
explained below:
Estimate to be expressed
in full amounts (or at most to one decimal place)
   || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 
  Establishment plan posts (officials and temporary agents) 
 02 01 01 01 (Headquarters and Commission’s Representation Offices) || 28 || 34 || 39 || 39 || 39 || 39 || 39 
 02 01 01 02 (Delegations) || - || - || - || - || - || - || - 
 02 01 05 01 (Indirect research) || - || - || - || - || - || - || - 
 10 01 05 01 (Direct research) ||   ||   ||   ||   ||   ||   ||   
  External personnel (in Full Time Equivalent unit: FTE)[26] 
 02 01 02 01 (CA, INT, SNE from the "global envelope") || 14 || 14 || 14 || 14 || 14 || 14 || 14 
 02 01 02 02 (CA, INT, JED, LA and SNE in the delegations) || - || - || - || - || - || - || - 
 02 01 04 yy [27] || - || - || - || - || - || - || - || 0 
 - || - || - || - || - || - || - || 0 
 02 01 05 02 (CA, INT, SNE - Indirect research) || - || - || - || - || - || - || - 
 10 01 05 02 (CA, INT, SNE - Direct research) || - || - || - || - || - || - || - 
 Other budget lines (specify) || - || - || - || - || - || - || - 
 TOTAL || 42 || 48 || 53 || 53 || 53 || 53 || 53 
The human
resources required will be met by staff from the DG who are already assigned to
management of the action and/or have been redeployed within the DG, together if
necessary with any additional allocation which may be granted to the managing
DG under the annual allocation procedure and in the light of budgetary
constraints.
The current human
resources in 2013 is 29FTE (17 Establishment plan posts and 12 External
personnel): the progressive increase to 53 FTE (+ 22 Establishment plan posts
and + 2 External personal should be covered as follows: After the revision on
2016 of all existing delegation agreements, a re-assessment of the resources allocated
is necessary to ensure that the objectives can be met with the staff in place. The actual figures for 2016 to 2019 are
indicative and could be revised.
–                        
for the 22 additional establishment plan posts
(EPP); 8 would be covered by redeployment inside the Directorate G of DG
Enterprise (a reorganisation is foreseen to merge the Space policy activities
and Space research and development activities), other 4 EPP would be covered by
redeployment inside DG Enterprise. The remaining 10 additional EPP must be
covered by the pool of redeployment from the Commission and/or by seconded (mis
à disposition) personnel from DGs involved in the Copernicus programme as it
was foreseen by the Commission decision on the creation of GMES from 2006
(C(2006)673) A proposal of modification of this decision will be submit.
–                        
for the External personnel: 2 additional FTE
requested in 2014 will be covered by internal redeployment; and if needed;
additional resources could be requested after the 2016 revision and should be granted
to DG Enterprise under the annual allocation procedure 
Description of tasks to be
carried out:
 Officials and temporary agents || - Prepare and monitor the implementation of the programme including the definition of the users requirements; - Select delegate bodies; - Negotiate delegation agreements (6-fold increase) - Supervise delegate bodies (4-fold increase); - Monitor budget implementation in indirect mode - Provide legal and regulatory analysis to support the policy-making process; - Ensure the compliance of proposed solutions with the applicable rules; - Guarantee sound financial management and complete the financial transactions related to contract management; - Perform activities required to ensure efficient cost control; - Follow-up on international cooperation and negotiate international agreements - Monitor security aspects of Copernicus - Maintain relations with Member States, in particular the in-situ component - Risk assessment and mitigation (accrued due to financial exposure of the enhanced envelope) - Relations with the European Parliament and the Council under art 58, 60-61 Financial Regulation - Prevention of fraud and irregularities and relations with OLAF and the Court of Auditors - Data policy and its enforcement by all stakeholders - Promote user uptake in the Member States 
 External personnel || Support to the tasks described here above 
3.2.4.     Compatibility with the
current multiannual financial framework 
–                        
þ Proposal/initiative is compatible the current multiannual financial
framework.
–                        
¨ Proposal/initiative will entail reprogramming of the relevant
heading in the multiannual financial framework.
–                        
¨ Proposal/initiative requires application of the flexibility
instrument or revision of the multiannual financial framework[28].
3.2.5.     Third-party contributions 
–                        
¨ The proposal/initiative does not provide for co-financing by third
parties 
–                        
þ The proposal/initiative provides for the co-financing estimated
below:
–                        
¨ The programme will be open for participation to third countries but
no formal agreement has been concluded yet.
Appropriations in EUR
million (to 3 decimal places)
   || 2014 || 2015 || 2016 || 2017 || 2018 || 2019 || 2020 || Total 
 Specify the co-financing body ||   ||   ||   ||   ||   ||   ||   ||   
 TOTAL appropriations cofinanced ||   ||   ||   ||   ||   ||   ||   ||   
3.3.        Estimated impact on revenue

–                        
þ Proposal/initiative has no financial impact on revenue.
–                        
¨ Proposal/initiative has the following financial impact:
–              
¨         on own resources 
–              
¨         on miscellaneous revenue 
EUR million (to 3 decimal
places)
 Budget revenue line: || Appropriations available for the ongoing budget year || Impact of the proposal/initiative[29] 
 Year N || Year N+1 || Year N+2 || Year N+3 || … insert as many columns as necessary in order to reflect the duration of the impact (see point 1.6) 
 Article …………. ||   ||   ||   ||   ||   ||   ||   ||   
For miscellaneous
assigned revenue, specify the budget expenditure line(s) affected.
.
Specify the method
for calculating the impact on revenue.
.
[1]               COM (2012) 42 final of 8 February 2012
[2]               COM
(2005) 565 final of 10 November 2005
[3]               COM
(2008)748 final of 11.12.2008
[4]               COM
(2009) 223 final of 20.5.2009. Regulation (EU) n°911/2010 of the European
Parliament and of the Council of 22 September 2010 on the European Earth
monitoring programme (GMES) and its initial operations (2011-2013) – OJ L276 of
20.10.2010, page 1.
[5]               COM
(2009)589 final of 28.10.2009
[6]               OJ C , , p. .
[7]               OJ C , , p. .
[8]               COM(2005) 565 final of 10 November 2005.
[9]               OJ L 276, 20.10.2010, p. 1.
[10]             OJ L 108, 25.4.2007, p. 1.
[11]             OJ L , , p. .
[12]             OJ L 298, 26.10.2012, p. 1.
[13]             OJ L 55, 28.2.2011, p. 13.
[14]             ABM: Activity-Based Management – ABB: Activity-Based
Budgeting.
[15]             As referred to in Article 49(6)(a) or (b) of the
Financial Regulation.
[16]             COM(2013) 108 final of 28.2.2013
[17]             In
particular, information aggregated at European or global level with a
sufficient quality is currently not available to European policy makers. 
[18]             See for instance Next generation innovation policy, the
future of EU innovation policy to support 
market growth, CEPS and Ernst &
Young, 2011.
[19]             The European Space Industry in 2010, ASD-Eurospace, 15th
edition, June 2011.
[20]             Details of management modes and references to the
Financial Regulation may be found on the BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html
[21]             As referred to in Article 185 of the Financial
Regulation.
[22]             COM(2011) 873 final
[23]             COM(2011)376, 24.06.2011
[24]             Technical and/or administrative assistance and
expenditure in support of the implementation of EU programmes and/or actions
(former "BA" lines), indirect research, direct research.
[25]             Technical and/or administrative assistance and
expenditure in support of the implementation of EU programmes and/or actions
(former "BA" lines), indirect research, direct research.
[26]             CA= Contract Agent; INT= agency staff ("Intérimaire");
JED= "Jeune Expert en Délégation" (Young Experts in
Delegations); LA= Local Agent; SNE= Seconded National Expert; 
[27]             Under
the ceiling for external personnel from operational
appropriations (former "BA" lines).
[28]             See points 19 and 24 of the Interinstitutional
Agreement.
[29]             As regards traditional own resources (customs duties,
sugar levies), the amounts indicated must be net amounts, i.e. gross amounts
after deduction of 25% for collection costs.