Article 3p 
1. It shall be prohibited, as of 1 January 2024, to purchase, import, or transfer, directly or indirectly, diamonds and products incorporating diamonds, as listed in Parts A, B and C of Annex XXXVIIIA, if they originate in Russia or have been exported from Russia into the Union or to any third country. 2. It shall be prohibited, as of 1 January 2024, to purchase, import, or transfer, directly or indirectly, diamonds and products incorporating diamonds, as listed in Parts A, B and C of Annex XXXVIIIA, of any origin, if they transited via the territory of Russia. 3. It shall be prohibited, as of 1 March 2024, to purchase, import, or transfer, directly or indirectly, products listed in Part A of Annex XXXVIIIA, when processed in a third country, consisting of diamonds originating in Russia or exported from Russia with a weight equal to or above 1.0 carats per diamond. 4. It shall be prohibited, as of 1 September 2024, to purchase, import, or transfer, directly or indirectly, products listed in Parts A, B and C of Annex XXXVIIIA, when processed in a third country, consisting of or incorporating diamonds originating in Russia or exported from Russia with a weight equal to or above 0.5 carats or 0.1 grams per diamond. 5. It shall be prohibited to: (a) provide technical assistance, brokering services or other services related to the goods referred to in paragraphs 1 to 4, and to the provision, manufacture, maintenance and use of those goods, directly or indirectly in relation to the prohibitions in paragraphs 1 to 4; (b) provide financing or financial assistance related to the goods referred to in paragraphs 1 to 4 for any purchase, import or transfer of those goods, or for the provision of related technical assistance, brokering services or other services, directly or indirectly in relation to the prohibitions in paragraphs 1 to 4. 6. The prohibitions in paragraphs 1 to 4 shall not apply to goods listed in Part C of Annex XXXVIIIA for the personal use of natural persons travelling to the Union or of their immediate family members travelling with them, owned by those individuals and not intended for sale. 7. By way of derogation from paragraphs 1 to 4, the competent authorities may authorise the transfer or import of cultural goods which are on loan in the context of formal cultural cooperation with Russia. 8. For the purposes of paragraphs 3 and 4, goods falling under CN codes 7102 31 00 and 7102 10 00 that are imported into the Union shall be submitted for verification without delay, together with documentation certifying their origin, to the authority specified in Annex XXXVIIIB. The Member State where those goods are brought into the customs territory of the Union shall ensure their submission to the authority specified in Annex XXXVIIIB. Customs transit may be granted to that effect. If such customs transit is granted, the verification provided for in this paragraph shall be suspended until the arrival of those goods at the authority specified in Annex XXXVIIIB. The importer shall be responsible for the proper movement of those goods and the costs of such movement. 9. All verifications required under paragraph 8 shall be carried out in accordance with the rules and procedures laid down in Council Regulation (EC) No 2368/2002 ( 14 ), which shall apply mutatis mutandis . 10. For the purposes of paragraphs 3 and 4, at the moment of importation, importers shall provide evidence of the country of origin of the diamonds or products incorporating diamonds used as inputs for the processing of the product in a third country. As of 1 September 2024, the traceability-based evidence shall include a corresponding certificate certifying that the diamonds are not mined, processed or produced in Russia.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal On 24 February 2022, Russia launched a full-scale military invasion of Ukraine, with devastating consequences for Ukraine and its people. Two years of intense fighting, heavy artillery shelling and airstrikes have resulted in high numbers of civilian casualties and immense human suffering. Russia’s war of aggression has caused extensive damage to civilian and defence critical infrastructure, production capacities and services across Ukraine and the wholesale destruction of cities and towns in some parts of the country. The resulting humanitarian crisis has displaced millions of Ukrainians from their homes and left many in desperate need of food, shelter and medical assistance. To this day, Russian aerial strikes continue to attack targets throughout the country. It will take years, if not decades, to heal the trauma of this senseless war. The EU supports Ukraine’s independence, sovereignty and territorial integrity within its internationally recognised borders, its inherent right of self-defence, and its pursuit of a comprehensive, just and sustainable peace in line with international law and the UN Charter. Russia’s war of aggression against Ukraine poses a fundamental threat not only to Ukraine but also to the European and global security. The EU’s contribution to Ukraine’s self-defence is a crucial investment in the EU’s own security. In this vein, the European Union and Member States will contribute, together with partners, to future security commitments to Ukraine, which will help Ukraine to defend itself, resist destabilization efforts and deter acts of aggression in the future. There is no defence without a defence industry. Ukraine is heavily dependent on military support made available by the EU and its Member States, including due to its largely destroyed defence industrial base. Russia’s military aggression against Ukraine has marked the dramatic return of territorial conflict and high-intensity warfare on European soil. The production capacity of the European Defence Technological and Industrial Base (EDTIB) has been tailored to respond primarily to limited Member States needs, mostly along national dividing lines, due to decades of public underinvestment. In such a scenario, defence companies often faced the need to reduce production rates in order to keep production lines afloat and maintain skilled personnel, while producing limited quantity of defence systems for national customers. Today, for many European defence companies the export of defence equipment to non-EU customers is a major market. The surge of demand for certain defence products in Europe caused by the radically changed security environment happened against this backdrop of an EDTIB constrained by limited “peace time” production capacity. On the long run, this situation raises the question of defence industrial readiness in Europe, i.e. the capacity of the EDTIB to respond effectively (in time and scale) to changes in European demand for defence products. This is closely linked to the broader challenge of security of supply (SoS) of defence equipment in Europe. Although this topic is not new to EU Member States, the recent ammunition plan has put it in the spotlight, by raising the question of the EDTIB’s ability to ensure Europe’s SoS of defence equipment both in peace and war times. Following the outbreak of the war and the invitation of the Versailles declaration of March 2022, in May 2022, the Commission, and the High Representative of the Union for Foreign Affairs and Security Policy (“the High Representative”)/Head of the European Defence Agency (EDA) adopted the Joint Communication on Defence Investment Gaps Analysis and Way Forward (JOIN/2022/24 final). The Joint Communication highlighted that the past decades of underinvestment in defence from Member States resulted into both capability and industrial gaps within the Union. Since the presentation of the Joint Communication of May 2022, several measures have been tabled to react to the most immediate consequences of Russia’s war of aggression against Ukraine: – As announced in the Joint Communication of May 2022, the Commission, and the High Representative/Head of Agency established the Defence Joint Procurement Task Force (DJPTF) to work with Member States to support the coordination of their very short-term procurement needs. The Task Force focused on de-confliction and coordination to avoid a race to secure orders. The Task Force also established an aggregate estimate of needs and mapped and highlight ed the need for expansion of the EU industrial manufacturing capacities necessary to answer the needs. – Also, as announced in the Joint Communication of May 2022, in July 2022 the Commission presented the European Defence Industrial Reinforcement through common Procurement Act (EDIRPA) , aimed at ince n tivising through financial support, Member States’ cooperation on procurement of the most urgent and critical defence equipment. EDIRPA was adopted by co-legislators on 18 October 2023 and contributes to strengthen the adaptation of Union’s defence industry to structural market changes. EDIRPA will end on 31 December 2025. – The capability gaps highlighted by the Joint Communication of May 2022 were various, but in light of the evolution of the situation in Ukraine, a specific pressing need for ground - to - ground ammunition and artillery ammunition, as well as missiles emerged. This was formally recognised by the Council, which agreed on 20 March 2023 on a three-track approach for the delivery and joint procurement of ammunition for Ukraine . In this context, in M ay 2023 the Commission tabled a new proposal for a Regulation on supporting ammunition production (ASAP) to face the sudden surge of demand for these products and urgently enable their timely availability, by mobilising EU budget to support investments in the ramp up of the EDTIB’s production capacities in this field. ASAP was adopted by co-legislators on 20 July 2023. It will end on 30 June 2025. The unlawful war of Russia against Ukraine not only raised urgent challenges for the EU and its Member States, but its continuation over time also keeps aggravating structural issues affecting the competitiveness of the EDTIB and questions its ability to ensure a sufficient level of SoS to Member States. Hence, the EU now needs to move from punctual emergency responses (illustrated by the above-described measures) to EU defence industrial readiness , from securing the availability of consumables in the requisite volumes during crisis times, to ensuring the timely delivery of tomorrow’s high end critical capabilities in the coming years. This is the exact purpose of the European defence industrial strategy (EDIS) presented on 5 March. In order to implement the orientations set out in EDIS as well as the actions it announces, the Commission proposes a new regulation on the European defence Industry Programme (EDIP) . Announced by the Joint Communication of May 2022, and called for by the European Council, EDIP aims to reconcile the urgent with the long term , by maintaining support for the EDTIB under this Multiannual Financial Framework (MFF) and preparing for the EU’s defence industrial readiness for the future. In doing so, EDIP will translate in effect part of EDIS as its action is structured around 3 main pillars. - Strengthen the competitiveness and responsiveness of the EDTIB . In order to increase efforts to aggregate and harmonise European demand for defence equipment requirements from the EDTIB, EDIP proposes a ready-to-use legal framework, the Structures for European Armament Programme ( S EAP ), for cooperating and jointly managing defence equipment throughout its life cycle. In a similar logic, EDIP extends the EDIRPA logic beyond 2025, to continue to defragment and harmonise European demand. EDIP also replicate s the logic of ASAP to support the EDTIB’s productive investments, help s the EDTIB to move towards more flexible production capacities, as well as ensure s the productization phase of EDF projects. In order to enhance access to finance for the EDTIB, EDIP also entails the establishment of a fund in order to leverage, de-risk and speed-up investments needed to increase the defence manufacturing capacities of EU-based SMEs and small mid-caps, building on the Commission’s experience of the ASAP “ramp up fund” as well as the successful set - up of the EUDIS’ defence equity facility. - Enhance the ability of the EDTIB to ensure the timely availability and supply of defence products . EDIP’s aims is to support Member States’ efforts in pursuing the highest possible level of SoS when it comes to defence equipment, by creating an EU wide SoS regime. The latter would also enhance M ember S tate ’s trust in cross-border supply chains, creating at the same time a key competitive advantage for the EDTIB. A comprehensive crisis management framework would enable the coordination of responses to possible future supply crises on specific defence equipment or along their supply chains. - Contribute to the recovery, reconstruction and modernisation of the Ukraine Defence Technological and Industrial Base (Ukrainian DTIB) . Ukraine’s current needs in military equipment far exceed its industrial production capacities while the EU and its M ember S tates provide military assistance from their own - largely depleted – stocks and with a defence industry tailored for peace time. In this context, both industry’s interests are to engage in a more in-depth cooperation. Failing to create a strong relationship between the respective industrial bases may result in a missed business opportunity in the short-term and in economic and strategic dependencies in the medium to long-term. In view of Ukraine’s future accession to the EU, it is necessary that EDIP enhances cooperation with Ukraine at industrial level. As part of the EU’s future security commitments to Ukraine 1 , the EU should foster greater cooperation with the Ukrainian DTIB to boost its capacity to deliver for the immediate needs, as well as to work towards alignment of standards and improved interoperability. A stronger cooperation with the Ukrainian DTIB will contribute to strengthen Ukraine’s ability to defend itself, and will benefit the EDTIB’s capacity to support both Member States’ and Ukraine’s needs. 
Revised version (Article 3p ):
1. It shall be prohibited, as of 1 January 2024, to purchase, import, or transfer, directly or indirectly, diamonds and products incorporating diamonds, as listed in Parts A, B and C of Annex XXXVIIIA, if they originate in Russia or have been exported from Russia into the Union or to any third country. 2. It shall be prohibited, as of 1 January 2024, to purchase, import, or transfer, directly or indirectly, diamonds and products incorporating diamonds, as listed in Parts A, B and C of Annex XXXVIIIA, of any origin, if they transited via the territory of Russia. 3. It shall be prohibited, as of 1 March 2024, to purchase, import, or transfer, directly or indirectly, products listed in Part A of Annex XXXVIIIA, when processed in a third country, consisting of diamonds originating in Russia or exported from Russia with a weight equal to or above 1.0 carats per diamond. 4. It shall be prohibited, as of 1 September 2024, to purchase, import, or transfer, directly or indirectly, products listed in Parts A and B of Annex XXXVIIIA, when processed in a third country, consisting of diamonds originating in Russia or exported from Russia with a weight equal to or above 0,5 carats or 0,1 grams per diamond. With regard to products listed in Part C of Annex XXXVIIIA, when processed in a third country, incorporating diamonds originating in Russia or exported from Russia with a weight equal to or above 0,5 carats or 0,1 grams per diamond, the prohibition in this paragraph shall apply as from the date decided by the Council pursuant to a proposal submitted on the basis of Article 215 of the Treaty on the Functioning of the European Union. 5. It shall be prohibited to: (a) provide technical assistance, brokering services or other services related to the goods referred to in paragraphs 1 to 4, and to the provision, manufacture, maintenance and use of those goods, directly or indirectly in relation to the prohibitions in paragraphs 1 to 4; (b) provide financing or financial assistance related to the goods referred to in paragraphs 1 to 4 for any purchase, import or transfer of those goods, or for the provision of related technical assistance, brokering services or other services, directly or indirectly in relation to the prohibitions in paragraphs 1 to 4. 6. The prohibitions in paragraphs 1 to 4 shall not apply to goods listed in Part C of Annex XXXVIIIA for the personal use of natural persons travelling to the Union or of their immediate family members travelling with them, owned by those individuals and not intended for sale. 7. By way of derogation from paragraphs 1 to 4, the competent authorities may authorise the transfer or import of cultural goods which are on loan in the context of formal cultural cooperation with Russia. 8. For the purposes of paragraphs 3 and 4, goods falling under CN codes 7102 31 00 and 7102 10 00 that are imported into the Union shall be submitted for verification without delay, together with documentation certifying their origin, to the authority specified in Annex XXXVIIIB. The Member State where those goods are brought into the customs territory of the Union shall ensure their submission to the authority specified in Annex XXXVIIIB. Customs transit may be granted to that effect. If such customs transit is granted, the verification provided for in this paragraph shall be suspended until the arrival of those goods at the authority specified in Annex XXXVIIIB. The importer shall be responsible for the proper movement of those goods and the costs of such movement. A submission to that authority shall not be necessary provided that the goods had previously undergone the verification procedure provided for in this paragraph and provided that that is proven by traceability-based evidence, including a corresponding certificate certifying that the diamonds are not mined, processed or produced in Russia, as provided for in paragraph 10. 9. All verifications required under paragraph 8 shall be carried out in accordance with the rules and procedures laid down in Council Regulation (EC) No 2368/2002 ( 16 ), which shall apply mutatis mutandis . 10. For the purposes of paragraphs 3 and 4, at the moment of importation, importers shall provide evidence of the country of origin of the diamonds or products incorporating diamonds used as inputs for the processing of the product in a third country. As of 1 March 2025, the traceability-based evidence for products listed in Part A of Annex XXXVIIIA shall include a corresponding certificate certifying that the diamonds are not mined, processed or produced in Russia. 11. The prohibitions in paragraphs 1, 3 and 4 shall not apply to products listed in Parts A, B and C of Annex XXXVIIIA if those products were physically located in the Union before the date of applicability of the respective prohibition and thereafter exported to a third country other than Russia. At the moment of importation into the Union, importers shall provide evidence that the products were physically located in the Union or a certificate, based on a submitted stock declaration, from the authority specified in Annex XXXVIIIB prior to the export from the Union. 12. The prohibitions in paragraphs 1, 3 and 4 shall not apply to products listed in Parts A, B and C of Annex XXXVIIIA if those products were physically located, polished or manufactured in a third country other than Russia before the date of applicability of the respective prohibition. Importers shall, at the moment of importation into the Union, provide evidence that the products had initially been imported into the third country before the date of applicability of the respective prohibition for products falling under CN codes 7102 10 00, 7102 31 00 and 7104 21 00. For products falling under CN codes 7102 39 00 and 7104 91 00, as well as for products listed in Part C of Annex XXXVIIIA, importers shall, at the moment of importation, provide evidence that the products had been finally processed or manufactured in the third country, or had been physically located in a processed or manufactured state in the third country before the date of applicability of the respective prohibition. 13. The prohibitions in paragraphs 4 and 5 shall not apply to products listed in Part C of Annex XXXVIIIA manufactured before 1 September 2024, and related services if those products were temporarily imported into the Union from any third country or territory other than Russia, or imported after a temporary exportation to any third country or territory other than Russia, provided that those products were placed under the temporary admission, inward processing, outward processing or temporary export customs procedures when entering or exiting the Union.
Article 3q 
1. It shall be prohibited for any national of a Member State, natural person residing in a Member State, and legal person, entity or body which is established in the Union to sell, or otherwise transfer ownership, directly or indirectly, of tankers for the transport of crude oil or petroleum products listed in Annex XXV, falling under HS code ex 8901 20 , whether or not originating in the Union, to any natural or legal person, entity or body in Russia or for use in Russia. 2. By way of derogation from paragraph 1, the competent authorities may authorise, under the conditions they deem appropriate, the sale or other transfer of ownership of tankers for the transport of crude oil or petroleum products listed in Annex XXV, falling under HS code ex 8901 20 . 3. When deciding on requests for the authorisation referred to in paragraph 2 of this Article, the competent authorities shall not grant an authorisation for a sale or other transfer of ownership to any natural or legal person, entity or body in Russia or for use in Russia, if they have reasonable grounds to believe that the tanker would be used to transport, or be re-exported to transport, crude oil or petroleum products listed in Annex XXV, originating in Russia or exported from Russia for import into the Union in breach of Article 3m or for transport to third countries at a purchase price per barrel exceeding the price laid down in Annex XXVIII. 4. Any sale or other arrangement entailing a transfer of ownership by a national of a Member State, a natural person residing in a Member State, and a legal person, entity or body which is established in the Union to any third country of tankers for the transport of crude oil or petroleum products listed in Annex XXV, falling under HS code ex 8901 20 , with the exception of a sale or other transfer of ownership prohibited under paragraph 1, shall be notified immediately to the competent authorities of the Member State where the owner of the tanker is a citizen, a resident or is established. The notification to the competent authority shall contain at least, the following information: the identities of the seller and the purchaser, and where applicable the incorporation documents of the seller and the purchaser including the shareholding and management; the IMO ship identification number of the tanker; and the Call Sign of the tanker. 5. Any sale or other transfer of ownership of tankers as referred to in paragraphs 1 and 4 after 5 December 2022 and prior to 19 December 2023 shall be notified to the competent authorities before 20 February 2024. 6. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraph 2, and of any notification under paragraphs 4 and 5, within two weeks of the authorisation or notification.
Article 4 
1. It shall be prohibited: (a) to provide, directly or indirectly, technical assistance and brokering services related to the goods and technology listed in the Common Military List ( 15 ), or related to the provision, manufacture, maintenance and use of goods included in that list, to any natural or legal person, entity or body in Russia or for use in Russia; (b) to provide, directly or indirectly, financing or financial assistance related to the goods and technology listed in the Common Military List, including in particular grants, loans and export credit insurance or guarantee, as well as insurance and reinsurance for any sale, supply, transfer or export of such items, or for any provision of related technical assistance, to any natural or legal person, entity or body in Russia or for use in Russia. 2b. The provision, directly or indirectly, of technical assistance, financing or financial assistance, related to the operations referred to in paragraphs 2a and 2aa shall be subject to prior authorisation by the competent authorities. Applicants for authorisation shall supply the competent authorities with all relevant information required. The competent authorities shall inform the Commission of all the authorisations granted. 3. The provision of the following shall be subject to an authorisation from the competent authority concerned: (a) technical assistance or brokering services related to items listed in Annex II and to the provision, manufacture, maintenance and use of those items, directly or indirectly, to any natural or legal person, entity or body in Russia, including its Exclusive Economic Zone and Continental Shelf or, if such assistance concerns items for use in Russia, including its Exclusive Economic Zone and Continental Shelf, to any person, entity or body in any other State; (b) financing or financial assistance related to items referred to in Annex II, including in particular grants, loans and export credit insurance, for any sale, supply, transfer or export of those items, or for any provision of related technical assistance, directly or indirectly, to any natural or legal person, entity or body in Russia, including its Exclusive Economic Zone and Continental Shelf or, if such assistance concerns items for use in Russia, including its Exclusive Economic Zone and Continental Shelf, to any person, entity or body in any other State. In duly justified cases of emergency referred to in Article 3(5), the provision of services referred to in this paragraph may proceed without prior authorisation, on condition that the provider notifies the competent authority within five working days after the provision of services. 4. Where authorisations are requested pursuant to paragraph 3 of this Article, Article 3, and in particular paragraphs 2 and 5 thereof, shall apply mutatis mutandis .
Article 5 
5. It shall be prohibited to list and provide services for, as of 12 April 2022, and to admit to trading as of 29 January 2023, on trading venues registered or recognised in the Union, the transferable securities of any legal person, entity or body established in Russia and with over 50 % public ownership. 6. It shall be prohibited to directly or indirectly make or be part of any arrangement to make: (i) new loans or credit with a maturity exceeding 30 days to any legal person, entity or body referred to in paragraph 1 or 3, after 12 September 2014 to 26 February 2022; or (ii) any new loans or credit to any legal person, entity or body referred to in paragraph 1, 2, 3 or 4 after 26 February 2022. The prohibition shall not apply to: (a) loans or credit that have a specific and documented objective to provide financing for non-prohibited imports or exports of goods and non-financial services between the Union and any third State, including the expenditure for goods and services from another third State that is necessary for executing the export or import contracts, provided that the national competent authority has been notified within three months of the date of the loan or credit; or (b) loans that have a specific and documented objective to provide emergency funding to meet solvency and liquidity criteria for legal persons established in the Union, whose proprietary rights are owned for more than 50 % by any entity referred to in Annex III, provided that the national competent authority has been notified within three months of the date of the loan or credit. The terms and conditions of drawdowns and disbursements referred to in point (a) include provisions concerning the length of the repayment period for each drawdown or disbursement, the interest rate applied or the interest rate calculation method, and the maximum amount.
Article 5a 
2. It shall be prohibited to directly or indirectly make or be part of any arrangement to make any new loans or credit to any legal person, entity or body referred to in paragraph 1 after 23 February 2022. The prohibition shall not apply to loans or credit that have a specific and documented objective to provide financing for non-prohibited imports or exports of goods and non-financial services between the Union and any third State, including the expenditure for goods and services from another third State that is necessary for executing the export or import contracts, provided that the national competent authority has been notified within three months of the date of the loan or credit. The terms and conditions of drawdowns and disbursements referred to in point (a) include provisions concerning the length of the repayment period for each drawdown or disbursement, the interest rate applied or the interest rate calculation method, and the maximum amount. 4. Transactions related to the management of reserves as well as of assets of the Central Bank of Russia, including transactions with any legal person, entity or body acting on behalf of, or at the direction of, the Central Bank of Russia, such as the Russian National Wealth Fund, are prohibited. 4b. Where the reporting natural or legal person, entity or body has established an extraordinary and unforeseen loss or damage to the assets and reserves referred to in paragraph 4a, this information shall be reported immediately to the competent authority of the relevant Member State and transmitted simultaneously to the Commission. 4c. Member States, as well as the natural and legal persons, entities and bodies covered by the reporting obligation set out in paragraph 4a, shall cooperate with the Commission in any verification of the information received pursuant to that paragraph. The Commission may request any additional information it requires to carry out such verification. When such a request is addressed to a natural or legal person, entity or body, the Commission shall simultaneously transmit it to the competent authority of the relevant Member State. Any additional information received directly by the Commission shall be made available to the competent authority of the relevant Member State. 4d. Any information provided to or received by the Commission and the competent authorities of the Member States in accordance with this Article shall be used by the Commission and the competent authorities of the Member States only for the purposes for which it was provided or received. 4e. Any processing of personal data shall be carried out in accordance with this Regulation and Regulations (EU) 2016/679 ( 20 ) and (EU) 2018/1725 ( 21 ) of the European Parliament and of the Council and only in so far as necessary for the application of this Regulation and to ensure effective cooperation between Member States as well as with the Commission in the application of this Regulation. 5. By way of derogation from paragraph 4, the competent authorities may authorise a transaction provided that it is strictly necessary to ensure the financial stability of the Union as a whole or of the Member State concerned. 6. The Member State concerned shall immediately inform the other Member States and the Commission of its intention to grant an authorisation under paragraph 5. 7. Paragraph 4 shall not apply to any balance sheet management transactions linked to assets and reserves of the Central Bank of Russia, or linked to assets and reserves of any legal person, entity or body acting on behalf of, or at the direction of, the Central Bank of Russia, such as the Russian National Wealth Fund, carried out on or after 28 February 2022. 9. Central securities depositories concerned shall report to the Commission and to their national supervisory authorities, by 30 June of each year, on the total amount of cash balances, revenues and net profits referred to in points (a) to (c) of paragraph 8 respectively. 10. The Commission shall be empowered to adopt regulations, by means of implementing acts, setting out specific modalities for reporting, in respect of revenues and profits referred to in paragraph 8. The Commission shall consult the national competent authorities to that effect.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal On 24 February 2022, Russia launched a full-scale military invasion of Ukraine, with devastating consequences for Ukraine and its people. Two years of intense fighting, heavy artillery shelling and airstrikes have resulted in high numbers of civilian casualties and immense human suffering. Russia’s war of aggression has caused extensive damage to civilian and defence critical infrastructure, production capacities and services across Ukraine and the wholesale destruction of cities and towns in some parts of the country. The resulting humanitarian crisis has displaced millions of Ukrainians from their homes and left many in desperate need of food, shelter and medical assistance. To this day, Russian aerial strikes continue to attack targets throughout the country. It will take years, if not decades, to heal the trauma of this senseless war. The EU supports Ukraine’s independence, sovereignty and territorial integrity within its internationally recognised borders, its inherent right of self-defence, and its pursuit of a comprehensive, just and sustainable peace in line with international law and the UN Charter. Russia’s war of aggression against Ukraine poses a fundamental threat not only to Ukraine but also to the European and global security. The EU’s contribution to Ukraine’s self-defence is a crucial investment in the EU’s own security. In this vein, the European Union and Member States will contribute, together with partners, to future security commitments to Ukraine, which will help Ukraine to defend itself, resist destabilization efforts and deter acts of aggression in the future. There is no defence without a defence industry. Ukraine is heavily dependent on military support made available by the EU and its Member States, including due to its largely destroyed defence industrial base. Russia’s military aggression against Ukraine has marked the dramatic return of territorial conflict and high-intensity warfare on European soil. The production capacity of the European Defence Technological and Industrial Base (EDTIB) has been tailored to respond primarily to limited Member States needs, mostly along national dividing lines, due to decades of public underinvestment. In such a scenario, defence companies often faced the need to reduce production rates in order to keep production lines afloat and maintain skilled personnel, while producing limited quantity of defence systems for national customers. Today, for many European defence companies the export of defence equipment to non-EU customers is a major market. The surge of demand for certain defence products in Europe caused by the radically changed security environment happened against this backdrop of an EDTIB constrained by limited “peace time” production capacity. On the long run, this situation raises the question of defence industrial readiness in Europe, i.e. the capacity of the EDTIB to respond effectively (in time and scale) to changes in European demand for defence products. This is closely linked to the broader challenge of security of supply (SoS) of defence equipment in Europe. Although this topic is not new to EU Member States, the recent ammunition plan has put it in the spotlight, by raising the question of the EDTIB’s ability to ensure Europe’s SoS of defence equipment both in peace and war times. Following the outbreak of the war and the invitation of the Versailles declaration of March 2022, in May 2022, the Commission, and the High Representative of the Union for Foreign Affairs and Security Policy (“the High Representative”)/Head of the European Defence Agency (EDA) adopted the Joint Communication on Defence Investment Gaps Analysis and Way Forward (JOIN/2022/24 final). The Joint Communication highlighted that the past decades of underinvestment in defence from Member States resulted into both capability and industrial gaps within the Union. Since the presentation of the Joint Communication of May 2022, several measures have been tabled to react to the most immediate consequences of Russia’s war of aggression against Ukraine: – As announced in the Joint Communication of May 2022, the Commission, and the High Representative/Head of Agency established the Defence Joint Procurement Task Force (DJPTF) to work with Member States to support the coordination of their very short-term procurement needs. The Task Force focused on de-confliction and coordination to avoid a race to secure orders. The Task Force also established an aggregate estimate of needs and mapped and highlight ed the need for expansion of the EU industrial manufacturing capacities necessary to answer the needs. – Also, as announced in the Joint Communication of May 2022, in July 2022 the Commission presented the European Defence Industrial Reinforcement through common Procurement Act (EDIRPA) , aimed at ince n tivising through financial support, Member States’ cooperation on procurement of the most urgent and critical defence equipment. EDIRPA was adopted by co-legislators on 18 October 2023 and contributes to strengthen the adaptation of Union’s defence industry to structural market changes. EDIRPA will end on 31 December 2025. – The capability gaps highlighted by the Joint Communication of May 2022 were various, but in light of the evolution of the situation in Ukraine, a specific pressing need for ground - to - ground ammunition and artillery ammunition, as well as missiles emerged. This was formally recognised by the Council, which agreed on 20 March 2023 on a three-track approach for the delivery and joint procurement of ammunition for Ukraine . In this context, in M ay 2023 the Commission tabled a new proposal for a Regulation on supporting ammunition production (ASAP) to face the sudden surge of demand for these products and urgently enable their timely availability, by mobilising EU budget to support investments in the ramp up of the EDTIB’s production capacities in this field. ASAP was adopted by co-legislators on 20 July 2023. It will end on 30 June 2025. The unlawful war of Russia against Ukraine not only raised urgent challenges for the EU and its Member States, but its continuation over time also keeps aggravating structural issues affecting the competitiveness of the EDTIB and questions its ability to ensure a sufficient level of SoS to Member States. Hence, the EU now needs to move from punctual emergency responses (illustrated by the above-described measures) to EU defence industrial readiness , from securing the availability of consumables in the requisite volumes during crisis times, to ensuring the timely delivery of tomorrow’s high end critical capabilities in the coming years. This is the exact purpose of the European defence industrial strategy (EDIS) presented on 5 March. In order to implement the orientations set out in EDIS as well as the actions it announces, the Commission proposes a new regulation on the European defence Industry Programme (EDIP) . Announced by the Joint Communication of May 2022, and called for by the European Council, EDIP aims to reconcile the urgent with the long term , by maintaining support for the EDTIB under this Multiannual Financial Framework (MFF) and preparing for the EU’s defence industrial readiness for the future. In doing so, EDIP will translate in effect part of EDIS as its action is structured around 3 main pillars. - Strengthen the competitiveness and responsiveness of the EDTIB . In order to increase efforts to aggregate and harmonise European demand for defence equipment requirements from the EDTIB, EDIP proposes a ready-to-use legal framework, the Structures for European Armament Programme ( S EAP ), for cooperating and jointly managing defence equipment throughout its life cycle. In a similar logic, EDIP extends the EDIRPA logic beyond 2025, to continue to defragment and harmonise European demand. EDIP also replicate s the logic of ASAP to support the EDTIB’s productive investments, help s the EDTIB to move towards more flexible production capacities, as well as ensure s the productization phase of EDF projects. In order to enhance access to finance for the EDTIB, EDIP also entails the establishment of a fund in order to leverage, de-risk and speed-up investments needed to increase the defence manufacturing capacities of EU-based SMEs and small mid-caps, building on the Commission’s experience of the ASAP “ramp up fund” as well as the successful set - up of the EUDIS’ defence equity facility. - Enhance the ability of the EDTIB to ensure the timely availability and supply of defence products . EDIP’s aims is to support Member States’ efforts in pursuing the highest possible level of SoS when it comes to defence equipment, by creating an EU wide SoS regime. The latter would also enhance M ember S tate ’s trust in cross-border supply chains, creating at the same time a key competitive advantage for the EDTIB. A comprehensive crisis management framework would enable the coordination of responses to possible future supply crises on specific defence equipment or along their supply chains. - Contribute to the recovery, reconstruction and modernisation of the Ukraine Defence Technological and Industrial Base (Ukrainian DTIB) . Ukraine’s current needs in military equipment far exceed its industrial production capacities while the EU and its M ember S tates provide military assistance from their own - largely depleted – stocks and with a defence industry tailored for peace time. In this context, both industry’s interests are to engage in a more in-depth cooperation. Failing to create a strong relationship between the respective industrial bases may result in a missed business opportunity in the short-term and in economic and strategic dependencies in the medium to long-term. In view of Ukraine’s future accession to the EU, it is necessary that EDIP enhances cooperation with Ukraine at industrial level. As part of the EU’s future security commitments to Ukraine 1 , the EU should foster greater cooperation with the Ukrainian DTIB to boost its capacity to deliver for the immediate needs, as well as to work towards alignment of standards and improved interoperability. A stronger cooperation with the Ukrainian DTIB will contribute to strengthen Ukraine’s ability to defend itself, and will benefit the EDTIB’s capacity to support both Member States’ and Ukraine’s needs. 
Revised version (Article 5a ):
2. It shall be prohibited to directly or indirectly make or be part of any arrangement to make any new loans or credit to any legal person, entity or body referred to in paragraph 1 after 23 February 2022. The prohibition shall not apply to loans or credit that have a specific and documented objective to provide financing for non-prohibited imports or exports of goods and non-financial services between the Union and any third State, including the expenditure for goods and services from another third State that is necessary for executing the export or import contracts, provided that the national competent authority has been notified within three months of the date of the loan or credit. The terms and conditions of drawdowns and disbursements referred to in point (a) include provisions concerning the length of the repayment period for each drawdown or disbursement, the interest rate applied or the interest rate calculation method, and the maximum amount. 4. Transactions related to the management of reserves as well as of assets of the Central Bank of Russia, including transactions with any legal person, entity or body acting on behalf of, or at the direction of, the Central Bank of Russia, such as the Russian National Wealth Fund, are prohibited. 4b. Where the reporting natural or legal person, entity or body has established an extraordinary and unforeseen loss or damage to the assets and reserves referred to in paragraph 4a, this information shall be reported immediately to the competent authority of the relevant Member State and transmitted simultaneously to the Commission. 4c. Member States, as well as the natural and legal persons, entities and bodies covered by the reporting obligation set out in paragraph 4a, shall cooperate with the Commission in any verification of the information received pursuant to that paragraph. The Commission may request any additional information it requires to carry out such verification. When such a request is addressed to a natural or legal person, entity or body, the Commission shall simultaneously transmit it to the competent authority of the relevant Member State. Any additional information received directly by the Commission shall be made available to the competent authority of the relevant Member State. 4d. Any information provided to or received by the Commission and the competent authorities of the Member States in accordance with this Article shall be used by the Commission and the competent authorities of the Member States only for the purposes for which it was provided or received. 4e. Any processing of personal data shall be carried out in accordance with this Regulation and Regulations (EU) 2016/679 ( 22 ) and (EU) 2018/1725 ( 23 ) of the European Parliament and of the Council and only in so far as necessary for the application of this Regulation and to ensure effective cooperation between Member States as well as with the Commission in the application of this Regulation. 5. By way of derogation from paragraph 4, the competent authorities may authorise a transaction provided that it is strictly necessary to ensure the financial stability of the Union as a whole or of the Member State concerned. 6. The Member State concerned shall immediately inform the other Member States and the Commission of its intention to grant an authorisation under paragraph 5. 7. Paragraph 4 shall not apply to any balance sheet management transactions linked to assets and reserves of the Central Bank of Russia, or linked to assets and reserves of any legal person, entity or body acting on behalf of, or at the direction of, the Central Bank of Russia, such as the Russian National Wealth Fund, carried out on or after 28 February 2022. 9. The net profits referred to in point (c) of paragraph 8 shall be subject to a financial contribution due by the central securities depositories to the Union. The rate of the financial contribution shall be 99,7 % of those net profits. The Commission shall call for financial contributions, in accordance with Regulation (EU, Euratom) 2018/1046 ( 24 ), from the central securities depositories concerned biannually on the basis of the interim financial report referred to in paragraph 11 of this Article. The Commission shall establish the definitive amounts of the financial contribution due annually on the basis of the statutory audited financial statements for year N after they are available in year N+1. If the definitive annual amount of the financial contribution due for year N is lower than the sum of amounts of the biannual payments made in respect of year N, the difference shall be deducted from the next payment due by the central securities depositories to the Union in the year N+1, including biannual payments and transfer of amounts provisionally retained in accordance with paragraph 10, points (e) and (f). The amount due by the central securities depositories resulting from the netting pursuant to the previous sentence shall not be lower than zero. The Commission shall inform the Council biannually on the amounts transferred by the CSDs. 11. Central securities depositories referred to in paragraph 8 shall submit to the Commission and to their national competent authorities, in accordance with the rules set out in the act referred to in paragraph 13 the interim financial reports and the audited annual financial statements. They shall also report by 30 June of each year, on the total amounts remaining provisionally retained on 31 December of the preceding year, according to paragraph 10, amounts provisionally retained that were used in accordance with paragraph 10, point (d), during the preceding year, and the amounts provisionally retained which have to be transferred to the Union in accordance with paragraph 10, points (e) and (f). 12. Central securities depositories concerned shall fully cooperate in the protection of the financial interests of the Union and shall grant the necessary rights and access required for the authorising officer responsible, for the European Public Prosecutor’s Office (EPPO) in respect of those Member States participating in the enhanced cooperation on the establishment of the EPPO pursuant to Council Regulation (EU) 2017/1939 ( 25 ), for the European Anti-Fraud Office (OLAF), for the Court of Auditors, and, where appropriate, for the relevant national authorities, to comprehensively exercise their respective competences. In the case of OLAF, such rights shall include the right to carry out investigations, including on-the-spot checks and inspections, in accordance with Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council ( 26 ). 13. The Commission shall be empowered to adopt regulations, by means of implementing acts, setting out specific detailed arrangements for reporting to the Commission and the national competent authority as provided for under paragraph 11, and for the implementation of revenue operations such as payments by central securities depositories and the establishment of definitive amounts of financial contributions. Those rules may, as appropriate, complement the horizontal rules on revenue operations set out in Regulation (EU, Euratom) No 2018/1046 to cater for the specific characteristics of the financial contribution. The Commission shall consult the relevant national supervisory authorities to that effect. 14. The amounts of the financial contribution paid to the Union budget shall be used to support Ukraine through the Union spending instruments listed in Annex XLI. Annex XLI shall be reviewed yearly, and for the first time before 1 January 2025, and may be amended through a Council Implementing Regulation, adopted upon a joint proposal of the High Representative of the Union for Foreign Affairs and Security Policy and of the Commission. Amounts used for spending instruments financed from the Union budget shall constitute external assigned revenues in accordance with Article 21(5) of Regulation (EU, Euratom) No 2018/1046.
Article 5aa 
1a. It shall be prohibited as from 22 October 2022 to hold any posts in the governing bodies of any legal person, entity or body referred to in paragraph 1. This prohibition shall not apply to any legal person, entity or body referred to in paragraph 1, for which paragraph 1a applies. 1c. By way of derogation from paragraph 1b, the competent authorities may authorise the holding of a post in the governing body of a legal person, entity or body referred to in paragraph 1b, after having determined that the legal person, entity or body is: (a) a joint venture or similar legal arrangement involving a legal person, entity or body referred to in paragraph 1b and concluded by a legal person, entity or body which is incorporated or constituted under the law of a Member State before 17 December 2022; or (b) a legal person, entity or body referred to in paragraph 1b which was established in Russia before 17 December 2022 and which is owned by, or solely or jointly controlled by, a legal person, entity or body which is incorporated or constituted under the law of a Member State. 1d. By way of derogation from paragraph 1b, the competent authorities may authorise the holding of a post in the governing body of a legal person, entity or body referred to in paragraph 1b, after having determined that the holding of such a post is necessary for ensuring critical energy supply. 1e. By way of derogation from paragraph 1b, the competent authorities may authorise the holding of a post in the governing body of a legal person, entity or body referred to in paragraph 1b, after having determined that the legal person, entity or body is involved in the transit through Russia of oil originating in a third country and that the holding of such a post is intended for operations which are not prohibited under Articles 3m and 3n. 2a. The prohibition in paragraph 1 shall not apply to the reception of payments due by the legal persons, entities or bodies referred to in Part A of Annex XIX pursuant to contracts performed before 15 May 2022. 2c. The prohibition in paragraph 1 shall not apply to the reception of payments due by the legal persons, entities or bodies referred to in Part B of Annex XIX pursuant to contracts performed before 8 January 2023. 2e. The prohibition in paragraph 1 shall not apply to the reception of payments due by the legal persons, entities or bodies referred to in Part C of Annex XIX pursuant to contracts performed before 18 March 2023. 3a. By way of derogation from paragraph 1, the competent authorities may authorise, under such conditions as they deem appropriate, transactions which are strictly necessary for the divestment and withdrawal by 31 December 2024, by the entities referred to in paragraph 1 or their subsidiaries in the Union from a legal person, entity or body established in the Union. 4. By way of derogation from the procedure laid down in Article 7(3) of Regulation (EC) No 391/2009 of the European Parliament and of the Council ( 22 ) and in Article 21(3) of Directive (EU) 2016/1629 of the European Parliament and of the Council ( 23 ), the Union's recognition of the Russian Maritime Register of Shipping under Regulation (EC) No 391/2009 and Directive (EU) 2016/1629 is withdrawn. 5. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraphs 1c, 1d, 1e and 3a within two weeks of the authorisation.
Article 5b 
1. It shall be prohibited to accept any deposits from Russian nationals or natural persons residing in Russia, legal persons, entities or bodies established in Russia or a legal person, entity or body established outside the Union and whose proprietary rights are directly or indirectly owned for more than 50 % by Russian nationals or natural persons residing in Russia, if the total value of deposits of that natural or legal person, entity or body per credit institution exceeds EUR 100 000 . 2. It shall be prohibited to provide crypto-asset wallet, account or custody services to Russian nationals or natural persons residing in Russia, or legal persons, entities or bodies established in Russia. 2a. It shall be prohibited as from 18 January 2024 to allow Russian nationals or natural persons residing in Russia to directly or indirectly own or control, or to hold any posts in the governing bodies of, a legal person, entity or body which is incorporated or constituted under the law of a Member State and is providing the services referred to in paragraph 2. 3. Paragraphs 1, 2 and 2a shall not apply to nationals of a Member State, of a country member of the European Economic Area or of Switzerland, or to natural persons having a temporary or permanent residence permit in a Member State, in a country member of the European Economic Area or in Switzerland.
Article 5c 
2. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraph 1, points (a), (b), (c) or (e), within two weeks of the authorisation.
Article 5d 
2. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraph 1 within two weeks of the authorisation.
Article 5e 
1. It shall be prohibited for Union central securities depositories to provide any services as defined in the Annex of Regulation (EU) No 909/2014 for transferable securities issued after 12 April 2022 to any Russian national or natural person residing in Russia or any legal person, entity or body established in Russia. 2. Paragraph 1 shall not apply to nationals of a Member State, of a country member of the European Economic Area or of Switzerland, or to natural persons having a temporary or permanent residence permit in a Member State, in a country member of the European Economic Area or in Switzerland.
Article 5f 
1. It shall be prohibited to sell transferable securities denominated in any official currency of a Member State issued after 12 April 2022, or denominated in any other currency issued after 6 August 2023, or units in collective investment undertakings providing exposure to such securities, to any Russian national or natural person residing in Russia or any legal person, entity or body established in Russia. 2. Paragraph 1 shall not apply to nationals of a Member State, of a country member of the European Economic Area or of Switzerland, or to natural persons having a temporary or permanent residence permit in a Member State, in a country member of the European Economic Area or in Switzerland.
Article 5h 
1. It shall be prohibited to provide specialised financial messaging services, which are used to exchange financial data, to the legal persons, entities or bodies listed in Annex XIV or to any legal person, entity or body established in Russia whose proprietary rights are directly or indirectly owned for more than 50 % by an entity listed in Annex XIV. 2. For each legal person, entity or body listed in Annex XIV, the prohibition set out in paragraph 1 shall apply as of the date mentioned for it in that Annex. The prohibition shall apply as of the same date to any legal person, entity or body established in Russia whose proprietary rights are directly or indirectly owned for more than 50 % by an entity listed in Annex XIV.
Article 5i 
1. It shall be prohibited to sell, supply, transfer or export banknotes denominated in any official currency of a Member State to Russia or to any natural or legal person, entity or body in Russia, including the government and the Central Bank of Russia, or for use in Russia. 2. The prohibition in paragraph 1 shall not apply to the sale, supply, transfer or export of banknotes denominated in any official currency of a Member State provided that such sale, supply, transfer or export is necessary for: (a) the personal use of natural persons travelling to Russia or members of their immediate families travelling with them; or (b) the official purposes of diplomatic missions, consular posts or international organisations in Russia enjoying immunities in accordance with international law.
Article 5j 
1. It shall be prohibited to provide credit rating services to or on any Russian national or natural person residing in Russia or any legal person, entity or body established in Russia. 2. It shall be prohibited as of 15 April 2022 to provide access to any subscription services in relation to credit rating activities to any Russian national or natural person residing in Russia or any legal person, entity or body established in Russia. 3. Paragraphs 1 and 2 shall not apply to nationals of a Member State or natural persons having a temporary or permanent residence permit in a Member State.
Article 5k 
3. The Member State concerned shall inform the other Member States and the Commission of any authorisations granted under this Article within two weeks of the authorisation. 4. The prohibitions in paragraph 1 shall not apply to the execution until 10 October 2022 of contracts concluded before 9 April 2022.
Article 5l 
1. It shall be prohibited to provide direct or indirect support, including financing and financial assistance or any other benefit under a Union, Euratom or Member State national programme and contracts within the meaning of Regulation (EU, Euratom) 2018/1046 ( 24 ), to any legal person, entity or body established in Russia with over 50 % public ownership or public control.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal On 24 February 2022, Russia launched a full-scale military invasion of Ukraine, with devastating consequences for Ukraine and its people. Two years of intense fighting, heavy artillery shelling and airstrikes have resulted in high numbers of civilian casualties and immense human suffering. Russia’s war of aggression has caused extensive damage to civilian and defence critical infrastructure, production capacities and services across Ukraine and the wholesale destruction of cities and towns in some parts of the country. The resulting humanitarian crisis has displaced millions of Ukrainians from their homes and left many in desperate need of food, shelter and medical assistance. To this day, Russian aerial strikes continue to attack targets throughout the country. It will take years, if not decades, to heal the trauma of this senseless war. The EU supports Ukraine’s independence, sovereignty and territorial integrity within its internationally recognised borders, its inherent right of self-defence, and its pursuit of a comprehensive, just and sustainable peace in line with international law and the UN Charter. Russia’s war of aggression against Ukraine poses a fundamental threat not only to Ukraine but also to the European and global security. The EU’s contribution to Ukraine’s self-defence is a crucial investment in the EU’s own security. In this vein, the European Union and Member States will contribute, together with partners, to future security commitments to Ukraine, which will help Ukraine to defend itself, resist destabilization efforts and deter acts of aggression in the future. There is no defence without a defence industry. Ukraine is heavily dependent on military support made available by the EU and its Member States, including due to its largely destroyed defence industrial base. Russia’s military aggression against Ukraine has marked the dramatic return of territorial conflict and high-intensity warfare on European soil. The production capacity of the European Defence Technological and Industrial Base (EDTIB) has been tailored to respond primarily to limited Member States needs, mostly along national dividing lines, due to decades of public underinvestment. In such a scenario, defence companies often faced the need to reduce production rates in order to keep production lines afloat and maintain skilled personnel, while producing limited quantity of defence systems for national customers. Today, for many European defence companies the export of defence equipment to non-EU customers is a major market. The surge of demand for certain defence products in Europe caused by the radically changed security environment happened against this backdrop of an EDTIB constrained by limited “peace time” production capacity. On the long run, this situation raises the question of defence industrial readiness in Europe, i.e. the capacity of the EDTIB to respond effectively (in time and scale) to changes in European demand for defence products. This is closely linked to the broader challenge of security of supply (SoS) of defence equipment in Europe. Although this topic is not new to EU Member States, the recent ammunition plan has put it in the spotlight, by raising the question of the EDTIB’s ability to ensure Europe’s SoS of defence equipment both in peace and war times. Following the outbreak of the war and the invitation of the Versailles declaration of March 2022, in May 2022, the Commission, and the High Representative of the Union for Foreign Affairs and Security Policy (“the High Representative”)/Head of the European Defence Agency (EDA) adopted the Joint Communication on Defence Investment Gaps Analysis and Way Forward (JOIN/2022/24 final). The Joint Communication highlighted that the past decades of underinvestment in defence from Member States resulted into both capability and industrial gaps within the Union. Since the presentation of the Joint Communication of May 2022, several measures have been tabled to react to the most immediate consequences of Russia’s war of aggression against Ukraine: – As announced in the Joint Communication of May 2022, the Commission, and the High Representative/Head of Agency established the Defence Joint Procurement Task Force (DJPTF) to work with Member States to support the coordination of their very short-term procurement needs. The Task Force focused on de-confliction and coordination to avoid a race to secure orders. The Task Force also established an aggregate estimate of needs and mapped and highlight ed the need for expansion of the EU industrial manufacturing capacities necessary to answer the needs. – Also, as announced in the Joint Communication of May 2022, in July 2022 the Commission presented the European Defence Industrial Reinforcement through common Procurement Act (EDIRPA) , aimed at ince n tivising through financial support, Member States’ cooperation on procurement of the most urgent and critical defence equipment. EDIRPA was adopted by co-legislators on 18 October 2023 and contributes to strengthen the adaptation of Union’s defence industry to structural market changes. EDIRPA will end on 31 December 2025. – The capability gaps highlighted by the Joint Communication of May 2022 were various, but in light of the evolution of the situation in Ukraine, a specific pressing need for ground - to - ground ammunition and artillery ammunition, as well as missiles emerged. This was formally recognised by the Council, which agreed on 20 March 2023 on a three-track approach for the delivery and joint procurement of ammunition for Ukraine . In this context, in M ay 2023 the Commission tabled a new proposal for a Regulation on supporting ammunition production (ASAP) to face the sudden surge of demand for these products and urgently enable their timely availability, by mobilising EU budget to support investments in the ramp up of the EDTIB’s production capacities in this field. ASAP was adopted by co-legislators on 20 July 2023. It will end on 30 June 2025. The unlawful war of Russia against Ukraine not only raised urgent challenges for the EU and its Member States, but its continuation over time also keeps aggravating structural issues affecting the competitiveness of the EDTIB and questions its ability to ensure a sufficient level of SoS to Member States. Hence, the EU now needs to move from punctual emergency responses (illustrated by the above-described measures) to EU defence industrial readiness , from securing the availability of consumables in the requisite volumes during crisis times, to ensuring the timely delivery of tomorrow’s high end critical capabilities in the coming years. This is the exact purpose of the European defence industrial strategy (EDIS) presented on 5 March. In order to implement the orientations set out in EDIS as well as the actions it announces, the Commission proposes a new regulation on the European defence Industry Programme (EDIP) . Announced by the Joint Communication of May 2022, and called for by the European Council, EDIP aims to reconcile the urgent with the long term , by maintaining support for the EDTIB under this Multiannual Financial Framework (MFF) and preparing for the EU’s defence industrial readiness for the future. In doing so, EDIP will translate in effect part of EDIS as its action is structured around 3 main pillars. - Strengthen the competitiveness and responsiveness of the EDTIB . In order to increase efforts to aggregate and harmonise European demand for defence equipment requirements from the EDTIB, EDIP proposes a ready-to-use legal framework, the Structures for European Armament Programme ( S EAP ), for cooperating and jointly managing defence equipment throughout its life cycle. In a similar logic, EDIP extends the EDIRPA logic beyond 2025, to continue to defragment and harmonise European demand. EDIP also replicate s the logic of ASAP to support the EDTIB’s productive investments, help s the EDTIB to move towards more flexible production capacities, as well as ensure s the productization phase of EDF projects. In order to enhance access to finance for the EDTIB, EDIP also entails the establishment of a fund in order to leverage, de-risk and speed-up investments needed to increase the defence manufacturing capacities of EU-based SMEs and small mid-caps, building on the Commission’s experience of the ASAP “ramp up fund” as well as the successful set - up of the EUDIS’ defence equity facility. - Enhance the ability of the EDTIB to ensure the timely availability and supply of defence products . EDIP’s aims is to support Member States’ efforts in pursuing the highest possible level of SoS when it comes to defence equipment, by creating an EU wide SoS regime. The latter would also enhance M ember S tate ’s trust in cross-border supply chains, creating at the same time a key competitive advantage for the EDTIB. A comprehensive crisis management framework would enable the coordination of responses to possible future supply crises on specific defence equipment or along their supply chains. - Contribute to the recovery, reconstruction and modernisation of the Ukraine Defence Technological and Industrial Base (Ukrainian DTIB) . Ukraine’s current needs in military equipment far exceed its industrial production capacities while the EU and its M ember S tates provide military assistance from their own - largely depleted – stocks and with a defence industry tailored for peace time. In this context, both industry’s interests are to engage in a more in-depth cooperation. Failing to create a strong relationship between the respective industrial bases may result in a missed business opportunity in the short-term and in economic and strategic dependencies in the medium to long-term. In view of Ukraine’s future accession to the EU, it is necessary that EDIP enhances cooperation with Ukraine at industrial level. As part of the EU’s future security commitments to Ukraine 1 , the EU should foster greater cooperation with the Ukrainian DTIB to boost its capacity to deliver for the immediate needs, as well as to work towards alignment of standards and improved interoperability. A stronger cooperation with the Ukrainian DTIB will contribute to strengthen Ukraine’s ability to defend itself, and will benefit the EDTIB’s capacity to support both Member States’ and Ukraine’s needs.
Article 5m 
2. It shall be prohibited as of 5 July 2022 to act as, or arrange for another person to act as, a trustee, nominee shareholder, director, secretary or a similar position, for a trust or similar legal arrangement as referred to in paragraph 1. 3. Paragraphs 1 and 2 shall not apply to the operations that are strictly necessary for the termination by 5 July 2022 of contracts which are not compliant with this Article concluded before 9 April 2022 or of ancillary contracts necessary for the execution of such contracts. 4. Paragraphs 1 and 2 shall not apply when the trustor or beneficiary is a national of a Member State, of a country member of the European Economic Area or of Switzerland, or a natural person having a temporary or permanent residence permit in a Member State, in a country member of the European Economic Area or in Switzerland. 5. By way of derogation from paragraph 2, the competent authorities may authorise, under such conditions as they deem appropriate, the services referred to in paragraph 2 to continue beyond 5 July 2022, for: (a) the completion by 5 September 2022 of operations strictly necessary for the termination of contracts referred to in paragraph 3, provided that such operations were initiated before 11 May 2022; or (b) other reasons, provided that the service providers do not accept from, or make available to, the persons referred to in paragraph 1 any funds or economic resources, directly or indirectly, or otherwise provide such persons with any benefit from assets placed in a trust. 7. The Member State concerned shall inform the Commission of any authorisation granted under paragraph 5 or 6 within two weeks of such authorisation.
Article 5n 
1. It shall be prohibited to provide, directly or indirectly, accounting, auditing, including statutory audit, bookkeeping or tax consulting services, or business and management consulting or public relations services to: (a) the Government of Russia; or (b) legal persons, entities or bodies established in Russia. 2. It shall be prohibited to provide, directly or indirectly, architectural and engineering services, legal advisory services and IT consultancy services to: (a) the Government of Russia; or (b) legal persons, entities or bodies established in Russia. 2a. It shall be prohibited to provide, directly or indirectly, market research and public opinion polling services, technical testing and analysis services and advertising services to: (a) the Government of Russia; or (b) legal persons, entities or bodies established in Russia. 2b. It shall be prohibited to sell, supply, transfer, export, or provide, directly or indirectly, software for the management of enterprises and software for industrial design and manufacture as listed in Annex XXXIX to: (a) the Government of Russia; or (b) legal persons, entities or bodies established in Russia. 3a. It shall be prohibited to: (a) provide technical assistance, brokering services or other services related to the goods and services referred to in paragraphs 1, 2, 2a and 2b for their provision, directly or indirectly, to the Government of Russia or legal persons, entities or bodies established in Russia; (b) provide financing or financial assistance related to the goods and services referred to in paragraphs 1, 2, 2a and 2b for their provision, or for the provision of related technical assistance, brokering services or other services, directly or indirectly, to the Government of Russia or legal persons, entities or bodies established in Russia. 4b. Paragraph 2b shall not apply to the sale, supply, transfer, export or provision of software that is strictly necessary for the termination by 20 March 2024 of contracts which are not compliant with this Article concluded before 19 December 2023, or of ancillary contracts necessary for the execution of such contracts. 5. Paragraphs 1 and 2 shall not apply to the provision of services that are strictly necessary for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy. 6. Paragraphs 1 and 2 shall not apply to the provision of services which are strictly necessary to ensure access to judicial, administrative or arbitral proceedings in a Member State, as well as for the recognition or enforcement of a judgment or an arbitration award rendered in a Member State, provided that such provision of services is consistent with the objectives of this Regulation and Regulation (EU) No 269/2014. 7. Paragraphs 1, 2, 2a and 2b shall not apply until 20 June 2024 to the sale, supply, transfer, export or provision of services intended for the exclusive use of legal persons, entities or bodies established in Russia that are owned by, or solely or jointly controlled by, a legal person, entity or body which is incorporated or constituted under the law of a Member State, a country member of the European Economic Area, Switzerland or a partner country as listed in Annex VIII. 8. Paragraphs 2, 2a and 2b shall not apply to the sale, supply, transfer, export, or provision of services necessary for public health emergencies, the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment, or as a response to natural disasters. 9b. By way of derogation from paragraph 2b, the competent authorities may authorise the provision of services referred to therein, under such conditions as they deem appropriate, after having determined that those services are necessary for the contribution of Russian nationals to international open-source projects. 11. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraphs 9a, 9b and 10 within two weeks of the authorisation.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal On 24 February 2022, Russia launched a full-scale military invasion of Ukraine, with devastating consequences for Ukraine and its people. Two years of intense fighting, heavy artillery shelling and airstrikes have resulted in high numbers of civilian casualties and immense human suffering. Russia’s war of aggression has caused extensive damage to civilian and defence critical infrastructure, production capacities and services across Ukraine and the wholesale destruction of cities and towns in some parts of the country. The resulting humanitarian crisis has displaced millions of Ukrainians from their homes and left many in desperate need of food, shelter and medical assistance. To this day, Russian aerial strikes continue to attack targets throughout the country. It will take years, if not decades, to heal the trauma of this senseless war. The EU supports Ukraine’s independence, sovereignty and territorial integrity within its internationally recognised borders, its inherent right of self-defence, and its pursuit of a comprehensive, just and sustainable peace in line with international law and the UN Charter. Russia’s war of aggression against Ukraine poses a fundamental threat not only to Ukraine but also to the European and global security. The EU’s contribution to Ukraine’s self-defence is a crucial investment in the EU’s own security. In this vein, the European Union and Member States will contribute, together with partners, to future security commitments to Ukraine, which will help Ukraine to defend itself, resist destabilization efforts and deter acts of aggression in the future. There is no defence without a defence industry. Ukraine is heavily dependent on military support made available by the EU and its Member States, including due to its largely destroyed defence industrial base. Russia’s military aggression against Ukraine has marked the dramatic return of territorial conflict and high-intensity warfare on European soil. The production capacity of the European Defence Technological and Industrial Base (EDTIB) has been tailored to respond primarily to limited Member States needs, mostly along national dividing lines, due to decades of public underinvestment. In such a scenario, defence companies often faced the need to reduce production rates in order to keep production lines afloat and maintain skilled personnel, while producing limited quantity of defence systems for national customers. Today, for many European defence companies the export of defence equipment to non-EU customers is a major market. The surge of demand for certain defence products in Europe caused by the radically changed security environment happened against this backdrop of an EDTIB constrained by limited “peace time” production capacity. On the long run, this situation raises the question of defence industrial readiness in Europe, i.e. the capacity of the EDTIB to respond effectively (in time and scale) to changes in European demand for defence products. This is closely linked to the broader challenge of security of supply (SoS) of defence equipment in Europe. Although this topic is not new to EU Member States, the recent ammunition plan has put it in the spotlight, by raising the question of the EDTIB’s ability to ensure Europe’s SoS of defence equipment both in peace and war times. Following the outbreak of the war and the invitation of the Versailles declaration of March 2022, in May 2022, the Commission, and the High Representative of the Union for Foreign Affairs and Security Policy (“the High Representative”)/Head of the European Defence Agency (EDA) adopted the Joint Communication on Defence Investment Gaps Analysis and Way Forward (JOIN/2022/24 final). The Joint Communication highlighted that the past decades of underinvestment in defence from Member States resulted into both capability and industrial gaps within the Union. Since the presentation of the Joint Communication of May 2022, several measures have been tabled to react to the most immediate consequences of Russia’s war of aggression against Ukraine: – As announced in the Joint Communication of May 2022, the Commission, and the High Representative/Head of Agency established the Defence Joint Procurement Task Force (DJPTF) to work with Member States to support the coordination of their very short-term procurement needs. The Task Force focused on de-confliction and coordination to avoid a race to secure orders. The Task Force also established an aggregate estimate of needs and mapped and highlight ed the need for expansion of the EU industrial manufacturing capacities necessary to answer the needs. – Also, as announced in the Joint Communication of May 2022, in July 2022 the Commission presented the European Defence Industrial Reinforcement through common Procurement Act (EDIRPA) , aimed at ince n tivising through financial support, Member States’ cooperation on procurement of the most urgent and critical defence equipment. EDIRPA was adopted by co-legislators on 18 October 2023 and contributes to strengthen the adaptation of Union’s defence industry to structural market changes. EDIRPA will end on 31 December 2025. – The capability gaps highlighted by the Joint Communication of May 2022 were various, but in light of the evolution of the situation in Ukraine, a specific pressing need for ground - to - ground ammunition and artillery ammunition, as well as missiles emerged. This was formally recognised by the Council, which agreed on 20 March 2023 on a three-track approach for the delivery and joint procurement of ammunition for Ukraine . In this context, in M ay 2023 the Commission tabled a new proposal for a Regulation on supporting ammunition production (ASAP) to face the sudden surge of demand for these products and urgently enable their timely availability, by mobilising EU budget to support investments in the ramp up of the EDTIB’s production capacities in this field. ASAP was adopted by co-legislators on 20 July 2023. It will end on 30 June 2025. The unlawful war of Russia against Ukraine not only raised urgent challenges for the EU and its Member States, but its continuation over time also keeps aggravating structural issues affecting the competitiveness of the EDTIB and questions its ability to ensure a sufficient level of SoS to Member States. Hence, the EU now needs to move from punctual emergency responses (illustrated by the above-described measures) to EU defence industrial readiness , from securing the availability of consumables in the requisite volumes during crisis times, to ensuring the timely delivery of tomorrow’s high end critical capabilities in the coming years. This is the exact purpose of the European defence industrial strategy (EDIS) presented on 5 March. In order to implement the orientations set out in EDIS as well as the actions it announces, the Commission proposes a new regulation on the European defence Industry Programme (EDIP) . Announced by the Joint Communication of May 2022, and called for by the European Council, EDIP aims to reconcile the urgent with the long term , by maintaining support for the EDTIB under this Multiannual Financial Framework (MFF) and preparing for the EU’s defence industrial readiness for the future. In doing so, EDIP will translate in effect part of EDIS as its action is structured around 3 main pillars. - Strengthen the competitiveness and responsiveness of the EDTIB . In order to increase efforts to aggregate and harmonise European demand for defence equipment requirements from the EDTIB, EDIP proposes a ready-to-use legal framework, the Structures for European Armament Programme ( S EAP ), for cooperating and jointly managing defence equipment throughout its life cycle. In a similar logic, EDIP extends the EDIRPA logic beyond 2025, to continue to defragment and harmonise European demand. EDIP also replicate s the logic of ASAP to support the EDTIB’s productive investments, help s the EDTIB to move towards more flexible production capacities, as well as ensure s the productization phase of EDF projects. In order to enhance access to finance for the EDTIB, EDIP also entails the establishment of a fund in order to leverage, de-risk and speed-up investments needed to increase the defence manufacturing capacities of EU-based SMEs and small mid-caps, building on the Commission’s experience of the ASAP “ramp up fund” as well as the successful set - up of the EUDIS’ defence equity facility. - Enhance the ability of the EDTIB to ensure the timely availability and supply of defence products . EDIP’s aims is to support Member States’ efforts in pursuing the highest possible level of SoS when it comes to defence equipment, by creating an EU wide SoS regime. The latter would also enhance M ember S tate ’s trust in cross-border supply chains, creating at the same time a key competitive advantage for the EDTIB. A comprehensive crisis management framework would enable the coordination of responses to possible future supply crises on specific defence equipment or along their supply chains. - Contribute to the recovery, reconstruction and modernisation of the Ukraine Defence Technological and Industrial Base (Ukrainian DTIB) . Ukraine’s current needs in military equipment far exceed its industrial production capacities while the EU and its M ember S tates provide military assistance from their own - largely depleted – stocks and with a defence industry tailored for peace time. In this context, both industry’s interests are to engage in a more in-depth cooperation. Failing to create a strong relationship between the respective industrial bases may result in a missed business opportunity in the short-term and in economic and strategic dependencies in the medium to long-term. In view of Ukraine’s future accession to the EU, it is necessary that EDIP enhances cooperation with Ukraine at industrial level. As part of the EU’s future security commitments to Ukraine 1 , the EU should foster greater cooperation with the Ukrainian DTIB to boost its capacity to deliver for the immediate needs, as well as to work towards alignment of standards and improved interoperability. A stronger cooperation with the Ukrainian DTIB will contribute to strengthen Ukraine’s ability to defend itself, and will benefit the EDTIB’s capacity to support both Member States’ and Ukraine’s needs. 
Revised version (Article 5n ):
1. It shall be prohibited to provide, directly or indirectly, accounting, auditing, including statutory audit, bookkeeping or tax consulting services, or business and management consulting or public relations services to: (a) the Government of Russia; or (b) legal persons, entities or bodies established in Russia. 2. It shall be prohibited to provide, directly or indirectly, architectural and engineering services, legal advisory services and IT consultancy services to: (a) the Government of Russia; or (b) legal persons, entities or bodies established in Russia. 2a. It shall be prohibited to provide, directly or indirectly, market research and public opinion polling services, technical testing and analysis services and advertising services to: (a) the Government of Russia; or (b) legal persons, entities or bodies established in Russia. 2b. It shall be prohibited to sell, supply, transfer, export, or provide, directly or indirectly, software for the management of enterprises and software for industrial design and manufacture as listed in Annex XXXIX to: (a) the Government of Russia; or (b) legal persons, entities or bodies established in Russia. 3a. It shall be prohibited to: (a) provide technical assistance, brokering services or other services related to the goods and services referred to in paragraphs 1, 2, 2a and 2b for their provision, directly or indirectly, to the Government of Russia or legal persons, entities or bodies established in Russia; (b) provide financing or financial assistance related to the goods and services referred to in paragraphs 1, 2, 2a and 2b for their provision, or for the provision of related technical assistance, brokering services or other services, directly or indirectly, to the Government of Russia or legal persons, entities or bodies established in Russia. 4b. Paragraph 2b shall not apply to the sale, supply, transfer, export or provision of software that is strictly necessary for the termination by 20 March 2024 of contracts which are not compliant with this Article concluded before 19 December 2023, or of ancillary contracts necessary for the execution of such contracts. 5. Paragraphs 1 and 2 shall not apply to the provision of services that are strictly necessary for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy. 6. Paragraphs 1 and 2 shall not apply to the provision of services which are strictly necessary to ensure access to judicial, administrative or arbitral proceedings in a Member State, as well as for the recognition or enforcement of a judgment or an arbitration award rendered in a Member State, provided that such provision of services is consistent with the objectives of this Regulation and Regulation (EU) No 269/2014. 7. Paragraphs 1, 2, 2a and 2b shall not apply until 30 September 2024 to the sale, supply, transfer, export or provision of services intended for the exclusive use of legal persons, entities or bodies established in Russia that are owned by, or solely or jointly controlled by, a legal person, entity or body which is incorporated or constituted under the law of a Member State, a country member of the European Economic Area, Switzerland or a partner country as listed in Annex VIII. 8. Paragraphs 2, 2a and 2b shall not apply to the sale, supply, transfer, export, or provision of services necessary for public health emergencies, the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment, or as a response to natural disasters. 8a. Paragraphs 1, 2 and 2a shall not apply to the provision of services, by nationals of a Member State who are residents of Russia and were so before 24 February 2022, to the legal persons, entities or bodies referred to in point (h) of paragraph 10 who are their employers, provided that such services are intended for the exclusive use of those legal persons, entities or bodies. 9b. By way of derogation from paragraph 2b, the competent authorities may authorise the provision of services referred to therein, under such conditions as they deem appropriate, after having determined that those services are necessary for the contribution of Russian nationals to international open-source projects. 11. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraphs 9a, 9b and 10 within two weeks of the authorisation.
Article 5o 
1. It shall be prohibited as of 27 March 2023 to allow Russian nationals or natural persons residing in Russia to hold any posts in the governing bodies of the owners or operators of critical infrastructures, European critical infrastructures and critical entities. 2. Paragraph 1 shall not apply to nationals of a Member State, of a country member of the European Economic Area or of Switzerland.
Article 5p 
3. By way of derogation from paragraph 1, the competent authorities may authorise, under such conditions as they deem appropriate, the provision of storage capacity as referred to in paragraph 1 after having determined that it is necessary for ensuring critical energy supply within the Union. 4. The Member State or Member States concerned shall inform the other Member States and the Commission of any authorisation granted under paragraph 3 within two weeks of the authorisation.
Article 5q 
2. By way of derogation from Article 5n, the competent authorities may authorise the provision of auditing services, engineering services, legal advisory services, technical testing and analysis services for the operation and maintenance of the CPC pipelines and associated infrastructure necessary for the transport of goods falling under CN 2709 00 originating in Kazakhstan and which are only being loaded in, departing from or transiting through Russia after having determined that: (a) the provision of those services is necessary for the operation, essential maintenance, repair or replacement of components of the CPC pipeline and associated infrastructure; and (b) such services are provided by a natural or legal person subject to Article 13. 3. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraphs 1 and 2 within two weeks of the authorisation. 4. When granting an authorisation under paragraphs 1 and 2, the competent authority shall require the presentation of an end-user certificate and detailed regular reports indicating that no such goods, technology or services were diverted from their intended purpose during the relevant works. It may impose additional conditions, in accordance with paragraph 1.
Article 5r 
2. Notwithstanding the applicable rules concerning reporting, confidentiality and professional secrecy, credit and financial institutions shall, as of 1 July 2024, report to the competent authority of the Member State where they are located, within two weeks of the end of each semester, information on all transfers of funds out of the Union of a cumulative amount, over that semester, exceeding 100 000 EUR that they initiated, directly or indirectly, for the legal persons, entities and bodies referred to in paragraph 1. 3. Member States shall assess the information received in accordance with paragraphs 1 and 2 to identify transactions, entities and business sectors that indicate a serious risk of breaches or circumvention of, or use of funds for purposes incompatible with, this Regulation or Council Regulations (EU) No 269/2014, (EU) No 692/2014 ( 27 ) or (EU) 2022/263 ( 28 ), or Council Decisions 2014/145/CFSP ( 29 ), 2014/386/CFSP ( 30 ), 2014/512/CFSP or (CFSP) 2022/266 ( 31 ), and shall regularly inform each other and the Commission of their findings. 4. Based on the information received from the Member States under paragraph 3, the Commission shall review the functioning of the measures provided for in this Article no later than 20 December 2024.
Article 6 
2. The Member States shall immediately inform each other and the Commission of any other relevant information at their disposal which might affect the effective implementation of this Regulation. 3. Any information provided or received in accordance with this Article shall be used for the purposes for which it was provided or received, including ensuring the effectiveness of the measures set out in this Regulation.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal On 24 February 2022, Russia launched a full-scale military invasion of Ukraine, with devastating consequences for Ukraine and its people. Two years of intense fighting, heavy artillery shelling and airstrikes have resulted in high numbers of civilian casualties and immense human suffering. Russia’s war of aggression has caused extensive damage to civilian and defence critical infrastructure, production capacities and services across Ukraine and the wholesale destruction of cities and towns in some parts of the country. The resulting humanitarian crisis has displaced millions of Ukrainians from their homes and left many in desperate need of food, shelter and medical assistance. To this day, Russian aerial strikes continue to attack targets throughout the country. It will take years, if not decades, to heal the trauma of this senseless war. The EU supports Ukraine’s independence, sovereignty and territorial integrity within its internationally recognised borders, its inherent right of self-defence, and its pursuit of a comprehensive, just and sustainable peace in line with international law and the UN Charter. Russia’s war of aggression against Ukraine poses a fundamental threat not only to Ukraine but also to the European and global security. The EU’s contribution to Ukraine’s self-defence is a crucial investment in the EU’s own security. In this vein, the European Union and Member States will contribute, together with partners, to future security commitments to Ukraine, which will help Ukraine to defend itself, resist destabilization efforts and deter acts of aggression in the future. There is no defence without a defence industry. Ukraine is heavily dependent on military support made available by the EU and its Member States, including due to its largely destroyed defence industrial base. Russia’s military aggression against Ukraine has marked the dramatic return of territorial conflict and high-intensity warfare on European soil. The production capacity of the European Defence Technological and Industrial Base (EDTIB) has been tailored to respond primarily to limited Member States needs, mostly along national dividing lines, due to decades of public underinvestment. In such a scenario, defence companies often faced the need to reduce production rates in order to keep production lines afloat and maintain skilled personnel, while producing limited quantity of defence systems for national customers. Today, for many European defence companies the export of defence equipment to non-EU customers is a major market. The surge of demand for certain defence products in Europe caused by the radically changed security environment happened against this backdrop of an EDTIB constrained by limited “peace time” production capacity. On the long run, this situation raises the question of defence industrial readiness in Europe, i.e. the capacity of the EDTIB to respond effectively (in time and scale) to changes in European demand for defence products. This is closely linked to the broader challenge of security of supply (SoS) of defence equipment in Europe. Although this topic is not new to EU Member States, the recent ammunition plan has put it in the spotlight, by raising the question of the EDTIB’s ability to ensure Europe’s SoS of defence equipment both in peace and war times. Following the outbreak of the war and the invitation of the Versailles declaration of March 2022, in May 2022, the Commission, and the High Representative of the Union for Foreign Affairs and Security Policy (“the High Representative”)/Head of the European Defence Agency (EDA) adopted the Joint Communication on Defence Investment Gaps Analysis and Way Forward (JOIN/2022/24 final). The Joint Communication highlighted that the past decades of underinvestment in defence from Member States resulted into both capability and industrial gaps within the Union. Since the presentation of the Joint Communication of May 2022, several measures have been tabled to react to the most immediate consequences of Russia’s war of aggression against Ukraine: – As announced in the Joint Communication of May 2022, the Commission, and the High Representative/Head of Agency established the Defence Joint Procurement Task Force (DJPTF) to work with Member States to support the coordination of their very short-term procurement needs. The Task Force focused on de-confliction and coordination to avoid a race to secure orders. The Task Force also established an aggregate estimate of needs and mapped and highlight ed the need for expansion of the EU industrial manufacturing capacities necessary to answer the needs. – Also, as announced in the Joint Communication of May 2022, in July 2022 the Commission presented the European Defence Industrial Reinforcement through common Procurement Act (EDIRPA) , aimed at ince n tivising through financial support, Member States’ cooperation on procurement of the most urgent and critical defence equipment. EDIRPA was adopted by co-legislators on 18 October 2023 and contributes to strengthen the adaptation of Union’s defence industry to structural market changes. EDIRPA will end on 31 December 2025. – The capability gaps highlighted by the Joint Communication of May 2022 were various, but in light of the evolution of the situation in Ukraine, a specific pressing need for ground - to - ground ammunition and artillery ammunition, as well as missiles emerged. This was formally recognised by the Council, which agreed on 20 March 2023 on a three-track approach for the delivery and joint procurement of ammunition for Ukraine . In this context, in M ay 2023 the Commission tabled a new proposal for a Regulation on supporting ammunition production (ASAP) to face the sudden surge of demand for these products and urgently enable their timely availability, by mobilising EU budget to support investments in the ramp up of the EDTIB’s production capacities in this field. ASAP was adopted by co-legislators on 20 July 2023. It will end on 30 June 2025. The unlawful war of Russia against Ukraine not only raised urgent challenges for the EU and its Member States, but its continuation over time also keeps aggravating structural issues affecting the competitiveness of the EDTIB and questions its ability to ensure a sufficient level of SoS to Member States. Hence, the EU now needs to move from punctual emergency responses (illustrated by the above-described measures) to EU defence industrial readiness , from securing the availability of consumables in the requisite volumes during crisis times, to ensuring the timely delivery of tomorrow’s high end critical capabilities in the coming years. This is the exact purpose of the European defence industrial strategy (EDIS) presented on 5 March. In order to implement the orientations set out in EDIS as well as the actions it announces, the Commission proposes a new regulation on the European defence Industry Programme (EDIP) . Announced by the Joint Communication of May 2022, and called for by the European Council, EDIP aims to reconcile the urgent with the long term , by maintaining support for the EDTIB under this Multiannual Financial Framework (MFF) and preparing for the EU’s defence industrial readiness for the future. In doing so, EDIP will translate in effect part of EDIS as its action is structured around 3 main pillars. - Strengthen the competitiveness and responsiveness of the EDTIB . In order to increase efforts to aggregate and harmonise European demand for defence equipment requirements from the EDTIB, EDIP proposes a ready-to-use legal framework, the Structures for European Armament Programme ( S EAP ), for cooperating and jointly managing defence equipment throughout its life cycle. In a similar logic, EDIP extends the EDIRPA logic beyond 2025, to continue to defragment and harmonise European demand. EDIP also replicate s the logic of ASAP to support the EDTIB’s productive investments, help s the EDTIB to move towards more flexible production capacities, as well as ensure s the productization phase of EDF projects. In order to enhance access to finance for the EDTIB, EDIP also entails the establishment of a fund in order to leverage, de-risk and speed-up investments needed to increase the defence manufacturing capacities of EU-based SMEs and small mid-caps, building on the Commission’s experience of the ASAP “ramp up fund” as well as the successful set - up of the EUDIS’ defence equity facility. - Enhance the ability of the EDTIB to ensure the timely availability and supply of defence products . EDIP’s aims is to support Member States’ efforts in pursuing the highest possible level of SoS when it comes to defence equipment, by creating an EU wide SoS regime. The latter would also enhance M ember S tate ’s trust in cross-border supply chains, creating at the same time a key competitive advantage for the EDTIB. A comprehensive crisis management framework would enable the coordination of responses to possible future supply crises on specific defence equipment or along their supply chains. - Contribute to the recovery, reconstruction and modernisation of the Ukraine Defence Technological and Industrial Base (Ukrainian DTIB) . Ukraine’s current needs in military equipment far exceed its industrial production capacities while the EU and its M ember S tates provide military assistance from their own - largely depleted – stocks and with a defence industry tailored for peace time. In this context, both industry’s interests are to engage in a more in-depth cooperation. Failing to create a strong relationship between the respective industrial bases may result in a missed business opportunity in the short-term and in economic and strategic dependencies in the medium to long-term. In view of Ukraine’s future accession to the EU, it is necessary that EDIP enhances cooperation with Ukraine at industrial level. As part of the EU’s future security commitments to Ukraine 1 , the EU should foster greater cooperation with the Ukrainian DTIB to boost its capacity to deliver for the immediate needs, as well as to work towards alignment of standards and improved interoperability. A stronger cooperation with the Ukrainian DTIB will contribute to strengthen Ukraine’s ability to defend itself, and will benefit the EDTIB’s capacity to support both Member States’ and Ukraine’s needs. 
Revised version (Article 6 ):
2. The Member States shall immediately inform each other and the Commission of any other relevant information at their disposal which might affect the effective implementation of this Regulation. 3. Any information provided or received in accordance with this Article shall be used for the purposes for which it was provided or received, including ensuring the effectiveness of the measures set out in this Regulation. 4. Any document held by the Council, the Commission or the High Representative of the Union for Foreign Affairs and Security Policy (the ‘High Representative’) for the purpose of ensuring the enforcement of the measures set out in this Regulation, or of preventing the violation or circumvention thereof, shall be subject to professional secrecy and shall enjoy the protection afforded by the rules applicable to the Union institutions. That protection shall apply to the joint proposals from the High Representative and the Commission for the amendment of this Regulation and to any preparatory documents related to them. It shall be presumed that the disclosure of any documents or proposals referred to in the first subparagraph would harm the security of the Union or that of one or more of its Member States or the conduct of their international relations.
Article 6a 
1. The Member State or Member States concerned shall inform the other Member States and the Commission of any authorisation denied under Articles 3, 3a, 3b, 3c, 3d, 3ea, 3f, 3g, 3h, 3i, 3k, 3m, 3n, 5a, 5c, 5d, 5k, 5m, 5n, 5p and 12b within two weeks of the denial. 2. Before a Member State grants an authorisation in accordance with Articles 3, 3a, 3b, 3c, 3d, 3ea, 3f, 3g, 3h, 3i, 3k, 3m, 3n, 5a, 5c, 5d, 5k, 5m, 5n, 5p and 12b for a transaction which is essentially identical to a transaction which is the subject of a denial that is still valid issued by another Member State or by other Member States, it shall first consult the Member State or Member States which issued the denial. If, following such consultations, the Member State concerned decides to grant an authorisation, it shall inform the other Member States and the Commission thereof, providing all relevant information to explain that decision.
Article 6b 
1. Consistent with respect for the confidentiality of communications between lawyers and their clients guaranteed in Article 7 of the Charter of Fundamental Rights of the European Union and, where applicable, without prejudice to rules regarding the confidentiality of information held by judicial authorities, natural and legal persons, entities and bodies shall: (a) supply any information which would facilitate the implementation of this Regulation to the competent authority of the Member State where they are resident or located within two weeks of acquiring this information; and (b) cooperate with the competent authority in any verification of such information. 1a. For the purposes of paragraph 1, the confidentiality of communications between lawyers and their clients shall include the confidentiality of communications relating to legal advice provided by other certified professionals who are authorised under national law to represent their clients in judicial proceedings, insofar as such legal advice is provided in connection with pending or prospective judicial proceedings. 2. The Member State concerned shall transmit to the Commission any relevant information received pursuant to paragraph 1 within one month of receiving it. The Member State concerned may transmit such information in an anonymised form if an investigating or judicial authority has declared it to be confidential in the context of pending criminal investigations or criminal judicial proceedings. 3. Any additional information received directly by the Commission shall be made available to the Member States. 4. Any information provided or received in accordance with this Article shall be used only for the purposes for which it was provided or received.
Article 7 
The Commission shall be empowered to amend Annexes I and IX on the basis of information supplied by Member States.
Article 7a 
The Commission shall amend: (a) Annex XXVIII in accordance with the decisions of the Council amending Decision 2014/512/CFSP to update the prices agreed by the Price Cap Coalition; and (b) Annex XXIX, in accordance with the decisions of the Council amending Decision 2014/512/CFSP to update the list of exempted energy projects on the basis of objective eligibility criteria agreed by the Price Cap Coalition.
Article 8 
1. Member States shall lay down the rules on penalties, including as appropriate criminal penalties, applicable to infringements of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. The penalties provided for must be effective, proportionate and dissuasive. Member States shall also provide for appropriate measures of confiscation of the proceeds of such infringements. 2. Member States shall notify the rules referred to in paragraph 1 to the Commission without delay after the entry into force of this Regulation and shall notify it of any subsequent amendment.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal On 24 February 2022, Russia launched a full-scale military invasion of Ukraine, with devastating consequences for Ukraine and its people. Two years of intense fighting, heavy artillery shelling and airstrikes have resulted in high numbers of civilian casualties and immense human suffering. Russia’s war of aggression has caused extensive damage to civilian and defence critical infrastructure, production capacities and services across Ukraine and the wholesale destruction of cities and towns in some parts of the country. The resulting humanitarian crisis has displaced millions of Ukrainians from their homes and left many in desperate need of food, shelter and medical assistance. To this day, Russian aerial strikes continue to attack targets throughout the country. It will take years, if not decades, to heal the trauma of this senseless war. The EU supports Ukraine’s independence, sovereignty and territorial integrity within its internationally recognised borders, its inherent right of self-defence, and its pursuit of a comprehensive, just and sustainable peace in line with international law and the UN Charter. Russia’s war of aggression against Ukraine poses a fundamental threat not only to Ukraine but also to the European and global security. The EU’s contribution to Ukraine’s self-defence is a crucial investment in the EU’s own security. In this vein, the European Union and Member States will contribute, together with partners, to future security commitments to Ukraine, which will help Ukraine to defend itself, resist destabilization efforts and deter acts of aggression in the future. There is no defence without a defence industry. Ukraine is heavily dependent on military support made available by the EU and its Member States, including due to its largely destroyed defence industrial base. Russia’s military aggression against Ukraine has marked the dramatic return of territorial conflict and high-intensity warfare on European soil. The production capacity of the European Defence Technological and Industrial Base (EDTIB) has been tailored to respond primarily to limited Member States needs, mostly along national dividing lines, due to decades of public underinvestment. In such a scenario, defence companies often faced the need to reduce production rates in order to keep production lines afloat and maintain skilled personnel, while producing limited quantity of defence systems for national customers. Today, for many European defence companies the export of defence equipment to non-EU customers is a major market. The surge of demand for certain defence products in Europe caused by the radically changed security environment happened against this backdrop of an EDTIB constrained by limited “peace time” production capacity. On the long run, this situation raises the question of defence industrial readiness in Europe, i.e. the capacity of the EDTIB to respond effectively (in time and scale) to changes in European demand for defence products. This is closely linked to the broader challenge of security of supply (SoS) of defence equipment in Europe. Although this topic is not new to EU Member States, the recent ammunition plan has put it in the spotlight, by raising the question of the EDTIB’s ability to ensure Europe’s SoS of defence equipment both in peace and war times. Following the outbreak of the war and the invitation of the Versailles declaration of March 2022, in May 2022, the Commission, and the High Representative of the Union for Foreign Affairs and Security Policy (“the High Representative”)/Head of the European Defence Agency (EDA) adopted the Joint Communication on Defence Investment Gaps Analysis and Way Forward (JOIN/2022/24 final). The Joint Communication highlighted that the past decades of underinvestment in defence from Member States resulted into both capability and industrial gaps within the Union. Since the presentation of the Joint Communication of May 2022, several measures have been tabled to react to the most immediate consequences of Russia’s war of aggression against Ukraine: – As announced in the Joint Communication of May 2022, the Commission, and the High Representative/Head of Agency established the Defence Joint Procurement Task Force (DJPTF) to work with Member States to support the coordination of their very short-term procurement needs. The Task Force focused on de-confliction and coordination to avoid a race to secure orders. The Task Force also established an aggregate estimate of needs and mapped and highlight ed the need for expansion of the EU industrial manufacturing capacities necessary to answer the needs. – Also, as announced in the Joint Communication of May 2022, in July 2022 the Commission presented the European Defence Industrial Reinforcement through common Procurement Act (EDIRPA) , aimed at ince n tivising through financial support, Member States’ cooperation on procurement of the most urgent and critical defence equipment. EDIRPA was adopted by co-legislators on 18 October 2023 and contributes to strengthen the adaptation of Union’s defence industry to structural market changes. EDIRPA will end on 31 December 2025. – The capability gaps highlighted by the Joint Communication of May 2022 were various, but in light of the evolution of the situation in Ukraine, a specific pressing need for ground - to - ground ammunition and artillery ammunition, as well as missiles emerged. This was formally recognised by the Council, which agreed on 20 March 2023 on a three-track approach for the delivery and joint procurement of ammunition for Ukraine . In this context, in M ay 2023 the Commission tabled a new proposal for a Regulation on supporting ammunition production (ASAP) to face the sudden surge of demand for these products and urgently enable their timely availability, by mobilising EU budget to support investments in the ramp up of the EDTIB’s production capacities in this field. ASAP was adopted by co-legislators on 20 July 2023. It will end on 30 June 2025. The unlawful war of Russia against Ukraine not only raised urgent challenges for the EU and its Member States, but its continuation over time also keeps aggravating structural issues affecting the competitiveness of the EDTIB and questions its ability to ensure a sufficient level of SoS to Member States. Hence, the EU now needs to move from punctual emergency responses (illustrated by the above-described measures) to EU defence industrial readiness , from securing the availability of consumables in the requisite volumes during crisis times, to ensuring the timely delivery of tomorrow’s high end critical capabilities in the coming years. This is the exact purpose of the European defence industrial strategy (EDIS) presented on 5 March. In order to implement the orientations set out in EDIS as well as the actions it announces, the Commission proposes a new regulation on the European defence Industry Programme (EDIP) . Announced by the Joint Communication of May 2022, and called for by the European Council, EDIP aims to reconcile the urgent with the long term , by maintaining support for the EDTIB under this Multiannual Financial Framework (MFF) and preparing for the EU’s defence industrial readiness for the future. In doing so, EDIP will translate in effect part of EDIS as its action is structured around 3 main pillars. - Strengthen the competitiveness and responsiveness of the EDTIB . In order to increase efforts to aggregate and harmonise European demand for defence equipment requirements from the EDTIB, EDIP proposes a ready-to-use legal framework, the Structures for European Armament Programme ( S EAP ), for cooperating and jointly managing defence equipment throughout its life cycle. In a similar logic, EDIP extends the EDIRPA logic beyond 2025, to continue to defragment and harmonise European demand. EDIP also replicate s the logic of ASAP to support the EDTIB’s productive investments, help s the EDTIB to move towards more flexible production capacities, as well as ensure s the productization phase of EDF projects. In order to enhance access to finance for the EDTIB, EDIP also entails the establishment of a fund in order to leverage, de-risk and speed-up investments needed to increase the defence manufacturing capacities of EU-based SMEs and small mid-caps, building on the Commission’s experience of the ASAP “ramp up fund” as well as the successful set - up of the EUDIS’ defence equity facility. - Enhance the ability of the EDTIB to ensure the timely availability and supply of defence products . EDIP’s aims is to support Member States’ efforts in pursuing the highest possible level of SoS when it comes to defence equipment, by creating an EU wide SoS regime. The latter would also enhance M ember S tate ’s trust in cross-border supply chains, creating at the same time a key competitive advantage for the EDTIB. A comprehensive crisis management framework would enable the coordination of responses to possible future supply crises on specific defence equipment or along their supply chains. - Contribute to the recovery, reconstruction and modernisation of the Ukraine Defence Technological and Industrial Base (Ukrainian DTIB) . Ukraine’s current needs in military equipment far exceed its industrial production capacities while the EU and its M ember S tates provide military assistance from their own - largely depleted – stocks and with a defence industry tailored for peace time. In this context, both industry’s interests are to engage in a more in-depth cooperation. Failing to create a strong relationship between the respective industrial bases may result in a missed business opportunity in the short-term and in economic and strategic dependencies in the medium to long-term. In view of Ukraine’s future accession to the EU, it is necessary that EDIP enhances cooperation with Ukraine at industrial level. As part of the EU’s future security commitments to Ukraine 1 , the EU should foster greater cooperation with the Ukrainian DTIB to boost its capacity to deliver for the immediate needs, as well as to work towards alignment of standards and improved interoperability. A stronger cooperation with the Ukrainian DTIB will contribute to strengthen Ukraine’s ability to defend itself, and will benefit the EDTIB’s capacity to support both Member States’ and Ukraine’s needs. 
Revised version (Article 8 ):
1. Member States shall lay down the rules on penalties, including as appropriate criminal penalties, applicable to infringements of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. The penalties provided for must be effective, proportionate and dissuasive, and may take the voluntary self-disclosure of infringements of the provisions of this Regulation into account as a mitigating factor, in accordance with the respective national law. Member States shall also provide for appropriate measures of confiscation of the proceeds of such infringements. 2. Member States shall notify the rules referred to in paragraph 1 to the Commission without delay after the entry into force of this Regulation and shall notify it of any subsequent amendment.
Article 9 
1. Member States shall designate the competent authorities referred to in this Regulation and identify them on the websites listed in Annex I. Member States shall notify the Commission of any changes in the addresses of their websites listed in Annex I. 2. Member States shall notify the Commission of their competent authorities, including the contact details of those competent authorities, without delay after the entry into force of this Regulation, and shall notify it of any subsequent amendment. 3. Where this Regulation sets out a requirement to notify, inform or otherwise communicate with the Commission, the address and other contact details to be used for such communication shall be those indicated in Annex I.
Article 10 
Actions by natural or legal persons, entities or bodies shall not give rise to liability of any kind on their part, if they did not know, and had no reasonable cause to suspect, that their actions would infringe the measures set out in this Regulation.
Article 11 
2. In any proceedings for the enforcement of a claim, the onus of proving that satisfying the claim is not prohibited by paragraph 1 shall be on the person seeking the enforcement of that claim. 3. This Article is without prejudice to the right of the persons, entities and bodies referred to in paragraph 1 to judicial review of the legality of the non-performance of contractual obligations in accordance with this Regulation.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal On 24 February 2022, Russia launched a full-scale military invasion of Ukraine, with devastating consequences for Ukraine and its people. Two years of intense fighting, heavy artillery shelling and airstrikes have resulted in high numbers of civilian casualties and immense human suffering. Russia’s war of aggression has caused extensive damage to civilian and defence critical infrastructure, production capacities and services across Ukraine and the wholesale destruction of cities and towns in some parts of the country. The resulting humanitarian crisis has displaced millions of Ukrainians from their homes and left many in desperate need of food, shelter and medical assistance. To this day, Russian aerial strikes continue to attack targets throughout the country. It will take years, if not decades, to heal the trauma of this senseless war. The EU supports Ukraine’s independence, sovereignty and territorial integrity within its internationally recognised borders, its inherent right of self-defence, and its pursuit of a comprehensive, just and sustainable peace in line with international law and the UN Charter. Russia’s war of aggression against Ukraine poses a fundamental threat not only to Ukraine but also to the European and global security. The EU’s contribution to Ukraine’s self-defence is a crucial investment in the EU’s own security. In this vein, the European Union and Member States will contribute, together with partners, to future security commitments to Ukraine, which will help Ukraine to defend itself, resist destabilization efforts and deter acts of aggression in the future. There is no defence without a defence industry. Ukraine is heavily dependent on military support made available by the EU and its Member States, including due to its largely destroyed defence industrial base. Russia’s military aggression against Ukraine has marked the dramatic return of territorial conflict and high-intensity warfare on European soil. The production capacity of the European Defence Technological and Industrial Base (EDTIB) has been tailored to respond primarily to limited Member States needs, mostly along national dividing lines, due to decades of public underinvestment. In such a scenario, defence companies often faced the need to reduce production rates in order to keep production lines afloat and maintain skilled personnel, while producing limited quantity of defence systems for national customers. Today, for many European defence companies the export of defence equipment to non-EU customers is a major market. The surge of demand for certain defence products in Europe caused by the radically changed security environment happened against this backdrop of an EDTIB constrained by limited “peace time” production capacity. On the long run, this situation raises the question of defence industrial readiness in Europe, i.e. the capacity of the EDTIB to respond effectively (in time and scale) to changes in European demand for defence products. This is closely linked to the broader challenge of security of supply (SoS) of defence equipment in Europe. Although this topic is not new to EU Member States, the recent ammunition plan has put it in the spotlight, by raising the question of the EDTIB’s ability to ensure Europe’s SoS of defence equipment both in peace and war times. Following the outbreak of the war and the invitation of the Versailles declaration of March 2022, in May 2022, the Commission, and the High Representative of the Union for Foreign Affairs and Security Policy (“the High Representative”)/Head of the European Defence Agency (EDA) adopted the Joint Communication on Defence Investment Gaps Analysis and Way Forward (JOIN/2022/24 final). The Joint Communication highlighted that the past decades of underinvestment in defence from Member States resulted into both capability and industrial gaps within the Union. Since the presentation of the Joint Communication of May 2022, several measures have been tabled to react to the most immediate consequences of Russia’s war of aggression against Ukraine: – As announced in the Joint Communication of May 2022, the Commission, and the High Representative/Head of Agency established the Defence Joint Procurement Task Force (DJPTF) to work with Member States to support the coordination of their very short-term procurement needs. The Task Force focused on de-confliction and coordination to avoid a race to secure orders. The Task Force also established an aggregate estimate of needs and mapped and highlight ed the need for expansion of the EU industrial manufacturing capacities necessary to answer the needs. – Also, as announced in the Joint Communication of May 2022, in July 2022 the Commission presented the European Defence Industrial Reinforcement through common Procurement Act (EDIRPA) , aimed at ince n tivising through financial support, Member States’ cooperation on procurement of the most urgent and critical defence equipment. EDIRPA was adopted by co-legislators on 18 October 2023 and contributes to strengthen the adaptation of Union’s defence industry to structural market changes. EDIRPA will end on 31 December 2025. – The capability gaps highlighted by the Joint Communication of May 2022 were various, but in light of the evolution of the situation in Ukraine, a specific pressing need for ground - to - ground ammunition and artillery ammunition, as well as missiles emerged. This was formally recognised by the Council, which agreed on 20 March 2023 on a three-track approach for the delivery and joint procurement of ammunition for Ukraine . In this context, in M ay 2023 the Commission tabled a new proposal for a Regulation on supporting ammunition production (ASAP) to face the sudden surge of demand for these products and urgently enable their timely availability, by mobilising EU budget to support investments in the ramp up of the EDTIB’s production capacities in this field. ASAP was adopted by co-legislators on 20 July 2023. It will end on 30 June 2025. The unlawful war of Russia against Ukraine not only raised urgent challenges for the EU and its Member States, but its continuation over time also keeps aggravating structural issues affecting the competitiveness of the EDTIB and questions its ability to ensure a sufficient level of SoS to Member States. Hence, the EU now needs to move from punctual emergency responses (illustrated by the above-described measures) to EU defence industrial readiness , from securing the availability of consumables in the requisite volumes during crisis times, to ensuring the timely delivery of tomorrow’s high end critical capabilities in the coming years. This is the exact purpose of the European defence industrial strategy (EDIS) presented on 5 March. In order to implement the orientations set out in EDIS as well as the actions it announces, the Commission proposes a new regulation on the European defence Industry Programme (EDIP) . Announced by the Joint Communication of May 2022, and called for by the European Council, EDIP aims to reconcile the urgent with the long term , by maintaining support for the EDTIB under this Multiannual Financial Framework (MFF) and preparing for the EU’s defence industrial readiness for the future. In doing so, EDIP will translate in effect part of EDIS as its action is structured around 3 main pillars. - Strengthen the competitiveness and responsiveness of the EDTIB . In order to increase efforts to aggregate and harmonise European demand for defence equipment requirements from the EDTIB, EDIP proposes a ready-to-use legal framework, the Structures for European Armament Programme ( S EAP ), for cooperating and jointly managing defence equipment throughout its life cycle. In a similar logic, EDIP extends the EDIRPA logic beyond 2025, to continue to defragment and harmonise European demand. EDIP also replicate s the logic of ASAP to support the EDTIB’s productive investments, help s the EDTIB to move towards more flexible production capacities, as well as ensure s the productization phase of EDF projects. In order to enhance access to finance for the EDTIB, EDIP also entails the establishment of a fund in order to leverage, de-risk and speed-up investments needed to increase the defence manufacturing capacities of EU-based SMEs and small mid-caps, building on the Commission’s experience of the ASAP “ramp up fund” as well as the successful set - up of the EUDIS’ defence equity facility. - Enhance the ability of the EDTIB to ensure the timely availability and supply of defence products . EDIP’s aims is to support Member States’ efforts in pursuing the highest possible level of SoS when it comes to defence equipment, by creating an EU wide SoS regime. The latter would also enhance M ember S tate ’s trust in cross-border supply chains, creating at the same time a key competitive advantage for the EDTIB. A comprehensive crisis management framework would enable the coordination of responses to possible future supply crises on specific defence equipment or along their supply chains. - Contribute to the recovery, reconstruction and modernisation of the Ukraine Defence Technological and Industrial Base (Ukrainian DTIB) . Ukraine’s current needs in military equipment far exceed its industrial production capacities while the EU and its M ember S tates provide military assistance from their own - largely depleted – stocks and with a defence industry tailored for peace time. In this context, both industry’s interests are to engage in a more in-depth cooperation. Failing to create a strong relationship between the respective industrial bases may result in a missed business opportunity in the short-term and in economic and strategic dependencies in the medium to long-term. In view of Ukraine’s future accession to the EU, it is necessary that EDIP enhances cooperation with Ukraine at industrial level. As part of the EU’s future security commitments to Ukraine 1 , the EU should foster greater cooperation with the Ukrainian DTIB to boost its capacity to deliver for the immediate needs, as well as to work towards alignment of standards and improved interoperability. A stronger cooperation with the Ukrainian DTIB will contribute to strengthen Ukraine’s ability to defend itself, and will benefit the EDTIB’s capacity to support both Member States’ and Ukraine’s needs. 
Revised version (Article 11 ):
2. In any proceedings for the enforcement of a claim, the onus of proving that satisfying the claim is not prohibited by paragraph 1 shall be on the person seeking the enforcement of that claim. 3. This Article is without prejudice to the right of the persons, entities and bodies referred to in paragraph 1 to judicial review of the legality of the non-performance of contractual obligations in accordance with this Regulation. 4. By way of derogation from paragraph 1, the competent authorities, based on a specific and case-by-case assessment, may authorise, until 31 December 2024, the satisfaction of a claim made by one of the persons, entities and bodies indicated in point (b) paragraph 1, under such conditions as the competent authorities deem appropriate and after having determined that the satisfaction of the claim is strictly necessary for the divestment from Russia or the wind-down of business activities in Russia.
Article 12 
It shall be prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions in this Regulation.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal On 24 February 2022, Russia launched a full-scale military invasion of Ukraine, with devastating consequences for Ukraine and its people. Two years of intense fighting, heavy artillery shelling and airstrikes have resulted in high numbers of civilian casualties and immense human suffering. Russia’s war of aggression has caused extensive damage to civilian and defence critical infrastructure, production capacities and services across Ukraine and the wholesale destruction of cities and towns in some parts of the country. The resulting humanitarian crisis has displaced millions of Ukrainians from their homes and left many in desperate need of food, shelter and medical assistance. To this day, Russian aerial strikes continue to attack targets throughout the country. It will take years, if not decades, to heal the trauma of this senseless war. The EU supports Ukraine’s independence, sovereignty and territorial integrity within its internationally recognised borders, its inherent right of self-defence, and its pursuit of a comprehensive, just and sustainable peace in line with international law and the UN Charter. Russia’s war of aggression against Ukraine poses a fundamental threat not only to Ukraine but also to the European and global security. The EU’s contribution to Ukraine’s self-defence is a crucial investment in the EU’s own security. In this vein, the European Union and Member States will contribute, together with partners, to future security commitments to Ukraine, which will help Ukraine to defend itself, resist destabilization efforts and deter acts of aggression in the future. There is no defence without a defence industry. Ukraine is heavily dependent on military support made available by the EU and its Member States, including due to its largely destroyed defence industrial base. Russia’s military aggression against Ukraine has marked the dramatic return of territorial conflict and high-intensity warfare on European soil. The production capacity of the European Defence Technological and Industrial Base (EDTIB) has been tailored to respond primarily to limited Member States needs, mostly along national dividing lines, due to decades of public underinvestment. In such a scenario, defence companies often faced the need to reduce production rates in order to keep production lines afloat and maintain skilled personnel, while producing limited quantity of defence systems for national customers. Today, for many European defence companies the export of defence equipment to non-EU customers is a major market. The surge of demand for certain defence products in Europe caused by the radically changed security environment happened against this backdrop of an EDTIB constrained by limited “peace time” production capacity. On the long run, this situation raises the question of defence industrial readiness in Europe, i.e. the capacity of the EDTIB to respond effectively (in time and scale) to changes in European demand for defence products. This is closely linked to the broader challenge of security of supply (SoS) of defence equipment in Europe. Although this topic is not new to EU Member States, the recent ammunition plan has put it in the spotlight, by raising the question of the EDTIB’s ability to ensure Europe’s SoS of defence equipment both in peace and war times. Following the outbreak of the war and the invitation of the Versailles declaration of March 2022, in May 2022, the Commission, and the High Representative of the Union for Foreign Affairs and Security Policy (“the High Representative”)/Head of the European Defence Agency (EDA) adopted the Joint Communication on Defence Investment Gaps Analysis and Way Forward (JOIN/2022/24 final). The Joint Communication highlighted that the past decades of underinvestment in defence from Member States resulted into both capability and industrial gaps within the Union. Since the presentation of the Joint Communication of May 2022, several measures have been tabled to react to the most immediate consequences of Russia’s war of aggression against Ukraine: – As announced in the Joint Communication of May 2022, the Commission, and the High Representative/Head of Agency established the Defence Joint Procurement Task Force (DJPTF) to work with Member States to support the coordination of their very short-term procurement needs. The Task Force focused on de-confliction and coordination to avoid a race to secure orders. The Task Force also established an aggregate estimate of needs and mapped and highlight ed the need for expansion of the EU industrial manufacturing capacities necessary to answer the needs. – Also, as announced in the Joint Communication of May 2022, in July 2022 the Commission presented the European Defence Industrial Reinforcement through common Procurement Act (EDIRPA) , aimed at ince n tivising through financial support, Member States’ cooperation on procurement of the most urgent and critical defence equipment. EDIRPA was adopted by co-legislators on 18 October 2023 and contributes to strengthen the adaptation of Union’s defence industry to structural market changes. EDIRPA will end on 31 December 2025. – The capability gaps highlighted by the Joint Communication of May 2022 were various, but in light of the evolution of the situation in Ukraine, a specific pressing need for ground - to - ground ammunition and artillery ammunition, as well as missiles emerged. This was formally recognised by the Council, which agreed on 20 March 2023 on a three-track approach for the delivery and joint procurement of ammunition for Ukraine . In this context, in M ay 2023 the Commission tabled a new proposal for a Regulation on supporting ammunition production (ASAP) to face the sudden surge of demand for these products and urgently enable their timely availability, by mobilising EU budget to support investments in the ramp up of the EDTIB’s production capacities in this field. ASAP was adopted by co-legislators on 20 July 2023. It will end on 30 June 2025. The unlawful war of Russia against Ukraine not only raised urgent challenges for the EU and its Member States, but its continuation over time also keeps aggravating structural issues affecting the competitiveness of the EDTIB and questions its ability to ensure a sufficient level of SoS to Member States. Hence, the EU now needs to move from punctual emergency responses (illustrated by the above-described measures) to EU defence industrial readiness , from securing the availability of consumables in the requisite volumes during crisis times, to ensuring the timely delivery of tomorrow’s high end critical capabilities in the coming years. This is the exact purpose of the European defence industrial strategy (EDIS) presented on 5 March. In order to implement the orientations set out in EDIS as well as the actions it announces, the Commission proposes a new regulation on the European defence Industry Programme (EDIP) . Announced by the Joint Communication of May 2022, and called for by the European Council, EDIP aims to reconcile the urgent with the long term , by maintaining support for the EDTIB under this Multiannual Financial Framework (MFF) and preparing for the EU’s defence industrial readiness for the future. In doing so, EDIP will translate in effect part of EDIS as its action is structured around 3 main pillars. - Strengthen the competitiveness and responsiveness of the EDTIB . In order to increase efforts to aggregate and harmonise European demand for defence equipment requirements from the EDTIB, EDIP proposes a ready-to-use legal framework, the Structures for European Armament Programme ( S EAP ), for cooperating and jointly managing defence equipment throughout its life cycle. In a similar logic, EDIP extends the EDIRPA logic beyond 2025, to continue to defragment and harmonise European demand. EDIP also replicate s the logic of ASAP to support the EDTIB’s productive investments, help s the EDTIB to move towards more flexible production capacities, as well as ensure s the productization phase of EDF projects. In order to enhance access to finance for the EDTIB, EDIP also entails the establishment of a fund in order to leverage, de-risk and speed-up investments needed to increase the defence manufacturing capacities of EU-based SMEs and small mid-caps, building on the Commission’s experience of the ASAP “ramp up fund” as well as the successful set - up of the EUDIS’ defence equity facility. - Enhance the ability of the EDTIB to ensure the timely availability and supply of defence products . EDIP’s aims is to support Member States’ efforts in pursuing the highest possible level of SoS when it comes to defence equipment, by creating an EU wide SoS regime. The latter would also enhance M ember S tate ’s trust in cross-border supply chains, creating at the same time a key competitive advantage for the EDTIB. A comprehensive crisis management framework would enable the coordination of responses to possible future supply crises on specific defence equipment or along their supply chains. - Contribute to the recovery, reconstruction and modernisation of the Ukraine Defence Technological and Industrial Base (Ukrainian DTIB) . Ukraine’s current needs in military equipment far exceed its industrial production capacities while the EU and its M ember S tates provide military assistance from their own - largely depleted – stocks and with a defence industry tailored for peace time. In this context, both industry’s interests are to engage in a more in-depth cooperation. Failing to create a strong relationship between the respective industrial bases may result in a missed business opportunity in the short-term and in economic and strategic dependencies in the medium to long-term. In view of Ukraine’s future accession to the EU, it is necessary that EDIP enhances cooperation with Ukraine at industrial level. As part of the EU’s future security commitments to Ukraine 1 , the EU should foster greater cooperation with the Ukrainian DTIB to boost its capacity to deliver for the immediate needs, as well as to work towards alignment of standards and improved interoperability. A stronger cooperation with the Ukrainian DTIB will contribute to strengthen Ukraine’s ability to defend itself, and will benefit the EDTIB’s capacity to support both Member States’ and Ukraine’s needs. 
Revised version (Article 12 ):
It shall be prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions in this Regulation, including by participating in such activities without deliberately seeking that object or effect but being aware that the participation may have that object or effect and accepting that possibility.
Article 12a 
1. The Commission shall process personal data in order to carry out its tasks under this Regulation. These tasks include the handling of information on deposits and information on authorisations granted by the competent authorities. 2. For the purposes of this Regulation, the Commission is designated as ‘controller’ within the meaning of Article 3(8) of Regulation (EU) 2018/1725 in relation to the processing activities necessary to accomplish the tasks referred to in paragraph 1. 3. The competent authorities of the Member States, including enforcement authorities, customs authorities within the meaning of Regulation (EU) No 952/2013 of the European Parliament and of the Council ( 32 ), competent authorities within the meaning of Regulation (EU) No 575/2013, Directive (EU) 2015/849 of the European Parliament and of the Council ( 33 ) and Directive 2014/65/EU, as well as administrators of official registers wherein natural persons, legal persons, entities and bodies as well as immovable or movable property are registered, shall process and exchange without delay information, including personal data and, if necessary, the information referred to in Article 6b(1), with other competent authorities of their Member State, of other Member States and the Commission, if such processing and exchange is necessary to carry out the tasks of the processing authority or the receiving authority under this Regulation, in particular when they detect instances of a breach or circumvention, or attempts at a breach or circumvention of the prohibitions set out in this Regulation. This provision is without prejudice to rules regarding the confidentiality of information held by judicial authorities. 4. Any processing of personal data shall be carried out in accordance with this Regulation and Regulations (EU) 2016/679 ( 34 ) and (EU) 2018/1725 ( 35 ) of the European Parliament and of the Council and only in so far as necessary for the application of this Regulation and to ensure effective cooperation between Member States as well as with the European Commission in the application of this Regulation.
Article 12b 
1a. By way of derogation from Article 3, the competent authorities may authorise the sale, supply or transfer of goods and technologies listed in Annex II until 30 September 2024, where such sale, supply or transfer is strictly necessary for the divestment from a joint venture incorporated or constituted under the law of a Member State before 24 February 2022, involving a Russian legal person, entity or body, and operating a gas pipeline infrastructure between Russia and third countries. 2. By way of derogation from Articles 3g and 3i, the competent authorities may authorise the import or transfer of goods listed in Annexes XVII and XXI until 30 June 2024, where such import or transfer is strictly necessary for the divestment from Russia or the wind-down of business activities in Russia, provided that the following conditions are fulfilled: (a) the goods are owned by a national of a Member State or by a legal person, entity or body which is incorporated or constituted under the law of a Member State or by legal persons, entities or bodies established in Russia that are owned by, or solely or jointly controlled by, a legal person, entity or body which is incorporated or constituted under the law of a Member State; and (b) the concerned goods were physically located in Russia before the relevant prohibitions in Articles 3g and 3i entered into force in respect of those goods. 2a. By way of derogation from Article 5n, the competent authorities may authorise the continuation of the provision of services listed therein until 31 July 2024 where such provision of services is strictly necessary for the divestment from Russia or the wind-down of business activities in Russia, provided that the following conditions are fulfilled: (a) such services are provided to and for the exclusive benefit of the legal persons, entities or bodies resulting from the divestment; and (b) the competent authorities deciding on requests for authorisations have no reasonable grounds to believe that the services might be provided, directly or indirectly, to the Government of Russia or a military end-user or have a military end-use in Russia. 2b. By way of derogation from Article 5n(2), the competent authorities may authorise the provision, until 31 March 2024, of legal advisory services which are legally required for the completion of a sale or transfer of proprietary rights directly or indirectly owned by legal persons, entities or bodies established in Russia in a legal person, entity or body established in the Union. 3. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraphs 1, 1a, 2, 2a or 2b within two weeks of the authorisation. 4. All authorisations referred to in paragraph 1 with respect to goods and technologies listed in Annex VII as well as in Annex I to Regulation (EU) 2021/821 shall be issued by electronic means, whenever possible, on forms containing at least all the elements of, and in the order provided for in, the model C set out in Annex IX.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal On 24 February 2022, Russia launched a full-scale military invasion of Ukraine, with devastating consequences for Ukraine and its people. Two years of intense fighting, heavy artillery shelling and airstrikes have resulted in high numbers of civilian casualties and immense human suffering. Russia’s war of aggression has caused extensive damage to civilian and defence critical infrastructure, production capacities and services across Ukraine and the wholesale destruction of cities and towns in some parts of the country. The resulting humanitarian crisis has displaced millions of Ukrainians from their homes and left many in desperate need of food, shelter and medical assistance. To this day, Russian aerial strikes continue to attack targets throughout the country. It will take years, if not decades, to heal the trauma of this senseless war. The EU supports Ukraine’s independence, sovereignty and territorial integrity within its internationally recognised borders, its inherent right of self-defence, and its pursuit of a comprehensive, just and sustainable peace in line with international law and the UN Charter. Russia’s war of aggression against Ukraine poses a fundamental threat not only to Ukraine but also to the European and global security. The EU’s contribution to Ukraine’s self-defence is a crucial investment in the EU’s own security. In this vein, the European Union and Member States will contribute, together with partners, to future security commitments to Ukraine, which will help Ukraine to defend itself, resist destabilization efforts and deter acts of aggression in the future. There is no defence without a defence industry. Ukraine is heavily dependent on military support made available by the EU and its Member States, including due to its largely destroyed defence industrial base. Russia’s military aggression against Ukraine has marked the dramatic return of territorial conflict and high-intensity warfare on European soil. The production capacity of the European Defence Technological and Industrial Base (EDTIB) has been tailored to respond primarily to limited Member States needs, mostly along national dividing lines, due to decades of public underinvestment. In such a scenario, defence companies often faced the need to reduce production rates in order to keep production lines afloat and maintain skilled personnel, while producing limited quantity of defence systems for national customers. Today, for many European defence companies the export of defence equipment to non-EU customers is a major market. The surge of demand for certain defence products in Europe caused by the radically changed security environment happened against this backdrop of an EDTIB constrained by limited “peace time” production capacity. On the long run, this situation raises the question of defence industrial readiness in Europe, i.e. the capacity of the EDTIB to respond effectively (in time and scale) to changes in European demand for defence products. This is closely linked to the broader challenge of security of supply (SoS) of defence equipment in Europe. Although this topic is not new to EU Member States, the recent ammunition plan has put it in the spotlight, by raising the question of the EDTIB’s ability to ensure Europe’s SoS of defence equipment both in peace and war times. Following the outbreak of the war and the invitation of the Versailles declaration of March 2022, in May 2022, the Commission, and the High Representative of the Union for Foreign Affairs and Security Policy (“the High Representative”)/Head of the European Defence Agency (EDA) adopted the Joint Communication on Defence Investment Gaps Analysis and Way Forward (JOIN/2022/24 final). The Joint Communication highlighted that the past decades of underinvestment in defence from Member States resulted into both capability and industrial gaps within the Union. Since the presentation of the Joint Communication of May 2022, several measures have been tabled to react to the most immediate consequences of Russia’s war of aggression against Ukraine: – As announced in the Joint Communication of May 2022, the Commission, and the High Representative/Head of Agency established the Defence Joint Procurement Task Force (DJPTF) to work with Member States to support the coordination of their very short-term procurement needs. The Task Force focused on de-confliction and coordination to avoid a race to secure orders. The Task Force also established an aggregate estimate of needs and mapped and highlight ed the need for expansion of the EU industrial manufacturing capacities necessary to answer the needs. – Also, as announced in the Joint Communication of May 2022, in July 2022 the Commission presented the European Defence Industrial Reinforcement through common Procurement Act (EDIRPA) , aimed at ince n tivising through financial support, Member States’ cooperation on procurement of the most urgent and critical defence equipment. EDIRPA was adopted by co-legislators on 18 October 2023 and contributes to strengthen the adaptation of Union’s defence industry to structural market changes. EDIRPA will end on 31 December 2025. – The capability gaps highlighted by the Joint Communication of May 2022 were various, but in light of the evolution of the situation in Ukraine, a specific pressing need for ground - to - ground ammunition and artillery ammunition, as well as missiles emerged. This was formally recognised by the Council, which agreed on 20 March 2023 on a three-track approach for the delivery and joint procurement of ammunition for Ukraine . In this context, in M ay 2023 the Commission tabled a new proposal for a Regulation on supporting ammunition production (ASAP) to face the sudden surge of demand for these products and urgently enable their timely availability, by mobilising EU budget to support investments in the ramp up of the EDTIB’s production capacities in this field. ASAP was adopted by co-legislators on 20 July 2023. It will end on 30 June 2025. The unlawful war of Russia against Ukraine not only raised urgent challenges for the EU and its Member States, but its continuation over time also keeps aggravating structural issues affecting the competitiveness of the EDTIB and questions its ability to ensure a sufficient level of SoS to Member States. Hence, the EU now needs to move from punctual emergency responses (illustrated by the above-described measures) to EU defence industrial readiness , from securing the availability of consumables in the requisite volumes during crisis times, to ensuring the timely delivery of tomorrow’s high end critical capabilities in the coming years. This is the exact purpose of the European defence industrial strategy (EDIS) presented on 5 March. In order to implement the orientations set out in EDIS as well as the actions it announces, the Commission proposes a new regulation on the European defence Industry Programme (EDIP) . Announced by the Joint Communication of May 2022, and called for by the European Council, EDIP aims to reconcile the urgent with the long term , by maintaining support for the EDTIB under this Multiannual Financial Framework (MFF) and preparing for the EU’s defence industrial readiness for the future. In doing so, EDIP will translate in effect part of EDIS as its action is structured around 3 main pillars. - Strengthen the competitiveness and responsiveness of the EDTIB . In order to increase efforts to aggregate and harmonise European demand for defence equipment requirements from the EDTIB, EDIP proposes a ready-to-use legal framework, the Structures for European Armament Programme ( S EAP ), for cooperating and jointly managing defence equipment throughout its life cycle. In a similar logic, EDIP extends the EDIRPA logic beyond 2025, to continue to defragment and harmonise European demand. EDIP also replicate s the logic of ASAP to support the EDTIB’s productive investments, help s the EDTIB to move towards more flexible production capacities, as well as ensure s the productization phase of EDF projects. In order to enhance access to finance for the EDTIB, EDIP also entails the establishment of a fund in order to leverage, de-risk and speed-up investments needed to increase the defence manufacturing capacities of EU-based SMEs and small mid-caps, building on the Commission’s experience of the ASAP “ramp up fund” as well as the successful set - up of the EUDIS’ defence equity facility. - Enhance the ability of the EDTIB to ensure the timely availability and supply of defence products . EDIP’s aims is to support Member States’ efforts in pursuing the highest possible level of SoS when it comes to defence equipment, by creating an EU wide SoS regime. The latter would also enhance M ember S tate ’s trust in cross-border supply chains, creating at the same time a key competitive advantage for the EDTIB. A comprehensive crisis management framework would enable the coordination of responses to possible future supply crises on specific defence equipment or along their supply chains. - Contribute to the recovery, reconstruction and modernisation of the Ukraine Defence Technological and Industrial Base (Ukrainian DTIB) . Ukraine’s current needs in military equipment far exceed its industrial production capacities while the EU and its M ember S tates provide military assistance from their own - largely depleted – stocks and with a defence industry tailored for peace time. In this context, both industry’s interests are to engage in a more in-depth cooperation. Failing to create a strong relationship between the respective industrial bases may result in a missed business opportunity in the short-term and in economic and strategic dependencies in the medium to long-term. In view of Ukraine’s future accession to the EU, it is necessary that EDIP enhances cooperation with Ukraine at industrial level. As part of the EU’s future security commitments to Ukraine 1 , the EU should foster greater cooperation with the Ukrainian DTIB to boost its capacity to deliver for the immediate needs, as well as to work towards alignment of standards and improved interoperability. A stronger cooperation with the Ukrainian DTIB will contribute to strengthen Ukraine’s ability to defend itself, and will benefit the EDTIB’s capacity to support both Member States’ and Ukraine’s needs. 
Revised version (Article 12b ):
1a. By way of derogation from Article 3, the competent authorities may authorise the sale, supply or transfer of goods and technologies listed in Annex II until 31 December 2024, where such sale, supply or transfer is strictly necessary for the divestment from a joint venture incorporated or constituted under the law of a Member State before 24 February 2022, involving a Russian legal person, entity or body, and operating a gas pipeline infrastructure between Russia and third countries. 2. By way of derogation from Articles 3g and 3i, the competent authorities may authorise the import or transfer of goods listed in Annexes XVII and XXI until 31 December 2024, where such import or transfer is strictly necessary for the divestment from Russia or the wind-down of business activities in Russia, provided that the following conditions are fulfilled: (a) the goods are owned by a national of a Member State or by a legal person, entity or body which is incorporated or constituted under the law of a Member State or by legal persons, entities or bodies established in Russia that are owned by, or solely or jointly controlled by, a legal person, entity or body which is incorporated or constituted under the law of a Member State; and (b) the concerned goods were physically located in Russia before the relevant prohibitions in Articles 3g and 3i entered into force in respect of those goods. 2a. By way of derogation from Article 5n, the competent authorities may authorise the continuation of the provision of services listed therein until 31 December 2024 where such provision of services is strictly necessary for the divestment from Russia or the wind-down of business activities in Russia, provided that the following conditions are fulfilled: (a) such services are provided to and for the exclusive benefit of the legal persons, entities or bodies resulting from the divestment; and (b) the competent authorities deciding on requests for authorisations have no reasonable grounds to believe that the services might be provided, directly or indirectly, to the Government of Russia or a military end-user or have a military end-use in Russia. 2b. By way of derogation from Article 5n(2), the competent authorities may authorise the provision, until 31 March 2024, of legal advisory services which are legally required for the completion of a sale or transfer of proprietary rights directly or indirectly owned by legal persons, entities or bodies established in Russia in a legal person, entity or body established in the Union. 3. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraphs 1, 1a, 2, 2a or 2b within two weeks of the authorisation. 4. All authorisations referred to in paragraph 1 with respect to goods and technologies listed in Annex VII as well as in Annex I to Regulation (EU) 2021/821 shall be issued by electronic means, whenever possible, on forms containing at least all the elements of, and in the order provided for in, the model C set out in Annex IX.
Article 12c 
1. The competent authorities shall exchange information with the other Member States and the Commission on authorisations granted pursuant to paragraph 1 of Article 12b in relation to goods and technologies listed in Annex VII as well as in Annex I to Regulation (EU) 2021/821. The exchange of information shall be carried out using the electronic system provided pursuant to Article 23(6) of Regulation (EU) 2021/821. 2. Information received as a result of the application of this Article shall be used only for the purpose for which it was requested, including the exchanges mentioned in paragraph 4 of Article 2d. 3. Member States and the Commission shall ensure the protection of confidential information acquired in the application of this Article in accordance with Union law and the respective national law. 4. Member States and the Commission shall ensure that classified information provided or exchanged under this Article is not downgraded or declassified without the prior written consent of the originator.
Article 12d 
The prohibitions laid down in this Regulation shall not apply to the provision of pilot services which are necessary for reasons of maritime safety.
Article 12e 
1. For the purposes of the prohibitions on importing goods provided for in this Regulation, goods physically in the Union may be released as provided for in Article 5, point (26) of the Union Customs Code ( 36 ) by the customs authorities provided that they have been presented to customs in accordance with Article 134 of the Union Customs Code before the entry into force or applicability date of the respective import prohibitions, whichever is latest. 2. All procedural steps necessary for the release referred to in paragraphs 1 and 5 of the relevant goods pursuant to the Union Customs Code shall be allowed. 3. The customs authorities shall not allow the release of the goods if they have reasonable grounds to suspect circumvention and shall not authorise the re-export of the goods to Russia. 4. Payments in relation to such goods shall be consistent with the provisions and objectives of this Regulation, in particular the prohibition on purchasing, and Regulation (EU) No 269/2014. 5. Goods physically in the Union and presented to customs prior to 26 February 2023 which were stopped in application of this Regulation may be released by the customs authorities under the conditions provided for in paragraphs 1, 2, 3 and 4.
Article 12f 
1. It shall be prohibited to sell, supply, transfer or export, directly or indirectly, goods and technology as listed in Annex XXXIII, whether or not originating in the Union, to any natural or legal person, entity or body in the third country specified in that Annex. 3. Annex XXXIII shall only include sensitive dual-use goods and technology, or goods and technology that might contribute to the enhancement of Russia’s military, technological or industrial capacities or to the development of Russia’s defence and security sector, in a way that strengthens its ability to wage war, and whose export to Russia is prohibited under this Regulation and that present a high and continuous risk of being sold, supplied, transferred or exported from third countries to Russia after being sold, supplied, transferred or exported from the Union. Annex XXXIII shall specify, for each item of listed goods or technology, the third countries to which the sale, supply, transfer or export is prohibited. Annex XXXIII shall only include third countries that have been identified by the Council as having systematically and persistently failed to prevent the sale, supply, transfer or export to Russia of goods and technology, as listed in that Annex, exported from the Union, despite the Union’s prior outreach and assistance to the country in question. 4. If the sale, supply, transfer or export of goods or technology listed in Annex XXXIII to a natural or legal person, entity or body in Russia or for use in Russia is not prohibited under certain exemptions provided for in this Regulation, their sale, supply, transfer or export to a natural or legal person, entity or body in the third country specified shall not be prohibited, provided that the same conditions applicable under this Regulation for export to Russia or for use in Russia are fulfilled. 5. If the sale, supply, transfer or export of goods or technology listed in Annex XXXIII to a natural or legal person, entity or body in Russia or for use in Russia can be authorised by the competent authorities in accordance with this Regulation, their sale, supply, transfer or export to a natural or legal person, entity or body in the third country specified may be authorised by the competent authorities under the same conditions applicable to derogations for exports to Russia or for use in Russia.
Article 12g 
1. When selling, supplying, transferring or exporting to a third country, with the exception of partner countries listed in Annex VIII to this Regulation, goods or technology as listed in Annexes XI, XX and XXXV to this Regulation, common high priority items as listed in Annex XL to this Regulation, or firearms and ammunition as listed in Annex I to Regulation (EU) No 258/2012, exporters shall, as of 20 March 2024, contractually prohibit re-exportation to Russia and re-exportation for use in Russia. 2. Paragraph 1 shall not apply to the execution of contracts concluded before 19 December 2023 until 20 December 2024 or until their expiry date, whichever is earlier. 3. In application of paragraph 1, exporters shall ensure that the agreement with the third-country counterpart contains adequate remedies in the event of a breach of a contractual obligation concluded in accordance with paragraph 1. 4. If the third-country counterpart breaches any of the contractual obligations concluded in accordance with paragraph 1, exporters shall inform the competent authority of the Member State where they are resident or established as soon as they become aware of the breach. 5. Member States shall inform each other and the Commission of detected instances of a breach or circumvention of a contractual obligation concluded in accordance with paragraph 1.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal On 24 February 2022, Russia launched a full-scale military invasion of Ukraine, with devastating consequences for Ukraine and its people. Two years of intense fighting, heavy artillery shelling and airstrikes have resulted in high numbers of civilian casualties and immense human suffering. Russia’s war of aggression has caused extensive damage to civilian and defence critical infrastructure, production capacities and services across Ukraine and the wholesale destruction of cities and towns in some parts of the country. The resulting humanitarian crisis has displaced millions of Ukrainians from their homes and left many in desperate need of food, shelter and medical assistance. To this day, Russian aerial strikes continue to attack targets throughout the country. It will take years, if not decades, to heal the trauma of this senseless war. The EU supports Ukraine’s independence, sovereignty and territorial integrity within its internationally recognised borders, its inherent right of self-defence, and its pursuit of a comprehensive, just and sustainable peace in line with international law and the UN Charter. Russia’s war of aggression against Ukraine poses a fundamental threat not only to Ukraine but also to the European and global security. The EU’s contribution to Ukraine’s self-defence is a crucial investment in the EU’s own security. In this vein, the European Union and Member States will contribute, together with partners, to future security commitments to Ukraine, which will help Ukraine to defend itself, resist destabilization efforts and deter acts of aggression in the future. There is no defence without a defence industry. Ukraine is heavily dependent on military support made available by the EU and its Member States, including due to its largely destroyed defence industrial base. Russia’s military aggression against Ukraine has marked the dramatic return of territorial conflict and high-intensity warfare on European soil. The production capacity of the European Defence Technological and Industrial Base (EDTIB) has been tailored to respond primarily to limited Member States needs, mostly along national dividing lines, due to decades of public underinvestment. In such a scenario, defence companies often faced the need to reduce production rates in order to keep production lines afloat and maintain skilled personnel, while producing limited quantity of defence systems for national customers. Today, for many European defence companies the export of defence equipment to non-EU customers is a major market. The surge of demand for certain defence products in Europe caused by the radically changed security environment happened against this backdrop of an EDTIB constrained by limited “peace time” production capacity. On the long run, this situation raises the question of defence industrial readiness in Europe, i.e. the capacity of the EDTIB to respond effectively (in time and scale) to changes in European demand for defence products. This is closely linked to the broader challenge of security of supply (SoS) of defence equipment in Europe. Although this topic is not new to EU Member States, the recent ammunition plan has put it in the spotlight, by raising the question of the EDTIB’s ability to ensure Europe’s SoS of defence equipment both in peace and war times. Following the outbreak of the war and the invitation of the Versailles declaration of March 2022, in May 2022, the Commission, and the High Representative of the Union for Foreign Affairs and Security Policy (“the High Representative”)/Head of the European Defence Agency (EDA) adopted the Joint Communication on Defence Investment Gaps Analysis and Way Forward (JOIN/2022/24 final). The Joint Communication highlighted that the past decades of underinvestment in defence from Member States resulted into both capability and industrial gaps within the Union. Since the presentation of the Joint Communication of May 2022, several measures have been tabled to react to the most immediate consequences of Russia’s war of aggression against Ukraine: – As announced in the Joint Communication of May 2022, the Commission, and the High Representative/Head of Agency established the Defence Joint Procurement Task Force (DJPTF) to work with Member States to support the coordination of their very short-term procurement needs. The Task Force focused on de-confliction and coordination to avoid a race to secure orders. The Task Force also established an aggregate estimate of needs and mapped and highlight ed the need for expansion of the EU industrial manufacturing capacities necessary to answer the needs. – Also, as announced in the Joint Communication of May 2022, in July 2022 the Commission presented the European Defence Industrial Reinforcement through common Procurement Act (EDIRPA) , aimed at ince n tivising through financial support, Member States’ cooperation on procurement of the most urgent and critical defence equipment. EDIRPA was adopted by co-legislators on 18 October 2023 and contributes to strengthen the adaptation of Union’s defence industry to structural market changes. EDIRPA will end on 31 December 2025. – The capability gaps highlighted by the Joint Communication of May 2022 were various, but in light of the evolution of the situation in Ukraine, a specific pressing need for ground - to - ground ammunition and artillery ammunition, as well as missiles emerged. This was formally recognised by the Council, which agreed on 20 March 2023 on a three-track approach for the delivery and joint procurement of ammunition for Ukraine . In this context, in M ay 2023 the Commission tabled a new proposal for a Regulation on supporting ammunition production (ASAP) to face the sudden surge of demand for these products and urgently enable their timely availability, by mobilising EU budget to support investments in the ramp up of the EDTIB’s production capacities in this field. ASAP was adopted by co-legislators on 20 July 2023. It will end on 30 June 2025. The unlawful war of Russia against Ukraine not only raised urgent challenges for the EU and its Member States, but its continuation over time also keeps aggravating structural issues affecting the competitiveness of the EDTIB and questions its ability to ensure a sufficient level of SoS to Member States. Hence, the EU now needs to move from punctual emergency responses (illustrated by the above-described measures) to EU defence industrial readiness , from securing the availability of consumables in the requisite volumes during crisis times, to ensuring the timely delivery of tomorrow’s high end critical capabilities in the coming years. This is the exact purpose of the European defence industrial strategy (EDIS) presented on 5 March. In order to implement the orientations set out in EDIS as well as the actions it announces, the Commission proposes a new regulation on the European defence Industry Programme (EDIP) . Announced by the Joint Communication of May 2022, and called for by the European Council, EDIP aims to reconcile the urgent with the long term , by maintaining support for the EDTIB under this Multiannual Financial Framework (MFF) and preparing for the EU’s defence industrial readiness for the future. In doing so, EDIP will translate in effect part of EDIS as its action is structured around 3 main pillars. - Strengthen the competitiveness and responsiveness of the EDTIB . In order to increase efforts to aggregate and harmonise European demand for defence equipment requirements from the EDTIB, EDIP proposes a ready-to-use legal framework, the Structures for European Armament Programme ( S EAP ), for cooperating and jointly managing defence equipment throughout its life cycle. In a similar logic, EDIP extends the EDIRPA logic beyond 2025, to continue to defragment and harmonise European demand. EDIP also replicate s the logic of ASAP to support the EDTIB’s productive investments, help s the EDTIB to move towards more flexible production capacities, as well as ensure s the productization phase of EDF projects. In order to enhance access to finance for the EDTIB, EDIP also entails the establishment of a fund in order to leverage, de-risk and speed-up investments needed to increase the defence manufacturing capacities of EU-based SMEs and small mid-caps, building on the Commission’s experience of the ASAP “ramp up fund” as well as the successful set - up of the EUDIS’ defence equity facility. - Enhance the ability of the EDTIB to ensure the timely availability and supply of defence products . EDIP’s aims is to support Member States’ efforts in pursuing the highest possible level of SoS when it comes to defence equipment, by creating an EU wide SoS regime. The latter would also enhance M ember S tate ’s trust in cross-border supply chains, creating at the same time a key competitive advantage for the EDTIB. A comprehensive crisis management framework would enable the coordination of responses to possible future supply crises on specific defence equipment or along their supply chains. - Contribute to the recovery, reconstruction and modernisation of the Ukraine Defence Technological and Industrial Base (Ukrainian DTIB) . Ukraine’s current needs in military equipment far exceed its industrial production capacities while the EU and its M ember S tates provide military assistance from their own - largely depleted – stocks and with a defence industry tailored for peace time. In this context, both industry’s interests are to engage in a more in-depth cooperation. Failing to create a strong relationship between the respective industrial bases may result in a missed business opportunity in the short-term and in economic and strategic dependencies in the medium to long-term. In view of Ukraine’s future accession to the EU, it is necessary that EDIP enhances cooperation with Ukraine at industrial level. As part of the EU’s future security commitments to Ukraine 1 , the EU should foster greater cooperation with the Ukrainian DTIB to boost its capacity to deliver for the immediate needs, as well as to work towards alignment of standards and improved interoperability. A stronger cooperation with the Ukrainian DTIB will contribute to strengthen Ukraine’s ability to defend itself, and will benefit the EDTIB’s capacity to support both Member States’ and Ukraine’s needs. 
Revised version (Article 12g ):
1. When selling, supplying, transferring or exporting to a third country, with the exception of partner countries listed in Annex VIII to this Regulation, goods or technology as listed in Annexes XI, XX and XXXV to this Regulation, common high priority items as listed in Annex XL to this Regulation, or firearms and ammunition as listed in Annex I to Regulation (EU) No 258/2012, exporters shall, as of 20 March 2024, contractually prohibit re-exportation to Russia and re-exportation for use in Russia. 2a. Paragraph 1 shall not apply to public contracts concluded with a public authority in a third country or with an international organisation. 2b. Exporters shall inform the competent authority of the Member State where they are resident or established of any public contract they concluded that benefited from the exemption under paragraph 2a, within 2 weeks of its conclusion. The Member State concerned shall inform the other Member States and the Commission of any information received under this paragraph within 2 weeks of its receipt. 3. In application of paragraph 1, exporters shall ensure that the agreement with the third-country counterpart contains adequate remedies in the event of a breach of a contractual obligation concluded in accordance with paragraph 1. 4. If the third-country counterpart breaches any of the contractual obligations concluded in accordance with paragraph 1, exporters shall inform the competent authority of the Member State where they are resident or established as soon as they become aware of the breach. 5. Member States shall inform each other and the Commission of detected instances of a breach or circumvention of a contractual obligation concluded in accordance with paragraph 1.
Article 13 
This Regulation shall apply: (a) within the territory of the Union; (b) on board any aircraft or any vessel under the jurisdiction of a Member State; (c) to any person inside or outside the territory of the Union who is a national of a Member State; (d) to any legal person, entity or body, inside or outside the territory of the Union, which is incorporated or constituted under the law of a Member State; (e) to any legal person, entity or body in respect of any business done in whole or in part within the Union.
Article 14 
This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union .