Article 1 Subject matter
This Regulation sets up nine joint undertakings within the meaning of Article 187 TFEU for the implementation of institutionalised European partnerships referred to in Article 10(1), point (c), of the Horizon Europe Regulation. It determines their objectives and tasks, membership, organisation and other operating rules.
Article 2 Definitions
For the purposes of this Regulation, the following definitions apply: 1. ‘member other than the Union’ means any participating state, private member or international organisation that is a member of a joint undertaking; 2. ‘founding member’ means any legal entity established in a Member State, a country associated to Horizon Europe, or an international organisation that is identified as a member of a joint undertaking in this Regulation or in one of its Annexes; 3. ‘associated member’ means any legal entity established in a Member State, a country associated to Horizon Europe, or an international organisation that accedes to a joint undertaking by signing a letter of commitment in accordance with Article 6(3) and subject to an approval in accordance with Article 7; 4. ‘participating state’ means any Member State or country associated to Horizon Europe upon notification of its participation in the activities of the relevant joint undertaking by means of a letter of commitment; 5. ‘private member’ means any legal entity established under public or private law that is a member of a joint undertaking other than the Union, participating states or international organisations; 6. ‘constituent entities’ means the entities that constitute a private member of a joint undertaking, where the private member is an association according to that member’s statutes; 7. ‘contributing partner’ means any country, international organisation or legal entity other than a member of a joint undertaking, or a constituent entity of a member or an affiliated entity of either, that supports the objectives of a joint undertaking in its specific area of research and whose application has been approved in accordance with Article 9; 8. ‘in-kind contributions to operational activities’ means contributions by private members, constituent entities or the affiliated entities of either, by international organisations and by contributing partners, consisting of the eligible costs incurred by them in implementing indirect actions less the contribution of that joint undertaking and of the participating states of that joint undertaking to those costs; 9. ‘additional activity’ means an activity, included in the annual additional activities plan annexed to the main part of the work programme, that does not receive financial support from the joint undertaking but contributes to its objectives and is directly linked to the uptake of results from projects under that joint undertaking or its preceding initiatives or that has a significant Union added value; 10. ‘in-kind contributions to additional activities’ means contributions by the private members, constituent entities or the affiliated entities of either, and by international organisations, consisting of the costs incurred by them in implementing additional activities less any contribution to those costs from the Union and from the participating states of that joint undertaking; 11. ‘preceding initiative’ means any partnership in one of the areas covered by a joint undertaking that received financial support from one of the previous Union framework programmes for research; 12. ‘Strategic Research and Innovation Agenda’ means the document covering the duration of Horizon Europe that identifies the key priorities and the essential technologies and innovations required to achieve the objectives of a joint undertaking; 13. ‘work programme’ means the document referred to in Article 2, point (25), of the Horizon Europe Regulation; 14. ‘conflict of interest’ means a situation involving a financial actor or other person as referred to in Article 61 of Regulation (EU, Euratom) 2018/1046; 15. ‘newcomer’ means an entity that is, for the first time, a beneficiary of a grant awarded by an individual joint undertaking or its preceding initiative and that is not a founding member of that joint undertaking or its preceding initiative.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 2 Definitions):
For the purposes of this Regulation, the following definitions apply: 1. ‘member other than the Union’ means any participating state, private member or international organisation that is a member of a joint undertaking; 2. ‘founding member’ means any legal entity established in a Member State, a country associated to Horizon Europe or, where applicable, associated with DEP, or an international organisation that is identified as a member of a joint undertaking in this Regulation or in one of its Annexes; 3. ‘associated member’ means any legal entity established in a Member State, a country associated to Horizon Europe or, where applicable, associated to DEP, or an international organisation that accedes to a joint undertaking by signing a letter of commitment in accordance with Article 6(3) and subject to an approval in accordance with Article 7; 4. ‘participating state’ means any Member State or country associated to Horizon Europe or, where applicable, associated to DEP upon notification of its participation in the activities of the relevant joint undertaking by means of a letter of commitment; 5. ‘private member’ means any legal entity established under public or private law that is a member of a joint undertaking other than the Union, participating states or international organisations; 6. ‘constituent entities’ means the entities that constitute a private member of a joint undertaking, where the private member is an association according to that member’s statutes; 7. ‘contributing partner’ means any country, international organisation or legal entity other than a member of a joint undertaking, or a constituent entity of a member or an affiliated entity of either, that supports the objectives of a joint undertaking in its specific area of research and whose application has been approved in accordance with Article 9; 8. ‘in-kind contributions to operational activities’ means contributions by private members, constituent entities or the affiliated entities of either, by international organisations and by contributing partners, consisting of the eligible costs incurred by them in implementing indirect actions less the contribution of that joint undertaking and of the participating states of that joint undertaking to those costs; 9. ‘additional activity’ means an activity, included in the annual additional activities plan annexed to the main part of the work programme, that does not receive financial support from the joint undertaking but contributes to its objectives and is directly linked to the uptake of results from projects under that joint undertaking or its preceding initiatives or that has a significant Union added value; 10. ‘in-kind contributions to additional activities’ means contributions by the private members, constituent entities or the affiliated entities of either, and by international organisations, consisting of the costs incurred by them in implementing additional activities less any contribution to those costs from the Union and from the participating states of that joint undertaking; 11. ‘preceding initiative’ means any partnership in one of the areas covered by a joint undertaking that received financial support from one of the previous Union framework programmes for research; 12. ‘Strategic Research and Innovation Agenda’ means the document covering the duration of Horizon Europe that identifies the key priorities and the essential technologies and innovations required to achieve the objectives of a joint undertaking; 13. ‘work programme’ means the document referred to in Article 2, point (25), of the Horizon Europe Regulation; 14. ‘conflict of interest’ means a situation involving a financial actor or other person as referred to in Article 61 of Regulation (EU, Euratom) 2018/1046; 15. ‘newcomer’ means an entity that is, for the first time, a beneficiary of a grant awarded by an individual joint undertaking or its preceding initiative and that is not a founding member of that joint undertaking or its preceding initiative.
Article 3 Establishment
1. The following joint undertakings are set up as Union bodies for a period ending on 31 December 2031 and financed under the MFF 2021-2027: (a) the Circular Bio-based Europe Joint Undertaking; (b) the Clean Aviation Joint Undertaking; (c) the Clean Hydrogen Joint Undertaking; (d) the Europe’s Rail Joint Undertaking; (e) the Global Health EDCTP3 Joint Undertaking; (f) the Innovative Health Initiative Joint Undertaking; (g) the Key Digital Technologies Joint Undertaking; (h) the Single European Sky ATM Research 3 Joint Undertaking; (i) the Smart Networks and Services Joint Undertaking. 2. The Union bodies referred to in paragraph 1 shall be collectively referred to as the ‘joint undertakings’. 3. In order to take into account the duration of Horizon Europe, calls for proposals under the joint undertakings shall be launched at the latest by 31 December 2027. In duly justified cases, calls for proposals may be launched by 31 December 2028, at the latest. 4. The joint undertakings shall have legal personality. In each of the Member States, they shall enjoy the most extensive legal capacity accorded to legal persons under the laws of that Member State. They may, in particular, acquire or dispose of movable and immovable property and may be a party to legal proceedings. 5. The seat of the joint undertakings shall be in Brussels, Belgium. 6. Unless specified otherwise, the provisions set out in Part One and Part Three shall apply to all joint undertakings. The provisions set out in Part Two shall apply to individual joint undertakings, as appropriate. 7. For the purposes of Parts One and Three and unless specified otherwise, a reference to an individual joint undertaking or body shall denote a reference to each joint undertaking or each equivalent body of the individual joint undertakings and its competences in relation to other bodies of the same joint undertaking.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 3 Establishment):
2. The Union bodies referred to in paragraph 1 shall be collectively referred to as the ‘joint undertakings’. 3. In order to take into account the duration of Horizon Europe and, where applicable, DEP, calls for proposals under the joint undertakings shall be launched at the latest by 31 December 2027. In duly justified cases, calls for proposals may be launched by 31 December 2028, at the latest. 4. The joint undertakings shall have legal personality. In each of the Member States, they shall enjoy the most extensive legal capacity accorded to legal persons under the laws of that Member State. They may, in particular, acquire or dispose of movable and immovable property and may be a party to legal proceedings. 5. The seat of the joint undertakings shall be in Brussels, Belgium. 6. Unless specified otherwise, the provisions set out in Part One and Part Three shall apply to all joint undertakings. The provisions set out in Part Two shall apply to individual joint undertakings, as appropriate. 7. For the purposes of Parts One and Three and unless specified otherwise, a reference to an individual joint undertaking or body shall denote a reference to each joint undertaking or each equivalent body of the individual joint undertakings and its competences in relation to other bodies of the same joint undertaking.
Article 4 Objectives and principles
1. The joint undertakings referred to in Article 3 of this Regulation shall contribute to the general and specific objectives of the Horizon Europe Regulation as set out in Article 3 thereof. 2. The joint undertakings shall, through the involvement and commitment of partners in designing and implementing a programme of research and innovation activities with European added value, deliver collectively on the following general objectives: (a) strengthening and integrating the scientific, innovation and technological capacities and facilitating collaborative links across the Union to support the creation and diffusion of high-quality new knowledge and skills, in particular with a view to delivering on global challenges, securing and enhancing Union competitiveness, European added value, resilience and sustainability and contributing to a reinforced European Research Area (ERA); (b) securing sustainability-driven global leadership and resilience of Union value chains in key technologies and industries in line with the industrial and SMEs strategies for Europe, the European Green Deal, the European Recovery Plan and other relevant Union policies; (c) developing and accelerating the uptake of innovative solutions throughout the Union addressing climate, environmental, health, digital and other global challenges contributing to Union strategic priorities, accelerating the economic growth of the Union and fostering the innovation ecosystem, while reaching the United Nations Sustainable Development Goals and achieving climate neutrality in the Union at the latest by 2050, in line with the Paris Agreement, thereby improving the quality of life of European citizens. 3. The joint undertakings shall deliver on the following specific objectives: (a) enhance the critical mass and scientific and technological capabilities and competences in collaborative, cross-sectoral, cross policy, cross-border and interdisciplinary research and innovation across the Union as well as facilitate their integration into European ecosystems; (b) accelerate the green and digital transitions as well as economic, social and societal transformations in areas and sectors of strategic importance for Union priorities, in particular to reduce greenhouse gas emissions by 2030 in accordance with the climate and energy targets set in line with the European Green Deal and the European Climate Law; (c) enhance the research and innovation capabilities and performance of existing and new European innovation ecosystem and economic value chains, including in start-ups and SMEs; (d) accelerate the deployment, uptake and diffusion of innovative solutions, technologies, services and skills in reinforced European research and innovation ecosystems and industrial ecosystems, including through wide and early engagement and co-creation with end-users, including SMEs and start-ups, citizens and regulatory and standardisation bodies; (e) deliver environmental, energy, resource-saving, societal, circularity and productivity improvements in new products, technologies, applications and services by exploiting Union capabilities and resources. 4. The joint undertakings shall also have the additional objectives set out in Part Two. 5. In the implementation of the Horizon Europe Regulation, the joint undertakings shall respect the principles set out in Article 7 of that Regulation. 6. The joint undertakings shall adhere to the conditions and criteria for European partnerships set out in Article 10 of and Annex III to the Horizon Europe Regulation.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 4 Objectives and principles):
1. The joint undertakings referred to in Article 3 of this Regulation shall contribute to the general and specific objectives of the Horizon Europe Regulation as set out in Article 3 thereof. 4. The joint undertakings shall also have the additional objectives set out in Part Two. 5. In the implementation of the Horizon Europe Regulation, the joint undertakings shall respect the principles set out in Article 7 of that Regulation. 6. The joint undertakings shall adhere to the conditions and criteria for European partnerships set out in Article 10 of and Annex III to the Horizon Europe Regulation.
Article 5 Operational objectives and tasks
1. The joint undertakings shall adhere to the following operational objectives in accordance with the criteria set out in Annex III to the Horizon Europe Regulation, and contribute to the operational objectives of Horizon Europe set out in the Specific Programme implementing Horizon Europe: (a) reinforce and spread excellence, including by fostering wider participation and boosting collaborative links throughout the Union; (b) strengthen scientific excellence, including by considering, where relevant, state-of-the-art basic and frontier research findings in the implementation of their activities; (c) stimulate research and innovation activities in SMEs and contribute to the creation and scaling-up of innovative companies, in particular start-ups, SMEs and, in exceptional cases, small mid-caps; (d) reinforce the link between research, innovation and, where appropriate, education, training and other policies, including complementarities with national, regional and Union research and innovation policies and activities; (e) strengthening gender mainstreaming, including the integration of gender dimension in the research and innovation content; (f) increase collaboration links in European research and innovation and across sectors and disciplines, including social sciences and humanities; (g) strengthen international cooperation in support of Union policy objectives and international commitments; (h) increase public awareness and acceptance, respond to demand and encourage the diffusion and uptake of new solutions by involving, where appropriate, citizens and end-users in co-design and co-creation processes; (i) encourage exploitation of research and innovation results and actively disseminate and exploit results, in particular for leveraging private investments and for policy development; (j) accelerate industrial transformation and resilience across the value chains, including through improving skills for innovation and advancing digital technology; (k) support the scientific evidence-based implementation of related Union policies, as well as regulatory, standardisation and sustainable investment activities at national, European and global levels. 2. The joint undertakings shall carry out the following tasks by adopting a systemic approach in achieving the objectives: (a) provide financial support, mainly in the form of grants, to research and innovation indirect actions, selected following open, transparent and competitive calls except in duly justified cases specified in their work programme in order to set additional conditions requiring the participation of members of the joint undertaking or their constituent or affiliated entities; (b) develop close cooperation and ensure coordination with other European partnerships, including by dedicating, where appropriate, a part of the joint undertaking’s budget to joint calls; (c) seek and maximise synergies with and, where appropriate, possibilities for further funding from relevant activities and programmes at Union, national and regional level, in particular with those supporting the deployment and uptake of innovative solutions, training, education and regional development, such as Cohesion Policy Funds, or the national Recovery and Resilience Plans; (d) ensure their operations contribute towards the strategic multiannual planning, reporting, monitoring and evaluation and other requirements of Horizon Europe set out in Articles 50 and 52 of the Horizon Europe Regulation, such as the implementation of the common policy feedback framework; (e) promote the involvement of SMEs and start-ups in their activities and ensure the provision of timely information to them, in line with the objectives of Horizon Europe; (f) develop a targeted approach within their Strategic Research and Innovation Agenda to implement measures for attracting newcomers, in particular SMEs, higher education institutions and research organisations, for expanding collaborative networks; (g) mobilise the public and private sector resources needed to achieve the objectives set out in this Regulation; (h) monitor progress towards the achievement of the objectives set out in this Regulation, as well as in accordance with the provisions set out in Article 50 of and Annexes III and V to the Horizon Europe Regulation; (i) define and implement their work programme; (j) liaise with the most extensive range of stakeholders including, but not limited to, decentralised agencies, research organisations and higher education institutions, end users and public authorities, in particular for the purpose of defining the priorities and activities of each joint undertaking as well as to ensure transparency, openness and inclusiveness, and benefits to society; (k) engage in information, communication, publicity and dissemination and exploitation activities by applying mutatis mutandis Article 51 of the Horizon Europe Regulation, including by making the detailed and coherent information on results from funded research and innovation activities available and accessible in a common Horizon Europe e-database, in a timely manner; (l) provide the Commission with the necessary technical, scientific and administrative support to carry out its tasks for the purposes of ensuring the proper functioning and development in the Union of the specific areas addressed by the joint undertaking; (m) contribute to developing a more effective science-policy interface, to fostering open science by ensuring better use of results and to addressing policy needs, as well as to promoting faster exploitation, dissemination and uptake of results in accordance with Articles 14 and 39 of the Horizon Europe Regulation; (n) identify and report, in line with the common policy feedback framework and with strategies and actions to support the European Green Deal objectives, the relevant knowledge acquired from the management of research and innovation projects and their results to the Commission to serve as input for monitoring, evaluating and rectifying, where necessary, existing policy measures or shaping new policy initiatives and decisions; (o) support the Commission in the development and implementation of robust science-based technical screening criteria pursuant to Article 3 of Regulation (EU) 2020/852 on sustainable investments, by monitoring and assessing their implementation within the economic sector in which they operate, in order to provide ad hoc feedback to policy-making, when needed; (p) consider the ‘do no significant harm’ principle pursuant to Article 17 of Regulation (EU) 2020/852 for activities of the joint undertakings falling within the scope of that Regulation and take into account the provisions of that Regulation to improve access to sustainable finance, where relevant; (q) perform any other task necessary to achieve the objectives set out in this Regulation. 3. In addition to the tasks set out in this Article and in Part Two, the joint undertakings may be entrusted with the implementation of additional tasks requiring cumulative, complementary or combined funding between Union programmes.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 5 Operational objectives and tasks):
3. In addition to the tasks set out in this Article and in Part Two, the joint undertakings may be entrusted with the implementation of additional tasks requiring cumulative, complementary or combined funding between Union programmes.
Article 6 Members
1. The members of the joint undertakings referred to in Article 3 shall be the Union, represented by the Commission, and any of the following, as specified in Part Two: (a) participating states; (b) founding members; (c) associated members. 2. Membership of a joint undertaking may not be transferred to a third party without the prior agreement of the governing board referred to in Chapter 3, Section 1 of this Title. 3. A letter of commitment shall be signed by founding members and associated members and shall detail the scope of the membership in terms of content, activities and its duration, as well as the founding members’ and associated members’ contributions to the joint undertaking, including an indication of the envisaged additional activities referred to in Article 11(1), point (b).
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 6 Members):
2. Membership of a joint undertaking may not be transferred to a third party without the prior agreement of the governing board referred to in Chapter 3, Section 1 of this Title. 3. A letter of commitment shall be signed by founding members and associated members and shall detail the scope of the membership in terms of content, activities and its duration, as well as the founding members’ and associated members’ contributions to the joint undertaking, including an indication of the envisaged additional activities referred to in Article 11(1), point (b).
Article 7 Selection of associated members
1. Joint undertakings may launch open and transparent calls for expression of interest with a view to selecting associated members with the potential to contribute to the achievement of the objectives of the joint undertakings. Joint undertakings whose founding members are listed in Annexes I, II and III shall launch such calls. The call for expression of interest shall set out the key capacities needed in order to achieve the objectives of the joint undertaking and may request applicants to provide an indication of their potential contributions. All calls shall be published on the joint undertaking’s website and communicated through all appropriate channels including, where applicable, the states’ representatives group, in order to ensure the widest possible participation in the interest of achieving the objectives of the joint undertaking. 2. The executive director shall assess the applications for membership with the assistance of independent experts and, where appropriate, of relevant bodies of the joint undertaking, on the basis of documented knowledge, experience and added value of the applicant in achieving the objectives of the joint undertaking, the applicant’s financial soundness and long-term commitment for financial and in-kind contributions to the joint undertaking, and taking into account potential conflicts of interest. 3. The governing board shall assess and approve or reject applications for membership.
Article 8 Changes to or termination of membership
1. Any member of a joint undertaking may terminate its membership of that joint undertaking. The termination shall become effective and irrevocable six months after notification to the executive director of the joint undertaking, who shall inform the other members. As from the date of termination, the member shall be discharged from any obligations other than those approved or incurred by the joint undertaking prior to terminating the membership, unless mutually agreed otherwise. 2. Each private member shall inform in a timely manner the joint undertaking of any merger or acquisition between members likely to affect the joint undertaking or any takeover of a member by an entity that is not a member of the joint undertaking. 3. The governing board shall decide whether to terminate the membership of any member referred to in paragraph 2, with a view to ensuring business continuity and protecting the Union’s or the joint undertaking’s interest. The termination shall become effective and irrevocable no later than six months from the decision of the governing board or on the date specified in that decision, whichever is earlier. The member or members concerned shall not participate in the vote of the governing board. 4. Each private member shall inform in a timely manner the joint undertaking of any other significant changes in its ownership, control or composition. Where the Commission considers that the change is likely to affect the Union’s or the joint undertaking’s interest on grounds of security or public order, it may propose to the governing board to terminate the membership of the concerned private member. The governing board shall decide on a termination of the membership of the private member concerned. The private member concerned shall not participate in the vote of the governing board. 5. The termination shall become effective and irrevocable not later than six months from the decision of the governing board or on the date specified in that decision, whichever is earlier. 6. The governing board may terminate the membership of any member that fails to fulfil its obligations pursuant to this Regulation. The procedure set out in Article 28(6) applies mutatis mutandis . 7. Where appropriate, the Commission may request private members to take appropriate measures to ensure that the Union’s and the joint undertaking’s interest on grounds of security or public order are safeguarded. 8. Where there is a change to membership or termination, the joint undertaking shall immediately publish on its website an updated list of its members, together with the date when such change shall take effect. 9. Where appropriate and subject to Article 16(3), the governing board shall decide on a redistribution of the voting rights in the governing board due to the change to membership or due to termination.
Article 9 Contributing partners
1. Any candidate contributing partner as defined in Article 2, point (7), shall submit a letter of endorsement to the governing board. The letter of endorsement shall specify the scope of the partnership in terms of subject matter, activities and their duration and detail the applicant’s contribution to the joint undertaking. 2. The governing board shall assess the letter of endorsement and shall approve or reject the application. 3. Contributing partners shall not have voting rights in the governing board of a joint undertaking.
Article 10 Union financial contribution
1. The Union financial contribution to the joint undertakings, including European Economic Area (EEA) appropriations, shall cover administrative and operational costs up to the maximum amounts specified in Part Two, provided that that amount is at least matched by the contribution of members other than the Union or their constituent or affiliated entities. 2. The amount of the Union contribution specified in Part Two may be increased with contributions from third countries associated to Horizon Europe in line with Article 16(5) of the Horizon Europe Regulation and provided that the total amount by which the Union contribution is increased is at least matched by the contribution of members other than the Union, or their constituent or affiliated entities. 3. The Union contribution shall be paid from the appropriations in the general budget of the Union allocated to the Specific Programme implementing Horizon Europe, in accordance with Article 62(1), point (c)(iv), and Article 154 of Regulation (EU, Euratom) 2018/1046 in the case of bodies referred to in Article 71 of that Regulation. 4. Additional Union funds complementing the contribution referred to in paragraph 3 of this Article may be entrusted to the joint undertakings in accordance with Article 62(1), point (c)(iv), and Article 154 of Regulation (EU, Euratom) 2018/1046. 5. For contributions corresponding to additional tasks entrusted to a Joint Undertaking in accordance with paragraph 4 of this Article or Article 5(3) of this Regulation, the requirements of Article 155 of Regulation (EU, Euratom) 2018/1046 are applicable. 6. Additional contributions from Union programmes corresponding to additional tasks entrusted to a joint undertaking pursuant to paragraph 4 of this Article or Article 5(3) shall not be accounted for in the calculation of the Union maximum financial contribution specified in Part Two.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 10 Union financial contribution):
1. The Union financial contribution to the joint undertakings, including European Economic Area (EEA) appropriations, shall cover administrative and operational costs up to the maximum amounts specified in Part Two, provided that that amount is at least matched by the contribution of members other than the Union or their constituent or affiliated entities. 2. The amount of the Union contribution specified in Part Two may be increased with contributions from third countries associated to Horizon Europe in line with Article 16(5) of the Horizon Europe Regulation and, where applicable, to DEP in accordance with Article 10(1), point (d), of Regulation (EU) 2021/694, provided that the total amount by which the Union contribution is increased is at least matched by the contribution of members other than the Union, or their constituent or affiliated entities. 3. The Union contribution shall be paid from the appropriations in the general budget of the Union allocated to the Specific Programme implementing Horizon Europe and, where applicable, to DEP, in accordance with Article 62(1), point (c)(iv), and Article 154 of Regulation (EU, Euratom) 2018/1046 in the case of bodies referred to in Article 71 of that Regulation. 4. Additional Union funds complementing the contribution referred to in paragraph 3 of this Article may be entrusted to the joint undertakings in accordance with Article 62(1), point (c)(iv), and Article 154 of Regulation (EU, Euratom) 2018/1046. 5. For contributions corresponding to additional tasks entrusted to a Joint Undertaking in accordance with paragraph 4 of this Article or Article 5(3) of this Regulation, the requirements of Article 155 of Regulation (EU, Euratom) 2018/1046 are applicable. 6. Additional contributions from Union programmes corresponding to additional tasks entrusted to a joint undertaking pursuant to paragraph 4 of this Article or Article 5(3) shall not be accounted for in the calculation of the Union maximum financial contribution specified in Part Two.
Article 11 Contributions from members other than the Union and contributing partners
1. Unless specified otherwise in Part Two, the contributions of private members shall consist of financial contributions and of any of the following: (a) in-kind contributions to operational activities; (b) in-kind contributions to additional activities, approved by the governing board in accordance with Article 17(2), point (n). 2. Unless specified otherwise in Part Two, the private members shall report by 31 May each year at the latest to their respective governing board on the value of the contributions referred to in paragraph 1, point (b), made in each of the previous financial years. For the purpose of valuing these contributions, the costs shall be determined in accordance with the usual cost accounting practices of the entities concerned, to the applicable accounting standards of the country where the entity is established, and to the applicable International Accounting Standards and International Financial Reporting Standards. The costs shall be certified by an independent audit body appointed by the entity concerned and shall not be audited by the joint undertaking concerned or any Union body. The valuation method may be verified by the joint undertaking concerned should there be any uncertainty arising from the certification. In duly specified cases, the governing board may authorise the use of lump sums or unit costs for valuing those contributions. 3. The contributions from participating states shall consist of financial contributions. The participating states shall report by 31 January of each year to the governing board on the financial contributions made in the previous financial year. 4. The contributions from international organisations shall consist of financial contributions and in-kind contributions to operational activities, unless specified otherwise in Part Two. 5. The contributions from contributing partners shall correspond to the amounts they have committed in the letter of endorsement when becoming a contributing partner and shall consist of financial contributions and in-kind contributions to operational activities. 6. The Commission may terminate, proportionally reduce or suspend the Union financial contribution to a joint undertaking or trigger the winding-up procedure referred to in Article 45 in any of the following cases: (a) where the joint undertaking concerned fails to meet the conditions for the entrustment of the Union contribution; (b) where the members other than the Union or their constituent or affiliated entities fail to contribute, contribute only partially, do not respect the time limits set out in paragraph 2 with regard to the contribution referred to in paragraphs 1, 4 and 5 of this Article; (c) as a result of the evaluations referred to in Article 171(2). 7. The Commission’s decision to terminate, proportionally reduce or suspend the Union financial contribution shall not hinder the reimbursement of eligible costs already incurred by the members other than the Union before the decision is notified to the joint undertaking. 8. Following the procedure set out in Article 28(6), any member of the joint undertaking other than the Union that fails to meet their commitments concerning the contributions referred to in this Regulation shall be disqualified from voting in the governing board until their obligations have been met. Where any such member fails to meet their obligations upon expiry of an additional six-month period, their membership shall be revoked, unless the governing board decides otherwise in duly justified cases. The entity concerned shall not participate in the vote of the governing board.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 11 Contributions from members other than the Union and contributing partners):
2. Unless specified otherwise in Part Two, the private members shall report by 31 May each year at the latest to their respective governing board on the value of the contributions referred to in paragraph 1, point (b), made in each of the previous financial years. For the purpose of valuing these contributions, the costs shall be determined in accordance with the usual cost accounting practices of the entities concerned, to the applicable accounting standards of the country where the entity is established, and to the applicable International Accounting Standards and International Financial Reporting Standards. The costs shall be certified by an independent audit body appointed by the entity concerned and shall not be audited by the joint undertaking concerned or any Union body. The valuation method may be verified by the joint undertaking concerned should there be any uncertainty arising from the certification. In duly specified cases, the governing board may authorise the use of lump sums or unit costs for valuing those contributions. 3. The contributions from participating states shall consist of financial contributions. The participating states shall report by 31 January of each year to the governing board on the financial contributions made in the previous financial year. 4. The contributions from international organisations shall consist of financial contributions and in-kind contributions to operational activities, unless specified otherwise in Part Two. 5. The contributions from contributing partners shall correspond to the amounts they have committed in the letter of endorsement when becoming a contributing partner and shall consist of financial contributions and in-kind contributions to operational activities. 7. The Commission’s decision to terminate, proportionally reduce or suspend the Union financial contribution shall not hinder the reimbursement of eligible costs already incurred by the members other than the Union before the decision is notified to the joint undertaking. 8. Following the procedure set out in Article 28(6), any member of the joint undertaking other than the Union that fails to meet their commitments concerning the contributions referred to in this Regulation shall be disqualified from voting in the governing board until their obligations have been met. Where any such member fails to meet their obligations upon expiry of an additional six-month period, their membership shall be revoked, unless the governing board decides otherwise in duly justified cases. The entity concerned shall not participate in the vote of the governing board.
Article 12 Management of contributions from the participating states
1. Each participating state shall make an indicative commitment of the amount of their national financial contributions to the joint undertaking. Such commitment shall be made prior to the adoption of the work programme. In addition to criteria set out in Article 22 of the Horizon Europe Regulation, the work programme may include, as an annex, eligibility criteria regarding national legal entities. Each participating state shall entrust the joint undertaking with the evaluation of the proposals according to the Horizon Europe Regulation. The selection of proposals shall be based on the ranking list provided by the evaluation committee. The body responsible for selection may deviate from that list in duly justified cases as set out in the work programme to ensure the overall consistency of the portfolio approach. Each participating state shall have a right of veto on all issues concerning the use of its own national financial contributions to the joint undertaking for applicants established in those participating states, on the basis of national strategic priorities. 2. Each participating state shall conclude one or more administrative agreements with the joint undertaking laying down the coordination mechanism for the payment of and reporting on contributions to applicants established in that participating state. This agreement shall include the schedule, conditions of payment, reporting and audit requirements. Each participating state shall strive to synchronise its payment schedule, reporting and audits with those of the joint undertaking and to converge its cost eligibility rules with Horizon Europe’s rules. 3. In the agreement referred to in paragraph 2, each participating state may entrust the joint undertaking with the payment of its contribution to its beneficiaries. After the selection of proposals, the participating state shall commit the amount necessary for payments. The audit authorities of the participating state may audit the respective national contributions.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 12 Management of contributions from the participating states):
1. Each participating state shall make an indicative commitment of the amount of their national financial contributions to the joint undertaking. Such commitment shall be made prior to the adoption of the work programme. In addition to criteria set out in Article 22 of the Horizon Europe Regulation or, in the case of the Chips Joint Undertaking, in Article 18 of Regulation (EU) 2021/694, the work programme may include, as an annex, eligibility criteria regarding national legal entities. Each participating state shall entrust the joint undertaking with the evaluation of the proposals according to the Horizon Europe Regulation and, where applicable, to Regulation (EU) 2021/694. The selection of proposals shall be based on the ranking list provided by the evaluation committee. The body responsible for selection may deviate from that list in duly justified cases as set out in the work programme to ensure the overall consistency of the portfolio approach. Each participating state shall have a right of veto on all issues concerning the use of its own national financial contributions to the joint undertaking for applicants established in those participating states, on the basis of national strategic priorities. 2. Each participating state shall conclude one or more administrative agreements with the joint undertaking laying down the coordination mechanism for the payment of and reporting on contributions to applicants established in that participating state. This agreement shall include the schedule, conditions of payment, reporting and audit requirements. Each participating state shall strive to synchronise its payment schedule, reporting and audits with those of the joint undertaking and to converge its cost eligibility rules with Horizon Europe’s rules. 3. In the agreement referred to in paragraph 2, each participating state may entrust the joint undertaking with the payment of its contribution to its beneficiaries. After the selection of proposals, the participating state shall commit the amount necessary for payments. The audit authorities of the participating state may audit the respective national contributions.
Article 13 Synergies and efficiencies in back office arrangements
1. Joint undertakings shall, within one year following the date of entry into force of this Regulation, operate back office arrangements by concluding service level agreements, unless specified otherwise in Part Two and subject to the need to guarantee an equivalent level of protection of the Union’s financial interest when entrusting budgetary implementation tasks to joint undertakings. Such arrangements shall include at least the following areas, subject to confirmation of viability and following screening of resources: (a) human resource support; (b) legal support; (c) information and communication technologies; (d) accounting (excluding treasury); (e) communication; (f) logistics, events and meeting room management; (g) support for audit and anti-fraud strategy. 2. The back office arrangements referred to in paragraph 1 shall be provided by one or more selected joint undertakings to all others. Interrelated arrangements shall be kept within the same joint undertaking to the extent appropriate for efficient and effective implementation of the tasks concerned in order to ensure a coherent organisational structure. 3. The service level agreements referred to in paragraph 1 shall enable the transfer of appropriations or the recovery of costs for the provision of the common services between the joint undertakings. 4. Without prejudice to the reassignment to other tasks within the joint undertaking, or to other administrative arrangements, which do not impact contracts of employment, staff assigned to the functions transferred for the purpose of the back office arrangements, hosted by another joint undertaking, may be transferred to that joint undertaking. Where a member of the staff concerned expresses his or her refusal in writing, the contract of that member of staff may be terminated by the joint undertaking under the conditions referred to in Article 47 of the Conditions of Employment of Other Servants of the Union, laid down in Council Regulation (EEC, Euratom, ECSC) No 259/68 ( 30 ) (CEOS). 5. Staff referred to in paragraph 4, who are transferred to the joint undertaking hosting the back office arrangements, shall keep the same type of contract and function group and grade, and shall be deemed to have served their entire service in that joint undertaking.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 13 Synergies and efficiencies in back office arrangements):
2. The back office arrangements referred to in paragraph 1 shall be provided by one or more selected joint undertakings to all others. Interrelated arrangements shall be kept within the same joint undertaking to the extent appropriate for efficient and effective implementation of the tasks concerned in order to ensure a coherent organisational structure. 3. The service level agreements referred to in paragraph 1 shall enable the transfer of appropriations or the recovery of costs for the provision of the common services between the joint undertakings. 4. Without prejudice to the reassignment to other tasks within the joint undertaking, or to other administrative arrangements, which do not impact contracts of employment, staff assigned to the functions transferred for the purpose of the back office arrangements, hosted by another joint undertaking, may be transferred to that joint undertaking. Where a member of the staff concerned expresses his or her refusal in writing, the contract of that member of staff may be terminated by the joint undertaking under the conditions referred to in Article 47 of the Conditions of Employment of Other Servants of the Union, laid down in Council Regulation (EEC, Euratom, ECSC) No 259/68 ( 2 ) (CEOS). 5. Staff referred to in paragraph 4, who are transferred to the joint undertaking hosting the back office arrangements, shall keep the same type of contract and function group and grade, and shall be deemed to have served their entire service in that joint undertaking.
Article 14 Bodies of the joint undertakings
1. Each joint undertaking shall have a governing board, an executive director and, except in joint undertakings where states are represented in the Governing Board, a states’ representatives group. 2. A joint undertaking may also have a scientific advisory body and a stakeholders group and any other body in accordance with the provisions in Part Two. 3. When carrying out its tasks, each body of the joint undertakings shall only pursue the objectives set out in this Regulation and shall only act within the scope of the activities of the joint undertaking for the purpose of which it was established. 4. Without prejudice to paragraph 3, bodies of two or more joint undertakings may decide to establish a structured cooperation, including through regular meetings or joint committees.
Article 15 Composition of the governing board
1. The governing board shall be composed of at least two representatives of the Commission on behalf of the Union and of the number of representatives from each of the members of the joint undertaking other than the Union as set out in Part Two in relation to each joint undertaking. 2. Where, in accordance with Article 6(1), point (b), the members of the joint undertaking include participating states, one representative of each participating state shall be appointed to the governing board.
Article 16 Functioning of the governing board
1. The representatives of the members in the governing board shall make every effort to adopt decisions by consensus. Failing consensus a vote shall be held. A decision shall be deemed adopted by a majority of at least 75 % of the votes including the votes of representatives who are absent, but excluding abstentions. Adoption of decisions by the governing board may also be subject to any relevant specific rules set out in Part Two. 2. The presence of the Commission, of at least 50 % of the private members and, if applicable, of at least 50 % of participating states’ delegates is required to enable the governing board to vote. 3. The Union shall hold 50 % of the voting rights, unless specified otherwise in Part Two. The voting rights of the Union shall be indivisible. The voting rights of the members other than the Union shall be subject to the specific rules set out in Part Two. Unless specified otherwise in Part Two, each of the representatives of the members other than the Union shall hold an equal number of votes. 4. The chairperson of the governing board shall be appointed on a rotating annual basis by the Union and by the other representatives, in turn, unless otherwise provided in Part Two. 5. The governing board shall hold ordinary meetings at least twice a year. Extraordinary meetings may be convened at the request of the chairperson, the executive director, the Commission or a majority of the representatives of the members other than the Union or of the participating states. The meetings of the governing board shall be convened by the chairperson and shall take place at the seat of the joint undertaking concerned, unless decided otherwise by the governing board in duly justified cases. The agenda of meetings and decisions shall be made publicly available in a timely manner on the website of the respective joint undertaking. 6. The executive director shall attend the meetings and shall have the right to take part in the deliberations but shall have no voting rights. 7. The chairperson and vice-chairperson of the states’ representatives group shall have observer status in the governing board meetings. The chairpersons of the other bodies of the joint undertaking concerned shall have the right to attend meetings of the governing board as observers whenever issues falling within the scope of their tasks are discussed. Observers may take part in deliberations but shall have no voting rights. 8. Other persons, in particular representatives of other European partnerships, executive or regulatory agencies, regional authorities within the Union and European technology platforms may also be invited to attend by the chairperson as observers on a case-by-case basis subject to the rules on confidentiality and conflict of interest. 9. The representatives of the members shall not be personally liable for actions they have taken in their capacity as representatives on the governing board except in cases of gross negligence or wilful misconduct. 10. The governing board shall adopt its own rules of procedure. 11. The representatives of the members and observers shall be bound by the provisions of a code of conduct which shall establish their obligations to safeguard the integrity and reputation of the joint undertaking concerned and of the Union.
Article 17 Tasks of the governing board
1. The governing board is the decision-making body of each joint undertaking. It shall have overall responsibility for the strategic orientation, coherence with relevant Union objectives and policies, and operations of that joint undertaking and shall supervise the implementation of its activities. The Commission, in its role in the governing board, shall seek to ensure coordination and coherence between the activities of the joint undertakings and the relevant activities of Union funding programmes with a view to promoting synergies and complementarities while avoiding duplications when identifying priorities covered by collaborative research. 2. The governing board shall carry out the following tasks: (a) take measures to implement the joint undertaking’s general, specific and operational objectives, assess their effectiveness and impact, ensure close and timely monitoring of the progress of the joint undertaking’s research and innovation programme and individual actions in relation to the priorities of the Union and the Strategic Research and Innovation Agenda, including in relation to complementarity with regional or national programmes, and take corrective measures where needed to ensure that the joint undertaking meets its objectives; (b) assess, accept or reject applications for membership in accordance with Article 7; (c) assess, accept or reject applications of prospective contributing partners in accordance with Article 9; (d) decide on the termination of the membership in the joint undertaking with regard to any member that does not fulfil its obligations pursuant to this Regulation or in accordance with Article 8(2) and (3); (e) adopt the financial rules of the joint undertaking in accordance with Article 27; (f) adopt the annual budget and the staff establishment plan including the number of permanent and temporary posts by function group and by grade as well as the number of contract staff and seconded national experts expressed in full-time equivalents; (g) decide on the distribution of administrative costs among the members other than the Union, where these members fail to reach an agreement in accordance with Article 28(2), taking into account possible imbalances in their administrative commitments compared to their participation; (h) exercise, in accordance with paragraph 4 of this Article and with regard to the staff of the joint undertaking, the powers conferred by the Staff Regulations of Officials of the European Union laid down in Regulation (EEC, Euratom, ECSC) No 259/68 (the ‘Staff Regulations’) on the Appointing Authority and by the CEOS on the Authority Empowered to Conclude a Contract of Employment (the ‘appointing authority powers’); (i) appoint, dismiss, extend the term of office, provide guidance and monitor the performance of the executive director; (j) adopt the Strategic Research and Innovation Agenda at the beginning of the joint undertaking and update it throughout the duration of Horizon Europe, where necessary. The Strategic Research and Innovation Agenda shall identify the partnership’s targeted impact, foreseen portfolio of activities, measurable expected outcomes, resources, deliverables and milestones within a defined timeframe. It shall also identify the other European partnerships with which the joint undertaking shall establish a formal and regular collaboration and the possibilities for synergies between the joint undertaking’s actions and national or regional initiatives and policies based on information received by the participating states or the states’ representatives group as well as synergies with other Union programmes and policies; (k) adopt the work programme and corresponding expenditure estimates as proposed by the executive director, after taking into consideration the states’ representatives group’s opinion, to implement the Strategic Research and Innovation Agenda, including the administrative activities, the content of the calls for proposals, possible conditions for dealing with ex aequo proposals in accordance with Article 28(3) of Horizon Europe and its work programmes, the research areas subject to joint calls and cooperation with other partnerships and synergies with other Union programmes, the applicable funding rate, and the related rules for submission, evaluation, selection, award and review procedures with particular attention to the feedback to policy requirements; (l) where appropriate, limit the participation in specific actions in the work programme in accordance with Article 22(5) of the Horizon Europe Regulation and in accordance with the position agreed on a case-by-case basis between the Commission and the Member States in the states’ representatives group, unless specified otherwise in Part Two; (m) adopt measures for attracting newcomers, in particularly SMEs, higher education institutions and research organisations, into the activities and actions of the joint undertaking, including where applicable by encouraging them to become private members or constituent entities of the private members; (n) approve the annual additional activities plan, set out in an annex to the main part of the work programme, on the basis of a proposal from the members other than the Union and after having consulted the scientific advisory body or such body as set out in Part Two and after taking into consideration the states’ representatives group’s opinion; (o) provide strategic orientation as regards the collaboration with other European partnerships in accordance with the Strategic Research and Innovation Agenda; (p) assess and approve the consolidated annual activity report, including the corresponding expenditure and the budget dedicated to joint calls with other European partnerships; (q) deliver an opinion on the joint undertaking’s final accounts; (r) make arrangements, as appropriate, for the establishment of an internal audit capability of the joint undertaking; (s) approve the organisational structure of the programme office upon recommendation of the executive director; (t) approve the joint undertaking’s communication policy upon recommendation by the executive director; (u) unless specified otherwise in Part Two, approve the list of actions selected for funding; (v) adopt implementing rules for giving effect to the Staff Regulations and the CEOS in accordance with Article 110(2) of the Staff Regulations; (w) adopt rules on the secondment of national experts to the joint undertakings or the use of trainees; (x) set up, as required, advisory or working groups, including in collaboration with other joint undertakings, in addition to the bodies of the joint undertaking referred to in Article 14, for a determined period of time and to fulfil a specific purpose; (y) submit to the Commission, where appropriate, requests to amend this Regulation; (z) request scientific advice or analysis on specific issues to the joint undertaking’s scientific advisory body or its members, including as regards developments in adjacent sectors; (a1) adopt by the end of 2023 a plan for the phasing-out of the joint undertaking from Horizon Europe funding upon recommendation of the executive director; (b1) ensure the performance of any task that is not specifically assigned to a particular body of a joint undertaking, subject to the possibility that the governing board may assign such task to another body of the joint undertaking concerned. 3. The governing board of a joint undertaking may also be subject to specific rules set out in Part Two. 4. The governing board shall adopt, in accordance with Article 110(2) of the Staff Regulations, a decision based on Article 2(1) of the Staff Regulations and on Article 6 of the CEOS, delegating relevant appointing authority powers to the executive director and defining the conditions under which that delegation of powers can be suspended. The executive director shall be authorised to sub-delegate those powers. 5. The governing board shall take the utmost account of the states’ representatives group’s opinions, recommendations or proposals, if any, before voting. The governing board shall inform without undue delay the states’ representatives group of the follow-up it has given to such opinions, recommendations or proposals, or it shall give reasons if they are not followed up.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 17 Tasks of the governing board):
1. The governing board is the decision-making body of each joint undertaking. It shall have overall responsibility for the strategic orientation, coherence with relevant Union objectives and policies, and operations of that joint undertaking and shall supervise the implementation of its activities. The Commission, in its role in the governing board, shall seek to ensure coordination and coherence between the activities of the joint undertakings and the relevant activities of Union funding programmes with a view to promoting synergies and complementarities while avoiding duplications when identifying priorities covered by collaborative research. 3. The governing board of a joint undertaking may also be subject to specific rules set out in Part Two. 4. The governing board shall adopt, in accordance with Article 110(2) of the Staff Regulations, a decision based on Article 2(1) of the Staff Regulations and on Article 6 of the CEOS, delegating relevant appointing authority powers to the executive director and defining the conditions under which that delegation of powers can be suspended. The executive director shall be authorised to sub-delegate those powers. 5. The governing board shall take the utmost account of the states’ representatives group’s opinions, recommendations or proposals, if any, before voting. The governing board shall inform without undue delay the states’ representatives group of the follow-up it has given to such opinions, recommendations or proposals, or it shall give reasons if they are not followed up.
Article 18 Appointment, dismissal and extension of the term of office of the executive director
1. The Commission shall propose a list of candidates, preferably at least three, for executive director after consultation with the members other than the Union of the joint undertaking. For the purpose of such consultation, each type of members other than the Union of the joint undertaking shall appoint one representative as well as one observer on behalf of the governing board. 2. The executive director shall be appointed by the governing board on the basis of merit and skills, from the list of candidates proposed by the Commission, following an open and transparent selection procedure, which shall respect the principle of gender balance. 3. The executive director shall be a member of staff and shall be engaged as a temporary agent of the joint undertaking under Article 2, point (a), of the CEOS. For the purpose of concluding the contract of the executive director, the joint undertaking shall be represented by the chairperson of the governing board. 4. The term of office of the executive director shall be four years. By the end of that period, the Commission after consulting the members other than the Union shall carry out an assessment of the performance of the executive director and the future tasks and challenges of the joint undertaking. 5. The governing board of the joint undertaking, acting on a proposal from the Commission which takes into account the assessment referred to in paragraph 4, may extend the term of office of the executive director once, for a period of not more than three years. 6. An executive director whose term of office has been extended may not participate in another selection procedure for the same post. 7. An executive director may be dismissed only upon a decision of the governing board acting on a proposal from the Commission, after consulting the states’ representatives group and the members other than the Union of the joint undertaking.
Article 19 Tasks of the executive director
1. The executive director shall be the chief executive responsible for the day-to-day management of the joint undertaking in accordance with the decisions of the governing board. He or she shall provide the governing board with all information necessary for the performance of its functions. Without prejudice to the respective competencies of the Union institutions and the governing board, the executive director shall neither seek nor take instructions from any government or from any other body. 2. The executive director shall be the legal representative of the joint undertaking. He or she shall be accountable to the governing board of the joint undertaking. 3. The executive director shall implement the budget of the joint undertaking and shall ensure coordination between the different bodies and services of the joint undertaking. 4. The executive director shall carry out the following tasks for the joint undertaking: (a) ensure sustainable and efficient management of the joint undertaking and efficient implementation of the work programme; (b) prepare and submit for adoption to the governing board the draft annual budget and the staff establishment plan; (c) prepare and, after having taken into account the opinion of the states’ representatives group or the Public Authorities Board as appropriate, submit for adoption to the governing board the work programme and the corresponding expenditure estimates for the joint undertaking, to implement the Strategic Research and Innovation Agenda; (d) submit for opinion to the governing board the annual accounts for the joint undertaking; (e) prepare and submit for assessment and approval to the governing board the consolidated annual activity report, including information on the corresponding expenditure and contributions from members other than the Union referred to in Article 11(1); (f) monitor the contributions referred to in Article 11(1), report to the governing board regularly on the progress in achieving the targets and propose remedial or corrective measures, where necessary; (g) monitor the implementation of measures for attracting newcomers, in particularly SMEs, higher education institutions and research organisations; (h) establish a formal and regular collaboration with the European partnerships identified in the Strategic Research and Innovation Agenda and in accordance with the strategic orientation provided by the governing board; (i) following an invitation from the Chair, inform regularly the relevant configuration of the Horizon Europe Programme Committee, further to the Commission responsibility to inform the Programme Committee under Article 14(7) and Annex III to the Specific Programme implementing Horizon Europe, and in particular, before adoption of the work programme of the joint undertaking, in relation to the application of Article 22(5) of the Horizon Europe Regulation; (j) submit for approval to the governing board or to the Public Authorities Board as appropriate the list of actions to be selected for funding by the joint undertaking; (k) assess applications for associated members to the joint undertaking following an open call for expression of interest and submit proposals for associated members to the governing board; (l) inform regularly the other bodies of the joint undertaking on all matters relevant to their role; (m) sign individual grant agreements and decisions in his or her remit on behalf of the joint undertaking; (n) sign procurement contracts on behalf of the joint undertaking; (o) ensure the programme’s monitoring and assessment of the progress compared to relevant impact indicators and the joint undertaking’s specific objectives as defined in Part Two, under the supervision of the governing board and in coordination with advisory bodies where relevant, and in accordance with Article 171; (p) implement the communications policy of the joint undertaking; (q) organise, direct and supervise the operations and the staff of the joint undertaking within the limits of the delegations by the governing board; (r) establish and ensure the functioning of an effective and efficient internal control system and report any significant change to it to the governing board; (s) protect the financial interests of the Union and of other members by applying preventive measures against fraud, corruption and any other illegal activities by means of effective checks and, if irregularities are detected, by recovering amounts that were wrongly paid and, where appropriate, imposing effective, proportionate and dissuasive administrative and financial penalties; (t) ensure the carrying out of risk assessments and risk management for the joint undertaking; (u) take any other measures necessary for assessing the progress of the joint undertaking towards achieving its objectives; (v) prepare and submit for adoption to the governing board a plan for the phasing out of the joint undertaking from Horizon Europe funding; (w) perform any other tasks entrusted or delegated to him or her by the governing board or as may be required by this Regulation; (x) have the power to delegate his or her powers to other staff members subject to rules to be adopted in accordance with Article 17(4). 5. The executive director may also be subject to any specific rules set out in Part Two. 6. The executive director shall set up a programme office for the execution, under his or her responsibility, of all support tasks of the joint undertaking deriving from this Regulation. The programme office shall be composed of the staff of the joint undertaking and shall in particular carry out the following tasks: (a) provide support in establishing and managing an appropriate accounting system in accordance with the financial rules for the joint undertaking; (b) manage the implementation of the work programme of the joint undertaking throughout the implementation cycle; (c) provide to the members of the joint undertaking and its bodies all relevant and timely information and support necessary for them to perform their duties; (d) act as the secretariat of the bodies of the joint undertaking and provide support to advisory groups set up by the governing board, if any.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 19 Tasks of the executive director):
1. The executive director shall be the chief executive responsible for the day-to-day management of the joint undertaking in accordance with the decisions of the governing board. He or she shall provide the governing board with all information necessary for the performance of its functions. Without prejudice to the respective competencies of the Union institutions and the governing board, the executive director shall neither seek nor take instructions from any government or from any other body. 2. The executive director shall be the legal representative of the joint undertaking. He or she shall be accountable to the governing board of the joint undertaking. 3. The executive director shall implement the budget of the joint undertaking and shall ensure coordination between the different bodies and services of the joint undertaking. 5. The executive director may also be subject to any specific rules set out in Part Two.
Article 20 The states’ representatives group
1. Except in cases where Member States and associated countries participate in a joint undertaking as members or constituent entities of members, joint undertakings shall establish a states’ representatives group as specified in Part Two subject to the provisions in this Article. 2. The states’ representatives group shall consist of up to two representatives and up to two alternates from each Member State and from each associated country. The states’ representatives group shall elect a chairperson and vice-chairperson from among its members. 3. The states’ representatives group shall meet at least twice a year. The meetings shall be convened by the chairperson or by at least one third of the states’ representatives group members. The chairperson of the governing board and the executive director or their representatives shall attend the meetings as observers upon request of the chairperson of the states’ representatives group for the purpose of delivering information on specific matters. 4. The meetings of the states’ representatives group may be regulated by any relevant specific provisions set out in Part Two. 5. The chairperson of the states’ representatives group may invite other persons to attend its meetings as observers, in particular representatives of relevant federal or regional authorities within the Union, representatives of higher education institutions and research performing organisations, SME associations or industry associations and representatives of other bodies of the joint undertaking. 6. The agenda and supporting documents of the state representatives group’s meetings shall be circulated sufficiently in advance to ensure appropriate representation by each Member State and associated country. The agenda shall also be circulated for information to the governing board in a timely manner. 7. The states’ representatives group shall be consulted and, in particular, it shall review information and provide opinions on the following matters: (a) programme progress of the joint undertaking and achievement of its targets and expected impacts as part of Horizon Europe, including the information on calls for proposals and proposals received as well as on the proposal evaluation process; (b) updating of the Strategic Research and Innovation Agenda or equivalent in line with the Horizon Europe strategic planning and with other Union and Member States funding instruments; (c) links to Horizon Europe and other Union, national and, where relevant, regional initiatives, including cohesion policy funds in line with smart specialisation strategies; (d) draft work programmes, including the content of calls for proposals, especially on lower TRL research topics included in the draft work programme and on the application of eligibility criteria; (e) involvement of SMEs, start-ups, higher education institutions and research organisations, and measures taken for promoting participation of newcomers; (f) actions taken for dissemination and exploitation of results along the value chain; (g) annual activity report. 8. For the purpose of seeking the agreed position referred to in Article 17(2), point (l), the states’ representatives group shall solely include Member States. The rules of procedure of the states’ representatives group shall further specify the procedure for agreeing that position. 9. Where applicable, the states’ representatives group shall also regularly report to the governing board, and act as an interface with the joint undertaking on the following matters: (a) the status of relevant national or regional research and innovation programmes and identification of potential areas of cooperation, including concrete actions taken or envisaged for the deployment and uptake of relevant technologies and innovative solutions; (b) specific measures taken at national level or regional level with regard to dissemination events, dedicated technical workshops and communication activities; (c) specific measures at national or regional level with regard to deployment activities in relation to each respective joint undertaking; (d) national or regional policies and initiatives with a view to ensuring complementarities with regard to the joint undertaking’s Strategic Research and Innovation Agenda and annual work programmes. 10. The states’ representatives group shall submit, at the end of each calendar year, a report describing the national or regional policies in the scope of the joint undertaking and identifying specific ways of cooperation with the actions funded by the joint undertaking. 11. The states’ representatives group may issue, on its own initiative, opinions, recommendations or proposals to the governing board or the executive director on technical, managerial and financial matters as well as on work programmes and other documents, in particular when those matters affect national or regional interests. 12. The states’ representatives group shall receive timely and relevant information on a regular basis, including a breakdown by country, among other data on the application and participation in indirect actions funded by the joint undertaking, on the evaluation results of each call for proposals and project implementation, on synergies with other relevant Union programmes and other European partnerships, on additional activities, on committed and actually provided financial and in-kind contributions and on the execution of the budget of the joint undertaking. 13. The states’ representatives group shall adopt its own rules of procedure with due consideration to Articles 33 and 42. 14. One or more joint undertakings may establish a joint state representatives group in accordance with the relevant provisions set out in Part Two.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 20 The states’ representatives group):
1. Except in cases where Member States and associated countries participate in a joint undertaking as members or constituent entities of members, joint undertakings shall establish a states’ representatives group as specified in Part Two subject to the provisions in this Article. 2. The states’ representatives group shall consist of up to two representatives and up to two alternates from each Member State and from each associated country. The states’ representatives group shall elect a chairperson and vice-chairperson from among its members. 3. The states’ representatives group shall meet at least twice a year. The meetings shall be convened by the chairperson or by at least one third of the states’ representatives group members. The chairperson of the governing board and the executive director or their representatives shall attend the meetings as observers upon request of the chairperson of the states’ representatives group for the purpose of delivering information on specific matters. 4. The meetings of the states’ representatives group may be regulated by any relevant specific provisions set out in Part Two. 5. The chairperson of the states’ representatives group may invite other persons to attend its meetings as observers, in particular representatives of relevant federal or regional authorities within the Union, representatives of higher education institutions and research performing organisations, SME associations or industry associations and representatives of other bodies of the joint undertaking. 6. The agenda and supporting documents of the state representatives group’s meetings shall be circulated sufficiently in advance to ensure appropriate representation by each Member State and associated country. The agenda shall also be circulated for information to the governing board in a timely manner. 8. For the purpose of seeking the agreed position referred to in Article 17(2), point (l), the states’ representatives group shall solely include Member States. The rules of procedure of the states’ representatives group shall further specify the procedure for agreeing that position. 10. The states’ representatives group shall submit, at the end of each calendar year, a report describing the national or regional policies in the scope of the joint undertaking and identifying specific ways of cooperation with the actions funded by the joint undertaking. 11. The states’ representatives group may issue, on its own initiative, opinions, recommendations or proposals to the governing board or the executive director on technical, managerial and financial matters as well as on work programmes and other documents, in particular when those matters affect national or regional interests. 12. The states’ representatives group shall receive timely and relevant information on a regular basis, including a breakdown by country, among other data on the application and participation in indirect actions funded by the joint undertaking, on the evaluation results of each call for proposals and project implementation, on synergies with other relevant Union programmes and other European partnerships, on additional activities, on committed and actually provided financial and in-kind contributions and on the execution of the budget of the joint undertaking. 13. The states’ representatives group shall adopt its own rules of procedure with due consideration to Articles 33 and 42. 14. One or more joint undertakings may establish a joint state representatives group in accordance with the relevant provisions set out in Part Two.
Article 21 Scientific advice
1. Unless specified otherwise in Part Two, joint undertakings shall seek independent scientific advice by means of: (a) a scientific advisory body to be set up by the joint undertaking in accordance with the relevant provisions set out in Part Two, and subject to the provisions in this Article; or (b) ad hoc requests for independent expertise by the governing board to the joint undertaking on specific questions. 2. There shall be a balanced representation of experts among the members of the scientific advisory body, within the scope of the activities of the joint undertaking, including with respect to gender and geographical balance. Collectively, the members of the scientific advisory body shall have the necessary competences and expertise covering the technical domain in order to make science-based recommendations to the joint undertaking, taking into account the climate, environmental and socioeconomic impact of such recommendations and the objectives of the joint undertaking. 3. The members of the scientific advisory body, as well as invited observers, shall be subject to the obligation of professional secrecy which, by virtue of the Treaties and the rules implementing them, applies to all members of the institutions and their staff, as well as to the Commission’s rules on security regarding the protection of sensitive non-classified and Union classified information, laid down in Commission Decisions (EU, Euratom) 2015/443 ( 31 ) and (EU, Euratom) 2015/444 ( 32 ) respectively. 4. The governing board shall establish an open selection process including specific criteria for the composition of the scientific advisory body of the joint undertaking and shall appoint its members. The governing board shall take into consideration the potential candidates proposed by the states’ representatives group. 5. The scientific advisory body shall elect its chair from among its members. 6. The scientific advisory body shall meet at least twice a year and meetings shall be convened by the chairperson. The chairperson may invite other persons to attend its meetings as observers. The scientific advisory body shall adopt its own rules of procedure. The agenda of meetings shall be made publicly available in a timely manner on the website of the respective joint undertaking. 7. The scientific advisory body shall carry out the following tasks: (a) advise on the scientific priorities to be addressed in the work programmes including on scope of calls for proposals, in line with the Strategic Research and Innovation Agenda and the Horizon Europe strategic planning; (b) advise on the scientific achievements to be described in the annual activity report; (c) suggest, in view of the progress of the Strategic Research and Innovation Agenda and individual actions, corrective measures or re-orientations to the governing board, where necessary; (d) provide independent advice and scientific analysis on specific issues as requested by the governing board, in particular as regards developments in adjacent sectors or to support the assessment of applications of potential associated members and contributing partners; (e) where specified in Part Two, evaluate the results from technology and innovation actions that are funded by the joint undertaking and report to the governing board; (f) where specified in Part Two, participate in sector integration committees specifically set up between European partnerships under Horizon Europe to enable synergies; (g) carry out any other task, as specified in Part Two. 8. After each meeting of the scientific advisory body, its chairperson shall submit to the governing board a report outlining the body’s and its members’ opinions on the matters discussed during the meeting. To the extent possible, the report shall be made publicly available on the website of the respective joint undertaking. 9. The scientific advisory body may, of its own initiative, advise the governing board to consult it on specific points not covered by the tasks set out in paragraph 7. To the extent possible, the report shall be made publicly available on the website of the respective joint undertaking. 10. The scientific advisory body shall be informed of the reasons in the event that its advice on the work programme and the Strategic Research and Innovation Agenda is not followed.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 21 Scientific advice):
1. Unless specified otherwise in Part Two, joint undertakings shall seek independent scientific advice by means of: (a) a scientific advisory body to be set up by the joint undertaking in accordance with the relevant provisions set out in Part Two, and subject to the provisions in this Article; or (b) ad hoc requests for independent expertise by the governing board to the joint undertaking on specific questions. 2. There shall be a balanced representation of experts among the members of the scientific advisory body, within the scope of the activities of the joint undertaking, including with respect to gender and geographical balance. Collectively, the members of the scientific advisory body shall have the necessary competences and expertise covering the technical domain in order to make science-based recommendations to the joint undertaking, taking into account the climate, environmental and socioeconomic impact of such recommendations and the objectives of the joint undertaking. 3. The members of the scientific advisory body, as well as invited observers, shall be subject to the obligation of professional secrecy which, by virtue of the Treaties and the rules implementing them, applies to all members of the institutions and their staff, as well as to the Commission’s rules on security regarding the protection of sensitive non-classified and Union classified information, laid down in Commission Decisions (EU, Euratom) 2015/443 ( 3 ) and (EU, Euratom) 2015/444 ( 4 ) respectively. 4. The governing board shall establish an open selection process including specific criteria for the composition of the scientific advisory body of the joint undertaking and shall appoint its members. The governing board shall take into consideration the potential candidates proposed by the states’ representatives group. 5. The scientific advisory body shall elect its chair from among its members. 6. The scientific advisory body shall meet at least twice a year and meetings shall be convened by the chairperson. The chairperson may invite other persons to attend its meetings as observers. The scientific advisory body shall adopt its own rules of procedure. The agenda of meetings shall be made publicly available in a timely manner on the website of the respective joint undertaking. 8. After each meeting of the scientific advisory body, its chairperson shall submit to the governing board a report outlining the body’s and its members’ opinions on the matters discussed during the meeting. To the extent possible, the report shall be made publicly available on the website of the respective joint undertaking. 9. The scientific advisory body may, of its own initiative, advise the governing board to consult it on specific points not covered by the tasks set out in paragraph 7. To the extent possible, the report shall be made publicly available on the website of the respective joint undertaking. 10. The scientific advisory body shall be informed of the reasons in the event that its advice on the work programme and the Strategic Research and Innovation Agenda is not followed.
Article 22 The stakeholders group
1. Joint undertakings may establish a stakeholders group in accordance with the relevant provisions in Part Two and subject to this Article. 2. The stakeholders group shall be open to all public and private stakeholders, including organised groups, active in the field of the joint undertaking, international interest groups from Member States, associated countries or other countries. 3. The governing board shall establish the specific criteria and selection process for the composition of the stakeholders group and shall aim to balance representation in terms of geographical distribution, gender, sector and stakeholders’ expertise. Where relevant, the governing board shall take into account the potential candidates proposed by the states’ representatives group. 4. The stakeholders group shall be regularly informed of the activities of the joint undertaking and shall be invited to provide comments on the joint undertaking’s planned initiatives. 5. The meetings of the stakeholders group shall be convened by the executive director. 6. The executive director may advise the governing board to consult the stakeholders group on specific questions. Where such consultation takes place, a report shall be submitted to the governing board and to the states’ representatives group after the relevant discussion in the stakeholders group and be made publicly available on the website of the respective joint undertaking.
Article 23 Coherent application of limitation to participation
The joint undertakings shall ensure coherence with the approach taken for actions funded under the Horizon Europe work programme adopted in accordance with Article 13(2), point (b), of the Specific Programme implementing Horizon Europe regarding the application of Article 22(5) of the Horizon Europe Regulation, as well as Union legislation and guidance relevant for its application in similar topics in the work programme of the joint undertaking concerned.
Article 24 Rules applicable to the activities funded by the joint undertakings
1. The Horizon Europe Regulation shall apply to the actions funded by the joint undertakings under Horizon Europe. In accordance with that Regulation, each joint undertaking shall be considered as a funding body and shall provide financial support to indirect actions pursuant to Article 6 of that Regulation. 2. Actions funded by the joint undertakings under Horizon Europe may also be subject to any specific provisions set out in Part Two. 3. By way of derogation from Article 40(4), point (a), of the Horizon Europe Regulation, the right to object shall also apply to participants generating the results that have not received funding from a joint undertaking.
Article 25 Operational and financial planning
1. The executive director shall submit for adoption to the governing board a draft work programme. 2. The work programme shall be adopted by the end of the year prior to its implementation. The work programme and the calls for proposals shall be published on the website of the joint undertaking and on the Horizon Europe website, and, to support the coordination with the overall strategy of Horizon Europe, be shared with the relevant configuration of the Programme Committee for information. 3. The executive director shall prepare a draft annual budget for the following year and submit it to the governing board for adoption. 4. The annual budget for a particular year shall be adopted by the governing board by the end of the year prior to its implementation. 5. The annual budget shall be adapted in order to take into account the amount of the Union financial contribution as set out in the Union budget and, where applicable, the amounts of the financial contributions from members other than the Union and from contributing partners, if any.
Article 26 Operational and financial reporting
1. The executive director shall provide the governing board with a consolidated annual activity report on the performance of his or her duties in accordance with the financial rules of the joint undertaking. The consolidated annual activity report shall be made public in a timely manner on the website of the respective joint undertaking. 2. The consolidated annual activity report shall include, among other things, information on the following matters: (a) research, innovation and other actions carried out and the corresponding expenditure; (b) the proposals submitted, including a breakdown by country where the legal entity is established, and by participant type, in particular SMEs and newcomers; (c) the indirect actions selected for funding, including a breakdown by participant type, including SMEs, and by country and indicating the contribution of the respective joint undertaking to the individual participants and actions; (d) information regarding the openness of the joint undertakings, including monitoring of collaborative links; (e) the additional activities undertaken by the members other than the Union, including a breakdown by country where the private members, their constituent entities or the affiliated entities of either is established; (f) the collaboration with other European partnerships, including joint calls, and synergies between the joint undertaking’s actions and national or regional initiatives and policies. 3. The accounting officer of the joint undertaking shall send the provisional accounts to the Commission’s accounting officer and the Court of Auditors in accordance with the financial rules of the joint undertaking. 4. The executive director shall send the report on the budgetary and financial management to the European Parliament, the Council and the Court of Auditors in accordance with the financial rules of the joint undertaking. 5. The discharge procedure shall be carried out in accordance with the financial rules of the joint undertaking.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 26 Operational and financial reporting):
1. The executive director shall provide the governing board with a consolidated annual activity report on the performance of his or her duties in accordance with the financial rules of the joint undertaking. The consolidated annual activity report shall be made public in a timely manner on the website of the respective joint undertaking. 3. The accounting officer of the joint undertaking shall send the provisional accounts to the Commission’s accounting officer and the Court of Auditors in accordance with the financial rules of the joint undertaking. 4. The executive director shall send the report on the budgetary and financial management to the European Parliament, the Council and the Court of Auditors in accordance with the financial rules of the joint undertaking. 5. The discharge procedure shall be carried out in accordance with the financial rules of the joint undertaking.
Article 27 Financial rules
1. The joint undertakings shall adopt their financial rules in accordance with Article 71 of Regulation (EU, Euratom) 2018/1046. 2. The financial rules shall be published on the website of the respective joint undertaking.
Article 28 Sources of financing
1. Each joint undertaking shall be jointly funded by the Union, the members other than the Union and the contributing partners through financial contributions and in-kind contributions to operational activities. 2. The members other than the Union shall agree on how to share their collective contribution among them in accordance with the applicable financial rules. 3. The operational costs of a joint undertaking shall be covered by means of the: (a) financial contribution by the Union; (b) financial contributions by the private members or their constituent or affiliated entities, by contributing partners or by an international organisation that is a member of a joint undertaking; (c) where applicable, financial contributions by the participating states; (d) in-kind contributions defined in Article 2, point (8). 4. In accordance with Articles 10 and 11, the resources of a joint undertaking entered in its budget shall be composed of the following contributions: (a) members’ financial contributions to the joint undertaking for the administrative costs, divided equally on an annual basis between the Union and the members other than the Union, unless specified otherwise in Part Two due to the specific membership nature of a joint undertaking; (b) members’ or contributing partners’ financial contributions to the joint undertaking for the operational costs; (c) any revenue generated by the joint undertaking; (d) any other financial contributions, resources and revenues. Any interest yielded by the contributions referred to in this paragraph shall be considered to be its revenue. 5. Any unused part of the contribution for administrative costs may be made available to cover the operational costs of the joint undertaking concerned. 6. Should a member other than the Union of the joint undertaking be in default of its commitment concerning its contribution, the executive director shall inform it in writing and shall set a reasonable period within which such default should be remedied. Where, on the expiry of that period, the member other than the Union concerned is still in default, the executive director shall inform the Commission and the participating states, where applicable, in view of potential measures pursuant to Article 11(8) and inform the member concerned that it is disqualified from voting in the governing board in line with that Article. 7. The resources of the joint undertaking and its activities shall be used for the fulfilment of its objectives and tasks. 8. The joint undertaking shall own all assets generated by it or transferred to it for the fulfilment of its objectives and tasks. 9. Except where the joint undertaking is wound up, any excess revenue over expenditure shall not be paid to the members of that joint undertaking, unless decided otherwise by the governing board.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal This explanatory memorandum accompanies the proposal for a Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe. This proposal complements the proposal for a Regulation of the European Parliament and Council establishing a framework of measures for strengthening Europe’s semiconductor ecosystem ( ‘ Chips Act ’ ) 1 by implementing most of the actions foreseen under the Chips for Europe Initiative , set up under the Chips Act proposal . The Chips Act proposal delivers on the political commitment by President von der Leyen, who announced in her 2021 State of the Union speech that t he aim is to jointly create a state-of-the-art European chip ecosystem, including production 2 . The Chips Act proposal’s underlying strategic vision for strengthening Europe’s semiconductor ecosystem is explained in its accompanying Communication. 3 To fulfil this vision, t he European Chips Strategy is articulated around five strategic objectives : · Europe should strengthen its research and technology leadership ; · Europe should build and reinforce its own capacity to innovate in the design, manufacturing , and packaging of advanced chips, and turn them into commercial products ; · Europe should put in place an adequate framework to increase substantially its production capacity by 2030 ; · Europ e should address the acute skills shortage, attract new talent , and support the emergence of a skilled workforce ; · Europe should develop an in-depth understanding of global semiconductor supply chains. The Chips Act proposal aims at reaching the strategic objective of increasing the resilience of Europe’s semiconductor ecosystem and increasing its global market share. It also aims at facilitating early adoption of new chips by European industry and increase its competitiveness. For this, it needs to attract investment in innovative production facilities, have a skilled workforce, but also be in the position to design and produce the most advanced chips that will define the markets of tomorrow, developing capabilities and having the possibility to test and prototype innovative designs through pilot lines in close collaboration with its industrial vertical sectors. These are necessary steps, but not sufficient unless Europe has the analytical capability of increasing the transparency of the value chain and is capable to benefit from increased capacity to serve the common interest of the single market in case of crisis. The objective is not to become self-sufficient, which is not an achievable target. The Union must strengthen its strengths and work with third countries in a supply chain where interdependencies will remain strong. In terms of delivering on these objectives, one of the goals of the proposed Chips Act is to set up the Chips for Europe Initiative (the ‘Initiative’), to support large-scale capacity building throughout investment into cross-border and openly accessible research, development and innovation infrastructure set up in the Union to enable the development of cutting-edge and next-generation semiconductor technologies that will reinforce the EU’s advanced design, systems integration, and chips production capabilities, including emphasis on start-ups and scale-ups. In particular, the Initiative will build a virtual design platform to reinforce Europe’s design capacity, which will be accessible on open, non-discriminatory, and transparent terms . The p latform will stimulate a wide cooperation of user communities with design houses, intellectual property ( IP ) and tool suppliers, designers , and research and technology organisations ( RTOs ) , and will int egrate existing and new design facilities with extended libraries and EDA 4 tools. The Initiative will support pilot lines that provide the means for third parties under open, transparent, and non-discriminatory terms to test, validate, and further develop their product designs. The development of new pilot lines will prepare for the next generation of production capabilities and their validation. Furthermore, the Initiative will set up advanced technology and engineering capacities for quantum chips, e.g. in the form of design libraries for quantum chips, pilot lines, and testing and experimentation facilities. The Initiative will support a network of competence centres across Europe that will provide expertise to stakeholders, including end-user small and medium-sized enterprises (SMEs), start-ups as well as vertical sectors, and improve their skills. Competence centres will facilitate open, transparent, and non-discriminatory access to and effective use of the design infrastructure and the pilot lines. They will become poles of attraction for innovation and for new, highly skilled talent, including via reskilling and upskilling of workers. The actions under the Initiative will be primarily implemented through the Chips Joint Undertaking , i.e. the amended and renamed current Key Digital Technologies Joint Undertaking 5 . This Joint Undertaking currently provides extensive support for industrially driven research, technology development, and innovation in the area of electronic components and systems, and related software and systems tech nologies. These activities will become part of the Initiative . This proposal aims to amend the legal provisions of the Council Regulation amending Council Regulation (EU) 2021/2085 establishing the Joint Undertakings under Horizon Europe for equipping the Key Digital Technologies Joint Undertaking for its new tasks related to the Initiative. This proposal also renames the Key Digital Technologies as the “Chips Joint Undertaking”. 
Revised version (Article 28 Sources of financing):
1. Each joint undertaking shall be jointly funded by the Union, the members other than the Union and the contributing partners through financial contributions and in-kind contributions to operational activities. 2. The members other than the Union shall agree on how to share their collective contribution among them in accordance with the applicable financial rules. 5. Any unused part of the contribution for administrative costs may be made available to cover the operational costs of the joint undertaking concerned. 6. Should a member other than the Union of the joint undertaking be in default of its commitment concerning its contribution, the executive director shall inform it in writing and shall set a reasonable period within which such default should be remedied. Where, on the expiry of that period, the member other than the Union concerned is still in default, the executive director shall inform the Commission and the participating states, where applicable, in view of potential measures pursuant to Article 11(8) and inform the member concerned that it is disqualified from voting in the governing board in line with that Article. 7. The resources of the joint undertaking and its activities shall be used for the fulfilment of its objectives and tasks. 8. The joint undertaking shall own all assets generated by it or transferred to it for the fulfilment of its objectives and tasks. 9. Except where the joint undertaking is wound up, any excess revenue over expenditure shall not be paid to the members of that joint undertaking, unless decided otherwise by the governing board.
Article 29 Financial commitments
1. The financial commitments of a joint undertaking shall not exceed the amount of financial resources available or committed to its budget by its members and contributing partners. 2. Budgetary commitments of the joint undertakings referred to in Article 3(1), points (b), (d) and (h), may be divided into annual instalments. Until 31 December 2024, the cumulative amount of those budgetary commitments in instalments shall not exceed 50 % of the maximum Union contribution set out in Article 10. From January 2025, at least 20 % of the cumulative budget of the residual years shall not be covered by annual instalments.
Article 30 Protection of the financial interests of the members
1. The joint undertaking shall grant Commission staff and other persons authorised by the respective joint undertaking or the Commission, as well as the Court of Auditors, access to its sites and premises and to all the information, including information in electronic format, needed in order to conduct their audits. 2. The European Anti-Fraud Office (OLAF) has the power to carry out administrative investigations, including on-the-spot checks and inspections, in accordance with the provisions and procedures laid down in Council Regulation (Euratom, EC) No 2185/96 ( 33 ) and Regulation (EC, Euratom) No 883/2013 of the European Parliament and of the Council ( 34 ) and with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union in connection with an agreement, a decision or a contract funded under this Regulation. 3. The European Public Prosecutor’s Office (EPPO) is empowered, in accordance with Council Regulation (EU) 2017/1939 ( 35 ) , to investigate and prosecute criminal offences affecting the financial interests of the Union as set out in Article 4 of that Regulation. 4. Notwithstanding paragraphs 1 to 3, agreements, decisions and contracts resulting from the implementation of this Regulation shall contain provisions expressly empowering the Commission, the respective joint undertaking, the Court of Auditors, the EPPO and OLAF to conduct such audits, on-the spot checks and investigations in accordance with their respective competences. 5. Each joint undertaking shall ensure that the financial interests of its members are adequately protected by carrying out or commissioning appropriate internal and external controls. 6. Each joint undertaking shall accede to the Interinstitutional Agreement of 25 May 1999 between the European Parliament, the Council and the Commission concerning internal investigations by the European Anti-Fraud Office (OLAF) ( 36 ) . Each joint undertaking shall adopt the necessary measures needed to facilitate internal investigations conducted by OLAF. 7. The joint undertaking shall grant each national court of auditors on their request access to all the information related to the national contributions of the respective participating state, including information in electronic format, needed in order to conduct their audits.
Article 31 Ex post audits
Audits of expenditure on indirect actions shall be carried out in accordance with Article 53 of the Horizon Europe Regulation as part of the Horizon Europe indirect actions, in particular in line with the audit strategy referred to in Article 53(2) of that Regulation.
Article 32 Internal audit
1. The Commission’s internal auditor shall exercise the same powers over the joint undertakings as those exercised in respect of the Commission and shall endeavour to reduce the administrative burden of the joint undertaking. 2. The governing board may establish an internal audit capability in accordance with the financial rules of the joint undertaking concerned.
Article 33 Confidentiality
Without prejudice to Articles 34 and 36, each joint undertaking shall ensure the protection of confidential information the disclosure of which beyond Union institutions and other Union bodies, offices or agencies could damage the interests of its members or of participants in the activities of the respective joint undertaking. Such confidential information includes but is not limited to personal, commercial, sensitive non-classified and classified information.
Article 34 Transparency
Regulation (EC) No 1049/2001 of the European Parliament and of the Council ( 37 ) shall apply to documents held by a joint undertaking.
Article 35 Processing of personal data
Where the implementation of this Regulation requires the processing of personal data, this shall be processed in accordance with Regulation (EU) 2018/1725 of the European Parliament and of the Council ( 38 ) .
Article 36 Access to results and information on proposals
1. The joint undertaking shall provide the Union institutions and Union bodies, offices or agencies, as well as the authorities of the participating states where applicable, access to all information related to the indirect actions it funds. Such information shall include contributions and results of beneficiaries participating in indirect actions of the joint undertaking, or any other information deemed necessary for developing, implementing, monitoring and evaluating Union or where applicable participating states’ policies or programmes. Such access rights are limited to non-commercial and non-competitive use and shall comply with applicable confidentiality rules. 2. For the purposes of developing, implementing, monitoring and evaluating Union policies or programmes, the joint undertaking shall provide the Commission with the information included in submitted proposals. This shall apply mutatis mutandis to participating states where applicable regarding proposals which include applicants established in their territories, limited to non-commercial and non-competitive use and in accordance with applicable confidentiality rules.
Article 37 Staff
1. The Staff Regulations and the CEOS and the rules adopted jointly by the institutions of the Union for the purpose of applying the Staff Regulations and the CEOS shall apply to the staff of the joint undertakings. 2. The staff resources shall be determined in the staff establishment plan of each joint undertaking indicating the number of temporary posts by function group and by grade and the number of contract staff expressed in full-time equivalents, in line with its annual budget. 3. The staff of the joint undertaking shall consist of temporary staff and contract staff. 4. All costs related to staff shall be borne by the joint undertaking.
Article 38 Seconded national experts and trainees
1. A joint undertaking may make use of seconded national experts and trainees not employed directly by it. The number of seconded national experts expressed in full-time equivalents shall be added to the information on staff resources as referred to in Article 37(2) in accordance with the annual budget of the joint undertaking concerned. 2. The governing board of the joint undertaking concerned shall adopt a decision laying down rules on the secondment of national experts to the respective joint undertaking and on the employment of trainees.
Article 39 Privileges and Immunities
Protocol No 7 on the privileges and immunities of the European Union, annexed to the TEU and the TFEU, shall apply to the joint undertakings and their staff.
Article 40 Liability of the joint undertakings
1. The contractual liability of a joint undertaking shall be governed by the relevant contractual provisions and by the law applicable to the agreement, decision or contract in question. 2. Where liability is of a non-contractual nature, a joint undertaking shall, in accordance with the general principles common to the laws of the Member States, make good any damage caused by its staff in the performance of their duties. 3. Any payment by a joint undertaking in respect of the liability referred to in paragraphs 1 and 2 and the costs and expenses incurred in connection therewith shall be considered as expenditure of the joint undertaking and shall be covered by its resources. 4. Joint undertakings shall be solely responsible for meeting their obligations.
Article 41 Liability of members and insurance
1. The financial liability of the members of a joint undertaking for its debts shall be limited to their financial contributions made to the joint undertaking. 2. The joint undertakings shall take out and maintain appropriate insurance.
Article 42 Conflicts of interest
1. The joint undertaking, its bodies and staff shall avoid any conflict of interest in carrying out their activities. 2. The governing board shall adopt rules for the prevention, avoidance and management of conflicts of interest in respect of the staff of the joint undertaking, the members and other persons serving the governing board and in the other bodies or groups of the joint undertaking, in accordance with the financial rules of the joint undertaking and with the Staff Regulations in respect of staff.