Changes from plenary report to adopted text

Removed13. The undertaking shall provide all relevant and substantiated information to allow the Commission to assess the merits of the objections raised.

Removed14. Based on the examination of the reasons and evidence provided by the undertaking, the Commission may, after consulting the Member State of establishment, amend its implementing Act to release, partially or in totality the undertaking concerned from its obligations under this Article.

Removed15. This Article shall be without prejudice to the use of national mechanisms or initiatives having an equivalent effect.

Removed16. When an undertaking established in the Union is subject to a measure of a third country which entails a priority rated order, it shall notify the Commission thereof. The Commission shall then inform the Committee of the existence of such measures.

Removed17. Where an undertaking accepts or is obliged to accept and prioritise a priority rated order in accordance with paragraphs 6 or 7, point (b), it shall be shielded from any contractual or extra-contractual liability in relation to comply with the priority rated orders. The liability shall be excluded only to the extent the violation of contractual obligations was necessary for compliance with the mandated prioritisation.

Removed18. Where an economic operator, after having expressly accepted or been obliged to accept to prioritise the orders requested by the Commission, intentionally or through gross negligence, does not comply with the obligation to prioritise those orders, it shall be subject to fines set in accordance with Article 54, except where the undertaking has sufficient reasons for not complying with the obligation to prioritise those orders.

Removed19. The Commission shall adopt an implementing act laying down the practical and operational arrangements for the functioning of priority rated orders.

Removed20. The implementing acts referred to in this Article shall be adopted in accordance with the examination procedure referred to in Article 58(3).

RemovedSecurity-crisis state

Removed1. A security crisis shall be considered to occur where Member States have triggered Article 42(7) TEU.

Removed3. The Council, upon the proposal of the Commission and acting by qualified majority, shall adopt an Implementing Act activating the security crisis state.

Removed5. The security crisis state shall be activated for a maximum period of twelve months. No later than three weeks before the expiry of the period for which the security crisis state was activated, the Commission with the support of the High-Representative shall submit to the Council a report, assessing whether that period should be prolonged. The report shall in particular analyse the security situation and the economic consequences of the security crisis in the Union as a whole and in Member States, as well as the impact of the measures previously activated under this Regulation.

Removed6. If Article 42(7) TEU is still active, the Commission shall propose a prolongation to the Council. The Council, acting by qualified majority, may repeatedly decide to prolong the period for which the security crisis state is activated where that is appropriate to address the crisis, taking into account the need to ensure a high level of security of the Union, Member States and European citizens.

Removed8. Upon expiry of the period for which the security crisis state is activated, the measures taken in accordance with Articles 49 to 54 shall cease to apply.

RemovedIn the course of the preparation and implementation of the measures set out in Articles 49 to 54, the Commission shall, whenever possible, act in close coordination with the Defence Industrial Readiness Board, which shall provide advice in a timely manner. The Commission shall inform the Defence Industrial Readiness Board on the action taken.

Removed9. Where the security crisis state is activated, the Commission may take the measure provided for in Articles 46 and 47, under the conditions laid down therein and in Article 45.

RemovedWhere the Council activates this measure in accordance with Article 48(4), the Commission may take the measure provided for in Article 46 in relation to defence products, in accordance with the conditions defined therein.

Removed1. Where the Council activates the security-crisis state pursuant to Article 48(3), a Member State, which faces or may face severe difficulties either in the placing of an order or in the execution of a contract for the supply of defence products and these difficulties may undermine the security of the Union and of its Member States, may ask another Member State to require an undertaking based on its territory to accept, or to prioritise certain orders of defence and crisis-relevant products.

Removed2. Upon a request referred to in paragraph 1, the Member State on which territory the undertaking is established, shall require the undertaking established on its territory to accept the priority rated order. The Commission shall ensure the application of this provision.

Removed3. The Member State may ask the Commission to carry out the request on its behalf. In such case, the Commission shall adopt an implementing act providing for:

Removed(a) the legal basis of the priority rated order which has to be complied with by the undertaking;

Removed(b) the defence products and crisis-relevant products subject to the priority rated order and quantity in which they are to be supplied;

Removed(c) the time limits within which the priority rated order is to be completed;

Removed(d) the beneficiaries of the priority rated order, and

Removed(e) the waiver of contractual liability under the conditions laid down in paragraph 5.

Removed(f) the penalties provided for in Article 55 for non-compliance with the obligation by undertakings referred to in paragraph 2.

Removed4. The priority rated order shall be placed at a fair and reasonable price adequately taking into account the economic operator’s opportunity costs when fulfilling the priority rated orders vis-à-vis existing contractual obligations. The priority rated order shall take precedence over any prior private or public contractual obligation related to the products subject to the priority rated order under private or public law.

Removed5. The economic operator subject to that priority-rated order shall not be liable for any breach of contractual obligation that is governed by the law of a Member State, where:

Removed(a) the breach of contractual obligations is strictly necessary for compliance with the required prioritization,

Removed(b) the implementing act referred to in paragraph 3 has been complied with, and

Removed(c) the acceptance of the priority rated order was not solely made with a view to unduly avoiding a prior performance obligation.

Removed6. Where an economic operator, after having expressly acknowledged the order from the Commission, intentionally or through gross negligence, does not comply with the obligation to prioritise those orders, it shall be subject to fines set in accordance with Article 55, except where the undertaking has sufficient reasons for not complying with the obligation to prioritise those orders.

Removed7. This Article shall be without prejudice to the use of national mechanisms or initiatives having an equivalent effect.

Removed8. When an undertaking established in the Union is subject to a measure of a third country which entails a priority rated order, it shall notify the Commission thereof. The Commission shall then inform the Committee of the existence of such measures.

Removed9. The implementing act referred to in paragraph 3 shall be adopted in accordance with the examination procedure referred to in Article 58(3).

Removed1. Where the Council activates this measure in accordance with Article 48(4) and without prejudice to Directive 2009/43/EC and Member States’ prerogatives under that Directive, Member States shall ensure that applications related to intra-EU transfers are processed in an efficient and timely manner. To that end, all national authorities concerned shall ensure that the treatment of an application is without undue delay.

Removed2. Where a Member State imposes, in accordance with Article 4(8) of Directive 2009/43/EC, export limitation on components which are crisis-relevant products, that Member State shall not require further authorisations for the intra-EU transfer of the components concerned where the recipient provides a declaration of use in which it declares that the components subject to that transfer licence are integrated or are to be integrated into a defence product and cannot be transferred or exported as such. This shall be without prejudice to the obligations of recipients laid down in Article 10 of Directive 2009/43/EC.

Removed2a. Member States shall reply to any prior authorisation request for the transfer of defence products as referred to in Article 4(1) of Directive 2009/43/EC, without undue delay and no later than within a week of having received all necessary information from the applicant.

Removed1. Where the Council activates the security-crisis state pursuant to Article 48(3), innovation actions related to one of the following activities shall be deemed eligible under the Programme, provided for in Chapter II:

Removed(a) activities that aim at rapid adaptation and modification of civilian products for defence applications;

Removed(b) activities that aim at very significantly shortening the delivery lead time of defence products;

Removed(c) activities that aim at significantly simplifying the technical specifications of defence products in order to enable their mass production;

Removed(d) activities that aim at significantly simplifying the production process of defence products to enable their mass production.

Removed(da) activities that aim to replace components by alternatives that are available in the EU or are easily adaptable or can be developed in a timely manner by economic entities inside EU.

Removed1. Where the Council activates the security-crisis state pursuant to Article 48(3), Member States shall ensure that administrative procedures related to the certification and where necessary technical adaptations are processed in the most rapid possible way, according to their applicable national laws and regulations.

Removed2. Where such status exists in national law, certification of defence and crisis-relevant products shall be allocated the status of the highest national significance possible.

Removed3. Where this measure is activated, defence products certified in a Member State shall be deemed certified in another Member State without being subject to additional controls.

Removed4. The Implementing Act of the Council referred to article 48(3) may lay down more precise provisions on the scope of this measure.

Removed5. This measure shall be without prejudice to Member States’ essential security interests.

Removed1. Where the Council activates the security-crisis state pursuant to Article 48(3), and where such status exists in national law the planning, construction and operation of production facilities of defence and crisis-relevant products shall be allocated the status of the highest national significance possible and be treated as such in permit granting processes, including those relating to environmental assessments and if national law so provides, in spatial planning.

Removed2. The security of supply of defence products may be considered an imperative reason of overriding public interest within the meaning of Article 6(4) and Article 16(1), point (c), of Directive 92/43/EEC and of overriding public interest within the meaning of Article 4(7) of Directive 2000/60. Therefore, the planning, construction and operation of related production facilities may be considered of overriding public interest, provided that the remaining other conditions set out in these provisions are fulfilled.

RemovedContinuity of production of relevant defence products

Removed1. Where the Council activates the security-crisis state pursuant to Article 48(3), Member States may decide to use or to encourage companies producing relevant defence products to make use of derogations provided for in Article 17(3) of Directive 2003/88/EC in order to allow for the expansion of working shifts hence facilitating continuity of production of defence relevant products, if they deem it necessary to achieve the objectives of this Regulation.

Removed2. To that end and where prior authorisation is required, all national authorities concerned shall ensure that the most rapid treatment legally possible is given to applications from entities producing or being part of the supply chain of relevant defence product to use such derogations.

RemovedPenalties

Removed1. The Commission may, by way of implementing act, impose on the undertakings or associations, including their owners or representatives, being the addressees of information gathering measures referred to in Articles 46, and 48, or of any of the obligations to inform the Commission of a third-country obligation pursuant to Articles 47(16) and 50(8) or to prioritise the production of crisis-relevant products and defence products pursuant to Articles 47, 49 or 50, where it deems it to be necessary and proportionate:

Removed(a) fines not exceeding 0,5 % of the undertaking’s net annual worldwide turnover, where it, intentionally or through gross negligence, supplies incorrect, incomplete or misleading information in response to a request made pursuant to Article 46 and 48, or does not supply the information within the prescribed time limit;

Removed(b) fines not exceeding 0,2% of the undertaking’s net annual worldwide turnover, where it, intentionally or through gross negligence, does not comply with the obligation to inform the Commission of a third-country obligation pursuant to Article 47(16) and 50(8);

Removed(c) periodic penalty payments not exceeding 3 % of the average daily turnover in the preceding business year for each working day of non-compliance from the date established in the decision in which the priority-rated order was issued, where it, intentionally or through gross negligence, does not comply with an obligation to prioritise the production of crisis-relevant products pursuant to Article 47. Where the undertaking concerned is an SME, the periodic penalty payments imposed shall not exceed 1 % of its average daily turnover in the preceding business year;

Removed(d) fines not exceeding 0,5% of the undertaking’s net annual worldwide turnover, where it, intentionally or through gross negligence, does not comply with the obligation to prioritise the production of crisis-relevant products pursuant to Article 49.