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EU accession process: Revised enlargement methodology

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Today’s Communication sets out the Commission’s proposals to strengthen the EU accession process. It aims to make the enlargement process more credible, predictable, dynamic and subject to stronger political steering. This will reinvigorate the accession process and make it more effective, enhancing credibility and trust on both sides.

What is new in these proposals? How did the enlargement methodology change?

The revised enlargement methodology builds on four main principles

Credibility:

Candidate countries need to deliver on the reforms they promised, and EU needs to deliver when they do.

Stronger political steer:

Engaging with the candidates at top level through regular summits and ministerial meetings.

Member States will be involved more strongly and have better opportunities to monitor and review the process.

A more dynamic process:

Clustering chapters will allow for more thorough political discussions on thematic areas and to identify opportunities for early alignment and integration into EU policies.

The cluster on fundamentals (rule of law, economic criteria and public administration reform) will take a central role and sufficient progress will need to be achieved before other clusters can be opened.

Predictability for both sides:

Defining more clearly the conditions for candidate countries. Providing them with clear incentives if key reforms successfully implemented – closer integration of the country with the European Union.

Clear incentives: supporting solid and accelerated economic development and tangible benefits for citizens in order to provide the environment that allows for the substantial reforms needed, e.g. increased investment opportunities, work for accelerated integration and “phasing-in” to individual EU policies, the EU markets and EU programmes, while ensuring a level playing field and strengthened regional integration.

More decisive measures sanctioning any serious or prolonged stagnation or even backsliding: from slowing down negotiations, to adjusting funding and withdrawing benefits of closer integration.

Is the Commission changing its enlargement policy?

The conditions to join the EU are set out in the Treaty on European Union and by the Copenhagen criteria, which are very clear, and do not change. The proposals will improve the process and make it more comprehensive.

Previous enlargement countries did not have to fulfil all these conditions. You are moving the goalposts and delaying the accession process.

No, the revised methodology is based on the same, well-established criteria to join the EU. These were defined already in 1993 at the European Council in Copenhagen: need to have stable institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities; a functioning market economy and the capacity to cope with competition and market forces in the EU; the ability to take on and implement effectively the obligations of membership.

In the case of the Western Balkans, additional conditions for membership were set out in the ‘Stabilisation and Association Process’, mostly relating to regional cooperation and good neighbourly relations.

There are no shortcuts to membership. It is true that the accession process today is more demanding than in the past. But this is because the process has been made more rigorous to help the countries tackle the more difficult challenges they face in their reform efforts.

How do you asses the progress of enlargement countries?

Each year the Commission adopts its “Enlargement package” – which includes a Communication on enlargement (setting out the way forward and taking stock of the situation in the enlargement countries) and individual country Reports. In the Reports, the Commission presents its detailed assessment of the state of play in each candidate country and potential candidate, what has been achieved over the last year, and set out guidelines on reform priorities. The assessments are based on the Commission’s regular monitoring of the situation in the countries, input from the EU Delegations on the ground and from a variety of other sources, including: contributions from the EU Member States, European Parliament reports, contributions from the governments of the countries, and information from various international and non-governmental organisations.

How does the EU support reforms in the enlargement countries?

The EU helps the countries that wish to become members with political, financial and technical support. This makes it easier for them to make progress in meeting the well-established requirements of membership, in particular implementing far-reaching reforms and aligning with EU rules and regulations.

The European Union provides the countries with financial support through the Instrument for Pre-accession Assistance. From 2014-2020, the EU dedicated EUR 11.7 billion for this purpose, with continued funding foreseen for 2021-2027. The EU and the national authorities decide on the areas where to invest the funds.

The Commission and Member States also support the enlargement countries’ public administrations with technical assistance to align, apply and enforce EU legislation as well as facilitating the sharing of EU best practices. This is done inter alia through TAIEX / Twinning workshops, expert missions and study visits.

What does the revised methodology mean for the fundamentals, in particular the rule of law?

We propose a balanced approach, which will lead to a more dynamic and more credible process, while putting an even stronger focus on the core role of fundamental reforms essential for the EU path. Rule of law will become even more central in the accession negotiations, for example through anti-corruption work being main-streamed in relevant chapters. There will be a stronger focus on the fundamentals of functioning of democratic institutions, public administration reform and supporting economic reforms. Progress on the fundamental reforms will determine the overall pace of negotiations.

Will public administration reform now be part of the accession negotiations as a chapter? What does this mean in practice?

The Commission’s proposal reconfirms the central role that public administration reform plays among the fundamentals of the enlargement process. These fundamentals will become even more central in the accession negotiations. Negotiations in the area of fundamentals will be opened first and closed last and progress on the fundamentals will determine the overall pace of negotiations. In this sense, public administration reform will be on an equal footing with the other fundamentals.  

Will the new methodology be applied only to North Macedonia and Albania, or also Serbia and Montenegro?

The new methodology will be formalised into the negotiating frameworks for North Macedonia and Albania .

Many of the proposals could also be attractive for Serbia and Montenegro, as they can contribute to making the process more dynamic, predictable and credible for them as well. Serbia and Montenegro will be able to opt in if they wish. The negotiating frameworks already in place for Montenegro and Serbia would however not need to be changed.

The fact that a revised methodology will be the basis for the new negotiating frameworks will it mean there will be a two-speed process for accession: easier for the ones already negotiating and more difficult for Albania and North Macedonia?

The accession process is equally difficult for any candidate, but in different ways, since challenges differ. Negotiating frameworks are never identical. They take into account the context of each candidate and spell out the way negotiations are conducted. The speed of progress towards accession to the EU does not depend on the negotiations frameworks but on the political will of the country to implement the necessary reforms so the country meets the EU’s accession criteria. The conditions to join the EU are the same for all countries and the speed depends on the time they take to meet the criteria.

But by proposing today adjustments to the methodology we aim at better supporting their reform process: through the clustering of chapters, clearer criteria, and stronger political steer, our objective is to help the countries to move faster on reforms.

What about Bosnia and Herzegovina and Kosovo? What does this mean for them?

The EU has repeatedly confirmed its unequivocal support to the European perspective of the Western Balkans. The Stabilisation and Association Process remains the common framework of relations with the two.

In its conclusions of December 2019, the Council welcomed the Commission’s Opinion on Bosnia and Herzegovina’s application to EU membership. The Council urged executive and legislative bodies at all levels of government to start addressing the key priorities identified in the opinion, in line with the legitimate aspirations of the citizens of Bosnia and Herzegovina to advance towards the European Union.

The EU has welcomed the appointment of the new Government in Bosnia and Herzegovina and is ready to work with the authorities on the implementation of the 14 priorities identified, paving the way towards the candidate status.

For Kosovo, it is important that the new government resumes work on reforms, including the implementation of the Stabilisation and Association Agreement and building on the European Reform Agenda, to deliver tangible results for citizens.

The Commission looks forward to working with the new Government in Kosovo and to assisting in its European Reform Agenda, focusing on strengthening the rule of law, public administration and the economy. Is it also important that Kosovo abolishes the tariffs and renews its engagement in regional initiatives and cooperation.

What are the next steps now?

The Commission hopes the Member States will endorse the proposal, in parallel with the opening of accession negotiations with North Macedonia and Albania, ahead of the European Union-Western Balkans Summit in Zagreb on 6-7 May, for which the Commission will also put forward an economic and investment development plan for the Western Balkans region. If the Council takes a positive decision in this sense, it will task the Commission with presenting draft negotiating frameworks with the two countries. These will further spell out the proposals set out in the revised methodology.

EU Politics

Commission proposes draft mandate for negotiations on Gibraltar

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The European Commission has today adopted a Recommendation for a Council decision authorising the opening of negotiations for an EU-UK agreement on Gibraltar. The Commission also presented its proposal for negotiating guidelines.

It is now for the Council to adopt this draft mandate, after which the Commission can begin formal negotiations with the United Kingdom.

Vice-President Maroš Šefčovič, the EU’s co-chair of the Joint Committee and Partnership Council, said: “By putting forward this draft mandate, we are honouring the political commitment we made to Spain to start the negotiations of a separate agreement between the EU and the UK on Gibraltar. This is a detailed mandate, which aims to have a positive impact for those living and working on either side of the border between Spain and Gibraltar, while protecting the integrity of the Schengen Area and the Single Market.”

Gibraltar was not included in the scope of the EU-UK Trade and Cooperation Agreement agreed between the EU and UK at the end of 2020. The Commission committed to begin the negotiation of a separate agreement on Gibraltar, should Spain request so. That is why the Commission is now recommending that the Council authorises the launch of specific negotiations on Gibraltar.

Draft mandate

Today’s Recommendation builds upon the political understanding reached between Spain and the UK on 31 December last year. It is without prejudice to the issues of sovereignty and jurisdiction, and focuses on cooperation in the region.

The proposed negotiating directives put forward solutions to remove physical checks and controls on persons and goods at the land border between Spain and Gibraltar, while ensuring the integrity of the Schengen area and the Single Market. The proposals include rules establishing responsibility for asylum, returns, visas, residence permits, and operational police cooperation and information exchange.

Other measures are included in different areas, such as land and air transport, the rights of cross border workers, the environment, financial support, and establishing a level playing field. It envisages a robust governance mechanism, including a review of the implementation of the agreement after four years, the possibility for both parties to terminate the agreement at any time and the possibility of unilateral suspension of the application of the agreement under certain circumstances.

Spain, as the neighbouring Schengen Member State and as the Member State to be entrusted with the application and implementation of certain provisions of the future agreement, will be particularly affected by the agreement. The Commission will therefore maintain close contacts with the Spanish authorities throughout the negotiations and afterwards, taking their views duly into account.

With regard to external border control, in circumstances requiring increased technical and operational support, any Member State, including Spain, may request Frontex assistance in implementing its obligations. The Commission acknowledges that Spain has already expressed its full intention to ask Frontex for assistance.

Background

The UK-EU Trade and Cooperation Agreement excluded Gibraltar from its territorial scope (Article 774(3)). On 31 December 2020, the Commission received a note of the proposed framework for a UK-EU legal instrument setting out Gibraltar’s future relationship with the EU. The relevant services in the Commission have examined this in close consultation with Spain. Building upon the proposed framework and in line with Union rules and interests, the Commission has today adopted a Recommendation for a Council decision authorising the opening of negotiations for an EU-UK agreement on Gibraltar and presented its proposal for negotiating guidelines.

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EU Politics

Commission overhauls anti-money laundering and countering the financing of terrorism rules

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The European Commission has today presented an ambitious package of legislative proposals to strengthen the EU’s anti-money laundering and countering terrorism financing (AML/CFT) rules. The package also includes the proposal for the creation of a new EU authority to fight money laundering. This package is part of the Commission’s commitment to protect EU citizens and the EU’s financial system from money laundering and terrorist financing. The aim of this package is to improve the detection of suspicious transactions and activities, and to close loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system. As recalled in the EU’s Security Union Strategy for 2020-2025, enhancing the EU’s framework for anti-money laundering and countering terrorist financing will also help to protect Europeans from terrorism and organised crime.

Today’s measures greatly enhance the existing EU framework by taking into account new and emerging challenges linked to technological innovation. These include virtual currencies, more integrated financial flows in the Single Market and the global nature of terrorist organisations. These proposals will help to create a much more consistent framework to ease compliance for operators subject to AML/CFT rules, especially for those active cross-border.

Today’s package consists of four legislative proposals:

Members of the College said:

Valdis Dombrovskis, Executive Vice-President for an Economy that works for people, said: “Every fresh money laundering scandal is one scandal too many – and a wake-up call that our work to close the gaps in our financial system is not yet done. We have made huge strides in recent years and our EU AML rules are now among the toughest in the world. But they now need to be applied consistently and closely supervised to make sure they really bite. This is why we are today taking these bold steps to close the door on money laundering and stop criminals from lining their pockets with ill-gotten gains.”

Mairead McGuinness, Commissioner responsible for financial services, financial stability and Capital Markets Union said: “Money laundering poses aclear and present threat to citizens, democratic institutions, and the financial system. The scale of the problem cannot be underestimated and the loopholes that criminals can exploit need to be closed. Today’s package significantly ramps up our efforts to stop dirty money being washed through the financial system. We are increasing coordination and cooperation between authorities in member states, and creating a new EU AML authority. These measures will help us protect the integrity of the financial system and the single market.”

A new EU AML Authority (AMLA)

At the heart of today’s legislative package is the creation of a new EU Authority which will transform AML/CFT supervision in the EU and enhance cooperation among Financial Intelligence Units (FIUs). The new EU-level Anti-Money Laundering Authority (AMLA) will be the central authority coordinating national authorities to ensure the private sector correctly and consistently applies EU rules. AMLA will also support FIUs to improve their analytical capacity around illicit flows and make financial intelligence a key source for law enforcement agencies.

In particular, AMLA will:

  • establish a single integrated system of AML/CFT supervision across the EU, based on common supervisory methods and convergence of high supervisory standards;
  • directly supervise some of the riskiest financial institutions that operate in a large number of Member States or require immediate action to address imminent risks;
  • monitor and coordinate national supervisors responsible for other financial entities, as well as coordinate supervisors of non-financial entities;
  • support cooperation among national Financial Intelligence Units and facilitate coordination and joint analyses between them, to better detect illicit financial flows of a cross-border nature.

A Single EU Rulebook for AML/CFT

The Single EU Rulebook for AML/CFT will harmonise AML/CFT rules across the EU, including, for example, more detailed rules on Customer Due Diligence, Beneficial Ownership and the powers and task of supervisors and Financial Intelligence Units (FIUs). Existing national registers of bank accounts will be connected, providing faster access for FIUs to information on bank accounts and safe deposit boxes. The Commission will also provide law enforcement authorities with access to this system, speeding up financial investigations and the recovery of criminal assets in cross-border cases. Access to financial information will be subject to robust safeguards in Directive (EU) 2019/1153 on exchange of financial information.

Full application of the EU AML/CFT rules to the crypto sector

At present, only certain categories of crypto-asset service providers are included in the scope of EU AML/CFT rules. The proposed reform will extend these rules to the entire crypto sector, obliging all service providers to conduct due diligence on their customers. Today’s amendments will ensure full traceability of crypto-asset transfers, such as Bitcoin, and will allow for prevention and detection of their possible use for money laundering or terrorism financing. In addition, anonymous crypto asset wallets will be prohibited, fully applying EU AML/CFT rules to the crypto sector.

EU-wide limit of €10,000 on large cash payments

Large cash payments are an easy way for criminals to launder money, since it is very difficult to detect transactions. That is why the Commission has today proposed an EU-wide limit of €10,000 on large cash payments. This EU-wide limit is high enough not to put into question the euro as legal tender and recognises the vital role of cash. Limits already exist in about two-thirds of Member States, but amounts vary. National limits under €10,000 can remain in place. Limiting large cash payments makes it harder for criminals to launder dirty money. In addition, providing anonymous crypto-asset wallets will be prohibited, just as anonymous bank accounts are already prohibited by EU AML/CFT rules.

Third countries

Money laundering is a global phenomenon that requires strong international cooperation. The Commission already works closely with its international partners to combat the circulation of dirty money around the globe. The Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog, issues recommendations to countries. A country that is listed by FATF will also be listed by the EU. There will be two EU lists, a “black-list” and a “grey-list, reflecting the FATF listing. Following the listing, the EU will apply measures proportionate to the risks posed by the country. The EU will also be able to list countries which are not listed by FATF, but which pose a threat to the EU’s financial system based on an autonomous assessment.

The diversity of the tools that the Commission and AMLA can use will allow the EU to keep pace with a fast-moving and complex international environment with rapidly evolving risks.

Next steps

The legislative package will now be discussed by the European Parliament and Council. The Commission looks forward to a speedy legislative process. The future AML Authority should be operational in 2024 and will start its work of direct supervision slightly later, once the Directive has been transposed and the new regulatory framework starts to apply.

Background

The complex issue of tackling dirty money flows is not new. The fight against money laundering and terrorist financing is vital for financial stability and security in Europe. Legislative gaps in one Member State have an impact on the EU as a whole. That is why EU rules must be implemented and supervised efficiently and consistently to combat crime and protect our financial system. Ensuring the efficiency and consistency of the EU AML framework is of the utmost importance. Today’s legislative package implements the commitments in our Action Plan for a comprehensive Union policy on preventing money laundering and terrorism financing which was adopted by the Commission on 7 May 2020.

The EU framework against money laundering also includes the regulation on the mutual recognition of freezing and confiscation orders, the directive on combating money laundering by criminal law, the directive laying down rules on the use of financial and other information to combat serious crimesthe European Public Prosecutor’s Office, and the European system of financial supervision.

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EU Politics

New EU guidance helps companies to combat forced labour in supply chains

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The Commission and the European External Action Service (EEAS) have published today a Guidance on due diligence to help EU companies to address the risk of forced labour in their operations and supply chains, in line with international standards. The Guidance will enhance companies’ capacity to eradicate forced labour from their value chains by providing concrete, practical advice on how to identify, prevent, mitigate and address its risk.

Executive Vice-President and Commissioner for Trade Valdis Dombrovskis said: “There is no room in the world for forced labour. The Commission is committed to wiping this blight out as part of our broader work to defend human rights. This is why we put strengthening the resilience and sustainability of EU supply chains at the core of our recent trade strategy. Businesses are key to making this happen, because they can make all the difference by acting responsibly. With today’s Guidance, we are supporting EU companies in these efforts. We will ramp up our due diligence work with our upcoming legislation on Sustainable Corporate Governance.”

High Representative/Vice-President Josep Borrell said: “Forced labour is not only a serious violation of human rights but also a leading cause of poverty and an obstacle to economic development. The European Union is a global leader on responsible business conduct and business and human rights. The Guidance we publish today translates our commitment into concrete action. It will help EU companies to ensure their activities do not contribute to forced labour practices in any sector, region or country.”

The Guidance explains the practical aspects of due diligence and provides an overview of EU and international instruments on responsible business conduct that are relevant for combatting forced labour. The EU has already put in place mandatory standards in some sectors and actively promotes the effective implementation of international standards on responsible business conduct.

Promoting responsible and sustainable value chains is one of the pillars of the recent EU trade strategy. The Guidance delivers on the strategy by helping EU businesses already take the appropriate measures, bridging the time until legislation on Sustainable Corporate Governance is in place. This upcoming legislation should introduce a mandatory due diligence duty requiring EU companies to identify, prevent, mitigate and account for sustainability impacts in their operations and supply chains. Subject to the upcoming impact assessment, this will include effective action and enforcement mechanisms to ensure that forced labour does not find a place in the value chains of EU companies.

EU trade policy already contributes to the abolishment of forced labour through its various instruments. EU trade agreements are unique in including binding commitments to ratify and effectively implement all fundamental ILO Conventions, including those on forced labour. Those conventions include an obligation to suppress the use of forced or compulsory labour in all its forms. This commitment extends to the countries benefitting from the special incentive arrangement for sustainable development and good governance (GSP+) under the EU’s General Scheme of Preferences (GSP). All 71 beneficiary countries of the General Scheme of Preferences are obliged to not commit serious and systematic violations of the principles of the fundamental ILO Conventions.

The Guidance also delivers on a number of the priorities of the EU Action Plan on Human Rights and Democracy 2020-2024 in the area of business and human rights. Those priorities include the eradication of forced labour and the promotion of internationally recognised due diligence standards.

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