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Shaping Europe’s digital future: What you need to know

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The EU is pursuing a digital strategy that builds on our successful history of technology, innovation and ingenuity, vested in European values, and projecting them onto the international stage. The White Paper on Artificial Intelligence (AI) and the European data strategy presented today show that Europe can set global standards on technological development while putting people first.

 Europe as the global leader of the digital transformation

 Digital technologies considerably improve our lives, from better access to knowledge and content to how we do business, communicate or buy goods and services. The EU must ensure that the digital transformation works for the benefit of all people, not just a few. Citizens should have the opportunity to flourish, choose freely, engage in society and at the same time feel safe online. Businesses should benefit from a framework that allows them to start up, scale up, pool data, innovate and compete with large companies on fair terms. Society should benefit from social and environmental sustainability, and a secure digital environment that respects privacy, dignity, integrity and other rights in full transparency.

What does the strategy say?

Over the next five years, the Commission will focus on three key objectives to promote technological solutions that will help Europe pursue its own way towards a digital transformation that works for the benefit of people and respects our fundamental values:

  •      Technology that works for people;
  •      A fair and competitive economy; and
  •      An open, democratic and sustainable society.

The EU’s digital strategy indicates the path that Europe needs to take to pursue its own way: a digital Europe that reflects the best of Europe. And it defines an ambitious approach towards digital technological development, as well as how technology will be used to meet our climate-neutrality objectives.

The White Paper on Artificial Intelligence and the European data strategy are the first pillars of the new digital strategy of the Commission. They are fully aligned with the need to put people first in developing technology, as well as with the need to defend and promote European values and rights in how we design, make and deploy technology in the real economy and how we improve the services of the public sector towards the citizens.

How will the EU fund the proposals on AI and data?

The required investments will be channelled from the Digital Europe programme (DEP), the Connecting Europe Facility 2 and Horizon Europe. For Horizon Europe, the Commission proposed to invest €15 billion in the ‘Digital, Industry and Space’ cluster, with AI as a key activity to be supported. As part of DEP, the European Commission proposed to invest almost €2.5 billion in deploying data platforms and AI applications. Out of these, €2 billion euros could be invested into a European High Impact project on European data spaces, including trustworthy and energy efficient data sharing and cloud infrastructures.The DEP will also support national authorities in making high value data sets available for re-use in different common data spaces.

How can technology support the European Green Deal?

Digital technologies are a critical enabler for the Green Deal, the EU’s new growth strategy to become the world’s first climate-neutral continent by 2050. For example, they can increase energy efficiency by tracking when and where electricity is most needed. Smart heating could help us save the equivalent of 6 million tonnes of oil, and farmers will be able to use fewer pesticides and fertilisers thanks to data and AI. However, for digitalisation to deliver its benefits, the ICT sector needs to undergo its own green transformation. Data centres and telecommunications need to become more energy efficient, use more renewable sources and should become climate neutral by 2030.

How does Europe work for an open global digital economy and society?

The Commission can leverage regulatory power, stronger economic and technological capabilities, diplomatic strengths and external financial instruments to advance the European approach and shape the global frameworks. This is the case for work done under association agreements and trade agreements. Europe must now lead the standardisation process of the new generation of technology, i.e. on blockchain, high-performance and quantum computing, AI and tools for data sharing and usage. The European Union is and will remain the most open region for trade and investment in the world, but this is not unconditional. Everyone can access the European market as long as they accept and respect our rules. The Commission will continue to address unjustified restrictions for European companies in third countries, such as data localisation requirements, and pursue ambitious goals in terms of markets access, research and development and standardisation programmes.

Europe as a leader in human-centric Artificial Intelligence

Why does the Commission present a White Paper on Artificial Intelligence?

The White Paper on Artificial Intelligence sets out the Commission’s proposals to promote the development of AI in Europe whilst ensuring respect of fundamental rights. AI is developing fast, which is why Europe needs to maintain and increase its level of investment. At the same time, AI entails a number of potential risks that need to be addressed. The White Paper sets out options to maximise the benefits and address the challenges of AI, and invites comments on these options by stakeholders.

What is the Commission’s approach on Artificial Intelligence?

In the White Paper, the Commission is taking a balanced approach, based on excellence and trust.

To achieve an ecosystem of excellence, the Commission proposes to streamline research, foster collaboration between Member States and increase investment into AI development and deployment. These actions build on the Coordinated Plan on AI with Member States of December 2018.

To achieve an ecosystem of trust, the Commission presents options on creating a legal framework that addresses the risks for fundamental rights and safety. This builds on the work of the High-Level Expert Group on artificial intelligence, in particular the Ethics Guidelines for Trustworthy AI, which were tested by companies in late 2019. A legal framework should be principles-based and focus on high-risk AI systems in order to avoid unnecessary burden for companies to innovate.

How will the EU ensure compliance with fundamental rights?

A human-centric approach means ensuring that AI systems are developed and used in a way that respects EU law and fundamental rights. For example, biases in algorithms or training data used for recruitment AI systems could lead to unjust and discriminatory outcomes, which would be illegal under EU non-discrimination laws. It is important to prevent breaches of fundamental rights and if they occur, to ensure that those breaches can be addressed by national authorities. High-risk AI systems need to be certified, tested and controlled, as cars, cosmetics, and toys are. For other AI systems, the Commission proposes voluntary labelling in case defined standards are respected. All AI systems and algorithms are welcome in the European market as long as they comply with EU rules.

What is facial recognition?

Facial recognition can take different forms. It can be used for user authentication i.e. to unlock a smartphone or for verification/ authentication at border crossings to check a person’s identity against his/her travel documents (one-to-one matching). Facial recognition could also be used for remote biometric identification, where an image of a person is checked against a database (one-to-many matching). This is the most intrusive form of facial recognition and in principle prohibited in the EU.

Will the EU regulate facial recognition for remote identification?

The gathering and use of biometric data for remote identification purposes carries specific risks for fundamental rights. EU data protection rules already prohibit in principle the processing of biometric data for the purpose of uniquely identifying a natural person, except under specific conditions. Specifically, remote biometric identification can only take place for reasons of substantial public interest. It must be based on EU or national law, the use has to be duly justified, proportionate and subject to adequate safeguards. Hence, allowing facial recognition is currently the exception. With the AI White Paper, the Commission wants to launch a broad debate on which circumstances might justify exceptions in the future, if any.

What about victims or damage caused by AI?

There is no need to completely re-write liability rules at EU or national level. The Commission is inviting opinions on how best to ensure that safety remains at a high standard and that potential victims do not face more difficulties to get compensation compared to victims of traditional products and services.

A secure and dynamic single market for data

Why does the EU need a data strategy?

Data is the basis of different waves of innovation. The way that we organise data access and reuse will determine our future innovation capacity. While currently a small number of big tech firms hold a large part of the world’s data, huge opportunities lie ahead for Europe. Rapidly increasing amounts of data will be generated in the next years and storage shifts from the cloud to the edge. The EU can build on a strong legal framework in data protection, fundamental rights, safety and cyber-security; its internal market; and a large degree of interconnection in public services.

Citizens, businesses and organisations should be empowered to make better decisions based on insights gleaned from non-personal data. That data should be available to all, whether public or private, start-up or giant.

TheEuropean data strategy presented today aims to enhance the use of data, which will bring enormous benefits to citizens and businesses. It will enable the development of new products and services and will lead to productivity gains and resource efficiency for businesses and better services provided by the public sector. It can for example help develop personalised medicine for patients, improve mobility for commuters or contribute to Europe becoming the first climate neutral continent by 2050.

What is the aim of the data strategy?

The aim of the strategy is to create a genuine single market for data, where personal and non-personal data, including confidential and sensitive data, are secure and where businesses and the public sector have easy access to huge amounts of high quality data to create and innovate. It will be a space where all data-driven products and services fully respect EU rules and values. This will ensure Europe’s technological sovereignty in a globalised world and unlock the enormous potential of new technologies like AI.

How does the data strategy relate to the General Data Protection Regulation?

Every day, people generate ever-increasing amounts of data through their daily activities. Its collection and reuse need to respect the rights and interests of the people first, in line with European values and rules. With the General Data Protection Regulation (GDPR), the EU has laid down a solid basis for a human-centric data economy by ensuring that individuals remain in full control of their data. This has made the EU a source of inspiration for the protection of privacy in many countries worldwide.

At the same time, individuals could benefit from technical tools and standards that make the exercise of their rights, in particular their right to data portability, simple and easy. This would also enable novel data flows, protect consumers and foster competition.

The data strategy presented today will empower people to have a stronger say on who can access the data they generate, including personal IoT data, and how it is used through personal data spaces. This could, for example, be supported by having stricter requirements on interfaces for real-time data access or by guaranteeing the neutrality of personal data spaces.

How can even more data be made available for reuse?

The legislative framework proposed in the data strategy would reinforce essential data governance structures and mechanisms in Member States and at the EU level to make more data available for reuse, with full respect of the data protection legislation.

This would help to prioritise standards and a more harmonised datasets to foster data interoperability within and across sectors; facilitate the access to and reuse of sensitive data such as health or social data for scientific research purposes (including for AI), in compliance with data protection legislation; help people make their data available for the common good for researchers to innovate for the benefit of society.

How will data be used in a way that benefits EU citizens?

Data can give insights that help combat emergencies, such as floods and wildfires, make our cities greener and cleaner, help people live longer and healthier lives. The existing Open Data Directive already makes vast amounts of data available for reuse for the benefit of society. Business-to-government data sharing can be a game-changer for providing general welfare in the EU.

The strategy on data intends to make more privately and publicly held data available by opening up public sector datasets of high commercial and societal value, such as environmental data and earth observation data; facilitating the use of publicly held sensitive data for scientific research and for the common good; exploring the creation of EU-wide legislation on the use of private sector data by the public sector for the common good.

How will the European data strategy help businesses?

Access to data is crucial to ensure competition and to create new business opportunities for smaller and larger firms. Companies need common standards and clear rules on how data transfers should take place. This also requires investments in new technologies and infrastructures so that data is the basis of future innovative products, services and improved efficiency.

Businesses should also be free to decide to whom and under what conditions access can be granted to their non-personal data. The Commission already started to address this problem with non-binding guidelines on businesses-to-business data sharing, which aimed to create fair and open markets for IoT-generated data.

Finally, the Commission envisages to propose a ‘Data Act’ to look at different types of data sharing scenarios and ways to empower individuals so that they become more involved in the data economy.

How can data contribute to the common good?

Data can give insights that help combat emergencies, such as floods and wildfires, make our cities greener and cleaner, and help people live longer and healthier in a secure environment. The existing Open Data Directive already make vast amounts of data available for reuse for the benefit of society. There are, however, some valuable but highly sensitive datasets gathered by some public institutions, falling outside the scope of that Directive, which could be reused for the common good under some strict conditions. For example, the reuse of publicly held health records or social data could help develop personalised medicine or advance research to find cures for specific diseases. Companies also collect huge amounts of data useful to society. If the public sector could access and reuse certain private sector data, it would be able to improve public services and policies.

What are the next steps?

The Commission will present later this year further measures, such as a Digital Services Act to establish clear rules for all businesses to access the Single Market, to strengthen the responsibility of online platforms and to protect fundamental rights. It will also propose a review of the eIDAS regulation, allowing for a secure electronic identity that puts people in control of the data they share online. Furthermore, the EU will put a strong emphasis on cybersecurity by promoting cooperation through a Joint Cyber Unit that protects critical European infrastructure and strengthens the cybersecurity single market. Finally, Europe will continue to build alliances with global partners, leveraging its regulatory power, capacity building, diplomacy and finance to promote the European digitalisation model internationally.

The White Paper on Artificial Intelligence is open for public consultation until 19 May 2020. The Commission is also gathering feedback on the data strategy. Based on the input received, the Commission is planning to take further action to support the development of trustworthy AI and a data-agile economy.

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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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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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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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