On 17 June, the European Commission presented a European strategy to accelerate the development, manufacturing and deployment of vaccines against COVID-19. The EU Vaccines Strategy intends to ensure the production in Europe of qualitative, safe and efficacious vaccines, and to secure swift access to them for Member States and their populations. Moreover, the Strategy reflects the global solidarity effort and ensures equitable access to an affordable vaccine as early as possible.
Joint action at EU level is the surest, quickest and most efficient way of achieving these objectives. No Member State on its own has the capacity to secure the investment in developing and producing a sufficient number of vaccines. It is only through swift and unified action by the EU and its Member States that sufficient and speedy supplies of a safe and effective vaccine can be ensured. A common strategy allows better hedging of bets, sharing of risks and pooling investments to achieve economies of scale, scope and speed.
The Commission has signed two first contracts to allow the purchase of a vaccine, once proven safe and efficient, with AstraZeneca and Sanofi-GSK. Successful exploratory talks were concluded with Johnson & Johnson on 13 August, CureVac on 18 August, Moderna on 24 August and BioNTech on 9 September.*
Are all Member States represented in the Steering Committee and in the Negotiation Team?
All Member States have endorsed the approach set out by the Vaccines Strategy and signed up to an agreement for its implementation. As a result, all Member States are represented at the Steering Committee which discusses and reviews all aspects of the Advanced Purchase Agreement (APA) contracts before signature. The Committee appoints the members of the Joint Negotiation Team, which negotiates the APAs with the vaccines developers and reports to the Committee. All participants in these instances have been appointed by their Governments and have signed declarations of absence of conflict of interest and confidentiality.
What is the difference between concluding an Advanced Purchase Agreement (APA) and signing a contract with a pharmaceutical company?
Before an Advanced Purchase Agreement (APA) is negotiated, the Negotiation Team holds exploratory talks with the company to find out whether proceeding into detailed contractual negotiations is reasonable. If this is the case and a common understanding is reached on a terms sheet, a tender invitation is sent to the company, which then has to propose an offer.
An APA is concluded when both sides have finalised the contractual work. This is discussed and agreed with the Steering Committee. The conclusion of an APA requires the approval of the Commission.
If the APA provides for an obligation for the Member States to purchase vaccine doses (even if there might also be additional optional doses in the APA), Member States have 5 working days to notify if they wish to opt-out. The contract is only signed if at least four Member States are ready to be bound by it.
If the APA provides only for an option for Member States to purchase vaccine doses at a later date, the Commission can approve and sign the APA directly with the company concerned. Member States can decide later whether to exercise the option. It are the Member States that are responsible for purchasing the vaccines when they become available.
Will the Commission publish the contracts signed with pharmaceutical companies?
The focus for the Commission is the protection of public health and securing the best possible agreements with companies so that vaccines are affordable, safe and efficacious. Contracts are protected for confidentiality reasons, which is warranted by the highly competitive nature of this global market. This is in order to protect sensitive negotiations as well as business related information, such as financial information and development and production plans.
Disclosing sensitive business information would also undermine the tendering process and have potentially far-reaching consequences for the ability of the Commission to carry out its tasks as set out in the legal instruments that form the basis of the negotiations. All companies require that such sensitive business information remains confidential between the signatories of the contract. The Commission therefore has to respect the contracts it concludes with the companies.
Finally, the Commission is accountable towards the other European institutions and the European citizen. The Commission is acting in full compliance with all applicable rules regarding financial management, which can be subject to audit at a later stage.
LIABILITY & INDEMNIFICATION
Has the Commission made concessions on liability to the industry, in particular on indemnification for certain liabilities?
The Commission ensures that any agreement made to secure vaccines through the Vaccines Strategy will be fully compliant with EU law. The contracts the Commission is negotiating fully respect and protect citizens’ rights, in line with the Product Liability Directive.
In line with EU product liability rules, liability remains with the company. However, in order to compensate for potential risks taken by manufacturers due to the unusually shorter timespan for vaccines development, the APAs provide for Member States to indemnify the manufacturer for possible liabilities incurred only under specific conditions set out in the APAs.
The Commission has made clear throughout the implementation of the Vaccines strategy that it is not prepared to make compromises on the application of the existing rules that apply to bringing a pharmaceutical product into the market. These principles are equally valid for any indemnification clause the Commission negotiates.
Thus, the provisions on liability and indemnification do not alter in any way the regulatory burden of proof borne by the companies to demonstrate the safety and efficacy of their products. Any vaccine put on the market will have to meet the necessary safety requirements and undergo the independent scientific assessment by the European Medicines Agency as part of the EU market authorisation procedure.
The EU and Member States will continue taking all necessary measures to protect citizens, ensuring that:
- a strict, independent scientific assessment (looking at quality, safety and efficacy) must be carried out before a vaccine is approved;
- citizens’ rights remain fully protected;
- Member States are ready to financially cover certain of the companies risks to ensure that vaccines are actually available for EU citizens to protect public health.
How can a COVID-19 vaccine be developed and authorised within a 12-18 months timeframe when the normal process takes around 10 years? What are the roles of the European Medicines Agency (EMA) and the European Commission in this context and how can the process of marketing authorisation be speeded up in emergency situations?
We are currently in the middle of the most severe public health crisis in modern times. Finding a safe and effective vaccine will be a key element of the exit strategy from the pandemic. Europe and the world need to act swiftly and teams around the world are working with the ambition of delivering a successful vaccine within a timeframe of 12 -18 months. Delivering a successful vaccine within a compressed timeframe does however not mean compromising on safety, on the contrary, the safety and effectiveness of vaccines is non-negotiable and a fundamental requirement for any vaccine to reach the EU and other markets.
It is indeed true that vaccine development can take time and this is why we created our Vaccines Strategy to come together and work on all fronts, around the clock, with all Member States, global partners, researchers and scientists to develop a safe and efficacious vaccine in a short time frame. The often-quoted 10 year timeframe refers to the time from concept to authorisation, including gathering the necessary evidence through clinical trials. Reducing this timeline to 12-18 months means both accelerating development and manufacturing timelines as well as the marketing authorisation.
The regulatory processes will be flexible but will remain as rigorous as always. Together with the Member States and the European Medicines Agency, the Commission will use existing flexibilities in the EU’s regulatory framework to accelerate the authorisation and availability of successful vaccines against COVID-19, while maintaining the standards for vaccine quality, safety and efficacy.
Market authorisation process
The vaccine producers will decide if and when to submit an application for a marketing authorisation for a vaccine. The role of the EMA in this context is to carry out an independent scientific assessment of the application and submit its scientific opinion to the European Commission which is responsible for issuing a marketing authorisation that is valid for the entire EU. The marketing authorisation will only be granted if the benefit-risk balance is positive following an assessment of the quality, safety and efficacy of the product.
Variations to usual development plans are possible in the emergency context and developers can reduce timelines, for example, by conducting some studies in parallel, instead of carrying them out sequentially, and by using a variety of trial designs and endpoints to determine efficacy. Developers are advised to discuss development plans with regulators to clarify requirements for marketing approval.
Clinical trials for COVID-19 vaccines are being carried out more quickly than usual because the effort being put into their organisation and conduct has been significantly increased by the sponsors, researchers and regulators. The widespread nature of the pandemic means that large numbers of trial participants can be recruited in a relatively short time, without compromising the quality of the trials themselves.
The EU regulatory system is dedicating significant resources to supporting the rapid development and authorisation of safe, effective and high-quality COVID-19 vaccines. EMA’s pandemic Task Force (COVID-ETF), which brings together in one group the best scientific experts from the EU regulatory network, will work closely with EMA’s human medicines committee (CHMP) for optimal and fast coordination of activities related to the development, authorisation and safety monitoring of vaccines against COVID-19.
Can a vaccine be approved before completion of phase 3 of clinical trials?
A core objective of the Commission and the European Medicines Agency, through the EU Vaccines Strategy, is to ensure the quality, safety and efficacy of vaccines. As such, any vaccine can only be granted a marketing authorisation in the EU after a thorough evaluation. To recommend the authorisation of a vaccine, EMA needs to have sufficient information on its safety, efficacy and pharmaceutical quality. Marketing authorisation is only granted when the evidence shows that the benefits of the vaccine outweigh any risks.
In principle, large-scale Phase 3 efficacy trials involving thousands of participants are required to support the marketing authorisation of a COVID-19 vaccine. These trials should be designed to measure the vaccine’s efficacy in protecting against COVID-19 (efficacy endpoints) and its safety. This is because there are no known indicators (such as the levels of antibodies in the blood) that can predict protection and could be used instead of efficacy endpoints. In addition, we are currently in a situation where the virus is circulating, which makes it feasible to establish the efficacy of a vaccine in large-scale clinical trials.
The protocols of such clinical trials, including any plans for interim analyses, are subject to regulatory approval.
What does the scientific assessment by the European Medicines Agency consist of? What is the process of approval?
To obtain a marketing approval for a vaccine in the EU, a vaccine developer needs to submit the results of all testing/investigations to the medicines regulatory authorities in Europe as part of a ‘marketing authorisation’ application.
Applications for marketing authorisation submitted to EMA undergo a comprehensive, independent scientific assessment carried out by EMA’s expert scientific committees on human medicines and on safety (the “CHMP” and “PRAC”), made up of experts working in national medicines’ regulatory agencies. As for all medicines, EU legislation requires that the initial evaluations are carried out separately by two different assessment teams (led by a so-called Rapporteur and Co-Rapporteur) and reviewed by the Committee as a whole.
For COVID-19, EMA has put in place rapid review procedures to deliver assessments of applications quickly while ensuring robust scientific opinions. Key to this shortening of timescales are ‘rolling reviews’. In a public health emergency, EMA assesses data for promising medicines or vaccines as they become available. Through these rolling reviews, EMA can therefore start evaluating data while the development is still ongoing. When the medicine’s development is progressed enough for a marketing authorisation application, the formal assessment procedure can take place in a shorter than usual timeframe, because the data have already been scrutinised during the rolling review.
The CHMP, once it has concluded its scientific evaluation of the data and after assessing the quality, safety and efficacy of the medicinal product in question, makes a recommendation on whether the medicine should be given a marketing authorisation in the EU.
However, if comprehensive data would not be available at the time of the marketing authorisation application, the EU regulatory system is designed to potentially accommodate this situation by providing for a conditional authorisation system. This means that the initial (“conditional”) authorisation granted by the Commission is based on less comprehensive data than would normally be the case (nonetheless with a positive benefit-risk balance), and with obligations on the marketing authorisation holders for the data to be completed afterwards and to be submitted for assessment. Conditional marketing authorisations are closely monitored and are subject to annual review.
The European Commission takes a decision on whether or not to issue the marketing authorisation on the basis of the recommendation from the EMA. The decision-making timeframe will also be reduced by shortening the period for consulting Member States, and allowing translation of the documents into the full set of languages after the authorisation, rather than before.
What safety requirements need to be met?
In order to authorise any medicinal product, EMA needs to have and assess robust information on its safety, efficacy and pharmaceutical quality, with safety being of the utmost importance. The safety requirements for COVID-19 vaccines remain as high as for any other vaccine in the EU, the context of a pandemic will not change this.
Before a vaccine is approved for use, the main body of evidence for its safety and efficacy comes from the results of clinical trials, where participants are selected carefully and followed up under controlled conditions.
In addition, after authorisation, EU law requires that the safety of the vaccine – as is the requirement all medicinal products – will be monitored while in use. In addition to safety, the vaccine’s effectiveness should also be monitored. As part of such monitoring, studies are carried out after marketing. Some of these studies may be imposed on companies as part of the conditions for maintaining their marketing authorisation; other studies will be conducted by public authorities responsible for vaccination programmes.
The EU has a comprehensive safety monitoring (pharmacovigilance) system that allows measures to be put in place to minimise risk, to ensure reporting of suspected side effects, to detect any potential adverse effects, and introduce any necessary mitigating actions early.
Specifically for COVID-19 vaccines, EMA in close collaboration with the Commission, Member States, European and international partners, is establishing enhanced safety monitoring activities. These activities are aimed at making sure that any new information collected post-marketing will be identified and evaluated as quickly as possible, and appropriate regulatory actions are taken in a timely manner to protect patients and safeguard public health. These activities include the collection of exposure data, enhanced safety signal detection and management, enhanced transparency and setting a European infrastructure for vaccines monitoring, including multicentre observational studies on COVID-19 patients. Prompt and clear communication of the outcomes of these evaluations will be ensured.
ONCE A VACCINE IS AVAILABLE
What actually happens when the vaccine is available?
A vaccine will only become available after meeting the established safety requirements, having first undergone the robust scientific assessment by the European Medicines Agency and completed the EU market authorisation procedure.
The Member States will then be able to benefit from those doses by purchasing them, according to the APA concluded.
Where will the doses be stored?
Each Member State will decide on the best way to store the vaccines. The technical storage conditions are defined by each manufacturer based on specific requirements of each type of vaccine so as to ensure they quality.
Who will receive the first doses?
All Member States will have equal access to the available doses. The Member States will then decide whom they will offer the vaccines to among their population.
COVID-19 VACCINE GLOBAL ACCESS FACILITY (COVAX)
What is the Commission‘s involvement with COVAX?
The COVAX Facility, co-led by Gavi, the Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations (CEPI) and WHO, aims to accelerate the development and manufacture of COVID-19 vaccines and to guarantee fair and equitable access for every country in the world.
Supporting equal and global access to a safe and efficient vaccine for everyone in the world is a priority for the Commission. No region of the world is safe until we are all safe. That is why, on 31 August, the Commission’s expressed its interest to participate in COVAX. The 31 August announcement included a support of €400 million in guarantees for the COVAX Facility. The vaccines purchased in this context are for Low and Medium Income Countries.
The Commission and Member States joining the COVAX Facility reaffirm that they are supporting COVAX’s objectives and interest as a group, in order to make the EU Vaccines Strategy and the COVAX Facility complementary and thus mutually reinforcing.
The Commission and Member States are currently pursuing a joint approach for their participation in COVAX, and the 31 August expression of interest is part of this process. Talks are ongoing with Gavi and CEPI to reach an agreement in September on terms and conditions for the EU’s participation in the COVAX Facility. .
Will the Commission procure vaccines through the COVAX facility?
The Commission is only purchasing vaccines on behalf of EU Member States via the mechanism set up in the EU Vaccines Strategy and finances it through the Emergency Support Instrument (ESI). The Commission’s participation in COVAX supports a global effort to produce and distribute vaccines to all in need, in particular for low and middle income countries. The detailed terms and conditions for the EU’s and Member States’ participation and contribution is under discussion and will be worked out in the coming days and weeks.
Can Member States buy vaccines through COVAX?
Member States have committed, as part of the EU Vaccines Strategy, not to enter into parallel negotiations with the same vaccine manufacturers with which talks are on-going at EU level. This does not exclude the possibility to take part in negotiations with other vaccine companies through COVAX.
What will the guarantees be used for and why not give cash?
The Commission is providing financial guarantees backing COVAX negotiations on advanced purchase agreements of vaccines. These guarantees will enable COVAX to lower the risk and conclude advanced purchase agreements with a larger portfolio of vaccine producers.
Contracts under negotiation by COVAX require a strong financial backing which the EU guarantees will provide.
How does the Commission ensure complementarity between the EU Vaccines Strategy and COVAX?
The EU Vaccines Strategy goes hand in hand with the EU’s commitment to global solidarity. This applies at different levels: support to companies in their capacity expansion, advancing research and support development for the benefit of the world population. Investing upfront in the accelerated development and manufacturing of vaccines to the benefit of the rest of the world. By providing financial resources to the international institutions, such as WHO, CEPI, GAVI, the EU is also supporting access to vaccines for the whole world.
Manufacturers with whom the EU negotiates are also committed to supply future doses to other countries in the world, there is no exclusivity for delivery to Europe only and no export restriction.
What Europe is doing is making important and risky investments so that together with the regulatory authorisation procedures that we have in place, we accelerate the development of safe and efficacious vaccines, which will also be to the benefit of the rest of the world.
What we do in Europe is complementary and mutually reinforcing with our action for global solidarity. That is also why the Commission and the EU Member States have decided to join the COVAX facility.
Commission proposes draft mandate for negotiations on Gibraltar
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.
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.
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.
Commission overhauls anti-money laundering and countering the financing of terrorism rules
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:
- A Regulation establishing a new EU AML/CFT Authority;
- A Regulation on AML/CFT, containing directly-applicable rules, including in the areas of Customer Due Diligence and Beneficial Ownership;
- A sixth Directive on AML/CFT (“AMLD6”), replacing the existing Directive 2015/849/EU (the fourth AML directive as amended by the fifth AML directive), containing provisions that will be transposed into national law, such as rules on national supervisors and Financial Intelligence Units in Member States;
- A revision of the 2015 Regulation on Transfers of Funds to trace transfers of crypto-assets (Regulation 2015/847/EU).
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.
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.
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.
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 crimes, the European Public Prosecutor’s Office, and the European system of financial supervision.
New EU guidance helps companies to combat forced labour in supply chains
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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