COUNCIL OF THE EUROPEAN UNION,update

 

Press material Wednesday 20 December 2023

● Council of the EU   20/12/2023 12:35 | Press release | Sustainable finance: Council agrees negotiating mandate on ESG ratings   The Council today reached an agreement on its negotiating mandate on a proposal for a regulation on environmental, social and governance (ESG) ratings, with the aim of boosting investor confidence in sustainable products. ESG ratings provide an opinion on a company’s or a financial instrument’s sustainability profile, by assessing its exposure to sustainability risks and its impact on society and the environment. ESG ratings have an increasingly important impact on the operation of capital markets and on investor confidence. The new rules aim to strengthen the reliability and comparability of ESG ratings by improving the transparency and integrity of the operations of ESG ratings providers, making ratings more comparable and preventing potential conflicts of interests. Under the proposed rules, ESG rating providers will need to be authorised and supervised by the European Securities and Markets Authority (ESMA) and comply with transparency requirements, in particular with regard to their methodology and sources of information. Providers will be subject to specific measures to prevent and manage conflicts of interests. Main changes brought by the Council In its negotiating mandate, the Council clarified the circumstances under which ESG ratings fall under the scope of the regulation, providing further details on the applicable exemptions. Additionally, in line with the corporate sustainable reporting directive, it clarified that ESG ratings encompass environmental, social and human rights or governance factors. ESG rating providers that wish to operate in the EU will need to comply with certain requirements, including obtaining an authorisation from ESMA, or in the case of ESG rating providers established outside the EU, an equivalence decision, an endorsement of their ESG ratings or a recognition. The Council also clarified the territorial scope of the regulation, outlining what constitutes operating in the EU, and provided further clarification on the applicable provisions under the endorsement regime. The Council also introduced a lighter, temporary and optional registration regime of three years for existing small ESG rating providers and new small markets entrants. Small ESG rating providers who opt in under the lighter regime will not have to pay ESMA supervisory fees. They will have to comply with some general organisational and governance principles, as well as transparency requirements to the public and users. They will also be subject to the powers of ESMA to request information and conduct investigations and on-site inspections. Upon exiting this temporary regime, small ESG rating providers will need to comply with all the provisions outlined in the regulation, including the requirements regarding governance and supervisory fees. Regarding the separation of business and activities, the Council introduced the possibility for ESG ratings providers to not have a separate legal entity for certain activities, provided that there is a clear distinction between activities and that they put in place measures to avoid conflicts of interests. This derogation would not be applicable to consulting or audit activities when they are provided to rated entities. Next steps The European Parliament agreed on its negotiating mandate in the plenary session held between 11 and 14 December 2023. Today’s agreement on the Council mandate paves the way to interinstitutional negotiations that are expected to start in January 2024. Background On 13 June 2023, the Commission presented a proposal for a regulation on ESG ratings providers. The proposed rules concern the following: authorisation and supervision by ESMA of third-party providers of ESG ratings separation of business for the prevention and management of conflicts of interests proportionate and principle-based organisational requirements minimum transparency requirements to the public on ratings methodologies and objectives and more granular information to subscribers and rated companies transparency of fees and requirements for fees to be fair, reasonable and non-discriminatory possibility for providers established outside the EU to operate in the EU market under the equivalence, endorsement, recognition regimes Council’s negotiating mandate Commission proposal on ESG rating activities Capital Markets Union (background information)

Press material Wednesday 20 December 2023

● Council of the EU   20/12/2023 11:51 | Press release | Benchmarks: Council agrees its negotiating mandate   Today, the Council agreed its negotiating mandate on benchmarks regulation. The proposal concerns the scope of the rules for benchmarks, the use in the EU of benchmarks provided by an administrator located in a third country, and certain reporting requirements. Benchmarks are widely used by companies and investors in the EU as a reference in their financial instruments or contracts. Under the current rules, EU market participants can only use benchmarks produced or administered in a non-EU country if the country concerned has a framework equivalent to that of the EU, if its benchmark is endorsed by an EU benchmark administrator, or if the benchmark is recognised in the EU. The proposal aims to reduce the regulatory burden on administrators of benchmarks that are not economically significant in the EU by removing them from the scope of current rules. It intends to significantly reduce the scope of benchmark administrators subject to its requirements. It also aims to simplify the current approach to non-EU country benchmarks in the EU. In its negotiating mandate, the Council agreed that the regulatory treatment of commodity benchmarks should be tailored to their specific characteristics. The Council specified that only those benchmarks designated as critical, as significant (either by meeting a quantitative threshold, or by designation of the national competent authority concerned or by ESMA), EU Paris-aligned Benchmarks, EU Climate Transition Benchmarks, and certain commodity benchmarks (subject to Annex II) should remain under the scope of regulation. Administrators of those benchmarks that were authorised, registered, endorsed or recognised on the date of application of this amending regulation should not be obliged to re-apply for authorisation, registration, recognition, or endorsement. Background and next steps This proposal forms part of a package of measures to rationalise reporting requirements. It aims to rationalise benchmark authorisation and registration and alleviate the burden on EU companies, in particular SMEs. Market participants have called for a revision of the framework of benchmarks regulation and for making regulatory requirements dependent on the systemic relevance of a benchmark or the significance of the role that a benchmark plays for the operation of markets in a member state or across the EU. In its Communication ‘Long-term competitiveness of the EU: looking beyond 2030’, the Commission stressed the importance of a regulatory system that ensures that objectives are reached at minimum costs. It has therefore committed to a fresh push to rationalise and simplify reporting requirements, with the aim of reducing the administrative burden by 25%, without undermining the related policy objectives. Council’s negotiating mandate Capital Markets Union (background information)

Press material Wednesday 20 December 2023

● Council of the EU   20/12/2023 11:04 | Press release | Cyber solidarity act: Member states agree common position to strengthen cyber security capacities in the EU   To strengthen EU’s solidarity and capacities to detect, prepare for and respond to cybersecurity threats and incidents, member states’ representatives (Coreper) reached a common position on the so-called ‘cyber solidarity act’. The draft regulation establishes EU capabilities to make Europe more resilient and reactive in front of cyber threats, while strengthening cooperation mechanisms. "Today’s agreement is another step to improve cyber resilience in Europe. It will certainly strengthen EU’s and member states’ capabilities to prepare, prevent, respond, and recover from large-scale cyber threats and attacks in a more efficient and effective manner." José Luis Escrivá, Spanish minister for digital transformation Main objectives of the Commission proposal The Commission proposal mainly aims to: support detection and awareness of significant or large-scale cybersecurity threats and incidents bolster preparedness and protect critical entities and essential services, such as hospital and public utilities strengthen solidarity at EU level, concerted crisis management and response capabilities across member states contribute to ensuring a safe and secure digital landscape for citizens and businesses To detect major cyber threats quickly and effectively, the draft regulation establishment a ‘European cyber shield’, which is a pan-European infrastructure composed of national and cross-border security operations centres (SOCs) across the EU. These are entities in charge of sharing information and tasked with detecting and acting on cyber threats. They will use state-of-the-art technology, such as artificial intelligence (AI) and advanced data analytics, to detect and share timely warnings on cyber threats and incidents across borders. In turn, authorities and relevant entities will be able to respond more efficiently and effectively to major incidents. The draft regulation also provides for the creation of a cyber emergency mechanism to increase preparedness and enhance incident response capabilities in the EU. It will support: preparedness actions, including testing entities in highly critical sectors (healthcare, transport, energy, etc.) for potential vulnerabilities, based on common risk scenarios and methodologies a new EU cybersecurity reserve consisting of incident response services from private sector trusted providers pre-contracted and therefore ready to intervene, at the request of a member state or EU institutions, bodies, and agencies, in case of a significant or large-scale cybersecurity incident mutual assistance in financial terms, where a member state could offer support to another member state Finally, the proposed regulation establishes the cybersecurity incident review mechanism to enhance EU resilience by reviewing and assessing significant or large-scale cybersecurity incidents after they have taken place, drawing lessons learned and where appropriate, issuing recommendations to improve EU's cyber posture. At the request of the Commission or of national authorities, the EU’s cybersecurity agency (ENISA) would review certain cybersecurity incidents and deliver a report with lessons learned and recommendations. The Council’s amendments The Council’s position maintains the general thrust of the Commission proposal but amends the draft regulation in the following aspects: it clarifies terminology and adapts the text to member states’ specificities, particularly regarding the SOCs and the cyber shield in the subject matter and scope, language was improved on the response measures and recovery, as well as on provisions referring to national security definitions have been modified and aligned with other legislation, mainly the recently revised directive on network and information systems (‘NIS 2’) the voluntary nature of member states’ involvement in the mechanisms established by the Commission proposal was stressed throughout the text and interactions between existing entities and those defined by the draft regulation have been clarified the role of the EU agency for cybersecurity (ENISA) has been reinforced and clarified throughout the text improvements have been introduced on procurement, funding, information sharing and the incident review mechanism. Next steps Today’s agreement on the Council’s common position (‘negotiating mandate’) will allow the incoming presidency to enter negotiations with the European Parliament (‘trilogues’) on the final version of the proposed legislation. Background On 18 April 2023, the Commission adopted the proposal for a regulation laying down measures to strengthen solidarity and capacities in the EU to detect, prepare for and respond to cybersecurity threats and incidents, the so-called ‘Cyber solidarity act’. The origin of such a legislative proposal is multiple. The EU cybersecurity strategy adopted in December 2020 mentioned the creation of a European cyber shield, reinforcing the cyber threat detection and information sharing capabilities in the EU. On 8 and 9 March 2022, ministers of EU member states in charge of telecommunications met informally in Nevers and expressed the wish for the EU to fully prepare to face large-scale cyberattacks. The Council conclusions of May 2022 on the cyber posture highlighted the need to address gaps in terms of response and preparedness to cyber-attacks, by calling for the Commission to present a proposal on a new emergency response fund for cybersecurity. The Commission proposal therefore introduces a ‘European cyber shield’, composed of operations centres (SOCs), brought together in several multi-country SOC platforms financed by the Digital Europe programme. The total budget for all actions under the EU cyber solidarity act is of EUR 1.1 billion, of which about 2/3 will be financed by the EU through the Digital Europe programme. Cyber solidarity act, Council’s progress report, 5 December 2023 Regulation on measures to strengthen solidarity and capacities in the Union to detect, prepare for and respond to cybersecurity threats and incidents (Cyber solidarity act), Commission proposal, 18 April 2023 Council conclusions on the development of EU’s cyber posture, Press release, 23 May 2022

Press material Wednesday 20 December 2023

● Council of the EU   20/12/2023 08:46 | Press release | The Council and the European Parliament reach breakthrough in reform of EU asylum and migration system   The Spanish presidency of the Council and the European Parliament have reached a deal on the core political elements of five key regulations that will thoroughly overhaul the EU’s legal framework on asylum and migration. "The EU is delivering on its promise to improve the asylum and migration system. Citizens across the EU want their governments to deal with the migration challenge and today is a big step in this direction. This reform is a crucial piece of the puzzle. But the EU also remains committed to tackling the root causes of migration, working together with countries of origin and transit and adressing the scourge of migrant smuggling." Fernando Grande-Marlaska Gómez, Spanish Minister for the Interior The five EU laws that the Spanish Presidency and Parliament have agreed on touch upon all stages of asylum and migration management, ranging from screening irregular migrants when they arrive in the EU, taking biometric data, procedures for making and handling asylum applications, the rules on determining which member state is responsible for handling an asylum application and cooperation and solidarity between member states and how to handle crisis situations, including cases of instrumentalisation of migrants. The new rules, once adopted, will make the European asylum system more effective and will increase the solidarity between member states by enabling to lighten the load on those member states where most migrants arrive.

Press material Tuesday 19 December 2023

● Council of the EU   19/12/2023 19:17 | Press release | DPRK/North Korea: Statement by the High Representative on behalf of the European Union on the launch of an inter-continental ballistic missile   The EU strongly condemns the Democratic People’s Republic of Korea’s (DPRK) launch of another intercontinental ballistic missile on 18 December, for the fifth time this year, following the launch of a short-range ballistic missile the day before. The DPRK must cease these illegal and dangerous launches, which blatantly violate UN Security Council resolutions (UNSCRs) and undermine international peace and security as well as the global non-proliferation regime. The DPRK must comply immediately with its obligations under UNSCRs by abandoning all its nuclear weapons, other weapons of mass destruction, ballistic missile programmes and existing nuclear programmes, in a complete, verifiable and irreversible manner and cease all related activities. This is the only viable route to sustainable peace and security on the Korean peninsula. The DPRK cannot and will never have the status of a nuclear weapon state in accordance with the Non-Proliferation Treaty (NPT). The EU urges the DPRK to return immediately to full compliance with the NPT as a non-nuclear weapon state and the International Atomic Energy Agency (IAEA) Comprehensive Safeguards Agreement, bring into force the Additional Protocol and sign and ratify the Comprehensive Nuclear Test Ban Treaty. The DPRK’s use of resources to support its unlawful weapons programmes exacerbates the difficult living conditions and human rights situation endured by much of its population. It is critical that all UN Member States, especially Members of the UN Security Council, urge the DPRK to resume meaningful dialogue, and ensure the full implementation of UN sanctions. The EU urges the DPRK and Russia to refrain from any exchanges of military equipment, missile technology or ammunition and abide by the successive UNSCRs that clearly prohibit any arms exports or imports involving the DPRK. The EU condemns any military support for Russia’s war of aggression against Ukraine provided by the DPRK, and reiterates its deep concern about reports of DPRK arms transfers to Russia. The EU expresses its full solidarity with the Republic of Korea and Japan. The EU is ready to work with all partners in promoting a meaningful diplomatic process aimed at building sustainable peace and security through the complete, verifiable and irreversible denuclearisation of the Korean peninsula.

Meetings Tuesday 19 December 2023

● Council of the EU   19/12/2023 17:18 | MEETING | Main results - Transport, Telecommunications and Energy Council (Energy), 19 December 2023   The Council reached a political agreement on extending the period of application of three emergency Council regulations adopted under article 122 of the Treaty on the Functioning of the EU. The emergency measures aims to enhance solidarity between member states, accelerate the deployment of renewable energy and protect EU citizens from excessively high energy prices. View meeting page

Press material Tuesday 19 December 2023

● Council of the EU   19/12/2023 13:44 | Press release | Energy prices and security of supply: Council agrees to extend emergency measures   Today ministers reached a political agreement on extending the period of application of three emergency Council regulations adopted under article 122 of the Treaty on the Functioning of the EU, designed for emergency situations. The emergency measures were adopted last year due to Russia’s war of aggression against Ukraine, in order to enhance solidarity between member states, accelerate the deployment of renewable energy and protect EU citizens from excessively high energy prices. "The extension of the three emergency measures is necessary to address a still-fragile situation in the EU following Russia’s invasion of Ukraine. This will allow us to ensure the stabilisation of the energy markets, alleviate the effect of the crisis and protect EU citizens from excessive high energy prices." Teresa Ribera, Spanish Deputy Prime Minister and Minister for the Ecological Transition and the Demographic Challenge

Press material Tuesday 19 December 2023

● Council of the EU   19/12/2023 13:07 | Press release | The EU and Kenya sign a landmark Economic Partnership Agreement   On 18 December, the EU and Kenya signed an Economic Partnership Agreement (EPA) which will boost trade in goods and create new economic opportunities, with targeted cooperation to enhance Kenya's economic development. "The signing of this Agreement is a testimony of our shared ambition to further deepen and modernise our relations in the areas of trade, development cooperation and sustainability. Its advanced rules and procedures will not only lead to a significant strengthening of our trade and investment ties but will also contribute to the diversification of Kenya’s economic activities, foster competitiveness and attract more investment." Xiana Margarida Méndez Bértolo, Secretary of State for Trade of Spain, Presidency-in-Office of the Council of the European Union The signing ceremony took place in Nairobi, Kenya. The Agreement was signed, on the EU side, by Xiana Margarida Méndez Bértolo, Secretary of State for Trade of Spain and Henriette Geiger, EU Ambassador to Kenya, and, on the Kenyan side, by Rebecca Miano, Cabinet Secretary for Investments, Trade and Industry of Kenya and Musalia Mudavadi, Prime Cabinet Secretary and Foreign Minister of Kenya. Ursula von der Leyen, President of the European Commission, and William Ruto, President of Kenya, witnessed the signing of the Agreement. Kenya is a long-standing and trusted partner of the European Union. In order to elevate a solid partnership to an even higher level, in June 2021 was launched a Strategic Dialogue, covering a wide range of areas of cooperation. One of the thematic pillars of the Strategic Dialogue concerns economy, trade and investment. The Economic Partnership Agreement we are about to sign today was a key priority under this cluster and is now its first major tangible outcome. This EPA will provide duty-free, quota-free EU market access to all exports from Kenya as soon as it enters into force, as well as partial and gradual opening of the Kenyan market to imports from the EU. The EPA includes binding provisions on trade and sustainable development, such as climate and environmental protection and labour rights, and a transparent dispute resolution mechanism. This is the most ambitious economic partnership agreement the EU has signed with a developing country when it comes to sustainability provisions. The EU is Kenya's first export destination and second largest trading partner, totalling €3.3 billion of trade in 2022 – an increase of 27% compared to 2018. Next steps Once the European Parliament has given its consent, and the EU and Kenya have notified each other of the completion of their internal legal procedures, the EPA can enter into force. Background Negotiations on the Economic Partnership Agreement between the East African Community and the EU (EAC-EU EPA) were concluded in 2014. Kenya signed and ratified the Agreement in September 2016. The EU and its Member States also signed it in June 2016. However, implementation of the EPA has not been possible because not all EAC partner countries signed and ratified it. The EAC Summit of 27 February 2021, under the chairmanship of Kenya, reached a decision allowing individual EAC states to implement the EPA. Subsequently, in May 2021, Kenya formally requested to engage with the EU to move forward with the implementation of the Agreement on a bilateral basis. On 17 February 2022, the EU and Kenya signed a Joint Statement at the margins of the EU-AU Summit agreeing to advance negotiations on the EU-Kenya EPA, which will remain open for other EAC Partners States. Negotiations were concluded on 24 May 2023 at technical level, and on 19 June 2023 at political level. On 12 December 2023, the Council adopted a Decision on the signing of the EU-Kenya Economic Partnership Agreement. Council decision on the signing of the EPA Council decision on the conclusion of the EPA EU-Kenya EPA EU-Kenya EPA (addendum 1) EU-Kenya EPA (addendum 2) Council and Commission joint statement Press release on the adoption of the Council Decision on signing EU-Kenya EPA (background information)