7.6.2014 EN Official Journal of the European Union L 169/14 DECISION No 554/2014/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 15 May 2014 on the participation of the Union in the Active and Assisted Living Research and Development Programme jointly undertaken by several Member States THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 185, and the second paragraph of Article 188, thereof, Having regard to the proposal from the European Commission, After transmission of the draft legislative act to the national parliaments, Having regard to the opinion of the European Economic and Social Committee (1), Acting in accordance with the ordinary legislative procedure (2), Whereas: (1) In its Communication of 3 March 2010 entitled 'Europe 2020 A strategy for smart, sustainable and inclusive growth' (the "Europe 2020 strategy"), the Commission emphasised the need to develop favourable conditions for investment in knowledge and innovation so as to achieve smart, sustainable and inclusive growth in the Union. Both the European Parliament and the Council have endorsed that strategy. (2) Regulation (EU) No 1291/2013 of the European Parliament and of the Council (3) established Horizon 2020 - The Framework Programme for Research and Innovation (2014-2020) ("Horizon 2020"). Horizon 2020 aims at achieving a greater impact on research and innovation by contributing to the strengthening of public-public partnerships, including through Union participation in programmes undertaken by several Member States in accordance with Article 185 of the Treaty on the Functioning of the European Union. (3) Public-public partnerships should aim to develop closer synergies, increase coordination and avoid unnecessary duplication with Union, international, national and regional research programmes, and should fully respect the Horizon 2020 general principles, in particular those relating to openness and transparency. Moreover, open access to scientific publications should be ensured. (4) Decision No 742/2008/EC of the European Parliament and of the Council (4) provides for a Community financial contribution to the Ambient Assisted Living Joint Research and Development Programme ("AAL JP") matching that of the Member States but not exceeding EUR 150 000 000 for the duration of the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007-2013) established by Decision No 1982/2006/EC of the European Parliament and of the Council (5). (5) In December 2012, the Commission communicated to the European Parliament and the Council a report on the interim evaluation of the AAL JP. That evaluation was carried out by an expert panel. The overall opinion of that expert panel was that the AAL JP had achieved good progress towards its objectives and remarkable results and that it should be continued beyond the current funding period. The expert panel noted however a few shortcomings, in particular the need for stronger user involvement in projects from the earliest possible stage and further improvements of the operational performance in terms of time-to-contract and time to payment. (6) The interim evaluation of 2010 and the consultation process of 2012 highlighted the diversity of financial instruments, eligibility rules and reimbursement systems. Participating States, through the Ambient Assisted Living General Assembly, could reflect on this and promote the exchange of good practices. (7) In its communication of 12 October 2006 entitled 'The demographic future of Europe — from challenge to opportunity', the Commission underlined the fact that demographic ageing is one of the main challenges facing all the Member States and that increased use of new technologies could help to control costs, improve well-being and promote the active participation in society of elderly people, as well as improving the competitiveness of Union economy. (8) Under the flagship initiative 'Innovation Union' of the Europe 2020 strategy, the Commission indicated the ageing of the population as one of the societal challenges where innovation breakthroughs can play an important role and boost competitiveness, enable European companies to lead in the development of new technologies, to grow and assume global leadership in new growth markets, improve the quality and efficiency of public services and so contribute to creating large numbers of new quality jobs. (9) About 20 million people across the Union are employed in "white-coat" jobs in the health sector and social services sector, a figure which is expected to increase in the coming years due to the aging population. Training and life-long learning in this sensitive sector should be a key priority. Therefore, the need for white coat jobs and for investments in modern skills, such as using information technologies, should be assessed more precisely. (10) In its communication of 19 May 2010 entitled 'A Digital Agenda for Europe', the Commission proposed to reinforce the AAL JP in order to help address the challenges of the ageing population. (11) In its communication of 29 February 2012 entitled 'Taking forward the Strategic Implementation Plan of the European Innovation Partnership on Active and Healthy Ageing', the Commission proposed to take account of relevant priorities of the Strategic Implementation Plan for future research and innovation work programmes and instruments which are part of Horizon 2020. The Commission also proposed to take into account the contributions that can be made by the AAL JP to the European Innovation Partnership on Active and Healthy Ageing. (12) Under the European Innovation Partnership on Active and Healthy Ageing established under the Innovation Union, innovative information and communication technologies (ICT) based solutions are expected to play an important role in meeting its goals of two additional healthy life years by 2020 as well as improving quality of life for citizens and improving efficiency of care systems in the Union. Its Strategic Implementation Plan sets out priorities for accelerating and scaling up innovation in active and healthy ageing across the Union, in three domains: prevention and health promotion, care and cure, and independent living and social inclusion. (13) Since ICT systems handle a large amount of personal data and profiles, and operate in real-time communication, thus bringing with them a high risk of data security breaches, data protection aspects should be taken into account. Moreover, the right to privacy should be respected. (14) The Active and Assisted Living Research and Development Programme ('the AAL Programme') should build on the achievements of the previous programme and address its shortcomings by encouraging sufficient user participation in projects from the initial stage, in order to ensure that solutions developed are acceptable and respond to specific user needs, and by ensuring better AAL Programme implementation. (15) The implementation of the AAL Programme should take into account a broad definition of innovation including organisational, business, technological, societal and environmental aspects. It should ensure a multidisciplinary approach and the integration of social sciences and humanities within the AAL Programme. (16) Activities of the AAL Programme should be in line with the objectives and research and innovation priorities of Horizon 2020 and with the general principles and conditions laid down in Article 26 of Regulation (EU) No 1291/2013. (17) A ceiling should be established for the Union's financial participation in the AAL Programme for the duration of Horizon 2020. The Union's financial participation in the AAL Programme should not exceed the financial contribution of the Participating States for the duration of Horizon 2020 in order to achieve a high leverage effect and ensure an active involvement of the Participating States in achieving the AAL Programme objectives. (18) In order to take into account the duration of Horizon 2020, calls for proposals under the AAL Programme should be launched at the latest by 31 December 2020. In duly justified cases, calls for proposals may be launched by 31 December 2021. (19) In line with the objectives of Regulation (EU) No 1291/2013, any Member State and any country associated to Horizon 2020 should be entitled to participate in the AAL Programme at any appropriate time. (20) In order to ensure that a financial commitment by the Union will be matched by the Participating States, the financial contribution by the Union should be subject to formal commitments from the Participating States before the launch of the AAL Programme and their fulfilment. The Participating States' contribution to the AAL Programme should include the administrative costs incurred at national level for the effective operation of the AAL Programme. (21) The joint implementation of the AAL Programme requires an implementation structure. The Participating States have agreed on the implementation structure for the AAL Programme and set up in 2007 the "Ambient Assisted Living" aisbl, an international non-profit association with legal personality established under Belgian law ('AALA'). Given that, according to the report on the interim evaluation, the existing governance structure of AAL JP has proven to be efficient and of good quality, the AALA should be used as the implementation structure and should take the role as allocation and monitoring body of the AAL Programme. The AALA should manage the Union's financial contribution and should ensure an efficient implementation of the AAL Programme. (22) In order to achieve the objectives of the AAL Programme, the AALA should provide financial support mainly through grants to participants in actions selected by the AALA. Those actions should be selected following calls for proposals under the responsibility of the AALA, which should be assisted by independent external experts. The ranking list should be binding as regards the selection of proposals and the allocation of funding from the Union's financial contribution and from the national budgets for AAL Programme projects. (23) The Union's financial contribution should be managed in accordance with the principle of sound financial management and with the rules on indirect management laid down in Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council (6) and Commission Delegated Regulation (EU) No 1268/2012 (7). (24) In order to protect the financial interests of the Union, the Commission should, through proportionate measures, have the right to reduce, withhold or terminate the Union's financial contribution where the AAL Programme is implemented inadequately, partially or late, or the Participating States do not contribute, or contribute partially or late, to the financing of the AAL Programme. Those rights should be provided for in the delegation agreement to be concluded between the Union and the AALA. (25) For the purpose of simplification, administrative burdens should be reduced for all parties. Double audits and disproportionate documentation and reporting should be avoided. When audits are conducted, the specificities of the national programmes should be taken into account, as appropriate. (26) Participation in indirect actions funded by the AAL Programme is subject to Regulation (EU) No 1290/2013 of the European Parliament and of the Council (8). However, due to specific operating needs of the AAL Programme it is necessary to provide for derogations from that Regulation in accordance with Article 1(3) of that Regulation. (27) Calls for proposals by AALA should also be published on the single portal for participants as well as through other Horizon 2020 electronic means of dissemination managed by the Commission. (28) Specific derogations from Regulation (EU) No 1290/2013 are necessary, as the AAL Programme is intended as a market-oriented research and innovation programme in which many different national funding streams are joined up (such as research innovation, health and industry funding programmes). By their nature, those national programmes have different participation rules and cannot be expected to fully align with Regulation (EU) No 1290/2013. In addition, the AAL Programme is targeting in particular small and medium-sized enterprises and user organisations not usually participating in Union research and innovation activities. In order to facilitate the participation of those enterprises and organisations, the Union's financial contribution is provided in accordance with the well-known rules of their national funding programmes and implemented through a single grant combining Union funding with the corresponding national funding. (29) The financial interests of the Union should be protected through proportionate measures throughout the expenditure cycle, including the prevention, detection and investigation of irregularities, the recovery of funds lost, wrongly paid or incorrectly used and, where appropriate, administrative and financial penalties in accordance with Regulation (EU, Euratom) No 966/2012. (30) The Commission should conduct, with the assistance of independent experts, an interim evaluation assessing in particular the quality and efficiency of the AAL Programme and progress towards the objectives set, as well as a final evaluation, and prepare a report on those evaluations. (31) The evaluation should be based on precise and up-to-date information. Upon request from the Commission, the AALA and the Participating States should therefore submit any information which the Commission needs to include in the reports on the evaluation of the AAL Programme. (32) The actions envisaged in the AAL Programme should help underpin European public health and care systems, since they are an essential means of sustaining social welfare and reducing the welfare gap between regions and population sectors that is widening alarmingly owing to the current economic and social crisis. (33) The AAL Programme should ensure the effective promotion of gender equality as set out in Horizon 2020. The AAL Programme should promote gender equality and the gender dimension in research and innovation content. Particular attention should be paid to gender balance, subject to the situation in the field, in evaluation panels and in bodies such as advisory groups and expert groups. The gender dimension should be adequately integrated in research and innovation content in strategies, programmes and projects and followed through at all stages of the research cycle. (34) The AAL Programme should comply with ethical principles as set out in Horizon 2020. Particular attention should be paid to the principle of proportionality, the right to privacy, the right to the protection of personal data, the right to the physical and mental integrity, the right to non-discrimination and the need to ensure high levels of human health protection. (35) Since Participating States have decided to continue the AAL Programme and since the objectives of this Decision, namely to directly support and complement the Union policies in the field of active and healthy ageing, cannot be sufficiently achieved by the Member States but can rather, by reason of the scale of the action, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Decision does not go beyond what is necessary in order to achieve those objectives, HAVE ADOPTED THIS DECISION: Article 1 Participation in the AAL Programme 1. The Union shall participate in the Active and Assisted Living Research and Development Programme ("AAL Programme") jointly undertaken by Austria, Belgium, Cyprus, Denmark, France, Hungary, Ireland, Luxembourg, the Netherlands, Poland, Portugal, Romania, Slovenia, Spain, Sweden, Switzerland and the United Kingdom (the "Participating States"), in accordance with the conditions laid down in this Decision. 2. Any Member State other than those listed in paragraph 1 and any other country associated to Horizon 2020 may apply to join the AAL Programme at any time, provided it fulfils the condition set out in point (c) of Article 3(1) of this Decision. If it fulfils the condition laid down in point (c) of Article 3(1), it shall be regarded as a Participating State for the purposes of this Decision. Article 2 Union's financial contribution 1. The Union financial contribution to the AAL Programme covering administrative costs and operational costs shall be up to EUR 175 000 000. The Union's financial contribution shall be paid from appropriations in the general budget of the Union allocated to the relevant parts of the Specific Programme implementing Horizon 2020, established by Council Decision 2013/743/EU (9) in accordance with point (c)(vi) of Article 58(1) and Articles 60 and 61 of Regulation (EU, Euratom) No 966/2012. 2. The annual financial commitment of the Union to the AAL Programme shall not exceed the annual financial commitment to the AAL Programme by Participating States. 3. An amount not exceeding 6 % of the Union financial contribution referred to in paragraph 1 shall be used to contribute to the administrative costs of the AAL Programme. Article 3 Conditions for the Union's financial contribution 1. The Union's financial contribution shall be conditional upon the following: (a) the demonstration by the Participating States that the AAL Programme is set up in accordance with Annexes I and II; (b) the designation by the Participating States or by organisations designated by the Participating States, of the AALA, as the structure responsible for the implementation of the AAL Programme and for allocating and monitoring the Union's financial contribution; (c) a commitment by each Participating State to contribute to the financing of the AAL Programme; (d) demonstration by the AALA of its capacity to implement the AAL Programme, including allocating and monitoring the Union contribution in the framework of indirect management of the Union budget in accordance with Articles 58, 60 and 61 of Regulation (EU, Euratom) No 966/2012; and (e) the establishment of a governance model for the AAL Programme in accordance with Annex III. 2. During the implementation of the AAL Programme, the Union's financial contribution shall also be conditional upon the following: (a) the implementation by the AALA of the AAL Programme objectives as set out in Annex I and activities set out in Annex II to this Decision in accordance with Regulation (EU) No 1290/2013, subject to Article 5 of this Decision; (b) the maintenance of an appropriate and efficient governance model in accordance with Annex III; (c) compliance by the AALA with the reporting requirements set out in Article 60 (5) of Regulation (EU, Euratom) No 966/2012; and (d) fulfilment of the commitments by each Participating State referred to in point (c) of paragraph 1 and fulfilment of the annual commitments to contribute to the financing of the AAL Programme. Article 4 Contributions from Participating States Contributions from the Participating States shall consist of the following: (a) financial contributions to the indirect actions supported under the AAL Programme in accordance with Annex II; (b) in-kind contributions corresponding to the administrative costs incurred by the national administrations for the effective implementation of the AAL Programme in accordance with Annex II. Article 5 Rules for participation and dissemination 1. For the purposes of Regulation (EU) No 1290/2013, the AALA shall be considered to be a funding body and shall provide financial support to indirect actions in accordance with Annex II to this Decision. 2. By way of derogation from Article 15(9) of Regulation (EU) No 1290/2013, the financial capacity of applicants shall be verified by the designated national programme management organisation in accordance with the rules of participation in the designated national programmes. 3. By way of derogation from Article 18(2) of Regulation (EU) No 1290/2013, the grant agreements with participants shall be signed by the designated national programme management agency. 4. By way of derogation from Article 23(1), (5) to (7)] and Articles 25 to 35 of Regulation (EU) No 1290/2013, the funding rules of the designated national programmes shall apply to the grants administered by the designated national programme management agencies. 5. By way of derogation from Articles 41 to 49 of Regulation (EU) No 1290/2013, the rules of the designated national programmes governing results, access rights to background and results shall apply, without prejudice to the principle of open access to scientific publications set out in Article 18 of Regulation (EU) No 1291/2013. Article 6 Implementation of the AAL Programme The AAL Programme shall be implemented on the basis of a strategy implemented through annual work plans in accordance with Annex II. Article 7 Agreements between the Union and the AALA 1. Subject to a positive ex-ante assessment of the AALA in accordance with Article 61(1) of Regulation (EU, Euratom) No 966/2012, the Commission, on behalf of the Union, shall conclude a delegation agreement and annual transfer of funds agreements with the AALA. 2. The delegation agreement referred to in paragraph 1 shall be concluded in accordance with Article 58(3) and Articles 60 and 61 of Regulation (EU, Euratom) No 966/2012 and with Article 40 of Delegated Regulation (EU) No 1268/2012. It shall also set out the following: (a) the requirements concerning the AALA's contribution regarding relevant indicators from among the performance indicators set out in Annex II to Decision 2013/743/EU; (b) the requirements concerning the AALA's contribution to the monitoring referred to in Decision 2013/743/EU; (c) the specific performance indicators necessary for monitoring the functioning of the AALA in accordance with Article 3(2); (d) the arrangements regarding the provision of data and information necessary to ensure that the Commission is able to meet its dissemination and reporting obligations. (e) provision for the publication of calls for proposals by the AALA in particular on the single portal for participants, as well as through other Horizon 2020 electronic means of dissemination managed by the Commission. Article 8 Termination, reduction or suspension of the Union's financial contribution 1. Where the AAL Programme is not implemented in accordance with the conditions set out in Article 3, the Commission may terminate, proportionally reduce, or suspend the Union's financial contribution in line with the actual implementation of the AAL Programme. 2. Where the Participating States do not contribute, contribute partially, or late to the financing of the AAL Programme, the Commission may terminate, proportionately reduce, or suspend the Union's financial contribution, taking into account the amount of funding allocated by the Participating States to implement the AAL Programme. Article 9 Ex-post audits 1. Ex-post audits of expenditure on indirect actions shall be carried out by the designated national programme management agencies in accordance with Article 29 of Regulation (EU) No 1291/2013. 2. The Commission may decide to carry out itself the audits referred to in paragraph 1. In such cases, it shall do so in accordance with the applicable rules, in particular the provisions of Regulations (EU, Euratom) No 966/2012, (EU) No 1290/2013 and (EU) No 1291/2013. Article 10 Protection of the financial interests of the Union 1. The Commission shall take appropriate measures ensuring that, when actions financed under this Decision are implemented, the financial interests of the Union are protected by the application of preventive measures against fraud, corruption and any other illegal activities, by effective checks and, if irregularities are detected, by the recovery of the amounts wrongly paid and, where appropriate, by effective, proportionate and dissuasive administrative and financial penalties. 2. The European Anti-Fraud Office (OLAF) may carry out investigations, including on-the-spot checks and inspections, in accordance with the provisions and procedures laid down in Council Regulation (Euratom, EC) No 2185/96 (10) and Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council (11), with a view to establishing whether there has been fraud, corruption or any other illegal activity affecting the financial interests of the Union in connection with a grant agreement or grant decision or a contract funded in accordance with this Decision. 3. Contracts, grant agreements and grant decisions resulting from the implementation of this Decision shall contain provisions expressly empowering the Commission, AALA, the Court of Auditors and OLAF to conduct audits and investigations, in accordance with their respective competences. 4. The AALA shall grant the Commission staff and other persons authorised by the Commission, as well as by the Court of Auditors, access to its sites and premises and to all the information, including information in electronic format, needed in order to conduct the audits referred to in paragraph 3. 5. In implementing the AAL Programme, the Participating States shall take the legislative, regulatory, administrative or other measures necessary for protecting the Union's financial interests, in particular, to ensure the full recovery of any amounts due to the Union in accordance with Regulation (EU, Euratom) No 966/2012 and Delegated Regulation (EU) No 1268/2012. Article 11 Communication of information 1. At the request of the Commission, the AALA shall submit to the Commission any information necessary for the preparation of the reports referred to in Article 12. 2. The Participating States shall submit, through the AALA, any relevant information requested by the European Parliament or the Council concerning the financial management of the AAL Programme. 3. The Commission shall communicate the information referred to in paragraph 2 of this Article in the reports set out in Article 12. Article 12 Evaluation 1. By 30 June 2017 the Commission shall carry out, with the assistance of independent experts, an interim evaluation of the AAL Programme. The Commission shall prepare a report on that evaluation which includes the conclusions of the evaluation and observations by the Commission. The Commission shall send that report to the European Parliament and to the Council by 31 December 2017. The result of the interim evaluation of AAL Programme shall be taken into account in the interim evaluation of Horizon 2020. 2. At the end of Union participation in the AAL Programme but no later than 31 December 2022, the Commission shall conduct a final evaluation of the AAL Programme. The Commission shall prepare a report on that evaluation which is to include results of the evaluation. The Commission shall send that report to the European Parliament and to the Council. Article 13 Entry into force This Decision shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. Article 14 Addressees This Decision is addressed to the Member States. Done at Brussels, 15 May 2014. For the European Parliament The President M. SCHULZ For the Council The President D. KOURKOULAS (1) Opinion of 10 December 2013 (not yet published in the Official Journal). (2) Position of the European Parliament of 15 April 2014 (not yet published in the Official Journal) and decision of the Council of 6 May 2014. (3) Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11 December 2013 establishing Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020) and repealing Decision No 1982/2006/EC (OJ L 347, 20.12.2013, p. 104). (4) Decision No 742/2008/EC of the European Parliament and of the Council of 9 July 2008 on the Community's participation in a research and development programme undertaken by several Member States aimed at enhancing the quality of life of older people through the use of new information and communication technologies (OJ L 201, 30.7.2008, p. 49). (5) Decision No 1982/2006/EC of the European Parliament and of the Council of 18 December 2006 concerning the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007-2013) (OJ L 412, 30.12.2006, p. 1). (6) Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1). (7) Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 (OJ L 362, 31.12.2012, p. 1). (8) Regulation (EU) No 1290/2013 of the European Parliament and of the Council of 11 December 2013 laying down the rules for participation and dissemination in "Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020)" and repealing Regulation (EC) No 1906/2006 (OJ L 347, 20.12.2013, p. 81). (9) Council Decision 2013/743/EU of 3 December 2013 establishing the specific programme implementing Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020) and repealing Decisions 2006/971/EC, 2006/972/EC, 2006/973/EC, 2006/974/EC and 2006/975/EC (OJ L 347, 20.12.2013, p. 965). (10) Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities' financial interests against fraud and other irregularities (OJ L 292, 15.11.1996, p. 2). (11) Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999 (OJ L 248, 18.9.2013, p. 1). ANNEX I OBJECTIVES OF THE AAL PROGRAMME 1. The AAL Programme shall fulfil the following objectives: 1.1. accelerate the emergence and take-up of relevant, affordable and integrated innovative ICT-based solutions for active and healthy ageing at home, in the community, or at work, thus improving the quality of life, autonomy, social inclusion, participation in social life, skills or employability of older adults and contributing to increasing the efficiency and effectiveness of health and social care provision; 1.2. support the development of solutions that contribute to the independence and alleviation of a sense of social isolation of older adults, in such a way that the ICT component does not reduce human contact, but is complementary to it. ICT-based solutions supported under the AAL Programme should integrate non-ICT aspects by design; 1.3. maintain and further develop a critical mass of applied research, development and innovation at Union level in the areas of ICT-based products and services for active and healthy ageing; 1.4. develop cost-effective, accessible and, where relevant, energy-efficient solutions, including establishing relevant interoperability standards and facilitating the localisation and adaptation of common solutions which are compatible with varying social preferences, socio-economic factors (including energy poverty, social inclusion), gender aspects, and regulatory aspects at national or regional level, respect the privacy and dignity of older adults, including the protection and security of personal data by applying state-of-the-art privacy-by-design and, where applicable, support access to services in rural and outlying areas or benefit other groups of people, such as people with disabilities. To improve accessibility, the concept of Design for All will be promoted in the development and deployment of solutions. 2. The AAL Programme shall establish a favourable environment for the participation of small and medium-sized enterprises. 3. The AAL Programme shall focus on market-oriented applied research and innovation and shall complement related longer-term research and large scale innovation activities envisaged under Horizon 2020, and other European and national initiatives such as joint programming initiatives and activities undertaken within the European Institute of Innovation and Technology and its relevant Knowledge and Innovation Communities. It shall also contribute to the implementation of the European Innovation Partnership on Active and Healthy Ageing. ANNEX II ACTIVITIES OF THE AAL PROGRAMME I. Indirect actions 1. The implementation of the AAL Programme shall mainly support market-oriented research and innovation projects for active and healthy ageing, which shall demonstrate the capability to exploit the project results within a realistic time frame; the financing of those indirect actions under the AAL Programme shall mainly take the form of grants. It may also take other forms such as prizes, pre-commercial procurement, and public procurement of innovative solutions. 2. In addition, actions for the purposes of brokerage, programme promotion, in particular outreach activities to countries not currently participating in the AAL Programme, actions to raise awareness of the current capabilities, foster deployment of innovative solutions and connect supply and demand side organisations and facilitating access to finance and investors may be supported. 3. Actions aimed at improving the quality of proposals, feasibility studies and workshops may also be supported. Collaboration with the regions of the Union may be envisaged to enlarge the group of stakeholders involved in the AAL Programme. 4. Actions shall aim to consolidate and analyse different methods of end-user involvement in order to develop evidence-based best practice guidelines. II. Implementation 1. The AAL Programme shall be implemented on the basis of annual work plans identifying forms of funding and topics for calls for proposals. The work plans shall be derived from a published strategy, highlighting challenges and priorities, adopted by the AALA. 2. The annual work plans shall be agreed with the Commission as a basis for the annual financial contribution from the Union. 3. The implementation of the AAL Programme shall entail consultations, including on strategy, with relevant stakeholders (including decision-makers from public authorities, user representatives, private-sector service providers and insurance providers as well as industry, including small and medium-sized enterprises) concerning the applied research and innovation priorities to be addressed. 4. The implementation of the AAL Programme shall take into account demographic trends and demographic research in order to provide solutions that reflect the social and economic situation across the Union. 5. The implementation of the AAL Programme shall take into account the Union's industrial, climate and energy policies. The AAL Programme shall also promote energy efficiency and reflect the need to tackle energy poverty. 6. Due account shall be taken of gender, ethical, social sciences and humanities and privacy issues, in line with the Horizon 2020 principles and rules. Account shall also be taken of relevant Union and national legislation and international guidelines, in particular regarding the rights to privacy and data protection. 7. In line with the close-to-market nature of the AAL Programme and in compliance with the rules set out in Regulation (EU, Euratom) No 966/2012, the AALA shall ensure time-to-grant and time-to-payment in accordance with Regulation (EU) No 1290/2013 and ensure compliance with them by Participating States during the implementation of the AAL Programme. 8. Each Participating State shall strongly promote, from the earliest stage of all research and innovation projects, the participation of organisations representing demand side actors, including end users. 9. Each Participating State shall co-finance its national participants whose proposals are successful through national agencies that shall, in addition, channel the Union co-funding from the dedicated implementation structure, on the basis of a common project description, which forms part of an agreement to be concluded between the respective national programme management agencies and their national participants for each project. 10. After the closure of a call for project proposals, a central eligibility check shall be carried out by the AALA in cooperation with the designated national programme management agencies. That check shall be performed on the basis of the common eligibility criteria for the AAL Programme which shall be published with the call for project proposals. 11. The AALA shall, with the assistance of the national programme management agencies, check the fulfilment of additional national eligibility criteria set out in the calls for project proposals. 12. The national eligibility criteria shall relate only to the legal and financial status of the individual applicants and not to the content of the proposal and shall concern the following aspects: 12.1. applicant type, including legal status and purpose; 12.2. liability and viability, including financial soundness, fulfilment of tax and social obligations. 13. Eligible project proposals shall be evaluated by the AALA with the assistance of independent experts, on the basis of transparent and common evaluation criteria, as set out in the published call for proposals, and a list of projects in order of score shall be produced. Projects shall be selected in accordance with that ranking and taking account of available funding. That selection, once adopted by the General Assembly of the AALA, shall be binding on the Participating States. 14. If a project participant fails to meet one or more of the national eligibility criteria or if the corresponding national budget for commitment for funding is exhausted, the Executive Board of the AALA may decide that an additional central independent evaluation of the proposal concerned should be carried out with the assistance of independent experts, in order to evaluate the proposal either without the participation of the participant in question or with a replacement participant, as suggested by project participants. 15. Legal and financial issues concerning participants in projects selected for funding shall be handled by the designated national programme management agency. National administrative rules and principles shall be applied. ANNEX III GOVERNANCE OF THE AAL PROGRAMME The organisational structure for the AAL Programme shall be as follows: 1. The AALA shall constitute the dedicated implementation structure created by the Participating States. 2. The AALA shall be responsible for all the activities of the AAL Programme. The AALA's tasks shall include contract and budget management, the development of the annual work plans, organisation of the calls for proposals, handling of the evaluation and ranking of proposals for funding. 3. In addition, the AALA shall supervise and be responsible for project monitoring and shall transfer the associated payments of the Union contributions to designated national programme management agencies. It shall also organise dissemination activities. 4. The AALA shall be governed by the General Assembly. The General Assembly shall be the decision-making body of the AAL Programme. It shall appoint the members of the Executive Board and supervise the implementation of the AAL Programme, including the approval of the strategy and annual work plans, allocation of national funding to projects and the handling of applications for new membership. It shall work on the basis of a one-country one-vote principle. Decisions shall be taken by simple majority, except for decisions on the succession, admission or exclusion of members or the dissolution of the AALA, for which specific voting requirements may be set out in the statutes of the AALA. 5. The Commission shall have an observer status in the meetings of the AALA General Assembly and shall approve the annual work plan. The Commission shall be invited to all the meetings of the AALA and may take part in the discussions. All the relevant documents circulated in connection with the AALA General Assembly shall be communicated to the Commission. 6. The AALA Executive Board — consisting of at least a president, a vice-president, a treasurer and a vice-treasurer — shall be elected by the AALA General Assembly to undertake specific management responsibilities such as budget planning, staffing and contracting. It shall legally represent the AALA and report to the AALA General Assembly. 7. The Central Management Unit established as a part of the AALA shall be responsible for the central management of the implementation of the AAL Programme in close coordination and cooperation with the national programme management agencies, which shall be authorised by the Participating States to undertake work associated with project management and administrative and legal aspects for the national project participants as well as to provide support for the evaluation and negotiation of project proposals. The Central Management Unit and national programme management agencies shall work together as the Management Unit under the supervision of the AALA. 8. An Advisory Board shall be established by the AALA with representatives from industry, users and other relevant stakeholders, seeking balance between generations and gender. It shall provide recommendations to the AALA on the overall programme strategy, concerning priorities and topics to be addressed in the calls for proposals and regarding other relevant actions of the AAL Programme.

Summary: Using IT to improve the quality of life of the elderly Using IT to improve the quality of life of the elderly SUMMARY OF: Decision No 554/2014/EU on the participation of the EU in the active and assisted living research and development programme jointly undertaken by several EU countries WHAT IS THE AIM OF THE DECISION? Decision No 554/2014/EU on the European Union’s (EU) participation in the Active and Assisted Living (AAL) Research and Development Programme builds on the achievements of the previous programme established in 2008. The programme is funded by the European Commission’s budget for Horizon 2020 and the financial contributions from the 17 Participating States. Any EU country or any other country associated to Horizon 2020 may apply to join the partnership, provided they make the necessary financial contributions. The main aim of the programme is to find innovative Information and Communications Technology (ICT)-based solutions for active and healthy ageing at home, therefore improving the quality of life and autonomy and contributing to increasing the efficiency and effectiveness of health and social care systems. These ICT-based solutions are also expected to play an important role in meeting the EU’s goal of two additional healthy life years by 2020. KEY POINTS Objectives To accelerate the development and use of affordable, innovative ICT-based solutions enabling active and healthy ageing at home, at work and in the community, including applications for health and social care. To support the development of solutions with an ICT component that complements rather than replaces human contact to ensure that older people do not feel isolated and remain autonomous and independent. To develop cost-effective, accessible and energy-efficient solutions that take into account aspects such as socioeconomic factors and gender. Implementation The programme is implemented by the Ambient Assisted Living (AAL), an international non-profit association, established under Belgian law. AAL manages the Union’s financial contribution and ensures an efficient implementation of the Programme. Annual work plans Each year a work plan is agreed with and approved by the European Commission. This plan identifies the topics for calls for proposals and the forms of funding available. Calls for proposals These are published on the single portal for participants, the so-called Funding and Tender Opportunities Portal. Taking the duration of Horizon 2020 into account, calls for proposals under the AAL programme should be launched at the latest by 31 December 2020, although in duly justified cases calls may be launched by 31 December 2021. Budget The Union financial contribution to the AAL Programme covering administrative and operational costs will be up to € 175 million. FROM WHEN DOES THE DECISION APPLY? It has applied since 27 June 2014. MAIN DOCUMENT Decision No 554/2014/EU of the European Parliament and of the Council of 15 May 2014 on the participation of the Union in the active and assisted living research and development programme jointly undertaken by several Member States (OJ L 169, 7.6.2014, pp. 14-26) last update 06.03.2020


14.3.2014 EN Official Journal of the European Union L 74/65 COMMISSION RECOMMENDATION of 12 March 2014 on a new approach to business failure and insolvency (Text with EEA relevance) (2014/135/EU) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, and in particular Article 292 thereof, Whereas: (1) The objective of this Recommendation is to ensure that viable enterprises in financial difficulties, wherever they are located in the Union, have access to national insolvency frameworks which enable them to restructure at an early stage with a view to preventing their insolvency, and therefore maximise the total value to creditors, employees, owners and the economy as a whole. The Recommendation also aims at giving honest bankrupt entrepreneurs a second chance across the Union. (2) National insolvency rules vary greatly in respect of the range of the procedures available to debtors facing financial difficulties in order to restructure their business. Some Member States have a limited range of procedures meaning that businesses are only able to restructure at a relatively late stage, in the context of formal insolvency proceedings. In other Member States, restructuring is possible at an earlier stage but the procedures available are not as effective as they could be or involve varying degrees of formality, in particular in relation to the use of out-of-court processes. (3) Similarly, national rules giving entrepreneurs a second chance, in particular by granting them discharge from the debts they have incurred in the course of their business vary as regards the length of the discharge period and the conditions under which discharge can be granted. (4) The discrepancies between the national restructuring frameworks, and between the national rules giving honest entrepreneurs a second chance lead to increased costs and uncertainty in assessing the risks of investing in another Member State, fragment conditions for access to credit and result in different recovery rates for creditors. They make the design and adoption of consistent restructuring plans for cross-border groups of companies more difficult. More generally, the discrepancies may serve as disincentives for businesses wishing to establish themselves in different Member States. (5) Council Regulation (EC) No 1346/2000 (1) only deals with issues of jurisdiction, recognition and enforcement, applicable law and cooperation in cross-border insolvency proceedings. The Commission proposal for the amendment of that Regulation (2) should extend the scope of the Regulation to preventive procedures which promote the rescue of an economically viable debtor and give a second chance to entrepreneurs. However, the proposed amendment does not tackle the discrepancies between those procedures in national law. (6) On 15 November 2011, the European Parliament adopted a Resolution (3) on insolvency proceedings. It included recommendations for harmonising specific aspects of national insolvency law, including the conditions for the establishment, effects and content of restructuring plans. (7) In the Communication on the Single Market Act II (4) of 3 October 2012, the Commission undertook as a key action to modernise the Union insolvency rules in order to facilitate the survival of businesses and present a second chance to entrepreneurs. To this end, the Commission announced that it would analyse how the efficiency of national insolvency laws could be further improved with a view to creating a level playing field for companies, entrepreneurs and private persons within the internal market. (8) The Commission Communication on a new European approach to business failure and insolvency (5) of 12 December 2012 highlights certain areas where differences between domestic insolvency laws may hamper the establishment of an efficient internal market. It noted that the creation of a level playing field in these areas would lead to greater confidence in the systems of other Member States for companies, entrepreneurs and private individuals, and improve access to credit and encourage investment. (9) On 9 January 2013 the Commission adopted the Entrepreneurship 2020 Action Plan (6) where the Member States are invited, among other things, to reduce when possible, the discharge time and debt settlement for honest entrepreneurs after bankruptcy to a maximum of 3 years by 2013 and to offer support services to businesses for early restructuring, advice to prevent bankruptcies and support for small and medium enterprises to restructure and re-launch. (10) Several Member States are currently undertaking reviews of their national insolvency laws with a view to improving the corporate rescue framework and the second chance for entrepreneurs. Therefore it is opportune to encourage coherence in these and any future such national initiatives in order to strengthen the functioning of the internal market. (11) It is necessary to encourage greater coherence between the national insolvency frameworks in order to reduce divergences and inefficiencies which hamper the early restructuring of viable companies in financial difficulties and the possibility of a second chance for honest entrepreneurs, and thereby to lower the cost of restructuring for both debtors and creditors. Greater coherence and increased efficiency in those national insolvency rules would maximise the returns to all types of creditors and investors and encourage cross-border investment. Greater coherence would also facilitate the restructuring of groups of companies irrespective of where the members of the group are located in the Union. (12) Furthermore, removing the barriers to effective restructuring of viable companies in financial difficulties contributes to saving jobs and also benefits the wider economy. Making it easier for entrepreneurs to have a second chance would also lead to higher self-employment rates in the Member States. Moreover, efficient insolvency frameworks would provide a better assessment of the risks involved in lending and borrowing decisions and smooth the adjustment for over-indebted firms, minimising the economic and social costs involved in their deleveraging process. (13) Small and medium sized enterprises would benefit from a more coherent approach at Union level, since they do not have the necessary resources to cope with high restructuring costs and take advantage of the more efficient restructuring procedures in some Member States. (14) Tax authorities also have an interest in an efficient restructuring framework for viable enterprises. In implementing this Recommendation, Member States should be able to take appropriate measures to ensure the collection and recovery of tax revenues respecting the general principles of tax fairness and to take efficient measures in cases of fraud, evasion or abuse. (15) It is appropriate to exclude from the scope of this Recommendation insurance undertakings, credit institutions, investment firms and collective investment undertakings, central counter parties, central securities depositories and other financial institutions which are subject to special recovery and resolution frameworks where national supervisory authorities have wide-ranging powers of intervention. Although consumer over-indebtedness and consumer bankruptcy are also not covered by the scope of this Recommendation, Member States are invited to explore the possibility of applying these recommendations also to consumers, since some of the principles followed in this Recommendation may also be relevant for them. (16) A restructuring framework should enable debtors to address their financial difficulties at an early stage, when their insolvency could be prevented and the continuation of their business assured. However, in order to avoid any potential risks of the procedure being misused, the financial difficulties of the debtor must be likely to lead to its insolvency and the restructuring plan must be capable of preventing the insolvency of the debtor and ensuring the viability of the business. (17) To promote efficiency and reduce delays and costs, national preventive restructuring frameworks should include flexible procedures limiting court formalities to where they are necessary and proportionate in order to safeguard the interests of creditors and other interested parties likely to be affected. For example, to avoid unnecessary costs and reflect the early nature of the procedure, debtors should in principle be left in control of their assets and the appointment of a mediator or a supervisor should not be compulsory, but made on a case-by-case basis. (18) A debtor should be able to request the court for a stay of individual enforcement actions and suspension of insolvency proceedings whose opening has been requested by creditors where such actions may adversely affect negotiations and hamper the prospects of a restructuring of the debtor’s business. However, in order to provide for a fair balance between the rights of the debtor and of creditors, and taking into account the experience of recent reforms in the Member States, the stay should be initially granted for a period of no more than 4 months. (19) Court confirmation of a restructuring plan is necessary to ensure that the reduction of the rights of creditors is proportionate to the benefits of the restructuring and that creditors have access to an effective remedy, in full compliance with the freedom to conduct a business and the right to property as enshrined in the Charter of Fundamental Rights of the European Union. The court should therefore reject a plan where it is likely that the attempted restructuring reduces the rights of dissenting creditors below what they could reasonably expect to receive in the absence of a restructuring of the debtor’s business. (20) The effects of bankruptcy, in particular the social stigma, legal consequences and the ongoing inability to pay off debts constitute important disincentives for entrepreneurs seeking to set up a business or have a second chance, even if evidence shows that entrepreneurs who have gone bankrupt have more chance to be successful the second time. Steps should therefore be taken to reduce the negative effects of bankruptcy on entrepreneurs, by making provisions for a full discharge of debts after a maximum period of time, HAS ADOPTED THIS RECOMMENDATION: I. OBJECTIVE AND SUBJECT MATTER 1. The objective of this Recommendation is to encourage Member States to put in place a framework that enables the efficient restructuring of viable enterprises in financial difficulty and give honest entrepreneurs a second chance, thereby promoting entrepreneurship, investment and employment and contributing to reducing the obstacles to the smooth functioning of the internal market. 2. By reducing those obstacles, the Recommendation aims in particular to: (a) lower the costs of assessing the risks of investing in another Member State; (b) increase recovery rates for creditors; and (c) remove the difficulties in restructuring cross-border groups of companies. 3. This Recommendation provides for minimum standards on: (a) preventive restructuring frameworks; and (b) discharge of debts of bankrupt entrepreneurs. 4. When implementing this Recommendation, Member States should be able to take appropriate and efficient measures to ensure the enforcement of taxes, in particular in cases of fraud, evasion or abuse. II. DEFINITIONS 5. For the purposes of this Recommendation: (a) ‘debtor’ means any natural or legal person in financial difficulties when there is a likelihood of insolvency; (b) ‘restructuring’ means changing the composition, conditions, or structure of assets and liabilities of debtors, or a combination of those elements, with the objective of enabling the continuation, in whole or in part, of the debtors’ activity; (c) ‘stay of individual enforcement actions’ means a court ordered suspension of the right to enforce a claim by a creditor against a debtor; (d) ‘courts’ includes any other body with competence in matters relating to preventive procedures to which the Member States have entrusted the role of the courts, and whose decisions may be subject to an appeal or review by a judicial authority. III. PREVENTIVE RESTRUCTURING FRAMEWORK A. Availability of a preventive restructuring framework 6. Debtors should have access to a framework which allows them to restructure their business with the objective of preventing insolvency. The framework should contain the following elements: (a) the debtor should be able to restructure at an early stage, as soon as it is apparent that there is a likelihood of insolvency; (b) the debtor should keep control over the day-to-day operation of its business; (c) the debtor should be able to request a temporary stay of individual enforcement actions; (d) a restructuring plan adopted by the majority prescribed by national law should be binding on all creditors provided that the plan is confirmed by a court; (e) new financing which is necessary for the implementation of a restructuring plan should not be declared void, voidable or unenforceable as an act detrimental to the general body of creditors. 7. The restructuring procedure should not be lengthy and costly and it should be flexible so that more steps can be taken out-of-court. The involvement of the court should be limited to where it is necessary and proportionate with a view to safeguarding the rights of creditors and other interested parties affected by the restructuring plan. B. Facilitating negotiations on restructuring plans Appointment of a mediator or a supervisor 8. Debtors should be able to enter a process for restructuring their business without the need to formally open court proceedings. 9. The appointment of a mediator or a supervisor by the court should not be compulsory, but rather be made on a case-by-case basis where it considers such appointment necessary: (a) in the case of a mediator, in order to assist the debtor and creditors in the successful running of negotiations on a restructuring plan; (b) in the case of a supervisor, in order to oversee the activity of the debtor and creditors and take the necessary measures to safeguard the legitimate interests of one or more creditors or another interested party. Stay of individual enforcement actions and suspension of insolvency proceedings 10. The debtors should have the right to request a court to grant a temporary stay of individual enforcement actions (hereafter ‘stay’) lodged by creditors, including secured and preferential creditors, who may otherwise hamper the prospects of a restructuring plan. The stay should not interfere with the performance of ongoing contracts. 11. In Member States which make the granting of the stay subject to certain conditions, debtors should be able to be granted a stay in all circumstances where: (a) creditors representing a significant amount of the claims likely to be affected by the restructuring plan support the negotiations on the adoption of a restructuring plan; and (b) a restructuring plan has a reasonable prospect of being implemented and preventing the insolvency of the debtor. 12. Where provided for in the laws of the Member States, the obligation of the debtor to file for insolvency, as well as applications by creditors requesting the opening of insolvency proceedings against the debtor lodged after the stay has been granted should also be suspended for the duration of the stay. 13. The duration of the stay should strike a fair balance between the interests of the debtor and of creditors, and in particular secured creditors. The duration of the stay should therefore be determined on the basis of the complexity of the anticipated restructuring, and should not exceed 4 months. Member States may provide that the period can be renewed upon evidence of progress in the negotiations on a restructuring plan. The total duration of the stay should not exceed 12 months. 14. When the stay is no longer necessary with a view to facilitating the adoption of a restructuring plan, the stay should be lifted. C. Restructuring plans Contents of restructuring plans 15. Member States should ensure that courts can confirm plans with expediency and in principle in written procedure. They should lay down clear and specific provisions on the content of restructuring plans. Restructuring plans should contain a detailed description of the following elements: (a) clear and complete identification of the creditors who would be affected by the plan; (b) the effects of the proposed restructuring on individual debts or categories of debts; (c) the position taken by affected creditors on the restructuring plan; (d) where applicable, the conditions for new financing; and (e) the potential of the plan to prevent the insolvency of the debtor and ensure the viability of the business. Adoption of restructuring plans by creditors 16. To increase the prospects of restructuring and therefore the number of viable businesses being rescued, it should be possible to adopt a restructuring plan by the affected creditors, including secured and unsecured creditors. 17. Creditors with different interests should be treated in separate classes which reflect those interests. As a minimum, there should be separate classes for secured and unsecured creditors. 18. A restructuring plan should be adopted by the majority in the amount of creditors’ claims in each class, as prescribed by national law. Where there are more than two classes of creditors, Member States should be able to maintain or introduce provisions which empower courts to confirm restructuring plans which are supported by a majority of those classes of creditors, taking into account in particular the weight of the claims of the respective classes of creditors. 19. Creditors should enjoy a level playing field irrespective of where they are located. Therefore, where the laws of the Member States require a formal voting process, creditors should in principle be allowed to vote by distance means of communication such as registered letter or secure electronic technologies. 20. To make the adoption of restructuring plans more effective, Member States should also ensure that it is possible for restructuring plans to be adopted by certain creditors or certain types or classes of creditors only, provided that other creditors are not affected. Court confirmation of the restructuring plan 21. To ensure that the rights of creditors are not unduly affected by a restructuring plan and in the interest of legal certainty, restructuring plans which affect the interests of dissenting creditors or make provision for new financing should be confirmed by a court in order to become binding. 22. The conditions under which a restructuring plan can be confirmed by a court should be clearly specified in the laws of the Member States and should include at least the following: (a) the restructuring plan has been adopted in conditions which ensure the protection of the legitimate interests of creditors; (b) the restructuring plan has been notified to all creditors likely to be affected by it; (c) the restructuring plan does not reduce the rights of dissenting creditors below what they would reasonably be expected to receive in the absence of the restructuring, if the debtor’s business was liquidated or sold as a going concern, as the case may be; (d) any new financing foreseen in the restructuring plan is necessary to implement the plan and does not unfairly prejudice the interests of dissenting creditors. 23. Member States should ensure that courts can reject restructuring plans which clearly do not have any prospect of preventing the insolvency of the debtor and ensuring the viability of the business, for example because new financing needed to continue its activity is not foreseen. Rights of creditors 24. All creditors likely to be affected by the restructuring plan should be notified of the content of the plan and given the right to formulate objections and to appeal against the restructuring plan. Nevertheless, in the interest of the creditors supporting the plan, the appeal should not in principle suspend the implementation of the restructuring plan. Effects of a restructuring plan 25. The restructuring plans which are adopted by the unanimity of affected creditors should be binding on all those affected creditors. 26. The restructuring plans which are confirmed by a court should be binding upon each creditor affected by and identified in the plan. D. Protection for new financing 27. New financing, including new loans, selling of certain assets by the debtor and debt-equity swaps, agreed upon in the restructuring plan and confirmed by a court should not be declared void, voidable or unenforceable as an act detrimental to the general body of creditors. 28. Providers of new financing as part of a restructuring plan which is confirmed by a court should be exempted from civil and criminal liability relating to the restructuring process. 29. Exceptions to the rules on protection of new financing should be made where fraud is subsequently established in relation to the new financing. IV. SECOND CHANCE FOR ENTREPRENEURS Discharge periods 30. The negative effects of bankruptcy on entrepreneurs should be limited in order to give them a second chance. Entrepreneurs should be fully discharged of their debts which were subject of a bankruptcy after no later than 3 years starting from: (a) in the case of a procedure ending with the liquidation of the debtor’s assets, the date on which the court decided on the application to open bankruptcy proceedings; (b) in the case of a procedure which includes a repayment plan, the date on which implementation of the repayment plan started. 31. On expiry of the discharge period, entrepreneurs should be discharged of their debts without the need in principle to re-apply to a court. 32. A full discharge after a short period of time is not appropriate in all circumstances. Member States should therefore be able to maintain or introduce more stringent provisions which are necessary to: (a) discourage entrepreneurs who have acted dishonestly or in bad faith, either before or after the bankruptcy proceedings were opened; (b) discourage entrepreneurs who do not adhere to a repayment plan or to any other legal obligation aimed at safeguarding the interests of creditors; or (c) safeguard the livelihood of the entrepreneur and his family by allowing the entrepreneur to keep certain assets. 33. Member States may exclude specific categories of debt, such as those rising out of tortious liability, from the rule of full discharge. V. SUPERVISION AND REPORTING 34. The Member States are invited to implement the principles set out in this Recommendation by 14 March 2015. 35. The Member States are invited to collect reliable annual statistics on the number of preventive restructuring procedures opened, the length of procedures and information about the size of the debtors involved and the outcome of the procedures opened, and to communicate that information to the Commission on an annual basis and for the first time by 14 March 2015. 36. The Commission will assess the implementation of this Recommendation in the Member States by 14 September 2015. In this context, the Commission will evaluate its impact on rescuing companies in financial difficulties and giving honest entrepreneurs a second chance, its interplay with other insolvency procedures in other areas such as discharge periods for natural persons not exercising a trade, business, craft or professional activity, its impact on the functioning of the internal market and on small and medium enterprises and the competitiveness of the economy of the Union. The Commission will assess also whether additional measures to consolidate and strengthen the approach reflected in this Recommendation should be proposed. Done at Brussels, 12 March 2014. For the Commission Viviane REDING Vice-President (1) Council Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings (OJ L 160, 30.6.2000, p. 1). (2) COM(2012) 744 final. (3) European Parliament Resolution of 15 November 2011 with recommendations to the Commission on insolvency proceedings in the context of EU company law, P7_TA (2011) 0484. (4) COM(2012) 573 final. (5) COM(2012) 742 final. (6) COM(2012) 795 final.

Summary: A new EU approach to handling business failure and insolvency A new EU approach to handling business failure and insolvency Each year some 200 000 businesses in European Union countries go broke and 1.7 million people lose their jobs. The new recommendation marks a shift towards the preventive restructuring of viable businesses to allow them to stay in operation and to safeguard jobs while enabling creditors to recoup more of their investment. It also seeks to ensure that bankrupt entrepreneurs get a second chance. ACT Commission Recommendation 2014/135/EU of 12 March 2014 on a new approach to business failure and insolvency. SUMMARY European attitudes to business insolvency are in flux, with reforms to existing European Union law on cross-border insolvencies already under way. This new European Commission recommendation, however, aims to provide a common framework for national insolvency rules. The framework would allow debtors to do the following. Restructure as soon as likely insolvency becomes apparent. Keep control over the day-to-day operation of their business. Request a temporary stay of enforcement actions lodged by creditors if such actions would hamper the prospects of a restructuring plan. The length of the stay should depend on the complexity of the anticipated restructuring and be granted for no more than 4 months initially and for no more than 12 months in total. Seek court confirmation of a restructuring plan which affects the interests of dissenting creditors. Creditors would be bound by any court-confirmed plan. The recommendation lists the contents of restructuring plans and the requirements for court confirmation. More easily obtain new financing for a restructuring plan as court confirmed new financing would be exempt from avoidance actions. The restructuring procedure aims to be rapid, to not be costly and to allow for as many steps as possible to be taken out of court. A mediator or supervisor may be appointed to assist negotiations between the debtor and creditors. Second chance Compelling evidence that honest entrepreneurs who get a second chance following bankruptcy are more successful in their next venture has convinced the Commission to recommend allowing entrepreneurs a fresh start after bankruptcy. Entrepreneurs would be fully discharged of their debtswithin 3 years of a court decision to open bankruptcy proceedings or the start date of any repayment plan. Nevertheless, the recommendation recognises that full discharge is not always appropriate and EU countries may introduce more stringent laws to discourage dishonest entrepreneurs or those who do not respect their legal obligations to their creditors. National laws to safeguard the livelihood of the entrepreneur and his/her family by allowing the entrepreneur to keep certain assets would also be permitted. REFERENCES Act Entry into force Deadline for transposition in the Member States Official Journal Recommendation 2014/135/EU 3.4.2014 - OJ L 74 of 14.3.2014 RELATED ACT Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee: A new European approach to business failure and insolvency (COM(2012) 742 final of 12 December 2012 - not published in the Official Journal). Proposal for a regulation of the European Parliament and of the Council amending Council Regulation (EC) No 1346/2000 on insolvency proceedings (COM(2012) 744 final of 12 December 2012 - not published in the Official Journal). Last updated: 28.07.2014