What changed between the plenary report and the adopted text

Removed:Supply crisis - prevention and mitigation

Removed:1. Where a national competent authority becomes aware of a risk of serious disruption in the supply of a crisis-relevant product, which are not defence products, or has concrete and reliable information of any other relevant risk factor or event materializing affecting the supply of a crisis relevant product, it shall alert the Defence Industrial Readiness Board without undue delay.

Removed:1a. In order to determine whether a risk of serious disruption should trigger an alert as referred to in paragraph 1, Member States shall take into account the following:

Removed:(a) the market position of economic operators that could be affected by the disruption;

Removed:(b) the anticipated duration of the potential disruption;

Removed:(c) the geographical area and the proportion of the internal market affected by the potential disruption and its possible cross-border effects, as well as its possible impact on particularly vulnerable or exposed geographical areas; and

Removed:(d) the impact of this potential disruption on the supply of crisis-relevant products.

Removed:2. Where the Member States alert the Defence Industrial Readiness Board or the Commission to the risk of serious disruption of the supply of a crisis relevant product or has concrete and reliable information of any other relevant risk factor or event materializing affecting the supply of a crisis relevant product, including on the basis of early warning indicators, upon an alert pursuant to paragraph 1 or from international partners, the Commission shall, without undue delay, carry out the following preventive actions:

Removed:(a) convene an extraordinary meeting of the Defence Industrial Readiness Board to coordinate the following actions:

Removed:(1) discuss the severity of the potential disruptions to the availability and supply of the concerned crisis-relevant products;

Removed:(2) recommend to the Commission to initiate action in accordance with Chapter II of this Regulation;

Removed:(3) discuss approaches and exchange best practices, including to assess the state of preparedness of the key market actors;

Removed:(4) invite Member States to enter into dialogue with stakeholders of the Union’s manufacturing capacities necessary for the supply of crisis-relevant products with a view to identifying, preparing and possibly coordinating preventive measures;

Removed:(5) discuss the activation of the supply crisis state referred to in Article 44 where necessary and proportionate.

Removed:(b) on behalf of the Union, enter into consultations or cooperation with relevant third countries and international organisations with a view to seeking cooperative solutions to address supply-chain disruptions, in compliance with international obligations, which may involve, where appropriate, carrying out coordination in relevant international fora.

Removed:(c) ensure synergies with relevant Union programmes and legal frameworks.

Removed:3. This Article shall be without prejudice to the right of each Member States to protect its essential security interests in accordance with Article 346(1), point (a) TFEU.

Removed:1. A supply crisis shall be considered to occur where:

Removed:(a) there are serious disruptions or an imminent risk of such disruptions in the provision of crisis-relevant products, which are not defence products, or serious obstacles to trade in such products within the Union causing their significant shortage or an imminent risk thereof; and

Removed:(b) such significant shortages prevent the supply, repair or maintenance of defence products to the extent that it would have serious detrimental effect on the functioning of the Union’s defence supply chains impacting the society, economy and security of the Union.

Removed:2. Where the Commission or the Defence Industrial Readiness Board become aware of a potential supply crisis pursuant to Article 43, the Commission shall assess whether the conditions set out in paragraph 1 of this Article are met. That assessment shall take into account the potential positive and negative impacts and consequences of the supply crisis state on the Union’s defence supply chains as well as assessments performed in other relevant Union crisis management frameworks. Where that assessment provides concrete and reliable evidence, the Commission may, after consulting the Defence Industrial Readiness Board, propose to the Council to activate the supply crisis state, specifying which measures could be triggered upon activation of the supply-crisis state.

Removed:3. The Council, acting by qualified majority, may activate the supply crisis state by means of a Council implementing act. The implementing act may specify which of the measures set out in this chapter can be activated. The duration of the supply crisis state shall be specified in the implementing act and shall not exceed 12 months.

Removed:4. The Commission shall report on a regular basis and at least every three months to the Council and to the European Parliament on the state of the crisis.

Removed:5. Before the expiry of the duration of the supply crisis, the Commission shall assess whether it is appropriate to prolong the supply crisis state, taking into account the potential negative impacts of the crisis state on the Union’s defence industry and other critical sectors. Where such assessment provides concrete and reliable evidence that the conditions for the activation of the supply crisis state are still met, the Commission may, after consulting the Defence Industrial Readiness Board, propose to the Council to prolong the supply crisis state.

Removed:6. The Council, acting by qualified majority, may prolong the supply crisis state by means of a Council implementing act. The duration of the prolongation shall be limited and specified in the Council implementing act.

Removed:7. The Commission may propose prolonging the supply crisis state once or more frequently where duly justified.

Removed:8. During the supply crisis state, the Commission shall, after consulting the Defence Industrial Readiness Board, assess the appropriateness of an early termination of the crisis state. If the assessment indicates so, the Commission may propose to the Council to terminate the crisis state.

Removed:9. The Council may terminate the supply crisis state by means of a Council implementing act.

Removed:10. During the crisis state, the Commission shall, upon request from a Member State or on their own initiative, convene extraordinary meetings of the Defence Industrial Readiness Board where necessary. Member States shall work closely with the Commission, inform in a timely manner about and coordinate any national measures taken with regard to the concerned defence supply chain within the Defence Industrial Readiness Board.

Removed:11. Upon expiry of the period for which the supply crisis state is activated or in the event of its early termination pursuant to paragraph 8 of this Article, the measures taken in accordance with Articles 46 and 47 shall cease to apply immediately.

Removed:12. The Commission shall update the mapping and the monitoring of the Union’s defence supply chains pursuant to Articles 40 and 41 taking into account the experience from the crisis no later than six months after the expiry of the supply crisis state.

Removed:1. Where the supply crisis state is activated pursuant to Article 44 and where necessary in order to address the supply crisis in the Union, the Commission may take the measures provided for in Articles 46 and 47, under the conditions laid down therein and according to the Council implementing act adopted pursuant to Article 44.

Removed:2. The Commission and the European Defence Agency shall, after consulting the Defence Industrial Readiness Board, restrict the application of the measures provided for in Articles 46 and 47 to the crisis-relevant products disturbed or under threat of disturbance on account of the supply crisis. The use of the measures referred to in paragraph 1 of this Article shall be proportionate and restricted to what is necessary for addressing serious disruptions affecting the supply chains of the crisis-relevant products in the Union and must be in the best interest of the Union. The use of those measures shall avoid placing disproportionate administrative burden in particular on SMEs.

Removed:3. Where the supply crisis state is activated pursuant to Article 44 and where appropriate in order to address the supply crisis in the Union, the Defence Industrial Readiness Board may assess and advise on appropriate and effective emergency measures.

Removed:4. The Commission shall regularly inform the European Parliament and the Council of any measures taken in accordance with paragraph 1 and explain the reasons for its action.

Removed:5. The Commission may, after consulting the Defence Industrial Readiness Board, issue guidance on the implementation and the use of the emergency measures.

Removed:1. Where the supply crisis state is activated pursuant to Article 44, the Commission working in liaison with the European Defence Agency may request the Member State, to provide information about the production capabilities and current primary disruptions of the relevant undertakings contribution to the production of crisis-relevant products, established in their territory, within a set time limit. The requested information shall be limited to what is necessary to assess the nature of the supply crisis or to identify and assess potential mitigation or emergency measures at Union or national level. The information requests shall not entail the supply of information the disclosure of which would be contrary to the Member States’ essential security interests. In such cases, in order to protect their essential security interests in accordance with Article 346(1), point (a) TFEU Member States may refuse such a request or may decide to classify the information they transmit to the Commission. The Commission shall prepare the request for information in consultation of the Defence Industrial Readiness Board.

Removed:3. The Commission shall use secure means to launch the request for information and handle any acquired information in accordance with Article 61. For this purpose, national competent authorities shall transmit to the Commission the list of contacts established under Article 41(5).

Removed:5. The request for information shall state its legal basis, be limited to the minimum necessary and be proportionate in terms of the granularity and volume of the data and frequency of access to the data requested, have regard for the legitimate aims of the undertaking and the cost and effort required to make the data available, and set out the time limit within which the information is to be provided. It shall also state the penalties provided for in Article 55.

Removed:6. The owners of the undertakings or their representatives and, in the case of legal persons or associations having no legal personality, the persons authorised to represent them by law or by their constitution shall supply to the Member State the information requested on behalf of the undertaking or the association of undertakings concerned.

Removed:7. If an undertaking established in the Union is subject to a request for information from a third country, related to its activities for a Union’s critical defence supply chain, it shall inform the Member State in which the undertaking is established, in due time, in such a manner as to enable the Member State to request similar information from the undertaking. The Member State shall inform the Commission and the Defence Industrial Readiness Board of the existence of such request from a third country.

Removed:8. If an undertaking supplies incorrect, incomplete or misleading information in response to a request made pursuant to this Article, or does not supply the information within the prescribed time limit, it shall be subject to fines set in accordance with Article 55, except where the undertaking has sufficient reasons for not supplying the requested information. Sufficient reasons shall be deemed to be in place where the processing of the information requested has the potential to significantly disrupt the operation of the undertaking or when the information is classified.

Removed:1. Where the crisis state is activated pursuant to Article 44, a Member State which faces or may face severe difficulties either in the placing of an order or in the execution of a contract for the supply of defence products due to shortages or serious risks of shortages along a Union’s critical defence supply chain, may request the Commission to require an undertaking to accept, or to prioritise an order of crisis-relevant products, which are not defence products (‘priority rated order’).

Removed:2. Upon a request referred to in paragraph 1, the Commission may, after consulting the Member State of establishment of the undertaking concerned and with its agreement, notify the undertaking concerned of its intent to impose a priority rated order.

Removed:3. The notification referred to in paragraph 2 shall include information about the legal basis for the request, specify the product, specifications and quantities concerned as well as the schedule and time-limit within which the order would have to be performed, and state the reasons justifying the use of the priority rated order.

Removed:4. From the notification referred to in paragraph 2, the undertaking shall reply to the Commission, within five working days and state whether it can accept or not the order. Where the urgency of the situation requires it, the Commission may, based on a justification of such urgency, reduce the deadline for the undertaking to reply.

Removed:5. Where the undertaking declines the priority rated order, it shall provide the Commission with a detailed justification.

Removed:6. Where the undertaking accepts the priority rated order, the order shall be deemed accepted under the conditions described in the Commission’s order in accordance with the meaning of paragraph 1 and the undertaking shall be legally bound.

Removed:7. Where the notified undertaking declines the priority rated order, the order shall be deemed refused. Having due regard to the justifications invoked by the undertaking, the Commission may:

Removed:(a) abstain from pursuing the order;

Removed:(b) oblige, by way of implementing acts, the concerned undertakings to accept or perform the priority rated order at a fair and reasonable price.

Removed:8. The Commission shall take into account the objections raised by the undertaking under paragraph 7 and state the reasons why, in line with the proportionality principle and the fundamental rights of the undertaking under the Charter of Fundamental rights of the Union, it was necessary to adopt the implementing act referred to in paragraph 7, point (b), in light of the circumstances described in paragraph 1.

Removed:9. The Commission shall state in the implementing act referred to in paragraph 7, point (b), the legal basis of the priority rated order, fix the time-limit within which the order is to be performed, and set out the product, specifications, volume, and any other parameter to be complied with. The Commission shall also state the penalties provided for in Article 55 for non-compliance with the obligation.

Removed:10. Where the undertaking has accepted the priority rated order of the Commission under paragraph 6 or where the Commission has adopted an implementing act under paragraph 7(b), the priority rated order shall:

Removed:(a) be placed at a fair and reasonable price, adequately taking into account the economic operator’s opportunity costs when fulfilling the priority rated orders vis-à-vis existing contractual obligations;

Removed:(b) take precedence over any performance obligation under private or public law with the exception of these directly related to military orders.

Removed:11. Any conflict between a priority rated order and a measure under any other prioritisation mechanism of the Union shall be discussed within the Defence Industrial Readiness Board and resolved by the Commission, based on the weighing of the public interest.

Removed:12. Where the undertaking has agreed to the order of the Commission under paragraph 6 or where the Commission has adopted an implementing act under paragraph 7(b), the undertaking may request the Commission to review the priority rated order where it considers it to be duly justified based on one of the following grounds:

Removed:(a) the undertaking is unable to perform the priority rated order on account of insufficient production capability or production capacity, even under preferential treatment of the order;

Removed:(b) acceptance of the order would place an unreasonable economic burden and entail particular hardship for the undertaking.