CHAPTER II

NON-COMPLIANCE PROCEDURE
SECTION 1

Inquiry

The non-compliance procedure
Article 2
1
The non-compliance procedure laid down in this Chapter covers all the administrative stages of investigation of possible breaches of Regulation (EC) No 216/2008 or its implementing rules.
2
The Agency may initiate the non-compliance procedure on its own initiative or following a request from the Commission or a Member State.
3
Where the initiation of the non-compliance procedure follows a request from the Commission or a Member State, the Commission or the Member State shall be informed by the Agency of the course given to their request.

Requests for information
Article 3
1
For the purposes of initiating and conducting a non-compliance procedure the Agency may use any information obtained in the exercise of any oversight power conferred on it by Union law as regards certificates issued in accordance with Regulation (EC) No 216/2008. This empowerment is without prejudice to Union law preventing the use of information for the purposes of attributing blame or liability.
2
Prior to initiating a non-compliance procedure, the Agency may request from the certificate holder concerned information relating to the alleged breach.
The Agency shall state the purpose of the request and the fact that it is made under this Regulation, and set a time-limit for the submission of the information.

Notification
Article 4
1
The Agency shall send written notification of the initiation of a non-compliance procedure to the certificate holder, to the Commission and to the national aviation authorities of the Member State(s) or the third country or countries where the certificate holder has its principal place of business and where the breach has taken place as well as, where appropriate, to the aeronautical authorities of third countries and international organisations competent in matters covered by this Regulation.
2
The notification shall:
a
set out the allegations against the certificate holder, specifying the provisions of Regulation (EC) No 216/2008 or its implementing rules allegedly breached, and the evidence on which those allegations are founded; and
b
inform the certificate holder that a fine or a periodic penalty payment may be imposed.

Inquiries
Article 5
1
Once the inquiry has been initiated, the Agency shall clarify the facts and allegations.
2
The Agency may request the certificate holder to provide written or oral explanations, or particulars or documents.
The request shall be addressed in writing to the certificate holder. The Agency shall state the legal basis and the purpose of the request, set a time-limit by which the information is to be provided, and inform the certificate holder about the periodic penalty payments provided for in Article 16(1)(a) and (b) for failing to comply with the request or for supplying incorrect or misleading information.
3
The Agency may request national aviation authorities to cooperate in the investigation and, in particular, to provide any information relating to the alleged breach.
The request shall state the legal basis and the purpose of the request and shall set a time-limit for the submission of the reply or the conduct of the measure of inquiry.
4
The Agency may ask any natural or legal persons or aeronautical authorities of third countries to provide information relating to the alleged breach.
The request shall state the legal basis and the purpose of the request, and shall set a time-limit by which the information is to be provided.

Voluntary compliance
Article 6
1
At the notification of the initiation of the non-compliance procedure or thereafter the Agency shall set a time-limit within which the certificate holder may indicate in writing that it has voluntarily complied, or, where appropriate, that it intends to comply, with the breached provisions. In case of voluntary compliance by the certificate holder within the time-limit set by the Agency, the Agency shall decide to close the initiated non-compliance procedure.
The Agency shall not be obliged to take into account replies received after the expiry of that time-limit.
2
The time-limit provided for in paragraph 1 shall in no case expire later than the date on which the Agency notifies the statement of objections provided for in Article 7.

Statement of objections
Article 7
1
When the Agency has established the facts and found that there are grounds to continue the non-compliance procedure, it shall notify in writing a statement of objections to the certificate holder concerned. The statement of objections shall contain:
a
the allegations against the certificate holder, specifying the provisions of Regulation (EC) No 216/2008 or its implementing rules allegedly breached, and the evidence on which those allegations are founded;
b
the information that a fine or a periodic penalty payment may be imposed.
2
When notifying the statement of objections, the Agency shall invite the certificate holder to submit written observations in response. It shall do so in writing, indicating a time-limit for the submission of those observations.

Oral hearing
Article 8
1
Where a certificate holder requests it, the Agency shall give them an opportunity to develop their arguments at an oral hearing.
2
Where necessary, the Agency may invite the national aviation authorities or any other persons to take part in the oral hearing.
3
The oral hearing shall not be public. Each person may be heard separately or in the presence of other persons invited to attend, having regard to the legitimate interest of certificate holders and other persons in the protection of their business secrets and other confidential information.

Time limits
Article 9
For the purposes of ensuring legal certainty in the conduct of the inquiry procedure, the Agency shall lay down detailed rules for the setting of time-limits.

Report
Article 10
1
The Agency shall provide the Commission, the Member States and the certificate holder with a report summarising its findings in the light of the inquiry conducted in accordance with this Section. The Agency shall also submit to the Commission the file under inquiry.
2
Where the report by the Agency concludes that the certificate holder has breached provisions of Regulation (EC) No 216/2008 or its implementing rules, the report shall also include:
a
an assessment of the circumstances of the case in accordance with the criteria set out in Article 15 of this Regulation;
b
a request to the Commission for imposition of a fine or a periodic penalty payment;
c
a reasoned proposal containing the amount of the fine or periodic penalty payment.
3
The Agency shall adopt its report no later than [12 months] after notification of initiation of the non-compliance procedure in accordance with Article 4 or [6 months] after notification by the Commission of the return of the file in accordance with Article 12.
SECTION 2

Decision-making

Requests for information
Article 11
1
Where, following a request from the Agency pursuant to Article 10 (2)(b), the Commission decides to further pursue the non-compliance procedure, it may request in writing the certificate holder to provide written or oral explanations, or particulars or documents. In such a case, the Commission shall inform the certificate holder of the periodic penalty payments provided for in Article 16(1) (c) and (d) for failing to comply with the request or for supplying incorrect or misleading information.
The Commission may also request the Agency, national aviation authorities or any natural or legal persons to provide information relating to the alleged breach.
2
The Commission shall ensure that the certificate holder can provide any written explanation or particular or documents in support of its case. Certificate holders may request an oral hearing but the Commission shall have the right to agree to such request only when it considers it necessary.

New period of inquiry
Article 12
Having regard to the report of the Agency, the observations of the certificate holder on the basis of that report, and other relevant information, the Commission may consider that additional information is needed. In that case it may return the file to the Agency. The Commission shall clearly indicate to the Agency the points of fact which the Agency needs to investigate further and, if appropriate, suggest possible measures of inquiry to that effect, as provided for in Regulation (EC) No 216/2008. Section 1 of Chapter II of this Regulation shall apply to the conduct of the new period of inquiry.
SECTION 3

Decisions on fines and periodic penalty payments

Fines and periodic penalty payments and maximum amounts
Article 13
1
Where following the decision-making provided for in Section 2, the Commission finds that the certificate holder has intentionally or negligently breached Regulation (EC) No 216/2008 or its implementing rules, it may adopt a decision imposing a fine not exceeding 4 % of the annual income or turnover of the certificate holder in the preceding business year.
2
Where the certificate holder has not terminated the breach at the time of the adoption of the decision referred to in paragraph 1, the Commission may, in that decision, impose periodic penalty payments per day not exceeding 2,5 % of the average daily income or turnover of the certificate holder in the preceding business year.
These periodic penalty payments may be imposed for a period running from the date of notification of the decision until the day on which the breach is brought to an end.
3
For the purposes of paragraphs 1 and 2, the preceding business year refers to the business year preceding the date of the decision referred to in paragraph 1.
4
Fines and periodic penalty payments shall be of an administrative nature.
5
The decision imposing fines and periodic penalty payments shall be enforceable.

Contents of decisions
Article 14
1
The decision provided for in Article 13 shall be based exclusively on grounds on which the certificate holder has been able to submit observations to the Commission.
2
The Commission shall inform the certificate holder of the judicial remedies available.
3
The Commission shall inform the Member States and the Agency about the adoption of the decision.
4
When publishing details of its decision and informing the Member States, the Commission shall have regard to the legitimate interest of certificate holders and other persons in the protection of their business secrets.

Criteria governing the application and quantification of fines and periodic penalty payments
Article 15
1
In determining whether to impose fines and periodic penalty payments and the amount of those fines and payments, the Commission shall be guided by the principles of effectiveness, proportionality and dissuasiveness.
2
In each case, the Commission shall take into consideration, where relevant, the following circumstances:
a
the seriousness and the effects of the breach and in particular, the implications and effects for safety and for the environment of such breach;
b
the degree of diligence and cooperation shown by the certificate holder in the detection of the breach and the application of the corrective action, or during the course of the non-compliance procedure or, any obstruction by the certificate holder of the detection of a breach and the conduct of a non-compliance procedure, or any non-compliance by the certificate holder with requests made by the Agency, the Commission or a national aviation authority in application of this Regulation;
c
the good faith of the certificate holder in the interpretation and fulfilment of the obligations connected with certificate holders in accordance with Regulation (EC) No 216/2008 or its implementing rules, or any evidence of wilful deceit on the part of the certificate holder;
d
the turnover involved in the case and the economic capacity of the certificate holder concerned;
e
the need to adopt provisional or urgent measures;
f
the repetition, frequency or duration of the breach by the certificate holder;
g
prior sanctions, including financial penalties, imposed on the same certificate holder.
3
In determining the amount of the fine and the periodic penalty payment, the Commission shall take into account any enforcement measures already taken regarding the certificate holder at national level or by the Agency and based on the same legal grounds and the same facts.
SECTION 4

Non-cooperation

Periodic penalty payments for non-cooperation
Article 16
1
At the Agency's request or at its own initiative, the Commission may by decision impose on certificate holders periodic penalty payments per day not exceeding [0,5] % of the average daily income or turnover of the certificate holders in the preceding business year where, intentionally or negligently:
a
they do not comply with a measure of inquiry adopted pursuant to Article 5;
b
they supply incorrect or misleading information in response to a measure of inquiry adopted pursuant to Article 5;
c
they do not comply with a request for information pursuant to Article 11;
d
they supply incorrect or misleading information in response to a request for information pursuant to Article 11.
Periodic penalty payments may be imposed for a period running from the date of notification of that decision until the non-cooperation has ceased.
2
For the purposes of paragraph 1, the preceding business year refers to the business year preceding the date of the decision referred to in paragraph 1.

Procedure
Article 17
Where the Commission intends to adopt a decision as referred to in Article 16(1), it shall first notify in writing the certificate holder, setting a time-limit within which the certicate holder may submit written observations to the Commission.
The Commission shall not be obliged to take into account written observations received after the expiry of that time-limit.

Complementarity of procedures
Article 18
For the purposes of the initiation and conduct of the non-compliance procedure, the Commission and the Agency shall take into account:
1. any non-compliance procedures already initiated or concluded by a Member State or a third country against the same certificate holder and based on the same legal grounds and the same facts; and
2. any procedure initiated by the Agency pursuant to Regulation (EC) No 216/2008 against the same certificate holder and based on the same legal grounds and the same facts, with the view to amending, limiting, suspending or revoking the relevant certificate.
SECTION 5

Recovery of fines and periodic penalty payments
Article 19
The Commission shall proceed with the recovery of fines and periodic penalty payments by establishing a recovery order and issuing a debit note addressed to the certificate holder concerned in accordance with Council Regulation (EC, Euratom) No 1605/2002 and Commission Regulation (EC, Euratom) No 2342/2002 .
OJ L 248, 16.9.2002, p. 1.
OJ L 357, 31.12.2002, p. 1.