Explanatory Memorandum to COM(2022)495 - Liability for defective products - Main contents

Please note

This page contains a limited version of this dossier in the EU Monitor.

dossier	COM(2022)495 - Liability for defective products.
source	COM(2022)495
date	28-09-2022

1. CONTEXT OF THE PROPOSAL

1.1. Reasons for and objectives of the proposal

This explanatory memorandum accompanies the proposal for a directive on liability for defective products repealing Directive 85/374/EEC ¹ (Product Liability Directive or PLD).

The PLD’s objective is to provide an EU-level system for compensating people who suffer physical injury or damage to property due to defective products. Since the adoption of the PLD in 1985, there have been significant changes in the way products are produced, distributed and operated, including the modernisation of product safety and market surveillance rules. The green and digital transitions are underway and bring with them enormous benefits for Europe’s society and economy, be it by extending the life of materials and products, e.g. through remanufacturing, or by increasing productivity and convenience thanks to smart products and artificial intelligence.

The evaluation of the PLD ² in 2018, carried out as part of the Commission’s regulatory fitness and performance (REFIT) programme, concluded that the PLD was, on the whole, an effective and relevant instrument. However, the Directive also had several shortcomings:

·it was legally unclear how to apply the PLD’s decades-old definitions and concepts to products in the modern digital economy and circular economy (e.g. software and products that need software or digital services to function, such as smart devices and autonomous vehicles);

·the burden of proof (i.e. the need, in order to obtain compensation, to prove the product was defective and that this caused the damage suffered) was challenging for injured persons in complex cases (e.g. those involving pharmaceuticals, smart products or AI-enabled products);

·the rules excessively limited the possibility of making compensation claims (e.g. property damage worth less than EUR 500 is simply not recoverable under the PLD).

The Directive’s shortcomings in the area of emerging digital technologies were further analysed in the White Paper on Artificial Intelligence (AI) ³ , the accompanying report on liability for AI, the Internet of Things and robotics ⁴ and the report of the Expert Group on Liability and New Technologies ⁵ . The European Parliament has also highlighted the need for liability rules that are adapted to the digital world, to ensure a high level of effective consumer protection and a level playing field with legal certainty for all businesses, while avoiding high costs and risks for small and medium-sized businesses (SMEs) and start-ups ⁶ .

The revision of the PLD seeks to ensure the functioning of the internal market, free movement of goods, undistorted competition between market operators, and a high level of protection of consumers’ health and property. In particular, this proposal aims to:

·ensure liability rules reflect the nature and risks of products in the digital age and circular economy;

·ensure there is always a business based in the EU that can be held liable for defective products bought directly from manufacturers outside the EU, in light of the increasing trend for consumers to purchase products directly from non-EU countries without there being a manufacturer or importer based in the EU;

·ease the burden of proof in complex cases and ease restrictions on making claims, while ensuring a fair balance between the legitimate interests of manufacturers, injured persons and consumers in general; and

·ensure legal certainty by better aligning the PLD with the new legislative framework created by Decision 768/2008/EC ⁷ and with product safety rules, and by codifying PLD-related case law.

1.2. Consistency with existing provisions in the policy area

National liability regimes exist in each Member State that allow compensation claims in more situations than under the PLD: claims can be made against a broader range of liable persons for a broader range of damages. These claims cover services as well as products, and often allow more time to make a claim. However, injured persons have to prove the wrongdoer’s fault ⁸ , which is not required under the PLD. The PLD, as a no-fault (strict) liability regime, does not affect these rights, so the PLD is consistent with the broader national regimes. In addition, several complementary instruments concerning liability exist at EU level and are described below.

·The Sale of Goods Act ⁹ and the Digital Content and Services Directive ¹⁰ give consumers the right to remedy, i.e. replacement, repair or reimbursement, when goods, including digital content or a digital service, are not in conformity with the contract or do not work properly. Those laws concern contractual liability, whereas the PLD is about extra-contractual liability of producers for injuries/damage caused by a lack of safety.

·The General Data Protection Regulation (GDPR) ¹¹ concerns liability of data processors and controllers for material or non-material damage caused by data processing that infringes the GDPR, whereas the PLD proposal provides compensation only for material losses resulting from death, personal injury, damage to property and loss or corruption of data.

·The Environmental Liability Directive ¹² sets out a framework to prevent and remedy environmental damage. It deals with ecological damage such as damage to protected species and natural habitats, as distinct from damage to privately owned property, which is covered under the PLD.

EU product safety legislation aims to ensure that only safe products are placed on the internal market. If they are covered by sectoral legislation (e.g. on machinery, pharmaceutical products, toys, radio equipment), they have to comply with essential health and safety requirements set out therein. Otherwise they fall under the General Product Safety Directive ¹³ and are required to be safe ¹⁴ . Safety rules are enforced by market surveillance rules ¹⁵ , which ensure consumer protection by stopping non-compliant products circulating or by bringing them into compliance. Product safety legislation does not contain specific provisions on liability of businesses, but refers to the fact that the PLD applies when a defective product causes damage. Product safety and product liability are therefore complementary mechanisms for achieving a functioning single market for goods that ensures high levels of safety. A number of legislative proposals are currently under negotiation in the area of product safety:

·The draft Artificial Intelligence Act ¹⁶ aims to ensure that high-risk AI systems comply with safety and fundamental rights requirements (e.g. data governance, transparency, human oversight). The PLD proposal will ensure that when AI systems are defective and cause physical harm, property damage or data loss it is possible to seek compensation from the AI-system provider or from any manufacturer that integrates an AI system into another product.

·The proposed Machinery Regulation ¹⁷ and the proposed General Product Safety Regulation ¹⁸ (GPSR), which revise the existing Machinery Directive and General Product Safety Directive, aim, in their respective fields, to address the risks of digitalisation in the area of product safety, but not liability. The GPSR proposal imposes additional obligations on online intermediary service providers to tackle the online sale of unsafe products. The recently adopted Digital Services Act ¹⁹ sets out horizontal rules for online intermediary service providers, including online marketplaces. When online platforms manufacture, import or distribute defective products, they can be held liable on the same terms as such economic operators. When online platforms play a mere intermediary role in the sale of products between traders and consumers, they are covered by a conditional liability exemption under the Digital Services Act. None of these measures concern liability for defective products.The Digital Services Act sets out under which conditions platforms operating as an intermediary can be exempt from liability.

In the area of cybersecurity, the Cybersecurity Act ²⁰ and the delegated act ²¹ under the Radio Equipment Directive ²² are intended to mitigate cybersecurity risks, but they do not regulate the liability of manufacturers. The recent proposal for a Cyber-resilience Act ²³ builds on existing rules to encourage manufacturers and software developers to mitigate cybersecurity risks, but does not address liability.

As regards the circular economy, the 2020 circular economy action plan ²⁴ announced a sustainable products policy to provide high-quality, functional and safe products designed for reuse, repair, remanufacturing and high-quality recycling. The action plan does not contemplate measures on liability for defective products.

The draft Directive on adapting non-contractual fault-based civil liability rules to artificial intelligence, adopted as a package with this proposal, seeks to facilitate access to information and alleviate the burden of proof in compensation claims pursued under national fault-based liability regimes in cases where certain AI systems are involved in causing damage. There is no overlap with claims brought under the PLD.

1.3. Consistency with other Union policies

This proposal is in line with the Commission’s priorities to make Europe fit for the digital age and to build a future-ready economy that works for people ²⁵ .

In order to minimise risks linked to digital technologies and improve the safety of products, the EU is modernising rules on machinery, radio equipment and general product safety, as well as creating new rules on safe and trustworthy AI systems ²⁶ . This proposal complements this digital-by-default modernisation process by ensuring that, when products cause harm, injured persons can be confident that their right to compensation will be respected, and businesses have legal certainty about the liability risks they face when doing business. Taken together, these modernisation efforts should better enable Europe to pursue a digital transformation that works for the benefit of people. These efforts should contribute to a fair and competitive economy and a frictionless single market. Companies of all sizes and in any sector should be able to compete on equal terms and develop, market and use digital technologies, products and services at a scale that boosts their productivity and global competitiveness.

In respect of AI in particular, this proposal confirms that AI systems and AI-enabled goods are “products” and therefore fall within the PLD’s scope, meaning that compensation is available when defective AI causes damage, without the injured person having to prove the manufacturer’s fault, just like for any other product. Second, the proposal makes it clear that not only hardware manufacturers but also software providers and providers of digital services that affect how the product works (such as a navigation service in an autonomous vehicle) can be held liable. Third, the proposal ensures that manufacturers can be held liable for changes they make to products they have already placed on the market, including when these changes are triggered by software updates or machine learning. Fourth, the revised PLD alleviates the burden of proof in complex cases, which could include certain cases involving AI systems, and when products fail to comply with safety requirements. In doing so, it responds in large part to the calls of the European Parliament ²⁷ to ensure liability rules are adapted to AI. As a complement to these changes, the parallel proposal for a directive on fault-based liability for AI seeks to ensure that, where an injured person has to prove that it was somebody’s fault that an AI system caused damage in order to obtain compensation under national law, the burden of proof can be alleviated if certain conditions are met.

For the circular economy, business models in which products are modified or upgraded are increasingly common and central to the EU’s efforts to achieve sustainability and waste-reduction goals in line with the European Green Deal and the European Climate Law ²⁸ . This proposal aims to reinforce efforts like the sustainable products initiative ²⁹ by ensuring consumers have rights to compensation for harm caused by defective modified products that are just as clear as those for entirely new products and by creating the legal clarity that industry needs in order to embrace circular business models.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

The proposal is, like Directive 85/374/EEC, based on Article 114 of the Treaty on the Functioning of the European Union (ex-Article 95 of the Treaty Establishing the European Community, ex-Article 100 of the Treaty establishing the European Economic Community). This is because its objective is to harmonise national rules to promote free movement of goods, thereby creating a level playing field for companies in the internal market, and to ensure consumer protection.

• Subsidiarity

The evaluation concluded that the added value of having EU product liability rules to complement EU product safety rules was uncontested ³⁰ . Indeed rules on compensating people harmed by defective products reinforce EU product safety rules. Both sets of rules pursue the same policy goal of a functioning internal market for goods that ensures a high level of consumer protection and they both also require modernisation.

This proposal will provide legal certainty about: (i) what products, businesses and types of damage fall within the PLD’s scope; and (ii) the appropriate balance of interests between manufacturers and consumers across the EU. Without a uniform set of rules for compensating people harmed by defective products, manufacturers would be faced with 27 different sets of rules. This would lead to different levels of consumer protection and distorted competition among businesses from different Member States.

• Proportionality

This proposal strikes a careful balance between the interests of industry and consumers, as explained in Section 8 of the impact assessment. The proposal provides legal certainty on what products and businesses are covered by no-fault liability. It will also encourage all businesses, including non-EU manufacturers, to place only safe products on the EU market in order to avoid incurring liability. This will in turn reinforce product safety.

The proposal will also ensure that people enjoy the same protection no matter whether the defective product that harms them is tangible or digital. By enlarging the scope of the EU’s product liability regime to explicitly include software providers, businesses that make substantial modifications to products, authorised representatives and fulfilment service providers, injured persons will have a better chance of being compensated for damage suffered, and a level playing field will be established between businesses. By covering material losses due to the loss, destruction or corruption of data, the proposal recognises the importance of data in the digital age. However, the proposal does not go beyond what is necessary and therefore does not address other types of harm, such as privacy or discrimination, which would be more appropriately dealt with under other legislation.

The proposal will also create greater legal certainty and achieve a more equal level of consumer protection across the EU. The burden of proof will be more fairly shared between injured persons and manufacturers in complex cases, increasing the chances of enforcing a successful compensation claim. However, there will be no reversal of the burden of proof, as this would expose manufacturers to significantly higher liability risks and could hamper innovation, leading also to potentially higher product prices and reduced access to innovative products.

• Choice of the instrument

The proposal takes the form of a directive, which gives Member States flexibility to seamlessly embed its rules into national systems. This is important, given that its rules interact closely with national civil codes and are deeply integrated into national legal systems. This proposal seeks to replace the PLD entirely. Changing the PLD by way of recast or amending act was deemed inappropriate in light of the need for changes in almost every article.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

• Ex-post evaluations/fitness checks of existing legislation

The evaluation of the PLD ³¹ in 2018 concluded that the PLD was on the whole an effective and relevant instrument, but had several shortcomings (see section 1.1).

These findings were taken on board in the preparation of the impact assessment supporting this proposal.

• Stakeholder consultations

In preparing this proposal, the Commission consulted a broad range of stakeholders, including EU and national consumer associations and civil society organisations, industry associations, businesses, insurance associations, legal firms, academic experts, members of the public, and national authorities. The consultation activities included an inception impact assessment ³² , a 12-week dedicated public consultation to which 291 responses were submitted, stakeholder workshops, a workshop with Member States, as well as a targeted consultation and interviews with stakeholders carried out by an independent consultant.

A summary of stakeholder input on each specific objective of the revision of PLD is provided below.

·Objective to ensure liability rules reflect nature and risks of products in the digital age and the circular economy

–Most stakeholders were in favour of clarifying that software is a product that falls within the scope of the PLD. However, a majority of industry stakeholders suggested clarifying this through non-binding guidelines rather than through the legislative revision of the PLD. There was a broad consensus among all stakeholders groups that a product could be considered defective for having cybersecurity vulnerabilities. 70% of respondents in the public consultation were in favour of the possibility of holding manufacturers liable for failing to provide software security updates necessary to tackle such vulnerabilities.

–Industry stakeholders were opposed to including no-fault liability for data protection infringements in the PLD, in part because such infringements can already be compensated under other laws like the GDPR. However, consumer organisations, public authorities and NGOs were more in favour of including this.

–There was broad support among all stakeholder groups for making it possible to hold economic operators that make substantial modifications to products liable when those modified products are defective and cause damage.

·Objective to ensure there is always an EU-based liable person for defective products bought from producers outside the EU

In the public consultation, 64% of all respondents agreed or strongly agreed that the PLD needs to ensure consumer protection if defective products bought directly from non-EU countries cause damage where there is no EU-based manufacturer or importer. Views diverged on whether it should be possible to hold the authorised representative of a non-EU manufacturer, the fulfilment service provider or an online marketplace liable.

·Objective to ease the burden of proof in complex cases and ease restrictions on making claims, while ensuring a fair balance between manufacturers and consumers

–In the public consultation, 77% of respondents considered that technically complex products created difficulties in respect of the injured person’s burden of proof. The percentage was considerably higher among consumer organisations, NGOs and members of the public (95%) than among business and industry organisations (38%). Industry stakeholders were more open to information disclosure obligations and easing the burden of proof in complex cases than to reversing the burden of proof, which they considered a radical option that would harm innovation. Most stakeholders from industry organisations, consumer organisations and legal experts were strongly in favour of retaining the PLD’s technology-neutral approach. A majority of stakeholders were opposed to removing the development risk defence.

–Consumer organisations, NGOs and member of the public were in favour of removing the rule that prevents compensation of property damage valued below EUR 500 and were in favour of lengthening the 10-year period for which manufacturers remain liable for a defective product after placing it on the market. Industry stakeholders were in favour of keeping the restrictions unchanged.

• Collection and use of expertise

The preparation for the proposal was informed in particular by the two independent studies: one prepared as part of the evaluation ³³ and the other as part of the impact assessment ³⁴ . The Commission also gathered expert advice from academia, consumer groups, industry and national authorities through the 2018-2020 Expert Group on Liability and New Technologies.

The legal analysis is based on a rich collection of case-law delivered since 1985, in particular from the Court of Justice of the European Union (CJEU), and on many publications ³⁵ .

• Impact assessment

This proposal is supported by an impact assessment (SWD[xxxx]), prepared in line with the Commission’s ‘Better Regulation’ guidelines. The impact assessment report was reviewed by the Regulatory Scrutiny Board and received a positive opinion. The impact assessment report was revised to take into account the Board’s comments, in particular by better explaining: the scope of the problems identified, the impact of product safety rules on product-related harm, the baseline estimates of cases, the impacts of the preferred option by stakeholder group, and the relevance of the initiative for SMEs.

Besides the baseline scenario of no action, the impact assessment identified 3 options to address the first problem relating to the digital age and circular economy, and 2 options to address the second problem on obstacles to getting compensation and making compensation claims.

–Option 1a would ensure that manufacturers of products for which software or digital services are necessary for them to operate would be liable under the Directive. Just like for tangible components, the providers of those intangible digital elements would be jointly and severally liable with the manufacturer. But under this option, producers of standalone software would not be liable under the PLD.

–Option 1b would build on option 1a and, in addition, it would include all relevant software as a product in its own right, including 3rd-party software added to a product or standalone software that itself may cause harm (such as a medical device smartphone app). Businesses that substantially modify a product and place it back on the market would also be liable under the Directive. Under this option it would also be possible to hold a non-EU producer’s authorised representative or fulfilment service provider liable when no importer is present in the EU.

–Option 1c would include the measures of option 1b and, in addition, would include any software with implications for fundamental rights. Damage resulting from fundamental rights infringements, such as data protection breaches, privacy infringements or discrimination (e.g. by AI recruitment software) would be compensable.

–Option 2a would ease the burden of proof on consumers by harmonising: (i) rules on when producers are obliged to disclose necessary technical information to the victim in court; and (ii) conditions for national courts to presume that a product was indeed defective or that the defect did indeed cause the damage, especially in complex cases where proving liability is very difficult. Option 2a would reduce restrictions on making claims (by removing the property-damage threshold and lengthening the period of liability).

–Option 2b would reverse the burden of proof, so that if a product causes damage, it would be the producer who must prove the product was not defective and did not cause the damage. The development risk defence, which exempts producers from liability when the defectiveness of a product was not discoverable according to state-of-the-art knowledge, would be removed. Option 2b would further reduce restrictions on making claims (thresholds and time limits).

The impact assessment identified options 1b and 2a as the preferred combination of options.

Option 1b will provide legal certainty on what products and producers are covered by no-fault liability and will encourage all producers, including non-EU producers, to place only safe products on the EU market to avoid incurring liability. This reinforces product safety and will have positive economic and social impacts. It will also ensure that consumers enjoy the same protection when they are harmed by defective products regardless of whether the defect concerned the product’s digital or tangible components and when they are harmed by defective standalone software itself. By explicitly bringing software providers, authorised representatives and fulfilment service providers into the scope of the Directive, victims of harm will have a better chance of getting compensation because they will not have to prove the fault of the producer (due to the Directive’s “no-fault liability” principle). Clearer liability rules with regard to circular business models will bring legal certainty and therefore help promote such business models, and so will have a positive environmental impact. All in all, with option 1b, annual compensation for injured persons is expected to increase by between EUR 0.15 million and 22.13 million compared to the baseline. This would translate into a small increase in annual insurance premiums for producers, estimated between EUR 4.35 million and 8.69 million compared to the baseline.

Option 2a will create greater legal certainty and achieve a more equal level of consumer protection across the EU, hence having a positive economic and social impact. The burden of proof will be shared more fairly between injured persons and producers in more complex cases. This will increase the chances of enforcing a successful compensation claim in such cases. Disproportionate obstacles to making claims will be reduced. All in all, with option 2a, annual compensation for injured persons is expected to increase by between EUR 0.20 million and 43.54 million compared to the baseline. This would translate into a small increase in annual insurance premiums for producers, estimated at between EUR 14.35 million and 28.71 million compared to the baseline.

The preferred option will contribute to the UN sustainable development goals (SDGs), in particular to SDG 3 (healthy lives and well-being) due to its positive social impacts on victims’ health and well-being, SDG 9 (fostering innovation) by providing legal certainty for businesses to innovate and SDG 12 (responsible consumption and production) by improving product safety when substantial modifications are made.

• Regulatory fitness and simplification

The evaluation of the PLD found the current administrative burden to be very low, with no need for simplification. Adapting liability rules to the digital age and circular economy will not create new administrative costs for businesses or consumers.

The proposal seeks to achieve a fair balance of interests between industry and consumers, in particular by avoiding measures that could make it difficult for SMEs to innovate or create additional costs that might be more difficult for SMEs to absorb. The proposal does not exempt micro-enterprises nor does it include specific mitigation measures for SMEs, because proper compensation for persons injured by defective products cannot be made dependent on the size of the liable company. Doing so would distort competition between market players if companies selling similar products faced different liability rules.

• Fundamental rights

Reducing restrictions on making claims and easing the burden of proof in complex cases would strengthen the right to an effective remedy, a right guaranteed under Article 47 of the Charter of Fundamental Rights of the European Union.

4. BUDGETARY IMPLICATIONS

This proposal does not have any implications for the EU budget.

5. OTHER ELEMENTS

• Implementation plans and monitoring, evaluation and reporting arrangements

Member States must transpose the Directive 12 months after it enters into force and communicate the national execution measures to the Commission. The Commission stands ready to provide technical support to Member States to implement the Directive.

The Commission will review the application and transposition of the Directive 6 years after it enters into force and propose, where appropriate, legislative amendments.

• Explanatory documents

The proposed Directive harmonises civil liability law, and contains both substantive and procedural rules. Member States might use different types of legal instruments to transpose it. It is therefore justified that when notifying their transposition measures, Member States should include one or more documents explaining the relationship between the parts of the Directive and the corresponding parts of the national transposition instruments, in accordance with the Joint Political Declaration of 28 September 2011 of Member States and the Commission on explanatory documents. ³⁶

• Detailed explanation of the specific provisions of the proposal

Chapter I – General provisions

Chapter I defines the subject matter and scope of the proposal, as well as defining the terms used in the proposal. It brings product liability terminology in line with the Union’s product safety framework by basing definitions, inter alia of ‘manufacturer’ and ‘placing on market’, on the definitions in the new legislative framework created by Decision 768/2008/EC ³⁷ . It also responds to the reality of products in the digital age, in a technology-neutral manner, by including software and digital manufacturing files within the definition of product and by clarifying when a related service is to be treated as a component of a product. It also expands the notion of compensable damage to include the loss or corruption of data.

Chapter II – Specific provisions on liability for defective products

1. Chapter II lays down the rules governing the liability of economic operators for damage caused by defective products and the conditions under which natural persons have a right to compensation:

–The test for determining whether a product is defective – i.e. whether the product provided the safety which the public at large is entitled to expect – is substantively the same as under the PLD. However, in order to reflect the changing nature of products in the digital age, and to reflect case law of the CJEU, factors such as the interconnectedness or self-learning functions of products have been added to the non-exhaustive list of factors to be taken into account by courts when assessing defectiveness.

–The range of economic operators that can be held liable for defective products takes into account the growing significance of products manufactured outside the Union that are placed on the Union market, and ensures that there is always an economic operator in the Union against whom a compensation claim can be made. The proposal does not affect the conditional liability exemption under the Digital Services Act, because it sets out conditions for liability only in cases in which an online platform does not benefit from the exemption. Moreover, this proposal targets only the specific case in which a person is harmed by a defective product and seeks compensation, a scenario not covered by the Digital Services Act. It also clarifies when economic operators who make modifications to a product, such as in the context of circular economy business models, can be held liable.

–The burden of proof is on injured persons, who have to prove the damage they have suffered, the defectiveness of the product and the causal link between the two. However, in light of challenges faced by injured persons, especially in complex cases, the burden of proof is eased in order to achieve a fair balance of industry and consumer interests.

–Economic operators are entitled, as under the PLD, to be exempted from liability on certain conditions for which they carry the burden of proof. The exemptions are adapted to take into account the capacity of products in the digital age to change or be changed after they are placed on the market. In the interests of a level playing field for manufacturers across the Union as well as uniform consumer protection, the exemption afforded to manufacturers for scientifically and technically undiscoverable defects should apply in all Member States and the possibility under the PLD to derogate should not be continued.

Chapter III – General provisions on liability

Chapter III lays down liability rules of a more general nature, which are closely based on those of the current PLD. It stipulates that if there are two or more liable persons, they are liable jointly and severally. It also stipulates that if a defective product causes damage, the contributory actions of third parties do not reduce the liability of the manufacturer, whereas the contributory actions of the injured person may do so. Importantly for consumer protection, liability cannot be excluded or limited by contract or other laws. It is therefore also not allowed to set either maximum or minimum financial ceilings for compensation. The 3-year time limit for initiating proceedings remains unchanged compared to the PLD. Economic operators are liable for defective products for a 10-year period after placing the product on the market, but claimants will enjoy an additional 5-year period in cases where the symptoms of personal injury are slow to emerge, for example following ingestion of a defective chemical or food product.

Chapter IV – Final provisions

Member States will be required to publish court judgments relating to product liability so that, in the interests of a more harmonised interpretation of the product liability rules, other national courts can take these judgments into account. These transparency measures will also facilitate the review that the Commission will undertake 6 years after entry into force. Besides standard provisions on transposition and entry into force, Chapter IV also provides for the repeal of the PLD and sets out transitional measures.