Article 63 — Prioritisation of products which are not defence products

1. Where the Council activates the measure under this Article in accordance with Article 60(3), a Member State which faces severe difficulties either in the placing of an order or in the execution of a contract related to the supply of crisis-relevant products may submit a request to the Commission to request an economic operator to accept, or to prioritise, a certain order of crisis-relevant products which are not defence products. 2. Upon a request as referred to in paragraph 1, the Commission may, where the production or supply of crisis-relevant products which are not defence products cannot be achieved by any other measures provided for in this Chapter, address a request to the economic operator concerned after: (a) consulting, and receiving prior agreement, of the Member State on the territory of which the production site of the economic operator concerned is located; and (b) consulting the Member State on the territory of which the executive management structure of the economic operator concerned is located. 3. The request referred to in paragraph 2 shall include information about the legal basis for the request, specify the products, their specifications and quantities, specify the schedule and time-limit for performing and completing the order, and state the reasons justifying the use of the priority-rated request. 4. The Commission shall demonstrate that the choice of the recipients and beneficiaries of the request referred to in paragraph 2 is non-discriminatory and complies with Union competition rules. 5. The Commission shall base the request referred to in paragraph 2 on objective, factual, measurable and substantiated data, showing that such prioritisation is indispensable in order to ensure the proper functioning of the internal market, and having regard to the legitimate interests of the economic operator concerned and to the cost and effort required for any change in the production sequence of the supply chain. 6. The economic operator concerned shall reply to the Commission within five working days upon receipt of the request referred to in paragraph 2 and state whether it accepts or refuses the request. Where the urgency of the situation so requires, the Commission may, based on a justification of such urgency, request the economic operator to reply within a shorter deadline. 7. Where the economic operator to which the request referred to in paragraph 2 is addressed has expressly accepted that request, the Commission, by means of an implementing act, shall adopt a priority-rated request setting out: (a) the legal basis of the priority-rated request to be complied with by the economic operator; (b) the list of crisis-relevant products subject to the priority-rated request, their specifications, price and the quantities in which they are to be supplied; (c) the time limits within which the priority-rated request is to be completed; (d) the beneficiaries of the priority-rated request; (e) the waiver of contractual liability under the conditions laid down in paragraph 12 of this Article; and (f) the penalties provided for in Article 72 for non-compliance with the obligations stemming from that implementing act. 8. Where the economic operator declines the request referred to in paragraph 2, it shall provide the Commission with a detailed justification for that refusal. 9. Having due regard to the justifications provided by the economic operator under paragraph 8 of this Article, and after consulting and receiving prior agreement of the Member State on the territory of which the production site of the economic operator concerned is located and the Member State on the territory of which the executive management structure of the economic operator is located, the Commission, by means of an implementing act, may adopt a priority-rated order imposing on the economic operator concerned an obligation to perform that order. The Commission shall state the reasons why, in line with the proportionality principle and the fundamental rights of the economic operator under the Charter of Fundamental Rights of the European Union and in light of the circumstances described in paragraph 1, it was necessary for it to adopt that implementing act. Any such implementing act shall provide the information referred to in paragraph 7. 10. The Commission shall not issue the priority-rated order in any of the following cases: (a) the economic operator is unable to perform the priority-rated order on account of insufficient production capability or production capacity, or on technical grounds, even under preferential treatment of the order; or (b) performance of the order would place an unreasonable economic burden on, and entail particular hardship for, the economic operator, including substantial risks relating to business continuity. 11. Priority-rated requests referred to in paragraph 7 and priority-rated orders referred to in paragraph 9 shall: (a) be placed at a fair and reasonable price, adequately taking into account the economic operator’s opportunity costs when fulfilling the priority-rated request or the priority-rated order as compared to existing contractual obligations; (b) take precedence over any performance obligation under private or public law related to the crisis-relevant products subject to the priority-rated request or to the priority-rated order, with the exception of obligations directly related to orders with a military purpose. 12. Economic operators subject to a priority-rated request pursuant to paragraph 7 or to a priority-rated order pursuant to paragraph 9 shall not be liable for any breach of contractual obligation that is governed by the law of a Member State, provided that: (a) the breach of contractual obligation is necessary for compliance with the required prioritisation; (b) the implementing act referred to in paragraph 7 or 9 has been complied with; and (c) where applicable, the acceptance of the priority-rated request did not have the sole purpose of unduly avoiding a prior contractual obligation. 13. Any conflict between a priority-rated request or a priority-rated order and a measure under any other prioritisation mechanism of the Union shall be discussed within the Board and resolved by the Commission, based on the weighing of the public interest. 14. The economic operator subject to a priority-rated request pursuant to paragraph 7 or to a priority-rated order pursuant to paragraph 9 may request the Commission to modify the implementing act referred to in paragraph 7 or 9 where it considers it to be duly justified based on one of the following grounds: (a) the economic operator is unable to perform the priority-rated request or the priority-rated order on account of insufficient production capability or production capacity, even under preferential treatment of the request or order; (b) completion of the request or the order would place an unreasonable economic burden on, and entail particular hardship for, the economic operator. 15. The economic operator shall provide all relevant and substantiated information to allow the Commission to assess the merits of the request for modification referred to in paragraph 14. 16. Based on the examination of the reasons and evidence provided by the economic operator, the Commission may, after consulting the Member State on the territory of which the production site of the economic operator concerned is located and the Member State on the territory of which the executive management structure of that economic operator is located, amend its implementing act to release, partially or in totality, the economic operator concerned from its obligations under this Article. 17. Where an economic operator established in the Union is subject to a measure of a third country which entails a priority-rated order or a priority-rated request of a crisis-relevant product which is not a defence product, it shall notify the Commission thereof. The Commission shall then inform the Board of the existence of such measure. 18. Where an economic operator subject to a priority-rated request pursuant to paragraph 7 or a priority-rated order pursuant to paragraph 9 intentionally, or through gross negligence, does not comply with that request or order, it shall be subject to fines set in accordance with Article 72, except where: (a) the economic operator is unable to perform the priority-rated request or the priority-rated order on account of insufficient production capability or production capacity, or on technical grounds; or (b) performance or completion of the order would place an unreasonable economic burden on, and entail particular hardship for, the economic operator, including substantial risks relating to business continuity. 19. The Commission shall adopt an implementing act laying down the practical and operational arrangements for the functioning of priority-rated requests and priority-rated orders, including a methodology for the determination of the price of crisis-relevant products subject to priority-rated orders. 20. The implementing acts referred to in this Article shall be adopted in accordance with the examination procedure referred to in Article 77(4). 21. This Article is without prejudice to the right of each Member State to protect the essential interests of its security in accordance with Article 346(1), point (b), TFEU.