Termination of contract

1. The contract shall lay down terms regarding the termination of the contract, in accordance with the applicable law. In the case of termination, the contract shall require the terminating Party to notify the Commission, in accordance with the procedural requirements laid down in Annex I to Implementing Regulation (EU) 2018/574.

2. The contract shall require parties to provide a minimum notice period of five months for the termination of the contract.

By derogation to the first subparagraph, the contract shall require manufacturers and importers to terminate the contract immediately:

in the event of a serious breach by the provider of its obligations under the contract,

where the provider becomes, or is in imminent risk of becoming, insolvent under the applicable law.

3. For the purposes of paragraph 2(a) a serious breach shall include:

the failure by the provider to carry out obligations or to perform services provided for under the contract that are critical to the effective functioning of the traceability system, including in particular, the failure to comply with requirements laid down in Chapter V of Implementing Regulation (EU) 2018/574,

where a provider ceases to comply with the requirements for legal and financial independence laid down in Article 35(2) of Implementing Regulation (EU) 2018/574 and where, by the expiry of the time-period referred to in Article 35(6) of Implementing Regulation (EU) 2018/574, compliance with the requirements could not be established.

COMMISSION DELEGATED REGULATION (EU) 2018/573 of 15 December 2017 on key elements of data storage contracts to be concluded as part of a traceability system for tobacco products