REPORT     ***I
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8 June 2017
PE 601.115v02-00 A8-0211/2017

on the proposal for a regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union and amending Regulation (EC) No 2012/2002, Regulations (EU) No 1296/2013, (EU) 1301/2013, (EU) No 1303/2013, EU No 1304/2013, (EU) No 1305/2013, (EU) No 1306/2013, (EU) No 1307/2013, (EU) No 1308/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, (EU) No 652/2014 of the European Parliament and of the Council and Decision No 541/2014/EU of the European Parliament and of the Council

(COM(2016)0605 – C8-0372/2016 – 2016/0282(COD))

Committee on Budgets

Committee on Budgetary Control

Rapporteurs: Ingeborg Gräßle, Richard Ashworth

(Joint committee procedure – Rule 55 of the Rules of Procedure)

Rapporteurs for the opinion (*):

Jérôme Lavrilleux, Committee on Employment and Social Affairs

Jerzy Buzek, Committee on Industry, Research and Energy

Wim van de Camp, Committee on Transport and Tourism

Constanze Krehl, Committee on Regional Development

Paolo De Castro, Committee on Agriculture and Rural Development

(*) Associated committees – Rule 54 of the Rules of Procedure

ERRATA/ADDENDA
DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 EXPLANATORY STATEMENT
 OPINION OF THE COMMITTEE ON LEGAL AFFAIRS ON THE LEGAL BASIS
 OPINION of the Committee on Employment and Social Affairs(*)
 OPINION of the Committee on Industry, Research and Energy(*)
 OPINION of the Committee on Transport and Tourism(*)
 OPINION of the Committee on Regional Development(*)
 OPINION of the Committee on Agriculture and Rural Development(*)
 OPINION of the Committee on Foreign Affairs
 OPINION of the Committee on Development
 OPINION of the Committee on Fisheries
 OPINION of the Committee on Civil Liberties, Justice and Home Affairs
 PROCEDURE – COMMITTEE RESPONSIBLE
 FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union and amending Regulation (EC) No 2012/2002, Regulations (EU) No 1296/2013, (EU) 1301/2013, (EU) No 1303/2013, EU No 1304/2013, (EU) No 1305/2013, (EU) No 1306/2013, (EU) No 1307/2013, (EU) No 1308/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, (EU) No 652/2014 of the European Parliament and of the Council and Decision No 541/2014/EU of the European Parliament and of the Council

(COM(2016)0605 – C8-0372/2016 – 2016/0282(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–  having regard to the Commission proposal to Parliament and the Council (COM(2016)0605),

–  having regard to Article 294(2) and Articles 42, 43(2), 46(d), 149, 153(2)(a), 164, 168(4)(b), 172, 175, 177, 178, 189(2), 212(2), 322(1) and 349 of the Treaty on the Functioning of the European Union and to Article 106a of the Treaty establishing the European Atomic Energy Community, pursuant to which the Commission submitted the proposal to Parliament (C8-0372/2016),

–  having regard to the opinion of the Committee on Legal Affairs on the proposed legal basis,

–  having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–  having regard to the opinion of the European Court of Auditors No 1/2017 of 26 January 2017(1),

–  having regard to Rules 59 and 39 of its Rules of Procedure,

–  having regard to the joint deliberations of the Committee on Budgets and the Committee on Budgetary Control under Rule 55 of the Rules of Procedure,

–  having regard to the report of the Committee on Budgets and the Committee on Budgetary Control and the opinions of Committee on Employment and Social Affairs, the Committee on Industry, Research and Energy, the Committee on Transport and Tourism, the Committee on Regional Development, the Committee on Agriculture and Rural Development, the Committee on Foreign Affairs, the Committee on Development, the Committee on Fisheries, and the Committee on Civil Liberties, Justice and Home Affairs (A8-0211/2017),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it replaces, substantially amends or intends to substantially amend its proposal;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment     1

Proposal for a regulation

Recital 1

Text proposed by the Commission

Amendment

(1)  Since following three years of implementation further amendments are to be made to the financial rules applicable to the general budget of the Union in order remove bottlenecks in implementation by increasing flexibility, to simplify delivery for the stakeholders and the services and to focus more on results, Regulation (EU, Euratom) no 966/201214 of the European Parliament and of the Council should be repealed and replaced by this Regulation.

(1)  Since following three years of implementation further amendments are to be made to the financial rules applicable to the general budget of the Union in order remove bottlenecks in implementation by increasing flexibility, to simplify delivery for the stakeholders and the services, to focus more on results and to improve accessibility, transparency and accountability, Regulation (EU, Euratom) no 966/201214 of the European Parliament and of the Council should be repealed and replaced by this Regulation.

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14 Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1).

14 Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, p. 1).

Amendment     2

Proposal for a regulation

Recital 1 a (new)

Text proposed by the Commission

Amendment

 

(1 a)  In order to ensure an appropriate debate between the European Parliament and the Council, more adequate deadlines should have been allowed for discussion of the Commission's proposal.

Justification

The European Parliament regrets that deadlines foreseen for this proposal´s debate would not take into account in an appropriate way co legislator´s opinions.

Amendment     3

Proposal for a regulation

Recital 3

Text proposed by the Commission

Amendment

(3)  The fundamental budgetary principles should be maintained. Derogations from those fundamental principles for specific areas such as research, external actions and structural funds should be reviewed and simplified as far as possible, taking into account their continuing relevance, their added-value for the budget, and the burden they impose on stakeholders.

(3)  The fundamental budgetary principles, as well as the distribution of powers and the central role of the Court of Auditors in carrying out the Union's audit laid down in Articles 285 and 287 of the Treaty on the Functioning of the European Union (TFEU), should be maintained. Derogations from those fundamental principles for specific areas such as research, external actions and structural funds should be reviewed and simplified as far as possible, taking into account their continuing relevance, their added-value for the budget, and the burden they impose on stakeholders.

Amendment    4

Proposal for a regulation

Recital 4

Text proposed by the Commission

Amendment

(4)  Up to 10% of the funds of the Instrument for Pre-accession Assistance (IPA II), the European Neighbourhood Instrument and the financing instrument for development cooperation (DCI) may be kept unallocated at the beginning of the financial year to allow additional funding to respond to major unforeseen needs, new crises situations or significant political shifts in third countries, in addition to the amounts already programmed. These unallocated funds, if not committed during the year, should be carried over by a Decision of the Commission.

(4)  Up to 10% of the funds of the Instrument for Pre-accession Assistance (IPA II), the European Neighbourhood Instrument and the financing instrument for development cooperation (DCI) may be kept unallocated at the beginning of the financial year to allow additional funding to respond to major unforeseen needs, new crises situations or significant political shifts in third countries, in addition to the amounts already programmed. These unallocated funds, if not committed during the year, should be carried over by a Decision of the Commission, whilst ensuring that they are spent in accordance with the specific objectives of their initial instrument and governed by the rules and bodies relating to that instrument.

Justification

The recital should be in line with Article 12(2)(e) which only concerns carry-over rules. It should be guaranteed that no unallocated funds carried over can be diverted from the specific objectives of the respective instrument.

Amendment     5

Proposal for a regulation

Recital 12

Text proposed by the Commission

Amendment

(12)  The concept of performance as regards the EU budget should be clarified. Performance should be described as a direct application of the principle of sound financial management. There should be a link between performance, objective-setting, indicators, results and economy, efficiency and effectiveness in the use of appropriations. To avoid conflicts with existing performance frameworks of the different programmes, references in terms of performance terminology should be limited to objectives and monitoring progress in achieving them.

(12)  The concept of performance as regards the EU budget should be clarified. Performance should be described on the basis of the achievement of objectives and the direct application of the principle of sound financial management. Without seeking to prejudge the relevance of the programme concerned, there should be a link between objectives set and performance, indicators, results, additionality and economy, efficiency and effectiveness in the use of appropriations. To avoid conflicts with existing performance frameworks of the different programmes, references in terms of performance terminology should be limited to objectives and monitoring progress in achieving them.

Amendment     6

Proposal for a regulation

Recital 14

Text proposed by the Commission

Amendment

(14)  The principle of transparency, enshrined in Article 15 TFEU which requires the institutions to work as openly as possible, implies, in the area of the implementation of the budget, that citizens are able to know where, and for what purpose, funds are spent by the Union. Such information fosters democratic debate, contributes to the participation of citizens in the Union's decision-making process and reinforces institutional control and scrutiny over Union expenditure. Such objectives should be achieved by the publication, preferably using modern communication tools, of relevant information concerning all recipients of Union funds which takes into account such all recipients' legitimate interests of confidentiality and security and, as far as natural persons are concerned, their right to privacy and the protection of their personal data. Institutions should therefore adopt a selective approach in the publication of information, in accordance with the principle of proportionality. Decisions to publish should be based on relevant criteria in order to provide meaningful information.

(14)  The principle of transparency is enshrined in Article 15 TFEU; this requires the institutions to work as openly as possible and, in the area of the implementation of the budget, implies that citizens are able to know where, and for what purpose, funds are spent by the Union. Such information fosters democratic debate, contributes to the participation of citizens in the Union's decision-making process, reinforces institutional control and scrutiny over Union expenditure and makes an exceptional contribution to boosting its credibility. Communication should be more targeted at recipients, aimed at increasing visibility for citizens, while ensuring through defined-measures that the messages are received by beneficiaries. Such objectives should be achieved by the full publication, preferably using modern communication tools, of relevant information concerning all recipients of Union funds which takes into account those same recipients' legitimate interests of confidentiality and security and, as far as natural persons are concerned, their right to privacy and the protection of their personal data. Institutions should therefore adopt a selective approach in the publication of information, in accordance with the principle of proportionality. Decisions to publish should be based on relevant criteria in order to provide meaningful information.

Amendment     7

Proposal for a regulation

Recital 15

Text proposed by the Commission

Amendment

(15)  The information on the use of Union funds implemented under direct implementation should be published on an internet website of the institutions and should include at least the name, the locality, the amount and the purpose of the funds. That information should take into account relevant criteria such as the periodicity, the type and the importance of the measure.

(15)  In any case, the utmost transparency regarding data on beneficiaries should be sought, without prejudice to the rules on the protection of personal data. The information on the use of Union funds implemented under direct, indirect and shared implementation should be published in the Financial Transparency System and on an internet website of the institutions and should include at least the name, the locality, the amount and the purpose of the funds. That information should take into account relevant criteria such as the periodicity, the type and the importance of the measure.

Amendment     8

Proposal for a regulation

Recital 16

Text proposed by the Commission

Amendment

(16)  The name and locality of the recipients of Union funds should be published for prizes, grants and contracts awarded following the opening-up of a public procedure to competition, as it is the case in particular for contests, call for proposals and call for tenders, in the respect of the principles of the TFEU and in particular the principles of transparency, proportionality, equal treatment and non-discrimination. Moreover such publication should contribute to the control of the public selection procedures by the rejected applicants of the competition.

(16)  For prizes, grants and contracts awarded following the opening-up of a public procedure to competition, and in particular for contests, for a call for proposals and/or a call for tenders, to respect the principles of the TFEU and in particular the principles of transparency, proportionality, equal treatment and non-discrimination, the name and locality of the recipients of Union funds should be published. Such publication should contribute to the control of the public selection procedures by the unsuccessful applicants in the competition.

Justification

Clearer language

Amendment     9

Proposal for a regulation

Recital 22

Text proposed by the Commission

Amendment

(22)  The name and the locality of the recipient and the amount and the purpose of the funds should not be published if it risks endangering the integrity of the recipient as protected by the Charter of Fundamental Rights of the European Union or would harm the legitimate commercial interests of the recipient.

(22)  The name and the locality of the recipient and the amount and the purpose of the funds should not be published where there is a risk that such publication might compromise the integrity of the recipient as protected, in particular, by the Charter of Fundamental Rights of the European Union or would harm the legitimate commercial interests of the recipient.

Amendment     10

Proposal for a regulation

Recital 23

Text proposed by the Commission

Amendment

(23)  In the case of indirect and shared implementation, it should be for the persons, entities or designated bodies implementing Union funds to make available information on recipients and final recipients. Where applicable, the level of detail and criteria should be defined in the relevant sector specific rules and may be further defined in the financial framework partnership agreements. The Commission should make available a reference of the website where the information on recipients and final recipients can be found.

(23)  Apart from the elements laid down in Recital 15, in the case of indirect and shared implementation, it should be the responsibility of the persons, entities or designated bodies implementing Union funds to make available information on recipients and final recipients. Where applicable, the level of detail and criteria should be defined in the relevant sector- specific rules and may be further defined in the financial framework partnership agreements. The Commission should make available a reference of the website where the information on recipients and final recipients can be found.

Amendment    11

Proposal for a regulation

Recital 40

Text proposed by the Commission

Amendment

(40)  Once the tasks and responsibilities of each financial actor have been defined, they may be held liable only under the conditions laid down in the Staff Regulations of Officials of the European Union and the Conditions of Employment of Other Servants of the European Union. The specialised financial irregularities panels have been set up in the Union institutions, however due to limited number of cases submitted to them and for reasons of efficiency, it is appropriate to transfer their functions to the newly established inter-institutional panel which has been set up to assess requests and issue recommendations on the imposition on administrative sanctions (exclusion and financial penalty) referred to it by the Commission or other Union institutions and Union bodies. This transfer also aims at avoiding duplication and mitigating the risks of contradictory recommendations or opinions, in cases where both an economic operator and an EU staff member are involved. The procedure should be maintained by which an authorising officer may seek confirmation of an instruction which that officer considers to be irregular or contrary to the principle of sound financial management, and thus be released from any liability. The composition of this panel should be modified when it fulfils this role.

(40)  Once the tasks and responsibilities of each financial actor have been defined, they may be held liable only under the conditions laid down in the Staff Regulations of Officials of the European Union and the Conditions of Employment of Other Servants of the European Union. A specific separate interinstitutional panel should be put in place. Since the matter of financial irregularities is linked to the institution's disciplinary powers and therefore intrinsically connected with the institution's administrative autonomy, the interinstitutional character of the panel should be reinforced via its composition.

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment     12

Proposal for a regulation

Recital 47

Text proposed by the Commission

Amendment

(47)  For the sake of legal security, the rules regarding the delays when a debit note is to be sent should be defined.

(47)  In order to guarantee legal security and transparency, the rules regarding the delays when a debit note is to be sent should be defined.

Amendment     13

Proposal for a regulation

Recital 54

Text proposed by the Commission

Amendment

(54)  This Regulation should stipulate that the payments must be made within a specified time limit and that in the event of failure to respect this time limit creditors will be entitled to default interests to be charged to the budget, with the exception of Member States and as newly introduced, also the European Investment Bank and the European Investment Fund.

(54)  This Regulation should stipulate that the payments must be made within a specified time limit and that in the event of failure to respect this time limit creditors will be entitled to default interests to be charged to the budget, with the exception of Member States.

Justification

The EIB Group should not be treated differently in this respect from other entities implementing EU budgetary funds or creditors of the Union. In this regard the EIB Group is required by its Statute to ensure its costs are covered and that the inclusion of the EIB/EIF in this provision may provoke negative reactions from the credit rating agencies related to existing instruments such as EFSI, the ELM (External Lending Mandate) and InnovFin.

Amendment     14

Proposal for a regulation

Recital 60

Text proposed by the Commission

Amendment

(60)  It is important to allow Member States to request that resources allocated to them under shared implementation are transferred at Union level and implemented by the Commission in direct or indirect implementation, where possible for the benefit of the Member State concerned. This would optimise the use of these resources and of the instruments established under this Regulation or under sector specific Regulations including the EFSI Regulation, to which the Member States would request these resources to be transferred. In order to guarantee an efficient implementation of these instruments, it is necessary to foresee that where resources are transferred to instruments established under this Regulation or under sector specific Regulations including the EFSI Regulation, the rules of those regulations shall apply.

deleted

Amendment     15

Proposal for a regulation

Recital 71

Text proposed by the Commission

Amendment

(71)  A person or entity should be excluded by the authorising officer responsible when a final judgment or a final administrative decision has been taken in the case of grave professional misconduct, non-compliance, whether intentional or not, with the obligations related to the payment of social security contributions or the payment of taxes, fraud affecting the budget, corruption, participation in a criminal organisation, money laundering, terrorist financing, terrorist related offences, child labour or other forms of trafficking in human beings or irregularity. It should also be excluded in the case of a serious breach of a legal commitment or bankruptcy.

(71)  A person or entity should be excluded by the authorising officer responsible when a final judgment or a final administrative decision has been taken in the case of grave professional misconduct, non-compliance, whether intentional or not, with the obligations related to the payment of social security contributions or the payment of taxes, where its registered office is established in a non-cooperative jurisdiction, tax good governance standards, including fair tax competition, fraud affecting the budget, corruption, participation in a criminal organisation, money laundering, terrorist financing, terrorist related offences, child labour or other forms of trafficking in human beings or irregularity. It should also be excluded in the case of a serious breach of a legal commitment or bankruptcy. It should also be excluded where it does not comply with tax transparency nor publicly disclose country by country reporting information as provided for in Directive 2013/34/EU.

Amendment     16

Proposal for a regulation

Recital 72

Text proposed by the Commission

Amendment

(72)  When deciding on the exclusion or the imposition of a financial penalty and on the publication thereof or on the rejection of person or entity, the authorising officer responsible should ensure compliance with the principle of proportionality by taking into particular account the seriousness of the situation, its budgetary impact, the time which has elapsed since the relevant conduct, its duration and its recurrence, the intention or degree of negligence and the degree of collaboration of the person or entity with the relevant competent authority and its contribution to the investigation.

(72)  When deciding on the exclusion of a person or entity, or the imposition of a financial penalty on a person or entity, and on the publication thereof, the authorising officer responsible should ensure compliance with the principle of proportionality by taking into particular account the seriousness of the situation, its budgetary impact, the time which has elapsed since the relevant conduct, its duration and its recurrence, the intention or degree of negligence and the degree of collaboration of the person or entity with the relevant competent authority and its contribution to the investigation.

Amendment   17

Proposal for a regulation

Recital 80

Text proposed by the Commission

Amendment

(80)  It is important to be able to reinforce the deterrent effect achieved by the exclusion and the financial penalty. In that regard, the deterrent effect should be reinforced by the possibility to publish the information related to the exclusion and/or to the financial penalty, with full respect for the data protection requirements set out in Regulation (EC) No 45/2001 of the European Parliament and of the Council (6) and in Directive 95/46/EC of the European Parliament and of the Council (7). This should contribute to ensuring that the same conduct is not repeated. For reasons of legal certainty and in accordance with the principle of proportionality it should be specified in which situations a publication should not take place. In its assessment, the authorising officer responsible should have regard to any recommendation of the panel. As far as natural persons are concerned, personal data should only be published in exceptional cases justified by the seriousness of the conduct or its impact on the Union's financial interests.

(80)  It is important to be able to reinforce the deterrent effect achieved by the exclusion and the financial penalty. In that regard, the deterrent effect should be reinforced by the possibility to publish the information related to the exclusion and/or to the financial penalty, with full respect for the data protection requirements set out in Regulation (EC) No 45/2001 of the European Parliament and of the Council (6) and in Regulation (EU) 2016/679 of the European Parliament and of the Council1a. This should contribute to ensuring that the same conduct is not repeated. For reasons of legal certainty and in accordance with the principle of proportionality it should be specified in which situations a publication should not take place. In its assessment, the authorising officer responsible should have regard to any recommendation of the panel. As far as natural persons are concerned, personal data should only be published in exceptional cases justified by the seriousness of the conduct or its impact on the Union's financial interests.

 

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1a Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1).

Amendment    18

Proposal for a regulation

Recital 88

Text proposed by the Commission

Amendment

(88)  Progress towards the electronic exchange of information and electronic submission of documents, which constitute a major simplification measure, should be accompanied by clear conditions for the acceptance of the systems to be used, so as to establish a legally sound environment while preserving flexibility in the management of Union funds for the participants, recipients and the authorising offices as provided for in this Regulation.

(88)  Progress towards the electronic exchange of information and electronic submission of documents, including e-procurement, where appropriate, which constitute a major simplification measure, should be accompanied by clear conditions for the acceptance of the systems to be used, so as to establish a legally sound environment while preserving flexibility in the management of Union funds for the participants, recipients and the authorising offices as provided for in this Regulation.

Amendment     19

Proposal for a regulation

Recital 96

Text proposed by the Commission

Amendment

(96)  It is important to recognise the specific nature of blending facilities where the Commission blends its contribution with that of Financial Institutions and to clarify the application of Title X on Financial Instruments.

(96)  It is important to improve the nature and the use of blending facilities where the Commission blends its contribution with that of Financial Institutions and to clarify the application of Title X on Financial Instruments.

Amendment     20

Proposal for a regulation

Recital 97 a (new)

Text proposed by the Commission

Amendment

 

(97a)  The utmost transparency should be ensured with regard to contractors and subcontractors, making the relevant data accessible.

Amendment     21

Proposal for a regulation

Recital 105

Text proposed by the Commission

Amendment

(105)  It is appropriate that different cases usually referred to as situations of conflict of interest be identified and treated distinctly. The notion of a ‘conflict of interest’ should be solely used for cases where an entity or person with responsibilities for budget implementation, audit or control or an official or an agent of a Union institution is in such a situation. In cases where an economic operator attempts to unduly influence a procedure or obtain confidential information, this should be treated as grave professional misconduct. In addition, economic operators may be in a situation where they should not be selected to implement a contract because of a professional conflicting interest. For instance, a company should not evaluate a project in which it has participated or an auditor should not be in a position to audit accounts it has previously certified.

(105)  It is appropriate that different cases usually referred to as situations of conflict of interest be identified and treated distinctly. The notion of a ‘conflict of interest’ should be solely used for cases where an entity or person with responsibilities for budget implementation, audit or control or an official or an agent of a Union institution is in such a situation. In cases where an economic operator attempts to unduly influence a procedure or obtain confidential information, this should be treated as grave professional misconduct as a result of which that operator can be excluded from the procedure. In addition, economic operators may be in a situation where they should not be selected to implement a contract because of a professional conflicting interest. For instance, a company should not evaluate a project in which it has participated or an auditor should not be in a position to audit accounts it has previously certified.

Amendment  22

Proposal for a regulation

Recital 108

Text proposed by the Commission

Amendment

(108)  Union public procurement should ensure that Union funds are used in an effective, transparent, and appropriate way. In that regard, electronic procurement should contribute to the better use of Union funds and enhance access to contracts for all economic operators.

(108)  Union public procurement should ensure that Union funds are used in an effective, transparent, and appropriate way, while reducing administrative burden on recipients of Union funding and on managing authorities. In that regard, electronic procurement should contribute to the better use of Union funds and enhance access to contracts for all economic operators. All Union institutions conducting public procurement should publish clear rules on their websites regarding acquisition, expenditure and monitoring, as well as all contracts awarded, including the value thereof.

Amendment     23

Proposal for a regulation

Recital 124

Text proposed by the Commission

Amendment

(124)  It is necessary to clarify the scope of the Title on grants, particularly with regard to the type of action or body eligible for a grant as well as with regard to legal commitments that may be used to cover grants. In particular, grant decisions should be phased out due to their limited use and progressive introduction of e-grants. The structure should be simplified by moving the provisions on instruments which are not grants to other parts of the Regulation. The nature of bodies which may receive operating grants should be clarified since the notion of bodies pursuing an aim of general Union interest is covered by the notion of bodies having an objective forming part of and supporting a Union policy. In addition, the restrictive definition of a body pursuing an aim of general Union interests should be removed.

(124)  It is necessary to clarify the scope of the Title on grants, particularly with regard to the type of action or body eligible for a grant as well as with regard to legal commitments that may be used to cover grants. In particular, grant decisions should be phased out due to their limited use and progressive introduction of e-grants. The structure should be simplified by moving the provisions on instruments which are not grants to other parts of the Regulation. The nature of bodies which may receive operating grants should be clarified since the notion of bodies pursuing an aim of general Union interest is covered by the notion of bodies having an objective forming part of and supporting a Union policy.

Amendment     24

Proposal for a regulation

Recital 130

Text proposed by the Commission

Amendment

(130)  The scope of checks and controls as opposed to the periodic assessment of lump sums, unit costs or flat rates should be clarified. Those checks and controls should focus on the fulfilment of the conditions triggering the payment of lump sums, unit costs or flat-rates, including, where required, the achievement of outputs. Those conditions should not require reporting on the costs actually incurred by the beneficiary. Where the amounts of lump sums, unit costs or flat-rate financing have been decided ex ante by the authorising officer responsible or the Commission they should not be challenged by ex post controls. The periodic assessment of lump sums, unit costs or flat rates may require access to the accounts of the beneficiary for statistical and methodological purposes. The periodic assessment may lead to updates of the lump sums, unit costs or flat rates applicable to future agreements but should not be used for questioning the value of the lump sums, unit costs or flat rates already agreed upon. Access to the beneficiary's accounts is also necessary for fraud-prevention and detection purposes.

(130)  The scope of checks and controls as opposed to the periodic assessment of lump sums, unit costs or flat rates should be clarified. Those checks and controls should focus on the fulfilment of the conditions triggering the payment of lump sums, unit costs or flat-rates, including, where required, the achievement of outputs. Those conditions should not require reporting on the costs actually incurred by the beneficiary. The frequency and scope of those checks and controls should be dependent, inter alia, on risk related to a beneficiary based on past irregularities. Where the amounts of lump sums, unit costs or flat-rate financing have been decided ex ante by the authorising officer responsible or the Commission they should not be challenged by ex post controls. The periodic assessment of lump sums, unit costs or flat rates may require access to the accounts of the beneficiary for statistical and methodological purposes. The periodic assessment may lead to updates of the lump sums, unit costs or flat rates applicable to future agreements but should not be used for questioning the value of the lump sums, unit costs or flat rates already agreed upon. Access to the beneficiary's accounts is also necessary for fraud-prevention and detection purposes.

Justification

Checks and controls should be focused more on beneficiaries posing a higher risk to the Union budget. Risk-based checks and controls would allow the EU to use more of its resources on concrete action instead of administration.

Amendment     25

Proposal for a regulation

Recital 131 a (new)

Text proposed by the Commission

Amendment

 

(131 a)   In order to protect one of the fundamental principles of public finances, the non-profit rule should be retained in this Regulation. The non-profit rule should be seen as one of the main instruments to avoid misuse of the public money.

Amendment    26

Proposal for a regulation

Recital 136

Text proposed by the Commission

Amendment

(136)  In recent years the Union has increasingly used financial instruments that allow a higher leverage of the EU budget to be achieved but, at the same time, they generate a financial risk for that budget. Among those financial instruments are not only the financial instruments already covered by the Financial Regulation, but also other instruments such as budgetary guarantees and financial assistance that previously have been governed only by the rules established in their respective basic acts. It is important to establish a common framework to ensure the homogeneity of the principles applicable to that set of instruments and to regroup them under a new Title, comprising sections on budgetary guarantees and on financial assistance to Member States or third countries in addition to the existing rules applicable to Financial Instruments.

(136)  In recent years the Union has increasingly used financial instruments that should allow a higher leverage of the EU budget to be achieved but, at the same time, they generate a financial risk for that budget. Among those financial instruments are not only the financial instruments already covered by the Financial Regulation, but also other instruments such as budgetary guarantees and financial assistance that previously have been governed only by the rules established in their respective basic acts. It is important to establish a common framework to ensure the homogeneity of the principles applicable to that set of instruments and to regroup them under a new Title, comprising sections on budgetary guarantees and on financial assistance to Member States or third countries in addition to the existing rules applicable to Financial Instruments.

Amendment     27

Proposal for a regulation

Recital 139

Text proposed by the Commission

Amendment

(139)  Financial instruments, budgetary guarantees and financial assistance should be authorised by means of a basic act. Where financial instruments are established without a basic act in duly justified cases, they should be authorised by the European Parliament and the Council in the budget.

(139)  Financial instruments, budgetary guarantees, financial assistance and Trust Funds should be authorised by means of a basic act.

Amendment     28

Proposal for a regulation

Recital 142

Text proposed by the Commission

Amendment

(142)  It is appropriate to recognise the alignment of interests in pursuing Union policy objectives and, in particular, that the European Investment Bank and the European Investment Fund have the specific expertise to implement financial instruments.

(142)  It is appropriate to recognise the alignment of interests in pursuing Union policy objectives and, in particular, that the European Investment Bank and the European Investment Fund (EIF) have the specific expertise to implement financial instruments and budgetary guarantees.

Justification

The EIB is the only EU finance institution which is obliged by the TFEU to apply EU objectives, regulations and standards and which has an audit and control system set out in the TFEU.

Amendment    29

Proposal for a regulation

Recital 164

Text proposed by the Commission

Amendment

(164)  The Commission should be authorised to create and manage Union trust funds for emergency, post-emergency or thematic actions not only in external actions but also in EU-internal actions. Recent events in the European Union show the need for increased flexibility for funding within the EU. As the boundaries between external and internal policies are increasingly blurred, this would also provide a tool for replying to cross-border challenges. It is necessary to specify the principles applicable to the contributions to Union Trust Funds, to clarify the responsibilities of the financial actors and of the Board of the Trust Fund. It is also necessary to define rules ensuring a fair representation of the participating donors in the Board of the Trust Fund and a mandatory positive vote of the Commission for the use of the funds.

(164)  Trust funds may seriously alter budgets adopted by the European Parliament and the Council and carry the risk of using funds from financing instruments for purposes not foreseen in the basic acts establishing those instruments. Trust funds do however add value through the pooling of resources, provided such pooling is not primarily limited to Union resources. The Commission should be authorised to create and manage Union trust funds for emergency, post-emergency or thematic actions for external actions. It is necessary to specify the principles applicable to the contributions to those trust funds, to clarify the responsibilities of the financial actors and of the Board of the Trust Fund. It is also necessary to define rules ensuring a fair representation of the participating donors and, where apppropriate, of the European Parliament in the Board of the Trust Fund and a mandatory positive vote of the Commission for the use of the funds.

Justification

The rapporteurs do not consider extending the scope of Union trust funds to internal actions appropriate at this time. See further justification in amendments to Art. 227.

Amendment     30

Proposal for a regulation

Recital 167

Text proposed by the Commission

Amendment

(167)  The manner in which the institutions currently report on building projects to the European Parliament and the Council should be maintained. Institutions should be allowed to finance new building projects with the appropriations received for buildings already sold, therefore a reference to assigned revenue provisions should be introduced. This would allow meeting the changing needs in the building policy of the institutions, while saving costs and introducing more flexibility.

(167)  The manner in which the institutions currently report on building projects to the European Parliament and the Council should be improved. Institutions should be allowed to finance new building projects with the appropriations received for buildings already sold, therefore a reference to assigned revenue provisions should be introduced. This would allow meeting the changing needs in the building policy of the institutions, while saving costs and introducing more flexibility.

Amendment     31

Proposal for a regulation

Recital 169

Text proposed by the Commission

Amendment

(169)  In order to improve agility of implementation of special instruments, it is appropriate to simplify mobilisation and transfer procedures by using Commission internal transfers for the European Globalisation Adjustment Fund and the European Union Solidarity Fund.

deleted

Amendment     32

Proposal for a regulation

Recital 170

Text proposed by the Commission

Amendment

(170)  In order to ensure that the European Union Programme for Employment and Social Innovation (EaSI) provides swiftly adequate resources to support changing political priorities, the indicative shares for each of the three axis and the minimum percentages for each of the thematic priorities within the individual axis should allow for a greater flexibility. This should improve the management of the Programme and allow focussing budgetary resources on actions producing better employment and social results.

(170)  In order to ensure that the European Union Programme for Employment and Social Innovation (EaSI) provides swiftly adequate resources to support changing political priorities, the indicative shares for each of the three axis and the minimum percentages for each of the thematic priorities within the individual axis should allow for a greater flexibility, while maintaining an ambitious deployment rate for EURES cross-border partnerships. This should improve the management of the Programme and allow focussing budgetary resources on actions producing better employment and social results.

Amendment    33

Proposal for a regulation

Recital 171

Text proposed by the Commission

Amendment

(171)  In order to facilitate investments in cultural and sustainable tourism infrastructure, without prejudice to the full application of EU environmental legislation, in particular the Directives on Strategic Environmental Assessment and Environmental Impact Assessment as appropriate, certain restrictions as regards the scope of support for these investments should be removed.

(171)  Investments in small-scale cultural and sustainable tourism infrastructure should be maintained, without prejudice to the full application of EU environmental legislation, in particular the Directives on Strategic Environmental Assessment and Environmental Impact Assessment as appropriate. In justified cases, the scope of support for these investments could be enlarged.

Amendment    34

Proposal for a regulation

Recital 172

Text proposed by the Commission

Amendment

(172)  With a view to responding to the challenges posed by increasing flows of migrants and refugees, the objectives to which the ERDF may contribute in its support of migrants and refugees should be spelled out.

(172)  With a view to responding to the challenges posed by increasing flows of migrants and refugees, the objectives to which the ERDF may contribute in its support of migrants and refugees under international protection should be spelled out. That contribution can be effective, especially in countries particularly exposed to migration flows, if accompanied by a genuine Europe-wide application of the principle of solidarity, and thus by actions aimed at fair burden sharing.

Amendment    35

Proposal for a regulation

Recital 172 a (new)

Text proposed by the Commission

Amendment

 

(172a)  Horizontal principles, i.e. partnership involvement, sustainable development, gender equality and non-discrimination, have generated important contributions to effective implementation of ESI Funds and should be upheld as forerunners for any kind of investment involving the Union budget, including financial instruments and EFSI.

Amendment    36

Proposal for a regulation

Recital 176

Text proposed by the Commission

Amendment

(176)  In view of maximising the synergies between all Union funds to address the challenges of migration and asylum in an effective way, it should be ensured that, when the thematic objectives are translated into priorities in the Fund-specific rules, such priorities cover the appropriate use of each Fund for these areas.

(176)  In view of maximising the synergies between all Union funds to address the challenges of migration and asylum in an effective way, it should be ensured that, when the thematic objectives are translated into priorities in the Fund-specific rules, such priorities cover the appropriate use of each Fund for these areas. Where appropriate, coordination with the Asylum, Migration and Integration Fund (AMIF) is recommended.

Amendment     37

Proposal for a regulation

Recital 178

Text proposed by the Commission

Amendment

(178)  In view of optimising the use of the financial resources allocated to Member States under Cohesion policy, it is necessary to allow Member States to transfer ESI Funds allocation to instruments established under the Financial Regulation or under sector specific Regulations.

deleted

Amendment    38

Proposal for a regulation

Recital 178 a (new)

 

Text proposed by the Commission

Amendment

 

(178 a)   The financial resources of the European Maritime and Fisheries Fund should be strictly earmarked to support the Common Fisheries Policy for the conservation of marine biological resources, for the management of fisheries and fleets exploiting those resources, for fresh water biological resources and aquaculture, as well as for the processing and marketing of fishery and aquaculture products.

Amendment    39

Proposal for a regulation

Recital 199 a (new)

Text proposed by the Commission

Amendment

 

(199a)  In line with the recommendations set out in Recital 10 of Regulation (EU) No 1296/2013 and Article 176 of this Regulation, Member States should increasingly make use of simplified cost options and of ‘single lump sum’ financing in order to make the associated administration less burdensome and to simplify the rules governing the allocation of funds.

Amendment    40

Proposal for a regulation

Recital 199 b (new)

 

Text proposed by the Commission

Amendment

 

(199b)  In the interests of increased efficiency, Member States should be able to make more frequent use of simplified cost options and of ‘single lump sum’ financing in order to make the associated administration less burdensome and to simplify the rules governing the allocation of funds.

Amendment    41

Proposal for a regulation

Recital 200

Text proposed by the Commission

Amendment

(202)  In order to facilitate earlier and more targeted application of simplified cost options, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of the definition of the standard scales of unit costs or the flat rate financing, the fair, equitable and verifiable method on which they may be established, and the financing based on the fulfilment of conditions related to the realisation of progress in implementation or the achievement of objectives of programmes rather than on costs. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement on Better Law-Making of 13 April 2016. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States' experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

(200)  In order to facilitate earlier and more targeted application of simplified cost options, the power to adopt acts supplementing this Regulation in accordance with Article 290 TFEU should be delegated to the Commission in respect of the definition of the differentiated treatment of investors and the conditions for its application, the definition of the standard scales of unit costs or the flat rate financing, the fair, equitable and verifiable method on which they may be established, and the financing based on the fulfilment of conditions related to the realisation of progress in implementation or the achievement of objectives of programmes rather than on costs. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States' experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts.

Amendment    42

Proposal for a regulation

Recital 239

Text proposed by the Commission

Amendment

(239)  In order to increase the efficiency of the intervention, a blending facility or blending facilities may be established under the Connecting Europe Facility (CEF). Such blending facilities should finance blending operations which are actions combining non-reimbursable forms of support and/or financial instruments from the Union budget, including combination of CEF equity and CEF debt financial instruments, and financing from EIB Group (including EIB financing under EFSI) development or other finance institutions as well as investors.

(239)  In order to increase the efficiency of the intervention, blending facilities may be established under the Connecting Europe Facility (CEF). Such blending facilities could finance Blending Operations which are actions combining non-reimbursable forms of support, such as Member States' budget, CEF grants and the European Structural and Investment Funds, and/or financial instruments from the Union budget, including combinations of CEF equity and CEF debt financial instruments and financing from the EIB Group (including EIB financing under EFSI), national promotional banks development or other finance institutions as well as investors and/or private financial support, including both direct and indirect financial contributions, including through Public Private Partnerships.

Justification

Blending should promote a wide combination of contributions from national and EU budgets or private investors, in order to optimise the use of available resources and attract private investments as much as possible.

Amendment    43

Proposal for a regulation

Recital 239 a (new)

Text proposed by the Commission

Amendment

 

(239a)  The governance of blending facilities should be based on an ex-ante assessment in accordance with the Financial Regulation and should reflect the results of lessons learned from the implementation of the CEF "Blending Call" referred to in the CEF Multi Annual Work Programme 2017 published on 20 January 2017. CEF blending facilities should be established by the multiannual and/or annual work programmes and adopted in accordance with Articles 17 and 25 of Regulation (EU) No 1316/2013. The Commission should ensure transparent and timely reporting to the European Parliament and the Council on the implementation of any blending facility.

Justification

It is important that the setting-up and use of blending facilities follows a well-defined and transparent governance process and includes lessons to be drawn from the ongoing CEF coordination call of 2017 (“blending call”). In particular regarding Parliament’s scrutiny of CEF, blending facilities and blending operation need be set up following the established planning and decision-making mechanisms in the CEF work programme cycle.

Amendment    44

Proposal for a regulation

Recital 239 b (new)

Text proposed by the Commission

Amendment

 

(239b)  The objective of CEF Blending Facilities is to facilitate and streamline one application for all forms of support, including Union grants from CEF and private sector finance. Those blending facilities should aim to optimise the application process for project promoters by providing a single evaluation process, from the technical and financial points of view.

Amendment    45

Proposal for a regulation

Recital 239 c (new)

Text proposed by the Commission

Amendment

 

(239c)  CEF Blending Facilities should increase flexibility as regards the timeline for submitting projects and simplify and streamline the process of project identification and financing. They should also increase the ownership and commitment of the financial institutions involved and mitigate the risk that projects for which grants are committed fail to achieve financial closure, and therefore fail to receive payments.

Amendment    46

Proposal for a regulation

Recital 239 d (new)

Text proposed by the Commission

Amendment

 

(239d)  CEF Blending Facilities should bring enhanced coordination, exchange of information and cooperation between Member States, the Commission, EIB, national promotional banks and private investors with the aim of generating and supporting a healthy pipeline of projects pursuing CEF policy objectives.

Amendment    47

Proposal for a regulation

Recital 240

Text proposed by the Commission

Amendment

(240)  A blending facility under CEF should aim to enhance the multiplier effect of Union spending by attracting additional resources from private investors. In addition, it should ensure that the actions supported become economically and financially viable.

(240)  CEF Blending Facilities should aim to enhance the multiplier effect of Union spending by attracting additional resources from private investors, thus ensuring a maximum degree of private investor involvement. In addition, they should ensure that the actions supported become economically and financially viable and help to avoid a lack of investment leverage. They should contribute to the achievement of the Union’s objectives on meeting the targets set at the Paris Climate Conference (COP 21), job creation and cross-border connectivity. When CEF and the EFSI are both used for financing actions, the Court of Auditors should carry out an evaluation to analyse whether they contribute to achieving those objectives.

Amendment   48

Proposal for a regulation

Recital 240 a (new)

Text proposed by the Commission

Amendment

 

(240a)   The financing of the EIB's guarantee fund under the EFSI comes from the Union budget. The EIB should therefore be able to intervene systematically to provide first loss guarantees in joint financing mechanisms for operations already supported by the Union budget, such as CEF and the, EFSI, in order to allow and facilitate additionality and the participation of private co-investors in the context of CEF Blending Facilities.

Amendment  49

Proposal for a regulation

Recital 241

 

Text proposed by the Commission

Amendment

(241)  In order to support the implementation of projects with most value added for the Trans European Transport Network concerning the Core Network Corridors, cross border projects and projects on the other sections of the Core Network, it is necessary to allow flexibility in the use of the multiannual work programme allowing to reach up to 95% of the financial budgetary resources indicated in the Regulation (EU) No 1316/2013.

deleted

Amendment    50

Proposal for a regulation

Recital 241 a (new)

Text proposed by the Commission

Amendment

 

(241a)  Due to the different nature of the CEF Telecom sector as compared to CEF Transport and CEF Energy sectors (smaller average size of grants, type of costs and type of projects), unnecessary burden on beneficiaries and Member States participating in related actions should be avoided through a lighter cost of certification obligation, without weakening the principle of sound financial management.

Amendment  51

Proposal for a regulation

Recital 241 b (new)

Text proposed by the Commission

Amendment

 

(241b)  The governance of blending facilities should be based on an ex-ante assessment under the Financial Regulation and should take into account the lessons learned from the implementation of the CEF “Blending Call” referred to in the CEF Multi Annual Work Programme 20171a published on 20 January 2017. CEF Blending Facilities should be set by the multiannual and/or annual work programmes adopted under Articles 17 and 25 of Regulation (EU) No 1316/2013 of the European Parliament and the Council1b. The Commission should ensure transparent and timely reporting to the European Parliament and the Council on the implementation of any blending facility.

 

________________

 

1a Commission Implementation Decision of 20 January 2017 amending Commission Implementation Decision C(2014)1921 establishing a Multi-Annual Work Programme 2014-2020 for financial assistance in the field of Connecting Europe Facility (CEF) - Transport sector C(2017)0164.

 

1b Regulation (EU) No 1316/2013 of the European Parliament and of the Council of 11 December 2013 establishing the Connecting Europe Facility, amending Regulation (EU) No 913/2010 and repealing Regulations (EC) No 680/2007 and (EC) No 67/2010 Text with EEA relevance (OJ L 348, 20.12.2013, p. 129–171).

Amendment  52

Proposal for a regulation

Recital 241 c (new)

Text proposed by the Commission

Amendment

 

(241c)  The objective of CEF Blending Facilities is to facilitate and streamline one application for all forms of support, including Union grants from CEF and private sector finance. The blending facilities should aim to optimise the application process for project promoters by providing a single evaluation process, from the technical and financial points of views.

Amendment  53

Proposal for a regulation

Recital 241 d (new)

Text proposed by the Commission

Amendment

 

(241d)  CEF Blending Facilities should increase flexibility as regards the timeline for submitting projects, simplifying and streamlining the process of project identification and financing. They should also increase the ownership and commitment of the financial institutions involved and mitigate the risk that projects for which grants are committed fail to achieve financial closure, and therefore fail to receive payments.

Amendment  54

Proposal for a regulation

Recital 241 e (new)

Text proposed by the Commission

Amendment

 

(241e)  CEF Blending Facilities should bring about enhanced coordination, exchange of information and cooperation between Member States, the Commission, EIB, national promotional banks and private investors, with the aim of generating and supporting a healthy pipeline of projects pursuing CEF policy objectives.

Amendment     55

Proposal for a regulation

Recital 242

Text proposed by the Commission

Amendment

(242)  Only grants and procurement may currently be used to support actions in the area of Digital Service Infrastructures. In order to ensure as efficient as possible, financial instruments should also be made available to support these actions.

(242)  Only grants and procurement may currently be used to support actions in the area of Digital Service Infrastructures. In order to ensure that the Digital Service Infrastructures function as efficiently as possible, other financial instruments which are currently used under CEF, including innovative financial instruments, should also be made available to support these actions.

Amendment    56

Proposal for a regulation

Recital 252 a (new)

Text proposed by the Commission

Amendment

 

(252 a)  Before proposing a revision of this Regulation, the Commission should carry out an impact assessment, in accordance with the Interinstitutional Agreement of 13 April 2016 on Better Law-Making1a.

 

__________________

 

1a OJ L 123, 12.5.2016, p. 1.

Justification

In accordance with the amendment proposed on Art. 278 a (new), the rapporteurs believe that the significant changes proposed in this mid-term revision of the Financial Regulation were not subject to an impact assessment from the Commission, in contravention of the Interinstitutional Agreement on Better Law-Making. The Rapporteurs therefore consider making an impact assessment compulsory for any future revision of this Regulation.

Amendment     57

Proposal for a regulation

Recital 253 a (new)

Text proposed by the Commission

Amendment

 

(253a)  Agricultural markets should be transparent and information about prices should be accessible and useful to all those involved. It is a part of the Union's role to facilitate transparency in the Union market. For that purpose, the next CAP reform should enhance market transparency through agricultural price observatories for each sector to provide on-going, segment-by-segment analysis of agricultural markets, with the involvement of economic stakeholders, and to make relevant data and forecasts available at regular intervals.

Amendment     58

Proposal for a regulation

Recital 253 b (new)

Text proposed by the Commission

Amendment

 

(253b)  In accordance with Article 42 and Article 43(2) TFEU, the objectives of the Common Agricultural Policy are to take precedence over all Union competition rules.

Amendment     59

Proposal for a regulation

Title 1

Text proposed by the Commission

Amendment

Proposal for a

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on the financial rules applicable to the general budget of the Union and amending Regulation (EC) No 2012/2002, Regulations (EU) No 1296/2013, (EU) 1301/2013, (EU) No 1303/2013, EU No 1304/2013, (EU) No 1305/2013, (EU) No 1306/2013, (EU) No 1307/2013, (EU) No 1308/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014,(EU) No 283/2014, (EU) No 652/2014 of the European Parliament and of the Council and Decision No 541/2014/EU of the European Parliament and of the Council

on the financial rules applicable to the general budget of the Union and amending Regulation (EC) No 2012/2002, Regulations (EU) No 1296/2013, (EU) 1301/2013, (EU) No 1303/2013, EU No 1304/2013, (EU) No 1305/2013, (EU) No 1306/2013, (EU) No 1307/2013, (EU) No 1308/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014,(EU) No 283/2014, (EU) No 652/2014 of the European Parliament and of the Council and Decision No 541/2014/EU of the European Parliament and of the Council and repealing Regulation (EU, Euratom) No 966/2012

Justification

Technical correction.

Amendment     60

Proposal for a regulation

Article 2 – paragraph 1 – point 6

Text proposed by the Commission

Amendment

6.  ‘blending operation’ means an action carried out within a blending facility which combines non-repayable forms of support and/or financial instruments from the EU budget and financial instruments from development or other public finance institutions as well as from commercial finance institutions and investors. Blending operations may include preparatory action leading to potential investments from finance institutions;

6.  ‘blending operation’ means an action carried out within a blending facility which combines non-repayable forms of support and/or financial instruments from the EU budget and financial instruments from development or other public finance institutions as well as from commercial finance institutions and investors, notwithstanding the rule set out in Article 201(4) that only public law bodies or bodies with a public service mission may be entrusted with the implementation of the Union budget. Blending operations may include preparatory action leading to potential investments from finance institutions;

Justification

This AM updates and replaces the original rapporteurs' AM 4. The purpose is to underline that only banks with a public service mission may be entrusted with the management of EU money.

Amendment     61

Proposal for a regulation

Article 2 – paragraph 1 – point 7

Text proposed by the Commission

Amendment

7.  ‘blending facility’ means a facility established as a cooperation framework between the Commission and development or other public finance institutions as well as commercial finance institutions and investors which aims at achieving certain Union priority objectives and policies in using blending operations and other individual actions;

7.  ‘blending facility’ means a facility established as a cooperation framework between the Commission and development or other public finance institutions as well as commercial finance institutions and investors which aims at achieving certain Union priority objectives and policies in using blending operations and other individual actions, notwithstanding the rule contained in Article 201(4) stating that only public law bodies or bodies with a public service mission may be entrusted with the implementation of the Union budget;

Justification

This AM updates and replaces the original rapporteurs' AM 5. The purpose is to underline that only banks with a public service mission may be entrusted with the management of EU money.

Amendment     62

Proposal for a regulation

Article 2 – paragraph 1 – point 7 a (new)

Text proposed by the Commission

Amendment

 

7 a.  " budget implementation" means a process including the stages of management, implementation, control and audit of Union financial resources, which involves the Commission and other actors depending on different methods of implementation;

Amendment    63

Proposal for a regulation

Article 2 – paragraph 1 – point 21 a (new)

Text proposed by the Commission

Amendment

 

21 a.  'de-commitment' means the operation by which the authorising officer responsible cancels wholly or partly the reservation of appropriations previously made by means of a budgetary commitment;

Justification

Moved from Art. 109(5) for reasons of consistency: all definitions should be in Art. 2.

Amendment     64

Proposal for a regulation

Article 2 – paragraph 1 – point 27

Text proposed by the Commission

Amendment

27.  ‘financial instruments’ means Union measures of financial support provided from the budget in order to address one or more specific policy objectives of the Union. Such instruments may take the form of equity or quasi-equity investments, loans or guarantees, or other risk-sharing instruments, and may, where appropriate, be combined with other forms of financial support or with funds under shared implementation or EDF funds;

27.  ‘financial instruments’ means Union measures of financial support provided from the budget in order to address one or more specific policy objectives of the Union. Such instruments may take the form of equity or quasi-equity investments, loans or guarantees, repayable advances or other risk-sharing instruments, and may, where appropriate, be combined with other forms of financial support or with funds under shared implementation or EDF funds;

Amendment     65

Proposal for a regulation

Article 2 – paragraph 1 – point 29 a (new)

Text proposed by the Commission

Amendment

 

29 a.  'grant' means direct financial contribution by way of donation from the Union budget under direct implementation, shared implementation and indirect implementation;

Justification

Moved from Art. 174 (2) for reasons of consistency: all definitions should be in Art. 2.

Amendment    66

Proposal for a regulation

Article 2 – paragraph 1 – point 31 a (new)

Text proposed by the Commission

Amendment

 

31 a.  'in-kind contributions' means non-financial resources made available free of charge by third parties to a beneficiary, including volunteers' work, use of equipment, supplies, meeting facilities and services;

Justification

Reinserted RAP Art. 183(2), which was omitted by the Commission.

Amendment     67

Proposal for a regulation

Article 2 – paragraph 1 – point 34

Text proposed by the Commission

Amendment

34.  ‘loan’ means an agreement which obliges the lender to make available to the borrower an agreed sum of money for an agreed period of time and under which the borrower is obliged to repay that amount within the agreed time;

34.  ‘loan’ means an agreement which obliges the lender to make available to the borrower an agreed sum of money for an agreed period of time and under which the borrower is obliged to repay that amount within the agreed time; such loans may take the form of a repayable advance;

Justification

In line with rapporteur's amendment to Art. 2. par. 1 - point 46a new.

Amendment     68

Proposal for a regulation

Article 2 – paragraph 1 – point 38

Text proposed by the Commission

Amendment

38.  'multiplier effect' means the investment by eligible final recipients divided by the amount of the Union contribution.

38.  'multiplier effect' means the amount of private capital attracted divided by the amount of the Union contribution.

Amendment     69

Proposal for a regulation

Article 2 – paragraph 1 – point 38 a (new)

Text proposed by the Commission

Amendment

 

38 a.  'output' means the specific measurable and desired outcome of a project, which is established in advance and upon the attainment of which the reimbursement of costs incurred by a beneficiary depends;

Justification

In its opinion (1/2017) the ECA recommends including a definition for ‘output’ in the Financial Rules (paragraph 148 of the opinion). Both the proposed Financial Rules and the sectoral regulations aim at putting a stronger focus on results and outputs. Recent audit results however highlighted that there are significant differences in the use ‘output’ between the Commission's activities (ECA opinion 1/2017, para 147), therefore the definition of the term should be streamlined.

Amendment     70

Proposal for a regulation

Article 2 – paragraph 1 – point 46 a (new)

Text proposed by the Commission

Amendment

 

46 a.  'repayable advance' means a loan for a project which is paid in one or more instalments and the conditions for the reimbursement of which depend on the outcome of the project;

Justification

Definition taken from Commission communication on 'Framework for State aid for research and development and innovation ' 2014/C 198/01. Repayable advances are not defined in the Financial Regulation which could create a legal vacuum given its definition and use in communications on EU state aid.

Amendment     71

Proposal for a regulation

Article 2 – paragraph 1 – point 49 a (new)

Text proposed by the Commission

Amendment

 

49 a.  'results' mean the achievement of specific performance assessed by reference to the previously set milestones or through performance indicators, upon which the reimbursement of costs incurred by a beneficiary depends;

Justification

In its opinion (1/2017) the ECA recommends including a definition for ‘results’ in the Financial Rules (para 148). Both the proposed Financial Rules and the sectoral regulations aim at putting a stronger focus on results and outputs. Recent audit results however highlighted that there are significant differences in the use ‘results’ between the Commission's activities (ECA opinion 1/2017, para 147), therefore the definition of the term should be streamlined.

Amendment     72

Proposal for a regulation

Article 2 – paragraph 1 – point 51 a (new)

Text proposed by the Commission

Amendment

 

51 a.  "sound financial management" means a principle of implementation of the Union budget in economical and efficient way and respecting legality and regularity;

Amendment     73

Proposal for a regulation

Article 2 – paragraph 1 – point 60 a (new)

Text proposed by the Commission

Amendment

 

60a.  'volunteer' means a person doing an unpaid non-compulsory activity for a non-profit organisation.

Amendment     74

Proposal for a regulation

Article 5 – paragraph 1

Text proposed by the Commission

Amendment

Personal data collected pursuant to this Regulation shall be processed in accordance with Directive 95/46/EC (28) and Regulation (EC) No 45/2001.A candidate or tenderer in a procurement procedure, an applicant in a grant award procedure, an expert in a procedure for the selection of experts, an applicant in a contest for prizes or an entity or person participating in a procedure for implementing Union funds in accordance with point (c) of Article 61(1)as well as a beneficiary, a contractor, a remunerated external expert or any person or entity that receives prizes or implements Union funds pursuant to point (c) of Article 61(1) shall be informed accordingly.

Personal data collected pursuant to this Regulation shall be processed in accordance with Regulations (EC) No 45/2001 and (EU) 2016/679.A candidate or tenderer in a procurement procedure, an applicant in a grant award procedure, an expert in a procedure for the selection of experts, an applicant in a contest for prizes or an entity or person participating in a procedure for implementing Union funds in accordance with point (c) of Article 61(1)as well as a beneficiary, a contractor, a remunerated external expert or any person or entity that receives prizes or implements Union funds pursuant to point (c) of Article 61(1) shall be informed accordingly.

_________________

 

28 OJ L 281, 23.11.1995, p. 31.

 

Amendment    75

Proposal for a regulation

Article 8 – paragraph 2

Text proposed by the Commission

Amendment

2.  No expenditure may be committed or authorised in excess of the authorised appropriations.

2.  No expenditure may be committed or authorised in excess of the authorised appropriations, with the exception of expenditure arising from liability for financial instruments, expenditure from assigned revenue, and buildings expenditure.

Justification

The three-column document provided by the Commission mentions these exceptions. The rapporteurs consider that if these exceptions exist in practice, they should be mentioned explicitly in the Regulation for reasons of transparency.

Amendment     76

Proposal for a regulation

Article 12 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4 a.  In respect of non-differentiated appropriations a distinction may be made between planned and unplanned carry-overs. The definition and reporting of those categories shall be established in guidelines by the Commission in cooperation with the European Parliament, the Council and the Court of Auditors.

Amendment    77

Proposal for a regulation

Article 13 – title

Text proposed by the Commission

Amendment

Decommitment of appropriations

Cancellation of appropriations following a decommitment

Justification

This AM does not change the content, but merely clarifies terminology. In order to render the text as comprehensible as possible, cancellations of appropriations should always be clearly distinguished from de-commitments, the latter denoting the cancellation of reservations of appropriations (= reversal of previous budgetary commitments). This justification also applies to the following rapporteurs' AMs to Art. 13 and 14.

Amendment    78

Proposal for a regulation

Article 13 – paragraph 1

Text proposed by the Commission

Amendment

1.  Where appropriations are decommitted in any financial year after that in which the appropriations were committed as a result of total or partial non-implementation of the actions for which they were earmarked, the appropriations concerned shall be cancelled, unless otherwise provided for in paragraph 3 and Article 14.

1.  Where budgetary commitments are cancelled in accordance with Article 112 in any financial year after that in which the commitment was made as a result of the total or partial non-implementation of the actions for which they were earmarked, the appropriations corresponding to such decommitments shall also be cancelled, unless otherwise provided for in Article 14.

Justification

See justification of rapporteurs' AM to title of this Art. The reference to par. 3 is redundant because Art. 14 already mentions Reg. 1303/2013. It is therefore deleted for the sake of clarity.

Amendment    79

Proposal for a regulation

Article 13 – paragraph 2

Text proposed by the Commission

Amendment

2.  In the case of amounts which have to be committed up to 31 March in accordance with Article 12(2), where the corresponding appropriations are decommitted after 31 March, they shall be cancelled.

2.  Where amounts have been committed by 31 March of year n+1 in accordance with Article 12(2)(a), but are decommitted after that deadline, the corresponding appropriations shall be cancelled.

Justification

See justification of rapporteurs' AM to title of this Art.

Amendment    80

Proposal for a regulation

Article 13 – paragraph 3

Text proposed by the Commission

Amendment

3.  Appropriations referred to in Regulation (EU) No 1303/2013 shall be decommitted automatically in accordance with that Regulation.

3.  As regards expenditure operations governed by Regulation (EU) No 1303/2013, decommitments shall be made automatically in accordance with that Regulation.

Justification

See justification of rapporteurs' AM to title of this Art. This paragraph might be better placed in Art. 112 (Time limits for commitments).

Amendment    81

Proposal for a regulation

Article 13 – paragraph 4

Text proposed by the Commission

Amendment

4.  Appropriations referred to in Regulation (EU) No 514/2014 shall be decommitted automatically in accordance with that Regulation.

4.  As regards expenditure operations governed by Regulation (EU) No 514/2014, decommitments shall be made automatically in accordance with that Regulation.

Justification

See justification of rapporteurs' AM to title of this Art. This paragraph might be better placed in Art. 112 (Time limits for commitments).

Amendment    82

Proposal for a regulation

Article 13 – paragraph 5

Text proposed by the Commission

Amendment

5.  Paragraphs 1, 2 and 3 of this Article shall not apply to external assigned revenue referred to in Article 20(2).

5.  This Article shall not apply to external assigned revenue referred to in Article 20(2).

Justification

Simplification. No change of meaning.

Amendment    83

Proposal for a regulation

Article 14 – title

Text proposed by the Commission

Amendment

Making decommitted appropriations available again

Making appropriations corresponding to decommitments available again

Justification

See Art. 13 (title).

Amendment    84

Proposal for a regulation

Article 14 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

The decommitted appropriations referred to in Regulation (EU) No 1303/2013 and Regulation (EU) No 223/201431 may be made available again in the event of a manifest error attributable solely to the Commission.

The appropriations corresponding to decommitments referred to in Regulation (EU) No 1303/2013 and Regulation (EU) No 223/201431 may be made available again in the event of a manifest error attributable solely to the Commission.

__________________

__________________

31 Regulation (EU) N° 223/2014 of the European Parliament and of the Council of 11 March 2014 on the Fund for European Aid to the Most Deprived (OJ L 72, 12.3.2014, p.1)

31 Regulation (EU) N° 223/2014 of the European Parliament and of the Council of 11 March 2014 on the Fund for European Aid to the Most Deprived (OJ L 72, 12.3.2014, p.1)

Justification

See Art. 13 (title).

Amendment    85

Proposal for a regulation

Article 14 – paragraph 2 – introductory part

Text proposed by the Commission

Amendment

2.  The decommitted appropriations shall be made available again in the event of:

2.  The appropriations corresponding to decommitments shall be made available again in the event of:

Justification

See Art. 13 (title).

Amendment    86

Proposal for a regulation

Article 14 – paragraph 2 – point a

Text proposed by the Commission

Amendment

(a)  the decommitment of appropriations from a programme under the arrangements for the implementation of the performance reserve established in Article 20 of Regulation (EU) No 1303/2013;

(a)  the decommitment from a programme under the arrangements for the implementation of the performance reserve established in Article 20 of Regulation (EU) No 1303/2013;

Justification

See Art. 13 (title).

Amendment    87

Proposal for a regulation

Article 14 – paragraph 2 – point b

Text proposed by the Commission

Amendment

(b)  the decommitment of appropriations from a programme dedicated to a specific financial instrument in favour of SMEs following the discontinuance of the participation of a Member State in the financial instrument, as referred to in the seventh subparagraph of Article 39(2) of Regulation (EU) No 1303/2013.

(b)  the decommitment from a programme dedicated to a specific financial instrument in favour of SMEs following the discontinuance of the participation of a Member State in the financial instrument, as referred to in the seventh subparagraph of Article 39(2) of Regulation (EU) No 1303/2013.

Justification

See Art. 13 (title).

Amendment    88

Proposal for a regulation

Article 14 – paragraph 3 – subparagraph 1

Text proposed by the Commission

Amendment

Without prejudice to paragraphs (1) and (2), decommitted appropriations made in year n-2 shall be made available again to the European Union Crisis Reserve in the framework of the budgetary procedure for the year n.

Without prejudice to paragraphs (1) and (2), appropriations from year n-2 corresponding to decommitments made in year n shall be made available again to the European Union Crisis Reserve in the framework of the budgetary procedure for the year n.

Justification

See Art. 13 (title).

Amendment    89

Proposal for a regulation

Article 14 – paragraph 4

Text proposed by the Commission

Amendment

4.  The commitment appropriations corresponding to the amount of the decommitted appropriations as a result of total or partial non-implementation of the corresponding research projects may also be made available again to the benefit of the research programme the projects belong to or its successor in the context of the annual budgetary procedure.

4.  The commitment appropriations corresponding to the amount of the decommitments made as a result of total or partial non-implementation of the corresponding research projects may also be made available again to the benefit of the research programme the projects belong to or its successor in the context of the annual budgetary procedure.

Justification

See Art. 13 (title).

Amendment    90

Proposal for a regulation

Article 15 – paragraph 4 – subparagraph 1

Text proposed by the Commission

Amendment

If the continuity of action by the Union so require, the Council, acting by qualified majority on a proposal of the Commission, may authorise expenditure in excess of one provisional twelfth but not exceeding the total of four provisional twelfths, excluding the one twelfth made automatically available, except in duly justified cases, both for commitments and for payments over and above those automatically made available in accordance with paragraphs 1 and 2. It shall forward the decision on authorisation without delay to the European Parliament.

If the continuity of action by the Union so require, the Council, acting by qualified majority on a proposal of the Commission, may authorise expenditure in excess of one provisional twelfth but not exceeding the total of four provisional twelfths, except in duly justified cases, both for commitments and for payments over and above those automatically made available in accordance with paragraphs 1 and 2. It shall forward the decision on authorisation without delay to the European Parliament.

Justification

The rapporteurs recommend reverting to the wording of Reg. 966/2012 (allowing for only four provisional twelfths).

Amendment    91

Proposal for a regulation

Article 20 – paragraph 2 – point a

Text proposed by the Commission

Amendment

(a)  financial contributions from Member States, third countries and bodies not set up under the TFEU and the Euratom Treaty to certain actions or programmes financed by the Union as well as to supplementary research and technological development programmes, and managed by the Commission on their behalf;

(a)  specific additional financial contributions from Member States, third countries and bodies not set up under the TFEU and the Euratom Treaty to certain actions or programmes financed by the Union as well as to supplementary research and technological development programmes, and managed by the Commission on their behalf;

Justification

Clarification to underline that "normal" financial contributions from MS do not constitute external assigned revenue.

Amendment     92

Proposal for a regulation

Article 20 – paragraph 2 – point g a (new)

Text proposed by the Commission

Amendment

 

(g a)  resources coming from Member States not complying with the corrective allocation mechanism established under Regulation (EU) No 604/2013.

Amendment    93

Proposal for a regulation

Article 24 – paragraph 2 – introductory part

Text proposed by the Commission

Amendment

2.  On the basis of specific internal rules Union institutions and bodies may exceptionally accept in kind corporate sponsoring provided that:

2.  On the basis of specific internal rules, which shall be published on their respective websites, Union institutions and bodies may exceptionally accept in-kind corporate sponsoring provided that:

Amendment     94

Proposal for a regulation

Article 24 – paragraph 2 – point a a (new)

Text proposed by the Commission

Amendment

 

(aa)  as regards transparency, all the data concerning the sponsoring and sponsors are published;

Amendment    95

Proposal for a regulation

Article 27 – paragraph 4

Text proposed by the Commission

Amendment

4.  Any institution other than the Commission may, within its own section of the budget, make transfers within articles and within each chapter without informing the European Parliament and the Council beforehand. It may also make transfers from one chapter to another of the same title up to a maximum of 10% of the appropriations for the year shown on the line from which the transfer is to be made without informing the European Parliament and the Council beforehand.

4.  Any institution other than the Commission may, within its own section of the budget, make transfers within articles without informing the European Parliament and the Council beforehand.

Justification

The Rapporteurs suggest not not to dilute further the budgetary authority prerogatives and thus to maintain the provision currently in force (Commission proposed changes reversed).

Amendment    96

Proposal for a regulation

Article 28 – paragraph 1 – subparagraph 1 – point c

Text proposed by the Commission

Amendment

(c)  with regard to operational expenditure, transfer appropriations between chapters within the same title or between different titles covered by the same basic act, including the administrative support chapters, up to a maximum of 10 % of the appropriations for the year shown on the line from which the transfer is made;

(c)  with regard to operational expenditure, transfer appropriations between chapters within the same title up to a maximum of 10 % of the appropriations for the year shown on the line from which the transfer is made;

Justification

Despite the Court of auditors' favourable opinion on this Commission proposed change Rapporteurs consider it would be detrimental to transparency and do not see it as a flexibility issue. The rights of the budgetary authority should not be further diluted.

Amendment     97

Proposal for a regulation

Article 28 – paragraph 1 – subparagraph 1 – point e

Text proposed by the Commission

Amendment

(e)  with regard to the European Union Solidarity Fund (EUSF), transfer appropriations from the reserve to the line upon the adoption by the Parliament and the Council of the decision of mobilisation of the Fund;

deleted

Justification

The budgetary authority oversight should be maintained.

Amendment    98

Proposal for a regulation

Article 28 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

For the purposes of point (c) of the first subparagraph autonomous transfers from the administrative support lines to the corresponding operational lines shall be allowed.

deleted

(See justification for AM to Article 28 (1) (c))

Amendment    99

Proposal for a regulation

Article 29 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

The Commission may submit proposals for transfers of payment appropriations to the funds managed under shared implementation with the exception of the EAGF to the European Parliament and the Council by 10 January of the following financial year. The transfer of the payment appropriations may be made from any item of the budget. The six-week period referred to in paragraph 3 shall be reduced to three weeks.

The Commission may submit proposals for transfers of payment appropriations to the funds managed under shared implementation with the exception of the EAGF to the European Parliament and the Council by 10 January of the following financial year. The transfer of the payment appropriations may be made from any item of the budget.

Justification

The shortening of the deliberation period proposed by COM is irreconcilable with the EP's and the BUDG Committee's internal procedures.

Amendment     100

Proposal for a regulation

Article 29 – paragraph 5 – subparagraph 2

Text proposed by the Commission

Amendment

The six-week period referred to in paragraph 4 shall be reduced to three weeks.

deleted

Amendment     101

Proposal for a regulation

Article 29 – paragraph 6 – introductory part

Text proposed by the Commission

Amendment

6.  The transfer proposal shall be approved, if, within the six-week period, any of the following occurs:

6.  The transfer proposal shall be approved, if, within the six-week period, neither the European Parliament nor the Council take a decision to amend or refuse the transfer proposal.

Justification

Simplification. No change in substance.

Amendment     102

Proposal for a regulation

Article 29 – paragraph 6 – point a

Text proposed by the Commission

Amendment

(a)  the European Parliament and the Council approve it;

deleted

Justification

Simplification. See above.

Amendment     103

Proposal for a regulation

Article 29 – paragraph 6 – point b

Text proposed by the Commission

Amendment

(b)  either the European Parliament or the Council approves it and the other institution refrains from acting;

deleted

Justification

Simplification. See above.

Amendment     104

Proposal for a regulation

Article 29 – paragraph 6 – point c

Text proposed by the Commission

Amendment

(c)  the European Parliament and the Council refrain from acting or do not take a decision to amend or refuse the transfer proposal.

deleted

Justification

Simplification. See above.

Amendment    105

Proposal for a regulation

Article 29 – paragraph 7 – point a

Text proposed by the Commission

Amendment

(a)  the transfer represents less than 10% of the appropriations of the line from which the transfer is made or does not exceed EUR 5 000 000;

(a)  the transfer represents less than 10% of the appropriations of the line from which the transfer is made and does not exceed EUR 5 000 000;

Justification

The Commission proposal has the effect of reducing the current Budgetary authority oversight on transfers as it would reduce the scrutiny period available from six to three weeks for some transfers exceeding EUR 5 000 000.

Amendment    106

Proposal for a regulation

Article 30 – paragraph 3

Text proposed by the Commission

Amendment

3.  Paragraph 1 shall not apply to internal assigned revenue in the event that there are no identified needs allowing such revenue to be used for the purpose for which it is assigned.

3.  Paragraph 1 shall not apply to internal assigned revenue in the event that there are no identified needs allowing such revenue to be used for the purpose for which it is assigned. In such cases, the procedure provided for in Article 29 shall apply.

Justification

The rapporteurs support the additional flexibility as regards internal assigned revenue for which there are no identified needs. However, in these cases the rules for non-autonomous transfers should apply.

Amendment    107

Proposal for a regulation

Article 30 – paragraph 5

Text proposed by the Commission

Amendment

5.  Transfers from the reserve for the European Globalisation Adjustment Fund shall be deemed approved by the European Parliament and the Council upon the adoption of the decision to mobilise the Fund.

deleted

Justification

The budgetary authority oversight should be maintained.

Amendment     108

Proposal for a regulation

Article 31 – paragraph 1 – introductory part

Text proposed by the Commission

Amendment

1.  Appropriations shall respect the principle of sound financial management, and thus be implemented in accordance with the following principles:

1.  Appropriations shall be used and the Union budget shall be implemented in accordance with the principle of sound financial management, and thus respecting the following principles:

Amendment    109

Proposal for a regulation

Article 31 – paragraph 2 – point c

Text proposed by the Commission

Amendment

(c)  achievements shall be reported to the European Parliament and the Council in accordance with point (h) of Article 39(3) and with point (ii) of Article 239(1)(b).

(c)  progress in, and problems with, the achievement of those objectives shall be reported to the European Parliament and the Council in accordance with point (h) of Article 39(3) and with point (ii) of Article 239(1)(b).

Amendment    110

Proposal for a regulation

Article 31 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2 a.  The objectives referred to in paragraphs 1 and 2 shall be specific, measurable, achievable, relevant and timed. The performance indicators used to monitor their achievement shall be defined down to activity level and shall cover all sectors.

Justification

The rapporteurs consider that the 'smart objectives' from the current version of the Financial Regulation are still relevant and should be reinserted in the Commission's proposal.

Amendment     111

Proposal for a regulation

Article 32 – paragraph 1

Text proposed by the Commission

Amendment

1.  Programmes and activities which entail significant spending shall be subject to ex-ante and retrospective evaluation ("evaluation"), which shall be proportionate to the objectives and expenditure.

1.  Programmes and activities which entail significant spending with resources mobilized exceeding EUR 5 000 000 shall be subject to impact assessment and ex-post evaluation ("evaluation"), which shall be proportionate to the objectives and expenditure.

Justification

See rapporteur's amendment to Art. 32 par. 3.

Amendment     112

Proposal for a regulation

Article 32 – paragraph 2

Text proposed by the Commission

Amendment

2.  Ex-ante evaluations supporting the preparation of programmes and activities shall be based on evidence on the performance of related programmes or activities and shall identify and analyse the issues to be addressed, EU added value, objectives, expected effects of different options and monitoring and evaluation arrangements.

2.  Impact assessments supporting the preparation of programmes and activities shall be based on evidence on the performance of related programmes or activities and shall identify and analyse the issues to be addressed, EU added value, objectives, the policy options available including the risks associated with them, expected effects of different options in particular any economic, social and environmental impact, and monitoring and evaluation arrangements needed to measure them, the most appropriate method of implementation for the preferred option or options, the internal coherence and relations with other relevant instruments, the volume of appropriations, human resources and other administrative expenditure to be allocated with due regard to cost-effectiveness, and the lessons learned from the past.

Justification

See rapporteur's amendment to Art. 32 par. 3.

Amendment     113

Proposal for a regulation

Article 32 – paragraph 3

Text proposed by the Commission

Amendment

3.  Retrospective evaluations shall assess the performance of the programme or activity, including aspects such as effectiveness, efficiency, coherence, relevance and EU added value. They shall be undertaken periodically and in sufficient time for the findings to be taken into account in ex-ante evaluations which support the preparation of related programmes and activities.

3.  Ex-post evaluations shall assess the performance of the programme or activity, including aspects such as effectiveness, efficiency, economy, coherence, relevance and EU added value. In so doing, they shall take into account the outcome of the monitoring exercise with performance indicators, as specified in Article 31(2). They shall be undertaken periodically, and at least every six years for programmes and activities which entail significant spending, and in sufficient time for the findings to be taken into account in impact assessments which support the preparation of related programmes and activities.

Justification

Additional text to AM 34. The terminology on 'Evaluations' should be aligned with the Interinstitutional Agreement of 13 April 2016 on Better Law-Making and the Better Regulation Guidelines. Moreover, wording from Art. 18 of the current Rules of Application has been reintroduced regarding programmes and activities entailing significant spending.

Amendment     114

Proposal for a regulation

Article 33 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

Any proposal or initiative submitted to the legislative authority by the Commission, the High Representative of the Union for Foreign Affairs and Security Policy (the ‘High Representative’) or by a Member State, which may have an impact on the budget, including changes in the number of posts, shall be accompanied by a financial statement and by an ex ante evaluation as provided for in Article 32.

Any proposal or initiative submitted to the legislative authority by the Commission, the High Representative of the Union for Foreign Affairs and Security Policy (the ‘High Representative’) or by a Member State, which may have an impact on the budget, including changes in the number of posts, shall be accompanied by a financial statement and by an impact assessment as provided for in Article 32.

Justification

Consistent terminology in line with rapporteur's amendments to Art. 32.

Amendment    115

Proposal for a regulation

Article 33 – paragraph 1 – subparagraph 4

Text proposed by the Commission

Amendment

In the case of multiannual operations, the financial statement shall contain the foreseeable schedule of annual requirements in terms of appropriations and posts, including for external staff, and an evaluation of their medium-term financial impact.

In the case of multiannual operations, the financial statement shall contain the foreseeable schedule of annual requirements in terms of appropriations and posts, including for external staff, and an evaluation of their medium-term and long-term financial impact.

Amendment    116

Proposal for a regulation

Article 34 – paragraph 2 – point a a (new)

Text proposed by the Commission

Amendment

 

(a a)  the attainment of performance objectives, as specified in Article 31(2);

Amendment    117

Proposal for a regulation

Article 34 – paragraph 3 – point e

Text proposed by the Commission

Amendment

(e)  procedures for monitoring effectiveness and efficiency and for follow-up of identified internal control weaknesses and exceptions;

(e)  procedures for monitoring effectiveness and efficiency;

Justification

The follow-up of identified internal control weaknesses is an important aspect and should consequently be dealt with in a separate point - see the following rapporteurs' AM below.

Amendment    118

Proposal for a regulation

Article 34 – paragraph 3 – point e a (new)

Text proposed by the Commission

Amendment

 

(e a)  procedures for follow-up of identified internal control weaknesses and exceptions.

Justification

See point (e) above.

Amendment     119

Proposal for a regulation

Article 35 – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

The budgets shall be published within three months of the date on which they are declared definitively adopted.

The budgets shall be published in one of the official languages of the Union within four weeks of the date on which they are declared definitively adopted, whilst the other linguistic versions will be published within two months of the date on which the budgets are declared definitively adopted.

Amendment     120

Proposal for a regulation

Article 36 – paragraph 1 – subparagraph 3

Text proposed by the Commission

Amendment

The information on recipients of Union’s funds implemented under direct implementation shall be published on an internet site of the Union institutions, no later than 30 June of the year following the financial year in which the funds were legally committed.

The information on recipients of Union’s funds implemented under direct implementation shall be published on an internet site of the Union institutions and in the Financial Transparency System, no later than 30 June of the year following the financial year in which the funds were legally committed.

Amendment     121

Proposal for a regulation

Article 36 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4 a.  The Commission, with the help of the Member States, shall make available, in an appropriate and timely manner, information on recipients, as well as the nature and purpose of the measure financed from the budget, where the latter is implemented in accordance with point (b) of Article 61(1).

 

The obligation set out in the first subparagraph shall also apply to local authorities when they implement the Union budget.

 

The information on recipients of Union's funds implemented under shared implementation shall be published on an internet site of the Union institutions, no later than 30 June of the year following the financial year in which the funds were legally committed.

 

The information referred to in the first subparagraph shall be made available, having due regard for the requirements of confidentiality and security, in particular the protection of personal data and shall include the following:

 

(a)   the name of the recipient;

 

(b)   the locality of the recipient;

 

(c)   the amount legally committed;

 

(d)   the nature and purpose of the measure.

 

For the purposes of point b) of the fourth subparagraph the term ‘locality’ shall mean:

 

(i)   the address of the recipient when the latter is a legal person

 

(ii)   the Region on NUTS 2 level when the recipient is a natural person

 

This information shall only be published for prizes, grants and contracts which have been awarded as a result of contests or grant award procedures or public procurement procedures, and for experts which have been selected pursuant to Article 230(2). The information shall not be published for:

 

(i)  education supports paid to natural persons and other direct support paid to natural persons most in need as referred to in point (b) of Article 185(4);

 

(ii)   very low value contracts awarded to experts selected pursuant to Article 230(2) as well as very low value contracts below the amount referred to in point 14.4 of the Annex.

 

The internet site of the Union institutions shall contain at least a reference to the address of the website where the information can be found if it is not published directly on the dedicated place of the internet site of the Union institutions.

 

Where natural persons are concerned, the publication shall be limited to the name and locality of the recipient, the amount legally committed and the purpose of the measure. The disclosure of those data shall be based on relevant criteria such as the periodicity, or the type or importance of the measure. As far as personal data are concerned, the information shall be removed two years after the end of the financial year in which the amount was legally committed. The same shall apply to personal data referring to legal persons for whom the official title identifies one or more natural persons.

 

The publication shall be waived if such disclosure risks threatening the rights and freedoms of individuals concerned as protected by the Charter of Fundamental Rights of the European Union or harm the commercial interests of the recipients.

Amendment     122

Proposal for a regulation

Article 36 – paragraph 5 – subparagraph 2

Text proposed by the Commission

Amendment

The information on final recipients of funds provided through financial instruments who receive support from the Union budget for an amount lower than EUR 500 000, shall be limited to statistical data, aggregated in accordance with relevant criteria, such as geographical situation, economic typology of recipients, type of support received and the Union policy area under which such support was provided.

The information on final recipients of funds provided through financial instruments who receive support from the Union budget for an amount lower than EUR 200 000, shall be limited to statistical data, aggregated in accordance with relevant criteria, such as geographical situation, economic typology of recipients, type of support received and the Union policy area under which such support was provided.

Amendment     123

Proposal for a regulation

Article 36 – paragraph 5 a (new)

Text proposed by the Commission

Amendment

 

5 a.  The publications as referred in to this Article shall be available on a single website under the responsibility of the Commission.

Amendment     124

Proposal for a regulation

Article 39 – paragraph 1 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

Before submitting the draft budget, the Commission shall consult citizens.

Justification

The co-rapporteurs welcome the idea of more citizens' engagement, as proposed by the Commission in Art. 54(3), and consider this should also apply to the drawing up of the annual budget.

Amendment     125

Proposal for a regulation

Article 39 – paragraph 3 – point b – point iii

Text proposed by the Commission

Amendment

(iii)  the number of posts actually filled at the beginning of the year in which the draft budget is presented, indicating their distribution by grade and administrative unit;

(iii)  the number of posts actually filled at the beginning of the year in which the draft budget is presented, indicating their distribution by grade, by administrative unit and by gender;

Amendment    126

Proposal for a regulation

Article 39 – paragraph 3 – point h – point iii

Text proposed by the Commission

Amendment

(iii)  updates in achieving programme objectives;

(iii)  updates in achieving programme objectives as set out in Article 31;

Amendment     127

Proposal for a regulation

Article 39 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3 a.  a comparative table including the Commission's draft budget for the other institutions and the other institutions' original estimates as sent to the Commission;

Justification

This amendment seeks to oblige the Commission to add to its proposal for the budget the original budget as adopted by the different institutions so that the unilateral changes made by the Commission become visible and transparent.

Amendment    128

Proposal for a regulation

Article 39 – paragraph 4 – subparagraph 1 – point i

Text proposed by the Commission

Amendment

(i)  the total amount of provisions for risks and liabilities, as well as any information on the financial risk exposure of the Union;

(i)  the total amount of provisions for risks and liabilities, as well as any information on the financial risk exposure of the Union, including any contingent liability;

Amendment    129

Proposal for a regulation

Article 39 – paragraph 4 – subparagraph 1 – point k

Text proposed by the Commission

Amendment

(k)  the performance of the financial instrument, including the investments realised, the target leverage effect and the achieved leverage effect;

(k)  the performance of the financial instrument, including the investments realised, the target leverage effect, the achieved leverage effect and the amount of private capital attracted so far;

Amendment     130

Proposal for a regulation

Article 39 – paragraph 4 – subparagraph 2

Text proposed by the Commission

Amendment

This working document shall also include an overview of the administrative expenditure arising from management fees and other financial and operating charges paid for the management of financial instruments in total and per managing party and per financial instrument managed.

This working document shall also include specific information on the ten worst-performing financial instruments, as well as an overview of the administrative expenditure arising from management fees and other financial and operating charges paid for the management of financial instruments in total and per managing party and per financial instrument managed.

Amendment    131

Proposal for a regulation

Article 39 – paragraph 6

Text proposed by the Commission

Amendment

6.  Where the Commission makes use of Union Trust Funds, it shall attach to the draft budget a working document on the activities supported by Union Trust Funds, on their implementation and performance.

6.  Where the Commission makes use of Union trust funds for external actions, it shall attach to the draft budget a detailed working document on the activities supported by those trust funds, on their implementation, their performance, their management costs, contributions other than those from the Union, and a preliminary assessment on how the conditions of Article 227(3) are fulfilled. The working document shall also set out how those activities have contributed to the objectives laid down in the basic act of the instrument from which the Union contribution to the Trust Funds were provided.

Justification

See justification for amendments to Art. 227.

Amendment    132

Proposal for a regulation

Article 39 – paragraph 9 – introductory part

Text proposed by the Commission

Amendment

9.  The working document referred to in paragraph 6 shall also:

9.  The working document referred to in paragraph 8 shall also:

Justification

Correction.

Amendment    133

Proposal for a regulation

Article 42 – paragraph 3

Text proposed by the Commission

Amendment

3.  The Commission shall, except in duly justified exceptional circumstances submit its draft amending budgets simultaneously to the European Parliament and the Council by 15 October at the latest of each financial year. It may attach an opinion to the requests for amending budgets from the other institutions.

3.  The Commission shall, except in duly justified exceptional circumstances submit its draft amending budgets simultaneously to the European Parliament and the Council by 1 September of each financial year. It may attach an opinion to the requests for amending budgets from the other institutions.

Justification

Reinserted previous deadline from Art. 41(3) of Reg. 966/2012.

Amendment    134

Proposal for a regulation

Article 48 – paragraph 1

Text proposed by the Commission

Amendment

The Commission section of the budget may include a "negative reserve" limited to a maximum amount of EUR 400 000 000. Such a reserve, which shall be entered in a separate title, shall comprise payment appropriations only.

The Commission section of the budget may include a "negative reserve" limited to a maximum amount of EUR 200 000 000. Such a reserve, which shall be entered in a separate title, shall comprise payment appropriations only.

Justification

Reinserted previous amount from Art. 47 of Reg. 966/2012, as has been suggested by the ECA (see par. 53 of Opinion No 1/2017).

Amendment     135

Proposal for a regulation

Article 50 – paragraph 1 – point a – point v a (new)

Text proposed by the Commission

Amendment

 

(v a)  all revenue and expenditure under the respective European Development Funds entered under a special budget heading within the Commission section;

Justification

Inclusion of the European Development Fund in the EU budget.

Amendment    136

Proposal for a regulation

Article 50 – paragraph 1 – point a – point vi

Text proposed by the Commission

Amendment

(vi)  appropriate remarks on each subdivision, as set out in Article 45(1). The budget remarks shall include the references of the basic act, where one exists as well as all appropriate explanations concerning the nature and purpose of the appropriations;

(vi)  appropriate remarks on each subdivision, as set out in Article 45(1), including highlighted additional remarks voted by the European Parliament and the Council. The budget remarks shall include the references of the basic act, where one exists, as well as all appropriate explanations concerning the nature and purpose of the appropriations;

Justification

The AM is intended to prevent situations where the outcome of the budgetary trilogues is not adequately reflected in the remarks in the final budget, as it has been the case in the past.

Amendment     137

Proposal for a regulation

Article 56 – paragraph 2 – point a – subparagraph 2

Text proposed by the Commission

Amendment

The total amount of appropriations for the pilot projects shall not exceed EUR 40 000 000 in any financial year.

The total amount of appropriations for the pilot projects shall not exceed EUR 40 000 000 in any financial year, not including pilot projects proposed by the Commission and accepted by the European Parliament and the Council.

Justification

The pilot projects and preparatory actions proposed by the Commission should come over and above the ceiling specified in the Financial Regulation.

Amendment     138

Proposal for a regulation

Article 56 – paragraph 2 – point b – subparagraph 2

Text proposed by the Commission

Amendment

The total amount of appropriations for new preparatory actions referred to under this point shall not exceed EUR 50 000 000 in any financial year, and the total amount of appropriations actually committed for preparatory actions shall not exceed EUR 100 000 000.

The total amount of appropriations for new preparatory actions referred to under this point shall not exceed EUR 50 000 000 in any financial year, and the total amount of appropriations actually committed for preparatory actions shall not exceed EUR 100 000 000. That amount shall not include preparatory actions proposed by the Commission and accepted by the European Parliament and the Council.

Justification

The pilot projects and preparatory actions proposed by the Commission should come over and above the ceiling specified in the Financial Regulation.

Amendment    139

Proposal for a regulation

Article 57 – paragraph 1

Text proposed by the Commission

Amendment

1.  The Commission shall confer on the other institutions the requisite powers for the implementation of the sections of the budget relating to them.

1.  The other institutions shall be responsible for the implementation of the sections of the budget relating to them.

Justification

Clarification - there is no actual Commission decision conferring such powers.

Amendment    140

Proposal for a regulation

Article 57 – paragraph 2

Text proposed by the Commission

Amendment

2.  The Commission may conclude agreements with the other Union institutions in order to facilitate the implementation of appropriations, in particular administrative ones governing the provision of services, supply of products, execution of works or the implementation of building contracts.

2.  The Union institutions may conclude agreements with each other in order to facilitate the implementation of appropriations, in particular administrative ones governing the provision of services, supply of products, execution of works or the implementation of building contracts.

Amendment    141

Proposal for a regulation

Article 57 – paragraph 3

Text proposed by the Commission

Amendment

3.  Such service-level agreements may also be agreed upon between departments of the Union institutions, Union bodies, European offices, bodies or persons entrusted with implementation of specific actions in the CFSP pursuant to Title V of the TEU and the Office of the Secretary General of the Board of Governors of the European schools. Those agreements shall enable the recovery of costs incurred as a result of their implementation.

3.  Such service-level agreements may also be agreed upon between Union institutions, Union bodies, European offices, bodies or persons entrusted with implementation of specific actions in the CFSP pursuant to Title V of the TEU and the Office of the Secretary General of the Board of Governors of the European schools. Those agreements shall enable the recovery of costs incurred as a result of their implementation. The annual activity report referred to in Article 73(9) of this Regulation shall contain information about any such agreement.

Justification

The AM limits the scope of the empowerment and adds a provision on reporting.

Amendment    142

Proposal for a regulation

Article 58 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

However, the Commission may delegate its powers of budget implementation concerning the operational appropriations of its own section to the Heads of Union delegations and, in order to ensure business continuity during their absence, to the deputy Heads of Delegations. When Heads of Union delegations act as subdelegated authorising officers of the Commission and their deputies in the absence of the latter, they shall apply the Commission rules for the implementation of the budget and shall be subject to the same duties, obligations and accountability as any other subdelegated authorising officer of the Commission.

However, the Commission may delegate its powers of budget implementation concerning the operational appropriations of its own section to the Heads of Union delegations and, in order to ensure business continuity during their absence from the country where their Delegation is based, to the deputy Heads of Delegations. When Heads of Union delegations act as subdelegated authorising officers of the Commission and their deputies in the absence of the latter, they shall apply the Commission rules for the implementation of the budget and shall be subject to the same duties, obligations and accountability as any other subdelegated authorising officer of the Commission.

Justification

Clarification.

Amendment    143

Proposal for a regulation

Article 58 – paragraph 3 – subparagraph 1

Text proposed by the Commission

Amendment

The EEAS may exceptionally delegate its powers of budget implementation concerning the administrative appropriations of its own section to Commission staff of the delegation where this is necessary in order to ensure the continuity in the administration of Delegations in the absence of the EEAS competent authorising officer. In the exceptional cases where Commission staff of Union Delegations act as sub-delegated authorising officers of the EEAS, they shall apply the EEAS internal rules for the implementation of the budget and shall be subject to the same duties, obligations and accountability as any other sub-delegated authorising officer of the EEAS.

The EEAS may exceptionally delegate its powers of budget implementation concerning the administrative appropriations of its own section to Commission staff of the delegation where this is necessary in order to ensure the continuity in the administration of Delegations in the absence of the EEAS competent authorising officer from the country where his/her Delegation is based. In the exceptional cases where Commission staff of Union Delegations act as sub-delegated authorising officers of the EEAS, they shall apply the EEAS internal rules for the implementation of the budget and shall be subject to the same duties, obligations and accountability as any other sub-delegated authorising officer of the EEAS.

Justification

Clarification.

Amendment     144

Proposal for a regulation

Article 61 – paragraph 1 – point c – introductory part

Text proposed by the Commission

Amendment

(c)  indirectly (‘indirect implementation'), where this is provided for in the basic act or in the cases referred to in points (a) to (d) of the first subparagraph of Article 56(2), with:

(c)  indirectly (‘indirect implementation'), where this is provided for in the basic act or in the cases referred to in points (a) to (d) of the first subparagraph of Article 56(2), by entrusting budget implementation tasks to:

Justification

Reinserted from Art. 58, paragraph 1 (c), Reg. 966/2012. If the modification from "indirect management" to "indirect implementation" is only linguistic, according to the Commission, the existing definition of indirect method of implementation of the budget should be kept.

Amendment    145

Proposal for a regulation

Article 61 – paragraph 1 – point c – point iii

Text proposed by the Commission

Amendment

(iii)  the European Investment Bank or the European Investment Fund ('the EIB group');

(iii)  the European Investment Bank ('EIB') or the EIF;

Justification

Since the composition of the "EIB group" might change in the future, it is better to refer to the EIB and the EIF separately.

Amendment    146

Proposal for a regulation

Article 61 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

The Commission is responsible for the implementation of the budget in accordance with Article 317 TFEU and shall not delegate implementation of the budget to third parties, where such tasks involve a large measure of discretion implying political choices.

The Commission is responsible for the implementation of the budget in accordance with Article 317 TFEU and shall not delegate implementation of the budget to third parties, where such tasks involve any discretion implying political choices.

Justification

Tasks involving discretion implying political choices should always be carried out by an official or other servant of the Union.

Amendment     147

Proposal for a regulation

Article 62 – paragraph 1

Text proposed by the Commission

Amendment

1.  Where the budget is implemented under shared implementation the Commission and the Member States shall respect the principles of sound financial management, transparency and non-discrimination and shall ensure the visibility of Union action. To this end, the Commission and the Member States shall fulfil their respective control and audit obligations and assume the resulting responsibilities laid down in this Regulation. Complementary provisions shall be laid down in sector-specific rules.

1.  Where the Commission implements the budget under shared implementation, implementation tasks shall be delegated to Member States. The Commission and the Member States shall respect the principles of sound financial management, transparency and non-discrimination and shall ensure the visibility of Union action when they implement Union funds. To this end, the Commission and the Member States shall fulfil their respective control and audit obligations and assume the resulting responsibilities laid down in this Regulation. Complementary provisions shall be laid down in sector-specific rules.

Amendment     148

Proposal for a regulation

Article 62 – paragraph 2 – subparagraph 1 – point b a (new)

Text proposed by the Commission

Amendment

 

(ba)  cooperating with the Commission, OLAF, the European Public Prosecutor’s Office (EPPO) and the European Court of Auditors (ECA).

Amendment     149

Proposal for a regulation

Article 62 – paragraph 3 – subparagraph 1

Text proposed by the Commission

Amendment

In accordance with the criteria and procedures laid down in sector-specific rules, Member States shall, at the appropriate level, designate bodies to be responsible for the management and control of Union funds. Such bodies may also carry out tasks not related to the management of Union funds and may entrust certain of their tasks to other bodies, including the bodies indicated in Article 61(1) (c) (ii) and (iii).

In accordance with the criteria and procedures laid down in sector-specific rules, Member States shall, at the appropriate level, designate bodies to be responsible for the management and control of Union funds. Such bodies may also carry out tasks not related to the management of Union funds and may entrust certain of their tasks to other bodies.

Justification

Entrusting tasks to international organisations and their agencies, as well as to the EIB Group would reduce the possibilities of Member States to control the implementation of Funds under shared implementation especially with regard grants.

Amendment     150

Proposal for a regulation

Article 62 – paragraph 5 – subparagraph 5

Text proposed by the Commission

Amendment

In addition, Member States may provide declarations signed at the appropriate level based on the information referred to in this paragraph.

In addition, Member States shall provide to the European Parliament and the Commission declarations signed at the appropriate level based on the information referred to in this paragraph.

Amendment    151

Proposal for a regulation

Article 62 – paragraph 8 – subparagraph 2

Text proposed by the Commission

Amendment

In order to promote best practices in the implementation of the Structural Funds, the Cohesion Fund, the European Agricultural Fund for Rural Development, the EAGF and the European Fisheries Fund, the Commission may, for information purposes, make available a methodological guide setting out its own control strategy and approach, including checklists, and best practice examples to bodies responsible for management and control activities. That guide shall be updated whenever necessary.

In order to promote best practices in the implementation of the Structural Funds, the Cohesion Fund, the European Agricultural Fund for Rural Development, the EAGF and the European Maritime and Fisheries Fund, the Commission may, for information purposes, make available a methodological guide setting out its own control strategy and approach, including checklists, and best practice examples to bodies responsible for management and control activities. That guide shall be updated whenever necessary.

Amendment    152

Proposal for a regulation

Article 62 – paragraph 8 – subparagraph 2 a (new)

Text proposed by the Commission

Amendment

 

With regard to maritime affairs and fisheries, the delivery of the national and sub-national programmes requires a comprehensive national and sub-national Management and Control System (MCS) of all financial commitments, based on a close collaboration between the national and any sub-national management authority and the Commission. The Commission shall report annually and publish interim evaluations.

Amendment     153

Proposal for a regulation

Article 62 – paragraph 8 a (new)

Text proposed by the Commission

Amendment

 

8 a.  In order for the specific and appropriate policy and measures to be determined, the Commission shall promote the preparation of regional operational programmes in accordance with the principles of proportionality and subsidiarity and taking into account regional competences.

Justification

Regions should be able to exercise their right to take part in the decision making process on matters within their competences. Accordingly, regions with competences in the fisheries sector should be able to prepare and manage their regional operational programmes.

Amendment    154

Proposal for a regulation

Article 62 – paragraph 9

Text proposed by the Commission

Amendment

9.  Resources allocated to Member States under shared implementation may also be used in combination with operations and instruments carried out under Regulation 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project Portal and amending Regulations (EU) No 1291/2013 and (EU) No 1316/2013.

9.  Resources allocated to Member States under shared implementation may in accordance with sector-specific rules also be used in combination with operations and instruments carried out under Regulation 2015/1017 of the European Parliament and of the Council of 25 June 2015 on the European Fund for Strategic Investments, the European Investment Advisory Hub and the European Investment Project Portal and amending Regulations (EU) No 1291/2013 and (EU) No 1316/2013. In so doing, the applicable maximum co-financing rate shall always be respected.

Amendment     155

Proposal for a regulation

Article 62 a (new)

Text proposed by the Commission

Amendment

 

Article 62 a

 

Single set of rules under shared implementation

 

Where an ESI fund is combined with one or more other ESI funds or with another type of Union funding within a single measure, a Member State may provide for general rules on the application of the legal framework of one of the ESI funds or types of Union funding to the whole measure. The Member State shall submit these general rules to the Commission for approval.

Justification

The AM aims to implement the "single set of rules" principle to shared management, in order to relieve the beneficiaries and the Member States' administrations of administrative burden, such as conflicting interpretations of rules by different Commission DGs. A bottom-up approach seems to be the best way of doing this.

Amendment    156

Proposal for a regulation

Article 63 – paragraph 1

Text proposed by the Commission

Amendment

1.  "European offices" are administrative structures set up by the Commission or by the Commission with one or more institutions to perform specific cross-cutting tasks, provided that that can be justified by a cost-benefit study and an assessment of the associated risks.

1.  "European offices" are administrative structures set up by the Commission or by the Commission with one or more institutions to perform specific cross-cutting tasks, provided that that can be justified by a cost-benefit study and an assessment of the associated risks and subject to approval by the European Parliament and the Council.

Amendment    157

Proposal for a regulation

Article 63 – paragraph 2 – point b

Text proposed by the Commission

Amendment

(b)  may perform non-obligatory tasks authorised by their Management Committees having considered the costs-benefits and associated risks for the parties involved. For the performance of these tasks the office may receive delegation of authorising officer powers, or may conclude ad hoc service-level agreements with the Union institutions, Union bodies, other European offices or third parties.

(b)  may perform non-obligatory tasks authorised by the European Parliament and the Council after their Management Committees have considered the costs-benefits and associated risks for the parties involved. For the performance of these tasks the office may receive delegation of authorising officer powers, or may conclude ad hoc service-level agreements with the Union institutions, Union bodies, other European offices or third parties.

Amendment    158

Proposal for a regulation

Article 68 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a.  All members of steering committees and boards of executive or decentralised Union agencies shall publish annually a declaration of interests on the website of their agency. To ensure clarity with regard to such declarations, the Commission shall provide a template for such declarations of interests, which may be adapted to the specificities of each agency.

Justification

The “declaration of conflict of interests” should be made compulsory in the revised financial regulation for all the members of management boards and steering committees of decentralised and executive agencies. Declarations of interest should be standardised but still be adapted to the specificities of each agency.

Amendment    159

Proposal for a regulation

Article 69 – paragraph 2

Text proposed by the Commission

Amendment

2.  The framework financial regulation shall be based on the principles and rules set out in this Regulation.

2.  The framework financial regulation shall be based on the principles and rules set out in this Regulation, taking into account the specificities of the bodies referred to in paragraph 1.

Amendment    160

Proposal for a regulation

Article 69 – paragraph 6

Text proposed by the Commission

Amendment

6.  An independent external auditor shall verify that the annual accounts of each of the bodies referred to in paragraph 1 of this Article properly present the income, expenditure and financial position of the relevant body prior to the consolidation in the Commission's final accounts. Unless otherwise provided in the basic act referred to in paragraph 1 of this Article, the Court of Auditors shall prepare a Specific Annual Report on each body in line with the requirements of Article 287(1) TFEU. In preparing this report, the Court shall consider the audit work performed by the independent external auditor and the action taken in response to the auditor's findings.

6.  An independent external auditor shall verify that the annual accounts of each of the bodies referred to in paragraph 1 of this Article properly present the income, expenditure and financial position of the relevant body prior to the consolidation in the Commission's final accounts. The fees for the auditor shall be borne by the ECAs. The auditor may also verify that all income has been received and all expenditure incurred in a lawful and regular manner. Unless otherwise provided in the basic act referred to in paragraph 1 of this Article, the ECA shall report annually on the audit results and issue a specific declaration of assurance for each body falling within the scope of this Article in line with the requirements of Article 287(1) TFEU in a single consolidated audit report. In preparing this report, the ECA shall consider the audit work performed by the independent external auditor and the action taken in response to the auditor's findings.

Justification

See justification to rapporteur's amendment on par. 6 a (new).

Amendment    161

Proposal for a regulation

Article 69 – paragraph 6 a (new)

Text proposed by the Commission

Amendment

 

6 a.  All aspects of the independent external audits, including the auditor’s reported findings, shall remain under the full responsibility of the ECA. All administrative and procurement procedures required shall be managed by the ECA and those procedures, as well as any other associated costs, from its own budget.

Justification

The proposed amendments to par. 6 of Art. 69 would replace the specific annual reports produced by the ECA on each of the bodies set up under the TFEU and Euratom Treaty, with a single consolidated audit report which would include a specific declaration of assurance for each body. The ECA assessment on the legality and regularity of expenditure may be prepared by the independent external auditor referred to in par. 6, under the guidance of the Court where necessary.

Amendment    162

Proposal for a regulation

Article 70 – paragraph 5

Text proposed by the Commission

Amendment

Paragraphs 2, 3 and 4 of Article 69 shall apply to public-private partnership bodies.

Paragraphs 2 to 6 of Article 69 shall apply to public-private partnership bodies.

Justification

The same rules applying to bodies set up under the TFEU and Euratom Treaty in Art. 69 should also apply to public-private partnerships.

Amendment    163

Proposal for a regulation

Article 73 – paragraph 1

Text proposed by the Commission

Amendment

1.  The authorising officer shall be responsible in each institution for implementing revenue and expenditure in accordance with the principle of sound financial management and for ensuring compliance with the requirements of legality and regularity and equal treatment of recipients of a programme.

1.  The authorising officer shall be responsible in each institution for implementing revenue and expenditure in accordance with the principle of sound financial management, for ensuring the reliability, completeness and correctness of the reported information on performance, and for ensuring compliance with the requirements of legality and regularity and equal treatment of recipients of a programme.

Justification

The rapporteurs consider that Art. 73 of the Commission proposal does not sufficiently take into account performance, and should therefore extend the responsibility of the authorising officer to cover the reliability, completeness and correctness of the information on performance given to him or her. Moreover, the text proposed in Art. 73(5) could be understood as allowing more limited performance reporting than is currently foreseen.

Amendment    164

Proposal for a regulation

Article 73 – paragraph 5 – subparagraph 1

Text proposed by the Commission

Amendment

Each operation shall be subject at least to an ex ante control relating to the operational and financial aspects of the operation, on the basis of a multiannual control strategy which takes risk into account. The purpose of the ex ante controls is to prevent errors and irregularities before the authorisation of operations.

Each operation shall be subject at least to an ex ante control relating to the operational and financial aspects of the operation, in order to prevent errors and irregularities before the authorisation of operations and to ensure the attainment of the objectives of the operation.

Amendment    165

Proposal for a regulation

Article 73 – paragraph 5 – subparagraph 2

Text proposed by the Commission

Amendment

The extent in terms of frequency and intensity of the ex ante controls shall be determined by the authorising officer responsible taking into account the results of prior controls as well as risk-based and cost-effectiveness considerations. In case of doubt, the authorising officer responsible for validating the relevant operations shall request complementary information or perform an on-the-spot control in order to obtain reasonable assurance as part of the ex ante control.

The extent in terms of frequency and intensity of the ex ante controls shall be determined by the authorising officer responsible taking into account the results of prior controls as well as risk-based, cost-effectiveness and performance considerations. On the basis of his/her own risk analysis, the authorising officer responsible for validating the relevant operations shall request complementary information or perform an on-the-spot control in order to obtain reasonable assurance as part of the ex ante control.

Amendment    166

Proposal for a regulation

Article 73 – paragraph 6 – subparagraph 1

Text proposed by the Commission

Amendment

The authorising officer by delegation may put in place ex post controls to detect and correct errors and irregularities or operations after they have been authorised. Such controls may be organised on a sample basis according to risk and shall take account of the results of prior controls and cost-effectiveness considerations.

The authorising officer by delegation may put in place ex post controls to detect and correct errors and irregularities of operations after they have been authorised. Such controls may be organised on a sample basis according to risk and shall take account of the results of prior controls as well as cost-effectiveness and performance considerations.

Amendment     167

Proposal for a regulation

Article 73 – paragraph 6 – subparagraph 3

Text proposed by the Commission

Amendment

Where the authorising officer by delegation implements financial audits of beneficiaries as ex-post controls, the related audit rules shall be clear, consistent and transparent, and shall respect the rights of both the Commission and the auditees.

Where the authorising officer by delegation implements financial audits of beneficiaries as ex-post controls, the related audit rules shall be clear, consistent and transparent, include timeframes and shall be made available to beneficiaries when signing the grant agreement. Audit rules shall respect the rights of both the Commission and the auditees and allow for appeal.

(Civil society organisations experience inconsistency in the application of financial rules not only from one DG to the other, but also within the same DG. Common guidelines and centralised trainings should be available to staff involved. Also transparency on the different steps, duration and timeframe of audit procedures should be improved and should be communicated at the signature of the contract)

Amendment     168

Proposal for a regulation

Article 73 – paragraph 7 – subparagraph 2 – point a

Text proposed by the Commission

Amendment

(a)  that the authorising officers by sub-delegation and their staff receive regularly updated and appropriate information concerning the control standards and the methods and techniques available for that purpose;

(a)  that the authorising officers by sub-delegation and their staff receive regularly updated and appropriate information and training concerning the control standards and the methods and techniques available for that purpose on the basis of common guidelines;

(Civil society organisations experience inconsistency in the application of financial rules not only from one DG to the other, but also within the same DG. Common guidelines and centralised trainings should be available to staff involved. Also transparency on the different steps, duration and timeframe of audit procedures should be improved and should be communicated at the signature of the contract)

Amendment    169

Proposal for a regulation

Article 73 – paragraph 8 – subparagraph 1

Text proposed by the Commission

Amendment

If a member of staff, involved in the financial management and control of transactions, considers that a decision he or she is required by his or her superior to apply or to agree to is irregular or contrary to the principle of sound financial management or the professional rules which that member of staff is required to observe, he or she shall inform his or her hierarchical superior accordingly. If the member of staff does so in writing, the hierarchical superior shall reply in writing. If the hierarchical superior fails to take action or confirms the initial decision or instruction and the member of staff believes that such confirmation does not constitute a reasonable response to his or her concern, the member of staff shall inform the authorising officer by delegation in writing. If that officer does not reply within a reasonable time given the circumstances of the case and, in any event, within a month at most, the member of staff shall inform the relevant panel referred to in Article 139.

If a member of staff, involved in the financial management and control of transactions, considers that a decision he or she is required by his or her superior to apply or to agree to is irregular or contrary to the principle of sound financial management or the professional rules which that member of staff is required to observe, he or she shall inform his or her hierarchical superior accordingly. If the member of staff does so in writing, the hierarchical superior shall reply in writing. If the hierarchical superior fails to take action or confirms the initial decision or instruction and the member of staff believes that such confirmation does not constitute a reasonable response to his or her concern, the member of staff shall inform the authorising officer by delegation in writing. If that officer does not reply within a reasonable time given the circumstances of the case and, in any event, within a month at most, the member of staff shall inform the relevant panel referred to in Article 90.

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    170

Proposal for a regulation

Article 73 – paragraph 9 – subparagraph 1 – point a

Text proposed by the Commission

Amendment

(a)  the information contained in the report presents a true and fair view;

(a)  the information contained in the report presents a true and fair view, and in particular the information on performance is reliable, complete and correct;

Justification

See justification for the amendment to par. 1 of this article.

Amendment    171

Proposal for a regulation

Article 73 – paragraph 9 – subparagraph 2

Text proposed by the Commission

Amendment

The annual activity report shall include information on the operations carried out, by reference to the objectives set in the strategic plans, the risks associated with those operations, the use made of the resources provided and the efficiency and effectiveness of internal control systems. This includes an overall assessment of the costs and benefits of controls and information on the extent to which the operational expenditure authorised contributes to the achievement of EU strategic objectives and generates EU added value. The Commission shall prepare a summary of the annual activity reports for the preceding year.

The annual activity report shall include information on the operations carried out, by reference to the objectives set in the strategic plans and information on the overall performance of those operations, the risks associated with those operations, the use made of the resources provided and the efficiency and effectiveness of internal control systems. This includes an overall assessment of the costs and benefits of controls and information on the extent to which the operational expenditure authorised contributes to the achievement of EU strategic objectives and generates EU added value. The Commission shall prepare a summary of the annual activity reports for the preceding year.

Justification

See justification for the amendment to par. 1 of this article.

Amendment    172

Proposal for a regulation

Article 73 – paragraph 9 – subparagraph 2 a (new)

Text proposed by the Commission

Amendment

 

The annual activity reports of the authorising officers and, where applicable, authorising officers by delegation of the institutions, offices, bodies and agencies shall be published on the website of the respective institution, office, body or agency in an easily accessible way by 1 July each year for the preceding year, subject to duly justified confidentiality and security considerations.

Justification

Reinserted fourth subparagraph from Art. 66(9) of Reg. 966/2012, which was deleted by the Commission.

Amendment    173

Proposal for a regulation

Article 75 – paragraph 2

Text proposed by the Commission

Amendment

2.  If Heads of Union delegations find themselves in a situation as referred to in Article 73(8), they shall refer the matter to the panel referred to in Article 139. In the event of any illegal activity, fraud or corruption which may harm the interests of the Union, they shall inform the authorities and bodies designated by the applicable legislation.

2.  If Heads of Union delegations find themselves in a situation as referred to in Article 73(8), they shall refer the matter to the panel referred to in Article 90. In the event of any illegal activity, fraud or corruption which may harm the interests of the Union, they shall inform the authorities and bodies designated by the applicable legislation.

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    174

Proposal for a regulation

Article 79 – paragraph 2

Text proposed by the Commission

Amendment

2.  The accounting officer may diverge from those standards if he or she considers this necessary in order to give a fair presentation of the assets and liabilities, charges, income and cash flow. Where an accounting rule diverges materially from those standards, the notes to the financial statements shall disclose this fact and the reasons for it.

2.  The accounting officer may diverge from those standards if he or she considers this necessary in order to give a true and fair view of the assets and liabilities, charges, income and cash flow. Where an accounting rule diverges materially from those standards, the notes to the financial statements shall disclose this fact and the reasons for it.

Justification

"True and fair view" is the commonly accepted terminology.

Amendment    175

Proposal for a regulation

Article 80 – paragraph 2

Text proposed by the Commission

Amendment

2.  The accounting officers shall obtain from authorising officers all the information necessary for the production of accounts which give a fair presentation of the institutions' financial situation and of budgetary implementation. The authorising officers shall guarantee the reliability of that information.

2.  The accounting officers shall obtain from authorising officers all the information necessary for the production of accounts which give a true and fair view of the institutions' financial situation and of budgetary implementation. The authorising officers shall guarantee the reliability of that information.

Justification

"True and fair view" is the commonly accepted terminology.

Amendment    176

Proposal for a regulation

Article 80 – paragraph 3 – subparagraph 1

Text proposed by the Commission

Amendment

Before the adoption of the accounts by the institution, or body referred to in Article 69, the accounting officer shall sign them off, thereby certifying that he or she has reasonable assurance that the accounts give a fair presentation of the financial situation of the institution or body referred to in Article 69.

Before the adoption of the accounts by the institution, or body referred to in Article 69, the accounting officer shall sign them off, thereby certifying that he or she has reasonable assurance that the accounts give a true and fair view of the financial situation of the institution or body referred to in Article 69.

Justification

"True and fair view" is the commonly accepted terminology.

Amendment    177

Proposal for a regulation

Article 80 – paragraph 10 – subparagraph 2 a (new)

Text proposed by the Commission

Amendment

 

Each institution shall decide in which department the supporting documents are to be kept.

Justification

Reinserted last paragraph from RAP Art. 64. Sentence was omitted by the Commission.

Amendment    178

Proposal for a regulation

Article 83 – paragraph 4 – subparagraph 1

Text proposed by the Commission

Amendment

The accounting officer may only make payments if the payee’s legal entity and payment details have first been entered in a common file by institution for which he/she is responsible.

deleted

Justification

For logical reasons the first subparagraph should be moved after the second: the payment is made after the commitment has been entered into.

Amendment    179

Proposal for a regulation

Article 83 – paragraph 4 – subparagraph 2

Text proposed by the Commission

Amendment

Before entering into a commitment towards a third party, the authorising officer shall establish the legal entity and payment details of payees and enter them in the common file by institution for which the accounting officer is responsible in order to ensure transparency, accountability and proper payment implementation.

Before entering into a commitment towards a third party, the authorising officer shall confirm the payee's identity, establish the legal entity and payment details of payees and enter them in the common file by institution for which the accounting officer is responsible in order to ensure transparency, accountability and proper payment implementation.

Justification

Reinserted from RAP Art. 63.

Amendment    180

Proposal for a regulation

Article 83 – paragraph 4 – subparagraph 2 a (new)

Text proposed by the Commission

Amendment

 

The accounting officer may only make payments if the payee's legal entity and payment details have first been entered in a common file by the institution for which he/she is responsible.

Justification

For logical reasons the first subparagraph has been moved after the second: the payment is made after the commitment has been entered into.

Amendment    181

Proposal for a regulation

Article 86 – paragraph 2

Text proposed by the Commission

Amendment

2.  Bank accounts for the imprest shall be opened by the accounting officer, who shall also authorise delegated signatures on them on the basis of a justified proposal from the authorising officer.

2.  Bank accounts for the imprest shall be opened and monitored by the accounting officer, who shall also authorise delegated signatures on them on the basis of a justified proposal from the authorising officer.

Justification

Reinserted provision from RAP Art. 69(1).

Amendment     182

Proposal for a regulation

Article 86 – paragraph 5

Text proposed by the Commission

Amendment

5.  The accounting officer shall carry out, or have carried out by a staff member in his own department or in the authorising department specially empowered for that purpose, checks, which must as a general rule be effected on the spot and, where appropriate, without warning, to verify the existence of the funds allocated to the imprest administrators and the bookkeeping and to check that imprest transactions are settled within the time-limit set. The accounting officer shall communicate the findings of those checks to the authorising officer responsible.

5.  The accounting officer shall carry out, or have carried out by a staff member in his own department or in the authorising department specially empowered for that purpose, checks, which must as a general rule be effected on the spot and, when necessary, without warning, to verify the existence of the funds allocated to the imprest administrators and the bookkeeping and to check that imprest transactions are settled within the time-limit set. The accounting officer shall communicate the findings of those checks to the authorising officer responsible.

Amendment    183

Proposal for a regulation

Article 90 – paragraph 1 – introductory part

Text proposed by the Commission

Amendment

1.  Without prejudice to the powers of the European Anti-Fraud Office, any infringement of a provision of the Financial Regulation or of a provision relating to financial management or the checking of operations resulting from an act or omission of a member of staff shall be referred to the panel referred to in Article 139 of this Regulation for an opinion by any of the following:

1.  Without prejudice to the powers of the European Anti-Fraud Office, any infringement of a provision of the Financial Regulation or of a provision relating to financial management or the checking of operations resulting from an act or omission of a member of staff shall be referred to a joint specialised financial irregularities panel for an opinion by any of the following:

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    184

Proposal for a regulation

Article 90 – paragraph 1 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

If the information is brought to the panel's attention by a whistle-blower, the information shall be handled by the panel in accordance with the rules of procedure for providing information in the event of serious irregularities ("whistleblowing") in force at the Commission and/or at the institution, body or office to which the whistle-blower belongs.

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    185

Proposal for a regulation

Article 90 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1 a.  The panel referred to in paragraph 1 shall be composed of:

 

(a)   a standing high-level independent Chair appointed by the Commission;

 

(b)   a representative from six different Union institutions, European offices or Union bodies referred to in Article 69.

 

The composition of the panel shall ensure the appropriate legal and technical expertise. The appointment of the members of the panel shall take into account the need for avoiding any conflict of interests. The panel shall be assisted by a permanent secretariat, provided by the Commission, which shall ensure the continuous administration of the panel.

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    186

Proposal for a regulation

Article 90 – paragraph 1 b (new)

Text proposed by the Commission

Amendment

 

1 b.  The term of office of the members of the panel referred to in paragraph 1a(b) shall be three years and shall be renewable.

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    187

Proposal for a regulation

Article 90 – paragraph 1 c (new)

Text proposed by the Commission

Amendment

 

1 c.  The Chair of the panel shall be chosen from among former members of the ECA, the Court of Justice of the European Union or former officials who have had at least the rank of Director-General in a Union institution other than the Commission. The Chair shall be selected on the basis of his or her personal and professional qualities, extensive experience in legal and financial matters and proven competence, independence and integrity. His or her term of office shall be five years and shall not be renewable. The Chair shall be appointed as special adviser within the meaning of Article 5 of the Conditions of Employment of Other Servants of the European Union. The Chair shall preside at all sessions of the panel and shall be independent in the performance of his or her duties. The Chair shall not have a conflict of interests between his or her duties as Chair and any other official duties.

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    188

Proposal for a regulation

Article 90 – paragraph 1 d (new)

Text proposed by the Commission

Amendment

 

1 d.  The rules of procedure of the panel shall be adopted by the Commission.

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    189

Proposal for a regulation

Article 90 – paragraph 2

Text proposed by the Commission

Amendment

2.  In the cases referred in paragraph 1, the panel referred to in Article 139 of this Regulation shall be competent to determine whether a financial irregularity has occurred. On the basis of the opinion of the panel referred to in Article 139 for cases referred to in paragraph 1, the institution concerned shall decide whether to initiate proceedings for disciplinary action or payment of compensation. If the panel detects systemic problems, it shall make a recommendation to the authorising officer and to the authorising officer by delegation, unless the latter is the member of staff involved, as well as to the internal auditor.

2.  The panel shall be competent to determine whether a financial irregularity has occurred.

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    190

Proposal for a regulation

Article 90 – paragraph 4

Text proposed by the Commission

Amendment

4.  Where the panel gives the opinion referred to in paragraph 1, it shall have the composition laid down in Article 139(2) and two additional members:

deleted

(a)   a representative of the appointing authority in charge of disciplinary matters of the institution or body concerned, and

 

(b)   another member appointed by the staff committee of the institution or body concerned. The appointment of those additional members shall take into account the need for avoiding any conflict of interests.

 

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    191

Proposal for a regulation

Article 90 – paragraph 5

Text proposed by the Commission

Amendment

5.  Where the panel gives the opinion referred to in Article paragprah 1, it shall be addressed to the disciplinary Board established by each institution or body in accordance to its internal rules.

5.  The panel's opinion shall be addressed to the appointing authority in charge of disciplinary matters of the institution, office or body concerned.

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    192

Proposal for a regulation

Article 90 – paragraph 5 a (new)

Text proposed by the Commission

Amendment

 

5 a.  On the basis of the panel's opinion, the institution concerned shall decide whether to initiate proceedings for disciplinary action or payment of compensation. If the panel detects systemic problems, it shall make a recommendation to the authorising officer and to the authorising officer by delegation, unless the latter is the member of staff involved, as well as to the internal auditor.

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    193

Proposal for a regulation

Article 90 – paragraph 5 b (new)

Text proposed by the Commission

Amendment

 

5 b.  If, on examining a case, the panel deems that the matter comes under the remit of OLAF, it shall immediately forward the case to the Director of OLAF and inform the appointing authority of the institution, office or body concerned accordingly. As from the day of transmittal, the case is withdrawn from the panel's consideration.

Justification

The Commission's proposal to merge the panel dedicated to the early detection and exclusion system with the panel dealing with financial irregularities is not justified given the differing objectives of the panels. A specific joint panel should be put in place with a reinforced interinstitutional character. Furthermore, the text proposed by the Commission is not compliant with the provisions on disciplinary proceedings laid down in Annex IX of the Staff Regulations. No disciplinary proceedings can be launched without either an OLAF report or an administrative inquiry having taken place.

Amendment    194

Proposal for a regulation

Article 91 – paragraph 1

Text proposed by the Commission

Amendment

1.  An authorising officer by delegation or subdelegation who receives a binding instruction which he considers to be irregular or contrary to the principle of sound financial management, in particular because the instruction cannot be carried out with the resources allocated to him, shall, in writing, so inform the authority from which he received the delegation or subdelegation. If the instruction is confirmed in writing and that confirmation is received in good time and is sufficiently clear, in that it refers explicitly to the points which the authorising officer by delegation or subdelegation has challenged, the authorising officer by delegation or subdelegation may not be held liable. He shall carry out the instruction, unless it is manifestly illegal or constitutes a breach of the relevant safety standards.

1.  An authorising officer by delegation or subdelegation who receives a binding instruction which he considers to be irregular or contrary to the principle of sound financial management, in particular because the instruction cannot be carried out with the resources allocated to him, shall, in writing, so inform the authority from which he received the delegation or subdelegation. If the instruction is confirmed in writing and that confirmation is received in good time and is sufficiently clear, in that it refers explicitly to the points which the authorising officer by delegation or subdelegation has challenged, the authorising officer by delegation or subdelegation may not be held liable. He shall carry out the instruction, unless it is manifestly illegal or constitutes a breach of the relevant safety standards. The authorising officer by delegation shall report on each such case under the heading "Confirmation of instructions pursuant to Article 91 of the Financial Regulation" in the annual activity report referred to in Article 73(9) of this Regulation.

Amendment     195

Proposal for a regulation

Article 99 – paragraph 5

Text proposed by the Commission

Amendment

5.  Each institution shall send to the European Parliament and Council each year a report on the waivers referred to in this paragraph involving EUR 100 000 or more. In the case of the Commission, that report shall be annexed to the summary of the annual activity reports referred to in Article 73(9).

5.  Each institution shall send to the European Parliament and Council each year a report on the waivers referred to in this paragraph. In the case of the Commission, that report shall be annexed to the summary of the annual activity reports referred to in Article 73(9).

Amendment     196

Proposal for a regulation

Article 108 – paragraph 2 – subparagraph 1 – point b a (new)

Text proposed by the Commission

Amendment

 

(ba)  performance assessment parameters;

Amendment     197

Proposal for a regulation

Article 108 – paragraph 2 – subparagraph 2 – point c

Text proposed by the Commission

Amendment

(c)  for contributions to trust funds referred to in Article 227 the appropriations reserved for the trust fund for the year together with the amounts planned over its duration;

(c)  for contributions to trust funds referred to in Article 227: the appropriations reserved for the trust fund for the year together with the amounts planned over its duration, as well as the share of funding from sources other than the Union budget, whose ratio shall remain fixed over the entire duration of the trust fund as specified in Article 227(1);

Justification

Update of rapporteurs' AM 91. The ratio of funding from the EU budget and other sources should be fixed, in order to avoid a situation where the EU needs to cover for other donors who do not fulfil their initial pledges.

Amendment    198

Proposal for a regulation

Article 108 – paragraph 2 – subparagraph 2 – point e

Text proposed by the Commission

Amendment

(e)  for financial instruments: the amount allocated to the financial instrument;

(e)  for financial instruments: the amount allocated to the financial instrument and the targeted share of private capital to be attracted;

Amendment    199

Proposal for a regulation

Article 108 – paragraph 2 – subparagraph 2 – point g

Text proposed by the Commission

Amendment

(g)  for contributions to blending facilities: the amount allocated to the blending facility and the list of entities participating in the blending facility;

(g)  for contributions to blending facilities: the amount allocated to the blending facility, the list of entities participating in the blending facility and their respective financial contribution;

Amendment    200

Proposal for a regulation

Article 109 – paragraph 3 – subparagraph 1 – point c

Text proposed by the Commission

Amendment

(c)  verify the conditions according to which payment is due.

(c)  verify the conditions according to which payment is due. Cost estimates cannot imply the fulfilment of such conditions.

Amendment    201

Proposal for a regulation

Article 109 – paragraph 5

Text proposed by the Commission

Amendment

5.  The de-commitment is the operation whereby the responsible authorising officer cancels wholly or partly the reservation of appropriations previously made with a budgetary commitment.

deleted

Justification

For reasons of consistency, this paragraph is moved to Art. 2 (definitions).

Amendment     202

Proposal for a regulation

Article 110 – paragraph 6

Text proposed by the Commission

Amendment

6.  Provisional budgetary commitments shall be implemented by the conclusion of one or more legal commitments giving rise to an entitlement to subsequent payments. However, in cases relating to expenditure on staff management or relating to communication expenditures engaged in by the institutions for the coverage of Union events or in cases referred to in point 14.5 of the Annex to this Regulation, they may be implemented directly by payments.

6.  Provisional budgetary commitments shall be implemented by the conclusion of one or more legal commitments giving rise to an entitlement to subsequent payments. However, in cases relating to expenditure on staff management, Members or former Members of a Union institution or relating to communication expenditures engaged in by the institutions for the coverage of Union events or in cases referred to in point 14.5 of the Annex to this Regulation, they may be implemented directly by payments.

Justification

Allowances to Members are paid the same way as allowances to staff and should thus also be mentioned in the exceptions where a provisional commitment can be directly followed by payments.

Amendment    203

Proposal for a regulation

Article 111 – paragraph 4 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

The commitments referred to in the first subparagraph shall be deducted from the global provisional commitment referred to paragraph 2.

Justification

Technical correction (moved from paragraph 5).

Amendment    204

Proposal for a regulation

Article 111 – paragraph 5

Text proposed by the Commission

Amendment

5.  The commitments referred to in the first sub-subparagraph shall be deducted from the global provisional commitment referred to paragraph 1.

deleted

Justification

Technical correction (moved to paragraph 4).

Amendment    205

Proposal for a regulation

Article 112 – paragraph 4

Text proposed by the Commission

Amendment

4.  Any parts of budgetary commitments which have not been executed by payments six months after the final date for implementation shall be decommitted in accordance with Article 13.

4.  Any parts of budgetary commitments which have not been executed by payments six months after the final date for implementation shall be decommitted.

Justification

The reference makes no sense because Art. 13 deals with the cancellation of appropriations following a decommitment, and not the decommitment procedure as such.

Amendment    206

Proposal for a regulation

Article 113 – paragraph 5 – subparagraph 3 a (new)

Text proposed by the Commission

Amendment

 

For grants under direct implementation of more than EUR 5 000 000 financing external actions, no more than two pre-financing payments shall remain uncleared throughout the duration of the action.

Justification

Reinserted second subparagraph from Art. 184(4) of Reg. 966/2012, which was omitted by the Commission.

Amendment     207

Proposal for a regulation

Article 114 – paragraph 1 – point a

Text proposed by the Commission

Amendment

(a)  90 calendar days for contribution agreements, contracts and, grant agreements involving technical services or actions which are particularly complex to evaluate and for which payment depends on the approval of a report or a certificate;

(a)  60 calendar days for contribution agreements, contracts and, grant agreements involving technical services or actions which are particularly complex to evaluate;

Justification

The AM is based on a suggestion by Civil Society Europe.

Amendment     208

Proposal for a regulation

Article 114 – paragraph 1 – point b

Text proposed by the Commission

Amendment

(b)  60 calendar days for all other contribution agreements, contracts and, grant agreements for which payment depends on the approval of a report or a certificate;

deleted

Justification

The AM is based on a suggestion by Civil Society Europe.

Amendment     209

Proposal for a regulation

Article 114 – paragraph 4 – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

Except in the case of Member States, the European Investment Bank and the European Investment Fund, on the expiry of the time limits laid down in paragraph 1, the creditor shall be entitled to interest in accordance with the following conditions:

Except in the case of Member States, on the expiry of the time limits laid down in paragraph 1, the creditor shall be entitled to interest in accordance with the following conditions:

Justification

The EIB Group should not be treated differently in this respect from other entities implementing EU budgetary funds or creditors of the Union. In this regard the EIB Group is required by its Statute to ensure its costs are covered and that the inclusion of the EIB/EIF in this provision may provoke negative reactions from the credit rating agencies related to existing instruments such as EFSI, the ELM and InnovFin.

Amendment     210

Proposal for a regulation

Article 115 – paragraph 1

Text proposed by the Commission

Amendment

1.  Each institution shall establish an internal auditing function which shall be performed in compliance with the relevant international standards. The internal auditor appointed by the institution shall be accountable to the latter for verifying the proper operation of budgetary implementation systems and procedures. The internal auditor may be neither authorising officer nor accounting officer.

1.  Each institution shall establish an internal auditing function which shall be performed in compliance with the relevant international standards. The internal auditor appointed by the institution shall be accountable to the latter for verifying the proper operation of budgetary implementation systems and procedures. The internal auditor shall be independent in performing his or her tasks and he may be neither authorising officer nor accounting officer.

Amendment    211

Proposal for a regulation

Article 116 – paragraph 4 – subparagraph 2

Text proposed by the Commission

Amendment

That annual report shall also mention any systemic problems detected by the panel set up pursuant to Article 139 where it gives the opinion referred to under Article 90.

That annual report shall also mention any systemic problems detected by the panel set up pursuant to Article 90.

Justification

See rapporteur's amendment to Art. 90 par. 5 b (new).

Amendment    212

Proposal for a regulation

Article 116 – paragraph 5

Text proposed by the Commission

Amendment

5.  The internal auditor shall, during the elaboration of his report, particularly focus on the overall compliance with the principle of sound financial management and shall ensure that appropriate measures have been taken in order to steadily improve and enhance its application.

5.  The internal auditor shall, during the elaboration of his report, particularly focus on the overall compliance with the principles of sound financial management and performance, and shall ensure that appropriate measures have been taken in order to steadily improve and enhance their application.

Amendment    213

Proposal for a regulation

Article 116 – paragraph 8

Text proposed by the Commission

Amendment

8.  Each year the institution shall draft a report containing a summary of the number and type of internal audits carried out, the recommendations made and the action taken on those recommendations and forward it to the European Parliament and the Council as provided for in Article 239.

8.  Each year the institution shall draft a report containing a meaningful summary of the number and type of internal audits carried out, the recommendations made and the action taken on those recommendations and forward it to the European Parliament and the Council as provided for in Article 239.

Amendment    214

Proposal for a regulation

Article 120 a (new)

Text proposed by the Commission

Amendment

 

Article 120 a

 

Internal audit committees

 

1.   Each institution shall establish an internal audit committee tasked with monitoring the quality of the internal audit work and ensuring that audit recommendations are properly taken into account and followed up by its services.

 

2.   The majority of the internal audit committee's membership shall be independent of the institution.

 

3.   The activities of the internal audit committees should in particular:

 

(a)   help to improve the adequacy and effectiveness of risk management and internal control;

 

(b)   promote the principles of good governance and their application to decision-making;

 

(c)   support the quality of the internal audits;

 

(d)   raise awareness of the need for robust risk management and internal control;

 

(e)   ensure the recommendations of internal and external audits are implemented; and

 

(f)   assist in embedding the values of ethical governance, including effective arrangements for countering fraud and corruption.

 

4.   The annual report of the internal auditor referred to in Article 116(4) shall contain appropriate information about the mandate, operations, activities, and outcomes of the internal audit committee.

Justification

In accordance with the ECA (see par. 14-15 of Opinion No 1/2017), international best practice in the area of public sector governing bodies requires the establishment of an internal audit committee, which is composed of a majority of independent members whose remit covers financial reporting, irregularities and risk management.

Amendment    215

Proposal for a regulation

Article 121 – paragraph 1 – subparagraph 1 – point -a (new)

Text proposed by the Commission

Amendment

 

(-a)  financing not linked to costs of the relevant operations based on:

 

(i)   either the fulfilment of conditions set out in sector specific legislation or Commission Decisions, or

 

(ii)   the achievement of results measured by reference to the previously set milestones or through performance indicators;

Justification

In order to embed a 'performance culture' within this Regulation, the rapporteurs suggest that the forms of Union contribution should first look to the achievement of results before considering other criteria.

Amendment    216

Proposal for a regulation

Article 121 – paragraph 1 – subparagraph 1 – point e

Text proposed by the Commission

Amendment

(e)  financing not linked to costs of the relevant operations based on:

deleted

i)   either the fulfilment of conditions set out in sector specific legislation or Commission Decisions or

 

ii)   the achievement of results measured by reference to the previously set milestones or through performance indicators;

 

Justification

Moved to par. (-a).

Amendment    217

Proposal for a regulation

Article 121 – paragraph 1 – subparagraph 2 a (new)

Text proposed by the Commission

Amendment

 

The authorising officer by delegation shall report on Union contributions established pursuant to paragraph 1 points (e) and (f) of this Article under the heading "Union contributions pursuant to Article 121(1)(e) and (f) of the Financial Regulation" in the annual activity report referred to in Article 73(9) of this Regulation.

Justification

This provision will strengthen the budgetary authority's oversight of these novel types of funding.

Amendment    218

Proposal for a regulation

Article 122

Text proposed by the Commission

Amendment

Article 122

deleted

Cross-reliance on assessment

 

The Commission may rely in full or in part on assessments made by itself or other entities, including donors, insofar as these assessments were made with regard to conditions equivalent to those set out in this Regulation for the applicable method of budget implementation. To this end, the Commission shall promote the recognition of internationally accepted standards or international best practices.

 

Justification

This new provision goes against the principle of sound financial management and should therefore be deleted.

Amendment    219

Proposal for a regulation

Article 123 – paragraph 1

Text proposed by the Commission

Amendment

Where an audit based on internationally accepted standards providing reasonable assurance has been conducted by an independent auditor on the financial statements and reports setting out the use of the Union contribution, that audit shall form the basis of the overall assurance, as further specified, where appropriate, in sector specific rules.

Where an audit based on internationally accepted standards providing reasonable assurance has been conducted by an independent auditor on the financial statements and reports setting out the use of the Union contribution, and where that Union contribution accounts for less than 50 % of the total funding available, that audit may, subject to a decision of the authorising officer responsible, form the basis of the overall assurance, as further specified, where appropriate, in sector specific rules. Exceptions may be made for research institutions.

Justification

In line with the principle of sound financial management, additional safeguards should be put in place for cross-reliance on audits.

Amendment    220

Proposal for a regulation

Article 123 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

To this end, the Commission and the Court of Auditors shall promote the recognition of internationally accepted standards or international best practices.

Justification

In line with the principle of sound financial management, additional safeguards should be put in place for cross-reliance on audits.

Amendment    221

Proposal for a regulation

Article 123 – paragraph 1 b (new)

Text proposed by the Commission

Amendment

 

Information already available at the management authority shall be used to the extent possible to avoid asking beneficiaries for the same information more than once.

Justification

In line with the principle of sound financial management, additional safeguards should be put in place for cross-reliance on audits.

Amendment     222

Proposal for a regulation

Article 124 – paragraph 1

Text proposed by the Commission

Amendment

1.  Any person or entity receiving Union funds shall fully cooperate in the protection of the Union’s financial interests and grant as a condition for receiving the funds the necessary rights and access required for the authorizing officer responsible, the European Anti-Fraud Office (OLAF) and the European Court of Auditors (ECA), and where appropriate the relevant national authorities, to comprehensively exert their respective competences. In the case of OLAF, this shall include the right to carry out investigations, including on-the-spot checks and inspections.

1.  Any person or entity receiving Union funds shall fully cooperate in the protection of the Union’s financial interests and grant as a condition for receiving the funds the necessary rights and access required for the authorizing officer responsible, the EPPO, OLAF and the ECA, and where appropriate the relevant national authorities, to comprehensively exert their respective competences. In the case of OLAF, this shall include the right to carry out investigations, including on-the-spot checks and inspections.

Amendment     223

Proposal for a regulation

Article 124 – paragraph 2

Text proposed by the Commission

Amendment

2.  Any person or entity receiving Union funds under direct and indirect implementation shall agree in writing to grant the necessary rights as referred to in paragraph 1. This includes the obligation for any third parties involved in the implementation of Union funds to ensure equivalent rights.

2.  Any person or entity receiving Union funds under direct, shared and indirect implementation shall agree in writing to grant the necessary rights as referred to in paragraph 1. This includes the obligation for any third parties involved in the implementation of Union funds to ensure equivalent rights.

Amendment     224

Proposal for a regulation

Article 125

Text proposed by the Commission

Amendment

Article 125

deleted

Transfer of resources to instruments established under this Regulation or sector specific Regulations

 

Resources allocated to Member States under shared implementation may, at their request, be transferred to instruments established under this Regulation or under sector specific Regulations. The Commission shall implement these resources in accordance with point (a) or (c) of Article 61(1), where possible for the benefit of the Member State concerned. In addition resources allocated to Member States under shared implementation may at their request be used to enhance the risk-bearing capacity of the EFSI. In such cases, EFSI rules shall apply.

 

Amendment    225

Proposal for a regulation

Article 126 – paragraph 2

Text proposed by the Commission

Amendment

2.  The financial framework partnership agreement shall specify the forms of financial cooperation, the common objectives of the cooperation as well as the principles governing such cooperation between the Commission and persons and entities implementing Union funds pursuant to point (c) of Article 61(1) or beneficiaries. These agreements shall also reflect the extent to which the Commission may rely on the systems and the procedures of the persons or entities implementing Union funds pursuant to point (c) of Article 61(1) or beneficiaries, including audit procedures.

2.  The financial framework partnership agreement shall specify the forms of financial cooperation, the common objectives of the cooperation as well as the principles governing such cooperation between the Commission and persons and entities implementing Union funds pursuant to point (c) of Article 61(1) or beneficiaries. These agreements shall also:

 

(a)   ensure the quality of implementation, and that the objectives of the Union intervention are reached, and

 

(b)   reflect on the systems and the procedures of the persons or entities implementing Union funds pursuant to point (c) of Article 61(1) or beneficiaries to reach those objectives, including audit procedures.

Justification

These additional safeguards will help in ensuring that financial framework partnerships have an added value for the EU.

Amendment    226

Proposal for a regulation

Article 126 – paragraph 3

Text proposed by the Commission

Amendment

3.  With a view to optimise costs and benefits of audits and facilitate coordination, audit or verification agreements may be concluded with persons and entities implementing funds pursuant to point (c) of Article 61(1) or beneficiaries of grants. In the case of the European Investment Bank the tripartite agreement concluded with the Commission and the European Court of Auditors shall apply.

3.  With a view to optimising costs and benefits of audits and facilitate coordination, audit or verification agreements may be concluded with persons and entities implementing funds pursuant to point (c) of Article 61(1) or beneficiaries of grants. Such agreements shall not restrict the access of the ECA to information necessary for the audit of Union funds.

Justification

The reference to the tripartite agreement provided in Art. 287(3) of the TFEU is redundant. In the interest of clarity, it should be specified that the audit or verification agreements referred to in this paragraph should not restrict the ECA's access to information necessary to perform its duties.

Amendment    227

Proposal for a regulation

Article 126 – paragraph 4 – point c

Text proposed by the Commission

Amendment

(c)  the duration of the partnership may not exceed four years save in duly justified cases;

(c)  the duration of the partnership may not exceed four years save in duly justified cases which shall be clearly indicated in the annual activity report referred to in Article 73(9);

Justification

The AM strengthens the budgetary authority's oversight of these partnership agreements.

Amendment    228

Proposal for a regulation

Article 126 – paragraph 6

Text proposed by the Commission

Amendment

6.  In the case of financial framework partnership agreement implemented through specific grants the verification of the operational and financial capacity referred to in Article 191 shall be performed before signature of the financial framework partnership agreement. The Commission may rely on an equivalent verification of the financial and operational capacity carried out by other donors.

6.  In the case of financial framework partnership agreements implemented through specific grants, the verification of the operational and financial capacity referred to in Article 191 shall be performed before signature of the financial framework partnership agreement. Only where the share borne by the Union budget accounts for less than 50 % of the total funding may the Commission rely on an equivalent verification of the financial and operational capacity carried out by other donors.

Justification

In line with the principle of sound financial management, additional safeguards should be put in place for cross-reliance on verifications. See also rapporteurs' AM to Art. 123(1).

Amendment    229

Proposal for a regulation

Article 126 – paragraph 8

Text proposed by the Commission

Amendment

8.  The Commission shall endeavour to harmonise its reporting requirements with those of other donors.

deleted

Justification

This new provision risks undermining the rules on reporting contained in title XIII and should therefore be deleted.

Amendment    230

Proposal for a regulation

Article 132 – paragraph 1 – point f a (new)

Text proposed by the Commission

Amendment

 

(f a)  the entity has its registered office and its centre of main interests in different jurisdictions, thereby circumventing its obligations arising from fiscal or social law, or any other legal obligations applicable in the jurisdiction of their centre of main interests (letterbox company).

Justification

Frequently, letterbox companies are set up with the purpose of circumventing fiscal, legal or social obligations applicable in the State of their centre of main interests, which runs counter to the financial interests of the EU and the purpose of EU funding. This AM is based on a suggestion made to the rapporteurs by the Bundesnotarkammer (German Federal Chamber of Notaries).

Amendment     231

Proposal for a regulation

Article 132 – paragraph 4 – point a

Text proposed by the Commission

Amendment

(a)  a natural or legal person who is a member of the administrative, management or supervisory body of the et person or entity referred to in Article 131(1), or who has powers of representation, decision or control with regard to these persons or entities is in one or more of the situations referred to in points (c) to (f) of paragraph 1;

(a)  a natural or legal person who is a member of the administrative, management or supervisory body of the et person or entity referred to in Article 131(1), or who has powers of representation, decision or control with regard to these persons or entities, including persons and entities within the ownership and control structure and beneficial owners, is in one or more of the situations referred to in points (c) to (f) of paragraph 1;

Justification

The AM clarifies the scope in respect of persons to whom the exclusion reasons stipulated in Art. 131 (1) apply and aligns the scope of verification of exclusion reasons with the scope of verification required from financial institutions and other designated non-financial bodies and professions under the Anti-money Laundering Directive 849/2015 and the scope of Regulation 2580/2001 on restrictive measures directed against certain persons and entities with a view to combating terrorism.

Amendment     232

Proposal for a regulation

Article 133 – paragraph 2 – point b

Text proposed by the Commission

Amendment

(b)  information on natural or legal persons that are members of the administrative, management or supervisory body of the participant or that have powers of representation, decision or control with regard to that participant and appropriate evidence that one or several of those persons are not in one of the exclusion situations referred to in points (c) to (f) of Article 132(1).

(b)  information on natural or legal persons that are members of the administrative, management or supervisory body of the participant or that have powers of representation, decision or control with regard to that participant, including persons and entities within the ownership and control structure and beneficial owners, and appropriate evidence that one or several of those persons are not in one of the exclusion situations referred to in points (c) to (f) of Article 132(1).

Justification

The AM clarifies the scope in respect of persons to whom the exclusion reasons stipulated in Art. 131 (1) apply and aligns the scope of verification of exclusion reasons with the scope of verification required from financial institutions and other designated non-financial bodies and professions under the Anti-money Laundering Directive 849/2015 and the scope of Regulation 2580/2001 on restrictive measures directed against certain persons and entities with a view to combating terrorism.

Amendment     233

Proposal for a regulation

Article 142 – paragraph 2

Text proposed by the Commission

Amendment

2.  Under shared implementation, all official exchanges of information between the Member States and the Commission shall be carried out by means indicated in the sector-specific rules. Those rules shall provide for interoperability of data gathered or received, and transmitted in the management of the budget.

2.  Under shared implementation, all official exchanges of information between the Member States and the Commission shall be carried out by means indicated in the sector-specific rules. Those rules shall provide for interoperability of data gathered or received, and transmitted in the implementation of the budget.

Amendment    234

Proposal for a regulation

Article 142 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2 a.  The Commission shall report regularly to the European Parliament and to the Council on the progress in the implementation of e-Government.

Justification

Reinserted third paragraph from Art. 95 of Reg. 966/2012, which was deleted by the Commission.

Amendment    235

Proposal for a regulation

Article 144 – paragraph 2 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

The Commission shall report regularly to the European Parliament and to the Council on the progress of the implementation of this paragraph.

Justification

Reinserted second subparagraph from Art. 111 of Reg. 966/2012, which was deleted by the Commission.

Amendment    236

Proposal for a regulation

Article 147 – paragraph 1 – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

1.  Except for low value contracts and low value grants, the authorising officer responsible may, if proportionate and subject to a risk-analysis, require a guarantee to be submitted:

1.  Except for low value contracts and low value grants, the authorising officer responsible may, if proportionate and subject to his/her risk analysis, require a guarantee to be submitted:

Justification

The AM clarifies that it must be the authorising officer's own risk analysis.

Amendment    237

Proposal for a regulation

Article 148 – paragraph 1 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

The guarantee shall be valid for a period sufficiently long to allow it to be activated.

Justification

Reinserted from RAP Art. 206(2). Sentence was omitted by the Commission.

Amendment     238

Proposal for a regulation

Article 149 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

The selection of the entities and persons implementing Union funds or budgetary guarantees pursuant to point (c) of Article 61 (1) shall be transparent, justified by the nature of the action and shall not give rise to a conflict of interests. For entities mentioned in points (ii), (v), (vi) and (vii) of Article 61(1)(c) the selection shall also take due account of their operational and financial capacity.

The selection of the entities and persons to be entrusted with budget implementation tasks, including implementation of budgetary guarantees pursuant to point (c) of Article 61 (1) shall be transparent, justified by the nature of the action and shall not give rise to a conflict of interests. For entities mentioned in points (ii), (v), (vi) and (vii) of Article 61(1)(c) the selection shall also take due account of their operational and financial capacity.

Justification

Reinserted from Art. 60, paragraph 1, Reg. 966/2012.

Amendment     239

Proposal for a regulation

Article 149 – paragraph 2

Text proposed by the Commission

Amendment

2.  Entities and persons implementing Union funds or budgetary guarantees pursuant to point (c) of Article 61(1) shall respect the principles of sound financial management, transparency, non-discrimination and visibility of Union action. Where the Commission establishes financial partnership agreements in accordance with Article 126 those principles shall be further described in such agreements.

2.  Entities and persons entrusted with budget implementation tasks including implementation of budgetary guarantees pursuant to point (c) of Article 61(1) shall respect the principles of sound financial management, transparency, non-discrimination and visibility of Union action. Where the Commission establishes financial partnership agreements in accordance with Article 126 those principles shall be further described in such agreements.

Justification

Reinserted from Art. 60, paragraph 1, Reg. 966/2012.

Amendment    240

Proposal for a regulation

Article 149 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2 a.  The entities and persons entrusted pursuant to point (c) of Article 61(1) shall prevent, detect, correct and notify the Commission of irregularities and fraud when executing tasks relating to the implementation of the budget. To that end, they shall carry out, in accordance with the principle of proportionality, ex ante and ex post controls including, as appropriate, on-the-spot checks on representative and risk-based samples of transactions, to ensure that the actions financed from the budget are effectively carried out and implemented correctly. They shall also recover funds unduly paid, exclude from access to Union funds or impose financial penalties and bring legal proceedings where necessary in that regard.

Justification

Reinserted Art. 60(3) of Reg. 966/2012, which was deleted by the Commission.

Amendment    241

Proposal for a regulation

Article 149 – paragraph 4 – subparagraph 1 – point d

Text proposed by the Commission

Amendment

(d)  apply appropriate rules and procedures for providing financing to third parties including appropriate review procedures, rules for recovering funds unduly paid and rules for excluding from access to funding;

(d)  apply appropriate rules and procedures for providing financing to third parties including transparent, non-discriminatory, efficient and effective review procedures, rules for recovering funds unduly paid and rules for excluding from access to funding;

Amendment    242

Proposal for a regulation

Article 149 – paragraph 4 – subparagraph 2

Text proposed by the Commission

Amendment

In addition, in agreement with the entities or persons, the Commission may assess other rules and procedures such as the administration cost accounting practices of the entities. On the basis on the results of this assessment the Commission may decide to rely on those rules and procedures.

In addition, in agreement with the entities or persons, the Commission may assess other rules and procedures such as the administration cost accounting practices of the entities. On the basis on the results of this assessment the Commission may decide to rely on those rules and procedures. The annual activity report referred to in Article 73(9) shall contain information about any such decision.

Amendment    243

Proposal for a regulation

Article 149 – paragraph 5

Text proposed by the Commission

Amendment

5.  Where these entities or persons comply only in part with the requirements referred to in paragraph 4, the Commission shall take appropriate supervisory measures ensuring the protection of the Union's financial interests. These measures shall be specified in the relevant agreements.

5.  Where these entities or persons comply only in part with the requirements referred to in paragraph 4, the Commission shall take appropriate supervisory measures ensuring the protection of the Union's financial interests. These measures shall be specified in the relevant agreements. The annual activity report referred to in Article 73(9) shall contain information about any such measure.

Amendment    244

Proposal for a regulation

Article 150 – paragraph 1 – subparagraph 5

Text proposed by the Commission

Amendment

The obligations set out in this paragraph shall be without prejudice to agreements concluded with the EIB group, international organisations and third countries. With regard to the management declaration, such agreements shall include at least the obligation of those entities to provide the Commission annually with a statement that, during the financial year concerned, the Union contribution was used and accounted for in compliance with the requirements set out in paragraphs 3 and 4 of Article 149 and with the obligations laid down in such agreements. Such statement may be incorporated in the final report if the action implemented is limited to 18 months.

The obligations set out in this paragraph shall be without prejudice to agreements concluded with the EIB, the EIF, international organisations and third countries. With regard to the management declaration, such agreements shall include at least the obligation of those entities to provide the Commission annually with a statement that, during the financial year concerned, the Union contribution was used and accounted for in compliance with the requirements set out in paragraphs 3 and 4 of Article 149 and with the obligations laid down in such agreements. Such statement may be incorporated in the final report if the action implemented is limited to 18 months.

Justification

See rapporteurs' AM to Art. 61(1)(c)(iii).

Amendment    245

Proposal for a regulation

Article 150 – paragraph 6

Text proposed by the Commission

Amendment

6.  All contribution agreements, financing agreements and guarantee agreements shall be made available to the European Parliament and the Council at their request.

6.  All contribution agreements, financing agreements and guarantee agreements shall be made available in the annual activity report referred to in Article 73(9).

Amendment     246

Proposal for a regulation

Article 151 a (new)

Text proposed by the Commission

Amendment

 

Article 151 a

 

Indirect implementation with Member State Organisations

 

1.  Member State Organisations shall mean entities listed in points (v) to (vii) of Article 61(1)(c) provided that:

 

(i)   they are entrusted by Member States with a public service mission in the field of international development and cooperation and are established under private or public law in Member States;

 

(ii)  their systems and procedures which are adapted to the specific legal and operational contexts of international development and cooperation have been positively assessed as provided for in Article 149(4).

 

2.   The Commission shall rely on those systems and procedures of the Member State Organisations that have been positively assessed in accordance with Article 149(4) or any additional systems and procedures beyond the scope of assessment of that article which have been duly established and are applied under the scrutiny of the relevant Member States, such as the cost structure of the Member State Organisations. In particular, but not exclusively, such cross-reliance shall apply to systems and procedures referred to under Article 123.

 

3.   Financial Framework Partnership Agreements concluded with Member State Organisations in accordance with Article 126 shall further specify the extent and modalities of cross-reliance on systems and procedures of Member State Organisations.

Justification

The rapporteur's propose an additional article in the Title on indirect implementation to recognise the particularities of Member State Organisations' activities in the field of external EU aid.

Amendment    247

Proposal for a regulation

Article 153 – paragraph 2

Text proposed by the Commission

Amendment

2.  Where financial instruments are implemented within a blending facility Title X applies.

2.  Where financial instruments are implemented within a blending facility and they account for more than 50 % of the total funding, Title X shall apply to the whole operation.

Justification

While the rapporteurs support the general aim of simplification behind this new provision, one should avoid the situation where an entire blending operation is governed by rules for financial instruments even though they account only for a small fraction of the funding.

Amendment    248

Proposal for a regulation

Article 153 – paragraph 2 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

Where grants are implemented within a blending facility and they account for more than 50 % of the total funding, Title VIII shall apply to the whole operation.

Justification

While the rapporteurs support the general aim of simplification behind this new provision, one should avoid the situation where an entire blending operation is governed by rules for financial instruments even though they account only for a small fraction of the funding.

Amendment     249

Proposal for a regulation

Article 153 – paragraph 3

Text proposed by the Commission

Amendment

3.  For financial instruments within blending facilities, point (h) of Article 202(1) shall be deemed to be complied with if an ex ante evaluation is carried out prior to the establishment of the relevant blending facility;

3.  For financial instruments within blending facilities, point (h) of Article 202(1) shall be deemed to be complied with if an impact assessment is carried out prior to the establishment of the relevant blending facility;

Justification

Consistent terminology with rapporteur's amendments to Art. 32.

Amendment     250

Proposal for a regulation

Article 174 – paragraph 2 – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

Grants are direct financial contributions, by way of donation, from the budget in order to finance any of the following:

Grants are awarded in order to finance any of the following:

Justification

For reasons of consistency part of this paragraph is moved to Art. 2 (definitions).

Amendment    251

Proposal for a regulation

Article 175 – paragraph 2

Text proposed by the Commission

Amendment

2.  Where possible and appropriate, lump sums, unit costs or flat rates shall be determined in such a way as to allow their payment upon achievement of concrete outputs.

2.  Where possible and appropriate, lump sums, unit costs or flat rates shall be determined in such a way as to allow their payment upon achievement of concrete outputs and results, provided that appropriate measures have been taken to ensure the adequateness of the respective amounts with regard to the required output.

Justification

Additional safeguard.

Amendment     252

Proposal for a regulation

Article 175 – paragraph 2 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

The precise criteria for the required output shall be negotiated between the Commission and the beneficiary and be specified in the grant agreement, on a case-by-case basis and as the circumstances require.

Amendment    253

Proposal for a regulation

Article 175 – paragraph 3

Text proposed by the Commission

Amendment

3.  Unless provided otherwise in the basic act, the use of lump sums, unit costs or flat-rate financing shall be authorised by the authorising officer responsible, who shall act in accordance with a predetermined procedure established within each institution.

3.  Unless provided otherwise in the basic act, the use of lump sums, unit costs or flat-rate financing shall be authorised by the authorising officer responsible, who shall act in accordance with a predetermined procedure established within each institution. The authorising officer responsible shall report in his/her annual activity report referred to in Article 73(9) on any such authorisation granted.

Amendment     254

Proposal for a regulation

Article 175 – paragraph 4 – point d

Text proposed by the Commission

Amendment

(d)  where possible, the essential conditions triggering the payment, including, where applicable, the achievement of outputs;

(d)  where possible, the essential conditions triggering the payment, including, where applicable, the achievement of outputs and results;

Amendment    255

Proposal for a regulation

Article 175 – paragraph 4 – point e

Text proposed by the Commission

Amendment

(e)  description of the conditions for ensuring that the principle of sound financial management is respected and the co-financing principle is reasonably complied with;

(e)  description of the conditions for ensuring that the principle of sound financial management is respected and the co-financing and no-profit principles are reasonably complied with;

Justification

The 'no-profit principle' should be reinstated as one of the general principles applicable to grants.

Amendment    256

Proposal for a regulation

Article 175 – paragraph 6

Text proposed by the Commission

Amendment

6.  The authorising officer responsible may authorise or impose, in the form of flat-rates, funding of the beneficiary's indirect costs up to a maximum of 7 % of total eligible direct costs for the action. A higher flat rate may be authorised by a reasoned Commission decision.

6.  The authorising officer responsible may authorise or impose, in the form of flat-rates, funding of the beneficiary's indirect costs up to a maximum of 7 % of total eligible direct costs for the action. A higher flat rate may be authorised by a reasoned Commission decision. The authorising officer responsible shall report in his/her annual activity report referred to in Article 73(9) on any such decision taken, the flat rate authorised, the amounts involved, and the reasons leading to that decision.

Justification

The AM will help the budgetary authority scrutinise the use of this exception by the authorising officers.

Amendment    257

Proposal for a regulation

Article 175 – paragraph 8

Text proposed by the Commission

Amendment

8.  Beneficiaries may declare personnel costs for the work carried out by volunteers under an action or work programme, on the basis of unit costs authorised in accordance with paragraphs 1 to 6.

8.  Beneficiaries may declare personnel costs for the work carried out by volunteers under an action or work programme as an accounting item, on the basis of unit costs authorised in accordance with paragraphs 1 to 6.

Justification

It is part of the concept of volunteering that work carried out by volunteers is upaid. Therefore, in order to avoid any possible misinterpretation, it should be clarified that this declaration is an accounting tool and does not lead to the remuneration of volunteer work. This AM is based on a suggestion made to the rapporteurs by the Bundesarbeitsgemeinschaft der Freien Wohlfahrtspflege (German Social Welfare Organisations).

Amendment    258

Proposal for a regulation

Article 176 – paragraph 3

Text proposed by the Commission

Amendment

3.  When authorising single lump sums the authorising officer responsible shall comply with Article 175.

3.  When authorising single lump sums the authorising officer responsible shall comply with Article 175 and with the applicable co-financing rules, in particular as regards the maximum co-financing rate for the overall action or work programme.

Amendment    259

Proposal for a regulation

Article 177 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

The amounts of lump sums, unit costs or flat-rate financing determined ex ante by application of the method authorised by the authorising officer responsible or the Commission in accordance with Article 175 shall not be challenged by ex-post controls without prejudice to the right of the authorising officer responsible to reduce the grant in accordance with paragraph 4 of Article 127. Where lump sums, unit costs or flat rates are established on the basis of the usual cost accounting practices of the beneficiary paragraph 2 of Article 179 shall apply.

The amounts of lump sums, unit costs or flat-rate financing determined ex ante by application of the method authorised by the authorising officer responsible or the Commission in accordance with Article 175 shall only be challenged by ex-post controls in case of reasonable doubt, without prejudice to the right of the authorising officer responsible to reduce the grant in accordance with paragraph 4 of Article 127. Where lump sums, unit costs or flat rates are established on the basis of the usual cost accounting practices of the beneficiary paragraph 2 of Article 179 shall apply.

Amendment     260

Proposal for a regulation

Article 177 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a.  The frequency and scope of checks and controls may depend, inter alia, upon the specific risk posed by a given beneficiary. That risk shall be assessed, inter alia, on the basis of occurrence in the past of irregularities attributable to that beneficiary which had a material impact on grants awarded to the beneficiary under similar conditions.

Justification

Checks and controls should be focused more on beneficiaries that pose a higher risk to the Union budget. Risk-based checks and controls would allow the EU to use more of its resources to concrete action instead of administration.

Amendment    261

Proposal for a regulation

Article 178 – paragraph 1

Text proposed by the Commission

Amendment

The method for determining lump sums, unit costs or flat rates, the underlying data and the resulting amounts shall be assessed periodically, and, where appropriate, adjusted in accordance with Article 175.

The method for determining lump sums, unit costs or flat rates, the underlying data and the resulting amounts, as well as the adequateness of those amounts with regard to the output delivered, shall be assessed periodically, and at least every two years, and, where appropriate, adjusted in accordance with Article 175.

Amendment    262

Proposal for a regulation

Article 180 – paragraph 2 – point b

Text proposed by the Commission

Amendment

(b)  where the estimated eligible costs include costs for volunteers' work referred to in paragraph 8 of Article 175, the grant shall not exceed the estimated eligible costs other than the costs for volunteers' work.

(b)  where the estimated eligible costs include costs for volunteers' work referred to in paragraph 8 of Article 175, the grant shall not exceed the estimated eligible costs other than the costs for volunteers' work or 75 % of the total estimated eligible costs, whichever is lower.

Justification

The AM is meant to prevent a situation where a very small in-kind contribution leads to a de facto co-financing rate of almost 100%.

Amendment    263

Proposal for a regulation

Article 182 – paragraph 1 – point e a (new)

Text proposed by the Commission

Amendment

 

(e a)  no-profit.

Justification

See justification for Art. 182 a (new).

Amendment     264

Proposal for a regulation

Article 183 – paragraph -1 (new)

Text proposed by the Commission

Amendment

 

-1.  Grants shall be subject to a work programme, to be published prior to its implementation.

Amendment   265

Proposal for a regulation

Article 183 – paragraph 2

Text proposed by the Commission

Amendment

2.  All grants awarded in the course of a financial year shall be published in accordance with paragraphs 1 to 4 of Article 36.

2.  All grants awarded in the course of a financial year shall be published in accordance with paragraphs 1 to 4 of Article 36. In addition, all Union institutions conducting public procurement shall publish on their websites clear rules regarding acquisition, expenditure and monitoring, as well as all contracts awarded, including the value thereof.

Amendment    266

Proposal for a regulation

Article 183 – paragraph 3 – introductory part

Text proposed by the Commission

Amendment

3.  Following the publication referred to in paragraphs 1 and 2, when requested by the European Parliament and the Council, the Commission shall forward a report to them on:

3.  Following the publication referred to in paragraphs 1 and 2, the Commission shall make public and forward a report to the European Parliament and the Council on:

Amendment    267

Proposal for a regulation

Article 183 – paragraph 3 – point c

Text proposed by the Commission

Amendment

(c)  the average duration of the procedure from date of closure of the call for proposals to the award of a grant;

(c)  the average duration of the procedure from date of closure of the call for proposals to the award of a grant, as well as the duration of the slowest and the fastest procedure, respectively;

Amendment    268

Proposal for a regulation

Article 183 – paragraph 3 – point d a (new)

Text proposed by the Commission

Amendment

 

(d a)  any grant awarded to the EIB or the European Investment Fund in accordance with point (g) of Article 188;

Amendment    269

Proposal for a regulation

Article 183 – paragraph 3 – point d b (new)

Text proposed by the Commission

Amendment

 

(d b)  any blending operation in accordance with Article 153 that involves a grant.

Amendment     270

Proposal for a regulation

Article 184 – paragraph 3

Text proposed by the Commission

Amendment

3.  As an exception to paragraph 1 an external action may be financed in full by the grant where this is essential for it to be carried out. In such a case grounds shall be provided in the award decision.

3.  As an exception to paragraph 1 an external action undertaken by a partner of the Union that demonstrates its compliance with the EC rules and requirements (through the ex-ante assessment) may be financed in full by the grant where this is essential for the action to be carried out. In such a case grounds shall be provided in the award decision.

Amendment    271

Proposal for a regulation

Article 185 – title

Text proposed by the Commission

Amendment

Principle of non-cumulative award and no double funding

Principle of non-cumulative award and prohibition of double funding

Justification

Linguistic AM.

Amendment    272

Proposal for a regulation

Article 185 – paragraph 1 – subparagraph 3 a (new)

Text proposed by the Commission

Amendment

 

An action to which a grant may be allocated from the budget must be clearly defined. An action may not be split into different actions for the purpose of evading the financing rules laid down in this Regulation.

Justification

Reinserted RAP Art. 176.

Amendment    273

Proposal for a regulation

Article 185 – paragraph 4 – introductory part

Text proposed by the Commission

Amendment

4.  Paragraphs 1, 2 and 3 shall not apply to:

4.  Paragraphs 1 and 2 shall not apply to:

Justification

There should be no exceptions to the prohibition of double funding.

Amendment    274

Proposal for a regulation

Article 186 – paragraph 2 – subparagraph 2 – point b – introductory part

Text proposed by the Commission

Amendment

(b)  in the event of extreme urgency for measures referred to in points (a) or (b) of Article 188 whereby an early engagement by the Union would be of major importance. In these cases the costs incurred by a beneficiary before the date of submission of the application shall be eligible for Union financing under the following conditions:

(b)  in the event of extreme urgency for measures referred to in point (a) of Article 188 whereby an early engagement by the Union would be of major importance. In these cases the costs incurred by a beneficiary before the date of submission of the application shall be eligible for Union financing under the following conditions:

Justification

The derogation from the principle of non-retroactivity should be strictly limited to humanitarian aid and related cases.

Amendment    275

Proposal for a regulation

Article 186 – paragraph 2 – subparagraph 2 a (new)

Text proposed by the Commission

Amendment

 

The authorising officer by delegation shall report on each of those cases under the heading "Derogations from the principle of non-retroactivity pursuant to Article 186 of the Financial Regulation" in the annual activity report referred to in Article 73(9).

Amendment     276

Proposal for a regulation

Article 186 – paragraph 4

Text proposed by the Commission

Amendment

4.  In the case of operating grants, the grant agreement shall be signed within six months of the start of the beneficiary's financial year. Costs eligible for financing may neither have been incurred before the grant application was submitted nor before the start of the beneficiary's financial year.

4.  In the case of operating grants, the grant agreement shall be signed within three months of the start of the beneficiary's financial year. Costs eligible for financing may neither have been incurred before the grant application was submitted nor before the start of the beneficiary's financial year. The first instalment shall be paid to the beneficiary within two months of the signature of the grant agreement.

Justification

The period of the signature of grant agreements by the COM should be reduced from 6 to 3 months of the start of the beneficiary’s financial year. This would allow the COM to increase its efficiency in the programming cycle. It would also avoid putting in jeopardy the financial capacity of civil society organisations, esp. the smallest one. Six months for the signature of agreements plus 3 months for payment of the first instalment require most civil society organisations to rely on bank loans.

Amendment    277

Proposal for a regulation

Article 186 a (new)

Text proposed by the Commission

Amendment

 

Article 186 a

 

No-profit principle

 

1.   Grants shall not have the purpose or effect of producing a profit within the framework of the action or the work programme of the beneficiary ('no-profit principle').

 

2.   Profit shall be defined as a surplus of receipts over eligible costs incurred by the beneficiary, when a request is made for payment of the balance.

 

3.   The receipts referred to in paragraph 2 shall be limited to income generated by the action or work programme, as well as financial contributions specifically assigned by donors to the financing of the eligible costs.

 

In the case of an operating grant, amounts dedicated to the building up of reserves shall not be taken into account for verifying compliance with the no-profit principle.

 

4.   Paragraph 1 shall not apply to:

 

(a)   actions the objective of which is the reinforcement of the financial capacity of a beneficiary, or actions which generate an income to ensure their continuity after the period of Union financing provided for in the grant decision or agreement;

 

(b)   study, research or training scholarships paid to natural persons;

 

(c)   other direct support paid to natural persons most in need, such as unemployed persons and refugees;

 

(d)   grants based on flat rates and/or lump sums and/or unit costs where these comply with the conditions set out in Article 175;

 

(e)   low value grants.

 

5.   Where a profit is made, the Commission shall be entitled to recover the percentage of the profit corresponding to the Union contribution to the eligible costs actually incurred by the beneficiary in carrying out the action or work programme.

 

By way of derogation from this Article, if a European political foundation within the meaning of Regulation (EU, Euratom) No 1141/2014 realises a surplus of income over expenditure at the end of a financial year in which it received an operating grant, the part of that surplus corresponding to up to 25 % of the total income for that year may be carried over to the following year provided that it is used before the end of the first quarter of that following year.

Justification

The 'no-profit principle' for grants is a key principle in public financial management. The Commission itself considers that the default option for funding revenue-generating projects should be the use of financial instruments rather than grants, therefore the retention of this principal in relation to grants is necessary.

Amendment    278

Proposal for a regulation

Article 187 – paragraph 1 – point c

Text proposed by the Commission

Amendment

(c)  the arrangements for Union financing, in particular the forms of grant;

(c)  the arrangements for Union financing, specifying all types of Union contributions, in particular the forms of grant;

Amendment     279

Proposal for a regulation

Article 187 – paragraph 2 – subparagraph 1 – point a

Text proposed by the Commission

Amendment

(a)  for informing all applicants of the outcome of the evaluation of their application, a maximum of six months from the final date for submission of complete proposals;

(a)  for informing all applicants of the outcome of the evaluation of their application, a maximum of three months from the final date for submission of complete proposals;

Amendment     280

Proposal for a regulation

Article 187 – paragraph 2 – subparagraph 1 – point b

Text proposed by the Commission

Amendment

(b)  for signing grant agreements with applicants a maximum of three months from the date of informing applicants that they have been successful.

(b)  for signing grant agreements with applicants a maximum of one month from the date of informing applicants that they have been successful.

Amendment    281

Proposal for a regulation

Article 187 – paragraph 2 – subparagraph 3

Text proposed by the Commission

Amendment

The authorising officer by delegation shall report in his or her annual activity report on the average time taken to inform applicants and to sign grant agreements. In the event of the periods referred to in the first subparagraph being exceeded, the authorising officer by delegation shall give reasons and, where not duly justified in accordance with the second subparagraph, shall propose remedial action.

The authorising officer by delegation shall report in his or her annual activity report on the average time taken to inform applicants and to sign grant agreements, as well as the longest and the shortest period, respectively. In the event of the periods referred to in the first subparagraph being exceeded, the authorising officer by delegation shall give reasons and, where not duly justified in accordance with the second subparagraph, shall propose remedial action.

Amendment    282

Proposal for a regulation

Article 188 – paragraph 1 – point c

Text proposed by the Commission

Amendment

(c)  to bodies with a de jure or de facto monopoly or to bodies designated by the Member States, under their responsibility, where those Member States are in a de jure or de facto monopoly situation;

deleted

Justification

The Commission proposal foresees the possibility to award direct grants to entities mandated by the Member States to the cases of a de facto or de jure monopoly or where direct beneficiaries have been chosen for their technical competencies. The rapporteurs are not sufficiently convinced that the risk of extending grants without a call for proposals is justified in this case.

Amendment     283

Proposal for a regulation

Article 188 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

The exceptions referred to in point (c) and (f) of the first subparagraph shall be interpreted and applied restrictively by the Union institutions and bodies or the Member States.

Amendment     284

Proposal for a regulation

Article 188 – paragraph 2 b (new)

Text proposed by the Commission

Amendment

 

The Union institutions and bodies or the Member States shall clearly define both the time frame and the scope of application for the exceptions referred to in point (c) and (f) of the first subparagraph.

Amendment     285

Proposal for a regulation

Article 189 – paragraph 1 – point d – subparagraph 6

Text proposed by the Commission

Amendment

The first subparagraph shall not apply to public bodies and the international organisations referred to in Article 151.

The first subparagraph shall not apply to public bodies, Member State Organisations, and the international organisations referred to in Article 151.

Justification

See rapporteur's amendment to Art. 151 a new.

Amendment    286

Proposal for a regulation

Article 189 – paragraph 1 – point e – subparagraph 1 – introductory part

Text proposed by the Commission

Amendment

(e)   a description of the action or work programme and an estimated budget which, where possible:

(e)   a description of the action or work programme and an estimated budget, which:

Amendment    287

Proposal for a regulation

Article 189 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2 a.  The applicant shall indicate the sources and amounts of Union funding received or applied for the same action or part of the action or for its functioning during the same financial year as well as any other funding received or applied for the same action.

Justification

Reinserted from RAP Art. 196(4).

Amendment     288

Proposal for a regulation

Article 191 – paragraph 5 – point c a (new)

Text proposed by the Commission

Amendment

 

(ca)  Member State Organisations;

Justification

See rapporteur's amendment to Art. 151 a new.

Amendment     289

Proposal for a regulation

Article 191 – paragraph 6

Text proposed by the Commission

Amendment

6.  The authorising officer responsible may, depending on a risk assessment, waive the obligation to verify the operational capacity of public bodies or international organisations.

6.  The authorising officer responsible may, depending on a risk assessment, waive the obligation to verify the operational capacity of public bodies, Member State organisations, or international organisations.

Justification

See rapporteur's amendment to Art. 151 a new.

Amendment    290

Proposal for a regulation

Article 192 – paragraph 1 – point b a (new)

Text proposed by the Commission

Amendment

 

(b a)  to enable an evaluation thereof.

Amendment    291

Proposal for a regulation

Article 200 – paragraph 5 – subparagraph 2 – introductory part

Text proposed by the Commission

Amendment

Following the publication when requested by the European Parliament and the Council, the Commission shall forward them a report on:

Following the publication, the Commission shall forward to the European Parliament and the Council a report on:

Amendment    292

Proposal for a regulation

Article 201 – paragraph 1

Text proposed by the Commission

Amendment

1.  The Union may establish financial instruments or provide budgetary guarantees or financial assistance backed by the general budget by means of a basic act.

1.  In order to achieve its objectives, the Union may establish financial instruments or provide budgetary guarantees or financial assistance backed by the general budget by means of a basic act where these prove to be the best way to achieve the Union objectives. The financial instruments shall be complementary to the other form of budgetary intervention.

Amendment     293

Proposal for a regulation

Article 201 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a.  The Court of Auditors shall have full access to any information related to the financial instruments, budgetary guarantees and financial assistance including by on-spot checks.

 

Unless provided otherwise in the basic act, the Court of Auditors shall be considered as the external auditor responsible for the projects and programmes supported by a financial instrument, a budgetary guarantee or a financial assistance.

Amendment    294

Proposal for a regulation

Article 202 – paragraph -1 (new)

Text proposed by the Commission

Amendment

 

-1.  Financial instruments shall be used in accordance with the principles of sound financial management, transparency, proportionality, non-discrimination, equal treatment and subsidiarity, and in accordance with their objectives and, where applicable, the duration established in the basic act for those financial instruments.

Justification

Reinserted Art. 140(1) of Reg. 966/2012, which was deleted by the Commission.

Amendment     295

Proposal for a regulation

Article 202 – paragraph 1 – point d

Text proposed by the Commission

Amendment

(d)  achieve a leverage or a multiplier effect, by mobilising a global investment exceeding the size of the Union contribution or guarantee. The target range of values for the leverage and multiplier effect shall be based on an ex-ante evaluation for the corresponding financial instrument or budgetary guarantee;

(d)  achieve a leverage or a multiplier effect, by mobilising a global investment exceeding the size of the Union contribution or guarantee. The target range of values for the leverage and multiplier effect shall be based on an impact assessment for the corresponding financial instrument or budgetary guarantee;

Justification

Consistent terminology with rapporteur's amendments to Art. 32.

Amendment     296

Proposal for a regulation

Article 202 – paragraph 1 – point g

Text proposed by the Commission

Amendment

(g)  provide for any remuneration of the implementing entities or counterparts involved in the implementation to be performance based. Performance based fees shall comprise administrative fees to remunerate the entity or counterpart for the work carried out in the implementation of a financial instrument or budgetary guarantee and, where appropriate, policy related incentives to promote the achievement of the policy objectives or incentivise the financial performance of the financial instrument or budgetary guarantee. Exceptional expenses may be reimbursed;

(g)  provide for any remuneration of the implementing entities or counterparts involved in the implementation to be performance based. Performance based fees shall comprise administrative fees to remunerate the entity or counterpart for the work carried out in the implementation of a financial instrument or budgetary guarantee calculated on the basis of funds actually transferred, and, where appropriate, policy related incentives to promote the achievement of the policy objectives or incentivise the financial performance of the financial instrument or budgetary guarantee. Exceptional expenses may be reimbursed in duly justified cases;

Amendment     297

Proposal for a regulation

Article 202 – paragraph 1 – point g a (new)

Text proposed by the Commission

Amendment

 

(ga)  agreements and performance measures shall need to be well-designed and carefully implemented; the Commission shall not allow the calculation of administrative fees as a percentage of the cumulative Union contribution committed, including uncalled budgetary commitments.

Amendment     298

Proposal for a regulation

Article 202 – paragraph 1 – point h

Text proposed by the Commission

Amendment

(h)  be based on ex-ante evaluations, individually or as part of a programme, in line with Article 32. The ex-ante evaluation shall contain explanations concerning the choice of the type of financial operation taking into account the policy objectives pursued and the associated financial risks and savings for the budget of the Union.

(h)  be based on impact assessments, individually or as part of a programme, in line with Article 32. The impact assessment shall contain explanations concerning the choice of the type of financial operation taking into account the policy objectives pursued and the associated financial risks and savings for the budget of the Union. These assessments shall be reviewed and updated to take into account the effect of major socioeconomic changes on the rationale of the instrument or guarantee.

Justification

Consistent terminology with rapporteur's amendments to Art. 32.

Amendment     299

Proposal for a regulation

Article 202 – paragraph 2 – subparagraph 1 – point b

Text proposed by the Commission

Amendment

(b)  after the end of the period of implementation of a financial instrument or budgetary guarantee, any outstanding amount originating in the Union budget shall be returned to the budget;

(b)  after the end of the period of implementation of a financial instrument or budgetary guarantee and taking into account the nature of that financial instrument or budgetary guarantee, any outstanding amount originating in the Union budget shall be returned to the budget;

Justification

In portfolio risk-sharing schemes, also portfolio life-time should be considered before returning funds to the EU budget.

Amendment     300

Proposal for a regulation

Article 203 – paragraph 2

Text proposed by the Commission

Amendment

2.  Budgetary guarantees and financial assistance may generate a contingent liability for the Union exceeding the financial assets provided to cover the financial liability of the Union.

2.  Budgetary guarantees and financial assistance may generate a contingent liability for the Union which may only exceed the financial assets provided to cover the financial liability of the Union if provided for in a basic act establishing a guarantee and under the conditions set out therein.

Justification

This AM updates and replaces the original rapporteurs' AM 159.

Amendment    301

Proposal for a regulation

Article 204 – paragraph 8 – point a

Text proposed by the Commission

Amendment

(a)  as a result of calls on a budgetary guarantee, the level of provisions for that budgetary guarantee falls below 30% of the provisioning rate provided for in paragraph 1, or it may fall below that rate within a year according to a risk assessment by the Commission;

(a)  as a result of calls on a budgetary guarantee, the level of provisions for that budgetary guarantee falls below 50 % of the provisioning rate provided for in paragraph 1, and again where it falls below 30 %, or where it may fall below any of these rates within a year according to a risk assessment by the Commission;

Amendment    302

Proposal for a regulation

Article 204 – paragraph 8 – point b a (new)

Text proposed by the Commission

Amendment

 

(b a)  the amount of private capital leveraged is lower than the amount of the contributions from public sources.

Amendment     303

Proposal for a regulation

Article 205 – paragraph 1

Text proposed by the Commission

Amendment

1.  The provisions made to cover the financial liabilities arising from financial instruments, budgetary guarantees or financial assistance shall be held in a common provisioning fund directly implemented by the Commission.

1.  The provisions made to cover the financial liabilities arising from financial instruments, budgetary guarantees or financial assistance shall be held in a common provisioning fund directly implemented by the Commission. The Commission shall inform and consult the European Parliament on the operation of the common provisioning fund and the calculation of its provisioning rate.

Amendment    304

Proposal for a regulation

Article 206 – paragraph 4 – subparagraph 2

Text proposed by the Commission

Amendment

An independent evaluation of the adequacy of the guidelines shall be carried out every three years.

An independent evaluation of the adequacy of the guidelines shall be carried out every three years and transmitted to the European Parliament and the Council.

Amendment    305

Proposal for a regulation

Article 207 – paragraph 1

Text proposed by the Commission

Amendment

The Commission shall report annually on financial instruments, budgetary guarantees, financial assistance, contingent liabilities and the common provisioning fund in accordance with Article 242.

The Commission shall report annually on financial instruments, including on the financial instruments governed by Article 210, budgetary guarantees, financial assistance, contingent liabilities and the common provisioning fund in accordance with Article 242.

Justification

The reporting requirements for financial instruments under shared implementation should be the same as for those under direct and indirect implementation.

Amendment    306

Proposal for a regulation

Article 208 – paragraph 1

Text proposed by the Commission

Amendment

1.  Notwithstanding Article 201(1), financial instruments may be established, in duly justified cases, without being authorised by means of a basic act, provided that such instruments are included in the budget in accordance with point (e) of Article 50(1).

deleted

Amendment    307

Proposal for a regulation

Article 208 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

2. Where financial instruments are combined within a single agreement with complementary support from the Union budget, including grants, this Title shall apply to the whole measure. The reporting shall be carried out in accordance with Article 242.

2. Where financial instruments are combined within a single agreement with complementary support from the Union budget, including grants, the rules applicable to the funding method accounting for more than 50 % of the total funding shall apply to the whole measure. The reporting on the financial instrument part of the funding shall be carried out in accordance with Article 242.

Amendment    308

Proposal for a regulation

Article 208 – paragraph 3

Text proposed by the Commission

Amendment

3.  The Commission shall ensure a harmonised management of financial instruments in particular in the area of accounting, reporting, monitoring and financial risk management.

3.  The Commission shall ensure a harmonised and simplified management of financial instruments in particular in the area of accounting, reporting, monitoring and financial risk management.

Amendment    309

Proposal for a regulation

Article 208 – paragraph 4

Text proposed by the Commission

Amendment

4.  Where the Union participates in a financial instrument as a minority stakeholder, the Commission shall ensure compliance with this Title in accordance with the principle of proportionality, on the basis of the size and value of the participation of the Union in the instrument. Notwithstanding the foregoing, the Commission shall ensure compliance with Article 124.

deleted

Amendment     310

Proposal for a regulation

Article 208 – paragraph 7 a (new)

Text proposed by the Commission

Amendment

 

7a.  The Commission shall, on an annual basis, report to the European Parliament and the Council on the efficiency and effectiveness of the financial instruments under the management modes referred to in points (a), (b) and (c) of Article 61(1). On its annual report, the Commission shall clearly demonstrate the added-value of the financial instruments, shall be able to identify the final beneficiaries of the funds and shall be able to list the projects financed by the financial instruments.

Amendment     311

Proposal for a regulation

Article 210 – paragraph 3

Text proposed by the Commission

Amendment

3.  As regards contributions from funds under shared implementation to financial instruments established under this Section, the sector specific rules shall apply. Notwithstanding the foregoing, Managing Authorities may rely on an existing ex-ante evaluation, carried out in accordance with point (h) of Article 202(1), prior to contributing to an existing financial instrument.

3.  As regards contributions from funds under shared implementation to financial instruments established under this Section, the sector specific rules shall apply. Notwithstanding the foregoing, Managing Authorities may rely on an existing impact assessment, carried out in accordance with point (h) of Article 202(1), prior to contributing to an existing financial instrument.

Justification

Consistent terminology with rapporteur's amendments to Art. 32.

Amendment    312

Proposal for a regulation

Article 213 – paragraph 1

Text proposed by the Commission

Amendment

1.  Financial assistance by the Union to Member States or third countries shall take the form of a loan or a credit line or any other instrument deemed appropriate to ensure the effectiveness of the support. To this end, the Commission shall be empowered, in the relevant basic act, to borrow the necessary funds on behalf of the Union on the capital markets or from financial institutions.

1.  Financial assistance by the Union to Member States or third countries shall be subject to pre-defined conditions and take the form of a loan or a credit line or any other instrument deemed appropriate to ensure the effectiveness of the support. To this end, the Commission shall be empowered, in the relevant basic act, to borrow the necessary funds on behalf of the Union on the capital markets or from financial institutions.

Amendment    313

Proposal for a regulation

Article 213 – paragraph 4

Text proposed by the Commission

Amendment

4.  The financial assistance shall be directly implemented by the Commission.

4.  The financial assistance shall be directly implemented by the Commission, who shall report regularly to the European Parliament and the Council on the fulfilment of conditions and the evolution of financial assistance.

Amendment    314

Proposal for a regulation

Article 213 – paragraph 5 – point a

Text proposed by the Commission

Amendment

(a)  ensuring that the beneficiary country regularly checks that the financing provided has been properly used, takes appropriate measures to prevent irregularities and fraud, and, if necessary, takes legal action to recover any funds provided under the Union financial assistance that have been misappropriated;

(a)  ensuring that the beneficiary country regularly checks that the financing provided has been properly used and that the conditions have been fulfilled, takes appropriate measures to prevent irregularities and fraud, and, if necessary, takes legal action to recover any funds provided under the Union financial assistance that have been misappropriated;

Amendment     315

Proposal for a regulation

Article 215 – paragraph 3

Text proposed by the Commission

Amendment

3.  Contributions shall not be used to directly or indirectly grant any personal advantage, in cash or in kind, to any individual member or member of staff of a European political party. Contributions shall not be used to directly or indirectly finance activities of third parties, in particular national political parties or political foundations at European or national level, whether in the form of grants, donations, loans or any other similar agreements. Contributions shall not be used for any of the purposes excluded by Article 22 of Regulation (EU, Euratom) No 1141/2014.

3.  Contributions shall not be used to directly or indirectly grant any personal advantage, in cash or in kind, to any individual member or member of staff of a European political party. Contributions shall not be used to directly or indirectly finance activities of third parties, in particular national political parties or political foundations at European or national level, whether in the form of grants, donations, loans or any other similar agreements. For the purposes of this Article, associated entities of European political parties at European level, such as youth and women organisations of these parties, shall not be regarded as third parties. Contributions shall not be used for any of the purposes excluded by Article 22 of Regulation (EU, Euratom) No 1141/2014.

Justification

The AM clarifies that European political parties under the new statute are still allowed to support their youth, women etc. organisations.

Amendment     316

Proposal for a regulation

Article 215 – paragraph 6 a (new)

Text proposed by the Commission

Amendment

 

6a.  European political parties are allowed to build up reserves with the amount of their own resources exceeding 15 % of their annual reimbursable expenditure.

Justification

The AM clarifies that European political parties under the new statute are still allowed to build up reserves from their own resources.

Amendment     317

Proposal for a regulation

Article 215 – paragraph 7

Text proposed by the Commission

Amendment

7.  If a European political foundation within the meaning of Regulation (EU, Euratom) No 1141/2014 realises a surplus of income over expenditure at the end of a financial year in which it received an operating grant, the part of that surplus corresponding to up to 25 % of the total income for that year may be carried over to the following year provided that it is used before the end of the first quarter of that following year.

deleted

Justification

An updated version of AM 170. The rapporteurs consider Article 215(7) should be moved to Article 186a (6) new.

Amendment    318

Proposal for a regulation

Article 219 – paragraph 1 – point -a (new)

Text proposed by the Commission

Amendment

 

(-a)  financing not linked to costs of the relevant operations based on either of the following:

 

i)   the fulfilment of certain conditions ex ante;

 

ii)   the achievement of results measured by reference to the previously set milestones or through performance indicators.

Justification

See justification for amendments to Art. 121.

Amendment    319

Proposal for a regulation

Article 219 – paragraph 1 – point e

Text proposed by the Commission

Amendment

(e)  financing not linked to costs of the relevant operations based on either of the following:

deleted

i)   the fulfilment of certain conditions ex ante;

 

ii)   the achievement of results measured by reference to the previously set milestones or through performance indicators.

 

Justification

See justification for amendments to Art. 121.

Amendment    320

Proposal for a regulation

Article 227 – title

Text proposed by the Commission

Amendment

Trust Funds

Union trust funds for external actions

Justification

See rapporteur's amendment to par. 1 of this article.

Amendment    321

Proposal for a regulation

Article 227 – paragraph 1

Text proposed by the Commission

Amendment

1.  For emergency, post-emergency or thematic actions, the Commission may create, after informing the European Parliament and the Council, trust funds under an agreement concluded with other donors. The constitutive act of each trust fund shall define the objectives of the trust fund. The Commission decision establishing the trust fund shall include a description of the fund's objectives, the justification for its creation in accordance with paragraph 3, an indication of its duration and the preliminary agreements with other donors.

1.  Only in duly justified cases and for emergency, post-emergency or thematic actions, the Commission may propose to the European Parliament and the Council the creation, through a basic act and according to the ordinary legislative procedure, of trust funds for external actions under an agreement concluded with other donors. The basic act establishing each trust fund shall include a description of the fund's objectives, the justification for its creation in accordance with paragraph 3, the share of funding from sources other than the Union budget, whose ratio shall remain fixed over the entire duration of the trust fund an indication of its duration and the preliminary agreements with other donors.

 

In no circumstances shall a trust fund be created within the Union.

Justification

Union trust funds in operation are marked by a lack of oversight by the EP and issues regarding commitments from the Union's budget being matched by other donors. Until these matters are resolved the rapporteurs consider it premature to extend their use to internal policies. Furthermore, project implementing organisations experience problems in trust funds with the co-financing of projects and therefore oppose their use within the Union. This AM takes into account suggestions from the Bundesarbeitsgemeinschaft der Freien Wohlfahrtspflege (German Social Welfare Organisations).

Amendment    322

Proposal for a regulation

Article 227 – paragraph 2

Text proposed by the Commission

Amendment

2.  The Commission shall submit its draft decisions concerning the establishment, the extension and the liquidation of a Union trust fund to the competent committee where provided for in the basic act under which the Union contribution to the Union trust fund is provided.

2.  The Commission shall submit its draft proposals concerning the establishment, the extension and the liquidation of a Union trust fund to the European Parliament and the Council.

Justification

See justification of rapporteurs' AM to par. 1.

Amendment     323

Proposal for a regulation

Article 227 – paragraph 3 – point a

Text proposed by the Commission

Amendment

(a)  there is added value to the Union intervention: trust funds shall only be created and implemented at Union level where their objectives, in particular by reason of their scale or potential effects, may be better achieved at Union level than at national level;

(a)  it has been established by an impact assessment that there is added value to the Union intervention: trust funds shall only be created and implemented at Union level where their objectives, in particular by reason of their scale or potential effects, may be better achieved at Union level than at national level and cannot be achieved to the same extent through any other existing financial instrument;

Justification

The AM is based on a suggestion by Civil Society Europe.

Amendment     324

Proposal for a regulation

Article 227 – paragraph 3 – point b a (new)

Text proposed by the Commission

Amendment

 

(ba)  the objectives of Union trust funds for external action shall be aligned with the objectives of the Union instrument or budgetary item from which they are funded.

Justification

The AM is based on a suggestion by Civil Society Europe.

Amendment     325

Proposal for a regulation

Article 227 – paragraph 4

Text proposed by the Commission

Amendment

4.  A board chaired by the Commission shall be established for each Union trust fund to ensure the fair representation of the donors, and of the non-contributing Member States as observers, and to decide upon the use of the funds. The rules for composition of the board and its internal rules shall be laid down in the constitutive act of the trust fund adopted by the Commission and adhered to by the donors. Those rules shall include the requirement to have the positive vote of the Commission for the final decision on the use of the funds.

4.  A board chaired by the Commission shall be established for each Union trust fund to ensure the fair representation as observers of the donors, and of the non-contributing Member States, and where appropriate, of the European Parliament, and to decide upon the use of the funds. The rules for composition of the board and its internal rules shall be laid down in the constitutive act of the trust fund adopted by the Commission and adhered to by the donors. Those rules shall include the requirement to have the positive vote of the Commission for the final decision on the use of the funds.

Amendment     326

Proposal for a regulation

Article 227 – paragraph 5 – subparagraph 1

Text proposed by the Commission

Amendment

Union trust funds shall be created for a limited duration determined in their constitutive act. This duration may be extended by a decision of the Commission upon request of the board of the trust fund concerned.

Union trust funds shall be created for a limited duration determined in their constitutive act. This duration may be extended by the European Parliament and the Council acting according to the ordinary legislative procedure following a proposal by the Commission upon request of the board of the trust fund concerned.

Amendment    327

Proposal for a regulation

Article 228 – title

Text proposed by the Commission

Amendment

Implementation of trust funds

Implementation of Union trust funds for external actions

Amendment     328

Proposal for a regulation

Article 228 – paragraph 1

Text proposed by the Commission

Amendment

1.  Union trust funds shall be implemented in accordance with the principles of sound financial management, transparency, proportionality, non-discrimination and equal treatment, and in accordance with the specific objectives defined in each constitutive act.

1.  Union trust funds shall be implemented in accordance with the principles of sound financial management, transparency, proportionality, non-discrimination and equal treatment, ensuring full respect of the budgetary scrutiny and control mechanism of the European Parliament and the Council, and in accordance with the specific objectives defined in each constitutive act.

Amendment    329

Proposal for a regulation

Article 228 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1 a.  Any Union contribution shall be used in accordance with the objectives set out in the basic act under which the Union contribution to the Union trust fund is provided.

Amendment     330

Proposal for a regulation

Article 228 – paragraph 2

Text proposed by the Commission

Amendment

2.  Actions financed under Union trust funds may be implemented directly by the Commission pursuant to point (a) of Article 61(1) and in indirect implementation with the entities pursuant to points (i), (ii), (iii), (v), and (vi) of Article 61(1)(c).

2.  Actions financed under Union trust funds may be implemented directly by the Commission pursuant to point (a) of Article 61(1) and in indirect implementation with the entities pursuant to points (i), (ii), (iii), (v), and (vi) of Article 61(1)(c) and shall comply with the financial rules.

Amendment     331

Proposal for a regulation

Article 228 – paragraph 5 – subparagraph 2

Text proposed by the Commission

Amendment

Financial reporting on the operations carried out by each trust fund shall be established twice every year by the authorising officer.

Financial reporting on the operations carried out by each trust fund shall be established twice every year by the authorising officer. In addition, the Commission shall report at least every six months on the implementation of each trust fund according to qualitative criteria, such as the nature of projects and programmes supported, the selection procedures, geographical and thematic priorities, the supervision of intermediaries and how the trust fund contributes to the fulfillment of the objectives foreseen in the basic act of the Union instruments contributing to its financing.

Amendment     332

Proposal for a regulation

Article 228 – paragraph 5 – subparagraph 3

Text proposed by the Commission

Amendment

The trust funds shall be subject to an independent external audit every year.

The trust funds shall be subject to an independent external audit every year. The ECA shall have a right of scrutiny.

Amendment     333

Proposal for a regulation

Article 228 – paragraph 5 – subparagraph 3 a (new)

Text proposed by the Commission

Amendment

 

The trust funds shall be part of the discharge procedure in accordance with Article 319 TFEU.

Amendment    334

Proposal for a regulation

Article 228 – paragraph 5 a (new)

Text proposed by the Commission

Amendment

 

5 a.  The Commission shall publish a detailed report on the activities supported by Union trust funds, as well as on their implementation and performance, by means of a working document attached to the draft budget every year in accordance with Article 39(6).

Amendment     335

Proposal for a regulation

Article 229 – paragraph 1 – point b a (new)

Text proposed by the Commission

Amendment

 

(ba)  the third country complies with the fundamental principles of the Universal Declaration of Human Rights;

Amendment     336

Proposal for a regulation

Article 229 – paragraph 1 – point d a (new)

Text proposed by the Commission

Amendment

 

(da)  the third country has provided for anti-corruption laws.

Amendment    337

Proposal for a regulation

Article 230 – paragraph 1

Text proposed by the Commission

Amendment

1.  For values below the thresholds laid down in Article 169(1) remunerated external experts, for assisting the institutions in the evaluation of grant applications, projects and tenders, and for providing opinions and advice in specific cases, may be selected on the basis of the procedure laid down in paragraph 3.

1.  For values below the thresholds laid down in Article 169(1) remunerated external experts, for assisting the institutions in the evaluation of grant applications, projects and tenders, and for providing opinions and advice in specific cases, may be selected on the basis of the procedure laid down in paragraph 3. They shall be subject to a Union tax.

Amendment    338

Proposal for a regulation

Article 234 – paragraph 1 – introductory part

Text proposed by the Commission

Amendment

The annual accounts shall be prepared for each financial year which shall run from 1 January to 31 December. These accounts shall be comprised of:

The annual accounts shall be prepared for each financial year which shall run from 1 January to 31 December. These accounts shall comprise:

Justification

See rapporteur's amendment on Art. 234 par. 1 a (new).

Amendment    339

Proposal for a regulation

Article 234 – paragraph 1 – point a

Text proposed by the Commission

Amendment

(a)  the financial statements, which present financial information in accordance with the accounting rules referred to in Article 79;

(a)  the consolidated financial statements, which present the consolidation of the financial information contained in the financial statements of the institutions financed by the budget, those of the bodies referred to in Article 69 and of other bodies whose accounts are required to be consolidated in accordance with the accounting rules referred to in Article 79;

Justification

See rapporteur's amendment on Art. 234 par. 1 a (new).

Amendment    340

Proposal for a regulation

Article 234 – paragraph 1 – point b

Text proposed by the Commission

Amendment

(b)  the budget accounts which present the information contained in the budget accounts of the institutions;

(b)  the aggregated budgetary accounts which present the information contained in the budgetary accounts of the institutions;

Justification

See rapporteur's amendment on Art. 234 par. 1 a (new).

Amendment    341

Proposal for a regulation

Article 234 – paragraph 1 – point c

Text proposed by the Commission

Amendment

(c)  the consolidated annual accounts which present, in accordance with the accounting rules referred to in Article 79 and in particular with the materiality principle, the consolidation of the financial information contained in the financial statements and the budget accounts of the bodies referred to in Article 69 and of other bodies meeting the accounting consolidation criteria.

deleted

Justification

See rapporteur's amendment on Art. 234 par. 1 a (new).

Amendment    342

Proposal for a regulation

Article 234 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1 a.   The Commission shall publish annually a long-term cash flow forecast spanning a seven- to ten-year time horizon, including information on budgetary ceilings, payment needs, capacity constraints and, where applicable, potential decommitments.

Justification

In line with the suggestions of the ECA (see Opinion No 1/2017), the rapporteurs suggest to 'restructure' the accounts, with the inclusion of a long-term cash flow forecast to assist stakeholders in assessing future payment requirements and budgetary priorities. The existing definition of the annual accounts is also retained.

Amendment    343

Proposal for a regulation

Article 235 – paragraph 3

Text proposed by the Commission

Amendment

3.  The accounting officer shall, after the close of the financial year and up to the date of transmission of the general accounts, make any adjustments which, without involving disbursement or collection in respect of that year, are necessary for a fair presentation of those accounts. Such adjustments shall comply with the accounting rules referred to in Article 79.

3.  The accounting officer shall, after the close of the financial year and up to the date of transmission of the general accounts, make any adjustments which, without involving disbursement or collection in respect of that year, are necessary for a true and fair view of those accounts. Such adjustments shall comply with the accounting rules referred to in Article 79.

Justification

"True and fair view" is the commonly accepted terminology.

Amendment    344

Proposal for a regulation

Article 237 – paragraph 1

Text proposed by the Commission

Amendment

1.  The accounting officers of the other institutions and bodies referred to in Article 234 shall send their provisional accounts to the accounting officer of the Commission and to the Court of Auditors by 1 March of the following year.

1.  The accounting officers of all Union institutions and bodies shall send their provisional accounts to the Court of Auditors by 1 March of the following year.

Justification

See rapporteur's amendments to Art. 237 par. 3 a (new).

Amendment    345

Proposal for a regulation

Article 237 – paragraph 3

Text proposed by the Commission

Amendment

3.  The accounting officer of the Commission shall consolidate those provisional accounts with the Commission’s provisional accounts and shall send, via electronic means, to the Court of Auditors, by 31 March of the following year, the provisional accounts of the Commission and the consolidated provisional accounts of the Union.

3.  The accounting officer of the Commission shall consolidate those provisional accounts with the Commission’s provisional accounts and shall send, via electronic means, to the Court of Auditors, by 31 March of the following year, the consolidated provisional accounts of the Union.

Justification

See rapporteur's amendments to Art. 237 par. 3 a (new).

Amendment    346

Proposal for a regulation

Article 237 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3 a.  The consolidated provisional accounts of the Union shall also include an estimation of the level of error in Union expenditure based on a consistent methodology.

Justification

In accordance with suggestions made by the ECA (see par. 13 and 108 of Opinion No 1/2017), the rapporteurs consider that the ECA should also cover the provisional accounts of the Union.

Amendment    347

Proposal for a regulation

Article 238 – paragraph 1

Text proposed by the Commission

Amendment

1.  The Court of Auditors shall, by 1 June, make its observations on the provisional accounts of the institutions other than the Commission and each body referred to in Article 234, and, by 15 June, make its observations on the provisional accounts of the Commission and the consolidated provisional accounts of the Union.

1.  The Court of Auditors shall, by 15 May of year n+1, make its observations on the provisional accounts of the institutions and each body referred to in Article 234, and, by 1 June of year n+1, make its observations on the consolidated provisional accounts of the Union.

Justification

See rapporteur's amendment to Art. 238 par. 2 - subpar. 2.

Amendment    348

Proposal for a regulation

Article 238 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

The accounting officers of the other institutions and bodies referred to in Article 234 shall send, by 15 June, the required accounting information for consolidation purposes to the accounting officer of the Commission, in the manner and format laid down by the latter.

The accounting officers of the other institutions and bodies referred to in Article 234 shall send, by 1 June, the required accounting information for consolidation purposes to the accounting officer of the Commission, in the manner and format laid down by the latter.

Justification

See rapporteur's amendment to Art. 238 par. 2 - subpar. 2.

Amendment    349

Proposal for a regulation

Article 238 – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

The institutions other than the Commission, and each of the bodies referred to in Article 234, shall send their final accounts to the accounting officer of the Commission, the Court of Auditors, the European Parliament and the Council by 1 July.

The institutions other than the Commission, and each of the bodies referred to in Article 234, shall send their final accounts to the accounting officer of the Commission, the Court of Auditors, the European Parliament and the Council by 15 June. By the same date, after approving its own final accounts, the Commission shall transmit them electronically to the European Parliament, the Council and the ECA.

Justification

The rapporteurs consider that there is scope to shorten the proposed timescale with regard to the approval and transmission of the final accounts.

Amendment    350

Proposal for a regulation

Article 239 – paragraph 1 – introductory part

Text proposed by the Commission

Amendment

1.  By 31 July of the following year the Commission shall communicate to the European Parliament and the Council an integrated set of financial and accountability reports which includes:

1.  By 31 March of the following year the Commission shall communicate to the European Parliament and the Council an integrated set of financial and accountability reports which includes:

Justification

Moving the date for the transmission of these reports from 30 June to 31 July, thus after the start of the summer recess, is irreconcilable with the EP's and the CONT Committee's internal procedures. On the contrary, the rapporteurs suggest advancing the deadline to 31 March.

Amendment    351

Proposal for a regulation

Article 239 – paragraph 1 – point a

Text proposed by the Commission

Amendment

a)  the consolidated annual accounts as referred to in Article 238;

a)  the consolidated annual accounts as referred to in Article 238 with a long-term cash flow forecast;

Justification

See rapporteur's amendment to Art. 239 par. 1 - point c.

Amendment    352

Proposal for a regulation

Article 239 – paragraph 1 – point b – introductory part

Text proposed by the Commission

Amendment

b)  the annual management and performance report providing for:

b)  a single accountability report providing for:

Justification

See rapporteur's amendment to Art. 239 par. 1 - point c.

Amendment    353

Proposal for a regulation

Article 239 – paragraph 1 – point b – point i a (new)

Text proposed by the Commission

Amendment

 

(i a)  a governance statement, providing information on the key governance systems of the Union;

Justification

See rapporteur's amendment to Art. 239 par. 1 - point c.

Amendment    354

Proposal for a regulation

Article 239 – paragraph 1 – point b – point i b (new)

Text proposed by the Commission

Amendment

 

(i b)  an evaluation of the progress towards the achievement of policy objectives which have been monitored with performance indicators referred to in Article 31;

Justification

See rapporteur's amendment to Art. 239 par. 1 - point c.

Amendment    355

Proposal for a regulation

Article 239 – paragraph 1 – point b – point i c (new)

Text proposed by the Commission

Amendment

 

(i c)  an assessment of the extent to which spending is affected by irregularities with its own estimate of the level of error and, separately, the amount of Union expenditure it envisages to recuperate as recoveries or financial corrections linked to the financial year concerned;

Justification

See rapporteur's amendment to Art. 239 par. 1 - point c.

Amendment    356

Proposal for a regulation

Article 239 – paragraph 1 – point b – point ii a (new)

Text proposed by the Commission

Amendment

 

(ii a)  a report on the role and conclusions of the internal audit committee as referred to in Article 120 a.

Justification

See rapporteur's amendment to Art. 239 par. 1 - point c.

Amendment    357

Proposal for a regulation

Article 239 – paragraph 1 – point c

Text proposed by the Commission

Amendment

c)  the report on the preventive and corrective actions covering the EU budget, which shall present the financial impact of the actions taken to protect the EU budget from expenditure in breach of law;

c)  the report on the preventive and corrective actions covering the EU budget, which shall provide for an estimate of the level of irregularity present in the initial or approved claims for reimbursement and present the financial impact of the actions taken to protect the EU budget from expenditure in breach of law;

Justification

The rapporteurs believe that the consolidated accounts should be accompanied by a single accountability report providing accounting information, a governance statement, a broad overview of spending and activities of the Union, an evaluation of the progress towards achieving objectives set, an assessment to the extent in which spending is affected by irregularities, as well as a report on the role and conclusions of the internal audit committee.

Amendment    358

Proposal for a regulation

Article 239 – paragraph 1 – point e

Text proposed by the Commission

Amendment

e)  the report on the internal audits as referred to in Article 116(7);

e)  the report on the internal audits as referred to in Article 116(4);

Justification

Correction.

Amendment    359

Proposal for a regulation

Article 241 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

They shall make the report available to the European Parliament, the Council and the Court of Auditors, by 31 March of the following financial year.

They shall make the report available to the European Parliament, the Council and the Court of Auditors, by 1 March of the following financial year.

Justification

Consistent alignment of reporting duties.

Amendment     360

Proposal for a regulation

Article 242 – paragraph 1

Text proposed by the Commission

Amendment

The Commission shall report annually to the European Parliament and to the Council on financial instruments, budgetary guarantees, financial assistance, contingent liabilities and the common provisioning fund in accordance with paragraphs 4 and 5 of Article 39 and with point (d) of Article 50(1). That information shall be made available to the Court of Auditors at the same time.

The Commission shall report annually to the European Parliament and to the Council on financial instruments, budgetary guarantees, financial assistance, contingent liabilities and the common provisioning fund as of 30 June of the year of publication in accordance with paragraphs 4 and 5 of Article 39 and with point (d) of Article 50(1). That information shall be made available to the Court of Auditors at the same time.

Justification

The rapporteur's welcome the proposal from the Commission to merge all reporting requirements into a single document attached to the draft budget. The document should provide the same level of information as the current reports, and provide a clear depiction of the situation as of 30 June of the year of publication.

Amendment    361

Proposal for a regulation

Article 244 – title

Text proposed by the Commission

Amendment

Reporting on Trust Funds

Reporting on Union trust funds for external actions

Justification

See rapporteur's amendments to Art. 227.

Amendment    362

Proposal for a regulation

Article 244 – paragraph 1

Text proposed by the Commission

Amendment

In accordance with Article 39(5), the Commission shall report annually to the European Parliament and to the Council on the activities supported by Union Trust Funds, on their implementation and performance, as well as on their accounts.

In accordance with Article 39(6), the Commission shall report annually to the European Parliament and to the Council on the activities supported by the Union trust funds for external actions, on their implementation and performance, as well as on their accounts.

Justification

See rapporteur's amendments to Art. 227.

Amendment    363

Proposal for a regulation

Article 247 – paragraph 1

Text proposed by the Commission

Amendment

1.  The examination by the Court of Auditors of whether all revenue has been received and all expenditure incurred in a lawful and proper manner shall have regard to the Treaties, the budget, this Regulation, the delegated acts adopted pursuant to this Regulation and all other acts adopted pursuant to the Treaties. This examination shall take account of the multiannual character of programmes and related supervisory and control systems.

1.  The examination by the Court of Auditors of whether all revenue has been received and all expenditure incurred in a lawful and proper manner shall have regard to the Treaties, the budget, this Regulation, the delegated acts adopted pursuant to this Regulation and all other acts adopted pursuant to the Treaties. This examination may take account of the multiannual character of programmes and related supervisory and control systems.

Justification

As pointed out by the ECA (see par. 106-108 of Opinion No 1/2017), the newly introduced wording from the Commission impinges on the Court's audit methodology, which is a matter for the Court to decide.

Amendment    364

Proposal for a regulation

Article 249 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

The Commission, the other institutions, the bodies administering revenue or expenditure on the Union’s behalf and recipients shall afford the Court of Auditors all the facilities and give it all the information which the Court of Auditors considers necessary for the performance of its task. They shall place at the disposal of the Court of Auditors all documents concerning the award and performance of contracts financed by the budget and all accounts of cash or materials, all accounting records or supporting documents, and also administrative documents relating thereto, all documents relating to revenue and expenditure, all inventories, all organisation charts of departments, which the Court of Auditors considers necessary for auditing the budgetary and financial outturn report on the basis of records or on-the-spot auditing and, for the same purposes, all documents and data created or stored electronically.

The Commission, the other institutions, the bodies administering revenue or expenditure on the Union’s behalf and recipients shall afford the Court of Auditors all the facilities and give it all the information which the Court of Auditors considers necessary for the performance of its task. They shall place at the disposal of the Court of Auditors, at its request, all documents concerning the award and performance of contracts financed by the budget and all accounts of cash or materials, all accounting records or supporting documents, and also administrative documents relating thereto, all documents relating to revenue and expenditure, all inventories, all organisation charts of departments, which the Court of Auditors considers necessary for auditing the budgetary and financial outturn report on the basis of records or on-the-spot auditing and, for the same purposes, all documents and data created or stored electronically. The right of access of the ECA shall include access to the IT system used for the management of revenue and expenditure subject to its audit.

Justification

See rapporteur's amendment to Art. 249 par. 7.

Amendment    365

Proposal for a regulation

Article 249 – paragraph 7

Text proposed by the Commission

Amendment

7.  Use of integrated computer systems shall not have the effect of reducing access by the Court of Auditors to the supporting documents.

7.  Use of integrated computer systems shall not have the effect of reducing access by the Court of Auditors to the supporting documents. Whenever technically possible, electronic access to data and documents necessary for the audit shall be given to the ECA for use on its own premises.

Justification

The rapporteurs propose amendments to Art. 249 in order to ensure the ECA has a clear right of access to IT system necessary to perform its audit.

Amendment     366

Proposal for a regulation

Article 250 – paragraph 1

Text proposed by the Commission

Amendment

1.  The Court of Auditors shall transmit to the Commission and the institutions concerned, by 15 June, any observations which are, in its opinion, such that they should appear in the annual report. Those observations shall remain confidential and shall be subject to an adversarial procedure. Each institution shall address its reply to the Court of Auditors by 15 October. The replies of institutions other than the Commission shall be sent to the Commission at the same time.

1.  The Court of Auditors shall transmit to the Commission and the institutions concerned, by 30 June, any observations which are, in its opinion, such that they should appear in the annual report to enable the institutions concerned to comment upon them. Those observations shall remain confidential. Each institution shall address its reply to the Court of Auditors by 15 July. The replies of institutions other than the Commission shall be sent to the Commission at the same time.

Justification

Correction to Amendment 205. In light of the experience of 2016, a more efficient and timely production of the ECA's annual report could be achieved on a regular basis, if the deadline for the Commission and other institutions to provide their annual accounts and related information was adjusted accordingly.

Amendment    367

Proposal for a regulation

Article 250 – paragraph 3 – subparagraph 2

Text proposed by the Commission

Amendment

The Court of Auditors shall take all necessary steps to ensure that the replies of each institution to its observations are published next to or after each observation to which they relate.

deleted

Justification

The prerogatives of the ECA in how they draft and present their special reports should be maintained rather than predetermined by this proposal.

Amendment    368

Proposal for a regulation

Article 251 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

The Court of Auditors shall transmit to the institution or the body concerned any observations which are, in its opinion, such that they should appear in a special report. Those observations shall remain confidential and shall be subject to an adversarial procedure.

The Court of Auditors shall transmit to the institution or the body concerned any observations which are, in its opinion, such that they should appear in a special report to enable the institution or the body concerned to comment upon them. Those observations shall remain confidential.

Amendment    369

Proposal for a regulation

Article 251 – paragraph 1 – subparagraph 3 a (new)

Text proposed by the Commission

Amendment

 

Upon request of the ECA or the institution or the body concerned, the replies may be examined by the European Parliament.

Justification

In order to increase the transparency of the procedure, particularly in cases of delay, the replies of the institution or the body concerned may be subject to consideration by the European Parliament.

Amendment    370

Proposal for a regulation

Article 251 – paragraph 1 – subparagraph 6

Text proposed by the Commission

Amendment

The Court of Auditors shall take all necessary steps to ensure that the replies to its observations from each institution or body concerned are published next to or after each observation to which they relate, and publish the timeline for the drawing up of the special report.

The Court of Auditors shall take all necessary steps to ensure that the replies to its observations from each institution or body concerned are published together with the special report.

Justification

The prerogatives of the ECA in how they draft and present their special reports should be maintained rather than predetermined in this proposal.

Amendment     371

Proposal for a regulation

Article 256 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

The administrative appropriations covered by this Title shall be those set out in Article 45(3).

The administrative appropriations covered by this Title shall be those set out in Article 45(3) and those of the other institutions.

Justification

The definition of administrative appropriations should not only refer to the Commission's administrative expenditure (Art. 45(3)), but include that of the other institutions as well.

Amendment     372

Proposal for a regulation

Article 258 – paragraph 3 – subparagraph 4

Text proposed by the Commission

Amendment

If the European Parliament and/or the Council raise duly justified concerns within that four-week period, that period shall be extended once by two weeks.

If the European Parliament and/or the Council raise concerns within that four-week period, that period shall be extended once by two weeks.

Amendment     373

Proposal for a regulation

Article 258 – paragraph 5 – subparagraph 1 – point a a (new)

Text proposed by the Commission

Amendment

 

(aa)  any exchange of land or buildings;

Amendment     374

Proposal for a regulation

Article 258 – paragraph 5 – subparagraph 1 – point b a (new)

Text proposed by the Commission

Amendment

 

(ba)  the acquisition, structural renovation, construction of buildings or any project combining these elements to be implemented in the same timeframe, exceeding EUR 1 000 000 in the case that the price represents more than 110 % of the local price or rent index of comparable properties;

Amendment     375

Proposal for a regulation

Article 258 – paragraph 5 – subparagraph 1 – point b b (new)

Text proposed by the Commission

Amendment

 

(bb)  the sale of land or buildings in the case that the price represents less than 90 % of the local price index of comparable properties;

Amendment     376

Proposal for a regulation

Article 259 – paragraph 2

Text proposed by the Commission

Amendment

2.  The early information and prior approval procedure set out in paragraphs 1 to 5 of Article 258 shall not apply to residential buildings. The European Parliament and the Council may request from the institution in charge any information related to residential buildings.

2.  The early information and prior approval procedure set out in paragraphs 1 to 5 of Article 258 shall also apply to residential buildings if the acquisition, structural renovation, construction of buildings or any project combining these elements is exceeding EUR 1 000 000 and the price is above of 110% of the local price or rent index of comparable properties. The European Parliament and the Council may request from the institution in charge any information related to residential buildings.

Amendment     377

Proposal for a regulation

Article 261 – paragraph 6

Text proposed by the Commission

Amendment

6.  A delegated act shall enter into force only if no objection has been expressed either by the European Parliament or by the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or the Council.

6.  A delegated act shall enter into force only if no objection has been expressed either by the European Parliament or by the Council within a period of three months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or the Council.

Amendment    378

Proposal for a regulation

Article 262 – paragraph 1 – point 2

Regulation (EC) No 2012/2002

Article 4 – paragraph 4

 

Text proposed by the Commission

Amendment

4.  Upon the adoption by the European Parliament and the Council of the decision to mobilise the Fund, the Commission shall adopt a decision, by means of an implementing act, awarding the financial contribution from the Fund and shall pay that financial contribution immediately and in a single instalment to the beneficiary State. If an advance has been paid pursuant to Article 4a only the balance shall be paid.

4.  At the same time as the European Parliament and the Council adopt a proposal for a decision to mobilise the Fund, the Commission shall adopt a decision on a financial contribution, by means of an implementing act, which shall enter into force on the date at which the European Parliament and the Council adopt the decision to mobilise the Fund and shall pay that financial contribution immediately and in a single instalment to the beneficiary State. If an advance has been paid pursuant to Article 4a only the balance shall be paid.

Amendment    379

Proposal for a regulation

Article 263 – paragraph 1 – point 1

Regulation (EU) No 1296/2013

Article 5 – paragraph 2

 

Text proposed by the Commission

Amendment

1.  in Article 5, paragraph 2 is replaced by the following:

deleted

‘2. The following indicative percentages shall apply on average over the whole period of the Programme to the axes set out in Article 3(1):

 

(a) at least 18% to the Progress axis;

 

(b) at least 18% to the EURES axis;

 

(c) at least 18% to the Microfinance and Social Entrepreneurship axis.’

 

Amendment    380

Proposal for a regulation

Article 263 – paragraph 1 – point 1 a (new)

Regulation (EU) No 1296/2013

Article 5 – paragraph 2 a (new)

 

Text proposed by the Commission

Amendment

 

1a.  in Article 5, the following paragraph is inserted:

 

‘2a.  Appropriations for any of the three axes – Progress, EURES or Microfinance, and Social Entrepreneurship – or for their thematic priorities, which are unused at the end of a financial year, shall be carried forward to the following financial year. The indicative minima set out in points (a), (b) and (c) of paragraph 2 shall not apply to those appropriations.’

Amendment    381

Proposal for a regulation

Article 263 – paragraph 1 – point 2

Regulation (EU) No 1296/2013

Article 14 – paragraph 1

 

Text proposed by the Commission

Amendment

1.  The Progress axis shall support actions in one or more of the thematic sections listed in points (a), (b) and (c).

“1.  The Progress axis shall support actions in one or more of the thematic sections listed in points (a), (b) and (c). Over the entire period of the Programme, the indicative breakdown of the allocation set out in point (a) of Article 5(2) between the different sections shall respect the following minimum percentages:

(a)  employment, in particular to fight youth unemployment;

(a)  employment, in particular to fight youth unemployment: 20 %;

(b)  social protection, social inclusion and the reduction and prevention of poverty;

(b)  social protection, social inclusion and the reduction and prevention of poverty: 45 %;

(c)  working conditions.”

(c)  working conditions: 7 %.

 

Any remainder shall be allocated to one or more of the thematic sections referred to in points (a), (b), or (c), or to a combination of them.

Amendment    382

Proposal for a regulation

Article 263 – paragraph 1 – point 3

Regulation (EU) No 1296/2013

Article 19

 

Text proposed by the Commission

Amendment

"Article 19

"Article 19

Thematic sections and financing

Thematic sections and financing

The EURES axis shall support actions in one or more of the thematic sections listed in points (a), (b) and (c):

The EURES axis shall support actions in one or more of the thematic sections listed in points (a), (b) and (c). Over the entire period of the Programme, the indicative breakdown of the allocation set out in point (b) of Article 5(2) between the different sections shall respect the following minimum percentages:

(a)  transparency of job vacancies, applications and any related information for applicants and employers;

(a)  transparency of job vacancies, applications and any related information for applicants and employers: 15 %;

(b)  development of services for the recruitment and placing of workers in employment through the clearance of job vacancies and applications at Union level, in particular targeted mobility schemes;

(b)  development of services for the recruitment and placing of workers in employment through the clearance of job vacancies and applications at Union level, in particular targeted mobility schemes: 15 %;

(c)  cross-border partnerships

(c)  cross-border partnerships: 18 %.

 

Any remainder shall be allocated to one or more of the thematic sections referred to in points (a), (b), or (c), or to a combination of them.”

Amendment    383

Proposal for a regulation

Article 263 – paragraph 1 – point 4

Regulation (EU) No 1296/2013

Article 25

 

Text proposed by the Commission

Amendment

"Article 25

"Article 25

Thematic sections and financing

Thematic sections and financing

The Microfinance and Social Entrepreneurship axis shall support actions in one or more of the thematic sections listed in points (a) and (b):

The Microfinance and Social Entrepreneurship axis shall support actions in one or more of the thematic sections listed in points (a) and (b). Over the entire period of the Programme, the indicative breakdown of the allocation set out in point (c) of Article 5(2) between the different sections shall respect the following minimum percentages:

(a)  microfinance for vulnerable groups and micro-enterprises;

(a)  microfinance for vulnerable groups and micro-enterprises: 35 %;

(b)  social entrepreneurship."

(b)  social entrepreneurship: 35 %.

 

Any remainder shall be allocated to the thematic sections referred to in points (a) or (b) or to a combination of them.”

Amendment    384

Proposal for a regulation

Article 263 – paragraph 1 – point 4 a (new)

Regulation (EU) No 1296/2013

Article 32

 

Present text

Amendment

 

4a.  Article 32 is replaced by the following:

"Article 32

"Article 32

Work Programmes

Work Programmes

The Commission shall adopt implementing acts laying down work programmes covering the three axes. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 36(3).

1.  The Commission shall adopt delegated acts in accordance with Article 34, laying down work programmes covering the three axes.

The work programmes shall, where relevant, be for a three-year rolling period and shall contain a description of the actions to be financed, the procedures for selecting actions to be supported by the Union, the geographic coverage, the target audience and an indicative implementation time frame. The work programmes shall also include an indication of the amount allocated to each specific objective and shall reflect the re-allocation of funds in accordance with Article 33. The work programmes shall reinforce the coherence of the Programme by indicating the links between the three axes."

The work programmes shall, where relevant, be for a three-year rolling period and shall contain a description of the actions to be financed, the procedures for selecting actions to be supported by the Union, the geographic coverage, the target audience and an indicative implementation time frame. The work programmes shall also include an indication of the amount allocated to each specific objective, as well as annual allocations to the three axes of the Programme and to the sections thereof, and shall reflect the re-allocation of funds in accordance with Article 33. The work programmes shall reinforce the coherence of the Programme by indicating the links between the three axes.

 

2.  In order to ensure greater transparency and accountability, the competent committee of the European Parliament may invite the Commission to appear before the committee to discuss the draft work programme referred to in paragraph 1 before the Commission’s adoption of the delegated act laying down the work programme."

Amendment    385

Proposal for a regulation

Article 263 – paragraph 1 – point 5

Regulation (EU) No 1296/2013

Article 33

 

Text proposed by the Commission

Amendment

5.  Article 33 is deleted.

5.  Article 33 is replaced by the following:

 

“Article 33

 

Re-allocation of funds between the axes and to the individual thematic sections within the axes

 

The Commission shall be empowered to adopt delegated acts, in accordance with Article 34, re-allocating funds between axes and to individual thematic sections within each axis where developments in the socio-economic context so require. The re-allocation of funds to thematic sections within each axis shall be reflected in the work programmes referred to in Article 32.”

Justification

Amendment seeks to maintain the possibilities for reallocation of funds given by the existing regulation and the controls provided by the use of delegated acts. It simply deletes the percentages and the reference to the mid-term evaluation. Article 13(1) requires this evaluation to be carried out by 1 July 2017.

Amendment    386

Proposal for a regulation

Article 263 – paragraph 1 – point 5 a (new)

Regulation (EU) No 1296/2013

Article 34 – paragraph 2

 

Present text

Amendment

 

5a.  In Article 34, paragraph 2 is replaced by the following:

2.  The power to adopt delegated acts referred to in Article 33 shall be conferred on the Commission for a period of seven years from 1 January 2014.

2.  The power to adopt delegated acts referred to in Articles 32 and 33 shall be conferred on the Commission for a period of seven years from 1 January 2014.

Amendment    387

Proposal for a regulation

Article 263 – paragraph 1 – point 5 b (new)

Regulation (EU) No 1296/2013

Article 34 – paragraph 3

 

Present text

Amendment

 

5b.  In Article 34, paragraph 3 is replaced by the following:

3.  The delegation of power referred to in Article 33 may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.

3.  The delegation of power referred to in Articles 32 and 33 may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.

Amendment    388

Proposal for a regulation

Article 263 – paragraph 1 – point 5 c (new)

Regulation (EU) No 1296/2013

Article 34 – paragraph 5

 

Present text

Amendment

 

5c.  In Article 34, paragraph 5 is replaced by the following:

5.  A delegated act adopted pursuant to Article 33 shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council."

5.  A delegated act adopted pursuant to Article 32 and Article 33 shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or of the Council."

Amendment    389

Proposal for a regulation

Article 264 – paragraph 1 – point 1

Regulation (EU) No 1301/2013

Article 3 – paragraph 1 – point e

 

Text proposed by the Commission

Amendment

(e)  investment in the development of endogenous potential through fixed investment in equipment and infrastructure, including cultural and sustainable tourism infrastructure, services to enterprises, support to research and innovation bodies and investment in technology and applied research in enterprises;

(e)  investment in the development of endogenous potential through fixed investment in equipment and small-scale infrastructure, including small-scale cultural and sustainable tourism infrastructure, services to enterprises, support to research and innovation bodies and investment in technology and applied research in enterprises; in justified cases, the scope of support may be enlarged;

Amendment    390

Proposal for a regulation

Article 264 – paragraph 1 – point 1 a (new)

Regulation (EU) No 1301/2013

Article 3 – paragraph 1 – subparagraph 1 a (new)

 

Text proposed by the Commission

Amendment

 

1a.  In Article 3(1), the following subparagraph is added:

 

“Investment referred to in point (e) of the first subparagraph shall be considered to be small-scale if its ERDF co-financing does not exceed EUR 10 000 000; that ceiling shall be raised to EUR 20 000 000 in the case of infrastructure considered to be world cultural heritage within the meaning of Article 1 of the 1972 UNESCO Convention Concerning the Protection of the World Cultural and Natural Heritage.”

Amendment    391

Proposal for a regulation

Article 264 – paragraph 1 – point 2

Regulation (EU) No 1301/2013

Article 5 – paragraph 9 – point e

 

Text proposed by the Commission

Amendment

(e)  supporting the reception and social and economic integration of migrants and refugees

(e)  supporting the reception and social and economic integration of migrants and refugees under international protection

Amendment    392

Proposal for a regulation

Article 264 – paragraph 1 – point 3

Regulation (EU) No 1301/2013

Annex I – table on Social infrastructure

 

Text proposed by the Commission

Childcare & education

persons

Capacity of supported childcare or educational infrastructure

Health

persons

Population covered by improved health services

Housing

housing units

Rehabilitated housing

 

housing units

Rehabilitated housing, of which for migrants and refugees (not including reception centres)

Migrants and refugees

persons

Capacity of infrastructure supporting migrants and refugees (other than housing)

Amendment

Childcare & education

persons

Capacity of supported childcare or educational infrastructure

Health

persons

Population covered by improved health services

Housing

housing units

Rehabilitated housing

 

housing units

Rehabilitated housing, of which for migrants and refugees who are under international protection (not including reception centres)

Migrants and refugees who are under international protection

persons

Capacity of infrastructure supporting migrants and refugees who are under international protection (other than housing)

Amendment    393

Proposal for a regulation

Article 265 – paragraph 1 – point 1 – point a a (new)

Regulation (EU) No 1303/2013

Article 2 – point 11 a (new)

 

Text proposed by the Commission

Amendment

 

(aa)  The following point is inserted:

 

“ (11a)  ‘repayable advance’ means a loan for a project which is paid in one or more instalments and the conditions for the reimbursement of which depend on the outcome of the project; ”

Justification

Repayable advances (“avances récupérables”) are widely used instruments in several members States to support early-stage projects mainly in the innovation sector and they have the features of financial instruments. They are still neither defined nor included in the definition of financial instruments as set out in the Common Provisions and the financial regulations. This legal vacuum should be urgently addressed all the more that repayable advances are explicitly defined as loans and thus risk-sharing instruments in the EU State Aid regulation.

Amendment    394

Proposal for a regulation

Article 265 – paragraph 1 – point 1 – point b

Regulation (EU) No 1303/2013

Article 2 – point 31

 

Text proposed by the Commission

Amendment

(31)  ‘macroregional strategy’ means an integrated framework, which may be supported by the ESI Funds among others, to address common challenges faced by a defined geographical area relating to Member States and third countries located in the same geographical area which thereby benefit from strengthened cooperation contributing to achievement of economic, social and territorial cohesion;

(31)  ‘macroregional strategy’ means an integrated framework in line with guidance given by the European Council, which may be supported by the ESI Funds among others, to address common challenges faced by a defined geographical area relating to Member States and third countries located in the same geographical area which thereby benefit from strengthened cooperation contributing to achievement of economic, social and territorial cohesion;

Amendment    395

Proposal for a regulation

Article 265 – paragraph 1 – point 4

Regulation (EU) No 1303/2013

Article 9 – subparagraph 2 a

 

Text proposed by the Commission

Amendment

“The priorities established for each of the ESI Funds in the Fund specific rules shall in particular cover the appropriate use of each Fund in the areas of migration and asylum.”

“The priorities established for each of the ESI Funds in the Fund specific rules shall in particular cover the appropriate use of each Fund in the areas of migration and asylum and ensure, where appropriate, coordination with the AMIF.”

Amendment    396

Proposal for a regulation

Article 265 – paragraph 1 – point 6

Regulation (EU) No 1303/2013

Article 30 a (new)

 

Text proposed by the Commission

Amendment

6.  The following Article 30a is inserted:

deleted

‘Article 30a

 

1.   Part of a Member State ESI Funds allocation may, at the request of that Member State and in agreement with the Commission, be transferred to one or several instruments established under the Financial Regulation or under sector specific Regulations or to enhance the risk-bearing capacity of the EFSI in accordance with Article 125 of the Financial Regulation. The request to transfer the ESI Funds allocation should be submitted by 30 September.

 

2.   Only financial appropriations of future years in the financial plan of a programme may be transferred.

 

3.   The request shall be accompanied by a proposal to amend the programme or programmes from which the transfer will be made. Corresponding amendments to the programme and to the partnership agreement shall be made in accordance with Article 30(2) which shall set out the total amount transferred for each relevant year to the Commission. ’

 

Amendment    397

Proposal for a regulation

Article 265 – paragraph 1 – point 8

Regulation (EU) No 1303/2013

Article 34 – paragraph 3 – point a

 

Text proposed by the Commission

Amendment

(a)  building the capacity of local actors to develop and implement operations including fostering their project management capabilities;

(a)  building the capacity of local actors to develop and implement operations including fostering their project management capabilities, and of potential final beneficiaries to prepare and implement the projects;

Amendment    398

Proposal for a regulation

Article 265 – paragraph 1 – point 8

Regulation (EU) No 1303/2013

Article 34 – paragraph 3 – point a a (new)

 

Text proposed by the Commission

Amendment

 

(aa)  ensuring visibility of the strategy, operations and projects;

Amendment    399

Proposal for a regulation

Article 265 – paragraph 1 – point 8

Regulation (EU) No 1303/2013

Article 34 – paragraph 3 – point f

 

Text proposed by the Commission

Amendment

(f)  selecting operations and fixing the amount of support and presenting the proposals to the body responsible for final verification of eligibility before approval;

(f)  selecting operations and fixing the amount of support and, where relevant, presenting the proposals to the body responsible for final verification of eligibility before approval;

Amendment    400

Proposal for a regulation

Article 265 – paragraph 1 – point 10 – point a

Regulation (EU) No 1303/2013

Article 37 – paragraph 2 – point c

 

Text proposed by the Commission

Amendment

(c)  an estimate of additional public and private resources to be potentially raised by the financial instrument down to the level of the final recipient (expected leverage effect), including as appropriate an assessment of the need for, and level of, differentiated treatment to attract counterpart resources from private investors and/or a description of the mechanisms which will be used to establish the need for, and extent of, such differentiated treatment, such as a competitive or appropriately independent assessment process;

(c)  an estimate of additional public and private resources to be potentially raised by the financial instrument down to the level of the final recipient (expected leverage effect);

Amendment    401

Proposal for a regulation

Article 265 – paragraph 1 – point 10 – point b a (new)

Regulation (EU) No 1303/2013

Article 37 – paragraph 8

 

Present text

Amendment

 

(ba)  paragraph 8 is replaced by the following:

“8.  Final recipients supported by an ESI Fund financial instrument may also receive assistance from another ESI Funds priority or programme or from another instrument supported by the budget of the Union in accordance with applicable Union State aid rules. In that case, separate records shall be maintained for each source of assistance and the ESI Funds financial instrument support shall be part of an operation with eligible expenditure distinct from the other sources of assistance.”

“8.  Final recipients supported by an ESI Fund financial instrument may also receive assistance from another ESI Funds priority or programme or from another instrument supported by the budget of the Union or from the European Fund for Strategic Investments, in accordance with applicable Union State aid rules, as appropriate. In that case, separate records shall be maintained for each source of assistance and the ESI Funds financial instrument support shall give rise to eligible expenditure distinct from the other sources of assistance.”

Amendment    402

Proposal for a regulation

Article 265 – paragraph 1 – point 11 – point a

Regulation (EU) No 1303/2013

Article 38 – paragraph 1 – point c

 

Text proposed by the Commission

Amendment

(c)  financial instruments allowing for the combination of such contribution with EIB financial products under the European Fund for Strategic Investment.

(c)  financial instruments allowing for the combination of such contribution with EIB financial products under the European Fund for Strategic Investment and those of other institutions referred to in Article 38(4) and in accordance with Article 39a.

Amendment    403

Proposal for a regulation

Article 265 – paragraph 1 – point 11 – point b – point i

Regulation (EU) No 1303/2013

Article 38 – paragraph 4 – subparagraph 1 – point b – point iii

 

Text proposed by the Commission

Amendment

(iii)  a publicly-owned bank or financial institution, established as a legal entity carrying out financial activities on a professional basis, which fulfils all the following conditions:

(iii)  a publicly-owned bank or institution, established as a legal entity carrying out financial activities on a professional basis, which fulfils all the following conditions:

Amendment    404

Proposal for a regulation

Article 265 – paragraph 1 – point 11 – point b – point i

Regulation (EU) No 1303/2013

Article 38 – paragraph 4 – subparagraph 1 – point b – point iii – indent 2

 

Text proposed by the Commission

Amendment

–  operates under a public policy mandate given by the relevant authority of a Member State at national or regional level, to carry out economic development activities contributing to the objectives of the ESI Funds;

–  operates under a public policy mandate given by the relevant authority of a Member State at national or regional level, which shall include carrying out, as part of its operations, economic development activities contributing to the objectives of the ESI Funds;

Amendment    405

Proposal for a regulation

Article 265 – paragraph 1 – point 11 – point b – point i

Regulation (EU) No 1303/2013

Article 38 – paragraph 4 – subparagraph 1 – point b – point iii – indent 3

 

Text proposed by the Commission

Amendment

–  carries out its development activities in regions, policy areas and sectors for which access to funding from market sources is not generally available or sufficient;

–  carries out, among its operations, its economic development activities contributing also to the objectives of the ESI Funds in regions, policy areas and sectors for which access to funding from market sources is not generally available or sufficient;

Amendment    406

Proposal for a regulation

Article 265 – paragraph 1 – point 11 – point b – point i

Regulation (EU) No 1303/2013

Article 38 – paragraph 4 – subparagraph 1 – point b – point iii – indent 4

 

Text proposed by the Commission

Amendment

–  operates on a non-profit maximisation basis in order to ensure a long-term financial sustainability;

–  operates without primarily focussing on maximising profits in order to ensure a long-term financial sustainability for its operations;

Amendment    407

Proposal for a regulation

Article 265 – paragraph 1 – point 11 – point b – point i

Regulation (EU) No 1303/2013

Article 38 – paragraph 4 – subparagraph 1 – point b – point iii – indent 5 a (new)

 

Text proposed by the Commission

Amendment

 

–  ensures that this direct involvement does not provide any direct or indirect benefit for commercial activities by way of keeping separate accounts, a separate administration for commercial activities, or any other measure in line with applicable law;

Amendment    408

Proposal for a regulation

Article 265 – paragraph 1 – point 11 – point b – point i

Regulation (EU) No 1303/2013

Article 38 – paragraph 4 – subparagraph 1 – point b – point iii – indent 6

 

Text proposed by the Commission

Amendment

–  is subject to the supervision of an independent authority in accordance with national law.

–  is subject to the supervision of an independent authority in accordance with applicable law.

Amendment    409

Proposal for a regulation

Article 265 – paragraph 1 – point 11 – point b – point ii

Regulation (EU) No 1303/2013

Article 38 – paragraph 4 – subparagraph 2

 

Text proposed by the Commission

Amendment

“When implementing the financial instrument, the bodies referred to in points (a)to (d) of the first subparagraph shall ensure compliance with applicable law, including rules covering the ESI Funds, State aid, public procurement and relevant standards and applicable legislation on the prevention of money laundering, the fight against terrorism, tax fraud and tax evasion. Those bodies shall not make use of or engage in tax avoidance structures, in particular aggressive tax planning schemes or practices not complying with tax good governance criteria, as set out in EU legislation including Commission recommendations and communications or or any formal notice by the latter. They shall not be established and, in relation to the implementation of the financial operations shall not maintain business relations with entities incorporated in jurisdictions that do not co-operate with the Union in relation to the application of the internationally agreed tax standards on transparency and exchange of information. Those bodies may, under their responsibility, conclude agreements with financial intermediaries for the implementation of financial operations. They shall transpose requirements referred to in this paragraph in their contracts with the financial intermediaries selected to participate in the execution of financial operations under such agreements.”

“When implementing the financial instrument, the bodies referred to in points (a)to (d) of the first subparagraph shall comply with applicable law, including rules covering the ESI Funds, State aid, public procurement and relevant standards and applicable legislation on the prevention of money laundering, the fight against terrorism, tax fraud and tax evasion. Those bodies shall not make use of or engage in tax avoidance structures, in particular aggressive tax planning schemes or practices not complying with tax good governance criteria, as set out in EU legislation. They shall not be established and, in relation to the implementation of the financial operations shall not maintain business relations with entities incorporated in jurisdictions that do not co-operate with the Union in relation to the application of the internationally agreed tax standards on transparency and exchange of information. Those bodies may, under their responsibility, conclude agreements with financial intermediaries for the implementation of financial operations. They shall transpose requirements referred to in this paragraph in their contracts with the financial intermediaries selected to participate in the execution of financial operations under such agreements.”

Amendment    410

Proposal for a regulation

Article 265 – paragraph 1 – point 13

Regulation (EU) No 1303/2013

Article 39a – paragraph 1

 

Text proposed by the Commission

Amendment

1.  Member States may use ESI Funds to provide a contribution to financial instruments referred to in point (c) of Article 38(1) to attract additional private sector investment.

1.  Managing authorities in the respective Member States may use ESI Funds to provide a contribution to financial instruments referred to in point (c) of Article 38(1) if this is aimed to attract additional private sector investment and continues to contribute to ESI Funds objectives and the Union strategy for smart, sustainable and inclusive growth.

Amendment    411

Proposal for a regulation

Article 265 – paragraph 1 – point 13

Regulation (EU) No 1303/2013

Article 39a – paragraph 2

 

Text proposed by the Commission

Amendment

2.  The contribution referred to in paragraph 1 shall not exceed 25 % of the total support provided to final recipients. In the less developed regions referred to in point (b) of Article 120(3), the financial contribution may exceed 25% where duly justified by the ex-ante assessment, but shall not exceed 50%. The total support referred to in this paragraph shall comprise the total amount of new loans and guaranteed loans as well as equity and quasi-equity investments provided to final recipients. The guaranteed loans referred to in this paragraph shall only be taken into account to the extent that ESI Funds resources are committed for guarantee contracts calculated on the basis of a prudent ex ante risk assessment covering a multiple amount of new loans.

2.  The contribution referred to in paragraph 1 shall not exceed 15 % of the total support provided to final recipients. In the less developed and transition regions referred to in point (b) of Article 120(3), the financial contribution may exceed 15% where duly justified by the ex-ante assessment or preparatory assessment undertaken by the EIB under paragraph 3 of this Article, but shall not exceed 30%. The total support referred to in this paragraph shall comprise the total amount of new loans and guaranteed loans as well as equity and quasi-equity investments provided to final recipients. The guaranteed loans referred to in this paragraph shall only be taken into account to the extent that ESI Funds resources are committed for guarantee contracts calculated on the basis of a prudent ex ante risk assessment covering a multiple amount of new loans.

Amendment    412

Proposal for a regulation

Article 265 – paragraph 1 – point 13

Regulation (EU) No 1303/2013

Article 39a – paragraph 4

 

Text proposed by the Commission

Amendment

4.  Reporting by managing authorities under Article 46 on operations comprising financial instruments under this Article shall be based on the information kept by the EIB for the purposes of its reporting pursuant to Article 16(1) and (2) of the EFSI Regulation, supplemented by the additional information required under Article 46(2).

4.  Reporting by managing authorities under Article 46 on operations comprising financial instruments under this Article shall be based on the information kept by the EIB for the purposes of its reporting pursuant to Article 16(1) and (2) of the EFSI Regulation, supplemented by the additional information required under Article 46(2). Requirements under this paragraph shall allow for uniform reporting conditions in accordance with Article 46(3) of this Regulation.

Amendment    413

Proposal for a regulation

Article 265 – paragraph 1 – point 13

Regulation (EU) No 1303/2013

Article 39a – paragraph 5 – point b

 

Text proposed by the Commission

Amendment

(b)  entrust implementation tasks to a financial institution, which shall either open a fiduciary account in its name and on behalf of the managing authority or set up a separate block of finance within the financial institution for programme contribution. In the case of a separate block of finance, an accounting distinction shall be made between programme resources invested in the financial instrument and the other resources available in the financial institution. The assets held on fiduciary accounts and such separate blocks of finance shall be managed in accordance with the principle of sound financial management following appropriate prudential rules and shall have appropriate liquidity.

(b)  entrust implementation tasks to a body, which shall either open a fiduciary account in its name and on behalf of the managing authority or set up a separate block of finance within the financial institution for programme contribution. In the case of a separate block of finance, an accounting distinction shall be made between programme resources invested in the financial instrument and the other resources available in the financial institution. The assets held on fiduciary accounts and such separate blocks of finance shall be managed in accordance with the principle of sound financial management following appropriate prudential rules and shall have appropriate liquidity.

Amendment    414

Proposal for a regulation

Article 265 – paragraph 1 – point 13

Regulation (EU) No 1303/2013

Article 39a – paragraph 6

 

Text proposed by the Commission

Amendment

6.  When implementing financial instruments under point (c) of Article 38(1), the bodies referred to in paragraph 2 of this article shall ensure compliance with applicable law, including rules covering the ESI Funds, State aid, public procurement and relevant standards and applicable legislation on the prevention of money laundering, the fight against terrorism, tax fraud and tax evasion. Those bodies shall not make use of or engage in tax avoidance structures, in particular aggressive tax planning schemes or practices not complying with tax good governance criteria as set out in EU legislation including Commission recommendations and communications or any formal notice by the latter. They shall not be established and, in relation to the implementation of the financial operations shall not maintain business relations with entities incorporated in jurisdictions that do not co-operate with the Union in relation to the application of the internationally agreed tax standards on transparency and exchange of information. Those bodies may, under their responsibility, conclude agreements with financial intermediaries for the implementation of financial operations. They shall transpose requirements referred to in this paragraph in their contracts with the financial intermediaries selected to participate in the execution of financial operations under such agreements.

6.  When implementing financial instruments under point (c) of Article 38(1), the bodies referred to in paragraph 5 of this article shall comply with applicable law, including rules covering the ESI Funds, State aid, public procurement and relevant standards and applicable legislation on the prevention of money laundering, the fight against terrorism, tax fraud and tax evasion. Those bodies shall not make use of or engage in tax avoidance structures, in particular aggressive tax planning schemes or practices not complying with tax good governance criteria as set out in EU legislation. They shall not be established and, in relation to the implementation of the financial operations shall not maintain business relations with entities incorporated in jurisdictions that do not co-operate with the Union in relation to the application of the internationally agreed tax standards on transparency and exchange of information. Those bodies may, under their responsibility, conclude agreements with financial intermediaries for the implementation of financial operations. They shall transpose requirements referred to in this paragraph in their contracts with the financial intermediaries selected to participate in the execution of financial operations under such agreements.

Amendment    415

Proposal for a regulation

Article 265 – paragraph 1 – point 13

Regulation (EU) No 1303/2013

Article 39a – paragraph 7

 

Text proposed by the Commission

Amendment

7.  The bodies referred to in paragraph 2 of this Article, when implementing funds of funds, may further entrust part of the implementation to financial intermediaries provided that those bodies ensure under their responsibility that the financial intermediaries satisfy the criteria laid down in Articles 201(4) and 202(1) and (2) of the Financial Regulation. The financial intermediaries shall be selected on the basis of open, transparent, proportionate and non-discriminatory procedures, avoiding conflict of interest.

7.  The bodies referred to in paragraph 5 of this Article, when implementing funds of funds, may further entrust part of the implementation to financial intermediaries provided that those bodies ensure under their responsibility that the financial intermediaries satisfy the criteria laid down in Articles 201(4) and 202(1) and (2) of the Financial Regulation. The financial intermediaries shall be selected on the basis of open, transparent, proportionate and non-discriminatory procedures, avoiding conflict of interest.

Amendment    416

Proposal for a regulation

Article 265 – paragraph 1 – point 13

Regulation (EU) No 1303/2013

Article 39a – paragraph 8

 

Text proposed by the Commission

Amendment

8.  Where managing authorities contribute ESI Funds programme resources to an existing instrument under point (c) of Article 38(1), the fund manager of which has already been selected by the EIB, international financial institutions in which a Member State is a shareholder, or a publicly-owned bank or financial institution, established as a legal entity carrying out financial activities on a professional basis and fulfilling the conditions set out under Article 38(4)(b)(iii), they shall entrust implementation tasks to this fund manager through the award of a direct contract.

8.  Where managing authorities contribute ESI Funds programme resources to an existing instrument under point (c) of Article 38(1), the fund manager or financial intermediary of which has already been selected by the EIB, international financial institutions in which a Member State is a shareholder, or a publicly-owned bank or financial institution, established as a legal entity carrying out financial activities on a professional basis and fulfilling the conditions set out under Article 38(4)(b)(iii), they shall entrust implementation tasks to this fund manager or financial intermediary through the award of a direct contract.

Amendment    417

Proposal for a regulation

Article 265 – paragraph 1 – point 13

Regulation (EU) No 1303/2013

Article 39a – paragraph 12

 

Text proposed by the Commission

Amendment

12.  In case of financial instruments referred to in point (c) of Article 38(1) which take the form of a guarantee instrument, ESI Funds may contribute to junior and/or mezzanine tranches of portfolios of loans covered also under the EFSI’s Union guarantee.

12.  In case of financial instruments referred to in point (c) of Article 38(1) which take the form of a guarantee instrument, Member States may decide that ESI Funds contribute, as appropriate, to different tranches of portfolios of loans covered also under the EFSI's Union guarantee. Resources paid back to financial instruments from investments or from the release of resources committed for guarantee contracts, including capital repayments and gains and other earnings or yields, such as interest, guarantee fees, dividends, capital gains or any other income generated by investments, which are attributable to the contribution from the ESI Funds shall be re-used in accordance with the objectives of the respective ESI Funds to support actions and final recipients consistent with the programme(s) from which such contributions are made.

Amendment    418

Proposal for a regulation

Article 265 – paragraph 1 – point 13

Regulation (EU) No 1303/2013

Article 39a – paragraph 13

 

Text proposed by the Commission

Amendment

13.  For the ERDF, the ESF, the Cohesion Fund and the EMFF, a separate priority, and for the EAFRD, a separate type of operation, with a co-financing rate of up to 100% may be established within a programme to support operations implemented through financial instruments referred to in point (c) of Article 38(1).

13.  For the ERDF, the ESF, the Cohesion Fund and the EMFF, a separate priority, and for the EAFRD, a separate type of operation, with a co-financing rate according to the determination of co-financing rates in Article 120(3) with an increase of up to 15% may be established within a programme to support operations implemented through financial instruments referred to in point (c) of Article 38(1).

Amendment    419

Proposal for a regulation

Article 265 – paragraph 1 – point 14 – point a

Regulation (EU) No 1303/2013

Article 40 – paragraph 1 – subparagraph 3

 

Text proposed by the Commission

Amendment

The EIB or other international financial institutions in which a Member State is a shareholder shall provide to the designated authorities control reports with each application for payment. They shall also provide to the Commission and to the designated authorities an annual audit report drawn up by the external auditors of these bodies.

The EIB or other international financial institutions in which a Member State is a shareholder shall by 30 June of each calendar year provide to the designated authorities control and performance reports concerning each application for payment and a level of reimbursement to final recipients of the previous calendar year. They shall also provide to the Commission and to the designated authorities an annual audit report drawn up by the external auditors of these bodies.

Justification

The EIB and other financial institutions should have responsibilities regarding achievement of results and reporting of performance of the financial instruments under ESIF which they manage as it is required from beneficiaries of grants or other managers of ESIF financial instruments.

Amendment    420

Proposal for a regulation

Article 265 – paragraph 1 – point 14 – point a

Regulation (EU) No 1303/2013

Article 40 – paragraph 1 – subparagraph 4

 

Text proposed by the Commission

Amendment

The Commission shall be empowered to adopt an implementing act concerning the models for the control reports and the annual audit reports of the first sub-paragraph of this paragraph.

The Commission shall be empowered to adopt an implementing act concerning the models for the control reports and the annual audit reports of the third sub-paragraph of this paragraph.

Amendment    421

Proposal for a regulation

Article 265 – paragraph 1 – point 14 – point a

Regulation (EU) No 1303/2013

Article 40 – paragraph 2 – subparagraph 2 a (new)

 

Text proposed by the Commission

Amendment

 

The ECA shall carry out performance audits of the EIB or other financial institutions in which a Member State is a shareholder for financial instruments implemented by them and involving Union budget resources.

Amendment    422

Proposal for a regulation

Article 265 – paragraph 1 – point 15 a (new)

Regulation (EU) No 1303/2013

Article 41 – paragraph 1 – point c

 

Present text

Amendment

 

15a.  In Article 41, point (c) of paragraph 1 is replaced by the following:

(c)  subsequent applications for interim payment submitted during the eligibility period shall only be made:

(c)  second and subsequent applications for interim payments submitted during the eligibility period shall only be made, when at least 60% of the amount included in the previous application for interim payments has been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1).”

(i)  for the second application for interim payment, when at least 60 % of the amount included in the first application for interim payments has been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1);

 

(ii)  for the third and subsequent applications for interim payment, when at least 85 % of the amounts included in the previous applications for interim payments have been spent as eligible expenditure within the meaning of points (a), (b) and (d) of Article 42(1);

 

Justification

It is proposed to lower the limit from 85% to 60 % applied for third and subsequent tranches, as it is one of the factors influencing the lack of funds in the middle of implementation of national financial instruments. Such amendment would increase the efficiency of the Fund of Fund’s operation, ease the pressure on national budgets (as payments to these funds are made ex-ante by the Managing authority) and ensure the smooth process of implementation with less risk of pauses in the middle of the process.

Amendment    423

Proposal for a regulation

Article 265 – paragraph 1 – point 15 b (new)

Regulation (EU) No 1303/2013

Article 42 – paragraph 3 – subparagraph 1

 

Present text

Amendment

 

15b.  In Article 42, the first subparagraph of paragraph 3 is replaced by the following:

In the case of equity-based instruments targeting enterprises referred to in Article 37(4) for which the funding agreement referred to in point (b) of Article 38(7) was signed before 31 December 2017, which by the end of the eligibility period invested at least 55 % of the programme resources committed in the relevant funding agreement, a limited amount of payments for investments in final recipients to be made for a period not exceeding four years after the end of eligibility period may be considered as eligible expenditure, when paid into an escrow account specifically set up for that purpose, provided that State aid rules are complied with and that all of the conditions set out below are fulfilled.

“ In the case of equity-based instruments targeting enterprises referred to in Article 37(4) for which the funding agreement referred to in point (b) of Article 38(7) was signed before 31 December 2018, which by the end of the eligibility period invested at least 55 % of the programme resources committed in the relevant funding agreement, a limited amount of payments for investments in final recipients to be made for a period not exceeding four years after the end of eligibility period may be considered as eligible expenditure, when paid into an escrow account specifically set up for that purpose, provided that State aid rules are complied with and that all of the conditions set out below are fulfilled.”

Amendment    424

Proposal for a regulation

Article 265 – paragraph 1 – point 16

Regulation (EU) No 1303/2013

Article 42 – paragraph 5 – subparagraph 1

 

Text proposed by the Commission

Amendment

Where management cost and fees as referred to in point (d) of the first subparagraph of paragraph 1 and in paragraph 2 of this Article are charged by the body implementing the fund of funds or bodies implementing financial instruments pursuant to point (c) of Article 38(1) and points (a) and (b) of Article 38(4), they shall not exceed the thresholds defined in the delegated act referred to in paragraph 6 of this Article. Whereas management costs shall comprise direct or indirect cost items reimbursed against evidence of expenditure, management fees shall refer to an agreed price for services rendered established via a competitive market process, where applicable. Management costs and fees shall be based on a performance based calculation methodology.;

Where management cost and fees as referred to in point (d) of the first subparagraph of paragraph 1 and in paragraph 2 of this Article are charged by the body implementing the fund of funds or bodies implementing financial instruments pursuant to point (c) of Article 38(1) and points (a), (b) and (c) of Article 38(4), they shall not exceed the thresholds defined in the delegated act referred to in paragraph 6 of this Article. Whereas management costs shall comprise direct or indirect cost items reimbursed against evidence of expenditure, management fees shall refer to an agreed price for services rendered established via a competitive market process, where applicable. Management costs and fees shall be based on a performance based calculation methodology.;

Amendment    425

Proposal for a regulation

Article 265 – paragraph 1 – point 17

Regulation (EU) No 1303/2013

Article 43a – paragraph 1

 

Text proposed by the Commission

Amendment

1.  Support from the ESI Funds to financial instruments invested in final recipients and gains and other earnings or yields, such as interest, guarantee fees, dividends, capital gains or any other income generated by those investments, which are attributable to the support from the ESI Funds, may be used for differentiated treatment of private investors, as well as the EIB when using the EU guarantee pursuant to Regulation (EU) 2015/1017. Such differentiated treatment shall be justified by the need to attract private counterpart resources.

1.  Support from the ESI Funds to financial instruments invested in final recipients and gains and other earnings or yields, such as interest, guarantee fees, dividends, capital gains or any other income generated by those investments, which are attributable to the support from the ESI Funds, may be used for differentiated treatment of investors operating under the market economy principle, as well as the EIB when using the EU guarantee pursuant to Regulation (EU) 2015/1017. Such differentiated treatment shall be justified by the need to attract private counterpart resources and leverage public funding.

Amendment    426

Proposal for a regulation

Article 265 – paragraph 1 – point 17

Regulation (EU) No 1303/2013

Article 43 a – paragraph 2

 

Text proposed by the Commission

Amendment

2.  The need and the level of differentiated treatment as referred to in paragraph 1 shall be established in the ex-ante assessment.

deleted

Amendment    427

Proposal for a regulation

Article 265 – paragraph 1 – point 17

Regulation (EU) No 1303/2013

Article 43a – paragraph 3

 

Text proposed by the Commission

Amendment

3.  The differentiated treatment shall not exceed what is necessary to create the incentives for attracting private counterpart resources. It shall not over-compensate private investors and the EIB when using the EU guarantee according to Regulation (EU) 2015/1017. The alignment of interest shall be ensured through an appropriate sharing of risk and profit.

3.  The differentiated treatment shall not exceed what is necessary to create the incentives for attracting private counterpart resources. It shall not over-compensate investors operating under the market economy principle and the EIB when using the EU guarantee according to Regulation (EU) 2015/1017. The alignment of interest shall be ensured through an appropriate sharing of risk and profit.

Justification

It is crucial that also national and regional promotional banks are covered by this regulation. In Germany for instance, financial instruments are processed almost exclusively via promotional banks. The COM proposal has only mentioned “private investors” (referring to the new state aid concept), whereas the previous regulation explicitly mentioned also “public investors under the market economy principle”.

Amendment    428

Proposal for a regulation

Article 265 – paragraph 1 – point 17

Regulation (EU) No 1303/2013

Article 43a – paragraph 4

 

Text proposed by the Commission

Amendment

4.  Differentiated treatment of private investors shall be without prejudice to the Union State aid rules.

4.  Differentiated treatment of investors