Procedure : 2010/0395(COD)
Document stages in plenary
Document selected : A7-0325/2011

Texts tabled :

A7-0325/2011

Debates :

PV 26/10/2011 - 4
CRE 26/10/2011 - 4

Votes :

PV 26/10/2011 - 8.6
CRE 26/10/2011 - 8.6
Explanations of votes
Explanations of votes
PV 23/10/2012 - 6.6
CRE 23/10/2012 - 6.6
Explanations of votes

Texts adopted :

P7_TA(2011)0465
P7_TA(2012)0362

REPORT     ***I
PDF 1682kWORD 1820k
4.10.2011
PE 460.942v03-00 A7-0325/2011

on the proposal for a regulation of the European Parliament and of the Council on the financial rules applicable to the annual budget of the Union

(COM (2010)0815 – C7‑0016/2011 – 2010/0395 (COD))

Committee on Budgets

Committee on Budgetary Control

Rapporteurs: Ingeborg Gräßle, Crescenzio Rivellini

(Joint committee meetings – Rule 51 of the Rules of Procedure)

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 OPINION of the Committee on Foreign Affairs
 OPINION of the Committee on Industry, Research and Energy
 OPINION of the Committee on Regional Development
 PROCEDURE

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 annual budget of the Union

(COM (2010)0815 – C7‑0016/2011 – 2010/0395(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to Parliament and the Council (COM(2010)0815),

–   having regard to Article 294(2) and Article 322 of the Treaty on the Functioning of the European Union as well as Article 106a of the Treaty establishing the European Atomic Energy Community, pursuant to which the Commission submitted the proposal to Parliament (C7‑0016/2011),

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

–   having regard to the opinions 3/2010(1) and 6/2010(2) of the European Court of Auditors , as revised and updated on 25 January 2011,

–   having regard to Rule 55 of its Rules of Procedure,

–   having regard to the joint deliberations of the Committee on Budgets and the Committee on Budgetary Control under Rule 51 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 the Committee on Industry, Research and Energy and the Committee on Regional Development (A7-0325/2011),

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

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

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) Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities has been substantially amended several times. Since further amendments are to be made, including changes to take account of amendments introduced by the Treaty of Lisbon, the Regulation (EC, Euratom) No 1605/2002 should be replaced by this Regulation, in the interests of clarity.

(1) Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities has been substantially amended several times. Since further amendments are to be made, including changes to take account of amendments introduced by the Treaty of Lisbon, the Regulation (EC, Euratom) No 1605/2002 should be replaced by this Regulation, according to the Treaty of Lisbon adopted jointly by the European Parliament and the Council according to the ordinary legislative procedure, in the interest of clarity.

Justification

Enforced role of the EP should be reflected in this recital.

Amendment  2

Proposal for a regulation

Recital 2

Text proposed by the Commission

Amendment

(2) Regulation (EC, Euratom) No 1605/2002 laid down the budgetary principles and financial rules to be respected in all legislative acts and by all institutions. The fundamental principles, the concept and the structure of that Regulation and the basic rules of budgetary and financial management need to be maintained. Derogations to those fundamental principles should be reviewed and simplified as far as possible, taking into account their continuing relevance, their added-value for the annual budget of the Union (hereinafter the ‘budget’), and the burden they impose on stakeholders. It is necessary to maintain and strengthen the key elements of the financial reform: the role of the financial actors, the integration of controls in operational services, the internal auditors, the Activity Based Budgeting, the modernisation of accounting principles and rules and the basic principles for grants.

(2) Regulation (EC, Euratom) No 1605/2002 laid down the budgetary principles and financial rules governing the establishment and implementation of the general budget, ensuring sound and effective management, control and protection of the financial interests of the Union, as well as increasing transparency, to be respected in all legislative acts and by all institutions. The fundamental principles, the concept and the structure of that Regulation and the basic rules of budgetary and financial management need to be maintained. Derogations to those fundamental principles should be reviewed and simplified as far as possible, taking into account their continuing relevance, their added-value for the annual budget of the Union (hereinafter the ‘budget’), and the burden they impose on stakeholders. It is necessary to maintain and strengthen the key elements of the financial reform: the role of the financial actors, the integration of controls in operational services, the internal auditors, the Activity Based Budgeting, the modernisation of accounting principles and rules and the basic principles for grants.

Amendment  3

Proposal for a regulation

Recital 4 a (new)

Draft legislative resolution

Amendment

 

(4a) As regards the Union’s research framework programmes, further simplification and harmonisation of rules and procedures should be introduced, as stated in the European Parliament resolution of 11 November 2010 on simplifying the implementation of the Research Framework Programmes1, and in the Final Report of the Expert Group on Interim Evaluation of the Seventh Framework Programme, published on 12 November 2010 on the basis of Article 7(2) of Decision No 1982/2006/EC;

 

___________

 

1 Texts adopted, P7_TA(2010)0401.

Justification

The European Parliament resolution of 11 November 2010 on simplifying the implementation of the Research Framework Programmes (2010/2079 (INI)) called for simplification and harmonisation of rules and procedures in Financial Regulation.

Amendment  4

Proposal for a regulation

Recital 5

Text proposed by the Commission

Amendment

(5) Regulation (EC, Euratom) No 1605/2002 was confined to stating the broad principles and basic rules governing the whole budgetary sector covered by the Treaties, while the implementing provisions were laid down in Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities11 in order to produce a better hierarchy of rules and make Regulation (EC, Euratom) No 1605/2002 easier to read. Under the Treaty on the Functioning of the European Union (hereinafter the TFEU) the Commission may receive delegation to adopt acts of general application to supplement or amendment certain non-essential elements of legislative acts. As a consequence, some provisions laid down in Regulation (EC, Euratom) No 2342/2002, should be incorporated into this Regulation. The detailed rules for the application of this Regulation adopted by the Commission should be confined to technical details and implementing modalities.

(5) Regulation (EC, Euratom) No 1605/2002 was confined to stating the broad principles and basic rules governing the whole budgetary sector covered by the Treaties, while the implementing provisions were laid down in Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities11 in order to produce a better hierarchy of rules and make Regulation (EC, Euratom) No 1605/2002 easier to read. Under Article 290 of the Treaty on the Functioning of the European Union (hereinafter the TFEU) a legislative act may delegate to the Commission the power to adopt non-legislative acts only to supplement or amend certain non-essential elements of the legislative act. As a consequence, some provisions laid down in Regulation (EC, Euratom) No 2342/2002, should be incorporated into this Regulation.

Justification

The recital should better reflect the new constitutional law basis.

Amendment 5

Proposal for a regulation

Recital 8

Text proposed by the Commission

Amendment

(8) The rules governing interest generated by pre-financing should be simplified as they generate excessive administrative burden on both recipients of Union funds and Commission services and create misunderstandings between the Commission services and operators and partners. For reasons of simplification, in particular in respect of grant beneficiaries, and in line with the principle of sound financial management, there should no longer be an obligation to generate interest on pre-financing and to recover such interest. However, it should be possible to include such obligation in a delegation agreement in order to allow the re-use of interests generated by prefinancing for the programmes managed by some delegates, or its recovery.

(8) The rules governing interest generated by pre-financing should be simplified as they generate excessive administrative burden on both recipients of Union funds and Commission services and create misunderstandings between the Commission services and operators and partners. For reasons of simplification, in particular in respect of grant beneficiaries, and in line with the principle of sound financial management, the obligation to generate interest on pre-financing and to recover such interest should be lifted immediately. However, it should be possible to include such obligation in a delegation agreement in order to allow the re-use of interests generated by prefinancing for the programmes managed by some delegates, or its recovery.

Amendment  6

Proposal for a regulation

Recital 11

Text proposed by the Commission

Amendment

(11) The Treaty requires that the multiannual financial framework be laid down in the form of a regulation. It is therefore necessary to incorporate certain provisions from the multiannual financial framework for 2007-2013 into this Regulation. In particular, in order to ensure budgetary discipline, it is necessary to establish a link between the multiannual financial framework and the annual budgetary procedure. It is also necessary to include provisions on commitment of the European Parliament and of the Council to respect the allocations of commitment appropriations laid down in the basic acts for structural operations, rural development and the European Fisheries Fund.

(11) As according to the Treaty the multiannual financial framework will in future be laid down in the form of a regulation and the interinstitutional agreement on budgetary discipline and sound financial management has to be amended accordingly, it is logical to incorporate certain provisions from the interinstitutional agreement into this Regulation. In particular, in order to ensure budgetary discipline, it is necessary to establish a link between the multiannual financial framework and the annual budgetary procedure. It is also necessary to include provisions on commitment of the European Parliament and of the Council to respect the allocations of commitment appropriations laid down in the basic acts for structural operations, rural development and the European Fisheries Fund.

Amendment  7

Proposal for a regulation

Recital 13 a (new)

Text proposed by the Commission

Amendment

 

(13a) Revenue received by non-state third parties in the pursuit of the Union’s legitimate aims such as the fight against smuggling and counterfeiting of cigarettes (e.g. the ‘Phillip Morris’ agreement) should be treated as assigned revenue, in particular where these are the results of agreements concluded in the process of alternative dispute resolution.

Amendment 8

Proposal for a regulation

Recital 16

Text proposed by the Commission

Amendment

(16) Concerning provisions on proportionality, the notion of tolerable risk of error should be introduced as part of the risk assessment made by the Authorising Officer. The institutions should be able to move away from the general 2% materiality threshold used by the Court of Auditors to conclude on the legality and regularity of the underlying transactions. Tolerable risk levels constitute more appropriate basis for the Discharge Authority to judge the quality of the management of risk by the Commission. The European Parliament and the Council should therefore determine the level of tolerable risk of error per policy area, taking into account the costs and benefits of controls.

(16) In order to assess the risk of error, taking account of the principle of sound financial management and appropriate controls, and to react accordingly, a management tool showing the risk of error should be used.

Amendment   9

Proposal for a regulation

Recital 16 a (new)

Text proposed by the Commission

Amendment

 

(16a) The principle of transparency, enshrined in Article 15 TFEU which requires the institutions to work as openly as possible, requires, in the area of the implementation of the Union budget, that citizens be 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 decision-making process of the Union and reinforces the institutional control and scrutiny over Union expenditure. This objective should be achieved by the publication, preferably using modern communication tools, of relevant information concerning final contractors and final beneficiaries of Union funds which takes into account their legitimate interests of confidentiality and security and, as far as natural persons are concerned, their rights to respect for their private lives and the protection of their personal data. Institutions should therefore apply a selective approach in line with the principle of proportionality. Decisions to publish should be based on relevant criteria in order to provide meaningful information.

Amendment 10

Proposal for a regulation

Recital 23 a (new)

Text proposed by the Commission

Amendment

 

(23a) For very low and low-value grants, simplified procedures in accounting and authorisation may be applied in order to create a beneficiary-driven approach.

Amendment 11

Proposal for a regulation

Recital 23 b (new)

Text proposed by the Commission

Amendment

 

(23b) Grants may also be authorised in the field of basic research, where no outcome or result can be presented in consequence of the research activity.

Amendment  12

Proposal for a regulation

Recital 24

Text proposed by the Commission

Amendment

(24) The experience with Public Private Partnerships (PPPs) institutionalised as Union bodies under Article 185 of Regulation (EC, Euratom) No 1605/2002 demonstrates that further alternatives should be added in order to increase the choice of instruments to include bodies whose rules are more flexible and accessible to the private partners than those applicable to the Union institutions. Such alternatives should operate under indirect management. An alternative should be a body established by a basic act and endowed with financial rules which should take into account the principles necessary to ensure sound financial management of Union funds. These principles should be adopted in a delegated regulation and should be based on those with which third entities entrusted with budget implementation tasks have to comply. Another alternative should be the implementation of PPPs by bodies governed by private law of a Member State.

(24) The experience with Public Private Partnerships (PPPs) institutionalised as Union bodies under Article 185 of Regulation (EC, Euratom) No 1605/2002 demonstrates that further alternatives should be added in order to increase the choice of instruments to include bodies whose rules are more flexible and accessible to the private partners than those applicable to the Union institutions. Such alternatives should operate under indirect management. An alternative should be a body established by a basic act and endowed with financial rules which should take into account the principles necessary to ensure sound financial management of Union funds. These principles should be adopted in a delegated regulation on which the European Court of Auditors should be consulted and should be based on those with which third entities entrusted with budget implementation tasks have to comply.

Amendment  13

Proposal for a regulation

Recital 25

Text proposed by the Commission

Amendment

(25) Basic control and audit obligations of Member States where they implement the budget indirectly in shared management, which currently exist only in sector-specific Regulations, should be, for the purposes of Article 317 of the TFEU, introduced in this Regulation. Therefore it is necessary to include provisions, setting out a coherent framework for all policy areas concerned, on a harmonised administrative structure at national level, common management and control obligations for those structures, annual management declaration of assurance with independent audit opinion thereon and an annual declaration by Member States by which they assume the responsibility for the management of Union funds they are entrusted with, financial clearance, suspension and correction mechanisms operated by the Commission. Detailed provisions should remain in sector-specific Regulations.

(25) Basic control and audit obligations of Member States where they implement the budget indirectly in shared management, which currently exist only in sector-specific Regulations, should be, for the purposes of Articles 317 and 290 of the TFEU, introduced in this Regulation. Therefore it is necessary to include provisions, setting out a coherent framework for all policy areas concerned, on a harmonised administrative structure at national level, which does not create any additional control structures but allows the Member States to accredit bodies entrusted with the implementation of Union funds. The Member States should have the competence to determine the entity or organisation carrying out the functions of the accrediting authority, which may be at the same administrative level as the accredited body or already be responsible for the supervision of other authorities at present; this should not preclude the choice of any other structure on the part of the Member States as long as this is in line with the provisions of this Regulation. Furthermore, common management and control obligations for those structures, annual management declaration of assurance with independent audit opinion thereon and an annual declaration by Member States by which they assume the responsibility for the management of Union funds they are entrusted with, financial clearance, suspension and correction mechanisms operated by the Commission should be contained in this Regulation in order to create a coherent legislative framework which also improves the overall legal certainty and the efficiency of controls and remedial actions as well as the protection of the Union’s financial interests. Detailed provisions should remain in sector-specific Regulations.

Amendment  14

Proposal for a regulation

Recital 33 a (new)

Text proposed by the Commission

Amendment

 

(33a) All draft proposals submitted to the legislative authority should be suitable for the application of user-friendly information technologies (‘e-government’) and the interoperability of data processed in the management of the budget should be ensured, which should improve efficiency. Uniform data transmission standards for data available in electronic format should be foreseen. A transitional period of two years from the entry into force of this Regulation should be granted for the attainment of these targets.

Amendment  15

Proposal for a regulation

Recital 38 a (new)

Text proposed by the Commission

Amendment

 

(38a) Lump sums and flat rates should be used on a voluntary basis and only applied where appropriate. The terminology in use on flat rates and lump sums should be clarified.

Amendment  16

Proposal for a regulation

Recital 38 b (new)

Text proposed by the Commission

Amendment

 

(38b) A further clarification or a reasonable definition of eligible costs should be proposed, as it would enhance compliance with the full cost principle, namely direct and indirect costs, upstream and downstream of research.

Amendment  17

Proposal for a regulation

Recital 43 a (new)

Text proposed by the Commission

Amendment

 

(43a) In order to allow its auditees sufficient time to address findings of the Court of Auditors that could have an impact on the auditees’ final accounts or the legality and/or regularity of their underlying transactions, the Court of Auditors shall ensure that all such findings are transmitted to the institution or body concerned in good time.

Amendment  18

Proposal for a regulation

Recital 44

Text proposed by the Commission

Amendment

(44) The provisions concerning provisional and final accounts should be updated, in particular in order to provide for the reporting information that should accompany the accounts sent to the Commission’s Accounting officer for the purpose of consolidation. Reference should also be made to the representation letter accompanying the transmission, by the institutions and bodies financed by the budget, to the Court of Auditors of their final accounts, as well as to the representation letter accompanying the transmission of the Union’s final consolidated accounts. Finally, an earlier deadline should be set out for the Court of Auditors to make its observations on the provisional accounts of institutions other than the Commission and bodies financed by the budget in order to allow them to draw up their final accounts taking into account the remarks by the Court of Auditors remarks.

(44) The provisions concerning provisional and final accounts should be updated, in particular in order to provide for the reporting information that should accompany the accounts sent to the Commission’s Accounting officer for the purpose of consolidation. Reference should also be made to the representation letter accompanying the transmission, by the institutions and bodies financed by the budget, to the Court of Auditors of their final accounts, as well as to the representation letter accompanying the transmission of the Union’s final consolidated accounts. Finally, an earlier deadline should be set out for the Court of Auditors to make its observations on the provisional accounts of institutions other than the Commission and bodies financed by the budget in order to allow them to draw up their final accounts taking into account the remarks by the Court of Auditors remarks. In order to close the discharge procedure during the year following the year being audited, a working group will be set up to make proposals aimed at shortening the time taken by the procedure.

Amendment  19

Proposal for a regulation

Recital 45

Text proposed by the Commission

Amendment

(45) As regards the information which is to be submitted by the Commission in the context of discharge, the Commission should notably submit to the European Parliament and to the Council an evaluation report on the Union’s finances based on the results achieved, in accordance with Article 318 of the TFEU. Adequate provisions should therefore be introduced in this Regulation for such report in relation to other existing reporting requirements.

(45) As regards the information which is to be submitted by the Commission in the context of discharge, the Commission should notably submit to the European Parliament and to the Council an evaluation report on the Union’s finances based on the results achieved, in accordance with Article 318 of the TFEU. Adequate provisions should therefore be introduced in this Regulation for such report in relation to other existing reporting requirements. The report should include in particular elements on the achievements in the field of gender aspects of staff policy.

Amendment  20

Proposal for a regulation

Recital 48

Text proposed by the Commission

Amendment

(48) As regards the specific provisions relating to the implementation of external actions, it is necessary to adapt them to the changes proposed for the methods of implementation.

(48) As regards the specific provisions relating to the implementation of external actions, it is necessary to adapt them to the changes proposed for the methods of implementation and to propose a differentiated approach when the European Union is required to respond to humanitarian emergencies, international crises or third countries undergoing a process of democratic transition.

Amendment 21

Proposal for a regulation

Recital 54 a (new)

Text proposed by the Commission

Amendment

 

(54a) It is of particular importance that the Commission carry out appropriate consultations during its preparatory work for delegated acts, including at expert level.

 

The Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and Council.

Justification

Recital 54a (new) is based on a standard clause of Common Understanding of Parliament, Council and Commission on the implementation of Article 290 TFEU.

Amendment  22

Proposal for a regulation

Recital 55

Text proposed by the Commission

Amendment

(55) The revision of this Regulation should be made only when necessary. Too frequent revisions generate disproportionate cost of adjusting administrative structures and procedures to the new rules. Furthermore, time may be too short to allow for valid conclusion to be drawn from the application of the rules in force.

deleted

Amendment  23

Proposal for a regulation

Recital 56 a (new)

Text proposed by the Commission

Amendment

 

(56a) The readability of this Regulation should be improved by attaching an index that also includes the names of each article, as well as a glossary of financial terms,

Amendment  24

Proposal for a regulation

Article 1

Text proposed by the Commission

Amendment

This Regulation lays down the rules for the establishment and the implementation of the annual budget of the Union, (hereinafter the ‘budget’) and the presentation and auditing of the accounts.

1. This Regulation lays down the rules for the establishment and the implementation of the general budget of the European Union, (‘the budget’) and the presentation and auditing of the accounts.

 

2. For the purposes of this Regulation:

 

- the term ‘institution’ refers to the European Parliament, the European Council and the Council, the European Commission, the Court of Justice of the European Union and the European Court of Auditors, the European Economic and Social Committee, the Committee of the Regions, the European Ombudsman, the European Data Protection Supervisor and the European External Action Service (‘EEAS’);

 

- the European Central Bank shall not be considered as an institution of the Union.

 

Any reference to the ‘Union’ shall be understood as a reference to the European Union and the European Atomic Energy Community.

Justification

Retain original text which resulted from negotiations on the EEAS.

Amendment  25

Proposal for a regulation

Article 2

Text proposed by the Commission

Amendment

Any provision concerning the implementation of the revenue and expenditure of the budget, contained in another legislative act, must comply with the budgetary principles set out in Title II.

Any provision concerning the implementation of the revenue and expenditure of the budget, contained in another legislative act, must comply with this Regulation and the detailed rules for the application of this Regulation in accordance with the delegated regulation referred to in Article 199 .

This Regulation shall apply to the European Parliament, the European Council and the Council, the European Commission, the Court of Justice of the European Union and the European Court of Auditors, the European Economic and Social Committee, the Committee of the Regions, the European Ombudsman, the European Data Protection Supervisor and the European External Action Service (hereinafter referred to as ‘institution(s)’).

Any proposal or amendment to a proposal submitted to the legislative authority shall clearly indicate the provisions containing deviations from this Regulation or from delegated regulations adopted pursuant to this Regulation and shall state the specific reasons justifying such deviations in the respective Explanatory Memorandum of any such proposal.

This Regulation shall not apply to the European Central Bank.

 

This Regulation shall apply to the implementation of administrative expenditure relating to the appropriations provided in the budget for the Euratom Supply Agency.

 

Justification

The amendment reintroduces the current text of the Financial Regulation.

(i) The second part of Commission’s proposal is redundant because it is already included in Article 1.

(ii) The text of the current Implementing Rules is included in the amended text, further to recommendations by the legal service. The aim is to avoid contradictions between the Financial Regulation and other legal provisions.

Amendment 26

Proposal for a regulation

Article 2 a (new)

Text proposed by the Commission

Amendment

 

Article 2a

 

Protection of personal data

 

This Regulation is without prejudice to the requirements of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data and of Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data.

Amendment  27

Proposal for a regulation

Article 4 – paragraph 1

Text proposed by the Commission

Amendment

1. The budget is the instrument which, for each financial year, forecasts and authorises all revenue and expenditure considered necessary for the Union and the European Atomic Energy Community.

1. All revenue and expenditure have to be included in the budget and its annexes, including, for each financial year, forecasts and all authorised revenue and expenditure considered necessary for the Union.

Justification

The amendments on Article 4 stem from the RUF-report (Réseau des Unités Financières) ‘In order to better reflect the distinction between administrative and operational expenditure, it is proposed to modify Article 4 FR.’

Amendment  28

Proposal for a regulation

Article 4 – paragraph 2

Text proposed by the Commission

Amendment

2. The revenue and expenditure of the Union shall comprise:

2. The revenue and expenditure of the Union shall comprise:

(a) the revenue and expenditure of the Union, including administrative expenditure occasioned for the institutions by the provisions of the Treaty on European Union relating to the common foreign and security policy, and the operational expenditure occasioned by implementation of those provisions where this is charged to the budget;

(a) the revenue and expenditure of the Union;

(b) the expenditure and revenue of the European Atomic Energy Community.

(b) the revenue and expenditure occasioned for the implementation of the respective European Development Fund.

Amendment  29

Proposal for a regulation

Article 4 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. The expenditure of the Union referred to in paragraph 2 includes:

 

(a) administrative expenditure, including expenditure occasioned for the institutions by the provisions of the Treaty on European Union relating to the Common Foreign and Security Policy and the operating expenditure occasioned by implementation of those provisions where this is charged to the budget; and

 

(b) the operational expenditure, occasioned by implementation of those provisions where this is charged to the budget, including related support expenditure.

Amendment  30

Proposal for a regulation

Article 4 – paragraph 2 b (new)

Text proposed by the Commission

Amendment

 

2b. The budget shall record the guarantee for borrowing-and-lending operations entered into by the Union in the management of the European Financial Stability Facility (EFSF) and the European Financial Stability Mechanism (EFSM) and payments to the Guarantee Fund for external actions.

Justification

Re-install paragraph 3 of Article 4 of the current state of the Financial Regulation with adjustments.

Amendment 31

Proposal for a regulation

Article 5 – paragraph 4

Text proposed by the Commission

Amendment

4. Interest yielded by the funds which are the property of the Union shall not be due to the Union save otherwise provided for in the agreements concluded with the entrusted entities listed in points (ii) to (viii) of Article 55(1)(b), and in grant decisions or agreements concluded with beneficiaries. In those cases, such interest shall be re-used for the corresponding programme or recovered.

4. Interest yielded by the funds which are the property of the Union shall not be due to the Union save otherwise provided for in the agreements concluded with the entrusted entities listed in points (ii) to (viii) of Article 55(1)(b). In those cases, such interest shall be re-used for the corresponding programme and set off against the entitlements of the respective recipient or, where this would be impossible, impractical or inefficient, recovered.

Justification

The deletion clarifies that there should be no duty of the beneficiaries to make use of interest bearing accounts, which has been a reason for excessive bureaucracy and implementation problems.

Amendment  32

Proposal for a regulation

Article 5 a (new)

Text proposed by the Commission

Amendment

 

Article 5a

 

Lapse of a deadline

 

1. A deadline specified by days ends on the expiry of the last day of the period.

 

2. A deadline specified by weeks, by months or by a duration of time comprising more than one month - year, half-year, quarter - ends on the expiry of the day of the last week or of the last month which, in its designation or its number, corresponds to the day on which the event or the point of time occurs.

 

3. If, in the case of a deadline determined by months, the day on which it is due to expire does not occur in the last month, the period ends on the expiry of the last day of this month.

Amendment  33

Proposal for a regulation

Article 5 b (new)

Text proposed by the Commission

Amendment

 

Article 5b

 

Extension of period

 

If a deadline is extended, the new deadline is calculated from the lapse of the previous deadline.

Amendment  34

Proposal for a regulation

Article 5 c (new)

Text proposed by the Commission

Amendment

 

Article 5c

 

Sundays and holidays; Saturdays

 

If an act is to be performed on a particular day or within a deadline, and if the particular day or the last day of the deadline falls on a Sunday, a general holiday which is officially recognised, or on a Saturday, the next working day takes the place of this day.

Amendment  35

Proposal for a regulation

Article 9 – paragraph 2 – point a a (new)

Text proposed by the Commission

Amendment

 

(aa) or, in duly substantiated cases, amounts for building projects within the meaning of Article 195(3) which have not yet been completed if the preparatory stages of the commitment procedure have not yet been completed by 31 December and the amounts are needed so that progress with works can be stepped up or debt repaid early; these amounts may then be committed up to 31 December of the following year; and

Amendment  36

Proposal for a regulation

Article 9 – paragraph 2 – point b a (new)

Text proposed by the Commission

Amendment

 

(ba) amounts corresponding from an own resource system;

Justification

Since the European Commission is going to present a proposal to re-organise the EU’s own resource system in June 2011, Art. 9 paragraph 2 of the Financial Regulation should allow the carry-over of amounts corresponding from this new resource system.

Amendment  37

Proposal for a regulation

Article 9 – paragraph 4

Text proposed by the Commission

Amendment

4. Non-differentiated appropriations corresponding to obligations duly contracted at the close of the financial year shall be carried over automatically to the following financial year only.

4. Non-differentiated appropriations corresponding to obligations duly contracted at the close of the financial year shall be carried over automatically to the following financial year only. The same shall apply to de-committed and unused appropriations (commitments and payments) not covered by paragraphs 2 and 3 as well as available, unspent margins below the overall ceiling of the Multiannual Financial Framework for each heading, which shall constitute a ‘global MFF margin’ and be attributed to the different headings in the following financial year according to their needs.

Amendment  38

Proposal for a regulation

Article 9 – paragraph 6

Text proposed by the Commission

Amendment

6. Without prejudice to Article 10, appropriations placed in reserve and appropriations for staff expenditure may not be carried over.

6. Without prejudice to Article 10, appropriations placed in reserve and appropriations for staff expenditure may not be carried over. For the purpose of this Article, staff expenditure comprises the remuneration and allowances for members and staff of the institutions to which the Staff Regulations apply.

Justification

Incorporation of a provision formerly contained in the Implementing Rules. According to a Commission proposal, this is an ‘essential’ element in the meaning of Article 290 TFEU and therefore this definition should be better inserted into the Financial Regulation itself.

Amendment  39

Proposal for a regulation

Article 9 a (new)

Text proposed by the Commission

Amendment

 

Article 9a

 

Carry over of unused appropriations

 

Unused appropriations both in commitments and payments as well as decommitted appropriations of year N may be carried over into N+1 budget, or in one of the future budgets in the framework of the annual budgetary procedure, by a decision of the budgetary authority.

 

The Commission shall present before 1 October of the year N to the budgetary authority its forecast for unused and decommitted appropriations of year N, both in commitments and payments.

 

Each arm of the budgetary authority shall eventually indicate how to allocate unused appropriations either in the N+1 budget or even on subsequent years.

 

The decision will be taken jointly by the two arms of the budgetary authority following the procedure in accordance with Article 314 TFEU.

 

The unused and decommitted appropriations shall be entered into one of the budgets and beyond the ceilings of the Multiannual Financial Framework.

 

Unused and decommitted appropriations may be allocated either to a specific programme, or entered into a provisional chapter. In this case resources from the Member States will be called for only after the decision of the budgetary authority on the specific destination.

 

Carry over of margin of the Multiannual Financial Framework

 

If, after the adoption of the annual budget, margins are left under each ceiling of the financial framework, the budgetary authority may decide, before the end of the exercise, to carry over the unused margins in any ceiling of one of the subsequent years of the Multiannual Financial Framework. The total amount of the Multiannual Financial Framework will remain unchanged.

Amendment   40

Proposal for a regulation

Article 13 – paragraph 3

Text proposed by the Commission

Amendment

3. If the continuity of action by the Union and management needs so require, the Council, acting by a qualified majority on a proposal of the Commission, may authorise two or more provisional twelfths both for commitments and for payments over and above those automatically made available pursuant to paragraphs 1 and 2. It shall forward the decision on authorisation without delay to the European Parliament.

3. If the continuity of action by the Union and management needs so require, the Council, acting by a qualified majority on a proposal of the Commission, may authorise expenditure in excess of one provisional twelfth but not exceeding the total of two provisional twelfths 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.

The decision shall enter into force thirty days following its adoption unless the European Parliament, acting by a majority of its Members, decides to reduce that expenditure within those thirty days.

The decision shall enter into force thirty days following its adoption unless the European Parliament, acting by a majority of its component Members, decides to reduce that expenditure within that time limit.

If the European Parliament decides to reduce that expenditure, the Council shall review the decision on authorisation taking into account the amount approved by the European Parliament.

If the European Parliament decides to reduce that expenditure, that reduced amount shall apply.

The additional twelfths shall be authorised in full and shall not be divisible.

If, for a given chapter, the amount of the two provisional twelfths granted in accordance with the first subparagraph is not sufficient to cover the expenditure necessary to avoid a break in continuity of the Union’s activity in the area covered by the chapter in question, authorisation may exceptionally be given to exceed the amount of the appropriations entered in the relevant chapter of the budget of the preceding financial year. The budgetary authority shall act under the procedures provided for in this paragraph. However, the available overall total of the appropriations in the budget of the preceding financial year may in no circumstances be exceeded.

Amendment 41

Proposal for a regulation

Article 15

Text proposed by the Commission

Amendment

Balance from financial year

Carry-over of budgetary balance

1. The balance from each financial year shall be entered in the budget for the following financial year as revenue in the case of a surplus or as a payment appropriation in the case of a deficit.

1. The balance from each financial year after carry-overs according to Articles 9 and 10 shall be entered in the budget for the following financial year as additional revenue in the case of a surplus or as a payment appropriation only in the case of a deficit, in strict accordance with Article 7 of the Council Decision on Own resources, not including a quasi-automatic adaptation of Member States’ contributions to the Union budget.

2. The estimates of such revenue or payment appropriations shall be entered in the budget during the budgetary procedure and in a letter of amendment presented pursuant to Article 35. They shall be drawn up in accordance with the Council Regulation implementing the Decision on the system of the Union’s own resources.

2. The estimates of such revenue or payment appropriations shall be entered in the budget during the budgetary procedure and in a letter of amendment presented pursuant to Article 35.

3. After the presentation of the accounts for each financial year, any discrepancy with the estimates shall be entered in the budget for the following financial year through an amending budget devoted solely to that discrepancy. In such a case, the draft amending budget must be submitted by the Commission within 15 days following the submission of the provisional accounts.

3. After the presentation of the accounts for each financial year, any discrepancy with the estimates shall be entered in the budget for the following financial year through an amending budget devoted to that discrepancy and, in the case of a surplus, to corresponding additional appropriations. The draft amending budget must be submitted by the Commission within 45 days following the submission of the provisional accounts.

Amendment  42

Proposal for a regulation

Article 15 a (new)

Text proposed by the Commission

Amendment

 

Article 15a

 

Reserve for payments and commitments

 

The surplus and the unspent commitments of the previous budgetary years of the current multi-annual financial framework as well as decommitted appropriations shall be entered in the reserve for payments and commitments.

 

This reserve shall be used in first instance for any additional and/or unforeseen needs as well as to compensate any negative reserve, which procedure is laid down in Article 44.

 

The decision to mobilise this reserve will be taken jointly by the two arms of the budgetary authority following a proposal by the Commission.

Amendment  43

Proposal for a regulation

Article 16

Text proposed by the Commission

Amendment

The multiannual financial framework and the budget shall be drawn up and implemented in euro and the accounts shall be presented in euro.

The multiannual financial framework and the budget shall be drawn up and implemented in euro and the accounts shall be presented in euro.

However, for the cash-flow purposes referred to in Article 65, the accounting officer and, in the case of imprest accounts, the imprest administrators, and, for the needs of the administrative management of the Commission and the European External Action Service (hereinafter referred to as ‘EEAS’), the authorising officer responsible shall be authorised to carry out operations in national currencies as laid down in the delegated Regulation referred to in Article 199.

However, for the cash-flow purposes referred to in Article 65, the accounting officer and, in the case of imprest accounts, the imprest administrators, and, for the needs of the administrative management of the Commission and the European External Action Service, the authorising officer responsible shall be authorised to carry out operations in national currencies as laid down in the delegated regulation referred to in Article 199.

 

The results of such currency operations shall be shown under a separate heading in the respective institution’s accounts; this shall apply mutatis mutandis to bodies referred to in Article 196b.

 

The Commission shall assure by appropriate means that currency fluctuations in the remuneration and for reimbursements of Union staff are being equalised at least at monthly intervals in order to ensure equal treatment of euro-based operations and salaries necessarily carried out in other currencies. Its calculation shall be based on the Infor€uro rate.

Justification

The third subparagraph is inserted to enhance budgetary transparency of third currency operations. The fourth subparagraph is inserted in order to compensate EU staff in third countries for currency fluctuations in a quick manner.

Amendment 44

Proposal for a regulation

Article 18 – paragraph 2 – point e a (new)

Text proposed by the Commission

Amendment

 

(ea) fines imposed in the area of competition, other fines and amounts receivable as a result of out-of-court settlements, understandings, or any other similar agreements concluded with, or off payments paid by, any non-state third parties;

Amendment  45

Proposal for a regulation

Article 18 – paragraph 2 – subparagraph 2 (new)

Text proposed by the Commission

Amendment

 

However, in the case provided for in point (b), commitment appropriations may be made available upon signature by the Member State of a contribution agreement expressed in Euro. This shall not apply to cases provided for in Article 173(2) and 175(2).

Justification

Incorporation of a provision formerly contained in the Implementing rules. According to a Commission proposal, it should be better inserted in the Financial Regulation itself.

Amendment  46

Proposal for a regulation

Article 18 – paragraph 3

Text proposed by the Commission

Amendment

3. The following shall constitute internal assigned revenue:

3. The following shall constitute internal assigned revenue:

(a) revenue from third parties in respect of goods, services or work supplied at their request;

(a) revenue from third parties in respect of goods, services or work supplied at their request;

(b) proceeds from the sale of vehicles, equipment, installations, materials, and scientific and technical apparatus which are being replaced or scrapped when the book value is fully depreciated;

(b) proceeds from the sale of vehicles, equipment, installations, materials, and scientific and technical apparatus which are being replaced or scrapped when the book value is fully depreciated;

(c) revenue arising from the repayment of amounts wrongly paid;

(c) revenue arising from the repayment of amounts wrongly paid subject to Article 77;

 

(ca) revenue arising from interest on pre-financing subject to Article 5;

(d) proceeds from the supply of goods, services and works for other departments, institutions or bodies, including refunds by other institutions or bodies of mission allowances paid on their behalf;

(d) proceeds from the supply of goods, services and works for other departments, institutions or bodies, including refunds by other institutions or bodies of mission allowances paid on their behalf;

(e) insurance payments received;

(e) insurance payments received;

(f) revenue from the sale, letting or any other contract concerning rights connected with real estate;

(f) revenue from the sale, letting, reimbursement or any other contract concerning rights connected with real estate;

(g) revenue from the sale of publications and films, including those on an electronic medium.

(g) revenue from the sale of publications and films, including those on an electronic medium.

Amendment  47

Proposal for a regulation

Article 19 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. All individual donations to the Commission exceeding EUR 999 or aggregate donations from one donor in excess of this amount in any one year will be traceable via a dedicated website.

Amendment  48

Proposal for a regulation

Article 20 – paragraph 1

Text proposed by the Commission

Amendment

1. The delegated Regulation referred to in Article 199 may specify the cases where certain revenue may be deducted from requests for payment, which shall then be passed for payment of the net amount.

1. The following deductions may be made from payment requests which shall then be passed for payment of the net amount:

 

(a) penalties imposed on parties to procurement contracts or beneficiaries of a grant;

 

(b) discounts, refunds and rebates on individual invoices and cost statements;

 

(c) interest generated by pre-financing payments;

 

(d) adjustments for amounts unduly paid.

 

Adjustments referred to in point (d) of the first subparagraph may be made, by means of direct deduction, against a new payment of the same type to the same payee under the chapter, article and financial year in respect of which the excess payment was made, and which give rise to interim payments or payments of balances.

 

To the items referred to in points (c) and (d) of the first subparagraph the Union accounting rules shall apply.

Justification

Incorporation of a provision formerly contained in the Implementing rules. According to a Commission proposal, this is an ‘essential’ element in the meaning of Article 290 TFEU and therefore as derogation from the no-netting principle, it should be better inserted in the Financial Regulation itself.

Amendment  49

Proposal for a regulation

Article 21 – paragraph 1

Text proposed by the Commission

Amendment

1. Appropriations shall be earmarked for specific purposes by title and chapter; the chapters shall be further subdivided into articles and items.

1. Appropriations shall be earmarked for specific purposes by title and chapter; the chapters shall be further subdivided into articles and items. Operating appropriations and investments shall be presented separately.

Amendment  50

Proposal for a regulation

Article 21 – paragraph 2

Text proposed by the Commission

Amendment

2. The Commission may, within its own section of the budget, transfer appropriations autonomously as detailed in Article 23 or shall request the budgetary authority’s approval for the transfer of appropriations in the cases detailed in Article 24.

2. The Commission may, within its own section of the budget, transfer appropriations as detailed in Article 23; alternatively the Commission or the other institutions shall request the budgetary authority’s approval for the transfer of appropriations in the cases detailed in Article 24.

Amendment  51

Proposal for a regulation

Article 21 – paragraph 3

Text proposed by the Commission

Amendment

3. Appropriations may be transferred only to budget lines for which the budget has authorised appropriations or carries a token entry ‘pro memoria’.

deleted

Justification

Now Article 24a para. 1 (no change to the present legal situation).

Amendment  52

Proposal for a regulation

Article 21 – paragraph 4

Text proposed by the Commission

Amendment

4. Appropriations corresponding to assigned revenue may be transferred only if such revenue is used for the purpose to which it is assigned.

deleted

Justification

Now Article 24a para. 2 (no change to the present legal situation).

Amendment  53

Proposal for a regulation

Article 22 – paragraph 3

Text proposed by the Commission

Amendment

3. Any institution other than the Commission may propose to the budgetary authority, within its own section of the budget, transfers from one title to another exceeding the limit of 10 % of the appropriations for the financial year on the line from which the transfer is to be made. Those transfers shall be subject to the procedure laid down in Article 24.

3. Any institution other than the Commission may propose to the budgetary authority, within its own section of the budget, transfers from one title to another exceeding the limit of 15 % of the appropriations for the financial year on the line from which the transfer is to be made. Those transfers shall be subject to the procedure laid down in Article 24.

Amendment 54

Proposal for a regulation

Article 23

Text proposed by the Commission

Amendment

1. The Commission may, within its own section of the budget, autonomously:

1. The Commission may, within its own section of the budget:

(a) transfer commitment appropriations within each chapter;

(a) transfer commitment appropriations within each chapter;

(b) transfer payment appropriations within each title;

(b) transfer payment appropriations within each title after prior notification to Parliament and Council provided that neither of them opposes the transfer within three weeks;

(c) as regards expenditure on staff and administration which is common to several titles, transfer appropriations from one title to another;

(c) as regards expenditure on staff and administration, transfer appropriations from one title to another up to a maximum of 15 % of the appropriations for the year shown on the line from which the transfer is made, and up to a maximum of 30 % of the appropriations for the year shown on the line to which the transfer is made;

(d) as regards operational expenditure, transfer appropriations between chapters within the same title, up to a maximum total of 10 % of the appropriations for the year shown on the line from which the transfer is made.

(d) as regards operational expenditure, transfer appropriations between chapters within the same title, up to a maximum total of 15 % of the appropriations for the year shown on the line from which the transfer is made;

2. The Commission may, within its own section of the budget, decide on the following transfer appropriations from one title to another, provided it informs immediately the budgetary authority of its decision:

2. The Commission may, within its own section of the budget, decide to transfer from one title to another

(a) transfer appropriations from the ‘provisions’ title referred to in Article 43, where the only condition to lift the reserve lies in the adoption of a basic act in accordance with the ordinary legislative procedure foreseen in Article 294 TFEU;

appropriations from the ‘provisions’ title referred to in Article 43, where the only condition to lift the reserve lies in the adoption of a basic act in accordance with the ordinary legislative procedure foreseen in Article 294 TFEU; provided it informs immediately the budgetary authority of its decision.

(b) in duly substantiated exceptional cases of international humanitarian disasters and crises, occurring after 1 December of the budgetary year, the Commission may transfer unused budgetary appropriations for the current budgetary year still available in the budget titles falling under heading 4 of the multiannual financial framework to the budget titles concerning the crisis management aid and humanitarian aid operations.

2a. In duly reasoned exceptional cases of international humanitarian disasters and crises, occurring after 1 December of the budgetary year, the Commission may transfer unused budgetary appropriations for the current budgetary year still available in the budget titles falling under heading 4 of the multiannual financial framework to the budget titles concerning the crisis management aid and humanitarian aid operations.

 

The Commission shall inform the two branches of the budgetary authority immediately after making such transfers or making such use of appropriations for the following year.

 

2b. The Commission may supply the information justifying the transfer in the form of a staff working document.

 

2c. The Commission may, within its own section of the budget, propose to the budgetary authority transfers other than those referred to in paragraph 1.

Amendment  55

Proposal for a regulation

Article 24 – title

Text proposed by the Commission

Amendment

Transfers by the Commission submitted to the budgetary authority

Transfers by the institutions submitted to the budgetary authority

Amendment  56

Proposal for a regulation

Article 24 – paragraph 1

Text proposed by the Commission

Amendment

1. The Commission shall submit its proposal of transfers simultaneously to the European Parliament and the Council.

1. The institutions shall submit their proposals simultaneously to the two arms of the budgetary authority.

Amendment  57

Proposal for a regulation

Article 24 – paragraph 2

Text proposed by the Commission

Amendment

2. The budgetary authority shall take decisions on transfers of appropriations as provided for in paragraphs 3 to 6, save as otherwise provided in Title I of Part Two.

2. The budgetary authority shall take decisions on transfers of appropriations as provided for in paragraphs 3, 4 and 6, save as otherwise provided in Title I of Part Two.

Amendment  58

Proposal for a regulation

Article 24 – paragraph 3

Text proposed by the Commission

Amendment

3. Save in urgent circumstances, the Council, by a qualified majority, and the European Parliament, shall deliberate upon the Commission proposal within six weeks of the date on which the two institutions received the proposal for each transfer submitted to them.

3. Save in duly reasoned urgent circumstances, the Council, by a qualified majority, and the European Parliament, shall deliberate upon the institution’s proposal within six weeks of the date on which the two institutions received the proposal for each transfer submitted to them.

Amendment 59

Proposal for a regulation

Article 24 – paragraph 4

Text proposed by the Commission

Amendment

4. The transfer proposal shall be approved, if within the six-week period in any of the following cases:

4. The transfer proposal shall be approved, if within the six-week period:

(a) European Parliament and the Council approve it;

- both arms of the budgetary authority approve it;

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

- one of the two arms of the budgetary authority approves it and the other refrains from acting;

(c) European Parliament and the Council refrain from acting or have not taken a decision contrary to the Commission proposal.

- both arms of the budgetary authority refrain from acting or have not taken a decision contrary to the transfer proposal.

Amendment  60

Proposal for a regulation

Article 24 – paragraph 5

Text proposed by the Commission

Amendment

5. The six-week period referred to under point 4 shall be reduced to three weeks, unless either the European Parliament or the Council requests otherwise, in any of the following cases:

deleted

(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 million;

 

(b) the transfer concerns only payment appropriations and the overall amount of the transfer does not exceed EUR 100 million.

 

Amendment  61

Proposal for a regulation

Article 24 – paragraph 6

Text proposed by the Commission

Amendment

6. If either the European Parliament or the Council has amended the transfer while the other institution has approved it or refrains from acting, or if European Parliament and the Council have amended the transfer, the smaller amount approved either by the European Parliament or the Council shall be deemed approved, unless the Commission withdraws its proposal.

6. If one of the two arms of the budgetary authority has amended the transfer while the other approved it or refrains from acting, or if both arms have amended the transfer, the smaller amount approved either by the European Parliament or the Council shall be deemed approved, unless the institution withdraws its proposal.

Amendment  62

Proposal for a regulation

Article 24 a (new)

Text proposed by the Commission

Amendment

 

Article 24a

 

Specific rules on transfers

 

1. Appropriations may be transferred only to budget lines for which the budget has authorised appropriations or carries a token entry ‘pro memoria’.

 

2. Appropriations corresponding to assigned revenue may be transferred only if such revenue is used for the purpose to which it is assigned.

Justification

Transferred from Article 21 (3) and (4).

Amendment  63

Proposal for a regulation

Article 25 – paragraph 2

Text proposed by the Commission

Amendment

2. Decisions on transfers to allow the use of the emergency aid reserve shall be taken by the budgetary authority on a proposal from the Commission, or by the Commission for a maximum of 10% of the appropriations for the year shown on the line from which the transfer is made. The procedure provided for in Article 24(3) and (4) shall apply. If the Commission proposal is not agreed to by the European Parliament and the Council and there is a failure to arrive at a common position on the use of this reserve, the European Parliament and the Council shall refrain from acting on the Commission’s proposal of transfers.

2. Decisions on transfers to allow the use of the reserve for emergency aid shall be taken by the budgetary authority on a proposal from the Commission. A separate proposal must be submitted for each individual operation. The procedure provided for in Article 24(3) and (4) shall apply. If the Commission proposal is not agreed to by both arms of the budgetary authority and there is a failure to arrive at a common position on the use of this reserve, the European Parliament and the Council shall refrain from acting on the Commission’s proposal for a transfer.

The procedure provided for in Article 24(3) and (4) shall apply. If the Commission proposal is not agreed to by the European Parliament and the Council and there is a failure to arrive at a common position on the use of this reserve, the European Parliament and the Council shall refrain from acting on the Commission’s proposal of transfers.

The procedure provided for in Article 24(3) and (4) shall apply. If the Commission proposal is not agreed to by both arms of the budgetary authority and there is a failure to arrive at a common position on the use of this reserve, both arms of the budgetary authority shall refrain from acting on the Commission’s proposal of transfers.

Justification

Maintain current provisions of the Financial Regulation and thus protect Parliament’s rights.

Amendment  64

Proposal for a regulation

Article 26 – paragraph 3

Text proposed by the Commission

Amendment

3. Specific, measurable, achievable, relevant and timed objectives shall be set for all sectors of activity covered by the budget. Achievement of those objectives shall be monitored by performance indicators for each activity and information shall be provided by the spending authorities to the budgetary authority. Such information shall be provided annually and at the latest in the documents accompanying the draft budget.

3. Specific, measurable, achievable, relevant and timed objectives shall be set for all sectors of activity covered by the budget. Achievement of those objectives shall be monitored by performance indicators for each activity and information shall be provided by the spending authorities to the budgetary authority. Such information, as referred to in Article 34(2a)(d), shall be provided annually and at the latest in the documents accompanying the draft budget.

Amendment  65

Proposal for a regulation

Article 27 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. During the budgetary procedure, the Commission shall provide the necessary information for a comparison between changes in the appropriations required and the initial forecasts made in the financial statements. This information shall include progress made and the stage reached by the legislative authority in its consideration of proposals presented. The appropriations required shall, where appropriate, be revised in the light of the progress of deliberations on the basic act.

Amendment  66

Proposal for a regulation

Article 27 – paragraph 2

Text proposed by the Commission

Amendment

2. In order to reduce the risk of fraud and irregularities, the financial statement referred to in paragraph 1 shall provide information on the internal control system set up, an assessment of the risk involved, as well as existing and planned fraud prevention and protection measures.

2. In order to reduce the risk of fraud and irregularities, the financial statement referred to in paragraph 1 shall provide information on the internal control system set up, an estimate of the costs and benefits of controls implied by such systems and an assessment of the risk involved, as well as existing and planned fraud prevention and protection measures.

Amendment  67

Proposal for a regulation

Article 28 – paragraph 2 – point a a (new)

Text proposed by the Commission

Amendment

 

(aa) precise, consistent and transparent rules for control with respect to the rights of involved parties;

Justification

The Parliament asked in its report of 11 November 2010 on research simplification (2010/2079(INI)), paragraph 29, to present precise, consistent and transparent rules for control with respect to the rights of involved parties and these principles shall be an integral part of internal control of budget implementation.

Amendment  68

Proposal for a regulation

Article 28 – paragraph 2 – point d

Text proposed by the Commission

Amendment

(d) prevention, detection and correction of fraud and irregularities;

(d) notwithstanding the responsibilities of the financial actors as defined in Chapter 3, prevention, detection and follow-up of correction of fraud and irregularities;

Amendment  69

Proposal for a regulation

Article 28 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. Effective internal control shall be based on best international practices and include in particular the following:

 

(a) segregation of tasks;

 

(b) an appropriate risk management and control strategy including controls at beneficiary level;

 

(c) avoidance of conflicts of interests;

 

(d) adequate audit trails and data integrity in data systems;

 

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

 

(f) periodic assessment of the sound functioning of the internal control system.

Justification

Incorporation of a provision formerly contained in the Implementing rules. According to a Commission proposal, it should be better inserted in the Financial Regulation itself.

Amendment  70

Proposal for a regulation

Article 28 – paragraph 2 b (new)

Text proposed by the Commission

Amendment

 

2b. Efficient internal control shall be based on the following elements:

 

(a) the implementation of an appropriate risk management and control strategy coordinated among appropriate actors involved in the control chain;

 

(b) the accessibility of control results to all appropriate actors involved in the control chain;

 

(c) reliance where appropriate on management declarations of implementation partners and independent audit opinions, provided that the quality of the underlying work is adequate and acceptable and that it has been performed in accordance with agreed standards.

 

(d) the timely application of corrective measures including, where appropriate, dissuasive penalties;

 

(e) clear and unambiguous legislation underlying the policies;

 

(f) the elimination of multiple controls;

 

(g) the principle of improving the cost-benefit ratio of controls, taking into account the risk of error referred to in Article 29.

Justification

Incorporation of a provision formerly contained in the Implementing rules. According to a Commission proposal, it should be better inserted in the Financial Regulation itself.

Amendment 71

Proposal for a regulation

Article 29

Text proposed by the Commission

Amendment

Tolerable risk of error

Risk of error

The Legislative authority shall, in accordance with the procedure laid down in Article 322 of the TFEU, decide on a level of tolerable risk of error at an appropriate aggregation of the budget. That decision shall be taken into account during the annual discharge procedure, in accordance with Article 157(2).

When presenting revised or new spending proposals, the Commission shall estimate the cost of administrative and control systems as well as the level of risk of error with the proposed legislation per fund and per Member State.

The level of tolerable risk of error shall be based on an analysis of the costs and benefits of controls. Member States and entities and persons referred to in point (b) Article 55(1) shall on request report to the Commission on the costs of controls borne by them as well as the number and size of activities financed by the budget.

If, during the programme implementation, the level of error is persistently high, the Commission shall identify the weaknesses in the control systems and analyse the cost and benefits of possible corrective measures and take appropriate action such as simplification of the applicable provisions, re-design of the programme, tightening of controls or suggest, if necessary, termination of the activity.

The level of tolerable risk of error shall be closely monitored and shall be reviewed in case of major changes in the control environment.

Integral to the full effectiveness of national management and control systems are management declarations on these systems submitted by the bodies accredited by the Member States.

Amendment  72

Proposal for a regulation

Article 29 a (new)

Text proposed by the Commission

Amendment

 

Article 29a

 

Segregation of duties

 

The duties of accounting officer and payments officer shall be kept separate.

Amendment  73

Proposal for a regulation

Article 30 – paragraph 2 – subparagraph 3

Text proposed by the Commission

Amendment

The consolidated annual accounts and the report on budgetary and financial management drawn up by each institution shall be published in the Official Journal of the European Union.

The consolidated annual accounts and the report on budgetary and financial management drawn up by each institution shall be published immediately upon adoption in the Official Journal of the European Union.

Amendment 74

Proposal for a regulation

Article 31 – paragraph 2

Text proposed by the Commission

Amendment

2. The Commission shall make available, in an appropriate manner, information on the recipients of funds deriving from the budget held by it when the budget is implemented on a centralised basis and directly by its departments or by Union Delegations in accordance with the second paragraph of Article 53, and information on the recipients of funds as provided by the entities to which budget implementation tasks are delegated under other modes of management.

2. The Commission shall make available, in an appropriate manner, information on its contractors and beneficiaries of funds deriving from the budget when the budget is implemented on a centralised basis, and information on the contractors and beneficiaries of funds as provided by the entities to which budget implementation tasks are delegated under other modes of management.

 

This obligation shall also apply to the other institutions with regard to their contractors and, where applicable, their beneficiaries.

Amendment 75

Proposal for a regulation

Article 31 – paragraph 3

Text proposed by the Commission

Amendment

3. This information shall be made available with due observance of the requirements of confidentiality, in particular the protection of personal data, as laid down in Directive No 95/46/EC of the European Parliament and of the Council and Regulation (EC) No 45/2001 of the European Parliament and of the Council, and of the requirements of security taking into account the specificities of each management mode referred to in Article 53 and where applicable in conformity with the relevant sector-specific rules.

3. This information shall be made available with due observance of the requirements of confidentiality and security, and where natural persons are concerned, of the right to respect for private life and of the right to the protection of personal data, as set out in Directive No 95/46/EC of the European Parliament and of the Council and Regulation (EC) No 45/2001 of the European Parliament and of the Council.

 

Where natural persons are concerned, the publication shall be limited to the name of the contractor or the beneficiary, its localisation, the amount awarded and the purpose of the award, and the disclosure of these data, shall be based on relevant criteria such as the periodicity of award, or the type or the importance of the award. The level of details published and the criteria for disclosure shall take into account the specificities of the sector and of each management mode referred to in Article 55; the level of details and criteria shall be defined by means of the delegated regulation referred to in Article 199 and, where applicable, in the relevant sector-specific rules.

Amendment  76

Proposal for a regulation

Article 32 – paragraph 1

Text proposed by the Commission

Amendment

The European Parliament, the European Council and the Council, the Court of Justice of the European Union, the Court of Auditors, the Economic and Social Committee, the Committee of the Regions, the Ombudsman, the European Data-Protection Supervisor and the EEAS shall draw up an estimate of their revenue and expenditure, which they shall send to the Commission before 1 July each year.

The European Parliament, the European Council and the Council, the Court of Justice of the European Union, the Court of Auditors, the Economic and Social Committee, the Committee of the Regions, the Ombudsman, the European Data-Protection Supervisor and the EEAS shall draw up an estimate of their revenue and expenditure, which they shall send to the Commission and in parallel, for information, to the budgetary authority before 1 July each year.

Amendment  77

Proposal for a regulation

Article 32 – paragraph 3

Text proposed by the Commission

Amendment

These estimates shall also be sent by these institutions to the budgetary authority for information by no later than 1 July each year. The Commission shall draw up its own estimates, which it shall also send to the budgetary authority by the same date.

The Commission shall draw up its own estimates, which it shall also send to the budgetary authority directly after adoption.

Amendment  78

Proposal for a regulation

Article 33 – paragraph 1

Text proposed by the Commission

Amendment

Each body referred to in Article 200 shall, in accordance with the instrument establishing it, send to the Commission and the budgetary authority by 31 March each year an estimate of its revenue and expenditure, including the establishment plan, and its draft work programme.

Each body referred to in Article 200 shall, in accordance with the instrument establishing it, send to the Commission and the budgetary authority in parallel and no later than 31 March each year an estimate of its revenue and expenditure, including the establishment plan, and its draft work programme.

Amendment  79

Proposal for a regulation

Article 34 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

The draft budget shall contain a summary general statement of the expenditure and revenue of the Union and consolidate the estimates referred to in Article 32.

The draft budget shall contain a summary general statement of the expenditure and revenue of the Union, including a summary general statement of the reserve for payments and commitments, and consolidate the estimates referred to in Article 32.

Amendment  80

Proposal for a regulation

Article 34 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

2. Where relevant, the Commission shall attach to the draft budget a financial programming for the following years.

2. The Commission shall attach to the draft budget a financial programming for the following years.

Amendment  81

Proposal for a regulation

Article 34 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. The Commission shall also attach to the draft budget:

 

(a) an analysis of financial management in the previous year and the commitments outstanding;

 

(b) where appropriate, an opinion on the estimates of the other institutions which may contain different estimates, accompanied by the reasons therefore;

 

(c) any working paper it considers useful in connection with the establishment plans of the institutions and the grants which the Commission awards to the bodies referred to in Article 196b and to the European Schools. Any such working paper, showing the latest authorised establishment plan, shall present:

 

(i) all staff employed by the Union, including its legally separate entities, displayed by type of contract,

 

(ii) a statement of the policy on posts and external personnel and on gender balance,

 

(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,

 

(iv) a list of posts broken down per policy area,

 

(v) for each category of external staff, the initial estimated number of full-time equivalents on the basis of the authorised appropriations as well as the number of persons actually in place at the beginning of the year in which the draft budget is presented, indicating their distribution by function group and, as appropriate, by grade, and

 

(d) the activity statements containing:

 

(i) information on the achievement of all previously set specific, measurable, achievable, relevant and timed objectives for the various activities as well as new objectives measured by indicators,

 

(ii) full justification and cost-benefit approach for proposed changes in the level of appropriations,

 

(iii) clear rationale for intervention at the Union level in keeping, inter alia, with the principle of subsidiarity,

 

(iv) information on the implementation rates of the previous year’s activity and implementation rates for the current year.

 

Evaluation results shall be consulted and referred to as evidence of the likely merits of proposed budget changes.

Justification

The amendments on Article 34 reinstate the present information-flow of Parliament in the budgetary procedure thus maintaining Parliament’s rights as one arm of the budgetary authority. In addition, the transparency on staffing as a major cost-category should be enhanced. The amendment also aims at creating a sound information basis for the budgetary authority where the budget is implemented by entering into public private partnerships or issuing financial instruments, in particular where these are linked to the risk of loss incurred.

Amendment  82

Proposal for a regulation

Article 34 – paragraph 2 b (new)

Text proposed by the Commission

Amendment

 

2b. Where the Commission entrusts the budget implementation to public private partnerships (ppp), it shall attach to the draft budget a working document presenting:

 

(a) an annual report on the performance of existing ppps in the previous year;

 

(b) the targets set for the year to which the draft budget relates, indicating any specific budgetary needs dedicated to attaining this target,

 

(c) the administrative cost and implemented budget in total and per type as defined in Article 196a and per individual ppp in the preceding year;

 

(d) the amount of financial contributions made from the Union’s budget and the value of contributions in kind made by the other partners for each ppp;

 

(e) the staff tables, in application of paragraph (2a)(c) mutatis mutandis, of such ppps where staff are paid or partly paid by Union funds; these staff tables shall be taken into account when preparing the working document under paragraph (2a)(c);

 

Where ppps make use of financial instruments, the working document shall set out the data in application of and notwithstanding paragraph 2c per ppp and per financial instrument.

Amendment  83

Proposal for a regulation

Article 34 – paragraph 2 c (new)

Text proposed by the Commission

Amendment

 

2c. Where the Commission makes use of financial instruments, it shall attach to the draft budget a working document presenting:

 

(a) the capital issued in the form of financial instruments and funded from the Union’s budget and the overall capital invested per financial instrument, including by third parties, in total and as leverage ratio per financial instrument, the value of participations in equity and quasi-equity investments;

 

(b) revenues and repayments received in the previous year and a forecast for the year to which the draft budget relates;

 

(c) the total amount of contingent and existing liabilities of the Union arising from the implementation of financial instruments in the previous year and in total broken down in particular by:

 

(i) all potential liabilities towards third parties arising from guarantees,

 

(ii) all potential liabilities arising from the maximum drawing on credit lines provided to any third parties,

 

(iii) all potential total loss of junior debt or equity or quasi-equity participations, or

 

(iv) any other potential or contingent liability as well as any information relevant or potentially relevant for the assessment of risks;

 

(d) the financial provisions made in the budget for anticipated risks as well as unforeseen risks in total and per financial instrument;

 

(e) the percentage and absolute number of cases in which guarantees were drawn on or junior debt or equity or quasi-equity participations were lost as a result of impairment or bankruptcy in total and per financial instrument for the previous year and the overall running time of the respective financial instrument;

 

(f) the average duration between the payment of financial instruments in the form of junior debt capital (mezzanine) to the beneficiaries and the withdrawal of such capital; where this exceeds three years, the Commission shall provide an action plan for the reduction of the duration in the framework of the annual discharge procedure;

 

(g) the geographical distribution of the application (absorption) of financial instruments per Member State and per financial instrument;

 

(h) the administrative expenditure arising from any management fees, reimbursement or other monies paid for the management of financial instruments where this has been entrusted to third parties in total and per managing party and per financial instrument managed;

 

(i) the staff tables, in application of paragraph (2a)(c) mutatis mutandis, where staff are paid or part paid by Union funds; these staff tables shall be taken into account when preparing the working document under paragraph (2a)(c).

Amendment  84

Proposal for a regulation

Article 34 – paragraph 3

Text proposed by the Commission

Amendment

3. The Commission shall also attach to the draft budget any working paper it considers useful to support its budget requests.

3. The Commission shall also attach to the draft budget any further working paper it considers useful to support its budget requests.

Amendment  85

Proposal for a regulation

Article 34 – paragraph 4 – subparagraph 2 – point d

Text proposed by the Commission

Amendment

(d) provide a detailed picture of all staff in place in the Union delegations at the time of presenting the draft budget, including a breakdown by geographic area, individual country and mission, distinguishing establishment plan posts, contract agents, local agents and seconded national experts and appropriations requested in the draft budget for such other types of personnel with corresponding estimates of the equivalent full-time staff that may be employed within the limits of the appropriations requested.

(d) provide a detailed picture of all staff in place in the Union delegations at the time of presenting the draft budget, including a breakdown by geographic area, gender, individual country and mission, distinguishing establishment plan posts, contract agents, local agents and seconded national experts and appropriations requested in the draft budget for such other types of personnel with corresponding estimates of the equivalent full-time staff that may be employed within the limits of the appropriations requested.

Amendment  86

Proposal for a regulation

Article 34 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a. The Commission shall accompany the draft budget with a proposal to mobilise the reserve for payments and commitments for any arising needs not initially foreseen in the annual budget or the regulation laying down the multiannual financial framework.

Amendment  87

Proposal for a regulation

Article 34 – paragraph 4 b (new)

Text proposed by the Commission

Amendment

 

4b. In addition, the Commission shall transmit to the European Parliament and Council, together with the draft budget, a working document on building policy drawn up by each institution and body within the meaning of Article 196b incorporating the following information:

 

(a) for each building, expenditure and areas covered by the appropriations of the corresponding budget lines;

 

(b) expected evolution of the global programming of areas and locations for the coming years, with a description of the building projects in planning phase referred to in Article 195(3) which are already identified;

 

(c) final terms and costs as well as relevant information regarding project implementation of new building projects previously submitted to the budgetary authority under the procedure established in Article 195(3) and not included in previous year’s working documents;

 

(d) final terms and costs regarding contract extensions not subject to the procedure established in Article 195(3) but exceeding an annual charge of EUR 500 000.

Amendment  88

Proposal for a regulation

Article 35

Text proposed by the Commission

Amendment

Until the Conciliation Committee referred to in Article 314 of the TFEU is convened, the Commission may, on its own initiative or if requested by the other institutions, each in respect of its own section, present simultaneously to the European Parliament and the Council letters of amendment to the draft budget on the basis of new information which was not available at the time the draft was established, including a letter of amendment updating expenditure estimates for agriculture.

On the basis of new information which was not available at the time the draft budget was established, the Commission may, on its own initiative or if requested by the other institutions, each in respect of its own section, present simultaneously to the European Parliament and the Council letters of amendment to the draft budget in due time before the Conciliation Committee referred to in Article 314 TFEU is convened. This might include a letter of amendment updating expenditure estimates for agriculture.

Amendment  89

Proposal for a regulation

Article 36

Text proposed by the Commission

Amendment

Approval of the outcome of the Conciliation Committee

deleted

Once the Conciliation Committee has agreed on a joint text, the European Parliament and the Council shall endeavour to approve the outcome of the Conciliation Committee as soon as possible in accordance with Article 314(6) of the TFEU, in accordance with their respective internal rules of procedure.

 

Amendment 90

Proposal for a regulation

Article 38

Text proposed by the Commission

Amendment

 

1. The Commission shall present draft amending budgets for mobilising the European Solidarity Fund and draft amending budget for each of the following purposes:

 

(a) surplus,

 

(b) revision of the forecast of traditional own resources and Value Added Tax and Gross National Income bases,

 

(c) increase in the forecast of revenue and decrease in payment appropriations.

1. If there are unavoidable, exceptional or unforeseen circumstances, the Commission may present draft amending budgets.

If there are unavoidable, exceptional or unforeseen circumstances, the Commission may present two additional draft amending budgets per year.

Requests for amending budgets, in the same circumstances as referred to in the preceding paragraph, from institutions other than the Commission shall be sent to the Commission.

Requests for amending budgets, in the same circumstances as referred to in the preceding paragraph, from institutions other than the Commission shall be sent to the Commission.

Before presenting a draft amending budget, the Commission and the other institutions shall examine the scope for reallocation of the relevant appropriations, taking into account any expected under-implementation of appropriations.

Before presenting a draft amending budget, the Commission and the other institutions shall examine the scope for reallocation of the relevant appropriations, taking into account any expected under-implementation of appropriations.

2. The Commission shall, save in exceptional circumstances, submit any draft amending budget simultaneously to the European Parliament and the Council by 1 September each year at the latest. It may attach an opinion to the requests for amending budgets from the other institutions.

2. The Commission shall, save in duly justified exceptional circumstances or in the case of the mobilisation of the European Solidarity Fund for which a draft amending budget can be presented at any time of the year, submit its draft amending budgets, simultaneously to the European Parliament and the Council, in April and / or in August. It may attach an opinion to the requests for amending budgets from the other institutions.

3. The European Parliament and the Council shall discuss them with due account for their urgency.

3. The European Parliament and the Council shall discuss them with due account for their urgency.

Amendment  91

Proposal for a regulation

Article 40 – paragraph 1 – point a

Text proposed by the Commission

Amendment

(a) a general statement of revenue and expenditure;

(a) a general statement of revenue and expenditure making a distinction between operations and investment;

Amendment  92

Proposal for a regulation

Article 41 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. Administrative expenditure shall be classified as follows:

 

(a) expenditure on staff authorised in the establishment plan: there shall be an amount of appropriations and a number of establishment plan posts corresponding to this expenditure;

 

(b) expenditure on external personnel and other expenditure referred to in point (c) of Article 23(1) and financed under the ‘administration’ heading of the multiannual financial framework;

 

(c) expenditure on buildings and other related expenditure, including cleaning and maintenance, rental and hiring, telecommunications, water, gas and electricity;

 

d) external personnel and technical assistance directly linked to the implementation of programmes.

 

The administrative expenditure of the Commission of a type which is common to several titles shall be set out in a separate summary statement classified by type.

Justification

Incorporation of a provision formerly contained in the Implementing rules. According to a Commission proposal, it should be better inserted in the Financial Regulation itself.

Amendment  93

Proposal for a regulation

Article 41 – paragraph 2 b (new)

Text proposed by the Commission

Amendment

 

2b. Wherever possible and appropriate, articles and items shall correspond to individual operations carried out in the framework of a certain individual activity. The delegated regulation referred to in Article 199 shall lay down guidelines for the classification of articles and items aiming at maximum transparency and conciseness of the budget.

Justification

Amendment revised following discussions with Commission.

Amendment  94

Proposal for a regulation

Article 44 – paragraph 2

Text proposed by the Commission

Amendment

This reserve must be drawn upon before the end of the financial year by means of transfer in accordance with the procedure laid down in Articles 21 and 23.

This reserve must be drawn upon as soon as possible and before the end of the financial year, in first instance by means of the reserve for payments and commitments, as laid down in Article 15 (3a), or by means of transfer in accordance with the procedure laid down in Articles 21 and 23.

Amendment  95

Proposal for a regulation

Article 46 – paragraph 1

Text proposed by the Commission

Amendment

1. The budget shall show:

1. The budget shall show:

(a) in the general statement of revenue and expenditure:

(a) in the general statement of revenue and expenditure:

(i) the estimated revenue of the Union for the financial year concerned;

(i) the estimated revenue of the Union for the financial year concerned;

(ii) the estimated revenue for the preceding financial year and the revenue for year n - 2;

(ii) the estimated revenue for the preceding financial year and the revenue for year n - 2;

(iii) the commitment and payment appropriations for the financial year concerned;

(iii) the commitment and payment appropriations for the financial year concerned;

(iv)      the commitment and payment appropriations for the preceding financial year;

(iv) he commitment and payment appropriations for the preceding financial year;

(v) the expenditure committed and the expenditure paid in year n – 2;

(v) the expenditure committed and the expenditure paid in year n – 2;

(vi) appropriate remarks on each subdivision, as set out in Article 41(1);

(vi) appropriate remarks on each subdivision, as set out in Article 41(1);

(b) in each section of the budget, the revenue and expenditure shall be shown in the same structure as in point (a);

(b) in each section of the budget, the revenue and expenditure shall be shown in the same structure as in point (a);

(c) as regards staff:

(c) as regards staff:

(i) or each section of the budget, an establishment plan setting the number of posts for each grade in each category and in each service and the number of permanent and temporary posts authorised within the limits of the budget appropriations;

(i) for each section of the budget, an establishment plan providing a comprehensive presentation of the entire human resources and setting the number of posts for each grade in each category and in each service and the number of permanent and temporary posts authorised within the limits of the budget appropriations, accompanied by a document presenting the full time equivalents of contract agents as well as local agents;

(ii) an establishment plan for staff paid from the research and technological development appropriations for direct action and an establishment plan for staff paid from the same appropriations for indirect action; the establishment plans shall be classified by category and grade and shall distinguish between permanent and temporary posts, authorised within the limits of the budget appropriations;

(ii) an establishment plan for staff paid from the research and technological development appropriations for direct action and an establishment plan for staff paid from the same appropriations for indirect action; the establishment plans shall be classified by category and grade and shall distinguish between permanent and temporary posts, authorised within the limits of the budget appropriations;

(iii) as regards scientific and technical staff, the classification may be based on groups of grades, in accordance with the conditions laid down in each budget; the establishment plan must specify the number of highly qualified technical or scientific personnel who are accorded special advantages under the specific provisions of the Staff Regulations;

(iii) as regards scientific and technical staff, the classification may be based on groups of grades, in accordance with the conditions laid down in each budget; the establishment plan must specify the number of highly qualified technical or scientific personnel who are accorded special advantages under the specific provisions of the Staff Regulations;

(iv) an establishment plan setting the number of posts by grade and by category for each body referred to in Article which receives a grant charged to the budget. The establishment plans shall show next to the number of posts authorised for the financial year the number authorised for the preceding year;

(iv) an establishment plan setting the number of posts by grade and by category for each body referred to in Article 196b which receives a grant charged to the budget. The establishment plans shall show next to the number of posts authorised for the financial year the number authorised for the preceding year;

 

(ca) as regards funding to international organisations, in a document annexed to the Commission section:

 

(i) a summary of all contributions, with a breakdown per Union programme/fund and per international organisation,

 

(ii) a statement of reasons explaining why it was more efficient for the Union to fund those international organisations rather than to act directly;

(d) as regards borrowing-and-lending operations:

(d) as regards borrowing-and-lending operations:

(i) in the general statement of revenue, the budget lines corresponding to the relevant operations and intended to record any reimbursements received from beneficiaries who initially defaulted, leading to activation of the performance guarantee. These lines shall carry a token entry ‘pro memoria’ and be accompanied by appropriate remarks;

(i) in the general statement of revenue, the budget lines corresponding to the relevant operations, in particular the implementation of financial instruments (Articles 130, 131) and intended to record any reimbursements received from beneficiaries who initially defaulted leading to activation of the performance guarantee as well as any revenue arising from the implementation of financial instruments. These lines shall carry a token entry ‘pro memoria’ and be accompanied by appropriate remarks;

(ii) in the Commission section:

(ii) in the Commission section:

- the budget lines containing the Union’s performance guarantees in respect of the operations concerned. These lines shall carry a token entry ‘pro memoria’, so long as no effective charge which has to be covered by definitive resources has arisen;

- the budget lines containing the Union’s performance guarantees and financial instruments in respect of the operations concerned. These lines shall carry a token entry ‘pro memoria’, so long as no effective charge which has to be covered by definitive resources has arisen;

- remarks giving the reference to the basic act and the volume of the operations envisaged, the duration and the financial guarantee given by the Union in respect of these operations;

- remarks giving the reference to the basic act and the volume of the operations envisaged, the duration and the financial guarantee given, or other financial instrument implemented by the Union in respect of these operations;

 

- a comprehensive calculation of the rate of overall funds dedicated to financial instruments in relation to the Union’s budget;

(iii) in a document annexed to the Commission section, as an indication:

(iii) in a document annexed to the Commission section, as an indication:

 

- all equity participations by means of financial instruments or ppp which shall be accompanied by specific remarks on their performance;

- ongoing capital operations and debt management;

- ongoing capital operations and debt management;

- the capital operations and debt management for the financial year concerned;

- the capital operations and debt management for the financial year concerned;

(e) the total amount of CFSP expenditure shall be entered into one budget chapter, entitled CFSP, with specific budgetary articles. Those articles shall cover CFSP expenditure and shall contain specific budget lines identifying at least the single major missions.

(e) the total amount of CFSP expenditure shall be entered into one budget chapter, entitled CFSP, with specific budgetary articles. Those articles shall cover CFSP expenditure and shall contain a specific budget line per mission.

 

(ea) all revenue and expenditure under the respective European Development Fund which shall be entered under a special budget heading within the Commission section.

Justification

The percentage of the Union’s annual budget dedicated to financial instruments varies according to the respective source of information. The rate should be made transparent and included in the budget. Equal rules should apply for financial instruments and other borrowing and lending operations.

Amendment  96

Proposal for a regulation

Article 49

Text proposed by the Commission

Amendment

Article 49

Article 49

Where by implementation of an act of the Union the appropriations available in the budget or the allocations available in the multiannual financial framework would be exceeded, such act may be implemented in financial terms only after the budget has been amended and, if necessary, the financial framework has been appropriately revised.

Where by implementation of an act of the Union the appropriations available in the budget or the allocations available in the multiannual financial framework would be exceeded, such act may be implemented in financial terms only after the budget has been amended and, if necessary, the financial framework has been appropriately revised. For the purposes of this Article, and notwithstanding Article 4(2), an act of the Union shall be deemed to exist where borrowing or lending operations affect the global MFF margin (Article 9(4)) of any present or future years to which the multiannual financial framework applies.

Amendment  97

Proposal for a regulation

Article 50 – paragraph 2

Text proposed by the Commission

Amendment

2. The Member States shall cooperate with the Commission so that the appropriations are used in accordance with the principle of sound financial management.

2. The Member States shall cooperate with the Commission so that the appropriations are used in accordance with the principle of sound financial management and shall perform their control and audit obligations in accordance with Article 317 of the Treaty on the Functioning of the European Union.

Amendment  98

Proposal for a regulation

Article 51 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

A basic act is a legal act which provides a legal basis for the action and for the implementation of the corresponding expenditure entered in the budget.

A basic act is a legal act which provides a legal basis for the action and for the implementation of the corresponding expenditure entered in the budget. Article 2 applies.

Justification

The amendment is designed to ensure streamlining of budgetary provisions. Derogations should be restricted.

Amendment  99

Proposal for a regulation

Article 51 – paragraph 3

Text proposed by the Commission

Amendment

3. In application of Title V of the Treaty on European Union, a basic act may take one of the forms specified in Articles 26(2), 28(1), 29, 31(2), 33 and 37 of the Treaty on European Union.

3. In application of Title V of the Treaty on European Union (hereinafter ‘TEU’), a basic act may take one of the following forms:

 

- Council Decision necessary for defining and implementing the common foreign and security policy (Article 26(2) TEU);

 

- Council decision on operational action required by the international situation (Article 28(1) TEU);

 

- Council decision defining the Union’s approach to a particular matter of geographical or thematic nature (Article 29 TEU);

 

- Council decisions defining a Union action or position, or implementing such action or position (Article 31(2) 1st-3rd indents TEU) or on the appointment of a special representative (Article 31(2) 4th indent, Art. 33 TEU);

 

- conclusion of agreements with one or more states or international organisations (Article 37 TEU).

Justification

The full titles of the enumerated acts are inserted in order to enhance the accessibility of the text.

Amendment  100

Proposal for a regulation

Article 51 – paragraph 5 – point b - subparagraphs 2a and 2b (new)

Text proposed by the Commission

Amendment

 

The total amount of appropriations for the pilot schemes referred to in point (a) may not exceed EUR 40 million in any budget year.

 

The total amount of appropriations for new preparatory actions referred to in the first subparagraph of this point may not exceed EUR 50 million in any budget year, and the total amount of appropriations actually committed for preparatory actions may not exceed EUR 100 million;

Justification

The amendment integrates Article 32 of the present implementing rules into the Financial Regulation.

Amendment  101

Proposal for a regulation

Article 51 – paragraph 5 – point c

Text proposed by the Commission

Amendment

(c) appropriations for preparatory measures in the field of Title V of the Treaty on European Union. These measures shall be limited to a short period of time and shall be designed to establish the conditions for Union action in fulfilment of the objectives of the CFSP and for the adoption of the necessary legal instruments.

(c) appropriations for preparatory measures in the field of Title V of the Treaty on European Union (concerning General Provisions on the Union’s External Action and Specific Provisions on the Common Foreign and Security Policy). These measures shall be limited to a short period of time and shall be designed to establish the conditions for European Union action in fulfilment of the objectives of the CFSP and for the adoption of the necessary legal instruments;

For the purpose of Union crisis management operations, preparatory measures are designed inter alia to assess the operational requirements, to provide for a rapid initial deployment of resources, or to establish the conditions on the ground for the launching of the operation.

For the purpose of Union crisis management operations, preparatory measures are designed inter alia to assess the operational requirements, to provide for a rapid initial deployment of resources, or to establish the conditions on the ground for the launching of the operation.

Preparatory measures shall be agreed by the Council, on a proposal by the High Representative of the Union for Foreign Affairs and Security Policy.

Preparatory measures shall be agreed by the Council, in full association with the Commission, and the European Parliament shall be consulted in due time in advance and shall be informed in detail about the preparatory measures, in particular those regarding the CFSP and Common Security and Defence Policy actions.

In order to ensure the rapid implementation of preparatory measures, the High Representative shall inform the Commission as early as possible on the Council’s intention to launch a preparatory measure and in particular of the estimated resources required for this purpose. In conformity with this Regulation, the Commission shall take all the necessary measures to ensure a rapid disbursement of the funds.

In order to ensure the rapid implementation of preparatory measures, the High Representative of the Union for Foreign Affairs and Security Policy shall inform the European Parliament and the Commission as early as possible on the Council’s intention to launch a preparatory measure and in particular of the estimated resources required for this purpose. In conformity with the provisions of this Regulation, the Commission shall take all the necessary measures to ensure a rapid disbursement of the funds;

Amendment  102

Proposal for a regulation

Article 54 – paragraph 1

Text proposed by the Commission

Amendment

1. All financial actors and any other person involved in budget implementation, management, audit or control shall be prohibited from taking any action which may bring their own interests into conflict with those of the Union. Should such a case arise, the person concerned must refrain from such actions and refer the matter to the competent authority.

1. All financial actors and any other person involved in budget implementation and management, including acts preparatory thereto, audit or control shall be prohibited from taking any action which may bring their own interests into conflict with those of the Union. Should such a case arise, the person in question must refrain from such actions and refer the matter to his hierarchical superior who shall confirm in writing whether a conflict of interests exists. Where a conflict of interest is found to exist, the person subject to such interest shall cease all his/her activities in the pending matter. The hierarchical superior shall personally take any further appropriate action.

Amendment  103

Proposal for a regulation

Article 54 – paragraph 2

Text proposed by the Commission

Amendment

2. There is a conflict of interests where the impartial and objective exercise of the functions of a financial actor or other person, as referred to in paragraph 1, is compromised for reasons involving family, emotional life, political or national affinity, economic interest or any other shared interest with the beneficiary.

2. There is a conflict of interests where the impartial and objective exercise of the functions of a financial actor or other person, as referred to in paragraph 1, is or might in the public perception be compromised for reasons involving family, emotional life, political or national affinity, economic interest or any other shared interest with the beneficiary.

 

Acts likely to be vitiated by a conflict of interest may take inter alia one of the following forms:

 

(a) granting oneself or any third parties related by blood, kin or by any other specific properties unjustified direct or indirect advantages;

 

(b) refusing to grant a potential beneficiary, recipient, candidate or tenderer the rights or advantages to which he is entitled or to grant these in excess;

 

(c) committing undue or wrongful acts or failing to carry out acts that are mandatory.

 

A conflict of interest shall be deemed to exist, where a potential beneficiary, applicant, candidate or tenderer is a member of staff covered by the Staff Regulations, a contract agent, local agent or seconded national expert.

Amendment 104

Proposal for a regulation

Article 55 – paragraph 1– point a

Text proposed by the Commission

Amendment

(a) by its departments, by Union Delegations in accordance with the second paragraph of Article 53, or through executive agencies referred to in Article 59;

(a) by its departments, by staff in the Union Delegations under the supervision of the respective Head of Delegation, in accordance with the second paragraph of Article 53, or through executive agencies referred to in Article 59;

Amendment  105

Proposal for a regulation

Article 55 – paragraph 1 – point b

Text proposed by the Commission

Amendment

(b) indirectly, in shared management with Member States or by entrusting budget implementation tasks to:

(b) indirectly, in shared management with Member States or, subject to a specific provision in the basic act which shall also set out, other than in the cases of (i) and (iv), the type of implementing partners and types of operations, by entrusting certain specified budget implementation tasks to:

(i) third countries or the bodies they have designated;

(i) third countries or the bodies they have designated;

(ii) international organisations and their agencies;

(ii) international organisations and their agencies;

(iii) financial institutions entrusted with the implementation of Financial Instruments pursuant to Title VIII;

 

(iv) the European Investment Bank and the European Investment Fund or any other subsidiary of the Bank;

(iv) the European Investment Bank and the European Investment Fund;

(v) bodies referred to in Articles 200 and 201;

(v) bodies referred to in Articles 196b and 196c;

(vi) public law bodies or bodies governed by private law with a public service mission as far as these latter provide adequate financial guarantees;

(vi) public law bodies or bodies governed by private law with a public service mission as far as these latter provide adequate financial guarantees;

(vii) bodies governed by private law of a Member State, entrusted with the implementation of a public and private partnership and providing adequate financial guarantees;

 

(viii) persons entrusted with the implementation of specific actions pursuant to Title V of the Treaty on the European Union, and identified in the relevant basic act within the meaning of Article 51 of this Regulation.

(viii) persons entrusted with the implementation of specific actions in the Common Foreign and Security Policy pursuant to Title V of the Treaty on the European Union, and identified in the relevant basic act within the meaning of Article 51 of this Regulation.

 

The Commission remains responsible for the implementation of the budget (Article 317 TFEU) and shall inform the European Parliament on the operations carried out by the entities under points (i) to (viii). The financial statement (Article 27) shall provide a full justification for the choice of a particular entity under points (i) to (viii).

Amendment  106

Proposal for a regulation

Article 55 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. The financing decision which shall be annexed to the annual activity report (Article 63(9)) shall specify the objective pursued, the expected results, the method of implementation and the total amount of the financing plan. It shall also contain a description of the actions to be financed and an indication of the amount allocated to each action, and an indicative implementation timetable.

 

In case of indirect management, it shall also specify the implementing partner chosen, the criteria used and the tasks entrusted to it.

Amendment  107

Proposal for a regulation

Article 55 – paragraph 1 b (new)

Text proposed by the Commission

Amendment

 

1b. The entities and persons listed in points (i) to (viii) of paragraph 1(b) shall fully cooperate in the protection of the European Union’s financial interests. The European Court of Auditors as well as OLAF must in all cases have the right to comprehensively exert their competences under the TFEU in the audit of funds so managed.

 

The Commission shall make the entrustment of implementing tasks contingent upon the existence of transparent, non-discriminatory, efficient and effective judicial review procedures concerning the actual implementation of these tasks or the performance of an action plan for the reinforcement of such procedures.

 

A list of entities and persons entrusted with certain specified implementation tasks shall be kept by the accounting officer and be annexed to the annual accounts. All agreements concluded with such entities and persons shall be made available to the budgetary authority at its request.

 

Entities and persons listed in points (i) to (viii) of paragraph 1(b) to which implementation tasks are delegated shall ensure, in conformity with Article 31(2), adequate annual ex post publication of beneficiaries of funds deriving from the budget. The Commission shall be notified of the measures taken.

Justification

Entities entrusted with management of EU funds should be obliged to cooperate in the protection of EU funds and comply with certain minimum standards. The creation of public private partnerships under 27 different legal regimes bears an undue risk of error in the application of law and clogs the discharge process.

Amendment 108

Proposal for a regulation

Article 56 – paragraph 1

Text proposed by the Commission

Amendment

 

Responsibilities for budget implementation in shared management

1. Member States shall respect the principles of sound financial management, transparency and non-discrimination and ensure the visibility of Union action when they manage Union funds. To this end, Member States shall fulfil the control and audit obligations and assume the resulting responsibilities laid down in this Regulation. Complementary provisions may be laid down in sector-specific rules.

1. Where the Commission implements the budget under shared management, implementation tasks shall be delegated to Member States. Member States shall respect the principles of sound financial management, transparency and non-discrimination, and ensure the visibility of Union action when they manage 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 109

Proposal for a regulation

Article 56 – paragraph 2

Text proposed by the Commission

Amendment

 

Specific duties of the Member States

2. Member States shall prevent, detect and correct irregularities and fraud when executing tasks related to the implementation of the budget. To this end they shall carry out ex ante and ex post controls including, where appropriate, on the spot checks, to ensure that the actions financed from the budget are effectively carried out and implemented correctly, recover funds unduly paid and bring legal proceedings as necessary.

2. Member States shall, when executing tasks relating to the implementation of the budget, take all the legislative, regulatory and administrative or other measures necessary to protect the Union’s financial interests, in particular:

 

(a) satisfy themselves that actions financed from the budget are actually carried out and ensure that they are implemented correctly and for that purpose accredit and supervise bodies responsible for the management and control of Union funds;

 

(b) prevent, detect and correct irregularities and fraud.

 

To this effect, they shall, in accordance with the principle of proportionality, and in compliance with paragraphs 2(a), 3 to 5 as well as the relevant sector-specific rules, carry out ex ante and ex post checks including, where appropriate, on-the-spot checks on representative samples of transactions. They shall also recover funds unduly paid and bring legal proceedings as necessary. The Commission may appraise the systems set up in the Member States on its own risk assessment or in application of sector-specific rules.

 

As far as Member States immediately disclose errors and / or irregularities they discover to the Commission and remedy them, namely by recovering any amounts unduly paid, they shall be exempt from financial corrections concerning these errors and / or irregularities up to the time of disclosure.

Member States shall impose effective, dissuasive and proportionate penalties on recipients as provided for in sector-specific rules and in national legislation.

Member States shall impose effective, dissuasive and proportionate penalties on recipients where provided for in sector-specific rules and in specific provisions in national legislation.

Amendment 110

Proposal for a regulation

Article 56 – paragraph 3

Text proposed by the Commission

Amendment

 

Role and competences of the accrediting authority

3. In accordance with the sector-specific rules, Member States shall accredit one or more public sector bodies which shall be solely responsible for the proper management and control of the funds, for which accreditation has been granted. This shall be without prejudice to the possibility for these bodies to carry out tasks not related to the management of Union funds or to entrust certain of their tasks to other bodies.

3. In accordance with criteria and procedures laid down in sector-specific rules, Member States shall accredit bodies which shall be responsible for the management and internal control of Union funds for which accreditation was granted. This shall be without prejudice to the possibility for these bodies to carry out tasks not related to the management of Union funds or to entrust certain of their tasks to other bodies. The accrediting authority shall further be responsible for monitoring compliance of the accredited bodies with the accreditation criteria, on the basis of existing audit and control results. It shall take all necessary measures to ensure that deficiencies in the implementation of the tasks entrusted to the bodies it has accredited are being remedied, including by suspension and withdrawal of the accreditation. The role of the Commission in the accreditation process to which paragraph 2 applies shall be further defined in sector-specific rules taking account of the risk in the policy area concerned.

The accreditation shall be given by a Member State authority in accordance with sector-specific rules ensuring that the body is capable of properly managing the funds. The sector-specific rules may also define a role of the Commission in the accreditation process.

 

The accrediting authority shall be responsible for supervising the body and for taking all necessary measures to remedy any deficiency in its operation, including the suspension and withdrawal of the accreditation.

 

Amendment 111

Proposal for a regulation

Article 56 – paragraph 4

Text proposed by the Commission

Amendment

 

Role and competences of the accredited body

4. Bodies accredited pursuant to paragraph 3 of this Article shall:

4. Member States at the appropriate level, by means of bodies accredited pursuant to paragraph 3 of this Article shall:

(a) set up and ensure the functioning of an effective and efficient internal control system;

(a) set up and ensure the functioning of an effective and efficient internal control system;

(b) use an annual accounting system providing accurate, complete and reliable information in a timely manner;

(b) use an accounting system providing accurate, complete and reliable annual information in a timely manner;

(c) be subject to an independent external audit, performed in accordance with internationally accepted auditing standards by an audit service functionally independent of the accredited body;

(c) provide the prerequisite data and information in accordance with paragraph 5;

(d) ensure, in conformity with Article 31(2), annual ex post publication of recipients of Union funds;

(d) ensure ex post publication of recipients of Union funds in accordance with Article 31(2). Any processing of personal data shall comply with national provisions implementing Directive 95/46/EC.

(f) ensure a protection of personal data which satisfies the principles laid down in Directive 95/46/EC.

 

Amendment 112

Proposal for a regulation

Article 56 – paragraph 5

Text proposed by the Commission

Amendment

 

Content, timing and audit of data reported by the accredited bodies

5. Bodies accredited pursuant to paragraph 3 of this Article shall provide the Commission by 1 February of the following financial year with:

5. Bodies accredited pursuant to paragraph 3, shall provide the Commission by 1 March of the following financial year with:

(a) their accounts drawn up for the expenditure made in the execution of the tasks entrusted;

(a) the annual accounts of the accredited bodies on the expenditure that is made in the execution of the tasks entrusted to them and that is presented to the Commission for reimbursement, including the payments on account and sums for which recovery procedures are underway or have been completed. That information shall be accompanied by a statement of management responsibilities confirming that, in the opinion of those in charge of the management of the funds:

 

- the information is properly presented, complete and accurate;

 

- the expenditure has been used for its intended purpose, as defined in the sector-specific rules;

 

- the control procedures put in place give the necessary guarantees concerning the legality and regularity of the underlying transactions; an annex to the declaration shall present the error rate per funds and an analysis of the errors as well as reservations, where applicable;

(b) a summary of the results of all available audits and controls carried out, including an analysis of systematic or recurrent weaknesses as well as corrective actions taken or planned;

(b) a summary of the final audit reports and a summary of controls carried out, including an analysis of recurrent or systemic weaknesses, as well as corrective actions taken or planned and their results.

(c) a management declaration of assurance as to the completeness, accuracy and veracity of the accounts, the proper functioning of the internal control systems as well as to the legality and regularity of the underlying transactions and the respect of the principle of sound financial management;

The annual accounts referred to under point (a) and the summary referred to under point (b) shall be accompanied by an opinion of an independent audit body, drawn up in accordance with internationally accepted audit standards, on whether the accounting information gives a true and fair view and whether expenditure for which reimbursement has been requested from the Commission is legal and regular, and on the proper functioning of the control systems put in place. The opinion shall state if the examination puts in doubt the assertions made in the statement of management responsibilities. An annex to the opinion shall present the error rate per funds and an analysis of the errors as well as reservations.

(d) the opinion of an independent audit body on the management declaration of assurance mentioned in point (c) of this paragraph, covering all its elements.

 

If a Member State has accredited more than one body per policy area, it shall by 15 February of the following financial year provide the Commission with a synthesis report consisting of an overview at national level of all management declarations of assurance and the independent audit opinions thereon, prepared for the policy area concerned.

If a Member State has accredited more than one body with responsibility for the management of funds per policy area, it shall by 15 March of the following financial year provide the Commission with a synthesis report consisting of an overview at national level of all management declarations of assurance and the corresponding independent audit opinions, prepared for the policy area concerned.

 

Member States shall, at the appropriate level, publish this information no later than 6 months after providing the Commission with these documents.

Amendment 113

Proposal for a regulation

Article 56 – paragraph 6

Text proposed by the Commission

Amendment

 

Specific duties of the Commission

6. The Commission shall:

6. In order to ensure that the funds are used in accordance with the applicable rules, the Commission shall:

 

(-a) monitor the manner in which Member States fulfil their responsibilities, in particular by carrying out audits during the programme implementation;

(a) apply procedures for a timely financial clearance of the accounts of the accredited bodies, ensuring that the accounts are complete, accurate and true and allowing for a timely clearance of irregularity cases;

(a) apply procedures for a timely financial clearance of the accounts of the accredited bodies, establishing whether the accounts are complete, accurate and true;

(b) exclude from Union financing expenditure the disbursements which have been made in breach of Union law.

(b) exclude from Union financing expenditure for which disbursements have been made in breach of Union law.

 

(ba) interrupt payment deadlines or suspend payments in the event of significant deficiencies in the monitoring by a Member State or in the functioning of a body accredited in accordance with paragraph 3, in the event that the prerequisite actions are not taken immediately.

Sector-specific rules shall govern the conditions under which payments to Member States may be suspended by the Commission or interrupted by the authorising officer by delegation

The Commission may decide to lift all or part of the interruption or suspension on payments after a Member State has presented its observations. The annual activity report of the Commission’s competent authorising officer by delegation shall report on all the obligations under this paragraph.

Amendment 114

Proposal for a regulation

Article 56 – paragraph 6 a (new)

Text proposed by the Commission

Amendment

 

Specific provision for European Territorial Cooperation

 

6a. Sector-specific rules shall take account of the needs of European Territorial Cooperation programmes as regards, in particular, the content of the annual management declaration, the accreditation process and the audit function.

Amendment 115

Proposal for a regulation

Article 56 – paragraph 6 b (new)

Text proposed by the Commission

Amendment

 

National declarations of assurance

 

6b. Member States shall provide a national declaration on the expenditure made under the method of shared management. This declaration shall be signed at the appropriate political level, and be based on the information to be provided under paragraph 5(c), and shall cover at least the effective functioning of the internal control systems in place and the legality and regularity of the underlying transactions. It shall be subject to the opinion of an independent audit body and be provided to the Commission by 15 March of the year following the financial year concerned.

 

The Court of Auditors and the Contact Committee of the Supreme Audit Institutions of the European Union shall be consulted on the guidelines for the establishment of such national declarations.

 

Where a Member State has provided a national declaration in accordance with this paragraph, this shall be taken into account in the establishment of the Commission’s audit and control strategies under paragraph 6 of this Article and the establishment of risk at Member States’ level in accordance with Article 29; it shall be forwarded to the budgetary authority in application of Article 63(9) mutatis mutandis.

Amendment  116

Proposal for a regulation

Article 57 – paragraph 1

Text proposed by the Commission

Amendment

1. Entities and persons entrusted with budget implementation tasks pursuant to point (b) of Article 55(1) shall respect the principles of sound financial management, transparency and non-discrimination and ensure the visibility of Union action when they manage Union funds. They shall guarantee a level of protection of the financial interests of the Union equivalent to that required under this Regulation when they manage Union funds, with due consideration:

1. Entities and persons other than the Member States entrusted with budget implementation tasks pursuant to point (b) of Article 55(1) shall respect the principles of sound financial management, transparency and non-discrimination and ensure the visibility of Union action when they manage Union funds. They shall guarantee a level of protection of the financial interests of the Union equivalent to that required under this Regulation when they manage Union funds, with due consideration for:

(a) the nature of the tasks entrusted and the amounts involved;

(a) the nature of the tasks entrusted and the amounts involved;

(b) the financial risks involved;

(b) the financial risks involved;

(c) the level of assurance stemming from their systems, rules and procedures together with the measures taken by the Commission to supervise and support the implementation of the tasks entrusted.

(c) the level of assurance stemming from their systems, rules and procedures together with the measures taken by the Commission to supervise and support the implementation of the tasks entrusted.

Amendment  117

Proposal for a regulation

Article 57 – paragraph 2

Text proposed by the Commission

Amendment

2. To this effect, the entities and persons referred to in paragraph 1 shall:

2. To this effect, the entities and persons referred to in paragraph 1 shall, in accordance with standards equivalent to those commonly applied in the Union or, where such standards do not exist, internationally accepted standards and defined in the agreement entrusting the certain specified implementation tasks:

(a) set up and ensure the functioning of an effective and efficient internal control system;

(a) set up and ensure the functioning of an effective and efficient internal control system;

(b) use an annual accounting system providing accurate, complete and reliable information in a timely manner;

(b) use an annual accounting system providing accurate, complete and reliable information in a timely manner;

(c) be subject to an independent external audit, performed in accordance with internationally accepted auditing standards by an audit service functionally independent of the entity or person concerned;

(c) be subject to an independent external audit, performed in accordance with internationally accepted auditing standards by an audit service functionally independent of the entity or person concerned;

(d) apply appropriate rules and procedures for providing financing from Union funds through grants, procurement and financial instruments;

(d) apply appropriate rules and procedures for providing financing from Union funds through grants, procurement and financial instruments;

(e) ensure, in conformity with Article 31(2), annual ex post publication of recipients of Union funds;

(e) ensure ex post publication of recipients of Union funds in conformity with Article 31(2) and the protection of personal data which satisfies the principles laid down in Directive 95/46/EC;

(f) ensure a reasonable protection of personal data.

(f) ensure a reasonable protection of personal data as laid down in Directive 95/46/EC and Regulation (EC) No 45/2001.

Persons referred to in point (viii) of Article 55(1)(b) may satisfy these requirements progressively. They shall adopt their financial rules with the Commission’s prior consent.

Persons referred to in point (viii) of Article 55(1)(b) may satisfy the requirements laid down in points (a) to (e) of this paragraph progressively within the first six months of their mandate. They shall adopt their financial rules with the Commission’s prior consent.

Justification

The provision is streamlined with Article 56 in order to achieve a coherent reporting and control environment in cases where the indirect management is carried out by entities other than Member States.

Amendment  118

Proposal for a regulation

Article 57 – paragraph 4 – subparagraph 2

Text proposed by the Commission

Amendment

The authorising officer by delegation may interrupt payments to such entities or persons fully or partially for the purpose of further verifications when information comes to his notice indicating a significant deficiency in the functioning of the internal control system or that the expenditure certified by the entity or person concerned is linked to a serious irregularity and has not been corrected, provided the interruption is necessary to prevent significant damage to the financial interests of the Union.

Notwithstanding Article 89, the authorising officer by delegation may interrupt payments to such entities or persons fully or partially for the purpose of further verifications when information comes to his notice indicating a significant deficiency in the functioning of the internal control system or that the expenditure certified by the entity or person concerned is linked to a serious irregularity and has not been corrected, provided the interruption is necessary to prevent significant damage to the financial interests of the Union.

Justification

The provision is streamlined with Article 56 in order to achieve a coherent reporting and control environment in cases where the indirect management is carried out by entities other than Member States.

Amendment  119

Proposal for a regulation

Article 57 – paragraph 5

Text proposed by the Commission

Amendment

5. The entities and persons referred to in paragraph 1 shall provide the Commission with:

5. The entities and persons referred to in paragraph 1 shall provide the Commission with:

(a) a report on the implementation of the tasks entrusted;

(a) a report on the implementation of the tasks entrusted;

(b) their accounts drawn up for the expenditure made in the execution of the tasks entrusted;

(b) their accounts drawn up for the expenditure made in the execution of the tasks entrusted;

(c) a summary of the results of all available audits and controls carried out, including an analysis of systematic or recurrent weaknesses as well as corrective actions taken or planned;

(c) a summary of the results of all available audits and controls carried out, including an analysis of systematic or recurrent weaknesses as well as corrective actions taken or planned;

(d) a management declaration of assurance as to the completeness, accuracy and veracity of the accounts, the proper functioning of the internal control systems as well as to the legality and regularity of the underlying transactions and the respect of the principle of sound financial management;

(d) a management declaration providing reasonable assurance that:

 

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

 

(ii) the expenditure referred in the accounts has been used for its intended purpose and in accordance with the principle of sound financial management;

 

(iii) the control procedures put in place give the necessary guarantees concerning the legality and regularity of the underlying transactions.

(e) the opinion of an independent audit body on the management declaration of assurance mentioned in point (d) of this paragraph, covering all its elements.

(e) These documents shall be accompanied by an opinion of an independent audit body, drawn up in accordance with the internationally accepted audit standards, on the completeness, accuracy and veracity of the accounts, on the proper functioning of the control procedures put in place as well as on the legality and regularity of the underlying transactions. The audit body shall report if the examination puts in doubt the assertions made in the management declaration.

These elements shall be provided to the Commission by 1 February of the following financial year with the exception of the audit opinion referred to in point (e). The latter shall be provided at the latest by 15 March.

These elements shall be provided to the Commission by 1 February of the following financial year with the exception of the audit opinion referred to in point (e). The latter shall be provided at the latest by 15 March.

These obligations shall be without prejudice to the provisions made in agreements concluded with international organisations and third countries. These provisions shall include at least the obligation of such entities to provide the Commission annually with a statement that, during the financial year concerned, the Union contribution has been used and accounted for in compliance with the requirements set out in paragraph 2 of this Article and the obligations laid down in the agreement concluded with the relevant international organisations or third country.

These obligations shall be without prejudice to the provisions made in agreements concluded with international organisations and third countries. These provisions shall include at least the obligation of such entities to provide the Commission annually with a statement that, during the financial year concerned, the Union contribution has been used and accounted for in compliance with the requirements set out in paragraph 2 of this Article and the obligations laid down in the agreement concluded with the relevant international organisations or third country, audited by the competent supreme audit institution. The results of the audits shall be made available to the discharge authority. This shall not preclude the European Court of Auditors’ as well as the OLAF’s powers of investigation.

Justification

The provision is streamlined with Article 56 in order to achieve a coherent reporting and control environment in cases where the indirect management is carried out by entities other than Member States.

Amendment  120

Proposal for a regulation

Article 57 – paragraph 6

Text proposed by the Commission

Amendment

6. The Commission shall:

6. The Commission shall:

(a) ensure supervision and evaluation of the implementation of the tasks entrusted;

(a) supervise that these entities fulfil their responsibilities, in particular by carrying out audits and evaluations during the programme implementation;

(b) apply procedures for a timely financial clearance of the accounts of the entrusted entities and persons, ensuring that the accounts are complete, accurate and true and allowing for a timely clearance of irregularity cases;

(b) apply procedures for a timely clearance of the accounts of the entities, establishing whether the accounts are complete, accurate and true and allowing for a timely clearance of irregularity cases;

(c) exclude from Union financing expenditure the disbursements which have been made in breach of the applicable rules.

(c) exclude from Union financing expenditure for which disbursements have been made in breach of Union law.

Justification

The provision is streamlined with Article 56 in order to achieve a coherent reporting and control environment in cases where the indirect management is carried out by entities other than Member States.

Amendment  121

Proposal for a regulation

Article 57 – paragraph 7

Text proposed by the Commission

Amendment

7. Paragraphs 5 and 6 of this Article shall not apply to entities and persons which are subject to a separate procedure of discharge from the budgetary authority.

7. Paragraphs 5 and 6 of this Article shall not apply to Union entities which are subject to a separate discharge procedure when these entities implement the Union budget.

Amendment  122

Proposal for a regulation

Article 57 – paragraph 7 a (new)

Text proposed by the Commission

Amendment

 

7a. Paragraphs 1, 2 and 3 shall apply mutatis mutandis for the indirect management of the appropriations allocated by the European Parliament to its political groups. The European Parliament shall adopt implementing measures in this regard which take account of the particular requirements of the political groups.

Justification

The provision is streamlined with Article 56 in order to achieve a coherent reporting and control environment in cases where the indirect management is carried out by entities other than Member States.

Amendment  123

Proposal for a regulation

Article 62 – paragraph 6 a (new)

Text proposed by the Commission

Amendment

 

6a. The authorising officer responsible may be assisted in his duties by persons covered by staff entrusted, under his responsibility, with certain operations required for the implementation of the budget and production of the financial and management information. In order to prevent any conflict of interests, staff assisting authorising officers by delegation or subdelegation shall be subject to the obligations referred to in Article 54.

Amendment  124

Proposal for a regulation

Article 62 – paragraph 6 b (new)

Text proposed by the Commission

Amendment

 

6b. Each institution shall inform the budgetary authority whenever an authorising officer by delegation takes up his duties, changes duties or terminates his duties.

Amendment  125

Proposal for a regulation

Article 62 – paragraph 6 c (new)

Text proposed by the Commission

Amendment

 

6c. Each institution shall lay down in its internal rules such measures for the management of appropriations as it considers necessary for proper implementation of its section of the budget. These internal rules shall be communicated to the European Parliament in the course of the discharge procedure.

Amendment  126

Proposal for a regulation

Article 63 – paragraph 6 – subparagraph 2

Text proposed by the Commission

Amendment

The ex ante controls shall be carried by the members of staff other than those responsible for the ex post controls. The members of staff responsible for the ex post controls shall not be subordinate to the members of staff responsible for the ex ante controls.

The ex ante controls shall be carried out by members of staff other than those responsible for the ex post controls. The members of staff responsible for the ex post controls shall not be subordinate to the members of staff responsible for the ex ante controls , and vice versa.

Amendment  127

Proposal for a regulation

Article 63 – paragraph 8

Text proposed by the Commission

Amendment

8. Any member of staff, involved in the financial management and control of transactions who considers that a decision he is required by his superior to apply or to agree to is irregular or contrary to the principles of sound financial management or the professional rules he is required to observe, shall inform the authorising officer by delegation in writing and, if that officer fails to take action, the panel referred to in Article 70(6). In the event of any illegal activity, fraud or corruption which may harm the interests of the Union, he shall inform the authorities and bodies designated by the applicable legislation.

8. Any member of staff, involved in the financial management and control of transactions who considers that a decision he is required by his superior to apply or to agree to is irregular or contrary to the principles of sound financial management or the professional rules he is required to observe, shall inform the authorising officer by delegation in writing and, if that officer fails to take action, the panel referred to in Article 70(6).

 

In the event of any illegal activity, fraud or corruption which may harm the interests of the Union, such a member of staff shall inform the authorities and bodies designated by the applicable legislation. That latter obligation shall also apply, in cases of fraud, to the independent auditors who carry out procedures in connection with the financial management of the Union. In making such a disclosure they shall not incur liability.

 

For the purposes of this paragraph, the member of staff concerned shall benefit from the relevant provisions of the Staff Regulations.

Amendment  128

Proposal for a regulation

Article 65 – paragraph 7 a (new)

Text proposed by the Commission

Amendment

 

7a. The accounting officer of the Commission shall lay down rules for the management of the fiduciary accounts and their use.

Amendment  129

Proposal for a regulation

Article 69 – paragraph 2

Text proposed by the Commission

Amendment

2. Each authorising officer, accounting officer or imprest administrator shall be liable to disciplinary action and payment of compensation as laid down in the Staff Regulations, without prejudice to Articles 70, 71 and 72. In the event of illegal activity, fraud or corruption which may harm the interests of the Union, the matter shall be submitted to the authorities and bodies designated by the applicable legislation.

2. Each authorising officer, accounting officer or imprest administrator shall be liable to disciplinary action and payment of compensation as laid down in the Staff Regulations, without prejudice to Articles 70, 71 and 72. In the event of illegal activity, fraud or corruption which may harm the interests of the Union, the matter shall be submitted to the authorities and bodies designated by the applicable legislation, in particular to the OLAF.

Amendment  130

Proposal for a regulation

Section 4 – Title

Text proposed by the Commission

Amendment

AUTHORISATION OF RECOVERY

RECOVERY AND FINANCIAL CORRECTIONS

Amendment  131

Proposal for a regulation

Article -76 (new)

Text proposed by the Commission

Amendment

 

Article -76

 

Definitions

 

For the purposes of this section:

 

a) recoveries are instruments applied to correct the receipt of irregular expenditure; in principle it is the recipients of such expenditure who repay sums incorrectly received. Where it is impossible to determine the actual amount of expenditure concerned, the amount to be recovered may be established by other scientific means. Such means should in principle be stipulated before the expenditure is committed;

 

b) financial corrections are instruments that predominantly address weaknesses in management systems. They withdraw funding from Member States or third countries or others which fail to ensure that the Union’s rules are correctly applied. They may also be applied for the promotion of the implementation of the Union’s policies laid down in the legal basis for the respective Union’s contribution.

 

All financial corrections decided and outstanding per funds and per Member State shall be presented in the accounts in accordance with Article 132.

Amendment  132

Proposal for a regulation

Article 76 – paragraph 1 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

The debit note corresponding to the recovery order shall be served upon the debtor and shall be binding on the Commission in its content at the time of service.

Amendment  133

Proposal for a regulation

Article 76 – paragraph 2

Text proposed by the Commission

Amendment

2. The institution may formally establish an amount as being receivable from persons other than Member States by means of a decision which shall be enforceable within the meaning of Article 256 of the EC Treaty.

2. The Council, the Commission or the European Central Bank may formally establish an amount as being receivable from persons other than Member States by means of a decision which shall be enforceable within the meaning of Article 299 TFEU. As regards the other institutions, the Commission may adopt, on their behalf, such an enforceable decision within the meaning of Article 299 TFEU, under the conditions laid down in the delegated regulation referred to in Article 199.

Justification

According to recent case-law, only the Council, the Commission and the European Central Bank have the power to adopt enforceable decisions under Article 299 TFEU. Other institutions, such as the Parliament, are unable to adopt enforceable decisions under Article 299 TFEU (see the Order of the President of the General Court dated 19 October 2010 in Case T-431/10 R, Nencini v Parliament). The current wording of Article 76(2) of the Financial Regulation is therefore inoperative, as regards institutions other than the Council, Commission and ECB.

In order for other institutions (including the Parliament) to take effective action to recover sums due, it is therefore necessary for the Commission to adopt, on their behalf, an enforceable decision under Article 299 TFEU.

Amendment  134

Proposal for a regulation

Article 77 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

The accounting officer shall recover amounts by offsetting them against equivalent claims that the Union have on any debtor who himself has a claim on the Union that is certain, of a fixed amount and due.

The accounting officer shall recover amounts by offsetting them against equivalent claims that the Union has on any debtor who himself has a claim on the Union. Such claims must be certain, of a fixed amount and due.

Amendment  135

Proposal for a regulation

Article 77 – paragraph 2

Text proposed by the Commission

Amendment

2. Where the responsible authorising officer by delegation is planning to waive or partially waive recovery of an established amount receivable, he shall ensure that the waiver is in order and complies with the principle of sound financial management and proportionality in accordance with the procedures and the criteria laid down in the delegated Regulation referred to in Article 199. The waiver decision must be substantiated. The authorising officer may delegate the decision only as laid down in the delegated Regulation referred to in Article 199.

2. Where the competent authorising officer by delegation is planning to waive or partially waive recovery of an established amount receivable, he/she shall ensure that the waiver is in order and complies with the principle of sound financial management and proportionality. The waiver decision must be substantiated and shall be presented in the annual activity reports referred to in Article 63(9). The authorising officer may delegate the decision.

The responsible authorising officer may cancel an established amount receivable in full or in part in accordance with the conditions set out in the delegated Regulation referred to in Article 199. The partial cancellation of an established amount receivable does not imply a waiver of a Union’s established entitlement.

The competent authorising officer may cancel an established amount receivable in full or in part. The partial cancellation of an established amount receivable does not imply a waiver of a Union’s established entitlement.

 

The rules for the procedures and criteria of a waiver decision as well as the delegation thereof by the authorising officer and the cancellation of an established amount shall be laid down in the delegated regulation referred to Article 199.

Justification

The amendment aims at streamlining the rules for recoveries. It is based on Article 32 of Regulation 1290/2005 (on the Common Agricultural Policy).

Amendment  136

Proposal for a regulation

Article 77 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. Sums recovered by the Member States following the occurrence of irregularity or negligence and the interest on these sums shall be made over to the managing authority and booked by it as revenue in the month in which the money is actually received.

Justification

The amendment aims at streamlining the rules for recoveries. It is based on Article 32 of Regulation 1290/2005 (on the Common Agricultural Policy).

Amendment  137

Proposal for a regulation

Article 77 – paragraph 2 b (new)

Text proposed by the Commission

Amendment

 

2b. When the Union budget is credited, the Member State may retain 20 % of the corresponding amounts as flat rate recovery costs, except in cases of irregularity or negligence attributable to its administrative authorities or other official bodies.

Justification

The amendment aims at streamlining the rules for recoveries. It is based on Article 32 of Regulation 1290/2005 (on the Common Agricultural Policy).

Amendment  138

Proposal for a regulation

Article 77 – paragraph 2 c (new)

Text proposed by the Commission

Amendment

 

2c. If there is justification for doing so, Member States may decide not to pursue recovery. A decision to this effect may be taken only in the following cases:

 

(a) if the costs already and likely to be incurred total more than the amount to be recovered, or

 

(b) if recovery proves impossible owing to the insolvency, recorded and recognised under national law, of the debtor or the persons legally responsible for the irregularity.

Justification

The amendment aims at streamlining the rules for recoveries. It is based on Article 32 regulation 1290/2005 (on the Common Agricultural Policy).

Amendment  139

Proposal for a regulation

Article 77 a (new)

Text proposed by the Commission

Amendment

 

Article 77a

 

Financial corrections by Member States in shared management under Title II of Part 2

 

1. The Member States shall in the first instance bear the responsibility for investigating irregularities, acting upon evidence of any major change affecting the nature or the conditions for the implementation or control of operations or operational programmes under Title II of Part 2 and making the financial corrections required in accordance with paragraphs 2 to 4.

 

They shall also recover funds affected by irregularities in expenditure effected under Title I of Part 2.

 

2. The Member State shall make the financial corrections required in connection with the individual or systemic irregularities detected in operations or operational programmes. The corrections made by a Member State shall consist in cancelling all or part of the public contribution to the operational programme. The Member State shall take into account the nature and gravity of the irregularities and the financial loss to the Funds.

 

Where this is provided for in the relevant legal basis, the resources from the funds released in this way may be reused by the Member State for operations within the operational programme concerned (replacement operation).

 

3. The contribution cancelled in accordance with paragraph 2 may not be reused for:

 

(a) the operation or operations that were the subject of the correction, nor

 

(b) where a financial correction is made for a systemic irregularity, for existing operations within the whole or part of the priority axis where the systemic irregularity occurred, nor

 

(c) where a financial correction is made in a replacement operation.

 

4. In the case of a systemic irregularity, the Member State shall extend its enquiries to cover all operations liable to be affected.

Justification

The amendment responds to long standing criticism of the ECA with regard to the management of funds. The traceability of the funds is to be improved.

Amendment  140

Proposal for a regulation

Article 77 b (new)

Text proposed by the Commission

Amendment

 

Article 77b

 

Criteria for financial corrections by the Commission

 

1. The Commission applies financial corrections by cancelling all or part of the Union contribution to an operational programme where, after carrying out the necessary examination, it concludes that:

 

(a) there is a serious deficiency in the management and control system of the programme which has put at risk the Union contribution already paid to the programme;

 

(b) expenditure contained in a certified statement of expenditure is irregular and has not been corrected by the Member State prior to the opening of the correction procedure under this paragraph;

 

(c) a Member State has not complied with its obligations under Article 77a prior to the opening of the correction procedure under this paragraph.

 

2. The Commission shall base its financial corrections on individual cases of irregularity identified, taking account of the systemic nature of the irregularity to determine whether a flat rate or extrapolated correction should be applied.

 

Flat rate corrections shall only be applied where it is impossible, due to the nature of the case, to either identify the extent and amount of the irregularity found or to extrapolate the amount to be corrected.

 

3. The Commission shall, when deciding the amount of a correction, take into account the nature and gravity of the irregularity and the extent and financial implications of the deficiencies found in the operational programme concerned. Unless otherwise provided for in the applicable legal basis, the following rates for correction apply:

 

(a) 100% correction

 

The rate of correction may be fixed at 100% when the deficiencies in the Member State’s management and control system are, or an individual breach is, so serious as to constitute a complete failure to comply with Community rules, thus rendering all the payments irregular;

 

(b) 25% correction

 

When a Member State’s application of its management and control system is gravely deficient, and there is evidence of widespread irregularity, and negligence in countering irregular or fraudulent practices, a correction of 25% is justified, as it can then reasonably be assumed that the freedom to submit irregular claims with impunity will occasion exceptionally high losses to the Fund. A correction at this rate is also appropriate for irregularities in an individual case which are serious but do not invalidate the whole operation;

 

(c) 10% correction

 

When one or more key elements of the system do not function or function so poorly or so infrequently that they are completely ineffective in determining the eligibility of the claim or preventing irregularity, a correction of 10% is justified, as it can reasonably be concluded that there was a high risk of widespread loss to the Fund. This rate of correction is also appropriate for individual irregularities of moderate seriousness in relation to key elements of the system;

 

(d) 5% correction

 

When all the key elements of the system function, but not with the consistency, frequency, or depth required by the regulations, then a correction of 5% is justified, as it can reasonably be concluded that they do not provide a sufficient level of assurance of the regularity of claims, and that the risk to the Funds was significant. A 5% correction can also be appropriate for less serious irregularities in individual operations in relation to key elements.

 

The fact that the way in which a system operates is perfectible is not in itself sufficient grounds for a financial correction. There must be a serious deficiency of compliance with explicit Union rules or standards of good practice and the deficiency must expose the Structural Funds to a real risk of loss or irregularity;

 

(e) 2% correction

 

When performance is adequate in relation to the key elements of the system, but there is a complete failure to operate one or more ancillary elements, a correction of 2% is justified in view of the lower risk of loss to the Fund, and the lesser seriousness of the infringement.

 

A 2% correction will be increased to 5% if the same deficiency is established in relation to expenditure after the date of the first correction imposed and the Member State has failed to take adequate corrective measures for the part of the system at fault after the first correction.

 

A correction of 2% is also justified where the Commission has informed the Member State, without imposing any correction, of the need to make improvements to ancillary elements of the system that are in place but do not operate satisfactorily, but the Member State has not taken the necessary action.

 

Corrections are only imposed for deficiencies in ancillary elements of management and control systems where no deficiencies have been identified in key elements. If there are deficiencies in relation to ancillary elements as well as in key elements, corrections are only made at the rate applicable to the key elements.

 

4. When a Member State does not comply with its obligations under the applicable legal basis, the Commission may, in relation to the degree of non-compliance with these obligations, make a financial correction by cancelling all or part of the contribution to the Member State concerned.

 

Unless otherwise provided for in the applicable legal basis, the financial corrections applicable to:

 

(a) non compliance with public procurement rules, and

 

(b) shortcomings between agreed target levels and levels achieved, as well as

 

(c) any other obligations arising directly out of the application of the legal basis or where this is stipulated in a funding agreement, where the breach of such obligations frustrates in full or in part the Union’s policy on which the funding is based or where the protection of the Union’s financial interests so requires

 

shall be those laid down in the delegated regulation referred to with Article 199.

 

5. Where the Commission bases its position on facts established by auditors other than those of its own services, it shall draw its own conclusions regarding the financial consequences after examining the measures taken by the Member State concerned under Article 77a, the reports supplied under Article 56, and any replies from the Member State.

Amendment  141

Proposal for a regulation

Article 77 c (new)

Text proposed by the Commission

Amendment

 

Article 77c

 

Reduction of financial corrections

 

1. The amount of financial corrections for any specific funds in any given Member State subject to such correction shall be reduced where the management body has given a true and fair management declaration:

 

(a) where the Commission has established for the two consecutive previous years that this Member State has achieved an error rate below 2%, by 10%;

 

(b) where the Commission has established for the five consecutive previous years that a Member State has achieved an error rate below 2%, by 20%;

 

(c) where the Commission has established for the ten consecutive previous years that a Member State has achieved an error rate below 2%, by 50%;

 

unless the act of establishment of the error rate itself has been subject to fraud or other intentional or grossly negligent misconduct.

 

2. The financial correction shall be reduced by fifteen per cent per fund, where a Member State has submitted a national declaration on the expenditure made under the system of shared management in accordance with Article 56(6b).

 

3. Without prejudice to other measures taken by the Commission, a management body that has returned a false management declaration shall be barred from reductions in application of this Article.

Amendment  142

Proposal for a regulation

Article 77 d (new)

Text proposed by the Commission

Amendment

 

Article 77d

 

Contradictory procedure

 

1. Before taking a decision on a financial correction, the Commission shall open the contradictory procedure by informing the Member State of its provisional conclusions.

 

Within two months following receipt of the provisional conclusions, the Member State shall:

 

(a) confirm receipt and agree to the provisional conclusions; or

 

(b) be given the opportunity to demonstrate through an examination of the documentation concerned, that the actual extent of irregularity was less than the Commission’s assessment, where the Commission proposes a financial correction on the basis of extrapolation or at a flat rate.

 

In agreement with the Commission, the Member State may limit the scope of this examination to an appropriate proportion or sample of the documentation concerned; or

 

(c) be invited to a hearing by the Commission, and chaired by a pre-selected panel comprising experts from both the Member States and Commission in which both sides in cooperation based on the partnership shall make efforts to reach an agreement concerning the observations and the conclusions to be drawn from them.

 

The time allowed for procedures under points (a) and (b) shall only be prolonged once for each party by a maximum of two months upon substantiated notice by the respective party to the other.

 

The time allowed for procedures under point (c) shall not exceed four months unless the expert panel by a majority of its constituent members grants an extension of up to 6 months following the date of the hearing in which the extension is decided.

 

2. The Commission shall take account of any evidence supplied by the Member State within the time limits mentioned in paragraph 1. In the absence of agreement, the Commission shall take a decision on the financial correction within three months of the final date of the examination or hearing, taking account of all information and observations submitted during the course of the procedure.

 

3. In case of an agreement, the Member State may reuse the Union funds concerned in conformity with the second subparagraph of Article 77a(2).

Justification

The amendment is based on Article 100 of Regulation 1083/2006 and serves to streamline the rules.

Amendment  143

Proposal for a regulation

Article 77 e (new)

Text proposed by the Commission

Amendment

 

Article 77e

 

Repayment

 

1. Any repayment due to be made to the general budget of the European Union shall be effected before the due date indicated in the order for recovery drawn up in accordance with Article 76. The due date shall be the last day of the second month following the issuing of the order.

 

2. Any delay in effecting repayment shall give rise to interest on account of late payment, starting on the due date and ending on the date of actual payment. The rate of such interest shall be one-and-a-half percentage points above the rate applied by the European Central Bank in its main refinancing operations on the first working day of the month in which the due date falls.

Justification

The amendment is based on Article 102 of Regulation 1083/2006 and serves to streamline the rules.

Amendment  144

Proposal for a regulation

Article 81 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. The financing decision shall specify the objective pursued, the expected results, the method of implementation and the total amount of the financing plan. It shall also contain a description of the actions to be financed and an indication of the amount allocated to each action, and an indicative implementation timetable.

 

In case of indirect management, it shall also specify the implementing partner chosen, the criteria used and the tasks entrusted to it.

Amendment 145

Proposal for a regulation

Article 83 - paragraph 1

Text proposed by the Commission

Amendment

1. In respect of any measure which may give rise to expenditure chargeable to the budget, the authorising officer responsible must first make a budgetary commitment before entering into a legal obligation with third parties or transferring funds to a trust fund on the basis of Article 178.

1. Notwithstanding Article 82(3), in respect of any measure which may give rise to expenditure chargeable to the budget, the authorising officer responsible must first make a budgetary commitment before entering into a legal obligation with third parties or transferring funds to a trust fund on the basis of Article 178.

 

However, in the case of humanitarian aid operations, civil protection operations and crisis management aid, and when an urgent situation outside the Union so demands, the budgetary commitment may be made without delay after entering into a legal obligation with third parties, provided that that is indispensable for the efficient execution of the Union’s intervention.

Amendment  146

Proposal for a regulation

Article 83 – paragraph 3 – subparagraph 4

Text proposed by the Commission

Amendment

The amount of each individual legal commitment adopted following a global commitment shall, prior to signature, be registered by the authorising officer responsible in the budgetary accounts and booked to the global commitment. In case of humanitarian aid operations, civil protection operations and crisis management aid, and when the urgency justifies it, the registration of the amounts may be done immediately after the signature of the corresponding individual legal commitment.

The amount of each individual legal commitment adopted following a global commitment shall, prior to signature, be registered by the authorising officer responsible in the budgetary accounts and booked to the global commitment.

Amendment  147

Proposal for a regulation

Article 87 – paragraph 1 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

Payments shall be made by bank credit transfer, by cheque or by debit card.

Amendment 148

Proposal for a regulation

Article 87 – paragraph 4

Text proposed by the Commission

Amendment

4. Pre-financing payments shall be cleared regularly by the responsible authorising officer. To this effect appropriate provisions shall be included in the contracts, grant decisions and agreements as well as the delegation agreements entrusting implementation tasks to the entities and persons referred to in point (b) of Article 55(1).

4. Pre-financing payments shall be cleared regularly by the responsible authorising officer, following the economic substance and timing of the underlying project. For pre-financing amounts of a value in excess of EUR 2 million and representing more than 50% of the total operation being funded, ex post verifications shall be carried out at least annually throughout the duration of the operation. To this effect appropriate provisions shall be included in the contracts, grant decisions and agreements as well as the delegation agreements entrusting implementation tasks to the entities and persons referred to in point (b) of Article 55(1).

Amendment  149

Proposal for a regulation

Article 89

Text proposed by the Commission

Amendment

Article 89

Article 89

The validation, authorisation and payment of expenditure must be completed within the time limits laid down in the delegated Regulation referred to in Article 199, which shall also specify the circumstances in which creditors paid late are entitled to receive default interest charged to the line from which the principal was paid.

1. The time allowed for making payments shall be:

 

(a) 90 calendar days for contracts, grant agreements and decisions 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;

 

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

 

(c) 30 calendar days in all other cases.

 

These time limits shall not apply to payments under shared management.

 

2. The competent authorising officer by delegation or subdelegation may suspend the time limit for payment by informing creditors, at any time that the payment request cannot be met, either because the amount is not due or because the appropriate supporting documents have not been produced. If information comes to the notice of the competent authorising officer which puts in doubt the eligibility of expenditure appearing in a payment request, the authorising officer may suspend the time limit for payment for the purpose of further verification, including on the spot checks, in order to ascertain, prior to payment, that the expenditure has been indeed eligible.

 

The creditors concerned shall be informed in writing of the reasons for suspension.

 

Where the suspension exceeds two months, the competent clearing committee shall take a decision on the continuity of the suspension upon an application by the creditor.

 

On expiry of the time limits laid down in paragraph 1, the creditor shall be entitled to interest.

 

 

Justification

The revision takes into account discussions with the Commission. It reflects practical needs for pre-financing and - on the other hand - improves the legal certainty for the beneficiaries.

Amendment  150

Proposal for a regulation

Chapter 7 – Title

Text proposed by the Commission

Amendment

IT SYSTEMS

IT SYSTEMS AND E-GOVERNMENT

Amendment  151

Proposal for a regulation

Article 91 – paragraph 1

Text proposed by the Commission

Amendment

Subject to the prior agreement of the institutions concerned, any transmission of documents between institutions may be done by electronic means.

Subject to the prior agreement of the institutions and Member States concerned, any transmission of documents between them may be done by electronic means.

Amendment  152

Proposal for a regulation

Article 91 a (new)

Text proposed by the Commission

Amendment

 

Article 91a

 

Electronic Government (e-government)

 

All draft proposals submitted to the legislative authority shall be suitable for application of user-friendly information technologies at all levels, in particular the level of final recipients of funds.

 

Where funds are managed in shared management in accordance with Article 56, Commission and Member States shall ensure the interoperability of data gathered or otherwise received and transmitted in the management of the budget.

 

Where data is available in an electronic format, possibilities for its transmission in such format must be foreseen. Where this is necessary, the Member States and the Commission shall agree on uniform data transmission standards.

 

The Commission’s directorates and the executive agencies as well as entities referred to in Article 200 shall apply uniform standards for electronic information supplied to third parties in the process of procurements and grants procedures. They shall, to the greatest possible extent, design and apply uniform standards for the submission, storage and processing of data submitted in grants and procurement procedures, and to this end, shall designate a single ‘electronic data interchange area’ for potential beneficiaries, beneficiaries or candidates and tenderers.

 

The Commission shall designate a Chief Intelligence Officer (CIO) who shall supervise the implementation of this provision and regularly report on achievements to the budgetary authority in the framework of the budget implementation.

Amendment  153

Proposal for a regulation

Chapter 7a (new)

Text proposed by the Commission

Amendment

 

CHAPTER 7A

 

ADMINISTRATIVE PRINCIPLES

 

Article 91b

 

Right to good administration

 

Where, due to an obvious clerical error on the part of the applicant or tenderer acting in good faith, there is a failure to submit evidence, to give statements or to complete applications or otherwise miss of taking procedural steps, the competent officer shall invite the applicant or tenderer to take respective remedial measures. Where appropriate, the applicant or tenderer shall be advised of his procedural rights or duties.

 

The need to supply evidence and/or documentation, its form and prerequisite content shall be announced at the earliest possible convenience and discussed with potential applicants and tenderers.

 

Where appropriate, tenderers and applicants shall be informed immediately upon receipt of an application or tender of the time required for processing and provisional completion of the procedure as well as the completeness of the application or tender filed.

 

Article 91c

 

Indication of means of redress

 

Where a procedural act of an authorising officer adversely affects the rights of an applicant or tenderer, beneficiary or contractor, it shall contain an indication of the available means of administrative and/or judicial redress for challenging this act.

 

In particular, the nature of the redress, the body or bodies before which it can be brought as well as time limits for their exercise shall be indicated.

 

Unless otherwise provided, such redress shall be time barred following the expiry of two months after the service of a complete and concise indication of the available means of redress on the applicant or tenderer.

Justification

The European Ombudsman has asked to include the right to good administration (Article 41 Charter of Fundamental Rights) into Financial Regulation. Suggestion by the European Ombudsman in order to improve procedural transparency and rights of applicants vis-à-vis the administration.

Amendment  154

Proposal for a regulation

Article 93 – paragraph 4

Text proposed by the Commission

Amendment

4. Each year the institution shall forward a report to the discharge authority containing a summary of the number and type of internal audits carried out, the recommendations made and the action taken on those recommendations.

4. All audit reports shall be made available to the discharge authority immediately after they are issued. Each year the institution shall forward a report to the discharge authority containing a summary of the number and type of internal audits carried out, the recommendations made and the action taken on those recommendations.

 

In the summary report, the discharge authority shall be made aware of any review that recommends changes to any major acquisition project or grant or that recommends significant budgetary savings.

 

Where an audit progress committee exists, this shall report in a separate statement on the impact of actions taken on the recommendations for the institution as well as further possible improvements.

Justification

The amendment applies international standards to the Financial Regulation. In particular, Sections 516 and 522 of the United States Departments of Commerce and Justice, Science, and Related Agencies Appropriations Act, 2008 require ‘the Inspectors General ]…[ to conduct audits of grants or contracts funded by this Act and submit reports to Congress on the progress of such audits. Requires the results of such audits to be made available to the public on federal websites. Prohibits the use of funds for banquets and conferences not directly related to a grant or contract purpose. Requires a grant or contract recipient to submit a conflict of interest statement and to (1) forward all audit reports to the Senate Committee on Appropriations immediately after they are issued; (2) make the Committee aware of any review that recommends changes to any major acquisition project or grant or that recommends significant budgetary savings; and (3) withhold from public distribution for 15 days any final audit or investigation report requested by the Committee’.

Amendment  155

Proposal for a regulation

Article 95 – paragraph 3

Text proposed by the Commission

Amendment

3. This Title does not apply to grants, without prejudice to Articles 100 to 103, or to service contracts concluded between the Commission, on the one hand, and the European Investment Bank, the European Investment Fund or any other subsidiary of the European Investment Bank, on the other hand.

3. This Title does not apply to grants, without prejudice to Articles 100 to 103.

Justification

Equal treatment for all European Institutions and those of the Member States.

Amendment  156

Proposal for a regulation

Article 102 – paragraph 1

Text proposed by the Commission

Amendment

1. A central database shall be set up and operated by the Commission in compliance with Union rules on the protection of personal data. The database shall contain details of candidates and tenderers which is in one of the situations referred to in Article 100, point (b) of Article 103(1) and point (a) of Article 103(2). It shall be common to the institutions, executive agencies and the bodies referred to in Article 200.

1. A central database shall be set up and operated by the Commission in compliance with Union rules on the protection of personal data. The database shall contain details of candidates and tenderers which are in one of the situations referred to in Article 100, 101, point (b) of Article 103(1) and point (a) of Article 103(2). It shall be common to the institutions, executive agencies and the bodies referred to in Article 196b, as well as publicly accessible. The discharge authority shall be informed of the number of cases reported for entry and, where this differs, actually entered into the database.

Justification

The amendment aims at applying the world bank’s system of ‘name and shame’ to the exclusion database in order to enhance transparency and increase the deterrent power of this tool. The discharge authority should regularly be informed of the number of cases entered into the database in order to assess the efficiency of its use.

Amendment  157

Proposal for a regulation

Article 102 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a. Access may be granted to authorities of third countries only when the rules laid down in Article 9 of Regulation (EC) No 45/2001 are fulfilled and after an evaluation on a case-by-case basis.

Amendment   158

Proposal for a regulation

Article 103 paragraph 3

Text proposed by the Commission

Amendment

3. Decisions or summary of decisions indicating the name of the economic operator, a short description of the facts, the duration of the exclusion or the amount of the financial penalties may be published by the institution.

3. In order to reinforce the protection of the Union’s financial interests, institutions may decide, in compliance with the principle of proportionality, to publish their decisions imposing administrative or financial penalties referred to in paragraph 1 after the procedure set out in paragraph 1 has been fully complied with.

 

The decision to publish a decision imposing administrative or financial penalties referred to in the first subparagraph shall take into account, in particular, the seriousness of the misconduct including its impact on the Union’s financial interests and image and the time which has elapsed since the misconduct took place, the duration and recurrence of the misconduct, the intention or degree of negligence of the entity concerned and the measures taken by the entity concerned to remedy the situation.

 

The decision on the publication shall be included in the decision imposing administrative or financial penalties and shall expressly provide for publication of the decision imposing penalties, or of a summary thereof, on the internet site of the institution.

 

In order to ensure a deterrent effect, the summary published shall include the name of the person responsible for the misconduct, a short description of that misconduct, the programme concerned and the duration of the exclusion and/or the amount of the financial penalties.

 

The decision shall be published after the legal remedies against the decision have been exhausted or after the expiry of the deadlines for redress and the publication shall remain on the internet site until the end of the exclusion period or until 6 months after the payment of the financial penalties where these penalties constitute the sole measure decided.

 

Where natural persons are concerned, the decision to publish shall be taken with due consideration of the right to privacy and with due observance of the rights provided for in the Regulation (EC) No 45/2001.

Amendment  159

Proposal for a regulation

Article 105 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. The Commission shall ensure by appropriate means and in application of Article 91a that tenderers may enter the contents of the tenders and any supporting evidence in an electronic format (e-procurement) if they so wish and shall, with the consent of the tenderer, store such supporting evidence for the purpose of conducting future e-procurement procedures, in a central database common to all institutions and entities to which this Regulation applies. The data shall be erased after a six month period unless the tenderer applies for ongoing storage. It shall be the tenderer’s responsibility to maintain and update the stored data.

 

The Commission shall report to Parliament and Council on the progress of the implementation of this provision within two years after the entry into force of this Regulation and regularly afterwards.

Amendment  160

Proposal for a regulation

Article 107 – paragraph 2

Text proposed by the Commission

Amendment

2. The contracting authority shall notify all candidates or tenderers whose applications or tenders are rejected of the grounds on which the decision was taken, and all tenderers who meet the exclusion and the selection criteria and who make a request in writing of the characteristics and relative advantages of the successful tender and the name of the tenderer to whom the contract is awarded.

2. The contracting authority shall notify all candidates or tenderers whose applications or tenders are rejected of the grounds on which the decision was taken as well as the date on which the standstill period referred to in Article 112(2) lapses, and all tenderers who meet the exclusion and the selection criteria and who make a request in writing of the characteristics and relative advantages of the successful tender and the name of the tenderer to whom the contract is awarded.

However, certain details need not be disclosed where disclosure would hinder application of the law, would be contrary to the public interest or would harm the legitimate business interests of public or private undertakings or could distort fair competition between those undertakings.

However, certain details need not be disclosed where disclosure would hinder application of the law, would be contrary to the public interest or would harm the legitimate business interests of public or private undertakings or could distort fair competition between those undertakings.

Amendment  161

Proposal for a regulation

Article 109 – paragraph 1

Text proposed by the Commission

Amendment

1. The contracting authority shall require contractors to lodge a guarantee in advance in the cases specified in the delegated Regulation referred to in Article 199.

deleted

Amendment  162

Proposal for a regulation

Article 109 – paragraph 2

Text proposed by the Commission

Amendment

2. The contracting authority may, if it deems it appropriate and proportionate, require contractors to lodge such a guarantee in order to:

2. Other than in the case of very low value contracts, the contracting authority may, if it deems it appropriate and proportionate on a case-by-case basis and subject to a risk-analysis, require contractors to lodge a guarantee in order to:

(a) ensure full performance of the contract or

(a) ensure full performance of the contract or

(b) limit the financial risks connected with payment of pre-financing.

(b) limit the financial risks connected with payment of pre-financing.

 

The Commission may define criteria for the risk analysis in the delegated regulation referred to in Article 199.

Justification

Very low value contracts (< 16.000 EUR) should not require a guarantee.

Amendment  163

Proposal for a regulation

Article 113

Text proposed by the Commission

Amendment

Participation in tendering procedures shall be open on equal terms to all natural and legal persons coming within the scope of the Treaties and to all natural and legal persons in a third country which has with the Union a special agreement in the field of public procurement under the conditions laid down in that agreement.

Participation in tendering procedures shall be open on equal terms to all natural and legal persons coming within the scope of the Treaties and to all natural and legal persons in a third country which has with the Union a special agreement in the field of public procurement under the conditions laid down in that agreement and where this agreement expressly stipulates control competences equal to the standards of the European Union, in particular a right to access and inspect all relevant documents and premises by the European Court of Auditors as well as by OLAF.

Amendment  164

Proposal for a regulation

Article 115 – paragraph 1 – point b

Text proposed by the Commission

Amendment

(b) the functioning of a body which pursues an aim of general European interest or has an objective forming part of a Union policy (operating grants).

(b) the functioning of a body which pursues an aim of general European interest or has an objective forming part of, and acts in support of, a Union policy (operating grants).

Amendment  165

Proposal for a regulation

Article 115 – paragraph 2 - point c

Text proposed by the Commission

Amendment

(c) financial instruments as referred to in Title VIII of Part One, as well as shareholdings or equity participations in international financial institutions such as the European Bank for Reconstruction and Development (EBRD) or specialised Union bodies such as the European Investment Fund;

(c) financial instruments as referred to in Title VIII of Part One, loans, risk-sharing instruments of the Union or the Union’s financial contributions to such instruments, equity instruments on the basis of the private investor’s principle and quasi equity financing, as well as shareholdings or equity participations in international financial institutions such as the European Bank for Reconstruction and Development (EBRD) or specialised Union bodies such as the European Investment Fund;

Justification

The amendment to point (c) re-introduces the present enumeration of exceptions and clarifies the provision for financial instruments.

Amendment  166

Proposal for a regulation

Article 115 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. The following shall be assimilated to grants and shall be governed, as appropriate, by this Title:

 

(a) the benefit deriving from an interest subsidy on certain loans;

 

(b) equity investments or participations other than those referred to in point (c) of paragraph 2.

Justification

Paragraph 2a (new) re-integrates the present provision of the Financial Regulation rules and streamlines it with the provisions on subsidies / grants applicable to the Member States.

Amendment  167

Proposal for a regulation

Article 115 a (new)

Text proposed by the Commission

Amendment

 

Article 115a

 

Beneficiaries

 

1. For the purposes of this Title, the term ‘beneficiary’ shall mean one or several entities to which the grant is awarded.

 

2. Where the action is implemented by one or several legal entities represented by or affiliated to a coordinating legal entity, the grant agreement may be signed by the coordinating legal entity on behalf of its affiliated members who shall be regarded as co-beneficiaries.

 

3. Where the grant is awarded to several (co-)beneficiaries, the grant agreement shall identify these beneficiaries and specify the rights and obligations between them and the Commission. It shall stipulate in particular but not exclusively:

 

(a) the applicable law and legal venue,

 

(b) the financial responsibility of the coordinating legal entity and its affiliated members towards the Commission for the implementation of the whole action,

 

(c) the possibility to modify, following a majority decision of the co-beneficiaries, the rights and obligations between them; any modification in the number or identity of participating beneficiaries shall be subject to the approval of the competent authorising officer, which shall be granted unless there is a danger of that modification frustrating the purpose of the grant or adversely and materially affecting the Commission’s legal rights under the grant agreement.

Amendment  168

Proposal for a regulation

Article 116

Text proposed by the Commission

Amendment

Grants may take any of the following forms:

Grants may take any of the following forms:

(a) reimbursement of a specified proportion of the eligible costs actually incurred;

(a) reimbursement of a specified proportion of the eligible part of the full economic costs actually incurred;

 

(aa) reimbursement of a specified proportion of standard scale of unit costs;

(b) lump sums;

(b) lump sums;

(c) standard scale of unit costs;

 

(d) flat-rate financing;

(d) flat-rate financing;

(e) a combination of the forms referred to in points (a) to (d).

(e) a combination of the forms referred to in points (a) to (d) and taking into account the preferences of the beneficiaries with regard to their usual accounting principles;.

Justification

Thresholds inserted from the draft implementing rules (Articles 173, 175b) as proposed by the Commission in its working document (SEC(2010) 639). The amendment highlights the need for a ‘client-based-approach’.

Amendment  169

Proposal for a regulation

Article 117 – paragraph 3

Text proposed by the Commission

Amendment

3. Grants must involve co-financing without prejudice to the specific rules laid down in Title IV of Part Two.

3. Grants must involve co-financing without prejudice to the specific rules laid down in Title IV of Part Two.

 

The first subparagraph shall not apply to political parties and political foundations at Union level.

Grants shall not exceed an overall ceiling expressed in terms of an absolute value which is established on the basis of estimated eligible costs.

The beneficiary may substitute other sources of funding from third parties to its own financial resources, provided that the co-financing principle is respected.

The grant shall not exceed the eligible costs.

 

Justification

The second and third sentences are moved to Article 117a to enhance the legibility of the text. Article 165 (1) of the implementing rules as proposed by the Commission in its working document (SEC(2010) 639) is included here in a modified form: Substitution of co-financing helps in particular smaller beneficiaries and widens the basis of EU funding and consequently the visibility of the Union.

Amendment 170

Proposal for a regulation

Article 117 – paragraph 4

Text proposed by the Commission

Amendment

4. Grants may not have the purpose or effect of producing a profit within the framework of the action or the work programme of the beneficiary.

4. Grants may not have the purpose or effect of producing a profit within the framework of the action or the work programme of the beneficiary.

The first subparagraph shall not apply to:

The first subparagraph shall not apply to:

(a) actions the objective of which is the reinforcement of the financial capacity of a beneficiary or the generation of an income;

(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 sustainability after the period of Union financing provided for in the grant decision or agreement;

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

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

 

(ba) other direct support paid to natural persons in most need, such as unemployed persons and / or under the Union external action programmes for refugees;

 

(bb) grants based on flat rates and/or lump sums and/or unit costs where these comply with the conditions set out in Article 116a(2);

 

(bc) low value grants.

 

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 to carry out the action or work programme.

Amendment 171

Proposal for a regulation

Article 117 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a. For the purpose of this Title, ‘profit’ shall be defined as follows:

 

(a) in the case of a grant for an action, profit means a surplus of receipts over the costs incurred by the beneficiary, when the request is made for final payment;

 

(b) in the case of an operating grant, profit means a surplus balance on the operating budget of the beneficiary. Beneficiaries shall be entitled to carry over 3% profit into the year N+2. Funds carried over must be first used by the beneficiary. The rules on guarantees shall apply mutatis mutandis where the amount carried over exceeds the thresholds set for very low and/or low value grants.

Amendment  172

Proposal for a regulation

Article 117 – paragraph 6

Text proposed by the Commission

Amendment

6. For lumps sums, standard scale of unit costs and flat rate financing, the no-profit and the co-financing rules laid down in paragraphs 3 and 4 shall be reasonably ensured at the time of their determination or at the stage of the evaluation of the grant application.

deleted

Justification

The vague provision in paragraph 6 seems redundant after the amendments presented to paragraphs 3 and 4.

Amendment 173

Proposal for a regulation

Article 117 a (new)

Text proposed by the Commission

Amendment

 

Article 117a

 

Eligible costs

 

1. Grants shall not exceed an overall ceiling expressed in terms of an absolute value which is to be established on the basis of estimated eligible costs.

 

Grants shall not exceed the eligible costs.

 

2. Eligible costs are costs actually incurred by the beneficiary of a grant which meet all the following criteria:

 

(a) they are incurred during the duration of the action or of the work programme, with the exception of costs relating to final reports and audit certificates;

 

(b) they are indicated in the estimated overall budget of the action or work programme;

 

(c) they are necessary for the implementation of the action or of the work programme which is the subject of the grant;

 

(d) they are identifiable and verifiable, in particular being recorded in the accounting records of the beneficiary and determined according to the applicable accounting standards of the country where the beneficiary is established and according to the usual cost-accounting practices of the beneficiary; and

 

(e) they comply with the requirements of applicable tax and social legislation.

 

3. Without prejudice to paragraph 1 and to the basic act to which Article 2 applies, the call for proposals shall specify the categories of costs considered eligible for Union funding.

 

The following costs shall be considered as eligible by the competent authorising officer by delegation:

 

(a) costs relating to a bank guarantee or comparable surety to be lodged by the beneficiary of the grant pursuant to Article 125;

 

(b) costs relating to external audits required by the competent authorising officer either at the time of the request for financing or on receipt of the cost statement;

 

(c) value added tax (‘VAT’) paid by, and which cannot be refunded to, the beneficiary according to the applicable national legislation. The modalities of the reimbursement shall be laid down in the delegated regulation referred to in Article 199;

 

(d) depreciation costs, provided they are actually incurred by the beneficiary;

 

(e) administrative expenditure, staff and equipment costs, including the salary costs of the personnel of national administrations to the extent that they relate to the cost of activities which the relevant public authority would not carry out if the project concerned were not undertaken;

 

(f) other than in the case of operating grants, costs incurred that are necessary for the continued functioning of the business, but which cannot be immediately associated with the products/services being offered (‘indirect’ or ‘overhead’ cost) of up to 10% of the total direct eligible cost of the action where this does not exceed EUR 250 000, and up to 8% thereafter on a flat-rate basis. That percentage may be increased in particular for coordinating legal entities in accordance with the delegated regulation referred to in Article 199. The ceiling may be exceeded by reasoned decision of the Commission.

 

4. Costs incurred by affiliated members as referred to in Article 115a shall be accepted as eligible provided that the affiliated members concerned are identified in the grant agreement or decision and abide by the rules applicable to the beneficiary under the grant agreement or decision, including those concerning the rights of the Commission, OLAF and the Court of Auditors to control the spending of expenditure in accordance with the grant rules.

Amendment  174

Proposal for a regulation

Article 117 b (new)

Text proposed by the Commission

Amendment

 

Article 117b

 

Co-financing in kind

 

1. For the purpose of calculating the profit generated by the grant, co-financing in the form of in-kind contributions shall not be taken into account.

 

2. The authorising officer responsible may accept in-kind contributions as co-financing, if considered necessary or appropriate. Where co-financing in kind is offered in support of low value grants and the authorising officer intends to refuse this, he shall justify why it is not necessary or inappropriate.

 

Such contributions must not exceed:

 

(a) either the costs actually borne and duly supported by accounting documents;

 

(b) or, in the absence of such documents, the costs generally accepted on the market in question.

 

In-kind contributions shall be presented separately in the estimated budget to reflect the total resources allocated to the action. Their unit value is evaluated in the provisional budget and shall not be subject to subsequent changes.

 

In-kind contributions shall comply with national tax and social security rules.

Amendment  175

Proposal for a regulation

Article 118 – paragraph 1 – subparagraph 3

Text proposed by the Commission

Amendment

The first subparagraph shall not apply to crisis management aid, civil protection operations and humanitarian aid operations.

The first subparagraph shall not apply to crisis management aid, in particular civil protection operations carried out in this context and humanitarian aid operations.

Justification

Clarification, civil protection operations must always be directly connected to crisis management.

Amendment 176

Proposal for a regulation

Article 120 – paragraph 1 – subparagraph 2

Text proposed by the Commission

Amendment

In such cases, costs eligible for financing may not have been incurred prior to the date of submission of the grant application, save in duly substantiated exceptional cases as provided for in the basic act or in case of extreme urgency for crisis management aid, civil protection operations and humanitarian aid operations.

In such cases, costs eligible for financing may not have been incurred prior to the date of submission of the grant application, save in duly substantiated exceptional cases as provided for in the basic act or in case of extreme urgency for crisis management aid, civil protection operations, humanitarian aid operations, or in situations threatening to escalate into armed conflict.

Amendment  177

Proposal for a regulation

Article 121

Text proposed by the Commission

Amendment

Article 121

deleted

Principle of degressive award

 

Unless otherwise specified in the basic act or in the financing decision for grants awarded under point (d) of Article 51(5) with regard to bodies pursuing an objective of general Union interest, when operating grants are renewed for a period exceeding four years, they shall be gradually decreased after the fourth year.

 

Amendment  178

Proposal for a regulation

Article 122 – paragraph 1

Text proposed by the Commission

Amendment

1. Grant applications shall be submitted in writing.

1. Grant applications shall be submitted in writing or, where appropriate, in a secure electronic format. The Commission shall provide, where it deems it feasible, the possibility for online applications.

Justification

Changes in line with the e-governance approach.

Amendment  179

Proposal for a regulation

Article 122 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. The maximum time limit for processing applications shall be six months, or, where a panel decision is prerequisite, nine months, from the expiry of the deadline set for the submission of the application. This time limit may exceptionally be exceeded where the specific nature and subject-matter of the grant so require. Where this is the case, the provisional time limit shall be announced in the respective call for proposals. Where the time limit cannot be met due to other reasons, the authorising officer by delegation shall include this into his annual activity report together with the reasons and proposals for remedial action. He shall report in the following annual activity report on the success of the remedial action.

Justification

Further to discussions with Commission, the extended time limit is necessary in cases where the evaluation process is subject to a panel decision which takes more time to coordinate.

Amendment  180

Proposal for a regulation

Article 122 – paragraph 3

Text proposed by the Commission

Amendment

3. Articles 100 to 103 shall also apply to grant applicants. Applicants must certify that they are not in one of the situations referred to in Articles 100 to 103. However, the authorising officer may refrain from requiring such certification, as specified in the delegated Regulation referred to in Article 199, for any of the following:

3. Articles 100 to 103 shall also apply to grant applicants. Applicants must certify that they are not in one of the situations referred to in Articles 100 to 103. However, the authorising officer shall not require such certification, for any of the following:

(a) very low valued grants;

(a) low valued grants;

(b) when such certification has recently been provided in another award procedure;

(b) when such certification has recently been provided in another award procedure;

(c) when there is a material impossibility to provide such certification.

 

Amendment  181

Proposal for a regulation

Article 122 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a. The application shall show the legal status of the applicant and his financial and operational capacity to carry out the proposed action or work programme.

 

For that purpose the applicant shall submit a declaration on his honour and, unless the grant is a low value grant, any supporting documents requested, on the basis of his risks assessment, by the authorising officer responsible. The prerequisite documents shall be indicated in the call for proposals.

 

The supporting documents may consist in particular in the profit and loss account or the balance sheet for the last financial year for which the accounts were closed.

 

The verification of financial capacity shall not apply to natural persons in receipt of scholarships, to public bodies or international organisations. The authorising officer responsible may, depending on his risk analysis, waive the obligation to verify the operational capacity of public bodies or international organisations.

 

Where the application concerns grants for an action for which the amount exceeds EUR 750 000 or operating grants which exceed EUR 100 000, an audit report produced by an approved external auditor shall be submitted. That report shall certify the accounts for the last financial year available and the authorising officer by delegation shall explicitly accept or reject the audit report within 90 days. Once accepted by the authorising officer by delegation, such reports shall become binding and shall not be subject to ex-post audits or evaluation unless there is new prima facie evidence of irregularities or fraud.

Justification

Paragraph 3a new is based on the implementing rules (Article 173a and 176) as proposed for amendment by Commission in its working document (SEC(2010) 639) which have been part-merged in order to improve overall legibility.

Amendment 182

Proposal for a regulation

Article 125

Text proposed by the Commission

Amendment

The authorising officer responsible may, if he deems it appropriate and proportionate, require the beneficiary to lodge a guarantee in advance in order to limit the financial risks connected with the payment of pre-financing.

The authorising officer responsible may, if he deems it appropriate and proportionate on a case-by-case basis and subject to risk analysis, require the beneficiary to lodge a guarantee in advance in order to limit the financial risks connected with the payment of pre-financing.

 

Guarantees shall not be required in the case of very low value grants or of low value grants where the beneficiary received at least one grant every year over the last five years.

Amendment  183

Proposal for a regulation

Article 126 – paragraph 1

Text proposed by the Commission

Amendment

1. The amount of the grant shall not become final until after the authorising officer responsible has accepted the final reports and accounts, without prejudice to subsequent checks by the institution.

1. The amount of the grant shall not become final until after the competent authorising officer by delegation has accepted the final reports and accounts, without prejudice to subsequent checks by the institution, which shall be carried out in a timely manner.

Justification

Amendment  184

Proposal for a regulation

Article 126– paragraph 2

Text proposed by the Commission

Amendment

2. Where substantial errors, irregularities or fraud are committed during the award procedure or the implementation of the grant and after the beneficiary has been given the opportunity to make his observations, the responsible authorising officer may take any of the measures referred to in Article 110.

2. Where the award procedure proves to have been subject to substantial errors, irregularities or fraud, the authorising officer responsible shall suspend the procedure and may take whatever measures are necessary, including the cancellation of the procedure. He shall inform OLAF immediately of suspected cases of fraud.

Amendment  185

Proposal for a regulation

Article 126 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. Where, after the award of the grant, the award procedure or the implementation of the grant proves to have been subject to substantial errors, irregularities or fraud, the authorising officer responsible may, depending on the stage reached in the procedure, refrain from signing the grant agreement or notifying the grant decision, suspend implementation of the grant or, where appropriate, terminate the grant agreement or decision after the applicant or beneficiary has been given the opportunity to make his observations.

Amendment  186

Proposal for a regulation

Article 126 – paragraph 2b (new)

Text proposed by the Commission

Amendment

 

2b. Where those errors, irregularities or fraud are attributable to the beneficiary, or should the beneficiary fail to comply with his obligations under a grant agreement or decision, the authorising officer responsible may in addition reduce the grant or recover amounts unduly paid under the grant agreement or decision, in proportion to the seriousness of the errors, irregularities or fraud or of the breach of obligations, after the beneficiary has been given the opportunity to make his observations.

Amendment  187

Proposal for a regulation

Article 126 – paragraph 3 and paragraph 3 a (new)

Text proposed by the Commission

Amendment

3. Where controls or audits demonstrate that recurrent errors exist for one beneficiary which also have an impact on non-audited projects in which that beneficiary participates or has participated, the authorising officer may extend the findings to those non audited projects which may still be audited in accordance with the grant agreement and request the reimbursement of the related amount.

3. In case of systemic or recurrent errors or irregularities attributable to the beneficiary, exceeding the materiality threshold and having an impact on a number of grants awarded to him under similar conditions, the authorising officer responsible may suspend implementation of all the grants concerned or, where appropriate, terminate the concerned grant agreements or decisions with this beneficiary, in proportion to the seriousness of the errors, irregularities or fraud, after the beneficiary has been given the opportunity to make his observations. The authorising officer responsible may in addition proceed to financial corrections for all the grants concerned by the systemic or recurrent errors or irregularities referred to above that may be audited in accordance with the grant agreements or decisions by either reducing the grants or recovering amounts unduly paid under the grant agreements or decisions.

 

The amount of financial corrections to be made shall be determined wherever possible and practicable on the basis of costs unduly declared as eligible for each grant concerned. Where it is not possible or practicable to quantify the amount of ineligible costs precisely, financial corrections may be based on extrapolation or a flat rate, having regard to the principle of proportionality.

The beneficiary may, within an adversarial procedure, challenge the correction applied by demonstrating that the calculation of corrections is erroneous and submitting new calculation.

3a. The beneficiary may, within an adversarial procedure before the competent clearing committee, challenge decisions taken under paragraphs 2a to 3.

 

The beneficiary may in particular challenge the correction applied by demonstrating on the balance of probabilities that no recurrent or systemic error exists or that the calculation of corrections is erroneous and submit a new calculation. The beneficiary shall be entitled to the reimbursement of the cost of legal representation to the extent to which he succeeds.

Amendment  188

Proposal for a regulation

Article 126 a (new)

Text proposed by the Commission

Amendment

 

Article 126a

 

Periods for record keeping

 

1. Beneficiaries shall keep records, supporting documents, statistical records and other records pertinent to a grant for five years following the payment of the balance and for three years for low value grants.

 

2. Records related to audits, appeals, litigation or the settlement of claims arising out of the performance of the project shall be retained until such audits, appeals, litigation or claims have been disposed of.

 

3. The Commission may define periods for record keeping by the accredited bodies and by the Commission in the delegated regulation referred to in Article 199.

Justification

The periods for record keeping have been modified following discussions with the paying agencies, the European Court of Auditors and the Commission.

Amendment  189

Proposal for a regulation

Article 128

Text proposed by the Commission

Amendment

Article 128

Article 128

Definition

Scope of prizes

For the purposes of this Regulation, ‘prizes’ shall mean financial contributions awarded following contests.

Prizes are financial contributions given as rewards following contests. The use of prizes shall be encouraged but not as a substitute for properly structured funding.

Amendment 190

Proposal for a regulation

Article 129 – paragraph 1

Text proposed by the Commission

Amendment

1. Prizes are subject to the principles of transparency and equal treatment.

1. Prizes are subject to the principles of transparency and equal treatment and must promote the achievement of European added value. Prizes in excess of EUR 5.000.000 may only be awarded in accordance with a legal act of the Union within the meaning of Articles 288, 289 and 290 TFEU, expressly laying down the conditions for participation, the award criteria, the amount of the prize as well as the procedure for the selection of the evaluating experts. Prizes shall lapse automatically on the expiry of the Regulation laying down the multiannual financial framework in which their implementation started or five years following their publication, whichever is the later.

 

Revenue arising from the lapse of a prize shall be treated as internal assigned revenue.

Justification

Prizes must further the Union’s aims, in particular in terms of added value. They should promote the targets of e.g. the Europe 2020 strategy. Given the considerable amount intended for prizes (possibly between dozens and hundreds of millions), the application of prizes should be based on a specific legal base, possibly a delegated act to the Framework programme on Research, whenever they exceed EUR 1 million. The discharge authority should be made aware of the award decision and the underlying procedure.

Amendment  191

Proposal for a regulation

Article 129 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

2. Prizes shall be part of the work programme referred to in Article 118 and adopted by the Commission and shall be subject to Article 118(2).

2. For this purpose, prizes shall be subject to a work programme to be published at the start of the year of implementation. The work programme shall be implemented through the publication of contests.

Amendment  192

Proposal for a regulation

Article 129 – paragraph 2 – subparagraph 3

Text proposed by the Commission

Amendment

Prizes may not be awarded directly without a contest and shall be subject to publication in the same way as call for proposals.

Prizes may not be awarded directly without a contest and shall be published annually in application of Article 31(2) and (3).

Justification

The proposed amendments on Art 129 paragraph 2 are in line with AM 163 of the rapporteur in the BUDG committee. However in view of the foreseen increased use of prizes in the future research and innovation programme, arrangements need to be introduced in the criteria for the subsequent management of resulting intellectual property rights, for example: in the health sector whereby research results could be subject to open access, compulsory licensing or affordable commercialisation prices.

Amendment  193

Proposal for a regulation

Article 129 – paragraph 3

Text proposed by the Commission

Amendment

 

3. Entries in a contest shall be evaluated by a panel of experts on the basis of the published rules of the contest.

3. Prizes shall be awarded by the responsible authorising officer or by a jury. They shall be free to decide whether or not to award prizes depending on their appraisal of the quality of the entries by reference to the rules of the contest.

Prizes shall then be awarded by the authorising officer responsible, on the basis of the evaluation provided by the panel of experts, who are free to decide whether or not to recommend the award of prizes, depending on their appraisal of the quality of the entries. The competent authorising officer by delegation shall annex the award decision together with a list of the experts participating in the evaluation and a justification of their selection to his annual activity report.

Amendment  194

Proposal for a regulation

Article 130 – paragraph 3

Text proposed by the Commission

Amendment

3. The Commission may implement financial instruments in direct management mode, or in indirect management mode by entrusting tasks to the entities referred to in points (iv) of Article 55(1)(b).

3. The Commission may implement financial instruments in direct management mode, or in indirect management mode by entrusting tasks to the entities referred to in points (iv) and (vi) of Article 55(1)(b). The statute and nature of the operator to which the management is entrusted should be defined in the basic act.

Justification

National financial institutions with a public service mission such as national development banks for example have a crucial role to play in the management and implementation of EU financial instruments.

Amendment  195

Proposal for a regulation

Article 131 – paragraph 1

Text proposed by the Commission

Amendment

1. Financial instruments shall be provided to final recipients of Union funds in accordance with sound financial management, transparency and equal treatment and in accordance with the objectives established in the basic act that applies to those financial instruments.

1. Financial instruments shall be provided to final recipients of Union funds in accordance with the principles of sound financial management, transparency, proportionality, non-discrimination and equal treatment and in accordance with the objectives established in the basic act that applies to those financial instruments.

Amendment  196

Proposal for a regulation

Article 131 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. Revenues and repayments under a financial instrument shall constitute internal assigned revenue according to Article 18(3) and shall be carried over automatically with a view to being re-invested.

 

In any case, the Union’s contribution to a project shall not be distributed to third parties in the form of dividends or profits.

Amendment  197

Proposal for a regulation

Article 131 – paragraph 2

Text proposed by the Commission

Amendment

2. Without prejudice to points (d) and (e) of article 46(1), the budgetary expenditure linked to a financial instrument shall be kept within the relevant budgetary commitment made for it.

2. Without prejudice to points (d) and (e) of Article 46(1), the budgetary expenditure linked to a financial instrument and the financial liability of the Union shall not exceed the amount of the relevant budgetary commitment made for it, thus excluding contingent liabilities for the Union budget.

Amendment  198

Proposal for a regulation

Article 131 – paragraph 3

Text proposed by the Commission

Amendment

3. Financial intermediaries involved in the execution of financial operations under a financial instrument shall comply with relevant standards on the prevention of money laundering and fight against terrorism. They shall not be established in territories whose jurisdictions do not co-operate with the Union in relation to the application of internationally agreed tax standards.

3. The entities referred to in point (iv) of Article 55(1)(b) and all financial intermediaries involved in the execution of financial operations under a financial instrument shall comply with relevant standards on the prevention of money laundering and fight against terrorism. They shall not be established and/or shall not interact with entities incorporated in territories whose jurisdictions do not co-operate with the Union in relation to the application of internationally agreed tax standards.

Justification

The amendment is based on the Commission’s non-paper on financial instruments.

Amendment 199

Proposal for a regulation

Article 131 – paragraph 4

Text proposed by the Commission

Amendment

4. Each agreement between an entity referred to in point (iii) and (iv) of Article 55(1)(b) and a financial intermediary referred to in paragraph 3 shall provide expressly for the Commission and the Court of Auditors to exercise their powers of control, on documents and on the premises and on information, even stored on electronic media, over all third parties who have received Union funds.

4. Each agreement between an entity referred to in point (iv) of Article 55(1)(b) and a financial intermediary referred to in paragraph 3 shall provide expressly access for the Commission and the Court of Auditors and OLAF to documents, premises and to any requested information related to the implementation of the financial instruments, even stored on electronic media, that has been provided by all third parties who have received Union funds.

Amendment  200

Proposal for a regulation

Article 131 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4a. The Commission shall report annually to the discharge authority on the activities supported by financial instruments, on the financial institutions involved in their implementation, on the performance of financial instruments, including reinvestments realised, on the balance on the trust accounts, on revenues and repayments, on the multiplier effect achieved, and on the value of participations. The Commission shall attach its report to the summary of the annual reports referred to in Article 63(9).

Justification

Prizes must further the Union’s aims, in particular in terms of added value. They should promote the targets of e.g. the Europe 2020 strategy. Given the considerable amount intended for prizes (between dozens and hundreds of millions), the application of prizes should be approved by the budgetary authority where they exceed EUR 1 million. The discharge authority should be made aware of the award decision and the underlying procedure.

Amendment  201

Proposal for a regulation

Article 134 – paragraph 1

Text proposed by the Commission

Amendment

The financial statements referred to in Article 132 shall the Union accounting rules as adopted by the Accounting Officer of the Commission and shall present a true and fair view of the assets and liabilities, charges, income and cash flow.

The financial statements referred to in Article 132 shall be based on the international accounting standards applicable to the public sector and shall present a true and fair view of the assets and liabilities, charges, income and cash flow.

Amendment  202

Proposal for a regulation

Article 135

Text proposed by the Commission

Amendment

Article 135

Article 135

The financial statements referred to in Article 132 shall present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information. They shall be drawn up in compliance with the generally accepted accounting principles as outlined in the Union’s accounting rules.

The financial statements referred to in Article 132 shall present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information. They shall be drawn up in compliance with the generally accepted accounting principles as outlined in the Union’s accounting rules, and be based on international accounting standards applicable to the public sector.

Amendment  203

Proposal for a regulation

Article 135 a (new)

Text proposed by the Commission

Amendment

 

Article 135a

 

Exceptions from accounting principles

 

Where, in a specific case, the accounting officers consider that an exception should be made to the content of one of the accounting principles, defined in Articles 187 to 194, that exception shall be duly substantiated and reported in the annex to the financial statements referred to in Article 136.

Justification

The possibility for an Accounting Officer to derogate from a principle of accounting must be included in the Financial Regulation. Furthermore, as far as this Regulation enumerates the different accounting principles it can refer to the delegated act for their explanation.

Amendment  204

Proposal for a regulation

Article 136 – paragraph 2

Text proposed by the Commission

Amendment

2. The notes to the financial statements shall supplement and comment on the information presented in the statements referred to in paragraph 1 and shall supply all the additional information prescribed by the relevant accounting rules adopted by the Accounting Officer of the Commission.

2. The notes to the financial statements shall supplement and comment on the information presented in the statements referred to in paragraph 1 and shall supply all the requisite additional information.

Amendment  205

Proposal for a regulation

Article 138 – paragraph 3

Text proposed by the Commission

Amendment

The accounting officer of the Commission shall consolidate these provisional accounts with the Commission’s provisional accounts and shall send to the Court of Auditors, by 31 March of the following year at the latest, the Commission’s and the consolidated Union provisional accounts.

The accounting officer of the Commission shall consolidate these provisional accounts with the Commission’s provisional accounts and shall send to the Court of Auditors and the European Parliament, by 31 March of the following year at the latest, the Commission’s and the consolidated Union provisional accounts.

Amendment  206

Proposal for a regulation

Article 139 – paragraph 1

Text proposed by the Commission

Amendment

1. The Court of Auditors shall, by the 1st of June at the latest, make its observations on the provisional accounts of other institutions and each body referred to in Article 132, and by 15 June at the latest, make its observations on the provisional accounts of the Commission and the consolidated Union provisional accounts.

1. The Court of Auditors shall, by the 1st of June at the latest, make its observations on the provisional accounts of other institutions and each body referred to in Article 132, and make its observations on the provisional accounts of the Commission and the consolidated Union provisional accounts.

Amendment  207

Proposal for a regulation

Article 139 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

The institutions other than the Commission, and each of the bodies referred to in Article 132, shall draw up their final accounts and send them to the accounting officer of the Commission, the Court of Auditors, the European Parliament and the Council by 1 July of the following year at the latest with a view to drawing up the final consolidated accounts.

The institutions other than the Commission, and each of the bodies referred to in Article 132, shall draw up their final accounts and send them to the accounting officer of the Commission, the Court of Auditors, the European Parliament and the Council by 28 February of the following year at the latest with a view to drawing up the final consolidated accounts.

Amendment  208

Proposal for a regulation

Article 139 – paragraph 5 – subparagraph 1

Text proposed by the Commission

Amendment

After approving the final consolidated accounts and its own final accounts, the Commission shall send them both to the European Parliament, the Council and the Court of Auditors before 31 July of the following financial year.

After approving the final consolidated accounts and its own final accounts, the Commission shall send them both to the European Parliament, the Council and the Court of Auditors before 31 March of the following financial year.

Amendment  209

Proposal for a regulation

Article 139 – paragraph 6

Text proposed by the Commission

Amendment

6. The final consolidated accounts shall be published in the Official Journal of the European Union together with the statement of assurance given by the Court of Auditors in accordance with Article 287 of the TFEU and Article 160c of the Euratom Treaty by 15 November of the following financial year.

6. The final consolidated accounts shall be published in the Official Journal of the European Union together with the statement of assurance given by the Court of Auditors in accordance with Article 287 of the TFEU and Article 160c of the Euratom Treaty by 31 July of the following financial year

Amendment  210

Proposal for a regulation

Article 141 – paragraph 3

Text proposed by the Commission

Amendment

3. The figures and the report on implementation of the budget shall at the same time be sent to the Court of Auditors.

3. The figures and the report on implementation of the budget shall at the same time be sent to the Court of Auditors and published on the internet.

Amendment  211

Proposal for a regulation

Article 141 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a . During the financial year, a simplified consolidated interim statement of the accounts of the European Union shall be drawn up for the period from 1 January to 30 June. It shall be drawn up by the Commission and be subject to limited review by the European Court of Auditors. The consolidated interim statement of accounts as at 30 June shall be forwarded to the European Parliament, along with the report of the European Court of Auditors and, possibly, the Commission’s observations, by 30 October of the same year.

Amendment  212

Proposal for a regulation

Article 143 – paragraph 2 – subparagraph 1 a (new)

Text proposed by the Commission

Amendment

 

He/she shall justify and document all such departures and communicate this justification to the Court of Auditors at the time of adoption or updating of a given accounting rule.

Justification

Insertion of the Court of Auditors Remarks in opinion 6/2010 (No. 92)

Amendment  213

Proposal for a regulation

Article 145 – paragraph 3

Text proposed by the Commission

Amendment

3. The accounting system must be such as to leave a trail for all accounting entries.

3. The accounting system must be such as to leave a clear audit trail for all accounting entries.

Amendment  214

Proposal for a regulation

Article 147 – paragraph 1

Text proposed by the Commission

Amendment

1. The budgetary accounts provide a detailed record of budgetary implementation.

1. The budgetary accounts provide a detailed record of the implementation of the budget.

Amendment  215

Proposal for a regulation

Article 150 – 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 provisions of the Treaties, the budget, this Regulation, the delegated Regulation referred to in Article 199 and all other acts adopted pursuant to the Treaties.

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 provisions of the Treaties, the budget, this Regulation, the delegated Regulation referred to in Article 199 and all other acts adopted pursuant to the Treaties. The Court of Auditors shall carry out its audit task on a permanent basis.

Amendment  216

Proposal for a regulation

Article 150 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

2. In the performance of its task, the Court of Auditors shall be entitled to consult, in the manner provided for in Article 152, all documents and information relating to the financial management of departments or bodies with regard to operations financed or co-financed by the Union. It shall have the power to make enquiries of any official responsible for a revenue or expenditure operation and to use any of the auditing procedures appropriate to the aforementioned departments or bodies. The audit in the Member States shall be carried out in conjunction with the national audit institutions or, where they do not have the necessary powers, with the national departments responsible. The Court of Auditors and the national audit bodies of the Member States shall cooperate in a spirit of trust while maintaining their independence.

2. In the performance of its task, the Court of Auditors shall be entitled to consult, in the manner provided for in Article 152, all documents and information relating to the financial management of departments or bodies with regard to operations financed or co-financed by the Union. It shall have the power to make enquiries of any official responsible for a revenue or expenditure operation and to use any of the auditing procedures appropriate to the aforementioned departments or bodies. The audit in the Member States shall be carried out in liaison with the national audit institutions or, where they do not have the necessary powers, with the competent national departments. The Court of Auditors and the national audit institutions of the Member States shall cooperate in a spirit of trust while maintaining their independence.

Justification

The amendment takes into account the Court of Auditors’ comments to Article 155 and reconciles these with the internationally recognised standards for accounting procedures.

Amendment  217

Proposal for a regulation

Article 152 – paragraph 1 – subparagraph 1

Text proposed by the Commission

Amendment

1. The Commission, the other institutions, the bodies administering revenue or expenditure on the Union’s behalf and the final beneficiaries of payments from the budget 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 and, for the same purposes, all documents and data created or stored on a magnetic medium.

1. The Commission, the other institutions, the bodies administering revenue or expenditure on the Union’s behalf and the final beneficiaries of payments from the budget 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 and, for the same purposes, all documents and data created or stored on a data carrier.

Amendment  218

Proposal for a regulation

Article 153 – paragraph 1

Text proposed by the Commission

Amendment

1. The Court of Auditors shall transmit to the Commission by 15 June and to other institutions and bodies referred to in Article 132 by 1st of June at the latest, any observations which are, in its opinion, such that they should appear in the annual report. These observations must remain confidential and are subject to a contradictory procedure. Each institution shall address its reply to the Court of Auditors by 15 October at the latest. 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 by 15 June and to other institutions and bodies referred to in Article 132 by 15 June at the latest, any observations which are, in its opinion, such that they should appear in the annual report or should be taken into account by the competent accounting officer when preparing the accounts. These observations must remain confidential and are subject to a contradictory procedure. Each institution shall address its reply to the Court of Auditors by 30 September at the latest. The replies of institutions other than the Commission shall be sent to the Commission at the same time.

Justification

Acceleration of discharge timetable and incorporation of remarks of the European Court of Auditors.

Amendment  219

Proposal for a regulation

Article 153 – paragraph 2

Text proposed by the Commission

Amendment

2. After completion of the contradictory procedure, each institution or body concerned shall address its reply to the Court of Auditors by 15 October at the latest. The replies of institutions other than the Commission and of the bodies shall be sent to the Commission at the same time.

deleted

Justification

Acceleration of discharge timetable and incorporation of remarks of the European Court of Auditors.

Amendment  220

Proposal for a regulation

Article 153 – paragraph 5

Text proposed by the Commission

Amendment

5. The Court of Auditors shall transmit to the authorities responsible for giving discharge and to the other institutions, by 15 November at the latest, its annual report accompanied by the replies of the institutions and shall ensure publication thereof in the Official Journal of the European Union.

5. The Court of Auditors shall transmit to the authorities responsible for giving discharge and to the other institutions, by 31 October at the latest, its annual report accompanied by the replies of the institutions and shall ensure publication thereof in the Official Journal of the European Union.

Justification

Acceleration of discharge timetable and incorporation of remarks of the European Court of Auditors.

Amendment  221

Proposal for a regulation

Article 155

Text proposed by the Commission

Amendment

Article 155

deleted

Statements of preliminary findings

 

1. The Court of Auditors shall transmit to the institutions, bodies or Member States concerned the statements of preliminary findings resulting from its audits. The statements of preliminary findings which are, in the Court’s opinion, such that they should appear in the annual report, shall be transmitted no later than by 1st of June of the exercise following the one to which they refer. The statements of preliminary findings must remain confidential.

 

2. The institution, the body or the Member State concerned shall have two and a half months within which to inform the Court of Auditors of any comments it wishes to make on the statements of preliminary findings.

 

Justification

The amendment takes into account the Court of Auditors’ reflections.

Amendment   222

Proposal for a regulation

Article 156 – paragraph 1

Text proposed by the Commission

Amendment

1. The European Parliament, upon a recommendation from the Council acting by a qualified majority, shall, before 15 May of year n + 2 give a discharge to the Commission in respect of the implementation of the budget for year n.

1. The European Parliament, upon a recommendation from the Council acting by a qualified majority, shall, before 15 April of year n + 2 give a discharge in respect of the implementation of the budget for year n to:

 

- the European Commission,

 

- the other institutions as referred to in Article 1(2),

 

- the entities mentioned under Article 196b(1),

 

- other bodies responsible for the implementation of Union funds, insofar as a requirement of discharge to those bodies by the European Parliament is foreseen in Union legislation.

Amendment  223

Proposal for a regulation

Article 157 – paragraph 3

Text proposed by the Commission

Amendment

3. The Commission shall submit to the European Parliament, at the latter’s request, any information required for the smooth application of the discharge procedure for the financial year concerned, in accordance with Article 319 of the TFEU.

3. The institutions of the Union as defined by Article 1(2) shall submit to the European Parliament, at the latter’s request, any information required for the smooth application of the discharge procedure for the financial year concerned, in accordance with Article 319 and the third sentence of Article 335 of the TFEU.

Amendment  224

Proposal for a regulation

Article 167 – paragraph 1

Text proposed by the Commission

Amendment

1. Parts One and Three of this Regulation shall apply to expenditure effected by the authorities and bodies referred to in the Regulation (EC) No 1290/2005 on European Agricultural Fund for Rural Development, Regulation (EC) No 1080/2006 of the European Parliament and of the Council23 on the European Regional Development Fund, Regulation (EC) No 1081/2006 of the European Parliament and of the Council24 on the European Social Fund, Council Regulation (EC) No 1084/200625 on the Cohesion Fund, Council Regulation (EC) No 1198/200626 on the European Fisheries Fund, and funds in the area of Freedom, Security and Justice managed in shared management pursuant to Article 56 of this Regulation, (hereinafter the ‘Funds’), and to their revenue, save as otherwise provided in this Title.

1. Parts One and Three of this Regulation shall apply to expenditure effected by the authorities and bodies referred to in the Regulation (EC) No 1290/2005 on European Agricultural Fund for Rural Development, Regulation (EC) No 1080/2006 of the European Parliament and of the Council23 on the European Regional Development Fund, Regulation (EC) No 1081/2006 of the European Parliament and of the Council24 on the European Social Fund, Council Regulation (EC) No 1084/200625 on the Cohesion Fund, Council Regulation (EC) No 1198/200626 on the European Fisheries Fund, and funds in the area of Freedom, Security and Justice, including the Funds under the ‘Solidarity and Management of Migration Flows’ Programme, managed in shared management pursuant to Article 56 of this Regulation, (hereinafter the ‘Funds’), and to their revenue, save as otherwise provided in this Title.

Amendment  225

Proposal for a regulation

Article 168

Text proposed by the Commission

Amendment

Article 168

deleted

Respect of the allocations of commitment appropriations

 

The European Parliament and the Council undertake to respect the allocations of commitment appropriations provided for in the relevant basic acts for structural operations, rural development and the European Fisheries Fund.

 

Justification

The draft provision’s ambit goes beyond the mere scope of the Financial Regulation and creates inter-institutional relations. It should therefore be moved to a more appropriate political instrument.

Amendment  226

Proposal for a regulation

Article 169 - paragraph 3

Text proposed by the Commission

Amendment

 

3. In accordance with the regulations referred to in Article 167 the repayment in full or in part of payments on account in respect of a given operation shall not have the effect of reducing the contribution from the funds to the operation concerned.

 

Amounts repaid shall constitute assigned revenue in accordance with Article 18(3)(c).

3. The treatment of repayments by the Member States and the implications for the amount of contributions from the Funds shall be governed by the regulations referred to in Article 167.

The treatment of repayments by the Member States and the implications for the amount of contributions from the Funds shall be governed by the regulations referred to in Article 167.

Justification

According to a Commission proposal, this text stemming from the draft implementing rules (Article 228) proposed by the Commission in its working document (SEC(2010) 639) constitutes an ‘essential’ element in the meaning of Article 290 TFEU and therefore it should be better inserted into the Financial Regulation itself.

Amendment  227

Proposal for a regulation

Title III – Chapter 1 – new heading (before Art. 173)

Text proposed by the Commission

Amendment

 

CHAPTER 1

 

General provisions

Amendment  228

Proposal for a regulation

Article 175 – paragraph 2 - subparagraph 1

Text proposed by the Commission

Amendment

2. Shall be treated as assigned revenue within the meaning of Article 18(2) the appropriations relating to:

2. Appropriations relating to

(a) grant and procurement procedures in which the JRC participates or;

(a) grant and procurement procedures in which the JRC participates or;

(b) activities of the JRC on behalf of third parties or;

(b) activities of the JRC on behalf of third parties or;

(c) activities undertaken under an administrative agreement with other institutions or other Commission’s departments for the provision of technical-scientific services.

(c) activities undertaken under an administrative agreement with other institutions or other Commission’s departments for the provision of technical-scientific services.

 

shall be treated as assigned revenue within the meaning of Article 18(2).

Justification

Correction of Commission draft text, obviously translated from French, which otherwise appears nonsensical.

Amendment  229

Proposal for a regulation

Title III – Chapter 2 (new)

Text proposed by the Commission

Amendment

 

CHAPTER 2

 

Funding and eligible cost

 

Article 175a

 

Average personnel cost

 

The following criteria for the acceptance of average personnel costs shall apply:

 

(a) the average personnel costs shall be the beneficiary’s usual соst accounting practice; this includes cost-centre approaches.

 

(b) the average personnel costs shall be based on the actual personnel costs of the beneficiary as registered in its statutory accounts, or cost accounting as required by applicable national rules, including budgeted or estimated amounts where necessary;

 

(c) the average personnel costs shall exclude any ineligible costs and costs claimed under other costs categories.

Justification

The amendment stems from Commission decision C(2011) 174 final of 24 January 2011 on simplification. The objective is to provide legal certainty to the beneficiaries and to define the basic principles of average personnel costs.

Amendment  230

Proposal for a regulation

Title III - Chapter 3 (new)

Text proposed by the Commission

Amendment

 

CHAPTER 3

 

Research clearing committee

 

Article 175b

 

Research clearing committee

 

1. A specialised clearing committee for research questions (‘ Research clearing committee’) is set up between the Directorates-General responsible for the implementation of the respective framework programmes, with the mandate to take final and uniform positions upon any legal and financial matter related to the implementation of the whole project cycle as well as to all business process-related matters for which the usual working modalities between the services did not allow a consensus to be reached.

 

The Research clearing committee shall act as the competent clearing committee referred to in Article 126b for all matters related to research projects and programmes, including the Framework Programme.

 

No member of the Research clearing committee shall be liable as a result of the application of Articles 70 and 71 for decisions made in its capacity as a member of the Research clearing committee.

 

2. The Research clearing committee is composed of the Directors-General of the Directorates-General for Research and Innovation, Education and Culture, Enterprise and Industry, Information Society and Media, Mobility and Transport and Energy or of one representative per Director-General duly empowered. It shall sit at least four times per year, and may take consensual decisions by written procedure.

 

3. The following rules shall apply to its procedure:

 

(a) the Research clearing committee shall be chaired by the Director-General for Research and Innovation or his/her representative;

 

(b) if necessary, the Research clearing committee may request the opinion of the Commission’s horizontal central services, in particular the Legal Service and the Directorate-General for Budget;

 

(c) the Research clearing committee may invite stakeholders or their representatives or any experts it considers apt to give an opinion;

 

(d) decisions shall be taken by consensus or, where this is impossible, by majority decision and shall be binding for the Directorates-General referred to in paragraph 1;

 

(e) the final and uniform positions taken shall also be binding for the Executive Agencies which implement parts of the Framework Programme;

 

(f) a dedicated sector within the Directorate-General for Research and Innovation shall provide secretarial support for the Research clearing committee. The decisions of the Research clearing committee shall be made available to the public in the form of an electronic database, giving due regard to the applicable data protection legislation;

 

(g) the Research clearing committee shall adopt its rules of procedure, in accordance with Article 126c.

Justification

The amendment stems from Commission decision C(2011) 174 final of 24 January 2011 on simplification. It should be clarified that members of the committee are not personally liable for the decisions taken in their capacity as members of the clearance committee, which are questions of interpretation of applicable legal provisions.

Amendment  231

Proposal for a regulation

Title III - Chapter 3 - Section 1 - heading (new) (before Article 177)

Text proposed by the Commission

Amendment

 

Section 1

 

General provisions

Amendment 232

Proposal for a regulation

Article 177 a (new)

Text proposed by the Commission

Amendment

 

Article 177a

 

Use of budget support

 

1. Where provided for in the relevant basic acts, the Commission may use sectoral or general budget support within a third country if the partner country’s management of public spending is sufficiently transparent, reliable and effective.

 

2. The Commission includes in the corresponding financing agreements concluded in accordance with Article 176(2)(b), the appropriate provisions following which the concerned beneficiary country commits to immediately reimburse all or part of the relevant operation funding, in the event that it is established that the management of the concerned Union funds has been vitiated by serious irregularities.

 

For processing the reimbursement referred to in the first subparagraph, Article 77(1) concerning recovery by offsetting may be applied.

 

3. The Commission shall support the development of parliamentary control and audit capacities and to increase transparency and public access to information.

Amendment  233

Proposal for a regulation

Title III - Chapter 3 - Section 2 - heading (new) (before Article 178)

Text proposed by the Commission

Amendment

 

Section 2

 

Multi donor trust funds

Amendment  234

Proposal for a regulation

Article 178 – paragraph 2

Text proposed by the Commission

Amendment

The contributions of the Union and the donors shall be entered into a specific bank account. These contributions are not integrated in the budget and are managed by the Commission under the responsibility of the authorising officer by delegation. The entities and persons referred to in point (b) of Article 55(1) may be entrusted with budget implementation tasks in accordance with the relevant rules for indirect management.

The contributions of the Union and the donors shall be entered into a specific bank account. These contributions are not integrated in the budget and are managed by the Commission under the responsibility of the authorising officer by delegation. Article 55(3) applies.

Amendment  235

Proposal for a regulation

Title III - Chapter 2 - Section 3 - heading (new) (before Article 179)

Text proposed by the Commission

Amendment

 

Section 3

 

Other management modes

Amendment 236

Proposal for a regulation

Article 195 – paragraph 3

Text proposed by the Commission

Amendment

3. The institutions shall inform the budgetary authority as soon as possible of any building project likely to have significant financial implications for the budget.

3. The institutions and bodies within the meaning of Article 196b shall inform the budgetary authority as soon as possible of any building project likely to have significant financial implications for the budget.

If either branch of the budgetary authority intends to issue an opinion, it shall within two weeks after receipt of the information on the building project notify the institution concerned of its intention to issue such an opinion. Failing a reply, the institution concerned may proceed with the planned operation under its administrative autonomy, subject to Article 335 of the TFEU and Article 185 of the Euratom Treaty with regard to Union representation.

In particular, they shall inform the budgetary authority in connection with:

 

(a) construction and renovation projects, before invitations to tender are issued, about the specific planning arrangements and, once detailed cost plans have been drawn up but before contracts are concluded, about all aspects with a bearing on decision-taking and about project financing, as well as, after completion of the works, about the extent to which the works were carried out as planned and on budget;

 

(b) other building contracts, before invitations to tender are issued or any prospecting of the local market takes place, about the specific building surface area required and, before contracts are concluded, about all aspects with a bearing on decision-taking and about project financing, as well as, after completion of projects, about budget compliance and project implementation.

 

Where appropriate, the institutions and bodies may provide information in the working document on building policy referred to in Article 34(4a).

 

The approval of the budgetary authority shall be obtained before contracts are concluded. The budgetary authority shall take a decision on giving approval within eight weeks after receipt of the application and of all information with a bearing on decision-taking.

The institutions shall request the approval of the budgetary authority for the acquisition of real state assets or any other building project, financed through a loan.

 

Amendment 237

Proposal for a regulation

Article 195 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a. Building projects likely to have significant financial implications for the budget are:

 

(i) the acquisition, sale, renovation or construction of buildings exceeding EUR 2 million, or the extension of existing building contracts exceeding EUR 2 million per annum,

 

(ii) any acquisition of land,

 

(iii) all new building contracts (including usufruct and long term leases) for new property with an annual charge of at least EUR 500.000,

 

(iv) all building projects which have an inter-institutional nature.

Amendment  238

Proposal for a regulation

Article 195 – paragraph 3 b (new)

Text proposed by the Commission

Amendment

 

3b. A building project may be financed from the budget or, in derogation from Article 14, with the agreement of the budgetary authority, through loans. Loans shall be repaid within an appropriate period.

 

The financing plan to be submitted, together with the application for approval, by the institution concerned shall specify, in particular, the maximum level of financing, the financing period and the type of financing.

Amendment  239

Proposal for a regulation

Title VII a (new)

Text proposed by the Commission

Amendment

 

TITLE VIIa

 

AGENCIES, BODIES AND PUBLIC PRIVATE PARTNERSHIPS

Amendment  240

Proposal for a regulation

Article 196 a (new)

Text proposed by the Commission

Amendment

 

Article 196a

 

Types of public-private partnerships

 

The following types of public-private partnerships may be established:

 

(a) bodies which are set up under the TFEU and the Euratom Treaty and which have legal personality and receive contributions charged to the budget in accordance with Article 196b;

 

(b) bodies with legal personality set up by a basic act defining their statute as well as the scope and nature of their operations and entrusted with the implementation of a public-private partnership in accordance with Articles 196b and 196c, where this creates European added value and the intervention by means of public funds is justified.

Justification

The types of possible ppp should be clearly defined and, given their potential impact, presented in a separate title.

Amendment  241

Proposal for a regulation

Article 196 b (new)

Text proposed by the Commission

Amendment

 

Article 196b

 

Framework financial regulation for agencies, bodies and public-private partnerships set up under specific provisions of the TFEU and the Euratom Treaty

 

1. A framework financial regulation shall be adopted, following consultation of the Court of Auditors by means of a delegated regulation in accordance with Articles 202, 203 and 204 of this Regulation for entities which are set up under specific provisions of the TFEU and the Euratom Treaty and which have legal personality.

 

This framework financial regulation will be based on the principles and rules provided under this Regulation.

 

The financial rules of those bodies may not deviate from the framework financial regulation except where their specific needs so require. Such deviations may not concern the budgetary principles referred to in Title II of Part One, the principle of equality of treatment of operators, and specific provisions set out in the basic acts establishing such bodies Where the financial rules of these ppps deviate from the framework financial regulation, the Commission shall be notified of these deviations and their justification. The Commission shall have the right to object to such deviations within six weeks following the notification.

 

The rules of these bodies may deviate from the Staff Regulations.

 

1a. Deviations and specific reasons for such deviations shall be communicated to the European Parliament and the Council in a working document annually and no later than 31 October in a working document. The working document shall also set out the progress in the completion of the purpose for which the individual entities were set up, and the relevance of the aforementioned deviations for the progress achieved; the information mentioned in Article 34(2b); and the completion of the previously defined specific targets in the year to which the discharge relates. Where the targets have not been fully met, the management of the entity shall set out the specific reasons for this and propose remedial action which may also comprise the reasoned demand for a temporary increase in administrative allocations for not more than one subsequent year.

 

The working document shall further present the governance structures of all entities under this Article including a comprehensive overview of the size of the individual governing structures in relation to the respective staff.

 

2. Discharge for the implementation of the budgets of the entities referred to in paragraph 1 shall be given by the European Parliament on the recommendation of the Council. Whenever it deems necessary to do so, the European Parliament shall be entitled to invite their management in the process of the discharge, in particular where the targets described in paragraph 1a are not met for two consecutive years.

 

3. The Commission’s internal auditor shall exercise the same powers over the entities referred to in paragraph 1 as he/she does in respect of Commission departments.

 

4. Each of the agencies shall appoint by contract, after consultation of the Court of Auditors, an independent auditor whose mission is to verify the conformity of the body’s accounts with Article 134 and to undertake an analysis, under the direction of the Court of Auditors, of the legality and regularity of the revenue and expenditure of this body. The Court of Auditors shall examine the report prepared by any such independent auditor and, together with carrying out any other procedures it deems necessary, may rely on the independent auditor’s report when forming its opinion.

Amendment  242

Proposal for a regulation

Article 196 c (new)

Text proposed by the Commission

Amendment

 

Article 196c

 

Model Financial Regulation for public-private partnership bodies not based on specific provisions of the TFEU

 

1. The bodies having legal personality set up by a basic act in application of Articles 288 and 289 TFEU and entrusted with the implementation of a public-private partnership shall adopt their financial rules covering the establishment, implementation, accounting and discharge of the ppp’s budget.

 

2. Those rules shall include a set of principles necessary to ensure sound financial management of Union funds, and be based on Articles 55 and 57 and a model financial regulation adopted by means of a delegated regulation in accordance with Articles 202, 203 and 204 after consultation of the Court of Auditors.

 

Where the financial rules of these ppps deviate from the model financial regulation, the Commission shall be notified of these deviations and their justification. The Commission shall have the right to object to such deviations within six weeks following the notification.

 

The rules of these bodies may deviate from the Staff Regulations insofar as the acts establishing these bodies according to Art. 1a(2) of the Staff Regulations do not foresee an application of the Staff Regulations.

 

3. Deviations and specific reasons for such deviations shall be communicated to the European Parliament and the Council annually and no later than 31 October in a working document. The working document shall also set out the progress in the completion of the purpose for which the individual bodies were set up, and the relevance of the aforementioned deviations for the progress attained; the information mentioned in Article 34(2b); and the completion of the previously defined specific targets in the year to which the discharge relates. Where the targets have not been fully met, the management of the body shall set out the specific reasons for this and propose remedial action which may also comprise the reasoned demand for a temporary increase in administrative allocations for not more than one subsequent year. The working document shall further present the governance structures of all entities under this Article including a comprehensive overview of the size of the individual governing structures in relation to the respective staff.

 

4. Discharge for the implementation of the budgets of the bodies referred to in paragraph 1 shall be given by the European Parliament on the recommendation of the Council.

 

5. The Commission’s internal auditor shall exercise the same powers over the bodies referred to in paragraph 1 as he/she does in respect of Commission departments.

Amendment  243

Proposal for a regulation

Article 199

Text proposed by the Commission

Amendment

Article 199

Article 199

Adoption of the detailed rules for the application of this Regulation

Adoption of the detailed rules for the application of this Regulation

The Commission shall adopt a delegated Regulation on detailed rules for the application of this Regulation in accordance with Articles 202, 203 and 204. The delegated Regulation shall include rules on the implementation of administrative expenditure relating to the appropriations provided in the budget for the Euratom Supply Agency.

The Commission shall be empowered to adopt a delegated regulation in accordance with Articles 202, 203 and 204 concerning detailed rules to supplement or amend certain non-essential elements of the following Articles: 5, 8, 9, 16, 18, 19, 20, 22, 23, 25, 26, 27, 30, 31, 34, 38, 41, 46, 50, 51, 55, 56, 57, 58, 61, 63, 65, 66, 67, 69, 70, 71, 72, 75, 76, 77, 77b, 78, 80, 81, 82, 83, 84, 85, 86, 87, 89, 90, 92, 93, 94, 95, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 117a, 118, 119, 120, 122, 123, 124, 125, 126, 126a, 126c, 127, 133, 135, 136, 137, 139, 142, 145, 147, 148, 173, 175, 176, 178, 179, 180, 181, 182, 183, 184, 187, 188, 191, 193, 195, 196, 197.

 

An annex to this Regulation lists the objectives, content and scope of the delegation with reference to the aforementioned Articles.

 

The delegated regulation shall also include rules on the implementation of administrative expenditure relating to the appropriations provided in the budget for the Euratom Supply Agency.

 

 

Amendment  244

Proposal for a regulation

Article 200

Text proposed by the Commission

Amendment

Article 200

deleted

Framework financial regulation for agencies and bodies set up under the TFEU and the Euratom Treaty

 

1. The Commission shall adopt a framework financial regulation for bodies which are set up under the TFEU and the Euratom Treaty and which have legal personality and receive contributions charged to the budget by means of a delegated act in accordance with Articles 202, 203 and 204 of this Regulation.

 

This framework financial regulation will be based on the principles and rules provided under this Regulation.

 

The financial rules of those bodies may not depart from the framework financial regulation except where their specific needs so require and with the Commission’s prior consent. Such exception may not concern the budgetary principles referred to in Title II of Part One, the principle of equality of treatment of operators, and specific provisions set out in the basic acts establishing such bodies.

 

2. Discharge for the implementation of the budgets of the bodies referred to in paragraph 1, shall be given by the European Parliament on the recommendation of the Council.

 

3. The Commission’s internal auditor shall exercise the same powers over the bodies referred to in paragraph 1 as he does in respect of Commission departments.

 

4. Unless otherwise provided in the basic act referred to in paragraph 1, the Court of Auditors shall examine the legality and regularity of the revenue and expenditure of this body before its accounts are consolidated with the Commission’s accounts. This examination shall rely on the audit report established by an independent external auditor designated by the body and whose mission is to verify the conformity of the body’s accounts with Article 134.

 

Justification

The subject of this article is moved from the final provisions to a new Title (see Amd 474).

Amendment  245

Proposal for a regulation

Article 201

Text proposed by the Commission

Amendment

Article 201

deleted

Model Financial Regulation for public-private partnership bodies

 

The bodies having legal personality set up by a basic act and entrusted with the implementation of a public-private partnership pursuant to point (v) of Article 55(1)(b)shall adopt their financial rules.

 

Those rules shall include a set of principles necessary to ensure sound financial management of Union funds, and be based on Article 57 and a model financial regulation adopted by the Commission by means of a delegated act in accordance with Articles 202, 203 and 204.

 

Justification

The subject of this article is moved from the final provisions to a new Title .

Amendment 246

Proposal for a regulation

Article 202, paragraph 1

Text proposed by the Commission

Amendment

1. The powers to adopt the delegated act referred to in Articles 199, 200 and 201 shall be conferred on the Commission for an indeterminate period of time.

1. The powers to adopt the delegated regulations referred to in Articles 196b, 196c and 199 shall be conferred on the Commission for a period of 3 years from * and subject to the conditions laid down in Articles 203 and 204.

 

* Date of entry into force of this Regulation.

Justification

The amendments to Article 202 aim at protecting Parliament’s rights in the new procedure for delegated acts (Article 290 TFEU). They take into account the report on the power of legislative delegation (2010/2021(INI)) – (‘Szájer-report’). Addition of a sunset clause for the delegated act based on a standard clause of the Common Understanding.

Amendment 247

Proposal for a regulation

Article 202, paragraph 2

Text proposed by the Commission

Amendment

2. As soon as it adopts this delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

2. As soon as it adopts a delegated regulation, the Commission shall notify it simultaneously to the European Parliament and to the Council.

 

The Commission shall carry out appropriate consultations during its preparatory work, including with the European Parliament and at expert level, and shall ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and Council.

amendment 248

Proposal for a regulation

Article 202, paragraph 3

Text proposed by the Commission

Amendment

3. The powers to adopt the delegated act are conferred on the Commission subject to the conditions laid down in Articles 203 and 204.

3. Whenever this Regulation is subject to a review, the Commission shall submit a revised delegated regulation.

Amendment 249

Proposal for a regulation

Article 203, Title

Text proposed by the Commission

Amendment

Revocation of delegation

Revocation of the delegation and repeal of the delegated regulation

Amendment 250

Proposal for a regulation

Article 203 – paragraph 1

Text proposed by the Commission

Amendment

1. The delegation of power referred to in Article 199 may be revoked at any time by the European Parliament or by the Council.

1. The delegation of power referred to in Articles 196b, 196c and 199 may be revoked in full or in part with effect for the future at any time by the European Parliament or by the Council. The European Parliament or the Council may, in addition, repeal, in full or in part, the delegated regulations that were adopted pursuant to the delegated powers revoked under the previous sentence.

Justification

The amendments to Article 203 aim at protecting Parliament’s rights in the new procedure for delegated acts (Article 290 TFEU). They take into account the report on the power of legislative delegation (2010/2021(INI)) – (‘Szájer-report’).

Amendment 251

Proposal for a regulation

Article 203 – paragraph 2

Text proposed by the Commission

Amendment

2. The institution which has commenced an internal procedure for deciding whether to revoke the delegation of power shall inform the other institution and the Commission within a reasonable time before the final decision is taken, indicating the delegated powers which could be subject to revocation and possible reasons for a revocation.

2. The institution which has commenced an internal procedure for deciding whether to revoke the delegation of power and whether to repeal the delegated regulation, in full or in part, shall inform the other institution and the Commission within a reasonable time before the final decision is taken, indicating the delegated powers and, where applicable, the delegated regulation or the part of it which could be subject to revocation or repeal and possible reasons for a revocation or repeal.

Amendment 252

Proposal for a regulation

Article 203 – paragraph 3

Text proposed by the Commission

Amendment

3. The decision of revocation shall put an end to the delegation of the powers specified in that decision. It shall take effect immediately or at a later date specified therein. It shall not affect the validity of the delegated acts already in force. It shall be published in the Official Journal of the European Union.

3. The decision of revocation shall put an end to the delegation of the powers specified in that decision. In addition, the decision may also put an end to the validity of the delegated regulation in force or parts of it. It shall take effect immediately or at a later date specified therein. It shall be published in the Official Journal of the European Union.

Amendment 253

Proposal for a regulation

Article 203 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a. Within a reasonable time after a decision has been taken on a revocation of part of the delegation of power and, where applicable, a repeal, in full or in part, of the delegated regulation, the Commission shall submit a proposal for the revision of this Regulation and/or a revised delegated regulation.

Amendment 254

Proposal for a regulation

Article 204 – Title

Text proposed by the Commission

Amendment

Objection to delegated acts

Objection to a delegated regulation

Justification

The amendments to Article 204 aim at protecting Parliament’s rights in the new procedure for delegated acts (Article 290 TFEU). They take into account the report on the power of legislative delegation (2010/2021(INI)) – (‘Szájer-report’).

Amendment  255

Proposal for a regulation

Article 204 – paragraph 1

Text proposed by the Commission

Amendment

1. The European Parliament and the Council may object to the delegated act within a period of two months from the date of notification.

1. The European Parliament and the Council may object to a delegated regulation proposed by the Commission under Articles 196b, 196c and 199 within a period of three months from the date of notification.

Amendment 256

Proposal for a regulation

Article 204 – paragraph 2

Text proposed by the Commission

Amendment

2. If, on expiry of that period, neither the European Parliament nor the Council has objected to the delegated act it shall be published in the Official Journal of the European Union and shall enter into force at the date stated therein.

2. If, on expiry of that period, neither the European Parliament nor the Council has objected to the delegated regulation it shall be published in the Official Journal of the European Union and shall enter into force at the date stated therein.

The delegated act may be published in the Official Journal of the European Union and enter into force before the expiry of that period if the European Parliament and the Council have both informed the Commission of their intention not to raise objections.

The delegated act may be published in the Official Journal of the European Union and enter into force before the expiry of that period if the European Parliament and the Council have both informed the Commission of their intention not to raise objections.

Amendment 257

Proposal for a regulation

Article 204 – paragraph 3

Text proposed by the Commission

Amendment

3. If the European Parliament or the Council objects to a delegated act, it shall not enter into force. The institution which objects shall state the reasons for objecting to the delegated act.

3. If either the European Parliament or the Council object to the delegated regulation and propose modifications to it within the period indicated in paragraph 1, the Commission shall take note of the modifications and may adopt a revised delegated regulation. The European Parliament or the Council may object to such a revised delegated regulation in accordance with this Article.

Justification

Amendment 258

Proposal for a regulation

Article 204 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a. The European Parliament or the Council may request the Commission at any time to submit a partially or completely revised delegated regulation. They shall inform each other of their intention for such request at the earliest possible convenience.

Amendment 259

Proposal for a regulation

Article 205

Text proposed by the Commission

Amendment

Revision

Review

This Regulation shall be revised whenever it proves necessary to do so, in accordance with the procedure laid down by Article 322 of the TFEU and Article 183 of the Euratom Treaty.

Every three years or whenever it proves necessary to do so, this Regulation shall be subject to a review in accordance with the procedure laid down by Article 322(1) of the TFEU and Article 183 of the Euratom Treaty.

 

The thresholds laid down in this Regulation may be adjusted to the inflation rate by means of a delegated regulation referred to in Article 199 in accordance with Articles 202, 203 and 204.

Amendment  260

Proposal for a regulation

Article 208

Text proposed by the Commission

Amendment

This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Union.

1. This Regulation shall enter into force on the third day following that of its publication in the Official Journal of the European Union.

It shall apply as of 1 January 2012.

2. It shall apply as of 1 January 2012.

Article 56 shall apply only to commitments made as of 1 January 2014 of funds referred to in Article 167.

3. Article 56 shall only apply as of 1 January 2014 until which time Article 53b of Regulation (EC, Euratom) No 1605/2002 remains in force.

 

However, Member States may already apply Article 56(2) as of 1 January 2012.

 

Where Member States provide a national declaration in the meaning of Article 56(6b) also the final subparagraph of Article 56(6b) shall apply as of 1 January 2012.

 

The functions of existing bodies under Council Regulation (EC) No 1083/20061 shall remain unaffected by the accreditation of such bodies. From 1 January 2014, the accredited bodies shall be competent for performing their functions.

 

4. Article 5(4) shall have immediate effect as from the publication of this Regulation.

 

Where beneficiaries have applied Article 5(5) of Regulation (EC) No 1605/2002 without having made use of an interest-bearing bank account, this shall not be considered as an error or irregularity.

This Regulation shall be binding in its entirety and directly applicable in the Member States.

5. This Regulation shall be binding in its entirety and directly applicable in the Member States.

 

___________________

 

1 OJ L 210, 31.7.2006, p. 25.

Justification

Member States should be allowed to use the transitional period for adapting the present system to the proposed changes. Double structures pending the closure of the 2007 to 2013 funding period and the 2014 to 2020 funding period should be avoided where possible.

Amendment  261

Proposal for a regulation

Annex (new)

Text proposed by the Commission

Amendment

 

Annex on the delegated regulation according to Article 199 of this Regulation

 

Article 5

 

The delegated regulation may define rules on the accounting of interest yielded for pre-financing.

 

Article 8

 

The delegated regulation may contain detailed rules concerning appropriations for a financial year.

 

Article 9

 

The delegated regulation may contain detailed rules for the cancellation and carry over of appropriations.

 

Article 16

 

The delegated regulation may establish rules concerning the rate of conversion between the euro and other currencies.

 

Article 18

 

The delegated regulation may establish the structure to accommodate external and internal assigned revenue and the provision of the corresponding appropriations and determine rules for the contribution from Member States to research programmes. Further, the delegated regulation may complement this Regulation with regard to the proceeds of sanctions imposed on Member States declared to have an excessive deficit, and relating to assigned revenue resulting from the participation of EFTA states in certain Union programmes.

 

Article 19

 

The delegated regulation may contain detailed rules on the acceptance of donations made to the Union.

 

Article 20

 

The delegated regulation may contain detailed rules concerning the accounts for recoverable taxes.

 

Article 22

 

The delegated regulation may establish detailed rules concerning the calculation of percentages of transfers by institutions other than the Commission, and the grounds for transfer requests.

 

Article 23

 

The delegated regulation may establish detailed rules concerning the calculation of percentages of internal transfers by the Commission, and grounds for transfer requests.

 

Article 25

 

The delegated regulation may contain detailed rules concerning requests for transfers from the emergency aid reserve.

 

Article 26

 

The delegated regulation may contain detailed rules concerning ex ante midterm and ex post evaluations.

 

Article 27

 

The delegated regulation may contain detailed rules concerning the requirements of the financial statement.

 

Article 30

 

The delegated regulation may establish detailed rules concerning the provisional publication of the budget.

 

Article 31

 

The delegated regulation may establish detailed rules on the publication of information on recipients of funds awarded in indirect management.

 

Article 34

 

The delegated regulation may define detailed rules concerning financial programming.

 

Article 38

 

The delegated regulation may contain detailed rules concerning the draft amending budgets.

 

Article 41

 

[Text will follow]

 

Article 46

 

The delegated regulation may contain detailed rules concerning the presentation of the budget, including a definition of actual expenditure in the last financial year for which the accounts have been closed, budget remarks and the establishment plan.

 

Article 50

 

The delegated regulation may contain detailed rules concerning the budget implementation according to sound financial management, and information on transfers of personal data for audit purposes.

 

Article 51

 

The delegated regulation may contain detailed rules concerning the basic act and the exceptions enumerated in Article 51.

 

Article 55

 

The delegated regulation may contain detailed rules concerning the methods of implementation of the budget, including direct centralised management, the exercise of powers delegated to executive agencies, specific provisions for indirect management with international organisations and the designation of public law bodies or bodies governed by private law with a public service mission.

 

Article 56

 

The delegated regulation may contain detailed rules concerning shared management with Member States, including sector-specific rules that govern conditions under which payments to Member States may be suspended, the compilation of a register of bodies responsible for management, certification and audit activities under the sector-specific regulations, measures to promote best practices and the establishment the clearance-of-account procedures.

 

Article 57

 

The delegated regulation may contain detailed rules concerning the indirect management of entities and persons other than Member States, including the content of the agreement entrusting budget implementation tasks, the establishment of the conditions in indirect management where the systems, rules and procedures of the Commission are equivalent with those of entities and persons other than Member States, management declarations of assurance, and the establishment of the clearance-of-account procedures.

 

Article 58

 

The delegated regulation may contain detailed rules concerning the ex ante assessments of rules and procedures under indirect management.

 

Article 61

 

The delegated regulation may contain detailed rules concerning the rights and obligations of the financial actors.

 

Article 63

 

The delegated regulation may contain detailed rules concerning ex ante and ex post controls, the keeping of supporting documents, code of professional standards, failure of the authorising officer to act, transmission of information to the accounting officer, and reports on negotiated procedures.

 

Article 65

 

The delegated regulation may contain detailed rules concerning the powers and duties of the accounting officer, including his/her appointment and termination of duties, the opinion on accounting and inventory systems, treasury and bank account management, signatures on accounts, management of account balances, transfer and conversion operations, methods of payment, legal entity files and keeping of supporting documents.

 

Article 66

 

The delegated regulation may lay down detailed rules concerning the persons empowered to administer accounts in a local unit.

 

Article 67

 

The delegated regulation may establish the conditions of imprest accounts and rules also for external actions, including rules regarding the choice of imprest administrators, the endowment of imprest accounts, and checks by authorising and accounting officers.

 

Article 69

 

The delegated regulation may contain detailed rules concerning the liability of the authorising officer, accounting officer and imprest administrator in case of illegal activity, fraud or corruption.

 

Article 70

 

The delegated regulation may lay down detailed rules applicable to authorising officers by delegation, including confirmation of instructions and the role of the Financial Irregularities Panel.

 

Article 71

 

The delegated regulation may contain detailed rules concerning the liability of accounting officers in case of other forms of misconduct.

 

Article 72

 

The delegated regulation may contain detailed rules concerning the liability of imprest officers in case of other forms of misconduct.

 

Article 75

 

The delegated regulation may contain detailed rules concerning the estimates of amounts receivable and the establishment of amounts receivable, including procedure and supporting documents, and default interest.

 

Article 76

 

The delegated regulation may contain detailed rules concerning the establishment of the recovery order.

 

Article 77

 

The delegated regulation may contain detailed rules on the way of recovery, including recovery by offsetting, recovery procedure failing voluntary payment, additional time for payment, recovery of fines and other penalties, waiving of recovery and cancellation of an established amount receivable.

 

Article 77b

 

The delegated regulation may contain detailed rules for the implementation of the criteria and procedures for financial corrections by the Commission.

 

Article 78

 

The delegated regulation may contain detailed rules concerning the limitation period.

 

Article 80

 

The delegated regulation may establish rules with regard to the amounts received by way of fines, penalties and accrued interest.

 

Article 81

 

The delegated regulation may contain detailed rules concerning the financing decision.

 

Article 82

 

The delegated regulation may contain detailed rules regarding the types of commitment, adoption of global commitments, single signature, and administrative expenditure covered by provisional commitments.

 

Article 83

 

The delegated regulation may contain detailed rules on the budgetary and legal commitment including registration of individual commitments.

 

Article 84

 

The delegated regulation may contain detailed rules concerning the verifications applicable to the different commitments.

 

Article 85

 

The delegated regulation may establish detailed rules concerning validation of expenditure, including passing for payment of staff expenditure and for interim and balance payments of procurement and grant, certified correct for pre-financing and interim payments, and material forms of ‘passed for payment’ and ‘certified correct’.

 

Article 86

 

The delegated regulation may contain detailed rules on the authorisation of expenditure, including the establishment of the mandatory details on a payment order and the checks by the authorising officer of payments orders.

 

Article 87

 

The delegated regulation may contain detailed rules concerning the types of payments and supporting documents.

 

Article 89

 

The delegated regulation may contain detailed rules concerning payment time limits.

 

Article 90

 

The delegated regulation may contain detailed rules on the electronic management of operations.

 

Article 92

 

The delegated regulation may contain detailed rules concerning the appointment of the internal auditor.

 

Article 93

 

The delegated regulation may contain detailed rules concerning the powers and duties of the internal auditor.

 

Article 94

 

The delegated regulation may contain detailed rules concerning the independence and the liability of the internal auditor.

 

Article 95

 

The delegated regulation may contain detailed rules concerning the different contracts under procurement, including framework contracts and specific contracts.

 

Article 97

 

The delegated regulation may contain detailed rules concerning the requirements for the advertising of contracts and publication of notices.

 

Article 98

 

The delegated regulation may contain detailed rules concerning the types of procurement procedure, joint procurement with Member States and low value contracts.

 

Article 99

 

The delegated regulation may contain detailed rules concerning the content of tender documents, including the possibility and the conditions for revision of the price and the technical specifications.

 

Article 100

 

The delegated regulation may contain detailed rules concerning the exclusion criteria applicable for participation in tenders. It may establish what evidence may be satisfactory to show that an exclusion situation does not exist. Furthermore, in case of an exclusion situation it may establish the duration of the exclusion.

 

Article 101

 

The delegated regulation may contain detailed rules concerning the exclusion criteria applicable during the procurement procedure. It may establish what evidence may be satisfactory to show that an exclusion situation does not exist. Furthermore, in case of an exclusion situation it may establish the duration of the exclusion.

 

Article 102

 

The delegated regulation may define detailed rules concerning the Central Exclusion Database.

 

Article 103

 

The delegated regulation may establish detailed rules concerning different administrative and financial penalties for tenderers or candidates who have made false declarations, have made substantial errors, have committed irregularities or fraud or have been found in serious breach of their contractual obligations.

 

Article 104

 

The delegated regulation may define the selection criteria and the award criteria. It furthermore may define the documents that give proof of economic and financial capacity and the evidence of technical and professional capacity. The delegated regulation may also contain detailed rules on electronic auctions and abnormally low tenders.

 

Article 105

 

The delegated regulation may contain detailed rules concerning the submission of tenders. It may establish the time limits for receipt of tenders and requests to participate, the time allowed for access to invitation to tender documents and the time limits in urgent cases. It may also define the different methods of communication. Furthermore, it may establish rules on the possibility of a tender guarantee, the opening of tenders, the requests to participate and the Committee for the evaluation of tenders and requests to participate.

 

Article 106

 

The delegated regulation may contain detailed rules concerning the principles of equal treatment and transparency. It may define the contact that is allowed between contracting authorities and tenderers during the contract award procedure, the minimum requirements of the written record of an evaluation and the minimum details of the decision taken by the contracting authority.

 

Article 107

 

The delegated regulation may contain detailed rules concerning the award decision, information to tenderers, and the signature and implementation of the contract.

 

Article 108

 

The delegated regulation may contain detailed rules concerning information for tenderers, including on the cancellation of the procurement procedure.

 

Article 109

 

The delegated regulation may contain detailed rules concerning the guarantees that are required from contractors.

 

Article 110

 

The delegated regulation may contain detailed rules on the suspension of a contract in case of errors, irregularities and fraud.

 

Article 111

 

The delegated regulation may contain detailed rules concerning the function of contracting authority, including the identification of the appropriate levels for the calculation of thresholds.

 

Article 112

 

The delegated regulation may contain detailed rules on the thresholds applicable, separate contracts and contracts with lots, and estimating the value of certain contracts.

 

Article 113

 

The delegated regulation may contain detailed rules concerning tender participation ne evidence of access to contracts.

 

Article 114

 

The delegated regulation may contain detailed rules on the procurement rules of the World Trade Organization.

 

Article 115

 

The delegated regulation may specify in more detail the scope and content of grants, and may contain rules determining whether grant agreements or grant decisions are to be used. Further, the delegated regulation may contain details on the use of framework partnership agreements.

 

Article 116

 

The delegated regulation may define rules for the different forms of grants.

 

Article 117

 

The delegated regulation may complement the general principles applicable to grants, including the non-profit rule and the co-financing principle.

 

Article 117a

 

The delegated regulation may contain further specifications on eligible costs

 

Article 118

 

The delegated regulation may define the requirements regarding the annual work programme, the content of the calls for proposals, the exceptions to a call for proposals, the information to applicants and the publication of the grant award decision.

 

Article 119

 

The delegated regulation may contain detailed rules concerning the principle of non-cumulative award.

 

Article 120

 

The delegated regulation may contain detailed rules concerning retroactive award.

 

Article 122

 

The delegated regulation may contain detailed rules concerning the arrangements for grant applications, evidence of non-exclusion, applicants without legal personality, legal entities forming one applicant, financial and administrative penalties, eligibility criteria and very low value grants.

 

Article 123

 

The delegated regulation may contain detailed rules concerning selection and award criteria.

 

Article 124

 

The delegated regulation may contain detailed rules concerning the evaluation and award of grants and information to applicants.

 

Article 125

 

The delegated regulation may contain detailed rules concerning the pre-financing guarantee.

 

Article 126

 

The delegated regulation may specify rules for payment of grants and controls, including rules concerning the supporting documents and the suspension and reduction of grants.

 

Article 126a

 

The delegated regulation may stipulate periods for record keeping by the accredited bodies and the Commission

 

Article 126c

 

The delegated regulation may contain detailed rules on the competences and composition of the clearing committees.

 

Article 127

 

The delegated regulation may contain detailed rules concerning implementation contracts and support to third parties.

 

Article 133

 

The delegated regulation may contain detailed rules concerning the report on budgetary and financial management.

 

Article 135

 

The delegated regulation may specify the general accepted accounting principles, including the going-concern principle, the principle of prudence, the principle of consistency of preparation, the principle of comparative information, the materiality and aggregation principle, the no-netting principle, and the principle of substance over form, and rules on supporting documents.

 

Article 136

 

The delegated regulation may contain detailed rules concerning the financial statements, including statements of financial performance, cash flow statements, notes to the financial statements and explanatory notes.

 

Article 137

 

The delegated regulation may contain detailed rules concerning the content of budgetary accounts.

 

Article 139

 

The delegated regulation may contain detailed rules concerning the approval of accounts, including the transmission of the final consolidated accounts.

 

Article 142

 

The delegated regulation may contain detailed rules concerning the organisation of the budgetary accounts, including the use of computerised systems.

 

Article 145

 

The delegated regulation may contain detailed rules concerning the entries in the accounts. Furthermore, it may contain detailed rules concerning accounting ledgers, the trail balance, accounting reconciliations, recording in the journal and the reconciliation of accounts.

 

Article 147

 

The delegated regulation may contain detailed rules on the keeping and the content of the budgetary accounts.

 

Article 148

 

The delegated regulation may contain detailed rules concerning the property inventory and the procedure for the resale and disposing of property, including rules on inventories in delegations.

 

Article 173

 

The delegated regulation may contain detailed rules concerning types of operations under research.

 

Article 175

 

The delegated regulation may contain detailed rules concerning the Joint Research Centre.

 

Article 176

 

The delegated regulation may contain detailed rules concerning the actions which may be financed under external actions.

 

Article 178

 

The delegated regulation may contain detailed rules concerning trust funds for external actions.

 

Article 179

 

The delegated regulation may contain detailed rules concerning the implementation of external actions through indirect management.

 

Article 180

 

The delegated regulation may contain detailed rules concerning agreements with entities on the implementation of external actions, including rules on special loans and bank accounts.

 

Article 181

 

The delegated regulation may contain detailed rules on external action procurement.

 

Article 182

 

The delegated regulation may contain detailed rules on the participation in tender procedures.

 

Article 183

 

The delegated regulation may contain detailed rules on the full financing of an external action and financing applications.

 

Article 184

 

The delegated regulation may contain detailed rules on grant procedures applicable in indirect management.

 

Article 187

 

The delegated regulation may contain detailed rules concerning the scope of the European offices and the delegations by the institutions to the European offices.

 

Article 188

 

The delegated regulation may contain detailed rules concerning the appropriations for the European offices, including the delegation of certain tasks by the accounting officer, treasury and bank accounts.

 

Article 191

 

The delegated regulation may contain detailed rules concerning the delegation of authorising officer powers to the director of an inter-institutional office.

 

Article 193

 

The delegated regulation may contain detailed rules regarding the scope of administrative appropriations and rent guarantees.

 

Article 195

 

The delegated regulation may contain detailed rules concerning specific administrative appropriations, including buildings and advances to staff members of the institutions.

 

Article 196

 

The delegated regulation may contain detailed rules concerning external experts.

 

Article 197

 

The delegated regulation may contain detailed rules concerning transitional provisions, including on the liquidation of the guarantee account and updating of thresholds and amounts.

(1)

OJ C 145, 3.06.2010, p. 1.

(2)

OJ C 334, 10.12.2010, p. 1.


OPINION of the Committee on Foreign Affairs (24.6.2011)

for the Committee on Budgets

for the Committee on Budgetary Control

on the proposal for a regulation of the European Parliament and of the Council on the financial rules applicable to the annual budget of the Union

(COM(2010)0815 – C7-0016/2011 – 2010/0395(COD))

Rapporteur: Franziska Katharina Brantner

SHORT JUSTIFICATION

The proposed revision of financial regulation comes at a historically significant moment for the European Union after the Lisbon Treaty. In the current process of transition towards democracy in the South, it could also facilitate the Union’s task to implement the new neighbourhood policy in an effective way. The revision should be seen as an opportunity to strengthen the European external policy.

To this extent the reform of financial regulation should ensure:

•         flexibility and rapidity in disbursing financial assistance to third ODA eligible countries;

· particular measures for rapid disbursement in a crisis situations including countries undergoing a transition towards democratisation. This should also result in simplification of administrative procedures and elimination of red tape, allowing civil society organisations, small non profit organisations and single entities in urgent need of protection to have a facilitated access to EU funding;

•         sound coordination with international donors when EU funding is to channelled through international organisation authorising retroactive payments, eliminating redundant controls and increasing the tolerance of error in very specific and exceptional cases linked again to crisis situation or humanitarian needs and taking into account the costs and benefits of controls;

•         a reduction of the administrative burden, in particular in grants procedures;

•         the possibility of creating EU Trust funds that will allow pooling of funds from multiple sources (Member States, Union Budget, third countries).

AMENDMENTS

The Committee on Foreign Affairs calls on the Committee on Budgets and the Committee on Budgetary Control, as the committees responsible, to incorporate the following amendments in their report:

Amendment  1

Proposal for a regulation

Recital 48

Text proposed by the Commission

Amendment

(48) As regards the specific provisions relating to the implementation of external actions, it is necessary to adapt them to the changes proposed for the methods of implementation.

(48) As regards the specific provisions relating to the implementation of external actions, it is necessary to adapt them to the changes proposed for the methods of implementation and to propose a differentiated approach when the European Union is required to respond to humanitarian emergencies, international crises or third countries undergoing a process of democratic transition.

Amendment  2

Proposal for a regulation

Article 31 – paragraph 2

Text proposed by the Commission

Amendment

2. The Commission shall make available, in an appropriate manner, information on the recipients of funds deriving from the budget held by it when the budget is implemented on a centralised basis and directly by its departments or by Union Delegations in accordance with the second paragraph of Article 53, and information on the recipients of funds as provided by the entities to which budget implementation tasks are delegated under other modes of management.

2. The Commission shall make available, in an appropriate manner, information on the recipients of funds and the precise nature and purpose of the measures financed by the budget held by it when the budget is implemented on a centralised basis and directly by its departments or by Union Delegations in accordance with the second paragraph of Article 53, and information on the recipients of funds as provided by the entities to which budget implementation tasks are delegated under other modes of management.

 

In particular, the Commission and the EEAS shall make available and update on their websites information concerning the way in which the Union funds have been used under heading 4, the results achieved by them, the recipients of the funds and the precise nature and purpose of the measures financed by the budget.

Amendment  3

Proposal for a regulation

Article 34 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. The Commission shall also attach to the draft budget:

 

(a) an analysis of the financial management in the previous year and the commitments outstanding;

 

(b) where appropriate, an opinion on the estimates of the other institutions which may contain different estimates, accompanied by the reasons therefor;

 

(c) any working paper it considers useful in connection with the establishment plans of the institutions and the grants which the Commission awards to the bodies referred to in Article 200 and to the European Schools. Any such working paper, showing the latest authorised establishment plan, shall present:

 

(i) all staff employed by the Union, including its legally separate entities, displayed by type of contract,

 

(ii) a statement of the policy on posts and external personnel, gender balance,

 

(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,

 

(iv) a list of posts broken down per policy area,

 

(v) for each category of external staff, the initial estimated number of full-time equivalents on the basis of the authorised appropriations as well as the number of persons actually in place at the beginning of the year in which the draft budget is presented, indicating their distribution by function group and, as appropriate, by grade, as well as an estimate based on appropriations requested in the draft budget for such other categories of staff, and

 

(vi) the overall direct and indirect cost of the Union’s obligations towards its staff arising from the application of the Staff Regulations and the annexes thereto, in total and per respective provision;

 

(d) the activity statements containing:

 

(i) information on the achievement of all previously set specific, measurable, achievable, relevant and timed objectives for the various activities as well as new objectives measured by indicators,

 

(ii) full justification of, and the cost-benefit approach applied to, proposed changes in the level of appropriations,

 

(iii) a clear rationale for intervention at Union level in keeping, inter alia, with the principle of subsidiarity,

 

(iv) information on the implementation rates of the previous year’s activity and implementation rates for the current year,

 

(v) a list of operations carried out by the entities enumerated in points (i) to (v) of Article 55(1)(b) justifying the choice of a specific operator for the management of the funds.

 

Evaluation results shall be consulted and referred to as evidence of the likely merits of proposed budget changes;

 

(e) a summary statement of the schedule of payments due in subsequent financial years to meet budgetary commitments entered into in previous financial years.

Amendment  4

Proposal for a regulation

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

Text proposed by the Commission

Amendment

 

(ca) as regards funding to international organisations, in a document annexed to the Commission section:

 

(i) a summary of all contributions, with a breakdown per Union programme/fund and per international organisation,

 

(ii) a statement of reasons explaining why it was more efficient for the Union to fund those international organisations rather than to act directly.

Amendment  5

Proposal for a regulation

Article 46 – paragraph 1 – point e

Text proposed by the Commission

Amendment

(e) the total amount of CFSP expenditure shall be entered into one budget chapter, entitled CFSP, with specific budgetary articles. Those articles shall cover CFSP expenditure and shall contain specific budget lines identifying at least the single major missions.

(e) the total amount of CFSP expenditure shall be entered into one budget chapter, entitled CFSP, with specific budgetary articles. Those articles shall cover CFSP expenditure and shall contain a specific budget line per mission.

Amendment  6

Proposal for a regulation

Article 51 – paragraph 5 – point c – subparagraph 3

Text proposed by the Commission

Amendment

Preparatory measures shall be agreed by the Council, on a proposal by the High Representative of the Union for Foreign Affairs and Security Policy.

Preparatory measures shall be agreed by the Council, in full association with the Commission, and the European Parliament shall be consulted in due time in advance and shall be informed in detail about the preparatory measures, in particular those regarding the CFSP and Common Security and Defence Policy actions.

Amendment  7

Proposal for a regulation

Article 55 – paragraph 1

Text proposed by the Commission

Amendment

1. The Commission shall implement the budget in the following ways:

1. The Commission shall implement the budget in the following ways:

(a) by its departments, by Union Delegations in accordance with the second paragraph of Article 53, or through executive agencies referred to in Article 59;

(a) by its departments, by Union Delegations in accordance with the second paragraph of Article 53, or through executive agencies referred to in Article 59;

(b) indirectly, in shared management with Member States or by entrusting budget implementation tasks to:

(b) indirectly, in shared management with Member States or, subject to a specific provision in the basic act which also sets out, other than in the cases referred to in points (i) and (iv), the type of implementing partners and types of operations, by entrusting certain specified budget implementation tasks to:

(i) third countries or the bodies they have designated;

(i) third countries or the bodies they have designated;

(ii) international organisations and their agencies;

(ii) international organisations and their agencies;

(iii) financial institutions entrusted with the implementation of Financial Instruments pursuant to Title VIII;

 

(iv) the European Investment Bank and the European Investment Fund or any other subsidiary of the Bank;

(iv) the European Investment Bank and the European Investment Fund;

(v) bodies referred to in Articles 200 and 201;

(v) bodies referred to in Articles 200 and 201;

(vi) public law bodies or bodies governed by private law with a public service mission as far as these latter provide adequate financial guarantees;

(vi) public law bodies or bodies governed by private law with a public service mission as far as these latter provide adequate financial guarantees;

(vii) bodies governed by private law of a Member State, entrusted with the implementation of a public and private partnership and providing adequate financial guarantees;

 

(viii) persons entrusted with the implementation of specific actions pursuant to Title V of the Treaty on the European Union, and identified in the relevant basic act within the meaning of Article 51 of this Regulation.

(viii) persons entrusted with the implementation of specific actions in the CFSP pursuant to Title V of the Treaty on the European Union, and identified in the relevant basic act within the meaning of Article 51 of this Regulation.