2012R1268 — EN — 01.01.2016 — 001.001

This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents

Amended by:









▼B

COMMISSION DELEGATED REGULATION (EU) No 1268/2012

of 29 October 2012

on the rules of application of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union







THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union ( 1 ), and in particular Articles 8, 11, 13, 19, 21, 22, 23, 25, 26, 29, 30, 31, 34, 35, 38, 41, 44, 49, 53, 54, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 68, 69, 70, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 83, 84, 85, 86, 87, 88, 89, 90, 92, 93, 98, 99, 100, 101, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 121, 122, 123, 124, 125, 126, 128, 129, 130, 131, 132, 133, 134, 135, 137, 138, 139, 140, 142, 144, 145, 146, 148, 151, 154, 156, 157, 181, 183, 184, 186, 187, 188, 190, 191, 192, 195, 196, 199, 201, 203, 204, 205, 208 and 209 thereof, Whereas: (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 ( 2 ) has been substantially amended and replaced by Regulation (EU, Euratom) No 966/2012 (hereinafter ‘Financial Regulation’). It is therefore necessary to align 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 Communities ( 3 ) to the Financial Regulation. In the interests of clarity, it is necessary to replace Regulation (EC, Euratom) No 2342/2002. (2) Under Article 290 of the Treaty on the Functioning of the European Union (hereinafter ‘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. Therefore, some provisions laid down in Regulation (EC, Euratom) No 2342/2002 have been incorporated in the Financial Regulation. Thus those provisions should not be included in this Regulation. (3) During its preparatory work, the Commission has carried out appropriate consultations, including at expert level and ensured a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and the Council. (4) As regards the budgetary principles, in particular the principle of unity, the simplification of the rules governing the generation and recovery of interest yielded on pre-financing, and in particular the waiver of the obligation for grant recipients to generate such interest, render obsolete the provisions on the scope and conditions for the recovery of the interest. Where such obligation would still be imposed on entities entrusted with budget implementation tasks, the rules governing the identification, use and accounting for the interest generated should be included in the delegation agreements with those entities. In those cases where the interest yielded on pre-financing is due to the Union on the basis of those agreements that interest should be paid to the budget as assigned revenue. (5) For the principle of annuality, it is important to clarify the meaning of annual appropriations and the preparatory stages of the commitment procedure which, if completed by 31 December, may allow the carryover of commitment appropriations. (6) As regards the principle of the unit of account, the rates to be used for conversion between the euro and the other currencies for the requirements of the management of the cash flow and the accounts should be specified. In addition, the transparency in the accounting for the results of such currency conversion operations should be further enhanced. Following the introduction of the euro, the obligation on the Commission to provide information to the Member States on cash transfers carried out between different currencies should be removed. (7) As regards the derogations from the principle of universality, the budget treatment to be given to assigned revenue, in particular to contributions by Member States or third countries to certain Union programmes, should be specified, as well as the limits on the netting of expenditure and revenue. In particular, having regard to the current practice, for reasons of legal certainty, it is necessary to clarify that as a general rule assigned revenue should generate commitment and payments appropriations automatically, as soon as the revenue has been received by the institution. It is also necessary to specify the cases where, by way of exception, assigned revenue can be made available before the revenue has actually been received by the institution. (8) As regards the principle of specification, a precise definition should be given of the calculation of the percentage of appropriations which the institutions are authorised to transfer by virtue of their autonomy. The European Parliament and the Council should receive full information through a detailed explanation of the requests for transfers which have to be submitted to them. (9) As for sound financial management, it is necessary to specify the objectives of the ex ante, interim and ex post evaluations of the programmes and activities, the minimum frequency with which they are to be carried out and the information to be given in the legislative financial statement. (10) As for the principle of transparency, publication of data by name relating to the recipients concerned and the precise amounts received by them increases transparency with respect to the use of the funds concerned. Such information made available to citizens reinforces public control of the use to which that money is put and contributes to the best use of public funds. At the same time, where recipients are natural persons, such publication is subject to the rules on protection of personal data. Therefore personal data should be published only if it is necessary and proportionate with respect to the legitimate aim pursued. (11) The information on the use of Union funds should be published on an internet website of the institutions and should include at least the name, the locality, the amount and the purpose of the funds. That information should take into account the criteria laid down in Article 35(3) of the Financial Regulation, in particular the type and the importance of the award. (12) The name and locality of the recipients of Union funds should be published for prizes, grants and contracts awarded following the opening-up of a public procedure to competition, as it is the case in particular for contests, call for proposals and call for tenders, in the respect the principles of the TFEU and in particular the principles of transparency, proportionality, equal treatment and non-discrimination. Moreover such publication should contribute to the control of the public selection procedures by the rejected applicants of the competition. (13) The publication of personal data referring to natural persons should not exceed the duration during which the funds are being used by the recipient and should therefore be removed after two years. The same should apply to personal data referring to legal persons for whom the official title identifies one or more natural persons. (14) In most of the cases covered by this Regulation, the publication concerns legal persons. (15) When natural persons are concerned, such publication should only be envisaged respecting the principle of proportionality between the importance of the amount granted and the need to control the best use of the funds. Where natural persons are concerned, the publication of the region on NUTS 2 level is consistent with the objective of publication of recipients, ensures equal treatment between Member States of different sizes while respecting the recipients’ right to private life and in particular the protection of their personal data. (16) Information on scholarships, and other direct support paid to natural persons in most need should remain exempt from publication. (17) In order to ensure the respect of the principle of equal treatment between recipients, the publication of information related to natural persons should also be ensured in line with the obligation for the Member States to establish a large transparency of the contracts above the amount laid down in Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts ( 4 ). (18) The name and the locality of the recipient and the amount and the purpose of the funds should not be published if it risks endangering the integrity of the recipient as protected by the Charter of Fundamental Rights of the European Union or would harm the legitimate commercial interests of the recipient. (19) The budgetary nomenclature should provide clarity and transparency necessary for the budgetary process. (20) Acts likely to constitute a conflict of interests should also be defined. (21) In respect of indirect management, it is necessary to lay down the framework of such delegation of powers and the content of the delegation agreement. Any entity or person entrusted with budget implementation tasks should guarantee a level of protection of the financial interests of the Union which is equivalent to that required under the Financial Regulation. The conditions under which the Commission may accept that the systems, rules and procedures of these entities or persons are equivalent to its own should be laid down in order to ensure sound financial management of Union funds by the entrusted entities. (22) The executive agencies, which remain under Commission control, should be recognised as authorising officers by delegation of that institution for implementation of the Union budget. (23) In the case of indirect management with international organisations, the organisations eligible for this kind of management should be identified. (24) Where budget implementation tasks are entrusted to public bodies or bodies governed by private law with a public service mission, the conditions of their designation should be set out. (25) For indirect management it is necessary to establish detailed rules for the procedures for the examination and acceptance of accounts and for the exclusion from Union financing of expenditure for which disbursements have been made in breach of applicable rules. (26) Private-law entities performing preparatory or ancillary tasks on the Commission’s behalf should be selected in accordance with procurement procedures. (27) As regards the role of the financial actors, the reform of financial management, together with the abolition of centralised ex ante controls, increases the responsibilities of the authorising officers in all revenue and expenditure operations, including in terms of internal control systems. The European Parliament and Council should in future be informed of the appointment or termination of duties of an authorising officer by delegation. Consequently, the tasks, responsibilities and principles of the procedures to be observed should also be laid down. The internalisation of ex ante controls requires, in particular, a clear distinction between tasks relating to the initiation of operations in implementation of the budget and tasks relating to the verification of such operations. Moreover, each institution should adopt a code of professional standards applicable to the staff responsible for ex ante and ex post verifications. It is also necessary to provide that the responsibilities assumed are accounted for in an annual report to the institution which is in charge of, inter alia, the ex post verifications. The supporting documents relating to the operations carried out should be kept. Finally, all the various forms of negotiated procedure for the award of public contracts should, since those contracts represent derogations from the usual award procedures, be the subject of a special report to the institution and of a communication to the European Parliament and Council. (28) Regulation (EC, Euratom) No 2342/2002 should be adapted to take into account the double role of the head of delegation as authorising officer by subdelegation for the European External Action Service (hereinafter ‘EEAS’) and, as regards operational appropriations, for the Commission. (29) In order to clarify responsibilities, a precise definition should also be given of the tasks and responsibilities of the accounting officer in connection with the accounting systems, treasury management, the management of bank accounts and third-party files. The arrangements for the termination of the accounting officer’s duties should also be established. (30) The conditions for the use of imprest accounts, a system of management which constitutes an exception to normal budgetary procedures, should also be laid down, and the tasks and responsibilities of the imprest administrators, as well as those of the authorising officer and accounting officer in connection with the control of imprest accounts, should be set out. The European Parliament and Council should be informed of any appointment or termination of duties. For reasons of efficiency, only one imprest account should be set up in delegations, for appropriations from both the Commission and EEAS sections of the Budget. It has proven necessary to introduce the possibility to use debit cards linked to imprest accounts in order to facilitate payments in particular in the Union delegations and representations, and avoid the risks associated with handling cash. (31) Once the tasks and responsibilities of each financial actor have been defined, they may be held liable only under the conditions laid down in the Staff Regulations of Officials of the European Union and the Conditions of Employment of Other Servants of the European Union. The specialised financial irregularities panel set up in each institution have proven to be an efficient mechanism to determine whether irregularities of a financial nature have occurred and should therefore be maintained. It is necessary to lay down the procedure by which an authorising officer may seek confirmation of an instruction which that officer considers to be irregular or contrary to the principle of sound financial management, and thus be released from any liability. (32) As regards revenue, except for the special case of own resources covered by Council Decision 2007/436/EC, Euratom of 7 June 2007 on the system of the Communities’ own resources ( 5 ) it is necessary to specify the tasks and controls falling within the responsibility of the authorising officers at the different stages of the procedure: establishment of the estimate of amounts receivable, recovery order, dispatch of the debit note informing the debtor that the amount receivable has been established, calculation of any default interest due, and the decision, where necessary, to waive an entitlement subject to criteria guaranteeing compliance with sound financial management in order to ensure a efficient collection of revenues. (33) It is necessary to specify the role of the accounting officer in the collection of revenue and in allowing any additional time for payment of expenditures. The accounting officer should also have a flexibility in the recovery of payments such as the possibility to offset debts directly, or in exceptional circumstances to waive the requirement of lodging a guarantee to repay a debt, when the debtor is willing and able to make the payment in the additional time period but is not able to lodge such guarantee taking due account of the principle of proportionality. (34) In order to secure the management of assets whilst also yielding financial remuneration, it is necessary to have the amounts provisionally cashed, such as competitions fines which are being contested, invested in financial assets, and to determine the assignment of the interests yielded by those investments. (35) In order to ensure that the Commission has all the necessary information for the adoption of the financing decisions, it is necessary to lay down the minimum requirements for the contents of financing decisions on grants, procurement, trust funds, prizes and financial instruments. (36) As regards expenditure, the relationship between financing decisions, global commitments and individual commitments as well as characteristics of those different stages should be defined in order to establish a clear framework for the different stages of budget implementation. (37) It is necessary to clarify the relationship between validation, authorisation and payment operations and the controls to be carried out by the authorising officer when validating expenditure, with the endorsement ‘passed for payment’. The documents to be produced in support of payments should be specified and rules laid down for the clearing of pre-financing and interim payments. (38) Detailed rules for the application of time limits applicable for validation and payment operations should be laid down, taking into account Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions ( 6 ) in order to ensure there is no undue delay for payments to recipients. (39) For the internal audit, it is necessary to lay down the procedure for appointing the auditor and to guarantee his independence within the institution which has appointed him and to which he must report on his activities. The European Parliament and Council should be informed of any appointment or termination of duties in order to ensure transparency towards the European Parliament and the Council. (40) Rules on procurement should be based on Directive 2004/18/EC. It is necessary to define the various types of procurement procedures, the advertising and publication measures applicable, the conditions in which use may be made of a particular type of procedure and the main features of the existing procedures, the specification of selection and award criteria, rules for access to tender documents and for communication with tenderers or candidates and, for cases where the Commission awards contracts on its own account, the thresholds applicable and the rules for estimating the value of the contracts to be awarded. (41) The purpose of the procedures for the award of contracts is to satisfy the needs of the institutions on the best possible terms while guaranteeing equal access to public contracts and complying with the principles of transparency and non-discrimination. With a view to ensuring transparency and the equal treatment of candidates and tenderers, as well as the full responsibility of authorising officers in the final choice, it is necessary to lay down the procedure for opening and then evaluating tenders and requests to participate, from the appointment of a committee up to the substantiated and documented award decision, which ultimately rests with the contracting authority. (42) On the basis of past experience, it is necessary to establish a new procurement procedure for middle value contracts. It is necessary to allow the use of the ‘vendors’ list’ under the same conditions as the existing ‘call for expression of interest’ as that list provides for less administrative burden for potential tenderers. (43) In order to protect the Union financial interests during contract execution, it is necessary to provide for a possibility to require the entities providing financial capacity in procurement to be jointly liable for the execution of the corresponding contract. (44) In order to protect the Union financial interests and to guarantee control over the contract execution, it is necessary to provide for a possibility to require the contractor to perform himself directly certain critical tasks. (45) In order to guarantee execution of a contract to the highest professional standard, it is necessary to provide for a possibility to reject the tenderers who have potential conflicts of interest. (46) Given that the request for financial guarantees is no longer automatic, it is necessary to lay down the criteria according to which they may be requested. (47) It is necessary to clarify the scope of the Title on grants, particularly with regard to the type of action or body of general European interest eligible for a grant as well as with regard to the types of legal commitments that may be used to cover grants. For those legal commitments, the criteria for choosing between agreements and decisions, their minimum content and the possibility to conclude specific grant agreement or decision under framework partnerships should be specified, so as to ensure equal treatment and avoid restricting access to Union funding. (48) The scope of the Title on grants should also take account of the introduction in the Financial Regulation of, on the one hand, specific titles on prizes and financial instruments and, on the other hand, of the key rules applicable to grants, eligible costs, deletion of the degressivity principle, use of simplified forms of grants (lump sums, unit costs and flat rates) and removal of compulsory submission of pre-financing guarantees. (49) Progress towards electronic exchange of information and electronic submission of documents, which constitute a major simplification measure, should be accompanied by clear conditions for the acceptance of the systems to be used, so as to establish a legally sound environment. (50) The no-profit and co-financing principles should be revised in line with the clarifications and simplification measures introduced in the Financial Regulation. In particular, for the sake of clarity, it is necessary to establish detailed rules on the types of receipts to be retained for the no-profit principle as well as the forms of external co-financing and in kind contributions. (51) With regard to the transparency principle, adoption and publication of multiannual work programmes should be authorised, since they have an added value for applicants, which can more easily anticipate and better prepare for calls for proposals. In this context, the conditions under which work programmes may be considered as the financing decisions should be specified. To ensure transparency, it is also necessary to publish calls for proposals, except in cases of urgency or where the action may only be implemented by one entity. It is necessary to specify the minimum content of such publication. (52) As the eligibility conditions for value added tax (VAT) paid by beneficiaries is prone to errors and discrepancies, there is a need to ensure that the notions of non-recoverable VAT and non-taxable persons within the meaning of Article 13(1) of the Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax ( 7 ) are consistently understood and applied, by reference to the activities that those notions encompass. (53) In order to ensure transparency, equal treatment for applicants and the enhancement of the accountability of authorising officers, it is necessary to lay down the award procedure, from the application for the grant, for which the Commission should have provided minimum information for applicants, to its evaluation in the light of previously specified eligibility, selection and award criteria before the authorising officer responsible takes his final, appropriately documented decision. It is necessary to established detailed rules on the composition and tasks of the committee in charge of assessing the proposals against the selection and award criteria, as well as the possibilities to contact applicants during the award procedure or to invite them to adjust their proposals. Those possibilities should properly reflect the requirements in terms of good administration introduced in the Financial Regulation and should include the conditions under which proposals may be adjusted before signature of the grant agreements or notification of the grant decisions, while ensuring equal treatment of applicants and compliance with the principle according to which initiative for the actions lies solely with the applicants. (54) The use of lump sums, unit costs and flat rates being facilitated and broadened under the Financial Regulation, the definitions of those simplified forms of grants should be clarified. It is in particular necessary to clarify that they are meant, as any form of grant, to cover categories of eligible costs and indicate that their amounts should not necessarily be fixed ex ante, which is particularly relevant where they are determined on the basis of the beneficiary’s usual cost accounting practices. There is also a need to ensure stability in the rules of funding under a specific programme. For that purpose, it should be allowed to use the simplified forms of grants for its full duration. For statistical, methodological or fraud-prevention and detection purposes, it is necessary to have access to general accounting information from a beneficiary, even where those are financed by way of lump sums, unit costs or flat rates. Those verifications, however, should not be used for questioning the unit values of the lump sums, unit costs or flat rates already agreed on. (55) Sound financial management requires that the Commission protect itself with guarantees. At the stage of grant applications, by arranging financial audits for applications involving larger amounts, at the time of paying pre-financing, where the risks as assessed by the authorising officer justify, by requiring advance financial guarantees and at the stage of interim payment or payment of the balance, by arranging submission of certificates established by auditors for the payment requests which involve the largest amounts and which present most risk. (56) The conditions and procedures for suspending and reducing grants should be clarified, so as to better define the grounds for such suspension or reduction, provide adequate information to beneficiaries and ensure that the beneficiaries have the possibility to exercise their right of defence at any stage. (57) Sound management of Union funds also means that the grant beneficiaries themselves use Union grants with economy and efficiency. In particular, the costs of contracts awarded by beneficiaries to implement the action should be eligible provided those implementation contracts are awarded to the tender offering best value for money. (58) As the restrictions on recourse to financial support to third parties are softened in the Financial Regulation, it is necessary to lay down the minimum provisions to be agreed on at the level of the grant agreement or to be inserted in the grant decision in order to clearly differentiate the award of financial support to third parties by a beneficiary from the implementation of budget tasks by a delegatee under indirect management. (59) Powers for imposing penalties on grant beneficiaries should be aligned with those conferred in the context of procurement considering that they are of the same nature and should be subject to the same rules in terms of effectiveness and proportionality. (60) Prizes should be subject to the principles of transparency and equal treatment, in the same was as grants. In that context, the minimum characteristics of work programmes and of contests should also be laid down, taking account of the corresponding requirements for grants. In particular, the conditions under which the work programmes may be considered as financing decisions, as well as the minimum content of rules of contest, notably the conditions for paying the prize to the winners in case of award, and the appropriate publication means should be specified. (61) Compliance with the transparency and equal treatment principles also requires the establishment of a clearly defined award procedure, from submission of the entries to information of applicants and notification to the winning participant. That procedure should include evaluation of the entries by a panel of experts appointed by the authorising officer responsible, using the award criteria announced in the rules of the contest in order to ensure competence and neutrality in the assessment of entries. Based on their recommendations, the authorising officer responsible should take the final decision on the award of the prize since the responsibility for budget implementation always lies with the Commission. (62) In order to ensure a harmonised implementation of the various financial instruments within the Commission, the general framework included in Title VIII of the Financial Regulation should be complemented by detailed rules for the management of financial instruments, including provisions for the selection of entrusted entities, content of delegation agreements, management costs and fees and for fiduciary accounts. (63) Rules for the selection of financial intermediaries and final recipients should be defined in particular where financial instruments are managed directly in exceptional cases, either through dedicated investment vehicles or other delivery mechanisms, thereby ensuring efficient spending of Union funds. (64) It is necessary to determine the conditions for the use of financial instruments, including the leverage effect, and the monitoring framework. It is also necessary to ensure that financial instruments are implemented on the basis of a robust ex ante evaluation, which allows the Commission to design them specifically to respond to market failures and suboptimal investment situations. (65) As regards the keeping and presentation of the accounts, the generally accepted accounting principles on which the financial statements must be based are defined in the Union accounting rules. These accounting rules also specify the conditions for entering a transaction in the accounts and the rules for valuing assets and liabilities and for the constitution of provisions in order to ensure that information is properly presented, complete and accurate. (66) On accounting matters, it should be specified that the accounting officer of each institution must produce documents describing the organisation of the accounts and the accounting procedures of that institution and define the conditions to be respected by the computerised accounting systems, in particular in order to ensure security of access and the audit trail for any changes made to the systems. (67) As regards the keeping of the accounts, it is necessary to specify the principles applicable to the accounting ledgers, the trial balance, the periodical reconciliation of the totals in that balance and the inventory, and to specify the components of the chart of accounts adopted by the Commission’s accounting officer. The rules applicable to the registration of operations, in particular the double-entry method, the rules for the conversion of operations which are not denominated in euro and the supporting documents for accounting entries, should be laid down. The content of the accounting records should also be specified. (68) It is necessary to lay down the rules relating to the property inventory and to clarify the respective responsibilities in this field of the accounting officers and authorising officers, as well as the rules applicable to the resale of property entered in the inventory with the view to an efficient asset management. (69) For external actions, this Regulation, in line with the Financial Regulation, should provide for exceptions which reflect the specific operational features of that sector, mainly as regards procurement and the award of grants, notably because these procedures are carried out by the authorities of third countries receiving Union financial support. As regards procurement, such differences should mainly pertain to types of procedures and thresholds from which they apply. As regards grants, full financing should be allowed in certain cases, mainly to take the reduced co-financing capacity of the beneficiaries into account. (70) It is necessary to establish detailed provisions concerning the use of budget support, specifying the conditions under which budget support may be used and the obligation of the partner to provide the Commission with timely and reliable information to evaluate the fulfilment of those conditions. (71) In regard to Union Trust Funds, it is necessary to specify the principles applicable to the Union contribution to Union Trust Funds as well as to the contributions of the other donors, to lay down the accounting and reporting rules of the Union Trust Fund, in particular for the interest matured in the bank account of the trust fund, to clarify the respective responsibilities of the financial actors and of the Board of the Trust Fund, as well as to define external audit obligations. It is also necessary to ensure a fair representation of the participating donors in the Board of the Trust Fund and to ensure a mandatory positive vote of the Commission for the use of the funds. (72) In order to simplify procurement procedures under external actions, some thresholds have been modified and other thresholds and management procedures coming from the common provisions have been added and adapted. (73) As for grants, the conditions for derogating from the principle of co-financing should be streamlined in line with the Financial Regulation. (74) To guarantee the sound management of Union appropriations, it is also necessary to specify the pre-conditions and the rules to be included in the agreements when the management of appropriations is decentralised or if imprest accounts are used. (75) It is appropriate to define the European Offices and to set out specific rules for the Publications Office and provisions authorising the Commission’s accounting officer to delegate some of his tasks to staff in those Offices. Operating procedures should also be laid down for the bank accounts which the European Offices may be authorised to open in the Commission’s name. (76) By analogy with the publication of information on recipients of Union’s funds, the list of experts referred to in Article 204 of the Financial Regulation selected through a call for expressions of interest and the subject of their tasks should be published. Their remuneration should also be published when it exceeds EUR 15 000 . (77) The new procedure introduced in Article 203 of the Financial Regulation should be complemented, in particular regarding the type of costs to be included in the thresholds established therein. It is necessary to establish detailed rules on the building projects in Union delegations given their specificities, in particular in cases of urgency. It is appropriate to provide that residential buildings, namely in delegations, which need to be rented or purchased within a short period of time, should be excluded from the procedure laid down in Article 203 of the Financial Regulation. The acquisition of land for free or for a symbolic amount should not fall within the procedure laid down in Article 203 of the Financial Regulation as it does not impose in itself an additional burden to the budget. (78) To ensure the coherence with the provisions of the Financial Regulation it is necessary to establish transitional provisions. Moreover, in order to ensure coherence with the sectorial legal basis, it is appropriate to defer application of the provisions on the management modes and financial instruments to 1 January 2014, Whereas: HAS ADOPTED THIS REGULATION:







PART ONE

COMMON PROVISIONS







TITLE I

SUBJECT MATTER

Article 1

Subject matter

This Regulation lays down the rules of application for Regulation (EU, Euratom) No 966/2012 (hereinafter ‘the Financial Regulation’).







TITLE II

BUDGETARY PRINCIPLES







CHAPTER 1

Principles of unity and budgetary accuracy

Article 2

Accounting for interest yielded on pre-financing

(Article 8(4) of the Financial Regulation)

Where interest is due to the budget, the agreement concluded with the entities or persons listed in points (ii) to (viii) of Article 58(1)(c) of the Financial Regulation shall stipulate that pre-financing is paid to bank accounts or sub-accounts which allow the funds and related interest to be identified. Otherwise, the accounting methods of the recipients or intermediaries must make it possible to identify the funds paid by the Union and the interest or other benefits yielded by those funds.

Provisions of this Regulation concerning interest on pre-financing shall be without prejudice to the entry of pre-financing on the assets side of financial statements, as laid down in the accounting rules referred to in Article 143 of the Financial Regulation.







CHAPTER 2

Principle of annuality

Article 3

Appropriations for the financial year

(Article 11(3) of the Financial Regulation)

The commitment appropriations and payment appropriations authorised for the financial year shall consist of:

(a) appropriations provided in the budget, including by amending budgets;

(b) appropriations carried over;

(c) appropriations made available again in accordance with Articles 178 and 182 of the Financial Regulation;

(d) appropriations arising from pre-financing payments which have been repaid in accordance with Article 177(3) of the Financial Regulation;

(e) appropriations provided following the receipt of revenue assigned during the financial year or during previous financial years and not used.

Article 4

Cancellation and carryover of appropriations

(Article 13(2) of the Financial Regulation)

1. The commitment appropriations and the non-differentiated appropriations relating to building projects referred to in Article 13(2)(a) of the Financial Regulation may be carried over only if the commitments could not be made before 31 December of the financial year for reasons not attributable to the authorising officer and if the preparatory stages are sufficiently advanced to make it reasonable to surmise that the commitment will be made by no later than 31 March of the following year, or 31 December for building projects.

2. The preparatory stages referred to in Article 13(2)(a) of the Financial Regulation, which should be completed by 31 December of the financial year in order to allow a carryover to the following year, are in particular:

(a) for global commitments within the meaning of Article 85 of the Financial Regulation, the adoption of a financing decision or the closing by that date of the consultation of the departments concerned within each institution for the adoption of the decision;

(b) for individual commitments within the meaning of Article 85 of the Financial Regulation, the completion of the selection of potential contractors, beneficiaries, prize winners or delegatees.

3. Appropriations carried over in accordance with Article 13(2)(a) of the Financial Regulation which have not been committed by 31 March of the following financial year or up to 31 December of the following year for amounts relating to building projects shall be automatically cancelled.

The Commission shall inform the European Parliament and Council of the appropriations cancelled in this way within one month following the cancellation in accordance with the first subparagraph.

4. Appropriations carried over in accordance with Article 13(2)(b) of the Financial Regulation may be used until 31 December of the following financial year.

5. The accounts shall identify appropriations carried over in accordance with paragraphs 1 to 4.







CHAPTER 3

Principle of unit of account

Article 5

Rate of conversion between the euro and other currencies

(Article 19 of the Financial Regulation)

1. Without prejudice to specific provisions arising from the application of sector-specific regulations, conversion by the responsible authorising officer shall be made using the daily euro exchange rate published in the C series of the Official Journal of the European Union.

Where conversion between the euro and another currency is to be made by the contractors or beneficiaries, the specific arrangements for conversion contained in procurement contracts, grant agreements or financing agreements shall apply.

2. In order to avoid that currency conversion operations have a significant impact on the level of the Union co-financing or a detrimental impact on the Union budget, the specific arrangements for conversion referred to in paragraph 1 shall provide, if appropriate, for a rate of conversion between the euro and other currencies to be calculated using the average of the daily exchange rate in a given period.

3. If no daily euro exchange rate is published in the Official Journal of the European Union for the currency in question, the responsible authorising officer shall use the accounting rate referred to in paragraph 4.

4. For the purposes of the accounts provided for in Articles 151 to 156 of the Financial Regulation and subject to Article 240 of this Regulation, conversion between the euro and another currency shall be made using the monthly accounting rate of the euro. That accounting exchange rate shall be established by the Commission’s accounting officer by means of any source of information he regards as reliable, on the basis of the exchange rate on the penultimate working day of the month preceding that for which the rate is established.

5. The results of the currency operations referred to in paragraph 4 of this Article shall be shown under a separate heading in the respective institution’s accounts.

The first subparagraph of this paragraph shall apply mutatis mutandis to bodies referred to in Article 208 of the Financial Regulation.

Article 6

Rate to be used for conversion between the euro and other currencies

(Article 19 of the Financial Regulation)

1. Without prejudice to specific provisions deriving from the application of sector-specific regulations, or from specific procurement contracts, grant agreements or grant decisions and financing agreements, the rate to be used for conversion between the euro and other currencies shall, in cases where the conversion is carried out by the responsible authorising officer, be that of the day on which the payment order or recovery order is drawn up by the authorising department.

2. In case of euro imprest accounts, the rate to be used for the conversion between the euro and other currencies shall be determined by the date of the payment by the bank.

3. For the regularisation of imprest accounts in national currencies, as referred to in Article 19 of the Financial Regulation, the rate to be used for the conversion between the euro and other currencies shall be that of the month of the expenditure from the imprest account concerned.

4. For the reimbursement of flat-rate expenditure, or expenditure arising from the Staff Regulations of Officials of the European Union and the Conditions of Employment of Other Servants of the European Union (hereinafter ‘Staff Regulations’) which is fixed at a ceiling, and which is paid in a currency other than the euro, the rate to be used shall be that which is in force when the entitlement arises.







CHAPTER 4

Principle of universality

Article 7

Structure to accommodate assigned revenue and provision of corresponding appropriations

(Article 21 of the Financial Regulation)

1. Without prejudice to Articles 9 and 10, the structure to accommodate assigned revenue in the budget shall comprise:

(a) in the statement of revenue of each institution’s section, a budget line to receive the revenue;

(b) in the statement of expenditure, the budget remarks, including general remarks, shall show which lines may receive the appropriations corresponding to the assigned revenue which are made available.

In the case referred to in point (a) of the first subparagraph, a token entry ‘pro memoria’ shall be made and the estimated revenue shall be shown for information in the remarks.

2. The appropriations corresponding to assigned revenue shall be made available automatically, both as commitment appropriations and as payment appropriations, when the revenue has been received by the institution, save in any of the following cases:

(a) in cases provided for in Article 181(2) and 183(2) of the Financial Regulation;

(b) in the case provided for in Article 21(2)(b) of the Financial Regulation for Member States where the contribution agreement is expressed in euro.

In the case referred to in point (b) of the first subparagraph, commitment appropriations may be made available upon signature by the Member State of the contribution agreement.

Article 8

Contributions from Member States to research programmes

(Article 21(2)(a) of the Financial Regulation)

1. The Member States’ contributions to the financing of certain supplementary research programmes, provided for in Article 5 of Council Regulation (EC, Euratom) No 1150/2000 ( 8 ) shall be paid as follows:

(a) seven twelfths of the sum entered in the budget shall be paid by no later than 31 January of the current financial year;

(b) the remaining five twelfths shall be paid by no later than 15 July of the current financial year.

2. Where the budget has not been finally adopted before the start of a financial year, the contributions provided for in paragraph 1 shall be based on the sum entered in the budget for the previous financial year.

3. Any contribution or additional payment owed by the Member States to the budget shall be entered in the Commission’s account or accounts within 30 calendar days of the call for funds.

4. Payments made shall be entered in the account provided for in Regulation (EC, Euratom) No 1150/2000 and shall be subject to the conditions laid down by that Regulation.

Article 9

Assigned revenue resulting from the participation of EFTA States in certain Union programmes

(Article 21(2)(e) of the Financial Regulation)

1. The budget structure to accommodate the participation of the Member States of the European Free Trade Association (hereinafter ‘EFTA States’) in certain Union programmes shall be as follows:

(a) in the statement of revenue, a line with a token entry ‘pro memoria’ shall be entered to accommodate the full amount of the EFTA States’ contribution for the financial year in question.

(b) in the statement of expenditure: (i) the remarks for each line relating to the Union activities in which the EFTA States participate shall show ‘for information’ the estimated amount of the participation; (ii) an annex, forming an integral part of the budget, shall set out all the lines covering the Union activities in which the EFTA States participate.

For the purposes of point (a) of the first subparagraph the estimated amount shall be shown in the budget remarks.

The annex referred to in point (b)(ii) of the first subparagraph reflects and is part of the structure to accommodate the appropriations corresponding to such participation, as provided for in paragraph 2, and to allow the expenditure to be implemented.

2. Under Article 82 of the Agreement on the European Economic Area (hereinafter ‘EEA Agreement’) the amounts of the annual participation of the EFTA States, as confirmed to the Commission by the Joint Committee of the European Economic Area in accordance with Article 1(5) of Protocol 32 annexed to the EEA Agreement, shall give rise to the provision, at the start of the financial year, of the full amounts of the corresponding commitment appropriations and payment appropriations.

3. If, in the course of the financial year, additional appropriations are provided on the budget lines with EFTA State participation without the EFTA States being able, during that year, to adjust their contributions accordingly in order to comply with the ‘proportionality factor’ provided for in Article 82 of the EEA Agreement, the Commission may, as a provisional and exceptional measure, use its cash resources to pre-finance the share of the EFTA States. Whenever such additional appropriations are provided, the Commission shall, as soon as possible, call in the corresponding contributions from the EFTA States. The Commission shall inform the European Parliament and Council each year of any such decisions taken.

The pre-financing shall be regularised as soon as possible in the budget for the following financial year.

4. In accordance with Article 21(2)(e) of the Financial Regulation, the financial contributions of the EFTA States shall constitute external assigned revenue. The accounting officer shall adopt appropriate measures to ensure that use of the revenue arising from those contributions and of the corresponding appropriations is monitored separately.

In the report provided for in Article 150(2) of the Financial Regulation, the Commission shall show separately the stage of implementation, in both revenue and expenditure, corresponding to EFTA State participation.

Article 10

Proceeds of sanctions imposed on Member States declared to have an excessive deficit

(Article 21(2)(c) of the Financial Regulation)

The budget structure to accommodate the proceeds of the sanctions referred to in Section 4 of Council Regulation (EC) No 1467/97 ( 9 ) shall be as follows:

(a) in the statement of revenue, a line carrying a token entry ‘pro memoria’ shall be entered to accommodate the interest on such amounts;

(b) at the same time, and without prejudice to Article 77 of the Financial Regulation, entry of those amounts in the statement of revenue shall give rise to the provision, in the statement of expenditure, of commitment appropriations and payment appropriations.

The appropriations referred to in point (b) of the first subparagraph shall be implemented in accordance with Article 20 of the Financial Regulation.

Article 11

Charges entailed by acceptance of donations to the Union

(Article 22 of the Financial Regulation)

For the purposes of the authorisation of the European Parliament and of the Council referred to in Article 22(2) of the Financial Regulation, the Commission shall estimate and duly explain the financial charges, including follow-up costs, entailed by the acceptance of donations made to the Union.

Article 12

Accounts for recoverable taxes

(Article 23(3) of the Financial Regulation)

Any taxes borne by the Union under Article 23(2) and 23(3)(a) of the Financial Regulation shall be entered in a suspense account until they are refunded by the States concerned.







CHAPTER 5

Principle of specification

Article 13

Rules concerning the calculation of percentages of transfers of the institutions other than the Commission

(Article 25 of the Financial Regulation)

1. The percentages referred to in Article 25 of the Financial Regulation shall be calculated at the time the request for transfer is made and with reference to the appropriations provided in the budget, including amending budgets.

2. The amount to be taken into consideration shall be the sum of the transfers to be made on the line from which transfers are being made, after adjustment for earlier transfers made.

The amount corresponding to the transfers which can be carried out autonomously by the institution concerned without a decision of the European Parliament and Council shall not be taken into consideration.

Article 14

Rules concerning the calculation of percentages of transfers of the Commission

(Article 26 of the Financial Regulation)

1. The percentages referred to in Article 26(1) of the Financial Regulation shall be calculated at the time the request for transfer is made and with reference to the appropriations provided in the budget, including amending budgets.

2. The amount to be taken into consideration shall be the sum of the transfers to be made on the line from which or to which transfers are being made, after adjustment for earlier transfers made.

The amount corresponding to the transfers which can be carried out autonomously by the Commission without a decision of the European Parliament and the Council shall not be taken into consideration.

Article 15

Administrative expenditure

(Article 26 of the Financial Regulation)

The expenditure referred to in point (b) of the first subparagraph of Article 26(1) of the Financial Regulation shall cover, for each policy area, the items referred to in Article 44(3) of the Financial Regulation.

Article 16

Grounds for requests for transfers of appropriations

(Articles 25 and 26 of the Financial Regulation)

Proposals for transfers and all information for the European Parliament and Council concerning transfers made under Articles 25 and 26 of the Financial Regulation shall be accompanied by appropriate and detailed supporting documents showing the implementation of appropriations and estimates of requirements up to the end of the financial year, both for the lines to which the appropriations are to be transferred and for those from which they are to be taken.

Article 17

Grounds for requests for transfers from the emergency aid reserve

(Article 29 of the Financial Regulation)

Proposals for transfers to allow the utilisation of the emergency aid reserve, referred to in Article 29 of the Financial Regulation, shall be accompanied by appropriate and detailed supporting documents showing:

(a) for the line to which the transfer is to be made, the most recent information available for the implementation of appropriations and the estimate of requirements up to the end of the financial year;

(b) for all lines relating to external action, the implementation of appropriations up to the end of the month preceding the request for transfer and an estimate of requirements up to the end of the financial year, including a comparison with the initial estimate;

(c) an analysis of the possibilities of reallocating appropriations.







CHAPTER 6

Principle of sound financial management

Article 18

Evaluation

(Article 30 of the Financial Regulation)

1. All proposals for programmes or activities occasioning budget expenditure shall be the subject of an ex ante evaluation, which shall address:

(a) the need to be met in the short or long term;

(b) the added value of Union involvement;

(c) the policy and management objectives to be achieved, which include measures necessary to safeguard the financial interests of the Union in the field of fraud prevention, detection, investigation, reparation and sanctions;

(d) the policy options available, including the risks associated with them;

(e) the results and impacts expected, in particular economic, social and environmental impacts, and the indicators and evaluation arrangement needed to measure them;

(f) the most appropriate method of implementation for the preferred option(s);

(g) the internal coherence of the proposed programme or activity and its relations with other relevant instruments;

(h) the volume of appropriations, human resources and other administrative expenditure to be allocated with due regard for the cost-effectiveness principle;

(i) the lessons learned from similar experiences in the past.

2. The proposal shall set out the arrangements for monitoring, reporting and evaluation, taking due account of the respective responsibilities of all levels of government that will be involved in the implementation of the proposed programme or activity.

3. All programmes or activities, including pilot projects and preparatory actions, where the resources mobilised exceed EUR 5 000 000 shall be the subject of an interim and/or ex post evaluation in terms of the human and financial resources allocated and the results obtained in order to verify that they were consistent with the objectives set, as follows:

(a) the results obtained in carrying out a multiannual programme shall be periodically evaluated in accordance with a timetable which enables the findings of that evaluation to be taken into account for any decision on the renewal, modification or suspension of the programme;

(b) activities financed on an annual basis shall have their results evaluated at least every six years.

Points (a) and (b) of the first subparagraph shall not apply to each of the projects or actions conducted within those activities, for which the requirement may be met by the final reports sent by the bodies which carried out the action.

4. The evaluations referred to in paragraphs 1 and 3 shall be proportionate to the resources mobilised for and the impact of the programme and activity concerned.

Article 19

Financial statement

(Article 31 of the Financial Regulation)

The financial statement shall contain the financial and economic data for the assessment by the legislative authority of the need for Union action. It shall provide appropriate information as regards coherence with other activities of the Union and any possible synergy.

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







CHAPTER 7

Principle of transparency

Article 20

Provisional publication of the budget

(Article 34 of the Financial Regulation)

As soon as possible and no later than four weeks after the final adoption of the budget, the final detailed budget figures shall be published in all languages on the internet site of the institutions, on the Commission’s initiative, pending official publication in the Official Journal of the European Union.

Article 21

Publication of information on value and recipients of Union funds

(Article 35 of the Financial Regulation)

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

In addition to the publication referred to in the first subparagraph the information may also be published, according to a standard presentation, by other appropriate means.

2. The following information shall be published unless otherwise provided in this Regulation and in the sector specific rules, taking into account the criteria set out in Article 35(3) of the Financial Regulation:

(a) the name of the recipient;

(b) the locality of the recipient;

(c) the amount awarded;

(d) the nature and purpose of the measure.

For the purpose of point (b) the term ‘locality’ shall mean:

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

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

As far as personal data referring to natural persons are concerned, the information published shall be removed two years after the end of the financial year in which the funds were awarded. The same shall apply to personal data referring to legal persons for whom the official title identifies one or more natural persons.

3. The information referred to in paragraph 2 shall only be published for prizes, grants and contracts which have been awarded as a result of contests or grant award procedures or public procurement procedures. The information shall not be published for:

(a) scholarships paid to natural persons and other direct support paid to natural persons in most need, referred to in Article 125(4)(c) of the Financial Regulation;

(b) contracts below the amount referred to in Article 137(2) of this Regulation.

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

Article 22

Link to the publication of information on recipients of Union funds awarded under indirect management

(Article 35 of the Financial Regulation)

Where the management of Union funds is delegated to the authorities and bodies referred to in Article 58(1)(c) of the Financial Regulation, the delegation agreements shall require that information referred to in paragraphs 2 and 3 of Article 21 is published according to a standard presentation, by those entrusted authorities and bodies on their website.

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

In addition to the publication referred to in the first subparagraph the information may also be published, according to a standard presentation, by any other appropriate means.

Paragraphs 2 to 4 of Article 21 shall apply to the publication referred to in the first paragraph of this Article.







TITLE III

ESTABLISHMENT AND STRUCTURE OF THE BUDGET

Article 23

Financial programming

(Article 38 of the Financial Regulation)

The financial programming referred to in Article 38 of the Financial Regulation shall be structured by category of expenditure, policy area and budget line. The complete financial programming shall cover all categories of expenditure with the exception of agriculture, cohesion policy and administration for which only summary data shall be provided.

Article 24

Draft amending budgets

(Article 41(1) of the Financial Regulation)

Draft amending budgets shall be accompanied by statements of grounds and the information on the implementation of the budget for the preceding and current financial years available at the time of their establishment.

Article 25

Budget nomenclature

(Article 44 of the Financial Regulation)

The budget nomenclature shall comply with the principles of specification, transparency and sound financial management. It shall provide clarity and transparency necessary for the budgetary process, facilitating the identification of the main objectives as reflected in the relevant legal bases, making possible choices on political priorities and enabling efficient and effective implementation.

Article 26

Actual expenditure in the last financial year for which the accounts have been closed

(Article 49(1)(a)(v) of the Financial Regulation)

For the purposes of establishing the budget, actual expenditure in the last financial year for which the accounts have been closed shall be determined as follows:

(a) in commitments: commitments entered in the accounts during the financial year against appropriations for that financial year as defined in Article 3;

(b) in payments: payments made during the financial year, that is to say, for which a payment order has been sent to the bank, against appropriations for that financial year as defined in Article 3.

Article 27

Budget remarks

(Article 49(1)(a)(vi) of the Financial Regulation)

The budget remarks shall include:

(a) the references of the basic act, where one exists;

(b) all appropriate explanations concerning the nature and purpose of the appropriations.

Article 28

Establishment plan

(Article 49(1)(c)(i) of the Financial Regulation)

The staff of the Supply Agency shall appear separately in the Commission establishment plan.







TITLE IV

IMPLEMENTATION OF THE BUDGET







CHAPTER 1

General provisions

Article 29

Information on transfers of personal data for audit purposes

(Article 53 of the Financial Regulation)

In any call made in the context of grants, procurement or prizes implemented in direct management, potential beneficiaries, candidates, tenderers and participants shall, in accordance with Regulation (EC) No 45/2001 of the European Parliament and of the Council ( 10 ) be informed that, for the purposes of safeguarding the financial interests of the Union, their personal data may be transferred to internal audit services, to the European Court of Auditors, to the Financial Irregularities Panel or to the European Anti-Fraud Office (hereinafter ‘OLAF’) and between authorising officers of the Commission and the executive agencies.

Article 30

Preparatory measures in the field of the common foreign and security policy

(Article 54(2)(c)of the Financial Regulation)

The financing of measures agreed by the Council for the preparation of Union crisis management operations under Title V of the Treaty on European Union shall cover incremental costs directly arising from a specific field deployment of a mission or team involving inter alia personnel from the Union institutions, including high risk insurance, travel and accommodation costs and per diem payments.

Article 31

Specific powers of the Commission under the Treaties

(Article 54(2)(d) of the Financial Regulation)

1. The articles of the Treaty on the Functioning of the European Union (hereinafter ‘TFEU’) which directly confer specific powers on the Commission are as follows:

(a) Article 154 (social dialogue);

(b) Article 156 (studies, opinions and consultations on social matters);

(c) Articles 159 and 161 (special reports on social matters);

(d) Article 168(2) (initiatives to promote coordination on health protection matters);

(e) Article 171(2) (initiatives to promote coordination on trans-European networks);

(f) Article 173(2) (initiatives to promote coordination on matters relating to industry);

(g) Article 175, second subparagraph (report on progress made towards achieving economic, social and territorial cohesion);

(h) Article 181(2) (initiatives to promote coordination on research and technological development);

(i) Article 190 (report on research and technological development);

(j) Article 210(2) (initiatives to promote coordination of development cooperation policies);

(k) Article 214(6) (initiatives to promote coordination on humanitarian aid measures).

2. The articles of the Treaty Establishing the European Atomic Energy Community (hereinafter ‘Euratom Treaty’) which directly confer specific powers on the Commission are as follows:

(a) Article 70 (financial support, within the limits set by the budget, for prospecting programmes in the territories of the Member States);

(b) Articles 77 to 85.

3. In the presentation of the draft budget, further detail may be added to the lists set out in paragraphs 1 and 2, with an indication of the articles in question and the amounts involved.

Article 32

Acts likely to constitute a conflict of interests and procedure

(Article 57 of the Financial Regulation)

1. ►M1 Acts likely to be affected by a conflict of interests within the meaning of Article 57(2) of the Financial Regulation may, inter alia, take one of the following forms without prejudice to their qualification as illegal activities under point (d) of Article 106(1) of the Financial Regulation: ◄

(a) granting oneself or others unjustified direct or indirect advantages;

(b) refusing to grant a beneficiary the rights or advantages to which that beneficiary is entitled;

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

Other acts likely to be affected by a conflict of interests are those which may impair the impartial and objective performance of a person’s duties such as, inter alia, the participation in an evaluation committee for a public procurement or grant procedure when the person may, directly or indirectly, benefit financially from the outcome of these procedures.

2. A conflict of interest shall be presumed to exist if an applicant, candidate or tenderer is a member of staff covered by the Staff Regulations, unless his participation in the procedure has been authorised in advance by his superior.

3. In the event of a conflict of interests, the authorising officer by delegation shall take appropriate measures to avoid any undue influence of the person concerned on the process or procedure in question.







CHAPTER 2

Methods of implementation







Section 1

General provisions

Article 33

Management mode

(Article 58 of the Financial Regulation)

The accounting system of the Commission shall identify the management mode and, under each management mode, the type of entity or person listed in Article 58(1)(c) of the Financial Regulation entrusted with tasks of budget implementation.

As regards direct management by the Commission according to Article 58(1)(a) of the Financial Regulation, the accounting system shall distinguish management by the following:

(a) departments of the Commission;

(b) executive agencies;

(c) heads of Union delegations;

(d) trust funds referred to in Article 187 of the Financial Regulation.







Section 2

Direct Management

Article 34

Direct management

(Article 58 (1)(a) of the Financial Regulation)

Where the Commission implements the budget directly in its departments, implementation tasks shall be performed by the financial actors within the meaning of Articles 64 to 75 of the Financial Regulation and in compliance with the conditions laid down in this Regulation.

Article 35

Exercise of powers delegated to executive agencies

(Articles 58(1)(a) and 62 of the Financial Regulation)

1. Decisions to delegate powers to executive agencies shall authorise them, as authorising officers by delegation, to implement appropriations relating to the Union programme the management of which is entrusted to them.

2. The Commission’s instrument of delegation shall contain at least the provisions as provided for in points (a) to (d) and (h) of Article 40. It shall be formally accepted in writing by the director on behalf of the executive agency.

Article 36

Compliance with the procurement rules

(Article 63 of the Financial Regulation)

Where the Commission entrusts tasks to private bodies under Article 63(2) of the Financial Regulation, it shall conclude a contract in accordance with Title V of Part One and Part Two Title IV Chapter III of the Financial Regulation.







Section 3

Shared management with Member States

Article 37

Specific provisions for shared management with Member States measures to promote best practices

(Article 59 of the Financial Regulation)

The Commission shall compile a register of bodies responsible for management, certification and audit activities under the sector-specific regulations.

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







Section 4

Indirect management

Article 38

Equivalence of systems, rules and procedures in indirect management

(Article 60 of the Financial Regulation)

1. The Commission may accept that procurement rules and procedures are equivalent to its own if the following conditions are met:

(a) they comply with the principle of broad competition of tenderers to obtain the best value for money, and negotiated procedures are limited to reasonable amounts or are duly justified;

(b) they ensure transparency with adequate ex ante publication, in particular of calls for tenders, and adequate ex post publication of contractors;

(c) they ensure equal treatment, proportionality and non-discrimination;

(d) they prevent conflicts of interests throughout the entire procurement procedure.

National law of Member States or third countries transposing Directive 2004/18/EC shall be considered equivalent to the rules applied by the institutions in accordance with the Financial Regulation.

2. The Commission may accept that grant rules and procedures are equivalent to its own if the following conditions are met:

(a) they comply with the principles of proportionality, sound financial management, equal treatment and non-discrimination;

(b) they ensure transparency with adequate publication of calls for proposals, direct award procedures being limited to reasonable amounts or being duly justified, and adequate ex post publication of beneficiaries taking account of the principle of proportionality;

(c) they prevent conflicts of interests throughout the entire grant award procedure;

(d) they provide that grants may not be cumulative or awarded retrospectively, that they must, as a rule, involve co-financing and that they may not have the purpose or the effect of producing a profit for the beneficiary.

3. The Commission may accept that the accounting systems and the internal control systems used by entities and persons to be entrusted with budget implementation tasks on behalf of the Commission are providing equivalent levels of protection of the financial interests of the Union and of reasonable assurance of achieving the management objectives if they comply with the principles laid down in Article 32 of the Financial Regulation.

Article 39

Ex ante assessment of rules and procedures of the entities and persons in indirect management

(Article 61(1) of the Financial Regulation)

For the purposes of the ex ante assessment pursuant to Article 61(1) of the Financial Regulation, the authorising officer responsible may rely on an ex ante assessment made by another authorising officer provided that their conclusions are relevant to the specific risks of the tasks to be entrusted, in particular their nature and the amounts involved.

The authorising officer responsible may rely on an ex ante assessment made by other donors as far as this assessment was made with regard to conditions equivalent to those for indirect management set out in Article 60 of the Financial Regulation.

▼M1

Article 40

Content of the agreement entrusting budget implementation tasks to entities and persons

(Articles 60(3) and 61(3) of the Financial Regulation)

▼B

Delegation agreements shall include detailed arrangements ensuring the protection of the financial interests of the Union and the transparency of operations carried out. They shall include at least the following:

(a) a clear definition of the tasks assigned and the limits thereof, concerning in particular the modification of the tasks entrusted, the waiving of debts, the use of funds reimbursed or unused;

(b) conditions and detailed arrangements for performing the tasks, responsibilities and organising the controls to be carried out, including the evaluation of the programmes;

(c) conditions for payments of the Union contribution, including the reimbursement of costs incurred in respect of implementation as well as the remuneration of the entrusted entity, together with rules on which supporting documents are required to justify the payments;

(d) rules on reporting to the Commission on how the tasks are performed, the results expected, irregularities which occurred and the measures taken, the conditions under which payments may be suspended or interrupted as well as the conditions under which performance of the tasks terminates;

(e) the date, by which individual contracts and agreements which implement the delegation agreement shall be concluded, which shall be commensurate with the nature of the tasks entrusted;

▼M1

(f) rules which allow the entity or person to exclude economic operators which are in a situation referred to in points (d) and (f) of Article 106(1) and in point (b) of Article 107 of the Financial Regulation from participating in procurement, grant or prize award procedures or from being awarded procurement contracts, grants or prizes and rules which allow the entity or person to impose a financial penalty to these economic operators;

▼B

(g) detailed arrangements for Commission scrutiny as well as provisions granting the Commission, OLAF and the Court of Auditors access to the information that is required for them to perform their duties, as well as the power to conduct audits and investigations including on the spot-checks;

(h) arrangements providing for: (i) an undertaking of the entrusted entity to inform the Commission without delay of fraud or irregularity as referred to in points (d) and (f) of Article 106(1) of the Financial Regulation occurring in the management of Union funds and the measures taken; ▼B (ii) the designation of a contact point which shall have the appropriate powers to cooperate directly with OLAF in order to facilitate the latter’s operational activities;

(i) conditions governing the use of bank accounts and of the interest yielded as provided for in Article 8(4) of the Financial Regulation;

(j) provisions guaranteeing the visibility of Union action in relation to the other activities of the body.

▼M1

In the case of point (f) of the first paragraph, for the purpose of Article 106(5) of the Financial Regulation, a third country is considered in failure to act, inter alia, where its national legislation does not allow to exclude an economic operator from all EU financed award procedures within the meaning of Article 106 of the Financial Regulation. The delegation agreements specify where a third country is considered in failure to act.

For the purpose of point (h)(i) of the first paragraph, in the case of third countries and international organisations, these arrangements specify where the third country and the international organisation shall prevent, detect, correct and notify irregularities and fraud in accordance Article 60(3) of the Financial Regulation.

▼B

Article 41

Management declaration and compliance statement

(Article 60(5) of the Financial Regulation)

In case of actions terminating before the end of the financial year concerned, the final report of the entrusted entity or person for such action may replace the management declaration referred to in Article 60(5)(b) of the Financial Regulation, provided it is submitted before 15 February of the year following the financial year concerned.

Where international organisations and third countries implement non-multiannual actions limited to 18 months, the compliance statement referred to in Article 60(5) of the Financial Regulation may be incorporated in the final report.

Article 42

Procedures for the examination and acceptance of the accounts and exclusion from Union financing of expenditure made in breach of applicable rules under indirect management

(Article 60(6)(b) and (c) of the Financial Regulation)

1. Without prejudice to specific provisions contained in sector specific rules, the procedures referred to in points (b) and (c) of Article 60(6) of the Financial Regulation shall include:

(a) desk reviews and, where appropriate, on-the-spot checks by the Commission;

(b) the establishment by the Commission of the amount of expenditure recognised as accepted, following, where necessary, a contradictory procedure with the authorities and bodies and after these authorities and bodies have been informed;

(c) where appropriate, calculation by the Commission of financial corrections;

(d) recovery or payment by the Commission of the balance arising from the difference between accepted expenditure and the sums already paid to the authorities or bodies.

For the purposes of point (d) of the first subparagraph, the Commission shall recover amounts due preferably by offsetting as set out in Article 87.

2. Where budget implementation tasks are entrusted to an entity implementing a multi-donor action, the procedures referred to in points (b) and (c) of Article 60(6) of the Financial Regulation shall consist in verifying that an amount corresponding to that paid by the Commission for the action concerned has been used by the entity for the action and that the expenditure has been incurred in accordance with the obligations laid down in the agreement signed with the entity.

For the purpose of this Regulation, multi-donor action shall mean any action where Union funds are pooled with at least one other donor.

▼M1

Article 43

Specific provisions for indirect management with international organisations

(Article 58(1)(c)(ii) and Article 188 of the Financial Regulation)

1. The international organisations referred to in point (ii) of Article 58(1)(c) of the Financial Regulation shall be international public-sector organisations set up by international agreements and specialised agencies set up by such organisations.

The agreements referred to in the first subparagraph shall be submitted to the authorising officer responsible for the ex ante assessment referred to in Article 39 before the Commission entrusts tasks of budget implementation.

2. The following organisations shall be assimilated to international organisations:

(a) the International Committee of the Red Cross;

(b) the International Federation of National Red Cross and Red Crescent Societies.

3. The Commission may adopt a duly justified decision assimilating a non-profit organisation to an international organisation providing that it satisfies the following conditions:

(a) it has its own legal personality and autonomous governance bodies;

(b) it has been established to perform specific tasks of general international interest;

(c) at least six Member State are members of the non-profit organisation;

(d) it provides adequate financial guarantees;

(e) it operates on the basis of a permanent structure and in accordance with systems, rules and procedures which may be assessed in accordance with Article 61(1) of the Financial Regulation.

4. Where the Commission implements the budget under indirect management with international organisations, the verification agreements concluded with them shall apply.

▼B

Article 44

Designation of public law bodies or bodies governed by private law with a public-service mission

(Article 58(1)(c)(v) and (vi) of the Financial Regulation)

1. The public law bodies or bodies governed by private law with a public-service mission shall be subject to the law of the Member State or the country in which they have been set up.

2. In cases of management by a network, requiring the designation of at least one body or entity by Member State or by country concerned, the body or entity shall be designated by the Member State or the country concerned in accordance with the basic act.

In all other cases, the Commission shall designate such bodies or entities in agreement with the Member States or countries concerned.







CHAPTER 3

Financial actors







Section 1

Rights and obligations of the financial actors

Article 45

Rights and obligations of the financial actors

(Article 64 of the Financial Regulation)

1. Each institution shall provide each financial actor with the resources required to perform his duties and a charter describing in detail his tasks, rights and obligations.

2. Heads of Union delegations acting as authorising officers by subdelegation in accordance with Article 56(2) of the Financial Regulation shall be subject to the charter provided by the Commission for the implementation of the financial management tasks subdelegated to them.







Section 2

Authorising officer

Article 46

Assistance for authorising officers by delegation and subdelegation

(Article 65 of the Financial Regulation)

The authorising officer responsible may be assisted in his duties 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 57 of the Financial Regulation.

Heads of Union delegations acting as authorising officers by subdelegation in accordance with the second paragraph of Article 56(2) of the Financial Regulation may be assisted in their duties by staff of the Commission.

Article 47

Internal provisions governing delegations

(Article 65 of the Financial Regulation)

In accordance with the Financial Regulation and this Regulation, 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.

Heads of Union delegations acting as authorising officers by subdelegation in accordance with the second paragraph of Article 56(2) of the Financial Regulation shall be subject to the internal rules of the Commission for the implementation of the financial management tasks subdelegated to them.

Article 48

Keeping of supporting documents by authorising officers

(Article 66(2) of the Financial Regulation)

The authorising officer shall set up paper based or electronic systems for the keeping of original supporting documents relating to and subsequent to budget implementation and budget implementation measures. The systems shall provide for:

(a) such documents to be numbered;

(b) such documents to be dated;

(c) registers, which may be computerised, to be kept identifying the exact location of such documents;

(d) such documents to be kept for at least five years from the date on which the European Parliament grants discharge for the budgetary year to which the documents relate;

(e) keeping of documents relating to pre-financing guarantees for the institution and of a log to enable such guarantees to be adequately monitored.

Documents relating to operations not definitively closed shall be kept for longer than provided for in point (d) of the first paragraph, that is to say, until the end of the year following that in which the operations are closed.

Personal data contained in supporting documents shall be deleted where possible when those data are not necessary for budgetary discharge, control and audit purposes. Article 37(2) of Regulation (EC) No 45/2001 shall apply to the conservation of traffic data.

Article 49

Ex ante and ex post controls

(Article 66(5) and (6) of the Financial Regulation)

1. Initiation of an operation shall be understood as all the operations which are normally carried out by the staff referred to in Article 46 and which are preparatory to the adoption of the acts implementing the budget by the authorising officer responsible.

2. Ex ante verification of an operation shall be understood as all the ex ante checks put in place by the authorising officer responsible in order to verify its operational and financial aspects.

3. Ex ante controls shall verify the coherence among supporting documents requested and any other information available.

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

The purpose of the ex ante controls shall be to ascertain that:

(a) the expenditure and revenue are in order and comply with the provisions applicable, in particular those of the budget and the relevant regulations and of any acts adopted in implementation of the Treaties or regulations and, where appropriate, the terms of contracts;

(b) the principle of sound financial management referred to in Chapter 7 of Title II of Part One of the Financial Regulation is applied.

For the purpose of controls, a series of similar individual transactions relating to routine expenditure on salaries, pensions, reimbursement of mission expenses and medical expenses may be considered by the authorising officer responsible to constitute a single operation.

4. The ex post controls may be carried out on the basis of documents and, where appropriate, on the spot.

The ex post controls shall verify that operations financed by the budget are correctly implemented and in particular that the criteria referred to in paragraph 3 are complied with.

The outcomes of ex post controls shall be reviewed by the authorising officer by delegation at least annually to identify any potential systemic issues. The authorising officer by delegation shall take measures to address those issues.

The risk analysis referred to in Article 66(6) of the Financial Regulation shall be reviewed in the light of the results of controls and other relevant information.

In case of multiannual programmes, the authorising officer by delegation shall establish a multiannual control strategy, specifying the nature and extent of controls over the period and the manner how the results are to be measured year-on-year for the annual assurance process.

Article 50

Code of professional standards

(Articles 66(7) and 73(5) of the Financial Regulation)

1. The staff designated by the authorising officer responsible to verify financial operations shall be chosen on the grounds of their knowledge, skills and particular qualifications as evidenced by diplomas or by appropriate professional experience, or after an appropriate training programme.

2. Each institution shall draw up a code of professional standards which determine, on matters of internal control:

(a) the level of technical and financial competence required of the staff referred to in paragraph 1;

(b) the obligation for such staff to undergo continuous training;

(c) the mission, role and tasks allocated to them;

(d) the rules of conduct, in particular the standards of ethics and integrity that they must comply with and the rights they enjoy.

3. Heads of Union delegations acting as authorising officers by subdelegation in accordance with the second paragraph of Article 56(2) of the Financial Regulation shall be subject to the Commission code of professional standards referred to in paragraph 2 of this Article for the implementation of the financial management tasks subdelegated to them.

4. Each institution shall put in place the appropriate structures to distribute to authorising departments and update periodically appropriate information concerning the control standards and the methods and techniques available for that purpose.

Article 51

Failure of the authorising officer by delegation to take action

(Article 66(8) of the Financial Regulation)

Failure by the authorising officer by delegation to take action, as referred to in Article 66(8) of the Financial Regulation, shall mean the absence of any reply within a reasonable time given the circumstances of the case and, in any event, within a month at most.

Article 52

Transmission of financial and management information to the accounting officer

(Article 66 of the Financial Regulation)

The authorising officer by delegation shall send the accounting officer, in accordance with the rules adopted by the latter, the financial and management information required for the performance of the accounting officer’s duties.

The accounting officer shall be informed, regularly and at least for the closure of the accounts, by the authorising officer of the relevant financial data of the fiduciary bank accounts in order to allow the use of Union funds to be reflected in the accounts of the Union.

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Article 53

Report on negotiated procedures

(Article 66 of the Financial Regulation)

Authorising officers by delegation shall record, for each financial year, contracts concluded by the negotiated procedures referred to in points (a) to (f) of Article 134(1) and Article 266 of this Regulation. If the proportion of negotiated procedures in relation to the number of contracts awarded by the same authorising officer by delegation increases appreciably in relation to earlier years or if that proportion is distinctly higher than the average recorded for the institution, the authorising officer responsible shall report to the institution setting out any measures taken to reverse that trend. Each institution shall send a report on negotiated procedures to the European Parliament and Council. In the case of the Commission, that report shall be annexed to the summary of the annual activity reports referred to in Article 66(9) of the Financial Regulation.

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Section 3

Accounting officer

Article 54

Appointment of the accounting officer

(Article 68 of the Financial Regulation)

1. Each institution shall appoint an accounting officer from officials subject to the Staff Regulations of Officials of the European Union.

The accounting officer shall be chosen by the institution on the grounds of his particular competence as evidenced by diplomas or by equivalent professional experience.

2. Two or more institutions or bodies may appoint the same accounting officer.

In such case, they shall make the necessary arrangements in order to avoid any conflict of interest.

Article 55

Termination of duties of the accounting officer

(Article 68 of the Financial Regulation)

1. A trial balance shall be drawn up without delay in the event of termination of the duties of the accounting officer.

2. The trial balance accompanied by a handing over report shall be transmitted by the accounting officer who is terminating his duties or, if it is not possible, by an official in his department to the new accounting officer.

The new accounting officer shall sign the trial balance in acceptance within one month from the date of transmission and he may make reservations.

The handing over report shall also contain the result of the trial balance and any reservations made.

3. Each institution or body referred to in Article 208 of the Financial Regulation shall inform the European Parliament, the Council and the accounting officer of the Commission within two weeks of the appointment or termination of duties of its accounting officer.

Article 56

Validation of accounting and inventory systems

(Article 68 of the Financial Regulation)

The responsible authorising officer shall notify the accounting officer of all developments or significant modifications of a financial management system, an inventory system or a system for the valuation of assets and liabilities, if it provides data for the accounts of the institution or is used to substantiate data thereof, so that the accounting officer can verify compliance with the validation criteria.

At any time, the accounting officer may reexamine a financial management system already validated. Where a financial management system set up by the authorising officer is not or is no longer validated by the accounting officer, the responsible authorising officer shall establish an action plan in order to correct, in due time, weaknesses for which the validation has been rejected.

The responsible authorising officer shall be responsible for the completeness of information transmitted to the accounting officer.

Article 57

Treasury management

(Article 68 of the Financial Regulation)

1. The accounting officer shall ensure that his institution has at its disposal sufficient funds to cover the cash requirements arising from budgetary implementation.

2. For the purposes of paragraph 1, the accounting officer shall set up cash management systems enabling him to draw up cash-flow forecasts.

3. The accounting officer of the Commission shall divide up the funds available in accordance with Regulation (EC, Euratom) No 1150/2000.

Article 58

Management of bank accounts

(Article 68 of the Financial Regulation)

1. For the requirements of treasury management, the accounting officer may open accounts in the name of the institution with financial institutions or national central banks or cause such accounts to be opened. In duly warranted circumstances, the accounting officer may open accounts in currencies other than the euro.

2. The accounting officer shall be responsible for closing accounts referred to in the paragraph 1 or for ensuring that such accounts are closed.

3. The accounting officer shall set the operating terms for accounts referred to in paragraph 1 with financial institutions, in accordance with the principles of sound financial management, efficiency and competitive tendering.

4. At least every five years the accounting officer shall relaunch competitive tendering between financial institutions with which accounts could be opened in accordance with paragraph 1.

Where local banking conditions allow for it, imprest related bank accounts opened with financial institutions located outside the Union shall be regularly subject to a competitive survey. Such a survey shall be undertaken, at least every five years, at the initiative of the imprest account holder, who then shall submit to the accounting officer a substantiated proposal for the selection of a bank for a period not exceeding five years.

5. The accounting officer shall ensure strict compliance with the operating terms for accounts opened with financial institutions in accordance with paragraph 1.

For imprest related bank accounts opened with financial institutions located outside the Union, the imprest account holder shall assume this responsibility taking into account the applicable legislation in the country where that holder exercises his mandate.

6. The accounting officer of the Commission shall inform the accounting officers of the other institutions and of the bodies referred to in Article 208 of the Financial Regulation, on the operating terms of accounts opened with financial institutions. The accounting officers of the other institutions and of the bodies referred to in Article 208 of the Financial Regulation shall harmonise, with those operating terms, the operating terms of the accounts they open.

Article 59

Signatures on accounts

(Article 68 of the Financial Regulation)

The terms governing the opening, operation and use of accounts shall provide, depending on internal control requirements, that cheques, bank credit transfer orders or any other banking operations must be signed by one or more duly authorised members of staff. Manual instructions shall be signed by at least two duly authorised members of staff, or by the accounting officer in person.

For the purposes of the first subparagraph, the accounting officer of each institution shall communicate to all financial institutions with which the institution concerned has opened accounts the names and specimen signatures of the authorised members of staff.

Article 60

Management of account balances

(Article 68 of the Financial Regulation)

1. The accounting officer shall ensure that the balance on the bank accounts provided for in Article 58 does not deviate significantly from the cash-flow forecasts referred to in Article 57(2) and in any event:

(a) that none of those accounts is in debit;

(b) that the balance of accounts held in other currencies is periodically converted into euro.

2. The accounting officer may not maintain balances in foreign currency accounts which might cause excessive losses to the institution as a result of exchange rate fluctuations.

Article 61

Transfers and conversion operations

(Article 68 of the Financial Regulation)

Without prejudice to Article 69, the accounting officer shall conduct transfers between accounts opened by him in the name of the institution with financial institutions, and conduct currency conversion operations.

Article 62

Methods of payment

(Article 68 of the Financial Regulation)

Payments shall be made by bank credit transfer, by cheque or, from imprest accounts by debit card in accordance with Article 67(4).

Article 63

Legal entities files

(Article 68 of the Financial Regulation)

1. The accounting officer may make payments by bank credit transfer only if the payee’s bank acc