This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCIL REGULATION (EC, Euratom) No 1605/2002
of 25 June 2002
on the Financial Regulation applicable to the general budget of the European Communities
(OJ L 248, 16.9.2002, p. 1)
Amended by:
Official Journal
No page date
►M1 Council Regulation (EC, Euratom) No 1995/2006 of 13 December
2006L 390 1 30.12.2006
Corrected by:
►C1 Corrigendum, OJ L 25, 30.1.2003, p. 43 (1605/2002)
►C2 Corrigendum, OJ L 99, 14.4.2007, p. 18 (1605/2002)2002R1605 —EN—01.01.2007 —001.002 —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
CONTENTS
PART 1 COMMON PROVISIONS .................................................................................
TITLE I SCOPE ...................................................................................................................
TITLE II BUDGETARY PRINCIPLES ...............................................................................
Chapter 1 Principles of unity and of budget accuracy ....................................................
Chapter 2 Principle of annuality .........................................................................................
Chapter 3 Principle of equilibrium .....................................................................................
Chapter 4 Principle of unit of account ...............................................................................
Chapter 5 Principle of universality .....................................................................................
Chapter 6 Principle of specification ....................................................................................
Chapter 7 Principle of sound financial management .......................................................
Chapter 8 Principle of transparency ...................................................................................
TITLE III ESTABLISHMENT AND STRUCTURE OF THE BUDGET ..........................
Chapter 1 Establishment of the budget ..............................................................................
Chapter 2 Structure and presentation of the budget .......................................................
TITLE IV IMPLEMENTATION OF THE BUDGET ..........................................................
Chapter 1 General provisions ..............................................................................................
Chapter 2 Methods of implementation ...............................................................................
Chapter 3 Financial actors ...................................................................................................
Section 1 Principle of separation of duties ..........................................................................Section 2 Authorising officer ................................................................................................
Section 3 Accounting officer ................................................................................................
Section 4 Imprest administrator ............................................................................................Chapter 4 Liability of the financial actors ........................................................................
Section 1 General rules …
Section 2 Rules applicable to authorising officers by delegation and subdelegation ........
Section 3 Rules applicable to accounting officers and imprest administrators ..................
Chapter 5 Revenue operations .............................................................................................
Section 1 Making available of own resources .....................................................................
Section 2 Estimate of amounts receivable ...........................................................................
Section 3 Establishment of amounts receivable ...................................................................
Section 4 Authorisation of recovery .....................................................................................
Section 5 Recovery ............................................................................................................... .
Chapter 6 Expenditure operations ......................................................................................
Section 1 Commitment of expenditure .................................................................................
Section 2 Validation of expenditure .....................................................................................Section 3 Authorisation of expenditure ................................................................................
Section 4 Payment of expenditure ........................................................................................
Section 5 Time limits for expenditure operations ...............................................................▼B2002R1605 —EN—01.01.2007 —001.002 —2
Chapter 7 IT systems ............................................................................................................
Chapter 8 Internal auditor ...................................................................................................
TITLE V PROCUREMENT .................................................................................................
Chapter 1 General provisions ..............................................................................................
Section 1 Scope and award principles .................................................................................
Section 2 Publication ............................................................................................................ .
Section 3 Procurement procedures ........................................................................................
Section 4 Guarantees and control .........................................................................................
Chapter 2 Provisions applicable to contracts awarded by the Community institutions
on their own account ..........................................................................................
TITLE VI GRANTS ...............................................................................................................
Chapter 1 Scope and form of grants ..................................................................................
Chapter 2 Principles ..............................................................................................................
Chapter 3 Award procedure ................................................................................................
Chapter 4 Payment and control ..........................................................................................
Chapter 5 Implementation ....................................................................................................
TITLE VII PRESENTATION OF THE ACCOUNTS AND ACCOUNTING ....................
Chapter 1 Presentation of the accounts ..............................................................................
Chapter 2 Information on the implementation of the budget ........................................
Chapter 3 Accounting ............................................................................................................
Section 1 Common provisions ..............................................................................................
Section 2 General accounts ...................................................................................................
Section 3 Budgetary accounts ...............................................................................................
Chapter 4 Property inventories ...........................................................................................
TITLE VIII EXTERNAL AUDIT AND DISCHARGE .........................................................
Chapter 1 External audit ......................................................................................................
Chapter 2 Discharge ..............................................................................................................
PART TWO SPECIAL PROVISIONS ...................................................................................
TITLE I EUROPEAN AGRICULTURAL GUARANTEE FUND ...................................
TITLE II STRUCTURAL FUNDS, COHESION FUND, EUROPEAN FISHERIES
FUND, AND EUROPEAN AGRICULTURAL FUND FOR RURAL DEVEL-OPMENT ...............................................................................................................
TITLE III RESEARCH ..........................................................................................................
TITLE IV EXTERNAL ACTIONS .......................................................................................
Chapter 1 General provisions ..............................................................................................
Chapter 2 Implementation of actions ..................................................................................
Chapter 3 Procurement .........................................................................................................
Chapter 4 Grants ...................................................................................................................
Chapter 5 Auditing of accounts ...........................................................................................
TITLE V EUROPEAN OFFICES ........................................................................................
TITLE VI ADMINISTRATIVE APPROPRIATIONS ..........................................................
TITLE VII EXPERTS ..............................................................................................................PART THREE TRANSITIONAL AND FINAL PROVISIONS ..............................................
TITLE I TRANSITIONAL PROVISIONS .........................................................................TITLE II FINAL PROVISIONS ..........................................................................................▼B2002R1605 —EN—01.01.2007 —001.002 —3
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and
in particular Article 279 thereof,
Having regard to the Treaty establishing the European Atomic Energy
Community, and in particular Article 183 thereof,
Having regard to the proposal from the Commission (1),
Having regard to the opinion of the European Parliament (2),
Having regard to the opinion of the Court of Auditors (3),
Having regard to the opinion of the Economic and Social Committee (4),
Whereas:
(1) Since times have changed considerably since the Financial Regu-
lation of 21 December 1977 applicable to the general budget ofthe European Communities (
5) was adopted, in particular as a
result of a financial perspective forming a framework for thedevelopment of the budget, developments in the institutionalstructure and a series of enlargements, that Financial Regulationhas been substantially amended several times. In order to takeaccount, in particular, of the requirements of simplification in
legislative and administrative matters and the tightening up of
management of Community finances, the Financial Regulationof 21 December 1977 should be recast in the interests of clarity.
(2) This Regulation should be confined to stating the broad principlesand basic rules governing the whole budgetary sector covered bythe Treaty, while the implementing provisions should be moved
to a Regulation on rules for the implementation of this Regulation
in order to produce a better hierarchy of rules and make theFinancial Regulation easier to read. The Commission shouldtherefore be authorised to adopt the implementing rules.
(3) The establishment and implementation of the budget shouldrespect the four fundamental principles of budgetary law (unity,universality, specification, annuality), and the principles of budget
accuracy, equilibrium, unit of account, sound financial
management and transparency.
(4) This Regulation should reassert those principles and keepexceptions to a strict minimum subject to strict conditions.
(5) As regards the principle of unity, this Regulation should specifythat it also applies to operational expenditure on implementingthe European Union Treaty provisions on the common foreignand security policy and on police and judicial cooperation incriminal matters, where this is charged to the budget. Theprinciple of unity and budget accuracy means that allCommunity revenue and expenditure, and that of the Union,when this is charged to the budget, are entered in the budget.▼
B2002R1605 —EN—01.01.2007 —001.002 —4
(1) OJ C 96 E, 27.3.2001, p. 1, and
OJ C 103 E, 30.4.2002, p. 292.
(
2) OJ C 153 E, 27.6.2002, p. 236.
(3) OJ C 162, 5.6.2001, p. 1 and
OJ C 92, 17.4.2002, p. 1
.
(4) OJ C 260, 17.9.2001, p. 42.
(5) OJ L 356, 31.12.1977, p. 1. Regulation as last amended by Regulation (EC,
ECSC, Euratom) No 762/2001 (OJ L 111, 20.4.2001, p. 1).
(6) As regards the principle of universality, the practices of
repayment of payments on account and reuse should be discon-tinued; in some cases they should be replaced by assignedrevenue and ways of reconstituting decommitted appropriations.These amendments do not affect the special rules applicable tothe Structural Funds.
(7) As regards the principle of specification, the institutions need tohave some degree of management flexibility for transfers ofappropriations. This Regulation should allow integrated presen-tation of the allocation of financial and administrative resourcesby purpose. The procedures for transferring appropriations shouldalso be harmonised for all the other institutions so that transfersof staff and operating appropriations are a matter for each insti-tution. As regards transfers of appropriations concerning opera-tional expenditure, the Commission may make transfers between
chapters within one and the same title within a total limit of 10 %
of the appropriations for the financial year which appear on theline from which the transfer is made. The budgetary authorityshould be allowed to constitute reserves in only two cases:where there is no basic act or where it is not certain that appro-priations are adequate.
(8) As regards the principle of annuality, the distinction betweendifferentiated appropriations and non-differentiated appropriations
should be retained. Decisions on carryovers of commitment and
payment appropriations should be taken by each institution. Theadditional periods should be confined exclusively to the caseswhere they are absolutely necessary, namely EAGGF payments.
(9) The principle of equilibrium constitutes a basic budgetary rule. Inthis connection, it should be emphasised that recourse to loans isnot compatible with the system of Community own resources.However, the principle of equilibrium is not such as to hinder
the borrowing and lending operations guaranteed by the general
budget of the Union.
(10) In accordance with Article 277, first paragraph, of the EC Treatyand Article 181, first paragraph, of the Euratom Treaty the unit ofaccount in which the budget is drawn up, and which is also usedfor purposes of implementation and for presentation of theaccounts, should be determined.
(11) The principle of sound financial management should be definedby reference to the principles of economy, efficiency and effec-tiveness, and compliance with those principles checked by meansof performance indicators established per activity and measurablein such a way that results can be assessed. The institutions shouldcarry out ex ante andex post evaluation, in accordance with the
guidelines determined by the Commission.
(12) Finally, as regards the principle of transparency, information onimplementation of the budget and the accounts should beimproved. A strict deadline should also be set for the publicationof the budget without prejudice to provisional publication by theCommission between the declaration of definitive adoption by thePresident of the European Parliament and publication in theOfficial Journal of the European Communities . The possibility
of a negative reserve is also to be retained.
(13) As regards the establishment and presentation of the budget, thecurrent provisions should be harmonised and simplified by elim-inating the distinction, which has no practical impact, betweensupplementary budgets and amending budgets.
(14) The Commission section of the budget should present appro-priations and resources by purpose, i.e. activity-basedbudgeting, with a view to enhancing transparency in themanagement of the budget with reference to the objectives of▼
B2002R1605 —EN—01.01.2007 —001.002 —5
sound financial management and in particular efficiency and
effectiveness.
(15) The institutions should enjoy a measure of flexibility in themanagement of statutory posts in relation to what is authorisedin the budget, especially as the emphasis in management is nowto be on results and not on means. This freedom will, however,continue to be restricted by the dual limit of budget appro-priations for a financial year and the total number of postsallocated; in addition there will be no latitude as regards gradeA 1, A 2 and A 3 posts.
(16) As regards implementation of the budget, there should be clar-ification of the various possible methods of implementing thebudget, either on a centralised basis by the Commission or ona shared basis with the Member States or on a decentralised basiswith third countries receiving external aid or jointly with inter-national organisations. It should be possible for centralisedmanagement either to be performed directly by Commissiondepartments or indirectly by delegation to bodies governed byCommunity law or by national public law. The implementationmethods should guarantee that the procedures for protectingCommunity funds are complied with, whatever the entityresponsible for all or part of this implementation and mustconfirm that final responsibility for budgetary implementation
lies with the Commission in accordance with Article 274 of the
Treaty.
(17) As the Commission is responsible for implementation of thebudget, it may not delegate any tasks of public authorityinvolving the use of discretionary powers. This Regulationshould restate this principle and specify the scope of the tasksthat may be delegated. It should also be stipulated that private-sector bodies, other than those which have a public-service
mission and under specific conditions, should not be able to
undertake any budgetary implementation measure but onlyprovide specialist technical or administrative services orperform preparatory or ancillary tasks.
(18) For the sake of compliance with the principles of transparencyand sound financial management, the public-sector bodies orbodies with a public-service mission to which implementing
tasks are delegated on behalf of the Commission should have
transparent procurement procedures, effective internal controls,a system for presentation of the accounts which is separatefrom their other activities and an external audit.
(19) In accordance with Article 279(c) of the Treaty, this Regulationdefines the powers and responsibilities of authorising officers, theaccounting officer and the internal auditor.
Authorising officers are made fully responsible for all revenue
and expenditure operations executed under their authority andmust be held accountable for their actions, including, wherenecessary, through disciplinary proceedings. This empowermentshould therefore be strengthened by the removal of centralisedprior controls and in particular ending the advance approval ofrevenue and expenditure operations by the financial controllerand the check by the accounting officer that payment constitutesvalid discharge.
The accounting officer continues to be responsible for the proper
execution of payments, the collection of revenue and the recoveryof receivables. He/She manages the treasury, keeps the accountsand is responsible for drawing up the institution's financialstatements.
The internal auditor performs his duties in accordance with inter-
national audit standards. His role is to verify the proper func-▼
B2002R1605 —EN—01.01.2007 —001.002 —6
tioning of the management and control systems put in place by
the authorising officers.
The internal auditor is not an actor involved in the financial
operations and does not have the role of exercising controlover these operations ahead of the decisions by the authorisingofficers; the authorising officers should now assume full respon-sibility for these decisions.
(20) The liability of authorising officers, accounting officers andimprest administrators is not different from that of otherofficials and staff and should be subject, under the Staff Regu-lations of officials of the European Communities, and theConditions of employment of other servants of the EuropeanCommunities, to the application of the existing disciplinary andfinancial compensation measures. On the other hand, certainspecific provisions identifying cases of misconduct of accounting
officers and imprest administrators, given the special nature of
their duties, should be retained; they will no longer have anyspecial allowance or insurance. Furthermore, the liability of theauthorising officer should be clarified. In cases not involvingfraud, in order to provide the appointing authority with thenecessary expertise, each institution will set up a specialisedfinancial irregularities panel which will determine whether ornot an irregularity has occurred which could make the officialor other servant liable to disciplinary action or payment ofcompensation and, if it has detected problems with systems, toreport to the authorising officer and the internal auditor. For casesof fraud, however, this Regulation should refer to the provisionsin force on the protection of the European Communities' financialinterests and on the fight against corruption involving officials ofthe European Communities or officials of Member States of theEuropean Union.
(21) The concepts of budgetary and legal commitment of expenditureand the conditions for applying them should be defined. In orderto restrict the volume of dormant commitments, the period duringwhich individual legal commitments may be made on the basis ofoverall budget commitments should be limited. Moreover, a
decommitment provision must be provided for individual
commitments which have not given rise to any payment over athree-year period.
(22) This Regulation should define the typology of payments which
may be made by authorising officers. Such payments must be
made principally as a function of the effectiveness of the actionand the results which flow from it.
The rather vague concepts of advance and payment on account
should be removed; payments should be made in the form of pre-
financing, interim payments and payments of the final balance,when the entire amount is not paid in one instalment.
(23) This Regulation should stipulate that the operations of validation,authorisation and payment must be completed within a time limitwhich will be set in the implementing rules and that in the eventof failure to respect this time limit creditors will be entitled todefault interest to be charged to the budget.
(24) As regards contracts awarded by the institutions of the Commu-nities on their own account, provision should be made for therules contained in the Directives of the European Parliament andof the Council coordinating the procedures for the award ofpublic works, service and supply contracts to apply: the rulesapplicable to contracts awarded on behalf of third partiesshould also be consistent with the principles posited by thoseDirectives.▼
B2002R1605 —EN—01.01.2007 —001.002 —7
(25) In order to prevent irregularities and to combat fraud and
corruption and promote sound and efficient management,candidates or tenderers who are guilty of such acts or haveconflicting interests should be excluded from the award ofcontracts.
(26) For the sake of transparency, candidates and tenderers should beinformed in an appropriate manner about the award of contracts.
(27) Finally, as part of the process of empowerment of authorising
officers, prior checking by the current Advisory Committee on
Procurement and Contracts should be dispensed with.
(28) As regards grants, a framework for the award and monitoring ofCommunity grants involving specific provisions for implementingthe principles of transparency, equal treatment, co-financing,prohibition of retrospective awards and control should be put inplace.
(29) In order to avoid any cumulation, it should not be possible forgrants to be awarded to finance twice the same action or foroperating expenditure for the same year.
(30) In a similar manner to the rules concerning the award of publiccontracts, grounds for excluding certain parties from the award ofgrants should be laid down in order to give the institutions appro-priate means of combating fraud and corruption.
(31) To ensure that the rights and obligations of the institution and ofthe beneficiary are clear and are observed, the grant award should
be the subject of a written agreement.
(32) As regards accounting and the presentation of accounts, it should
be stipulated that the accounts comprise general accounts andbudget accounts and it should be added that the generalaccounts are based on a system of accrual accounting whereasthe budget accounts are intended to draw up the budget outturnaccount and the reports on implementation of the budget.
(33) The principles on which the general accounts are based and thefinancial statements are presented should be defined by referenceto internationally accepted accounting principles and theDirectives of the European Parliament and of the Council onthe annual accounts of certain types of companies, where theyare relevant in the context of the public service.
(34) The provisions on the supply of information concerning imple-mentation of the budget should be adapted to extend this infor-mation to the use of appropriations carried over, made availableagain and reused and to the various Community-law bodies, toimprove the arrangements for providing monthly figures and thereport on implementation, which will be sent three times a year tothe budgetary authority.
(35) The accounting methods employed by the institutions should beharmonised and, in this field, the Commission's accountingofficer should have the right of initiative.
(36) It should be specified that the use of computerised financialmanagement systems should in no way restrict the Court of
Auditors' rights of access to supporting documents.
(37) As regards external audit and discharge, although the
Commission is fully responsible for implementation of thebudget, the importance of management shared with the MemberStates involves their cooperation in the audit procedure by theCourt of Auditors and the discharge by the budgetary authority.
(38) In order to provide optimum conditions for the presentation of theaccounts and the discharge procedure, the timetable leading up todischarge should be amended.▼
B2002R1605 —EN—01.01.2007 —001.002 —8
(39) The Commission should submit to the European Parliament, at its
request, any information required for the smooth application ofthe discharge procedure for the financial year in question, inaccordance with Article 276 of the EC Treaty.
(40) Special provisions should be laid down for certain Communitypolicies; such provisions should comply with the basic principles
of this Regulation.
(41) It seems necessary to make provision for the possibility of
advance commitments against EAGGF and administrative appro-priations from 15 November preceding the financial year inquestion.
(42) As regards the Structural Funds, the provision for repayment ofpayments on account and making appropriations available againcontained in the Commission declaration annexed to CouncilRegulation (EC) No 1260/1999 of 21 June 1999 laying downgeneral provisions on the Structural Funds (
1), as last amended
by Regulation (EC) No 1447/2001 (2), should be retained.
(43) As regards research, the presentation of the budget should beharmonised with the provisions concerning activity-based
budgeting, whilst preserving the flexibility of management
which the Joint Research Centre (JRC) currently enjoys.
(44) As regards external action, decentralisation of management ofexternal aid should be authorised provided that the Commissionis given guarantees of sound financial management and the bene-ficiary State is accountable to the Commission for the funds paidto it.
(45) Financing agreements or contracts signed with the beneficiaryState or a national, Community or international public-sectorbody and natural or legal persons governed by private lawmust include the general procurement principles laid down inTitle V of part one and Title IV of part two of this Regulationas regards external actions.
(46) A special title should be included containing the generalprovisions for the management of European offices.
(47) A separate title should also contain the special rules applicable toadministrative appropriations. Provision should also be made toenable each of the two branches of the budgetary authority toissue an opinion in good time on building projects likely to havesignificant financial implications for the budget.
(48) The change in the timetable for the consolidation of the insti-tutions' accounts should be deferred until the financial year 2005in order to allow the necessary time to put in place the essentialinternal procedures involved.
(49) A suitable framework, tailored to the specific management needs,
should be provided for the financial rules to apply to bodies set
up by the Communities and having legal personality, whichreceive a subsidy from the general budget of the EuropeanCommunities. At the same time, and without in any wayimpairing the organic autonomy required by these bodies forthe performance of their tasks, the substance of the rulesgoverning certain matters, and in particular discharge andaccounting, needs to be harmonised. The Commission's internalauditor will exercise the same powers over these bodies as overCommission departments. The financial rules internal to thesebodies will have to be adapted accordingly to be compatiblewith this Financial Regulation. The Commission shouldaccordingly be empowered to draw up a model financial regu-▼
B2002R1605 —EN—01.01.2007 —001.002 —9
(1) OJ L 161, 26.6.1999, p. 1.
(2) OJ L 198, 21.7.2001, p. 1.
lation, which Community bodies can depart from only with the
Commission's agreement,
HAS ADOPTED THIS REGULATION:
PART ONE
COMMON PROVISIONS
TITLE I
SCOPE
Article 1
►M1 This Regulation lays down the rules for the establishment and
implementation of the general budget of the European Communities,hereinafter ‘the budget ’, and the presentation and auditing of the
accounts. ◄
For the purposes of this Regulation, the Economic and Social
Committee, the Committee of the Regions, the Ombudsman and theEuropean Data-Protection Supervisor shall be treated as Communityinstitutions.
Article 2
Any provision concerning the implementation of the revenue and expen-
diture of the budget, contained in another legislative act, must complywith the budgetary principles set out in Title II.
TITLE II
BUDGETARY PRINCIPLES
▼
M1
Article 3
The budget shall be established and implemented in compliance with
the principles of unity, budgetary accuracy, annuality, equilibrium, unitof account, universality, specification, sound financial managementwhich requires effective and efficient internal control, and transparencyas set out in this Regulation.
▼
B
CHAPTER 1
Principles of unity and of budget accuracy
Article 4
1. The budget is the instrument which, for each financial year,
forecasts and authorises all revenue and expenditure considerednecessary for the European Community and the European AtomicEnergy Community.
2. The revenue and expenditure of the Communities shall comprise:
(a) the revenue and expenditure of the European Community, including
administrative expenditure occasioned for the institutions by theprovisions of the Treaty on European Union relating to thecommon foreign and security policy and police and judicial coop-▼
B2002R1605 —EN—01.01.2007 —001.002 —10
eration in criminal matters, and the ►C2operational expen-
diture◄occasioned by implementation of those provisions where
this is charged to the budget;
(b) the expenditure and revenue of the European Atomic Energy
Community.
3. The budget shall record the guarantee for borrowing-and-lending
operations entered into by the Communities and payments to theGuarantee Fund for external actions.
Article 5
1. Subject to Article 74, no revenue shall be collected and no expen-
diture effected unless booked to a line in the budget.
2. No expenditure may be committed or authorised in excess of the
authorised appropriations.
3. An appropriation may not be entered in the budget if it is not for
an item of expenditure considered necessary.
▼
M1
4. Subject to Articles 5a, 18 and 74, interest yielded by the fundswhich are the property of the Communities shall be entered in thebudget as miscellaneous revenue.
Article 5a
1. Interest generated by pre-financing payments shall be assigned to
the programme or the action concerned and deducted from the paymentof the balance of the amounts due to the beneficiary.
The Regulation laying down the rules for implementing this Regulation,
hereinafter ‘the implementing rules ’, shall specify the cases in which the
authorising officer responsible shall, by way of exception, recoverannually such interest. That interest shall be entered in the budget as
miscellaneous revenue.
2. Interest shall not be due to the Communities in the following
cases:
(a) pre-financing which does not represent a significant amount, as
determined in the implementing rules;
(b) pre-financing paid under a procurement contract within the meaning
of Article 88;
(c) pre-financing paid to Member States;(d) pre-financing paid under the pre-accession aid;(e) advances paid to members of the institutions and to staff in
accordance with the Staff Regulations of officials of the European
Communities and the Conditions of employment of other servants
of the European Communities, hereinafter ‘the Staff Regulations ’;
(f) pre-financing paid in the framework of joint management as referred
to in point (c) of Article 53(1).▼
B2002R1605 —EN—01.01.2007 —001.002 —11
CHAPTER 2
Principle of annuality
Article 6
The appropriations entered in the budget shall be authorised for one
financial year which shall run from 1 January to 31 December.
Article 7
1. The budget shall contain differentiated appropriations, which shall
consist of commitment appropriations and payment appropriations, andnon-differentiated appropriations.
2. Commitment appropriations shall cover the total cost of the legal
commitments entered into during the current financial year, subject to
Articles 77(2) and 166(2).
3. Payment appropriations shall cover payments made to honour the
legal commitments entered into in the current financial year and/orearlier financial years.
4. Paragraphs 1 and 2 shall be without prejudice to the special
provisions of Titles I, IV and VI of part two. They shall not preventappropriations being committed globally nor budgetary commitmentsbeing made in annual instalments.
Article 8
1. The revenue of a financial year shall be entered in the accounts for
the financial year on the basis of the amounts collected during thefinancial year. However, the own resources for the month of Januaryof the next financial year may be paid in advance pursuant to theCouncil Regulation implementing the Decision on the system of theCommunities' own resources.
2. The entries in respect of value added tax own resources, the
additional GNP-based resource and any financial contributions may beadjusted in accordance with the Regulation referred to in paragraph 1.
3. The appropriations authorised for a given financial year may be
used solely to cover expenditure committed and paid in that financialyear and to cover amounts due against commitments from earlierfinancial years.
4. Commitments shall be entered in the accounts on the basis of the
legal commitments entered into up to 31 December, subject to theglobal commitments referred to in Article 77(2) and the financingagreements referred to in Article 166(2), which shall be entered in theaccounts on the basis of the budget commitments up to 31 December.
5. Payments shall be entered in the accounts for a financial year on
the basis of the payments effected by the accounting officer by 31December of that year at the latest.
6. By way of derogation from paragraphs 3, 4 and 5, the expenditure
of the Guarantee Section of the European Agricultural Guidance andGuarantee Fund (EAGGF) shall be entered in the accounts for afinancial year in accordance with the rules laid down in Title I ofpart two.▼
B2002R1605 —EN—01.01.2007 —001.002 —12
Article 9
1. Appropriations which have not been used at the end of the
financial year for which they were entered shall be cancelled.
However, they may be carried over to the following financial year only,
by a decision taken by the institution concerned by 15 February at thelatest, in accordance with paragraphs 2 and 3 or be carried over auto-matically in accordance with paragraph 4.
►
C22. Differentiated commitment appropriations ◄and non-
differentiated appropriations not yet committed at the close of thefinancial year may be carried over in respect of:
(a) amounts corresponding to commitment appropriations for which
most of the preparatory stages of the commitment procedure havebeen completed by 31 December. These amounts may then becommitted up to 31 March of the following year;
(b) amounts which are necessary when the legislative authority has
adopted a basic act in the final quarter of the financial year andthe Commission has been unable to commit the appropriationsprovided for this purpose by 31 December.
3.►
M1 Payment appropriations ◄may be carried over in respect
of amounts needed to cover existing commitments or commitmentslinked to commitment appropriations carried over, when the appro-priations provided for the relevant lines in the budget for thefollowing financial year do not cover requirements. The institutionconcerned shall first use the appropriations authorised for the currentfinancial year and shall not use the appropriations carried over until theformer are exhausted.
4. Non-differentiated appropriations corresponding to obligations
duly contracted at the close of the financial year shall be carried overautomatically to the following financial year only.
5. The institution concerned shall inform the European Parliament
and the Council (hereinafter ‘the budgetary authority ’) by 15 March
at the latest of the carry-over decision it has taken and shall state, for
each budget line, how the criteria in paragraphs 2 and 3 have been
applied to each carry-over.
6. Appropriations placed in reserve and appropriations for staff
expenditure may not be carried over.
Article 10
Revenue not used and appropriations available at 31 December arising
from the assigned revenue referred to in Article 18 shall be carried overautomatically. The appropriations available corresponding to assignedrevenue carried over must be used first.
Article 11
Without prejudice to ►
M1 Articles 157 and 160a ◄, where amounts
are decommitted as a result of total or partial non-implementation of theactions for which they were earmarked, in any financial year after thatin which the appropriations were entered in the budget, the appro-
priations concerned shall be cancelled.
Article 12
The appropriations entered in the budget may be committed with effect
from 1 January, once the budget has been finally adopted, save asotherwise provided in Title I and Title VI of part two.▼
B2002R1605 —EN—01.01.2007 —001.002 —13
Article 13
1. If the budget has not been finally adopted at the beginning of the
financial year, the first paragraph of Article 273 of the EC Treaty andthe first paragraph of Article 178 of the Euratom Treaty shall apply tocommitment and payment of expenditure which it has been possible tobook to a specific line in the budget as part of implementation of thelast budget duly adopted.
2. Commitments may be made per chapter to a maximum of one
quarter of the total allotted appropriations in the chapter in questionof the previous financial year plus one twelfth for each month whichhas elapsed.
Payments may be made monthly per chapter to a maximum of one
twelfth of the allotted appropriations in the chapter in question of thepreceding financial year.
The limit of the appropriations provided for in the draft budget in
preparation may not be exceeded.
3. If the continuity of action by the Communities and management
needs so require:
(a) the Council, acting by a qualified majority at the request of the
Commission and after consulting the European Parliament, maysimultaneously authorise two or more provisional twelfths bothfor commitments and for payments over and above those automa-tically made available by the provisions of paragraphs 1 and 2;
(b) for expenditure other than that necessarily resulting from the
Treaties or acts adopted pursuant thereto, the third paragraph ofArticle 273 of the EC Treaty and the third paragraph of Article178 of the Euratom Treaty shall apply.
The additional twelfths shall be authorised in full and shall not be
divisible.
4. If, for a given chapter, the authorisation of two or more provi-
sional twelfths granted in the circumstances and under the proceduresprovided for in paragraph 3 is not sufficient to cover the expenditurenecessary to avoid a break in continuity of the Communities' activity in
the area covered by the chapter in question, authorisation may excep-
tionally be given to exceed the amount of the appropriations entered inthe corresponding chapter of the budget of the preceding financial year.The budgetary authority shall act under the procedures provided for inparagraph 3. However, the available overall total of the appropriationsin the budget of the preceding financial year may in no circumstancesbe exceeded.
CHAPTER 3
Principle of equilibrium
Article 14
1. Budget revenue and payment appropriations must be in balance.
2. Without prejudice to Article 46(1)(4), the European Community
and the European Atomic Energy Community, as well as the bodies setup by the Communities as referred to in Article 185, may not raiseloans.▼
B2002R1605 —EN—01.01.2007 —001.002 —14
Article 15
1. The balance from each financial year shall be entered in the
budget for the following financial year as revenue in the case of asurplus or as a payment appropriation in the case of a deficit.
2. The estimates of such revenue or payment appropriations shall be
entered in the budget during the budgetary procedure and in a letter ofamendment presented pursuant to Article 34. They shall be drawn up inaccordance with the Council Regulation implementing the Decision onthe system of the Communities' own resources.
3. After the presentation of the accounts for each financial year, any
discrepancy with the estimates shall be entered in the budget for thefollowing financial year through an amending budget devoted solely to
that discrepancy. In such a case, the preliminary draft amending budget
must be submitted by the Commission within 15 days following thesubmission of the provisional accounts.
CHAPTER 4
Principle of unit of account
Article 16
The budget shall be drawn up and implemented in euro and the
accounts shall be presented in euro.
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However, for the cash-flow purposes referred to in Article 61, theaccounting officer and, in the case of imprest accounts, the imprestadministrators, and, for the needs of the administrative managementof the Commission's External Service, the authorising officerresponsible shall be authorised to carry out operations in nationalcurrencies as laid down in the implementing rules.
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CHAPTER 5
Principle of universality
Article 17
Total revenue shall cover total payment appropriations, subject to
Article 18. All revenue and expenditure shall be entered in fullwithout any adjustment against each other, subject to Article 20.
Article 18
1.►
M1 Without prejudice to Article 160(1a) and Article 161(2),
the following items of revenue shall be used to finance specific itemsof expenditure: ◄
(a) financial contributions from Member States to certain research
programmes pursuant to the Council Regulation implementingthe Decision on the system of the Communities' own resources;
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(aa) financial contributions from Member States and other donor
countries, including in both cases their public and parastatalagencies, or from international organisations to certain externalaid projects or programmes financed by the Community andmanaged by the Commission on their behalf, pursuant to therelevant basic act;▼
B2002R1605 —EN—01.01.2007 —001.002 —15
(b) interest on deposits and the fines provided for in the Regulation on
speeding up and clarifying the implementation of the excessivedeficit procedure;
(c) revenue earmarked for a specific purpose, such as income from
foundations, subsidies, gifts and bequests, including the earmarkedrevenue specific to each institution;
(d) contributions to Community activities from third countries or
various bodies;
(e) revenue from third parties in respect of goods, services or work
supplied at their request;
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(ea) proceeds from the sale of vehicles, equipment, installations,
materials, and scientific and technical apparatus which are beingreplaced or scrapped when the book value is fully depreciated;
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(f) revenue arising from the repayment of amounts wrongly paid;
(g) proceeds from the supply of goods, services and works for other
institutions or bodies, including refunds by other institutions orbodies of mission allowances paid on their behalf;
(h) insurance payments received;
(i) revenue from payments connected with lettings;
(j) revenue from the sale of publications and films, including those on
an electronic medium.
2. The basic act applicable may also assign the revenue for which it
provides to specific items of expenditure.
3. The budget shall carry lines to accommodate the categories of
assigned revenue referred to in paragraphs 1 and 2 and whereverpossible shall indicate the amount.
Article 19
1. The Commission may accept any donation made to the Commu-
nities, such as foundations, subsidies, gifts and bequests.
2.►
M1 Acceptance of donations of a value of EUR 50 000 or more
which involve a financial charge, including follow-up costs, exceeding10 % of the value of the donation made, shall be subject to the author-isation of the European Parliament and of the Council, both of whichshall act on the matter within two months of the date of receipt of therequest from the Commission. ◄If no objection has been made within
that period, the Commission shall take a final decision in respect ofacceptance.
Article 20
1. The implementing rules may specify the cases where certain
revenue may be deducted from invoices or requests for payment,which shall then be passed for payment of the net amount.
2. The cost of products or services provided to the Communities
incorporating taxes refunded by the Member States pursuant to theProtocol on the Privileges and Immunities of the European Communitiesor by third countries on the basis of the relevant agreements shall becharged to the budget for the ex-tax amount.
3. Adjustments may be made in respect of exchange differences
occurring in the implementation of the budget. The final gain or lossshall be included in the balance for the year.▼
B2002R1605 —EN—01.01.2007 —001.002 —16
CHAPTER 6
Principle of specification
Article 21
Appropriations shall be earmarked for specific purposes by title and
chapter; the chapters shall be further subdivided into articles and items.
▼M1
Article 22
1. Any institution other than the Commission may, within its own
section of the budget, transfer appropriations:
(a) from one title to another up to a maximum of 10 % of the appro-
priations for the year shown on the line from which the transfer ismade;
(b) from one chapter to another and from one article to another without
limit.
2. Three weeks before making the transfers referred to in
paragraph 1, the institutions shall inform the budgetary authority oftheir intentions. In the event of duly substantiated reasons beingraised within this period by either branch of the budgetary authority,the procedure laid down in Article 24 shall apply.
3. Any institution other than the Commission may propose to the
budgetary authority, within its own section of the budget, transfersfrom one title to another exceeding the limit of 10 % of the appro-priations for the financial year on the line from which the transfer is tobe made. Those transfers shall be subject to the procedure laid down inArticle 24.
4. Any institution other than the Commission may, within its own
section of the budget, make transfers within articles without informing
the budgetary authority beforehand.
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Article 23
1. The Commission may, within its own section of the budget:
(a) transfer appropriations within articles and transfers between articles
within each chapter;
▼M1
(b) as regards expenditure on staff and administration, transfer appro-
priations from one title to another up to a maximum of 10 % of theappropriations for the year shown on the line from which thetransfer is made, and up to a maximum of 30 % of the appro-priations for the year shown on the line to which the transfer ismade;
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(c) as regards operational expenditure, transfer appropriations between
chapters within the same title, up to a maximum total of 10 % ofthe appropriations for the year shown on the line from which thetransfer is made;
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(d) transfer appropriations, as soon as the basic act is adopted pursuant
to the procedure laid down in Article 251 of the Treaty, from the‘provisions ’title referred to in Article 43 for the cases where no
basic act existed for the action concerned when the budget wasestablished.▼
B2002R1605 —EN—01.01.2007 —001.002 —17
Three weeks before making the transfers referred to in points (b) and (c)
of the first subparagraph, the Commission shall inform the budgetaryauthority of its decision. In the event of duly substantiated reasons beingraised within that three-week period by either branch of the budgetaryauthority, the procedure laid down in Article 24 shall apply.
However, during the last two months of the financial year, the
Commission may autonomously transfer appropriations concerningexpenditure on staff, external staff and other agents from one title toanother within the total limit of 5 % of the appropriations of thefinancial year. The Commission shall inform the budgetary authoritywithin two weeks after its decision on those transfers.
The Commission shall inform the budgetary authority within two weeks
after its decision on transfers referred to in point (d) of thefirst subparagraph.
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2. The Commission may propose to the budgetary authority, withinits own section of the budget, transfers other than those referred to in►
M1 paragraph 1 ◄.
Article 24
1. The budgetary authority shall take decisions on transfers of appro-
priations as provided for in paragraphs 2, 3 and 4, save as otherwiseprovided in Title I of part two.
2. In the case of proposals for transfers of appropriations relating to
expenditure necessarily resulting from the Treaties or from acts adoptedin accordance therewith, the Council shall, after consulting the EuropeanParliament, act by a qualified majority within six weeks, except inurgent cases. The European Parliament shall deliver its opinion withinsuch time as will permit the Council to take note of it and to act withinthe stipulated time limit. Where the Council does not act within thistime limit, the proposals for transfers shall be deemed to be approved.
3. In the case of proposals for transfers relating to expenditure other
than that necessarily resulting from the Treaties or from acts adopted inaccordance therewith, the European Parliament shall, after consultingthe Council, act within six weeks, except in urgent cases. TheCouncil shall deliver its opinion, by a qualified majority, within suchtime as will permit the European Parliament to take note of it and to actwithin the stipulated time limit. Where no decision is taken within thistime limit, the proposals for transfers shall be deemed to be approved.
4. Proposals for transfers relating both to expenditure necessarily
resulting from the Treaties or from acts adopted in accordancetherewith and to other expenditure shall be deemed to be approved ifneither the European Parliament nor the Council has decided otherwisewithin six weeks of the date on which the two institutions received theproposals. If, in the case of such proposals for transfers, the EuropeanParliament and the Council reduce the proposed transfer by differentamounts, whichever is the smaller of the amounts accepted by one ofthe two institutions shall be deemed to be approved. Where one of theinstitutions rejects the principle of the transfer, the transfer shall not bemade.
Article 25
1. Appropriations may be transferred only to budget lines for which
the budget has authorised appropriations or carries a token entry (p.m.).
2. Appropriations corresponding to assigned revenue may be trans-
ferred only if such revenue is used for the purpose to which it isassigned.▼
M12002R1605 —EN—01.01.2007 —001.002 —18
Article 26
▼M1
1. Transfers within the titles of the budget devoted to the EuropeanAgricultural Guarantee Fund (EAGF), the Structural Funds, theCohesion Fund, the European Fisheries Fund, the European AgriculturalFund for Rural Development (EAFRD) and Research shall be thesubject of special provisions under Titles I, II and III of Part Two.
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2.►M1 Decisions on transfers to allow the utilisation of the reserve
for emergency aid shall be taken by the budgetary authority on aproposal from the Commission. A separate proposal must besubmitted for each individual operation. ◄
The procedure provided for in Article 24(2) and (3) shall apply. If the
Commission proposal is not agreed to by both arms of the budgetaryauthority and there is a failure to arrive at a common position on theutilisation of these reserves, the European Parliament and the Councilshall refrain from acting on the Commission's proposal for a transfer.
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3. In duly substantiated exceptional cases of international humani-tarian disasters and crises, occurring after 15 December of thebudgetary year, the Commission may transfer unused budgetary appro-priations for the current budgetary year still available in the budget titlesfalling under heading 4 of the multiannual financial framework to thebudget titles concerning the crisis management aid and humanitarian aidoperations. The Commission shall inform the two branches of thebudgetary authority immediately after making such transfers.
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CHAPTER 7
Principle of sound financial management
Article 27
1. Budget appropriations shall be used in accordance with the
principle of sound financial management, namely in accordance withthe principles of economy, efficiency and effectiveness.
2. The principle of economy requires that the resources used by the
institution for the pursuit of its activities shall be made available in duetime, in appropriate quantity and quality and at the best price.
The principle of efficiency is concerned with the best relationship
between resources employed and results achieved.
The principle of effectiveness is concerned with attaining the specific
objectives set and achieving the intended results.
3. Specific, measurable, achievable, relevant and timed objectives
shall be set for all sectors of activity covered by the budget.Achievement of those objectives shall be monitored by performanceindicators for each activity and information shall be provided by thespending authorities to the budgetary authority. Such information, asreferred to in Article 33(2)(d), shall be provided annually and at thelatest in the documents accompanying the preliminary draft budget.
4. In order to improve decision-making, institutions shall undertake
both ex ante andex post evaluations in line with guidance provided by
the Commission. Such evaluations shall be applied to all programmesand activities which entail significant spending and evaluation resultsdisseminated to spending, legislative and budgetary authorities.▼
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Article 28
▼M1
1. Any proposal or initiative submitted to the legislative authority bythe Commission or by a Member State in conformity with the relevantprovisions of the EC Treaty or the Treaty on European Union (TEU),which may have an impact on the budget, including changes in thenumber of posts, must be accompanied by a financial statement andthe evaluation provided for in Article 27(4) of this Regulation.
Any amendment to a proposal or initiative submitted to the legislative
authority which may have appreciable implications for the budget,including changes in the number of posts, must be accompanied by afinancial statement prepared by the institution proposing the
amendment.
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2. During the budgetary procedure, the Commission shall provide thenecessary information for a comparison between changes in the appro-priations required and the initial forecasts made in the financialstatements. This information shall include progress made and thestage reached by the legislative authority in its consideration ofproposals presented. The appropriations required shall, where appro-priate, be revised in the light of the progress of deliberations on thebasic act.
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M1
3. In order to prevent the risk of fraud and irregularities, the financial
statement referred to in paragraph 1 shall record any information
regarding existing and planned fraud prevention and protection
measures.
Article 28a
1. The budget shall be implemented in compliance with effective and
efficient internal control as appropriate in each management mode, andin accordance with the relevant sector-specific regulations.
2. For the purposes of the implementation of the budget, internal
control is defined as a process applicable at all levels of themanagement and designed to provide reasonable assurance ofachieving the following objectives:
(a) effectiveness, efficiency and economy of operations;
(b) reliability of reporting;(c) safeguarding of assets and information;(d) prevention and detection of fraud and irregularities;(e) adequate management of the risks relating to the legality and regu-
larity of the underlying transactions, taking into account the multi-annual character of programmes as well as the nature of thepayments concerned.
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CHAPTER 8
Principle of transparency
Article 29
1. The budget shall be established and implemented and the accounts
presented in compliance with the principle of transparency.▼B2002R1605 —EN—01.01.2007 —001.002 —20
2. The President of the European Parliament shall have the budget
and amending budgets, as finally adopted, published in the OfficialJournal of the European Union.
The budget shall be published within three months following the date
on which the budget is declared finally adopted.
The consolidated annual accounts and the report on budgetary and
financial management drawn up by each institution shall be publishedin the Official Journal of the European Union.
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Article 30
1. Information on borrowing-and-lending operations contracted by
the Communities for third parties shall appear in an Annex to thebudget.
2. Information on the operations of the Guarantee Fund for external
actions shall appear in the financial statements.
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M1
3. The Commission shall make available, in an appropriate manner,
information on the beneficiaries of funds deriving from the budget held
by it when the budget is implemented on a centralised basis and directlyby its departments, and information on the beneficiaries of funds asprovided by the entities to which budget implementation tasks aredelegated under other modes of management.
This information shall be made available with due observance of the
requirements of confidentiality, in particular the protection of personaldata as laid down in Directive 95/46/EC of the European Parliament andof the Council of 24 October 1995 on the protection of individuals withregard to the processing of personal data and on the free movement ofsuch data (
1) and Regulation (EC) No 45/2001 of the European
Parliament and of the Council of 18 December 2001 on the protectionof individuals with regard to the processing of personal data by theCommunity institutions and bodies and on the free movement of suchdata (
2), and of the requirements of security, taking into account the
specificities of each management mode referred to in Article 53 andwhere applicable in conformity with the relevant sector-specific rules.
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TITLE III
ESTABLISHMENT AND STRUCTURE OF THE BUDGET
CHAPTER 1
Establishment of the budget
Article 31
The European Parliament, the Council, the Court of Justice of the
European Communities, the Court of Auditors, the Economic andSocial Committee, the Committee of the Regions, the Ombudsmanand the European Data-Protection Supervisor shall draw up anestimate of their revenue and expenditure, which they shall send tothe Commission before 1 July each year.
These estimates shall also be sent by these institutions to the budgetary
authority for information by no later than 1 July each year. The▼
M12002R1605 —EN—01.01.2007 —001.002 —21
(1) OJ L 281, 23.11.1995, p. 31. Directive as amended by Regulation (EC)
No 1882/2003 (OJ L 284, 31.10.2003, p. 1)
(2) OJ L 8, 12.1.2001, p. 1.
Commission shall draw up its own estimates, which it shall also send to
the budgetary authority by the same date.
In preparing its own estimates the Commission shall use the information
referred to in Article 32.
Article 32
Each body referred to in Article 185 shall, in accordance with the
instrument establishing it, send to the Commission by 1 April eachyear an estimate of its revenue and expenditure, including the estab-lishment plan, and its work programme.
The Commission shall forward these documents to the budgetary
authority for information, except in the case provided for in point (3)(d) of Article 46(1).
Article 33
1. The Commission shall place a preliminary draft budget before the
Council by 1 September each year at the latest. It shall at the same timetransmit the preliminary draft budget to the European Parliament.
The preliminary draft budget shall contain a summary general statement
of the expenditure and revenue of the Communities and consolidate theestimates referred to in Article 31.
2. The Commission shall attach to the preliminary draft budget:
(a) an analysis of financial management in the previous year and the
commitments outstanding;
(b) where appropriate, an opinion on the estimates of the other insti-
tutions which may contain different estimates, accompanied by thereasons therefor;
(c) any working paper it considers useful in connection with the estab-
lishment plans of the institutions and the grants which theCommission awards to the bodies referred to in Article 185 andto the European Schools;
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(d) the activity statements containing the following:
—information on the achievement of all previously set specific,
measurable, achievable, relevant and timed objectives for thevarious activities as well as new objectives measured by indi-cators,
—full justification and cost-benefit approach for proposed changes
in the level of appropriations,
—clear rationale for intervention at the EU level in keeping, inter
alia, with the principle of subsidiarity,
—information on the implementation rates of the previous year's
activity and implementation rates for the current year.
Evaluation results shall be consulted and referred to as evidence of
the likely merits of proposed budget changes;
(e) a summary statement of the schedule of payments due in subsequent
financial years to meet budgetary commitments entered into inearlier financial years.▼
B2002R1605 —EN—01.01.2007 —001.002 —22
Article 34
1. The Commission may, on its own initiative or if requested by the
other institutions, each in respect of its own section, present to theCouncil a letter of amendment to the preliminary draft budget on thebasis of new information which was not available at the time the preli-minary draft was established.
2. However, save as otherwise agreed by the institutions or in excep-
tional circumstances, the Commission shall put such letter ofamendment to the Council at least 30 days before the first reading ofthe draft budget by the European Parliament. The Council must put theletter of amendment to the European Parliament at least 15 days beforethe said first reading.
Article 35
1. The Council shall establish the draft budget in accordance with the
procedure laid down in Article 272(3) of the EC Treaty and Article 177(3) of the Euratom Treaty.
2. The Council shall place the draft budget before the European
Parliament by 5 October of the year preceding that of implementationof the budget at the latest. The Council shall attach to that draft budgetan explanatory memorandum defining its reasons for departing from thepreliminary draft budget.
Article 36
1. The President of the European Parliament shall declare the budget
finally adopted in accordance with the procedure provided for in Article
272(7) of the EC Treaty and Article 177(7) of the Euratom Treaty.
2. Once the budget has been declared finally adopted, each Member
State shall, from 1 January of the following financial year or from the
date of the declaration of final adoption of the budget if that is after 1January, be bound to make over to the Community the payments due asspecified in the Council Regulation implementing the Decision on thesystem of the Communities' own resources.
Article 37
1. If there are unavoidable, exceptional or unforeseen circumstances,
the Commission may present preliminary draft amending budgets.
Requests for amending budgets, in the same circumstances as referred to
in the preceding paragraph, from institutions other than the Commissionshall be sent to the Commission.
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Before presenting a preliminary draft amending budget, the Commission
and institutions other than the Commission shall examine the scope for
reallocation of the relevant appropriations, taking into account anyexpected under-implementation of appropriations.
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2. The Commission shall, save in exceptional circumstances, submitany preliminary draft amending budget to the Council by 1 Septembereach year at the latest. It may attach an opinion to the requests foramending budgets from the other institutions.
3. The budgetary authority shall discuss them with due account for
their urgency.▼
B2002R1605 —EN—01.01.2007 —001.002 —23
Article 38
1. Where the Council receives a preliminary draft amending budget,
it shall draw up a draft amending budget in accordance with Articles 35and 37.
2. Except for the timetable, Articles 35 and 36 shall apply to
amending budgets. They must be substantiated by reference to thebudget whose estimates they are amending.
Article 39
The Commission and the budgetary authority may agree to bring
forward certain dates for the transmission of the estimates, and for theadoption and transmission of the preliminary draft and draft budgets.
This arrangement may not, however, have the effect of shortening or
prolonging the periods allowed for consideration of these texts underArticle 272 of the EC Treaty and Article 177 of the Euratom Treaty.
CHAPTER 2
Structure and presentation of the budget
Article 40
The budget shall consist of:
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M1
(a) a general statement of revenue and expenditure;
▼B
(b) separate sections subdivided into statements of revenue and expen-
diture for each institution.
Article 41
1. Commission revenue and the revenue and expenditure of the other
institutions shall be classified by the budgetary authority according totheir type or the use to which they are assigned under titles, chapters,articles and items.
2. The statement of expenditure for the Commission section shall be
set out on the basis of a nomenclature adopted by the budgetaryauthority and classified according to purpose.
A title shall correspond to a policy area and a chapter shall, as a rule,
correspond to an activity.
Each title may include ►
C2operational appropriations ◄and admin-
istrative appropriations.
The administrative appropriations for a title shall be grouped in a single
chapter.
Article 42
The budget may not contain negative revenue.
The own resources paid under the Council Decision on the system of
the Communities' own resources shall be net amounts and shall beshown as such in the summary statement of revenue in the budget.▼
B2002R1605 —EN—01.01.2007 —001.002 —24
Article 43
1. Each section of the budget may include a ‘provisions ’title. Appro-
priations shall be entered in this title in the following two circum-stances:
(a) where no basic act exists for the action concerned when the budget
is established;
(b) where there are serious grounds for doubting the adequacy of the
appropriations or the possibility of implementing, under conditionsconsonant with sound financial management, the appropriationsentered on the lines concerned.
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The appropriations in this title may be used only after transfer inaccordance with the procedure laid down in Article 23(1)(d), wherethe adoption of the basic act is subject to the procedure laid down inArticle 251 of the Treaty, and that of Article 24, for all other cases.
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2. In the event of serious implementation difficulties, theCommission may propose, in the course of a financial year, that appro-priations be transferred to the ‘provisions ’title. The budgetary authority
shall take a decision on these transfers as provided in Article 24.
Article 44
The Commission section of the budget may include a ‘negative reserve ’
limited to a maximum amount of EUR 200 million. This reserve, whichshall be ►
C2entered in a separate title ◄, may comprise both
commitment appropriations and payment appropriations.
This reserve must be drawn upon before the end of the financial year by
means of transfer in accordance with the procedure laid down in►
M1 Articles 23 and 25 ◄.
▼M1
Article 45
1. The Commission section of the budget shall include a reserve for
emergency aid for third countries.
2. The reserve referred to in paragraph 1 shall be drawn upon before
the end of the financial year by means of transfer in accordance with theprocedure laid down in Articles 24 and 26.
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Article 46
1. The budget shall show:
(1)►M1 in the general statement of revenue and expenditure: ◄
(a) the estimated revenue of the Communities for the financial year
in question;
(b) the estimated revenue for the preceding financial year and the
revenue for year n-2 ;
(c) the commitment and payment appropriations for the financial
year in question;
(d) the commitment and payment appropriations for the preceding
financial year;
(e) the expenditure committed and the expenditure paid in year n-
2,▼B2002R1605 —EN—01.01.2007 —001.002 —25
__________
(g) appropriate remarks on each subdivision, as set out in Article 41
(1);
(2) in the section for each institution, the revenue and expenditure shall
be shown in the same structure as in point (1);
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(3) as regards staff:
(a) for each section of the budget, an establishment plan setting the
number of posts for each grade in each category and in eachservice and the number of permanent and temporary postsauthorised within the limits of the budget appropriations;
(b) an establishment plan for staff paid from the research and tech-
nological development appropriations for direct action and an
establishment plan for staff paid from the same appropriations
for indirect action; the establishment plans shall be classified bycategory and grade and shall distinguish between permanent andtemporary posts, authorised within the limits of the budgetappropriations;
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M1
(c) as regards scientific and technical staff, the classification may
be based on groups of grades, in accordance with the conditions
laid down in each budget; the establishment plan must specifythe number of highly qualified technical or scientific personnelwho are accorded special advantages under the specificprovisions of the Staff Regulations;
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(d) an establishment plan setting the number of posts by grade and
by category for each body referred to in Article 185 whichreceives a grant charged to the budget. The establishmentplans shall show next to the number of posts authorised forthe financial year the number authorised for the preceding year;
(4) as regards borrowing-and-lending operations:
(a) in the general statement of revenue, the budget lines corre-
sponding to the relevant operations and intended to recordany reimbursements received from beneficiaries who initiallydefaulted, leading to activation of the performance guarantee.These lines shall carry a token entry (p.m.) and be accompaniedby appropriate remarks;
(b) in the Commission section:
(i) the budget lines containing the Communities' performance
guarantees in respect of the operations in question. Theselines shall carry a token entry (p.m.), so long as no effective
charge which has to be covered by definitive resources has
arisen;
(ii) remarks giving the reference to the basic act and the
volume of the operations envisaged, the duration and thefinancial guarantee given by the Communities in respect ofthese operations;
(c) in a document annexed to the Commission section, as an indi-
cation:
(i) ongoing capital operations and debt management;
(ii) the capital operations and debt management for the
financial year in question;
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M1
(5) the budget lines under revenue and expenditure necessary for imple-
menting the Guarantee Fund for external actions.▼M12002R1605 —EN—01.01.2007 —001.002 —26
2. In addition to the documents referred to in paragraph 1 the
budgetary authority may attach any other relevant documents to thebudget.
Article 47
1. The establishment plan described in point 3 of Article 46(1) shall
constitute an absolute limit for each institution or body; no appointmentmay be made in excess of the limit set.
However, save in the case of ►
M1 grades AD 16, AD 15 and AD
14◄, each institution or body may modify establishment plans by up
to 10 % of posts authorised, subject to two conditions:
(a) that the volume of staff appropriations corresponding to a full
financial year is not affected, and
(b) that the limit of the total number of posts authorised by each estab-
lishment plan is not exceeded.
Three weeks before making the modifications referred to in the second
subparagraph, the institutions shall inform the budgetary authority oftheir intentions. In the event of duly justified reasons being raisedwithin this period by either branch of the budgetary authority, theinstitutions shall refrain from making the modifications and thenormal procedure shall apply.
2. By way of derogation from the first subparagraph of paragraph 1,
the effects of part-time work authorised by the appointing authority inaccordance with the Staff Regulations may be offset by otherappointments.
TITLE IV
IMPLEMENTATION OF THE BUDGET
CHAPTER 1
General provisions
Article 48
1. The Commission shall implement the revenue and expenditure of
the budget in accordance with this Regulation, on its own responsibilityand within the limits of the appropriations authorised.
2. The Member States shall cooperate with the Commission so that
the appropriations are used in accordance with the principle of soundfinancial management.
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Article 49
1. A basic act shall first be adopted before the appropriations entered
in the budget for any action by the Communities or by the EuropeanUnion may be used.
A basic act is a legal act which provides a legal basis for the action and
for the implementation of the ►
C2operational expenditure ◄entered
in the budget.
2. In application of the EC Treaty and the Euratom Treaty, a basic
act is an act adopted by the legislative authority and may take the formof a regulation, a directive, a decision within the meaning of Article 249of the EC Treaty or a decision sui generis .▼
B2002R1605 —EN—01.01.2007 —001.002 —27
3. In application of Title V of the Treaty on European Union
(concerning Common Foreign and Security Policy —CFSP), a basic
act may take one of the forms specified in Articles 13(2) and (3), 14, 18(5), 23(1) and (2) and 24 of the Treaty on European Union.
4. In application of Title VI of the Treaty on European Union
(concerning Police and Judicial Cooperation in Criminal Matters), abasic act may take one of the forms referred to in Article 34(2) ofthe Treaty on European Union.
5. Recommendations and opinions do not constitute basic acts within
the meaning of this Article, nor do resolutions, conclusions, declarationsor other acts which have no legal effects.
6. By way of derogation from paragraphs 1 to 4, the following may
be implemented without a basic act provided the actions which they areintended to finance fall within the powers of the Communities or theEuropean Union:
(a) appropriations for pilot schemes of an experimental nature designed
to test the feasibility of an action and its usefulness. The relevantcommitment appropriations may be entered in the budget for notmore than two successive financial years;
(b) appropriations for preparatory actions in the fields of application of
the EC Treaty and the Euratom Treaty and of Title VI of the TEU,
designed to prepare proposals with a view to the adoption of future
actions. The preparatory actions are to follow a coherent approachand may take various forms. The relevant commitment appro-priations may be entered in the budget for not more than threesuccessive financial years. The legislative procedure must beconcluded before the end of the third financial year. In the courseof the legislative procedure, the commitment of appropriations mustcorrespond to the particular features of the preparatory action asregards the activities envisaged, the aims pursued and the personsbenefited. Consequently, the means implemented cannot correspondin volume to those envisaged for financing the definitive actionitself.
When the preliminary draft budget is presented, the Commission
shall submit a report to the budgetary authority on the actionsreferred to in points (a) and (b) which shall also contain anassessment of results and the follow-up envisaged;
(c) appropriations for preparatory measures in the field of Title V of the
Treaty on European Union (concerning CFSP). These measuresshall be limited to a short period of time and shall be designed toestablish the conditions for European Union action in fulfilment ofthe objectives of the CFSP and for the adoption of the necessarylegal instruments.
For the purpose of EU crisis management operations, preparatory
measures are designed inter alia to assess the operational
requirements, to provide for a rapid initial deployment ofresources, or to establish the conditions on the ground for thelaunching of the operation.
Preparatory measures shall be agreed by the Council, in full asso-
ciation with the Commission. To this end, the Presidency, assistedby the Secretary-General of the Council/High Representative for theCFSP, shall inform the Commission as early as possible of theCouncil's intention to launch a preparatory measure and in particularof the estimated resources required for this purpose. In conformitywith the provisions of this Regulation, the Commission shall take allthe necessary measures to ensure a rapid disbursement of the funds;
(d) appropriations for one-off actions, or even actions for an indefinite
duration, carried out by the Commission by virtue of tasks resultingfrom its prerogatives at institutional level pursuant to the EC Treatyand the Euratom Treaty other than its right of legislative initiative▼
M12002R1605 —EN—01.01.2007 —001.002 —28
referred to in point (b) and under specific powers directly conferred
on it by those Treaties, a list of which is given in the implementingrules;
(e) appropriations for the operation of each institution under its admin-
istrative autonomy.
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Article 50
The Commission shall confer on the other institutions the requisite
powers for the implementation of the sections of the budget relating
to them.
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Each institution shall exercise these powers in accordance with thisRegulation and within the limits of the appropriations authorised.
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Article 51
The Commission and each of the other institutions may, within their
departments, delegate their powers of budget implementation inaccordance with the conditions laid down by this Regulation and bytheir internal rules and within the limits which they lay down in theinstrument of delegation. Those so empowered may act only within thelimits of the powers expressly conferred upon them.
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Article 52
1. All financial actors and any other person involved in budget
implementation, management, audit or control shall be prohibitedfrom taking any action which may bring their own interests intoconflict with those of the Communities. Should such a case arise, the
person in question must refrain from such actions and refer the matter to
the competent authority.
2. There is a conflict of interests where the impartial and objective
exercise of the functions of a financial actor or other person, as referredto in paragraph 1, is compromised for reasons involving family,emotional life, political or national affinity, economic interest or anyother shared interest with the beneficiary.
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CHAPTER 2
Methods of implementation
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Article 53
The Commission shall implement the budget in accordance with the
provisions set out in Articles 53a to 53d in any of the following ways:
(a) on a centralised basis;(b) by shared or decentralised management;
(c) by joint management with international organisations.▼
M12002R1605 —EN—01.01.2007 —001.002 —29
Article 53a
Where the Commission implements the budget on a centralised basis,
implementation tasks shall be performed either directly by itsdepartments or indirectly, in accordance with Articles 54 to 57.
Article 53b
1. Where the Commission implements the budget by shared
management, implementation tasks shall be delegated to MemberStates. That method shall apply in particular to the actions referred toin Titles I and II of Part Two.
2. Without prejudice to complementary provisions included in
relevant sector-specific regulations, and in order to ensure in sharedmanagement that the funds are used in accordance with the applicablerules and principles, the Member States shall take all the legislative,regulatory and administrative or other measures necessary for protectingthe Communities' financial interests. To this effect they shall inparticular:
(a) satisfy themselves that actions financed from the budget are actually
carried out and to ensure that they are implemented correctly;
(b) prevent and deal with irregularities and fraud;(c) recover funds wrongly paid or incorrectly used or funds lost as a
result of irregularities or errors;
(d) ensure, by means of relevant sector-specific regulations and in
conformity with Article 30(3), adequate annual ex post publication
of beneficiaries of funds deriving from the budget.
To that effect, the Member States shall conduct checks and shall put in
place an effective and efficient internal control system, according to the
provisions laid down in Article 28a. They shall bring legal proceedingsas necessary and appropriate.
3. Member States shall produce an annual summary at the appro-
priate national level of the available audits and declarations.
4. In order to ensure that the funds are used in accordance with the
applicable rules, the Commission shall apply clearance-of-accountsprocedures or financial correction mechanisms which enable it toassume final responsibility for the implementation of the budget.
Article 53c
1. Where the Commission implements the budget by decentralised
management, implementation tasks shall be delegated to third countriesin accordance with Article 56 and Title IV of Part Two, withoutprejudice to delegation of residual tasks to bodies referred to inArticle 54(2).
2. In order to ensure that the funds are used in accordance with the
applicable rules, the Commission shall apply clearance-of-accountsprocedures or financial correction mechanisms which enable it toassume final responsibility for the implementation of the budget.
3. Third countries to which implementation tasks are delegated shall
ensure, in conformity with Article 30(3), adequate annual ex post publi-
cation of beneficiaries of funds deriving from the budget.
Article 53d
1. Where the Commission implements the budget by joint
management, certain implementation tasks shall be delegated to inter-▼
M12002R1605 —EN—01.01.2007 —001.002 —30
national organisations, in accordance with the implementing rules, in the
following cases:
(a) wherever the Commission and the international organisation are
bound by a long-term framework agreement laying down theadministrative and financial arrangements for their cooperation;
(b) wherever the Commission and the international organisation
elaborate a joint project or programme;
(c) where the funds of several donors are pooled and are not earmarked
for specific items or categories of expenditure, that is to say, in thecase of multi-donor actions.
These organisations shall, in their accounting, audit, internal control and
procurement procedures, apply standards which offer guaranteesequivalent to internationally accepted standards.
2. Individual agreements concluded with international organisations
for the award of financing shall contain detailed provisions for theimplementation of the tasks entrusted to such international organi-sations.
3. International organisations to which implementation tasks are
delegated shall ensure, in conformity with Article 30(3), adequateannual ex post publication of beneficiaries of funds deriving from the
budget.
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Article 54
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1. The Commission may not delegate to third parties the executive
powers it enjoys under the Treaties where they involve a large measureof discretion implying political choices. The implementing tasks
delegated must be clearly defined and fully supervised as to the use
made of them.
The delegation of budget-implementation tasks shall comply with the
principle of sound financial management which requires effective and
efficient internal control and shall ensure compliance with the principle
of non-discrimination, and the visibility of Community action. Noimplementing tasks delegated in this way may give rise to conflictsof interests.
▼
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2.►M1 Within the limits laid down in paragraph 1, the
Commission may, when implementing the budget by indirect centralisedmanagement or by decentralised management under Articles 53a or 53c,delegate tasks of public authority and in particular budget implemen-tation tasks to: ◄
(a) agencies governed by Community law, referred to in Article 55,
hereinafter: ‘executive agencies ’;
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(b) bodies set up by the Communities as referred to in Article 185 and
other specialised Community bodies, such as the EuropeanInvestment Bank or the European Investment Fund, provided thatto do so is compatible with the tasks of each body as defined in thebasic act;
(c) national or international public-sector bodies or bodies governed by
private law with a public-service mission providing adequatefinancial guarantees and complying with the conditions providedfor in the implementing rules;
(d) persons entrusted with the implementation of specific actions
pursuant to Title V of the Treaty on European Union, and identified▼
M12002R1605 —EN—01.01.2007 —001.002 —31
in the relevant basic act within the meaning of Article 49 of this
Regulation.
▼B
3. Where the bodies referred to in paragraph 2 perform implemen-tation tasks, they shall conduct regular checks to ensure that the actionsto be financed from the budget have been implemented correctly.
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Such bodies or persons shall take appropriate measures to prevent irre-
gularities and fraud and if necessary bring legal proceedings to recoverfunds wrongly paid or incorrectly used.
Article 55
1. The executive agencies shall be legal persons under Community
law created by Commission Decision to which powers may be delegatedto implement all or part of a Community programme or project onbehalf of the Commission and under its responsibility in accordancewith Council Regulation (EC) No 58/2003 of 19 December 2002laying down the statute for executive agencies to be entrusted withcertain tasks in the management of Community programmes (
1).
2. Implementation of the corresponding operational appropriations
shall be carried out by the director of the agency.
Article 56
1. Where the Commission implements the budget by indirect
centralised management, it shall first obtain evidence of the existence
and proper operation within the entities to which it entrusts implemen-
tation of the following:
(a) transparent procurement and grant-award procedures which are non-
discriminatory and exclude any conflict of interest and which are inaccordance with the provisions of Titles V and VI respectively;
(b) an effective and efficient internal control system for the
management of operations, which includes effective segregation ofthe duties of authorising officer and accounting officer or of theequivalent functions;
(c) an accounting system that enables the correct use of Community
funds to be verified and the use of funds to be reflected inCommunity accounts;
(d) an independent external audit;(e) public access to information at the level provided for in Community
Regulations;
(f) adequate annual ex post publication of beneficiaries of funds
deriving from the budget in conformity with Article 30(3).
The Commission may accept that the audit, accounting and procurement
systems of the entities referred to in paragraphs 1 and 2 are equivalentto its own, with due account for internationally accepted standards.
2. In the case of decentralised management, the criteria laid down in
paragraph 1 with the exception of the criterion provided in point (e),shall apply, in full or in part, depending on the degree of decentrali-sation, agreed between the Commission and the third country, national
or international public-sector bodies concerned.
Notwithstanding paragraph (1)(a) and Article 169a, the Commission
may decide:
—in the case of pooling of funds, and▼
M12002R1605 —EN—01.01.2007 —001.002 —32
(1) OJ L 11, 16.1.2003, p. 1.
—under the conditions provided in the basic act,
to use the procurement or grant procedures of the beneficiary partner
country or as agreed among donors.
Before taking such a decision, the Commission shall first obtain
evidence on a case-by-case basis that such procedures satisfy the prin-
ciples of transparency, equal treatment and non-discrimination, preventany conflict of interest, offer guarantees equivalent to internationallyaccepted standards and ensure compliance with the provisions ofsound financial management which requires effective and efficientinternal control.
The third country, national or international public-sector bodies
concerned shall undertake to fulfil the following obligations:
(a) to comply, subject to the first subparagraph of this paragraph, with
the criteria laid down in paragraph 1;
(b) to ensure that the audit referred to in point (d) of paragraph 1 is
exercised by a national institution for independent external auditing;
(c) to conduct regular checks to ensure that the actions to be financed
from the budget have been implemented correctly;
(d) to take appropriate measures to prevent irregularities and fraud and,
if necessary, to bring legal proceedings to recover funds wronglypaid.
3. The Commission shall ensure supervision, evaluation and control
of the implementation of the tasks entrusted. It shall take theequivalence of control systems into account when it carries outcontrols using its own control systems.
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Article 57
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1. The Commission may not entrust measures of implementation of
funds deriving from the budget, including payment and recovery, to
external private-sector entities or bodies, except in the case referred to
in Article 54(2)(c) or in specific cases where the payments involved areto be made to beneficiaries determined by the Commission, are subjectto conditions and amounts fixed by the Commission and do not involvethe exercise of discretion by the entity or body making the payments.
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2. The tasks which may be entrusted by contract to external private-
sector entities or bodies other than those which have a public-servicemission are technical expertise tasks and administrative, preparatory orancillary tasks involving neither the exercise of public authority nor theuse of discretionary powers of judgment.
CHAPTER 3
Financial actors
Section 1
Principle of segregation of duties
Article 58
The duties of authorising officer and accounting officer shall be
segregated and mutually incompatible.▼
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Section 2
Authorising officer
Article 59
1. The institution shall perform the duties of authorising officer.
▼M1
1a. For the purposes of this Title, the term ‘staff’refers to persons
covered by the Staff Regulations.
2. Each institution shall lay down in its internal administrative rules
the staff of an appropriate level to whom it delegates in compliance withthe conditions in its rules of procedure the duties of the authorisingofficer, the scope of the powers delegated and the possibility for thepersons to whom these powers are delegated to subdelegate them.
3. The powers of authorising officer shall be delegated or subde-
legated only to staff.
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4. Authorising officers by delegation or subdelegation may act only
within the limits set by the instrument of delegation or subdelegation.The responsible authorising officer by delegation or subdelegation maybe assisted in his/her task by one or more members of staff entrusted,
under his/her responsibility, to carry out certain operations necessary for
implementation of the budget and presentation of the accounts.
Article 60
1. The authorising officer shall be responsible in each institution for
implementing revenue and expenditure in accordance with the principlesof sound financial management and for ensuring that the requirementsof legality and regularity are complied with.
2. To implement expenditure, the authorising officer by delegation
and by subdelegation shall make budgetary commitments and legalcommitments, shall validate expenditure and authorise payments and
shall undertake the preliminaries for the implementation of appro-
priations.
3. Implementation of revenue shall comprise drawing up estimates of
amounts receivable, establishing entitlements to be recovered andissuing recovery orders. It shall involve waiving established entitlementswhere appropriate.
4. The authorising officer by delegation shall put in place, in
compliance with the minimum standards adopted by each institutionand having due regard to the risks associated with the managementenvironment and the nature of the actions financed, the organisationalstructure and the internal management and control procedures suited tothe performance of his/her duties, including where appropriate ex post
verifications. Before an operation is authorised, the operational andfinancial aspects shall be verified by members of staff other than theone who initiated the operation. The initiation and the ex ante andex
post verification of an operation shall be separate functions.
5. All staff responsible for controlling the management of financial
operations must have the necessary professional skills. They shallrespect a specific code of professional standards established by eachinstitution.
6. Any member of staff involved in the financial management and
control of transactions who considers that a decision he/she is requiredby his/her superior to apply or to agree to is irregular or contrary to theprinciples of sound financial management or the professional rules he/she is required to observe shall inform the authorising officer by dele-▼
B2002R1605 —EN—01.01.2007 —001.002 —34
gation in writing and, if the latter fails to take action, the panel referred
to in Article 66(4). In the event of any illegal activity, fraud orcorruption which may harm the interests of the Community, he/sheshall inform the authorities and bodies designated by the applicablelegislation.
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7. The authorising officer by delegation shall report to his institution
on the performance of his duties in the form of an annual activity reporttogether with financial and management information confirming that the
information contained in the report presents a true and fair view except
as otherwise specified in any reservations related to defined areas ofrevenue and expenditure.
That report shall indicate the results of the operations by reference to the
objectives set, the risks associated with these operations, the use madeof the resources provided and the efficiency and effectiveness of theinternal control system. The internal auditor shall take note of theannual report and any other pieces of information identified. No laterthan 15 June each year, the Commission shall send to the budgetaryauthority a summary of the annual reports for the previous year.
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Section 3
Accounting officer
Article 61
1. Each institution shall appoint an accounting officer who shall be
responsible in each institution for:
(a) proper implementation of payments, collection of revenue and
recovery of amounts established as being receivable;
(b) preparing and presenting the accounts in accordance with Title VII;(c) keeping the accounts in accordance with Title VII;(d) laying down, in accordance with Title VII, the accounting rules and
methods and the chart of accounts;
(e) laying down and validating the accounting systems and where
appropriate validating systems laid down by the authorising
officer to supply or justify accounting information; ►
M1 the
accounting officer shall be empowered to verify the respect ofvalidation criteria; ◄
(f) treasury management.
2. The accounting officer shall obtain from authorising officers, who
shall guarantee its reliability, all the information necessary for the
production of accounts which give a true image of the Communities'assets and of budgetary implementation.
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2a. Before the adoption of the accounts by the institution, theaccounting officer shall sign them off, thereby certifying that he has areasonable assurance that the accounts present a true and fair view ofthe financial situation of the institution.
For that purpose, the accounting officer shall satisfy himself that the
accounts have been prepared in accordance with the accounting rules,methods and accounting systems established under his responsibility aslaid down in this Regulation for the accounts of his institution, and thatall revenue and expenditure is entered in the accounts.
The authorising officers by delegation shall forward all information that
the accounting officer needs in order to fulfil his duties.▼
B2002R1605 —EN—01.01.2007 —001.002 —35
The authorising officers shall remain fully responsible for the proper use
of the funds they manage as well as the legality and regularity of theexpenditure under their control.
2b. The accounting officer shall be empowered to check the infor-
mation received as well as to carry out any further checks he deemsnecessary in order to sign off the accounts.
The accounting officer shall make reservations, if necessary, explaining
exactly the nature and scope of such reservations.
2c. The accounting officers of the other institutions and agencies
shall sign off their annual accounts and send them to the Commission'saccounting officer.
3. Save as otherwise provided in this Regulation, only the accounting
officer is empowered to manage cash and cash equivalents. He shall beresponsible for their safekeeping.
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Article 62
►M1 The accounting officer may, in the performance of his duties,
delegate certain tasks to subordinate staff. ◄
The instrument of delegation shall lay down the tasks entrusted to the
delegatees.
Section 4
Imprest administrator
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Article 63
1. Imprest accounts may be set up for the collection of revenue other
than own resources and for the payment of small sums as defined in theimplementing rules.
However, in the field of crisis management aid and humanitarian aid
operations within the meaning of Article 110, imprest accounts may beused without any limitation on the amount while respecting the level ofappropriations decided by the budgetary authority on the correspondingbudget line for the current financial year.
2. Imprest accounts shall be endowed by the institution's accounting
officer and shall be placed under the responsibility of imprest adminis-trators designated by the institution's accounting officer.
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CHAPTER 4
Liability of the financial actors
Section 1
General rules
Article 64
1. Without prejudice to any disciplinary action, authorising officers
by delegation and subdelegation may at any time have their delegationor subdelegation withdrawn temporarily or definitively by the authoritywhich appointed them.▼
M12002R1605 —EN—01.01.2007 —001.002 —36
2. Without prejudice to any disciplinary action, the accounting officer
may at any time be suspended temporarily or definitively from his/herduties by the authority which appointed him/her.
3. Without prejudice to any disciplinary action, imprest adminis-
trators may at any time be suspended temporarily or definitively fromtheir duties by the authority which appointed them.
Article 65
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1. The provisions of this Chapter are without prejudice to anyliability under criminal law which the financial actors referred to inArticle 64 may incur as provided in the applicable national law andin the provisions in force on the protection of the Communities'financial interests and on the fight against corruption involvingofficials of the Communities or officials of Member States.
▼
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2. Each authorising officer, accounting officer or imprest adminis-
trator shall be liable to disciplinary action and payment of compensationas laid down in the Staff Regulations, without prejudice to Articles 66,67 and 68. In the event of illegal activity, fraud or corruption which
may harm the interests of the Community, the matter will be submitted
to the authorities and bodies designated by the applicable legislation.
Section 2
Rules applicable to authorising officers by
delegation and subdelegation
Article 66
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1. The authorising officer shall be liable for payment of compen-sation as laid down in the Staff Regulations.
1a. The obligation to pay compensation shall apply in particular if:(a) the authorising officer, whether intentionally or through gross
negligence on his part, determines entitlements to be recovered orissues recovery orders, commits expenditure or signs a paymentorder without complying with this Regulation and the implementingrules;
(b) the authorising officer, whether intentionally or through gross
negligence on his part, omits to draw up a document establishingan amount receivable, neglects to issue a recovery order or is late inissuing it or is late in issuing a payment order, thereby rendering theinstitution liable to civil action by third parties.
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2. An authorising officer by delegation or subdelegation who
considers that a decision which it is his/her responsibility to take isirregular or contrary to the principles of sound financial management
shall inform the delegating authority in writing. If the delegating
authority then gives a reasoned instruction in writing to the authorisingofficer by delegation or subdelegation to take the decision in question,the authorising officer may not be held liable.
▼
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3. In the event of subdelegation within his services, the authorisingofficer by delegation continues to be responsible for the efficiency andeffectiveness of the internal management and control systems put inplace and for the choice of the authorising officer by subdelegation.▼
B2002R1605 —EN—01.01.2007 —001.002 —37
4. Each institution shall set up a specialised financial irregularities
panel or participate in a joint panel established by several institutions.The panels shall function independently and determine whether afinancial irregularity has occurred and what the consequences, if any,should be.
▼
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On the basis of the opinion of this panel, the institution shall decide
whether to initiate proceedings entailing liability to disciplinary actionor to payment of compensation. If the panel detects systemic problems,it shall send a report with recommendations to the authorising officerand to the authorising officer by delegation, provided the latter is notthe person involved, as well as to the internal auditor.
Section 3
Rules applicable to a ccounting of ficers and
imprest administrators
Article 67
An accounting officer shall be liable to disciplinary action and payment
of compensation, as laid down and in accordance with the procedures inthe Staff Regulations. He/She may in particular render himself liable byany of the following forms of misconduct:
(a) he/she loses or damages monies, assets and documents in his/her
keeping;
(b) he/she wrongly alters bank accounts or postal giro accounts;
(c) he/she recovers or pays amounts which are not in conformity with
the corresponding recovery or payment orders;
(d) he/she fails to collect revenue due.
Article 68
An imprest officer shall be liable to disciplinary action and payment of
compensation, as laid down and in accordance with the procedures inthe Staff Regulations. He/She may in particular render himself liable byany of the following forms of misconduct:
(a) he/she loses or damages monies, assets and documents in his/her
keeping;
(b) he/she cannot provide proper supporting documents for the
payments he/she has made;
(c) he/she makes payments to persons other than those entitled;
(d) he/she fails to collect revenue due.
CHAPTER 5
Revenue operations
Section 1
Making available of own resources
Article 69
An estimate of revenue constituted by own resources, as referred to in
the Council Decision on the system of the Communities' own resources,▼
M12002R1605 —EN—01.01.2007 —001.002 —38
shall be entered in the budget in euro. It shall be made available in
accordance with the Council Regulation implementing that Decision.
Section 2
Estimate of amounts receivable
Article 70
1. An estimate of the amount receivable shall first be made by the
authorising officer responsible in respect of any measure or situationwhich may give rise to or modify an amount owing to the Communities.
2. By way of derogation from paragraph 1, no estimate of the
amount receivable shall be made before Member States make
available to the Commission the amounts of own resources defined inthe Council Decision on the system of the Communities' own resourceswhich are paid at fixed intervals by the Member States. The authorisingofficer responsible shall issue a recovery order in respect of theseamounts.
Section 3
Establishment of amounts receivable
Article 71
1. Establishment of an amount receivable is the act by which the
authorising officer by delegation or subdelegation:
(a) verifies that the debt exists;(b) determines or verifies the reality and the amount of the debt;
(c) verifies the conditions in which the debt is due.
2. The own resources made available to the Commission and any
amount receivable that is identified as being certain, of a fixedamount and due must be established by a recovery order to theaccounting officer followed by a debit note sent to the debtor, bothdrawn up by the authorising officer responsible.
3. Amounts wrongly paid shall be recovered.4. The conditions in which interest on late payment is due to the
Communities shall be laid down in the implementing rules.
Section 4
Authorisation of recovery
Article 72
1. The authorisation of recovery is the act whereby the authorising
officer by delegation or subdelegation responsible instructs the
accounting officer, by issuing a recovery order, to recover an amount
receivable which he/she has established.
2. The institution may formally establish an amount as being
receivable from persons other than States by means of a decisionwhich shall be enforceable within the meaning of Article 256 of theEC Treaty.▼
B2002R1605 —EN—01.01.2007 —001.002 —39
Section 5
Recovery
Article 73
1. The accounting officer shall act on recovery orders for amounts
receivable duly established by the authorising officer responsible. He/She shall exercise due diligence to ensure that the Communities receivetheir revenue and shall see that their rights are safeguarded.
The accounting officer shall recover amounts by offsetting them against
equivalent claims that the Communities have on any debtor who
himself/herself has a claim on the Communities that is certain, of a
fixed amount and due.
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2. Where the responsible authorising officer by delegation isplanning to waive or partially waive recovery of an establishedamount receivable, he/she shall ensure that the waiver is in order andcomplies with the principle of sound financial management and propor-tionality in accordance with the procedures and the criteria laid down inthe implementing rules. The waiver decision must be substantiated. Theauthorising officer may delegate the decision only as laid down in theimplementing rules.
The responsible authorising officer may furthermore cancel or adjust an
established amount receivable, in accordance with the conditions set outin the implementing rules.
Article 73a
Without prejudice to the provisions of specific regulations and the
application of the Council Decision relating to the Communities' ownresources system, entitlements of the Communities in respect of thirdparties and entitlements of third parties in respect of the Communitiesshall be subject to a limitation period of five years.
The date for calculating the limitation period and the conditions for
interrupting this period shall be laid down in the implementing rules.
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Article 74
Revenue received by way of fines, periodic penalty payments and other
penalties and any accrued interest shall not be finally recorded asbudgetary revenue as long as the decisions imposing them may beannulled by the Court of Justice.
The first paragraph shall not apply to decisions on clearance of accounts
or financial corrections.
CHAPTER 6
Expenditure operations
Article 75
1. Every item of expenditure shall be committed, validated,
authorised and paid.
2. Except in the case of appropriations which can be implemented
without a basic act in accordance with ►
M1 Article 49(6)(e) ◄, the
commitment of the expenditure shall be preceded by a financing▼B2002R1605 —EN—01.01.2007 —001.002 —40
decision adopted by the institution or the authorities to which powers
have been delegated by the institution.
Section 1
Commitment of expenditure
Article 76
1. The budgetary commitment is the operation reserving the appro-
priation necessary to cover subsequent payments to honour a legalcommitment.
The legal commitment is the act whereby the authorising officer enters
into or establishes an obligation which results in a charge.
The budgetary commitment and the legal commitment shall be adopted
by the same authorising officer, save in duly substantiated cases asprovided for in the implementing rules.
2. The budgetary commitment is individual when the beneficiary and
the amount of the expenditure are known.
The budgetary commitment is global when at least one of the elements
necessary to identify the individual commitment is still not known.
The budgetary commitment is provisional when it is intended to cover
the expenditure referred to in Article 150 or routine administrative
expenditure and either the amount or the final beneficiaries are not
definitively known.
3. Budgetary commitments for actions extending over more than one
financial year may be broken down over several years into annualinstalments only where the basic act so provides and for administrativeexpenditure. Where the budgetary commitment is thus divided intoannual instalments, the legal commitment shall stipulate this, except
in the case of expenditure on staff.
Article 77
1. In respect of any measure which may give rise to expenditure
chargeable to the budget, the authorising officer responsible must firstmake a budgetary commitment before entering into a legal obligationwith third parties.
2. Subject to the special provisions of Title IV of part two, global
budget commitments shall cover the total cost of the corresponding
individual legal commitments concluded up to 31 December of year n
+1 .
Subject to Article 76(3) and Article 179(2), individual legal
commitments relating to individual or provisional budgetarycommitments shall be concluded by 31 December of year n.
At the end of the periods referred to in the first and second subpara-
graphs, the unused balance of these budgetary commitments shall bedecommitted by the authorising officer responsible.
The amount of each individual legal commitment adopted following a
global commitment shall, prior to signature, be registered by theauthorising officer responsible in the budgetary accounts and bookedto the global commitment.
3. The legal commitments entered into for actions extending over
more than one financial year and the corresponding budgetarycommitments shall, save in the case of staff expenditure, have a finaldate for implementation set in compliance with the principle of soundfinancial management.▼
B2002R1605 —EN—01.01.2007 —001.002 —41
Any parts of such commitments which have not been executed six
months after that date shall be decommitted in accordance withArticle 11.
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The amount of a budget commitment corresponding to a legalcommitment for which no payment within the meaning of Article 81has been made in a period of three years following the signing of thelegal commitment shall be decommitted.
▼
B
Article 78
1. When adopting a budgetary commitment, the authorising officer
responsible shall ensure that:
(a) the expenditure has been charged to the correct item in the budget;(b) the appropriations are available;
(c) the expenditure conforms to the provisions of the Treaties, of the
budget, of this Regulation, of the implementing rules and of all actsadopted in accordance with the Treaties and regulations;
(d) the principle of sound financial management is complied with.2. When registering a legal commitment, the authorising officer shall
ensure that:
(a) the commitment is covered by the corresponding budgetary
commitment;
(b) the expenditure is regular and conforms to the provisions of the
Treaties, of the budget, of this Regulation, of the implementingrules and of all acts adopted in accordance with the Treaties andthe regulations;
(c) the principle of sound financial management is respected.
Section 2
Validation of expenditure
Article 79
Validation of expenditure is the act whereby the authorising officer
responsible:
(a) verifies the existence of the creditor's entitlement;(b) determines or verifies the reality and the amount of the claim;
(c) verifies the conditions in which payment is due.
Section 3
Authorisation of expenditure
Article 80
Authorisation of expenditure is the act whereby the authorising officer
responsible, having verified that the appropriations are available and byissuing a payment order, instructs the accounting officer to pay anamount of expenditure which he/she has validated.▼
B2002R1605 —EN—01.01.2007 —001.002 —42
Where periodic payments are made with regard to services rendered,
including rental services, or goods delivered, and subject to his riskanalysis, the authorising officer may order the application of a directdebit system.
▼
B
Section 4
Payment of expenditure
Article 81
1. Payment shall be made on production of proof that the relevant
action is in accordance with the provisions of the basic act or thecontract and shall cover one or more of the following operations:
(a) payment of the entire amount due;(b) payment of the amount due in any of the following ways:
(i) pre-financing, which may be divided into a number of
payments;
(ii) one or more interim payments;
(iii) payment of the balance of the amounts due.
2. A distinction shall be made in the accounts between the different
types of payment referred to in paragraph 1 at the time they are made.
Article 82
Payment of expenditure shall be made by the accounting officer within
the limits of the funds available.
Section 5
Time limits for expenditure operations
Article 83
The validation, authorisation and payment of expenditure must be
completed within the time limits laid down in the implementing rules,
which shall also specify the circumstances in which creditors paid lateare entitled to receive default interest charged to the line from which theprincipal was paid.
CHAPTER 7
IT systems
Article 84
Where revenue and expenditure operations are managed by means of
computer systems, documents may be signed by a computerised orelectronic procedure.▼
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CHAPTER 8
Internal auditor
Article 85
Each institution shall establish an internal auditing function which must
be performed in compliance with the relevant international standards.The internal auditor appointed by the institution shall be answerable tothe latter for verifying the proper operation of budgetary implementation
systems and procedures. The internal auditor may not be either
authorising officer or accounting officer.
Article 86
1. The internal auditor shall advise his/her institution on dealing with
risks, by issuing independent opinions on the quality of managementand control systems and by issuing recommendations for improving theconditions of implementation of operations and promoting soundfinancial management.
He/She shall be responsible in particular:(a) for assessing the suitability and effectiveness of internal
management systems and the performance of departments in imple-
menting policies, programmes and actions by reference to the risks
associated with them;
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(b) for assessing the efficiency and effectiveness of the internal control
and audit systems applicable to every budgetary implementationoperation.
▼
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2. The internal auditor shall perform his/her duties on all the institu-
tion's activities and departments. He/She shall enjoy full and unlimitedaccess to all information required to perform his duties, if necessary onthe spot, including in the Member States and in third countries.
3. The internal auditor shall report to the institution on his/her
findings and recommendations. The institution shall ensure that action
is taken on recommendations resulting from audits. The internal auditor
shall also submit to the institution an annual internal audit report indi-cating the number and type of internal audits carried out, the recom-mendations made and the action taken on those recommendations.
4. Each year the institution shall forward a report to the discharge
authority summarising the number and type of internal audits carriedout, the recommendations made and the action taken on those recom-mendations.
Article 87
Special rules applicable to the internal auditor shall be laid down by the
institution and shall be such as to guarantee that he/she is totally inde-
pendent in the performance of his/her duties and to establish his respon-
sibility.
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If the internal auditor is a member of staff, he shall assume responsi-bility as laid down in the Staff Regulations and spelt out in the imple-menting rules.▼
B2002R1605 —EN—01.01.2007 —001.002 —44
TITLE V
PROCUREMENT
CHAPTER 1
General provisions
Section 1
Scope and award principles
▼M1
Article 88
1. Public contracts are contracts for pecuniary interest concluded in
writing between one or more economic operators and one or morecontracting authorities within the meaning of Articles 104 and 167, inorder to obtain, against payment of a price paid in whole or in part fromthe budget, the supply of movable or immovable assets, the execution of
works or the provision of services.
These contracts comprise:
(a) contracts for the purchase or rental of a building;(b) supply contracts;(c) works contracts;(d) service contracts.2. Framework contracts are contracts concluded between one or more
contracting authorities and one or more economic operators, the purpose
of which is to establish the terms governing contracts to be awardedduring a given period, in particular with regard to price and, whereappropriate, the quantity envisaged. They shall be governed by theprovisions of this Title concerning the award procedure, includingadvertising.
3. This Title does not relate to grants, without prejudice to
Articles 93 to 96.
▼
B
Article 89
1. All public contracts financed in whole or in part by the budget
shall comply with the principles of transparency, proportionality, equal
treatment and non-discrimination.
2. All procurement contracts shall be put out to tender on the
broadest possible base, except when use is made of the negotiatedprocedure referred to in Article 91(1)(d).
▼
M1
Contracting authorities may not use framework contracts improperly orin such a way that the purpose or effect is to prevent, restrict or distortcompetition.▼
B2002R1605 —EN—01.01.2007 —001.002 —45
Section 2
Publication
Article 90
▼M1
1. All contracts exceeding the thresholds provided for in Article 105
or Article 167 shall be published in the Official Journal of the European
Union .
Contract notices shall be published in advance except in the cases
referred to in Article 91(2) of this Regulation, as specified in the imple-menting rules, and for the service contracts covered by Annex IIB toDirective 2004/18/EC of the European Parliament and of the Council of31 March 2004 on the coordination of procedures for the award ofpublic works contracts, public supply contracts and public service
contracts (
1).
▼B
Publication of certain information after the contract has been awardedmay be dropped where it would hinder application of the law, would becontrary to the public interest or would harm the legitimate businessinterests of public or private undertakings or could distort fair compe-tition between them.
▼
M1
2. Contracts with a value below the thresholds provided for inArticle 105 or Article 167 and the service contracts referred to inAnnex IIB to Directive 2004/18/EC shall be advertised by appropriatemeans, as specified in the implementing rules.
▼
B
Section 3
Procurement procedures
Article 91
▼M1
1. Procurement procedures shall take one of the following forms:
(a) the open procedure;(b) the restricted procedure;(c) contests;(d) the negotiated procedure;(e) the competitive dialogue.Where a public contract or a framework contract is of interest to two or
more institutions, executive agencies or bodies referred to inArticle 185, and whenever there is a possibility for realising efficiencygains, the contracting authorities concerned shall seek to carry out theprocurement procedure on an interinstitutional basis.
Where a public contract or framework contract is necessary for the
implementation of a joint action between one institution and acontracting authority from a Member State, the procurement proceduremay be carried out jointly by the institution and this contractingauthority, as specified in the implementing rules.▼
B2002R1605 —EN—01.01.2007 —001.002 —46
(1) OJ L 134, 30.4.2004, p. 114. Directive as last amended by Commission
Regulation (EC) No 2083/2005 (OJ L 333, 20.12.2005, p. 28).
2. For contracts where the value exceeds the thresholds provided for
in Article 105 or Article 167, use of the negotiated procedure shall beauthorised only in the cases provided for in the implementing rules.
▼
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▼B
3. The thresholds below which the contracting authority may either
use a negotiated procedure or, by way of derogation from the firstsubparagraph of Article 88(1), simply pay costs against invoices shallbe determined in the implementing rules.
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4. The implementing rules shall define the procurement procedure,referred to in paragraph 1, applicable to service contracts covered byAnnex IIB to Directive 2004/18/EC and to contracts which are declaredto be secret, whose performance must be accompanied by specialsecurity measures, or when the protection of essential interests of theCommunities or the European Union so requires.
Article 92
The documents relating to the call for tenders shall give a full, clear and
precise description of the subject of the contract and specify theexclusion, selection and award criteria applicable to the contract.
▼
B
Article 93
1.►M1 Candidates or tenderers shall be excluded from partici-
pation in procurement procedures if: ◄
(a) they are bankrupt or being wound up, are having their affairs admi-
nistered by the courts, have entered into an arrangement withcreditors, have suspended business activities, are the subject ofproceedings concerning those matters, or are in any analogoussituation arising from a similar procedure provided for in nationallegislation or regulations;
(b) they have been convicted of an offence concerning their profes-
sional conduct by a judgment which has the force of res judicata ;
(c) they have been guilty of grave professional misconduct proven by
any means which the contracting authority can justify;
(d) they have not fulfilled obligations relating to the payment of social
security contributions or the payment of taxes in accordance with
the legal provisions of the country in which they are established orwith those of the country of the contracting authority or those of thecountry where the contract is to be performed;
(e) they have been the subject of a judgment which has the force of res
judicata for fraud, corruption, involvement in a criminal organi-
sation or any other illegal activity detrimental to the Communities'financial interests;
▼
M1
(f) they are currently subject to an administrative penalty referred to in
Article 96(1).
Points (a) to (d) of the first subparagraph shall not apply in the case of
purchase of supplies on particularly advantageous terms from a supplierwhich is definitively winding up its business activities, or from thereceivers or liquidators of a bankruptcy, through an arrangement with
creditors, or through a similar procedure under national law.
2. Candidates or tenderers shall certify that they are not in one of the
situations listed in paragraph 1. However, the contracting authority may▼
B2002R1605 —EN—01.01.2007 —001.002 —47
refrain from requiring such certification for very low value contracts, as
specified in the implementing rules.
For the purpose of the correct application of paragraph 1, the candidate
or tenderer, whenever requested by the contracting authority, must:
(a) where the candidate or tenderer is a legal entity, provide information
on the ownership or on the management, control and power ofrepresentation of the legal entity;
(b) where subcontracting is envisaged, certify that the subcontractor is
not in one of the situations referred to in paragraph 1.
3. The implementing rules shall determine the maximum period
during which the situations referred to in paragraph 1 give rise to theexclusion of candidates or tenderers from participation in a procurementprocedure. The maximum period shall not exceed 10 years.
Article 94
A contract shall not be awarded to candidates or tenderers who, during
the procurement procedure for this contract:
(a) are subject to a conflict of interest;(b) are guilty of misrepresentation in supplying the information required
by the contracting authority as a condition of participation in the
procurement procedure or fail to supply this information;
(c) find themselves in one of the situations of exclusion, referred to in
Article 93(1), for this procurement procedure.
Article 95
1. A central database shall be set up and operated by the Commission
in compliance with Community rules on the protection of personal data.
The database shall contain details of candidates and tenderers which is
in one of the situations referred to in Articles 93, 94, 96(1)(b) and (2)(a). It shall be common to the institutions, executive agencies and thebodies referred to in Article 185.
2. The authorities of the Member States and third countries as well as
the bodies, other than those referred to in paragraph 1, participating inthe implementation of the budget in accordance with Articles 53 and 54,shall communicate to the competent authorising officer information oncandidates and tenderers which are in one of the situations referred to inArticle 93(1) (e), where the conduct of the operator concerned wasdetrimental to the Communities' financial interest. The authorisingofficer shall receive this information and request the accountingofficer to enter it into the database.
The authorities and bodies mentioned in the first subparagraph shall
have access to the information contained in the database and maytake it into account, as appropriate and on their own responsibility forthe award of contracts associated with the implementation of the budget.
3. Transparent and coherent criteria to ensure proportionate appli-
cation of the exclusion criteria shall be laid down in the implementingrules. The Commission shall define standardised procedures andtechnical specifications for the operation of the database.
Article 96
1. The contracting authority may impose administrative or financial
penalties on the following:
(a) candidates or tenderers in the cases referred to in point (b) of
Article 94;▼
M12002R1605 —EN—01.01.2007 —001.002 —48
(b) contractors who have been declared to be in serious breach of their
obligations under contracts covered by the budget.
In all cases, however, the contracting authority must first give the
person concerned an opportunity to present his observations.
2. The penalties referred to in paragraph 1 shall be proportionate to
the importance of the contract and the seriousness of the misconduct,and may consist in:
(a) the exclusion of the candidate or tenderer or contractor concerned
from the contracts and grants financed by the budget, for a
maximum period of ten years; and/or
(b) the payment of financial penalties by the candidate or tenderer or
contractor up to the value of the contract in question.
Article 97
1. Contracts shall be awarded on the basis of award criteria
applicable to the content of the tender after the capability ofeconomic operators not excluded under Articles 93, 94 and 96(2)(a)has been checked in accordance with the selection criteria containedin the documents relating to the call for tenders.
2. Contracts shall be awarded by the automatic award procedure or
by the best-value-for-money procedure.
▼
B
Article 98
▼M1
1. The arrangements for submitting tenders shall be such as to ensure
that there is genuine competition and that the contents of tenders remainconfidential until they are all opened simultaneously.
2. If deemed appropriate and proportionate, the contracting authority
may require tenderers, as provided in the implementing rules, to lodge asecurity in advance as a guarantee that the bids made will not bewithdrawn.
▼
B
3. With the exception of the contracts involving small amountsreferred to in Article 91(3), applications and tenders shall be openedby an opening board appointed for this purpose. Any tender or appli-cation declared by the board not to satisfy the conditions laid downshall be rejected.
▼
M1
4. All requests to participate or tenders declared by the opening
board as satisfying the conditions laid down shall be evaluated, onthe basis of the criteria provided in the documents relating to the callfor tenders, in order to propose to the contracting authority the award ofthe contract or to proceed with an electronic auction.
▼
B
Article 99
While the procurement procedure is under way, all contacts between the
contracting authority and candidates or tenderers must satisfy conditionsensuring transparency and equal treatment. They may not lead toamendment of the conditions of the contract or the terms of theoriginal tender.▼
M12002R1605 —EN—01.01.2007 —001.002 —49
Article 100
1. The authorising officer shall decide to whom the contract is to be
awarded, in compliance with the selection and award criteria laid downin advance in the documents relating to the call for tenders and theprocurement rules.
2. The contracting authority shall notify all candidates or tenderers
whose applications or tenders are rejected of the grounds on which thedecision was taken, and all tenderers whose tenders are admissible andwho make a request in writing of the characteristics and relativeadvantages of the successful tender and the name of the tenderer towhom the contract is awarded.
However, certain details need not be disclosed where disclosure would
hinder application of the law, would be contrary to the public interest orwould harm the legitimate business interests of public or private under-takings or could distort fair competition between those undertakings.
Article 101
The contracting authority may, before the contract is signed, either
abandon the procurement or cancel the award procedure without thecandidates or tenderers being entitled to claim any compensation.
The decision must be substantiated and be brought to the attention of
the candidates or tenderers.
Section 4
Guarantees and control
▼
M1
Article 102
1. The contracting authority shall require contractors to lodge a
guarantee in advance in the cases specified in the implementing rules.
2. The contracting authority may, if it deems it appropriate and
proportionate, require contractors to lodge such a guarantee in order to:
(a) ensure full performance of the contract;(b) limit the financial risks connected with payment of pre-financing.
Article 103
Where the award procedure proves to have been subject to substantial
errors, irregularities or fraud, the institutions shall suspend the procedureand may take whatever measures are necessary, including the cancel-lation of the procedure.
Where, after the award of the contract, the award procedure or the
performance of the contract prove to have been subject to substantialerrors, irregularities or fraud, the institutions may, depending on thestage reached in the procedure, refrain from concluding the contractor suspend performance of the contract or, where appropriate,terminate the contract.
Where such errors, irregularities or fraud are attributable to the
contractor, the institutions may in addition refuse to make payments,may recover amounts already paid or may terminate all the contractsconcluded with this contractor, in proportion to the seriousness of theerrors, irregularities or fraud.▼
B2002R1605 —EN—01.01.2007 —001.002 —50
CHAPTER 2
Provisions applicable to contracts awarded by the Community
institutions on their own account
Article 104
The Community institutions shall be deemed to be contracting autho-
rities in the case of contracts awarded on their own account.►
M1 They shall delegate, in accordance with Article 59, the
necessary powers for the exercise of the function of contractingauthority. ◄
▼
M1
Article 105
1. Subject to Title IV of Part Two of this Regulation,
Directive 2004/18/EC lays down the thresholds which determine:
(a) the publication arrangements referred to in Article 90;
(b) the choice of procedures referred to in Article 91(1);
(c) the corresponding time limits.
2. Subject to exceptions and conditions specified in the implementing
rules, the contracting authority shall not, in the case of contracts coveredby Directive 2004/18/EC, sign the contract or framework contract withthe successful tenderer until a period of standstill has elapsed.
▼
B
Article 106
Participation in tendering procedures shall be open on equal terms to all
natural and legal persons coming within the scope of the Treaties and toall natural and legal persons in a third country which has with theEuropean Communities a special agreement in the field of publicprocurement under the conditions laid down in that agreement.
Article 107
Where the Multilateral Agreement on Government Procurement
concluded within the World Trade Organisation applies, the contractsshall also be open to nationals of the States which have ratified thisagreement, under the conditions laid down in that agreement.
TITLE VI
GRANTS
▼
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CHAPTER 1
Scope and form of grants
▼B
Article 108
1. Grants are direct financial contributions, by way of donation, from
the budget in order to finance:▼B2002R1605 —EN—01.01.2007 —001.002 —51
(a) either an action intended to help achieve an objective forming part
of a European Union policy;
(b) or the functioning of a body which pursues an aim of general
European interest or has an objective forming part of a EuropeanUnion policy.
▼
M1
They shall be covered either by a written agreement or by aCommission decision notified to the successful applicant.
2. The following shall not constitute grants within the meaning of
this Title:
(a) expenditure on the members and staff of the institutions and contri-
butions to the European schools;
(b) loans, risk-bearing instruments of the Community or Community
financial contributions to such instruments, the public contractsreferred to in Article 88 and aid paid as macro financial assistanceand budgetary support;
(c) equity investments on the basis of the private investor principle,
quasi-equity financing and shareholdings or equity participationsin international financial institutions such as the European Bankfor Reconstruction and Development (EBRD) or specialised
Community bodies such as the European Investment Fund (EIF);
(d) contributions paid by the Communities as subscriptions to bodies of
which they are members;
(e) expenditure implemented as part of shared, decentralised or joint
management within the meaning of Articles 53 to 53d;
(f) payments made to bodies to which implementation tasks are
delegated in accordance with Article 54(2) and contributions made
by virtue of their constitutive basic act to bodies set up by the
legislative authority;
(g) expenditure relating to fisheries markets referred to in Article 3
(2) (f) of Council Regulation (EC) No 1290/2005 of 21 June2005 on the financing of the common agricultural policy (
1);
(h) repayment of travel and subsistence expenses incurred by, or where
appropriate any other indemnities paid to, persons invited ormandated by the institutions.
3. The following shall be assimilated to grants and shall be governed,
as appropriate, by this Title:
(a) the benefit deriving from an interest subsidy on certain loans;(b) equity investments or participations other than those referred to in
point (c) of paragraph 2.
4. Each institution may award grants for communication activities
where, for duly justified reasons, the use of public procurementprocedures is not appropriate.
Article 108a
1. Grants may take any of the following forms:
(a) reimbursement of a specified proportion of the eligible costs
actually incurred;
(b) lump sums;(c) flat-rate financing;▼
B2002R1605 —EN—01.01.2007 —001.002 —52
(1) OJ L 209, 11.08.2005, p. 1. Regulation as amended by Regulation (EC)
No 320/2006 (OJ L 58, 28.2.2006, p. 42).
(d) a combination of the forms referred to in points (a), (b) and (c).
2. Grants shall not exceed an overall ceiling expressed in terms of
absolute value.
CHAPTER 2
Principles
Article 109
1. Grants shall be subject to the principles of transparency and equal
treatment.
They may not be cumulative or awarded retrospectively and they must
involve co-financing.
On no account may the combined total costs eligible, as specified in the
implementing rules, for financing be exceeded.
2. Grants may not have the purpose or effect of producing a profit
for the beneficiary.
3. Paragraph 2 shall not apply to the following:
(a) study, research or training scholarships paid to natural persons;
(b) prizes awarded following contests;
(c) actions the objective of which is the reinforcement of the financial
capacity of a beneficiary or the generation of an income in theframework of external actions.
▼
B
Article 110
▼M1
1. Grants shall be subject to an annual work programme, to bepublished at the start of the year.
That annual work programme shall be implemented through the publi-
cation of calls for proposals, save in duly substantiated exceptionalcases of urgency or where the characteristics of the beneficiary or ofthe action leave no other choice for a given action, or where the bene-ficiary is identified in a basic act as recipient of a grant.
The first subparagraph shall not apply to crisis management aid and
humanitarian aid operations.
▼
B
2. All grants awarded in the course of a financial year shall bepublished annually with due observance of the requirements of confi-dentiality and security.
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Article 111
Each action may give rise to the award of only one grant from the
budget to any one beneficiary, except where the relevant basic actsauthorise otherwise.
A beneficiary may be awarded only one operating grant from the budget
per financial year.
The applicant shall immediately inform the authorising officers of any
multiple applications and multiple grants relating to the same action orto the same work programme.
In no circumstances shall the same costs be financed twice by the
budget.▼
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Article 112
1. A grant may be awarded for an action which has already begun
only where the applicant can demonstrate the need to start the actionbefore the grant is awarded.
In such cases, costs eligible for financing may not have been incurred
prior to the date of submission of the grant application, save in dulysubstantiated exceptional cases as provided for in the basic act or in thecase of expenditure necessary for the proper implementation of crisismanagement aid or humanitarian aid operations as provided for in theimplementing rules.
No grant may be awarded retrospectively for actions already completed.2. An operating grant shall be awarded within six months after the
start of the beneficiary's budgetary year. Costs eligible for financingmay neither have been incurred before the grant application waslodged nor before the start of the beneficiary's budgetary year.
▼
B
Article 113
1. The grant may not finance the entire costs of the action, subject to
Title IV of part two.
The grant may not finance the entire operating expenditure of the bene-
ficiary body.
▼M1
2. Unless otherwise specified in the basic act with regard to bodiespursuing an objective of general European interest, when operatinggrants are renewed, they shall be gradually decreased. This provisionshall not apply to grants taking one of the form referred to in points (b)and (c) of Article 108a(1).
▼
B
CHAPTER 3
Award procedure
▼M1
Article 114
1. Grant applications shall be submitted in writing.
2. Grant applications shall be eligible if submitted by the following:(a) legal persons; grant applications may be eligible if submitted by
entities which do not have legal personality under the applicablenational law, provided that their representatives have the capacity toundertake legal obligations on their behalf and assume financialliability;
(b) natural persons in so far as this is required by the nature or char-
acteristics of the action or the objective pursued by the applicant.
3. Grants may not be awarded to applicants who are, at the time of a
grant award procedure, in one of the situations referred to in Articles 93(1), 94 and 96(2)(a).
Applicants must certify that they are not in one of the situations referred
to in the first subparagraph. However, the authorising officer mayrefrain from requiring such certification for very low value grants, asspecified in the implementing rules.▼
M12002R1605 —EN—01.01.2007 —001.002 —54
4. Administrative and financial penalties which are effective, propor-
tionate and dissuasive may be imposed on applicants by the authorisingofficer, in accordance with Article 96.
Such penalties may also be imposed on beneficiaries who at the moment
of the submission of the application or during the implementation of thegrant, have made false declarations in supplying the informationrequired by the authorising officer or fail to supply this information.
▼
B
Article 115
1. The selection criteria shall be such as to make it possible to assess
the applicant's ability to complete the proposed action or workprogramme.
2. The award criteria announced in advance in the call for proposals
shall be such as to make it possible to assess the quality of theproposals submitted in the light of the objectives and priorities set.
Article 116
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1. Proposals shall be evaluated, on the basis of pre-announcedselection and award criteria, with a view to determining whichproposals may be financed.
▼
B
2. The authorising officer responsible shall then, on the basis of the
evaluation provided for in paragraph 1, draw up the list of beneficiaries
and the amounts approved.
3. The authorising officer responsible shall inform applicants in
writing of the decision on their application. If the grant requested isnot awarded, the institution shall give the reasons for the rejection of theapplication, with reference in particular to the selection and awardcriteria already announced.
CHAPTER 4
Payment and control
Article 117
The pace of payments shall be determined by the financial risks
involved, the duration and progress of the action or the costs incurredby the beneficiary.
▼
M1
Article 118
1. The authorising officer responsible may, if he deems it appropriate
and proportionate, require the beneficiary to lodge a guarantee inadvance in order to limit the financial risks connected with thepayment of pre-financing.
2. The authorising officer shall require the beneficiary to lodge such
a guarantee in advance in the cases specified in the implementing rules.▼
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Article 119
1. The amount of the grant shall not become final until after the
institution has accepted the final reports and accounts, withoutprejudice to subsequent checks by the institution.
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M1
2. Should the beneficiary fail to comply with his obligations, thegrant shall be suspended or reduced or terminated in the casesprovided for by the implementing rules after the beneficiary has beengiven the opportunity to make his observations.
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CHAPTER 5
Implementation
▼M1
Article 120
1. Where implementation of the action requires the award of
procurement contracts by the beneficiary, the relevant procedures shallbe as set out in the implementing rules.
2. Where implementation of the action requires financial support to
be given to third parties, the beneficiary of a Community grant maygive such financial support provided that the following conditions aremet:
(a) the financial support is not the primary aim of the action;(b) the conditions for the giving of such support are strictly defined in
the grant decision or agreement between the beneficiary and theCommission, with no margin for discretion;
(c) the amounts concerned are small.
For the purpose of point (c), the maximum amount of financial support
that can be paid to a third party by a beneficiary shall be determined in
the implementing rules.
3. Each grant decision or agreement shall provide expressly for the
Commission and the Court of Auditors to exercise their powers ofcontrol, on documents and on the premises, over all contractors and
subcontractors who have received Community funds.
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TITLE VII
PRESENTATION OF THE ACCOUNTS AND ACCOUNTING
CHAPTER 1
Presentation of the accounts
Article 121
The Community accounts shall comprise:
▼M1
(a) the financial statements of the institutions as set out in Article 126,
those of the bodies referred to in Article 185 and of other bodieswhose accounts must be consolidated in accordance withCommunity accounting rules;▼
B2002R1605 —EN—01.01.2007 —001.002 —56
(b) the consolidated financial statements which present in aggregated
form the financial information contained in the financial statementsof the institutions and bodies referred to in point (a);
(c) the reports on implementation of the budget of the institutions and
the budgets of the bodies referred to in Article 185;
▼
M1
(d) the aggregated reports on implementation of the budget which
present the information contained in the reports referred to inpoint (c).
Article 122
1. The accounts of the institutions and bodies referred to in
Article 121 shall be accompanied by a report on budgetary and
financial management of the financial year.
2. The report referred to in paragraph 1 shall give an account, inter
alia, of the rate of implementation of the appropriations together withsummary information on the transfers of appropriations among thevarious budget items.
▼
B
Article 123
The accounts must comply with the rules and be accurate and compre-
hensive and present a true and fair view:
(a) as regards the financial statements, of the assets and liabilities,
charges and income, entitlements and obligations not shown asassets or liabilities and cash flow;
(b) as regards reports on budgetary implementation, of revenue and
expenditure operations.
Article 124
The financial statements shall be drawn up in accordance with the
generally accepted accounting principles, namely:
(a) going-concern basis;
(b) prudence;(c) consistent accounting methods;
(d) comparability of information;
(e) materiality;
(f) no netting;
(g) reality over appearance;
(h) accrual-based accounting.
Article 125
1. In accordance with the principle of accrual-based accounting, the
financial statements shall show the charges and income for the financialyear, regardless of the date of payment or collection.
2. The value of assets and liabilities shall be determined in
accordance with the valuation rules provided for in Article 133.▼
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Article 126
1. The financial statements shall be presented in millions of euro and
shall comprise:
(a) the balance sheet and the economic outturn account, which
represent the assets and liabilities and financial situation and the
economic outturn at 31 December of the previous year; they shallbe presented in accordance with the structure laid down by theDirectives of the European Parliament and of the Council on theannual accounts of certain types of companies, but with accountbeing taken of the specific nature of the Communities' activities;
(b) the cash-flow table showing amounts collected and disbursed during
the year and the final treasury position;
(c) the statement of changes in capital presenting in detail the increases
and decreases during the year in each item of the capital accounts.
2. The Annex to the financial statements shall supplement and
comment on the information presented in the statements referred to inparagraph 1 and shall supply all the additional information prescribedby internationally accepted accounting practice where such informationis relevant to the activities of the Communities.
Article 127
The budgetary implementation reports shall be presented in millions of
euro. They shall comprise:
(a) the budgetary outturn account, which sets out all budgetary
operations for the year in terms of revenue and expenditure; thestructure in which it is presented shall be the same as that of thebudget itself;
(b) the Annex to the budget outturn account, which shall supplement
and comment on the information given in that account.
▼
M1
Article 128
The accounting officers of the other institutions and bodies referred to
in Article 121 shall send to the Commission's accounting officer and tothe Court of Auditors by 1 March of the following year at the latesttheir provisional accounts together with the report on budgetary andfinancial management during the year.
The Commission's accounting officer shall consolidate these provisional
accounts with the Commission's provisional accounts and shall send tothe Court of Auditors, by 31 March of the following year at the latest,the Commission's provisional accounts accompanied by its report onbudgetary and financial management during the year together with theprovisional consolidated accounts.
The accounting officer of each institution and body referred to in
Article 121 shall also send the report on budgetary and financial
management to the European Parliament and the Council by the datespecified in the second paragraph.
▼
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Article 129
1. The Court of Auditors shall, by 15 June at the latest, make its
observations on the provisional accounts of each institution and eachbody referred to in ►
M1 Article 121 ◄.▼B2002R1605 —EN—01.01.2007 —001.002 —58
2. The institutions other than the Commission, and each of the bodies
referred to in Article 121, shall draw up their final accounts inaccordance with Article 61 and send them to the Commission'saccounting officer and the Court of Auditors by 1 July of thefollowing year at the latest with a view to drawing up the final conso-lidated accounts.
2a. The Commission's accounting officer shall prepare the final
consolidated accounts on the basis of the information presented bythe other institutions under paragraph 2. The final consolidatedaccounts shall be accompanied by a note established by the Commis-sion's accounting officer, by which he/she declares that they wereprepared in accordance with Title VII and with the accounting prin-ciples, rules and methods set out in annex to the financial statements.
3. After approving the final consolidated accounts and its own final
accounts, the Commission shall send them both to the EuropeanParliament, the Council and the Court of Auditors before 31 July ofthe following financial year.
▼
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4. The final consolidated accounts shall be published in the Official
Journal of the European Communities together with the statement of
assurance given by the Court of Auditors in accordance with Article 248
of the EC Treaty and Article 160c of the Euratom Treaty by ►M1 15
November ◄of the following financial year.
CHAPTER 2
Information on the implementation of the budget
Article 130
In addition to the statements provided for in Articles 126 and 127, the
Commission shall report to the European Parliament and to the Counciltwice a year on budgetary guarantees and the corresponding risks.
This information shall be sent to the Court of Auditors at the same time.
Article 131
1. In addition to the statements provided for in Articles 126 and 127,
►
M1 the Commission's accounting officer ◄shall send once a month
to the European Parliament and to the Council figures, aggregated at
chapter level at least, on the implementation of the budget, both for
revenue and for expenditure against all appropriations.
These figures shall also provide details of the utilisation of appro-
priations carried over.
The figures shall be sent within 10 working days following the end of
each month.
2. Three times a year, within the 30 working days following 31 May,
31 August and 31 December, ►M1 the Commission's accounting
officer◄shall send to the European Parliament and to the Council a
report on the implementation of the budget, covering both revenue andexpenditure broken down by chapter, article and item.
This report shall also provide details of the utilisation of appropriations
carried over from previous financial years.
3. The figures and the report on implementation of the budget shall
at the same time be sent to the Court of Auditors.▼
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CHAPTER 3
Accounting
Section 1
Common provisions
Article 132
1. The institution's accounting system is the system serving to
organise the budgetary and financial information in such a way thatfigures can be input, filed and registered.
2. The accounts shall consist of general accounts and budgetary
accounts. These accounts shall be kept in euro on the basis of thecalendar year.
3. The figures in the general accounts and the budgetary accounts
shall be adopted at the close of the budgetary year so that the accountsreferred to in Chapter 1 can be drawn up.
4. Notwithstanding paragraphs 2 and 3, the authorising officer by
delegation may keep analytical accounts.
Article 133
1. The Commission's accounting officer shall, after consulting the
accounting officers of the other institutions and bodies referred to in►
M1 Article 121 ◄, adopt the accounting rules and methods and the
harmonised chart of accounts to be applied by all the institutions, theoffices referred to in Title V of part two and all the bodies referred to in►
M1 Article 121 ◄.
2. When adopting the rules and methods referred to in paragraph 1,
the Commission's accounting officer shall be guided by the interna-tionally accepted accounting standards for the public sector but maydepart from them where justified by the specific nature of the Commu-nities' activities.
Section 2
General accounts
Article 134
The general accounts shall record, in chronological order using the
double entry method, all events and operations which affect theeconomic and financial situation and the assets and liabilities of theinstitutions and bodies referred to in ►
M1 Article 121. ◄
Article 135
1. Movements on the accounts and the balances shall be entered in
the accounting ledgers.
2. All accounting entries, including adjustments to the accounts, shall
be based on supporting documents, to which they shall refer.
3. The accounting system must be such as to leave a trail for all
accounting entries.▼B2002R1605 —EN—01.01.2007 —001.002 —60
Article 136
The accounting officer shall, after the close of the budgetary year and
up to the date of presentation of the accounts, make any adjustmentswhich, without involving disbursement or collection in respect of thatyear, are necessary for a true and fair presentation of the accounts whichcomplies with the rules.
Section 3
Budgetary accounts
Article 137
1. The budgetary accounts provide a detailed record of budgetary
implementation.
2. For the purposes of applying paragraph 1, the budgetary accounts
shall record all budgetary revenue and expenditure operations providedfor in Title IV of part one.
CHAPTER 4
Property inventories
Article 138
1. Each institution and each body referred to in ►
M1 Article
121◄shall keep inventories showing the quantity and value of all
the Communities' tangible, intangible and financial assets in accordancewith a model drawn up by the accounting officer of the Commission.
Each institution and each body referred to in ►
M1 Article 121 ◄
shall check that entries in the inventory correspond to the actual
situation.
2. The sale of movable property shall be suitably advertised.
TITLE VIII
EXTERNAL AUDIT AND DISCHARGE
CHAPTER 1
External audit
Article 139
1. The European Parliament, the Council and the Commission shall
inform the Court of Auditors, as soon as possible, of all decisions andrules adopted pursuant to Articles 9, 13, 18, 22, 23, 26 and 36.
▼
M1
2. Each institution shall inform the Court of Auditors and thebudgetary authority of any internal rules it adopts in respect offinancial matters.
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3. The Court of Auditors shall be informed of the appointment ofauthorising officers, internal auditors, accounting officers and imprestadministrators and of delegation decisions under Articles 51, 61, 62, 63and 85.▼
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Article 140
1. The examination by the Court of Auditors of whether all revenue
has been received and all expenditure incurred in a lawful and propermanner shall have regard to the provisions of the Treaties, the budget,this Regulation, the implementing rules and all other acts adoptedpursuant to the Treaties.
2. In the performance of its task, the Court of Auditors shall be
entitled to consult, in the manner provided for in Article 142, alldocuments and information relating to the financial management ofdepartments or bodies with regard to operations financed or co-financed by the Communities. It shall have the power to makeenquiries of any official responsible for a revenue or expenditureoperation and to use any of the auditing procedures appropriate to theaforementioned departments or bodies. The audit in the Member Statesshall be carried out in conjunction with the national audit institutions or,where they do not have the necessary powers, with the nationaldepartments responsible. The Court of Auditors and the national audit
bodies of the Member States shall cooperate in a spirit of trust while
maintaining their independence.
In order to obtain all the necessary information for the performance of
the task entrusted to it by the Treaties or the acts adopted pursuant to
them, the Court of Auditors may be present, at its request, during the
audit operations carried out within the framework of the implementationof the budget by, or on behalf of, any Community institution.
At the request of the Court of Auditors, each institution shall authorise
financial institutions holding Community deposits to enable the Court of
Auditors to ensure that external data tally with the accounts.
3. In order to perform its task, the Court of Auditors shall notify the
institutions and authorities to which this Regulation applies of the
names of the members of its staff who are empowered to audit them.
Article 141
The Court of Auditors shall ensure that all securities and cash on
deposit or in hand are checked against vouchers signed by the deposi-tories or against official memoranda of cash and securities held. It maycarry out such checks itself.
Article 142
1. The Commission, the other institutions, the bodies administering
revenue or expenditure on the Communities' behalf and the final bene-ficiaries of payments from the budget shall afford the Court of Auditorsall the facilities and give it all the information which the Court ofAuditors considers necessary for the performance of its task. Theyshall place at the disposal of the Court of Auditors all documents
concerning the award and performance of contracts financed by the
Community budget and all accounts of cash or materials, all accountingrecords or supporting documents, and also administrative documentsrelating thereto, all documents relating to revenue and expenditure, allinventories, all organisation charts of departments, which the Court ofAuditors considers necessary for auditing the budgetary and financialoutturn report on the basis of records or on the spot and, for the samepurposes, all documents and data created or stored on a magneticmedium.
The other services and internal audit bodies of the national adminis-
trations concerned shall afford the Court of Auditors all the facilitieswhich it considers necessary for the performance of its task.▼
B2002R1605 —EN—01.01.2007 —001.002 —62
The first subparagraph shall also apply to natural or legal persons
receiving payments from the Community budget.
2. The officials whose operations are checked by the Court of
Auditors shall:
(a) show their records of cash in hand, any other cash, securities and
materials of all kinds, and also the supporting documents in respectof their stewardship of the funds with which they are entrusted, andalso any books, registers and other documents relating thereto;
(b) present the correspondence and any other document required for the
full implementation of the audit referred to in Article 140(1).
The information supplied under point (b) of the first subparagraph may
be requested only by the Court of Auditors.
3. The Court of Auditors shall be empowered to audit the documents
in respect of the revenue and expenditure of the Communities which areheld by the departments of the institutions and, in particular, by thedepartments responsible for decisions in respect of such revenue andexpenditure, the bodies administering revenue or expenditure on theCommunities' behalf and the natural or legal persons receivingpayments from the budget.
4. The task of establishing that the revenue has been received and the
expenditure incurred in a lawful and proper manner and that thefinancial management has been sound shall extend to the utilisation,by bodies outside the institutions, of Community funds received byway of grants.
5. Community financing paid to beneficiaries outside the institutions
shall be subject to the agreement in writing by the beneficiaries or,failing agreement on their part, by the contractors or subcontractors,to an audit by the Court of Auditors into the use made of thefinancing granted.
6. The Commission shall provide the Court of Auditors, at its
request, with any information on borrowing-and-lending operations.
7. Use of integrated computer systems may not have the effect of
reducing the access of the Court of Auditors to the supportingdocuments.
Article 143
1. The annual report of the Court of Auditors shall be governed by
the provisions of paragraphs 2 to 6 of this Article.
2. The Court of Auditors shall transmit to the Commission and the
institutions concerned, by ►
M1 30 June ◄at the latest, any obser-
vations which are, in its opinion, such that they should appear in theannual report. These observations must remain confidential. Each insti-tution shall address its reply to the Court of Auditors by ►
M1 15
October◄at the latest. The replies of institutions other than the
Commission shall be sent to the Commission at the same time.
3. The annual report shall contain an assessment of the soundness of
financial management.
4. The annual report shall contain a section for each institution. The
Court of Auditors may add any summary report or general observationswhich it sees fit to make.
The Court of Auditors shall take all necessary steps to ensure that the
replies of each institution to its observations are published immediatelyafter the observations to which they relate.
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M1
5. The Court of Auditors shall transmit to the authorities responsiblefor giving discharge and to the other institutions, by 15 November at the▼
B2002R1605 —EN—01.01.2007 —001.002 —63
latest, its annual report accompanied by the replies of the institutions
and shall ensure publication thereof in the Official Journal of theEuropean Union.
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6. As soon as the Court of Auditors has transmitted the annual
report, the Commission shall inform the Member States concernedimmediately of the details of that report which relate to managementof the funds for which they are responsible under the rules applicable.
Following receipt of such information, the Member States shall reply to
the Commission within 60 days. The latter shall transmit a summary to
the Court of Auditors, the Council and the European Parliament before
►
M1 28 February ◄.
Article 144
1. The Court of Auditors shall notify the institution concerned of all
observations which are, in its opinion, such that they should appear in aspecial report. These observations must remain confidential.
The institution concerned shall have two-and-a half months within
which to inform the Court of Auditors of any comments it wishes tomake on the observations in question.
The Court of Auditors shall adopt the definitive version of the special
report in question the following month.
The special reports, together with the replies of the institutions
concerned, shall be transmitted without delay to the EuropeanParliament and the Council, each of which shall decide, where appro-priate in conjunction with the Commission, what action is to be taken inresponse.
▼
M1
Should the Court of Auditors decide to have any such special reports
published in the Official Journal of the European Union, they shall beaccompanied by the replies of the institutions concerned.
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2.►M1 The opinions referred to in Article 248(4) of the EC Treaty
and Article 160c(4) of the Euratom Treaty which do not relate toproposals or drafts covered by the legislative consultation proceduremay be published by the Court of Auditors in the Official Journal ofthe European Union. ◄The Court of Auditors shall take its decision
on publication after consulting the institution which requested theopinion or which is concerned by it. Opinions published shall beaccompanied by any remarks by the institutions concerned.
CHAPTER 2
Discharge
Article 145
1. The European Parliament, upon a recommendation from the
Council acting by a qualified majority, shall, before ►
M1 15
May◄of year n+ 2 give a discharge to the Commission in respect
of the implementation of the budget for year n.
2. If the date provided for in paragraph 1 cannot be met, the
European Parliament or the Council shall inform the Commission ofthe reasons for the postponement.
3. If the European Parliament postpones the decision giving a
discharge, the Commission shall make every effort to take measures,▼
M12002R1605 —EN—01.01.2007 —001.002 —64
as soon as possible, to remove or facilitate removal of the obstacles to
that decision.
Article 146
1. The discharge decision shall cover the accounts of all the Commu-
nities' revenue and expenditure, the resulting balance and the assets andliabilities of the Communities shown in the balance sheet.
2. With a view to granting the discharge, the European Parliament
shall, after the Council has done so, examine the accounts and financialstatements referred to in Article 275 of the EC Treaty and Article 179aof the Euratom Treaty. It shall also examine the annual report made bythe Court of Auditors together with the replies of the institutions underaudit, any relevant special reports by the Court of Auditors in respect ofthe financial year in question and the Court of Auditors' statement ofassurance as to the reliability of the accounts and the legality andregularity of the underlying transactions.
3. The Commission shall submit to the European Parliament, at the
latter's request, any information required for the smooth application ofthe discharge procedure for the financial year in question, in accordancewith Article 276 of the EC Treaty.
Article 147
1. In accordance with Article 276 of the EC Treaty and Article 180b
of the Euratom Treaty, the Commission and the other institutions shalltake all appropriate steps to act on the observations accompanying theEuropean Parliament's discharge decision and on the comments accom-panying the recommendation for discharge adopted by the Council.
2. At the request of the European Parliament or the Council, the
institutions shall report on the measures taken in the light of theseobservations and comments, and, in particular, on the instructionsthey have given to those of their departments which are responsiblefor the implementation of the budget. The Member States shallcooperate with the Commission by informing it of the measures theyhave taken to act on these observations so that the Commission may
take them into account when drawing up its own report. The reports
from the institutions shall also be transmitted to the Court of Auditors.
PART TWO
SPECIAL PROVISIONS
▼
M1
TITLE I
EUROPEAN AGRICULTURAL GUARANTEE FUND
▼B
Article 148
▼M1
1. Parts One and Three of this Regulation shall apply to expenditureeffected by the authorities and bodies referred to in the rules relating tothe European Agricultural Guarantee Fund (EAGF), and to revenue,save as otherwise provided in this Title.
▼
B
2. Operations managed directly by the Commission shall be imple-mented in accordance with the rules laid down in parts one and three.▼
B2002R1605 —EN—01.01.2007 —001.002 —65
Article 149
▼M1
1. For each financial year, the EAGF shall include non-differentiatedappropriations, with the exception of the expenditure related to themeasures referred to in Article 3(2) ofRegulation (EC) No 1290/2005, which shall be covered by differen-tiated appropriations.
▼
B
2. Payment appropriations which have been carried over but whichhave not been used by the end of the financial year shall be cancelled.
▼
M1
3. Non-committed appropriations relating to the actions referred to in
Article 3(1) of Regulation (EC) No 1290/2005 may be carried over tothe next financial year only.
Such carryover shall not exceed, within a limit of 2 % of the initial
appropriations referred to in the first subparagraph, the amount of theadjustment of direct payments referred to in Article 11 of CouncilRegulation (EC) No 1782/2003 of 29 September 2003 establishingcommon rules for direct support schemes under the common agriculturalpolicy and establishing certain support schemes for farmers (
1) and
which was applied during the last financial year.
Appropriations which are carried over shall be returned exclusively to
the budgetary lines which cover the actions referred to in Article 3(1)(c)of Regulation (EC) No 1290/2005.
Such carryover may lead to an additional payment only to the final
beneficiaries who have been subject, in the last financial year, to theadjustment of direct payments in accordance with Article 11 ofRegulation (EC) No 1782/2003.
The carryover decision shall be taken, at the latest on 15 February of the
year to which the carryover is being made, by the Commission, whichshall inform the budgetary authority.
▼
B
Article 150
1. The Commission shall reimburse the expenditure incurred by the
Member States.
▼M1
2. The Commission decisions fixing the amounts of these paymentsshall constitute global provisional commitments, which may not exceedthe total appropriations entered for the EAGF.
3. As from 15 November, routine management expenditure for the
EAGF may be committed in advance against the appropriationsprovided for the following financial year. Such commitments maynot, however, exceed three quarters of the total corresponding appro-priations for the current financial year. They may apply only to expen-diture for which the principle is laid down in an existing basic act.
▼
B
Article 151
1.►M1 Expenditure effected by the authorities and bodies referred
to in the rules relating to the EAGF shall, within two months followingreceipt of the statements sent in by Member States, be the subject of acommitment by chapter, article and item. Such commitment may be▼
B2002R1605 —EN—01.01.2007 —001.002 —66
(1) OJ L 270, 21.10.2003, p. 1. Regulation as last amended by Regulation (EC)
No 1405/2006 (OJ L 265, 26.9.2006, p. 1).
made after the elapse of that two-month period whenever a procedure
for a transfer of appropriations concerning the budget lines in questionis necessary. Save where payment has not yet been made by theMember States or where eligibility is in doubt, the amounts shall becharged as payments within the same two-month period. ◄
This budgetary commitment shall be deducted from the global provi-
sional commitment referred to in Article 150.
2. Global provisional commitments which have been made for a
financial year and which have not given rise to commitment onspecific lines in the budget nomenclature by 1 February of thefollowing financial year shall be cancelled in respect of the originalfinancial year.
3. Paragraphs 1 and 2 shall apply subject to the clearance of
accounts.
▼
M1
Article 152
In budgetary accounting, expenditure shall be booked to the accounts
for a financial year on the basis of the repayments made by theCommission to the Member States by 31 December of the yearconcerned at the latest, provided that the payment order has reachedthe accounting officer by 31 January of the following financial year atthe latest.
▼
B
Article 153
▼M1
1. Where the Commission may transfer appropriations pursuant to
Article 23(1), it shall take its decision by 31 January of the following
financial year at the latest and shall inform the budgetary authority asprovided for in Article 23(1).
▼
B
2. In cases other than those referred to in paragraph 1, theCommission shall submit transfer proposals to the budgetary authorityby 10 January of the following financial year at the latest.
The budgetary authority shall take decisions on such transfers in
accordance with the procedure provided for in Article 24, but withina time limit of three weeks.
▼
M1
Article 154
1. Assigned revenue under this Title shall be assigned according to
origin in accordance with Article 18(2).
2. The result of decisions on clearance of accounts, as referred to in
Article 30 of Regulation (EC) No 1290/2005 shall be entered in a singleArticle.▼
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TITLE II
STRUCTURAL FUNDS, COHESION FUND, EUROPEAN
FISHERIES FUND, AND EUROPEAN AGRICULTURAL FUND
FOR RURAL DEVELOPMENT
▼B
Article 155
▼M1
1. Parts One and Three of this Regulation shall apply to expenditureeffected by the authorities and bodies referred to in the Regulationsgoverning the European Agricultural Fund for Rural Development(EAFRD) (
1), the European Regional Development Fund (ERDF) (2),
the European Social Fund (ESF) (3), the Cohesion Fund (4), and the
European Fisheries Fund (EFF) (5), hereinafter ‘the Funds ’, and to
their revenue, save as otherwise provided in this Title.
▼B
2. Operations managed directly by the Commission shall also beimplemented in accordance with the rules laid down in parts one andthree of this Regulation.
▼
M1__________
▼B
Article 156
1. Payment by the Commission of financial contributions from the
Funds shall be made in accordance with the regulations referred to inArticle 155.
2. The time limit for interim payments by the Commission shall be
laid down in accordance with the regulations referred to in Article 155.
3. The treatment of repayments by the Member States and the impli-
cations for the amount of contributions from the Funds shall begoverned by the regulations referred to in Article 155.
Article 157
The Commission shall automatically decommit appropriations that have
been committed as provided for in the regulations referred to in Article155.
▼
M1
The decommitted appropriations may be made available again in theevent of a manifest error attributable solely to the Commission.
▼
B
To this end, the Commission shall examine decommitments made
during the previous financial year and decide, by 15 February of the
current year, on the basis of requirements, whether it is necessary to
make the corresponding appropriations available again.▼M12002R1605 —EN—01.01.2007 —001.002 —68
(1) Regulation (EC) No 1290/2005.
(2) Regulation (EC) No 1080/2006 of the European Parliament and of the
Council of 5 July 2006 on the European Regional Development Fund (OJL 210, 31.7.2006, p. 1).
(
3) Regulation (EC) No 1081/2006 of the European Parliament and of the
Council of 5 July 2006 on the European Social Fund (OJ L 210,31.7.2006, p. 12).
(
4) Council Regulation (EC) No 1084/2006 of 11 July 2006 establishing a
Cohesion Fund (OJ L 210, 31.7.2006, p. 79).
(5) Council Regulation (EC) No 1198/2006 of 27 July 2006 on the European
Fisheries Fund (OJ L 223, 15.8.2006, p. 1)
Article 158
With regard to the ►C2operational expenditure ◄referred to in this
Title, the Commission may, except in the case of the EAFRD, maketransfers from one title to another, provided that the appropriations inquestion are for the same objective within the meaning of the Regu-lations governing the Funds referred to in Article 155, or are TechnicalAssistance expenditure.
▼
B
Article 159
Aspects concerning the management and selection of projects and audit
shall be governed by the regulations referred to in Article 155.
TITLE III
RESEARCH
Article 160
1. Parts one and three shall apply to the research and technological
development appropriations, save as otherwise provided in this Title.
These appropriations shall be entered either in one of the titles of the
budget relating to the policy area research by direct or indirect action orin a chapter relating to research activities in another title.
They shall be used by implementation of the actions listed in the
implementing rules.
▼
M1
1a. The appropriations relating to the revenue generated by theResearch Fund for Coal and Steel established by the Protocolannexed to the EC Treaty on the financial consequences of the expiryof the ECSC Treaty and on the Research Fund for Coal and Steel shallbe treated as assigned revenue within the meaning of Article 18. Thecommitment appropriations generated by this revenue shall be madeavailable as soon as the amount receivable has been estimated andthe payment appropriations as soon as the revenue has been received.
▼
B
2. With regard to the operational expenditure referred to in this Title,
the Commission may make transfers from one title to another, providedthat the appropriations are used for the same purpose.
3. Experts paid from the research and technological development
appropriations shall be recruited in accordance with the procedureslaid down by the Council when it adopts each research frameworkprogramme.
▼
M1
Article 160a
1. The commitment appropriations corresponding to the amount of
the commitment decommitted as a result of total or partial non-imple-mentation of the projects relating to research for which they wereearmarked may, exceptionally and in duly substantiated cases, bemade available again where it is essential to carry out the programmeoriginally planned, unless the budget for the current financial yearcontains funds for this purpose.
2. For the purposes of paragraph 1, the Commission shall, at the
beginning of each financial year, examine decommitments made▼
M12002R1605 —EN—01.01.2007 —001.002 —69
during the previous financial year and assess, in the light of the
requirements, the need for making the appropriations available again.
On the basis of this assessment, the Commission may submit appro-
priate proposals to the budgetary authority, by 15 February of each
financial year, stating for each budget item the reasons for makingthese appropriations available again.
3. The budgetary authority shall decide on the Commission's
proposals within six weeks. Where no decision is taken within thistime limit, the proposals shall be deemed to be approved.
The amount of commitment appropriations to be made available again
in year nshall in no case exceed 25 % of the total amount decommitted
on the same budget line in year n-1.
4. Commitment appropriations made available again shall not be
carried over.
Legal commitments relating to the commitment appropriations which
have been made available again shall be concluded by 31 Decemberof year n.
At the end of year n, the unused balance of the commitment appro-
priations made available again shall be definitively decommitted by theauthorising officer responsible.
▼
B
Article 161
1. The Joint Research Centre (JRC) may receive funding charged to
appropriations entered outside the titles and the chapters referred to inArticle 160(1) in respect of its participation on a competitive or nego-tiated basis in Community activities financed in whole or in part fromthe general budget.
2. The appropriations relating to the activities in which the JRC
participates on a competitive basis shall be treated as assignedrevenue within the meaning of Article 18. The commitment appro-priations generated by this revenue shall be made available as soon asthe amount receivable has been estimated.
The utilisation of these appropriations shall be shown in a set of
analytical accounts in the budgetary outturn account for each categoryof action to which it relates; it shall be separate from revenue origi-nating from financing by third parties (public or private) and fromrevenue from other services carried out by the Commission for thirdparties.
3. The rules on procurement in Title V of part one shall not apply to
the activities of the JRC on behalf of third parties.
4. By way of derogation from Article 23, the Commission may,
within the title of the budget relating to the policy area ‘Direct action
research ’, make transfers between chapters of up to 15 % of the appro-
priation in the line from which the transfer is made.▼
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TITLE IV
EXTERNAL ACTIONS
CHAPTER I
General provisions
Article 162
1. Parts one and three shall apply to external actions financed from
the budget, save as otherwise provided in this Title.
2. The appropriations for the actions referred to in paragraph 1 shall
be used by the Commission:
(a) either within the framework of aid granted on an autonomous basis;(b) or under agreements concluded with one or more beneficiary third
countries;
(c) or under agreements with the international organisations referred to
in Article 53.
CHAPTER 2
Implementation of actions
Article 163
►
M1 The actions referred to in this Title may be implemented on a
centralised basis by the Commission, by shared management, on adecentralised basis by the beneficiary third country or countries, or
jointly with international organisations in compliance with the relevant
provisions of Articles 53 to 57. ◄Appropriations for external actions
may be combined with funds from other sources to achieve a jointobjective.
▼
M1__________
▼B
Article 165
The implementation of actions by beneficiary third countries or inter-
national organisations is subject to scrutiny by the Commission. Suchscrutiny shall be exercised either by prior approval, by ex post checks or
by a combined procedure.
Article 166
1. Actions carried out shall give rise to:
▼
M1
(a) a financing agreement drawn up between the Commission, acting
for the Communities, and the beneficiary third country or countriesor the bodies they have designated, hereinafter: ‘the beneficiaries ’;
(b) a contract or a grant agreement between the Commission and
national or international public-sector bodies or between theCommission and natural or legal persons responsible for carryingout the actions.▼
B2002R1605 —EN—01.01.2007 —001.002 —71
The terms on which the external aid is given shall be laid down in the
instrument by which the financing agreements or the contracts or thegrants provided for in points (a) and (b) shall be managed.
2. Financing agreements with the beneficiary third countries referred
to in paragraph 1(a) shall be concluded by 31 December of year n+1 at
the latest, year nbeing the one in which the budgetary commitment was
made.
The individual contracts, grant decisions and agreements which
implement such financing agreements shall be concluded or adopted
no later than three years following the date of conclusion of thefinancing agreement.
Individual contracts and agreements relating to audit and evaluation may
be concluded later.
3. The provision under paragraph 2 shall not apply to the multi-
annual programmes in the following cases:
—the cross-border cooperation, regional development, human
resources development and rural development components of
Council Regulation (EC) No 1085/2006 of 17 July 2006 establishingan Instrument for Pre-Accession Assistance (IPA) (
1),
—the cross-border cooperation component of Regulation (EC)
No 1638/2006 of the European Parliament and of the Council of24 October 2006 laying down general provisions establishing aEuropean Neighbourhood and Partnership Instrument (
2).
In these cases, the following rules shall apply:(a) any portion of a budget commitment for such a multi-annual
programme shall be automatically decommited where, by31 December of the third year following year nbeing the one in
which the budget commitment was made:
(i) it has not been used for the purpose of pre-financing; or
(ii) it has not been used for making intermediate payments; or
(iii) no declaration of expenditure has been presented in relation to
it;
(b) that part of budget commitments still open on 31 December 2017
for which a declaration of expenditure has not been made by31 December 2018 shall be automatically decommitted.
▼
B
CHAPTER 3
Procurement
Article 167
1. The provisions of Article 56 and of Chapter 1 of Title V of part
one relating to the general provisions on procurement shall beapplicable to contracts covered by this Title subject to the specialprovisions relating to thresholds and the arrangements for awardingexternal contracts laid down in the implementing rules. The contractingauthorities for the purposes of this chapter shall be:
(a) the Commission on behalf of and for the account of one or more
beneficiaries;
(b) the beneficiary or beneficiaries;▼
M12002R1605 —EN—01.01.2007 —001.002 —72
(1) OJ L 210, 31.7.2006, p. 82.
(2) OJ L 310, 9.11.2006, p. 1.
(c) a national or international public-sector body or natural or legal
persons who are beneficiaries of a grant for the implementation ofan external action.
2. The procurement procedures must be laid down in the financing
agreements or in the grant decision or grant agreement provided for inArticle 166.
▼
B
Article 168
1. Participation in tendering procedures shall be open on equal terms
to all persons coming within the scope of the Treaties and, inaccordance with the specific provisions in the basic instrumentsgoverning the cooperation sector concerned, to all such natural andlegal persons who are nationals of the beneficiary third countries orof any other third country as are expressly mentioned in thoseinstruments.
2. In duly substantiated exceptional cases, it may be decided, on the
basis of the specific conditions laid down in the basic acts governingcooperation, to allow third-country nationals other than those referred toin paragraph 1 to tender for contracts.
3. Where an agreement on widening the market for procurement of
goods or services to which the Community is party applies, thecontracts for procurement financed by the budget shall also be opento third-country nationals other than those referred to in paragraphs 1and 2, under the conditions laid down in this agreement.
▼
M1
CHAPTER 4
Grants
▼B
Article 169
An action may be financed in full by the budget only if this proves
essential for it to be carried out.
▼M1
Article 169a
Grant procedures to be applied in decentralised management by bene-
ficiary third countries shall be laid down in the financing agreementsreferred to in Article 166. They shall be based on the rules laid down inTitle VI of Part One.
▼
B
CHAPTER 5
Auditing of accounts
▼M1
Article 170
Each financing agreement or grant agreement or grant decision must
expressly provide for the Commission and the Court of Auditors to havethe power of audit, on the basis of documents and on the spot, over allcontractors and subcontractors who have received Community funds.▼
M12002R1605 —EN—01.01.2007 —001.002 —73
TITLE V
EUROPEAN OFFICES
Article 171
1.‘European offices ’for the purposes of applying this Title are the
administrative structures set up by one or more institutions to performspecific cross-cutting tasks.
▼
M1
2. This Title shall apply to the operation of the European Anti-fraudOffice (OLAF), with the exception of Articles 174, 174a and 175(2).
▼
B
3. Parts one and three shall apply to the operation of the Europeanoffices, save as otherwise provided in this Title.
Article 172
1. The appropriations for each European office, the total amount of
which shall be entered in a specific budget line within the section of thebudget relating to the Commission, shall be set out in detail in anAnnex to that section.
The Annex shall take the form of a statement of revenue and expen-
diture, subdivided in the same way as the sections of the budget.
The appropriations entered in that Annex shall cover all the financial
requirements of each European office in the performance of its duties onbehalf of the institutions.
2. Each European office's establishment plan shall be annexed to that
of the Commission.
3. The Director of each European office shall take decisions on
transfers within the Annex provided for in paragraph 1. The
Commission shall inform the budgetary authority of such transfers.
4. Each European office's accounts shall form an integral part of the
Communities' accounts referred to in Article 121.
▼
M1
Article 173
The Commission shall, in respect of the appropriations entered in the
Annex for each European office, delegate the powers of authorisingofficer to the Director of the European office concerned, in accordancewith Article 59.
▼
B
Article 174
1. Each interinstitutional European office shall draw up analytical
accounts of its expenditure, enabling the proportion of its servicessupplied to each of the institutions to be determined. ►
M1 The
Director of the European office concerned shall adopt, after approvalby its Management Committee, the criteria on which the accountingsystem shall be based. ◄
2. The remarks concerning the specific budget line in which is
entered the total appropriation for each interinstitutional Europeanoffice shall show an estimate of the cost of services supplied by theoffice to each of the institutions. This shall be based on the analyticalaccounts provided for in paragraph 1.▼
B2002R1605 —EN—01.01.2007 —001.002 —74
3. Each interinstitutional European office shall notify the institutions
concerned of the results of the analytical accounts.
▼M1
Article 174a
1. Each institution may delegate authorising officer powers to the
director of an interinstitutional European office for the management ofappropriations entered in its section and shall set the limits andconditions for this delegation of powers.
2. The internal auditor of the Commission shall exercise all respon-
sibilities laid down in Title IV, Chapter 8 of Part One.
Article 175
Should the remit of a European office involve supplies to third parties
for pecuniary interest, its Director shall, after approval of theManagement Committee, lay down the specific provisions governinghow these supplies are to be made and the keeping of the correspondingaccounts.
__________
▼B
TITLE VI
ADMINISTRATIVE APPROPRIATIONS
Article 177
Parts one and three shall apply to administrative appropriations, save as
otherwise provided in this Title.
Article 178
1. As from 15 November of each year, routine administrative expen-
diture may be committed in advance against the appropriations providedfor the following financial year. ►
M1 Such commitments may not,
however, exceed one quarter of the appropriations decided by thebudgetary authority on the corresponding budget line for the currentfinancial year. ◄They may not apply to new expenditure of a kind
not yet approved in principle in the last budget duly adopted.
2. Expenditure which must be paid in advance pursuant to legal or
contractual provisions, for example rents, may give rise to paymentsfrom 1 December onwards to be charged to the appropriations for thefollowing financial year. ►
M1 In this case, the limit referred to in
paragraph 1 shall not apply. ◄
Article 179
▼C1
1. Administrative appropriations shall be non-differentiated appro-priations.
▼
B
2.►C2Operating expenditure ◄arising from contracts covering
periods that extend beyond the financial year, either in accordancewith local practice or relating to the supply of equipment, shall becharged to the budget of the financial year in which it is effected.▼
B2002R1605 —EN—01.01.2007 —001.002 —75
3. The institutions shall inform the two branches of the budgetary
authority as soon as possible of any building project likely to havesignificant financial implications for the budget.
▼
M1
If either branch of the budgetary authority intends to issue an opinion, it
shall within two weeks after receipt of the information on the building
project notify the institution concerned of its intention to issue such an
opinion. Failing a reply, the institution concerned may proceed with theplanned operation under its administrative autonomy, subject toArticle 282 of the EC Treaty and Article 185 of the Euratom Treatywith regard to Community representation.
This opinion shall be forwarded to the institution concerned within two
weeks of such notification.
TITLE VII
EXPERTS
Article 179a
The implementing rules shall include a specific procedure for the
selection of experts, to be paid on the basis of a fixed amount, forassisting the institutions, in particular in evaluating proposals andgrant applications or tenders for procurement, and for providingtechnical assistance in the follow-up to, and final evaluation of,projects financed by the budget.
▼
B
PART THREE
TRANSITIONAL AND FINAL PROVISIONS
TITLE I
TRANSITIONAL PROVISIONS
▼M1__________
Article 181
1. As regards the Funds mentioned in Article 155(1) for which the
basic acts were repealed before the date of application of this Regu-lation, appropriations which were decommitted in application ofArticle 157(1) may be made available again in the event of amanifest error attributable solely to the Commission or in the case offorce majeure which has serious repercussions for the implementation of
operations supported by these Funds.
2. The central database referred to in Article 95 shall be set up by
1 January 2009.
3. For transfers of appropriations concerning operational expenditure
referred to in the Regulations governing the Structural Funds and theCohesion Fund for the 2000 to 2006 programming period, for whichCommunity payments still have to be made for the financial settlementof outstanding Community commitments until the closure of theassistance, the Commission may make transfers from one title toanother, provided that the appropriations in question:
—are for the same objective, or
—relate to Community initiatives or to technical assistance and inno-
vative measures and are transferred to measures of the same nature.▼
B2002R1605 —EN—01.01.2007 —001.002 —76
4. Article 30(3) shall apply for the fund mentioned in Article 148(1)
for the first time in respect of the payments charged to the 2008 budget.
▼B
TITLE II
FINAL PROVISIONS
Article 182
The European Parliament and the Council shall be empowered to obtain
any information or explanations regarding budgetary matters within theirfields of competence.
Article 183
The Commission shall adopt rules for implementing this Regulation.
Article 184
Every three years, or whenever it proves necessary to do so, this Regu-
lation shall be the subject of a review in accordance with the procedurelaid down by Article 279 of the EC Treaty and Article 183 of theEuratom Treaty, after recourse to the conciliation procedure, if theEuropean Parliament so requests.
▼
C1__________
▼B
Article 185
1.►M1 The Commission shall adopt a framework financial regu-
lation for the bodies set up by the Communities and having legalpersonality which actually receive contributions charged to thebudget.◄The financial rules of these bodies may not depart from
the framework regulation except where their specific operating needsso require and with the Commission's prior consent.
2. Discharge for the implementation of the budgets of the bodies
referred to in paragraph 1, shall be given by the European Parliamenton the recommendation of the Council.
3. The Commission's internal auditor shall exercise the same powers
over the bodies referred to in paragraph 1 as he/she does in respect ofCommission departments.
▼
M1__________
▼B
Article 186
The Financial Regulation of 21 December 1977 is hereby repealed.
References to the repealed Regulation shall be construed as references
to this Regulation and shall be read in accordance with the correlationtable in the Annex.▼
M12002R1605 —EN—01.01.2007 —001.002 —77
Article 187
This Regulation shall enter into force on the 20th day following its
publication in the Official Journal of the European Communities .
It shall apply from 1 January 2003.This Regulation shall be binding in its entirety and directly applicable in
all Member States.▼
B2002R1605 —EN—01.01.2007 —001.002 —78
ANNEX
CORRELATION TABLE
referred to in Article 186
Financial Regulation of 21stDecember 1977 Financial Regulation of 25thJune 2002
Part I —Provisions applicable to the
general budget of the EuropeanCommunitiesPart one —Common provisions
Title I: General principles Title II: Budgetary principles
Article 1, 1(1) Article 4, 4(1) and 4(2)Article 1, 1(2) Article 6Article 1, 1(3) Article 179, 179(2)Article 1, 1(4) and 1(5) Article 7Article 1, 1(6) DeletedArticle 1, 1(7) Article 77, 77(3)Article 2 Articles 27 and 48, 48(2)Article 3 Article 28
Article 4, 4(1) Article 17
Article 4, 4(2) Articles 17 and 18Article 4, 4(3) Article 19Article 5 Article 5Article 6 Articles 6 and 8Article 7, 7(1) Article 9(1), 9(2), 9(4) and 9(6)Article 7, 7(2) Article 9(1), 9(2), 9(3), 9(5) and 9(6)Article 7, 7(3) DeletedArticle 7, 7(4) Article 10Article 7, 7(5) Article 9(1)
Article 7, 7(6) Articles 11 and 157
Article 7, 7(7) Deleted, except Article 156, 156(3)Article 7, 7(8) Consigned to the regulation foreseen in
Article 183
Article 7, 7(9) Consigned to the regulation foreseen in
Article 183
Article 8, 8(1) Article 12Article 8, 8(2) and 8(3) Articles 150, 150(3) and 178
Article 9 Article 13
Article 10 Article 29, 29(2)Article 11 Article 16Title II: Establishment and structure of
the budgetTitle III: Establishment and structure of
the budget
Section I: Establishment of the budget Chapter 1: Establishment of the budgetArticle 12 Article 31Article 13 Article 33Article 14 Article 34▼B2002R1605 —EN—01.01.2007 —001.002 —79
Financial Regulation of 21stDecember 1977 Financial Regulation of 25thJune 2002
Article 15, except 15(2) Article 37
Articles 15, 15(2) and 16, 16(2) Article 38Article 16, 16(1) Article 35
Article 17 Article 36
Article 18 Article 39Section II: Structure and presentation
of the budgetChapter 2: Structure and presentation
of the budget
Article 19, 19(1) Articles 40 and 41
Article 19, 19(2) and 19(3) Article 41Article 19, 19(4) Article 43
Article 19, 19(5) Article 44
Article 19, 19(6) DeletedArticle 19, 19(7) Article 30, 30(1)
Article 19, 19(8) Article 45
Article 20, except 20(4) Article 46
Article 20, 20(4) Article 47
Title III: Implementation of the budget Title IV: Implementation of the budgetSection I: General provisions Chapter 1: General provisions
Article 21 Article 58
Article 22, 22(1) Articles 48 and 49Article 22, 22(2) Article 50, 54(1) and 57(1)
Article 22, 22(3) Deleted
Article 22, 22(4) Articles 51, 52 and 59
Article 22, 22(4a) Article 56
Article 22, 22(5) Article 1(2)Article 23 Article 84
Article 24 Deleted
Article 24a Articles 85 and 86Article 25 Article 61
Article 26, 26(1) Article 21
Article 26, 26(2) and 26(4) Article 22
Article 26, 26(3) Article 23
Article 26, 26(5) Article 24Article 26, 26(6) and (7) Deleted
Article 26, 26(8) and (9) Article 25
Article 26, 26(10) and (11) Article 26Article 27, 27(1) Article 20, 20(1)
Article 27, 27(2) and (5) Deleted
Article 27, 27(2a) Article 20, 20(2)
Article 27, 27(3) Deleted▼B2002R1605 —EN—01.01.2007 —001.002 —80
Financial Regulation of 21stDecember 1977 Financial Regulation of 25thJune 2002
Article 27, 27(4) Article 20, 20(3)
Section II: Budgetary revenue,
management of available fundsChapter 5: Revenue operations
Article 28, 28(1) Article 70, 70(1)
Article 28, 28(2) Article 71, 71(2)
Article 28, 28(3) Article 70, 70(2)
Article 28a Article 74Article 29 Article 73Article 30 Consigned to the regulation foreseen in
Article 183
Article 31 Article 69Article 32 Article 15Article 33 Consigned to the regulation foreseen in
Article 183
Article 34 Article 131Article 35 Consigned to the regulation foreseen in
Article 183
Section III: Commitment, validation,
authorisation and payment of expen-
ditureChapter 6: Expenditure operations
Article 36 Articles 77, 77(1) and (2) and 166, 166
(2)
Article 37 DeletedArticle 38 DeletedArticle 39 DeletedArticle 40 Article 79Article 41 Consigned to the regulation foreseen in
Article 183
Article 42 Consigned to the regulation foreseen in
Article 183
Article 43 Article 80Article 44 Consigned to the regulation foreseen in
Article 183
Article 45 Consigned to the regulation foreseen in
Article 183
Article 46 Article 81Article 47 DeletedArticle 48 DeletedArticle 49 Article 71, 71(4)Article 50 DeletedArticle 51, 51(1) DeletedArticle 51, 51(2) Article 82Article 51, 51(3) DeletedArticle 52 Deleted▼B2002R1605 —EN—01.01.2007 —001.002 —81
Financial Regulation of 21stDecember 1977 Financial Regulation of 25thJune 2002
Article 53 Consigned to the regulation foreseen in
Article 183
Article 54 Article 63Section IV: Management of postsArticle 55 DeletedTitle IV: Conclusion of contracts,
inventories, accountancyTitle V: Procurement
Section I: Contracts for the supply of
goods and services; contracts for
purchase, lease and hire
Article 56 Article 105
Article 57 Deleted
Article 58, 58(1) Articles 88, 89, 89(2) and 91Article 58, 58(2) Article 90Article 58, 58(3) Article 97, 97(1)Article 58, 58(4) Consigned to the regulation foreseen in
Article 183
Article 59 Article 91, 91(2)
Article 60 Article 91, 91(3)
Article 61 DeletedArticle 62 Article 89, 89(1)Article 63 DeletedArticle 64 DeletedArticle 64a Article 102Section II: Inventories of movable and
immovable propertyTitle VII: Presentation of the accounts
and accounting
Chapter 4: Property inventories
Article 65 Article 138, 138(1)Article 66 Article 138, 138(2)Article 67 Consigned to the regulation foreseen in
Article 183
Article 68 Consigned to the regulation foreseen in
Article 183
Section III: Accounts Chapter 3: AccountingArticle 69 Articles 132 and 133Article 70 Articles 132, 133, 134 and 137Article 70a Consigned to the regulation foreseen in
Article 183
Article 71 DeletedArticle 72 Articles 132, 132(3) and 136Title V: Responsibilities of authorising
officers, financial controllers,accounting officers and administratorsof advance fundsTitle IV: Implementation of the budget
Chapter 4: Liability of the financialactors
Article 73 Article 66▼B2002R1605 —EN—01.01.2007 —001.002 —82
Financial Regulation of 21stDecember 1977 Financial Regulation of 25thJune 2002
Article 74 Deleted
Article 75, 75(1) Article 67Article 75, 75(2) Article 68
Article 75, 75(3) Deleted
Article 75, 75(4) DeletedArticle 75, 75(5) Consigned to the regulation foreseen in
Article 183
Article 76 Article 65, 65(2)Article 77 DeletedTitle VI: Presenting and auditing
accountsTitle VII: Presentation of the accounts
and accounting
Chapter 1: Presentation of the accounts
Article 78 Article 128
Article 79 Article 128
Article 80 Articles 122 and 127Article 81 Articles 126 and 128Article 82 Article 128, 128(2)Article 83, 83(1) Article 140, 140(3)Article 83, 83(2) bis (4) Article 139Article 84 DeletedArticle 85 Article 140, 140(1) and (2)Article 86 Article 141Article 87 Article 142, 142(1) bis (5)
Article 88 Article 143
Article 88a DeletedArticle 89, 89(1) Article 145, 145(1)Article 89, 89(2), (3) and (5) Article 146Article 89, 89(4) Article 145, 145(2) and (3)Article 89, 89(6) DeletedArticle 89, 89(7) and (8) Article 147Article 89, 89(9) and (10) Consigned to the regulation foreseen in
Article 183
Article 90 Article 144Title VII: Special provisions applicable
to research and technological devel-opment appropriationsPart Two: Special provisions
Title III: Research
Article 91 Article 160, 160(1)
Article 92, 92(1) and (2) Article 160, 160(1)Article 92, 92(3) Article 161, 161(1)Article 92, 92(4) Article 161, 161(3)Article 93 DeletedArticle 94 DeletedArticle 95 Article 161, 161(4)▼B2002R1605 —EN—01.01.2007 —001.002 —83
Financial Regulation of 21stDecember 1977 Financial Regulation of 25thJune 2002
Article 96, 96(1) and (4) Article 161, 161(2)
Article 96, 96(2) and (3) Deleted
Article 97 Deleted
Title VIII: Special provisions
applicable to the European Agricultural
Guidance and Guarantee Fund,Guarantee SectionPart Two: Special provisions
Title I: European Agricultural
Guidance and Guarantee Fund,Guarantee Section
Article 98 Article 148Article 99, 99(1) Article 150, 150(1) and (2)Article 99, 99(2) DeletedArticle 100 Article 151, 151(1)Article 101 Article 152
Article 102 Consigned to the regulation foreseen in
Article 183
Article 103 Article 151, 151(2)Article 104 Article 153
Title IX: Special provisions applicable
to external aidPart Two: Special provisions
Title IV: External actions
Section I: General provisions Chapter 1: General provisions
Article 105, 105(1) and (2) Article 162
Article 105, 105(3) Consigned to the regulation foreseen in
Article 183
Article 105, 105(4) Deleted
Article 105, 105(5) Consigned to the regulation foreseen in
Article 183
Article 106, 106(1) Article 166
Article 106, 106(2) Deleted
Article 106, 106(3) Consigned to the regulation foreseen in
Article 183
Section II: Implementation Chapter 2: Implementation of actions
Article 107 DeletedArticle 108 DeletedArticle 109 DeletedArticle 110 DeletedArticle 111 DeletedSection III: Award of contracts Chapter 3: ProcurementArticle 112 Article 167, 167(1)Article 113 Article 167, 167(2)
Article 114 Article 168
Article 115 Consigned to the regulation foreseen in
Article 183
Article 116 Deleted
Article 117 Deleted▼B2002R1605 —EN—01.01.2007 —001.002 —84
Financial Regulation of 21stDecember 1977 Financial Regulation of 25thJune 2002
Article 118 Consigned to the regulation foreseen in
Article 183
Article 119 Deleted
Section IV: Auditing of accounts Chapter 4: Auditing of accountsArticle 120 Article 170Title X: Special provisions applicable
to the management of appropriations
relating to staff serving in offices andsuboffices in the Community and indelegations outside the Community
and to their administrationDeleted
Article 121 Deleted
Article 122 (Deleted) DeletedArticle 123 Deleted
Title XI: Special provisions applicable
to financial participation by thirdparties and outside bodies inCommunity activitiesDeleted
Section I: General provisions
Article 124 to 126 Article 18(1)(d)Section II: Provisions applicable to
participation provided for pursuant to
the agreement on the European
Economic Area
Article 127 to 132 Article 18(1)(d)Title XIa: Special provisions relating to
the sanctions referred to in Section 4 of
Regulation (EC) No 1467/97
Article 132a Article 18(1)(b)Title XII: Special provisions relating to
the Office for Official Publications of
the European CommunitiesTitle V: European Offices
Article 133 Article 171 to 175
Part II: Provisions applicable to
borrowing-and-lending operations bythe European Communities
Article 134 Article 130
Article 135 Consigned to the regulation foreseen in
Article 183
Article 136 DeletedArticle 137 Article 142, 142(6)
Part III: Transitional and final
provisionsPart three: Transitional and final
provisions
Article 138 Article 182
Article 139 Article 183Article 140 Article 184Article 141 Article 186▼B2002R1605 —EN—01.01.2007 —001.002 —85
Financial Regulation of 21stDecember 1977 Financial Regulation of 25thJune 2002
Article 142 Article 185
Article 143 Article 187▼B2002R1605 —EN—01.01.2007 —001.002 —86