1.

Calls on the Commission, with a view to granting of the discharge, to present to Parliament an action plan for the achievement of the following priority actions: Communication of the Commission on the protection of the Union budget (a) The Commission should adopt annually, and for the first time in September 2013, a communication to Parliament, the Council and the Court of Auditors with a view to making the impact of its preventive and corrective actions as regards the protection of the Union budget public; notes that it should, in particular, disclose in due time all suspensions, interruptions and retentions which aimed to prevent errors and all the amounts (in nominal terms) recovered per Member State, international organisation or third country in the course of the preceding year through financial corrections and recoveries for all management modes at the level of the Union and broken down by Member States; the Commission should demonstrate as far as possible that the financial corrections adequately compensated for errors made, and that they contributed to lasting improvements of the management and control systems; (b) Financial corrections should be made by the Commission for the total amount of the Union’s contribution of a programme if, due to errors or mismanagement of funds by national or regional authorities, the programme fails largely to achieve its aims, even when a part of the programme has been financed and funds have already been dispersed; (c) The Commission should provide the relevant data covering all the policies managed by the Commission in Note 6 ‘Financial corrections and recoveries’, attached to the accounts of the Union; (d) As regards the policies managed by multiannual programmes, the Commission should specify, upon the closure of the programming period, the impact of the recoveries and financial corrections made during that period on the error rate; notes, moreover, that the Commission should demonstrate that the financial corrections adequately compensated for errors made, and that they contributed to lasting improvements of the management and control systems; (e) The Commission should shoulder greater responsibility for national audit authorities and for control systems in those Member States in which most errors were detected; is of the opinion that the Commission should draw up a proposal in how far the certification and work of audit authorities in those Member States could be further improved; believes that the Commission should publish its findings, and integrate them into the midterm-review of relevant regulations and the MFF; Error rate in shared management Calls on the Commission to: (f) harmonise the practice of its services concerning the interruption/suspension of payments when significant deficiencies are detected at the level of the supervisory and control systems of Member States; (g) urge Member States to communicate to its services the draft eligibility rules in order to adapt national eligibility rules which are not compatible with the relevant Union rules and to intensify the controls on the declaration of costs and the effectiveness of the first-level checks; (h) collect information from Member States concerning the degree to which national rules render Union legislation on budget management terms unnecessarily complicated (‘gold-plating’) and report to Parliament by October 2013; recalls that an infringement of those national rules represents an error in budget management and that the Commission is ultimately responsible for errors in implementing the Union budget (Article 317 TFEU); requests that this information is sent to the national parliaments once a year and that Parliament’s Committee on Budgetary Control is duly informed; (i) support the management and control authorities of the Member States in identifying the systemic sources of errors and in particular in ensuring compliant implementation of public procurement rules and give guidance in the form of motivated opinions to those authorities in their simplification efforts; those opinions will be made public; (j) apply the principle of proportionality, without underestimating the rules to reduce administrative burdens and facilitate streamlining of procedures; notes that an additional step towards simplification is the obligatory use of the electronic project application and reporting, as well as the unification and standardisation of documents and procedures for management and implementation of the operational programmes; (k) harmonise the criteria used by its services for making reservations in its annual activity report and the different methodologies used to quantify public procurement errors in the two policy areas of agriculture and cohesion policy; (l) speed up the audit and financial correction procedures followed by its own services and in particular, consider merging the different stages of the ‘contradictory’ procedure leading to a financial correction; (m) evaluate the progress made in the financial management under the policy groups of the budget of the Union with a view to arriving at a positive statement of assurance and to report about this evaluation by March 2014 in the context of the annual activity reports drafted by the Directors-General and the Synthesis report on the Commission’s management achievements for 2013; DG AGRI (n) DG AGRI should align its practices for the interruption of payments with the best practices of other directorates-general or services as well as put forward proposals for enhanced application and use of suspensions in the policy area of agriculture and rural development; (o) Taking into account the legal framework, DG AGRI should systematically interrupt and suspend payments when the prime level controls reveal that they are materially affected by error; the payments should be resumed only if sufficient appropriate evidence gathered on the spot proves that the weaknesses have been remedied; (p) The Commission should report by the end of June 2013 on the progress made by the working group set up by DG AGRI to assess the root causes of Rural Development errors and develop corrective action for the current and future programming periods; that report should be sent to the Member States, national parliaments and Parliament’s Committee on Agriculture and Rural Development so that they can analyse the causes of errors, deliver non-binding opinions and submit proposals for countering those errors; (q) DG AGRI should take all necessary measures to support the Member States’ efforts to eliminate from their programmes those conditions that are intrinsically prone to creating implementation and control difficulties; DG REGIO (r) The Commission should maintain its original proposals for the general provisions of the 2014-2020 programming period in cohesion policy and should insist, vis-à-vis the Member States, on the absolute need to introduce in the new legislation the principles of net financial corrections (8) as well as streamlined procedures and conditions under which payments can be interrupted or suspended; (s) The Commission should also use, as far as possible, net financial corrections to correct serious errors in the current programming period pursuant to Article 99 et seq. of Council Regulation (EC) No 1083/2006 (9); in particular net financial corrections should be applied at the closure of the programming period; (t) In addition, the Commission should defend its initial position not to allow the secondary selection of projects physically completed or fully implemented before the funding application (so-called ‘retrospective projects’) for the funding period 2014-2020 (10); (u) DG REGIO should fully align its payment practices with the best practices of other directorates-general or services, and continue making direct and full use of the legal instruments provided for by the regulations, especially the interruption of payments or whenever necessary by the suspension of operational programmes; (v) Calls for more stringent monitoring and conditions in the case of Member States which manifestly breach Union provisions on budgetary and competition law (particularly with regard to the award of public contracts); calls for systematic suspension of payments for the relevant Structural Fund programmes where Union law is breached until rules are complied with, so that use of the funds in accordance with Union rules is guaranteed; (w) Calls for a tougher suspension policy for the European Regional Development Fund (ERDF) and Cohesion Fund (CF), like that already successfully applied to European Social Fund payments, thus enabling early action to prevent any improper use of Structural Fund monies and underpinning, from the outset, the zero-tolerance approach by the Commission; (x) In particular, DG REGIO should systematically interrupt the payments and suspend the programmes when the prime level controls reveal that they are materially affected by error; the payments should be resumed only if there is sufficient and reliable evidence that weaknesses have been remedied; Error rate in centralised management DG Research (y) By the end of June 2013, the Commission should present a report to Parliament assessing the impact of the simplification measures introduced in 2011; (z) That report should also assess the improvements announced by the Commission in respect of the ex ante control and the ex post audit strategies and of the improvement in the guidance on the most common errors given to participants in the seventh framework research programme and to auditors; (aa) In that report, the Commission should explain whether the measures taken to reduce the audit burden, generated by the fact that seven Authorising Officers by Delegation are responsible for the Research budget, have been effective and, if not, propose other solutions; Evaluation report (Article 318 TFEU) and enhanced use of performance audits (ab) The Commission services should develop a new culture of performance, defining in their management plan a number of targets and indicators meeting the requirements of the Court of Auditors in terms of relevance, comparability and reliability; furthermore performance indicators and targets should be fully integrated in all proposals for new policies and programmes; (ac) Asks the Commission to take full account of the remarks and requests formulated in the ‘Response of the European Court of Auditors to the Commission’s second Article 318 evaluation report’; (ad) Calls on the Commission, until the midterm review in the various areas of policy and programmes, to propose a clear definition of European added value; calls for a review of the programmes with the aim of avoiding national and regional displacement effects and genuinely only financing measures which could not be carried out without impetus from the Union; (ae) In their annual activity reports, the services should measure their performance in summarising the results achieved when contributing to the main policies pursued by the Commission; this ‘departmental’ performance will be complemented by a global evaluation of the performance of the Commission in the evaluation report provided for by Article 318 TFEU; (af) The Commission should modify the structure of the abovementioned evaluation report, distinguishing the internal policies from the external ones and focussing, within the section relating to internal policies, on the Europe 2020 strategy as being the economic and social policy of the Union; the Commission should place the emphasis on the progress made in the achievement of the flagship initiatives; (ag) Expects that in the framework of a new and enhanced policy on performance, all evaluation reports done or paid for by the Commission will be made available in full to Parliament, which may decide to make them available on its website for consultation; Revenues and traditional own resources In order to ensure proper protection of the Union’s financial interests, and with a view to equipping the Union with sufficient own resources for growth, the Commission should: (ah) provide Parliament, in time for the 2012 discharge procedure with an evaluation of the cost of postponing the full application of the Modernised Customs Code (MCC), which would quantify the budgetary consequences of such postponement; (ai) collect reliable data on the customs and VAT gap in the Member States and report every six months to Parliament in this regard; (aj) identify and implement actions which would increase the effectiveness and efficiency of the collection of customs duties and VAT in the Member States; the Commission and the Member States should implement the Court of Auditors’ recommendation in the Special Report No 13/2011 (11); (ak) identify the channels and schemes allowing for tax evasion and tax avoidance, in particular by multinationals and through post box companies, and promote appropriate countermeasures; welcomes in this context the OECD report on tax base erosion and profit shifting and calls on the Commission to cooperate with the OECD who will establish an action plan on how to address this problem by July 2013; (al) raise the Member States’ and public awareness, in the context of the negotiations on the Multiannual Financial Framework, that effective revenue collection remains an essential feature of sound management of public finances, including the fact that uncollected revenue aspects have an impact on the availability of the Union’s own resources, the economic situation of the Member States and the internal market and commission a study which would calculate the potential financial benefits for the Member States in tax revenue terms if an equal level playing field against tax evasion and tax avoidance throughout the Union should be created;