20.8.76 OfficialJournaloftheEuropeanCommunities NoL229/9
FINANCIAL REGULATION
of27July1976
applicabletothefourthEuropeanDevelopmentFund
(76/647/EEC)
THECOUNCILOFTHEEUROPEAN COMMUNITIES ,
HavingregardtotheTreatyestablishingthe
EuropeanEconomicCommunity,
HavingregardtotheACP-EECConventionof
Lomesignedon28February1975,hereinafter
referredtoas'theConvention',
HavingregardtoCouncilDecision76/568/EECof29
June1976ontheassociationoftheoverseas
countriesandterritorieswiththeEuropean
EconomicCommunity (2),
HavingregardtoCouncilDecision75/250/EECof
21April1975onthedefinitionandconversionofthe
Europeanunitofaccountusedforexpressingthe
amountsofaidmentionedinArticle42oftheACP­
EECConventionofLome(3),
HavingregardtotheInternalAgreementonthe
financingandadministration ofCommunityaid(4)
signedon11July1975,hereinafterreferredtoas'theInternalAgreement',andinparticularArticle
30thereof,
HavingregardtothedraftFinancialRegulation
presentedbytheCommission ,
HavingregardtotheopinionoftheEuropean
InvestmentBank,hereinafterreferredtoas'the
Bank',
WhereaspursuanttoArticle1(1)oftheInternal
AgreementtheMemberStateshavesetupafourth
EuropeanDevelopmentFund,hereinafterreferredto
as'theEDF;
WhereasaccordingtoArticle30oftheInternal
Agreementtheprovisionsforimplementing that
AgreementshallbethesubjectofaFinancial
Regulationadopted,upontheentryintoforceofthe
Convention,bytheCouncilactingbythequalified
majoritylaiddowninArticle18(4)ofthesaid
Agreement,
HASADOPTEDTHISFINANCIAL "REGULATION :
TITLEI
FINANCIAL ARRANGEMENTS
Article1
1.Thefinancialcontributions oftheMember
StatesshallbeexpressedintheEuropeanunitof
account,hereinafterreferredtoas'EUA',referred
toinArticle3oftheInternalAgreementanddefined
byDecision75/250/EEC.EachMemberStateshall
paytheamountofitscontributioninitsnational
currencyonthebasisoftheconversionrate
calculatedbytheCommissionpursuanttoArticle2
ofthesaidDecision.
2.Thefinancialcontributionsshallbecreditedby
eachMemberStatetoaspecialaccountentitled
'Commission oftheEuropeanCommunities —
EuropeanDevelopment Fund'openedwiththe
TreasuryofthatMemberStateorthebody
designatedbyit.
3.UponexpiryoftheConventionandDecision
76/568/EEC,thatpartofthecontributionswhichtheMemberStatesremainobligedtomakeshallbe
calledupbytheCommission,asrequired,onthe
conditionslaiddowninthisFinancialRegulation.
Article2
1.TheCouncilDecisionprovidedforinthefirst
subparagraph ofArticle7(2)oftheInternal
Agreementandwhichrelatestothescheduleofcalls
forcontributions ,shallbenotifiedtothe
Commissionby31Octobereachyear.
2.Theannualcontributions shallnormallybe
payable:
(a)before20Januaryfortherequirementsofthe
EDFasforecastforthefirstsevenmonthsofthe
yearinquestion;
(b)on1Julyforthebalanceoftheannual
contribution .
3.EachMemberStateshallmakethepayments
referredtoinparagraph2inproportiontoits
contributions asfixedinArticle1(2)oftheInternal
Agreement .(!)OJNoL25,30.1.1976,p.1.
(2)OJNoL176,1.7.1976,p.8.
(3)OJNoL104,24.4.1975,p.35.
(4)OTNoL25,30.1.1976,p.168.

NoL229/10 OfficialJournaloftheEuropeanCommunities 20.8.76
toinArticle1(2)insuchawayastomaintain
adistributionofitsassetsamongstthevarious
currenciescorresponding totheproportioninwhich
thecurrenciesoftheMemberStatesenterintothe
compositionoftheEUA.
ArticleS
Byreferencetothecashrequirementsforexecuting
projectsandprogrammes ,theauthorizingofficer
shallmakethetransfersneededtoreplenishthe
accountsopenedonbehalfoftheCommissionin
accordancewithArticle32ofProtocol2annexedto
theConvention,hereinafterreferredtoas'Protocol
2',andwithArticle3ofthisFinancialRegulation .4.Supplementary paymentsdecidedupon
pursuanttothesecondsubparagraphofArticle7(2)
oftheInternalAgreementshall,unlessotherwise
decidedbytheCouncil,bedueandbemadewithin
asbriefaperiodaspossible,whichmaynotinany
casebemorethanthreemonths.
Article3
1.IneachMemberStatetheCommissionshall
hold,withthebankofissueorthefinancial
institutiondesignatedbythatMemberState,
accountsunderthesamenameasthatopened
pursuanttoArticle1(2).
2.Foroperationswhicharenotcurrently
undertakenbybanksofissueorbypostofficegiro
centres,orinordertofacilitatethepaymentswhich
ithastomake,theCommissionshallopenaccounts
atoneormorebanks.
3.ThesignaturesoftheCommissionofficials
empoweredtocarryoutoperationsontheEDF's
accountsshallbelodgedwhentheaccountsare
openedor,inthecaseofofficialswhoareauthorized
subsequently ,whentheyaredesignated .Article6
1.Anytransfersofassetsfromthecurrencyof
oneMemberStateintothatofanotherMemberState
whichhavebeenrequestedbytheCommissionfor
themanagementoftheEDFshallbemadeatthe
currentrateofexchangebythebanksofissueorthe
financialinstitutionsapprovedbytheMember
States.
2.Anyexchangedifferencesandcostsshallbe
chargedagainstEDFresources.
Article7
TheCommission shallcommunicate totheCouncil
eachyearastatementofcontributionpaymentsand
aprogressreportonEDFoperations .Article4
1.TheCommission shallusethefundscreditedto
theaccountsreferredtoinArticle3tomakethe
necessarypaymentsandtransfers.
2.TheCommissionshall,asfaraspossible,make
anywithdrawalsfromthespecialaccountsreferred
TITLEII
MANAGEMENT OFTHEEDF
SECTION I
GENERALPROVISIONS3.Anauthorizingofficermaynotexercisethe
functionsoffinancialcontrolleroraccounting
officer.
Article8
1.TheEDFshallbeadminsteredfinanciallyin
accordancewiththeprinciplethattheauthorizing
officersandaccountingofficersareseparate
individuals .Theappropriations shallbeadministered
bytheauthorizingofficers,whoaloneshallhave
thepowertoenterintocommitments regarding
expenditure,establishsumsduetobecollectedand
issueproofofrevenueandpayments.
2.Collectionandpaymentoperationsshallbe
carriedoutbytheaccountingofficers.Article9
Withinthelimitoftheappropriations providedfor
inArticle1oftheInternalAgreementthe
Commissionshall,withoutprejudicetoArticle11(2)
thereof,managetheEDFonitsownresponsibility
undertheconditionslaiddownintheConvention,
inDecision76/568/EEC,intheInternalAgreement
andinthisFinancialRegulation .Inaccordancewith
Article29(1)ofProtocol2theCommissionshall
appointthechiefauthorizingofficeroftheEDF.The
lattermayhaverecoursetodeputyauthorizing

20.8.76 OfficialJournaloftheEuropeanCommunities NoL229/11
SECTION II
REVENUEofficers,whomheshallappointsubjecttoapproval
bytheCommission .Eachdecisiontodelegate
powersshallstatethedurationandextentofthe
mandate.
Thosetowhompowersaredelegatedmayactonly
withinthelimitsofthepowersexpresslyconferred
uponthem.
Article10
1.TheCommissionshallappointthefinancial
controller,whoshallberesponsibleformonitoring
thecommitment,forauthorizingexpenditureandfor
monitoringrevenue.
2.Thespecialrulesapplicabletothefinancial
controllershallbeformulatedinsuchawayasto
ensurehisindependence incarryingouthisduties.
Measurestakeninrespectofhisappointmentand
promotion,disciplinaryactionortransfers,andthe
variousmethodsofinterruptionorterminationof
hisappointmentshallbethesubjectofreasoned
decisionswhichshallbeforwardedtotheCouncil
forinformation .
3.ThepersonconcernedortheCommissionmay
instituteproceedingsbeforetheCourtofJustice.Article13
1.TherecoveryofanysumduetotheEDFshall
giverisetotheissue,bytheauthorizingofficer,of
arevenueorder.
2.Revenueordersshallbetransmittedbythe
authorizingofficertothefinancialcontrollerand
shallbesubjecttothelatter'sapproval.Thepurpose
ofapprovalbythefinancialcontrollershallbeto
establishthat:
(a)therevenueiscorrectlycredited;
(b)therevenueorderisinorderandinconformity
withtheprovisionsapplicabletothe
managementoftheEDF,withallactstakenin
implementation ofthoseprovisions;
(c)theprinciplesofsoundfinancialmanagement
havebeenaffected.
3.Thefinancialcontrollermayrefusehis
approval.Theauthorizingofficermay,bymeansof
adecisionstatingthefullreasonsthereforandonhis
soleresponsibility ,disregardthis.Thedecisionofthe
authorizingofficershallbeimplemented ;itshallbe
communicated tothefinancialcontrollerfor
information .TheCommission shallinformtheAudit
BoardprovidedforinArticle206oftheTreatyof
eachofthesedecisions.
4.Whentheauthorizingofficerwaivestheright
todrawupadocumentestablishingadebtorto
recoversumsdue,hemustinformthefinancial
controllerandtheAuditBoard.
Whenthefinancialcontrollerfindsthatadocument
establishingadebthasnotbeendrawnuporthata
sumduehasnotbeenrecovered,heshallinformthe
Commissionthereof.Article11
Thecollectionofrevenueandthepaymentof
expenditureshallbecarriedoutbyanaccounting
officerappointedbytheCommission .Subjectto
Article33(2)thisaccountingofficeraloneshallbe
empoweredtomanagefundsandassets.Heshallbe
responsiblefortheircare.
Article12
TheCommissionmaydelegatepartofthedutiesof
theaccountingofficerandpartoftheresponsibility
formonitoringtoauthorizedagentsappointedbyit.
Therulesgoverningresponsibilities adoptedunder
thisTitleshallapplytosuchauthorizedagents
withinthelimitsofthepowersdelegatedtothem.
TheprinciplesoftheprovisionsofthisFinancial
Regulationrelatingtothemonitoringandpayment
ofexpenditureshallbeapplicabletoexpenditure
effectedbydelegation.Suchexpendituremaynotbe
finallyenteredintotheEDFaccountsuntilthe
Commissionhasverifiedthattheexpenditurehas
beencorrectlyclearedandthattheauthorizationand
paymentareinorder,inaccordancewiththe
requirementsofthisRegulation .Article14
1.Theaccounting officershallassume
responsibility forrevenueordersforwardedtohim
bytheauthorizingofficer.
2.Theaccountingofficershalldoallinhispower
toensurethatEDFresourcesarerecoveredatthedue
datesandtoensurethattheCommunity'srightsare
safeguarded .

NoL229/12 OfficialJournaloftheEuropeanCommunities 20.8.76
2.Thefinancialcontrollershalltakeintoaccount
anyobservationsmadeinthedischargedecisions.3.Theaccountingofficershallinformthe
authorizingofficerandthefinancialcontrollerof
anyrevenuenotrecoveredwithinthetimelimitslaid
down.
Article15
Areceiptshallbeissuedinrespectofallcash
paymentsmadetotheaccountingofficer.
SECTIONIII
COMMITMENT ,CLEARANCE ,AUTHORIZATION
ANDPAYMENT OFEXPENDITURE
1.Commitment ofexpenditureArticle19
1.Wherethefinancialcontrollerwithholdshis
approvalheshallfurnishawrittenstatementofhis
reasonstherefor.Theauthorizingofficershallbe
notifiedaccordingly .
Whereapprovaliswithheldandtheauthorizing
officermaintainshisproposal,therefusalshallbe
referredforadecisiontotheCommission .
2.Exceptwheretheavailabilityofappropriations
isindoubt,theCommissionmay,bymeansofa
decisionstatingthefullreasonsthereforandonits
soleresponsibility ,overrulesucharefusal.This
decisionshallbeimplemented ;itshallbe
communicated forinformation tothefinancial
controller.TheCommissionshallinformtheAudit
Boardofeachofthesedecisions.Article16
1.Allmeasureswhichmaygiveriseto
expenditurepayablebytheEDFmustbepreceded
byaproposalforcommitmentofexpenditurefrom
theauthorizingofficer.
2.Aprovisionalcommitmentmaybeenteredinto
inrespectofcurrentexpenditure .
3.Anaccountshallbekeptofcommitmentsand
authorizations .2.Clearanceofexpenditure
Article20
Thepurposeofclearanceofexpenditurebythe
authorizingofficershallbe:
(a)toverifytheexistenceoftherightsofthe
creditor;
(b)todetermineorverifytheexistenceandthe
amountofthedebt;and
(c)toverifytheconditionsunderwhichpayment
fallsdue.Article17
Proposalsforcommitments shallbereferredtothe
financialcontroller.Theyshallinparticularshow
thepurposeoftheexpenditure,theestimated
amountinvolved,theitemtowhichitistobe
chargedandthenameanddescriptionofthe
creditor.Theyshallberegisteredafterapprovalby
thefinancialcontroller .
Article21
1.Clearanceofanyexpenditureshallbesubjectto
thesubmissionofsupportingdocumentsshowingthe
creditor'sclaimand,whereappropriate ,theservice
rendered.
2.However,forcertaincategoriesofexpenditure,
advancesmaybegrantedundertheconditionslaid
downbytheCommission .
3.TheCommissionshalllaydownthenatureand
contentsofthesupportingdocumentstobeenclosed
withthepaymentorders.
4.Theauthorizingofficerempoweredtoclear
expenditureshallpersonallycheckthesupporting
documentsorshall,onhisownresponsibility ,
ascertainthatthishasbeendone.Article18
1.Thepurposeofapprovalbythefinancial
controllershallbetoestablishthat:
(a)theexpenditurehasbeenchargedtothecorrect
item;
(b)appropriations areavailable;
(c)theexpenditureisinorderandinconformity
withtheprovisionsapplicabletothemanagement
oftheEDFandwithallactstakenin
implementation ofthoseprovisions,inparticular
thegeneralandspecialclausesofthefinancing
agreementrelatingtotheoperation;
(d)theprinciplesofsoundfinancialmanagement
havebeenapplied.

20.8.76 OfficialJournaloftheEuropeanCommunities NoL229/13
3.Authorization ofexpenditure (b)thepaymentorderagreeswiththecommitment
ofexpenditureandthattheamountthereofis
correct;
(c)theexpenditureischargedtothecorrectitem;
(d)theappropriations areavailable;
(e)thesupportingdocumentsareinorder;
(f)thepayeeiscorrectlydescribed.Article22
Authorization shallbetheactwherebythe
authorizingofficer,bytheissueofapaymentorder,
authorizestheaccountingofficertopayanitemof
expenditurewhichhehascleared.
Article27
Shouldapprovalbewithheld,Article19shallapply.
Article28
Afterapproval,theoriginalofthepaymentorder,
togetherwithallsupportingdocuments,shallbe
forwardedtotheaccountingofficer.
4.PaymentofexpenditureArticle23
Thepaymentordershallstate:
(a)theitemagainstwhichpaymentshallbecharged;
(b)theamounttobepaid;
(c)thenameandaddressofthepayee;
(d),themethodofpayment;
(e)thepurposeoftheexpenditure .
Thepaymentordershallbedatedandsignedbythe
authorizingofficer.
Article24
1.Thepaymentordershallbeaccompanied by
theoriginalsupportingdocuments,whichshallbear
orbeaccompanied bytheapprovalofthe
authorizingofficerconfirmingthattheamountsto
bepaidarecorrect,thereceiptofthesuppliesorthe
performanceoftheservice.Thepaymentordershall
showthenumbersanddatesoftherelevant
approvalsofcommitment .
2.Copiesofthesupportingdocuments,certified
astruecopiesbytheauthorizingofficer,may,in
somecases,beacceptedinplaceoftheoriginals.
Article25
1.Forpaymentsbyinstalment,thefirstpayment
ordershallbeaccompanied bydocuments
establishingthecreditor'srighttopaymentofthe
instalmentinquestion.
2.Subsequentpaymentordersshallrefertothe
supportingdocumentsalreadyfurnishedandrepeat
thereferencenumberofthefirstpaymentorder.Article29
1.PaymentshallbethefinalactwherebytheEDF
isdischargedofitsobligationsresultingfrom
carryingouttheoperationsfinanced.
2.Paymentshallbemadebytheaccounting
officerwithinthelimitsofthefundsavailable.
Article30
Intheeventofasubstantiveerrororofthevalidity
ofthedischargebeingcontestedoroffailureto
observetheformalitiesprescribedbythisFinancial
Regulation,theaccountingofficershallsuspend
payment.
Article31
1.Ifpaymentissuspended,theaccountingofficer
shallgivethereasonsthereforinawrittenstatement
whichheshallsendforthwithtotheauthorizing
officerand,forinformation,tothefinancial
controller .
2.Exceptwherethevalidityofthedischargeis
contestedtheauthorizingofficermay,where
paymentissuspended,referthemattertothe
Commission .Thelattermayrequire,inwritingand
onitsownresponsibility ,thatthewithholdingof
paymentbedisregarded .Article26
Paymentordersshallbesenttothefinancial
controllerforpriorapproval.Thispriorapproval
shallconfirmthat:
(a)thepaymentorderwasproperlyissued;

NoL229/14 OfficialJournaloftheEuropeanCommunities 20.8.76
Article32
1.Paymentsshall,asageneralrule,beeffected
throughabankaccountorapostofficegiro
account.Theprocedureforopening,administering
andusingsuchaccountsshallbedeterminedbythe
Commission .
2.Theproceduresreferredtoinparagraph1shall
inparticularrequiretwosignaturesonchequesand
onpostofficeorbanktransferorders,onesignature
necessarilybeingthatoftheaccountingofficerorof
adulyauthorizedadministratorofadvancefunds;
theyshall,moreover,determinetheexpenditure
whosepaymentmustnecessarilybeeffectedeitherby
chequeorbypostofficeorbanktransfer.
Article33
1.Forthepaymentofcertaincategoriesof
expenditurefundsforadvancesmaybesetupunder
theconditionslaiddownbytheCommission .
2.Therulesgoverningthemanagementofthe
advancefundsofficesshallinparticularconcern:
(a)theappointmentofadministrators ofadvance
funds;
(b)thenatureandmaximumamountofeach
expendituretobeincurred;
(c)themaximumamountofthefundswhichmay
beadvanced;
(d)theproceduresfortheproductionofsupporting
documentsandthetimewithinwhichtheymust
beproduced;
(e)theresponsibilityoftheadministratorofadvance
funds.
Article34
Theconversionratestobeusedforthecalculation
inEUAofpaymentstobemadeforthepurposeof
theprojectsorprogrammesreferredtoinTitleIVof
theConventionandinthecorresponding provisions
ofDecision76/568/EECshallbethoseinforceon
theeffectivedateofsuchpayments.Thisdateshall
correspondtothatinwhichtheCommission
accountsreferredtoinArticle32ofProtocol2and
inArticle3weredebited.
SECTIONIV
RESPONSIBILITIES OFAUTHORIZING OFFICERS,
FINANCIAL CONTROLLERS ,
ACCOUNTING OFFICERSAND
ADMINISTRATORS OFADVANCE FUNDS
Article35
WithoutprejudicetoArticle30(5)ofProtocol2,
authorizing officerswho,whenestablishing
entitlementstoberecovered,whenissuingcollectionorders,enteringintocommitmentsofexpenditureor
signingpaymentorders,dosowithoutcomplying
withthisFinancialRegulation,shallbeliableto
disciplinaryactionand,whereappropriate,topay
compensation .Thesameshallapplyiftheyomitto
drawupadocumentestablishingaclaimorifthey
neglecttoissuerevenueordersorare,without
justification ,lateinissuingthem.
Article36
Financialcontrollersrenderthemselvesliableto
disciplinaryactionand,whereappropriate,to
paymentofcompensation iftheyallow
appropriations tobeexceededorareguiltyof
seriousnegligenceincarryingouttheirduties.
Article37
1.Accounting officersshallbeliableto
disciplinaryactionand,whereappropriate,to
paymentofcompensation asregardspaymentsthey
makeindisregardofArticle31.
Theyshallrenderthemselvesliabletodisciplinary
actionandtopaymentofcompensation asregards
anylossordeteriorationofthemonies,assetsand
documentsintheirchargewheresuchlossor
deterioration resultsfromanintentionalmistakeor
seriousnegligenceontheirpart.
Underthesameconditions,theyshallberesponsible
forthecorrectexecutionofordersreceivedbythem
inrespectoftheuseandadministration ofbankand
postofficegiroaccounts,andinparticular:
(a)ifthepaymentsorrecoveriesmadebythemdo
notagreewiththeamountsonthepayment
ordersorcollectionorders;
(b)iftheyeffectpaymenttoapartyotherthanthe
entitledpayee.
2.Administrators ofadvancefundsshallbeliable
todisciplinaryactionand,whereappropriate,to
paymentofcompensation :
(a)iftheycannotshowduewarrantwithproper
documentsforpaymentsmadebythem;
(b)iftheyeffectpaymentstoapartyotherthanthe
entitledpayee.
Theyshallbeliabletodisciplinaryactionandto
paymentofcompensation inrespectofanylossor
deteriorationofthemonies,assetsanddocumentsin
theirchargeasaresultofanintentionalmistakeor
seriousnegligenceontheirpart.
3.Accountingofficersandadministrators of
advancefundsshallinsurethemselvesagainstany
financialriskstheymayincurvis-a-visthe
CommissionunderthisArticle.
TheCommission shallcovertherelevantinsurance
costs.Itshallspecifythecategoriesofofficials

20.8.76 OfficialJournaloftheEuropeanCommunities NoL229/15
SECTION V
ACCOUNTS
Article40
1.Theaccountsshallbekept,expressedinEUA,
bythedoubleentrymethodandonthebasisofthe
calendaryear.Theyshallshowallrevenueand
expenditurebetween1Januaryand31Decemberof
eachyearandshallincludethesupportingdocuments.
2.Therevenueandexpenditureaccountandthe
balancesheetshallbedrawnupinEUA.qualifyingasaccountingofficersoradministrators of
advancefundsandthetermsonwhichitshallcover
theinsurancecostsbornebytheaccountingofficers
oradministrators ofadvancefundsinorderto
protectthemselvesagainsttherisksinvolvedintheir
duties.
4.Aspecialindemnityshallbegrantedto
accountingofficersandadministrators ofadvance
funds.
Thesumscorresponding tothisindemnityshallbe
creditedeachmonthtoanaccountopenedbythe
Commission onbehalfofeachoftheseofficialsin
ordertoestablishaguaranteefundtocoveranycash
orbankshortageforwhichthepersonconcerned
mightrenderhimselfliable,insofarassucha
shortagehasnotbeencoveredbyrefundsfrom
insurancecompanies .
Thecreditbalanceintheseguaranteeaccountsshall
bepaidovertothepersonsconcernedafterthey
terminatetheirappointmentasaccountingofficeror
administrator ofadvancefundsandaftertheyhave
beengivenfinaldischargefortheirfinancial
administration .Article41
1.Entriesshallbemadeonthebasisofan
accountingsystemcomprisinganomenclature of
budgetaryitemswhichmakesacleardistinction
betweentheaccountswhichpermitthebalancesheet
tobedrawnupandthosewhichpermittherevenue
andexpenditureaccounttobedrawnup.These
entriesshallberecordedinbooksoroncards,which
mustmakeitpossibletodrawupageneralmonthly
balance.
2.Theaccountingsystemshallbesetoutina
Commission Decision.Article38
Theliabilityofauthorizingofficers,financial
controllers,accountingofficersandadministrators of
advancefundstopaymentofcompensation and
disciplinaryactionmaybedeterminedinaccordance
withArticles22and86to89oftheStaffRegulations
ofofficialsoftheEuropeanCommunities .SECTIONVI
GENERALPROVISIONS
Article39
TheCommissionshallbeallowedaperiodoftwo
yearsfromthedateonwhichtheaccountfor
revenueandexpenditureissubmittedtotakea
decisiononthefinaldischargetobegivento
accountingofficersforthetransactionsrelating
thereto.Artide42
TheAuditBoardshallbenotifiedofthe
appointmentoftheauthorizingofficer,thefinancial
controller,theaccountingofficerandofthe
administratorofadvancefunds,ofanydelegationof
powerspursuanttoArticles9and12andofthe
accountingsystemreferredtoinArticle41.
TITLEIII
IMPLEMENTING MEASURES
SECTION I
EXECUTION OFEDFOPERATIONS
Article43
TheCommissionshall,inrespectofthoseresources
oftheEDFwhichitadministers,informtheCouncileachyearoftheresultsofinvitationstotenderfor
theprecedingyear.Whereappropriateitshallnotify
theCouncilofanymeasuresithastakenorproposes
totaketoimprovethetermsofcompetitionfor
participationininvitationstotenderissuedbythe
EDF.
Initsreport,theCommissionshallprovidethe
Councilwithinformationenablingittoassess

NoL229/16 OfficialJournaloftheEuropeanCommunities 20.8.76
whetherthemeasurestakenbytheCommission
haveactuallyaffordedallfirmsofthevarious
MemberStates,oftheACPStatesandofthe
associatedcountriesandterritoriesequalopportunity
ofaccesstoworksandsupplycontractsfinancedby
theEDF.variouscurrenciesaredefinedbyreferenceto
anothercurrencytheconversionshallbeeffectedon
thebasisoftheratespecifiedinthecontract.
4.WheretendersaredrawnupinEUA,payments
connectedwiththedebtshall,asappropriate,be
madeinthecurrencyofaMemberStateorinthe
currencyofarecipientState,countryorterritory
specifiedinthecontractonthebasisofthe
equivalentvalueoftheEUAonthedaypreceding
payment .
5.Wherepaymentismadeinacurrencyother
thanthecurrencyoftherecipientState,countryor
territoryorotherthanthecurrencyofthecountry
wherethecontractorhashisregisteredplaceof
business,itmustbethroughtheintermediaryofan
approvedbankoragency,establishedinthecountry
wherethecontractorhashisregisteredplaceof
business.Article44
UnderArticle19ofProtocol2andthe
corresponding provisionsofDecision76/568/EEC,a
favourableopinionfromtheEDFCommitteeshall
berequiredfortheawardofcontractsbydirect
agreementorafterrestrictedinvitationstotender
andfortheperformancethereofthroughpublic
worksdepartments .
However,wheretheyarejustifiedbyurgencyandby
unforeseencircumstances ,theaboveexceptionsto
therulesgoverningcompetitionmaybeauthorized
bytheCommissionwithoutaprioropinionfromthe
EDFCommittee .Inthatevent,theCommissionshall
immediatelyinformtheEDFCommitteethereof.
SECTION II
FINANCIAL COMMITMENTS
Article46
WheretheEDF'sresourcesmanagedbythe
Commissionareinvolvedafinancingagreementshall
bedrawnupandconcludedinEUAbetweenthe
Commission ,actingfortheCommunity,andthe
GovernmentoftherecipientStateorthecompetent
authorityoftherecipientcountryorterritoryforany
projectorprogrammeonwhichafinancingdecision
istaken.
Thefinancingagreementshallspecifythedetailsof
theEDF'sfinancialcommitment ,thearrangements
forandtermsofthefinancing,andthepersonsor
institutionsresponsibleforsupervision,payments
andrecoveries .Article45
1.Tendersforsupplycontractsfinancedbythe
EDFshallbedrawnupandpaymentsmade,atthe
optionofthetenderer,inEUA,inthecurrencyof
therecipientState,countryorterritory,inthe
currencyofthecountryofhisregisteredplaceof
businessorinthatofthecountryproducingthe
supplies.
2.Tendersforworkscontractsandfortechnical
assistancecontractsandcontractsforthesupervision
ofworksfinancedbytheEDFshallbedrawnupand
paymentsmadeinthecurrencyoftherecipientState,
countryorterritory.However,thetenderermay
requestinhistenderthatajustifiedpartofthe
nominalamountofhistenderbepaidinthe
currencyofthecountryofhisregisteredplaceof
businessonthebasisoftheconversionrateinforce
onthefirstdayofthemonthprecedingthemonthin
whichthedatesetfortheopeningoftendersfalls.
HemayalsodrawupthatpartinEUAonthebasis
oftheconversionratestipulatedabove.
3.Tendersforstudycontractsfinancedbythe
EDFshallbedrawnupandpaymentsmadeatthe
optionofthecontractoreitherinEUAorinthe
currencyofthecountryinwhichthecontractorhas
hisregisteredplaceofbusiness.
However,thatpartoftheservicesprovidedwhich
correspondstoexpenditureinthecurrencyofthe
recipientState,countryorterritoryshallbepaidin
thatcurrency.WherethesumstobepaidintheArticle47
Noexpenditureinexcessoftheamountlaiddown
inthefinancingagreementmaybechargedtothe
EDFunlessadecisionhasbeentakentocommit
additionalfundstheretoundertheconditionslaid
downinArticles16to19andinArticle56.

20.8.76 OfficialJournaloftheEuropeanCommunities NoL229/17
Therequestforthecommitmentofadditionalfunds
shallbeaddressedtotheCommission andexamined
undertheconditionslaiddowninArticle33of
Protocol2.Reimbursements andinterestpaymentsshallbemade
inoneormoreofthecurrenciesoftheMember
States,chosenbytheborrower.
6.TheratesforconvertingEUAintothe
currenciesoftheMemberStatesforthepurposeof
payingsumsdueintheformofreimbursements ,
interestpaymentsandanycommissiondueshallbe
thoseinforceonthe10thdayprecedingpayment.Article48
ThetransferagreementreferredtoinArticle22of
theConventionandinthecorresponding provisions
ofDecision76/568/EECshallstatethedataon
whichcalculationoftheannualtransferinEUAis
based,thecurrenciesinwhichthetransferofthis
amountistobemadeand,whereappropriate,the
conditionsforthereconstitution oftheresources
madeavailabletothestabilizationsystemreferredto
inTitleIIoftheConvention .SECTIONIV
RISKCAPITAL
SECTIONIII
SPECIALLOANSArticle50
1.Anydecisiontograntriskcapitalshallseta
limitinEUAtotheCommunity'scommitmentand
financialresponsabilities andtotheextentofthe
rightsinthecompanyattachingtosuchoperations.
Theinstrumentsgivingeffecttoriskcapital
operationsshallbeconcludedbytheBankactingas
theCommunity'sauthorizedagent.
2.TheBank,actingforandonbehalfofthe
Community,shallmanagetheoperationsreferredto
inparagraph1whichhavebeenthesubjectofa
financingdecisionbytheBoardofDirectorsofthe
Bank.
3.Followingthesigningofeachcontract,theBank
shallcommunicate totheCommission theestimated
datesandamountsofthecallsforfunds.Whenever
calleduponbytheBanktodoso,theCommission
shallpaytoittheamountitneedsforcarryingout
riskcapitaloperationsinthecurrencyorcurrencies
fixedbytheBank.
4.Paymentsrelatingtoreceipts,incomeand
repaymentsinrespectofriskcapitaloperationsshall
bemadetotheBankfortheCommunity .Article49
1.Adecisiontograntspecialloansshallsetthe
limittotheCommunity'scommitment .Contracts
relatingtosuchloans,drawnupjointlywiththe
Bankforthepartswhichconcernthelatter,shallbe
concludedbytheCommissiononbehalfofthe
Community .
2.Theamountsoftheappropriations
corresponding toeachloangrantedshallbe
expressedinEUA.Ifanappropriation iscancelled
beforeallorpartofthepaymentsrelatingthereto
havebeenmadetheunpaidpartshallberegardedas
nothavingbeengranted.
3.Loansshallbepaidinthecurrencyor
currenciesoftheMemberStatesasfixedbythe
Commissionafterconsultationwiththeborrower.By
wayofderogationfromArticle34,thesumspaid
shallbechargedagainsttheappropriations onthe
basisoftheconversionratesinforce,ontheday
precedingthatofpayment,betweentheEUAandthe
currencyorcurrenciesusedforthepayment.
4.Reimbursements andinterestpaymentsshallbe
creditedtotheCommunity'saccountwiththeBank.
TheBankshallrecoversuchreimbursements and
interestpaymentsbyvirtueofspecialtermsof
referenceconferreduponbytheCommission ,
actingfortheCommunity,afterconsultingtheEDF
Committee .
5.Theamountstobereimbursedandinterestdue
inrespectofspecialloansshallbeexpressedinEUA.Article51
Thequasi-capitalaidreferredtoinArticle4of
Protocol2andinthecorresponding provisionsof
Decision76/568/EECshallservetofinance:
—primarily,fixedinvestmentsinpublic,privateor
semi-publicfirms,
—secondarily,specificstudiesforthepreparation
ofprojectsandassistanceforfirmsduringthe
starting-upperiod.

NoL229/18 OfficialJournaloftheEuropeanCommunities 20.8.76
Wheresuchaidisgrantedtoaconsultancyfirmit
shallnormally,onexecutionoftheproject,be
incorporatedinthecapitalorquasi-capitalassistance
towhichthepromotingfirmmayalsobeentitledfor
theexecutionoftheproject.
SECTIONV
SUBSIDIZED LOANSFROMTHEBANK4.Ifallorpartofanappropriation whichhas
beenopenediscancelledorallorpartofaloan
whichhasbeenmadeisrepaidinadvancetheBank
shallpaybackintothespecialaccountopenedwith
theBankinthenameoftheCommunityunder
Article68anamountcorresponding tothatpartof
theappropriation whichhasbeencancelledorthat
partoftheloanwhichhasbeenrepaid,plusthe
compoundinterest,up-datedatthesamerateasthat
stipulatedinparagraph1,fortheperiodbetweenthe
dateofpaymentoftheup-datedtotalamountofthe
interestratesubsidiesandthedateofrepayment.
Thelatterdatemaynotbemorethan30daysafter
thecompleteorpartialcancellationoradvance
repaymentofthesubsidizedloan.
5.AllpaymentsprovidedforinthisArticleshall
beexpressedinEUAandmovementsoffunds
relatingtheretoshallbemadeinthecurrenciesofthe
MemberStatesonthebasisofthecompositionofthe
EUA.
SECTIONVI
MANAGEMENT OFTHEEXPORTEARNINGS
STABILIZATION SYSTEM
Article53Article52
1.PursuanttoArticle5ofProtocol2andthe
corresponding provisionsofDecision76/568/EEC,
theaggregateamountofinterestratesubsidieson
loansfromtheBankshallbecalculatedinEUAin
termsofitscurrentvalueontheeffectivedateof
signingoftheloancontract,onthebasisofa
compoundinterestratefixedbytheCouncilandthe
BankinagreementwiththeCommission .
Forperiodsoflessthanonemonththecalculation
shallbemadeonthebasisofsimpleinterest.
2.TheBankshallmakethecalculationofcurrent
valuereferredtoinparagraph1byreferencetothe
followingtwoschedules:
(a)anestimatedscheduleforpayingoutand
repayingtheloan;
(b)anestimatedschedulefortheamountsrequired
tocovertheinterestratesubsidieswhenthey
falldue.
TheBankshallcommunicate totheCommission as
soonaspossibletheschedulesandthetotalamount
oftheinterestratesubsidiesattheircurrentvalueon
thedatefixedforthesigningoftheloancontract.
Wheretheactualscheduleforpayingouttheloan
provestodifferappreciablyfromtheestimated
schedule,theamountofthesubsidyontheinterest
paidtotheBankshallberecalculated .
Shouldthedatefixedforthesigningbechangedthe
Bankshallrevisethecalculationofthecurrentvalue
andshallforthwithcommunicate totheCommission
thetotalamountoftheinterestratesubsidiesattheir
currentvalueonthenewdatefixedforthesigning
togetherwiththeappropriategroundstherefor.
3.Theup-datedtotalamountoftheinterestrate
subsidyshallbepaidtotheBankbytheCommission
onthedateonwhichtheloancontractissigned.1.ForthecalculationinEUAofthereference
levelandoftheactualearningsreferredtoinArticle
19(1)and(2)respectivelyoftheConventionandin
thecorresponding provisionsofDecision76/568/
EEC,theexchangeratesapplicableshallbethe
averageratesinforceintheperiodstowhichthe
amountsconcernedrefer.
2.Forthepurposesofpaymentsrelatingtothe
transfersreferredtoinArticle19(3)and(6)ofthe
Conventionandinthecorresponding provisionsof
Decision76/568/EEC,theconversionratestobe
usedbetweentheEUAandthecurrencyor
currenciesusedforpaymentshallbethoseinforce
onthedayprecedingpayment.
3.Forthepurposesofpaymentsrelatingtothe
contributions towardsthereconstitution ofresources
referredtoinArticle21(2)oftheConventionandin
thecorresponding provisionsofDecision76/568/
EEC,theconversionratestobeusedbetweenthe
EUAandthecurrencyorcurrenciesusedfor
paymentshallbethoseinforceonthe10thday
precedingpayment.

20.8.76 OfficialJournaloftheEuropeanCommunities NoL229/19
Article54
Intheeventofadvanceuseofthefollowingyear's
instalment,theadvancesreferredtoinArticle19(6)
oftheConventionandinthecorresponding
provisionsofDecision76/568/EECshallbereduced
proportionately .
SECTIONVII
EXECUTIVE AGENTSdecisionstocommittheadditionalfundsrequiredto
coveranyexcessexpenditureincurredundera
projectshallbetaken:
—inaccordancewiththeprocedureslaiddownin
Articles19and20oftheInternalAgreement
wheretheexcessexpenditureishigherthana
ceilingof15°/ooftheoriginalcommitmentset
outinthefinancingdecision,
—bythechiefauthorizingofficeroftheEDFwhere
theexcessexpenditureisequaltoorlowerthan
the15°/oceiling.
ChapterI
Thechiefauthorizingofficer
ChapterII
Thenationalauthorizingofficer
Article57
Intheperformance ofhisduties,thenational
authorizingofficershallcomplywiththeprovisions
ofthisFinancialRegulationregardingcommitment ,
clearanceandauthorizationofexpenditure .
Article58Article55
1.ThechiefauthorizingofficeroftheEDF,
referredtoinArticle29ofProtocol2,shalltakeall
measuresnecessaryfortheimplementation ofthe
provisionsofChapter8ofProtocol2andofthe
corresponding provisionsofDecision76/568/EEC.
2.Thechiefauthorizingofficershallensure,
beforethepublicationofaninvitationtotender,that
thedocumentsrelatingtotendersdonotcontainany
directorindirectdiscriminatory provisions.Heshall
ensurethattendersarecomparedunderequal
conditionsandinparticularthattheimportdutiesor
taxationoftherecipientState,countryorterritory
donotconstituteanobstacletoparticipation in
invitationstotender.
3.Thechiefauthorizingofficermaysuspendthe
publicationofanoticeofinvitationtotenderwhere
itisfoundthatcorrectionsmustbemadetothe
specificationsorotherreplacementdocuments .To
thisend,heshallinformtherelevantauthoritiesof
therecipientState,countryorterritoryofhis
observations .
4.Thechiefauthorizingofficershallensurethat
whenacontractorisdesignatedandacontractis
awardedArticles18and20ofProtocol2are
respected.
Wherehedeemsitappropriate,thechiefauthorizing
officershallconsultexpertschosenfortheir
technicalcompetenceandtheirindependence vis-a­
visthefirmsconcernedbytheawardofthecontract.
Article56
UnderArticle33(3)ofProtocol2andthe
corresponding provisionsofDecision76/568/EECWherethechiefauthorizingofficeroftheEDFis
awareofdelaysintheproceduresrelatingtoprojects
financedbytheEDFheshall,inconjunctionwith
thenationalauthorizingofficer,makeallcontacts
necessarytoremedythesituation.
If,foranyreasonwhatsoever,serviceshavebeen
renderedbutfurtherdelayintheclearance,
authorizationorpaymententailsdifficultieslikelyto
callintoquestionthefullperformance ofthe
contract,thechiefauthorizingofficermaytakeall
appropriatemeasurestoresolvethesedifficulties,to
remedy,wherenecessary,thefinancialconsequences
oftheresultantsituationand,moregenerally,to
enabletheprojectorprojectstobecompletedunder
thebesteconomicconditions .Heshallinformthe
nationalauthorizingofficerofsuchmeasuresassoon
aspossible.Ifpaymentsarethusmadedirectlyby
theCommissiontothebeneficiaryofthecontract
theCommunityshallautomatically acquirethat
beneficiary'srightsascreditorvis-h-visthenational
authorities .

NoL229/20 OfficialJournaloftheEuropeanCommunities 20.8.76
ChapterIII
TheCommissiondelegate
Article59
Duringtheperformanceofoperations,thedelegate
shallverifyonthespotandonthebasisofrecords,
thatworkcarriedoutorservicesrenderedtallywith
theirdescriptions asgiveninthefinancing
agreements,contractsorestimates.
Article60
ThedelegateshallcomplywiththisFinancial
Regulationintheperformanceofhisduties.Commissionatthecloseofeachfinancialyear.
WithoutprejudicetoArticle31(4)oftheInternal
Agreement,theyshallbesubmittednolaterthan31
Marchofthefollowingfinancialyeartogetherwith
documentaryevidence,forexaminationbytheAudit
Board.
2.ThepowersconferredupontheAuditBoard
shallbeexercisedbyitsmembers,whoshalltake
collectiveactionandassumecollectiveresponsibility .
TheAuditBoardmayinstructoneormoreofits
memberstocarryoutcertaintasksorcertainaudits.
Anymemberormemberssoinstructedmayonhis
ortheirinitiativeseekassistancefromofficersofthe
board.
Thetasksdelegatedtosuchofficersmustbe
specificallylaiddownandlimitedtothetime
necessaryfortheircompletion.Theboarditselfor
oneofitsmembersshallnotifythesetaskstothe
authoritieswithwhomtherelevantofficersareto
carryouttheirwork.Article61
IntheeventoffailuretocomplywiththisFinancial
Regulation,ofmisconductorgrossnegligenceinthe
performanceofhisduties,thedelegateshallbe
answerabletotheCommission .
ChapterIV
Thepayingagent
Article62
Intheperformanceofhisduties,thepayingagent
referredtoinArticle32ofProtocol2shallcomply
withthisFinancialRegulation .
Article63
Intheeventoffailuretoobservetheprovisionsin
forceofmisconductorofgrossnegligencewhich
entailfinanciallossfortheCommunity,thepaying
agentshallbeheldfinanciallyresponsibleunderthe
conditionsandinaccordancewiththetermslaid
downinthecontractbindinghimtothe
Commission .Article65
1.TheauditcarriedoutbytheAuditBoardshall
bebasedonrecordsand,ifnecessary,performedon
thespot.Itshallbeconcernedwithoperationsand
projectsfinancedfromEDFresourcesmanagedby
theCommission vanditspurposeshallbetoestablish
thatallrevenuehasbeenreceivedandall
expenditureincurredinalawfulandregularmanner
withregardtotheprovisionsapplicable,andthatthe
financialmanagementhasbeensound.
2.IntheperformanceofitstasktheAuditBoard
may,undertheconditionslaiddowninparagraph4,
consultalldocumentsandinformationrelatingto
thefinancialmanagementofthedepartmentssubject
toitsinspection;ithasthepowertohearany
officialresponsibleforrevenueandexpenditure
operationsandtouseanyoftheauditingprocedures
appropriatetothosedepartments .
3.TheAuditBoardshallensurethatallsecurities
andcashondepositorinhandarecheckedagainst
voucherssignedbythedepositariesoragainst
officialmemorandaofcashandsecuritiesheld.The
boardmayitselfcarryoutsuchchecks.
4.TheCommissionshallprovidetheAuditBoard
withallthefacilitiesandinformationwhichthe
latterdeemsnecessaryfortheperformanceofits
task.SECTIONVIII
PRESENTING ANDAUDITING ACCOUNTS
Article64
1.Thebalancesheetandrevenueandexpenditure
account,expressedinEUA,shallbeadoptedbythe

20.8.76 OfficialJournaloftheEuropeanCommunities NoL229/21
Inparticular,itshallplaceatthedisposalofthe
AuditBoardalldocumentsconcerningthe
conclusionofcontractsandallaccountsincashor
materials,allaccountingrecordsorsupporting
documents andtheadministrative documents
pertainingthereto,aswellasalldocumentsrelating
torevenueandexpenditure .
Tothisend,officialssubjecttoauditbytheAudit
Boardshallinparticular :
(a)makeavailableforinspectiontheircashinhand,
anyothercash,securitiesandalltypesofassets,
thesupportingdocumentsinrespectoftheir
managementofthefundsofwhichtheyarethe
depositariesandanybooks,registersandother
documentsrelatingthereto;
(b)presentthecorrespondence oranyother
documentrequiredforthefullimplementation of
theaudits.
Theinformationreferredtounder(b)maybe
requestedonlybytheAuditBoardorbyoneofits
members,andsuchrequestshallbeinwriting.
TheAuditBoardshallbeempoweredtoauditthe
documentsinrespectofEDFrevenueand
expenditurewhichareheldbytheCommission's
departmentsand,inparticular,bythedepartment
responsiblefordecisionsonsuchrevenueand
expenditure .
Article66
1.AnycommentswhichtheAuditBoard
considersshouldappearintheannualreport
providedforinArticle206oftheTreatyshallbe
communicated totheCommission .
TheCommissionshallforwarditsrepliestothe
AuditBoard.TheAuditBoardshallattachtoits
reportanassessmentofthesoundnessofthe
financialmanagement .
2.TheAuditBoardshallconcludeitsreporton
theaccountsfortheprecedingfinancialyearnot
laterthan15July.
Therevenueandexpenditureaccount,thebalance
sheetandthereportoftheAuditBoard,together
withtherepliestothecomments,shallbesubmitted
bytheCommissiontotheEuropeanParliamentand
theCouncilnotlaterthan31October.
3.TheEuropeanParliamentandtheCouncilmay
requesttheAuditBoardtoforward,inadditionto
theannualreport,reportsoranalysesinrespectof
specificproblemsrelatingtooperationswhichhave
beenclosed.TheAuditBoardmay,onitsowninitiative,place
similarreportsoranalysesbeforetheEuropean
ParliamentortheCouncil.
Article67
1.Before30Aprilofthefollowingyearthe
Commissionshallbegivenadischargeinrespectof
thefinancialmanagementoftheEDFforthepast
year,inaccordancewithArticle31(3)ofthe
InternalAgreement .
2.TheCommissionshalltakeallappropriate
stepstoactonthecommentsappearinginthe
decisiongivingdischarge.Attherequestofthe
EuropeanParliamentortheCouncilitshallreport
onthemeasurestakeninthelightofthesecomments
andinparticularontheinstructionsgiventothose
ofitsdepartmentswhichareresponsibleforthe
managementoftheEDF.Thisreportshallalsobe
forwardedtotheAuditBoard.
Subjecttothesecondsentenceofthepreceding
paragraphtheCommissionmust,inanAnnextothe
revenueandexpenditureaccountforthenext
financialyear,giveanaccountofthemeasurestaken
furthertothecommentsappearinginthedecision
givingdischarge.
3.Therevenueandexpenditureaccountand
balancesheetforeachfinancialyearandthedecision
givingthedischargeshallbepublishedintheOfficial
journaloftheEuropeanCommunities .
SECTIONIX
GENERALANDFINALPROVISIONS
Article68
ThesumscollectedbytheBankeitherintheformof
repayments,interestorchargesinrespectofsp.ecial
loansorintheformofproducts,revenueor
repaymentsfromriskcapitaloperationsshallbe
centralizedinaspecialaccountopenedwiththe
BankonbehalfoftheCommunity .
Repaymentsinrespectofinterestratesubsidies
receivedshallalsobecentralizedinthisaccount.
Article69
ThisRegulationshallbeapplicableforthesame
periodastheInternalAgreement .
DoneatBrussels,27July1976.
FortheCouncil
ThePresident
M.vanderSTOEL