COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS

Amendment of the financial statement accompanying Regulation (EU) No 912/2010

Regulation (EU) No 912/2010 of the European Parliament and of the Council of 22 September 2010[1] set up the European GNSS Agency, repealing Council Regulation (EC) No 1321/2004 on the establishment of structures for the management of the European satellite radio navigation programmes and amending Regulation (EC) No 683/2008 of the European Parliament and of the Council. It entered into force on 9 November 2010.

The main purpose of the Regulation is to set up the European GNSS Agency and to determine its tasks in compliance with the provisions laid down in Regulation (EC) No 683/2008[2], which is the basic act for implementing the Galileo and EGNOS European satellite radio-navigation programmes. The European GNSS Agency now has four main tasks: to validate the security of the two European satellite radio-navigation systems; to operate the Galileo Security Monitoring Centre (GSMC); to help prepare the systems to be placed on the market; and to fulfil any other responsibilities that the Commission may confer on it, pursuant to Article 54(2)(b) of the Financial Regulation.

The adoption of Regulation (EU) No 912/2010 follows the submission to the European Parliament and the Council of a draft text adopted by the Commission on 24 March 2009 (COM(2009) 139 final). This draft text is accompanied by a financial statement also sent to the European Parliament and the Council. The figures on the financial statement were based on information at the Commission's disposal at the time regarding the European GNSS Agency's foreseeable operating costs, in particular with regard to staffing.

However, two years ago knowledge of the workload involved in complying with the security requirements relating to the two European radio-navigation satellite systems was not as advanced as it is today. Various studies and meetings between technical experts, mostly classified, have since 2009 made it possible to determine exactly the resources required to meet demand in this regard. Furthermore, during the discussions on the future Regulation (EU) No 912/2010 before Parliament and the Council, it proved necessary to make additions to the text drafted by the Commission on a number of points, specifically as regards the accreditation of systems security along with various clarifications.

Thus, as regards the Agency's task of accrediting systems security, while the Commission's draft text was limited to setting up the security accreditation committee, the Financial Regulation adopted sets out the conditions for that committee to pursue its activities. It makes provision, for example, for the security accreditation committee to set up specific subordinate bodies, in particular a group of experts charged with updating security analyses and performing tests, and a crypto-distribution authority.

Furthermore, the security accreditation committee's role is further detailed – with regard to the arrangements for access to public regulated service (PRS) offered by the system arising from the Galileo programme – in the draft decision of the European Parliament and the Council adopted by the Commission on 8 October 2010 (COM(2010) 550 final) and currently under discussion before the European Parliament and the Council. Under the proposal, the accreditation committee is responsible for accrediting manufacturers of receivers designed to receive signals relating to the PRS.

Moreover, as regards the GSMC's operation, under Regulation (EU) No 912/2010 the centre's staff are subject to the same statutory and regulatory provisions as the European GNSS Agency's other staff. It should be noted that the GSMC, comprising two hubs located in France and the UK, is expected to be entirely functional from 2013 with a view to being fully usable in 2014. It is required to remain operational 24 hours per day, seven days per week. Recent studies have shown that the GSMC will need 16 staff members in 2012 and then 28 in 2013.

All of the amendments made to the remit of the accreditation committee and the GSMC will naturally have an impact on the European GNSS Agency's running costs.

Compliance with security requirements is an essential prerequisite for the start-up and operation of the European satellite radio-navigation systems, given that these systems are liable to call into question the security of EU Member States.

Moreover, the European Council's decision to make Prague the seat of the European GNSS Agency entails relocation costs that are currently being assessed. A preliminary amount is incorporated into the draft budget to cover initial relocation costs and will be reviewed once negotiations with the Czech government have been completed. The Commission will then inform the budgetary authority of the results of this final assessment.

It is therefore vital to update the financial statement on the basis of the facts mentioned above. The new statement is attached herewith.

REVISED LEGISLATIVE FINANCIAL STATEMENT

1. FRAMEWORK OF THE PROPOSAL/INITIATIVE

1.1. Title of the proposal/initiative

1.2. Policy area(s) concerned

1.3. Nature of the proposal/initiative

1.4. Objective(s)

1.5. Grounds for the proposal/initiative

1.6. Duration and financial impact

1.7. Management mode(s) envisaged

2. MANAGEMENT MEASURES

2.1. Monitoring and reporting rules

2.2. Administration and controls

2.3. Measures to prevent fraud and irregularities

3. ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE

3.1. Heading(s) of the multiannual financial framework and expenditure budget line(s) affected

3.2. Estimated impact on expenditure

3.2.1. Summary of estimated impact on expenditure

3.2.2. Estimated impact on operational appropriations

3.2.3. Estimated impact on appropriations of an administrative nature

3.2.4. Compatibility with the current multiannual financial framework

3.2.5. Third-party contributions

3.3. Estimated impact on revenue

FRAMEWORK OF THE PROPOSAL/INITIATIVE

Title of the proposal/initiative

Regulation of the European Parliament and of the Council amending Regulation (EU) No 912/2010 of 22 September 2010 setting up the European GNSS Agency – amendment of the financial statement.

Policy area(s) concerned in the ABM/ABB structure[3]

Policy Area(s) concerned: Enterprise and Industry

Chapter 02 05: SATELLITE NAVIGATION PROGRAMME – GALILEO AND EGNOS

Nature of the proposal/initiative

( The proposal/initiative relates to a new action

( The proposal/initiative relates to a new action following a pilot project/preparatory action[4]

( The proposal/initiative relates to the extension of an existing action

( The proposal/initiative relates to an action redirected towards a new action

Objectives

The Commission's multiannual strategic objective(s) targeted by the proposal/initiative

To support the European presence in space and the development of services relating to satellites

Specific objective(s) and ABM/ABB activity(ies) concerned

Specific objective

To develop and provide infrastructure and services based on satellite radio-navigation (Galileo)

ABM/ABB activities concerned

02 05 SATELLITE NAVIGATION PROGRAMME – GALILEO AND EGNOS

Expected result(s) and impact

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted.

In light of current figures on the development of the Galileo Supervisory Authority (GSA), and in particular the Galileo Security Monitoring Centre (GSMC), it is not possible to carry out security tasks, in particular analysis capacity and response to threats to Galileo. The initial financial statement should therefore be revised to adapt to the reality of the agency's staffing needs. The extra staff will be funded by a transfer from the budget line of the GNSS programme administration.

Indicators of results and impact

Specify the indicators for monitoring implementation of the proposal/initiative.

N/A

Grounds for the proposal/initiative

Requirement(s) to be met in the short or long term

For the record, the European GNSS Agency, also known as the GSA, will provide the staffing for the infrastructure of the Galileo system known as the GSMC (GALILEO Security Monitoring Centre). This centre is the 'brains' of the Galileo system as regards overall security. It is based in two geographical sites, and therefore its staff will be physically located in Saint Germain en Laye in France and Swanwick in the UK.

The GSMC is an operational centre for the system. It will be operated 24 hours per day, seven days per week by qualified experts. It will also be able to analyse and respond to threats or attacks and will therefore have to be operational prior to the Galileo services being up and running, i.e. entirely operational by 2014, which implies that it must be capable of running by 2013 for training and hands-on learning to take place.

The figures given in the services section of the initial financial statement in 2009 – eight posts in 2012 and 13 in 2013 – carried a number of provisos because not all of the necessary information was available.

On the technical side, almost three years ago knowledge of the workload in the area of security was not as advanced as it is now. Successive studies of threats, vulnerable areas and a "Secret EU" classification have provided more thorough knowledge of the system and helped to determine the types of defence to be put in place.

On the legal side, the Regulations in question, namely Nos 683/2008 and 912/2010, have highlighted the complexity of the system, its vital role in terms of security and the crucial role of the GSA. Most importantly, every effort will be made to ensure that no malicious user can access the system, its facilities or its secured signals, especially during times of crisis. The mechanisms are based on provisions that will be under the control of the GSMC, which controls system security but also manages the secured PRS to be used by ministries of defence, the police, customs and government services. The European Council, Parliament and the Member States are working on the Commission's decision, defining the policy for access to the PRS, the outcome of which is expected in 2011. The Member States are also responsible, under Regulation No 912/2010, for accreditation as regards the Galileo system's security.

Lastly, in addition to the needs of the GSMC, the GSA must face new challenges. Accordingly, in discussions with the Council and Parliament, three tasks have been added to the GSA in relation to the Commission's proposal, i.e. the initial financial statement, and their human resources ramifications had not been taken into account. These are:

- the crypto distribution authority

- flight key cell management

- accreditation of the user segment, i.e. accreditation by the national security authorities of manufacturers of PRS receivers.

Added value of EU involvement

As indicated in recital 33 of Regulation (EC) No 683/2008, the establishment of satellite radio-navigation systems cannot be sufficiently achieved by the Member States since this objective exceeds the financial and technical capabilities of any single Member State. Action at Community level is therefore the most appropriate basis for completing the European GNSS programmes (Galileo and EGNOS).

Regulation (EC) No 912/2010 is of course compatible with Regulation (EC) No 683/2008, which is the basic act of the European GNSS programmes and, in particular, sets out their funding for the period 2008-2013.

Lessons learned from similar experiences in the past

N/A

Coherence and possible synergy with other financial instruments

It should also be noted that the programme chose the best offer in terms of security and costs, which was that of France and the UK. The two Member States hosting the sites will ensure that those sites are secure, and will provide infrastructure and logistics, which will save the programme some EUR 40 million.

Duration and financial impact

( Proposal/initiative of limited duration

- ( Proposal/initiative in effect from [DD/MM]YYYY to [DD/MM]YYYY

- ( Financial impact from [YYYY]to [YYYY]

( Proposal/initiative of unlimited duration

- Implementation with a start-up period from 2012 to 2013

- followed by full-scale operation.

Management mode(s) envisaged[5]

( Centralised direct management by the Commission

( Centralised indirect management with the delegation of implementation tasks to:

- ( executive Agencies

- ( bodies set up by the Communities[6]

- ( national public-sector bodies/bodies with public-service mission

- ( persons entrusted with the implementation of specific actions pursuant to Title V of the Treaty on European Union and identified in the relevant basic act within the meaning of Article 49 of the Financial Regulation

( Shared management with the Member States

( Decentralised management with third countries

( Joint management with international organisations ( to be specified )

If more than one management mode is indicated, please provide details in the ‘Comments’ section.

Comments

MANAGEMENT MEASURES

Monitoring and reporting rules

Specify frequency and conditions.

The committee is a member of the Agency's administration board and from now on will take part in any decision requiring a vote.

Administration and controls

Risk(s) identified

N/A

Control method(s) envisaged

The Agency’s accounts will be submitted for the approval of the Court of Auditors, and subject to the discharge procedure. The Commission’s Internal Audit Service will be the agency's internal auditor.

Measures to prevent fraud and irregularities

Specify existing or envisaged prevention and protection measures.

The agency is subject to monitoring by the Anti-Fraud Office.

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE

Heading(s) of the multiannual financial framework and expenditure budget line(s) affected

- Existing expenditure budget lines

In order of multiannual financial framework headings and budget lines.

Heading of multiannual financial framework | Budget line | Type of expenditure | Contribution |

Number [Description…...….] | Differentiated/Non-differentiated appropriations [7] | from EFTA countries[8] | from candidate countries[9] | from third countries | within the meaning of Article 18(1)(aa) of the Financial Regulation |

1a | 02.010405 European satellite radionavigation programmes (EGNOS and Galileo) – Expenditure on administrative management 02.0502 European GNSS Agency (GSA) | NDA DA | YES YES | None None | None None | None None |

Estimated impact on expenditure

Summary of estimated impact on expenditure

The appropriations required for budget line 02.050201 European GNSS Agency (GSA) – Titles 1 and 2 (EUR 1 million in 2012 and EUR 1 million in 2013) are covered by the redeployment of budget line 02.010405 European satellite radio-navigation programmes (EGNOS and Galileo) – Expenditure on administrative management.

EUR million (to three decimal places)

Heading of multiannual financial framework: | Number 1a | Competitiveness for growth and employment |

DG ENTR | Year 2011[10] | Year 2012 | Year 2013 | TOTAL |

( Operational appropriations |

Budget line 02.050201 European GNSS Agency (GSA) – Titles 1 and 2 | Commitments | (1) | 1.0 | 1.0 | 2.0 |

Payments | (2) | 1.0 | 1.0 | 2.0 |

Budget line | Commitments | (1a) |

Payments | (2a) |

( Appropriations of an administrative nature financed from the envelope of specific programmes[11] |

Budget line 02.010405 European satellite radionavigation programmes (EGNOS and Galileo) – Expenditure on administrative management | (3) | -1.0 | -1.0 | -2.0 |

TOTAL additional appropriations for DG ENTR | Commitments | =1+1a +3 | 0 | 0 | 0 |

Payments | =2+2a +3 | 0 | 0 | 0 |

( TOTAL operational appropriations | Commitments | (4) | 1.0 | 1.0 | 2.0 |

Payments | (5) | 1.0 | 1.0 | 2.0 |

( TOTAL appropriations of an administrative nature financed from the envelope of specific programmes | (6) | -1.0 | -1.0 | -2.0 |

TOTAL appropriations under HEADING 1a of the multiannual financial framework | Commitments | =4+ 6 | 0 | 0 | 0 |

Payments | =5+ 6 | 0 | 0 | 0 |

Heading of multiannual financial framework: | 5 | ‘Administrative expenditure’ |

EUR million (to three decimal places)

Year 2012 | Year 2013 | TOTAL |

DG: <…….> |

( Human resources | N/A |

( Other administrative expenditure | N/A |

TOTAL DG <….> | Appropriations | 0 | 0 | 0 |

TOTAL appropriations under HEADING 5 of the multiannual financial framework | (Total commitments = Total payments) | 0 | 0 | 0 |

EUR million (to three decimal places)

Year N[12] | Year N+1 | TOTAL |

TOTAL appropriations under HEADINGS 1 to 5 of the multiannual financial framework | Commitments | 0 | 0 | 0 |

Payments | 0 | 0 | 0 |

Estimated impact on operational appropriations

- ( The proposal/initiative does not require the use of operational appropriations

- ( The proposal/initiative requires the use of operational appropriations from the Agency's budget, as explained below:

Commitment appropriations in EUR million (to 3 decimal places)

|Type[13]

|Average cost |Number of outputs |Total Cost |Number of outputs |Total Cost |Number of outputs |Total Cost |Number of outputs |Total Cost |Number of outputs |Total Cost |Number of outputs |Total Cost |Number of outputs |Total Cost |Number of outputsTotal Number of outputs |Total Cost | |Objective No 1 Security Accreditation | | | | | | | | | | | | | | | | | |Title 1&2 | | | | | |3.300 | |3.500 | | | | | | | | | | | |Title 3 | | | | | |870 | |900 | | | | | | | | | | | |Sub-total for specific objective No 1 | | | |4.170 | |4.400 | | | | | | | | | | | |Objective No 2 Contributing to preparation for placing on the market | | | | | | | | | | | | | | | | | |Title 1&2 | | | | | |2.400 | |2.500 | | | | | | | | | | | |Title 3 | | | | | |700 | |800 | | | | | | | | | | | |Sub-total for specific objective No 2 | | | |3.100 | |3.300 | | | | | | | | | | | |Objective No 3 Operation of the Galileo security centre | | | | | | | | | | | | | | | | | |Title 1&2 | | | |2.830 | |4.300 | | | | | | | | | | | |Title 3 | | | |500 | |500 | | | | | | | | | | | |Sub-total for specific objective No 3 | | | |3.330 | |4.800 | | | | | | | | | | | | TOTAL COST | | | |10.600 | |12.500 | | | | | | | | | | | | In total the agency's indicative budget can be summed up as follows:

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Titles 1 and 2 correspond to a revised total number of staff of 44 temporary agents (TAs) and 17 contract agents (CAs) or seconded national experts (SNEs) for 2012 and 57 TAs and 17 CAs or SNEs in total for 2013.

Description of posts

GSMC ( Galileo Security Monitoring Centre)

It was assumed at the time of preparing the legislative financial statement accompanying Regulation (EU) No 912/2010 that the GSMC centre was to be in Brussels. The final bid accepted was that of France and the UK, with two centres operating in Saint Germain en Laye (France) and Swanwick (United Kingdom).

2012

The start of operations of the Galileo security centre involves an initial increase in staff in relation to the initial financial statement, with one TA redeployed within the agency in 2011, as suggested by the Commission's horizontal services. Furthermore, in relation to the initial financial statement which proposed an increase of eight TAs in 2012, the recruitment of a further five TAs and two SNEs has been requested in 2012 for the security department. This corresponds primarily to the start-up phase (establishing procedures, systems testing environments, training, etc.) for this centre. In total, 14 TAs and two SNEs will be at the GSMC's disposal in 2012.

The posts are as follows:

- 1 GSMC manager (AD11) responsible for all of the security centre's activities and services.

- 1 GSMC operations manager (AD9) responsible for the security centre's operations, including the recruitment and management of operating staff, but mainly security analysis, management of access to the PRS, Galileo security assessment, crisis management, etc.

- 1 GSMC Administrative Manager (AD7) supporting the centre's operations within the GSA and the work of the Administrative Board.

- 1 PRS Access Officer (SNE) responsible for managing access to the PRS, working in shifts to ensure that the centre is operational 24 hours per day, seven days per week.

- 2 Galileo Security Monitoring Officers (1 END and 1 AD7): responsible for monitoring the security of Galileo Signal In Space (SIS), Galileo Commercial Service (CS), Safety Of Life (SOL) et External Region Integrity System (ERIS) user data.

- 1 GSMC Technical Officer (AD7) analysing information and drafting technical reports, identifying threats to GNSS systems

- 1 GSMC System Administration Officer (AD7) responsible inter alia for storing information, maintaining databases and ensuring back-up, and, thus, for the entire computer system. This post also incorporates the role of Local Informatics Security Officer (LISO).

- 1 GSMC Local Security Officer (AD7) implementing security measures in the GSA and monitoring the implementation of the Commission's security measures in the GSA.

- 1 CDA COMSEC Officer (AD7) responsible for implementing COMSEC and TEMPEST

- 1 GSMC Administrative and Financial Administrator (AD7) assisting with the coordination of the GSMC's administration activities including finance.

- 1 GSMC HR Assistant (AST3) the GSA's human resources interface in the GSMC

For the record, the GSA must face fresh requests arising from the discussions with the Council and Parliament. Thus three tasks have been added to the GSA in relation to the Commission's proposal, i.e. the initial financial statement, and their human resources impact had not been taken into account. These are:

- the crypto distribution authority

- flight key cell management

- accreditation of the user sector, i.e. accreditation by the national security authorities of manufacturers of PRS receivers.

With regard to these additional tasks, the following posts are scheduled for 2012 (+3 TAs for the GSMC):

- 1 GNSS Technology Regime Implementation Officer (AD6): report to the Head of Security Department, aiming at the fulfilment of the Authority’s duties on the preparation of an EU GNSS control regime, the preparation of advice on security policy issues and export control and security matters in international agreements related to the European GNSS programmes

- 1 Security Documentalist Officer (AD6): to organise and structure the flow of documents produced and received by the GSA Security Department, in order to foster the optimum use of sensitive and classified information (with the support of the GSA Registry Control Officer) within the Security Department and for the European GNSS programmes, including the management of the Security Accreditation and PRS Reference Libraries. In line with the new missions of the Agency, he/she will be the point of contact for managing all PRS user segment documentation.

- 1 PRS Pilot Project Officer (AD7): The PRS Pilot Project will facilitate joint projects optimising PRS infrastructure for the Member States He will test the users' PRS functions.

2013:

The initial financial statement gave a total of 13 TAs in 2013 for the security centre (GSMC). The revised number of agents for this centre involves an increase of 13 TAs and 2 SNEs, giving a total number of 28 (26 TAs and 2 SNEs) in 2013.

The GSMC is expected to be fully functional in 2013. This implies seven additional TAs beyond the original increase of five TA posts planned in the financial statement for 2013 for the GSMC.

In 2013, 4 Galileo Security Monitoring Officers, 4 GSMC Technical Analysts, 1 GSMC Registry Control Officer, 1 CDA Crypto Custodian, 1 GSMC Finance Officer and 1 GSMC Call Centre Officer will be recruited.

In 2014 the centre is expected to be fully operational (24/7), which will necessitate a review of the needs of the GSMC which will be assessed subsequently as part of proposals for new financial perspectives.

Accreditation

These additional posts relate directly to the new tasks arising from discussions with the Council and Parliament.

2012 :

In relation to the initial financial statement proposing an increase of 0 TAs in 2012, the recruitment of two TAs is requested in 2012 for the security accreditation department.

The two security accreditation officers (AD7) will be in charge of everything relating to the security accreditation of user segments (including PRS receivers and manufacturers of PRS receivers).

2013:

Moreover, the accreditation committee requires one extra TA in 2013 in relation to the initial financial statement to cover aspects of the additional tasks requested by the Council and the Parliament in relation to accreditation.

Relocation

The agency is scheduled to move to Prague in 2012. The Commission, in conjunction with the agency, is in the process of estimating the costs required to cover allowances, compensation and removal costs for staff (whether relocating or not), improving the building, IT infrastructure and other materials. A preliminary amount of EUR 500 000 is integrated into the budget to cover the initial costs of the move. This initial estimate will be reviewed as soon as negotiations with the Czech government have been completed. The Commission will subsequently inform the budgetary authority of the results of this final assessment.

Staffing forecasts are as follows:

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Estimated impact on appropriations of an administrative nature

Summary

- ( The proposal/initiative does not require the use of administrative appropriations

- ( The proposal/initiative requires the use of administrative appropriations, as explained below:

Estimated human resources requirements

- ( The proposal/initiative does not require the use of human resources

- ( The proposal/initiative requires the use of human resources, as explained below:

Compatibility with the current multiannual financial framework

- ( Proposal is compatible with the current multiannual financial framework.

Appropriations necessary to cover the increase in the agency's contribution in budget line 02.050201 (EUR 1 million in 2012 and EUR 1 million in 2013) will be covered by the redeployment of the budget line 02.010405.

- ( Proposal will entail reprogramming of the relevant heading in the multiannual financial framework.

- ( Proposal/initiative requires application of the flexibility instrument or revision of the multiannual financial framework.[14]

Third-party contributions

- ( Proposal/initiative does not provide for cofinancing by third parties

- The proposal/initiative provides for the co-financing estimated below:

Estimated impact on revenue

- ( Proposal has no financial impact on revenue.

- ( Proposal has the following financial impact:

( on own resources

( on miscellaneous revenue

[1] OJ L 276, 20.10.2010, p. 11.

[2] OJ L 196, 24/07/2008, p. 1.

[3] ABM: Activity Based Management – ABB: Activity Based Budgeting.

[4] As referred to in Article 49(6)(a) or (b) of the Financial Regulation.

[5] Details of management modes and references to the Financial Regulation may be found on the BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html

[6] As referred to in Article 185 of the Financial Regulation.

[7] DA= Differentiated appropriations / NDA= Non-differentiated appropriations.

[8] EFTA: European Free Trade Association.

[9] Candidate countries and, if applicable, the western Balkan potential candidate countries.

[10] Year N is the year in which implementation of the proposal/initiative starts.

[11] Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research.

[12] Year N is the year in which implementation of the proposal/initiative starts.

[13] Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.).

[14] See points 19 and 24 of the Interinstitutional Agreement.