Opinion of the Economic and Social Committee on "Draft Commission Regulation (Euratom, ECSE, EC) amending Commission Regulation No 3418/93 of 9 December 1993 laying down detailed rules for the implementation of certain provisions of the Financial Regulation of 21 December 1977"

(2001/C 123/20)

On 20 November 2000 the Commission decided to consult the Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the above-mentioned draft regulation.

The Economic and Social Committee decided to appoint Mr Donovan as rapporteur-general for this opinion.

At its 378th plenary session of 24 and 25 January 2001 (meeting of 24 January), the Economic and Social Committee adopted the following opinion by 67 votes to one.

1. Introduction

1.1. A Council Regulation (Euratom, ECSC, EC) of 21 December 1977 is the legal basis, under the treaties, for the Financial Regulation applicable to the general budget of the European Communities.

1.2. Several amendments have been made over the years since 1977 and there have been further developments necessitating a general review, updating and consolidation to conform with modern best practice. Such review and consolidation is in course and completion is anticipated by 2002. This is a most welcome initiative.

1.3. The Commission is charged with the implementation of several provisions of the Council's Financial Regulation by way of "implementing rules". The rules currently in force are laid down in Commission Regulation (EC) No 3418/93 of 9 December 1993 and came into force on 1 January 1994.

1.4. The new consolidated Council Financial Regulation 2002 will of course necessitate review of the 1993 Commission "implementation rules" Regulation (EC) No 3418/93. Nevertheless it is necessary to include the proposed amendments contained in this draft proposal at this stage. These changes arise principally from Council Regulations (EC) Nos 2548/98, 2779/98 and 2673/1999.

2. Substance

The substance and reasons for these implementations rules amendments is set out in the foreword of the Commission draft in Section 3 paragraphs 1-13.

3. Analysis

The analysis of proposed amendments is set out in part B sections 1, 2 (paragraphs 1-9), 3, 4 (paragraphs 10-13) of the Commission draft proposal.

4. Specific Comments

4.1. Article 1 sub paragraph 1(a) should be amended to read "the need to be met in the short term or the long term" instead of "the need to be met".

4.2. Article 1a. Point 3, first line should read "The Commission shall use information from the European Central Bank when ..." instead of "The Commission shall use any source of information if considers reliable when ...".

4.3. Article 104, point 2, second paragraph add "... and including a legal officer".

Third paragraph, second line change as follows "... shall be present as an observer" instead of "may be present as an observer".

Point 4 delete the second paragraph and replace in third paragraph "may" with "shall" in the first line.

In the fifth and last paragraph of point 4, after "... committee" add "and shall be retained for possible future reference".

4.4. 49. In Article 135, point 3 the following four classes should be added to the list:

- undrawn commitment accounts;

- suspense accounts;

- provisions for legal cases;

- pensions liabilities.

5. General Comments

5.1. The Council Financial Regulation as variously amended together with the Commission Regulations setting down rules for implementation of certain provisions of that Regulation are highly technical and most cumbersome. Although designed to provide transparency in the financial affairs of the European Communities, the instruments in themselves lack transparency in many respects.

5.2. Although the "European Company" has finally been provisionally agreed in outline, harmonisation of financial accounting procedures is still not very advanced.

As a consequence, there remain differences in financial control and management systems across the Member States. These include differences in titles and responsibilities of those working in this area in some cases this leads to confusion.

5.3. In the case of the amendments proposed in this instance, there would seem to be lack of clarity particularly in the responsibilities under the titles Internal Audit and Financial Controller.

6. Conclusion

6.1. The Economic and Social Committee fully supports this necessary but interim draft proposal amending Commission Regulation (EC) No 3418/93 but suggests that the minor amendments outlined above would improve the text.

6.2. The proposed new Financial Regulation due in 2002 is urgently needed for the updating, modernising, consolidation, simplification and enhancement of transparency in the financial control systems of the European Communities.

Brussels, 24 January 2001.

The President

of the Economic and Social Committee

Göke Frerichs