8. 5. 89 Official Journal of the European Communities No C 115/1 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Regulation (ECSC, EEC, Euratom) amending the Financial Regulation of 
21 December 1977 applicable to the general budget of the European Communities 
COM(88) 838 final 
(Submitted by the Commission on 16 December 1988) 
(89/C 115/01) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Coal and Steel Community, and in particular Article 78H 
thereof, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 209 
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, 
Having regard to the opinion of the European Parliament, 
Having regard to the opinion of the Court of Auditors, 
Whereas the conciliation provided for in the Joint 
Declaration of 4 March 1975 of the European Parliament, 
the Council and the Commission (!) took place in a 
Conciliation Committee; 
Whereas Article 107 of the Financial Regulation of 21 
December 1977 (2), as last amended by Regulation (ECSC, 
EEC, Euratom) No 2049/88 (3) (hereinafter referred to as 
'the Financial Regulation'), provides for the Financial 
Regulation to be examined by the European Parliament 
and the Council in the light of a proposal from the 
Commission; 
Whereas, in view of the evolution of the general budget of 
the European Communities and of the application of the 
Financial Regulation, it is necessary to adjust many of the 
provisions of the said Financial Regulation; whereas the 
European Council of 11,12 and 13 February 1988 called for 
(!) OJ No C 89, 22. 4. 1975, p. 1. 
(2) OJ No L 356, 31. 12. 1977, p. 1. 
(3) OJ No L 185, 15. 7. 1988, p. 3. a general revision of the Financial Regulation by the end of 
1988; 
Whereas provision should be made for an appropriate 
budgetary structure for all expenditure in order to give a 
clearer picture of the policy breakdown of appropriations 
and thus create the conditions essential for effective 
management; whereas, to this end, the present Section III 
of the budget should be reserved for Commission staff and 
administrative appropriations and a new section should be 
introduced for expenditure common to all the institutions, 
as well as several sections for operating appropriations, 
taking into account past changes in the contents of the 
budget and future prospects; 
Whereas it is necessary to produce a more transparent 
presentation of the appropriations for research and 
technological development and to introduce appropriate 
rules for this presentation; 
Whereas, in order to cover all the appropriations entered in 
the general budget of the European Communities, the 
Financial Regulation should contain special provisions for 
the budgetary management of Community external aid; 
Whereas, in view of the changes to the rules on food aid, it 
is no longer necessary to include special provisions in the 
Financial Regulation; 
Whereas special provisions should be entered in the 
Financial Regulation, to be supplemented by implementing 
measures, to meet the specific requirements of managing 
the administrative appropriations relating to staff serving 
outside the Community and related administration; 
Whereas budgetary appropriations should be presented in 
a more uniform manner with the appropriations for all 
administrative expenditure, for the European Agricultural 
Guidance and Guarantee Fund Guarantee Section, and 
No C 115/2 Official Journal of the European Communities 8. 5. 89 
some technical appropriations being non-differentiated, 
while appropriations for the various policies intended to 
cover multiannual operations are differentiated; 
Whereas, in the light of the experience acquired since its 
entry into force, certain provisions of the Financial 
Regulation need to be made more detailed or revised 
notably in respect of the arrangements for provisional 
twelfths and transfers; 
Whereas, in order to improve interinstitutional relations, 
the Financial Regulation should include provisions on the 
procedure for supplementary and amending budgets, the 
establishment of the financial statement to accompany 
proposals, improvements to the organization of relations 
between the institutions and the Court of Auditors and the 
information to be given to the budgetary authority on the 
utilization of advances from the EAGGF Guarantee 
Section; 
Whereas, in connection with the repayment of Community 
aids, the Financial Regulation should contain provisions 
concerning the payment of interest; 
Whereas, in view of the technological advances in 
management and accounting systems, rules should be laid 
down to allow the budget to be implemented in a 
computerized environment; 
Whereas, since the cost of living is rising constantly, it has 
become essential that, for the determination of certain 
amounts in connection with the awarding of contracts and 
with inventories, reference be made to the rules for the 
implementation of this Regulation, so that these amounts 
can be adjusted by a legislative procedure that is more 
appropriate from the technical angle; 
Whereas, following the entry into force of this Regulation, 
a consolidated version of the Financial Regulations should 
be published in the 'C series of the Official journal of the 
European Communities, taking account of the various 
amendments made to it since its adoption, 
HAS ADOPTED THIS REGULATION: 
Article 1 
The Financial Regulation is hereby amended as follows: 
1. In the second subparagraph of Article 1(1), the third 
indent is replaced by the following: 
'— the revenue and expenditure of the European 
Atomic Energy Community which may be 
credited to or charged against the budget 
pursuant to the Euratom Treaty and to the 
measures taken in implementation thereof.' 2. In Article 1(2), the second subparagraph is replaced 
by the following: 
'Expenditure may not be authorized for a period 
extending beyond the financial year.' 
3. Article 1(3) is replaced by the following: 
'3. Administrative expenditure arising from: 
— contracts which have been concluded, in accord­
ance with local usage, or 
— contractual provisions relating, in particular, to 
the supply of equipment, 
for periods extending beyond the financial year shall 
be charged to the budget for the financial year in 
which it is effected.' 
4. In Article 1, paragraphs 3a, 4 and 5 are replaced by 
the following: 
'4. Staff and administrative expenditure, expendi­
ture under the European Agricultural Guidance and 
Guarantee Fund, Guarantee Section and expenditure 
on repayments to the Member States, as well as loan 
guarantees, shall be entered in the budget in the form 
of non-differentiated appropriations. 
Other expenditure shall be entered in the form of 
differentiated appropriations. 
Commitment appropriations shall cover, for the 
current financial year, the total cost of the legal 
obligations entered into for operations whose 
implementation extends over more than one finan­
cial year. 
Payment appropriations shall cover expenditure 
arising from commitments entered into in the 
current financial year and/or preceding financial 
years. 
5. Differentiated appropriations shall be shown in 
the budget as follows: 
— the commitment appropriation authorized for 
the financial year concerned and the payment 
appropriation for the same financial year shall be 
entered under the appropriate heading, 
— the estimated annual payment appropriations 
required for subsequent financial years shall be 
set out against the commitment appropriations in 
an indicative schedule in the remarks column. 
6. The sum of the non-differentiated appropri­
ations and the commitment appropriations shall 
constitute the appropriations for commitments. 
8. 5. 89 Official Journal of the European Communities No C 115/3 
The sum of the non-differentiated appropriations 
and the payment appropriations shall constitute the 
appropriations for payments. 
7. The legal commitments entered into for meas­
ures extending over more than one financial year 
shall contain a time limit for implementation which 
must be specified to the recipient in due form when 
the aid is granted. 
This time limit shall be determined with due regard 
to the need for multiannual implementation of the 
operations financed and the specific conditions of 
implementation in relation to the various spheres of 
intervention. 
The Commission may, in special circumstances, 
adjust the time limit for implementation of these 
commitments, on the basis of appropriate proof 
supplied by the recipients.' 
5. The following new Article 3 is inserted: 
'Article 3 
Where proposals submitted to the Council and 
Parliament may have budgetary consequences, 
including significant changes in the number of posts, 
the Commission shall draw up a financial statement. 
In the case of multiannual operations, this financial 
statement shall contain the estimated schedule of 
annual requirements in appropriations and posts.' 
6. Article 3 is renumbered Article 4. It is replaced by the 
following: 
'Article 4 
1. Subject to Article 27, all revenue and expendi­
ture shall be entered in full in the budget and in the 
accounts without any adjustment against each other. 
2. Total revenue shall cover total appropriations; 
revenue shall not be assigned to a specific purpose. 
However, certain revenues shall not be used for any 
other purpose, notably: 
— financial contributions from Member States to 
certain research programmes pursuant to the 
second paragraph of Article 6 and Article ll(2)(c) 
of Council Decision 88/376/EEC, Euratom of 24 
June 1988 on the system of the Communities' (!) 
own resources, hereinafter referred to as 'the 
Decision of 24 June 1988', 
— revenue earmarked for a specific purpose, such as 
income from foundations, subsidies, gifts, be­
quests, — contributions to Community activities from non-
Member States or various bodies, 
— revenue from third parties in respect of work 
carried out at their request. 
3. The total appropriations referred to in para­
graph 2 shall be represented by the appropriations 
for payments. 
4. The Commission may accept any donation 
made to the Communities, and in particular 
foundations, subsidies, gifts and bequests. 
The Commission may accept donations which may 
involve some financial charge only subject to prior 
authorization from Parliament and the Council, 
which shall act on the matter within two months of 
the date of receipt of the request from the 
Commission. If no objection has been made within 
this period, the Commission shall take a final 
decision in respect of acceptance. 
(!) OJ No L 185, 15. 7. 1988, p. 24.' 
7. Article 4 is renumbered Article 5. The present text is 
numbered paragraph 1 and the following paragraph 
2 is added: 
'2. No expenditure may be committed or author­
ized in excess of the authorized appropriations, 
without prejudice to Article 27(2).' 
8. Article 5 is renumbered Article 6. It is replaced by the 
following: 
'Article 6 
The financial year shall run from 1 January to 31 
December. 
The revenue of a financial year shall be entered in the 
accounts for the financial year on the basis of the 
amounts collected during the financial year, with the 
exception of the own resources for the month of 
January of the next financial year, in respect of 
which advance payment may be made pursuant to 
Article 10(2) of Council Regulation (EEC, Euratom, 
ECSC) No 2891/77 of 19 December 1977 im­
plementing the Decision of 21 April 1970 on the 
replacement of financial contributions from 
Member States by the Communities' own re­
sources (*). 
The readjustment of entries in respect of value added 
tax own resources and, if appropriate, of financial 
contributions, shall be carried out in accordance 
with the third subparagraph of Article 10(3) of the 
abovementioned Regulation. 
No C 115/4 Official Journal of the European Communities 8. 5. 89 
The alloted appropriations shall be used solely to 
cover expenditure properly entered into and paid in 
the financial year for which they were granted, save 
as otherwise provided in Articles 7 and 104, and to 
cover the debts relating to preceding financial years 
for which no appropriation was carried forward. 
The commitments shall be entered in the accounts of 
the basis of the commitments contracted up to 
31 December. 
The expenditure of a financial year shall be entered 
in the accounts for that year on the basis of the 
expenditure for which authorization reached the 
financial controller not later than 31 December and 
the accounting officer not later than the following 
10 January, and for which payment was effected by 
the accounting officer not later than 15 January. 
Notwithstanding the two preceding subparagraphs, 
the expenditure of the EAGGF Guarantee Section, 
shall be taken into account for a financial year in 
accordance with the rules laid down in Article 102. 
(!) OJ No L 336, 27. 12. 1977, p. 1.' 
9. Article 6 is renumbered Article 7. 
(a) Paragraph 1 is replaced by the following: 
' 1. In the case of budget headings where there is 
no distinction between commitment appropri­
ations and payment appropriations: 
(a) appropriations relating to remunerations and 
allowances of members and staff of the 
institutions may not be carried over; 
(b) a decision may be taken to carry over to the 
next financial year only the portion of the 
other appropriations still uncommitted at the 
close of the financial year; 
(c) appropriations in respect of payments still 
outstanding by virtue of commitments duly 
entered into before the close of the financial 
year shall be carried over automatically to the 
next financial year only.' 
(b) Paragraph 3 is replaced by the following: 
'3. In the case of appropriations for which a 
decision to carry over may be taken in accordance 
with paragraph 1(b) above, the Commission shall 
submit to the budgetary authority, not later than 
15 February, the duly substantiated requests to carry over appropriations made by Parliament, 
the Council, the Court of Justice, the Court of 
Auditors and by the Commission itself. 
The Council shall consult Parliament and, acting 
by qualified majority, shall decide on the requests 
to carry over appropriations in respect of 
expenditure necessarily resulting from the 
Treaties or acts adopted in accordance therewith. 
Parliament shall consult the Council and act on 
the requests to carry over appropriations in 
respect of expenditure other than that necessarily 
resulting from the Treaties or acts adopted in 
accordance therewith. 
If no decision is taken by the budgetary authority 
within six weeks, the requests to carry over 
appropriations shall be deemed to have been 
approved.' 
(c) Paragraph 4 is replaced by the following: 
'4. Unused revenue and appropriations avail­
able at 31 December arising from the specific 
revenue referred to in Article 4(2) shall be carried 
over automatically.' 
(d) Paragraph 5 is replaced by the following: 
'5. The following appropriations shall lapse at 
the end of the year: 
(a) appropriations from the previous financial 
year: 
— appropriations carried over by decision of 
the budgetary authority under paragraph 
1(b) which have been neither committed 
nor paid, 
— appropriations carried over automatically 
under paragraph 1(c) which have not been 
paid, 
— commitment appropriations and payment 
appropriations carried over by the Com­
mission under paragraph 2 and remaining 
unused at the end of the financial year; 
(b) appropriations of the financial year which 
have not been carried over.' 
(e) Paragraph 7 is replaced by the following: 
'7. The revenue and expenditure account shall 
show the automatic carryovers, the appropri-
8. 5. 89 Official Journal of the European Communities No C 115/5 
ations carried over by decision of the budgetary 
authority, those carried over by decision of the 
Commission and the appropriations made avail­
able again by the decision of the Commission 
after commitments have been cancelled.' 
10. Article 7 is renumbered Article 8, and 
— the first and second paragraphs are numbered 1 
and 2, 
— the third paragraph is replaced by the following: 
'3. Expenditure relating to rents or certain as­
sociated expenditure which is payable in advance in 
accordance with provisions laid down by law or 
contracts may give rise to payments from 20 
December onwards to be charged to the appropri­
ations for the next financial year.' 
11. Article 8 is renumbered Article 9. It is replaced by the 
following: 
'Article 9 
1. If the budget is not finally adopted at the 
beginning of the financial year, Article 78b of the 
ECSC Treaty, Article 204 of the EEC Treaty and 
Article 178 of the Euratom Treaty shall apply to 
commitment and payment of expenditure already 
approved in principle in the last budget duly 
adopted. 
An item of expenditure shall be considered as having 
been approved in principle in the last budget duly 
adopted if it could have been charged to a specific 
budget heading under the financial year concerned. 
2. (a) Commitments may be entered into in respect 
of any chapter: 
— for up to one quarter of the total appropri­
ations entered in the relevant chapter for 
the preceding financial year, account being 
taken of all transfers, plus one twelfth for 
each completed month, 
— without exceeding the appropriations 
provided for in the draft budget or, in the 
absence thereof, in the preliminary draft 
budget. 
The global provisional commitments of the 
EAGGF Guarantee Section referred to in 
Article 100 shall be treated as commitments 
for the purposes of these provisions. (b) Payments may be made monthly in respect of 
any chapter: 
— up to one twelfth of the total appropri­
ations entered in the chapter concerned for 
the preceding financial year, account being 
taken of all transfers, 
— as long as this measure does not have the 
effect of placing at the disposal of the 
Commission, for any month, appropri­
ations in excess of one twelfth of those 
provided for in the draft budget or, in the 
absence thereof, in the preliminary draft 
budget. 
3. The draft budget referred to in paragraphs 2(a) 
and (b) above shall be the draft in the form in which 
it stands at the start of the financial year when the 
provisional-twelfths arrangements began to be 
applied. 
4. Where the absence of a budget is due to the 
rejection of the draft budget by Parliament, as 
provided for by Article 78(8) of the ECSC Treaty, 
Article 203(8) of the EEC Treaty and Article 117(8) 
of the Euratom Treaty, the appropriations referred 
to in the second indent of paragraph 2(a) and in the 
rejected draft budget or, where appropriate, in the 
new draft budget drawn up, following the rejection 
decision, before the start of the financial year. 
5. If the continuity of Community activities and 
administrative needs so require: 
(a) for compulsory expenditure, the Council, acting 
by a qualified majority, may, at the request of the 
Commission and after consulting Parliament, 
authorize simultaneously two or more provi­
sional twelfths for both commitments and 
payments in addition to those automatically 
made available under paragraphs 2(a) and (b); 
(b) for non-compulsory expenditure, the second 
subparagraph of Article 78b(2) of the ECSC 
Treaty, the third paragraph of Article 204 of the 
EEC Treaty and the third paragraph of Article 
178 of the Euratom Treaty shall apply. 
The additional twelfth shall be authorized in 
whole and may not be split. 
Where this procedure is to be applied, the annual 
amount authorized for each chapter as twelfths 
may not exceed the amount in the chapter of the 
budget for the previous year, account being taken 
No C 115/6 Official Journal of the European Communities 8. 5. 89 
of transfers, or the amount in the chapter of the 
draft budget or, in the absence thereof, the 
preliminary draft budget. 
6. If, for a given chapter, the expenditure required 
to prevent any interruption of Community action in 
the sector concerned cannot be met by application of 
the procedures referred to in paragraphs 2 to 5, 
appropriations available under the twelfths arrange­
ments may, on a proposal from the Commission, be 
transferred between chapters. 
Decisions on the proposal for transfer shall be taken 
in accordance with the procedure laid down in 
Article 78b(2) of the ECSC Treaty, Article 204 of the 
EEC Treaty and the third paragraph of Article 178 of 
the Euratom Treaty. 
If, however, in the case of transfers involving both 
expenditure necessarily resulting from the Treaties 
or from acts adopted in accordance therewith and 
other expenditure, the Council and Parliament 
disagree on the amount to be transferred, the smaller 
of the amounts accepted by one of the two 
institutions shall be deemed to have been approved. 
Where one of the institutions rejects the principle of 
the transfer, such transfer shall not be made. 
7. The decisions referred to in the preceding 
paragraphs shall specify the requisite measures in 
respect of resources for the purposes of this Article. 
8. The budgetary authority shall seek to limit the 
period for which the system of provisional twelfths is 
applied.' 
12. Article 9 is renumbered Article 10. The following 
second paragraph is added: 
'Publication shall, under normal circumstances, take 
place within one month of the final adoption of the 
budget.' 
13. Article 10 is renumbered Article 11. It is replaced by 
the following: 
'Article 11 
1. The budget shall be drawn up in ecus. 
2. The ecu is the sum of specified amounts of the 
currencies of the Member States as set out in Council 
Regulation (EEC) No 3180/78 of 18 December 1978 
changing the value of the unit of account used by the 
European Monetary Cooperation Fund (*) (2). Any change in the composition of the ecu decided on 
in accordance with Regulation (EEC) No 3180/78, 
shall automatically apply to this provision. 
The value of the ecu in a given currency shall be 
equal to the sum of the equivalent in that currency of 
the amounts of the currencies which make up the 
ecu. 
3. The financial rights and obligations of the 
Communities shall be expressed and implemented in 
ecus. 
4. When the principle set out in the third para­
graph cannot be complied with because of special 
derogations arising from the application of sectoral 
rules governing debts or expenditure, any conver­
sion between the ecu and a national currency shall be 
effected in accordance with the implementing rules 
in Article 128. 
(!) OJ No L 379, 30. 12. 1978, p. 1, as last amended 
by Council Regulation (EEC) No 2626/84 (OJ 
No L 247, 16. 9. 1984, p. 1). 
(2) The following amounts applied when this 
Regulation entered into force: 
— German marks: 0,719, 
— Pounds sterling: 0,0878, 
— French francs: 1,31, 
— Italian lira: 140,00, 
— Dutch guilders: 0,256, 
— Belgian francs: 3,71, 
— Luxembourg francs: 0,14, 
— Danish kroner: 0,219, 
— Irish pounds: 0,00871, 
— Greek drachmas: 1,15.' 
14. Title II: the heading is replaced by the following: 
'TITLE II 
ESTABLISHMENT AND STRUCTURE OF THE 
BUDGET' 
15. Section I: the heading is replaced by the following: 
'SECTION I 
ESTABLISHMENT OF THE BUDGET' 
16. Article 11 is renumbered Article 12. It is replaced by 
the following: 
'Article 12 
Parliament, the Council, the Court of Justice and the 
Court of Auditors shall, each year before 1 July, 
draw up an estimate of their revenue and expendi­
ture for the following year. 
8. 5. 89 Official Journal of the European Communities No C 115/7 
The Economic and Social Committee shall, before 1 
June, forward to the Council an estimate of its 
revenue and expenditure for the following year. 
These estimates shall be forwarded to the Commis­
sion and, for information, to Parliament and the 
Council, no later than 1 July.' 
17. Article 12 is renumbered Article 13. It is replaced by 
the following: 
'Article 13 
1. The Commission shall, in the preliminary draft 
budget which it places before the Council not later 
than 1 September of each year, draw up a general 
statement of revenue of the Communities and 
consolidate the estimates referred to in Article 12. 
It shall at the same time forward the preliminary 
draft budget to Parliament. 
2. The Commission shall prepare a general 
introduction to the preliminary draft budget. This 
introduction shall contain in particular: 
(a) financial tables covering the entire budget; and 
(b) as regards the Commission sections: 
— a description of the policies for which the 
appropriations are requested, 
— an explanation of the changes in appropri­
ations from one financial year to the next, 
— a detailed statement on borrowing and 
lending policy. 
3. Each of the sections of the preliminary draft 
budget shall be preceded by an introduction 
prepared by the institution concerned. The Commis­
sion shall prepare a single introduction to its 
sections. 
4. The preliminary draft budget shall be ac­
companied by working documents containing the 
following information: 
(a) in respect of staff: 
— for each category of staff, a detailed list of 
budgetary posts and numbers of persons in 
post on the date of the submission of the 
preliminary draft budget, indicating their 
distribution by grade and administrative unit 
(or principal operational unit for the es­
tablishments of the Joint Research Centre), 
— where a change in the number of persons in 
post is proposed and in particular the 
creation, regrading or conversion of posts, a 
statement in support of such changes; (b) in respect of subsidies to the bodies set up 
pursuant to the Treaties or acts adopted in 
accordance therewith, and having legal perso­
nality, and subsidies to the European Schools, an 
estimate of revenue and expenditure prefaced by 
an explanatory statement drawn up by the bodies 
concerned. 
5. The Commission shall also attach to the 
preliminary draft budget: 
— an analysis of the financial management for the 
preceding financial year, as provided for in 
Article 81, and a balance sheet of assets and 
liabilities of the Communities as at 31 December 
of the preceding financial year, as provided for in 
Article 82, and 
— an opinion on the estimates of the other 
institutions; this opinion may contain different 
estimates, accompanied by the reasons there­
fore.' 
18. The following new Article 14 is inserted: 
'Article 14 
The Commission may, on its own initiative or if 
requested by Parliament, the Council, the Court of 
Justice or the Court of Auditors in respect of their 
section, present to the Council a letter of amendment 
to the preliminary draft budget necessitated by the 
receipt of new information which was not available 
at the time the preliminary draft was established.' 
19. The following new Article 15 is inserted: 
'Article 15 
1. In the event of unavoidable, exceptional or 
unforeseen circumstances, the Commission may 
submit preliminary draft supplementary and/or 
amending budgets. 
Preliminary draft supplementary budget means any 
proposal which would alter the total amount of 
appropriations and hence of revenue or which would 
finance one or more new operations without, 
however, increasing the total amount of appropri­
ations. 
Preliminary draft amending budget means any 
proposal which would not change or would reduce 
total appropriations or revenue and which involves 
internal financial or technical changes to the budget. 
2. Preliminary draft supplementary and/or amend­
ing budgets shall be subject to the provisions of 
No C 115/8 Official Journal of the European Communities 8. 5. 89 
Article 78 of the ECSC Treaty, Article 203 of the 
EEC Treaty and Article 177 of the Euratom Treaty. specified in the texts implementing the Decision on 
the system of the Communities' own resources.' 
They shall be submitted, examined, established and 
finally adopted in the same form and according to 
the same procedure as the budget whose estimates 
they are amending. They must be substantiated by 
reference to the latter. 
3. All preliminary draft supplementary and/or 
amending budgets must, as a general rule, be 
forwarded to the Council by the date laid down for 
the submission of the preliminary draft budget for 
the following financial year. 
The competent authorities shall discuss them in the 
light of their urgency. 
4. Requests for supplementary and/or amending 
budgets from Parliament, the Council, the Court of 
Justice or the Court of Auditors shall be forwarded 
by the Commission to the budgetary authority. The 
Commission may attach a dissenting opinion. 
5. Where the Commission proposes a preliminary 
draft supplementary and/or amending budget, the 
Council must present a draft supplementary and/or 
amending budget. However, if the Council does not 
consider it necessary to establish a draft budget, it 
shall consult with Parliament and the Commission. 22. The following new Article 18 is inserted: 
'Article 18 
The Commission and the budgetary authority may 
agree to bring forward certain dates for the adoption 
and transmission of the preliminary draft and draft 
budgets. This agreement may not, however, have the 
effect of reducing or delaying the periods allowed for 
consideration of these texts under Article 78 of the 
ECSC Treaty, Article 203 of the EEC Treaty and 
Article 177 of the Euratom Treaty.' 
23. Section II: the heading is replaced by the following: 
'SECTION II 
STUCTURE AND PRESENTATION OF THE BUDGET' 
24. Article 15 is renumbered Article 19. It is replaced by 
the following: 
'Article 19 
6. Preliminary draft and draft supplementary and/ 
or amending budgets shall be accompanied by 
statements of grounds and the information available 
on the implementation of the current budget at the 
time of their establishment. 
7. Preliminary draft supplementary and/or amend­
ing budgets shall take into account the transfers 
approved up to the time of their establishment.' 
20. Article 13 is renumbered Article 16. 
21. Article 14 is renumbered Article 17. It is replaced by 
the following: 
'Article 17 
1. The budget shall be adopted in accordance with 
Article 78 of the ECSC Treaty, Article 203 of the 
EEC Treaty and Article 177 of the Euratom Treaty. 
2. Once the budget has been declared finally 
adopted by the President of Parliament, each 
Member State shall, from 1 January of the following 
financial year or from the date of the formal 
declaration if it is made after 1 January, be bound to 
make over to the Community the payments due as 1. The budget shall consist of: 
— a general statement of revenue, 
— a general statement of expenditure, consisting of: 
— one part for the staff and administrative 
expenditure of the institutions, divided into a 
section each for Parliament, the Council, the 
Commission, the Court of Justice and the 
Court of Auditors containing a statement of 
revenue and expenditure, and a section for 
expenditure common to the institutions. 
The revenue and expenditure of the Economic 
and Social Committee shall be entered in an 
annex to the Council section and presented in 
the form of a statement of revenue and 
expenditure. 
The revenue and expenditure of the Office for 
Official Publications of the European Com­
munities shall be attached to the section for 
expenditure common to all the institutions, in 
accordance with Article 125(2), 
— one part for operating expenditure, divided 
into as many sections as are required. 
8. 5. 89 Official Journal of the European Communities No C 115/9 
2. Within each section, the items of revenue and 
expenditure shall be classified according to their type 
or the use to which they are assigned under titles, 
chapters, articles and items. 
3. The budgetary nomenclature shall be de­
termined as regards the apportionment of revenue 
and expenditure under separate titles, chapters and 
articles, during the budgetary procedure. 
4. Each section of the part relating to staff and 
administrative appropriations may include a chapter 
for 'provisional appropriations' and a 'contingency 
reserve' chapter. The appropriations entered in these 
chapters may be used only by means of transfer in 
accordance with the procedure laid down in Article 
26. 
5. The part of the budget relating to operating 
expenditure shall include a section for 'provisional 
appropriations' and a 'contingency reserve'. 
This section may include a 'negative reserve' limited 
to a maximum amount of 200 million ecus. This 
reserve, which shall be entered in a separate chapter, 
may comprise both appropriations for commitments 
and appropriations for payments. 
The appropriations in this section may be utilized 
and the negative reserve applied only in accordance 
with the procedure laid down in Article 26. 
6. The section for EAGGF Guarantee Section 
expenditure shall include a monetary reserve, for 
which the entry, utilization and financing conditions 
are determined by Council Decision 88/377/EEC of 
24 June 1988 concerning budgetary discipline (1), 
and the Decision of 24 June 1988 and the provisions 
adopted for implementing the latter. 
7. In addition, the document showing all the 
borrowing and lending operations referred to in 
point 5 of Article 20 shall be annexed to the part 
relating to operating expenditure. 
(!) OJ No L 185, 15. 7. 1988, p. 29.' 
25. Article 16 is renumbered Article 20. It is replaced by 
the following: 
'Article 20 1. In the general statement of revenue: 
— the estimated revenue of the Communities for the 
financial year in question, divided into titles, 
chapters, articles and items, 
— the revenue for the preceding financial year, 
divided into titles, chapters, articles and items, 
— appropriate remarks on each subdivision. 
2. In the Commission sections and the section for 
each of the other institutions: 
(a) as regards the statement of revenue: 
— the estimated revenue for each institution for 
the financial year in question, divided into 
titles, chapters, articles and items, following a 
decimal classification system, 
— the revenue entered in the budget for the 
preceding financial year and the revenue 
established for the last financial year for 
which accounts have been closed, using the 
same classification, 
— appropriate remarks on each revenue head­
ing; 
(b) as regards the statement of expenditure: 
(ba) in the case of the various items, articles, 
chapters and titles: 
— the appropriations made available for the 
financial year in question, these appropri­
ations being the commitment appropri­
ations and the payment appropriations for 
the budget headings for which this distinc­
tion has been agreed, 
— the appropriations made available for the 
preceding financial year, 
— the actual expenditure in the last financial 
year for which the accounts have been 
closed, determined as follows: 
— for the headings where the distinction 
between commitment appropriations 
and payment appropriations has not 
been made: 
— actual payments in the last financial 
year for which the accounts have been 
closed plus the carryovers to the next 
financial year, 
— for the headings where the distinction 
between commitment appropriations 
and payment appropriations has been 
made: 
The budget shall show: — in commitments: commitments 
entered into during the financial year 
No C 115/10 Official Journal of the European Communities 8. 5. 89 
against appropriations for that finan­
cial year and against appropriations 
carried over from the preceding finan­
cial year, 
— in payments: payments made during 
the financial year against appropri­
ations for that financial year and 
against appropriations carried over 
from the preceding financial year; 
(bb) in the case of operations covered by commit­
ment appropriations and payment appropri­
ations: in the remarks column, an indicative 
schedule of the payments for the financial year 
concerned and subsequent financial years; 
(be) appropriate remarks on each subdivision. 
These remarks shall include: 
— basic legal instrument, where one exists, 
— all such explanations as may be necessary 
concerning the nature and purpose of the 
appropriations. 
3. As regards staff: 
— for each section of the part of the budget for staff 
and administrative appropriations, an establish­
ment plan setting the number of permanent and 
temporary posts for each grade in each category 
and in each service authorized within the limits of 
the budget appropriations. The staff of the 
Supply Agency shall be shown separately in the 
Commission's establishment plan, 
— an establishment plan for staff paid from the 
research and technological development ap­
propriations, classified by category and grade 
and distinguishing between permanent and non-
permanent staff, authorized within the limits of 
the budget appropriations. 
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 specify 
the number of highly qualified technical or 
scientific personnel who are accorded special 
advantages under the Staff Regulations ap­
plicable to these officials. 
— an establishment plan setting the number of posts 
for each grade in each category in: 
— the Office for Official Publications, — the European Centre for the Development of 
Vocational Training, 
— the European Foundation for the Improve­
ment of Living and Working Conditions. 
The establishment plan shall show next to the 
number of posts authorized for the financial year the 
number authorized for the preceding year. 
4. The establishment plan shall constitute an 
absolute limit for each institution; no appointment 
may be made in excess of the limit set. 
In cases of half time work authorized by the 
appointing authority in accordance with Article 55a 
of the Staff Regulations of Officials of the European 
Communities, a post in a given grade may serve for 
the assignment of two officials of the same grade or 
of a lower grade. Such assignment shall automati­
cally terminate when the authorization expires. 
5. As regards borrowing and lending operations: 
(a) in the appropriate section of the part for 
operating expenditure: 
— the budget headings relating to the categories 
of operation and carrying a token entry so 
long as no effective charge which has to be 
covered by specific resources has arisen, 
— remarks giving a reference to the legal basis 
and, where appropriate, the volume of the 
operations envisaged and the financial guar­
antee given by the Communities in respect of 
these operations; 
(b) in a document annexed to the part for operating 
expenditure, as an indication: 
— current capital operations and current debt 
management, 
— the capital operations and debt management 
for the financial year in question.' 
26. Article 17 is renumbered Article 21. 
27. Article 18 is renumbered Article 22. Paragraph 3 is 
replaced by the following: 
'3. With the exception of decisions overruling the 
Financial Controller provided for in Articles 40, 50 
and 53, the Commission and each of the other 
institutions may delegate their powers of budgetary 
implementation in accordance with the conditions 
8. 5. 89 Official Journal of the European Communities No C 115/11 
laid down by their internal rules of procedure and 
within the limits which they themselves lay down in 
the act of delegation. 
Those so empowered may act only within the limits 
of the powers expressly conferred upon them. 
The acts of delegation shall be communicated to all 
the parties concerned in accordance with the 
implementing rules provided for in Article 128.' 
28. The following new Article 23 is inserted: 
'Article 23 
Where revenue and expenditure operations are 
managed by means of integrated computer systems, 
the provisions of Sections II and III and of Title VI 
shall apply with due allowance for the possibilities 
and requirements deriving from computerized 
management. To this end: 
— the supporting documents may remain with the 
authorizing officer for the purposes of checking, 
— signatures and approvals may be in appropriate 
computerized form. 
The conditions for implementing this Article shall be 
determined by the implementing rules provided for 
in Article 128.' 
29. Article 19 is renumbered Article 24. It is replaced by 
the following: 
'Article 24 
Each institution shall appoint a financial controller. 
He shall be responsible for monitoring: 
— the commitment and authorization of all ex­
penditure, 
— the establishment and collection of all revenue. 
The financial controller shall be consulted on all 
accounting systems applied by the institution to 
which he is attached. He shall access to the 
information contained in these accounts. 
Monitoring shall be carried out by that official by 
means of inspection of the files relating to expendi­
ture and revenue and, if necessary, on the spot. 
The financial controller may be assisted in his duties 
by one or more assistant financial controllers. 
The special rules applicable to such officials, which 
shall be laid down in the implementing rules provided for in Article 128, shall be such as to 
guarantee that they are independent in the perform­
ance of their duties. Their appointment, their 
promotion and disciplinary rules or transfer, and 
any interruption or termination of appointment by 
whatever procedure shall be the subject of reasoned 
decisions to be forwarded, for information, to 
Parliament, the Council, the Commission and the 
Court of Auditors. 
The persons concerned and the institutions to which 
they belong may institute proceedings before the 
Court of Justice.' 
30. Article 20 is renumbered Article 25. It is replaced by 
the following: 
'Article 25 
In each institution, the collection of revenue and the 
payment of expenditure shall be carried out by an 
accounting officer. 
The accounting officer shall be appointed by the 
institution. 
Without prejudice to the system provided for in 
Articles 4 and 5 of Council Regulation (EEC) 
No 729/70 of 21 April 1970 on the financing of the 
common agricultural policy (*), and subject to the 
second paragraph of Article 54 on payments 
procedures, to Article 55 on imprests and to Article 
112 on the financing of external aid of this 
Regulation, the accounting officer alone is empo­
wered to manage monies and other assets. He shall 
be responsible for their safekeeping. 
The accounting officer shall be responsible for 
preparing the financial statements provided for in 
Articles 79, 80, 81 and 82 of this Regulation. 
He may be assisted in his duties by one or more 
assistant accounting officers, appointed under the 
same conditions as the accounting officer. 
The special rules applicable to the accounting officer 
and to assistant accounting officers shall be laid 
down in the implementing rules provided for in 
Article 128. 
(!) OJ No L 94, 28. 4. 1970, p. 13.' 
31. Article 21 is renumbered Article 26. It is replaced by 
the following: 
'Article 26 
1. Appropriations shall be earmarked for specific 
purposes by chapter and article. 
2. Parliament, the Council, the Court of Justice 
and the Court of Auditors may transfer appropri-
No C 115/12 Official Journal of the European Communities 8. 5. 89 
ations from one chapter to another and from one 
article to another within their own sections of the 
budget. 
The Court of Justice and the Court of Auditors shall 
inform the budgetary authority and the Commission 
three weeks before making such transfers. 
3. The Commission may, within its own sections 
of the budget: 
(a) transfer appropriations from one article to 
another within each chapter; 
(b) transfer appropriations from one chapter to 
another within each of the titles relating to staff 
and administrative expenditure. It shall inform 
the budgetary authority three weeks before 
making such transfers; 
(c) transfer payment appropriations from one chap­
ter to another; 
(d) transfer appropriations entered in the chapter of 
the budget containing the provisional appropri­
ations to the budget heading for which they were 
initially earmarked provided that the suspensive 
condition that originally gave rise to entry of the 
appropriations in this special chapter has been 
satisfied. It shall inform the budgetary authority 
three weeks before making such transfers. 
4. Without prejudice to the transfers which it may 
make on its own authority in accordance with 
paragraph 3, the Commission may make proposals 
to the budgetary authority for transfers from one 
chapter to another. 
5. The budgetary authority shall take decisions on 
transfers of appropriations as follows: 
(a) in the case of proposals for transfers relating to 
expenditure necessarily resulting from the 
Treaties or from acts adopted in accordance 
therewith, the Council shall, after consulting 
Parliament, act by a qualified majority within six 
weeks, except in urgent cases. Parliament shall 
deliver its opinion within such time as will permit 
the Council to be apprised of it and to act within 
the time limit indicated. Where the Council does 
not act within this time limit, the proposals for 
transfers shall be deemed to be approved; 
(b) in the case of proposals for transfers relating to 
expenditure other than that necessarily resulting 
from the Treaties or from acts adopted in 
accordance therewith, Parliament shall, after 
consulting the Council, act within six weeks, 
except in urgent cases. The Council shall deliver its opinion within such time as will permit 
Parliament to be apprised of it and to act within 
the time limit indicated. Where Parliament does 
not act within this time limit, the proposals for 
transfers shall be deemed to be approved; 
(c) proposals for transfers relating both to expendi­
ture necessarily resulting from the Treaties or 
from acts adopted in accordance therewith, and 
to other expenditure shall be deemed to be 
approved if neither the Council nor Parliament 
has decided otherwise within six weeks of the 
date on which the two institutions received the 
proposals; 
(d) if, in the case of proposals for transfers referred to 
in (c), Parliament and the Council reduce the 
proposal for a transfer by different amounts, 
whichever is the smaller of the amounts accepted 
by one of the two institutions shall be deemed to 
be approved. Where only one of the institutions 
rejects the principle of the transfer, such transfer 
shall not be made. 
6. For the purposes of the Article the Commission 
sections shall be treated as a single section. 
7. Only appropriations for the current financial 
year may be transferred. By way of exception, 
appropriations carried over may be transferred by a 
decision of the budgetary authority in accordance 
with paragraph 5. 
8. Appropriations may also be transferred, by 
decision of the budgetary authority, between 
headings where a distinction is made between 
commitment appropriations and payment appropri­
ations and headings where no such distinction is 
made. 
9. Every proposal for a transfer within a chapter or 
from one chapter to another shall be subject to the 
approval of the financial controller, who shall certify 
that the appropriations are available. 
10. Appropriations may be transferred only to 
budget headings for which the budget has authorized 
appropriations or carried a token entry. 
11. This Article shall apply to the appropriations 
corresponding to revenue earmarked for a specific 
purpose under Article 4(2) only as long as the 
revenue is not used for any other purpose. 
12. Transfers within the titles of the budget 
devoted to the European Agricultural Guidance and 
8. 5. 89 Official Journal of the European Communities No C 115/13 
Guarantee Fund, Guarantee Section shall be the 
subject of special provisions under Article 105. 
13. As regards the section for expenditure common 
to all the institutions, the Commission may, without 
prejudice to the provisions of Article 125, transfer 
appropriations from one chapter to another within 
the same title, and from one article to another. It 
shall inform the budgetary authority three weeks 
before making such transfers.' 
32. Article 22 is renumbered Article 27: 
(a) In the first subparagraph of paragraph 1, the 
reference 'from Article 3' is replaced by 'from 
Article 4'. 
(b) Paragraph 2 is replaced by the following: 
'2. Notwithstanding Articles 4 and 5, the 
following sums may be reused under the heading 
to which the initial expenditure was charged: 
(a) revenue arising from the refund of amounts 
paid in error against budget appropriations; 
(b) proceeds from the supply of goods and 
services to other institutions or bodies, 
including refunds by such institutions or 
bodies of mission allowances paid on their 
behalf; 
(c) insurance payments received; 
(d) revenue from the sale of buildings or sums 
connected with lettings; 
(e) revenue from the sale of publications and 
films; 
(f) refunds of taxes — incorporated in the price 
of the products or services provided to the 
Communities — effected by Member States 
pursuant to the provisions of the Protocol on 
the Privileges and Immunities of the European 
Communities; 
(g) revenue from the supply of goods and services 
against payment; 
(h) proceeds from the sale of vehicles, equipment 
and installations and scientific and technical 
apparatus, equipment and materials which 
are being replaced or scrapped. 
Such sums must be reused before the end of the 
financial year following that in which the revenue 
was collected. The chart of accounts shall include suspense 
accounts to record reuse operations in both 
evenue and/or expenditure.' 
(c) In paragraph 3, the reference 'Article 3' is 
replaced by 'Article 4'. 
(d) Paragraphs 4 and 5 are replaced by the following: 
'4. Notwithstanding Article 4, adjustments 
must be made in respect of exchange differences 
occurring in budget operations. The final gain or 
loss shall be included in the balance for the year. 
5. In the cases referred to in paragraphs 1(c) 
and 2(b), (d), (e), (g) and (h), reuse and deduction 
shall be possible only if provision therefor is 
made in the remarks column in the budget. 
6. Revenue from the repayment of advances 
made by recipients of Community aid shall be 
entered in suspense accounts. 
At the beginning of each financial year the 
Commission shall examine the volume of this 
revenue and assess, in the light of requirements, 
the need for reuse under the heading to which the 
initial expenditure was charged. 
The Commission shall take this decision by 15 
February of each financial year, and shall inform 
the budgetary authority by 15 March of the 
decision taken. 
Revenue not reused shall be entered as miscella­
neous revenue for the financial year in which it 
was entered in the accounts.' 
Article 23 is renumbered Article 28. 
(a) In the first subparagraph of paragraph 1, the 
second sentence is replaced by the following: 
'Such proposals shall be sent to the financial 
controller of the institution for his approval and 
to the accounting officer for provisional regist­
ration.' 
(b) In the final sentence of the final subparagraph of 
paragraph 1, 'every three months' is replaced by 
'within one month'. 
No C 115/14 Official Journal of the European Communities 8. 5. 89 
34. Article 24 is renumbered Article 29. 
(a) The following sentence is added to the third 
subparagraph of paragraph 1: 
'If necessary, he shall initiate the recovery 
procedure.' 
(b) In the final sentence of the third subparagraph of 
paragraph 2, 'every three months' is replaced by 
'within one month'. 
35. Article 25 is renumbered Article 30. 
36. Article 26 is renumbered Article 31. 
The reference 'in Article 4(2) and (3) of the Decision 
of 21 April 1970' is replaced by 'in Article 2(7) of the 
Decision of 24 June 1988'. 
37. Article 27 is renumbered Article 32. It is replaced by 
the following: 
'Article 32 
The balance from each financial year, calculated in 
accordance with Article 15 of Council Regulation 
(EEC, Euratom, ECSC) No 2891/77, shall be entered 
as revenue in the case of a surplus or expenditure in 
the case of a deficit in a supplementary or amending 
budget in the following financial year.' 
38. Article 28 is renumbered Article 33. 
(a) Paragraph 1 is replaced by the following: 
'1. The contributions for the financing of 
certain supplementary research programmes 
provided for in Article 11 (2) (c) of the Decision of 
24 June 1988 shall be paid over as follows: 
— seven twelfths of the amount shown in the 
budget not later than 31 January, 
— the remaining five twelfths not later than 15 
July. 
2. If the budget is not finally adopted before the 
start of the financial year, the contributions 
provided for in paragraph 1 shall be based on the 
amount shown in the draft budget, as referred to 
in Article 9(3) and (4) of this Regulation or, if this 
does not exist, in the preliminary draft budget.' 
(b) Paragraph 2 is renumbered paragraph 3. 
(c) Paragraph 3 is renumbered paragraph 4. 39. Article 29 is renumbered Article 34. It is replaced by 
the following: 
'Article 34 
The Commission shall, four times a year, present to 
Parliament and the Council a report on the 
implementation of the budget and of any sup­
plementary or amending budgets and on the 
Communities' financial situation, covering both 
revenue and expenditure. This report shall also give 
details of the utilization of appropriations carried 
forward from previous financial years. 
This report shall at the same time be sent to the 
Court of Auditors.' 
40. Article 30 is renumbered Article 35. It is replaced by 
the following: 
'Article 35 
The financial contributions referred to in Article 
ll(2)(c) of the Decision of 24 June 1988 (for the 
completion of supplementary research programmes) 
shall be converted at the rate for the ecu applying on 
the last but one working day of the month preceding 
the final date for entry in the accounts.' 
41. Article 31 is renumbered Article 36. 
42. Article 32 is renumbered Article 37. 
(a) In paragraph 2, 'Article 96' is replaced by 'Article 
100'. 
(b) In paragraph 3, 'Article 106' is replaced by 
'Article 128'. 
43. Article 33 is renumbered Article 38. On the last line, 
'Article 106' is replaced by 'Article 128'. 
44. Article 34 is renumbered Article 39. 
(a) The first paragraph is renumbered paragraph 1. 
(b) The following paragraph 2 is added: 
'2. Approval may not be conditional.' 
(c) The second paragraph is renumbered para­
graph 3. 
45. Article 35 is renumbered Article 40. 
(a) In the first paragraph, 'Article 34' is replaced by 
'Article 39(1)'. 
(b) In the second paragraph, the phrase 'in the first 
two paragraphs of Article 18' is replaced by 'in 
the first two paragraphs of Article 22'. 
8. 5. 89 Official Journal of the European Communities No C 115/15 
(c) In the final sentence of the final paragraph, 'every 
three months' is replaced by 'within one month'. 
46. Article 36 is renumbered Article 41. 
47. Article 37 is renumbered Article 42. 
(a) In paragraph 1, 'Article 106' is replaced by 
'Article 128'. 
(b) Paragraph 2 is deleted. 
(c) Paragraph 3 is renumbered paragraph 2. 
48. Article 38 is renumbered Article 43. 
49. Article 39 is renumbered Article 44. 
50. Article 40 is renumbered Article 45. The third indent 
is replaced by the following: 
'— the amount to be paid (in figures and words), 
expressed in ecus or in national currency.' 
51. Article 41 is renumbered Article 46. In the first 
paragraph 'Article 106' is resplaced by 'Article 128' 
and 'Article 59' is replaced by 'Article 66\ 
52. Article 42 is renumbered Article 47. 
(a) The second paragraph is replaced by the follow­
ing: 
'The authorizing officer may grant advances if 
the Staff Regulations or the rules governing the 
policy concerned specifically provide therefor.' 
(b) In the third paragraph 'Article 106' is replaced by 
'Article 128'. 
(c) In the fourth paragraph 'Article 49' is replaced by 
'Article 55'. 
53. The following new Article 48 is inserted: 
'Article 48 
Interest shall be due, in accordance with the 
implementing rules provided for in Article 128, on 
any amount paid to recipients' of Community aid: 
— either as an advance, 
— or under the normal payment procedure, 
which gives rise to repayment to the general budget.' 54. Article 43 is renumbered Article 49. 
55. Article 44 is renumbered Article 50. The reference 
'Article 35' is replaced by 'Article 40'. 
56. Article 45 is renumbered Article 51. 
57. Article 46 is renumbered Article 52. 
58. Article 47 is renumbered Article 53. 
59. Article 48 is renumbered Article 54. In the second 
paragraph 'Article 106' is replaced by 'Article 128'. 
60. Article 49 is renumbered Article 55. 
(a) In the first paragraph 'Article 106' is replaced by 
'Article 128'. 
(b) The following new second paragraph is added: 
'Only the accounting officer may replenish the 
imprest accounts, save in exceptional cases 
defined in the implementing rules.' 
(c) The second paragraph becomes the third para­
graph. 
61. The following new section is inserted: 
'SECTION IV 
MANAGEMENT OF POSTS' 
62. The following new Article 56 is inserted: 
'Article 56 
Within each institution the following shall be 
established: 
(a) an establishment plan; 
(b) an organization chart showing the organization 
of the departments.' 
63. In Title IV the title of Section I is replaced by the 
following: 
'SECTION I 
CONTRACTS FOR THE SUPPLY OF GOODS AND 
SERVICES; CONTRACTS FOR PURCHASE, LEASE AND 
HIRE' 
64. Article 50 is renumbered Article 57. Paragraph 1 is 
replaced by the following: 
'1. Contracts for the purchase or hiring of 
buildings or goods, for the provision of services or 
for the performance of construction work shall be in 
writing. Apart from contracts relating to the 
purchase of a building already constructed or to the 
leasing of a building, all such contracts shall be 
concluded after an invitation to tender has been 
issued either by the automatic public tendering 
procedure or the discretionary tendering procedure. 
No C 115/16 Official Journal of the European Communities 8. 5. 89 
However, contracts may be made by private treaty in 
the circumstances referred to in Article 59. 
Contracts may be made against invoice or bill of 
costs in cases provided for in Article 64.' 
65. Article 51 is renumbered Article 58. In paragraph 3 
'Article 106' is replaced by 'Article 128'. 
66. Article 52 is renumbered Article 59. 
(a) In point (a), 'where the contract ... involves an 
amount not exceeding 6 500 ecus' is replaced by 
the phrase 'within the limit laid down in the 
implementing rules provided for in Article 128'. 
(b) In point (b) 'Article 51' is replaced by 'Article 58'. 
67. Article 53 is renumbered Article 60. 
68. Article 54 is renumbered Article 61. It is replaced by 
the following: 
'Article 61 
Each institution shall set up its own advisory 
committee on procurements and contracts to express 
an opinion on contracts before the authorizing 
officer takes the decision. 
If required, an advisory committee on procurements 
and contracts common to all the institutions may be 
set up. 
Details of the operation of these committees and the 
limit values for the contracts of which they are to be 
consulted shall be laid down in the implementing 
rules provided for in Article 128.' 
69. Article 55 is renumbered Article 62. In the first 
paragraph 'Article 54' is replaced by 'Article 61'. 
70. Article 56 is renumbered Article 63. The third 
paragraph is replaced by the following: 
'Beyond the limit laid down by the implementing 
rules provided for in Article 128, the provision of 
security shall be obligatory. A guarantee may be 
retained until final acceptance.' 
71. Article 57 us renumbered Article 64. It is replaced by 
the following: 
'Article 64 
Contracts may be made against invoice or bill of 
costs within the limits laid down by the implement­
ing rules provided for in Article 128.' 72. Article 58 is renumbered Article 65. It is replaced by 
the following: 
'Article 65 
Without prejudice to the provisions laid down in this 
Financial Regulation, when concluding contracts 
referred to in this Regulation, each institution shall 
comply with the Council Directives (!) on public 
works and supplies, whenever the amounts involved 
are equal to or greater than the amounts provided for 
in those Directives. 
The implementing rules provided for in Article 128 
shall include the supplementary provisions which 
may be required in order to implement this article. 
(*) The following Directives were in force at the time 
this Regulation was drawn up: 
(a) public works: 
Directive 71/305/EEC of 26 July 1971 (OJ No 
L 185, 16. 8. 1971, p. 5), as amended by 
Directive 78/669/EEC of 2 August 1978 (OJ 
No L 225, 16. 8. 1978, p. 41). 
(b) supplies : 
Directive 77/62/EEC of 21 December 1976 
(OJ No L 13,15. 1. 1977, p. 1), as amended by 
Directive 80/767/EEC of 22 July 1980( OJ No 
L 215, 18. 8. 1980, p. 1).' 
73. Article 59 is renumbered Article 66: 
(a) In the first paragraph, 'permanent quantitative 
inventories' is replaced by 'permanent inven­
tories showing the quantity and value'. 
(b) In the final paragraph, the following phrase is 
added: 
'in accordance with the implementing rules 
provided for in Article 128.' 
74. Article 60 is renumbered Article 67. In the first 
paragraph, 'Article 106' is replaced by 'Article 128'. 
75. Article 61 is renumbered Article 68. In the first 
paragraph the phrase 'disposed of is replaced by 
'sold, given away free of charge, ...'. 
76. Article 62 is renumbered Article 69. In the first 
paragraph, 'Article 59' is replaced by 'Article 66\ 
77. Article 63 is renumbered Article 70. In the last 
sentence, the phrase 'in European units of account' is 
replaced by 'in ecus'. 
8. 5. 89 Official Journal of the European Communities No C 115/17 
78. Article 64 is renumbered Article 71. It is replaced by 
the following: 
'Article 71 
The chart of accounts shall make a clear distinction 
between budgetary accounts and cash accounts. 
It shall comprise two parts: 
(a) accounts of budgetary expenditure and revenue, 
which show the detailed implementation of the 
budget; 
(b) the balance sheet accounts, which disclose the 
assets of the institutions. These accounts shall 
show the expected effect of the Communities' 
legal obligations. 
The detailed conditions for the establishment and 
operation of the chart of accounts for transactions 
relating both to assets and to the implementation of 
the budget shall be determined by the implementing 
rules provided for in Article 128. 
These accounts shall make it possible to draw up an 
annual balance of assets and a monthly statement of 
revenue and expenditure by chapter and article. 
These statements shall be forwarded to the financial 
controller, the authorizing officer and the Court of 
Auditors.' 
79. Article 65 is renumbered Article 72. 
(a) In the first paragraph, 'Articles 96 and 102' is 
replaced by 'Article 100'. 
(b) In the second paragraph, 'Article 42' is replaced 
by 'Article 47'. 
80. Article 66 is repealed. 
81. Article 67 is renumbered Article 73. 
82. Article 68 is renumbered Article 74. The following 
sentence is added: 
'The same shall apply if they neglect to issue 
payment orders or are, without justification, late in 
issuing them, thereby rendering the institution liable 
to civil action by third parties.' 
83. Article 69 is renumbered Article 75. 
84. Article 70 is renumbered Article 76. 
(a) In the first subparagraph of paragraph 1, 'the 
third paragraph of Article 46' is replaced by 'the 
third paragraph of Article 52'. (b) In paragraphs 3 and 5, 'Article 106', is replaced 
by 'Article 128'. 
(c) The third and fourth subparagraphs of para­
graph 3 are numbered paragraph 4. 
(d) Paragraph 4 is renumbered paragraph 5. 
85. Article 71 is renumbered Article 77. 
86. Article 72 is renumbered Article 78. 
87. Article 73 is renumbered Article 79. 
(a) The introductory words and point 1 are replaced 
by the following: 
'The Commission shall draw up, not later than 1 
May of the following year, a consolidated 
revenue and expenditure account of the general 
budget of the European Communities for the 
financial year ended 31 December. The con­
solidated revenue and expenditure account shall 
include: 
1. a table of revenue comprising: 
— estimated revenue for the financial year, 
— amendments to the revenue estimates as a 
result of supplementary or amending 
budgets and additional revenue as spe­
cified in the second subparagraph of 
Article 4(2), 
— entitlements established in the course of 
the financial year, 
— entitlements still to be collected from the 
preceding financial year, 
— revenue collected during the financial year 
and revenue carried over pursuant to 
Article 7(4), 
— amounts still to be collected at the end of 
the financial year. 
Statements shall be attached to this table 
showing revenue carried over pursuant to 
Article 7(4) and, where appropriate, the 
balance and gross amounts of the operations 
referred to in Article 27(2).' 
(b) In the last indent of point 2, 'Article 6' is replaced 
by 'Article 7'. 
No C 115/18 Official Journal of the European Communities 8. 5. 89 
(c) In point 3: 
— Fourth indent: 'Article 6' is replaced by 
'Article 7'. 
— Fifth indent: 'Article 6' is replaced by 'Article 
7'. 
— In the second paragraph, 'Article 22(2)' is 
replaced by 'Article 27(2)'. 
88. Article 74 is renumbered Article 80. It is replaced by 
the following: 
'Article 80 
Each institution shall, not later than 15 February, 
transmit to the Commission, after submitting it to its 
financial controller, the information required for 
drawing up the revenue and expenditure account 
and the balance sheet, together with a contribution 
to the analysis of the financial management referred 
to in Article 81.' 
89. Article 75 is renumbered Article 81. (Amendment 
does not affect English version.) 
90. Article 76 is renumbered Article 82. It is replaced by 
the following: 
'Article 82 
1. The Commission shall draw up not later than 1 
May a consolidated balance sheet of assets and 
liabilities of the Communities as at 31 December of 
the preceding financial year. A statement showing 
the movements and balances of the accounts at the 
same date shall be attached thereto. 
2. These documents shall be submitted to the 
financial controller.' 
91. Article 77 is renumbered Article 83. '1 June' is 
replaced by '1 May. 
92. Article 78 is renumbered Article 84. It is replaced by 
the following: 
'Article 84 
1. The Court of Auditors and its members may, in 
carrying out the task of the Court, be assisted by 
officers of the Court. The Court itself or one of its 
members shall notify the authorities with which the 
delegated officer is to work of the tasks delegated to 
him. 
2. Parliament, the Council and the Commission 
shall inform the Court of Auditors, as soon as possible, of all decisions and rules taken pursuant to 
Articles 4(4), 7(2), (3) and (6), 9, 17(1) and 26. 
3. The institutions shall transmit to the Court of 
Auditors any rules of procedure in respect of 
financial matters. 
4. The Court of Auditors shall be informed of the 
appointment of authorizing officers, financial 
controllers, accounting officer and administrators of 
imprest accounts and of the acts of delegation or 
appointment under Articles 22, 24, 25 and 55.' 
93. Article 79 is renumbered Article 85. 'Article 19 of 
Council Regulation (EEC, Euratom, ECSC) 
No 2891/77 and to Article 80 of this Financial 
Regulation' is replaced by 'Article 18 of Council 
Regulation (EEC, Euratom, ECSC) No 2891/77 and 
to Article 86 of this Financial Regulation'. 
94. Article 80 is renumbered Article 86. 
(a) (Amendment does affect English version.) 
(b) In the second paragraph, 'Article 82' is replaced 
by 'Article 88'. 
(c) In the third paragraph, 'Articles 18 and 19 of 
Regulation (EEC, Euratom, ECSC) No 2891/77' 
is replaced by 'Articles 17 and 18 of Regulation 
(EEC, Euratom, ECSC) No 2891/77'. 
(d) The following fourth paragraph is added: 
'At the request of the Court of Auditors, each 
institution shall authorize outside persons to 
permit the Court to make any checks to ensure 
that external data tally with the accounts.' 
95. Article 81 is renumbered Article 87. 
96. Article 82 is renumbered Article 88. 
(a) In point (b) of the second paragraph, 'the first 
paragraph of Article 80' is replaced by 'the first 
paragraph of Article 86'. 
(b) The final paragraph is replaced by the following: 
'The grant of Community funds to beneficiaries 
outside the institutions shall be subject to the 
agreement in writing by the recipients to an audit 
being carried out by the Court of Auditors on the 
utilization of the amounts granted.' 
8 5 89 Otticial]ournalotthe European Communities ^oC115B19 
97. Article 83 is renumbered Article 89. It is replaced by 
the following 
5Ar^^^9 
^Phe annual report ofthe Court ofAuditors provided 
formArticle78ofthePC5CLreaty,Article^0^aof 
thePPC^Preaty and Article 180aof thePuratom 
Lreaty shall be ^o^erned by the following pro^i 
sions. 
1. ^Phe Court of Auditors shall transmit to the 
Commission andthe institutions concerned, by 15 
]uly atthelatest, any comments which are, in its 
opinion,of suchanature that they should appearm 
the annual reports, rhesecomments must remain 
confidential, ^ach institution shall address its reply 
to the Court of Auditors by 31 October atthe latest. 
^Phe replies of the institutions other than the 
Commission shall be sent simultaneously to the 
Commission. 
^. ^Phe annual report shallcontam an assessment 
of the soundness of financial management. 
3. Idle annual report shall compnseasection for 
eachmstitution. I^achsectionshallcontainall the 
comments of the Court of Auditors on the relevant 
institution. ^Phe replies of each institution shallbe 
published immediately following the comments 
relating to that institution. 
^. ^Phe Court of Auditors shall transmit to the 
authontiesresponsiblefor^nan^dischar^eandto 
the other institutions, by30^o^ember at the latest, 
its annual report accompanied by the replies and it 
shall ensure publication thereof in the O^^ 
98. Article 8^ is repealed. 
99. Article 85 is renumbered Article 90. It is replaced by 
the following. 
^A^^90 
1. I^arhament,uponarecommeudationfrom the 
Council, acting byaqualifiedma^onty,shall, before 
30 Apnlof thene^tyear,^i^eadischar^etothe 
Commission in respect of the implementation of the 
budget. If that date cannot be met,I^arliament or the 
Council shall inform the Commission of the reasons 
for the postponement. 
^. parliament shall deliver its opinion on the 
discharge, in particular on the basis of the accounts 
of all revenue and expenditure of the Communities 
audited by the Court of Auditors. 
3. ^Phefmancial controller shall tal^eaccount of 
the commentsmthe decisions ^i^in^dischar^e. ^P Lhe institutions shall tal^e all appropriate steps 
to actonthe comments appearing inthe decisions 
^i^in^ discharge. 
5. At the request ofParliament or the Council, the 
institutions shall report on the rules tal^en in the h^ht 
of these comments, and, in particular, on the 
instructions ^i^en to those of their departments 
which are responsible for the implementation of the 
budget, ^uch reports shall also be transmitted to the 
Court of Auditors. 
D. IfParhament decides to postpone the discharge 
the Commission must as rapidly as possible remote 
anyobstacles to the discharge decision. 
7. ^upportin^ documents pertaining to the acD 
counts and the preparation of the revenue and 
expenditure account and the balance sheet shall be 
leeptforapenod office years following the date of 
the decision ^i^in^ discharge in respect of the 
implementation of the budget. 
mowe^erghe documents relating to transactions not 
finally closed shall be l^ept for longer than the said 
period until the end of the year following the year in 
which suchtransactions are fmallyclosedB 
100. ddie following newArticle 91 is inserted^ 
5^r^^9^ 
P In additiontothe annual report,the Court of 
Auditors may also, at any time, submit observations, 
in the form of special reports, on specific questions 
and deliver opinions at the request of one of the 
institutions of the Communities. 
^-. rhe special reports shallbe transmitted to the 
institution or bodyconcerned. 
^Phe institution concerned shall ha^e two andahalf 
months in which to inform the Court of Auditors of 
any comments it wishes to mal^e on the observations 
in question. 
^houldtheCourtof Auditors decide toha^e such 
observations published in the O^^^o^r^o^^ 
P^ro^^^Co^^^^^^, it shall include after them 
any comments submitted by the institution or 
institutions concerned. 
3. If the opinions referred to in para^raphldo not 
relate to proposals for legislation or draft legislation 
on which it has been consulted, the Court of 
Auditors shall not publish them unless the msti 
tution which has requested the opinion and the 
institution concerned a^ree. In this case, these 
opinions shall be accompanied by the replies of the 
institution or institutions concernedB 
No C 115/20 Official Journal of the European Communities 8. 5. 89 
101. Title VII: the heading is replaced by the following: 
'TITLE VII 
SPECIAL PROVISIONS APPLICABLE TO RESEARCH 
AND TECHNOLOGICAL DEVELOPMENT 
APPROPRIATIONS' 
102. Articles 86 to 94 are replaced by the following: 
'Article 92 
The provisions of Titles I to VI and XII shall apply to 
the research and technological development ap­
propriations entered in the special section provided 
for in Article 93, save as otherwise provided in this 
Title or where they are incompatible with the special 
provisions of this title. 
Article 93 
1. The appropriations relating to the activities 
covered by this Title shall be entered in a special 
section in the part of the budget devoted to operating 
appropriations. 
This section shall contain the appropriations 
intended for the realization of research and tech­
nological development objectives through the im­
plementation of the following: 
(a) direct action, consisting of research programmes 
carried out by the establishments of the Joint 
Research Centre (JRC) and in principle entirely 
financed from the general budget of the European 
Communities; 
(b) indirect action, consisting of programmes carried 
out under contracts to be concluded with third 
parties and in principle partially financed from 
the general budget of the European Communities 
(shared-cost action projects); 
(c) concerted action, consisting of work undertaken 
by the Community to coordinate the individual 
research projects carried out in the Member 
States, in respect of which the administrative 
expenditure alone is financed from the general 
budget of the European Communities; 
(d) possible financial contributions by the Com­
munity to supplementary programmes in accord­
ance with Article 1301 of the EEC Treaty, or to 
research and development programmes under­
taken by several Member States, including 
participation in the structures created for the 
execution of those programmes, in accordance with Article 130m of the EEC Treaty, or 
cooperation with third countries or international 
organizations as provided for in Article 130n of 
the EEC Treaty; 
(e) other activities of the JRC such as exploratory 
research, scientific and technical support ac­
tivities for the Commission and services for 
outside bodies and individuals. 
2. The appropriations for projects under the 
framework programme of activities in the field of 
research and technological development shall be 
entered separately in this section. 
Article 94 
1. The nomenclature of the special section pro­
vided for in Article 93 shall be based on the purpose 
of the expenditure in achieving research and 
technological development objectives or in the other 
activities referred to in that Article. 
The remarks for each subdivision shall also show: 
— the number of staff assigned for the current year, 
— details of supplementary programmes, program­
mes undertaken by several Member States and 
cooperation with third countries or international 
organizations, with an indication of the amount 
of any financial contribution from the Com­
munity. 
2. However, staff appropriations for the Joint 
Research Centre shall be entered separately in a 
single chapter. 
Article 95 
The following shall be annexed to the special section 
referred to in Article 93: 
— a table of equivalence giving the breakdown by 
purpose and type of expenditure of the appropri­
ations made available in the section, as specified 
in the implementing rules provided for in Article 
128. For management purposes, the Commission 
may create appropriation accounts correspond­
ing to the instruments of implementation, 
— a provisional schedule of commitments and 
payments showing the planned utilization of the 
commitment appropriations and the correspond­
ing payment appropriations. 
The schedule shall be reviewed annually. 
8. 5. 89 Official Journal of the European Communities No C 115/21 
Article 96 
Notwithstanding Article 26, the Commission may, 
within the special section referred to in Article 93, 
transfer appropriations from one chapter to another 
within a limit of 15 % for the commitment 
appropriations relating to the activities referred to in 
Article 93(1)(a) and (e), provided that these activities 
fall under the framework programme. 
These transfers may not have the effect of increasing 
the appropriations earmarked for exploratory 
research by more than 5 % of the initial allocation 
for the total appropriations in respect of the JRC 
under the framework programme. 
This special provision does not concern staff 
appropriations for the JRC. 
Article 97 
1. The Commission may provide services for 
outside bodies or individuals, in accordance with the 
remarks in the budget for the chapters and articles in 
question. 
Notwithstanding Article 5, the resulting revenue 
may give rise to additional appropriations: 
— in commitments, equal to the amount of the 
repayments provided for in the contracts con­
cluded with the outside bodies or individuals, 
— in payments, equal to the entitlements established 
from these repayments. 
2. Notwithstanding Article 7(2), additional ap­
propriations shall be maintained until they are 
cancelled by means of the revenue and expenditure 
account. 
3. Where provision is made in the remarks column 
for certain categories of expenditure to be repaid to 
the general budget, such repayments shall be booked 
to the statement of revenue, in accordance with the 
implementing rules, under headings entered specif­
ically for this purpose. 
Article 98 
With regard to the award of contracts in the fields 
falling under this Title, the implementing rules 
provided for in Article 128 may lay down special 
provisions on: 
— the limit values determining the conditions for 
concluding contracts, 
— the operation and the determination of the 
powers of the advisory committee on procure­
ments and contracts.' 103. Article 95 is renumbered Article 99. It is replaced by 
the following: 
'Article 99 
This Title shall apply to expenditure financed under 
the EAGGF, Guarantee Section, in accordance with 
Regulation (EEC) No 729/70, effected through the 
authorities or bodies referred to in Article 4(1) of 
Regulation (EEC) No 727/70, under the implement­
ing provisions adopted pursuant to Article 5(3) of 
that Regulation. 
Special operations which the Commission manages 
directly, shall be implemented in accordance with 
the rules laid down in Title III of this Regulation.' 
104. Article 96 is renumbered Article 100. 
(a) The first and second paragraphs are numbered 
paragraph 1. 
(b) The following paragraph 2 is added: 
'2. The Commission shall make a monthly 
report to Parliament and the Council. This 
communication on actual expenditure shall be 
accompanied by any information which it deems 
appropriate within the context of the early 
warning system provided for in Article 6 of 
Decision 88/377/EEC 
105. Article 97 is renumbered Article 101. In paragraph 2, 
'Article 96' is replaced by 'Article 100'. 
106. Article 98 is renumbered Article 102. 
107. Article 99 is renumbered Article 103. In paragraph 3, 
'Articles 97 and 98' is replaced by 'Articles 101 and 
102'. 
108. Article 100 is renumbered Article 104. It is replaced 
by the following: 
'Article 104 
Global provisional commitments which have been 
made for a financial year in accordance with Article 
100 and which have not been specifically committed 
under the budget nomenclature in accordance with 
Article 101 by 1 February of the following financial 
year, shall be released under the original financial 
year.' 
109. Article 101 is renumbered Article 105. It is replaced 
by the following: 
'Article 105 
1. Transfers from one article to another within 
each chapter shall be made by decision of the 
Commission, to be taken not later than 31 January in 
No C 115/22 Official Journal of the European Communities 8. 5. 89 
accordance with the procedure provided for in 
Article 13 of Regulation (EEC) No 729/70. 
The Commission shall inform the budgetary au­
thority of such transfers. 
2. Not later than one month before 31 January of 
the following financial year, the Commission may 
submit proposals to the budgetary authority for 
transfers of appropriations from one chapter to 
another. Acting by a qualified majority, the Council 
shall take a decision within three weeks, after 
consulting Parliament, in accordance with Article 
26. If it does not act within that period, the transfers 
of appropriations shall be deemed to be approved. 
3. Decisions on transfers relating to the monetary 
reserve referred to in Article 19(6) shall be taken by 
the budgetary authority in accordance with Article 
26(5)(a). 
4. Decisions on transfers between the EAGGF 
Guarantee Section headings to which refunds in 
connection with food aid are charged and the food 
aid chapter, which are made necessary by changing 
requirements, in relation to the appropriations 
authorized, in the parts of the expenditure char­
geable to the respective headings shall be taken by 
the Commission. 
The Commission shall inform the budgetary au­
thority of such transfers 15 days in advance.' 
110. Title IX and Article 102 are deleted. 
111. The following new Title IX is inserted: 
'TITLE IX 
SPECIAL PROVISIONS APPLICABLE TO EXTERNAL 
AID 
SECTION I 
GENERAL PROVISIONS 
Article 106 
1. Subject to derogation, the provisions of Titles I 
to VI and XII shall apply to foreign aid financed 
from the Community budget, in so far as they are not 
incompatible with the provisions of this Title. 
2. The appropriations assigned by the Community 
to its cooperation policy shall be used either under 
cooperation agreements with a financial protocol 
('preferential agreements') or as aid granted unilater­
ally. 3. The appropriations may be earmarked in 
particular for grant aid, special loans, risk capital or 
interest rate subsidies, and shall be used by the 
Commission, which may confer authority on behalf 
of the Community to administer a part thereof, 
either on the European Investment Bank or, under its 
responsibility, on other organizations. 
This provision shall not prejudice the audit powers 
of the Court of Auditors under Article 206a of the 
EEC Treaty. 
4. The following provisions shall govern the use of 
appropriations by the Commission. 
5. The amount of special loans and risk capital 
granted shall be shown in the balance sheet provided 
for in Article 82. 
Article 107 
1. Any cooperation project adopted by the Com­
mission may be covered by: 
— a financing agreement drawn up between the 
Commission, acting for the Community, and the 
Government of the recipient State or the 
governing bodies of the recipient organizations 
or institutions, hereinafter referred to as the 
recipient, 
— or a contract with international organizations, or 
natural or legal persons responsible for carrying 
out the project.. 
2. The financing agreement or contract shall 
determine the financial commitment of the Com­
munity for the measure concerned. No expenditure 
in excess of this amount may be charged to the 
budget without an additional commitment. 
3. In addition, a loan contract shall be drawn up 
between the Commission, acting for the Com­
munity, and the borrower in respect of any 
investment project financed by a special loan. 
SECTION II 
IMPLEMENTATION 
Article 108 
Projects covered by a financing agreement shall be 
implemented by the recipient in close collaboration 
with the Commission, which shall retain respons­
ibility for the utilization of appropriations. 
8. 5. 89 Official Journal of the European Communities No C 115/23 
Article 109 
1. The functions performed by the Commission 
may be referred to in the preferential agreements or 
the financing agreements as those of chief author­
izing officer. 
2. The Commission, in close cooperation with the 
recipient, shall ensure that participants in tendering 
procedures can compete on an equal footing, that 
there is no discrimination and that the tender 
selected is economically the most advantageous. In 
particular, it shall approve the terms of the invitation 
to tender before it is issued, be apprised of the results 
of the examination of the tenders, and approve the 
proposal for the award of the contract. 
Article 110 
1. In the case of preferential agreements in 
particular, the recipient may appoint a national 
authorizing officer to represent the national author­
ities in all operations relating to projects financed by 
the Community which are the subject of an 
agreement between the recipient State and the 
Community. 
2. The recipient shall submit invitations to tender 
to the Commission for agreement before issuing 
them. On the basis of the decisions thus endorsed 
and in close cooperation with the Commission, the 
recipient shall issue invitations to tender, receive 
tenders, preside over the examination of tenders and 
establish the results of the tendering procedure. 
3. It shall transmit to the Commission for agree­
ment the results of the examination of the tendering 
procedure and a proposal for the award of the 
contract. It shall sign contracts, additions to 
contracts, and estimates and shall notify the 
Commission thereof. For contracts, additions to 
contracts, and estimates, the Commission, where 
appropriate, shall enter into individual commit­
ments in accordance with the procedures laid down 
in Articles 37 to 40. Individual commitments shall 
count towards the commitments under the financing 
agreements provided for in Article 107(2). 
4. Where appropriate, the recipient shall validate 
and authorize any expenditure which is the subject 
of an agreement between that State and the 
Community against appropriations committed by 
the Commission. It shall remain financially liable to 
the Commission until the Commission clears the 
operations for the execution of which the recipient is 
responsible. 
Article 111 
1. For the purposes of applying the preferential 
agreement or convention between the Community and the recipient State, and in respect of the 
appropriations for which it is the authorizing officer, 
the Commission may be represented in the recipient 
State by a representative approved by that State. 
2. While operations are in progress the Com­
mission's representative shall verify, on the basis of 
documents and on the spot, that the work or services 
comply with their description in the financing 
agreements, contracts or estimates. 
Article 111 
1. For payments in a currency other than that of 
the recipient State, the Commission shall make 
payment direct for services provided in connection 
with projects financed with grant aid. 
2. For payments in the currency of the recipient 
State, accounts denominated in ecus may be opened 
with a financial institution in the recipient State in 
the name of the Commission or of the recipient. 
In the case of preferential agreements, the tasks 
referred to in paragraphs 5 and 6 may be entrusted to 
a financial institution, referred to as the paying 
agent. 
3. The accounts referred to in paragraph 2 shall be 
replenished to meet actual cash requirements. 
Transfers shall be made in ecus or, exceptionally, in 
the currency of a Member State and converted into 
the currency of the recipient State as payments fall 
due, at the exchange rate ruling on the day of 
payment. 
4. Interest on the deposits in the accounts referred 
to in paragraph 2 shall be used exclusively for the 
projects concerned, unless agreed otherwise when 
the functions of paying agent are being exercised by a 
public financial institution. 
The paying agent shall not be remunerated for his 
services. 
5. Within the limits of the funds available, the 
paying agent, after obtaining the approval of the 
Commission's representative, shall make the pay­
ments authorized after verifying that the supporting 
documents provided are substantively accurate and 
in order. 
6. At regular intervals, and at least once a quarter, 
the paying agent shall send the Commission a 
No C 115/24 Official Journal of the European Communities 8. 5. 89 
statement of actual expenditure and revenue, 
together with supporting documents. 
7. Payments made and revenue received in the 
currency of the recipient State shall be subject to a 
clearance procedure before they are finally booked 
to the budget appropriations. Clearance shall consist 
of an examination by the Commission to establish 
that validation, authorization and payment and the 
collection of revenue have been properly effected, in 
accordance with this Regulation. 
SECTION III 
AWARD OF CONTRACTS 
Article 113 
Notwithstanding Title IV of this Financial Regu­
lation, the award of contracts financed by the 
Community for recipients of external aid shall be 
governed by the following provisions. 
Article 114 
The procedure to be followed for the award of 
works, supply or service contracts, or the conclusion 
of technical cooperation contracts, shall be specified 
in the financing agreement, subject to the following 
principles. 
Article 115 
1. Participation in tendering procedures shall be 
open on equal terms to all natural and legal persons 
coming within the scope of application of the 
Treaties and to all natural and legal persons in the 
recipient State. 
The specifications shall therefore require tenderers 
to state their nationality and to present the 
supporting evidence normally acceptable under their 
own law. 
2. By way of exception, it may be decided, on the 
basis of the specific conditions laid down in the basic 
instruments governing cooperation, to allow 
nationals of third countries to compete for contracts 
financed by the Community. 
Article 116 
The Commission and the recipient shall take the 
necessary implementing measures to ensure that 
participants in tendering procedures and other 
procedures for the award of contracts financed by 
the Community can compete on an equal footing. 
To this end, without prejudice to Articles 117 and 
119, care shall be taken in particular to: 
(a) ensure advance publication in reasonable time of 
invitations to tender in the Official Journal of the European Communities and the official journal 
of the recipient State; 
(b) eliminate any discriminatory practice or tech­
nical specification liable to hamper participation 
on equal terms by all natural or legal persons of 
the Member States and of the recipient State. 
Article 117 
In urgent cases or where the nature, small scale or 
particular characteristics of certain works or 
supplies so warrant, the Commission or the recipient 
may, by agreement with the Commission stating the 
reasons therefor, exceptionally authorize: 
— the award of contracts after open invitations to 
tender, confined to a specific geographical area, 
— the award of contracts after restricted invitations 
to tender, 
— the conclusion of contracts by private treaty, 
— the performance of contracts through public 
works departments. 
Article 118 
The Commission and the recipient shall ensure that 
Articles 116, 117 and 119 are observed for each 
operation and that the tender selected is economi­
cally the most advantageous, with due regard 
notably to the price, utilization costs, technical 
value, the qualifications of and the guarantees 
offered by the tenderers, the nature and conditions of 
execution of the works or supplies. 
The Commission and the recipient shall ensure that 
all the selection criteria are specified in the invitation 
to tender. 
The result of invitations to tender shall be published 
at the earliest possible date in the Official Journal of 
the European Communities. 
Article 119 
1. Contracts for services and technical cooperation 
shall be awarded after restricted invitations to 
tender. 
2. However, some contracts may be awarded by 
private treaty, particularly in the following cases: 
— short projects or projects of minor importance, 
— projects being carried out by non-profit insti­
tutions or associations, 
8. 5. 89 Official Journal of the European Communities No C 115/25 
— extensions to projects already under way, 
— where the invitation to tender has been unsuc­
cessful. 
3. Contracts for services and technical cooperation 
shall, as a rule, be prepared, negotiated and 
concluded by the Commission. 
4. In the case of preferential agreements, or in cases 
where express provision is made therefor in the 
financing agreements, the tasks referred to in 
paragraph 3 shall be delegated to the recipient, in 
agreement and in collaboration with the Com­
mission's representative. 
Article 120 
Only service contracts awarded in the interests of the 
Commission shall be governed by the provisions of 
Articles 57 to 65. 
SECTION IV 
AUDITING OF ACCOUNTS 
Article 121 
1. Each agreement shall make express provision 
for the Court's power of audit. 
2. Should the Court of Auditors wish to carry out 
audits on the territory of recipient States, or States in 
which recipients are located, it shall do so by 
agreement with the relevant authorities of the State 
concerned. Such audits shall be limited to the 
inspection agreements implemented pursuant to the 
provisions governing Community aid and shall not 
apply in respect of the execution arrangements 
which are the responsibility of the national author­
izing officer.' 
112. The following new Title X is inserted: 
'TITLE X 
SPECIAL PROVISIONS APPLICABLE TO THE 
MANAGEMENT OF APPROPRIATIONS RELATING 
TO STAFF SERVING OUTSIDE THE COMMUNITY 
AND TO THEIR ADMINISTRATION 
Article 122 
The provision of Titles I to VI and XII shall apply to 
activities in this field, in so far as they are not 
incompatible with the provisions of this Title. 
Article 123 
The expenditure of a financial year shall be booked 
to the accounts for that year on the basis of the 
expenditure for which notification of authorization 
reaches the Financial Controller not later than 31 
December and in respect of which payment is made 
before 15 January. However, expenditure involving payments made not later than 31 December under 
the imprest accounts may still be booked to the 
accounts for that year up to 15 February of the 
following year. 
Article 124 
In accordance with Article 128 the Commission shall 
adopt implementing rules relating, in particular, to: 
— the award of contracts, 
— the keeping of inventories, 
— the system of accounts, 
— imprest accounts.' 
113. Title X is renumbered Title XI. 
114. Article 103 is renumbered Article 125. 
(a) Paragraph 2 is replaced by the following: 
'2. The appropriations for the Office, the total 
amount of which shall be entered under a special 
budget heading within the section for expendi­
ture common to all the institutions, shall be set 
out in detail in an annex to that section. The 
appropriations shown under this specific budget 
heading may be transferred in accordance with 
the conditions set out in Article 26. 
The annex shall take the form of a statement of 
revenue and expenditure, subdivided in the same 
way as the sections of the budget. 
The appropriations entered in that annex shall 
cover all the financial requirements of the Office 
in the performance of its duties in the service of 
the Community's institutions. 
3. Where necessary, the estimates may be 
adjusted during the financial year by the Manage­
ment Committee of the Office, which shall take 
decisions on the transfers required within the 
annex as a result of such adjustments. It shall 
inform the budgetary authority three weeks 
before effecting transfers from one chapter to 
another.' 
(b) Paragraph 3 is renumbered paragraph 4. The 
third subparagraph is deleted. 
(c) Paragraph 4 is deleted. 
(d) In the second subparagraph of paragraph 6, 
'Article 22' is replaced by 'Article 27'. 
No C 115/26 Official Journal of the European Communities 8. 5. 89 
(e) In the second subparagraph of paragraph 8, the 
sentence 'such payments may not exceed the total 
amount of the appropriations entered for this 
purpose in the Commission budget' is replaced by 
'such payments may not exceed the total amount 
of the appropriations entered for this purpose in 
the section for expenditure common to all the 
institutions, which contains all the appropri­
ations for the Publications Office'. 
(f) In paragraph 9, 'Articles 73 and 76' is replaced by 
'Articles 79 and 82'. 
115. The following new article 126 is inserted: 
'Article 126 
The financial rules of Community bodies with legal 
personality which receive subsidies from the general 
budget shall take over as far as possible the 
provisions of this Regulation and diverge from them 
only when their specific operational requirements 
warrant.' 
116. Article 104 is renumbered Article 127. 
117. Article 105 is deleted. 
118. Article 106 is renumbered Article 128. It is replaced 
by the following: 
'Article 128 
After consulting the other institutions, whose 
opinions must be given within two months, the 
Commission shall adopt rules for implementing this 
Financial Regulation. It shall inform all the Insti­
tutions of these rules.' 
119. Article 107 is renumbered Article 129. It is replaced 
by the following: 
'Article 129 
'Amendments to this Financial Regulation, pro­
posed by the Commission, shall be adopted by the 
Council after conciliation with Parliament.' 120. Article 108 is deleted. 
121. The following new Article 130 is inserted: 
'Article 130 
Until the entry into force of the implementing rules 
provided for in Article 128, the limit values to be 
specified for the purposes of Articles 59, 61, 63, 64 
and 98 shall be as follows: 
— Article 59, first paragraph, subparagraph (a): the 
limit below which contracts may be made by 
private treaty shall be 15 000 ecus, 
— Article 61: the limit above which the powers of 
the Advisory Committee on Procurements and 
Contracts take effect shall be 50 000 ecus, 
— third paragraph of Article 63: the threshold for 
compulsory security shall be 350 000 ecus, 
— Article 64: the limits below which contracts may 
be made against invoice or bill of costs shall be 
750 and 2 000 ecus respectively for expenditure 
away from the provisional places of work, 
— Article 98: the limit below which contracts may 
be made by private treaty shall be 75 000 ecus for 
scientific and technical equipment and for works 
contracts, 
— the limits for the powers of the Advisory 
Committee on Procurements and Contracts shall 
be: 
— 350 000 ecus for scientific and technical 
contracts and contracts relating to the pur­
chase of buildings, 
— 75 000 ecus for equipment and supply con­
tracts not of a scientific or technical nature, 
— 25 000 ecus for equipment and supply con­
tracts not of a scientific or technical nature, to 
which the provisions of Article 59 (c), (d) and 
(e) apply.' 
Article 2 
This Regulation shall enter into force on ... 
This Regulation shall be binding in its entirety and directly 
applicable in all Member States.