***** 
* * 
***** COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 01.06.1995 
COM(95) 208 final 
94/0192 (CNS) 
Amended proposal for a 
COUNCIL REGULATION (EC. ECSC. Euratom) 
amending the Financial Regulation of 21 December 1977 
applicable to the general budget of the European Communities 
(presented by the Commission pursuant to Article 189a(2) of the EC Treaty 
and the second paragraph of Article 119 of the Euratom Treaty) 

EXPLANATORY MEMORANDUM 
On 22 July 1994 the Commission presented a proposal for the amendment of the Financial 
Regulation in the research field to cater for the new activities being conducted by the Joini 
Research Centre under the fourth framework programme of European Community 
activities in the field of research, technological development and demonstration (1994-98) 
adopted by Parliament and Council Decision of 26 April 1994. 
The specific purpose is to cater for the new competitive approach for the JRC, whicli 
means that the Centre will have to start competing with other bodies to carry out certain 
projects financed by the general budget and will therefore have to make competitive bids to 
win funding for some of its activities. 
Parliament gave its opinion on the proposal at its March 1995 part-session and passed a 
number of amendments, most of which the Commission is able to accept. 
The Commission is incorporating Parliament's amendments subject to various drafting 
adjustments, but cannot endorse the refusal of the increase from the current 15% to 22% 
for transfers on which decisions are to be taken by the Commission itself in the field of 
direct action (excluding exploratory research). 
This increase, together with the other amendments proposed by the Commission 
concerning transfers, will give the Commission greater autonomy in managing JRC 
appropriations by putting it on the same footing as its competitors, which are not subject to 
the same constraints. 
The Commission has accordingly drawn up this amended proposal under Article 189a(2) oi 
the EC Treaty and the second paragraph of Article 119 of the Euratom Treaty. 
AMENDED PROPOSAL FOR A COUNCIL REGULATION (EC, ECSC, Euratom) 
amending the Financial Regulation of 21 December 1977 applicable 
to the general budget of the European Communities 
In the light of the opinions delivered by Parliament and the Court of Auditors, the 
Commission is amending its proposal as follows: 
INITIAL PROPOSAL 
(COM(94)338 final, 22.7.1994) AMENDED PROPOSAL 
THE COUNCIL OF THE EUROPEAN UNION, 
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 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 
Commission1 , 
Having regard to the opinion of the European 
Parliament2, 
Having regard to the opinion of the Court of 
Auditors3 , 
Whereas conciliation has taken place in a 
conciliation committee as provided in the Joint 
Declaration of the European Parliament, the 
Council and the Commission of 4 March 1975,4 
Whereas the fourth framework programme of 
European Community activities in the field of 
research and technological development and 
1 OJL 
2 OJL 
3 OJL 
4 OJC 89, 2.4.1975 p. 1 
INITIAL PROPOSAL AMENDED PROPOSAL 
demonstration (1994-1998)5 adopted by decision 
of the Council and Parliament of 26 April 1994 
introduced a new competitive approach for the 
Joint Research Centre, which implies, amongst 
other things, that the JRC will gradually have to 
enter into competition with other bodies for 
certain projects financed by means of 
appropriations in the general budget, whether 
inside or outside the particular subsection referred 
to in Article 92(1) of the Financial Regulation of 
21 December 1977 applicable to the general 
budget6 ; whereas it is necessary to adapt the 
Financial Regulation in order to take account of 
this competitive approach; 
Whereas this new competitive approach implies 
changes to certain terms of the Financial 
Regulation so as to afford the JRC greater 
flexibility in the management of its appropriations 
and thus enable it to compete effectively with 
other similar bodies; 
Whereas, in this connection, the Commission 
should be given greater autonomy in this area for 
transferring appropriations, including 
appropriations for staff; 
Whereas appropriations obtained on a competitive 
basis should be treated as revenue from services 
for third parties so as to ensure total transparency 
in the accounts pertaining to these operations, 
HAS ADOPTED THIS REGULATION: The third recital is replaced by the following: 
Whereas this new competitive approach implies 
changes to certain terms of the Financial 
Regulation so as to afford the JRC greater 
effectiveness in the management of its 
appropriations and thus enable it to compete with 
other similar bodies; 
The fourth recital is replaced by the following 
Whereas, in this connection, the Commission 
should be given greater autonomy in this area lor 
transferring appropriations; 
5 OJL 126, 19.5.1994, p. 1 
6 OL L 356, 31.12.1977 - last amended by Council Regulation N° 610/90 of 13.3.1990 (JO L 70, 
16.3.1990) 
INITIAL PROPOSAL AMENDED PROPOSAL 
Article 1 
The Financial Regulation is amended as follows: 
1. Article 92 is amended as follows: 
(a) in the second subparagraph of paragraph 
1, point (a) is replaced by the following: 
"(a) direct action consisting of research 
programmes and exploratory 
research and scientific and technical 
support activities of an institutional 
nature 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) in the second subparagraph of paragraph 
1, point (b) is replaced by the following: 
"(b) indirect action consisting of 
programmes carried out under 
contracts to be concluded with third 
parties. The JRC may participate in 
these activities on the same basis as 
third parties. These activities shall in 
principle be partially financed from 
the general budget of the European 
Communities (shared-cost action 
projects); 
(c) in the second subparagraph of paragraph 
1, point (e) is replaced by the following: 
"(e) other activities of a competitive 
nature carried out by the JRC: 
- scientific and technical support 
activities under the R&TD 
framework programmes in 
principle entirely financed from the 
general budget; 
- services for third parties."; Article 
Article 92 is amended as follows: 
(a) unchanged 
(b) unchanged 
(c) unchanged 
INITIAL PROPOSAL AMENDED PROPOSAL 
(d) the following paragraph is inserted after 
paragraph 2: 
"3. Notwithstanding paragraph 1, the JRC 
may receive appropriations entered 
elsewhere than in the subsection 
referred to in that paragraph in respect 
of its participation on a competitive 
basis in activities implemented under 
Community policies financed, in 
principle, entirely from the general 
budget." (d) the following paragraphs are inserted 
after paragraph 2: 
"3. Notwithstanding paragraph 1, the JRC 
may receive funding covered by 
appropriations entered elsewhere than 
in the subsection referred to in that 
paragraph in respect of its 
participation on a competitive basis in 
activities implemented under 
Community policies financed, in 
principle, entirely from the geneml 
budget. 
4. The provisions of Title IV on the 
conclusion of contracts shall app I y Jo 
the cases referred to in the first indent 
of paragraph 1(e) and in paragraph 3." 
Paragraph 2 of Article 93 is replaced by the 
following: 
" However, for the Joint Research Centre. 
appropriations for staff and appropriations for 
resources shall be entered in two separate 
chapters." 
The following indents are inserted in Article ()4: 
"- in order to permit full comparison between 
forecasts and outturn, the table of equivalence 
of commitments and payments shal I be 
presented with the same subdivisions and 
headings in the budget and in the revenue and 
expenditure account; 
- In the working document accompanying the 
preliminary draft budget the Commission shall 
provide the necessary information concerning 
the foreseeable distribution and utilization of 
the commitment appropriations for the various 
budget headings for the duration of the action 
and also concerning the revenue originating 
from financing by third parties (public or 
private) as part of JRC participation in shared-
cost action." 
INITIAL PROPOSAL AMENDED PROPOSAL 
2. Article 95 is amended as follows: 
(a) the first paragraph is replaced by the 
following: 
"Notwithstanding Article 26 and without 
prejudice to paragraph 7 thereof, the 
Commission may, within the subsection 
referred to in Article 92, transfer 
appropriations from one title to another 
and from one chapter to another in respect 
of the activities referred to in 
Article 92(lXa)."; 
(b) the second paragraph is replaced by the 
following: 
"These transfers may not have the effect of 
increasing or decreasing by more than 
22% in commitment appropriations the 
initial allocation entered in the budget for 
each of the programmes referred to in 
Article 92(1 )(a) excluding exploratory 
research. They may not have the effect of 
increasing the appropriations earmarked 
for exploratory research by more than 6% 
in commitment appropriations of the initial 
allocation for the total of the programmes 
referred to above"; 
(c) the third paragraph is deleted; 
(d) the fourdi subparagraph is replaced by the 
following: 
"For the purposes of the application of 
Article 26, the budget headings relating to 
the activities referred to in Article 92 (I) 
(b) (excluding JRC participation), (c) and 
(d) shall be regarded as chapters." Article 95 is amended as follows. 
(a)unchanged 
(b)unchanged 
(c) deleted 
(d)unchanged 
INITIAL PROPOSAL AMENDED PROPOSAL 
3. The following paragraph is added after Article 
96(3): 
"4. The appropriations relating to the activities 
referred to in Article 92 (I) (b), as regards the 
participation of the JRC on a competitive 
basis, and (e) and (3) shall be treated as 
revenue from services to third parties provided 
for in paragraphs 1 and 2." 
Article 2 
This regulation shall enter into force on the third 
day following that of its publication in the 
Official Journal of the European Communities. 
It shall apply from 
This Regulation shall be binding in its entirety 
and directly applicable in all Member States. 
Done at Brussels, 
For the Council 
The President 3. The following paragraph is added after Article 
96(3): 
"4. The appropriations relating to the activities 
referred to in Article 92 (1) (b), as regards the 
participation of the JRC on a competitive 
basis, and (e) and (3) shall be treated as 
revenue from services to third parties provided 
for in paragraphs 1 and 2." 
The utilization of these appropriations shall be 
shown in a set of analytical accounts in the 
revenue and expenditure accounts for each 
category of action to which it relates; it shall 
be separate from revenue originating from 
financing bv third parties (public or private) 
and from revenue from services provided for 
third parties in connection with the activities 
referred to in paragraphs 1 and 2 or activities 
of a different nature." 
Article 2 
Article 95 may be revised, if necessary, on expiry 
of the 1995-98 framework programme < >n the 
basis of a reasoned report. 
This regulation shall enter into force on the third 
day following that of its publication m the 
Official Journal of the European Communities. 
It shall apply from 
This Regulation shall be binding in its entirety 
and directly applicable in all Member States 
Done at Brussels, 
For the Council 
The President 
% 
BSN 0254-1475 
COM(95) 208 final 
DOCUMENTS 
EN 01 15 
Catalogue number : CB-CO-95-233-EN-C 
ISBN 92-77-89187-4 
Office for Officiai Pablicatioas of the European Communities 
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