Proposal for a Council Regulation (EC, Euratom) amending Council Regulation (EC, Euratom) No 2728/94 establishing a Guarantee Fund for external actions (1999/C 32/12) COM(1998) 168 final - 98/0117(CNS)

(Submitted by the Commission on 18 March 1998)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 235 thereof,

Having regard to the Treaty establishing the European Atomic Energy Community, and in particular Article 203 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 Guarantee Fund is endowed by payments from the general budget of the European Communities, by the interest on its invested resources and by the amounts recovered from defaulting debtors where the Fund has already honoured the guarantee;

Whereas experience of the functioning of the Guarantee Fund indicates that a ratio of 8 % between the Fund's resources and guaranteed liabilities in principal, increased by unpaid interest due, would be adequate;

Whereas payments to the Guarantee Fund equal to 6 % of the amount of each operation would seem sufficient to attain the target amount;

Whereas the Guarantee Fund attained its target amount on 31 December 1997 and the provisioning rate should be reviewed;

Whereas if the Guarantee Fund exceeds the target amount the surplus is paid back to the general budget of the European Communities;

Whereas experience has shown that the various Commission departments are closely involved in the functioning of the Guarantee Fund;

Whereas, in these circumstances, the financial management of the Guarantee Fund should be entrusted to the Commission; whereas the financial management of the Fund is subject to audit by the Court of Auditors;

Whereas the Treaties do not provide any powers other than those pursuant to Article 235 of the EC Treaty and Article 203 of the Euratom Treaty for the adoption of this Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC, Euratom) No 2728/94 is hereby amended as follows:

1. In Article 3 the second paragraph is replaced by the following:

'The target amount shall be 8 % of the Community's total outstanding capital liabilities arising from each operation, increased by unpaid interest due.`

2. Article 4(1) is replaced by the following:

'The payments provided for under the first indent of Article 2 shall be equivalent to 6 % of the capital value of the operations.`

3. In Article 5 the first paragraph is replaced by the following:

'If, as a result of the activation of guarantees following default, resources in the Fund stand below 75 % of the target amount, the rate of provisioning on new operations shall be raised to 7 % until the target amount has once more been reached.`

4. Article 6 is replaced by the following:

'The financial management of the Fund shall be entrusted to the Commission.`

5. Article 9 is replaced by the following:

'The Commission shall, before 31 December 2006, submit a comprehensive report on the functioning of the Fund.`

Article 2

This Regulation shall enter into force on 1 January 1999.

This Regulation shall be binding in its entirety and directly applicable in all Member States.