COMMISSION OF THE EUROPEAN COMMUNITIES 
COM(94) 14 final 
Brussels, 28.01.1994 
ïï "'*, lit 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 
^•$"i$§|f (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 2 September 1992 the Commission presented a proposal for the amendment of the Financial 
Regulation to take account of the revision of the Treaty at Maastricht and the conclusion of the 
Agreement on the European Economic Area.1 It also proposed an improvement to the 
presentation of borrowing and lending operations in the budget. 
Parliament delivered its opinion on this proposal at its part-session from 15 to 19 November 1993 
and adopted a number of amendments, some of which the Commission endorses. 
Apart from a number of adjustments which are basically changes in wording, the main 
amendments which the Commission is accepting can be summed up as follows: 
1. The provisions relating to the financial statement (Article 3 are tightened to ensure all the 
transparency and discipline desired. 
2. The institutional implications of the Maastricht Treaty are supplemented to take account of 
the following aspects: 
(a) Some provisions have been added to provide a budgetary framework for the 
Ombudsman instituted by Article 138e of the Treaty (in particular Articles 12, 19 
and 20). 
(b) Details are added to the provisions concerning the Economic and Social Committee 
and the new Committee of the Regions on matters relating to the organization of 
budgetary implementation (in particular the appointment of a single financial 
controller and a single accounting officer - see Articles 22, 24 and 25). 
3. The procedure for transfers within chapters for the Court of Justice, the Court of Auditors, 
the Economic and Social Committee and the Committee of the Regions has been made 
simpler (there is no longer an obligation to notify the budgetary authority in advance - see 
the second subparagraph of Article 26(2)). 
COM(92)358 final. 
- 1 ex. -
4. In support of its preliminary draft budget, the Commission will supply further inform: ;^>; 
on personnel management by listing mobility and redeployment measures broken down by 
sector of activity (Article 13(4)(a)). 
5. As regards the award of contracts, it is stipulated that the price revision procedures are to 
be set out in detail in the implementing rules (Article 58(4)). 
6. More details are provided on contributions by outside bodies to Community activities (the 
foreseeable amounts and an estimate of any administrative costs are indicated separately for 
information - see Article 124). 
7. Finally, a new provision (Article 140a) is included to specify the Court of Auditors' powers 
as regards borrowing and lending operations, which are now contained in a separate 
document presented together with the preliminary draft budget in accordance with Part II of 
the proposed Financial Regulation. 
Finally, although Parliament suggested that borrowing and lending operations should be entered in full 
and that the estimated amounts for contributions from third parties should be formally entered by way 
of prior authorization, the Commission has not been able to accept these amendments which are not 
compatible with the exercise of budgetary powers in the present context. 
* * * 
In accordance with Article 189a(2) of the EC Treaty, the Commission has therefore drawn up this 
amended proposal which it is submitting for the subsequent stages of the procedure. 
1^-
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 to the Council 
in accordance with Article 189a(2) 
of the EC Treaty and the second paragraph 
of Article 119 of the Euratom Treaty) 
Following the opinions of Parliament and the Court of Auditors, the Commission presents the following 
proposal : 
INITIAL PROPOSAL 
(COM(92)358. 2.9.1992) 
THE COUNCIL 
COMMUNITIES, OF THE EUROPEAN 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 Commission,1 
Having regard to the opinion of the European 
Parliament,' 
Having regard to the opinion of the Court of 
Auditors,3 
Whereas the conciliation provided for by the Joint 
Declaration of 4 March 1975 by the European 
Parliament, the Council and the Commission4 has 
taken place in a Conciliation Committee; 
Whereas the principle of subsidiarity is enshrined in 
the Treaty on European Union and must now be 
incorporated in the Financial Regulation of 
21 December 1977 applicable to the general budget of 
the European Communities5 (hereinafter referred to as 
the "Financial Regulation"), as last amended by 
Regulation (Euratom, ECSC, EEC) No 610/906; 
^ OJ No C 254, 1.10.1992, p.5. 
?OJ No C 342, 23.12.1992, p. 1. 
4 01 NoC 89, 22.4.1975, p. 1. 
5 OJ No L 356, 31.12.1977, p.l. 
6 OJ No L70, 16,3,1990, p.l. 
INITIAL PROPOSAL MENDED PROPOSAI 
Whereas the provisions of the Treaty on European 
Union, and in particular those relating to Monetary 
Union, make it all the more necessary to provide in 
the Financial Regulation for the principle that the 
budget shall be executed in ECU; 
Whereas that Treaty raises the Court of Auditors to 
institution status and confers a new task upon it; 
whereas the provisions of the Financial Regulation 
relating to that institution should be adapted and 
supplemented accordingly; 
Whereas, since that Treaty has enhanced the role of 
the Economic and Social Committee and provided for 
a Committee of the Regions, provisions need to be 
laid down to govern their budgetary status; 
Whereas Article 89 of the Financial Regulation must 
be amended to reflect the stronger powers of political 
control exercised by Parliament and the Council over 
the execution of the budget on the basis of reports by 
the Court of Auditors; The following recital is inserted after the fifth recital: 
Whereas that Treaty provides for the appointment of 
an Ombudsman after each election of the European 
Parliament: whereas appropriate budgetary 
arrangements therefore need to be made to ensure that 
he is completely independent in the performance of 
his duties: 
The sixth recital is replaced by the following: 
Whereas Article 89 of the Financial Regulation must 
be amended to reflect the stronger powers of political 
control exercised by Parliament and the Council over 
the execution of the budget on the basis of the reports 
and the statement of assurance as to the reliability of 
accounts issued by the Court of Auditors; 
Whereas the implementation of the Agreement on the 
European Economic Area requires that appropriate 
provisions be inserted in the Financial Regulation to 
govern, in particular, the budgetary presentation and 
execution of the additional financial contribution 
resulting from financial participation by the EFTA 
countries; 
Whereas appropriate provisions must be inserted in 
the Financial Regulation to govern the financial 
participation of third parties in Community activities; 
INITIAL PROPOSAL AMENDED PROPOSAL 
Whereas it must be clearly stated that, when awarding 
contracts, the institutions must comply with the same 
obligations as are incumbent on bodies in the Member 
States by virtue of the Council directives coordinating 
procedures for the award of public works, supply and 
services contracts with a value equal to or higher than 
the thresholds established by those directives; 
whereas the provisions applicable to contracts below 
those thresholds should at the same time be clarified 
and adjusted; 
Whereas appropriate provisions should be added in a 
second part of the Financial Regulation to improve 
the presentation and transparency of information 
relating to borrowing and lending activities, 
HAS ADOPTED THIS REGULATION: 
Article 1 
The Financial Regulation is amended as follows: Article 1 
1. The following heading is inserted: "Part I 
Provisions applicable to the general budget of 
the European Communities". 
Article 1 is amended as follows: 
(a) The following phrase is added after the first 
subparagraph of paragraph 1: 
"The budget may also authorize the 
underwriting of borrowing and lending 
operations entered into by the Community:" 
The word "Economic" is deleted from the 
second indent of the second subparagraph of 
Article 1(1). (b) The word "Economic" is deleted from 
second indent of the second subparagraph: the 
INITIAI PROPOSAL AMENDED PROPOSAL 
Article 3(2) is replaced by the following: Article 3 is amended as follows: 
"2. For activities of an operational nature, the 
financial statement shall contain financial data 
relating to the assessment by the legislative authority 
of the need for Community action as provided in the 
second paragraph of Article 3b of the EC Treaty. 
It shall also state why the financial instrument 
provided for is appropriate, specify- how it is to be 
implemented and justify the amount proposed." (a) Paragraph 2 is replaced by the following 
"2. For activities of an operational nature, *&.• 
financial statement shall contain financial und 
economic data relating to the assessment by i: 
legislative authority of the need for Community action 
as provided in the second paragraph of Article 3b of 
the EC Treaty. 
It shall also state why the financial instrument 
provided for is appropriate, specify how it is to be 
implemented and justify the amount proposed. 
It shall also give detail; 
financial instruments." ?JLanv synergies with other 
(b) Paragraphs 4 and 5 are replaced by the 
following: 
"4. In order to prevent any risk of fraud, the 
Commission shall, where appropriate, record in 
the financial statement any information 
regarding fraud prevention measures and 
legislative or administrative protection 
mechanisms planned (sanctions, checks, etc.) 
and shall justify them in terms of cost 
effectiveness. 
"5. At the start of the budget procedure, the 
Commission shall supply on the basis of a cost-
effectiveness analysis, appropriate information 
enabling a comparison to be made between the 
development of appropriation requirements and 
the original estimates contained in the financial 
statements:" 
4. The introductory phrase of the second 
subparagraph of Article 4(2) is replaced by the 
following: The introductory phrase of the second subparagraph 
of Article 4(2) is replaced by the following: 
" Notwithstanding the first subparagraph, and without 
prejudice to the specific provisions of Title XI, 
certain revenues shall not be used for any other 
purpose, notably:" "Notwithstanding the first subparagraph, and without 
prejudice to the specific provisions of Title XI, 
certain revenues, on condition that they are provided 
for in the budget and wimin the limit of the 
authorized amounts, shall not be used for any other 
purpose, notably:" 
INITIAL PROPOSAL 5 AMENDED PROPOSAL 
5. The first subparagraph of point 3 of Article 7 
is replaced by the following: 
"3. In the case of appropriations for which a 
decision to carry over may be taken in accordance 
with point 1(a), the Commission shall forward to the 
budgetary authority, not later than 15 February, the 
duly substantiated requests to carry over 
appropriations made by the European Parliament, the 
Council, the Court of Justice, the Court of Auditors, 
the Economic and Social Committee, the Committee 
of the Regions and the Commission itself. " 
6. In Article 9(1) and (3)(b) the words 
"EEC Treaty" are replaced by "EC Treaty". 
7. Article 11 is amended as follows: 
(a) At the beginning of the first subparagraph of 
paragraph 2 the words "the ECU is the sum of 
specified amounts of the currencies of the 
Member States" are replaced by "the ECU is 
defined as the sum of specified amounts of the 
currencies of the Member States". 
(b) The second subparagraph of paragraph 2 is 
replaced by the following: "Any change in the 
definition of the ECU adopted by the Council 
in accordance with the EC Treaty, and in 
particular Articles 109g and 1091(4) thereof, 
shall automatically apply to this provision". 
(c) Paragraph 4 is replaced by the following: 
"4. Without prejudice to specific provisions of 
sectoral rules governing either amounts due or 
expenditure, the rights and obligations of the 
Communities shall be expressed and executed 
in ECU." 
(d) The following paragraph 5 is added: 
"5. For as long as conversion between the 
ECU and national currencies is necessary, such 
conversion shall, without prejudice to specific 
sectoral rules, be made in accordance with the 
implementing measures provided for in 
Article 142." 
INITIAL PROPOSAL AMENDED PROPOSAL 
Article 12 is amended as follows: Article 12 is amended as follows: 
(a) The first paragraph 
following: is replaced by the (a) unchanged 
"The European Parliament, the Council, the 
Court of Justice, the Court of Auditors, the 
Economic and Social Committee and the 
Committee of the Regions shall, each year 
before 1 July, draw up an estimate of their 
revenue and expenditure for the following 
year." 
(b) The second paragraph is deleted. (b) the second paragraph is replaced by the 
following: 
9. The third indent of Article 13(2)(b) is deleted. "The Ombudsman shall, before 1 May, forward 
to the European Parliament an estimate of his 
revenue and expenditure for the following year." 
The third indent of Article 13(2)(b) is deleted and 
Article 13(4)(a) is replaced by the following: 
(a) in respect of staff: 
a statement of the staff policy measures 
taken, listing the measures taken to promote 
mobility and giving figures for the staff 
redeployed bv category: 
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 
establishments of the Joint Research Centre), 
where a change in the number of persons in 
post is proposed, a statement justifying such 
changes, 
a list of Commission posts broken down by 
area of activity:" 
INITIAL PROPOSAL 7 AMENDED PROPOSAL 
10. The first paragraph of Article 14 is replaced by 
the following: 
"The Commission may, on its own initiative or if 
requested by the European Parliament, the Council, 
the Court of Justice, the Court of Auditors, the 
Economic and Social Committee or the Committee 
of the Regions 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." 
11. Article 15 is amended as follows: 
(a) In paragraph 2, the words "EEC Treaty" are 
replaced by "EC Treaty". 
(b) Paragraph 4 is replaced by the following: 
"4. Requests for supplementary and/or 
amending budgets from the European 
Parliament, the Council, the Court of Justice, 
the Court of Auditors, the Economic and Social 
Committee or the Committee of the Regions 
shall be forwarded by the Commission to the 
budgetary authority. The Commission may 
attach a dissenting opinion. " 
12. In the first subparagraph of Article 16(1) the 
words "EEC Treaty" are replaced by 
"EC Treaty". 
13. In Article 17(1) the words "EEC Treaty" are 
replaced by "EC Treaty". 
14. In Article 18 the words "EEC Treaty" are 
replaced by "EC Treaty". 
INITIAL PROPOSAL AMENDED PROPOSAL 
15. Article 19 is amended as follows: 
(a) Paragraph 1 is replaced by the following: 
" 1. The budget shall consist of: 
a general statement of revenue; 
separate sections subdivided into 
statements of revenue and expenditure of 
the European Parliament, the Council, the 
Commission, the Court of Justice and the 
Court of Auditors. 
The revenue and expenditure of the Economic 
and Social Committee and the Committee of 
the Regions shall be entered in a special section 
subdivided as follows: 
Part A devoted to the Economic and 
Social Committee; 
Part B devoted to the Committee of the 
Regions; 
Part C devoted to the common 
organizational structure of the two 
committees. 
The Commission section shall consist of: 
Part A for the staff and administrative 
expenditure of that institution. 
The revenue and expenditure of the 
Office for Official Publications of the 
European Communities shall be attached 
to this part. 
Part B for operating expenditure, divided 
into as many subsections as are required." Article 19 is amended as follows: 
(a) Paragraph 1 is replaced by the following: 
" 1. unchanged 
unchanged 
unchanged 
The revenue and expenditure of the Ombudsman shall 
be entered in the Parliament's section of the budget in 
the form of a statement of revenue and expenditure 
subdivided in the same wav as the sections of the 
budget and subject to the same rules. 
unchanged 
unchanged 
unchanged 
unchanged 
unchanged 
unchanged 
unchanged 
unchanged 
INITIAL PROPOSAL AMENDED PROPOSAL 
(b) Paragraph 6 is replaced by the following : 
"6. The subsection for EAGGF Guarantee Section 
expenditure shall include a monetary reserve for 
which the entry, utilization and financing conditions 
are determined by the provisions of Title E. 
paragraph 15 of the 1993-1999 Interinstitutional 
Agreement. Council Decision .../EEC of ... 
concerning budgetary discipline1 and Decision 
.../EEC, Euratom ... of... and Regulation ... on the 
system of the Communities' own resources and the 
provisions adopted for implementing them. 
(b) Paragraph 7 is deleted. (c) Paragraph 7 is deleted. 
Article 20 is amended as follows: 
(a) In point 2(bb) the following fourth indent is 
added: 
- the amount of any revenue to be re-used. 
This amount is mentioned for information 
only;" 
(b) In point 3 the first indent is replaced by the 
following: 
"- for each section of the budget, an 
establishment 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; The staff 
of the Ombudsman shall he shown separately 
in Parliament's establishment plan: the staff 
of the Economic and Social Committee, the 
Committee of the Regions and their common 
organizational structure shall be shown 
separately in their specific section. " 
1 OJ ... 
INITIAL PROPOSAL 10 AMENDED PROPOSAL 
16. Point 5 of Article 20 is replaced by the 
following: (c) Point 5 is replaced by the following: 
"5. As regards borrowing and lending operations: "5. As regards borrowing and lending operations: 
(a) in the general statement of revenue, the budget 
headings corresponding to the relevant 
operations and intended to record any 
reimbursements received from beneficiaries 
who initially defaulted, leading to activation of 
the performance guarantee. These headings 
shall carry a token entry and be accompanied 
by appropriate remarks; 
(b) in the Commission section: (a) in the general statement of revenue, the budget 
headings corresponding to the relevant 
operations and intended to record any 
reimbursements received from beneficiaries who 
initially defaulted, leading to activation of the 
performance guarantee. These headings shall 
carry a token entry and be accompanied by 
appropriate remarks; 
(b) in the Commission section, Part B: 
- the budget headings containing the 
Community's performance guarantees in 
respect of the operations in question. These 
headings shall carry 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 
guarantee given by the Communities in 
respect of these operations;". 
17. Article 22 is amended as follows: - the budget headings containing the 
Community's performance guarantees in 
respect of the operations in question. These 
headings shall carry 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, the duration and the 
financial guarantee given by the Communities 
in respect of these operations;". 
17. Article 22 is amended as follows: 
(a) Paragraph 2 is replaced by the following: 
"2. The Commission shall confer upon the 
European Parliament, the Council, the Court of 
Justice, the Court of Auditors, the Economic 
and Social Committee and the Committee of 
the Regions the requisite powers for the 
implementation of the sections of the budget 
relating to them." (a) Paragraph 2 is replaced by the following: 
"2. The Commission shall confer upon the 
European Parliament, the Council, the 
Court of Justice, the Court of Auditors, the 
Economic and Social Committee and the 
Committee of the Regions the requisite 
powers for the implementation of the 
sections of the budget relating to them." 
By common agreement, the Economic and 
Social Committee of the Regions shall 
delegate the powers of authorizing officer to 
the official responsible for administering 
'Part C of the common organizational 
structure and shall establish the limits and 
conditions of this delegation of powers^ 
INITIAL PROPOSAL 11 AMENDED PROPO A L 
(b) Paragraph 5 is replaced by the following: 
"5. Save as otherwise provided, the Economic 
and Social Committee and the Committee of 
the Regions, shall, for the purpose of this 
Financial Regulation, be treated as institutions 
of the Communities." (b) Paragraph 5 is replaced by the following: 
"5. Save as otherwise provided, the 
Ombudsman, the Economic and Social 
Committee and the Committee of the 
Regions, shall, for the purpose of this 
Financial Regulation, be treated as 
institutions of the Communities." 
The common organizational structure of the 
Economic and Social Committee and the 
Committee of the Regions shall establish an 
accounting system with a breakdown of 
expenditure showing the proportion^of 
services provided to each of these two 
institutions." 
The first paragraph of Article 24 is replaced by the 
following: 
"Each institution shall appoint a financial controller. 
The Economic and Social Committee and the 
Committee of the Regions shall appoint a financial 
controller by common agreement. " 
18. Article 26 is amended as follows: In Article 25 the second paragraph is replaced by the 
following: 
"The accounting officer shall be appointed by the 
institution. The Economic and Social Committee and 
the Committee of the Regions shall appoint an 
accounting officer by common agreement." 
18. Article 26 is amended as follows: 
(a) The second subparagraph of paragraph 2 is 
replaced by the following: 
"The Court of Justice, the Court of Auditors, 
the Economic and Social Committee and the 
Committee of the Regions - the two latter 
Committees with regard to the part which 
relates to them and, by common agreement, 
with regard to the common organizational 
structure - may, within their own sections of 
the budget, transfer appropriations from one 
article to another within each chapter. They 
shall inform the budgetary authority and the 
Commission three weeks before making such 
transfers." (a) The second subparagraph of paragraph 2 is 
replaced by the following: 
"The Court of Justice, the Court of 
Auditors, the Economic and Social 
Committee and the Committee of the 
Regions - the two latter Committees with 
regard to the part which relates to them 
and, by common agreement, with regard to 
the common organizational structure - may, 
within their own sections of the budget, 
transfer appropriations from one article to 
another within each chapter. They shall 
inform the budgetary authority and the 
Commission." 
INITIAL PROPOSAL 12 AMENDED PROPOSAL 
(b) The third subparagraph of paragraph 
replaced by the following: 4 is (b) unchanged 
"Proposals made by the other institutions, the 
Economic and Social Committee and the 
Committee of the Regions for transfers from 
one chapter to another shall be automatically 
forwarded to the authority; the Commission 
may attach its own opinion to such proposals." 
Article 56 is renumbered Article 58 and 19. 
amended as follows: 
(a) In the first subparagraph of paragraph 1 the 
words "either by the automatic public tendering 
procedure or the discretionary tendering 
procedure" are deleted. 
(b) The second subparagraph of paragraph 1 is 
replaced by the following: 
"However, contracts may be made without a 
tendering procedure in the circumstances 
referred to in Article 59." 
(c) In the third subparagraph of paragraph 1, 
"Article 63" is replaced by "Article 60". 
(d) The following paragraph 3 is added: 
"3. Tendering procedures shall be laid down 
by the implementing measures provided for in 
Article 142." Article 56 is renumbered 
amended as follows: Article 58 and 
(a) unchanged 
(b) In the second subparagraph of paragraph 1 
"Article 58" is replaced by "Article 59". 
(c) unchanged 
(d) The following paragraphs 3 and 4 are added: 
"3. Tendering procedures and award criteria 
shall be laid down and governed by the 
implementing measures provided for in 
Article 142, on the understanding that these 
criteria shall be laid down bv analogy with those 
provided for in the directives referred to in 
Article 56. 
20. Article 57 is deleted. 
21. The following new Article 57 is inserted: 
"Article 57 4. The price revision procedures following the 
conclusion of contracts shall be governed by the 
implementing measures provided for in 
Article 142." 
The provisions of Articles 58, 59 and 60 shall 
be applicable to contracts other than those 
referred to in Article 56. " 
INITIAL PROPOSAL 13 AMENDED PROFCX 
22. Article 58 is renumbered 
amended as follows: Article 59 and 
(a) The introductory words "Contracts may be 
made by private treaty:" are replaced by 
"Contracts may be made without invitation to 
tender in the following circumstances:". 
(b) Point (a) is replaced by the following: 
"(a) where their estimated value, not 
including VAT, is below the threshold 
set by the implementing measures 
provided for in Article 142;". 
(c) In point (b), "Article 57" is replaced by 
"Article 58". Article 58 is renumbered Article 59 and replaced by 
the following: 
"Article 59 
Contracts may be made by private treaty: 
(a) within the limit laid down in the implementing 
rules provided for in Article 142 for the 
purchase or hiring of supplies, furniture and 
equipment, for the provision of services or for 
building works: 
(b) where the purchase or hiring of goods, the 
provision of services or the construction works 
are so urgently needed that it is not possible to 
wait for one of the tendering procedures 
specified in Article 58 to be carried out; 
(c) where the automatic public tendering or 
discretionary tendering procedures do not give 
any result or where the prices quoted are not 
acceptable; 
(d) where for technical, practical or legal reasons 
the supply of goods or services can only be 
carried out by a particular contractor or 
supplier; 
(e) for contracts for the supply of goods and 
services or for ancillary works which, 
technically, cannot be separated from the main 
contract: 
The institution concerned is bound, however, as far 
as possible and by all appropriate means, to enable 
suppliers or contractors who are likely to be able to 
supply the goods and services in question to compete, 
except in the cases referred to at (d) and (e). 
23. Article 59 is renumbered Article 62. 
24. Article 60 is renumbered Article 63 and in the 
first and third paragraphs "Article 126" is 
replaced by "Article 142". 
INITIAL PROPOSAL 14 AMENDED PROPOSAL 
25. Article 61 is renumbered Article 64 and 
amended as follows: 
(a) In the first paragraph "Article 60" is replaced 
by "Article 63". 
(b) In the second paragraph, the words "choice of 
supplier" are replaced by "selection of 
tenderer". 
26. The following new Article 61 is inserted: 
"Article 61 
Articles 62 to 64a shall apply to the award of 
contracts for the purchase or hiring of goods, 
furniture or equipment, for the provision of services 
or for the performance of works." 
27. Article 62 is renumbered Article 64a and 
amended as follows: 
(a) In the first and third paragraphs, "Article 126" 
is replaced by "Article 142". 
(b) In the third paragraph, the words "for works 
contracts" are inserted after "obligatory". 
28. Article 63 is renumbered Article 60 and 
"Article 126" is replaced by "Article 142". 
29. Article 64 is renumbered Article 56 and 
replaced by the following: 
"Article 56 
When concluding contracts for which the amount 
involved is equal to or higher than the threshold 
provided for by the Council directives on the 
coordination of procedures for the award of public 
works, supplies and services contracts, each 
institution shall comply with the same obligations as 
are imposed upon bodies in the Member States by 
those directives. 
The implementing measures provided for in Article 
142 shall include appropriate provisions to that end." 
INITIAL PROPOSAL 15 AMENDED PROPOS AL 
30. Point 5 of Article 78 is deleted. 
31. The following Article 87a is added: 
"Article 87a 
The Court of Auditors shall provide the European 
Parliament and the Council with a statement of 
assurance as to the reliability of the accounts and the 
legality and regularity of the underlying 
transactions." The following Article 87a is added: 
"Article 87a 
At the same time as the annual report referred to 
in Article 88. the Court of Auditors shall 
provide the European Parliament and the 
Council with a statement of assurance as to the 
reliability of the accounts and the legality and 
regularity of the underlying transactions." 
32. Article 88 is amended as follows: 
In the introductory sentence, the words "in Article 
78 of the ECSC Treaty, Article 206a of the EEC 
Treaty and Article 180a of the Euratom Treaty" are 
replaced by "in Article 45c of the ECSC Treaty, 
Article 188c of the EC Treaty and Article 160c of 
the Euratom Treaty". 
33. Article 89 is replaced by the following: 
"Article 89 
1. The European Parliament, upon a 
recommendation from the Council acting by a 
qualified majority, shall, before 30 April of the 
following year, give a discharge to the Commission 
in respect of the implementation of the budget. 
2. To this end the European Parliament shall, 
after the Council has done so, examine the accounts, 
the statement of revenue and expenditure and the 
balance sheet mentioned in Article 78d of the ECSC 
Treaty, Article 205a of the EC Treaty and Article 
179a of the Euratom Treaty, the Annual Report 
made by the Court of Auditors together with the 
replies of the institutions under audit to the 
observations of the Court of Auditors and any 
relevant special reports by the Court of Auditors. 
3. Before giving a discharge to the Commission, 
the European Parliament may question the 
Commission on the implementation of expenditure or 
the operation of financial control systems. The 
Commission shall submit any necessary information 
to the European Parliament at the latter's request. Article 89 is replaced by the following: 
"Article 89 
1. unchanged 
2. To this end the European Parliament shall, after 
the Council has done so, examine the accounts, the 
statement of revenue and expenditure and the balance 
sheet mentioned in Article 78d of the ECSC Treaty, 
Article 205a of the EC Treaty and Article 179a of the 
Euratom Treaty, the Annual Report made by the 
Court of Auditors together with the replies of the 
institutions under audit to the observations of the 
Court of Auditors and any relevant special reports by 
the Court of Auditors and the Court of Auditors' 
statement of assurance as to the reliability of the 
accounts and the legality and regularity of the 
underlying transactions. 
3. unchanged 
INITIAL PROPOSAL 16 AMENDED PROPOSAL 
4. If the date provided for in paragraph 1 cannot 
be met, the European Parliament or the Council 
shall inform the Commission of the reasons for the 
po'stponement. 
If the European Parliament postpones the decision 
giving a discharge, the Commission shall make 
every effort to take measures, as soon as possible, to 
facilitate removal of the obstacles to that decision. 4. unchanged 
5. The discharge decision shall cover the accounts 
of all the Community's revenue and expenditure, the 
resulting balance and the assets and liabilities of the 
Community shown in the balance sheet. It shall 
include an assessment of the responsibility of the 
Commission's budgetary management over the past 
financial year. 
6. The financial controller shall take account of 
the comments in the decisions giving discharge. 
7. The institutions shall take all appropriate steps 
to act on the observations accompanying the 
discharge decisions and on other observations by the 
European Parliament relating to the implementation 
of expenditure, and on the comments accompanying 
the recommendations for discharge adopted by the 
Council. 
8. At the request of the European Parliament or 
the Council, the institutions shall report on the 
measures taken in the light of these observations and 
comments, and, in particular, on the instructions 
given to those of their departments which are 
responsible for the implementation of the budget. 
Such reports shall also be transmitted to the Court of 
Auditors. 5. unchanged 
6. unchanged 
"7. The institutions shall, for their respective 
sections, take all appropriate steps to act on the 
observations accompanying the discharge decisions 
and on other observations by the European Parliament 
relating to the implementation of expenditure, and on 
the comments accompanying the recommendations for 
discharge adopted by the Council. 
8. unchanged 
9. The institutions shall also give an account, in 
an annex to the revenue and expenditure account for 
the financial year following that of the discharge 
decision, of the measures taken in the light of the 
comments appearing in the decisions giving 
discharge. 9. unchanged 
INITIAL PROPOSAL 17 AMENDED PROPOSAL 
10. Supporting documents pertaining to the 
accounts and the preparation of the revenue and 
expenditure accounts and the balance sheet 
shall be kept for a period of five years 
following the date of the decision giving 
discharge in respect of the implementation of 
the budget. 10. unchanged 
34. 
\ However, the documents relating to 
transactions not finally closed shall be kept for 
longer than the said period, until the end of the 
year following the year in which such 
transactions are finally closed. 
Each institution shall decide which department 
will keep the supporting documents." 
In Article 91, the words "VI and XII" are 
replaced by "VI, Title XI and Part III". 
35. In Article 92(l)(d), the words "Article 1301 of 
the EEC Treaty", "Article 130m of the EEC 
Treaty", "Article 130n of the EEC Treaty", 
and "Article 130o of the EEC Treaty" are 
replaced by "Article 130k of the EC Treaty, 
"Article 1301 of the EC Treaty", "Article 130m 
of the EC Treaty" and "Article 130n of the EC 
Treaty" respectively. 
36. In the first paragraph of Article 98, the words 
"and XII" are replaced by "and Part III". 
37. Article 105 is amended as follows: 
(a) In paragraph 1, the words "VI and XII" are 
replaced by "VI, Title XI and Part III". 
(b) In the second subparagraph of paragraph 3, the 
words "of Article 206a of the EEC Treaty" are 
replaced by "of Article 188c of the EC 
Treaty". 
38. In Article 119, the words "Articles 56 to 64" 
are replaced by "Articles 56 to 64a". 
iNfflAL PROPOSAI. AMENDED PROPOSA 
39 In Article 121, the woids "and XII" are 
replaced by "and Part III". 
40. The following new Title XI is inserted: 
"Title XI 
SPECIAL PROVISIONS APPLICABLE TO 
FINANCIAL PARTICIPATION BY 
NON-MEMBER COUNTRIES AND OUTSIDE 
BODIES 
IN COMMUNITY ACTIVITIES 
SECTION I 
GENERAL PROVISIONS 
Article 124 
Financial participation by a non-member country or 
outside body in a Community activity shall require 
the prior authorization of the budgetary authority, 
given according to one of the following procedures: 
(a) in the course of the budgetary procedure if 
already provided for. In such cases, the 
Commission shall, in the preliminary draft 
budget, propose the appropriate budgetary 
structure and the headings to which the 
contribution shall be charged in the statement 
of revenue and under which the corresponding 
appropriations shall be made available in the 
statement of expenditure, in accordance with 
Article 125. For information purposes the 
remarks to these headings may indicate the 
estimated amounts; 
(b) where the request for participation is made in 
the course of a financial year, the Commission 
may, if it considers it to be in the interest of 
the Community, propose that it be authorized 
by the budgetary authority. If neither the 
Council, acting by qualified majority, nor the 
European Parliament, acting by an absolute 
majority of its members, rejects the proposal 
within a period of four weeks, it shall stand as 
approved. Article 124 
unchanged 
(a) in the course of the budgetary procedure if 
already provided for. In such cases, the 
Commission shall, in the preliminary draft 
budget, propose the appropriate budgetary 
structure and the headings to which the 
contribution shall be charged in the statement of 
revenue and under which the corresponding 
appropriations shall be made available in the 
statemem of expenditure, in accordance with 
Article 125. The amount of the contribution 
shall be shown separately, for information. 
(b) where the request for participation is made in 
the course of a financial year, the Commission 
may, if it considers it to be in the interest of the 
Community, propose that it be authorized by the 
budgetary authority. If neither the Council, 
acting by qualified majority, nor the European 
Parliament, acting by an absolute majority of its 
members, rejects the proposal within a period of 
six weeks, it shall stand as approved. 
The Commission shall present its request, with an 
estimate of any administrative costs, entailed by the 
participation of third parties. 
INITIAL PROPOSAL 19 AMENDED PROPOSAL 
Article 125 
For the purposes of implementing the budget, the 
contributions referred to in Article 124 shall lead to 
additional appropriations being made available as 
follows: 
commitment appropriations equivalent to the 
entitlement due to the Community; 
payment appropriations equivalent to the 
amounts received. 
Article 126 Article 126 
The contributions referred to in Article 124 shall 
constitute earmarked revenue in accordance with the 
second subparagraph of Article 4(2). 
All necessary accounting measures shall be taken to 
ensure the separate monitoring of the appropriations 
made available under Article 125. unchanged 
All necessary accounting measures shall be taken to 
ensure the separate monitoring of the use both of the 
revenue from these contributions and of the 
appropriations made available under Article 125. 
SECTION II 
PROVISIONS APPLICABLE TO 
PARTICIPATION 
PROVIDED FOR UNDER THE AGREEMENT 
ON THE EUROPEAN ECONOMIC AREA 
Article 127 Article 127 
The budgetary structure to cover participation by the 
EFT A States shall be as follows: unchanged 
(a) in the statement of revenue there shall be a 
heading to cover the full amount of the 
contribution of the EFTA States for the 
relevant financial year. The amount entered 
shall be "for information"; (a) in the statement of revenue there shall be a 
heading to cover the full amount of the 
contribution of the EFTA States for the relevant 
financial year. The amount shall be entered 
separately "for information"; 
INITIAL PROPOSAL 20 
(b) in the statement of expenditure 
- the remark relating to each heading covering 
Community activities involving the 
participation of the EFTA States shall 
indicate the amount of their contribution "for 
information"; 
- an annex, constituting an integral part of the 
budget, shall contain all headings relating to 
Community activities involving the 
participation of the EFTA States. 
The annex shall serve as the budgetary 
structure for making available the 
appropriations corresponding to such 
contributions by virtue of Article 128 and for 
implementing expenditure. 
Article 128 
By virtue of Article 82 of the Agreement on the 
European Economic Area, amounts relating to the 
annual participation of EFTA States - as confirmed 
to the Commission by the Joint Committee in 
conformity with Article 1(5) of Protocol 32 - shall, 
at the beginning of the financial year, give rise to 
the full entry of the corresponding appropriations for 
commitment and appropriations for payment. 
Article 129 (b) unchanged 
unchanged 
unchanged 
"The annex shall serve as and supplement the 
budgetary structure for making available the 
appropriations corresponding to such 
contributions by virtue of Article 128 and for 
implementing expenditure. " 
1. If in the course of a financial year the 
appropriations for budget headings involving the 
participation of the EFTA States are increased by 
amending or supplementary budgets or by transfers, 
without it being possible for the EFTA States, in the 
course of that financial year, to adjust their 
contribution accordingly in line with the 
proportionality factor provided for in Article 82 of 
the EEA Agreement, the Commission shall be 
authorized to provide provisional advance financing 
from its cash resources for the share of the EFTA 
States in order to permit balanced implementation of 
expenditure relating to the relevant activity. 
2. The advance financing shall be regularized as 
soon as possible in the budget for the following 
financial year or, at the latest, for the second 
following financial year. 
N INITIAL PROPOSAL 21 AMENDED PROPOSAL 
Article 130 
By way of derogation from Article 58(2), as regards 
the rules governing tendering procedures, invitations 
to tender shall be published throughout all the 
Member States and all the EFTA States whenever 
the contract entails expenditure from a budget 
heading involving participation of the EFTA States. 
Article 131 
1. The financial contributions of EFTA States 
shall constitute earmarked revenue within the 
meaning of the third indent of the second 
subparagraph of Article 4(2). All appropriate 
accounting measures shall accordingly be taken to 
\ ensure the separate monitoring both of revenue 
) flowing from these contributions and of the 
corresponding appropriations. 
2. Point 4 of Article 7 and Article 26(9) shall 
apply to the contributions referred to in paragraph 1. 
3. In the quarterly reports provided for in Article 
34, the Commission shall give clear details of the 
state of execution of both the revenue and the 
expenditure corresponding to participation by the 
EFTA States. 
Article 132 
The revenue and expenditure corresponding to 
participation by the EFTA States shall be verified in 
compliance with the provisions of the EC Treaty of 
this Regulation and of regulations applicable to 
matters covered by Articles 78 of the Agreement on 
the European Economic Area and Protocol 31 
thereto." 
41. Title XI is renumbered Title XII. 
42. Article 124 is renumbered Article 133. 
INITIAL PROPOSAL 22 AMENDED PROPOSAI 
43. The following Part II is inserted: 
"Part II 
SPECIAL PROVISIONS APPLICABLE TO 
BORROWING AND LENDING 
OPERATIONS BY THE EUROPEAN 
COMMUNITIES 
Article 134 
The Commission shall, together with the preliminary 
draft budget provided for in Article 13, present a 
document giving details of all borrowing and lending 
operations. 
Article 135 
The document referred to in Article 134 shall 
contain: 
a detailed statement on borrowing and lending 
policy; 
as an indication: 
- current capital operations and current debt 
management; 
- the capital operations and debt management 
for the financial year in question; 
an estimate of the risk borne by the general 
budget in terms of capital and interest for 
future budget years. 
Article 136 
In the course of the budgetary procedure the Council 
and European Parliament shall give an assessment of 
borrowing and lending operations, in particular in 
the light of the provisions of the basic acts for each 
of the instruments concerned. 
The Commission shall take that assessment fully into 
account. 
Article 137 
The Commission shall report to the Council and the 
European Parliament twice a year on the position 
regarding budget guarantees and risks relating 
thereto. Article 134 
Does not apply to the English version. 
This information shall be sent at the same time to the 
Court of Auditors. 
INITIAL PROPOSAL 23 AMENDED PROPOSAL 
Article 138 
The expenditure and revenue account and financial 
balance sheet provided for in Articles 78 and 81 
shall give details of capital operations and debt 
management indicating: 
the amount of loans granted; 
the amount of the repayments made on 
borrowings contracted and of the charges on 
such borrowings; 
the amount of borrowings contracted; 
the amount of repayments of capital and 
payments of interest made on loans granted. 
Article 139 "Article 139 
Borrowing terms shall be negotiated in the best 
interests of the Community, in the light of conditions 
on the capital market, and shall respect constraints 
imposed as to the duration and other terms of the 
corresponding requests for loans. Borrowing terms shall be negotiated in the best 
financial interests of the Community, in the light 
of conditions on the capital market, and shall 
respect constraints imposed as to the duration 
and other terms of the corresponding requests 
for loans." 
Article 140 
The financial controller of the Commission 
shall be responsible for checking the execution 
of borrowing and lending operations in 
accordance with the powers conferred on the 
Commission in relation to each instrument. To 
this end, he shall check: 
- that operations are in conformity with the 
basic rules; 
- the assessment of risks; 
where appropriate, the calculation of interest 
rate subsidies where they are covered by the 
general budget; 
compliance with the principle of sound 
financial management. 
INITIAL PROPOSAL 24 AMENDED PROPOSAL 
2. To enable him to exercise his functions to the 
full, the financial controller of the 
Commission: 
shall have access either manually or by 
computer to all data, documents, ledgers, 
registers, correspondence, statements of 
account or computer files relating to 
borrowing and lending operations; 
shall be authorized to conduct or take part in 
on-the-spot checks." 
44. Title XII is renumbered Part III and entitled 
"Transitional and financial provisions". 
45. Article 125 is renumbered Article 141. The following Article 140a is added: 
"The Court of Auditors shall examine the legality, 
regularity and sound financial management of 
borrowing and lending operations. The Commission 
shall provide the Court of Auditors, at its request, 
with any information the latter considers necessary." 
Article 125 is renumbered Article 141 and is replaced 
by the following: 
"Article 141 
The European Parliament and the Council shall be 
empowered to require any information or explanations 
regarding budgetary matters and borrowing and 
lending policy within their competence. 
The Council may be assisted in its task by a 
committee set up within the framework of the 
Permanent Representatives Committee. " 
46. Article 126 is renumbered Article 142. 
References to this Article in Articles 22, 23, 
24, 25, 28, 29, 36, 37, 38, 41, 45, 46, 49, 53, 
54, 65, 66, 70, 75, 94, 97 and 123 are adapted 
accordingly. 
47. Article 127 is renumbered Article 143. 
INITIAL PROPOSAL 25 AMENDED PROPOSAL 
48. Article 128 is renumbered Article 144 and Article 128 is deleted, 
amended as follows: 
(a) In the introductory phrase, "Article 126" is 
replaced by "Article 142" and "Articles 58,60, 
62, 63" by "Articles 59, 60, 63, 64a"; 
(b) in the first indent, "Article 58" is replaced by 
"Article 59" and "by private treaty" by 
"without a tendering procedure"; 
(c) the second indent becomes the third indent and 
"Article 60" is replaced by "Article 63"; 
(d) the third indent becomes the fourth indent, 
"Article 62" is replaced by "Article 64a" and 
the words "for works contracts" are added after 
the word "compulsory security"; 
(e) the fourth indent becomes the second indent 
and "Article 63" is replaced by "Article 60"; 
(t) in the first subindent of the fifth indent, the 
words "by private treaty" are replaced by 
"without a tendering procedure"; 
(g) in the last subindent of the fifth indent, 
"Article 58" is replaced by "Article 59". 
49. Article 129 is renumbered Article 145. Article 129 is renumbered Article 144. 
50. Article 130 is renumbered Article 146. Article 130 is renumbered Article 145. 
51. Article 131 is renumbered Article 147. Article 131 is renumbered Article 146. 
INITIAL PROPOSAL 26 AMENDED PROPOSAL 
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 
- ^^ -
iSSN 0254-1475 
COM (94) 14 final 
DOCUMENTS 
EN oi 
Catalogue number : CB-CO-94-015-EN-C 
ISBN 92-77-64557-1 
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