5.3.94 OfficialJournaloftheEuropeanCommunities NoC68/17
AmendedproposalforaCouncilRegulation(ECSC,EC,Euratom)establishingaGuarantee
Fundforexternaloperations(x)
(94/C68/08)
COM(93)706final
(SubmittetbytheCommissionpursuanttoArticle189A(2)oftheECTreatyandArticle119(2)
oftheEAECTreatyon4February1994)
oOJNoC68,11.3.1993,p.10.
InthelightoftheopinionsoftheEuropeanParliamentandtheCourtofAuditors,the
Commissionispresentingthefollowingproposal:
ORIGINAL PROPOSAL AMENDED PROPOSAL
THECOUNCILOFTHEEUROPEANUNION,
HavingregardtotheTreatyestablishingtheEuropean
Community,andinparticularArticle235thereof,
HavingregardtotheTreatyestablishingtheEuropean
AtomicEnergyCommunity ,andinparticularArticle203
thereof,
HavingregardtotheproposalfromtheCommission ,
HavingregardtotheopinionoftheEuropean
Parliament,
HavingregardtotheopinionoftheCourtofAuditors.
Whereastheinstitutionshaveagreed,intheInterinstitu­
tionalAgreementof29October1993,toenterinthe
generalbudgetareserveforloansandloanguarantees :WhereastheEuropeanCouncil,meetinginEdinburgh
on11and12December,agreedthataGuaranteeFund
shouldbeestablishedtocoverloanguaranteesto
non-membercountries;
Whereasthegeneralbudgetisexposedtoincreased
financialriskasaresultoftheguaranteescoveringloans
tonon-membercountries;
Whereasmechanismscurrentlyexistforhonouringguar­
anteeswhentheyareactivated,inparticularbydrawing
provisionallyoncashresources,asprovidedforin
Article12ofCouncilRegulation (EEC,Euratom)
No1552/89implementing Decision88/376/EEC,
EuratomonthesystemoftheCommunity'sown
resources(*),aslastamendedbyRegulation (EEC,
Euratom)No...;
OOJNoL155,7.6.1989,p.1.

NoC68/18 OfficialJournaloftheEuropeanCommunities 5.3.94
ORIGINALPROPOSAL AMENDED PROPOSAL
Whereasitisnecessaryforthesemechanismstobe
reinforcedbymakingprovisionsfottheriskofdefault;
Whereasitispossibletomeetthisneedbythe
establishmentofaGuaranteeFundwhichmaybedrawn
ontopaytheCommunity'screditorsdirect;
WhereastheGuaranteeFundshouldbeconstitutedby
thegradualpaymentofresources;whereastheFundwill
subsequently alsoreceiveinterestonitsinvested
resourcesandlaterepaymentsbydefaultingdebtorsafter
theFundhaspaidcreditors;
Whereas,byreferencetothepracticeofinternational
financialinstitutions,aratioof10%betweenthe
GuaranteeFund'sresourcesandguaranteedliabilitiesin
principalwouldseemadequate;
WhereasinitialpaymentstotheGuaranteeFundequalto
14%oftheamountofeachoperationwouldseem
appropriatetoattainthistargetamount;
Whereas,oncethisamountisattained,paymentstothe
GuaranteeFundcouldthenbelimitedto10%ofthe
amountofnewoperations;whereasiftheGuarantee
Fundexceedsthisamount,thesurpluswillbepaidback
tothebudget;
WhereasmanagementoftheGuaranteeFundbythe
Commissionwillensureeffectiveandrapidimplemen­
tation;
Whereas,toensuremaximumtransparencyforoper­
ationsrelatingtotheFund,paymentsfromtheFundand
laterepaymentsreceivedfromdefaultingdebtorsshould
berecordedinthegeneralbudgettoenabletheCourtof
Auditorstoconductitscontrols;
WhereastheTreatiesdonotprovideanypowersother
thanthoseunderArticle235andArticle203,
respectively,fortheadoptionofthisRegulation,
HASADOPTEDTHISREGULATION :
Article1
AGuaranteeFund,hereinafterreferredtoas'theFund',
shallbeestablished,thepurposeofwhichshallbeto
repaytheCommunity'screditorsdirectintheeventof
defaultbythebeneficiaryofalendingoperation
guaranteedbythegeneralbudget.

5.3.94 OfficialJournaloftheEuropeanCommunities NoC68/19
ORIGINALPROPOSAL AMENDED PROPOSAL
Theoperationsreferredtointhefirstsubparagraphshall
becoveredbytheFundonlyifthebeneficiariesare
non-membercountriesorapersonnotresidentinthe
Community .
Article2
TheFundshallbeendowed'by:
—paymentsfromthegeneralbudgetcorresponding toa
setpercentageofeachoperationforanon-member
country,decidedonandcommittedbythe
Communityandguaranteedbythebudget,—paymentsfromthegeneralbudgetcorrespondingtoa
setpercentageofeachoperationforanon-member
country,decidedonandcommittedbythe
CommunityandguaranteedbytheCommunities
—interestonFundresourcesinvested,
—amountsrecoveredfromdefaultingdebtorswherethe
Fundhasalreadyhonouredtheguarantee.
Article3
TheFundshallrisetoanappropriatelevel,knownas
'thetargetamount',determinedbyreferenceto
guaranteedliabilities.
Thetargetamountshallbe10%oftheCommunity's
outstandingliabilitiesinprincipalarisingfromloansand
loanguaranteesgrantedbytheCommunity .
If,attheendofayear,theFundexceedsthisamount,
thesurplusshallbepaidbacktoaspecialheadinginthe
statementofrevenueinthebudget.
Article4
Thepaymentsprovidedforunderthefirstindentof
Article2:
—shallbeequivalentto14%ofthevalueofthe
operationuntiltheFundreachesitstargetamount,
—shallbereducedto10%whenthetargetamountis
reached.
Article5
If,asaresultoftheactivationofguarantees,resources
intheFundfallbelow75%ofthetargetamount,the
rateofprovisioningonnewoperationsshallberaisedto
15%untilthetargetamounthasbeenreached.
IfaguaranteeisactivatedbeforetheFundreachesits
targetamountandtheresourcesintheFundfallbelow
75%ofthetargetamountasaresult,therateofprovi­
sioningshallberaisedto15%untiltheamountdrawn
hasbeenfullyrestored.

NoC68/20 OfficialJournaloftheEuropeanCommunities 5.3.94
ORIGINALPROPOSAL AMENDED PROPOSAL
If,asaresultoftheactivationofguarantees,the
resourcesintheFundfallbelow50%ofthetarget
amount,thebudgetaryauthority,actingonaproposal
fromtheCommission ,shalldecideonmeasuresto
replenishtheFund.
Article6
TheFundshallbemanagedbytheCommission ,which
shalladoptrulessatisfyingtheprinciplesofprudenceand
soundfinancialmanagement .
Article7
TheCommissionshall,bynolaterthanthefollowing31
March,sendtotheEuropeanParliament,theCouncil
andtheCourtofAuditorsanannualreportonthe
situationoftheGuaranteeFundandthemanagement
thereofinthepreviousyear.
Article8
Therevenueandexpenditureaccountandthebalance
sheetrelatingtotheFundshallbeattachedtothe
Communities'revenueandexpenditureaccountand
balancesheet.
Article9
ThisRegulationshallenterintoforceontheseventhday
followingitspublicationintheOfficialJournalofthe
EuropeanCommunities .
ThisRegulationshallbebindinginitsentiretyand
directlyapplicableinallMemberStates.