OPINION No 5/97 on a proposal for a Council Regulation (EC, Euratom) amending Council Regulation (EEC, Euratom) No 1552/89 implementing Council Decision 94/728/EC, Euratom on the system of the European Communities' own resources (98/C 15/01)

THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES,

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 Council Decision 94/728/EC, Euratom of 31 October 1994 on the system of the Communities' own resources (1),

Having regard to Council Regulation (EEC, Euratom) No 1552/89 of 29 May 1989 implementing Decision 88/376/EEC, Euratom on the system of the Communities' own resources (2), as last amended by Council Regulation (Euratom, EC) No 1355/96 of 8 July 1996 (3),

Having regard to the Commission proposal of 3 July 1997 (4),

Having regard to the Council Decision of 17 July 1997 to consult the Court of Auditors on this proposal, received by the Court on 25 July 1997, in accordance with Article 209 of the Treaty,

Having regard to Opinion No 1/93 of the Court of Auditors of 1 April 1993 (5),

Whereas the Commission proposal reiterates the proposals for amendments to be made to Article 2 (6) and aims to introduce amendments to Article 17 in order to take account of the observations which the Court has presented in its annual reports, in particular the Annual Report concerning the financial year 1995 (7),

HAS ADOPTED THE FOLLOWING OPINION:

FIRST PART

Preliminary observation

1. The Commission proposal refers to phase III of the SEM 2000 initiative (Sound and efficient management), approved by the Madrid European Council of 15 and 16 December 1995. Although this proposal aims to strengthen the regulatory framework governing the collection of own resources, it also has the effect of increasing the complexity of that framework. In order to make the system of own resources more transparent, an overall recasting of the applicable texts needs to be considered so that they become easier to read and can be more consistently applied. Indeed, as last amended, the Regulation is a mixture of provisions of principle and detailed implementing procedures.

General observations

Article 2 (1)

2. The Court would like to point out that, in its Opinion 1/93 of 1 April 1993, it gave its opinion on a Commission proposal concerning an amendment to Article 2; that amendment was very similar in content to the one in question here, but it was not adopted by the legislator at the time of the most recent amendment to Regulation (EEC, Euratom) No 1552/89 on 8 July 1996 (8).

3. However, the proposal in question is different from the previous proposal for an amendment in that it is no longer targeted simply at accounting transparency but focuses on two situations in which the financial liability of the Member States would henceforth come into play, i.e. it has become impossible to establish the own resources because of an error on the part of the customs authorities,

(a) where the error on the part of the authorities could not reasonably have been detected by the person liable for payment, the latter for his part having acted in good faith and complied with all the provisions laid down by the legislation in force as regards the customs declaration;

(b) where, as a result of the error on the part of the authorities, the debtor is not informed of the amount of duty within the three-year period provided for under Article 221 of the Community Customs Code.

4. The Court takes cognisance of this move by the Commission but notes that the proposed text is not restricted to the cases referred to in the explanatory memorandum (paragraph 2 - proposed amendment of Article 2 - subparagraphs 1 and 2). It suggests that the text be amended accordingly.

5. At present, the customs authorities are released from the obligation to enter in the accounts entitlements whose amount is less than the threshold of ECU 10 set in accordance with Article 217(1)(c) of Regulation (EEC) No 2913/92 laying down the Community Customs Code (9). In its explanatory memorandum, the Commission does not put forward any arguments justifying a derogation from this provision. Consequently, the Court takes the view that the proposal to increase this proposed threshold to ECU 2 000 is not justified.

6. The Court notes that the proposed amendments do not lay down either the dates or the time limits to be taken into consideration for the implementation of Article 7(2) of Regulation (EEC, Euratom) No 1552/89.

Article 17(2) to (5)

7. In its Annual Report concerning the financial year 1995 the Court concluded that the management of the own resources entered in the separate account, known as the B account, must be made more transparent by publishing in an annex to the annual balance sheet the situation in each Member State in respect of the debts to the Community which it has not been possible to recover at the end of a specific period.

8. At the same time as fixing the period in question at five years, the Commission goes further by proposing to deduct from the separate account the amounts which have not been recovered by the end of the five-year period.

9. In the Court's opinion, the Commission must be kept informed of amounts in excess of ECU 10 000 that are written off by the Member States, in order to enable it to decide on whether these operations are acceptable and so as to ensure that the management of traditional own resources is transparent.

10. The Court considers that there are about 10 declared cases per year of debts being written off in the European Union in application of the existing regulations. The introduction of the five-year period will probably cause the clearance of a number of cases during the first year of application. In the end, however, the number of cases of amounts written off should not increase substantially. For this reason, the Court considers that it is premature for the threshold as of which the procedure of notification and approval by the Commission comes into effect to be raised from ECU 10 000 to 50 000. Furthermore, the Court considers it preferable to retain the parallelism between the threshold stipulated for the declaration of debts written off and that stipulated for the notification to the Commission of cases of fraud and irregularities (Article 6 of Regulation (EEC, Euratom) No 1552/89).

11. Pursuant to the Commission proposal, the Member States would automatically be released from the obligation of making available amounts to which a writing-off procedure had been applied and on which the Commission had not made a decision within six months. The Court considers that, where these are debts relating to significant amounts of own resources, for example, amounts higher than ECU 100 000, such a system of tacit approval of writing-off operations would be incompatible with the objectives of sound financial management and protection of the Union's financial interests and the responsibilities which the Treaty and the Financial Regulation allocate to the Commission in respect of Community revenue. The Court considers that, in the case of significant amounts, the absence of the Commission's formal approval within a period of six months means that the exemption from making the amounts available has been refused.

12. Furthermore, the actual recovery of entitlements which have been exempted from being made available should be treated as a new establishment of entitlements. These entitlements should be entered in the account referred to in Article 6(2)(a) and made available to the Commission pursuant to the conditions provided for in the current Regulation. This is because entitlements which are in the end recovered even after having been exempted from being made available do not lose their status as own resources, otherwise this would constitute an infringement of Article 2 of the Decision of 31 October 1994 on the system of own resources (10). The latter provision, which takes precedence over Regulation (EEC, Euratom) No 1552/89, does not provide for any exception to the Community nature of the entitlements listed therein.

SECOND PART

In the table shown below the Court sets out in summary form the observations referred to earlier and additional observations which it has deemed necessary in order to avoid certain ambiguities contained in the present text.

This opinion was adopted by the Court of Auditors in Luxembourg at its meeting of 25 September 1997.

For the Court of Auditors

Bernhard FRIEDMANN

President

(1) OJ L 293, 12. 11. 1994, p. 9.

(2) OJ L 155, 7. 6. 1989, p. 1.

(3) OJ L 175, 13. 7. 1996, p. 3.

(4) Doc COM(97) 343 final.

(5) OJ C 170, 21. 6. 1993.

(6) Doc COM(92) 519 final.

(7) Annual Report of the Court of Auditors concerning the financial year 1995, paragraph 1.16 (OJ C 340, 12. 11. 1996).

(8) Council Regulation (Euratom, EC) No 1355/96 of 8 July 1996 amending Regulation (EEC, Euratom) No 1552/89 implementing Decision 88/376/EEC, Euratom, on the system of the Communities' own resources (OJ L 175, 13. 7. 1996, p. 3).

(9) OJ L 302, 19. 10. 1992, p. 1.

(10) Council Decision 94/728/EC, Euratom, of 31 October 1994 on the system of the European Communities' own resources (OJ L 293, 12. 11. 1994, p. 9).

OPINION OF THE COURT OF AUDITORS ON A PROPOSAL FOR A COUNCIL REGULATION (EC, EURATOM) AMENDING COUNCIL REGULATION (EEC, EURATOM) NO 1552/89 IMPLEMENTING DECISION 94/728/EC, EURATOM ON THE SYSTEM OF THE COMMUNITIES' OWN RESOURCES

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