14. 4. 88 Official Journal of the European Communities No C 99/9 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Regulation (ECSC, EEC, Euratom) amending the Financial Regulation 
of 21 December 1977 applicable to the general budget of the European Communities 
COM(88) 148 final 
(Submitted by the Commission to the Council on 21 March 1988) 
(88/C 99/07) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
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 
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 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 conciliation provided for in the Joint 
Declaration of 4 March 1975 of the European 
Parliament, the Council and the Commission (') took 
place in a Conciliation Committee; 
Whereas the Financial Regulation of 21 December 
1977 (2), as last amended by Regulation (ECSC, EEC, 
Euratom), must be amended to give effect to the 
conclusions of the Brussels European Council of 11 to 13 
February 1988 concerning stricter annual management of 
appropriations, the financing arrangements for the 
common agricultural policy and the possibility of 
entering a 'negative reserve' when the budget is estab­
lished; 
Whereas, in the interests of improved budgetary 
management and greater transparency of appropriations, 
differentiated appropriations should no longer be carried 
over automatically; whereas, however, the Commission 
should be empowered to effect some carryovers on the 
basis of specific criteria; whereas certain appropriations 
(») OJ No C 89, 22. 4. 1975, p. 1. 
(2) OJ No L 356, 31. 12. 1977, p. 1. which have been released from commitment may be 
made available again only on the basis of specific criteria 
and only after a Commission decision; 
Whereas the Financial Regulation must reflect the 
arrangements for financing the Guarantee Section of the 
European Agricultural Guidance and Guarantee Fund to 
take account of the amendments to Council Regulation 
(EEC) No 729/70 O, as last amended by Regu­
lation . . .; 
Whereas an appropriate provision must be inserted to 
allow a negative reserve to be entered in the budget to 
cover the discrepancies which inevitably arise during 
implementation between the total appropriations auth­
orized and the total appropriations used, 
HAS ADOPTED THIS REGULATION: 
Article 1 
The Financial Regulation of 21 December 1977 is hereby 
amended as follows: 
1. In Article 1, the following paragraph 3a is inserted: 
'3 a. The legal commitments entered into for 
measures extending over more than one 
financial year shall contain a time limit for 
implementation which must be specified to the 
recipient in due form when the aid is granted.' 
2. In Article 6, paragraph 2 is replaced by the 
following: 
'2. In the case of budget headings where a 
distinction is made between commitment appropri­
ations and payment appropriations, commitment 
appropriations and payment appropriations which 
(») OJ No L 94, 28. 4. 1970, p. 13. 
No C 99/10 Official Journal of the European Communities 14. 4. 88 
have not been used at the end of the financial year 
for which they were entered may, by decision of the 
Commission taken not later than 15 February, be 
carried over to the next financial year only, in 
accordance with the following criteria: 
(a) in the case of commitment appropriations: 
— amounts which relate to operations for which 
preliminaries have been virtually completed 
at 31 December but for which accounting 
commitments have not yet been made: these 
amounts must in principle be committed by 
31 March of the following year, 
— amounts which are necessary when the 
Council has adopted a basic instrument 
towards the end of the financial year and the 
Commission has been unable to commit the 
appropriations provided for this purpose in 
the budget by 31 December; 
(b) in the case of payment appropriations: 
— amounts needed to cover existing 
commitments or relating to commitment 
appropriations carried over, when the appro­
priations provided for the headings 
concerned in the budget for the following 
financial year do not cover requirements: in 
exercising its powers to implement the 
budget the Commission shall, depending on 
management requirements, endeavour to use 
first the appropriations authorized for the 
current financial year and not use the appro­
priations carried over until the former are 
exhausted. 
The Commission shall inform the budgetary 
authority of the decision taken and state the reasons 
for carrying over the appropriations. 
3. In Article 6, paragraph 6 is replaced by the 
following: 
'6. When commitments in budget headings where 
there is a distinction between commitment appropri­
ations and payment appropriations are cancelled in 
any financial year after that in which the 
commitment appropriations were entered in the 
budget, the appropriations concerned shall, as a rule, 
lapse. 
However, the commitment appropriation corre­
sponding to the amount of the commitment 
cancelled may, exceptionally, be made available 
again, in accordance with the specific criteria laid 
down in the implementing measures provided for in 
Article 106, when it is essential to carry out the 
programme originally planned, unless the budget for 
the current financial year contains funds available 
for this purpose. 
At the beginning of each financial year, the 
Commission shall therefore examine the cancel­
lations which have taken place in the previous financial year and assess, in the light of 
requirements, the need for making the appropri­
ations available again. 
The Commission shall take this decision by 15 
February of each financial year. 
The Commission shall inform the budgetary 
authority of the decision taken and state the reasons 
for maintaining these appropriations.' 
4. In Article 15, the following paragraph 4a is inserted: 
'4 a. The chapter for provisional appropriations in 
the Commission Section may include a negative 
reserve limited to a maximum of 200 million 
ECU. 
This reserve may include both appropriations 
for commitments and appropriations for 
payments. 
This reserve shall be drawn upon by means of 
transfer in accordance with the procedure laid 
down in Article 21.' 
5. In Article 73 (2), the final indent is replaced by the 
following: 
'— appropriations carried over under Articles 6 and 
88;' 
6. In Article 73 (3), the fourth and fifth indents are 
replaced by the following: 
'— the commitment appropriations and payment 
appropriations carried over under Articles 6 and 
88;' 
7. In Article 73 (4), the first indent is replaced by the 
following: 
'— the amount of appropriations carried over, a 
distinction being made between commitment 
appropriations, payment appropriations and 
non-differentiated appropriations;' 
8. In Article 73 (4), the fifth indent is deleted. 
9. In Article 88 (3), the final subparagraph is replaced 
by the following: 
'The payment appropriations represent the upper 
limit of expenditure which may be paid or auth­
orized for payment during each financial year to 
cover commitments entered into during the current 
year or earlier financial years.' 
10. In Article 88, paragraph 4 is replaced by the 
following: 
'4. The commitment and payment appropriations 
for this sector shall, as a rule, be carried over 
pursuant to Article 6 (2) of this Regulation in view 
of the special requirements of these activities, in 
order to: 
H. 4. 88 Official Journal of the European Communities No C 99/11 
— maintain the continuity of budgetary execution 
from one year to the next, 
— safeguard the budgetary allocations which enable 
multiannual programme decisions to be 
respected.' 
11. Article 98 is replaced by the following: 
'Article 98 
Expenditure shall be booked to the accounts for a 
financial year on the basis of the advances paid by 
the Commission to the Member States during that 
year in accordance with Article 5 of Regulation 
(EEC) No 729/70, provided that notification of 
their commitment and authorization have reached 
the accounting officer not later than 31 January of 
the following year.' 
12. Article 99 is replaced by the following: 
'Article 99 
1. The object of the clearance of the accounts 
provided for in Article 5 (2) (b) of Regulation (EEC) 
No 729/70 shall be to determine the amount of 
expenditure effected in each Member State during 
the financial year in question which may be 
recognized as being chargeable to the EAGGF. 
Not later than 1 June of the year following the 
financial year in question Member States shall, for 
the purpose of clearance of the accounts, send to the 
Commission summary annual accounts for the 
financial year ended, amending where necessary the 
monthly accounts. The summary accounts shall be 
accompanied by the appropriate reports drawn up by 
the competent audit and control departments and 
dealing with the expenditure referred to in the 
Articles relating to expenditure covered by the 
clearance. 
If the accounts of a paying agency or department 
have not reached the Commission by 1 June, the 
Commission may clear the accounts of that agency 
or department solely on the basis of the financial statements referred to in Article 5 (1) (a) of Regu­
lation (EEC) No 729/70 as described by imple­
menting measures adopted pursuant to Article 5 (3) 
of that Regulation. 
2. On the basis of the accounts or statements 
mentioned in paragraph 1 and of the findings of 
audits of documents and on-the-spot checks under 
Article 9 of Regulation (EEC) No 729/70, the 
Commission, after consulting the Fund Committee 
referred to in Article 13 of that Regulation, shall 
clear the accounts not later than 15 September of the 
second year following the financial year in question. 
3. The Commission shall transmit the clearance 
decisions to the Member States and publish them in 
the Official Journal of the European Communities. 
4. The outcome of the clearance decision, i.e. any 
discrepancy which may exist between the total 
expenditure booked to the accounts for a financial 
year pursuant to Articles 97 and 98 and the total 
expenditure recognized as allowable by the 
Commission when clearing the accounts shall be 
booked, under a single article, as additional expen­
diture, or a reduction in expenditure.' 
13. In Article 100 (1), '1 April of the following financial 
year' is replaced by '1 February of the following 
financial year'. 
14. In the second subparagraph of Article 101 (1) and 
the first subparagraph of Article 101 (2) '31 March 
of the following financial year' is replaced by '31 
January of the following financial year'. 
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 .. . 1988. 
It shall be binding in its entirety and directly applicable 
in all Member States.