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COM(76)248
Vol.1976/0081

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(76)248final.
\
Brussels,2ndJune1976.
/
Proposalfora;
COUNCILREGULATION(EEC,EURATOM,ECSC),
\
amendingRegulation Ko2/71Implementing ;theDecisionof21April ■
1970onthereplacement offinancialcontributions fromMembersStates
bytheCommunities' ownresources
(submittedtotheCouncilbytheCommission)
/
1
V
1
\
C0r:(76)24Sfinal.
ι .

EXPLANATORY MEMORANDPM
1.Council Regulation (EEC ,Euratom ,ECSC )No2/71implementing theDecision
of21April 1970 on "thereplacement offinancial contributions from the
Member States bytheCommunities' ownresources wasadopted on2January 1971 «
Thefinancial year 1978 marks theentry into full operation oftheown
resources system asprovided for intheDecision of21April 1970 *Mainly
forthis reason ,Regulation Ho2/7Imust nowbemodified oramended .
2.Theprinciple ofthefinancial autonomy oftheCommunities isoneofthe
fundamental elements oftheownresources system .This system ,which was
incorporated inthebudget bytheDecision of21April 1970^twillbeinfull
operation asfrom 1978 *incorporated inthebudget bytheDecision of21April 1970 •will beinfull
Prom that year ,theprinciple offinancial autonomy will come into full
operation ,aswasrepeatedly stated during thenegotiations onthe
replacement ofcontributions from theMember States bytheCommunities *own
resources ,andreferred toindebates oftheEuropean Parliament .
Thefull application oftheprinciple means that Regulation No2/7Iandthe
Financial Regulation itself must beamended .
1
Counoil decision of -21April 1970 onthereplacement offinancial contributions
from theMember States bytheCommunities *ownresources (70/243/ECSC/EEC/Euratom )
O.J. ECL94,28april 1970 ,p.19

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TheCommunity will have full disposal ofitsownresources ,which will be
assigned toitonthebasis ofthenormal rate ofestablishment ofamounts ,
inaccordance with current regulations whereby theownresources belong to
theCommunity assoon asthey have been established .
Moreover ,itisexpressly stated inArticle 4(5)oftheDecision of
21April I97O :"anysurplus oftheCommunities' ownresources over andabove
theactual expenditure during afinancial year shall becarried over tothe
following ^financial year ".
TheCommission 'sproposal simply gives practical effect tothis Article by
explicitly stating that anysurplus remains available totheCommunity .Such
surplus will beused tohonour commitments entered into during thefinancial year
during which that surplus hasarisen andforwhich payment will notfall due
until later .That part ofthesurplus which exceeds theamount required tomeet
these obligations will make foragreater flexibility intheevent of
unforeseen contingencies ,andwould make iteasier forthebudgetary authority
toadopt –ifthis were necessary –asupplementary budget which ,Tinder these
conditions ,could then befinanced outofexisting resources .
This autonomy isofcourse limited :first ofallbythemaximum rate of1%
oftheuniform basis ofassessment ofVAT ,theamount corresponding towhich
maybemade available totheCommunities bythebudgetary authority ;secondly
because such autonomy would apply only within theframework oftheCommunity
Budget ,which incorporates allrevenue andallexpenditure ;andthirdly
because itissubject tocompliance with theTreaties andwith therequirements
ofsound financial management andbecause all actions curesubject tothe
internal andexternal financial controls stipulated .
Theapplication oftheprinciple offinancial autonomy makes itnecessary to
introduce into theFinancial Regulation anewbudget concept forrevenue ,in
that allrevenue collected inonefinancial year
istobecredited under that year ,irrespective ofthedate ofestablishment .
This newbudget concept inrespect ofrevenue will permit continuous
monitoring ofthevolume ofrevenue compared with total expenditure .

3.Furthermore ,Title IIofRegulation No2/71–Provisions formaking
available andpaying over theCommunities *ownresources -has "been
supplemented byprovisions setting outtheprocedures forpaying over the
GUPcontributions referred toinArticle 4(2)and (3)oftheDecision of
21April 1970 »In "thevery unlikely event ofcertain Member States notyet
applying theSixth Directive onVATin1978 ,itisproposed toclass
GUPpayments with ownresources .TheParliament and several Member States
soconsider them inpractice ,pending assignment tothebudget oftherevenue
from VAT .
4.Theforegoing points together with theapplication oftheEuropean unit
ofaccount tothebudget make itnecessary toamend Title VoftheRegulation ,
–Procedure forapplication ofArticle 4(2),(3)and (4)oftheDecision of
21April 1970 -asregards thecalculation oftheGUP .These amendments are
intended tobring uptodate thecalculation ,which will bebased onthedata
fortheyear preceding that during which thepreliminary draft budget is
drawn up,andthevalue oftheGUPinEUAwill becalculated byapplying an
average rate fortheEUAoftheyear taken into consideration forcalculating
the GUP .
5.Fortheoriginal Member States thetransitional period ends on
31December 1977 *From that date the "relative shares "system will no
longer beinforce .This advance into thedefinitive system means that
Title IVofRegulation No2/7I-Procedure forapplication ofArticle 3(3)
andArticle 4(l)oftheDecision of21April 1970 -must bedeleted .
However ,Article 131oftheActofAccession provides that forthe
newMember States ,thetransitional period will runfortwomore years# For
this reason ithasbeen necessary tointroduce into Regulation Kb2/7Ia
particular provision forapplying this Article inrespect ofthenew
Member States .

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6.Title III–Provisions concerning measures ofcontrol -has "been modified
totake account oftheprovisions oftheTreaty of22July 1975 »which changed
thedistribution ofbudgetary powers among theInstitutions ~
and established aEuropean Court ofAuditors .Inter alia theTreaty
provides that theCourt takes theplace oftheAudit Board .Allthe
provisions relating tothepowers andjurisdiction oftheAudit Board which
arenotinconsistent with theTreaty of22July 1975 will henceforth apply to
theCourt ofAuditors ,pending theformulation ofamore detailed andspecific
setofrules after consulting theCourt once ithasbeen setup.Allthose
amendments relating totheCourt ofAuditors which derive from theTreaty of
22July 1975 will apply only when that Treaty hascome into force and ,as
regards thedefining ofthepowers oftheCourt ofAuditors ,when subsequent
amendment hasbeen made totheFinancial Regulation .
7.TheCommission proposes toputforward induecourse theprovisions
which will become necessary when theuniform basis ofassessment forVAT
provided for intheSixth Directive comes into force .

COUHCILREGOLATION(ESC.Euratom.ECSCV
AmendingRegulation No2/71implementing theDecisionof
21April1970onthereplacementoffinancialcontributions fromMemberStates
bytheCommunities *ownresources;
THECOUNCILOFTHEEUROPEANCOMMUNITIES,
HavingregardtotheTreatyestablishingtheEuropeanCoalandSteelCommunity,,
andinparticularArticle78fthereof;
HavingregardtotheTreatyestablishingtheEuropeanEconomicCommunity,and
inparticularArticle209thereof;
HavingregardtotheTreatyestablishingtheEuropeanAtomicEnergyCommunity,
andinparticularArticle183thereof;.... . '
HavingregardtotheTreatyestablishing aSingleCouncilandaSingleCommission
_oftheEuropeanCommunities ,andinparticularArticle20thereofs
HavingregardtotheCouncilDecisionof21April1970on"thereplacementoffinancial
contributionsfromMemberStatesbytheCommunities' ownresources^"andin
particularArticle6(2)thereof;
HavingregardtotheproposalfromtheCommission;
HavingregardtotheOpinionoftheEuropeanParliament(••••••••••)•
WhereastheprincipleofthefinancialautonomyoftheCommunitiesis
thefundamentalelementoftheystemofownresources,andWhereasthissystem
willbefullyappliedasfrom1978;
Ylhereasthefullapplicationofthisprinciplenecessitates amendmenttoCouncil
RegulationNo2/71^andatthesametimeamendmenttotheFinancialRegulation
of25April1973applicationtothegeneralbudgetoftheEuropeanCommunities^;
OJNoL94#28April1970,p.19-
CouncilRegulation(ESC,Euratom,ECSC)No2/71of2January1971?
OJNoL3.5January1971*
FinancialRegulationof25Aprii1973(EEC,Euratom,ECSC);
OJNoL116,1May1973.

WhereastheCommxin.itie3aretohavefulldisposaloftheirresourcesas
referredtoinArticle4oftheDecisionof21April1970ftheenteringas
revenueofwhichistofollowthenaturalrateofestablishment ofamountsor
ofrequirements ;
Whereas,inapplicationoftheprincipleslaiddownabove,RegulationBo2/71
requiresamendmentinrespeot .ofthatseotionvdiichimplementsArticle4(5)
oftheDecisionof1April1970;
Whereastheintroduction ofthenewunitofaccount,calledtheEuropeanunit
ofaccount,makesitnecessaryinteraliatoamendtheprovisionsadoptedto
implementArticle4(2),(3)and(4)oftheDecisionof21April1970andto
bringuptodatethecalculationofthegrossnationalproductofthe
MemberStates;
Whereasfrom1January1978TitleIVofRegulationHo2/71willnolongerbe
applicable;andwhereasparticularprovisionsshouldbepreparedforthe
application ofArticle131oftheActofAccesioninrespectofthenew
MemberStatesandfortheperiodoftimelaiddowninthatArticle*
WhereastheCouncilRegulationof2April1973amendingtheCouncilRegulation
No2/71willnolongerbeapplicable;itsprovisionsbeingincorporatedinthe
amendedregulation.
HASADOPTEDTHISREGULATION,

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Article 1
Council Regulation (EEC ,EURATOM ,ECSC )No2/71of2January
1971 isamended asfollows :
l.The following Articles shall read asfollows :
// Article 3
Member States shall take allrequisite measures toensure
that thesupporting documents concerning established
entitlements and themaking available ofown resources are
kept for five years .
.Article 6
1.Accounts forownresources shall bekept bytheTreasury
ofeach Member State andbroken down into types ofresources .
2.The established entitlements shall beenteree inthose
accounts atthe latest onthe fifteenth day ofthe second
month following themonth during which the entitlements were
established .
Each Member State shall forward totheCommission ,within
the same period ,amonthly statement ofthose accounts
showing theposition asregards the entitlements esta­
blished for the month concerned .
3.The established entitlements shall beentered inthe
accounts ofthe Communities asrevenue tobecollected
insofar astheamounts inquestion have notbeen paid
over .
4.Theamounts actually paid over shall beentered as
revenue inthebudget oftheCommunities .
Article 8
1.Theownresources tobepaid over byeach Member State ,
together with thecontribution referred toinArticle *f(2)
and (3)oftheDecision of21April 1970 ,where applicable ,
shall bethesubject ofaprovisional estimate entered in
thebudget .
//

2.Payment shall bemade oftheamount actually established
bytheMember State for thekind ofownresources inquestion ;
thecontributions referred toinArticle 4(2 )and (3)ofthe
Decision of21April 1970 shall bedueuptotheamounts
entered inthe budget ;they shall bepaid over onthe basis
oftherequirements determined every month bytheCommission ,
andthey shall bedivided among theMember States inthe
proportion provided for inthebudget .
3.Adjustment shall bemade foramounts which aMember State
mayhave overpaid orwhich might still beowing .
Article 9
1.TheCommission shall notify each Member State ofthe
amount ofthecontributions which itisrequired topay .
Thecorresponding payments shall bemade atthelatest by
the fifteenth day ofthemonth following themonth inwhich
notification wasmade bytheCommission ,bycrediting them
totheaccount referred toinArticle 7(l).
2.The entry ofownresources established referred toin
Article 7(l )shall bemade atthelatest bythefifteenth
day ofthe second month following themonth during which
the entitlement was established .
3.Anydelay inmaking theentry shall give rise tothe
payment ofinterest bythe Member State concerned atarate
equal tothehighest rate ofdiscount ruling inthe Member
States onthe duedate .That rate shall beincreased by
0.25# foreach month ofdelay .Theincreased rate shall
beapplied totheentire period ofdelay .
Article 11
1.The Commission shall have atitsdisposal theamounts
credited toits account . The orders and instructions
which itforwards totheTreasury ortotheappropriate
department ofeach Member State shall becarried out as
soon aspossible .
2.Incases ofactual liquidity difficulty andwhere all
possibility ofdrawing upon thecontributions referred to
inArticle 4(2 )and (3)oftheDecision of21April 1970
isexhausted ,the Member States shall ,attheCommission 's
request ,bring forward the entry offuture resources toan
amount not exceeding one and ahalf month 'sestimated
revenue .Appropriate adjustment shall bemade subsequently .

2.Article12shallbedeleted
3.ThefollowingArticlesshallreadasfollowsJ
Articlel*f
1.MemberStatesshallcarryouttheverifications andin­
quiriesconcerningestablishedentitlements andthemaking
availableofownresources.TheCommissionshallmakeuse
ofitspowersinaccordancewiththisArticle.
2.Accordingly ,MemberStatesshall:
-carryoutanyadditional measuresofcontrolthe
Commission mayaskforinareasonedrequest;
-associatetheCommission ,atitsrequest,withthe
measuresofcontrolwhichtheyarecarryingout.
MemberStatesshalltakeallstepsrequiredtofacilitate
thesemeasuresofcontrol.WheretheCommissionis
associatedwiththesemeasures,MemberStatesshallplace
atitsdisposalthesupporting documentsreferredtoin
Article3«Inordertorestrictasfaraspossible
additionalmeasuresofcontroltheCommission may,in
specialcases,requirethatcertaindocumentsbeputat
itsdisposal.
3.Themeasuresofcontrolreferredtoinparagraphs 1and
2shallnotprejudicethefollowingmeasures:
a)themeasuresofcontrolundertakenbyMemberStatesin
accordancewiththeirownprovisionslaiddownbylaw,
regulationoradministrative action;
b)themeasuresprovidedforinArticles206,206aand
206boftheTreatyestablishing theEuropeanEconomic
CommunityandArticles180,l80aandl80boftheTreaty
establishing theEuropeanAtomicEnergyCommunity ;
c)theinspectionarrangements madepursuanttoArticle
209(c)oftheTreatyestablishing theEuropeanEconomic
CommunityandArticle183(c)oftheTreatyestablishing
theEuropeanAtomicEnergyCommunity.
^.TheCommissionshallfromtimetotimereporttothe
EuropeanParliament andtotheCouncilonthefunctioning
ofthesystem.
5.TheCouncilactingonaproposalfromtheCommissionshall
determine :
a)theconditionswhichofficialsappointedbytheCommission
mustsatisfywhentheycarryouttheverifications pro­
videdforinthisArticle,inparticularwithregardto
professional secrecyandtheprocedurewherebythey
exercisetheirpowersofinvestigation ;

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b)where required ,other provisions forapplying this Article .
Jf.TitleTlV "procedure forapplication ofArticle 3(3 )andArticle
4(l)oftheDecision of21April 1970 "(Articles 16-22 )shall
bedeleted .
5.Title Vbecomes Title IV
Article 23becomes Article 22and shall read asfollows :
Article 22
1.This Article shall beapplicable where itmay benecessary
totake provisional measures inderogation under Article 4(2 )
and (3)oftheDecision of21April 1970 .
2.The gross national product atmarket prices shall becal­
culated onthebasis ofstatistics established bytheStatis­
tical Office oftheEuropean Communities and onthat ofthe
data for the financial year preceding theyear inwhich the
preliminary draft budget isdrawn up.
3*The gross national product istobecalculated inthe
European Unit ofAccount defined inArticle 10oftheFinancial
Regulation ontheaverage oftherates for theEUA ofthe
financial year taken asthebasis for thecalculation referred
toinparagraph (2)above .
4.Aslong asthederogation provided forinArticle 4(2 )of
theDecision of21April 1970 isapplied toone ormore Member
States ,theCommission shall fix ,initspreliminary draft
budget ,the estimated percentage ofthebudget tobecovered
bythe financial contributions ofthe Member State orStates
concerned onthe basis ofthe proportion oftheir gross
national product tothe sum total ofthegross national pro­
ducts oftheMember States ,and shall establish therate of
thevalue added taxcorresponding totheremainder ofthe
budget tobecovered bytheother Member States .Theamounts
shall beapproved inaccordance with budgetary procedure .
5»For thepurpose ofthis Regulation !
a)the gross national product atmarket prices isequal to
the gross domestic product atmarket prices plus income
from employment ,property andbusiness received from the
rest oftheworld less thecorresponding flow towards the
rest ofthe world ;
b)the gross domestic product atmarket prices ;which re­
presents the final outcome ofproduction byresident
productive units ,corresponds tothetotal production
ofgoods and services bytheeconomy ,less total inter­
mediate consumption ,plus import charges .

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Article 23
Thecalculations provided for inArticle 13l(l)(a )and (b)
oftheAct ofAccession shall bemade bytheCommission
during the budgetary procedure .These calculations shall
beconsidered final atthetime when thebudget isadopted
and shall not besubject torevision when theaccounts are
closed .
6.Title VI"procedure forapplication ofArticle (5)ofthe
Decision of21April 1970 "shall become Title V.
Article 2kshall read asfollows :
Article 2k
Forthepurposes oftheapplication ofArticle k(5 )ofthe
Decision of21April 1970 ,thebalance ofafinancial year
shall consist ofthe difference between :
-all the revenue collected inrespect ofthe financial year
inquestion ,and
-the total amount ofpayments made inrespect ofthe same
financial year together with theappropriations carried
over pursuant toArticle 6oftheFinancial Regulation
(proposal ).
Ifthere isasurplus ofrevenue over thetotal amount referred
toabove ,tothedifference are added the sums cancelled at
the end ofthe financial year against appropriations origina­
ting inprevious financial years .
Ifthere isadeficit ,these sums are subtracted from that
difference .
7.Title VII "provisions relating totheAdvisory Committee on
theCommunities' OwnResources ,and final provisions "shall
become Title VI.
Article 27shall read asfollows :
Article 27
1.The provisions amending Articles 8,9,H,23(2 )and (3)
and thenewArticles 2kand27shall notapply until 1
January 1978
2.Theprovisions ofArticles 8,9,11,12,16to22,23
and2kofRegulation (EEC tEuratom ,ECSC )No2/71of
2January 1971 implementing theDecision of21April
1970 onthereplacement offinancial contributions from
theMember States bytheCommunities' ownresources shall
remain inforce until 31December 1977 *

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3.Sub-paragraph bofparagraph 3ofArticle ofthis
Regulation shall come into force ontheday onwhich the
Treaty ofthe22nd ofJuly 1975 comes into force ,which
Treaty amends certain financial provisions oftheTreaties
establishing theEuropean Communities andoftheTreaty
establishing aSingle Council and aSingle Commission of
theEuropean Communities .
ARTICLE 2
The Council Regulation of2
No2/71ishereby' repealed .April 1973 amending Regulation
ARTICLE 3
This Regulation shall enter into force on1stJanuary 1978J
This Regulation shall bebinding initsentirety and
directly applicable inallMember States .
Done atBrussels .