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
Date: 1994-01-28
Institutions: European Commission
Subjects: commitment of expenditure, financial control, financial regulation, general budget (EU), management audit

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

COM(94)  14 final 

Brussels,  28.01.1994 

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  pursuant to Article  189a(2) of the EC Treaty 
and the second paragraph of  Article  119 of the Euratom Treaty) 

^•$"i$§|f 

ïï 

"'*, lit 

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) 

(b) 

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). 
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 
Parliament,' 

Having  regard 
Auditors,3 

to  the  opinion  of  the  European 

to  the  opinion  of  the  Court  of 

Whereas  the  conciliation  provided  for  by  the  Joint 
the  European 
Declaration  of  4  March  1975  by 
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 
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; 

in 

^  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; 

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; 

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 
budgetary 
arrangements therefore need to be made to ensure that 
he  is  completely  independent  in  the  performance  of 
his  duties: 

appropriate 

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; 

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 
those  directives; 
the 
whereas  the  provisions  applicable  to contracts  below 
those thresholds  should  at the same time be  clarified 
and  adjusted; 

thresholds  established  by 

Whereas  appropriate provisions  should  be added  in a 
second  part  of  the  Financial  Regulation  to  improve 
information 
the  presentation  and  transparency  of 
relating  to  borrowing  and  lending  activities, 

HAS  ADOPTED  THIS  REGULATION: 

Article 1 

Article 1 

The  Financial  Regulation  is amended  as  follows: 

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: 

budget  may 

"The 
of  borrowing 
underwriting 
operations  entered  into by  the Community:" 

authorize 

the 
lending 

also 

and 

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. 

(a)  Paragraph  2  is replaced  by the  following 

"2.  For  activities  of  an  operational  nature,  *&.• 
financial  und 
financial 
statement  shall  contain 
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  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: 

financial 

statement 

"4.  In  order  to  prevent  any  risk  of  fraud,  the 
Commission  shall, where appropriate,  record in 
information 
the 
fraud  prevention  measures  and 
regarding 
legislative 
protection 
mechanisms  planned  (sanctions,  checks,  etc.) 
and  shall 
terms  of  cost 
them 
effectiveness. 

administrative 

justify 

any 

or 

in 

"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. 

introductory  phrase  of 

The 
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 
over 
requests 
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. " 

substantiated 

carry 

to 

6. 

and 
In  Article  9(1) 
"EEC Treaty"  are replaced  by  "EC Treaty". 

the  words 

(3)(b) 

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 
in 
Article  142." 

for 

INITIAL  PROPOSAL 

AMENDED  PROPOSAL 

Article  12 is  amended  as  follows: 

Article  12 is  amended  as  follows: 

(a)  The  first  paragraph 

is  replaced  by 

the 

(a)  unchanged 

following: 

"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 
following: 

is  replaced  by  the 

"The Ombudsman shall, before  1 May,  forward 
to  the  European  Parliament  an  estimate  of  his 
revenue and expenditure for the following year." 

9. 

The third  indent of  Article  13(2)(b) is deleted. 

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 
the 
(or  principal  operational  unit 
establishments  of the Joint Research Centre), 

for 

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: 

from 

Requests  for  supplementary  and/or 
"4. 
amending  budgets 
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. 

13. 

14. 

In  the first subparagraph  of  Article  16(1)  the 
words  "EEC Treaty" 
replaced  by 
"EC Treaty". 

are 

In  Article  17(1)  the  words  "EEC Treaty"  are 
replaced by  "EC Treaty". 

In  Article  18  the  words  "EEC Treaty"  are 
replaced by  "EC Treaty". 

INITIAL  PROPOSAL 

AMENDED  PROPOSAL 

15.  Article  19 is amended  as  follows: 

Article  19 is amended  as  follows: 

(a)  Paragraph  1 is replaced  by  the  following: 

(a)  Paragraph  1 is replaced  by  the  following: 

" 1.  The budget  shall  consist  of: 

" 1.  unchanged 

subdivided 

a general  statement  of  revenue; 
separate 
into 
sections 
statements  of revenue  and  expenditure of 
the European Parliament, the Council, the 
Commission,  the Court of Justice and the 
Court  of  Auditors. 

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 

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 
organizational 
committees. 

to 
the 
structure  of 

common 
two 
the 

devoted 

The  Commission  section  shall  consist  of: 

unchanged 

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. 

unchanged 

unchanged 

Part  B for  operating  expenditure,  divided 
into as many subsections as are required." 

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 
the  provisions  of  Title  E. 
are  determined  by 
paragraph  15  of  the  1993-1999  Interinstitutional 
Agreement.  Council  Decision 
... 
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. 

.../EEC  of 

(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 

(c)  Point  5  is replaced  by  the  following: 

following: 

"5.  As regards  borrowing  and lending operations: 

"5.  As regards borrowing  and lending  operations: 

(a) 

to 

the 

corresponding 

in the general  statement  of revenue, the budget 
relevant 
headings 
operations  and 
record  any 
intended 
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; 

to 

(a) 

to 

the 

and 

corresponding 

in  the general  statement  of  revenue,  the budget 
relevant 
headings 
operations 
any 
intended 
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; 

record 

to 

(b) 

in the Commission  section: 

(b) 

in the Commission  section,  Part  B: 

-  the 

budget 

containing 

the 
headings 
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 
financial 
operations  envisaged  and 
guarantee  given  by  the  Communities 
in 
respect of these operations;". 

the 

- 

- 

budget 

containing 

the 
headings 
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: 

17.  Article 22  is amended  as  follows: 

(a)  Paragraph  2  is  replaced  by  the  following: 

(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 
the  Regions  the  requisite  powers  for 
implementation  of  the  sections  of  the  budget 
relating to  them." 

the  Council, 

"2.  The Commission  shall  confer  upon the 
the 
European  Parliament, 
Court of Justice, the Court of Auditors,  the 
Economic  and  Social  Committee  and  the 
Committee  of  the  Regions  the  requisite 
the 
powers  for 
sections  of the budget  relating to  them." 

implementation  of 

the 

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: 

(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." 

"5.  Save  as  otherwise  provided,  the 
Ombudsman,  the  Economic  and  Social 
Committee  and  the  Committee  of  the 
Regions,  shall,  for  the  purpose  of  this 
treated  as 
Financial  Regulation,  be 
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. " 

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: 

18.  Article 26  is amended  as follows: 

(a)  The  second  subparagraph  of  paragraph  2  is 

(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." 

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 

4  is 

(b)  unchanged 

replaced  by the  following: 

"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 
amended  as  follows: 

19. 

Article  56 
amended  as  follows: 

is  renumbered 

Article  58  and 

(a) 

In  the  first  subparagraph  of  paragraph  1  the 
words "either by the automatic public tendering 
procedure  or 
tendering 
procedure"  are deleted. 

the  discretionary 

(a)  unchanged 

(b)  The  second  subparagraph  of  paragraph  1  is 

(b) 

replaced  by  the  following: 

In  the  second  subparagraph  of  paragraph  1 
"Article 58" is replaced  by  "Article  59". 

"However,  contracts  may  be  made  without  a 
the  circumstances 
in 
tendering  procedure 
referred  to  in Article 59." 

(c) 

In  the  third  subparagraph  of  paragraph  1, 
"Article 63" is replaced  by  "Article 60". 

(c)  unchanged 

(d)  The following  paragraph  3 is  added: 

(d)  The following  paragraphs  3 and 4  are  added: 

"3.  Tendering  procedures  shall  be  laid  down 
by the implementing  measures  provided  for  in 
Article  142." 

"3.  Tendering  procedures  and  award  criteria 
laid  down  and  governed  by  the 
shall  be 
implementing  measures  provided 
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. 

for 

4.  The  price  revision  procedures  following  the 
conclusion of contracts shall  be governed  by the 
implementing  measures  provided 
in 
Article  142." 

for 

20.  Article 57  is deleted. 

21.  The following  new  Article 57  is  inserted: 

"Article 57 

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 

Article  59  and 

amended  as  follows: 

Article 58  is  renumbered  Article 59  and  replaced  by 
the  following: 

(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 
implementing  measures 
provided  for  in Article  142;". 

the 

(c) 

In  point  (b),  "Article  57"  is  replaced  by 
"Article 58". 

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". 

"Article  59 

Contracts  may be made by private  treaty: 

(a)  within  the  limit  laid  down  in the  implementing 
rules  provided  for 
the 
purchase  or  hiring  of  supplies,  furniture  and 
equipment,  for  the provision  of  services  or  for 
building  works: 

in  Article  142  for 

(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 
ancillary  works  which, 
services  or 
technically,  cannot  be  separated  from  the main 
contract: 

for 

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). 

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 
"selection  of 
replaced  by 
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: 

The following  Article  87a is  added: 

"Article  87a 

"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 
underlying 
and 
legality 
transactions." 

regularity 

the 

of 

At the same time as the annual report referred  to 
in  Article  88.  the  Court  of  Auditors  shall 
provide 
the 
Council  with  a statement  of assurance  as to  the 
reliability  of  the  accounts  and  the  legality  and 
regularity  of the underlying  transactions." 

the  European  Parliament  and 

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 is replaced  by the  following: 

"Article  89 

"Article  89 

Parliament, 

a 
1.  The  European 
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. 

upon 

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 
observations  of  the  Court  of  Auditors  and  any 
relevant  special  reports  by the Court  of  Auditors. 

institutions  under  audit 

the 

to 

3.  Before  giving  a discharge  to the  Commission, 
the 
the  European  Parliament  may  question 
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. 

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. 

4. 

unchanged 

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. 

The discharge decision shall cover the accounts 
5. 
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. 

5.  unchanged 

6.  The  financial  controller  shall  take  account  of 
the comments  in the decisions  giving  discharge. 

6.  unchanged 

the  observations  accompanying 

7. 
The institutions  shall take all  appropriate steps 
the 
to  act  on 
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. 

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 
the  decisions  giving 
in 
comments  appearing 
discharge. 

their 

institutions  shall,  for 

"7.  The 
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. 

unchanged 

INITIAL PROPOSAL 

17 

AMENDED  PROPOSAL 

10.  unchanged 

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. 

relating 

the  documents 

However, 
to 
transactions not finally closed shall be kept for 
longer than the said period, until the end of the 
year  following 
in  which  such 
the  year 
transactions are finally closed. 

Each institution shall decide which department 
will  keep the supporting documents." 

34. 

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 

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 
In  such  cases,  the 
already  provided  for. 
Commission  shall,  in  the  preliminary  draft 
budget,  propose  the  appropriate  budgetary 
structure  and 
the 
the  headings 
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; 

to  which 

(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 
If  neither  the 
by  the  budgetary  authority. 
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. 

unchanged 

(a) 

in  the  course  of  the  budgetary  procedure  if 
In  such  cases,  the 
already  provided  for. 
Commission  shall,  in  the  preliminary  draft 
the  appropriate  budgetary 
budget,  propose 
structure  and 
the 
the  headings 
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. 

to  which 

(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 
If  neither  the  Council, 
budgetary  authority. 
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 
amounts  received. 

to 

the 

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). 

unchanged 

All  necessary  accounting  measures  shall  be taken  to 
ensure the separate monitoring  of the use both of the 
the 
revenue 
appropriations  made  available  under  Article  125. 

these  contributions  and  of 

from 

All  necessary  accounting  measures  shall be taken to 
ensure the separate monitoring  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) 

to  cover 

in  the  statement  of  revenue  there  shall  be  a 
heading 
the 
contribution  of the EFTA  States for  the relevant 
financial  year.  The  amount  shall  be  entered 
separately  "for  information"; 

the  full  amount  of 

INITIAL  PROPOSAL 

20 

(b) 

in the statement  of  expenditure 

(b)  unchanged 

-  the remark relating to each heading covering 
the 
activities 
Community 
participation  of 
the  EFTA  States  shall 
indicate the amount of their contribution  "for 
information"; 

involving 

-  an annex, constituting an integral part of the 
budget,  shall  contain all headings relating to 
Community 
the 
participation  of the EFTA  States. 

involving 

activities 

for  making 

The  annex  shall  serve  as  the  budgetary 
the 
structure 
appropriations 
such 
contributions by virtue of Article  128 and for 
implementing  expenditure. 

corresponding 

available 

to 

unchanged 

unchanged 

"The  annex  shall  serve  as  and  supplement  the 
budgetary  structure  for  making  available  the 
appropriations 
such 
contributions  by  virtue  of  Article  128  and  for 
implementing  expenditure. " 

corresponding 

to 

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 

1. 
the 
If  in  the  course  of  a  financial  year 
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 
their 
course  of  that  financial  year, 
contribution 
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. 

to  adjust 
line  with 

accordingly 

in 

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. 

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 

the 

third 

revenue  within 

1.  The  financial  contributions  of  EFTA  States 
shall  constitute  earmarked 
the 
meaning  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 
the 
corresponding  appropriations. 

these  contributions  and  of 

indent  of 

from 

\ 
N 
) 

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 

Article  134 

Does  not  apply  to the English  version. 

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. 

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 
in 
accordance  with  the  powers  conferred  on  the 
Commission  in relation to each instrument.  To 
this  end,  he shall  check: 

lending  operations 

-  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 
the 

controller 

financial 

of 

the 

full, 
Commission: 

shall  have  access  either  manually  or  by 
computer  to  all  data,  documents,  ledgers, 
registers,  correspondence,  statements  of 
account  or  computer 
to 
borrowing  and  lending  operations; 

relating 

files 

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) 

(b) 

In  the  introductory  phrase,  "Article  126"  is 
replaced  by  "Article  142" and  "Articles  58,60, 
62,  63" by  "Articles  59, 60, 63, 64a"; 

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 

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Catalogue number : CB-CO-94-015-EN-C 

ISBN 92-77-64557-1 

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