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: 1995-06-01
Institutions: European Commission
Subjects: Joint Research Centre, commitment of expenditure, financial regulation, general budget (EU), research budget, technological change

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COMMISSION  OF THE EUROPEAN  COMMUNITIES 

Brussels,  01.06.1995 
COM(95)  208  final 

94/0192  (CNS) 

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) 

EXPLANATORY  MEMORANDUM 

On 22 July  1994 the Commission presented  a proposal for the amendment  of the Financial 
Regulation in the research field to cater for the new activities being conducted  by the Joini 
Research  Centre  under  the  fourth  framework  programme  of  European  Community 
activities in the field of research,  technological  development  and  demonstration  (1994-98) 
adopted by Parliament and Council Decision of 26 April 1994. 

The  specific  purpose  is  to  cater  for  the  new  competitive  approach  for  the  JRC,  whicli 
means that  the Centre will have to  start  competing  with  other  bodies to  carry  out  certain 
projects financed by the general budget and will therefore  have to make competitive bids to 
win funding for some of its activities. 

Parliament  gave  its opinion  on  the  proposal  at  its March  1995  part-session  and  passed a 
number of amendments, most of which the Commission is able to accept. 

The  Commission  is  incorporating  Parliament's  amendments  subject  to  various  drafting 
adjustments,  but  cannot  endorse the refusal  of the increase from  the  current  15% to 22% 
for  transfers  on  which  decisions  are  to  be  taken  by  the  Commission  itself  in  the field of 
direct action (excluding exploratory research). 

This  increase,  together  with  the  other  amendments  proposed  by  the  Commission 
concerning  transfers,  will  give  the  Commission  greater  autonomy  in  managing  JRC 
appropriations by putting it on the same footing as its competitors, which are not subject to 
the same constraints. 

The Commission has accordingly drawn up this amended proposal under Article 189a(2) oi 
the EC Treaty and the second paragraph of Article 119 of the Euratom Treaty. 

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 

In  the  light  of  the  opinions  delivered  by  Parliament  and  the  Court  of  Auditors,  the 
Commission  is amending its proposal as  follows: 

INITIAL PROPOSAL 
(COM(94)338 final, 22.7.1994) 

AMENDED PROPOSAL 

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 
Commission1 , 

Having regard to the opinion of the European 
Parliament2, 

Having regard to the opinion of the Court of 
Auditors3 , 

Whereas conciliation has taken place in a 
conciliation committee as provided in the Joint 
Declaration of the European Parliament, the 
Council and the Commission of 4 March  1975,4 

Whereas the fourth framework  programme of 
European Community activities in the field of 
research and technological development and 

1  OJL 
2  OJL 
3  OJL 
4  OJC 89, 2.4.1975  p.  1 

INITIAL PROPOSAL 

AMENDED  PROPOSAL 

demonstration (1994-1998)5 adopted by decision 
of the Council and Parliament of 26 April  1994 
introduced a new competitive approach for the 
Joint Research Centre, which implies, amongst 
other things, that the JRC will gradually have to 
enter into competition with other bodies for 
certain projects financed  by means of 
appropriations in the general budget, whether 
inside or outside the particular subsection  referred 
to in Article 92(1) of the Financial Regulation of 
21 December  1977 applicable to the general 
budget6 ; whereas it is necessary to adapt the 
Financial Regulation in order to take account of 
this competitive approach; 

The third recital is replaced by the following: 

Whereas this new competitive approach  implies 
changes to certain terms of the Financial 
Regulation so as to afford  the JRC greater 
flexibility  in the management of its appropriations 
and thus enable it to compete effectively  with 
other similar bodies; 

Whereas this new competitive approach  implies 
changes to certain terms of the Financial 
Regulation so as to afford  the JRC greater 
effectiveness  in the management of its 
appropriations and thus enable it to compete with 
other similar bodies; 

The fourth  recital is replaced by the following 

Whereas, in this connection, the Commission 
should be given greater autonomy in this area  lor 
transferring  appropriations; 

Whereas, in this connection, the Commission 
should be given greater autonomy in this area for 
transferring appropriations, including 
appropriations for  staff; 

Whereas appropriations obtained on a competitive 
basis should be treated as revenue from services 
for third parties so as to ensure total transparency 
in the accounts pertaining to these operations, 

HAS ADOPTED THIS REGULATION: 

5  OJL 126,  19.5.1994, p. 1 
6  OL L 356,  31.12.1977 - last amended by Council Regulation N° 610/90 of 13.3.1990 (JO L 70, 

16.3.1990) 

INITIAL PROPOSAL 

Article 1 

AMENDED  PROPOSAL 

Article 

The Financial Regulation is amended as follows: 

1.  Article 92 is amended as follows: 

Article 92 is amended as follows: 

(a)  in the second subparagraph of paragraph 
1, point (a) is replaced by the following: 

(a) 

unchanged 

"(a)  direct action consisting of research 
programmes and exploratory 
research and scientific and technical 
support activities of an institutional 
nature carried out by the 
establishments of the Joint Research 
Centre (JRC) and in principle 
entirely financed from the general 
budget of the European 
Communities;" 

(b)  in the second subparagraph of paragraph 
1, point (b) is replaced by the following: 

(b) 

unchanged 

"(b)  indirect action consisting of 

programmes carried out under 
contracts to be concluded with third 
parties. The JRC may participate in 
these activities on the same basis as 
third parties. These activities shall in 
principle be partially financed  from 
the general budget of the European 
Communities (shared-cost action 
projects); 

(c) 

in the second subparagraph of paragraph 
1, point (e) is replaced by the following: 

(c) 

unchanged 

"(e)  other activities of a competitive 
nature carried out by the JRC: 

-  scientific and technical support 
activities under the R&TD 
framework  programmes in 
principle entirely financed from the 
general budget; 

-  services for third parties."; 

INITIAL PROPOSAL 

AMENDED  PROPOSAL 

(d)  the following paragraph is inserted  after 

(d)  the following paragraphs are inserted 

paragraph 2: 

after  paragraph 2: 

"3.  Notwithstanding paragraph  1, the JRC 
may receive appropriations entered 
elsewhere than in the subsection 
referred to in that paragraph in respect 
of its participation on a competitive 
basis in activities implemented under 
Community policies financed, in 
principle, entirely from the general 
budget." 

"3.  Notwithstanding paragraph  1, the JRC 

may receive funding covered by 
appropriations entered elsewhere than 
in the subsection referred to in that 
paragraph in respect of its 
participation on a competitive basis in 
activities implemented under 
Community policies financed, in 
principle, entirely from  the geneml 
budget. 

4.  The provisions of Title IV on the 

conclusion of contracts shall app I y Jo 
the cases referred to in the first indent 
of paragraph  1(e) and in paragraph  3." 

Paragraph  2  of  Article  93  is  replaced  by  the 
following: 

"  However,  for 

the  Joint  Research  Centre. 
appropriations for staff  and appropriations for 
resources  shall  be  entered  in  two  separate 
chapters." 

The following indents are inserted in Article ()4: 

"-  in  order  to  permit  full  comparison  between 
forecasts  and outturn, the table of equivalence 
of  commitments  and  payments  shal I  be 
presented  with  the  same  subdivisions  and 
headings in the budget  and  in the  revenue and 
expenditure account; 

- 

In  the  working  document  accompanying  the 
preliminary draft  budget the Commission  shall 
provide  the  necessary  information  concerning 
the  foreseeable  distribution  and  utilization  of 
the commitment appropriations  for  the various 
budget headings  for  the duration  of the action 
and  also  concerning  the  revenue  originating 
from  financing  by  third  parties  (public  or 
private) as part of JRC participation in shared-
cost action." 

INITIAL PROPOSAL 

AMENDED PROPOSAL 

2.  Article 95 is amended as follows: 

Article 95 is amended as follows. 

(a)  the  first  paragraph  is  replaced  by  the 

(a)unchanged 

following: 

"Notwithstanding  Article  26  and  without 
prejudice  to  paragraph  7  thereof,  the 
Commission  may,  within  the  subsection 
referred 
transfer 
appropriations  from  one  title  to  another 
and from one chapter to another in respect 
in 
of 
Article 92(lXa)."; 

in  Article  92, 

activities 

referred 

the 

to 

to 

(b)  the  second  paragraph  is  replaced  by  the 

(b)unchanged 

following: 

"These transfers may not have the effect  of 
increasing  or  decreasing  by  more  than 
22%  in  commitment  appropriations  the 
initial  allocation  entered  in the budget  for 
each  of  the  programmes  referred  to  in 
Article  92(1 )(a)  excluding  exploratory 
research. They  may  not have the effect  of 
increasing  the  appropriations  earmarked 
for exploratory  research  by more than  6% 
in commitment appropriations of the initial 
allocation  for  the total  of the  programmes 
referred to above"; 

(c)  the third paragraph is deleted; 

(c) deleted 

(d)  the fourdi  subparagraph  is replaced by the 

following: 

(d)unchanged 

"For  the  purposes  of  the  application  of 
Article 26, the budget headings  relating to 
the  activities  referred  to  in  Article  92  (I) 
(b) (excluding  JRC  participation), (c) and 
(d) shall be regarded as chapters." 

INITIAL PROPOSAL 

AMENDED PROPOSAL 

3.  The following paragraph  is added after  Article 
96(3): 

3.  The following paragraph  is added after  Article 
96(3): 

"4. The appropriations relating to the activities 
referred to in Article 92 (I) (b), as regards the 
participation  of  the  JRC  on  a  competitive 
basis,  and  (e)  and  (3)  shall  be  treated  as 
revenue from services to third parties provided 
for in paragraphs  1  and 2." 

"4. The appropriations  relating to the activities 
referred to in Article 92 (1) (b), as regards the 
participation  of  the  JRC  on  a  competitive 
basis,  and  (e)  and  (3)  shall  be  treated  as 
revenue from  services to third  parties provided 
for in paragraphs  1  and 2." 

The utilization of these appropriations  shall be 
shown  in  a  set  of  analytical  accounts  in  the 
revenue  and  expenditure  accounts  for  each 
category  of action  to which  it  relates;  it  shall 
be  separate  from  revenue  originating  from 
financing  bv  third  parties  (public  or  private) 
and  from  revenue  from  services  provided  for 
third  parties  in  connection  with  the  activities 
referred  to  in paragraphs  1 and 2 or  activities 
of a different  nature." 

Article 2 

Article 2 

Article 95 may be revised, if necessary, on expiry 
of  the  1995-98  framework  programme  < >n  the 
basis of a reasoned report. 

This  regulation  shall enter  into force  on the third 
day  following  that  of  its  publication 
in  the 
Official  Journal of the European Communities. 

This  regulation  shall  enter  into force  on the  third 
day  following  that  of  its  publication  m  the 
Official  Journal of the European Communities. 

It shall apply  from 

It shall apply from 

This  Regulation  shall  be  binding  in  its  entirety 
and directly applicable in all Member States. 

This  Regulation  shall  be  binding  in  its  entirety 
and directly applicable in all Member States 

Done at Brussels, 

Done at Brussels, 

For the Council 

The President 

For the Council 

The President 

% 

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