Proposal for a Council Regulation (EC) amending Regulation (EC) No 1628/96 relating to aid for Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia and the former Yugoslav Republic of Macedonia, in particular through the setting-up of the European Agency for Reconstruction
Date: 1999-06-23
Institutions: European Commission
Subjects: European Agency for Reconstruction, Kosovo, Yugoslavia, aid to refugees, economic reconstruction

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Proposal for a Council Regulation (EC) amending Regulation (EC) No 1628/96 relating to aid for
Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia and the former Yugoslav
Republic of Macedonia, in particular through the setting-up of the European Agency for Recon-
struction

(2000/C 21 E/05)

COM(1999) 312 final (cid:151) 1999/0132(CNS)

(Submitted by the Commission on 7 July 1999)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 308 thereof,

(8) The European Council has called upon the Commission to
develop, as a matter of priority, proposals regarding the
organisation of the reconstruction assistance envisaged, in
particular on appropriate means and mechanisms for
putting such a programme in place.

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

(9) Council Regulation (EC) No 1628/96 (1), as last amended
inter alia,
by Regulation (EC) No 851/98 (2), sets out,
objectives, mechanisms and instruments for the recon-
struction of the regions it covers, including Kosovo.

Whereas:

(1) In line with the United Nations Security Council
resolution of 10 June 1999, a large-scale programme of
to help resettle
reconstruction including measures
refugees and revitalise Kosovo’s economy is urgently
needed as soon as security conditions allow.

(2) The European Council held at Cologne on 3 and 4 June
1999 reiterated the European Union’s commitment
to
taking a leading role in the reconstruction efforts in
Kosovo.

(3) The European Council has reaffirmed its readiness to draw
the countries of that region closer to the prospect of full
integration into the structures of
the European Union
the Stability Pact of South-
within the framework of
Eastern Europe, which will help to enhance peace,
stability and prosperity in, and cooperation between,
countries in the region.

(4) The Stability Pact has underlined the European Union’s
role in bolstering democratic and economic institutions
in the region through a number of programmes.

(5) The objectives relating to this region must include recon-
struction as a prelude to revitalisation and to economic,
social and institutional development.

(6) The European Council has confirmed the European
Union’s willingness to contribute substantially to the
regional reconstruction effort.

(10) The reconstruction effort

rapid implementation of numerous

in Kosovo, which will be
coupled with the humanitarian aid effort, will require
the
small-scale
projects, measures to support returning refugees and the
assistance of large numbers of experts covering a wide
range of fields.

(11) The reconstruction programmes should be managed in
accordance with appropriate rules and procedures so as
to avoid the delays in implementation which occurred
during the first phase of the reconstruction programme
in Bosnia and Herzegovina, owing largely to unwieldy
procedures and a rigid regulatory framework.

(12) A Community agency offers advantages in terms of effec-
the Community’s

speed and visibility of

tiveness,
operation in these circumstances.

(13) The European Council has invited the Commission to
draw up proposals on setting up an agency to be
responsible for the implementation of Community recon-
struction programmes.

(14) Regulation (EC) No 1628/96 should be amended to take
account of the specific requirements for Kosovo’s recon-
struction, including provisions on setting up and running
an agency to be responsible for
implementing the
Community’s reconstruction programmes.

(15) The above agency should be capable of assuming respon-
sibility for implementing programmes approved by the
Commission.

(7) Aid programmes of

the major scale necessary for the
reconstruction of Kosovo cannot be implemented unless
the appropriate means and mechanisms are in place.

(1) OJ L 204, 14.8.1996, p. 1.
(2) OJ L 122, 24.4.1998, p. 1.

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(16) The reconstruction programmes

should be managed
locally. The Agency should therefore be established in
Pristina and the way left open for it to have a presence
for operational reasons in Skopje and other locations in
the region.

proposals to amend it
opments in the region;

in the light of political devel-

(28) Regulation (EC) No 1628/96 should be extended until 31

December 2004,

(17) The Agency’s mandate should also allow it to manage the
programmes of other donors contributing to the recon-
struction of the region.

HAS ADOPTED THIS REGULATION:

Article 1

(18) The Commission should ensure

that

the international

reconstruction
assistance is coordinated with the European Investment
Bank,
institutions and the
the High Commissioner for
United Nations Office of
Refugees. In implementing the programme, the Agency
must comply with decisions taken in the framework of
coordination.

financial

(19) The Agency’s mandate should cover the implementation
reconstruction and the return of
then, once the security
Federal
regions of

in Kosovo initially,
in other

of programmes for
refugees
situation permits,
Republic of Yugoslavia.

the

(20) The Agency should be set up for the purposes of recon-
struction, and a proposal will be made to wind it up once
that objective has been achieved.

(21) The Agency’s structure and status should allow it

to
respond rapidly and effectively to the requirements of
reconstruction.

(22) The Member States should be involved in the Agency’s
activities, their role in the governing board should be
defined and procedures laid down under which they are
to give opinions on project and programme decisions.

(23) For the sake of effectiveness, the Agency requires a special
financial regulation that is flexible and allows a rapid
response while at the same time ensuring full managerial
accountability and transparency in management.

(24)

In view of the urgency and the nature of the assistance to
be given, the Committee established by Regulation (EC)
in accordance with the
No 1628/96 should act
management procedure set out in Article 4 of Council
Decision 1999/. . ./EC laying down the procedures for
the exercise of implementing powers conferred on the
Commission, rather than using the regulatory procedure
originally laid down.

(25) The authority put in charge of the provisional adminis-
tration of Kosovo should be consulted on the implemen-
tation of the reconstruction programmes.

(26) Provision should be made for the countries covered by the
Phare
involved in
implementing the programmes provided for in Regulation
(EC) No 1628/96.

and Meda programmes

to be

(27) The Commission should submit a report by 31 December
2000 on the progress in the implementation of Regu-
lation (EC) No 1628/96 and may if appropriate make

Regulation (EC) No 1628/96 is hereby amended as follows:

1. In Article 4, the following paragraph 3 is added:

The programmes of reconstruction and assistance to

(cid:145)3.
refugees returning to Kosovo shall include:

(a) measures to help resettle refugees, such as projects to
provide psychological support or to aid children and
families, special programmes targeting education and
the strengthening of community life and cultural
life,
projects
return to work, projects
a
designed to ensure the involvement of professionals
and refugees in general
in reconstruction activities,
micro-credit and loan guarantees;

to encourge

(b) measures for economic revitalisation at local level;

(c) projects to set up and help run the administrative and
legal framework of the authorities, including local auth-
orities.(cid:146)

2. In Article 6, the following paragraph 3 is added:

The Commission shall ensure that

(cid:145)3.
reconstruction
assistance is coordinated with the European Investment
Bank,
and the
United Nations Office of the High Commissioner for Refu-
gees.(cid:146)

international

institutions

financial

the

3. In Article 8,

the first subparagraph of paragraph 1 is

replaced by the following:

(cid:145)The operations referred to in this Regulation may cover
expenditure relating to the importation of goods and
services, the local expenditure necessary to complete the
projects and programmes and co-financing (in forms
including interest-rate subsidies) of
investment projects
financed by loans from the European Investement Bank or
the international financial institutions, where the latter are
involved. Taxes, duties and charges and the acquisition of
real estate shall be excluded from Community financing.(cid:146)

4. Article 9 is amended as follows:

(a) The first two paragraphs are replaced by the following:

(cid:145)Participation in invitations to tender and contracts shall
be open on equal terms to all natural and legal persons
in the Member States and States which receive benefits,
or in countries benefiting under the Phare or Meda
programmes.(cid:146)

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(b) The third paragraph is replaced by the following:

(cid:145)The following shall be considered to be legal persons of
a Member State, a recipient State or a State benefiting
legal persons
under the Phare or Meda programmes:
who are established in accordance with the legislation
of a Member State, a recipient State or a State benefiting
under the Phare or Meda programmes, and who have
their central administration or principal establishment in
the territories in which the Treaty establishing the
European Community applies,
in the recipient States
or in the States benefiting under the Phare or Meda
programmes, or who have their registered office there,
where their activity has an actual and continuous link
with the economy of the said territories or States.(cid:146)

5. Article 10 is amended as follows:

The Committee may examine any other question
3.
relating to the implementation of this Regulation which is
put to it by its Chairman, including at the request of the
representative of a Member State, and in particular any
question relating
their
general implementation and co-financing.

to programming of projects,

The Committee shall adopt its rules of procedure by a

4.
qualified majority.(cid:146)

8. Article 14 becomes Article 26, and the second paragraph

thereof is replaced by the following:

(cid:145)It shall apply until 31 December 2004.(cid:146)

9. The following Articles are inserted:

(a) the following subparagraph is added to paragraph 1:

(cid:145)Article 14

(cid:145)By way of derogation from the first two subparagraphs,
with regard to reconstruction assistance to Kosovo,
annual programmes which set out the main objectives
and related allocations, guidelines and priorities for
Community support for reconstruction and the return
of refugees shall be adopted in accordance with the
procedure laid down in Article 12(2).(cid:146)

(b) the following paragraph 4 is added:

(cid:145)4.
Assistance for the reconstruction of Kosovo may
be implemented on the basis of financing agreements or
contracts concluded with the bodies referred to in
Article 3 following consultation with the authority
administering Kosovo.
for
provisionally responsible
Assistance may also be provided for that authority.(cid:146)

6. The following is inserted as the second sentence of the third

paragraph of Article 11:

(cid:145)The Annex shall not apply to contracts awarded by invi-
tation to tender in connection with the operations of the
European Agency for Reconstruction referred to in Article
14.(cid:146)

7. Article 12 is replaced by the following:

(cid:145)Article 12

1.
The Commission shall be assisted by a management
committee composed of the representatives of the Member
States and chaired by the representative of the Commission,
hereinafter referred to as (cid:147)the Committee(cid:148).

The Committee shall act

2.
in accordance with the
procedure laid down in Article 4 of Decision 1999/. . ./EC
[Comitology]. The period provided for in paragraph 3 of
that Article shall be at most one month.

reconstruction and assistance to
The programmes
for
initially target Kosovo and when
returning refugees will
conditions are right may also target other parts of
the
Federal Republic of Yugoslavia. The Commission may
delegate
Such
programmes shall be the subject of a Commission decision.

implementation

agency.

their

an

to

A European Agency for Reconstruction, hereinafter referred
to as the (cid:147)Agency(cid:148), shall be set up to that end with the aim
of implementing the programmes referred to in the first
reconstruction and assistance to
paragraph, namely for
returning refugees.

Article 15

1.
To achieve the objective referred to in Article 14, the
Agency shall carry out the duties set out in paragraphs 2, 3
and 4, within the bounds of its powers and in accordance
with the decisions taken by the Commission:

The Agency shall gather, analyse and communicate

2.
information to the Commission on:

(a) war damage, the requirements for reconstruction and
the return of refugees and related initiatives by the
government,
regional authorities and inter-
national community;

local or

(b) the urgent requirements of the communities concerned,
taking account of the various population displacements
and possibilities for their return;

(c) the priority sectors and geographical areas requiring
urgent assistance from the international community.

The Agency shall prepare projects and programmes
3.
for the reconstruction of Kosovo and the return of
its
refugees and submit them to the Commission with a view
to their adoption in accordance with Article 12(2) of this
Regulation.

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and

assistance

The Agency shall

implement
to

the programmes for
4.
reconstruction
refugees
approved by the Commission. To that end it may be
made responsible by the Commission for all operations
required to implement the programmes, and in particular
for:

returning

(a) drawing up the terms of reference;

(b) preparing and evaluating invitations to tender;

(c) signing contracts;

(d) concluding financing agreements;

(e) awarding contracts, in accordance with the provisions of

this Regulation;

(f) evaluating projects;

(g) monitoring project implementation;

(h) effecting payments.

ensure

the Agency shall

In addition to the tasks set out in paragraphs 2, 3 and
5.
such
4,
programmes of reconstruction and assistance to returning
refugees as the Member States and other donors shall
entrust to it in the framework of the coordination set up
by the Commission with the World Bank,
international
financial institutions and the European Investment Bank.

implementation of

Article 16

the
The Agency shall have legal personality.
it shall enjoy the most extensive legal
Member States,
it
capacity accorded to legal persons under their laws;
may,
in particular, acquire or dispose of movable and
immovable property and be a party to legal proceedings.
The Agency shall be non-profit-making.

In each of

The Agency shall establish itself
in Pristina, without
prejudice to its having a presence in Skopje or in other
locations in the region.

Article 17

The Agency shall have a governing board composed
1.
of one representative from each Member State and three
representatives of the Commission.

The Member States’ representatives shall be appointed
2.
by the Member States concerned. Member States shall make
the appointment with due regard to the experience and
qualifications relevant to the Agency’s activities.

One of the three Commission representatives shall be a
Member of the Commission.

The governing board shall be

chaired by the
4.
Commission, usually a Member of the Commission. The
Chair shall not vote.

The governing board shall

5.
procedure.

adopt

its

rules of

The Commission and Member State representatives on

6.
the governing board shall each have one vote.

Governing board decisions shall be adopted by a two-thirds
majority of its members.

The governing board shall determine the rules as to

7.
the languages of the Agency.

8.
The governing board shall be convened by its Chair
every month. It shall also be convened at the request of the
Agency’s director or at least by a simple majority of its
members.

the governing board,

On the basis of a draft submitted by the Agency’s
9.
in agreement with the
director,
Commission, shall examine by 30 November of each year
at the latest the preliminary draft annual work programme
the following year. The work programme shall be
for
adopted at
the beginning of each operating year. The
programme may be adapted as necessary during the year
by the same procedure,
inter alia of
programmes adopted by the Commission.

to take account

The projects included in the annual work programme shall
be accompanied by an estimate of the necessary expen-
diture.

10.
The governing board shall be closely involved in the
implementation of the reconstruction programmes. On a
proposal by the director,
it shall decide upon the main
issues relating to the Agency’s activities, and in particular:

(a) the

draft programmes

to be

submitted

to the

Commission;

(b) the conditions for implementing projects;

(c) methods of evaluating and properly implementing the

projects;

(d) proposals for programmes by other donors for possible

implementation by the Agency;

(e) whether representatives of

the countries and organi-
sations delegating implementation of their programmes
to the Agency should be present as observers on the
latter’s governing board.

11.
The governing board shall present a draft annual
report to the Commission, by 31 March of each year at
the latest, on the activities of the Agency for the previous
year and on how they were financed.

The term of office of representatives shall be thirty

3.
months.

The Commission shall adopt the annual report and submit
it to the European Parliament and the Council.

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Article 18

Article 20

1.
The director of the Agency shall be appointed by the
governing board, on a proposal from the Commission, for a
term of office of thirty months. The term of office may be
terminated by the same procedure.

1.
The director shall draw up each year a draft budget for
the Agency covering running costs and the proposed oper-
ational programme for the following financial year, and
shall submit it to the governing board.

The director shall be responsible for:

(a) the preparation and organisation of the work of the
governing board and, in particular, for the preparation
of the Agency’s draft work programme,

(b) the day-to-day administration of the Agency,

(c) the preparation of the statement of revenue and expen-

diture and execution of the Agency’s budget,

(d) the preparation and publication of reports specified

under this Regulation,

(e) all staff matters,

(f)

implementing the annual work programme referred to
in Article 17(9),

(g) implementing the governing board’s decisions and

guidelines laid down for the Agency’s activities.

The director shall be accountable to the governing

2.
board for his activities and shall attend its meetings.

The director shall be the legal representative of the

3.
Agency.

The director shall hold the power of Appointing Auth-

4.
ority.

The director shall present a quarterly activity report to

5.
the European Parliament.

Article 19

All items of revenue and expenditure of the Agency
1.
shall be included in the estimates for each financial year,
such financial year corresponding to the calendar year, and
shall be shown in the budget of the Agency, which shall
include an establishment plan.

2.
On the basis of the draft referred to in paragraph 1,
the governing board shall, by 15 February at the latest,
adopt a draft budget for the Agency and shall submit it
to the Commission.

3.
The Commission shall assess the draft budget of the
Agency, having regard to the priorities which it has estab-
financial guidelines for recon-
lished and to the overall
struction assistance for Kosovo.

It shall establish on this basis, and within the proposed
limits of the overall amount to be made available for aid
to Kosovo, the annual contribution for the budget of the
Agency to be included in the preliminary draft of
the
general budget of the European Communities.

the budget of

The governing board, after receiving the opinion of
4.
the Commission, shall adopt
the Agency
together with the work programme at the beginning of
each financial year, adjusting it to the various contributions
granted to the Agency and to funds from other sources. The
budget shall also specify the number, grade and categories
of staff employed by the Agency during the financial year in
question.

Article 21

The director

1.
Agency.

shall

implement

the budget of

the

2.
The Commission’s
responsible for financial checks.

Financial Controller

shall be

By 31 March each year at the latest, the director shall
3.
submit to the Commission, the governing board and the
Court of Auditors the detailed accounts of all revenue and
expenditure from the previous financial year.

The Court of Auditors shall examine these accounts in
accordance with Article 248a of the Treaty.

The European Parliament shall give a discharge to the

4.
driector in respect of the implementation of the budget.

The revenue and expenditure shown in the budget

2.
shall be in balance.

Article 22

The revenue of the Agency shall comprise, without
3.
income, a subsidy from the
prejudice to other types of
general budget of
the European Communities, payments
made as remuneration for services performed, and funding
from other sources.

4.
The budget shall also include details of any funds
made available by the recipient countries themselves for
projects benefiting from financial assistance from the
Agency.

the Agency’s Financial Regulation, which shall

The governing board, having received the agreement of the
Commission and the opinion of the Court of Auditors, shall
adopt
in
particular specify the procedure to be used for drawing
up and implementing the Agency’s budget, in accordance
the Financial Regulation of 21
with Article 142 of
December 1977 applicable to the general budget of
the
European Communities (1).

(1) OJ L 356, 31.12.1977, p. 1.

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Article 23

The Agency’s staff shall be subject to the rules and regu-
lations applicable to officials and other servants of
the
European Communities.

The governing board, in agreement with the Commission,
shall adopt the necessary implementing rules.

The Agency’s staff shall consist of a strictly limited number
of officials assigned or seconded by the Commission or
to carry out management duties. The
Member States
remaining staff shall consist of other employees recruited
by the Agency for a period strictly limited to its require-
ments.

Article 24

The contractual

1.
the Agency shall be
liability of
governed by the law applicable to the contract in question.

In the case of non-contractual
liability, the Agency
2.
shall,
in accordance with the general principles common
to the laws of the Member States, make good any damage
caused by the Agency or its servants in the performance of
their duties.

The Court of Justice of the European Communities shall
have jurisdiction in disputes relating to compensation for
any such damage.

The personal

the
3.
Agency shall be governed by the relevant provisions
applying to the staff of the Agency.

its servants towards

liability of

Article 25

1.
The Commission shall submit to the Council before 31
December 2000 a progress report on the implementation of
if appropriate, make proposals,
this Regulation;
notably with a view to establishing a unified regulatory
framework for assistance to Albania, Bosnia-Herzegovina,
Croatia,
the Federal Republic of Yugoslavia and the
Former Yugoslav Republic of Macedonia.

it may,

2.
Once the Commission considers that the Agency has
fulfilled its mandate as described in Article 14, it shall put to
the Council a proposal for the winding-up of the Agency.(cid:146)

Article 2

This Regulation shall enter into force on the day following that
of its publication in the Official Journal of the European Commu-
nities.

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

ANNEX

PRELIMINARY DRAFT

Financial Regulation of the European Agency for Reconstruction

Text adopted by the governing board at its meeting in (place)

(day) (month) 1999

THE GOVERNING BOARD,

Having regard to Regulation (EC) No . .
European Agency for Reconstruction,
Article . . . thereof,

setting up the
and in particular

Having regard to the agreement of the Commission,

Having regard to the opinion of the Court of Auditors,

Whereas the above Regulation lays down the basic rules
governing the management of the Agency, hereinafter called
(cid:145)the Agency(cid:146), the fixing of the annual grant to be charged
against the budget of the Communities, the presentation and
adoption of the budget and the controls to which the Agency is
subject;

Whereas the effectiveness of the programmes implemented by
is
the Agency demands a special Financial Regulation that

flexible, allows a rapid response and ensures maximum trans-
parency in mangement;

the Agency must make payments

Whereas
in respect of
numerous small projects in accordance with procedures and
therefore needs effective controls on the regularity,
legality
and sound management of
transactions and the
accuracy of its financial statements;

financial

Whereas the procedures for drawing up and implementing the
Agency’s budget and presenting and auditing accounts must be
laid down; whereas the rules governing authorising officers and
accounting officers should also be determined and a system set
up for checking the exercise of their responsibilities;

Whereas the Cologne European Council called on the Council,
the European Parliament and the Court of Auditiors (cid:145)to do their
utmost to allow the Agency to become operational before the
end of the summer(cid:146),

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HAS ADOPTED THIS REGULATION:

administrative costs to operational costs at Agency level shall
be deducted from these contributions during the implemen-
tation of the relevant programmes.

TITLE I

GENERAL PRINCIPLES

Article 1

1.
The budget of the Agency (hereinafter called (cid:145)the budget(cid:146))
is the instrument which sets out forecasts of, and authorises in
advance, the revenue and expenditure of the Agency for each
year. Expenditure shall be authorised in separate commitment
and payment appropriations in accordance with the principle
shall contain separate
of differentiated appropriations.
headings under
activities
for
and
financed by third parties.

It
expenditure

revenue

Commitment appropriations may be used to initiate
2.
activities during one financial year that will extend beyond
the year in question. Payment appropriations may be used to
pay for operations initiated earlier that have been authorised
and cleared before the end of the finanical years.

3.

Administrative expenditure arising from:

(cid:151) contracts, in accordance with local usage, or

The governing board may accept any donation made to
foundations, grants, gifts and
It shall

3.
the Agency,
bequests, and shall adhere to the designated use.
inform the Commission thereof.

in particular

Article 4

1.
No revenue shall be collected and no commitment or
payment effected unless credited to or charged against an
article in the budget.

No expenditure may be committed or authorised in excess of
the authorised appropriations.

Amounts

from financial
2.
contributions by third parties
entered in the
statement of revenue of the Agency’s budget and the same
amounts shall be entered in the statement of expenditure.

corresponding to revenue
shall be

The implementing rules to be established under Article 74 shall
include the detailed provisions necessary for implementation.

(cid:151) contractual provisions relating, in particular, to the supply

of equipement,

Article 5

The financial year shall correspond to the calendar year.

for periods extending beyond the financial year
shall be
charged against the budget for the financial year in which it
is effected.

The revenue of a financial year shall be entered in the accounts
for the financial year in which it is collected.

Article 2

The budget appropriations must be used in accordance with
the principles of sound financial management, and in particular
those of economy and cost-effectiveness. Quantified objectives
must be identified and progress towards achieving them moni-
tored.

The commitments of a given financial year shall be entered in
the accounts for that year on the basis of expenditure for
received by the
which the
financial controller no later than 31 December.

commitment proposal was

The payments of a financial year shall be entered in the
accounts for that year on the basis of expenditure the author-
isation for which reached the financial controller not later than
31 December.

Article 3

Article 6

1.
All revenue and expenditure shall be entered in full in the
form of commitments and payments in the budget and in the
accounts without any adjustment against each other.

Total

revenue shall cover

2.
total payments. However,
revenue from the contributions of third parties to activities
of the Agency shall not be used for any other purpose. Such
contributions must be authorised by the governing board when
the budget is established or during the financial year and the
Commission notified thereof. An amount representing a share
to the the ratio of
of

the management costs proportional

The following rules shall govern the use of appropriations:

1.

(a) commitment and payment appropriations still uncom-
mitted at the end of the financial year for which they
were entered, shall, as a rule, lapse;

(b) appropriations relating to remuneration and allowances

of staff may not be carried over;

(c) however, the following may be carried over:

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Appropriations not committed at 31 December may be
carried over to the next financial year only; the director
shall submit to the governing board, before 31 January,
duly substantiated requests for carry-overs.

The carry-over of such appropriations can be proposed
only for exceptional reasons in order to cope with
compelling needs which cannot be met by appropri-
ations from the following fianncial year.
In principle,
such carry-overs are intended to cover needs which
would normally have
the previous
financial year but which, owing to delays for which
the authorising officer was not responsible, could not
be used in good time.

come under

The governing board shall act on such requests for
carry-over by 1 March at the latest.

that

appropriations

the
Payment
payments outstanding on 31 December pursuant
to
commitments properly entered into between 1 January
and 31 December shall not be carried over for longer
than the subsequent year.

correspond

to

Appropriations still available on 31 December arising
from the donations referred to in Article 3(2) shall be
carried forward automatically.

2. The following appropriations shall lapse at the end of the

year:

(a) appropriations from the previous financial year:

(cid:151) appropriations carried over by decision under point
1(c) which have been neither committed nor paid,

(cid:151) appropriations

carried over automatically under

point 1(d) which have not been paid;

(b) appropriations of the financial year which have not been

carried over.

3. A list of the appropriations to be carried forward auto-
to the governing board for

matically shall be
information purposes before 1 March.

sent

4. For the purpose of implementing the budget, the use of
appropriations carried forward shall be shown separately,
in the accounts for the current
for each budget
financial year.

item,

Article 7

From 15 November of each year, routine administrative expen-
diture chargeable to the next
finanical year which, by its
nature, arises at the beginning of that financial year may be
charged as an advance commitment against the appropriations
provided for in respect of the next financial year up to a
maximum of one quarter of the total corresponding appropri-
ations for the current year. However, such commitments shall
not apply to new expentidure of a kind not yet approved in
principle in the budget of the current finanical year.

Expenditure relating to rents or certain associated expenditure
which is payable in advance in accordance with provisions laid
down by law or contracts may give rise to payments from 20
December onwards, to be charged to the appropriations for the
next finanical year.

Article 8

1.
If the budget is not finally adopted at the beginning of
the financial year, expenditure already approved in principle in
the last budget duly adopted may be effected under
the
conditions laid down in this Article.

An item of expenditure shall be considered as having been
approved in principle in the last budget duly adopted if it
could have been charged to a specific budget heading under
the financial year concerned.

appropriations

in excess of one-twelfth of

Payments may be made monthly in respect of any chapter
2.
up to one-twelfth of the total appropriations entered in the
chapter in question for the preceding financial year, account
being taken of transfers, provided this measure does not have
the effect of placing at the disposal of the Agency, for any
month,
the
the grant reserved for the Agency in the draft
amount of
in the absence thereof,
budget or,
in the preliminary draft
budget of
the Communities. Commitments may be entered
into in respect of any chapter for up to one-quarter of the
total appropriations entered in the relevant chapter for the
preceding financial year, account being taken of all transfers,
plus one-twelfth for each completed month, provided the
the grant reserved for the Agency in the draft
amount of
in the preliminary draft
in the absence thereof,
budget or,
budget of the European Communities, is not exceeded.

At the request of the director, the governing board may,
3.
in the light of administrative needs, authorise simultaneously
two or more provisional twelfths, provided that the amount
authortised for each chapter does not exceed the maximum
annual limit provided for in paragraph 2.

4.
If, for a given chapter, the expenditure necessary to avoid
a break in continuity of the Agency’s activity in the area in
question cannot be met with the authorisation of two or more
provisional twelfths as provided for in paragraph 3, author-
isation may,
same
procedure to exceed the total provided for in that paragraph,
provided that the overall total of the appropriations opened in
the budget of the preceding year is not exceeded.

exceptionally, be

given under

the

Article 8a

In no circumstances may the Agency make commitments for
activities of a duration beyond the date referred to in Article 27
of Regulation No . . . setting up the Agency.

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Article 9

Article 12

The budget shall be drawn up in euros. The value of the euro
and the
conversion into national
its
currencies shall be that laid down in the Financial Regulation
applicable to the general budget of the European Communities.

arrangements

for

The governing board shall adopt the budget, together with the
establishment plan, before the beginning of the financial year,
ensuring that the statement of revenue and the statement of
payments are in balance, having regard in particular to any
grant from the budgetary authority.

TITLE II

The budget thus adopted shall be forwarded to the Commission
forthwith.

PRESENTATION AND STRUCTURE OF THE BUDGET

Article 10

1.
The director shall send the governing board an estimate
of the Agency’s revenue and expenditure for the following year.
This estimate shall include a list of posts.

The governing board shall draw up the estimate along with the
list of posts and shall forward it to the Commission by 31
March at the latest.

2.
In the event of unavoidable, exceptional or unforeseen
circumstances, the director may submit draft supplementary
and/or amending budgets
to the governing board. Such
estimates shall be submitted in the same form and according
to the same procdure as the statement whose estimates they
are amending. They must be substantiated by reference to the
latter and, as a general rule, are to be submitted to the
Commission no later than the date laid down for submitting
the estimate for the following financial year.

Article 12a

In unforeseen circumstances the Agency may at any time adopt
a supplementary or amending budget in accordance with the
procedures set out in Articles 10 to 12.

Article 13

The budget and the list of posts shall be published in the
Official Journal of the European Communities.

Article 14

The budget shall be subdivided into titles, chapters, articles and
items according to the nature of the revenue or expenditure or
the intended purpose thereof, following a decimal classification
system.

Article 11

It shall show:

1.

In support of the estimate there shall be submitted:

1. as regards the statement of revenue:

(cid:151) a list of posts including, for each category of staff, a detailed
list of authorised posts and actual numbers of persons
holding posts on the date of submission of the estimate
of revenue and expenditure;

(cid:151) where a change in the numbers of persons holding posts is
proposed, a statement giving the reason for requesting new
posts;

(a) the revenue for the financial year in question;

(b) the revenue entered for the preceding financial year and
the revenue established for the last financial year for
which accounts have been closed;

(c) appropriate remarks on each revenue heading;

(cid:151) a quarterly estimate of cash payments and receipts.

2. as regards the statement of expenditure:

As a preface to the estimate, the director shall submit a

2.
general introductory note containing in particular:

(a) the commitment and payment appropriations made
in question, divided

the financial year

available for
into titles, chapters, articles and items;

(cid:151) an outline of the policy justifying the requests for appropri-
ations, particularly in terms of corresponding to the
programme of work adopted by the governing board;

(b) the appropriations made available for the preceding
financial year and the actual expenditure in the last
financial year
for which the accounts have been
closed, using the same classification;

(cid:151) an explanation of the changes in appropriations from one

financial year to the next.

(c) appropriate remarks on each subdivision.

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Such remarks may include financial information relating
to:

Those so empowered may act only within the limits of the
powers expressly conferred upon them.

(cid:151) the Agency’s draft work programme;

(cid:151) services provided for third parties;

(cid:151) the participation of

third parties in the Agency’s

activities.

(d) in an annex, a list of posts setting the number of
permanent and temporary posts for each grade in each
category and indicating the number of posts authorised
for the preceding year.

Article 18

integrated computer

Where revenue and expenditure operations are managed by
means of
the provisions of
Sections II and III of this Title and of Title VI shall apply
the possibilities and requirements
with due allowance for
deriving from computerised management. To this end:

systems,

(cid:151) the supporting documents may remain with the authorising
officer or the accounting officer for purposes of checking,

Article 15

(cid:151) signatures and approvals may be added in appropriate

computerised form.

The list of posts drawn up by the governing board shall
consitute an absolute limit for the Agency; no appointment
may be made in excess of the limit set.

Instances of half-time work authorised by the director in
accordance with Article 51 of the Staff Regulation of officials
of the European Communities may be compensated for by the
recruitment of other staff within the limits laid down by the
governing board.

TITLE III

IMPLEMENTATION OF THE BUDGET

SECTION I

General provisions

Article 16

The budget shall be implemented in accordance with the
principle that the authorising officers, accounting officers and
financial controllers are different individuals.

The appropriations shall be administered by the authorising
officer who alone is empowered to enter into commitments
regarding expenditure, establish entitlements to be collected
and issue recovery orders and payment orders. The operations
of collection or payment shall be carried out by the accounting
officer. The duties of authorising officer, financial controller
and accounting officer shall be mutually incompatible.

Article 17

The director of the Agency shall implement the budget on his
own responsibility in accordance with this Regulation, within
the limits of the appropriations allotted and in accordance with
Article 2.

The director shall delegate his powers under conditions to be
laid down by him and within the limits set by the act of
delegation, which shall be communicated to the empowered
person,
the
governing board and the Court of Auditors.

the financial controller,

the accounting officer,

conditions

The
shall be
determined by the implementing rules provided for in Article
74.

implementing this Article

for

Article 19

The financial controller shall be responsible for checking the
commitment and payment of all expenditure and the estab-
lishment and recovery of the Agency’s revenue, in accordance
with the principles laid down in Article 2.

Controls shall be carried out by that official by means of
inspection of
the files relating to expenditure and revenue
and, if necessary, on the spot.

The financial controller may be assisted in his duties by one or
more assistant controllers.

The financial controller must be consulted on the setting up of
the accounting systems of the Agency. He shall have access to
the data of such systems.

The financial controller shall carry out
internal audits in
accordance with the rules for implementation provided for in
Article 74. Audits shall include an evaluation of the efficiency
of management and control systems and verification of the
proper performance of operations.

Article 20

The collection of revenue and the payment of expenditure shall
be carried out by an accounting officer appointed by the
governing board.

Subject to the second paragraph of Article 42, and to Article
the accounting officer alone is empowered to manage
43,
funds and assets. He shall be responsible for their safekeeping.

He shall be responsible for preparing the financial statements
provided for in Article 65 and 66.

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He may be assisted in his duties by one or more assistant
accounting officers, appointed under the same conditions as
the accounting officer.

The special rules applicable to the accounting officer and to
assistant accounting officers
shall be laid down in the
implementing rules provided for in Article 74.

Article 21

(cid:151) adjustments of amounts paid in error, which may be
achieved by means of deduction beforehand when
another validation of the same type is being effected
under the chapter, article and financial year in respect
of which the excess payment was made;

(cid:151) the value of vehicles, apparatus, equipment and instal-
lations taken in part exchange in accordance with
commercial usage upon purchase of new apparatus,
vehicles, equipment and installations of the same kind.

The appropriations shall be classified by chapter and

1.
article.

Discounts, refunds and rebates on invoices and bills shall
not be recorded as separate revenue;

The appropriations entered under a chapter or article of

2.
expenditure may not be used for other expenditure.

(b) the following sums may be reused under the heading to

which the initial expenditure was charged:

However,

3.
the director may propose to the governing
board that appropriations be transferred from one chapter to
another. The governing board shall act within one month. If it
has not so acted, the transfers shall be deemed to be approved.

The governing board may, at the time of adoption of
the
budget, authorise the director to transfer appropriations from
one chapter to another. Such authorisation must specify the
chapters concerned and any limits and conditions on the
transfer.

(cid:151) revenue arising from the refund of amounts paid in
error against appropriations entered in the budget;

(cid:151) proceeds from the supply of goods and services to other
institutions or bodies, including refunds by such insti-
tutions or bodies of mission allowances paid on their
behalf;

(cid:151) insurance payments received;

The director may authorise transfers between articles on behalf
of the Agency.

(cid:151) revenue from payments connected with lettings;

The governing board shall be informed of such transfers.

Every proposal for a tansfer within a chapter or between
4.
chapters shall be subject
the financial
controller who shall attest that the appropriations are available.

to the approval of

(cid:151) the revenue from the sale of publications and films;

(cid:151) refunds of taxes (cid:151) incorporated in the price of the
products or
services provided to the Agency (cid:151)
effected by Member States pursuant to the provisions
of the Protocol on the Privileges and Immunities of the
European Communities;

Appropriations may be

5.
transferred only to budget
headings for which the statement of expenditure has authorised
appropriations or carried a token entry.

(cid:151) the revenue from the supply of goods and services and

from building works against payment;

6.
This Article shall apply to the appropriations for revenue
allocated for a specific purpose within the meaning of Article
3(2) only as long as that revenue is not used for any other
purpose.

(cid:151) proceeds from the sale of vehicles, equipment and
installations and scientific and technical apparatus,
equipment and materials which are being replaced or
scrapped.

Article 22

Notwithstanding Article 4(1):

(a) the following deductions may be made from all bills,
then be passed for

invoices or statements, which shall
payment of the net amount:

(cid:151) fines imposed on a party to a contract or an accepted

tender;

Sums must be re-used before the end of the financial year
following that in which the revenue was collected.

The chart of accounts shall include suspense accounts to
record reuse operations in both revenue and expenditure;

(c) adjustments may be made

in respect of

exchange
differences occurring in budget operations, and in respect
of debtor and creditor interest rates relating to cash oper-
ations. Only the final gain or loss shall be included in the
balance for the year.

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SECTION II

Article 24

Revenue and management of available funds

Article 23

The accounting officer shall assume responsibility for the

1.
recovery orders duly drawn up.

1.
Any measure or situation which may give rise to or
modify a debt due to the Agency must be preceded by a
debt forecast from the authorising officer. Such forecasts shall
be sent to the financial controller for approval and to the
registration. They shall
accounting officer
mention,
in particular, the type of revenue and the budget
item to which it is to be booked and also, as far as possible,
the estimated amount and the name and description of the
debtor.

for provisional

The financial contoller’s approval shall certify that:

(a) the revenue is booked to the correct item;

is in order and conforms to the relevant
(b) the forecast
provisions,
in particular of the budget and of the regu-
lations applying to the Agency and also of all acts
these regulations, and to
adopted in implementation of
the principles of sound financial management referred to
in Article 2.

The financial controller may withhold his approval. The
2.
director may, by a duly substantiated decision, and on his sole
responsibility, overrule this refusal. This decision shall be final
and binding,
shall be
and may not be delegated;
communicated for information to the Director, the governing
the
board,
Court of Auditors.

the financial controller and, within one month,

it

3.
The authorising officer shall draw up, in respect of every
debt established, a recovery order which shall be sent to the
financial controller for prior approval with the supporting
documents. The recovery orders shall then be registered by
the accounting officer after approval of the financial controller.

The accounting officer’s approval shall be to establish that:

(a) the revenue is booked to the correct item;

(b) the recovery order is in order and conforms to the relevant

provisions;

(c) the supporting documents are in order;

(d) the debtor is correctly described;

(e) the due date is indicated;

He shall exercise all due diligence to ensure that the resources
due to the Agency are recovered at the due dates indicated in
the recovery orders, and shall ensure that the rights of the
Agency are safeguarded.

The accounting officer shall inform the authorising officer and
the financial controller of any revenue not recovered within the
time limits laid down.

If the authorising officer waives the right to recover an
2.
for
first
established debt, he/she shall
cancellation to the accounting officer for registration and to
the financial controller for information.

forward a proposal

The director shall inform the governing board and the Court of
Auditors of all such decisions within one month.

When the accounting officer finds that a document establishing
a debt has not been drawn up, or that a sum due has not been
recovered, he shall inform the director thereof.

Article 25

A receipt shall be issued in respect of all cash payments made
to the accounting officer.

Article 26

The balance from each financial year shall be entered in the
budget for the following financial year as revenue in the case of
a surplus or as expenditure in the case of a deficit.

The relevant estimates of revenue or expenditure are entered in
the budget during the budget procedure.

the close of accounts

After
for each financial year, any
discrepancy with the estimates is entered in the budget for
the following financial year in accordance with Article 10(2).

(f)

the principles of sound financial management referred to in
Article 2 have been applied;

Article 27

(g) the amount and currency ot the sum to be recovered are

correct.

If the accounting officer’s approval is withheld, paragraph 2
shall apply.

Where the Agency’s budget includes provision for a grant paid
from the general budget of the European Communities, the
governing board shall ask the Commission for payment of
the grant on the basis of the estimate referred to in the third
indent of Article 11(1),
solely in accordance with actual
requirements.

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SECTION III

Commitment, validation, authorisation and payment of
expenditure

1. Commitment of expenditure

Article 28

1.
For any measure which may give rise to administrative
expenditure chargeable to the budget, the authorising officer
must first draw up a proposal for commitment and may not
enter into legal commitments vis-(cid:224)-vis third parties until the
financial controller has given his approval after effecting
controls commensurate with the risks involved. A provisional
commitment may be entered into for current expenditure.

2.
The implementing conditions in respect of paragraph 1
shall be determind by the implementing rules provided for in
Article 74. These conditons shall ensure that an exact account
is kept of commitments and authorisations in terms of actual
needs.

Article 29

Without prejudice to Article 18, proposals for commitments
and supporting documents shall show the purpose of
the
expenditure, the estimated amount involved,
if possible the
currency of payment, the budget item to which it is to be
they shall be
booked and the identity of
and registered in
approved by the
accordance with the implementing rules provided for
in
Article 74.

the creditor;
controller

financial

Article 30

The

purpose

for
1.
commitments of expenditure given by the financial controller
shall be to establish that:

proposals

approval

the

of

of

Except where the availability of the appropriations is in doubt,
the governing board may, by means of a decision stating the
full reasons therefor, and on its sole responsibility, overrule a
refusal of approval by financial controller. This decision shall
be final and bindng, and may not be delegated;
it shall be
communicated for information to the financial controller and,
within a month, the Court of Auditors.

2. Validation of expenditure

Article 32

The purpose of validation of expenditure by the authorising
officer shall be:

(cid:151) to verify the creditor’s claim;

(cid:151) to determine or verify the existence and the amount of the

sum due,

(cid:151) to verify the conditions under which payment falls due.

Article 33

Validation of any expenditure shall be subject to the submission
of supporting documents attesting the creditor’s claim and the
service rendered or the existence of a document
justifying
payment.

The authorising officer empowered to validate expenditure
shall personally check the supporting documents or shall, on
his own responsibility, ascertain that this has been done.

3. Authorisation of expenditure

Article 34

(a) the proposal

for commitment has been presented in

accordance with Article 28(1);

Authorisation is the act whereby the authorising officer, by the
issue of a payment order, instructs the accounting officer to
pay an item of expenditure which he has validated.

(b) the expenditure has been correctly charged,

(c) the appropriations are available.

Article 35

The payment order shall state:

(d) the expenditure is in order and conforms to the relevant
provisions,
the budget and the rules
applying to the Agency, and of all acts made in implemen-
tation of these rules;

in particular of

(cid:151) the financial year against which the payment shall be

charged,

(cid:151) the budget article and any other subdivision that may apply,

(e) the princples of sound financial management referred to in

Article 2 have been applied.

(cid:151) the amount to be paid (in figures and words), expressed in

euros or n national currency,

2.

Approval may not be conditional.

(cid:151) the name and address of the payee,

Article 31

(cid:151) the purpose of the expenditure,

(cid:151) the method of payment, wherever possible.

Where the financial controller withholds his approval he shall
furnish a written statement of his reasons therefor. The auth-
orising officer shall be notified accordingly.

The payment order shall be dated and signed by the auth-
orising officer.

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Article 36

Article 39

The payment order shall be accompanied by all the original
supporting documents, which shall bear or be accompanied by
a statement certifying the correctness of the amounts to be
paid, the receipt of the supplies and the performance of the
service and,
the goods in the
inventory referred to in Article 51.

if appropriate,

the entry of

It shall show the numbers and dates of the relevant approvals
of commitment. Copies of supporting documents, certified as
true copies by the authorising officer, may, in some cases, be
accepted in place of the originals.

Article 37

1.
For payments by instalment, the first payment order shall
be accompanied by documents establishing the creditor’s right
to payment of the instalment in question. Subsequent payment
supporting documents already
orders
shall
furnished, and repeat
the first
payment order.

the reference number of

to the

refer

2.
The authorising officer may grant advances to personnel
if a provision laid down by regulation specifically provides
therefor.

authorising officer may

The
to cover
disbursements to be effected by a member of staff on behalf
of the Agency.

advances

grant

Apart form the imprests referred to in Article 42, no advance
for administrative expenditure may be granted unless it has
been approved beforehand by the financial controller.

Article 38

The financial controller shall approve payment orders after
effecting controls commensurate with the risks involved in
order to verify that:

(a) the payment order was properly issued,

(b) the payment order agrees with the commitment of expen-
taking
sound

diture and that
account of
financial management rederred to in Article 2,

is correct,
the principles and requirements of

the amount

thereof

(c) the expenditure is charged to the correct item;

(d) the appropriations are available;

(e) the supporting documents are in order;

(f)

the payee is correctly named and described.

Should approval be withheld, Article 31 shall apply.

4. Payment of expenditure

Article 40

Payment is the final action whereby the Agency is discharged
of its obligations towards its creditors.

Payment shall be made by the accounting officer within the
limits of the funds available.

In the event of a substantive error or of the validity of the
to observe
discharge being contested or of
the
failure
formalities prescribed by this Regulation,
the accounting
officer shall suspend payment.

Article 41

If payment is suspended, the accounting officer shall give the
reasons therefor in a written statement which he shall send
forthwith to the authorising officer and, for information, to
the financial controller.

Except where the validity of the discharge is contested, the
authorising officer may place the matter before the governing
board in the manner laid down in the rules of procedure of the
Agency. The governing board may require in writing, and on
its own responsibility, that payment be effected.

Article 42

Payments shall be effected as a general rule through a bank
account or post office giro account.

The procedure for opening, administering and using such
shall be determined by the implementing rules
accounts
provided for in Article 74. These rules shall,
in particular,
indicate expenditure the payment of which must necessarily
be effected either by cheque or by post office or bank
transfer order, and shall
signature on
cheques and on post office or bank transfer orders of two
duly authorised officials, one signature necessarily being that
of the accounting officer, an assistant accounting officer or an
administrator of an imprest account.

receive the joint

5.

Imprest accounts

Article 43

For the payment of certain categories of expenditure, imprest
accounts may be set up in accordance with the implementing
rules provided for in Article 74.

Only the accounting officer may replenish the
imprest
accounts, save in exceptional cases defined in the implementing
rules of this Regulation.

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These rules shall contain specific provisions concerning in
particular:

(cid:151) the appointment of administrators of imprest accounts,

(cid:151) the nature and maximum amount of each item of expen-

diture to be paid;

(cid:151) the maximum amount of

the imprest which may be

advanced;

(cid:151) the time within which supporting documents must be

produced;

(cid:151) the responsibility of the administrators of imprest accounts.

SECTION IV

Management of posts

Article 44

1. The following shall be established:

nature of the goods or services or the operational requirements
are such that they are not appropriate for a general invitation
to competitive tender.

shall

The tendering procedures, award cirteria and price
3.
conclusion of
adopted after
adjustment procedures
contracts
the
by
and
implementing rules provided for in Article 74, on the under-
standing that award criteria shall be established by analogy
with the criteria laid down in the Financial Regulation
applicable to the general budget of the European Communities.

the
governed

established

be

Article 46

Contracts may be made by direct agreement:

(a) where the purchase or hiring of supplies, furniture and
equipment, or the provision of services or building works
are so urgently needed that it is not possible to wait for one
of the tendering producres specified in Article 45 to be
carried out,

(a) a file identifying the posts and containing a job

description for each category A post;

(b) where the tendering or award procedures do not give any
result or where the prices quoted are not acceptable;

(b) an organisation chart showing the organisation of the
departments, detailing the tasks of each administrative
unit.

2. If the note (cid:145)to be abolished(cid:146) is placed against a post in the
statement of revenue and expenditure, it may no longer be
filled when the next vacancy arises in the same career.

TITLE IV

CONCLUSION OF CONTRACTS, INVENTORY, ACCOUNTS

SECTION I

Contracts for the supply of goods and services, contracts
for lease and hire

(c) where for technical, practical or legal reasons the supply of
goods or services can be carried out only by a particular
contractor or supplier;

(d) for contracts for

the supply of additional supplies or
services or for ancillary building works which, technically,
cannot be separated from the main contract.

It shall be understood that the Agency is bound, as far as
possible and by all appropriate means,
to enable suppliers
who are likely to be able to supply the goods and services in
question to compete, excluding the cases referred to in (c) and
(d).

Article 45

Article 47

construction work shall be

1.
Contracts for the purchase or hiring of buildings or
goods, for the provision of services or for the performance
of
from
contracts
relating to the purchase of a building already
constructed or to the leasing of a building, all such contracts
shall be concluded

in writing. Apart

(a) by invitation to tender;

(b) by way of a bill of costs or invoice in the cases provided for

in Article 50;

(c) by direct agreement in the cases referred to in Article 46

and within the limits laid down in this article.

2.
Invitations to tender are published on the Internet, the S
series of the Official Journal and in all other appropriate media.
However, their publication may be limited where the scale or

Participation in invitations to tender and contracts awarded by
the Agency shall be open on equal terms to all natural and
legal persons from the Member States, the recipient states of
this Regulation and the states covered by the Phare and Meda
programmes.

The following shall be considered to be legal persons of a
Member State, the recipient states or states covered by the
Phare and Meda programmes: legal persons who are established
in accordance with the legislation of a Member State, a
recipient state or a state covered by the Phare or Meda
prgrammes and who have their central administration or
principal establishment in the territories in which the Treaty
establishing the European Community applies, in the recipient
states or
in the states covered by the Phare or Meda
programmes, or who have their registered office there, where
their activity has an actual and continuous link with the
economy of the said territories or countries.

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Participation in contracts awarded by the Agency that are
covered by contributions form third parties shall be governed
by the financing agreement concluded between the Agency and
the donor concerned.

The Agency shall carry out its own inspection once a year to
ascertain that entries in the inventory correspond to the facts.

(Deleted)

Article 48

Article 49

By way of guarantee of the performance of contracts, suppliers
or contractors may be required by a warranty clause to make a
preliminary deposit.

The amount of the deposit shall be fixed:

(cid:151) according to the usual trade terms of supply contracts,

(cid:151) according to the special conditions governing building

contracts.

For works of a value exceeding the ceiling laid down in the
implementing rules provided for in Article 74, a preliminary
deposit must be lodged. A sum may be retained as security
until final acceptance of delivery.

The Agency shall publish on the internet each quarter a list of
persons to whom contracts have been awarded.

the Agency shall ensure that

Where a contract has not been performed or completion has
is adequately
been late,
compensated in respect of all damages, interests and costs by
the deduction of the amount from the deposit, whether this
has been lodged directly by the supplier or contractor, or by a
third party.

it

Article 50

Contracts may be made against invoice or bill of costs where
the expected value of the goods, services or works does not
exceed the amounts laid down by the implementing rules of
the Financial Regulation applicable to the general budget of the
European Communities.

SECTION II

Inventory of movable and immovable property

Article 51

A permanent inventory showing the quantity and value of all
movable and immovable property belinging to the Agency
shall be kept in accordance with a model drawn up by the
Commission. Only movable property exceeding a specific value
laid down in the implementing rules provided for in Article 74
shall be entered in those inventories.

Article 52

The sale of movable property shall be suitably advertised under
the conditons laid down by the implementing rules provided
for in Article 74.

Apart from sales by public auction, staff of the Agency may
not acquire any movable property resold by the Agency.

Article 53

A statement or record shall be drawn up by the authorising
officer and endorsed by the financial controller whenever any
property in the inventory is sold, given away free of charge,
scrapped, hired out, or found missing on account of loss, theft
or any other reason.

The statement or record shall refer in particular to any obli-
gation that may devolve on a member of
the
Agency or any other person to replace the item in question.

the staff of

If immovable property or large installations are made available
free of charge, they must be covered by contracts approved by
the financial controller and such cases shall be mentioned in an
annual communication addressed to the Commission when the
estimate of revenue and expenditure is presented.

Article 54

All acquisitions of movable or immovable property as defined
in Article 51 shall, before payment, be entered in the
permanent inventory.

The entry shall be recorded in the corresponding invoice or
attached document drawn up with a view to payment of the
expenditure.

SECTION III

Accounts

Article 55

The accounts shall be kept
in euros by the double entry
method on the basis of the calendar year. They shall show
all revenue and expenditure for the financial year; they shall
be authenticated by supporting documents.

The revenue and expenditure account and the balance sheet
shall be drawn up in euros.

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Article 56

The chart of accounts shall make a clear distinction between
budgetary accounts and cash accounts.

It shall comprise two parts:

(a) accounts of budgetary expenditure and revenue which show

the detailed implementation of the budget;

(b) cash accounts which disclose the assets of the Agency.

These accounts shall show the expected effect of the Agency’s
legal obligations.

The accounts shall make it possible to draw up an annual
balance of assets and a monthly statement of revenue and
expenditure by chapter and article.

The statements shall be forwarded to the financial controller,
the authorising officer and the Court of Auditors.

Article 57

of expenditure or signing payment orders, do so without
complying with this Regulation and its implementing rules
shall be rendered liable to disciplinary action and, where
to payment of compensation. The same shall
appropriate,
to draw up a document establishing a
apply if
to issue recovery orders or are,
debt or
without justification, late in issuing them.

they omit
if

they neglect

The same shall apply if they neglect to issue payment orders or
thereby
late
are, without
rendering the Agency liable to civil action by third parties.

in issuing them,

justification,

Article 61

Accounting officers and assistant accounting officers shall
1.
themselves liable to disciplinary action and, where
render
appropriate,
to payment of compensation in respect of
payments made by them in disregard of the third paragraph
of Article 40.

They shall render themselves liable to disciplinary action and to
payment of compensation as regards any loss or deterioration
of the monies, assets and documents in their charge where
such loss or deterioration result from an intentional mistake
or serious negligence on their part.

Any advance, other than regular advances which are period-
ically re-examined, shall be entered in a suspense account and
settled at the latest during the financial year which follows the
payment of this advance.

Under the same conditions, they shall be responsible for the
correct execution of orders received by them in respect of the
use and the administration of bank and post office giro
accounts, and in particular:

However, the advances referred to in the second subparagraph
of Article 37(2) shall be settled as a general rule within six
weeks following completion of the project for which they were
granted.

Article 58

The detailed conditions for the establishment and operation of
the chart of accounts for transactions relating both to assets
and to the implementation of the budget shall be determined
by the implementing rules provided for in Article 74.

(a) where the recoveries or payments made by them do not
agree with the amounts on the corresponding recovery of
payment orders,

(b) where they effect payment to a party other than the payee
the supporting documents required
and
in

entitled or without
under
financing agreements
question.

to the payments

the Regulations,

agreements,

applicable

contracts

2.
Administrators of advance funds shall render themselves
liable to disciplinary action and, where appropriate, to payment
of compensation in the following cases:

Article 59

(a) where

they cannot

show due warrant with proper

documents for payments made by them;

The accounts shall be closed at the end of the financial year to
enable the balance sheet and the revenue and expenditure
account referred to in Title VI to be drawn up. The revenue
and expenditure account shall be submitted to the financial
controller.

TITLE V

RESPONSIBILITIES OF AUTHORISING OFFICERS,

THE

ACCOUNTING OFFICERS AND IMPREST ADMINISTRATORS

Article 60

(b) where they effect payments to parties other than entitled

payees.

They shall be liable to disciplinary action and to payment of
compensation in respect of any loss or deterioration of the
monies, assets and documents in their charge where such
loss or deterioration results from an intentional mistake or
serious negligence on their part.

The accounting officers, assistant accounting officers and
3.
imprest-holders shall insure themselves against the risks arising
under this Article.

Authorising officers who, when establishing entitlements to be
recovered, issuing recovery orders, entering into commitments

The Agency shall cover the related insurance costs.

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Article 62

(cid:151) amounts still to be collected at the end of the financial

The liability to payment of compensation and to disciplinary
action of authorising officers, accounting officers, assistant
accounting officers and administrators of
imprest accounts
may be determined in accordance with the provisions of
Articles 22 and 86 to 89 of the Staff Regulations applicable
to officials of the European Communities.

Article 63

The Agency shall be allowed a period of two years from the
date when the revenue and expenditure account is submitted to
take a decision on the final discharge to be given to accounting
officers for the transactions relating thereto.

TITLE VI

PRESENTING AND AUDITING THE ACCOUNTS

SECTION I

Presenting the accounts

Article 64

year,

(cid:151) the cancellation of established entitlements.

Where appropriate, a statement shall be attached to this
table, showing the balances and gross payments arising
from the transactions referred to in Article 23,

2. a table showing the movement in appropriations for the

financial year, indicating:

(cid:151) the initial appropriations,

(cid:151) any amendments to appropriations introduced by means

of transfers;

(cid:151) any amendments made by means of supplementary or

amending estimates,

(cid:151) the final appropriations for the financial year,

(cid:151) appropriations carried over under Article 6;

The director shall draw up each year a revenue and expenditure
account for the Agency.

3. a table showing the use of the appropriations allocated for

the financial year, indicating:

The revenue and expenditure account shall cover all revenue
and expenditure transactions relating to the preceding financial
year. It shall be submitted in the same form and following the
same subdivisions as the budget.

It shall be preceded by an analysis of the financial management
in respect of the year in question. In drawing up this analysis
the Agency shall supply details on the implementation of the
principles and objectives referred to in Article 2.

(cid:151) the commitments entered into and chargeable to the

financial year,

(cid:151) the payments made and chargeable to the financial year,

(cid:151) the sums still to be paid at the close of the financial

year,

(cid:151) the appropriations carried over pursuant to Article 6,

Article 65

(cid:151) cancelled appropriations.

The revenue and expenditure account
include the
following tables subdivided in accordance with the nomen-
clature of the Agency’s budget:

shall

1. a table of revenue comprising:

(cid:151) the revenue estimate for the year in question setting out
separately revenue and the grant from the budget of the
European Communities and revenue from other sources,

Where appropriate, a statement shall be attached to this
table, showing the balances and gross payments arising
from the transactions referred to in Article 22,

4. a table showing the use of appropriations carried over from

the preceding financial year, indicating:

(cid:151) the amount of appropriations carried over,

(cid:151) amendments to the revenue estimates as a result of

supplementary or amending estimates,

(cid:151) the payments made from appropriations which have

been carried over,

(cid:151) entitlements established in the course of the financial

year,

(cid:151) the unused appropriations to be cancelled.

(cid:151) entitlements still
financial year,

to be collected from the preceding

Article 66

(cid:151) revenue collected during the financial year and revenue

carried over pursuant to Article 6(3),

1.
The director shall also draw up a balance sheet of assets
and liabilities of the Agency as at 31 December of the financial
year just ending.

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A statement showing the movements and balances of
accounts at the same date shall be attached thereto.

the

the basis of records or on the spot, and all documents and data
created or stored on a magnetic medium.

The balance sheet shall include, on the assets side, the amount
the
of revenue to be collected and, on the liabilities side,
amount of expenditure chargeable to the financial year,
which have not yet been entered in the accounts.

These documents shall be submitted to the financial

2.
controller.

Article 67

The director shall, by 31 March at the latest, send the revenue
and expenditure account, the financial analysis and the balance
sheet of the Agency for the preceding financial year to the
governing board and the Court of Auditors
for
information, to the European Parliament, the Council and the
Commission.

and,

SECTION II

Auditing the accounts

Article 68

Without prejudice to the controls carried out by the financial
controller, the Court of Auditors shall exercise its powers in
respect of the Agency in accordance with the Financial Regu-
the European
lation applicable to the general budget of
Communities.

To this end, the officials whose operations are checked by the
in
Court of Auditors and the financial controller
particular:

shall

(a) show their

records of cash in hand, any other cash,
securities and materials of all kinds, and the supporting
their stewardship with which
documents in respect of
they are entrusted, and also any books,
registers and
other documents relating thereto;

(b) present

the correspondence and any other document

required for the full implementation of the audit.

The Court of Auditors shall be empowered to audit
the
documents in respect of revenue and expenditure which are
held by the departments of the Agency and, in particular, by
the department responsible for decisions in respect of such
revenue and expenditure.

The task of establishing that the revenue has been received and
the expenditure incurred in a lawful and proper manner, and
that the financial management has been sound, shall extend to
the utilisation, by bodies outside the Agency, of Community
funds received by way of aid.

The grant of aid to beneficiaries outside the Agency shall be
subject to the agreement in writing by the recipients of an
audit being carried out by the Court of Auditors on the utili-
sation of the amounts granted.

Article 69

Article 71

forward to the Court of Auditors, on a
The Agency shall
quarterly basis and at
the latest within the month which
follows the end of the quarter, the documents supporting the
accounts, in particular the documents and certificates in respect
of the correct application of the provisions which govern the
implementation of the budget and relating to the commitment
and payment of expenditure and the establishment and
collection of revenue.

The Court of Auditors may question the Agency on the subject
of the said supporting documents.

Article 70

The Agency shall afford the Court of Auditors all the facilities
and give it all the information which the Court may consider
necessary for the performance of its task.

In particular, the Agency shall place at the disposal of the
Court of Auditors all documents concerning the conclusion
of contracts and all accounts of cash or materials, all
accounting records or supporting documents, and also admin-
istrative documents pertaining thereto, all documents relating
to revenue and expenditure, all inventories, all lists of posts in
the departments, which the Court of Auditors may consider
necessary for auditing the revenue and expenditure account on

The report of the Court of Auditors shall be drawn up in
accordance with Article 248 of the EC Treaty and Article 88
of the Financial Regulation applicable to the general budget of
the European Communities.

Article 72

1.
Parliament shall, before 30 April of the following year,
give a discharge to the director in respect of the implemen-
tation of the budget. If that date cannot be met, the Parliament
shall inform the director of the reasons for the postponement.

the
If Parliament postpones the decision giving discharge,
director shall make every effort to take measures, as soon as
possible, to facilitate removal of the obstacles to that decision.

Parliament shall inform the Council, the Commission and the
Court of Auditors of the decisions which it adopts pursuant to
this paragraph.

The discharge decision shall cover the accounts of all
2.
revenue and expenditure of the Agency, the resulting balance
and the assets and liabilities of
the Agency shown in the
balance sheet. It shall include an assessment of the responsi-
bility of the director’s budgetary management over the past
financial year.

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The director shall take all appropriate steps to act on the

3.
comments appearing in the decisions giving discharge.

By 15 December of the year in which the decision giving
4.
discharge is taken, the director shall report on the measures
taken in the light of these comments and, in particular, on the
instructions given to those departments which are responsible
for the implementation of the budget. Such reports shall be
transmitted to Parliament and the Court of Auditors and, for
information, to the Council and the Commission.

The director must also give an account, in an annex to the
revenue and expenditure account for the next financial year, of
the measures taken in the light of the comments appearing in
the decisions giving discharge.

5.
Supporting documents pertaining to the accounts and the
preparation of the revenue and expenditure account 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.

TITLE VII

FINAL PROVISIONS

Article 73

The governing board shall inform the Court of Auditors, as
soon as possible, of all decisions and measures taken in
implementation of Articles 3, 6, 8, 12 and 21.

the
The Court of Auditors and the financial controller of
Commission shall be informed of the appointment of auth-
the accounting officer, assistant accounting
orising officers,
officers and imprest administrators, and of
the acts of
delegation or appointment pursuant to Articles 17, 20 and 41.

The governing board shall transmit to the Court of Auditors
and the Commission any rules of procedure they adopt in
respect of financial matters.

Article 74

On a proposal by the director, and with the assent of the
financial controller of the Commission, the governing board
shall establish the rules required for implementing this Regu-
lation.

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

Article 75

This Regulation shall enter into force on . . .