Amended proposal for a Council Decision laying down multiannual financial guidelines for managing the assets of the "ECSC in liquidation" and, on completion of the liquidation, the "Assets of the Coal and Steel Research Fund" (COM(2001) 121 final — 2000/0363(CNS)) (Text with EEA relevance)
Date: 2001-03-08
Institutions: European Commission
Subjects: ECSC Treaty, European Community, economic consequence, investment, research, validation of expenditure

C 180 E/10

EN

Official Journal of the European Communities

26.6.2001

Amended proposal for a Council Decision laying down multiannual financial guidelines for
managing the assets of the (cid:145)ECSC in liquidation(cid:146) and, on completion of the liquidation, the
(cid:145)Assets of the Coal and Steel Research Fund(cid:146) (1)

(2001/C 180 E/03)

(Text with EEA relevance)

COM(2001) 121 final (cid:151) 2000/0363(CNS)

(Submitted by the Commission pursuant to Article 250(2) of the EC Treaty on 8 March 2001)

(1) OJ C 29 E, 30.1.2001, p. 251.

INITIAL PROPOSAL

AMENDED PROPOSAL

THE COUNCIL OF THE EUROPEAN UNION,

Unchanged

Having regard to the Treaty establishing the European
Community,

the governments of

Having regard to the Decision [. . ./. . ./ECSC] of the represen-
tatives of
the Member States meeting
within the Council on [...] concerning the financial conse-
quences of the expiry of the Treaty establishing the European
Coal and Steel Community

Having regard to the Protocol annexed to the Treaty of Nice on
the financial consequences of the expiry of the ECSC Treaty
and on the Research Fund for Coal and Steel,

and in particular Article 32, paragraph 2 thereof,

Having regard to Council Decision [.../...], and in particular
Article 2, paragraph 2 thereof,

Having regard to the proposal from the Commission,

Unchanged

Having regard to the opinion of the European Parliament,

Whereas:

(1) For

the purposes of

the Decision [. . ./. . ./ECSC],

the
Commission shall manage the assets of the (cid:145)ECSC in liqui-
dation(cid:146) or, after the liquidation, the (cid:145)Assets of the Coal and
Steel Research Fund(cid:146).

the expiry of

(1) For the purposes of the Protocol on the financial conse-
quences of
the ECSC Treaty and on the
Research Fund for Coal and Steel, the Commission shall
manage the assets of the (cid:145)ECSC in liquidation(cid:146) and, after
the liquidation, the (cid:145)Assets of the Coal and Steel Research
Fund(cid:146).

(2) The management of these assets should be aimed at the
highest possible yield that is compatible with security.

Unchanged

(3) The entire capital of

the (cid:145)Assets of

Research Fund(cid:146), yielded by the liquidation,
preserved intact.

the Coal and Steel
should be

(4) The management of

the transferred assets should take
the experience gained in conducting the
account of
financial operations of
the European Coal and Steel
Community, and the multiannual financial guidelines for
the management of the assets of the (cid:145)ECSC in liquidation(cid:146)
should therefore be based on this experience.

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Official Journal of the European Communities

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INITIAL PROPOSAL

AMENDED PROPOSAL

(5) This Decision respects the fundamental rights and observes the
principles recognised in particular by the Charter of Fundamental
Rights of the European Union as general principles of Community
law.

HAS DECIDED AS FOLLOWS:

Unchanged

Article 1

The multiannual financial guidelines for managing the assets of the
(cid:145)ECSC in liquidation(cid:146), or, after the liquidation, the (cid:145)Assets of the Coal
and Steel Research Fund(cid:146), hereinafter called (cid:145)financial guidelines(cid:146), are set
out in the Annex.

The multiannual financial guidelines for managing the assets of the
(cid:145)ECSC in liquidation(cid:146) and, after the liquidation,
the
Coal and Steel Research Fund(cid:146), hereinafter called (cid:145)financial guidelines(cid:146),
are set out in the Annex.

the (cid:145)Assets of

Article 2

Unchanged

If need be, the financial guidelines shall be reviewed or supple-
mented every five years, commencing from 1 January 2008. To
this end, and at the latest in the first semester of the last year
of each five-year period, the Commission shall reassess the
operation and effectiveness of
the financial guidelines and
shall propose any appropriate amendments.

If it sees fit, the Commission may carry out such reassessment
and shall propose any appropriate amendments before the
expiry of the five-year period.

Article 3

This Decision shall take effect on 24 July 2002.

ANNEX

Unchanged

FINANCIAL GUIDELINES FOR THE INVESTMENT OF THE
ASSETS OF THE (cid:145)ECSC IN LIQUIDATION(cid:146) TRANSFERRED BY
THE MEMBER STATES TO THE COMMISSION

1. Introduction

The Member States of the European Coal and Steel Community
(ECSC), meeting in the Council, have transmitted to the European
Community the assets of the ECSC, which is to be wound up, after
the expiry of the Treaty, on 23 July 2002. They have charged the
European Community with the task of using these assets
to
discharge all
the ECSC, and have agreed that
these assets are to be managed according to their instructions in
such a way as to complete this task and to provide funds for the
benefit of financing continuing research in the coal and steel sectors.

liabilities of

legal

The Member States of the European Coal and Steel Community
(ECSC) have transmitted to the European Community all assets
and liabilities of the ECSC, which is to be wound up, after the
expiry of the Treaty, on 23 July 2002. They have charged the
European Community with the task of using these assets
to
discharge all
the ECSC, and have agreed that
these assets are to be managed according to their instructions in
such a way as to complete this task and to provide funds for the
benefit of financing continuing research in the coal and steel sectors.

liabilities of

legal

C 180 E/12

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Official Journal of the European Communities

26.6.2001

INITIAL PROPOSAL

AMENDED PROPOSAL

The following financial guidelines are to be applied when managing
these assets in order to provide for the discharge of the liabilities,
and to the extent of any eventual surplus to finance the research
activities.

Unchanged

2. Use of funds

All the assets of the (cid:145)ECSC in liquidation(cid:146)’, including both its loan
portfolio and its investments, are to be used as follows:

All the assets of the (cid:145)ECSC in liquidation(cid:146), and on completion of the
liquidation,
the Coal and Steel Research Fund(cid:146),
including both its loan portfolio and its investments, are to be
used as follows:

the (cid:145)Assets of

(cid:151) first,

the
such assets as necessary shall be used to meet
its
in terms both of
the ECSC,
its commitments resulting

remaining obligations of
outstanding borrowings (1) and of
from previous operating budgets, and

Unchanged

(cid:151) secondly, to the extent that such assets are not needed to meet
obligations as described above, they should be invested so as to
provide income to be used to fund the continuation of research
in the coal and steel industries

(cid:151) secondly, to the extent that such assets are not needed to meet
obligations as described above, they should be invested so as to
provide income to be used to fund the continuation of research
in the sectors related to the coal and steel industry.

3. Allocation of assets

Unchanged

Following from point 2 above, the Commission will allocate the
financial assets received from the Member States between the
following three categories:

(i) reserves needed to provide an assurance to the creditors of the
ECSC that all of its outstanding borrowings and the interest
thereon will be paid in full on their due date, thus enabling
the obligor to maintain its (cid:145)AAA(cid:146) rating;

(ii) funds needed to guarantee the disbursement of all amounts
the ECSC

the Operating Budget of

legally engaged under
prior to the expiry of the ECSC Treaty;

(iii) to the extent that funds are no longer needed for the above
purposes (due either to the reimbursement of borrowings or
payment of interest without call on the reserves or the eventual
cancellation of budgetary obligations),
such funds will be
allocated to a long-term investment category.

4. Investment categories

Financial assets allocated under this scheme are to be invested in
such a way as to ensure that funds are available as and when
needed, while still generating the highest return available, consistent
with maintaining a high degree of security and stability over the
long term.

(a) To obtain these objectives, the following investment instruments
shall be permitted, subject to the exposure limits set out below:

___________
(1) In the event of a non-performing loan, any shortfall is made good by the

application of ECSC’s assets

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INITIAL PROPOSAL

AMENDED PROPOSAL

(i) term deposits with authorised banks;

(ii) money market instruments, with a final maturity of

than one year,
categories of authorised issuers as
guidelines;

less
issued by authorised banks or by other
in these

set out

(iii) fixed and floating rate bonds, with a maturity not exceeding
the

they are issued by any of

10 years, provided that
categories of authorised issuers;

(iv) equity

shareholdings

in collective

funds,
provided that such investments are limited to funds whose
aim is to respond to the performance of a financial index
and only for the investments referred to 3(iii) above.

investment

(iv) equity

shareholdings

in collective

funds,
provided that such investments are limited to funds whose
aim is to respond to the performance of a financial index
and only for the investments referred to in 3(iii) above.

investment

(b) The Commission may also make use of the following operations:

Unchanged

(i) repurchase and reverse repurchase agreements, provided the
such transactions, and

counterparts are authorised for
provided that:

(a) securities held under such contracts may not be re-sold
to parties other than the contracting counterparty prior
to the contractual deadline, and

(b) the Commission remains in a position to re-purchase
the contractual
it may have sold at

that

securities
deadline;

(ii) bond lending operations, but only under the conditions and
procedures laid down by recognised clearing systems such as
CLEARSTREAM (formerly CEDEL) and EUROCLEAR, or by
leading financial
institutions specialising in this type of
operation.

(c) The Commission may not undertake the following operations:

(i) purchases of precious metals or certificates representing

precious metals;

(ii) purchases of real estate, except buildings occupied by EU

institutions;

(iii) buying or selling of derivatives contracts.

5. Investment limits

(a) The Commission’s investment shall be limited to the following

amounts:

(cid:151) for obligations issued or guaranteed by Member States or
institutions of the EU, EUR 250 million per Member State
or institution;

(cid:151) for obligations issued or guaranteed by other sovereign or
supranational borrowers, with a credit rating of not less
than (cid:145)AA-(cid:146) or equivalent, EUR 100 million;

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INITIAL PROPOSAL

AMENDED PROPOSAL

(cid:151) for deposits with and/or monetary instruments of an auth-
orised bank, the lower of either EUR 100 million or 5 % of
the bank’s own funds;

(cid:151) for obligations of corporate issuers with a credit rating of

not less than (cid:145)AAA(cid:146), EUR 50 million;

(cid:151) for obligations of corporate issuers with a credit rating of

not less than (cid:145)AA-(cid:146) or equivalent, EUR 25 million;

(cid:151) for holdings of collective investment vehicles with a credit
rating of not less than (cid:145)AA-(cid:146) or equivalent, EUR 25 million
for each such vehicle.

(b) The investment in any single bond issue, subject to the limits
given in (a) above, shall not be more than 20 % of the total
amount of such issue.

(c) Within the limits referred to (a), not more than 20 % of the total
amount held shall be invested in respect of any single issuer.

(d) The abovementioned ratings should be those applied by at least
one of the major international credit rating agencies, as generally
understood.

6. Transfer to EU budget

6. Transfer to the budget of the European Union

The net balance of the income will be committed to the general
budget of the EU as dedicated revenue and will be disbursed by the
Fund as necessary to meet the obligations from the budget line
directed to research programmes for the coal and steel sectors.

The net balance of the income will be committed to the general
budget of the European Union as dedicated revenue and will be
disbursed by the Fund as necessary to meet the obligations from
the budget line directed to research programmes for the coal and
steel sectors.

7. Investment procedures

Unchanged

The Commission shall carry out, on behalf of (cid:145)ECSC in liquidation(cid:146),
the abovementioned investment operations according to the regu-
lations and procedures in force for the ECSC at the time of its
dissolution subject
to change by the Commission, which is
required by best market practice.

8. Accounting

The management of the funds shall be accounted for in the annual
profit-and-loss account and the annual balance sheet prepared for
the (cid:145)ECSC in liquidation(cid:146). These shall be based upon generally
accepted accounting principles similar to those provided for the
ECSC. The accounts will be approved by the Commission and
certified by the Court of Auditors. The Commission may employ
an external firm to carry out an annual audit of its accounts.