Amended proposal for a Council Regulation (EC, ECSC, Euratom) on the Financial Regulation applicable to the general budget of the European Communities
Date: 2002-04-30
Institutions: European Commission
Subjects: amendment of a law, animal experimentation, animal welfare, approximation of laws, protection of animals, scientific research

C 103 E/292

EN

Official Journal of the European Communities

30.4.2002

Amended proposal for a Council Regulation (EC, ECSC, Euratom) on the Financial Regulation
applicable to the general budget of the European Communities

(2002/C 103 E/23)

COM(2001) 691 final/2 — 2000/0203(CNS)

(Submitted by the Commission on 10 January 2002)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 279 thereof,

Having regard to the Treaty establishing the European Coal and
Steel Community, and in particular Article 78h thereof,

Having regard to the Treaty establishing the European Atomic
Energy Community, and in particular Article 183 thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of the European Parliament,

Having regard to the opinion of the Court of Auditors (2),

Having regard to the opinion of the Economic and Social
Committee (3),

Whereas:

a

as
financial

(1) Since times have changed enormously since the Financial
Regulation of 21 December 1977 applicable to the
the European Communities (4) was
general budget of
in particular
series of
result of
adopted,
a
forming
a
enlargements,
a
perspective
framework for
the budget and
the development of
changes to the institutional structure, that Financial Regu-
lation has been substantially amended several times. Since
in
further amendments are necessary to take account,
particular, of the requirements of simplification in legis-
lative and administrative matters and the tightening up of
management of Community finances, the Financial Regu-
in the
lation of 21 December 1977 should be recast
interests of clarity.

(2) This Regulation should be confined to stating the broad
principles and basic rules governing all budgetary matters
referred to in the Treaties and the detailed provisions
should be moved to a Regulation laying down rules for

(1) OJ C 96 E, 27.3.2001, p. 1.
(2) OJ C 162, 5.6.2001, p. 1.
(3) OJ C 260, 17.9.2001, p. 42.
(4) OJ L 356, 31.12.1977, p. 1; Regulation as last amended by Regu-
lation (EC, ECSC, Euratom) No 762/2001 (OJ L 111, 20.4.2001,
p. 1).

‘the
the implementation of this Regulation (hereinafter:
implementing rules’)
a better
in order
hierarchy of rules and make the Financial Regulation
easier to read.

to produce

(3) As

regards budget principles,

the establishment and
implementation of the budget should respect
the four
fundamental principles of budgetary law (unity, univer-
sality, specification, annuality), and the principles of equi-
librium, unit of account, sound financial management and
transparency.

(4) This Regulation should reassert

those principles, keep
exceptions to an absolute minimum and impose strict
conditions on those exceptions.

(5) As regards the principle of unity, this Regulation should
state that it also applies to expenditure on the common
foreign and security policy and cooperation in the field of
justice and home affairs where this is charged to the
the
budget. Decisions on the establishment plans of
Community agencies should be taken by the budgetary
authority as part of the budgetary procedure in view of
their
real or potential, on the number of
European civil servants and on the general budget, via
the
subsidies paid or planned by those agencies, or
pensions which will be paid to their staff.

impact,

(6) As regards the principle of universality, the practices of
repayment of payments on account and re-use should be
discontinued; in some cases they should be replaced by
assigned revenue. These amendments should not affect the
special rules applicable to the Structural Funds.

staff

financial

and administrative

and administrative

(7) As regards the principle of specification, the Commission
needs to have some degree of management flexibility for
appropriations
transfers of
between titles
relating to different policy areas and
between chapters for operational expenditure. This Regu-
lation should allow integrated presentation of the allo-
cation of
resources by
purpose. The procedures for transferring administrative
appropriations should be harmonised for all the other
institutions so that transfers between titles are a matter
for the budgetary authority and those within titles a
for each institution. The budgetary authority
matter
should be allowed to constitute reserves in only two
cases: where there is no legal base or where it is not
certain that appropriations are adequate or can be used
in accordance with the principle of
sound financial
management.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/293

(8) As regards annuality, differentiated appropriations should
be used in all areas, although the technical arrangements
applied at present to appropriations of the European Agri-
cultural Guidance and Guarantee Fund (EAGGF) should be
retained. Decisions on carryovers of commitment and
payment appropriations should be taken by the institution
concerned as a result of the simplification brought about
by the abandoning of non-differentiated appropriations.
The additional periods should be confined exclusively to
the cases where they are absolutely necessary, namely
EAGGF payments.

bodies. The

performed directly by Commission departments or
indirectly by delegation to national or Community public-
sector
implementation methods must
guarantee that the procedures for protecting Community
funds are complied with, whatever the entity responsible
for all or part of this implementation and must confirm
that final responsibility for budget implementation lies
with the Commission in accordance with Article 274 of
the EC Treaty.

(9) As

the

regards

aim is

transparency,

to improve
information on implementation of the budget and the
accounts. A strict deadline should also be set for the
publication of the budget and the principle laid down
that it should published provisionally by the Commission
between the declaration of adoption by the President of
the European Parliament and official publication in the
Journal of the European Communities. In addition,
Official
in order to do away with negative amounts, negative
expenditure should now be treated as assigned revenue.
The possibility of a negative reserve is, however, to be
retained.

(10) Finally,

the principle of sound financial management
should be defined by reference to the principles of
economy, efficiency and effectiveness, and compliance
with those principles checked by means of measurable
indicators in such a way that results can be assessed.
Provision should be made for evaluation throughout the
cycle of a programme.

(11) As regards the establishment and presentation of

the
budget, budgetary procedures should be harmonised and
simplified by elimination of the distinction, which has no
practical
impact, between supplementary budgets and
amending budgets.

(12) The Commission section of the budget should present
appropriations and resources by purpose (activity-based
budgeting), with a view to enhancing transparency in
the budget with reference to the
the management of
objectives of
and in
particular efficiency and effectiveness.

sound financial management

(13) The Commission should enjoy a measure of flexibility in
the management of its staff complement in relation to
the
is authorised in the budget, especially as
what
emphasis in management is now to be on results and
not on means. This freedom will, however, continue to
be restricted by the dual limit of budget appropriations
and the total number of posts allocated; in addition there
will be no latitude as regards grade A1 and A2 posts.

of

the

possible methods

(14) As regards implementation of the budget, there should be
clarification
of
various
implementing the budget, either on a centralised basis
by the Commission or on a shared basis with the
Member States or on a decentralised basis with third
countries receiving external aid or jointly with inter-
be
national
to be
possible

public-sector
for

centralised management

It
either

organisations.

should

(15) As the Commission is responsible for implementation of
the budget,
it may not delegate any tasks of public
authority involving the use of discretionary powers. This
Regulation should restate this principle and specify the
scope of the tasks that may be delegated. It should also
be stipulated that private-sector bodies, other than those
which have a public-service mission guaranteed by the
States, should not be able to undertake any budget
specialist
implementation measure but only provide
technical
perform
or
administrative
preparatory or ancillary tasks.

services

or

(16) For the sake of compliance with the principles of trans-
parency and sound financial management,
the public-
sector bodies or bodies with a public-service mission
guaranteed by the State to which implementing tasks
are delegated on behalf of the Commission should have
transparent procurement procedures, effective internal
controls, a system for presentation of
the accounts
which is separate from their other activities and an
external audit.

their

revenue

financial

controller

approval of

(17) This Regulation meets the requirements of Article 279 of
the EC Treaty by defining the powers and responsibilities
of authorising officers,
the accounting officer and the
internal auditor. Authorising officers are made fully
responsible for all revenue and expenditure operations
executed under
authority and must be held
accountable for their actions, including, where necessary,
through disciplinary proceedings. This
empowerment
must
therefore be strengthened by the removal of
centralised prior controls and in particular the ending of
and expenditure
the
advance
operations by the
the
and of
checking that payment constitutes valid discharge by the
accounting officer. The accounting officer continues to be
responsible for the proper execution of payments, the
collection of revenue and the recovery of receivables. He
manages
and is
responsible for drawing up the financial statements of
the institutions. The internal auditor performs his duties
in accordance with international audit standards. His role
is to provide the institution with reasonable assurances
concerning the proper functioning of the management
and control systems put
in place by the authorising
officers. The internal auditor is not an actor involved in
the financial operations and does not have the role of
exercising control over these operations ahead of
the
decisions by the authorising officers;
the authorising
officers should now assume full responsibility for these
decisions.

treasury, keeps

accounts

the

the

C 103 E/294

EN

Official Journal of the European Communities

30.4.2002

of

of

the

officials

Regulations

(18) The liability of authorising officers, accounting officers
and imprest administrators is not different from that of
other officials and staff and should be subject, under the
Staff
European
Communities, and the Conditions of Employment of
other Servants of those Communities, to the application
of the existing disciplinary and financial compensation
measures. On the other hand, certain specific provisions
identifying specific cases of misconduct of accounting
officers and imprest administrators, given the nature of
they will no longer
their duties, should be retained;
have any special allowance or insurance.
In cases not
involving fraud,
to provide the appointing
in order
authority with the necessary expertise, each institution
irregularities panel
should set up a specialised financial
which will determine whether or not an irregularity has
occurred which could make the official or other servant
liable to disciplinary action or payment of compensation
and, if it has detected problems with systems, to report to
the authorising officer and the internal auditor. For cases
of fraud, however, this Regulation should refer to the
provisions in force on the protection of the European
Communities' financial interests and on the fight against
European
officials
corruption
Communities or officials of Member States of
the
European Union.

involving

the

of

(19) The concepts of budget and legal commitment of expen-
diture and the conditions of application should be defined.
In order to limit in time the potential budget impact of
the volume of
Commission decisions and to restrict
dormant commitments,
the period during which indi-
vidual legal commitments may be made on the basis of
global budget commitments should be limited.

(20) This Regulation should define the typology of payments
which may be made by authorising officers. Payments
must be made principally as a function of
the effec-
tiveness of the action and the results which flow from it.

authorisation

(21) This Regulation should stipulate that the operations of
validation,
be
completed within a time-limit which will be set in the
implementing rules and that in the event of failure to
respect
time-limit creditors will be entitled to
default interest to be charged to the budget.

payment must

and

this

of

and

the Council

(22) As regards procurement, the Directives of the European
Parliament
the
procedures for the award of public supply, service and
works
contracts
awarded by
acting on their own
account;
their principles should also govern the rules
applicable to all contracts awarded on behalf of third
parties.

should apply
institutions

contracts
the

coordinating

to public

(23) In order to prevent irregularities and to combat fraud and
corruption and promote sound and efficient management,
candidates or tenderers who are guilty of such acts or
have conflicting interests should be excluded from the
award of contracts.

(24) For the sake of transparency, candidates and tenderers
should be informed in an appropriate manner about the
award of contracts.

(25) Finally, as part of the process of empowerment of auth-
the current Advisory Committee on

orising officers,
Procurement and Contracts should be dispensed with.

(26) As regards grants, a framework for the award and moni-
toring of Community grants involving specific provisions
for implementing the principles of transparency, equal
treatment,
retrospective
awards, collective assessment and control should be put
in place.

co-financing, prohibition of

(27) In order to avoid any cumulation,

it should not be
possible for grants to be awarded to finance twice the
same action or routine expenditure for the same year.

(28) In a similar manner to the rules concerning the award of
public contracts, grounds for excluding certain parties
from the award of grants should be laid down in order
to have appropriate means of combating fraud and
corruption.

(29) So that the rights and obligations of the institution and of
the beneficiary are clear, the grant award should be the
subject of a written agreement.

(30) As regards accounting and the presentation of accounts, it
should be stipulated that the accounts comprise general
accounts and budget accounts and it should be added that
the general accounts are based on a system of accrual
accounting whereas the budget accounts are intended to
draw up the budget outturn account and the reports on
implementation of the budget.

(31) The principles on which the general accounts are based
and the financial statements are presented should be
defined
accepted
to
accounting principles and the Council Directives on the
annual accounts of certain types of companies, where
they are relevant in the context of the public service.

internationally

reference

by

(32) The provisions on the supply of information concerning
implementation of
the budget should be adapted to
extend this information to the use of appropriations
carried over, made available again and re-used and to
the various Community-law bodies,
to improve the
for providing monthly figures and the
arrangements
report on implementation, which will be sent
three
times a year to the budgetary authority.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/295

(33) The accounting methods employed by the institutions
should be harmonised and, in this field, the Commission's
accounting officer should have the right of initiative.

(34) It should be specified that

the use of computerised
financial management systems should in no way restrict
the Court of Auditors' rights of access to supporting
documents.

(35) The rather vague concepts of advance and payment on
account should be removed; payments should be made in
and
the
payments of the final balance, when the entire amount
is not paid in one instalment.

form of pre-financing,

interim payments

(36) As regards external audit and discharge, although the
Commission is fully responsible for implementation of
the budget, the importance of management shared with
cooperation
the Member States
the Court of
throughout
Auditors and the discharge by the budgetary authority.

audit procedure by

requires

their

full

the

(37) In order to provide optimum conditions for the presen-
tation of the accounts and the discharge procedure, the
timetable leading up to discharge should be amended.

(38) In order

to improve interinstitutional operation,

the
Commission should present to the European Parliament,
at its request, any information relating to the year in
question required for
the
discharge procedure, with due respect for fundamental
human rights,
the
provisions governing judicial and disciplinary proceedings
and the interests of the Union.

the protection of business secrecy,

the smooth application of

(39) Special provisions

should be laid down for certain
Community policies; such provisions should be based
on the principles of this Regulation.

(40) As regards the EAGGF, the specific management features,
relating in particular to the fact that commitment appro-
priations and payment appropriations are equal and to the
carryover arrangements, should be maintained, although
the appropriations for rural development will not be
covered with effect from 1 January 2007.

(41) In order to guarantee the overall amount of appro-
priations available, revenue from the EAGGF Guarantee
Section should be assigned to it as an overall amount.

(43) As

regards

the Structural Funds,

the provision for
repayment of payments on account and making appro-
priations available again contained in the Commission
declaration
(EC)
No 1260/1999 of 21 June 1999 laying down general
provisions on the Structural Funds should be retained.

Regulation

annexed

Council

to

harmonised with

(44) As regards research, the presentation of the budget should
be
concerning
the
activity-based budgeting, whilst preserving the flexibility
of management which the Joint Research Centre currently
enjoys.

provisions

(45) As

action,

external

regards
of
management of
authorised
aid should be
the Commission is given guarantees of
provided that
sound financial management and the beneficiary State is
accountable to the Commission for the funds paid to it.

decentralisation

external

(46) Financing agreements or contracts signed with the bene-
ficiary State or a national, Community or international
public-sector body or natural or legal persons governed
include the general procurement
by private law must
principles laid down in Title V of Part One and Title IV
of Part Two of this Regulation as regards external actions.

(47) A special title should be included containing the general
provisions for the management of European offices. Given
the status and special remit of the European Anti-Fraud
title should
Office (OLAF), a separate chapter in that
contain the special rules for its management.

(48) A separate title should also contain the special rules

applicable to administrative appropriations.

(49) It should be stipulated that the special provisions relating
to the appropriations for the EAGGF Guarantee Section
will apply to the programmes on rural development and
accompanying measures only until the end of the current
programming period.

(50) The change in the timetable for the consolidation of the
institutions' accounts should be deferred until 2005 in
order to allow time to put in place the essential internal
procedures involved.

(42) Provision should be made for the possibility of advance
commitments against EAGGF and administrative appro-
priations
from 15 November preceding the financial
year in question.

(51) Time-limits governing the procedure for adopting the
rules for implementing this Regulation should be laid
down, in order to ensure that any change made to the
Financial Regulation becomes effective within a reasonable
time.

C 103 E/296

EN

Official Journal of the European Communities

30.4.2002

(52) A suitable framework, tailored to the specific management
needs, should be provided for the financial rules to apply
to bodies set up by the Communities, with their own legal
personality, which may receive subsidies from the budget.
At the same time, and without in any way impairing the
operational autonomy required by these bodies for the
performance of
the
functions,
rules
and in particular
certain matters,
governing
discharge and accounting, needs to be harmonised. The
Commission's internal auditor should exercise over these
bodies the same powers as over Commission departments.
The specific provisions governing these bodies will have
to be adapted accordingly to comply with this Regulation,

the substance of

their

HAS ADOPTED THIS REGULATION:

P A R T O N E

COMMON PROVISIONS

TITLE I

SCOPE

Article 1

(Initial proposal: Article 1)

This Regulation lays down the rules for the establishment and
the European
implementation of
Communities, hereinafter ‘the budget’.

the general budget of

For the purposes of this Regulation, the Economic and Social
Committee,
the
and
Ombudsman shall be treated as Community institutions.

the Committee

the Regions

of

Article 2

(New)

All other regulatory instruments concerning the implemen-
tation of the revenue and expenditure of the budget shall be
based on the principles set out in Title II.

TITLE II

BUDGETARY PRINCIPLES

Article 3

(Initial proposal: Article 2)

shall be

The budget
established and implemented in
compliance with the principles of unity, annuality, equilibrium,
unit of account, universality, specification, sound financial
management and transparency as set out in this Regulation.

CHAPTER 1

PRINCIPLE OF UNITY

Article 4

(Initial proposal: Article 3)

The budget is the instrument which, each year, forecasts
considered

1.
and authorises
revenue
necessary for the Communities.

and expenditure

the

The revenue and expenditure of the Communities shall

2.
comprise:

(a) the revenue and expenditure of the European Community,
including administrative expenditure for
the common
foreign and security policy and for cooperation in the
field of justice and home affairs and the related operational
expenditure where this is charged to the budget;

(b) the administrative expenditure of the European Coal and

Steel Community and the related revenue;

(c)

the expenditure and revenue of
Energy Community.

the European Atomic

3.
The budget shall record the guarantee for borrowing and
lending operations entered into by the Communities and
payments to the Guarantee Fund for external actions.

Article 5

(Initial proposal: Article 4)

1.
Subject to Article 74, no revenue shall be collected and
no expenditure effected unless booked to a line in the budget.

No expenditure may be committed or authorised in

2.
excess of the authorised appropriations.

An appropriation may not be entered in the budget if it

3.
is not for an item of expenditure considered necessary.

Subject to Article 74, interest yielded by the funds which
4.
remain the property of the European Communities shall be
entered in the budget as general revenue.

CHAPTER 2

PRINCIPLE OF ANNUALITY

Article 6

(Initial proposal: Article 5)

The appropriations entered in the budget shall be authorised
for one financial year which shall run from 1 January to
31 December.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/297

Article 7

(Initial proposal: Article 6)

The budget shall contain differentiated appropriations,
and
commitment

appropriations

consist of

1.
which shall
payment appropriations.

Commitment appropriations shall cover the total cost of
2.
the legal commitments entered into during the current financial
year, subject to Articles 77(2) and 167(2).

3.
Payment appropriations shall cover payments made to
honour the legal commitments entered into in the current
financial year and/or earlier financial years.

4.
Paragraphs 1 and 2 shall be without prejudice to the
special provisions of Titles I, IV and VI of Part Two. They
shall not prevent appropriations being committed globally
nor budgetary commitments being made in annual instalments.

Article 8

(Initial proposal: Article 7)

1.
The revenue of a financial year shall be entered in the
accounts for the financial year on the basis of the amounts
collected during the financial year. However, the own resources
for the month of January of the next financial year may be paid
in advance pursuant to the Council Regulation implementing
the Decision on the
the Communities' own
system of
resources.

The entries in respect of value added tax own resources,
2.
financial
resource
additional GNP-based
the
contributions may be adjusted in accordance with the Regu-
lation referred to in paragraph 1.

and

any

3.
The appropriations authorised for a given year may be
used solely to cover expenditure committed and paid in that
financial year, save as otherwise provided in Title I of Part Two,
and to cover amounts due against commitments from earlier
financial years.

the

legal

Commitments shall be entered in the accounts on the
4.
into up to
commitments
basis of
31 December, subject to the global commitments referred to
in Article 77(2) and the financing agreements referred to in
Article 167(2), which shall be entered in the accounts on the
basis of the budget commitments up to 31 December.

entered

By way of derogation from paragraphs 4 and 5, the
6.
expenditure of the Guarantee Section of the European Agri-
cultural Guidance and Guarantee Fund (EAGGF)
shall be
entered in the accounts for a financial year in accordance
with the rules laid down in Title I of Part Two.

Article 9

(Initial proposal: Article 8)

1.
Commitment appropriations and payment appropriations
which have not been used at the end of the financial year for
which they were entered shall be cancelled.

However, they may be carried over to the following financial
year only, by a decision taken by the institution concerned
by 15 February at the latest, in accordance with paragraphs
2 and 3.

Commitment appropriations may be carried over

2.
respect of:

in

the preparatory stages of

(a) amounts corresponding to commitment appropriations for
which all
the commitment
procedure as specified in Article 60 have been completed
by 31 December. These amounts may then be committed
up to 31 March of the following year;

(b) amounts which are necessary when the legislative authority
has adopted a basic instrument in the final quarter of the
financial year and the Commission has been unable to
commit the appropriations provided for this purpose by
31 December.

to

cover

needed

existing

commitments

Payment appropriations may be carried over in respect of
3.
amounts
or
commitments linked to commitment appropriations carried
over, when the appropriations provided for the relevant lines
in the budget for the following financial year do not cover
requirements. The institution concerned shall
first use the
appropriations authorised for the current financial year and
shall not use the appropriations carried over until the former
are exhausted.

inform the European
The institution concerned shall
4.
‘the budgetary
Parliament
and the Council
authority’) by 15 March at
the carryover
decision taken and shall state, for each budget item, how the
criteria in paragraphs 2 and 3 have been applied to each
carryover.

(hereinafter
the latest of

5.
Payments shall be entered in the accounts for a financial
year on the basis of the payments effected by the accounting
officer by 31 December of that year at the latest.

Appropriations placed in reserve and appropriations for

5.
staff expenditure may not be carried over.

C 103 E/298

EN

Official Journal of the European Communities

30.4.2002

Article 10

(Initial proposal: Article 9)

Article 15

(Initial proposal: Article 14)

Revenue not used and appropriations available at 31 December
arising from the assigned revenue referred to in Article 18 shall
be carried over automatically. The appropriations available
corresponding to assigned revenue carried over must be used
first.

1.
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 a payment appropriation in the case of a
deficit.

Article 11

(Initial proposal: Article 10)

Where amounts are decommitted as a result of total or partial
non-implementation of
for which they were
the actions
earmarked, in any financial year after that in which the appro-
priations were entered in the budget,
the appropriations
concerned shall be cancelled.

Article 12

(Initial proposal: Article 11)

The appropriations entered in the budget may be committed
with effect from 1 January, once the budget has been finally
adopted, save as otherwise provided in Title I and Title VI of
Part Two.

Article 13

(Initial proposal: Article 12)

If

the budget has not been finally adopted at

the
1.
beginning of the financial year, Article 273 of the EC Treaty,
Article 78b of
the
Euratom Treaty shall apply to commitment and payment of
expenditure approved in principle in the last budget duly
adopted.

the ECSC Treaty, and Article 178 of

2.
If, for a given chapter, the authorisation of two or more
provisional twelfths granted in the circumstances provided for
to cover the expenditure
in the Treaties is not sufficient
necessary to avoid a break in continuity of the Communities'
activity in the area in question, authorisation may exceptionally
be given under the procedures provided for in the Treaties to
exceed that amount. In this case the overall total of the appro-
priations available in the budget of the preceding year may not
be exceeded.

CHAPTER 3

PRINCIPLE OF EQUILIBRIUM

Article 14

(Initial proposal: Article 13)

The estimates of such revenue or payment appropriations
2.
shall be entered in the budget during the budgetary procedure
and, where appropriate,
in a letter of amendment presented
pursuant to Article 34. They shall be drawn up in accordance
with the Council Regulation implementing the Decision on the
system of the Communities' own resources.

3.
After the presentation of the accounts for each financial
year, any discrepancy with the estimates shall be entered in the
budget for the following financial year through an amending
budget in accordance with Article 37.

CHAPTER 4

PRINCIPLE OF UNIT OF ACCOUNT

Article 16

(Initial proposal: Article 15)

The budget shall be drawn up and implemented in euro and
the accounts shall be presented in euro.

However, for the cash-flow purposes referred to in Article 61,
in the case of imprest accounts,
the accounting officer and,
imprest administrators,
shall be authorised to carry out
operations in national currencies as laid down in the regulation
laying down the rules for implementing this Regulation, here-
inafter referred to as ‘the implementing rules’.

CHAPTER 5

PRINCIPLE OF UNIVERSALITY

Article 17

(Initial proposal: Article 16)

Total revenue shall cover total payment appropriations, subject
to Article 18. All revenue and expenditure shall be entered in
to
full without any adjustment against each other, subject
Article 20.

Article 18

(Initial proposal: Article 17(1))

Budget revenue and payment appropriations must be in

1.
balance.

The following items of revenue shall be used to finance

1.
specific items of expenditure:

2.
The Communities may not raise loans to cover a budget
deficit. They are, however, authorised to raise loans for the sole
purpose of acquiring land and buildings on the strict condition
that such loans offer every guarantee of sound financial
management.

(a)

financial contributions from Member States to certain
research programmes pursuant to the Council Regulation
implementing
the
Communities' own resources;

the Decision on the

system of

30.4.2002

EN

Official Journal of the European Communities

C 103 E/299

(b) interest on deposits and the fines provided for in the Regu-
lation on speeding up and clarifying the implementation of
the excessive deficit procedure;

and
to the Protocol on the Privileges
States pursuant
Immunities of
the European Communities or by third
countries on the basis of the relevant agreements shall be
charged to the budget for the ex-tax amount.

(c) revenue earmarked for a specific purpose, such as income

from foundations, subsidies, gifts and bequests;

(d) contributions to Community activities from third countries

or various bodies;

(e) revenue from third parties in respect of goods, services or

work supplied at their request;

(f)

revenue arising from the repayment of amounts wrongly
paid;

(g) proceeds from the supply of goods, services and works for
including refunds by other
other institutions or bodies,
institutions or bodies of mission allowances paid on their
behalf;

(h) insurance payments received;

(i)

revenue from payments connected with lettings;

Adjustments may be made in respect of exchange
3.
differences occurring in the implementation of
the budget.
The final gain or loss shall be included in the balance for the
year.

CHAPTER 6

PRINCIPLE OF SPECIFICATION

Article 21

(Initial proposal: Article 19)

Appropriations shall be earmarked for specific purposes by title
and chapter;
the chapters shall be further subdivided into
articles and items.

Article 22

(Initial proposal: Article 20)

(j)

revenue from the sale of publications and films, including
those on an electronic medium.

the
Each institution may, within its own section of
1.
budget, propose to the budgetary authority transfers from
one title to another.

A legal basis may also assign the revenue for which it

2.
provides to specific items of expenditure.

The budget

3.
the
carry lines
categories of assigned revenue referred to in paragraphs 1
and 2 and wherever possible shall indicate the amount.

to accommodate

shall

Article 19

(Initial proposal: Article 17(2))

The Commission may accept any donation made to the
and
foundations,

subsidies,

such as

gifts

1.
Communities,
bequests.

2.
Acceptance of donations which may involve some
financial charge shall be subject to the authorisation of the
European Parliament and the Council, which shall act on the
matter within two months of the date of receipt of the request
from the Commission. If no objection has been made within
that period,
take a final decision in
respect of acceptance.

the Commission shall

Article 20

(Initial proposal: Article 18)

1.
The implementing rules may specify the cases where
certain revenue may be deducted from invoices or requests
for payment, which shall then be passed for payment of the
net amount.

Proposals made by the other institutions for transfers from one
title to another shall be forwarded by the Commission to the
budgetary authority for its decision. The Commission may
attach its own opinion to such proposals.

2.
the
Each institution may, within its own section of
budget, transfer appropriations from one chapter to another
and from one article to another. These institutions shall
inform the budgetary authority and the Commission of the
transfers they have made.

3.
The provisions of paragraphs 1 and 2 are without
prejudice to the specific provisions of Article 23 as regards
the Commission.

Article 23

(Initial proposal: Article 21)

The Commission may, within its own section of

1.
budget:

the

(a) transfer

appropriations within articles

and, with the
exception of expenditure on staff and administration,
from one article to another within each chapter;

The cost of products or

2.
services provided to the
Communities incorporating taxes refunded by the Member

(b) as regards expenditure on staff and administration, transfer
appropriations from one title to another provided that the
appropriations are used for the same purpose;

C 103 E/300

EN

Official Journal of the European Communities

30.4.2002

(c) as regards operational expenditure, transfer appropriations
between chapters within the same title, up to a maximum
of 10 % of the appropriations for the year shown on the
line from which the transfer is made.

Three weeks before making the transfers referred to at points
(b) and (c) of the first subparagraph, the Commission shall
inform the budgetary authority of its decision.

The Commission may propose

2.
authority, within its own section of
other than those referred to in paragraph 1.

to the budgetary
transfers

the budget,

Article 24

(Initial proposal: Article 22)

1.
The budgetary authority shall take decisions on transfers
of appropriations as provided for in paragraphs 2, 3 and 4,
save as otherwise provided in Title I of Part Two.

2.
In the case of proposals for transfers of appropriations
relating to expenditure necessarily resulting from the Treaties
or from acts adopted in accordance therewith,
the Council
shall, after consulting the European Parliament, act by a
qualified majority within six weeks, except in urgent cases.
The European Parliament shall deliver its opinion within such
time as will permit the Council to take note of it and to act
within the stipulated time-limit. Where the Council does not
act within this time-limit, the proposals for transfers shall be
deemed to be approved.

In the case of proposals for transfers relating to expen-
3.
diture other than that necessarily resulting from the Treaties or
from acts adopted in accordance therewith,
the European
Parliament shall, after consulting the Council, act within six
weeks, except in urgent cases. The Council shall deliver its
opinion, by a qualified majority, within such time as will
permit the European Parliament to take note of it and to act
within the stipulated time-limit. Where no decision is taken
within this time-limit,
the proposals for transfers shall be
deemed to be approved.

4.
Proposals for transfers relating both to expenditure neces-
sarily resulting from the Treaties or from acts adopted in
accordance therewith, and to other expenditure shall be
deemed to be approved if neither the European Parliament
nor the Council has decided otherwise within six weeks of
the date on which the two institutions received the proposals.
If, in the case of such proposals for transfers, the European
Parliament and the Council reduce the proposed transfer by
different amounts, whichever is the smaller of the amounts
accepted by one of the two institutions shall be deemed to
be approved. Where one of
the
rejects
principle of the transfer, the transfer shall not be made.

the institutions

Article 25

(Initial proposal: Article 23)

1.
Appropriations may be transferred only to budget lines
for which the budget has authorised appropriations or carries a
token entry (p.m.).

Assigned revenue may be transferred only if it is used for

2.
the purpose to which it is assigned.

Article 26

(Initial proposal: Article 24)

1.
Transfers within the titles of the budget devoted to the
EAGGF, Guarantee Section, the Structural Funds and research
shall be the subject of special provisions under Titles I, II and
III of Part Two.

2.
the
Decisions on transfers to allow the utilisation of
reserve relating to Community loans and loan guarantees to
third countries and the reserve for emergency aid shall be taken
by
from the
Commission.

authority on a proposal

the budgetary

The procedure provided for in Article 24 shall apply. However,
if the European Parliament and the Council are unable to agree
on an amount different
from the one indicated in the
Commission's proposal or if they fail to act, the Commission's
proposal for a transfer shall be deemed to be approved.

CHAPTER 7

PRINCIPLE OF SOUND FINANCIAL MANAGEMENT

Article 27

(Initial proposal: Article 25)

1.
Budget appropriations shall be used in accordance with
the principle of sound financial management, that is to say, in
accordance with the principles of economy, efficiency and
effectiveness.

The principle of economy requires that

2.
the resources
used by the institution for the pursuit of its activities shall
in appropriate quantity and
be made available in due time,
quality and at the best price.

The principle of
concerned with the best
relationship between resources employed and results achieved.

efficiency is

The principle of effectiveness is concerned with attaining the
specific objectives set and achieving the intended results.

3.
Objectives which can be checked by means of measurable
indicators shall be set and achievement of these objectives shall
be monitored.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/301

In order

4.
management,
actions regularly.

to apply the principle of

sound financial
the institutions shall evaluate programmes or

Article 28

(Initial proposal: Article 26)

Any proposal submitted to the legislative authority which
1.
may have an impact on the budget, including changes in the
number of posts, must be accompanied by a financial
statement.

2.
During the budgetary procedure, the Commission shall
provide the necessary information for a comparison between
changes in the appropriations required and the initial forecasts
made in the financial statements. This information shall include
progress made and the stage reached by the legislative
authority in its consideration of proposals presented. The
appropriations required shall, where appropriate, be revised
in the light of the deliberations on the legal basis.

CHAPTER 8

PRINCIPLE OF TRANSPARENCY

Article 29

(Initial proposal: Article 27)

The budget shall be established and implemented and the
1.
accounts presented in compliance with the principle of trans-
parency.

2.
The President of the European Parliament shall have the
budget and amending budgets, as finally adopted, published in
the Official Journal of the European Communities.

The budget shall be published within two months following the
date on which the budget is declared finally adopted.

Journal of

The consolidated financial statements shall be published in the
the European Communities. The financial
Official
management reports and analyses drawn up by each institution
shall also be published in the Official Journal of the European
Communities.

TITLE III

ESTABLISHMENT AND STRUCTURE OF THE BUDGET

CHAPTER 1

ESTABLISHMENT OF THE BUDGET

Article 31

(Initial proposal: Article 29)

The European Parliament, the Council, the Court of Justice of
the
the European Communities,
Economic and Social Committee,
the
Regions and the Ombudsman shall draw up an estimate of
their revenue and expenditure, which they shall send to the
Commission before 1 July each year.

the Court of Auditors,
the Committee of

These estimates shall also be sent by these institutions to the
budgetary authority for information by no later than 1 July
each year. The Commission shall draw up its own estimates,
which it shall also send to the budgetary authority by the same
date.

In preparing its own estimates the Commission shall use the
information referred to in Article 32.

Article 32

(New)

Each body referred to in Article 190 shall, in accordance with
the instrument establishing it, send to the Commission by
1 April each year an estimate of its revenue and expenditure,
including the establishment plan, and its work programme.

The Commission shall
budgetary authority for
provided for in point (3)(d) of Article 46(1).

forward these documents
information, except

to the
in the case

Article 33

(Initial proposal: Article 30)

1.
The Commission shall place a preliminary draft budget
before the Council by 1 September each year at the latest. It
shall at the same time transmit the preliminary draft budget to
the European Parliament.

Article 30

(Initial proposal: Article 28)

The preliminary draft budget shall contain a summary general
statement of the expenditure and revenue of the Communities
and consolidate the estimates referred to in Article 31.

Information on borrowing

1.
and lending operations
contracted by the Communities for third parties shall appear
in an annex to the budget.

The Commission shall attach to the preliminary draft

2.
budget:

Information on the operations of the Guarantee Fund for

2.
external actions shall appear in the financial statements.

(a) an analysis of financial management in the previous year;

C 103 E/302

EN

Official Journal of the European Communities

30.4.2002

(b) an opinion on the estimates of the other institutions; this
opinion may contain different estimates, accompanied by
the reasons therefor;

implementing the Decision on the system of the Communities'
own resources.

(c) any working paper it considers useful in connection with
the establishment plans of the institutions and the grants
which the Commission awards to the bodies referred to in
Article 190 and to the European Schools;

(d) information on objectives for the activities and on any

evaluation available.

Article 34

(Initial proposal: Article 31)

if
The Commission may, on its own initiative or
1.
requested by the other institutions, each in respect of
its
own section, present to the Council a letter of amendment to
the preliminary draft budget on the basis of new information
which was not available at the time the preliminary draft was
established.

2.
However, save as otherwise agreed by the institutions or
in exceptional circumstances, the Commission shall put such
letter of amendment to the Council at least thirty days before
the first
the draft budget by the European
Parliament. The Council must put the letter of amendment to
the European Parliament at least fifteen days before the said
first reading.

reading of

Article 35

(Initial proposal: Article 32)

1.
The Council shall establish the draft budget in accordance
with the procedure laid down in Article 272 of the EC Treaty,
Article 78 of the ECSC Treaty and Article 177 of the Euratom
Treaty.

2.
The Council shall place the draft budget before the
European Parliament by 5 October at the latest. The Council
shall attach to that draft budget an explanatory memorandum
defining, where appropriate, its reasons for departing from the
preliminary draft budget.

Article 37

(Initial proposal: Article 34)

1.
If necessary, or in the case provided for in Article 15(3),
the Commission may present preliminary draft amending
budgets.

Preliminary draft amending budgets from institutions other
than the Commission shall be sent to the Commission.

2.
The Commission shall, save in exceptional circumstances,
submit any preliminary draft amending budget to the Council
It may attach a
by 1 September each year at
for amending budgets
dissenting opinion to the requests
from the other institutions.

the latest.

The budgetary authority shall discuss them with due

3.
account for their urgency.

Article 38

(Initial proposal: Article 35)

1. Where the Council has received a preliminary draft
amending budget,
it shall draw up a draft amending budget
in accordance with Article 35.

2.
Except for the timetable, Articles 35 and 36 shall apply
to amending budgets. They must be substantiated by reference
to the budget whose estimates they are amending.

Article 39

(Initial proposal: Article 36)

for

the transmission of
the adoption and transmission of

The Commission and the budgetary authority may agree to
the
bring forward certain dates
estimates, and for
the
preliminary draft and draft budgets. This agreement may not,
however, have the effect of shortening or delaying the periods
allowed for consideration of these texts under Article 272 of
the EC Treaty, Article 78 of the ECSC Treaty and Article 177
of the Euratom Treaty.

Article 36

CHAPTER 2

(Initial proposal: Article 33)

STRUCTURE AND PRESENTATION OF THE BUDGET

The President of the European Parliament shall declare
1.
the budget finally adopted in accordance with the procedure
provided for in Article 272 of the EC Treaty, Article 78 of the
ECSC Treaty and Article 177 of the Euratom Treaty.

Article 40

(Initial proposal: Article 37)

The budget shall consist of:

2.
Once the budget has been declared finally adopted, each
Member State shall, from 1 January of the following financial
year or from the date of the formal declaration if it is made
after 1 January, be bound to make over to the Community the
specified in the Council Regulation
payments due

as

(a) a summary statement of revenue and expenditure;

(b) separate sections subdivided into statements of revenue and

expenditure for each institution.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/303

Article 41

(Initial proposal: Article 38)

budgetary authority shall take a decision on these transfers as
provided in Article 26.

1.
Commission revenue and the revenue and expenditure of
the other institutions shall be classified by the budgetary
authority according to their type or the use to which they
are assigned under titles, chapters, articles and items.

2.
The statement of expenditure for the Commission section
shall be set out on the basis of a nomenclature adopted by the
budgetary authority and classified according to purpose.

Article 44

(Initial proposal: Article 41)

The Commission section may include a ‘negative reserve’
limited to a maximum amount of EUR 200 million. This
reserve, which shall be entered in a separate chapter, may
comprise both commitment appropriations and payment
appropriations.

A title shall correspond to a policy area and a chapter shall, as
a rule, correspond to an activity.

the
This reserve must be drawn upon before the end of
financial year by means of transfer in accordance with the
procedure laid down in Articles 22, 23 and 25.

Each title may include operational appropriations and adminis-
trative appropriations.

Article 45

(Initial proposal: Article 42)

The administrative appropriations for a title shall be grouped in
a single chapter.

The Commission section of the budget shall include the

1.
following two reserves:

Article 42

(Initial proposal: Article 39)

(a) a reserve for emergency aid for third countries;

(b) a reserve relating to Community loans and loan guarantees

The budget may not contain negative revenue or expenditure.

to third countries.

The own resources paid under the Council Decision on the
system of
shall be net
amounts and shall be shown as
such in the summary
statement of revenue in the budget.

the Communities' own resources

2.
The conditions for the entry, utilisation and financing of
the reserves referred to in paragraph 1(a) and (b) are laid down
in the Council Regulation on budgetary discipline and in the
Council Regulation implementing the Decision on the system
of the Communities' own resources respectively.

Article 43

(Initial proposal: Article 40)

Article 46

(Initial proposal: Article 43)

1.
Each section of the budget may include a ‘provisions’ title.
Appropriations shall be entered in this title in the following
two circumstances:

1.

The budget shall show:

(a) where no legal basis exists for the action concerned when

the budget is established;

(b) where there is uncertainty, on serious grounds, about the
adequacy of the appropriations entered on the budget lines
or about
the possibility of using them in a manner
consistent with sound financial management.

The appropriations in this title may be used only after transfer
in accordance with the procedure laid down in Articles 22, 23
and 24.

1.

in the summary statement of revenue and expenditure:

(a) the estimated revenue of
financial year in question;

the Communities for

the

(b) the estimated revenue for the preceding financial year

and the revenue for year N-2;

(c) the commitment and payment appropriations for the

financial year in question;

(d) the commitment and payment appropriations for the

preceding financial year;

2.
In the event of serious implementation difficulties, the
Commission may propose, in the course of a financial year,
that appropriations be transferred to the ‘provisions’ title. The

(e) the expenditure committed and the expenditure paid in

year N-2;

C 103 E/304

EN

Official Journal of the European Communities

30.4.2002

(f) a summary statement of the schedule of payments due
budget

in
commitments entered into in earlier financial years;

subsequent

to meet

financial

years

(g) appropriate remarks on each subdivision;

2.

in the section for each institution, the revenue and expen-
diture shall be shown in the same structure as in point 1,
with appropriate remarks on each subdivision, and with
schedules of payments due in subsequent financial years
to meet budget commitments entered into in earlier
financial years.

The estimated annual amounts of payment appropriations
required for subsequent financial years in relation to the
commitment appropriations for the current year shall be
in a schedule entered in the
shown, as an indication,
remarks column of the budget.

3. as regards staff:

(a)

for each section of the budget, an establishment plan
setting the number of posts for each grade in each
category and in each service and the number of
permanent and temporary posts authorised within the
limits of the budget appropriations;

(b) an establishment plan for staff paid from the research
and technological development appropriations for direct
action and an establishment plan for staff paid from the
same appropriations
the estab-
indirect action;
lishment plans
shall be classified by category and
grade and shall distinguish between permanent and
temporary posts, authorised within the limits of the
budget appropriations;

for

(c) as regards scientific and technical staff, the classification
may be based on groups of grades, in accordance with
the conditions laid down in each budget. The estab-
specify the number of highly
lishment plan must
scientific personnel who are
qualified technical or
accorded
specific
provisions of the Staff Regulations of Officials of the
European Communities and Conditions of Employment
of Other Servants of the European Communities here-
inafter referred to as ‘the Staff Regulations’;

advantages

special

under

the

(d) an establishment plan setting the number of permanent
and temporary posts, authorised within the limits of the
budget appropriations, by grade and by category in each
body mentioned in Article 190.

The establishment plans shall show next to the number of
posts authorised for the financial year the number auth-
orised for the preceding year;

4. as regards borrowing and lending operations:

(a)

in the general statement of revenue, the budget lines
corresponding to the relevant operations and intended
to record any reimbursements received from bene-
ficiaries who initially defaulted, leading to activation of
the performance guarantee. These lines shall carry a
token entry (p.m.) and be accompanied by appropriate
remarks;

(b) in the Commission section:

(i) the budget

lines

containing the Communities'
performance guarantees in respect of the operations
in question. These lines shall carry a token entry
(p.m.), so long as no effective charge which has to
be covered by definitive resources has arisen;

(ii) remarks giving the reference to the legal basis and
the volume of the operations envisaged, the duration
and
the
Communities in respect of these operations;

guarantee

financial

given

the

by

(c)

in a document annexed to the Commission section, as
an indication:

(i) ongoing capital operations and debt management,

(ii) the capital operations and debt management for the

financial year in question;

5. the budget lines under revenue and expenditure necessary
for implementing the reserve relating to Community loans
and loan guarantees
to third countries and also for
implementing the Guarantee Fund for external actions.

2.
In addition to the documents referred to in paragraph 1
the budgetary authority may attach other documents to the
budget.

Article 47

(Initial proposal: Article 44)

The establishment plan described in point (3) of Article
1.
46(1) shall constitute an absolute limit for each institution or
body; no appointment may be made in excess of the limit set.

However, save in the case of grades A1 and A2, each insti-
tution or body may modify each establishment plan by up to
10 % of posts and within the limit of the budget appropriations
and the total number of posts allocated.

2.
By way of derogation from the first subparagraph of
paragraph 1, the effects of part-time work authorised by the
appointing authority in accordance with the Staff Regulations
may be offset by other appointments.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/305

TITLE IV

IMPLEMENTATION OF THE BUDGET

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

CHAPTER 1

GENERAL PROVISIONS

Article 48

(Initial proposal: Article 45)

1.
The Commission shall implement the budget in revenue
and expenditure in accordance with this Regulation, on its own
responsibility and within the limits of the appropriations auth-
orised.

2.
The Member States shall cooperate with the Commission
to ensure that the appropriations are used in accordance with
the principle of sound financial management.

Article 49

(Initial proposal: Article 46)

A basic act must

1.
first be adopted before the appro-
priations entered in the budget for any Community action or
any other Union action may be used.

The following appropriations may be used without a
the actions they are intended to

2.
basic act provided that
finance fall within the competence of the Community:

(a) appropriations for pilot projects of an experimental nature
the feasibility of an action and its

designed to test
usefulness;

(b) appropriations for preparatory actions, designed to prepare
proposals for the adoption of future Community actions;

(c) appropriations for one-off actions, or even actions for an
indefinite duration, carried out by the Commission by
virtue of tasks resulting from its prerogatives at institu-
tional level other than its right of legislative initiative and
under specific powers directly conferred on it by the
Treaties;

(d) appropriations for the operation of each institution under

its administrative autonomy.

Article 50

(Initial proposal: Article 47)

The Commission shall confer on the other institutions the
requisite powers for the implementation of the sections of
the budget relating to them.

Article 51

(Initial proposal: Article 48)

The Commission and each of the other institutions may, within
their departments, delegate their powers of budget implemen-
tation in accordance with the conditions laid down by this
Regulation and by their internal rules and within the limits
which they lay down in the instrument of delegation. Those

Article 52

(Initial proposal: Article 49)

financial actors

All
shall be prohibited from taking any
measures of budget implementation which may bring their
own interests into conflict with those of the Communities.
Should such a case arise, the actor in question must refrain
from such measures and refer the matter to the competent
authority.

CHAPTER 2

METHODS OF IMPLEMENTATION

Article 53

(Initial proposal: Article 50)

1.

The Commission shall implement the budget:

(a) on a centralised basis;

(b) by shared or decentralised management; or

(c) by joint management with international organisations.

2. Where the Commission implements the budget on a
centralised basis,
implementation tasks shall be performed
either directly by its departments or indirectly, in accordance
with the provisions of Articles 54 to 57.

3. Where the Commission implements the budget by shared
management,
shall be entrusted to
Member States in accordance with the provisions of Titles I
and II of Part Two.

implementation tasks

4. Where the Commission implements the budget by decen-
tralised management, implementation tasks shall be entrusted
to third countries in accordance with the provisions of Title IV
of Part Two.

In cases of shared or decentralised management, in order
5.
the funds are used in accordance with the
to ensure that
the Commission shall apply clearance of
applicable rules,
accounts procedures or
correction mechanisms
financial
which enable it to assume its responsibility for the implemen-
tation of the budget in accordance with Article 274 of the EC
Treaty.

6.
In the methods of budget implementation referred to in
paragraphs 3 and 4, the Member States and third countries
shall conduct regular checks to ensure that the actions to be
financed from the Community budget have been implemented
correctly.

They shall take appropriate measures to prevent irregularities
and fraud and if necessary shall bring prosecutions to recover
funds wrongly paid.

7. Where the Commission implements the budget by joint
management, certain implementation tasks shall be entrusted
to international public-sector organisations as specified in the
implementing rules.

C 103 E/306

EN

Official Journal of the European Communities

30.4.2002

in their accounting, audit, control
These organisations shall,
and procurement procedures, apply standards which offer guar-
antees equivalent to internationally accepted standards.

a way that the Commission retains control of implementation
and can monitor their operation.

Article 54

(Initial proposal: Article 51)

The Commission may not entrust to third parties the
1.
executive powers it enjoys under the Treaties where they
involve a large measure of discretion implying political
choices. The implementing tasks entrusted must be clearly
defined and supervised.

limits

laid down in paragraph 1,

2. Within the
the
Commission may, when implementing the budget on a
centralised basis and indirectly under Article 53(2), entrust
tasks of public authority and in particular budget implemen-
tation tasks to:

(a) agencies governed by Community law, referred to in Article

55, hereinafter: ‘executive agencies’;

Article 56

(Initial proposal: Article 53)

1.
Decisions entrusting executive tasks to the bodies referred
to in Article 54(2) shall include all appropriate arrangements
for ensuring the transparency of operations carried out and
must comprise:

(a) transparent, non-discriminatory procurement and grant
award procedures which prevent any conflicts of interest;

(b) an effective
operations;

internal control

system for management

(c) accounting

for

arrangements

operations
and
procedures for the presentation of
the accounts which
will enable the correct use of Community funds to be
ascertained and the true extent of this use to be reflected
in the Community accounts;

these

(b) bodies set up by the Communities as referred to in Article

190;

(d) an independent external audit.

(c) national public-sector bodies or bodies with a public-

service mission guaranteed by the State.

3. Where the bodies referred to in paragraph 2 perform
implementation tasks, they shall conduct regular checks to
ensure that the actions to be financed from the budget have
been implemented correctly.

Such bodies shall take appropriate measures to prevent irregu-
larities and fraud and if necessary bring prosecutions to recover
funds lost, wrongly paid or incorrectly used.

Article 55

(Initial proposal: Article 52)

1.
The executive agencies shall be set up by Commission
decision. They shall be legal persons under Community law
to which powers can be delegated to implement all or part
of a Community programme or project on behalf of
the
Commission and under its responsibility.

2.
The conditions and arrangements for the creation and
operation of these executive agencies shall be defined in such

2.
The Commission may accept that the audit, accounting
and procurement systems of the national bodies referred to in
Article 54(2)(c) are equivalent to its own, with due account for
internationally accepted standards.

The Commission shall

3.
evaluation and control of
entrusted.

ensure periodic
the implementation of

supervision,
the tasks

Article 57

(Initial proposal: Article 54)

1.
The Commission may not entrust measures of implemen-
tation of funds deriving from the budget, in particular payment
and recovery, to external private-sector entities or bodies, other
than those which have a public-service mission guaranteed by
the State under Article 54(2)(c).

The tasks which may be entrusted by contract to external
2.
private-sector entities or bodies other than those which have a
public-service mission guaranteed by the State are technical
expertise tasks and administrative, preparatory or ancillary
tasks involving neither the exercise of public authority nor
the use of discretionary powers of judgment.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/307

CHAPTER 3

FINANCIAL ACTORS

S e c t i o n 1

Principle of separation of duties

Article 58

(Initial proposal: Article 55)

The duties of authorising officer and accounting officer shall be
separated.

S e c t i o n 2

Authorising officer

Article 59

(Initial proposal: Article 56)

The institution shall perform the duties of authorising

1.
officer.

2.
Each institution shall lay down in its internal rules the
staff of an appropriate level to whom it delegates the duties of
authorising officer, the scope of the powers delegated and the
possibility for the persons to whom these powers are delegated
to subdelegate them.

3.
The powers of authorising officer shall be delegated or
subdelegated only to persons covered by the Staff Regulations.

4.
Authorising officers by delegation or subdelegation may
act only within the limits set by the instrument of delegation or
subdelegation.

Article 60

(Initial proposal: Article 57)

for

implementing

The authorising officer shall be responsible in each insti-
1.
tution
in
revenue
accordance with the principles of sound financial management
and for ensuring that the requirements of legality and regu-
larity are complied with.

expenditure

and

and

To implement expenditure,
by

2.
the authorising officer by
budget
subdelegation
delegation
commitments and legal commitments, shall validate expen-
diture and authorise payments and shall undertake
the
preliminaries for the implementation of appropriations.

shall make

The authorising officer by delegation shall put in place, in
4.
compliance with the minimum standards adopted by each
institution and having due regard to the risks associated with
the management environment and the nature of the actions
internal
financed,
management and control procedures suited to the performance
of his duties. Before an operation is authorised, the operational
and financial aspects shall be verified by members of staff other
than the one who initiated the operation. Initiation and verifi-
cation of an operation shall be separate functions.

the organisational

and the

structure

5.
All staff responsible for controlling the management of
financial operations must have the necessary professional skills.
They shall respect a specific code of professional standards
established by each institution.

staff

in the

involved

Any member of

financial
6.
management and control of transactions who considers that
a decision he is required by his superior to apply or to agree
to is irregular or contrary to the principles of sound financial
management shall inform the authorising officer by delegation
if the latter fails to take action, the panel
in writing and,
referred to in Article 66(3).
In the event of any illegal
activity, fraud or corruption which may harm the interests of
the Community, he shall
inform the authorities and bodies
designated by the applicable legislation.

7.
The authorising officer by delegation shall report to his
institution on the performance of his duties in the form of an
annual activity report covering the results of the operations by
reference to the objectives set, the risks associated with these
operations and the use made of the resources provided. The
authorising officer by delegation shall submit to his institution
and
the
management information.

together with financial

activity report,

annual

S e c t i o n 3

Accounting officer

Article 61

(Initial proposal: Article 58)

Each institution shall appoint an accounting officer who

1.
shall be responsible in each institution for:

(a) proper implementation of payments, collection of revenue
and recovery of amounts established as being receivable;

(b) preparing and presenting the accounts in accordance with

Title VII;

3.
Implementation of revenue shall comprise drawing up
estimates of amounts receivable, establishing entitlements to
be recovered and issuing recovery orders.
involve
waiving established entitlements where appropriate.

It shall

(d) laying down, in accordance with Title VII, the accounting

rules and methods and the chart of accounts;

(c) keeping the accounts in accordance with Title VII;

C 103 E/308

EN

Official Journal of the European Communities

30.4.2002

(e)

laying down and validating the accounting systems and
where appropriate validating systems laid down by the
authorising officer
accounting
to supply or
information;

justify

(f)

treasury management.

The accounting officer shall obtain from authorising
2.
officers, who shall guarantee its reliability, all the information
necessary for the production of accounts which give a true
image of the Communities' assets and of budget implemen-
tation.

3.
the
Save as otherwise provided in this Regulation,
accounting officer is alone empowered to manage monies
and other assets. He shall be responsible for their safekeeping.

Article 62

(New)

The accounting officer may, in the performance of his duties,
delegate certain tasks to subordinates subject to the Staff Regu-
lations.

or definitively from his duties by the authority which
appointed him.

imprest
3. Without prejudice to any disciplinary action,
administrators may at any time be suspended temporarily or
definitively from their duties by the authority which appointed
them.

Article 65

(Initial proposal: Articles 61and 62(1))

The provisions of this chapter are without prejudice to
1.
the criminal-law liability which the persons referred to in
Article 64 may incur as provided in the applicable national
law and in the provisions in force on the protection of the
interests and on the fight
European Communities'
against
European
the
Communities or officials of Member States.

corruption involving officials of

financial

Each authorising officer, accounting officer or imprest
2.
administrator
to disciplinary action and
payment of compensation as laid down in the Staff Regu-
lations, without prejudice to Articles 67 and 68.

shall be

liable

The instrument of delegation shall lay down the tasks entrusted
to the delegatees.

S e c t i o n 2

S e c t i o n 4

Imprest administrator

Article 63

(Initial proposal: Article 59)

For the payment of small sums and for the collection of
revenue other than own resources, imprest accounts may be
set up which shall be endowed by the institution's accounting
officer and shall be placed under the responsibility of imprest
administrators designated by the
accounting
officer.

institution's

CHAPTER 4

LIABILITY OF THE FINANCIAL ACTORS

S e c t i o n 1

General rules

Article 64

(Initial proposal: Article 60)

1. Without prejudice to any disciplinary action, authorising
officers by delegation and subdelegation may at any time have
their delegation or subdelegation withdrawn temporarily or
definitively by the authority which appointed them.

2. Without prejudice
the
accounting officer may at any time be suspended temporarily

to any disciplinary

action,

Rules applicable to authorising officers by delegation and
subdelegation

Article 66

(Initial proposal: Article 62(2) and (3))

1.
An authorising officer by delegation or subdelegation
who considers that a decision which it is his responsibility to
take is irregular or contrary to the principles of sound financial
management shall inform the delegating authority in writing. If
the delegating authority then gives a reasoned instruction in
writing to the authorising officer by delegation or subdel-
egation to take the decision in question,
the authorising
officer may not be held liable.

2.
In the event of subdelegation, the authorising officer by
delegation continues to be responsible for the effectiveness of
the internal management and control systems put in place and
for the choice of the authorising officer by subdelegation.

3.
Each institution shall set up a specialised financial irregu-
larities panel which shall determine whether a financial irregu-
larity has occurred and what the consequences, if any, should
be.

On the basis of the opinion of this panel, the institution shall
decide whether to initiate proceedings entailing liability to
disciplinary action or to payment of compensation.
the
panel detects systemic problems,
it shall send a report with
recommendations to the authorising officer by delegation and
to the internal auditor.

If

30.4.2002

EN

Official Journal of the European Communities

C 103 E/309

S e c t i o n 3

Rules applicable to accounting officers and imprest admin-
istrators

in euros. It shall be made available in accordance with the
Council Regulation implementing that Decision.

Article 67

(Initial proposal: Article 63)

An accounting officer may be liable to disciplinary action and
payment of compensation, as laid down in the Staff Regu-
lations, in particular where:

(a) he loses or damages monies, assets and documents in his

keeping;

(b) he alters bank accounts or postal giro accounts;

(c) he recovers or pays amounts which are not in conformity
with the corresponding recovery or payment orders;

(d) he fails to collect revenue due.

Article 68

(Initial proposal: Article 64)

An imprest administrator may be liable to disciplinary action
and payment of compensation, as laid down in the Staff Regu-
lations, in particular where:

(a) he loses or damages monies, assets and documents in his

keeping;

(b) he cannot provide proper supporting documents for the

payments he has made;

(c) he makes payments to persons other than those entitled;

(d) he fails to collect revenue due.

S e c t i o n 2

Estimate of amounts receivable

Article 70

(Initial proposal: Article 66)

1.
An estimate of the amount receivable shall first be made
by the authorising officer responsible in respect of any measure
or situation which may give rise to or modify an amount
owing to the Communities.

By way of derogation from paragraph 1, no estimate of
2.
the amount receivable shall be made before Member States
make available to the Commission the amounts of own
resources defined in the Council Decision on the system of
the Communities' own resources which are paid at
fixed
intervals by the Member States. The authorising officer
responsible shall
issue a recovery order in respect of these
amounts.

S e c t i o n 3

Establishment of amounts receivable

Article 71

(Initial proposal: Article 67)

1.
Establishment of an amount receivable is the act by
which the authorising officer by delegation or subdelegation:

(a) verifies that the debt exists;

(b) determines or verifies the reality and the amount of the

debt;

(c) verifies the conditions in which the debt is due.

CHAPTER 5

REVENUE OPERATIONS

S e c t i o n 1

Making available of own resources

Article 69

(Initial proposal: Article 65)

The own resources made available to the Commission
2.
and any amount receivable that is identified as being certain,
of a fixed amount and due must be established by a debit note
sent
to the
accounting officer, both drawn up by the authorising officer
responsible.

followed by a recovery order

to the debtor

3.

Amounts wrongly paid shall be recovered.

An estimate of revenue constituted by own resources, as
referred to in the Council Decision on the system of
the
Communities' own resources, shall be entered in the budget

4.
The conditions in which interest on late payment is due
to the Communities shall be laid down in the implementing
rules.

C 103 E/310

EN

Official Journal of the European Communities

30.4.2002

S e c t i o n 4

CHAPTER 6

Authorisation of recovery

EXPENDITURE OPERATIONS

Article 72

(New)

Article 75

(New)

1.
The authorisation of recovery is the act whereby the
authorising officer by delegation or subdelegation responsible
instructs the accounting officer, by issuing a recovery order, to
recover an amount receivable which he has established.

Every item of expenditure shall be committed, validated,

1.
authorised and paid.

The institution may formally establish an amount as
2.
being receivable from persons other than States by means of
a decision which shall be enforceable within the meaning of
Article 256 of the EC Treaty and Article 92 of the ECSC
Treaty.

S e c t i o n 5

Recovery

Article 73

(Initial proposal: Article 68)

2.
The commitment of the expenditure shall be preceded by
a financing decision adopted by the institution or the auth-
orities to which powers have been delegated by the institution.

S e c t i o n 1

Commitment of expenditure

Article 76

(Initial proposal: Article 70)

The budget commitment is the operation reserving the
subsequent payments to

1.
appropriation necessary to cover
honour a legal commitment.

1.
The accounting officer shall act on recovery orders for
amounts receivable duly established by the authorising officer
responsible. He shall exercise due diligence to ensure that the
Communities receive their revenue and shall see that their
rights are safeguarded.

The legal commitment
is the act whereby the authorising
officer responsible enters into an obligation with regard to
third parties which may result in expenditure being charged
to the budget.

The accounting officer shall recover amounts by offsetting
the Communities have
them against equivalent claims that
on any debtor who himself has a claim on the Communities
that is certain, of a fixed amount and due.

The budget commitment and the legal commitment shall be
adopted by the same authorising officer, save in duly substan-
tiated cases as provided for in the implementing rules.

recovery of

2. Where the responsible authorising officer by delegation is
planning to waive
an established amount
receivable, he shall ensure that the waiver is in order and
complies with the principle of sound financial management
and the criteria laid down in the implementing rules. The
waiver decision must be substantiated. The authorising officer
may delegate
laid down in the
implementing rules.

the decision only as

The budget commitment is individual when the bene-

2.
ficiary and the amount of the expenditure are known.

The budget commitment is global when at least one of the
elements necessary to identify the individual commitment is
still not known.

Article 74

(Initial proposal: Article 69)

The budget commitment is provisional when it is intended to
cover the expenditure referred to in Article 151 or routine
administrative expenditure and either the amount or the final
beneficiaries are not definitively known.

Revenue received by way of fines, periodic penalty payments
and other penalties and any accrued interest shall not be finally
recorded as budget revenue as long as the decisions imposing
them may be annulled by the Court of Justice.

The first paragraph shall not apply to decisions on clearance of
accounts or financial corrections.

3.
Budget commitments for actions extending over more
than one financial year may be broken down over several
instalments only where the basic act so
years into annual
the
provides
administrative
and for
budget commitment is thus divided into annual
instalments,
the legal commitment shall stipulate this, except in the case
of expenditure on staff.

expenditure. Where

30.4.2002

EN

Official Journal of the European Communities

C 103 E/311

Article 77

S e c t i o n 2

(Initial proposal: Article 71)

Validation of expenditure

In respect of any measure which may give rise to expen-
the authorising officer
to the budget,
first make a budget commitment before

1.
chargeable
diture
responsible must
entering into a legal obligation with third parties.

2.
Subject to the special provisions of Title IV of Part Two,
global budget commitments shall cover the total cost of the
corresponding individual legal commitments concluded up to
31 December of year N+1.

Subject to Article 76(3) and Article 183(2),
legal
commitments relating to individual or provisional budget
commitments shall be concluded by 31 December of year N.

individual

Article 79

(Initial proposal: Article 73)

Validation of expenditure is the act whereby the authorising
officer responsible:

(a) verifies the existence of the creditor's entitlement;

(b) determines or verifies the reality and the amount of the

claim;

(c) verifies the conditions in which payment is due.

At the end of the periods referred to in the first and second
subparagraphs,
budget
commitments shall be decommitted by the authorising officer
responsible.

balance

unused

these

the

of

The amount of each individual
legal commitment adopted
following a global commitment shall, prior to signature, be
registered by the authorising officer responsible in the budget
accounts and booked to the global commitment.

The legal commitments entered into for actions extending
3.
over more than one financial year and the corresponding
budget commitments shall, save in the case of staff expen-
diture, have a final date for implementation set in compliance
with the principle of sound financial management.

Any parts of such commitments which have not been executed
six months after that date shall be decommitted in accordance
with Article 11.

Article 78

(Initial proposal: Article 72)

When adopting a budget commitment, the authorising officer
responsible shall ensure that:

(a) the expenditure has been charged to the correct item in the

budget;

(b) the appropriations are available;

(c) the expenditure conforms to the relevant provisions,

in
particular of the budget and regulations, and of all acts
adopted in accordance with the Treaties and regulations;

S e c t i o n 3

Authorisation of expenditure

Article 80

(Initial proposal: Article 74)

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

S e c t i o n 4

Payment of expenditure

Article 81

(Initial proposal: Article 75)

Payment shall be made on production of proof that the
1.
relevant action has been carried out in accordance with the
provisions of the basic act or the contract and shall cover one
of the following operations:

(a) payment of the entire amount due;

(b) payment of the amount due in any of the following ways:

(i) pre-financing, which may be divided into a number of

payments;

(ii) one or more interim payments;

(iii) payment of the balance of the amounts due.

(d) the principle of sound financial management is complied

with.

2.
A distinction shall be made in the accounts between the
different types of payment referred to in paragraph 1 at the
time they are made.

C 103 E/312

EN

Official Journal of the European Communities

30.4.2002

Article 82

(Initial proposal: Article 76)

in implementing policies, programmes and actions by
reference to the risks associated with them;

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

(b) for assessing the suitability and quality of

the internal
control systems applicable to every budget implementation
operation.

S e c t i o n 5

Time-limits for expenditure operations

Article 83

(Initial proposal: Article 77)

completed within the

The validation, authorisation and payment of expenditure must
be
laid down in the
implementing rules, which shall also specify the circumstances
in which creditors paid late are entitled to receive default
interest charged to the line from which the principal was paid.

time-limits

CHAPTER 7

IT SYSTEMS

Article 84

(Initial proposal: Article 79)

Where revenue and expenditure operations are managed by
means of computer systems, documents may be signed by a
computerised or electronic procedure.

CHAPTER 8

INTERNAL AUDITOR

Article 85

(Initial proposal: Article 80)

Each institution shall appoint an internal auditor responsible
for providing the institution with guarantees,
in accordance
standards, concerning the
with the relevant
proper operation of budget
implementation systems and
procedures. The internal auditor may be neither authorising
officer nor accounting officer.

international

Article 86

(Initial proposal: Article 81)

1.
The internal auditor shall advise his institution on dealing
with risks, by issuing independent opinions on the quality of
management and control systems and by issuing recommen-
dations for improving the conditions of
implementation of
operations and promoting sound financial management.

He shall be responsible:

2.
The internal auditor shall perform his duties on all the
institution's activities and departments. He shall enjoy full and
unlimited access to all
information required to perform his
duties.

The internal auditor shall report to the institution on his
3.
findings and recommendations. The institution shall ensure
that action is taken on recommendations resulting from audits.

Article 87

(Initial proposal: Article 82)

Special rules applicable to the internal auditor shall be laid
down by the institution and shall be such as to guarantee
that he is independent in the performance of his duties.

The internal auditor shall assume responsibility for action taken
in the performance of his duties as laid down in the Staff
Regulations and spelt out in the implementing rules.

TITLE V

PROCUREMENT

CHAPTER 1

GENERAL PROVISIONS

S e c t i o n 1

Scope and award principles

Article 88

(Initial proposal: Article 83)

Public contracts are contracts

1.
for pecuniary interest
concluded in writing by a contracting authority within the
meaning of Articles 103 and 168, in order to obtain, against
payment of a price paid in whole or in part from the budget,
the supply of movable or immovable assets, the execution of
works or the provision of services.

These contracts comprise:

(a) building contracts;

(b) supply contracts;

(c) works contracts;

(d) service contracts.

(a)

for assessing the suitability and effectiveness of internal
management systems and the performance of departments

2.

This Title does not relate to grants.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/313

Article 89

(Initial proposal: Article 84)

The first subparagraph shall not apply to the service contracts
referred to in the implementing rules.

All public contracts financed in whole or in part by the
transparency,

1.
shall comply with the principles of
budget
proportionality, equal treatment and non-discrimination.

2.
All procurement contracts shall be put out to tender on
the broadest possible base, except when use is made of the
negotiated procedure referred to in Article 91(1)(d).

S e c t i o n 2

Publication

Article 90

(Initial proposal: Article 85)

1.
All contracts exceeding the thresholds provided for in
Article 104 or Article 168 shall be published in the Official
Journal of the European Communities.

Contract notices shall be published in advance except in the
cases referred to in Article 91(2) and for the service contracts
referred to in the implementing rules.

Publication of certain information after the contract has been
awarded may be dropped where it would hinder application of
the law, would be contrary to the public interest or would
harm the legitimate business interests of public or private
undertakings or could distort fair competition between them.

2.
Contracts with a value below the thresholds provided for
in Article 104 or Article 168 shall be advertised as appropriate.

S e c t i o n 3

Procurement procedures

Article 91

(Initial proposal: Articles 86 and 87)

Procurement procedures shall take one of the following

1.
forms:

(a) the open procedure;

(b) the restricted procedure;

(c) contests;

(d) the negotiated procedure.

For contracts where the value exceeds the thresholds
2.
provided for
the
negotiated procedure shall be authorised only in the cases
provided for in the implementing rules.

in Article 104 or Article 168, use of

The thresholds below which the contracting authority
3.
may either use a negotiated procedure or, by way of derogation
from the first subparagraph of Article 88(1), simply pay costs
against invoices shall be determined in the implementing rules.

Article 92

(Initial proposal: Article 87(4))

the
A full, clear and precise description of
contract must be given in the documents relating to the call
for tenders

the subject of

Article 93

(Initial proposal: Article 88)

Candidates or tenderers shall be excluded from partici-

1.
pation in a procurement procedure if:

(a) they are bankrupt or being wound up, are having their
affairs administered by the courts, have entered into an
suspended business
arrangement with creditors, have
activities, are the subject of proceedings concerning those
matters, or are in any analogous situation arising from a
similar procedure provided for in national
legislation or
regulations;

(b) they have been convicted of an offence concerning their
professional conduct by a judgment which has the force of
res judicata;

(c)

they have been guilty of grave professional misconduct
proven by any means which the contracting authority
can justify;

(d) they have not fulfilled obligations relating to the payment
of social security contributions or the payment of taxes in
accordance with the legal provisions of the country in
which they are established or with those of the country
of the contracting authority or those of the country where
the contract is to be performed;

(e)

(f)

they have been the subject of a judgment which has the
force of res judicata for fraud, corruption, involvement in a
criminal organisation or any other illegal activity detri-
mental to the Communities' financial interests;

following another procurement procedure or grant award
procedure financed by the Community budget, they have
been declared to be in serious breach of contract for failure
to comply with their contractual obligations.

Candidates or tenderers must certify that they are not in

2.
one of the situations listed in paragraph 1.

C 103 E/314

EN

Official Journal of the European Communities

30.4.2002

Article 94

(Initial proposal: Article 89)

advance as a guarantee that
withdrawn.

the bids made will not be

Contracts may not be awarded to candidates or tenderers who,
during the procurement procedure:

(a) are subject to a conflict of interest;

(b) are

guilty

of misrepresentation

the
information required by the contracting authority as a
condition of participation in the contract procedure or
fail to supply this information.

supplying

in

Article 95

(Initial proposal: Article 90)

Administrative or financial penalties may be imposed by the
contracting authority on candidates or tenderers who are in
one of the cases of exclusion provided for in Articles 93 and
94, after they have been given the opportunity to present their
observations.

These penalties may consist:

(a)

in the exclusion of the candidate or tenderer concerned
from contracts and grants financed by the budget, for a
maximum period of five years;

(b) in the payment of financial penalties by the contractor in
the case referred to in Article 93(1)(f) and by the candidate
or tenderer in the cases referred to in Article 94 where they
are really serious and without exceeding the value of the
contract in question.

The penalties imposed shall be in proportion to the seriousness
of the misconduct.

Article 96

(Initial proposal: Article 91)

The selection criteria for evaluating the capability of
1.
candidates or tenderers and the award criteria for evaluating
the content of the tenders shall be defined in advance and set
out in the call for tender.

Contracts may be awarded by the automatic award

2.
procedure or by the best-value-for-money procedure.

Article 97

(Initial proposal: Article 92)

1.
The arrangements for submitting tenders shall ensure that
there is genuine competition and that the contents of tenders
remain confidential until they are all opened simultaneously.

2.
The contracting authority may require tenderers, as
provided in the implementing rules, to lodge a security in

the contracts involving small
3. With the exception of
amounts referred to in Article 91(3), applications and tenders
shall be opened by an opening board appointed for this
purpose. Any tender or application declared by the board
not to satisfy the conditions laid down shall be rejected.

4.
All applications or tenders declared by the opening board
to satisfy the conditions laid down shall be evaluated, on the
basis of the selection and award criteria laid down in the
documents relating to the call for tenders, by a committee
appointed for this purpose with a view to proposing to
whom the contract should be awarded.

Article 98

(Initial proposal: Article 93)

While the procurement procedure is under way, all contacts
between the contracting authority and candidates or tenderers
must
satisfy conditions ensuring transparency and equal
treatment. They may not lead to amendment of the conditions
of the contract or the terms of the original tender.

Article 99

(Initial proposal: Article 94)

1.
The authorising officer shall decide to whom the contract
is to be awarded, in compliance with the selection and award
criteria laid down in advance in the documents relating to the
call for tenders and the procurement rules.

The contracting authority shall notify all candidates or
2.
tenderers whose applications or tenders are rejected of the
grounds on which the decision was taken, and all tenderers
whose tenders are admissible and who make a request
in
writing of the characteristics and relative advantages of the
successful tender and the name of the tenderer to whom the
contract is awarded.

However, certain details need not be disclosed where disclosure
would hinder application of the law, would be contrary to the
public interest or would harm the legitimate business interests
of public or private undertakings or could distort
fair
competition between those undertakings.

Article 100

(Initial proposal: Article 95)

The contracting authority may, before the contract is signed,
either abandon the procurement or cancel the award procedure
without the candidates or tenderers being entitled to claim any
compensation.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/315

The decision must be substantiated and be brought to the
attention of the candidates or tenderers.

(c)

the corresponding time-limits.

S e c t i o n 4

Guarantees and control

Article 101

(Initial proposal: Article 96)

contracting

The
the
implementing rules, require contractors to lodge a guarantee
in advance in order to:

authority may,

provided

as

in

(a) ensure full performance of the contract,

(b) limit

the financial

risks connected with payment of

pre-financing.

Article 102

(New, Article 84(3) of the initial proposal)

Where the award procedure or performance of the contract is
vitiated by substantial errors or irregularities or by fraud, the
institutions shall suspend performance of the contract.

Where such errors, irregularities or fraud are attributable to the
contractor, the institutions may in addition refuse to make
payments or may recover amounts already paid, in proportion
to the seriousness of the errors, irregularities or fraud.

CHAPTER 2

PROVISIONS APPLICABLE TO CONTRACTS AWARDED BY
THE COMMUNITY INSTITUTIONS ON THEIR OWN ACCOUNT

Article 103

(Initial proposal: Article 97)

Article 105

(Initial proposal: Article 99)

Participation in tendering procedures shall be open on equal
terms to all natural and legal persons coming within the scope
of the Treaties and to all natural and legal persons in a third
country which has ratified a special agreement with the
European Communities in the field of public procurement
under the conditions laid down in that agreement.

Article 106

(Initial proposal: Article 100)

Where the Plurilateral Agreement on Government Procurement
concluded within the World Trade Organisation applies, the
contracts shall also be open to nationals of the States which
have ratified this agreement, under the conditions laid down in
that agreement.

TITLE VI

GRANTS

CHAPTER 1

SCOPE

Article 107

(Initial proposal: Article 101)

Grants are direct

1.
donation, from the budget in order to finance:

financial contributions, by way of

(a) either an action intended to help achieve an objective

forming part of a European Union policy;

The Community institutions shall be deemed to be contracting
authorities in the case of contracts awarded on their own
account.

(b) or the functioning of a body which pursues an aim of
general European interest or has an objective forming
part of a European Union policy.

Article 104

They shall be covered by a written agreement.

(Initial proposal: Article 98)

to Title IV of Part Two of

Subject
the
Directives of the European Parliament and of the Council on
the coordination of procedures for the award of public service,
supply and works contracts shall
lay down the thresholds
which determine:

this Regulation,

The following shall not constitute grants within the

2.
meaning of this Title:

(a) expenditure on the institutions' staff,
holdings, and procurement contracts;

loans and share-

(a) the publication arrangements referred to in Article 90;

(b) the choice of procedures referred to in Article 91;

(b) EAGGF Guarantee

expenditure
and Structural
referred to in Articles 149(1) and 156(1) and aid paid as
macrofinancial assistance.

Funds

C 103 E/316

EN

Official Journal of the European Communities

30.4.2002

CHAPTER 2

AWARD PRINCIPLES

Article 108

(Initial proposal: Article 102)

1.
The award of grants is subject to the principles of trans-
parency and equal treatment. They may not be cumulative or
awarded retrospectively and they must involve co-financing.

The grant may not have the purpose or effect of

2.
producing a profit for the beneficiary.

Article 109

(Initial proposal: Article 103)

1.
Grants shall be subject to an annual programme, to be
published at the start of the year, with the exception of crisis
management aid and humanitarian aid operations.

This work programme shall be implemented through the publi-
cation of calls for proposals except in cases of urgency or
where the characteristics of
the beneficiary leave no other
choice for a given action.

2.
All grants awarded in the course of a financial year shall
be published annually with due observance of the requirements
of confidentiality and security.

Article 110

(Initial proposal: Article 104)

One action may give rise to the award of only one grant

1.
from the budget to any one beneficiary.

A beneficiary may be awarded only one operating grant

2.
from the budget per financial year.

Article 111

(Initial proposal: Article 105)

A grant may be awarded for an action which has already
1.
begun only where the applicant can demonstrate the need to
start the action before the agreement is signed.

In such cases, expenditure eligible for financing may not have
been incurred prior to the date of submission of the grant
application, save in duly substantiated exceptional cases as
provided for
the expenditure
necessary for the proper implementation of crisis management

in the legal basis or

for

aid or humanitarian aid operations as laid down in the
implementing rules.

No grant may be awarded retrospectively for actions already
completed.

2.
The agreement on an operating grant may not be signed
the beneficiary's
more than four months after the start of
budget year. Expenditure eligible for financing may not have
been incurred before the grant application was lodged or
before the start of the beneficiary's budget year.

Article 112

(Initial proposal: Article 106)

The grant may not finance the entire costs of the action,

1.
subject to Title IV of Part Two.

The grant may not finance the entire operating expenditure of
the beneficiary body.

2. When operating grants are renewed,
gradually decreased.

they shall be

The legal basis may, however, allow exceptions to the first
subparagraph for bodies pursuing an objective of general
European interest.

CHAPTER 3

AWARD PROCEDURE

Article 113

(Initial proposal: Article 108)

Grant applications submitted in writing by legal persons

1.
shall be eligible.

By way of exception, depending on the nature of the action or
the objective pursued by the applicant, the legal basis may
provide that natural persons may receive grants.

Grants may not be awarded to applicants who are, at the
in one of the situations

2.
time of a grant award procedure,
referred to in Articles 93 and 94.

Applicants must certify that
situations listed in Article 93.

they are not

in one of

the

3.
Administrative and financial penalties may be imposed by
the authorising officer, as provided in Article 95, on applicants
who are excluded under paragraph 2.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/317

Article 114

(Initial proposal: Article 107)

then be reduced or terminated after the beneficiary has been
given the opportunity to make his observations.

1.
The selection criteria shall be such as to make it possible
to assess the applicant's ability to complete the proposed action
or work programme.

2.
The award criteria shall be such as to make it possible to
assess the quality of the proposals submitted in the light of the
objectives and priorities set.

Article 115

(Initial proposal: Article 109)

CHAPTER 5

IMPLEMENTATION

Article 119

(Initial proposal: Article 113)

1. Where implementation of the action requires the award
of procurement contracts by the beneficiary, the award shall be
subject to the principles set out in Title V of this Part.

be

shall

Proposals

1.
of
pre-announced selection and award criteria, by an evaluation
committee set up for that purpose, with a view to determining
which proposals may be financed.

evaluated,

basis

the

on

The authorising officer responsible shall then draw up the

2.
list of beneficiaries and the amounts approved.

The

officer

responsible

authorising

3.
inform
applicants in writing of the decision on their application. If
the grant requested is not awarded, the institution shall give
the reasons for the rejection of the application, with reference
in particular
to the selection and award criteria already
announced.

shall

CHAPTER 4

PAYMENT AND CONTROL

Article 116

(Initial proposal: Article 110)

The pace of payments shall be determined by the financial risks
involved, the duration and progress of the action or the costs
incurred by the beneficiary.

In cases of

joint management

2.
the Commission shall
ensure that the principles of transparency and non-discrimi-
nation are complied with in the procurement procedures
applied by the international organisations.

Each grant agreement shall provide expressly for the
3.
Commission and the Court of Auditors to exercise their
powers of control, on documents and on the premises, over
all
received
contractors
Community funds.

subcontractors who have

and

TITLE VII

PRESENTATION OF THE ACCOUNTS AND
ACCOUNTING

CHAPTER 1

PRESENTATION OF THE ACCOUNTS

Article 120

(Initial proposal: Article 115)

The Community accounts shall comprise:

Article 117

(Initial proposal: Article 111)

(a) the financial statements of the institutions as set out in
Article 125 and those of the bodies referred to in Article
190;

The authorising officer responsible may require the beneficiary
to lodge a guarantee in advance in order to limit the financial
risks connected with the payment of pre-financing.

Article 118

(Initial proposal: Article 112)

1.
The amount of the grant shall not become final until after
the institution has accepted the final reports and accounts,
without prejudice to subsequent checks by the institution.

2.
Should the beneficiary fail to comply with his legal or
contractual obligations, the grant shall be suspended and may

(b) the consolidated financial statements which present

in
information contained in
the institutions and bodies

aggregated form the financial
the financial statements of
referred to in point (a);

(c)

the reports on implementation of the budget of the insti-
tutions and the budgets of the bodies referred to in Article
190;

(d) the consolidated reports on implementation of the budget
information

which present
contained in the reports referred to in point (c).

in aggregated form the

C 103 E/318

EN

Official Journal of the European Communities

30.4.2002

Article 121

(New)

The accounts of
the institutions and bodies referred to in
Article 190 shall be accompanied by a report on budgetary
and financial management during the year.

Article 122

(New, taken in part from Article 116(1) of the initial proposal)

The accounts must comply with the rules and be accurate and
comprehensive and present a true and fair view:

(a) as regards the financial statements, of

the assets and
liabilities, charges and income, entitlements and obligations
not shown as assets or liabilities and cash flow;

(b) as regards reports on budget implementation, of revenue

and expenditure operations.

Article 123

(New, taken from Article 116(2) of the initial proposal)

The financial statements shall be drawn up in accordance with
the generally accepted accounting principles, namely:

(a) going concern basis;

(b) prudence;

(c) consistent accounting methods;

(d) comparability of information;

(e) materiality;

(f) no netting;

(g) substance over form;

(h) accrual-based accounting.

Article 124

(New)

In accordance with the principle of

1.
accrual-based
accounting, the financial statements shall show the charges
and income for the financial year, regardless of the date of
payment or collection.

2.
The value of assets and liabilities shall be determined in
accordance with the valuation rules provided for in Article
132.

3.
The annex to the financial statements shall present the
entitlements and commitments which do not appear in the

influence on
balance sheet and which may have a material
the net assets, the financial situation or the outturn of the
institutions concerned or of any of the bodies referred to in
Article 190.

Article 125

(Initial proposal: Article 115)

The financial statements shall be presented in millions of

1.
euro and shall comprise:

economic outturn at 31 December of

(a) the balance sheet and the economic outturn account, which
represent the assets and liabilities and financial situation
and the
the
previous year; they shall be presented in accordance with
the structure laid down by the Council Directive on the
annual accounts of certain types of companies, but with
account being taken of
the
the
Communities' activities;

specific nature of

(b) the

cash-flow table

collected and
disbursed during the year and the final treasury position;

showing amounts

(c)

the statement of changes in capital presenting in detail the
increases and decreases during the year in each item of the
capital accounts.

2.
The annex to the financial statements shall supplement
and comment on the information presented in the statements
referred to in paragraph 1.

Article 126

(Initial proposal: Article 115(3))

The budget
millions of euro. They shall comprise:

implementation reports shall be presented in

(a) the budget outturn account, which sets out all budget
operations for the year in terms of revenue and expen-
diture; the structure in which it is presented shall be the
same as that of the budget itself;

(b) the annex to the budget outturn account, which shall
supplement and comment on the information given in
that account.

Article 127

(Initial proposal: Article 117)

The accounting officers of

referred to in Article 190 shall

the other institutions and
1.
bodies
send to the
Commission's accounting officer by 1 March of the following
year at the latest their provisional accounts together with the
report on budgetary and financial management during the year.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/319

The Commission's accounting officer shall consolidate the
2.
provisional accounts and shall send to the Court of Auditors,
by 31 March of the following year at the latest, the provisional
accounts of each institution and body referred to in Article 190
together with the provisional consolidated accounts.

He shall also send the report on budgetary and financial
management of each institution and body referred to in
Article 190 to the European Parliament, the Council and the
Court of Auditors by the same date.

Article 130

(New — formerly Article 78)

1.
In addition to the statements provided for in Articles 125
and 126, the Commission shall send once a month to the
European Parliament and the Council figures, aggregated at
chapter level at least, on the implementation of the budget,
both for revenue and for expenditure against all appropriations.

These figures shall also provide details of the utilisation of
appropriations carried over.

Article 128

(Initial proposal: Article 118)

The figures shall be sent within ten working days following the
end of each month;

The Court of Auditors shall, by 15 June at the latest,
1.
make its observations on the provisional accounts of each
institution and body referred to in Article 190 so that they
can make the corrections considered necessary for drawing up
the final accounts.

Three times a year, within the thirty working days
2.
following 31 May, 31 August and 31 December,
to the
European Parliament and the Council a report on implemen-
tation of the budget, covering both revenue and expenditure
broken down by chapter, article and item.

2.
Each institution and body referred to in Article 190 shall
draw up its final accounts and send them to the Commission's
accounting officer by 31 July of the following year at the latest
with a view to drawing up the final consolidated accounts.

This report shall also provide details of the utilisation of appro-
priations carried over from previous financial years.

3.
the
After approving the final consolidated accounts,
Commission shall send them to the European Parliament, the
Council and the Court of Auditors by 15 September of the
following year at the latest.

4.
The final consolidated accounts shall be published in the
Official Journal of the European Communities together with the
statement of assurance given by the Court of Auditors in
accordance with Article 248 of the EC Treaty, Article 45c of
the ECSC Treaty and Article 160c of the Euratom Treaty by
31 October of the following year.

CHAPTER 2

INFORMATION ON THE IMPLEMENTATION OF THE BUDGET

CHAPTER 3

ACCOUNTING

S e c t i o n 1

Common provisions

Article 131

(Initial proposal: Article 120)

1.
The institution's accounting system is the system serving
to organise the budgetary and financial information in such a
way that figures can be input, filed and registered.

2.
The accounts shall consist of general accounts and budget
accounts. These accounts shall be kept in euro on the basis of
the calendar year.

Article 129

(Initial proposal: Article 119)

3.
The figures in the general accounts and the budget
accounts shall be adopted at the close of the budget year so
that the accounts referred to in Chapter 1 can be drawn up.

In addition to the statements provided for in Articles 125 and
126, the Commission shall report to the European Parliament
and the Council twice a year on budget guarantees and the
corresponding risks.

4.
Notwithstanding paragraphs 2 and 3,
officer by delegation may keep analytical accounts.

the authorising

This information shall be sent to the Court of Auditors at the
same time.

For management purposes the Commission may set up

5.
allocation accounts.

C 103 E/320

EN

Official Journal of the European Communities

30.4.2002

Article 132

(New, taken from Article 120(2) of the initial proposal)

The Commission's

1.
accounting
officer
after
the other institutions
consulting the accounting officers of
and bodies referred to in Article 190, adopt the accounting
rules and methods and the harmonised chart of accounts to
be applied by all the institutions and all the bodies referred to
in Article 190.

shall,

2. When adopting the rules and methods referred to in
the Commission's accounting officer shall be
paragraph 1,
guided by the generally accepted accounting standards for
the public sector but may depart from them where justified
by the specific nature of the Communities' activities.

S e c t i o n 2

General accounts

Article 133

(Initial proposal: Article 120(3))

The general accounts shall record, in chronological order using
the double entry method, all events and operations which
affect the economic and financial situation and the assets and
liabilities of the institutions and bodies referred to in Article
190.

Article 134

(New, taken from Article 120(5) of the initial proposal)

1. Movements on the accounts and the balances shall be
entered in the accounting ledgers.

All accounting entries,

2.
to the
accounts, shall be based on supporting documents, to which
they shall refer.

including adjustments

The accounting system must be such as to leave a trail

3.
for all accounting entries.

Article 135

(New, taken from Article 121(2) of the initial proposal)

The accounting officer shall, after the close of the budget year
and up to the date of presentation of the accounts, make any
adjustments which, without
or
collection in respect of that year, are necessary for a true
and fair presentation of the accounts which complies with
the rules.

disbursement

involving

S e c t i o n 3

Budget accounts

Article 136

(New, taken from Article 120(4) of the initial proposal)

The budget accounts provide a detailed record of budget

1.
implementation.

2.
For the purposes of paragraph 1 the budget accounts
shall record all budget revenue and expenditure operations
provided for in Title IV of Part One.

CHAPTER 4

PROPERTY INVENTORIES

Article 137

(Initial proposal: Article 122)

1.
Each institution and body referred to in Article 190 shall
keep inventories showing the quantity and value of all the
Communities'
in
accordance with a model drawn up by the accounting officer
of the Commission.

intangible and financial assets

tangible,

Each institution and body referred to in Article 190 shall check
that entries in the inventory correspond to the actual situation.

2.

The sale of movable property shall be suitably advertised.

TITLE VIII

EXTERNAL AUDIT AND DISCHARGE

CHAPTER 1

EXTERNAL AUDIT

Article 138

(Initial proposal: Article 123)

The Court of Auditors shall conduct the audit of accounts
provided for by Article 248 of the EC Treaty, Article 45 of
the ECSC Treaty and Article 180 of the Euratom Treaty.

Article 139

(Initial proposal: Article 124)

The

European

Parliament,

1.
Commission shall
possible, of all decisions and rules adopted pursuant
Articles 9, 13, 18, 22, 23, 26 and 36.

the
inform the Court of Auditors, as soon as
to

the Council

and

30.4.2002

EN

Official Journal of the European Communities

C 103 E/321

The institutions shall send to the Court of Auditors any

2.
internal rules they adopt in respect of financial matters.

the depositories or against official memoranda of cash and
securities held. It may carry out such checks itself.

The Court of Auditors
authorising

3.
appointment
accounting officers
and imprest
delegation decisions under Articles 51, 61, 62, 63 and 85.

informed of
internal
administrators

shall be
officers,

the
auditors,
and of

of

Article 140

(Initial proposal: Article 125)

1.
The audit carried out by the Court of Auditors shall be
based on records and, if necessary, performed on the spot. Its
purpose shall be to establish that all revenue has been received
and all expenditure incurred in a lawful and proper manner
having regard to the provisions of the Treaties, the budget, this
Regulation and all other acts adopted pursuant to the Treaties.
It shall also establish that the financial management has been
sound. The audit in the Member States shall be carried out in
conjunction with the national audit institutions or, where they
do not have
the necessary powers, with the national
departments responsible.

2.
In the performance of its task, the Court of Auditors shall
be entitled to consult, in the manner provided for in Article
142, all documents and information relating to the financial
management of the departments or bodies subject to its audit.
It has the power to make enquiries of any official responsible
for a revenue or expenditure operation and to use any of the
auditing procedures appropriate to those departments or
bodies.

to obtain all

the necessary information for

In order
the
performance of the task entrusted to it by the Treaties or the
acts adopted pursuant to them, the Court of Auditors may be
present, at its request, during the audit operations carried out
within the framework of the implementation of the budget by,
or on behalf of, any Community institution.

Article 142

(Initial proposal: Article 127)

institutions,

the disposal of

The Commission,

1.
the bodies
the other
administering revenue or expenditure on the Communities'
behalf and the national audit institutions or, where they do
not have the necessary powers,
the national departments
responsible and the final beneficiaries of payments from the
budget shall afford the Court of Auditors all the facilities and
the information which the Court of Auditors
give it all
considers necessary for the performance of
its task. They
the Court of Auditors all
shall place at
award and performance of
documents
and all
contracts
accounts of cash or materials, all accounting records or
supporting documents, and also administrative documents
relating thereto, all documents relating to revenue and expen-
diture, all inventories, all organisation charts of departments,
which the Court of Auditors considers necessary for auditing
the budgetary and financial outturn report on the basis of
records or on the spot and,
the same purposes, all
documents and data created or stored on a magnetic medium.

the
the Community budget

concerning
financed by

for

The first subparagraph shall also apply to natural or legal
persons receiving payments from the Community budget.

The officials whose operations are checked by the Court

2.
of Auditors shall:

(a) show their

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

At the request of the Court of Auditors, each institution shall
authorise financial institutions holding Community deposits to
enable the Court of Auditors to ensure that external data tally
with the accounts.

(b) present

the correspondence and any other document
required for the full implementation of the audit referred
to in Article 140(1).

3.
In order to perform its task, the Court of Auditors shall
notify the institutions and authorities to which this Regulation
applies of the names of the members of its staff who are
empowered to audit them.

Article 141

(Initial proposal: Article 126)

The Court of Auditors shall ensure that all securities and cash
on deposit or in hand are checked against vouchers signed by

information supplied under point

The
first
subparagraph may be requested only by the Court of Auditors.

(b) of

the

3.
The Court of Auditors shall be empowered to audit the
documents in respect of the revenue and expenditure of the
Communities which are held by the departments of the insti-
tutions and, in particular, by the departments responsible for
the
decisions in respect of such revenue and expenditure,
revenue
bodies
the
on
administering
Communities' behalf
legal persons
and the natural or
receiving payments from the budget.

expenditure

or

C 103 E/322

EN

Official Journal of the European Communities

30.4.2002

The national audit institutions or, where they do not have the
necessary powers, the national departments responsible shall
provide the Court of Auditors, at
the
information they possess on operations financed or co-financed
by the Communities and on the management and control of
these operations.

its request, with all

The task of establishing that

4.
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 insti-
tutions, of Community funds received by way of grants.

Community financing paid to beneficiaries outside the
5.
institutions shall be subject to the agreement in writing by
the beneficiaries or, failing agreement on their part, by the
contractors or subcontractors, to an audit by the Court of
Auditors into the use made of the financing granted.

6.
The Commission shall provide the Court of Auditors, at
its request, with any information on borrowing and lending
operations.

7.
Use of integrated computer systems may not have the
effect of reducing the access of the Court of Auditors to the
supporting documents.

Article 143

(Initial proposal: Article 128)

The annual report of the Court of Auditors provided for
1.
in Article 248(4) of the EC Treaty, Article 45c(4) of the ECSC
Treaty and Article 160c(4) of the Euratom Treaty shall be
governed by the provisions of paragraphs 2 to 7 of this Article.

2.
The Court of Auditors shall transmit to the Commission
and the institutions concerned, by 15 June at the latest, any
observations which are, in its opinion, such that they should
appear in the annual report. These observations must remain
confidential. Each institution shall address its reply to the Court
of Auditors by 30 September at the latest. The replies of insti-
tutions other
to the
Commission at the same time.

than the Commission shall be sent

The Commission shall

inform Member States without
3.
the Court of Auditors' observations on the
delay of
management of Community funds
for which they are
responsible under the rules applicable whenever the Member
States referred to are identified in those observations.

4.
The Member States shall reply to the Commission by
31 August at the latest. The Commission shall transmit the
reply,
to the Court of
Auditors, by 30 September.

accompanied by its

comments

The annual report shall contain an assessment of the

5.
soundness of financial management.

6.
The annual report shall contain a section for each insti-
tution. The Court of Auditors may add any summary report or
general observations which it sees fit to make.

The Court of Auditors shall take all necessary steps to ensure
that
the replies of each institution to its observations are
published immediately after the observations to which they
relate.

7.
The Court of Auditors shall transmit to the authorities
responsible for giving discharge and to the other institutions,
by 31 October at the latest, its annual report accompanied by
the replies and shall ensure publication thereof in the Official
Journal of the European Communities.

Article 144

(Initial proposal: Article 129)

the Court of Auditors

At the same time as the annual report referred to in Article
143,
shall provide the European
Parliament and the Council with a statement of assurance as
to the reliability of the accounts and the legality and regularity
of the underlying transactions.

Article 145

(Initial proposal: Article 130)

In addition to the annual report, the Court of Auditors
in the form of
It may also deliver

1.
may also, at any time, submit observations,
reports, on specific questions.
special
opinions at the request of any of the institutions.

The Court of Auditors

2.
institution
concerned of all observations which are, in its opinion, such
that they should appear in a special report. These observations
must remain confidential.

shall notify the

The institution concerned shall have two and a half months
within which to inform the Court of Auditors of any
comments it wishes to make on the observations in question.

The Court of Auditors shall adopt the definitive version of the
special report in question the following month.

Where the observations referred to in the first subparagraph
concern the management of Community funds for which the
Member States are responsible under the relevant rules, the
Commission shall send the special report
to the Member
States identified.

The Member States shall send their replies to the Commission
within one and a half months of the presentation of the obser-
vations in question. The Commission shall, without delay,
transmit these replies to the Court of Auditors together with
its remarks.

The Court of Auditors shall adopt the definitive version of the
special report in question the following month.

The special reports, together with the replies of the institutions
concerned or the Member States in question, shall be trans-
mitted without delay to the European Parliament and the
Council, each of which shall decide, where appropriate in
conjunction with the Commission, what action is to be taken
in response.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/323

Should the Court of Auditors decide to have any such special
reports published in the Official
the European
Communities, they shall be accompanied by the replies of the
institutions concerned or of the Member States in question.

Journal of

human rights, the protection of business secrecy, the provisions
governing judicial
and the
interests of the Union.

and disciplinary proceedings

3.
The opinions referred to in paragraph 1 which do not
relate to proposals or drafts covered by the legislative consul-
tation procedure may be published by the Court of Auditors in
the Official Journal of the European Communities. The Court of
Auditors shall take its decision on publication after consulting
the institution which requested the opinion or which is
concerned by it. Opinions published shall be accompanied by
any remarks by the institutions concerned.

CHAPTER 2

DISCHARGE

Article 146

(Initial proposal: Article 131)

1.
The European Parliament, upon a recommendation from
the Council acting by a qualified majority, shall, before 30 April
of year N+2 give a discharge to the Commission in respect of
the implementation of the budget for year N.

If the date provided for in paragraph 1 cannot be met,
inform the

2.
the European Parliament or the Council shall
Commission of the reasons for the postponement.

If the European Parliament postpones the decision giving
3.
a discharge, the Commission shall make every effort to take
measures, as soon as possible, to remove or facilitate removal
of the obstacles to that decision.

Article 147

(Initial proposal: Article 132)

The discharge decision shall cover the accounts of all the
1.
Communities' revenue and expenditure, the resulting balance
and the assets and liabilities of the Communities shown in the
balance sheet. It shall include an assessment of the responsi-
bility of the Commission in budgetary management over the
financial year in question.

2. With a view to granting the discharge,
the European
Parliament shall, after the Council has done so, examine the
accounts and financial statements referred to in Article 275 of
the EC Treaty, Article 78d of the ECSC Treaty, and Article
179a of the Euratom Treaty. It shall also examine the annual
report made by the Court of Auditors together with the replies
of the institutions under audit, any relevant special reports by
the financial year in
the Court of Auditors in respect of
question and the Court of Auditors' statement of assurance
as to the reliability of the accounts and the legality and regu-
larity of the underlying transactions.

shall

The Commission

3.
European
Parliament, at the latter's request, any information required
for the control of the implementation of the budget of the
year in question. Access to confidential information and the
arrangements for handling it shall comply with fundamental

submit

the

to

Article 148

(Initial proposal: Article 133)

1.
In accordance with Article 276 of the EC Treaty, Article
78g of the ECSC Treaty and Article 180b of the Euratom
Treaty, the Commission and the other institutions shall take
all appropriate steps to act on the observations accompanying
the European Parliament's discharge decision and on the
comments accompanying the recommendation for discharge
adopted by the Council.

2.
At the request of the European Parliament or the Council,
the institutions shall report on the measures taken in the light
of these observations and comments, and, in particular, on the
instructions they have given to those of their departments
which are responsible for the implementation of the budget.
The Member States shall cooperate with the Commission by
informing it of the measures they have taken to act on these
observations so that
the Commission may take them into
account when drawing up its own report. The reports from
the institutions shall also be transmitted to the Court of
Auditors.

P A R T T W O

SPECIAL PROVISIONS

TITLE I

EUROPEAN AGRICULTURAL GUIDANCE AND
GUARANTEE FUND, GUARANTEE SECTION

Article 149

(Initial proposal: Article 134)

1.
Parts One and Three of this Regulation shall apply to
expenditure effected by the authorities and bodies referred to
in the rules relating to the EAGGF Guarantee Section and to
revenue, save as otherwise provided in this Title.

2.
Operations managed directly by the Commission shall be
implemented in accordance with the rules laid down in Parts
One and Three.

Article 150

(Initial proposal: Article 135)

For each financial year,

1.
the EAGGF
Guarantee Section shall include equal amounts of commitment
appropriations and payment appropriations.

the budget of

Payment appropriations not used at

2.
financial year
following year only to cover earlier commitments.

the
shall be carried over automatically to the

the end of

C 103 E/324

EN

Official Journal of the European Communities

30.4.2002

Payment appropriations which have been carried over but
3.
which have not been used by the end of the financial year shall
be cancelled.

Article 154

(Initial proposal: Article 139)

Article 151

(Initial proposal: Article 136)

The Commission shall reimburse the expenditure incurred

1.
by the Member States.

2.
The Commission decisions fixing the amounts of these
payments shall constitute global provisional commitments,
which may not exceed total appropriations entered in the
EAGGF Guarantee Section, less any assigned revenue.

As from 15 November, routine management expenditure
3.
for
the EAGGF Guarantee Section may be committed in
advance against the appropriations provided for the following
financial year. Such commitments may not, however, exceed
the total corresponding appropriations for the
one half of
current financial year. They may apply only to expenditure
for which the principle is laid down in an existing legal base.

Article 152

(Initial proposal: Article 137)

Expenditure

effected by the authorities

1.
and bodies
referred to in the rules relating to the EAGGF Guarantee
Section shall, within two months following receipt of
the
in by Member States, be the subject of a
statements sent
commitment by chapter,
and item. Save where
article
payment has not yet been made by the Member States or
where eligibility is in doubt, the amounts shall be charged as
payments within the same time-limit.

This budget commitment shall be deducted from the global
provisional commitment referred to in Article 151.

2.
Global provisional commitments which have been made
for a financial year and which have not given rise to
commitment on specific lines in the budget nomenclature by
1 February of the following financial year shall be cancelled in
respect of the original financial year.

Paragraphs 1 and 2 shall apply subject to the clearance of

3.
accounts.

Article 153

(Initial proposal: Article 138)

Expenditure shall be booked to the accounts for a financial
year on the basis of the repayments made by the Commission
to the Member States by 31 December of the year concerned at
the latest, provided that the payment order has reached the
accounting officer by 31 January of the following financial
year at the latest.

1. Where the Commission may transfer appropriations
pursuant to Article 23, it shall take its decision by 31 January
of the following financial year at the latest and shall inform the
budgetary authority thereof.

In cases other than those referred to in paragraph 1, the
2.
Commission shall submit transfer proposals to the budgetary
authority by 10 January of the following financial year at the
latest.

The budgetary authority shall take decisions on such transfers
in accordance with the procedure provided for in Article 24,
but within a time-limit of three weeks.

Article 155

(Initial proposal: Article 140)

Assigned revenue under this Title shall be assigned as an
overall amount either
the EAGGF
Guarantee Section for financing expenditure on the common
agricultural policy or
the EAGGF
Guarantee Section for financing rural development and accom-
panying measures.

to appropriations

to appropriations

for

for

TITLE II

STRUCTURAL FUNDS

Article 156

(Initial proposal: Article 141)

1.
Parts One and Three of this Regulation shall apply to
expenditure effected by the authorities and bodies referred to
in the regulations governing the Structural Funds, the Cohesion
Fund and the pre-accession structural and agricultural measures
and to their revenue, save as otherwise provided in this Title.

2.
Operations managed directly by the Commission shall
also be implemented in accordance with the rules laid down
in Parts One and Three of this Regulation.

3.
The pre-accession structural and agricultural measures
may be managed on a decentralised basis as provided in
Article 165.

Article 157

(Initial proposal: Article 142)

1.
Payment by the Commission of financial contributions
from the Funds shall be made in accordance with the regu-
lations referred to in Article 156.

2.
The time-limit for interim payments by the Commission
shall be laid down in accordance with the regulations referred
to in Article 156.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/325

The treatment of repayments by the Member States of
3.
prefinancing payments and the implications for the amount of
contributions from the Funds shall be governed by the regu-
lations referred to in Article 156.

2. With regard to the operational expenditure referred to in
this Title, the Commission may make transfers from one title to
another, provided that the appropriations are used for the same
purpose.

Article 158

(Initial proposal: Article 143)

The Commission shall automatically decommit appropriations
that have been committed as provided for in the regulations
referred to in Article 156.

The decommitted appropriations may be made available again
in the event of a manifest error attributable solely to the
Commission or in the case of force majeure which has serious
repercussions for the implementation of operations supported
by the Structural Funds.

To this end, the Commission shall examine decommitments
made during the previous
financial year and decide, by
15 February of the current year, on the basis of requirements,
is necessary to make the corresponding appro-
whether it
priations available again.

Article 159

(Initial proposal: Article 144)

With regard to the operational expenditure referred to in this
Title, the Commission may make transfers from one title to
another, provided that the appropriations in question are for
the same objective, within the meaning of
the regulations
referred to in Article 156.

Article 160

(Initial proposal: Article 145)

Aspects concerning the management and selection of projects
and audit shall be governed by the regulations referred to in
Article 156.

TITLE III

RESEARCH

Article 161

(Initial proposal: Article 146)

Parts One and Three shall apply to the research and tech-
as otherwise
appropriations,

save

1.
nological development
provided in this Title.

These appropriations shall be entered either in one of the
budget titles relating to the policy area research by direct or
indirect action or in a chapter relating to research activities in
another title.

3.
Experts paid from the research and technological devel-
opment appropriations shall be recruited in accordance with
the procedures laid down by the Council when it adopts each
research framework programme.

Article 162

(Initial proposal: Article 147)

1.
The Joint Research Centre (JRC) may receive funding
charged to appropriations entered outside the titles and the
chapters referred to in Article 161(1) in respect of its partici-
pation on a competitive or negotiated basis in Community
activities financed in whole or in part from the general budget.

The appropriations relating to the activities in which the
2.
JRC participates on a competitive basis shall be treated as
assigned revenue within the meaning of Article 18. The
commitment appropriations generated by this revenue shall
be made available as soon as the amount receivable has been
estimated.

The utilisation of these appropriations shall be shown in a set
of analytical accounts in the budget outturn account for each
category of action to which it relates; it shall be separate from
revenue originating from financing by third parties (public or
private) and from revenue from other services carried out by
the Commission for third parties.

3.
The rules on procurement in Title V of Part One shall not
apply to the activities of the JRC on behalf of third parties.

4.
By way of derogation from Article 23, the Commission
may, within the budget title relating to the policy area direct
action research, make transfers between chapters of up to 15 %
of the appropriation on the line from which the transfer is
made.

TITLE IV

EXTERNAL ACTIONS

CHAPTER 1

GENERAL PROVISIONS

Article 163

(Initial proposal: Article 148)

They shall be used by implementation of the actions listed in
the implementing rules.

1.
Parts One and Three shall apply to external actions
financed from the budget, save as otherwise provided in this
Title.

C 103 E/326

EN

Official Journal of the European Communities

30.4.2002

The

2.
paragraph 1 shall be used by the Commission:

appropriations

actions

the

for

referred to in

(a) either by autonomous decision;

(b) or under agreements concluded with one or more bene-

ficiary third countries;

(c) or under agreements with the international organisations

referred to in Article 53.

CHAPTER 2

IMPLEMENTATION OF ACTIONS

Article 164

(Initial proposal: Article 149)

Commission. Such scrutiny shall be exercised either by prior
approval, by ex post checks or by a combined procedure.

Article 167

(Initial proposal: Article 152)

1.

Actions carried out shall give rise to:

(a) a financing agreement drawn up between the Commission,
acting for the Communities, and the beneficiary third
country or countries or the bodies they have designated,
hereinafter: ‘the beneficiaries’; or

(b) a contract or grant agreement with a national or inter-
national public-sector bodies or natural or legal persons
responsible for carrying out the actions.

The actions referred to in this Title may be implemented either
on a centralised basis by the Commission or on a decentralised
basis by the beneficiary third country or countries, or jointly
with international organisations.

The contracts and agreements provided for
in the first
subparagraph shall lay down the terms on which the external
aid shall be managed by the contractor.

Article 165

(Initial proposal: Article 150)

1.
Under the decentralised management arrangements, the
Commission may decide to entrust management of certain
actions to the authorities of beneficiary third countries, after
the beneficiary third country or
having established that
countries
in the management of
are
Community funds, to apply at least the following criteria to
be specified according to the degree of decentralisation agreed:

in a position,

(a) effective separation of the duties of authorising officer and

accounting officer;

(b) existence of an effective system for the internal control of

management operations;

(c) separate procedures

for

the presentation of accounts

showing the use made of Community funds;

(d) existence of an independent external audit system;

(e) transparent, non-discriminatory procurement procedures

ruling out all conflicts of interest.

The beneficiary country must undertake to comply with

2.
Article 53(6).

Article 166

(Initial proposal: Article 151)

The implementation of actions by beneficiary third countries or
to scrutiny by the
international organisations

subject

is

Financing agreements with beneficiary third countries
2.
shall be concluded by 31 December of year N+1 at
the
latest, year N being the one in which the budget commitment
was made. The individual contracts and agreements which
implement such financing agreements shall be concluded by
31 December of year N+3 at the latest, year N being the
one in which the budget commitment was made. Individual
contracts and agreements relating to audit and evaluation may
be concluded later.

CHAPTER 3

PROCUREMENT

Article 168

(Initial proposal: Article 153)

1.
The provisions of Article 56 and of Chapter 1 of Title V
of Part One relating to the general provisions on procurement
shall be applicable to contracts covered by this Title subject to
the
and the
relating
arrangements for awarding external contracts laid down in
the implementing rules. The contracting authorities for the
purposes of this Chapter shall be:

special provisions

to thresholds

(a) the Commission on behalf of and for the account of one or

more beneficiaries;

(b) the beneficiary or beneficiaries;

(c) a national or international public-sector body or natural or
legal persons who have signed a financing agreement or
grant agreement with the Commission for the implemen-
tation of an external action.

30.4.2002

EN

Official Journal of the European Communities

C 103 E/327

The procurement procedures must be laid down in the
2.
financing agreements or grant agreements referred to in Article
167.

This Title shall also apply to the European Anti-Fraud

2.
Office.

Article 169

(Initial proposal: Article 154)

Participation in tendering procedures shall be open on
1.
equal terms to all persons coming within the scope of the
in accordance with the specific provisions in
Treaties and,
the basic
cooperation sector
concerned, to all natural and legal persons who are nationals
of the beneficiary third countries or of any other third country
expressly mentioned in those instruments.

instruments governing the

In duly substantiated exceptional cases, it may be decided,
2.
on the basis of the specific conditions laid down in the basic
instruments governing cooperation, to allow nationals of third
countries other than those referred to in paragraph 1 to tender
for contracts.

CHAPTER 4

AWARD OF GRANTS

Article 170

(Initial proposal: Article 155)

An action may be financed in full by the budget if this is
essential for it to be carried out.

CHAPTER 5

AUDITING OF ACCOUNTS

Article 171

(Initial proposal: Article 156)

Each financing agreement or grant agreement must expressly
provide for the Commission and the Court of Auditors to have
the power of audit, on the basis of documents and on the spot,
over all contractors and subcontractors who have received
Community funds, subject to Article 56(2).

TITLE V

EUROPEAN OFFICES

CHAPTER 1

GENERAL PROVISIONS

Article 172

(Initial proposal: Article 157)

1.
‘European offices’ for the purposes of this Title are the
bodies set up to perform specific cross-cutting tasks on behalf
of one or more institutions.

Parts One and Three shall apply to the operation of the

3.
European offices, save as otherwise provided in this Title.

Article 173

(Initial proposal: Article 158)

1.
The appropriations for each European office, the total
amount of which shall be entered in a special budget line
within the section of the budget relating to the Commission,
shall be set out in detail in an annex to that section.

The annex shall take the form of a statement of revenue and
expenditure, subdivided in the same way as the sections of the
budget.

The appropriations entered in that annex shall cover all the
in the
financial
performance of its duties on behalf of the institutions.

each European office

requirements of

2.
Each European office's
annexed to that of the Commission.

establishment plan shall be

3.
The Director of each European office shall take decisions
on transfers within the annex provided for in paragraph 1. The
inform the budgetary authority of such
Commission shall
transfers.

4.
Each European office's accounts shall form an integral
part of the Communities' accounts referred to in Article 120.

Article 174

(Initial proposal: Article 159)

The Commission shall, in respect of the appropriations entered
in the annex for each European office, delegate the powers of
authorising officer to the Director of the European office in
this
question and shall set
delegation of powers.

the limits and conditions for

Article 175

(Initial proposal: Article 160)

1.
Each interinstitutional European office shall draw up
analytical accounts of its expenditure, enabling the proportion
the institutions to be
of
determined.
lay down the
criteria on which the accounting system shall be based.

its services supplied to each of

Its Management Committee shall

The remarks concerning the specific budget

line on
2.
which is entered the total appropriation for each interinstitu-
tional European office shall show an estimate of the cost of
services supplied by the office to each of the institutions. This
shall be based on the analytical accounts provided for in
paragraph 1.

C 103 E/328

EN

Official Journal of the European Communities

30.4.2002

Each interinstitutional European office shall notify the
3.
institutions concerned of the results of the analytical accounts.

Article 182

(Initial proposal: Article 167)

Article 176

(Initial proposal: Article 161)

The Management Committee of each European office
lay down the detailed rules for the implementation of

1.
shall
this Title.

for

parties

Should the remit of a European office involve supplies to
2.
the Management
third
Committee shall
lay down the specific provisions governing
how these supplies are to be made and the keeping of the
corresponding accounts.

pecuniary

interest,

CHAPTER 2

EUROPEAN ANTI-FRAUD OFFICE

Article 177

(Initial proposal: Article 162)

1.
As from 15 November of each year, routine adminis-
trative expenditure may be committed in advance against the
appropriations provided for the following financial year. Such
commitments may not, however, exceed one quarter of the
appropriations on the corresponding budget
the
current financial year. They may not apply to new expenditure
of a kind not yet approved in principle in the last budget duly
adopted.

line for

Expenditure which must be paid in advance, for example
2.
rents, may give rise to payments from 1 December onwards to
be charged to the appropriations for the following financial
year.

Article 183

(Initial proposal: Article 168)

Chapter 1 shall apply to the operation of
the European
Anti-Fraud Office (OLAF), save as otherwise provided in this
Chapter.

1.
For each financial year the amount of the commitment
appropriations contained in the budget shall be equal to that of
the payment appropriations.

Article 178

(Initial proposal: Article 163)

The Commission shall, at the request of the Director of OLAF,
make transfers within the annex provided for in Article 173(1).
The Commission shall inform the budgetary authority of such
transfers.

Article 179

(Initial proposal: Article 164)

The Commission shall delegate to the Director of OLAF
1.
the powers of authorising officer in respect of
the appro-
priations entered in the annex to the Commission Section
relating to OLAF and shall set the limits and conditions for
this delegation of powers.

The Director of OLAF shall be authorised to subdelegate

2.
his powers to staff covered by the Staff Regulations.

Article 180

(Initial proposal: Article 165)

The provisions of Article 175(1),
(2) and (3) and those of
Article 176(2) shall not apply to the European Anti-Fraud
Office (OLAF).

TITLE VI

ADMINISTRATIVE APPROPRIATIONS

Article 181

(Initial proposal: Article 166)

Parts One and Three shall apply to administrative appro-
priations, save as otherwise provided in this Title.

expenditure

Administrative

2.
from contracts
covering periods that extend beyond the financial year, either
in accordance with local practice or relating to the supply of
equipment, shall be charged to the budget of the financial year
in which it is effected.

arising

P A R T T H R E E

TRANSITIONAL AND FINAL PROVISIONS

TITLE I

TRANSITIONAL PROVISIONS

Article 184

(Initial proposal: Article 169)

The section of the budget relating to the Commission shall, as
a transitional measure, contain within the appropriations for
the EAGGF Guarantee Section a monetary reserve, for which
the entry, utilisation and financing conditions are determined
by the Council Regulation on budgetary discipline and the
Council Decision on the system of
the Communities' own
resources and by the provisions adopted for implementing
the latter.

Article 185

(Initial proposal: Article 170)

The EAGGF Guarantee appropriations for rural development
and accompanying measures shall remain subject to Article
150 until
the period covered by the financial
perspective, that is until 31 December 2006.

the end of

30.4.2002

EN

Official Journal of the European Communities

C 103 E/329

Until that date, appropriations not committed and the corre-
sponding payment appropriations may be carried over, to the
following financial year only, up to a maximum of 3 % of the
appropriations for the title concerned. Such carryover shall be
possible only if the commitment appropriations earmarked on
the relevant lines in the budget for the following year will not
make it possible to make good the shortfall in implementation
of the rural development programmes in relation to the level
decided the previous year. The carryover decision shall be
taken, at the latest on 15 February of the year to which the
carryover is being made, by the Commission, which shall
inform the budgetary authority.

Article 186

(New)

1.
The classification of Commission expenditure according
to purpose as provided for in Article 41(2) shall apply for the
first time in respect of budget year 2004.

TITLE II

FINAL PROVISIONS

Article 187

(Initial proposal: Article 171)

The European Parliament and the Council shall be empowered
to demand any
regarding
budgetary matters within their competence.

information or

explanations

Article 188

(Initial proposal: Article 172)

In consultation with the European Parliament and the Council
and after the other institutions have delivered their opinions,
the Commission shall adopt rules for implementing this Regu-
lation.

For budget year 2003 the Commission section shall comprise:

(a) a part A devoted to expenditure on the institution's staff

and administrative operation;

All the institutions shall deliver their opinions within three
months after the Commission has sent
its draft regulation
laying down the rules for implementing the Financial Regu-
lation. If no reply is received within this time, the opinion
shall be deemed to be favourable.

(b) a part B devoted to operational expenditure made up of

several sub-sections depending on requirements.

The time-limits referred to in Articles 127(2), 128(4) and
2.
143(2), (4) and (7) shall apply for the first time in respect of
budget year 2005.

For earlier years these time-limits shall be:

(a) 1 May for Article 127(2),

(b) 15 July for Article 128(1),

(c) 15 September for Article 128(2),

(d) 15 October for Article 128(3),

(e) 30 November for Article 128(4),

(f) 15 July and 31 October for Article 143(2),

(g) 30 September and 31 October for Article 143(4),

(h) 30 November for Article 143(7).

The provisions of Title VII of Part One shall apply gradually
depending on technical possibilities
to be fully
effective for the budget year 2005.

in order

The Commission shall definitively adopt the regulation laying
down the rules for implementing the Financial Regulation
within three months after receiving the last opinion or, if no
opinion is received, within three months of expiry of
the
time-limit set in the second paragraph.

Article 189

(Initial proposal: Article 173)

Every three years, or whenever it is necessary to do so, the
European Parliament and the Council shall examine this Regu-
lation in the light of a proposal from the Commission.

Any regulations amending this Regulation shall be adopted by
the Council after recourse to the conciliation procedure, if the
European Parliament or the Council so requests. The procedure
shall be initiated if the Council
intends to depart from the
opinion adopted by the European Parliament.

The conciliation shall take place in a ‘conciliation committee’
consisting of the Council and representatives of the European
Parliament. The Commission shall participate in the work of
the conciliation committee.

the conciliation procedure shall be to seek
The aim of
agreement between the European Parliament and the Council.
The procedure should normally take place over a period not
exceeding three months, unless the instrument
in question
must be adopted by a specific date or if the matter is urgent,
in which case the Council may set an appropriate time-limit.

C 103 E/330

EN

Official Journal of the European Communities

30.4.2002

the two institutions are sufficiently
When the positions of
close, the European Parliament may give a new opinion, after
which the Council shall take definitive action.

The Commission's internal auditor shall exercise the same
3.
powers over the bodies referred to in the first subparagraph of
paragraph 1 as he does in respect of Commission departments.

Article 190

(Initial proposal: Article 174)

4.
The bodies referred to in the first subparagraph of
in
paragraph 1 shall apply the accounting rules set out
Article 132 so that their accounts can be consolidated with
the Commission's accounts.

1.
this
The Commission shall draw up, on the basis of
Regulation, a framework financial regulation for the bodies
set up by the Communities and having legal personality
which may receive grants from the budget.

The financial rules of these bodies may not depart from the
framework regulation except where their specific operating
needs so require and with the Commission's prior consent.

The framework regulation shall be adopted after the European
Parliament, the Council and the Court of Auditors have been
consulted. These institutions shall give their opinions on the
draft regulation within three months after the Commission has
transmitted the draft regulation. If no reply is received within
this time, the opinion shall be deemed to be favourable.

Discharge for the implementation of the budgets of the
2.
bodies referred to in the first subparagraph of paragraph 1
shall be given by the European Parliament.

Article 191

(Initial proposal: Article 175)

The Financial Regulation of 21 December 1977 is repealed.

References to the repealed Regulation shall be construed as
references to this Regulation and shall be read in accordance
with the correlation table in the annex.

Article 192

(Initial proposal: Article 176)

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

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