Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation applicable to the general budget of the European Communities
Date: 2002-06-25
Institutions: Council of the European Union
Subjects: financial management, financial regulation, general budget (EU), implementation of the budget

16.9.2002

EN

Official Journal of the European Communities

L 248/1

I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC, Euratom) No 1605/2002

of 25 June 2002

on the Financial Regulation applicable to the general budget of the European Communities

CONTENTS

PART 1

COMMON PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TITLE I

SCOPE

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TITLE II

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

Chapter 8

TITLE III

Chapter 1

Chapter 2

TITLE IV

Chapter 1

Chapter 2

Chapter 3

Section 1

Section 2

Section 3

Section 4

BUDGETARY PRINCIPLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Principles of unity and of budget accuracy

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Principle of annuality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Principle of equilibrium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Principle of unit of account

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Principle of universality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Principle of specification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Principle of sound financial management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Principle of transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ESTABLISHMENT AND STRUCTURE OF THE BUDGET . . . . . . . . . . . . . . . . . . . . .

Establishment of the budget

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Structure and presentation of the budget

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

IMPLEMENTATION OF THE BUDGET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General provisions

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Methods of implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Financial actors

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Principle of separation of duties

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Authorising officer

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accounting officer

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Imprest administrator

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 4

Liability of the financial actors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 1

Section 2

Section 3

Chapter 5

Section 1

Section 2

General rules

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rules applicable to authorising officers by delegation and subdelegation

. . . . . . . . .

Rules applicable to accounting officers and imprest administrators

. . . . . . . . . . . . .

Revenue operations

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Making available of own resources

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Estimate of amounts receivable

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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L 248/2

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Official Journal of the European Communities

16.9.2002

Section 3

Section 4

Section 5

Establishment of amounts receivable

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Authorisation of recovery

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 6

Expenditure operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 1

Section 2

Section 3

Section 4

Section 5

Chapter 7

Chapter 8

TITLE V

Chapter 1

Section 1

Section 2

Section 3

Section 4

Chapter 2

TITLE VI

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

TITLE VII

Chapter 1

Chapter 2

Chapter 3

Section 1

Section 2

Section 3

Commitment of expenditure

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Validation of expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Authorisation of expenditure

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payment of expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Time limits for expenditure operations

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

IT systems

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Internal auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROCUREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General provisions

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scope and award principles

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Publication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Procurement procedures

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Guarantees and control

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provisions applicable to contracts awarded by the Community institutions on
their own account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

GRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Award principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Award procedure

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Payment and control

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PRESENTATION OF THE ACCOUNTS AND ACCOUNTING . . . . . . . . . . . . . . . . . .

Presentation of the accounts

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Information on the implementation of the budget

. . . . . . . . . . . . . . . . . . . . . .

Accounting

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Common provisions

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General accounts

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Budgetary accounts

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter 4

Property inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TITLE VIII

Chapter 1

Chapter 2

EXTERNAL AUDIT AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

External audit

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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16.9.2002

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Official Journal of the European Communities

L 248/3

PART TWO

SPECIAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TITLE I

TITLE II

TITLE III

TITLE IV

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

TITLE V

TITLE VI

EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND, GUARANTEE
SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

STRUCTURAL FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RESEARCH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EXTERNAL ACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General provisions

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Implementation of actions

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Procurement

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Award of grants

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Auditing of accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

EUROPEAN OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ADMINISTRATIVE APPROPRIATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PART THREE

TRANSITIONAL AND FINAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .

TITLE I

TITLE II

TRANSITIONAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FINAL PROVISIONS

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Official Journal of the European Communities

16.9.2002

(4)

(5)

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 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 (2),

Having regard to the opinion of the Court of Auditors (3),

Having regard to the opinion of
Committee (4),

the Economic and Social

(6)

Whereas:

those principles and
This Regulation should reassert
keep exceptions to a strict minimum subject to strict
conditions.

As regards the principle of unity, this Regulation should
specify that it also applies to operational expenditure on
implementing the European Union Treaty provisions on
the common foreign and security policy and on police
and judicial cooperation in criminal matters, where this
is charged to the budget. The principle of unity and
budget accuracy means that all Community revenue and
expenditure, and that of
is
charged to the budget, are entered in the budget.

the Union, when this

As regards the principle of universality, the practices of
repayment of payments on account and reuse should be
discontinued; in some cases they should be replaced by
assigned
reconstituting
and ways
decommitted appropriations. These amendments do not
affect
rules applicable to the Structural
Funds.

the special

revenue

of

(1)

(2)

(3)

times have

the budget, developments

changed considerably since

Since
the
Financial Regulation of 21 December 1977 applicable
to the general budget of the European Communities (5)
in particular as a result of a financial
was adopted,
perspective forming a framework for the development
of
institutional
structure and a series of enlargements, that Financial
Regulation has been substantially amended several
in particular, of the
times.
in
requirements
and
legislative
tightening up of
administrative matters
management of Community finances,
the Financial
Regulation of 21 December 1977 should be recast in
the interests of clarity.

In order to take account,
simplification

and the

in the

of

and

basic

governing

This Regulation should be confined to stating the broad
principles
the whole
rules
budgetary sector covered by the Treaty, while the
should be moved to a
implementing provisions
Regulation on rules for the implementation of
this
Regulation in order to produce a better hierarchy of
rules and make the Financial Regulation easier to read.
The Commission should therefore be authorised to
adopt the implementing rules.

the four
law (unity,

The establishment and implementation of the budget
fundamental principles of
should respect
budgetary
specification,
universality,
annuality), and the principles of budget accuracy,
equilibrium,
financial
management and transparency.

account,

sound

unit

of

(1) OJ C 96 E, 27.3.2001, p. 1, and
OJ C 103 E, 30.4.2002, p. 292.
(2) OJ C 153 E, 27.6.2002, p. 236.
(3) OJ C 162, 5.6.2001, p. 1 and
OJ C 92, 17.4.2002, p. 1.
(4) OJ C 260, 17.9.2001, p. 42.
(5) OJ L 356, 31.12.1977, p. 1. Regulation as last amended by
Regulation (EC, ECSC, Euratom) No 762/2001 (OJ L 111,
20.4.2001, p. 1).

(7)

(8)

(9)

for each institution. As regards

As regards the principle of specification, the institutions
need to have some degree of management flexibility for
transfers of appropriations. This Regulation should
allow integrated presentation of
the allocation of
financial and administrative resources by purpose. The
procedures for transferring appropriations should also
be harmonised for all
the other institutions so that
transfers of staff and operating appropriations are a
matter
transfers of
appropriations concerning operational expenditure, the
Commission may make transfers between chapters
within one and the same title within a total
limit of
10 % of the appropriations for the financial year which
appear on the line from which the transfer is made. The
budgetary authority should be allowed to constitute
reserves in only two cases: where there is no basic act
or where it
is not certain that appropriations are
adequate.

appropriations

the distinction
As regards the principle of annuality,
and
between
differentiated
non-differentiated appropriations
should be retained.
Decisions on carryovers of commitment and payment
appropriations should be taken by each institution. The
additional periods should be confined exclusively to the
cases where they are absolutely necessary, namely
EAGGF payments.

In this

equilibrium constitutes
connection,

a basic
The principle of
should be
budgetary rule.
emphasised that recourse to loans is not compatible
with the
system of Community own resources.
However, the principle of equilibrium is not such as to
hinder the borrowing and lending operations guaranteed
by the general budget of the Union.

it

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(10)

(11)

(12)

In accordance with Article 277, first paragraph, of the
the
EC Treaty and Article 181,
Euratom Treaty the unit of account in which the budget
is drawn up, and which is also used for purposes of
implementation and for presentation of the accounts,
should be determined.

first paragraph, of

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 performance indicators
established per activity and measurable in such a way
that results can be assessed. The institutions should
carry out ex ante and ex post evaluation, in accordance
with the guidelines determined by the Commission.

as

regards

the principle of

Finally,
transparency,
information on implementation of the budget and the
accounts should be improved. A strict deadline should
also be set for the publication of the budget without
prejudice to provisional publication by the Commission
between the declaration of definitive adoption by the
President of the European Parliament and publication in
the Official
the European Communities. The
possibility of a negative reserve is also to be retained.

Journal of

(13) As regards the establishment and presentation of the
budget,
the current provisions should be harmonised
and simplified by eliminating the distinction, which has
no practical
impact, between supplementary budgets
and amending budgets.

(14)

(15)

and

The Commission section of the budget should present
i.e.
resources
appropriations
activity-based budgeting, with a view to enhancing
the budget with
transparency in the management of
financial
sound
the
reference
to
management
and
efficiency
and
effectiveness.

objectives
in

of
particular

purpose,

by

The institutions should enjoy a measure of flexibility in
the management of statutory posts in relation to what is
authorised in the budget, especially as the 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 for a financial
year and the total number of posts allocated; in addition
there will be no latitude as regards grade A 1, A 2 and
A 3 posts.

(16) As regards implementation of the budget, there should
be clarification of
the various possible methods of
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
jointly with
international organisations.
It should be possible for
centralised management either to be performed directly
by Commission departments or indirectly by delegation
to bodies governed by Community law or by national

receiving

external

aid or

procedures

law. The
that

implementation methods
the

should
public
protecting
guarantee
Community funds are complied with, whatever
the
entity responsible for all or part of this implementation
and must confirm that final responsibility for budgetary
implementation lies with the Commission in accordance
with Article 274 of the Treaty.

for

(17) 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 and under specific
conditions,
should not be able to undertake any
budgetary implementation measure but only provide
specialist technical or administrative services or perform
preparatory or ancillary tasks.

(18)

the sake of compliance with the principles of
For
transparency and sound financial management,
the
public-sector bodies or bodies with a public-service
mission 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.

(19)

In accordance with Article 279(c) of the Treaty, this
Regulation defines the powers and responsibilities of
the accounting officer and the
authorising officers,
internal auditor.

Authorising officers are made fully responsible for all
revenue and expenditure operations executed under
their authority and must be held accountable for their
actions, including, where necessary, through disciplinary
proceedings. This empowerment should therefore be
strengthened by the
centralised prior
controls and in particular ending the advance approval
of revenue and expenditure operations by the financial
controller and the check by the accounting officer that
payment constitutes valid discharge.

removal of

The accounting officer continues to be responsible for
the collection of
the proper execution of payments,
receivables. He/She
revenue
manages
the accounts and is
responsible for drawing up the institution’s financial
statements.

and the
the treasury, keeps

recovery of

The internal auditor performs his duties in accordance
with international audit standards. His role is to verify
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.

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(20)

(21)

of

of

the

officials

the European Communities,

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 Regulations
European
Communities, and the Conditions of employment of
to the
other servants of
application of
the existing disciplinary and financial
compensation measures. On the other hand, certain
specific provisions identifying cases of misconduct of
accounting officers and imprest administrators, given
the special nature of their duties, should be retained;
they will no longer have any special allowance or
insurance. Furthermore, the liability of the authorising
officer should be clarified. In cases not involving fraud,
in order to provide the appointing authority with the
set up a
necessary expertise, each institution will
specialised financial
irregularities panel 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
corruption
officials
Communities or officials of Member States of
the
European Union.

involving

the

of

commitments,

The concepts of budgetary and legal commitment of
expenditure and the conditions
for applying them
should be defined. In order to restrict the volume of
dormant
during which
individual legal commitments may be made on the basis
of overall budget commitments
should be limited.
Moreover, a decommitment provision must be provided
for individual commitments which have not given rise
to any payment over a three-year period.

the period

(22)

This Regulation should define the typology of payments
which may be made by authorising officers. Such
payments must be made principally as a function of the
effectiveness of the action and the results which flow
from it.

The rather vague concepts of advance and payment on
account should be removed; payments should be made
in the form of pre-financing,
interim payments and
payments of the final balance, when the entire amount
is not paid in one instalment.

(23)

authorisation

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
this time limit creditors will be entitled to
default interest to be charged to the budget.

payment must

and

(24) As regards contracts awarded by the institutions of the
Communities on their own account, provision should be
made for the rules contained in the Directives of the
European Parliament and of the Council coordinating
the procedures for the award of public works, service
and supply contracts to apply: the rules applicable to
contracts awarded on behalf of third parties should also
be consistent with the principles posited by those
Directives.

(25)

(26)

(27)

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.

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

Finally, as part of
the process of empowerment of
authorising officers, prior checking by the current
Advisory Committee on Procurement and Contracts
should be dispensed with.

(28) As regards grants, a framework for the award and
involving specific
monitoring of Community grants
provisions
of
principles
transparency, equal treatment, co-financing, prohibition
of retrospective awards and control should be put in
place.

implementing

the

for

(29)

(30)

(31)

In order to avoid any cumulation,
it should not be
possible for grants to be awarded to finance twice the
same action or for operating expenditure for the same
year.

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 give the institutions appropriate means of combating
fraud and corruption.

the rights and obligations of

the
To ensure that
institution and of
the beneficiary are clear and are
observed, the grant award should be the subject of a
written agreement.

should be stipulated that

(32) As regards accounting and the presentation of accounts,
it
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.

(33)

The principles on which the general accounts are based
and the financial statements are presented should be

(34)

(35)

(36)

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defined
reference
by
to
accepted
the
and
accounting principles
European Parliament and of the Council on the annual
accounts of certain types of companies, where they are
relevant in the context of the public service.

internationally
the Directives of

(43) As regards research,

the presentation of

the budget
should be harmonised with the provisions concerning
activity-based budgeting, whilst preserving the flexibility
of management which the Joint Research Centre (JRC)
currently enjoys.

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 reused and to the
the
various Community-law bodies,
arrangements for providing monthly figures and the
report on implementation, which will be sent
three
times a year to the budgetary authority.

improve

to

(44) As

action,

regards

external

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

decentralisation

The accounting methods employed by the institutions
should
the
Commission’s accounting officer should have the right
of initiative.

harmonised

field,

and,

this

be

in

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.

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

(38)

(39)

(40)

(41)

for
the
to provide optimum conditions
In order
presentation of
discharge
accounts
procedure, the timetable leading up to discharge should
be amended.

and

the

the

The Commission should submit
to the European
Parliament, at its request, any information required for
the smooth application of the discharge procedure for
the financial year in question, in accordance with Article
276 of the EC Treaty.

Special provisions should be laid down for certain
Community policies; such provisions should comply
with the basic principles of this Regulation.

It seems necessary to make provision for the possibility
against
of
and
advance
EAGGF
from 15 November
administrative
preceding the financial year in question.

commitments
appropriations

(42) As

regards

the Structural Funds,

the provision for
and making
repayment of payments on account
appropriations
the
in
available
Commission declaration annexed to Council Regulation
(EC) No 1260/1999 of 21 June 1999 laying down
general provisions on the Structural Funds (1), as last
amended by Regulation (EC) No 1447/2001 (2), should
be retained.

contained

again

(45)

a

or

State

national, Community

signed with the
Financing agreements or contracts
beneficiary
or
international public-sector body and natural or legal
persons governed by private law must
include the
general procurement principles laid down in Title V of
part one and Title IV of part two of this Regulation as
regards external actions.

(46) A special title should be included containing the general
provisions for the management of European offices.

(47) A separate title should also contain the special rules
applicable to administrative appropriations. Provision
should also be made to enable each of the two branches
of the budgetary authority to issue an opinion in good
time on building projects likely to have significant
financial implications for the budget.

(48)

The change in the timetable for the consolidation of the
the
institutions’ accounts
financial year 2005 in order to allow the necessary time
to put
internal procedures
involved.

should be deferred until

in place

essential

the

(49) A suitable

to

the

tailored

framework,

specific
management needs, should be provided for the financial
rules to apply to bodies set up by the Communities and
having legal personality, which receive a subsidy from
the general budget of the European Communities. At
the same time, and without in any way impairing the
organic autonomy required by these bodies for the
performance of their tasks, the substance of the rules
governing certain matters, and in particular discharge
and
harmonised. The
to
Commission’s internal auditor will exercise the same
powers
over Commission
bodies
departments. The financial rules internal to these bodies
will have to be adapted accordingly to be compatible
with this Financial Regulation. The Commission should
accordingly be empowered to draw up a model financial
regulation, which Community bodies can depart from
only with the Commission’s agreement,

accounting,

needs

these

over

be

as

(1) OJ L 161, 26.6.1999, p. 1.
(2) OJ L 198, 21.7.2001, p. 1.

HAS ADOPTED THIS REGULATION:

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PART ONE

COMMON PROVISIONS

TITLE I

SCOPE

Article 1

For the purposes of this Regulation, the Economic and Social
Committee, the Committee of the Regions, the Ombudsman
and the European Data-Protection Supervisor shall be treated
as Community institutions.

Article 2

This Regulation lays down the rules for the establishment and
the European
implementation of
Communities, hereinafter (cid:145)the budget(cid:146).

the general budget of

Any provision concerning the implementation of the revenue
and expenditure of the budget, contained in another legislative
act, must comply with the budgetary principles set out in Title
II.

TITLE II

BUDGETARY PRINCIPLES

Article 3

Article 5

shall be

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

implemented

equilibrium,

account,

unit

and

of

CHAPTER 1

Principles of unity and of budget accuracy

Article 4

The budget is the instrument which, for each financial
1.
forecasts and authorises all revenue and expenditure
year,
considered necessary for the European Community and the
European Atomic Energy Community.

The revenue and expenditure of the Communities shall

2.
comprise:

(a)

the revenue and expenditure of the European Community,
including administrative expenditure occasioned for the
institutions by the provisions of the Treaty on European
Union relating to the common foreign and security policy
and police and judicial cooperation in criminal matters,
and
by
implementation of those provisions where this is charged
to the budget;

expenditure

occasioned

operating

the

Subject to Article 74, no revenue shall be collected and

1.
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 Articles 18 and 74,

interest yielded by the
4.
funds which are the property of the European Communities
shall be entered in the budget as miscellaneous revenue.

CHAPTER 2

Principle of annuality

Article 6

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

Article 7

(b) the expenditure and revenue of

the European Atomic

Energy Community.

The budget shall contain differentiated appropriations,
1.
which shall
and
commitment
payment appropriations, and non-differentiated appropriations.

appropriations

consist of

The

shall

budget

for
3.
borrowing-and-lending
the
operations
Communities and payments to the Guarantee Fund for external
actions.

guarantee
by
into

the
entered

record

2.
Commitment appropriations shall cover the total cost of
the legal commitments entered into during the current
financial year, subject to Articles 77(2) and 166(2).

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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

1.
The revenue of a financial year shall be entered in the
accounts for the financial year on the basis of the amounts
the own
collected during the
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 system of the Communities’
own resources.

financial year. However,

The entries in respect of value added tax own resources,
financial
resource
additional GNP-based
and
adjusted in accordance with the

2.
the
contributions may be
Regulation referred to in paragraph 1.

any

3.
The appropriations authorised for a given financial year
may be used solely to cover expenditure committed and paid
financial year and to cover amounts due against
in that
commitments from earlier financial years.

Commitments shall be entered in the accounts on the
4.
basis of
the legal commitments entered into up to 31
December, subject to the global commitments referred to in
Article 77(2) and the financing agreements referred to in
Article 166(2), which shall be entered in the accounts on the
basis of the budget commitments up to 31 December.

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.

By way of derogation from paragraphs 3, 4 and 5, the
6.
expenditure of
the European
the Guarantee Section of
Agricultural 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

Appropriations which have not been used at the end of
for which they were entered shall be

1.
the financial year
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 or be carried over automatically in accordance with
paragraph 4.

for

Appropriations

2.
differentiated
appropriations and non-differentiated appropriations not yet
committed at the close of the financial year may be carried
over in respect of:

commitment

of

(a) amounts corresponding to commitment appropriations for
which most of the preparatory stages of the commitment
procedure 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 act 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.

of

for

payment

Appropriations

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

appropriations

first use

the

Non-differentiated

4.
to
obligations duly contracted at the close of the financial year
shall be carried over automatically to the following financial
year only.

appropriations

corresponding

The institution concerned shall
and the Council

inform the European
5.
Parliament
(cid:145)the budgetary
authority(cid:146)) by 15 March at the latest of the carry-over decision
it has taken and shall state, for each budget line, how the
criteria in paragraphs 2 and 3 have been applied to each
carry-over.

(hereinafter

Appropriations placed in reserve and appropriations for

6.
staff expenditure may not be carried over.

Article 10

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

automatically.

available

carried

shall

over

18

be

Article 11

to Article 157, where

Without prejudice
are
decommitted as a result of total or partial non-implementation
of the actions for which they were earmarked, in any financial
year after that in which the appropriations were entered in the
budget, the appropriations concerned shall be cancelled.

amounts

Article 12

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

If

1.
the
beginning of the financial year, the first paragraph of Article

the budget has not been finally adopted at

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273 of the EC Treaty and the first paragraph of Article 178 of
the Euratom Treaty shall apply to commitment and payment
of expenditure which it has been possible to book to a specific
line in the budget as part of implementation of the last budget
duly adopted.

Commitments may be made per chapter to a maximum
2.
of one quarter of
the total allotted appropriations in the
chapter in question of the previous financial year plus one
twelfth for each month which has elapsed.

Payments may be made monthly per chapter to a maximum of
one twelfth of the allotted appropriations in the chapter in
question of the preceding financial year.

The limit of
budget in preparation may not be exceeded.

the appropriations provided for in the draft

If

3.
management needs so require:

the continuity of action by the Communities and

(a)

the Council, acting by a qualified majority at the request of
the Commission and after
consulting the European
Parliament, may simultaneously authorise two or more
provisional
and for
payments over and above
those automatically made
available by the provisions of paragraphs 1 and 2;

twelfths both for

commitments

(b) for expenditure other than that necessarily resulting from
the Treaties or acts adopted pursuant thereto, the third
paragraph of Article 273 of the EC Treaty and the third
paragraph of Article 178 of
the Euratom Treaty shall
apply.

The additional twelfths shall be authorised in full and shall not
be divisible.

4.
If, for a given chapter, the authorisation of two or more
provisional twelfths granted in the circumstances and under
the procedures provided for in paragraph 3 is not sufficient to
cover the expenditure necessary to avoid a break in continuity
of the Communities’ activity in the area covered by the chapter
in question, authorisation may exceptionally be given to
exceed the amount of
the appropriations entered in the
corresponding chapter of the budget of the preceding financial
year. The budgetary authority shall act under the procedures
provided for in paragraph 3. However, the available overall
total of the appropriations in the budget of the preceding
financial year may in no circumstances be exceeded.

CHAPTER 3

Principle of equilibrium

Article 14

Article 15

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.

2.
The estimates of such revenue or payment appropriations
shall be entered in the budget during the budgetary procedure
and 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.

After the presentation of the accounts for each financial
3.
year, any discrepancy with the estimates shall be entered in the
budget for the following financial year through an amending
budget devoted solely to that discrepancy. In such a case, the
preliminary draft amending budget must be submitted by the
Commission within 15 days following the submission of the
provisional accounts.

CHAPTER 4

Principle of unit of account

Article 16

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,
shall be authorised to carry out
imprest administrators
laid down in the
operations
currencies
in national
Regulation laying down the rules
implementing this
Regulation, hereinafter referred to as (cid:145)the implementing rules(cid:146).

as
for

CHAPTER 5

Principle of universality

Article 17

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

Article 18

The following items of revenue shall be used to finance

1.
specific items of expenditure:

Budget revenue and payment appropriations must be in

1.
balance.

2. Without prejudice to Article 46(1)(4),
the European
Community and the European Atomic Energy Community, as
well as the bodies set up by the Communities as referred to in
Article 185, may not raise loans.

(a)

(b)

financial contributions
to certain
research programmes pursuant to the Council Regulation
the
implementing
Communities’ own resources;

the Decision on the

from Member States

system of

interest on deposits and the fines provided for in the
Regulation
the
speeding
implementation of the excessive deficit procedure;

clarifying

and

up

on

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(c) revenue earmarked for a specific purpose, such as income
from foundations, subsidies, gifts and bequests, including
the earmarked revenue specific to each institution;

(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;

CHAPTER 6

Principle of specification

Article 21

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

(f)

revenue arising from the repayment of amounts wrongly
paid;

Article 22

(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;

(j)

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

The basic act applicable may also assign the revenue for

2.
which it 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

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

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

The cost of products or

2.
services provided to the
Communities incorporating taxes refunded by the Member
to the Protocol on the Privileges
States pursuant
and
the European Communities or by third
Immunities of
the relevant agreements shall be
countries on the basis of
charged to the budget for the ex-tax amount.

1.
the
Each institution may, within its own section of
budget, make transfers from one title to another within a total
limit of 10 % of the appropriations for the financial year, from
one chapter to another and from one article to another.

the institutions

Three weeks before making the transfers referred to in
2.
inform the budgetary
paragraph 1,
authority of
In the event of duly justified
reasons being raised within this period by either branch of the
budgetary authority, the procedure laid down in Article 24
shall apply.

their intentions.

shall

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

Article 23

The Commission may, within its own section of

1.
budget:

the

(a)

transfer
between articles within each chapter;

appropriations within articles

and

transfers

(b) as regards expenditure on staff and administration, transfer
appropriations from one title to another within a total
limit of 10 % of the appropriations for the financial year;

(c) as regards operational expenditure, transfer appropriations
between chapters within the same title, up to a maximum
total 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 in points
(b) and (c) of the first paragraph, the Commission shall inform
the budgetary authority of its decision. In the event of duly
justified reasons being raised within this period by either
branch of the budgetary authority, the procedure laid down in
Article 24 shall apply.

The Commission may propose

2.
to the budgetary
authority, within its own section of the budget, transfers other
than those referred to in paragraph 1(c).

Article 24

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.

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

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

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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
the proposals for transfers shall be
within this time limit,
deemed to be approved.

for

In the

transfers

case of proposals

3.
relating to
expenditure 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.

for

transfers

Proposals

4.
relating both to expenditure
necessarily 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
transfer, the transfer shall not be made.

the institutions rejects the principle of

Article 25

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

2.
Appropriations corresponding to assigned revenue may
be transferred only if such revenue is used for the purpose to
which it is assigned.

European Parliament and the Council shall refrain from acting
on the Commission’s proposal for a transfer.

CHAPTER 7

Principle of sound financial management

Article 27

Budget appropriations shall be used in accordance with
1.
the principle of
sound financial management, namely 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 be
made available in due time, in appropriate quantity and 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.

Specific, measurable, achievable,

relevant and timed
3.
objectives shall be set for all sectors of activity covered by the
budget. Achievement of those objectives shall be monitored by
performance indicators for each activity and information shall
be provided by the spending authorities to the budgetary
authority. Such information, as referred to in Article 33(2)(d),
shall be provided annually and at the latest in the documents
accompanying the preliminary draft budget.

In order to improve decision-making,

institutions shall
4.
undertake both ex ante and ex post evaluations in line with
guidance provided by the Commission. Such evaluations shall
be applied to all programmes and activities which entail
significant spending and evaluation results disseminated to
spending, legislative and budgetary authorities.

Article 26

Article 28

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 the budgetary authority on a proposal
from the
Commission. A separate proposal
for a transfer relating to
utilisation of the reserve for emergency aid must be submitted
for each individual operation.

The procedure provided for in Article 24(2) and (3) shall
apply. If the Commission proposal is not agreed to by both
arms of the budgetary authority and there is a failure to arrive
at a common position on the utilisation of these reserves, the

1.
Any proposal submitted to the legislative authority which
may have an impact on the budget, including changes in the
number of posts, must be accompanied by a financial
statement and the evaluation provided for in Article 27(4).

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
information shall
made in the financial
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 progress of deliberations on the basic act.

statements. This

In order to prevent risk of

the
3.
Commission shall
statement any
information regarding existing and planned fraud prevention
and protection measures.

record in the financial

fraud or irregularity,

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CHAPTER 8

Principle of transparency

Article 29

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

Journal of

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

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

Article 30

Information

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

borrowing-and-lending

on

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

Information on the operations of the Guarantee Fund for

2.
external actions shall appear in the financial statements.

TITLE III

ESTABLISHMENT AND STRUCTURE OF THE BUDGET

CHAPTER 1

Establishment of the budget

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.

Article 31

The Commission shall attach to the preliminary draft

2.
budget:

The European Parliament, the Council, the Court of Justice of
the
the European Communities,
Economic and Social Committee,
the
Regions, the Ombudsman and the European Data-Protection
Supervisor 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

Each body referred to in Article 185 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

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.

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

and the commitments outstanding;

(b) where appropriate, an opinion on the estimates of

the
other institutions which may contain different estimates,
accompanied by the reasons therefor;

(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 185 and to the European Schools;

(d)

for

information on the achievement of all previously set
objectives
the various activities as well as new
objectives measured by indicators. Evaluation results shall
be consulted and referred to as evidence of
the likely
merits of a proposed budget amendment.

Article 34

1.
if
The Commission may, on its own initiative or
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

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letter of amendment to the Council at least 30 days before the
first reading of the draft budget by the European Parliament.
The Council must put
to the
the letter of amendment
European Parliament at
least 15 days before the said first
reading.

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

Article 35

The Council

in
1.
accordance with the procedure laid down in Article 272(3) of
the EC Treaty and Article 177(3) of the Euratom Treaty.

establish the

draft budget

shall

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

for

the transmission of
the adoption and transmission of

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

CHAPTER 2

Structure and presentation of the budget

Article 36

Article 40

1.
The President of the European Parliament shall declare
the budget finally adopted in accordance with the procedure
provided for in Article 272(7) of the EC Treaty and Article
177(7) of the Euratom Treaty.

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 declaration of final adoption of
the budget if that is after 1 January, be bound to make over to
the Community the payments due as specified in the Council
Regulation implementing the Decision on the system of the
Communities’ own resources.

Article 37

The budget shall consist of:

(a) a summary statement of revenue and expenditure;

(b) separate sections subdivided into statements of revenue

and expenditure for each institution.

Article 41

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.

If

there are unavoidable, exceptional or unforeseen
1.
circumstances, the Commission may present preliminary draft
amending budgets.

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

Requests for amending budgets, in the same circumstances as
referred to in the preceding paragraph, from institutions other
than the Commission shall be sent to the Commission.

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

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

the latest.

title may

Each
administrative appropriations.

include

operating

appropriations

and

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

The budgetary authority shall discuss them with due

3.
account for their urgency.

Article 42

Article 38

1. Where the Council receives a preliminary draft amending
budget,
in
accordance with Articles 35 and 37.

shall draw up a draft amending budget

it

The budget may not contain negative revenue.

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

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Article 43

(a)

the estimated revenue of
financial year in question;

the Communities for the

Each section of the budget may include a (cid:145)provisions(cid:146)
shall be entered in this title in the

1.
title. Appropriations
following two circumstances:

(b) the estimated revenue for the preceding financial year

and the revenue for year n ﬂ 2;

(a) where no basic act exists for the action concerned when

the budget is established;

(c)

the commitment and payment appropriations for the
financial year in question;

(b) where there are serious grounds for doubting the adequacy
of the appropriations or the possibility of implementing,
under
financial
consonant with
management,
the appropriations entered on the lines
concerned.

conditions

sound

The appropriations in this title may be used only after transfer
in accordance with the procedure laid down in Article 24.

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 (cid:145)provisions(cid:146) title. The
budgetary authority shall take a decision on these transfers as
provided in Article 24.

Article 44

The Commission section of the budget may include a (cid:145)negative
reserve(cid:146) 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.

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

(d) the commitment and payment appropriations for the

preceding financial year;

(e)

the expenditure committed and the expenditure paid in
year n ﬂ 2,

(f) a summary statement of the schedule of payments due
to meet budgetary
financial years
in subsequent
commitments entered into in earlier financial years;

(g) appropriate remarks on each subdivision;

(2) in the section for each institution,

the revenue and
expenditure 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 budgetary 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
shown, as an indication,
in a schedule entered in the
remarks column of the budget;

Article 45

(3) as regards staff:

The Commission section of the budget shall include the

1.
following two reserves:

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

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

to third countries.

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 46

1.

The budget shall show:

(1) in the summary statement of revenue and expenditure:

(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;

appropriations

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

(c) as

and

staff,

regards

scientific

technical

the
classification may be based on groups of grades,
in
accordance with the conditions laid down in each
specify the
budget. The establishment plan must
number of highly qualified technical or
scientific
personnel who are accorded special advantages under
the specific provisions of
the Staff Regulations of
officials of the European Communities and Conditions

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of employment of other servants of
Communities hereinafter
Regulations(cid:146);

referred to as

the European
(cid:145)the Staff

(d) an establishment plan setting the number of posts by
grade and by category for each body referred to in
Article 185 which receives a grant charged to the
budget. The establishment plans shall show next to the
number of posts authorised for the financial year the
number authorised for the preceding year;

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.

In addition to the documents referred to in paragraph 1
relevant

2.
the budgetary authority may attach any other
documents to the budget.

(4) as regards borrowing-and-lending operations:

Article 47

(a)

record

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

defaulted,

received

leading

(b)

in the Commission section:

(i)

lines

guarantees

the budget
containing the Communities’
the
performance
respect
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;

of

in

(ii) remarks giving the reference to the basic act and
the volume of
the
the operations
duration and the financial guarantee given by the
Communities in respect of these operations;

envisaged,

(c)

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

1.
The establishment plan described in point 3 of Article
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 A 1, A 2 and A 3, each
institution or body may modify establishment plans by up to
10 % of posts authorised, subject to two conditions:

(a)

that the volume of staff appropriations corresponding to a
full financial year is not affected, and

(b) that the limit of the total number of posts authorised by

each establishment plan is not exceeded.

the

institutions

Three weeks before making the modifications referred to in the
second subparagraph,
inform the
budgetary authority of their intentions. In the event of duly
justified reasons being raised within this period by either
branch of the budgetary authority, the institutions shall refrain
from making the modifications and the normal procedure shall
apply.

shall

(i) ongoing capital operations and debt management;

(ii) the capital operations and debt management for

the financial year in question;

By way of derogation from the first subparagraph of
2.
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.

TITLE IV

IMPLEMENTATION OF THE BUDGET

Article 49

CHAPTER 1

General provisions

Article 48

The Commission shall

1.
the revenue and
expenditure of the budget in accordance with this Regulation,
the
on its own responsibility and within the limits of
appropriations authorised.

implement

be

first

A basic

act must

1.
adopted
the
for any Community
appropriations entered in the budget
action may be used. Similarly, a basic act must first be adopted
before the operating expenditure arising from implementation
of the provisions of Titles V and VI of the Treaty on European
Union (hereinafter (cid:145)TEU(cid:146)) may be implemented.

before

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

In application of the EC Treaty and the Euratom Treaty and
Titles V and VI of the TEU, a (cid:145)basic act(cid:146) is an act of secondary
legislation which provides a legal basis for the Community

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expenditure

action or Union action and for the implementation of the
budget.
corresponding
Recommendations and opinions do not constitute basic acts
within the meaning of
this article nor do resolutions,
conclusions, declarations or other acts which have no legal
effects.

entered

the

in

In the implementing rules the Commission shall include a list
of the forms which may be taken by the basic acts adopted
under the EC Treaty and the Euratom Treaty, as well as in the
respective areas of application of Titles V and VI of the TEU.

2.
However, the following may be implemented without a
basic act as long as the actions which they are intended to
finance fall within the competence of the Community or the
Union:

(a) appropriations for pilot schemes of an experimental nature
designed to test
the feasibility of an action and its
usefulness. The relevant commitment appropriations may
be entered in the budget for only two successive financial
years;

(b) appropriations for preparatory actions, designed to prepare
proposals with a view to the adoption of future actions.
The preparatory actions are to follow a coherent approach
and may take various forms. The relevant commitment
appropriations may be entered in the budget for only three
successive financial years at most. The legislative procedure
must be concluded before the end of the third financial
year.
the
commitment of appropriations must correspond to the
particular features of the preparatory action as regards the
the aims pursued and the persons
activities envisaged,
benefited. Consequently,
the means implemented cannot
correspond in volume to those envisaged for financing the
definitive action itself.

the legislative procedure,

In the course of

is presented,
the
When the preliminary draft budget
Commission shall
to the budgetary
submit a report
authority on the actions referred to in points (a) and (b)
which shall also cover an assessment of results and the
follow-up envisaged;

tasks
resulting
level pursuant

(c) appropriations for one-off actions, or even actions for an
indefinite duration, carried out by the Commission by
from its prerogatives
virtue of
at
institutional
to the EC Treaty and the
Euratom Treaty other than its right of legislative initiative
referred to in point (b) and under specific powers directly
conferred on it by these Treaties, a list of which is given in
the implementing rules;

(d) appropriations for the operation of each institution under

its administrative autonomy.

Article 50

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

The Commission and each of
the other institutions may,
within their departments, delegate their powers of budget
implementation 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 so empowered may act only within the limits of the
powers expressly conferred upon them.

Article 52

1.
All financial actors shall be prohibited from taking any
measures of budgetary 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.

There is a conflict of interests where the impartial and
2.
in the
objective exercise of
is
implementation of
life,
compromised for
political or national affinity, economic interest or any other
shared interest with the beneficiary.

the functions of a player
the budget or an internal auditor

reasons involving family, emotional

CHAPTER 2

Methods of implementation

Article 53

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 delegated to
Member States in accordance with the provisions of Titles I
and II of part two.

implementation tasks

the budget by
4. Where the Commission implements
decentralised management,
shall be
delegated to third countries in accordance with the provisions
of Title IV of part two.

implementation tasks

In cases of

to ensure that

shared or decentralised management,

in
5.
the funds are used in accordance
order
apply
rules,
the Commission shall
with the
applicable
clearance-of-accounts
correction
procedures
mechanisms which enable it to assume final responsibility for
the implementation of the budget in accordance with Article
274 of the EC Treaty and Article 179 of the Euratom Treaty.

financial

or

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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 organisations as specified in the implementing
rules.

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

Article 54

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

the

visibility

and
action. No
implementing tasks entrusted in this way may give rise
to conflicts of interests.

of Community

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

shall

to prevent
Such bodies
irregularities and fraud and if necessary bring prosecutions to
recover funds lost, wrongly paid or incorrectly used.

take appropriate measures

Article 55

1.
The executive agencies shall be legal persons under
Community law created by Community decision 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 in accordance with
the Council Regulation laying down the statute for executive
agencies to be entrusted with certain tasks relating to the
management of Community programmes and defining the
conditions and arrangements for their creation and operation.

Implementation

operating
the
2.
appropriations shall be delegated to the director of the agency.

corresponding

of

Article 56

laid down in paragraph 1,

2. Within the limits
the
Commission may, when implementing the budget on a
centralised basis and indirectly under Article 53(2), entrust
budget
tasks
implementation tasks to:

particular

authority

public

and

of

in

Decisions entrusting executive tasks to the bodies and
1.
agencies
all
appropriate arrangements for ensuring the transparency of
operations carried out and must comprise:

referred to in Article 54(2)

include

shall

(a) agencies governed by Community law,
Article 55, hereinafter: (cid:145)executive agencies(cid:146);

referred to in

(a)

transparent procurement
and grant-award procedures
which are non-discriminatory and exclude any conflict of
interest and which are in accordance with the provisions
of Titles V and VI respectively;

(b) bodies set up by the Communities as referred to in Article
185 provided that to do so is compatible with the tasks of
each body as defined in the basic act;

(b) an effective internal control

system for management

operations;

(c) national public-sector bodies or bodies governed by private
law with a public-service mission providing adequate
financial guarantees and complying with the conditions
provided for
in the implementing arrangements. Such
bodies may be entrusted with implementation tasks only if:

(i)

the basic act of the programme or action concerned
provides for the possibility of delegation and lays down
the criteria for the selection of the bodies concerned,
and

(c) accounting

arrangements

and
for
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;

operations

these

(d) an independent external audit;

(e) public access to information at the level provided for in

Community regulations.

(ii) the delegation of budget-implementation tasks is a
response
sound financial
requirements of
management as shown by prior analysis and ensures
compliance with the principle of non-discrimination,

to the

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.

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3.
The Commission shall ensure supervision, evaluation and
control of the implementation of the tasks entrusted. It shall
take the equivalence of control systems into account when it
carries out controls using its own control systems.

Article 57

delegation or subdelegation may be assisted in his/her task by
staff entrusted, under his/her
one or more members of
to carry out certain operations necessary for
responsibility,
implementation of
the
accounts.

and presentation of

the budget

The Commission may

1.
of
implementation of funds deriving from the budget, including
payment and recovery, to external private-sector entities or
bodies, other than those which have a public-service mission
under Article 54(2)(c).

entrust measures

not

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

technical

expertise

tasks

CHAPTER 3

Financial actors

S e c t i o n 1

P r i n c i p l e o f s e g r e g a t i o n o f d u t i e s

Article 58

The duties of authorising officer and accounting officer shall
be segregated and mutually incompatible.

S e c t i o n 2

A u t h o r i s i n g o f f i c e r

Article 59

The institution shall perform the duties of authorising

1.
officer.

lay

shall

Each

down

institution

2.
internal
administrative rules the staff of an appropriate level to whom
it delegates in compliance with the conditions in its rules of
procedure 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.

its

in

3.
The powers of authorising officer shall be delegated or
subdelegated only to persons covered by the Regulations and
Rules applicable to officials and other servants (hereinafter
(cid:145)Staff Regulations(cid:146)).

Article 60

The authorising officer

shall be responsible in each
1.
institution for
implementing revenue and expenditure in
accordance with the principles of sound financial management
and for ensuring that
legality and
regularity are complied with.

the requirements of

To implement expenditure,

the authorising officer by
2.
subdelegation shall make budgetary
delegation and by
commitments
validate
legal
and
expenditure and authorise payments and shall undertake the
preliminaries for the implementation of appropriations.

commitments,

shall

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

the organisational

4.
The authorising officer by delegation shall put in place,
in 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
financed,
internal
management and control procedures suited to the performance
of his/her duties,
post
including where
verifications. 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. The initiation
and the ex ante and ex post verification of an operation shall be
separate functions.

appropriate

structure

and

the

ex

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

6.
financial
management and control of transactions who considers that a
decision he/she is required by his/her superior to apply or to
agree to is irregular or contrary to the principles of sound
the professional
financial management or
rules he/she is
inform the authorising officer by
required to observe shall
delegation in writing and, if the latter fails to take action, the
panel referred to in Article 66(4). In the event of any illegal
activity, fraud or corruption which may harm the interests of
the Community, he/she shall inform the authorities and bodies
designated by the applicable legislation.

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

subdelegation. The

7.
to
The authorising officer by delegation shall report
his/her institution on the performance of his/her duties in the
form of an annual activity report together with financial and

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management information. This report shall indicate the results
of the operations by reference to the objectives set, the risks
associated with these operations, the use made of the resources
provided and the way the internal control system functions.
The internal auditor shall take note of the annual report and
any other pieces of information identified. The Commission
shall no later than 15 June each year send to the budgetary
authority a summary of the annual reports for the previous
year.

The instrument of delegation shall
entrusted to the delegatees.

lay down the tasks

S e c t i o n 4

I m p r e s t a d m i n i s t r a t o r

Article 63

S e c t i o n 3

A c c o u n t i n g o f f i c e r

Article 61

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

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;

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

(d)

laying down, in accordance with Title VII, the accounting
rules and methods and the chart of accounts;

(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.

2.
The accounting officer shall obtain from authorising
officers, who shall guarantee its reliability, all the information
necessary for the production of accounts which give a true
image
budgetary
implementation.

the Communities’

assets

and

of

of

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.

CHAPTER 4

Liability of the financial actors

S e c t i o n 1

G e n e r a l r u l e s

Article 64

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

to any disciplinary

action,

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

Article 65

1.
The provisions of this chapter are without prejudice to
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

Article 62

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

2.
Each authorising officer, accounting officer or imprest
administrator shall be liable to disciplinary action and payment
of compensation as laid down in the Staff Regulations, without
prejudice to Articles 66, 67 and 68. In the event of illegal
activity, fraud or corruption which may harm the interests of

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the Community, the matter will be submitted to the authorities
and bodies designated by the applicable legislation.

S e c t i o n 3

R u l e s a p p l i c a b l e t o a c c o u n t i n g o f f i c e r s a n d
i m p r e s t a d m i n i s t r a t o r s

S e c t i o n 2

Article 67

R u l e s a p p l i c a b l e t o a u t h o r i s i n g o f f i c e r s b y
d e l e g a t i o n a n d s u b d e l e g a t i o n

Article 66

1.
The authorising officer shall be liable to payment of
compensation as laid down in the Staff Regulations, which
in
specify that an official may be required to make good,
whole or in part, any damage suffered by the Communities as
a result of serious misconduct on his/her part in the course of
or in connection with the performance of his/her duties,
in
particular if he/she determines entitlements to be recovered or
signs a
issues
payment order without
Financial
Regulation and its implementing rules. The same shall apply
where, through serious misconduct, he/she omits to draw up a
document establishing a debt or if he/she neglects to issue a
recovery order or is, without justification, late in issuing it, as
the issuing of a payment order may involve third-party liability
of the institution.

expenditure or
complying with this

recovery orders, commits

2.
An authorising officer by delegation or subdelegation
who considers that a decision which it is his/her responsibility
to take is irregular or contrary to the principles of sound
financial management shall inform the delegating authority in
writing.
the delegating authority then gives a reasoned
instruction in writing to the authorising officer by delegation
or
the
authorising officer may not be held liable.

the decision in question,

subdelegation to take

If

3.
In the event of subdelegation, within his services, 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.

4.
Each institution shall
irregularities panel which shall
determine whether a financial
what the consequences, if any, should be.

set up a specialised financial
function independently and
irregularity has occurred and

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 and to the
authorising officer by delegation, provided the latter is not the
person involved, as well as to the internal auditor.

If

An accounting officer shall be liable to disciplinary action and
payment of compensation, as laid down and in accordance
with the procedures in the Staff Regulations. He/She may in
particular render himself liable by any of the following forms
of misconduct:

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

his/her keeping;

(b) he/she wrongly alters bank accounts or postal giro

accounts;

(c) he/she recovers or pays amounts which are not

in
conformity with the corresponding recovery or payment
orders;

(d) he/she fails to collect revenue due.

Article 68

An imprest officer shall be liable to disciplinary action and
payment of compensation, as laid down and in accordance
with the procedures in the Staff Regulations. He/She may in
particular render himself liable by any of the following forms
of misconduct:

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

his/her keeping;

(b) he/she cannot provide proper supporting documents for

the payments he/she has made;

(c) he/she makes payments

to persons other

than those

entitled;

(d) he/she fails to collect revenue due.

CHAPTER 5

Revenue operations

S e c t i o n 1

M a k i n g a v a i l a b l e o f o w n r e s o u r c e s

Article 69

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

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S e c t i o n 2

E s t i m a t e o f a m o u n t s r e c e i v a b l e

2.
The institution may formally establish an amount as
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.

Article 70

An estimate of the amount receivable shall first be made
1.
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.

2.
By way of derogation from paragraph 1, no estimate of
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

E s t a b l i s h m e n t o f a m o u n t s r e c e i v a b l e

Article 71

Establishment of an amount receivable is the act by

1.
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.

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

3.

Amounts wrongly paid shall be recovered.

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

S e c t i o n 4

A u t h o r i s a t i o n o f r e c o v e r y

Article 72

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/she has established.

S e c t i o n 5

R e c o v e r y

Article 73

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

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

debtor who himself/herself has

a

recovery of

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

Article 74

Revenue received by way of fines, periodic penalty payments
and other penalties and any accrued interest shall not be
finally recorded as budgetary 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.

CHAPTER 6

Expenditure operations

Article 75

Every item of expenditure shall be committed, validated,

1.
authorised and paid.

Except

in the case of appropriations which can be
2.
implemented without a basic act in accordance with Article
49(2), the commitment of the expenditure shall be preceded
by a financing decision adopted by the institution or the
authorities to which powers have been delegated by the
institution.

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S e c t i o n 1

C o m m i t m e n t o f e x p e n d i t u r e

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

responsible

Article 76

1.
The budgetary commitment is the operation reserving
the appropriation necessary to cover subsequent payments to
honour a legal commitment.

The legal commitment
is the act whereby the authorising
officer enters into or establishes an obligation which results in
a charge.

The budgetary commitment and the legal commitment shall be
adopted by the
in duly
substantiated cases as provided for in the implementing rules.

same authorising officer,

save

The budgetary commitment

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

individual when the

is

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

The budgetary commitment is provisional when it is intended
to cover the expenditure referred to in Article 150 or routine
administrative expenditure and either the amount or the final
beneficiaries are not definitively known.

3.
Budgetary 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
administrative
and for
provides
budgetary commitment is thus divided into annual instalments,
the legal commitment shall stipulate this, except in the case of
expenditure on staff.

expenditure. Where

The

legal

commitments

actions
3.
extending over more
and the
than one
corresponding budgetary commitments shall, save in the case
of staff expenditure, have a final date for implementation set in
compliance with the principle of sound financial management.

financial year

into for

entered

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

Where a legal commitment has not then resulted in a payment
after a period of three years, the authorising officer responsible
shall decommit it.

Article 78

1. When adopting a budgetary 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 budget, of

the expenditure conforms to the provisions of the Treaties,
the implementing
this Regulation, of
of
rules and of all acts adopted in accordance with the
Treaties and regulations;

(d) the principle of sound financial management is complied

with.

2. When registering a legal commitment, the authorising
officer shall ensure that:

Article 77

(a)

the
commitment
budgetary commitment;

is

covered by

the

corresponding

In respect of any measure which may give rise to
1.
expenditure chargeable to the budget, the authorising officer
responsible must first make a budgetary commitment before
entering into a legal obligation with third parties.

(b) the expenditure is regular and conforms to the provisions
of the Treaties, of the budget, of this Regulation, of the
implementing rules and of all acts adopted in accordance
with the Treaties and the regulations;

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 179(2),
legal
commitments relating to individual or provisional budgetary
commitments shall be concluded by 31 December of year n.

individual

(c)

the principle of sound financial management is respected.

S e c t i o n 2

Va l i d a t i o n o f e x p e n d i t u r e

Article 79

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

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

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

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

claim;

in which creditors paid late are entitled to receive default
interest charged to the line from which the principal was paid.

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

S e c t i o n 3

A u t h o r i s a t i o n o f e x p e n d i t u r e

Article 80

expenditure

act whereby
the
responsible, having verified that

Authorisation of
the
the
authorising officer
appropriations are available and by issuing a payment order,
instructs
to pay an amount of
expenditure which he/she has validated.

accounting officer

the

is

S e c t i o n 4

P a y m e n t o f e x p e n d i t u r e

Article 81

1.
Payment shall be made on production of proof that the
relevant action is in accordance with the provisions of the
basic act or the contract and shall cover one or more 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.

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.

Article 82

CHAPTER 7

IT systems

Article 84

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

Each institution shall establish an internal auditing function
which must be performed in compliance with the relevant
international standards. The internal auditor appointed by the
institution shall be answerable to the latter for verifying the
proper operation of budgetary implementation systems and
procedures. The internal auditor may not be either authorising
officer or accounting officer.

Article 86

1.
The internal auditor shall advise his/her institution on
dealing with risks, by issuing independent opinions on the
quality of management and control systems and by issuing
recommendations
of
improving
implementation of operations and promoting sound financial
management.

conditions

the

for

He/She shall be responsible in particular:

(a)

internal
for assessing the suitability and effectiveness of
management systems and the performance of departments
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 and audit systems applicable to every budgetary
implementation operation.

S e c t i o n 5

T i m e l i m i t s f o r e x p e n d i t u r e o p e r a t i o n s

Article 83

The internal auditor shall perform his/her duties on all
2.
the institution’s activities and departments. He/She shall enjoy
full and unlimited access
information required to
to all
perform his duties, if necessary on the spot, including in the
Member States and in third countries.

The validation, authorisation and payment of expenditure must
be completed within the time limits
laid down in the
implementing rules, which shall also specify the circumstances

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

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an annual internal audit report indicating the number and type
of internal audits carried out, the recommendations made and
the action taken on those recommendations.

4.
Each year the institution shall forward a report to the
discharge authority summarising the number and type of
internal audits carried out, the recommendations made and the
action taken on those recommendations.

Article 87

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

If the internal auditor is an official or other member of staff,
he/she shall assume responsibility 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

S c o p e a n d a w a r d p r i n c i p l e s

Article 88

Public contracts are contracts

for pecuniary interest
1.
concluded in writing by a contracting authority within the
meaning of Articles 104 and 167, 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) contracts for the purchase or rental of a building;

(b) supply contracts;

(c) works contracts;

(d) service contracts.

2.

This Title does not relate to grants.

Article 89

S e c t i o n 2

P u b l i c a t i o n

Article 90

1.
All contracts exceeding the thresholds provided for in
Article 105 or Article 167 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.

Contracts with a value below the thresholds provided for
advertised as

2.
in Article 105 or Article 167 shall be
appropriate.

S e c t i o n 3

P r o c u r e m e n t p r o c e d u r e s

Article 91

Procurement procedures shall take one of the following

1.
forms:

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

1.
budget
shall comply with the principles of
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).

(a)

the open procedure;

(b) the restricted procedure;

(c) contests;

(d) the negotiated procedure.

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

in Article 105 or Article 167, use of

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

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

invoices

Article 92

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

the subject of

(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

Each institution shall establish a central database containing
details of candidates and tenderers who are in one of
the
situations described in Articles 93 and 94. The sole purpose of
in compliance with
the database
the
Community rules on the processing of personal data,
correct application of Articles 93 and 94. Each institution shall
have access to the databases of the other institutions.

to ensure,

shall be

Article 96

Article 93

Candidates

1.
be
participation in a procurement procedure if:

tenderers

shall

or

excluded

from

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.

(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
activity
illegal
criminal
detrimental to the Communities’ financial interests;

organisation or

other

any

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.

These penalties may consist:

(a)

(b)

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

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
importance of
misconduct.

imposed shall be
the contract and the seriousness of

in proportion to the
the

Article 97

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 98

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

remain confidential until

they

are

Article 94

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

2.
The contracting authority may require tenderers, as
provided in the implementing rules, to lodge a security in
advance as a guarantee that
the bids made will not be
withdrawn.

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3. With the exception of
the contracts involving small
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 99

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 100

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.

2.
The contracting authority shall notify all candidates or
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.

(a) ensure full performance of the contract,

(b)

the financial

limit
pre-financing.

risks connected with payment of

Article 103

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 104

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

Article 105

two of

to Title IV of part

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

this Regulation,

(a)

the publication arrangements referred to in Article 90;

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

Article 101

(c)

the corresponding time limits.

abandon the procurement or

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

cancel

the

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

S e c t i o n 4

G u a r a n t e e s a n d c o n t r o l

Article 102

The contracting authority may and, in certain cases provided
for in the implementing rules, must require contractors to
lodge a guarantee in advance in order to:

Article 106

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 with the European Communities a special
agreement
the
conditions laid down in that agreement.

in the field of public procurement under

Article 107

Agreement

the Multilateral

Where
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.

on

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TITLE VI

GRANTS

CHAPTER 1

Scope

Article 108

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;

(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 110

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
publication of calls for proposals save in duly substantiated
exceptional 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.

They shall be covered by a written agreement.

Article 111

The following shall not constitute grants within the

2.
meaning of this Title:

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

1.
from the budget to any one beneficiary.

(a) expenditure

and
shareholdings, the public contracts referred to in Article 88
and aid paid as macrofinancial assistance;

institutions’

loans

staff,

the

on

A beneficiary may be awarded only one operating grant

2.
from the budget per financial year.

(b) expenditure implemented as part of shared, decentralised
or joint management within the meaning of Article 53 of
this Regulation;

Article 112

(c) payments made to the delegatee bodies of the Commission
referred to in Articles 54 and 55 of this Regulation and
the other Community bodies referred to in Article 185 of
this Regulation.

CHAPTER 2

Award principles

Article 109

1.
The award of grants shall be subject to the principles of
transparency 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.

1.
A grant may be awarded for an action which has already
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 in the basic act or for the expenditure necessary
for the proper implementation of crisis management aid or
humanitarian aid operations as laid down in the implementing
rules.

No grant may be awarded retrospectively for actions already
completed.

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

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Article 113

Article 116

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

1.
subject to Title IV of part two.

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

be

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

The authorising officer responsible shall

2.
then, on the
basis of the evaluation provided for in paragraph 1, draw up
the list of beneficiaries and the amounts approved.

2.
Unless otherwise specified in the basic act with regard to
bodies pursuing an objective of general European interest,
when operating grants are renewed, they shall be gradually
decreased.

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
already
announced.

selection and award criteria

to the

shall

CHAPTER 3

Award procedure

Article 114

Grant applications submitted in writing by legal persons

1.
shall be eligible.

CHAPTER 4

Payment and control

Article 117

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.

Article 118

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

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.

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

Administrative and financial penalties of an effective,
3.
proportionate and dissuasive nature may be imposed by the
authorising officer, as provided in Articles 93 to 96 and in the
implementing rules relating to those articles, on applicants
who are excluded under paragraph 2.

Article 115

Article 119

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

2.
Should the beneficiary fail to comply with his/her legal
or contractual obligations, the grant shall be suspended and
reduced or
terminated in the cases provided for by the
implementing rules after the beneficiary has been given the
opportunity to make his/her observations.

CHAPTER 5

Implementation

Article 120

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.

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.

2.
The award criteria announced in advance in the call for
proposals 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.

2.
Each grant agreement shall provide expressly for the
Commission and the Court of Auditors to exercise their
powers of control, on documents and on the premises, over all
contractors and subcontractors who have received Community
funds.

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TITLE VII

PRESENTATION OF THE ACCOUNTS AND ACCOUNTING

CHAPTER 1

Presentation of the accounts

Article 121

The Community accounts shall comprise:

(a)

the financial statements of the institutions as set out in
Article 126 and those of the bodies referred to in Article
185;

(b) the consolidated financial statements which present

in
aggregated form the financial information contained in the
financial statements of the institutions and bodies referred
to in point (a);

(c)

the
the reports on implementation of
institutions and the budgets of the bodies referred to in
Article 185;

the budget of

(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

(e) materiality;

(f) no netting;

(g) reality over appearance;

(h) accrual-based accounting.

Article 125

In accordance with the principle of

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

the financial year,

regardless of

2.
The value of assets and liabilities shall be determined in
accordance with the valuation rules provided for in Article
133.

Article 126

Article 122

The financial statements shall be presented in millions of

1.
euro and shall comprise:

The accounts of
the institutions and bodies referred to in
Article 185 shall be accompanied by a report on budgetary
and financial management during the year.

(a)

Article 123

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

the balance sheet and the economic outturn account,
which represent
the assets and liabilities and financial
situation and the economic outturn at 31 December of the
previous year; they shall be presented in accordance with
the structure laid down by the Directives of the European
Parliament and of the Council on the annual accounts of
certain types of companies, but with account being taken
of the specific nature of the Communities’ activities;

(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) the

cash-flow table

showing amounts

collected and

disbursed during the year and the final treasury position;

(b) as

regards

reports on budgetary implementation, of

revenue and expenditure operations.

(c)

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

Article 124

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;

2.
The Annex to the financial statements shall supplement
and comment on the information presented in the statements
referred to in paragraph 1 and shall supply all the additional
information prescribed by internationally accepted accounting
practice where such information is relevant to the activities of
the Communities.

Article 127

The budgetary implementation reports shall be presented in
millions of euro. They shall comprise:

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(a)

the budgetary outturn account, which sets out
all
budgetary operations for the year in terms of revenue and
expenditure; 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 128

The accounting officers of the other institutions and bodies
referred to in Article 185 shall 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.

The Commission’s accounting officer shall consolidate the
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 each body referred to in
Article 185 together with the provisional
consolidated
accounts.

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

Article 129

1.
The Court of Auditors shall, by 15 June at the latest,
make its observations on the provisional accounts of each
institution and each body referred to in Article 185.

Each institution and each body referred to in Article 185
2.
shall draw up its
final accounts and send them to the
Commission’s accounting officer and the Court of Auditors by
1 July of
the latest with a view to
the following year at
drawing up the final consolidated accounts.

3.
the
After approving the final consolidated accounts,
Commission shall send them to the European Parliament, the
the
Council and the Court of Auditors before 31 July of
following financial year.

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 and Article 160c
of
the following
financial year.

the Euratom Treaty by 31 October of

CHAPTER 2

Information on the implementation of the budget

Article 130

and to the Council twice a year on budgetary guarantees and
the corresponding risks.

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

Article 131

1.
In addition to the statements provided for in Articles 126
and 127, the Commission shall send once a month to the
European Parliament and to the Council figures, aggregated at
chapter level at least, on the implementation of the budget,
all
for
both
appropriations.

expenditure

revenue

against

and

for

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

The figures shall be sent within 10 working days following the
end of each month.

2.
Three times a year, within the 30 working days following
31 May, 31 August and 31 December, the Commission shall
send to the European Parliament and to the Council a report
on the implementation of the budget, covering both revenue
and expenditure broken down by chapter, article and item.

This report shall also provide details of
appropriations carried over from previous financial years.

the utilisation of

3.
The figures and the report on implementation of the
budget shall at the same time be sent to the Court of Auditors.

CHAPTER 3

Accounting

S e c t i o n 1

C o m m o n p r o v i s i o n s

Article 132

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.

The accounts

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

In addition to the statements provided for in Articles 126 and
127, the Commission shall report to the European Parliament

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

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

the authorising

Article 136

Article 133

accounting

The Commission’s

after
1.
consulting the accounting officers of the other institutions and
bodies referred to in Article 185, adopt the accounting rules
and methods and the harmonised chart of accounts to be
applied by all the institutions, the offices referred to in Title V
of part two and all the bodies referred to in Article 185.

officer

shall,

2. When adopting the rules and methods referred to in
paragraph 1,
the Commission’s accounting officer shall be
guided by the internationally 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

G e n e r a l a c c o u n t s

Article 134

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
185.

Article 135

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

S e c t i o n 3

B u d g e t a r y a c c o u n t s

Article 137

The budgetary accounts provide a detailed record of

1.
budgetary implementation.

2.
For the purposes of applying paragraph 1, the budgetary
accounts shall record all budgetary revenue and expenditure
operations provided for in Title IV of part one.

CHAPTER 4

Property inventories

Article 138

1.
Each institution and each body referred to in Article 185
shall keep inventories showing the quantity and value of all
intangible and financial assets in
the Communities’ tangible,
accordance with a model drawn up by the accounting officer
of the Commission.

Each institution and each body referred to in Article 185 shall
check that entries in the inventory correspond to the actual
situation.

The accounting system must be such as to leave a trail

3.
for all accounting entries.

2.

The sale of movable property shall be suitably advertised.

CHAPTER 1

External audit

Article 139

TITLE VIII

EXTERNAL AUDIT AND DISCHARGE

The institutions shall send to the Court of Auditors any

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

The Court of Auditors
authorising
and

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

informed of
internal
administrators

shall be
officers,

imprest

the
auditors,
and of

of

Article 140

1.
The examination by the Court of Auditors of whether all
revenue has been received and all expenditure incurred in a

The

European

Parliament,

the
1.
Commission shall
inform the Court of Auditors, as soon as
possible, of all decisions and rules adopted pursuant to Articles
9, 13, 18, 22, 23, 26 and 36.

the Council

and

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lawful and proper manner shall have regard to the provisions
of the Treaties, the budget, this Regulation, the implementing
rules and all other acts adopted pursuant to the Treaties.

In the performance of its task, the Court of Auditors
2.
shall be entitled to consult,
in the manner provided for in
Article 142, all documents and information relating to the
financial management of departments or bodies with regard to
operations financed or co-financed by the Communities.
It
to make enquiries of any official
shall have the power
responsible for a revenue or expenditure operation and to use
to
any
the
aforementioned departments or bodies. 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.
The Court of Auditors and the national audit bodies of the
Member States shall cooperate in a spirit of
trust while
maintaining their independence.

appropriate

procedures

auditing

the

of

administrative documents
relating thereto,
all documents
inventories, all
relating to revenue and expenditure, 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, for the same purposes, all documents and data created or
stored on a magnetic medium.

The other services and internal audit bodies of the national
administrations concerned shall afford the Court of Auditors
all
the
performance of its task.

considers necessary

facilities which it

the

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:

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.

and materials of

(a) show their records of cash in hand, any other cash,
securities
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;

all kinds,

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

The Court of Auditors shall ensure that all securities and cash
on deposit or in hand are checked against vouchers signed by
the depositories or against official memoranda of cash and
securities held. It may carry out such checks itself.

Article 142

institutions,

The Commission,

1.
the bodies
the other
administering revenue or expenditure on the Communities’
behalf and the final beneficiaries of payments from the budget
shall afford the Court of Auditors all the facilities and give it
the information which the Court of Auditors considers
all
necessary for the performance of its task. They shall place at
the disposal of the Court of Auditors all documents concerning
the award and performance of contracts financed by the
Community budget and all accounts of cash or materials, all
and also
accounting records or

supporting documents,

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
institutions and, in particular, by the departments responsible
for decisions in respect of such revenue and expenditure, the
bodies
the
Communities’ behalf and the natural or legal persons receiving
payments from the budget.

administering

expenditure

revenue

on

or

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
the
extend to the utilisation, by bodies outside
institutions, of Community funds received by way of grants.

5.
Community financing paid to beneficiaries outside the
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.

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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

The annual report of

1.
governed by the provisions of paragraphs 2 to 6 of
Article.

the Court of Auditors shall be
this

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
institutions other than the Commission shall be sent to the
Commission at the same time.

The annual report shall contain an assessment of the

3.
soundness of financial management.

The annual

4.
shall contain a section for each
institution. The Court of Auditors may add any summary
report or general observations which it sees fit to make.

report

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.

5.
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 of
the institutions and shall ensure publication
thereof in the Official Journal of the European Communities.

6.
As soon as the Court of Auditors has transmitted the
annual report, the Commission shall inform the Member States
that report which
concerned immediately of
relate to management of
for which they are
responsible under the rules applicable.

the details of
the funds

Following receipt of such information, the Member States shall
reply to the Commission within 60 days. The latter shall
transmit a summary to the Court of Auditors, the Council and
the European Parliament before 15 February.

Article 144

The Court of Auditors

1.
shall notify the institution
concerned of all observations which are, in its opinion, such
that they should appear in a special report. These observations
must remain confidential.

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.

The special reports, together with the replies of the institutions
concerned, shall be transmitted 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.

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.

Journal of

2.
The opinions referred to in Article 248(4) of the EC
Treaty and Article 180a(4) of the Euratom Treaty which do
not relate to proposals or drafts covered by the legislative
consultation 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 145

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 146

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.

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 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 Court of Auditors in respect of
the financial year in question and the Court of Auditors’
statement of assurance as to the reliability of the accounts and
the legality and regularity of the underlying transactions.

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shall

The Commission

3.
European
Parliament, at the latter’s request, any information required for
the smooth application of
the discharge procedure for the
financial year in question, in accordance with Article 276 of
the EC Treaty.

submit

the

to

Article 147

In accordance with Article 276 of the EC Treaty and
1.
Article 180b of the Euratom Treaty, the Commission and the
other institutions shall take all appropriate steps to act on the
Parliament’s
observations

accompanying

European

the

discharge decision and on the comments accompanying the
recommendation for discharge adopted by the Council.

At

the request of

the European Parliament or

these observations and comments, and,

2.
the
Council, the institutions shall report on the measures taken in
in
the light of
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.

PART TWO

SPECIAL PROVISIONS

TITLE I

EUROPEAN AGRICULTURAL GUIDANCE AND GUARANTEE FUND, GUARANTEE SECTION

Article 148

Article 150

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 149

For each financial year, the EAGGF Guarantee Section

1.
shall include non-differentiated appropriations.

1.
The Commission shall
incurred by the Member States.

reimburse

the

expenditure

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

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

2.
Payment appropriations which have been carried over
but which have not been used by the end of the financial year
shall be cancelled.

Article 151

3.
Uncommitted EAGGF Guarantee Section appropriations
relating to rural development may be carried over to the next
financial year only, up to a maximum of 3 % of appropriations
under the title concerned. Such carryover shall be possible
only if
the appropriations provided for under the relevant
headings of the budget for the following financial 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.

Expenditure

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

This budgetary commitment shall be deducted from the global
provisional commitment referred to in Article 150.

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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

3.
of accounts.

Article 152

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.

Article 153

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.

2.
In cases other than those referred to in paragraph 1, the
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 154

The result of decisions on clearance of accounts shall be
entered in a single article as lower or higher expenditure.

TITLE II

STRUCTURAL FUNDS

Article 155

Article 157

Parts one and three of this Regulation shall apply to
1.
expenditure effected by the authorities and bodies referred to
in the
the
Cohesion Fund and the preaccession structural and agricultural
measures and to their revenue, save as otherwise provided in
this title.

regulations governing the Structural

Funds,

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 preaccession structural and agricultural measures
may be managed on a decentralised basis as provided in
Article 164.

The Commission shall automatically decommit appropriations
that have been committed as provided for in the regulations
referred to in Article 155.

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,
whether
corresponding
is
appropriations available again.

to make

necessary

the

it

Article 156

Article 158

Payment by the Commission of financial contributions
shall be made in accordance with the

1.
from the Funds
regulations referred to in Article 155.

2.
The time limit for interim payments by the Commission
shall be laid down in accordance with the regulations referred
to in Article 155.

With regard to the operating 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 regulations
the same objective, within the meaning of
referred to in Article 155.

3.
The treatment of repayments by the Member States and
the implications for the amount of contributions from the
Funds shall be governed by the regulations referred to in
Article 155.

Aspects concerning the management and selection of projects
and audit shall be governed by the regulations referred to in
Article 155.

Article 159

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TITLE III

RESEARCH

Article 160

1.
Parts one and three shall apply to the research and
technological development appropriations, save as otherwise
provided in this Title.

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

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

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.

Experts paid from the

research and technological
3.
development appropriations shall be recruited in accordance
with the procedures laid down by the Council when it adopts
each research framework programme.

Article 161

1.
The Joint Research Centre (JRC) may receive funding
charged to appropriations entered outside the titles and the

referred to in Article 160(1)

its
chapters
participation on a
in
Community activities financed in whole or in part from the
general budget.

in respect of
competitive or negotiated basis

2.
The appropriations relating to the activities in which the
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 budgetary 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.

The rules on procurement in Title V of part one shall not

3.
apply to the activities of the JRC on behalf of third parties.

By way of derogation from Article 23, the Commission
4.
may, within the title of the budget relating to the policy area
(cid:145)Direct action research(cid:146), make transfers between chapters of up
to 15 % of
the appropriation in the line from which the
transfer is made.

TITLE IV

EXTERNAL ACTIONS

CHAPTER I

General provisions

Article 162

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

The

2.
actions
paragraph 1 shall be used by the Commission:

appropriations

the

for

referred to in

CHAPTER 2

Implementation of actions

Article 163

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. Appropriations for external
actions may be combined with funds from other sources to
achieve a joint objective.

(a) either within the framework of aid granted on an

autonomous basis;

(b) or under

agreements

concluded with one or more

beneficiary third countries;

(c) or under agreements with the international organisations

referred to in Article 53.

Article 164

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

to apply in whole or in part

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

accounting officer;

following the date of the budgetary commitment. Individual
contracts and agreements relating to audit and evaluation may
be concluded later.

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

management operations;

(c)

for project support, procedures for the presentation of
separate accounts showing the use made of Community
funds; and for other forms of support, an officially certified
annual statement for the area of expenditure concerned to
be made available to the Community;

(d) existence of a national institution for independent external

auditing;

(e)

transparent, non-discriminatory procurement procedures
ruling out all conflicts of interest.

CHAPTER 3

Procurement

Article 167

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
the
relating
arrangements for awarding external contracts laid down in the
implementing rules. The
the
purposes of this chapter shall be:

contracting authorities

special provisions

to thresholds

and

for

The beneficiary country must undertake to comply with

2.
Article 53(6).

(a)

the Commission on behalf of and for the account of one
or more beneficiaries;

Article 165

(b) the beneficiary or beneficiaries;

The implementation of actions by beneficiary third countries
or international organisations is subject
to scrutiny by the
Commission. Such scrutiny shall be exercised either by prior
approval, by ex post checks or by a combined procedure.

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

agreement

for

or

Article 166

2.
The procurement procedures must be laid down in the
financing agreements or grant agreements referred to in Article
166.

1.

Actions carried out shall give rise to:

Article 168

(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: (cid:145)the beneficiaries(cid:146); or

(b) a

contract

or

grant

agreement with

national

international public-sector bodies or natural or
persons responsible for carrying out the actions.

or
legal

The contracts and agreements provided for in points (a) and
(b) of this paragraph shall lay down the terms on which the
external aid shall be managed by the contractor.

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

In duly substantiated exceptional cases,

2.
it may be
decided, on the basis of the specific conditions laid down in
the basic acts governing cooperation, to allow third-country
nationals other than those referred to in paragraph 1 to tender
for contracts.

Financing agreements with the beneficiary third countries
2.
referred to in paragraph 1(a)
shall be concluded by 31
December of year n + 1 at the latest, year n being the one in
which the budgetary commitment was made. The individual
contracts and agreements which implement such financing
than three years
agreements

shall be concluded no later

for
3. Where an agreement on widening the market
procurement of goods or services to which the Community is
party applies, the contracts for procurement financed by the
budget shall also be open to third-country nationals other than
those referred to in paragraphs 1 and 2, under the conditions
laid down in this agreement.

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CHAPTER 4

Award of grants

Article 169

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

CHAPTER 5

Auditing of accounts

Article 170

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.

TITLE V

EUROPEAN OFFICES

Article 171

1.
(cid:145)European offices(cid:146) for the purposes of applying this Title
are the administrative structures set up by one or more
institutions to perform specific cross-cutting tasks.

This Title shall also apply to the European Anti-fraud

2.
Office.

Parts one and three shall apply to the operation of the

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

Article 172

1.
The appropriations for each European office, the total
amount of which shall be entered in a specific 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
each European office
financial
performance of its duties on behalf of the institutions.

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 Commission shall inform the budgetary authority of such
transfers.

Each European office’s accounts shall form an integral

4.
part of the Communities’ accounts referred to in Article 121.

Article 173

authorising officer to the Director of
concerned and shall set
delegation of powers.

the European office
the limits and conditions for this

Article 174

Each interinstitutional European office shall draw up
1.
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

2.
The remarks concerning the specific budget line in which
is entered the total appropriation for each interinstitutional
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.

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

Article 175

The Management Committee of each European office
1.
shall lay down the detailed rules for the implementation of 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,

Article 176

the European
This Title shall apply to the operation of
Anti-fraud Office (OLAF), with the exception of Article 174
and Article 175(2).

The Commission shall, in respect of the appropriations entered
in the Annex for each European office, delegate the powers of

The Director of OLAF shall be authorised to subdelegate
his/her powers to staff covered by the Staff Regulations.

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TITLE VI

ADMINISTRATIVE APPROPRIATIONS

Article 177

one

Parts
appropriations, save as otherwise provided in this Title.

apply

three

shall

and

to

administrative

Article 178

of

As

each

year,

from 15 November

1.
routine
administrative 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 line
for 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.

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

expenditure

Administrative

from contracts
2.
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

The institutions shall

3.
inform the two branches of the
budgetary authority as soon as possible of any building project
likely to have significant financial implications for the budget.

The two branches of the budgetary authority shall immediately
notify the institution concerned of their intention to issue an
opinion to the latter. Failing a reply, the institution concerned
may
its
administrative autonomy, subject
the EC
Treaty and Article 185 of the Euratom Treaty with regard to
Community representation.

operation
to Article 282 of

proceed with

planned

under

the

Article 179

Administrative

1.
appropriations.

appropriations

shall be differentiated

When the two branches of the budgetary authority notify their
intention to issue an opinion, they shall forward the latter
within two weeks of such notification.

PART THREE

TRANSITIONAL AND FINAL PROVISIONS

TITLE I

TRANSITIONAL PROVISIONS

Article 180

or to appropriations for the EAGGF Guarantee Section for
financing rural development and accompanying measures.(cid:146)

1.
If, by 31 December 2006, the Council fails on the basis
of a possible Commission proposal to reach agreement on
alternative budgetary
agricultural
expenditure,
the latter shall as from 1 January 2007 be
replaced by revenue assigned in its entirety to the EAGGF.

for negative

treatment

2. Where the application of paragraph 1 would mean
replacing negative expenditure by assigned revenue, as from 1
January 2007:

(a)

the first sentence of Article 42 should be replaced by (cid:145)The
budget may not contain negative revenue or expenditure.(cid:146),

(b) Article 154 should read as follows:

(cid:145)Assigned revenue
under this Title shall be assigned according to origin either
to appropriations for the EAGGF Guarantee Section for
financing expenditure on the common agricultural policy

Article 181

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 the budgetary year 2004.

For the budgetary year 2003 the Commission section shall
comprise:

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

and administrative operation;

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

several subsections depending on requirements.

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The transfer procedure provided for in Articles 23, 158 and
160(2) shall apply for the first time to the appropriations for
the budgetary year 2004. For
the
budgetary
transferring
appropriations in the Commission section of the budget shall
the Financial
be governed by Article 26(3) and (4) of
Regulation of 21 December 1977, as last amended by Council
Regulation (EC, ECSC, Euratom) No 762/2001.

the appropriations for
for
procedure

2003,

year

the

2.
The time limits referred to in the second subparagraph of
Article 128, in Article 129 and in Article 143(2) and (5) shall
apply for the first time in respect of budgetary year 2005.

For earlier years, these time limits shall be:

(a) 1 May for Article 128(2);

(b) 15 July for Article 129(1);

(c) 15 September for Article 129(2);

(d) 15 October for Article 129(3);

(e) 30 November for Article 129(4);

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

(g) 30 November for Article 143(5).

The provisions of Title VII of part one shall apply gradually
depending on technical possibilities
to be fully
effective for the budgetary year 2005.

in order

Article 113(2) shall apply for the first time as from the

3.
budgetary year 2005.

The report by the authorising officer by delegation
4.
referred to in Article 60(7) shall be drawn up for the first time
for the budgetary year 2003.

appropriations

Any commitment

released from the
5.
budgetary year 2002 may, without prejudice to Article 157, be
made available again under the conditions laid down by Article
7(6) of the Financial Regulation of 21 December 1977, as last
amended by Regulation (EC, ECSC, Euratom) No 762/2001.

TITLE II

FINAL PROVISIONS

Article 182

The European Parliament and the Council shall be empowered
to obtain any information or explanations regarding budgetary
matters within their fields of competence.

Article 183

The Commission shall adopt
Regulation.

rules

for

implementing this

Article 184

Every three years, or whenever it proves necessary to do so,
this Regulation shall be the subject of a review in accordance
with the procedure laid down by Article 279 of the EC Treaty
and Article 183 of the Euratom Treaty, after recourse to the
conciliation procedure, if the European Parliament so requests.

2.
Discharge for the implementation of the budgets of the
bodies referred to in paragraph 1, shall be given by the
European Parliament on the recommendation of the Council.

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

4.
The bodies referred to in paragraph 1 shall apply the
accounting rules set out in Article 133 so that their accounts
can be consolidated with the Commission’s accounts.

Article 186

The Financial Regulation of 21 December 1977 is hereby
repealed.

Any regulations amending this Regulation shall be adopted by
the Council after recourse to the conciliation procedure, if the
European Parliament so requests.

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 185

Article 187

1.
The Commission shall adopt a framework financial
regulation for the bodies set up by the Communities and
having legal personality which actually receive grants charged
to 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.

into force on the 20th day
This Regulation shall enter
following its publication in the Official Journal of the European
Communities.

It shall apply from 1 January 2003.

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

Done at Luxembourg, 25 June 2002.

For the Council

The President

J. MATAS I PALOU

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ANNEX

CORRELATION TABLE

referred to in Article 186

Financial Regulation of 21st December 1977

Financial Regulation of 25th June 2002

Part I (cid:151) Provisions applicable to the general budget of
the European Communities

Part one (cid:151) Common provisions

Title I: General principles

Article 1, 1(1)

Article 1, 1(2)

Article 1, 1(3)

Article 1, 1(4) and 1(5)

Article 1, 1(6)

Article 1, 1(7)

Article 2

Article 3

Article 4, 4(1)

Article 4, 4(2)

Article 4, 4(3)

Article 5

Article 6

Article 7, 7(1)

Article 7, 7(2)

Article 7, 7(3)

Article 7, 7(4)

Article 7, 7(5)

Article 7, 7(6)

Article 7, 7(7)

Article 7, 7(8)

Article 7, 7(9)

Article 8, 8(1)

Title II: Budgetary principles

Article 4, 4(1) and 4(2)

Article 6

Article 179, 179(2)

Article 7

Deleted

Article 77, 77(3)

Articles 27 and 48, 48(2)

Article 28

Article 17

Articles 17 and 18

Article 19

Article 5

Articles 6 and 8

Article 9(1), 9(2), 9(4) and 9(6)

Article 9(1), 9(2), 9(3), 9(5) and 9(6)

Deleted

Article 10

Article 9(1)

Articles 11 and 157

Deleted, except Article 156, 156(3)

Consigned to the regulation foreseen in Article 183

Consigned to the regulation foreseen in Article 183

Article 12

Article 8, 8(2) and 8(3)

Articles 150, 150(3) and 178

Article 9

Article 10

Article 11

Article 13

Article 29, 29(2)

Article 16

Title II: Establishment and structure of the budget

Title III: Establishment and structure of the budget

Section I: Establishment of the budget

Chapter 1: Establishment of the budget

Article 12

Article 13

Article 14

Article 15, except 15(2)

Articles 15, 15(2) and 16, 16(2)

Article 16, 16(1)

Article 17

Article 18

Article 31

Article 33

Article 34

Article 37

Article 38

Article 35

Article 36

Article 39

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Financial Regulation of 21st December 1977

Financial Regulation of 25th June 2002

Section II: Structure and presentation of the budget

Chapter 2: Structure and presentation of the budget

Article 19, 19(1)

Article 19, 19(2) and 19(3)

Article 19, 19(4)

Article 19, 19(5)

Article 19, 19(6)

Article 19, 19(7)

Article 19, 19(8)

Article 20, except 20(4)

Article 20, 20(4)

Articles 40 and 41

Article 41

Article 43

Article 44

Deleted

Article 30, 30(1)

Article 45

Article 46

Article 47

Title III: Implementation of the budget

Title IV: Implementation of the budget

Section I: General provisions

Chapter 1: General provisions

Article 21

Article 22, 22(1)

Article 22, 22(2)

Article 22, 22(3)

Article 22, 22(4)

Article 22, 22(4a)

Article 22, 22(5)

Article 23

Article 24

Article 24a

Article 25

Article 26, 26(1)

Article 26, 26(2) and 26(4)

Article 26, 26(3)

Article 26, 26(5)

Article 26, 26(6) and (7)

Article 26, 26(8) and (9)

Article 26, 26(10) and (11)

Article 27, 27(1)

Article 27, 27(2) and (5)

Article 27, 27(2a)

Article 27, 27(3)

Article 27, 27(4)

Article 58

Articles 48 and 49

Article 50, 54(1) and 57(1)

Deleted

Articles 51, 52 and 59

Article 56

Article 1(2)

Article 84

Deleted

Articles 85 and 86

Article 61

Article 21

Article 22

Article 23

Article 24

Deleted

Article 25

Article 26

Article 20, 20(1)

Deleted

Article 20, 20(2)

Deleted

Article 20, 20(3)

Section II: Budgetary revenue, management of available
funds

Chapter 5: Revenue operations

Article 28, 28(1)

Article 28, 28(2)

Article 28, 28(3)

Article 28a

Article 29

Article 30

Article 31

Article 32

Article 70, 70(1)

Article 71, 71(2)

Article 70, 70(2)

Article 74

Article 73

Consigned to the regulation foreseen in Article 183

Article 69

Article 15

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Financial Regulation of 21st December 1977

Financial Regulation of 25th June 2002

Article 33

Article 34

Article 35

Consigned to the regulation foreseen in Article 183

Article 131

Consigned to the regulation foreseen in Article 183

Section III: Commitment, validation, authorisation and
payment of expenditure

Chapter 6: Expenditure operations

Article 36

Article 37

Article 38

Article 39

Article 40

Article 41

Article 42

Article 43

Article 44

Article 45

Article 46

Article 47

Article 48

Article 49

Article 50

Article 51, 51(1)

Article 51, 51(2)

Article 51, 51(3)

Article 52

Article 53

Article 54

Section IV: Management of posts

Article 55

Articles 77, 77(1) and (2) and 166, 166(2)

Deleted

Deleted

Deleted

Article 79

Consigned to the regulation foreseen in Article 183

Consigned to the regulation foreseen in Article 183

Article 80

Consigned to the regulation foreseen in Article 183

Consigned to the regulation foreseen in Article 183

Article 81

Deleted

Deleted

Article 71, 71(4)

Deleted

Deleted

Article 82

Deleted

Deleted

Consigned to the regulation foreseen in Article 183

Article 63

Deleted

Title IV: Conclusion of contracts, inventories, accountancy

Title V: Procurement

Section I: Contracts for the supply of goods and services;
contracts for purchase, lease and hire

Article 56

Article 57

Article 58, 58(1)

Article 58, 58(2)

Article 58, 58(3)

Article 58, 58(4)

Article 59

Article 60

Article 61

Article 62

Article 63

Article 64

Article 64a

Article 105

Deleted

Articles 88, 89, 89(2) and 91

Article 90

Article 97, 97(1)

Consigned to the regulation foreseen in Article 183

Article 91, 91(2)

Article 91, 91(3)

Deleted

Article 89, 89(1)

Deleted

Deleted

Article 102

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Financial Regulation of 21st December 1977

Financial Regulation of 25th June 2002

Section II: Inventories of movable and immovable
property

Title VII: Presentation of the accounts and accounting

Article 65

Article 66

Article 67

Article 68

Section III: Accounts

Article 69

Article 70

Article 70a

Article 71

Article 72

Chapter 4: Property inventories

Article 138, 138(1)

Article 138, 138(2)

Consigned to the regulation foreseen in Article 183

Consigned to the regulation foreseen in Article 183

Chapter 3: Accounting

Articles 132 and 133

Articles 132, 133, 134 and 137

Consigned to the regulation foreseen in Article 183

Deleted

Articles 132, 132(3) and 136

Title V: Responsibilities of authorising officers, financial
controllers, accounting officers and administrators of
advance funds

Title IV: Implementation of the budget

Chapter 4: Liability of the financial actors

Article 73

Article 74

Article 75, 75(1)

Article 75, 75(2)

Article 75, 75(3)

Article 75, 75(4)

Article 75, 75(5)

Article 76

Article 77

Article 66

Deleted

Article 67

Article 68

Deleted

Deleted

Consigned to the regulation foreseen in Article 183

Article 65, 65(2)

Deleted

Title VI: Presenting and auditing accounts

Title VII: Presentation of the accounts and accounting

Chapter 1: Presentation of the accounts

Article 78

Article 79

Article 80

Article 81

Article 82

Article 83, 83(1)

Article 83, 83(2) bis (4)

Article 84

Article 85

Article 86

Article 87

Article 88

Article 88a

Article 89, 89(1)

Article 89, 89(2), (3) and (5)

Article 89, 89(4)

Article 89, 89(6)

Article 89, 89(7) and (8)

Article 128

Article 128

Articles 122 and 127

Articles 126 and 128

Article 128, 128(2)

Article 140, 140(3)

Article 139

Deleted

Article 140, 140(1) and (2)

Article 141

Article 142, 142(1) bis (5)

Article 143

Deleted

Article 145, 145(1)

Article 146

Article 145, 145(2) and (3)

Deleted

Article 147

16.9.2002

EN

Official Journal of the European Communities

L 248/47

Financial Regulation of 21st December 1977

Financial Regulation of 25th June 2002

Article 89, 89(9) and (10)

Article 90

Title VII: Special provisions applicable to research and
technological development appropriations

Article 91

Article 92, 92(1) and (2)

Article 92, 92(3)

Article 92, 92(4)

Article 93

Article 94

Article 95

Article 96, 96(1) and (4)

Article 96, 96(2) and (3)

Article 97

Consigned to the regulation foreseen in Article 183

Article 144

Part Two: Special provisions

Title III: Research

Article 160, 160(1)

Article 160, 160(1)

Article 161, 161(1)

Article 161, 161(3)

Deleted

Deleted

Article 161, 161(4)

Article 161, 161(2)

Deleted

Deleted

Title VIII: Special provisions applicable to the European
Agricultural Guidance and Guarantee Fund, Guarantee
Section

Part Two: Special provisions

Title I: European Agricultural Guidance and Guarantee
Fund, Guarantee Section

Article 98

Article 99, 99(1)

Article 99, 99(2)

Article 100

Article 101

Article 102

Article 103

Article 104

Article 148

Article 150, 150(1) and (2)

Deleted

Article 151, 151(1)

Article 152

Consigned to the regulation foreseen in Article 183

Article 151, 151(2)

Article 153

Title IX: Special provisions applicable to external aid

Part Two: Special provisions

Section I: General provisions

Article 105, 105(1) and (2)

Article 105, 105(3)

Article 105, 105(4)

Article 105, 105(5)

Article 106, 106(1)

Article 106, 106(2)

Article 106, 106(3)

Title IV: External actions

Chapter 1: General provisions

Article 162

Consigned to the regulation foreseen in Article 183

Deleted

Consigned to the regulation foreseen in Article 183

Article 166

Deleted

Consigned to the regulation foreseen in Article 183

Section II: Implementation

Chapter 2: Implementation of actions

Article 107

Article 108

Article 109

Article 110

Article 111

Deleted

Deleted

Deleted

Deleted

Deleted

Section III: Award of contracts

Chapter 3: Procurement

Article 112

Article 113

Article 114

Article 115

Article 167, 167(1)

Article 167, 167(2)

Article 168

Consigned to the regulation foreseen in Article 183

L 248/48

EN

Official Journal of the European Communities

16.9.2002

Financial Regulation of 21st December 1977

Financial Regulation of 25th June 2002

Article 116

Article 117

Article 118

Article 119

Deleted

Deleted

Consigned to the regulation foreseen in Article 183

Deleted

Section IV: Auditing of accounts

Chapter 4: Auditing of accounts

Article 120

Title X: Special provisions applicable to the management
of appropriations relating to staff serving in offices and
suboffices in the Community and in delegations outside
the Community and to their administration

Article 121

Article 122 (Deleted)

Article 123

Title XI: Special provisions applicable to financial
participation by third parties and outside bodies in
Community activities

Section I: General provisions

Article 124 to 126

Section II: Provisions applicable to participation provided
for pursuant to the agreement on the European Economic
Area

Article 170

Deleted

Deleted

Deleted

Deleted

Deleted

Article 18(1)(d)

Article 127 to 132

Article 18(1)(d)

Title XIa: Special provisions relating to the sanctions
referred to in Section 4 of Regulation (EC) No 1467/97

Article 132a

Title XII: Special provisions relating to the Office for
Official Publications of the European Communities

Article 133

Part II: Provisions applicable to borrowing-and-lending
operations by the European Communities

Article 18(1)(b)

Title V: European Offices

Article 171 to 175

Article 134

Article 135

Article 136

Article 137

Article 130

Consigned to the regulation foreseen in Article 183

Deleted

Article 142, 142(6)

Part III: Transitional and final provisions

Part three: Transitional and final provisions

Article 138

Article 139

Article 140

Article 141

Article 142

Article 143

Article 182

Article 183

Article 184

Article 186

Article 185

Article 187