2003/76/EC: Council Decision of 1 February 2003 establishing the measures necessary for the implementation of the Protocol, annexed to the Treaty establishing the European Community, on the financial consequences of the expiry of the ECSC Treaty and on the Research Fund for Coal and Steel
Date: 2003-02-01
Institutions: Council of the European Union
Subjects: ECSC Treaty, budget, economic consequence, fund (EU), management, research, validation of expenditure

L 29/22

EN

Official Journal of the European Union

5.2.2003

II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 1 February 2003

establishing the measures necessary for the implementation of the Protocol, annexed to the Treaty
establishing the European Community, on the financial consequences of the expiry of the ECSC
Treaty and on the Research Fund for Coal and Steel

THE COUNCIL OF THE EUROPEAN UNION,

(4)

(2003/76/EC)

Having regard to the Treaty establishing the European
Community,

Having regard to the Protocol, annexed to the Treaty estab-
lishing the European Community, on the financial conse-
quences of the expiry of the ECSC Treaty and on the Research
Fund for Coal and Steel, and in particular Article 2 thereof,

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

Having regard to the opinion of the European Parliament (2),

Whereas:

It is necessary to establish the rules for implementing
the Protocol, and in particular
the decision-making
procedures for adopting the multiannual financial guide-
lines for managing the assets of the Research Fund for
Coal and Steel and the multiannual technical guidelines
for the research programme of the Research Fund for
Coal
‘the
programme’), bearing in mind that unless otherwise
provided in this Decision, the Commission is responsible
for the management of the assets in accordance with the
relevant provisions of
the Treaty establishing the
European Community and secondary legislation adopted
on the basis thereof.

(hereinafter

referred

to as

Steel

and

(1)

(2)

(3)

Under Article 97 of the Treaty establishing the European
Coal and Steel Community (ECSC), the Treaty expired on
23 July 2002.

The Protocol annexed to the Treaty establishing the
European Community,
(hereinafter referred to as ‘the
Protocol’) transfers the assets and liabilities of the ECSC
to the European Community and allocates the net worth
of these assets, as they appear in the balance sheet of the
ECSC of 23 July 2002, to research in the sectors related
to the coal and steel industry. This use of the assets is
consistent with the resolution on growth and employ-
ment adopted by the European Council at its meeting in
Amsterdam on 16 and 17 June 1997 (3), and with the
resolutions of the Council and the Representatives of the
Governments of the Member States, meeting within the
Council, of 20 July 1998 (4) and 21 June 1999 (5).

is necessary to determine the distribution of

It
research appropriations between the
concerned.

the
two sectors

(1) OJ C 180, 26.6.2001, p. 4.
(2) OJ C 177, 25.7.2002, p. 28.
(3) OJ C 236, 2.8.1997, p. 3.
(4) OJ C 247, 7.8.1998, p. 5.
(5) OJ C 190, 7.7.1999, p. 1.

(5) When the ECSC Treaty expires, certain financial opera-
tions, involving both revenue and expenditure, will still
be outstanding, resulting from the implementation of
ECSC operating budgets for earlier years and ECSC
borrowing and lending activities.

(6)

(7)

It is necessary to designate the institution responsible for
winding-up these operations and establishing the proce-
It would be appropriate to
dures needed to do so.
entrust the Commission with the winding-up and to
decide that the procedures to be followed will be those
in force at 23 July 2002, in accordance with the ECSC
Treaty and secondary legislation.

At its meeting of 11 September 1996, the Commission
concluded that reserves should be kept to cover, after
2002, 100 % of the outstanding loans not covered by a
Member State guarantee. The ECSC funds administered
totalled approximately EUR 1,6 billion on 23 July 2002.
The amount will vary depending on the financial activ-
ities still to be carried out before and after the expiry of
the ECSC Treaty.

5.2.2003

EN

Official Journal of the European Union

L 29/23

(8) Where debtors default during the liquidation period after
23 July 2002 and in order to guarantee the annual stabi-
lity of the coal and steel research Instrument, any default
by an ECSC debtor should first be charged to the capital
and then to the revenues funding research,

HAS ADOPTED THIS DECISION:

Article 1

The Commission shall be entrusted with winding-up the
1.
financial operations of the European Coal and Steel Community
which are still
in progress when the ECSC Treaty expires.
Where an ECSC debtor defaults during the liquidation period,
the resulting loss shall be charged first to the existing capital
and then to the revenue of the current year. The Commission,
before writing off any claim against an ECSC debtor in default,
will exhaust all remedies including the call on guarantees
(mortgages, cautions, bank guaranties or other). The Commis-
sion will reserve all possible actions in case that the debtor
regains solvency.

2.
The liquidation shall be conducted in accordance with the
rules and procedures applying to these operations, with the
Community institutions enjoying the existing powers and
prerogatives provided for by the ECSC Treaty and secondary
legislation in force on 23 July 2002.

Article 2

Article 4

1.
Net revenue from the investments provided for under
Article 2 shall constitute revenue in the general budget of the
European Union. This revenue shall be earmarked for a specific
purpose, namely financing research projects in the sectors
related to the coal and steel
industry not covered by the
Research Framework Programme. It shall form the Research
Fund for Coal and Steel and shall be managed by the Commis-
sion.

The revenue referred to in paragraph 1 shall be distrib-
2.
uted, 27,2 % being allocated to the coal-related research and
72,8 % to the steel-related research. Should it prove necessary,
the Council, acting unanimously on a proposal
from the
Commission, shall modify the breakdown between coal-related
research and steel-related research.

3.
The multiannual technical guidelines for the programme
shall be adopted by the Council acting by qualified majority on
a proposal
from the Commission and after consulting the
European Parliament.

4.
Unused revenue and appropriations deriving from this
revenue still available on 31 December in any given year shall
be carried over automatically to the following year. These
appropriations may not be transferred to other budget items.

1.
The assets shall be managed by the Commission in such a
manner as to ensure a long-term return. The investment of the
liquid assets should be aimed at the highest possible yield that
is compatible with security.

2.
The Council, acting by qualified majority on a proposal
from the Commission and after consulting the European Parlia-
ment, shall adopt multiannual financial guidelines for manage-
ment of the assets.

5.
Budgetary appropriations corresponding to cancellations
of commitments shall automatically lapse at the end of each
financial year. Provisions for commitments released as a result
of the cancellations shall be entered in the balance sheet and
the profit-and-loss account provided for in Article 3(1) and
shall return initially to the assets of the ECSC in liquidation and
subsequently, on completion of the liquidation, to the Assets of
the Research Fund for Coal and Steel. Amounts recovered shall
similarly be entered in the balance sheet and the profit-and-loss
account.

Article 3

1.
Each year a profit-and-loss account, balance sheet and
financial report shall be drawn up to show, separately from the
other financial operations of the remaining Communities, the
liquidation operations provided for in Article 1 and the invest-
ment transactions under Article 2.

These financial statements shall be annexed to the financial
statements drawn up by the Commission annually under
Article 275 of the EC Treaty and the Financial Regulation
applicable to the general budget of the European Communities.

2.
The powers of the European Parliament, the Council and
the Court of Auditors concerning control and discharge as set
out in the Treaty establishing the European Community and in
the Financial Regulation applicable to the general budget of the
European Communities shall apply to the operations referred
to in paragraph 1.

Article 5

1.
Net revenue available to finance research projects for year
n+2 shall be recorded in the balance sheet of the ECSC in liqui-
dation of year n and, on completion of the liquidation, in the
balance sheet of the Assets of the Research Fund for Coal and
Steel.

2.
In order to minimise fluctuations in research funding due
to movements on the financial markets, a smoothing shall be
effected and a provision made for a contingency. Details of the
calculations for smoothing and determining the size of the
contingency provision are contained in the Annex.

L 29/24

EN

Official Journal of the European Union

5.2.2003

Article 6

Article 8

Administrative expenditure resulting from liquidation,
invest-
ment and management operations referred to in this Decision,
corresponding to the expenditure laid down in Article 20 of
the Treaty establishing a Single Council and a Single Commis-
sion of
the
amount of which was adjusted by the Council Decision of 21
November 1977, shall be met by the Commission from the
general budget of the European Union.

the European Communities of 8 April 1965,

This Decision shall take effect on the day following that of its
publication in the Official Journal of the European Union.

It shall apply from 24 July 2002.

This Decision is addressed to the Member States.

Article 9

Article 7

Done at Brussels, 1 February 2003.

The Commission shall determine the amount of the assets and
liabilities of the ECSC in a balance sheet closed at 23 July
2002.

For the Council

The President

G. PAPANDREOU

ANNEX

Procedures to be followed to establish the amount of net revenue to be allocated to the Research Fund for Coal
and Steel

1. INTRODUCTION

Net revenue which may be used to finance research projects corresponds to the annual net result of the ECSC in
liquidation and subsequently, when liquidation has been completed, to the annual net result of the Assets of the
Research Fund for Coal and Steel. The method employed consists of establishing the funding for coal and steel
research for year n+2 when producing the balance sheet for year n, taking into account half of the increase or
decrease in the net result in relation to the last level of funding adopted for coal and steel research.

2. DEFINITION

n:

Rn:
Pn:
Dn+1:
Dn+2:

reference year

net result for year n

contingency provision for year n

allocation for research for year n+1 (established when the balance sheet for year n – 1 is produced)

allocation for research for year n+2

3. ALGORITHMS USED

The algorithms used to establish the size of the contingency provision and the allocations for research for year n+2,
which will appear in the balance sheet for year n, are as follows:

3.1. size of contingency provision:

Pn = Pn – 1 + 0,5 * (Rn – Dn + 1)

3.2. allocations for research for year n+2 (rounded up or down to the nearest EUR 100 000. If the calculation gives

a result exactly halfway, the allocation shall be rounded up to the nearest EUR 100 000):

Dn + 2 = Dn + 1 + 0,5 * (Rn – Dn + 1)
Where appropriate, the amount needed for rounding up (or the amount left over from rounding down) will be
taken from (or returned to) the contingency provision.