2003/77/EC: Council Decision of 1 February 2003 laying down multiannual financial guidelines for managing the assets of the ECSC in liquidation and, on completion of the liquidation, the Assets of the Research Fund for Coal and Steel
Date: 2003-02-01
Institutions: Council of the European Union
Subjects: ECSC, economic consequence, financial management, fund (EU), research, validation of expenditure

5.2.2003

EN

Official Journal of the European Union

L 29/25

COUNCIL DECISION

of 1 February 2003

laying down multiannual financial guidelines for managing the assets of the ECSC in liquidation
and, on completion of the liquidation, the Assets of the Research Fund for Coal and Steel

(2003/77/EC)

THE COUNCIL OF THE EUROPEAN UNION,

HAS ADOPTED THIS DECISION:

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 consequences
of the expiry of the ECSC Treaty and on the Research Fund for
Coal and Steel,

Having regard to Council Decision 2003/76/EC of 1 February
2003 establishing the measures necessary for the implementa-
tion 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 (1), and in particular Article 2(2) thereof,

Having regard to the proposal from the Commission (2),

Having regard to the opinion of the European Parliament (3),

Whereas:

(1)

(2)

(3)

(4)

For the purposes 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 Commission
shall manage the assets of the ECSC in liquidation and,
on completion of
the
the liquidation,
Research Fund for Coal and Steel.

the Assets of

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

The entire capital of the Assets of the Research Fund for
Coal and Steel, yielded by the liquidation, should be
preserved intact.

The management of the transferred assets should take
the experience gained in conducting the
account of
financial operations of
the European Coal and Steel
Community, and the multiannual financial guidelines for
managing the assets of the ECSC in liquidation and, on
completion of the liquidation, the Assets of the Research
Fund for Coal and Steel should therefore be based on
this experience,

Article 1

The multiannual financial guidelines for managing the assets of
the ECSC in liquidation and, on completion of the liquidation,
the Assets of the Research Fund for Coal and Steel (hereinafter
referred to as the ‘financial guidelines’) are set out
in the
Annex.

Article 2

The financial guidelines shall be reviewed or supplemented, if
first period ending on 31
appropriate, every five years,
December 2007. To this end, and at the latest in the first six
months of the last year of each five-year period, the Commis-
sion shall reassess the operation and effectiveness of the finan-
cial guidelines and shall propose any appropriate amendments.

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

Article 3

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.

Article 4

This Decision is addressed to the Member States.

Done at Brussels, 1 February 2003.

For the Council

The President

G. PAPANDREOU

(1) See page 22 of this Official Journal.
(2) OJ C 180, 26.6.2001, p. 10.
(3) OJ C 177, 25.7.2002, p. 28.

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EN

Official Journal of the European Union

5.2.2003

ANNEX

FINANCIAL GUIDELINES FOR MANAGING THE ASSETS OF THE ECSC IN LIQUIDATION AND, ON
COMPLETION OF THE LIQUIDATION, THE ASSETS OF THE RESEARCH FUND FOR COAL AND STEEL

1. USE OF FUNDS

(a) The assets of the ECSC in liquidation, including both its loan portfolio and its investments, shall be used as neces-
sary to meet the remaining obligations of the ECSC, in terms of its outstanding borrowings, of its commitments
resulting from previous operating budgets, and of any unforeseeable liability.

(b) To the extent that the assets of the ECSC in liquidation are not needed to meet obligations as described in (a),
they shall be invested so as to provide income to be used to fund the continuation of research in the sectors
related to the coal and steel industry.

(c) The Assets of the Research Fund for Coal and Steel shall be invested so as to provide income to be used to fund

the continuation of research in the sectors related to the coal and steel industry.

2. ALLOCATION OF ASSETS

Pursuant to point 1, the Commission will allocate the assets between the following three categories:

(a) reserves needed to provide an assurance to the creditors of the ECSC that all of its outstanding borrowings and
the interest thereon will be paid in full on their due date, thus enabling the obligor to maintain its ‘AAA’ rating
or its equivalent;

(b) funds needed to guarantee the disbursement of all amounts legally engaged under the Operating Budget of the

ECSC prior to the end of the ECSC Treaty;

(c) to the extent that funds are no longer needed for the above purposes (due either to the reimbursement of borrow-
ings or payment of interest without call on the reserves or the eventual cancellation of budgetary obligations)
such funds will be allocated to investment categories.

3. INVESTMENT CATEGORIES

The assets referred to in point 2 are to be invested in such a way as to ensure that funds are available as and when
needed, while still generating the highest return available, consistent with maintaining a high degree of security and
stability over the long-term.

(a) To obtain these objectives, investment in the following asset categories only shall be permitted:

(i) term deposits with authorised banks;

(ii) money market instruments, with a final maturity of less than one year, issued by authorised banks or by

other categories of authorised issuers;

(iii) fixed and floating rate bonds, with a maturity not exceeding 10 years, provided that they are issued by any

of the categories of authorised issuers;

(iv) equity shareholdings in authorised collective investment funds, provided that such investments are limited to
funds whose aim is to respond to the performance of a financial index and only for the investments referred
to in point 2(c).

(b) The Commission may also make use of the following operations in respect of the asset categories set out in (a):

(i) repurchase and reverse repurchase agreements, provided the counterparts are authorised for such transac-

tions, and provided that:

— securities held under such contracts may not be re-sold to parties other than the contracting counterparty

prior to the contractual deadline, and

— the Commission remains in a position to re-purchase securities that it may have sold at the contractual

deadline;

(ii) bond lending operations, but only under the conditions and procedures laid down by recognised clearing
systems such as Clearstream and Euroclear, or by leading financial institutions specialising in this type of
operations, subject to prudential rules considered as being equivalent to Community rules.

(c) ‘Authorised’ counterparts, as the term is used in these guidelines are those selected by the Commission under its

rules and procedures referred to in point 7.

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Official Journal of the European Union

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4. INVESTMENT LIMITS

(a) The investment shall be limited to the following amounts:

(i) for bonds issued or guaranteed by Member States or institutions of the Union, EUR 250 million per Member

State or institution;

(ii) for bonds issued or guaranteed by other sovereign or supranational borrowers, with a credit rating of not less

than ‘AA’ or its equivalent, EUR 100 million per issuer or guarantor;

(iii) for deposits with and/or debt instruments of an authorised bank, the lower of either EUR 100 million per

bank or 5 % of the bank's own funds;

(iv) for bonds of corporate issuers with a credit rating of not less than ‘AAA’ or its equivalent, EUR 50 million

per issuer;

(v) for bonds of corporate issuers with a credit rating of not less than ‘AA’ or its equivalent, EUR 25 million per

issuer;

(vi) for holdings of collective investment funds with a credit rating of not less than ‘AA’ or its equivalent,

EUR 25 million for each such vehicle.

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

total amount of such issue.

(c) The investment in any single counterparty, subject to the limits given in (a), and cumulated between instruments

where necessary, shall not be more than 20 % of the total assets.

(d) The ratings referred to in these guidelines shall be those applied by at least one of the major international credit

rating agencies, as generally understood.

5. TRANSFER TO THE BUDGET OF THE EUROPEAN UNION

The net revenue will be committed to the general budget of the European Union as dedicated revenue and will be
transferred from the ECSC in liquidation and, on completion of the liquidation, the Assets of the Research Fund for
Coal and Steel when necessary to meet the obligations from the budget line directed to research programmes for
sectors related to the coal and steel industry.

6. ACCOUNTING

The management of the funds shall be accounted for in the annual profit-and-loss account and the annual balance
sheet prepared for the ECSC in liquidation and, on completion of the liquidation, the Assets of the Research Fund for
Coal and Steel. These shall be based upon generally accepted accounting principles similar to those provided for the
ECSC, and in particular Fourth Council Directives 78/660/EEC of 25 July 1978 on the annual accounts of certain
types of companies (1) and Council Directive 86/635/EEC of 8 December 1986 on the annual accounts and consoli-
dated accounts of banks and other financial institutions (2). The accounts will be approved by the Commission and
examined by the Court of Auditors. The Commission shall engage external firms to carry out an annual audit of its
accounts.

7. MANAGEMENT PROCEDURES

The Commission shall carry out, in relation to the ECSC in liquidation and, on completion of the liquidation, the
Assets of the Research Fund for Coal and Steel, the abovementioned management operations in accordance with
these guidelines and under its internal rules and procedures in force for the ECSC at the time of its dissolution or as
modified thereafter.

A detailed report on management operations carried out under these guidelines shall be drawn up every three
months and sent to the Member States.

(1) OJ L 222, 14.8.1978, p.11. Directive as last amended by Directive 2001/65/EC (OJ L 283, 27.10.2001, p. 28).
(2) OJ L 372, 31.12.1986, p.1. Directive as last amended by Directive 2001/65/EC.