2004/197/CFSP: Council Decision 2004/197/CFSP of 23 February 2004 establishing a mechanism to administer the financing of the common costs of European Union operations having military or defence implications
Date: 2004-02-23
Institutions: Council of the European Union
Subjects: EU expenditure, EU financing, common security and defence policy, financial regulation

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(Acts adopted pursuant to Title V of the Treaty on European Union)

COUNCIL DECISION 2004/197/CFSP

of 23 February 2004

establishing a mechanism to administer the financing of the common costs of European Union
operations having military or defence implications

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on European Union, and in par-
ticular Article 13(3) and Article 28(3) thereof,

munity, Denmark does not participate in the elaboration
and implementation of decisions and actions of
the
European Union which have defence implications, and
Denmark does not participate in the financing of the
mechanism,

Whereas:

(1)

(2)

(3)

(4)

(5)

(6)

The European Council, meeting in Helsinki on 10 and
11 December 1999, agreed in particular that, coop-
erating voluntarily in EU-led operations, Member States
must be able by 2003 to deploy within 60 days, and
sustain for at least one year, military forces of up to
50 000 to 60 000 persons, capable of the full range of
Petersberg tasks.

The European Council, meeting in Thessaloniki on 19
and 20 June 2003, welcomed the conclusions of the
Council meeting on 19 May 2003, which in particular
confirmed the need for a European Union military rapid-
reaction capability.

On 22 September 2003, the Council decided that the
European Union should acquire the flexible capacity for
managing the financing of common costs of military
operations of any scale, complexity or urgency, in par-
ticular by setting up, by 1 March 2004, a permanent
financing mechanism to assume charge of the financing
of common costs of any future Union military opera-
tion.

the Council approved Document
On 17 June 2002,
10155/02 on the financing of EU-led crisis-management
operations having military or defence implications.

The Treaty on European Union provides in its Article
28(3) that Member States whose representatives in the
Council have made a formal declaration pursuant to its
Article 23(1), second subparagraph, shall not be obliged
to contribute to the financing of the operation having
military or defence implications concerned.

HAS DECIDED AS FOLLOWS:

Article 1

Definitions

For the purpose of this Decision:

(a) ‘participating Member States’ shall mean the Member States

of the European Union, except Denmark;

(b) ‘contributing States’ shall mean the Member States contri-
buting to the financing of the military operation in ques-
tion in accordance with Article 28(3) of the Treaty on
European Union and the third States contributing to the
financing of the common costs of this operation pursuant
to agreements between themselves and the European
Union.

CHAPTER 1

MECHANISM

Article 2

Establishment of the mechanism

1.
A mechanism to administer the financing of the common
costs of European Union operations having military or defence
implications is hereby established.

2.

The mechanism shall be called ATHENA.

In conformity with Article 6 of the Protocol on the posi-
tion of Denmark annexed to the Treaty on European
Union and the Treaty establishing the European Com-

3.
ATHENA shall act on behalf of the participating Member
States or, regarding the specific operations, the contributing
States as defined in Article 1.

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Article 3

Legal capacity

With a view to the administrative management of the financing
of European Union operations with military or defence implica-
tions, ATHENA shall have the necessary legal capacity, in par-
ticular, to hold a bank account, acquire, hold or dispose of
property, enter into contracts and administrative arrangements
and be a party to legal proceedings. ATHENA shall be non-
profit-making.

Article 4

Coordination with third parties

To the extent necessary to achieve its tasks, and in conformity
with the objectives and policies of
the European Union,
ATHENA shall coordinate its activities with the Member States,
Community institutions and international organisations.

CHAPTER 2

ORGANISATIONAL STRUCTURE

Article 5

Management bodies and staff

ATHENA shall be managed, under the authority of the

1.
Special Committee, by:

(a) the administrator;

(b) the commander of each operation, in relation to the opera-
tion which he/she commands (hereinafter referred to as the
‘operation commander’);

(c) the accounting officer.

ATHENA shall use existing administrative structures of
2.
the European Union to the greatest possible extent. ATHENA
shall resort to staff made available as necessary by the EU insti-
tutions or seconded by Member States.

The Secretary-General of the Council may provide the
3.
administrator or the accounting officer with the staff needed
for them to carry out their functions, which may be on the
basis of a proposal by a participating Member State.

ATHENA's bodies and staff shall be activated on the basis

4.
of operational needs.

3. When the Special Committee is discussing the financing
of the common costs of a given operation:

(a) the Special Committee shall be composed of one represen-

tative of each contributing Member State;

(b) the representatives of contributing third States shall partici-
pate in the proceedings of the Special Committee. They
shall neither take part in nor be present at its votes;

(c) the operation commander or his/her representative shall
participate in the proceedings of the Special Committee,
without taking part in its votes.

The Presidency of the Council of the European Union
4.
shall convene and chair the meetings of the Special Committee.
The administrator shall provide the secretariat for the Special
Committee. He/she shall draw up the minutes of the result of
the Committee's discussions. He/she shall not take part in its
votes.

5.
The accounting officer shall participate as necessary in
the proceedings of the Special Committee, without taking part
in its votes.

6.
If a participating Member State, the administrator or the
operation commander so requests, the Presidency shall convene
the Special Committee within at most 15 days.

The administrator

7.
shall
Committee of any claim or dispute addressed to ATHENA.

suitably inform the Special

The

Special Committee

8.
unanimously
amongst its members, taking into account its composition as
defined in paragraphs 1 and 3. Its decisions shall be binding.

decide

shall

9.
The Special Committee approves all budgets, taking into
account the relevant reference amounts, and generally exercises
the competences foreseen by Articles 18, 19, 20, 21, 22, 24,
25, 27, 29, 31, 32, 36, 37, 38, 39 and 41.

10.
The Special Committee shall be informed by the admin-
istrator, the operation commander and the accounting officer
as provided for in the present Decision.

11.
The text of the acts approved by the Special Committee
pursuant to Articles 18, 19, 20, 21, 22, 24, 27, 29, 31, 32, 37,
38, 39 and 41 shall be signed by the chairman of the Special
Committee at the time of their approval and by the adminis-
trator.

Article 6

The Special Committee

Article 7

The administrator

A Special Committee composed of one representative of
1.
each participating Member State
established (Special
Committee). The Commission shall attend the meetings of the
Special Committee without taking part in its votes.

is

The Secretary-General of the Council shall appoint the
least one deputy administrator for a

1.
administrator and at
period of three years.

ATHENA shall be managed under the authority of the

2.
Special Committee.

The administrator shall discharge his/her duties on behalf

2.
of ATHENA.

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3.

The administrator:

(a) shall draw up and submit to the Special Committee any
draft budget. The expenditure section for an operation in
any draft budget shall be drawn up on the basis of a
proposal from the operation commander;

(b) shall adopt the budgets after their approval by the Special

Committee;

(c) shall be the authorising officer for the revenue, common
costs incurred in preparation for, or further to, operations
and operational common costs incurred outside the active
phase of the operation;

(d) as regards revenue, shall implement the financial arrange-
ments made with third parties in relation to the financing
of the common costs of the Union's military operations.

The administrator shall ensure that the rules established
4.
by the present Decision are complied with, and that the deci-
sions of the Special Committee are applied.

The administrator

5.
measures which he/she deems necessary to implement
expenditure financed through ATHENA. He/she shall
the Special Committee thereof.

shall be authorised to adopt any
the
inform

The administrator shall coordinate work on financial
6.
questions relating to the Union's military operations. He/she
shall be the contact point with national administrations and, as
appropriate, international organisations on these matters.

Article 9

The accounting officer

The Secretary-General of the Council shall appoint the
1.
accounting officer and at least one deputy accounting officer
for a period of two years.

The accounting officer shall discharge his/her duties on

2.
behalf of ATHENA.

3.

The accounting officer shall be responsible for:

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

(b) preparing the accounts for ATHENA each year, and, after
completion of each operation, the accounts for that opera-
tion;

(c) supporting the administrator when he/she submits the
annual accounts or the accounts for an operation to the
Special Committee for approval;

(d) keeping the accounts for ATHENA;

(e) laying down the accounting rules and methods and the

chart of accounts;

(f) laying down and validating the accounting systems for
revenue and, where appropriate, validating systems laid
down by the authorising officer
justify
accounting information;

to supply or

The administrator shall be accountable before the Special

7.
Committee.

(g) keeping supporting documents;

Article 8

The operation commander

The operation commander shall discharge his/her duties
1.
on behalf of ATHENA in relation to the financing of the
common costs of the operation which he/she commands.

For the operation which he/she commands, the operation

2.
commander shall:

(a) send the administrator his/her proposals for the ‘expendi-
ture — operational common costs’ section of the draft
budgets;

(b) as

the

implement

authorising officer,

appropriations
relating to the operational common costs; he/she shall exer-
cise his/her authority over any person participating in the
including pre-
implementation of
financing; he/she may award contracts and enter
into
contracts on behalf of ATHENA; he/she shall open a bank
account on behalf of ATHENA for the operation which he/
she commands.

those appropriations,

3.
The operation commander shall be authorised to adopt
any measures which he/she deems necessary to implement the
expenditure financed through ATHENA,
for the operation
which he/she commands. He/she shall inform the administrator
and the Special Committee thereof.

(h) treasury management, jointly with the administrator.

4.
The administrator and the operation commander shall
provide the accounting officer with all the information neces-
sary for the production of accounts which accurately represent
ATHENA's financial assets and budget implementation adminis-
tered by ATHENA. They shall guarantee its reliability.

The accounting officer shall be accountable before the

5.
Special Committee.

Article 10

General provisions applicable to the administrator, the
accounting officer and ATHENA's staff

1.
The functions of administrator or deputy administrator,
on the one hand, and accounting officer or deputy accounting
officer, on the other, shall be mutually incompatible.

2.
Any deputy administrator shall act under the authority of
the administrator. Any deputy accounting officer shall act
under the authority of the accounting officer.

3.
A deputy administrator shall stand in for the adminis-
trator when he/she is absent or prevented from attending. A
deputy accounting officer shall stand in for the accounting
officer when he/she is absent or prevented from attending.

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Officials and other servants of the European Commu-
4.
nities, when carrying out functions on behalf of ATHENA, shall
remain subject to the rules and regulations applicable to them.

4. When a military operation is launched by the Union, the
administrator shall, for the amounts of contributions decided
by the Council,
implement the arrangements with the third
States contributing to that operation.

The staff made available to ATHENA by the Member
5.
States shall be subject to the same rules as those set out in the
Council decision concerning the rules applicable to national
experts on secondment, and to the provisions agreed on by
their national administration and the Community institution or
ATHENA. However, in any case, the seconding Member State
shall assume charge of the experts' entitlements defined by
such Council decision concerning the rules applicable to
national experts on secondment.

Before their appointment,

6.
the staff of ATHENA must
have received clearance for access to classified information up
to at least ‘Secret UE’ level held by the Council, or equivalent
clearance by a Member State.

7.
The administrator may negotiate and enter into arrange-
ments with the Member States or Community institutions with
a view to designating in advance those staff who could, if need
be, be made immediately available to ATHENA.

CHAPTER 4

BANK ACCOUNTS

Article 12

Opening and purpose

The administrator shall open one or more bank accounts

1.
on behalf of ATHENA.

Any bank account shall be opened at a first-rate financial

2.
institution with its head office in a Member State.

3.
The contributions from contributing States shall be paid
into these accounts. They shall be used to pay for the costs
administered by ATHENA and to make the necessary advances
to the operation commander for the implementation of expen-
diture relating to the common costs of a military operation. No
bank account may be overdrawn.

CHAPTER 3

CONTRIBUTING THIRD STATES

Article 13

Management of funds

Article 11

Any payment from ATHENA's account shall require the
1.
joint signature of the administrator or a deputy administrator
on the one hand and the accounting officer or a deputy
accounting officer on the other.

Standing and ad hoc administrative arrangements on
modalities for the payment of third States' contributions

In the framework of the agreements concluded between
1.
the EU and third States indicated by the Council as potential
contributors to EU operations or as contributors to a specific
EU operation, the administrator shall negotiate with these third
States standing or ad hoc administrative arrangements, respec-
tively. These arrangements shall take the form of an exchange
of Letters between ATHENA and the competent administrative
services of the third States concerned establishing the modal-
ities necessary to facilitate swift payment of contributions to
any future EU military operation.

Funds

administered

2.
those
entrusted to an operation commander, may not be deposited
other than with a first-rate financial
institution in euro in a
current or short-term account.

by ATHENA,

including

CHAPTER 5

COMMON COSTS

Article 14

Pending the conclusion of the agreements referred to in
2.
paragraph 1,
the necessary
the administrator may take
measures to facilitate payments by the contributing third States.

3.
The administrator shall inform the Special Committee in
advance of the envisaged arrangements, before signing them on
behalf of ATHENA.

Definition of common costs and periods for eligibility

The common costs listed in Annex I shall be at the
1.
expense of ATHENA whenever
they are incurred. When
entered in an article of the budget showing the operation to
which they are most related, they shall be regarded as opera-
tional costs of this operation. Otherwise, they shall be regarded
as common costs incurred in preparation for, or following,
operations.

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Furthermore, during the preparatory phase of the opera-
2.
tion, which begins on the date when the Council decides that
the Union will conduct
the military operation, unless the
Council sets an earlier date, and ends on the day on which the
operation commander is appointed, ATHENA shall bear the
operational common costs listed in Annex II.

3.
During the active phase of an operation, which runs from
the date on which the operation commander is appointed to
the day on which the operation headquarters ceases its activity,
ATHENA shall bear as operational common costs:

(a) the common costs listed in Annex III-A;

(b) the common costs listed in Annex III-B, when the Council

so decides.

4.
The operational common costs of an operation also
include the expenditure necessary to wind it up, as listed in
Annex IV.

The operation is wound up when the equipment and infrastruc-
ture commonly funded for the operation have found their final
destination and the accounts for the operation have been
drawn up.

5.
No expenditure incurred with a view to covering costs
which would in any case have been borne by one or more
contributing States, a Community institution or an interna-
tional organisation,
independently of the organisation of an
operation, may be eligible as a common cost.

Article 15

Exercises

1.
The common costs of the European Union's exercises
shall be financed through ATHENA following rules and proce-
dures similar to those for operations to which all participating
Member States contribute.

2.
These exercise common costs shall be composed of,
firstly, incremental costs for deployable or fixed headquarters
and, secondly,
incremental costs incurred by EU recourse to
NATO common assets and capabilities when made available for
an exercise.

3.

Exercise common costs shall not include costs related to:

(a) capital acquisitions,

including those related to buildings,

infrastructure and equipment;

(b) the planning and preparatory phase of exercises;

shall contain a reference amount for the common costs of this
operation. The administrator shall, with the support in particu-
lar of the Union military staff and,
if he/she is in post, the
operation commander, evaluate the amount judged necessary
to cover the common costs of the operation for the planned
period. The administrator shall propose this amount through
the Presidency to the Council bodies responsible for examining
the draft joint action or decision.

CHAPTER 6

BUDGET

Article 17

Budgetary principles

1.
The budget, drawn up in euro, is the act which for each
financial year lays down and authorises all the revenue and
expenditure administered by ATHENA.

All expenditure shall be linked to a specific operation,

2.
except where appropriate for the costs listed in Annex I.

3.
The appropriations entered in the budget are authorised
for the duration of a financial year which begins on 1 January
and ends on 31 December of the same year.

4.

Budget revenue and expenditure must balance.

5.
No revenue nor expenditure may be implemented other
than by allocation to a heading in the budget and within the
limit of the appropriations entered there.

Article 18

Establishment and adoption of the annual budget

1.
Each year the administrator shall draw up a draft budget
for the following financial year, with the assistance of each
the ‘operational common costs’
operation commander
section. The administrator shall propose the draft budget to the
Special Committee by 31 October at the latest.

for

(c) transport, barracks and lodging for forces.

2.

The draft shall include:

Article 16

Reference amount

Any joint action by which the Council decides that the Union
will conduct a military operation and any joint action or deci-
sion by which the Council decides to extend a Union operation

(a) the appropriations deemed necessary to cover the common
costs incurred in preparation for, or further to, operations;

(b) the appropriations deemed necessary to cover the opera-
tional common costs for ongoing or planned operations,
including, where appropriate, to reimburse common costs
which have been prefinanced by a State or third party;

(c) a forecast of the revenue needed to cover expenditure.

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The appropriations shall be classified in titles and chap-
3.
ters grouping expenditure together by type or purpose, subdi-
vided as necessary into articles. Detailed comments by chapter
or article shall be included in the draft budget. One specific
title shall be dedicated to each operation. One specific title shall
include the
be the general part of
common costs incurred in preparation for, or further to, opera-
tions.

the budget and shall

Each title may include a chapter entitled ‘provisional
4.
appropriations’. These appropriations shall be entered where
there is uncertainty, based on serious grounds, about
the
amount of appropriations needed or the scope for imple-
menting the appropriations entered.

5.

Revenue shall consist of:

(a) contributions payable by the participating and contributing
Member States and, where appropriate, by contributing
third States;

(b) miscellaneous revenue, subdivided by title, which includes
interest
revenue from sales and the budget
outturn from the previous financial year, after it has been
determined by the Special Committee.

received,

The Special Committee shall approve the draft budget by
the approved

6.
31 December. The administrator shall adopt
budget and notify the participating and contributing States.

Article 19

Amending budgets

In the case of unavoidable, exceptional or unforeseen
1.
circumstances,
in particular when an operation arises during
the course of the financial year, the administrator shall propose
a draft amending budget. If the draft amending budget substan-
the operation
tially
concerned, the Special Committee may request the Council to
approve it.

reference

amount

exceeds

the

for

The draft amending budget shall be drawn up, proposed,
2.
approved and adopted and notification given in accordance
with the same procedure as the annual budget. However, when
the amending budget is linked to the launch of a Union mili-
tary operation, it shall be accompanied by a detailed financial
statement on the common costs anticipated for the whole of
the operation. The Special Committee shall discuss it taking
account of its urgency.

Article 20

Transfers

1.
The administrator, where appropriate on the basis of a
proposal by the operation commander, may make transfers of
appropriations. The administrator shall
inform the Special
Committee of his/her intention, in so far as the urgency of the
situation permits, three weeks in advance.

However, the prior approval of the Special Committee shall be
required when:

(a) the planned transfer will amend the total of the appropria-

tions provided for an operation;

or

(b) the planned transfers between chapters during the financial
the appropriations entered in the
year exceed 10 % of
chapter from which the appropriations are being drawn, as
appearing in the adopted budget for the financial year on
the date when the proposal for the transfer in question is
made.

2. When he/she deems this to be necessary for the proper
conduct of an operation,
in the three months following the
date of launching of the operation, the operation commander
may make transfers of appropriations allocated for the opera-
tion, between articles and between chapters in the ‘operational
common costs’ section of the budget. He/she shall inform the
administrator and the Special Committee thereof.

Article 21

Carryover of appropriations

In principle,

1.
the appropriations intended to cover the
common costs incurred in preparation for, or further to, opera-
tions, which have not been committed, are cancelled at the end
of the financial year.

Appropriations intended to cover the cost of storing
2.
material and equipment administered by ATHENA may be
carried over once to the following financial year, when a
commitment to that effect was made before 31 December of
the current financial year. Appropriations intended to cover
operational common costs may be carried over if they are
necessary for an operation which has not been fully wound up.

3.
The administrator shall submit proposals for the carrying
over of appropriations from the preceding financial year to the
Special Committee by 15 February.

Article 22

Anticipated implementation

Once the annual budget has been adopted:

(a) appropriations appearing in that budget may be committed

with effect from 1 January of the following year;

(b) expenditure which, by virtue of legal or contractual obliga-
tions, must be paid in advance, may be paid from the
appropriations provided for the following year, following
approval by the Special Committee.

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CHAPTER 7

CONTRIBUTIONS AND REIMBURSEMENTS

Article 23

Determination of contributions

1.
Appropriations to cover the common costs incurred in
preparation for, or further to, operations which are not covered
by miscellaneous revenue shall be financed by contributions
from the participating Member States.

2.
Appropriations to cover the operational common costs of
an operation shall be covered by contributions from the
Member States and third States contributing to the operation.

3.
The contributions payable by the contributing Member
States for an operation shall be equal to the amount of the
appropriations entered in the budget and intended to cover the
operational common costs of
the
amounts of the contributions payable for the same operation
by contributing third States in application of Article 11.

that operation, minus

4.
The breakdown of contributions between the Member
States from whom a contribution is required shall be deter-
mined in accordance with the gross national product scale as
specified in Article 28(3) of the Treaty on European Union and
in accordance with Council Decision 2000/597/EC, Euratom of
29 September 2000 on the system of the European Commu-
nities' own resources (1), or any other Council decision which
may replace it.

The data for the calculation of contributions shall be
5.
those set out
in the ‘GNI own resources’ column in the
‘Summary of financing of the general budget by type of own
resource and by Member State’ table appended to the latest
budget adopted by the European Communities. The contribu-
tion of each Member State from whom a contribution is due
shall be proportional to the share of gross national
income
(GNI) of that Member State in the total GNI aggregate of the
Member States from whom a contribution is due.

Article 24

Schedule for payment of contributions

The contributions

from participating Member States
1.
intended to cover the common costs incurred in preparation
for, or further to, operations, shall be payable before 1 March
of the financial year concerned.

2. When the Council has adopted a reference amount for a
Union military operation, the contributing Member States shall
pay their contributions at the level of 30 % of the reference
amount, unless the Council decides on a higher percentage.

(1) OJ L 253, 7.10.2000, p. 42.

The Special Committee, on the basis of a proposal by the
3.
administrator, may decide that additional contributions will be
called before the adoption of an amending budget for the
operation. The Special Committee may decide to refer the
matter to the competent preparatory bodies at the Council.

4. When the appropriations intended to cover the opera-
tional common costs of the operation have been entered in the
budget, the Member States shall pay the balance of the contri-
butions which they owe for that operation in application of
Article 23 after deduction of the contributions already called
from them for the same operation in the same financial year.

5. When a reference amount or a budget has been adopted,
the administrator shall send the corresponding calls for contri-
butions by letter to the national administrations whose details
have been communicated to him/her.

6. Without prejudice to paragraph 1, the contributions shall
be paid within 30 days following despatch of the relevant call
for contributions.

Each contributing State shall pay the bank charges

7.
relating to the payment of its own contribution.

Article 25

Early financing of expenditure

1.
If expenditure on the common costs of a Union military
operation must be paid before the contributions to ATHENA
can be received, the Council shall, when it adopts a joint action
or an implementing decision on that operation:

(a) designate the Member States responsible for prefinancing

such expenditure;

(b) determine alternative advance financing for such expendi-
ture and establish any necessary modalities, if the necessary
prefinancing is not available.

The Special Committee shall supervise the implementa-

2.
tion of this Article and shall act with the necessary urgency.

3.
Any advance financing pursuant to paragraph 1(b) shall
be reimbursed as soon as the payment of contributions so
permits.

Article 26

Reimbursement of prefinancing

A Member State, a third State or, as appropriate, an inter-
1.
national organisation which has been authorised by the
Council to prefinance a part of the common costs of an opera-
tion may obtain reimbursement from ATHENA by making a
request accompanied by the necessary supporting documents
and addressed to the administrator at the latest two months
after the date of completion of the operation concerned.

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No request for reimbursement may be honoured if it has
2.
not been approved by the operation commander and by the
administrator.

Article 28

Interest on late payment

3.
If a request for reimbursement presented by a contri-
buting State is approved, it may be deducted from the next call
for contributions addressed to that State by the administrator.

If no call

4.
for contributions is anticipated when the
request is approved, or if the approved request for reimburse-
ment would exceed the anticipated contribution, the adminis-
trator shall make payment of the amount to be reimbursed
within 30 days, taking account of ATHENA's cash flow and of
what is needed to finance the common costs of the operation
concerned.

Reimbursement shall be due in accordance with this Deci-

5.
sion even if the operation is cancelled.

Article 27

Management by ATHENA of expenditure not included in
common costs

1.
The Special Committee, on the basis of a proposal by the
administrator or a Member State, may decide that the adminis-
trative management of certain expenditure in relation to an
operation, particularly in the area of manpower support/
messing and laundry, while remaining the responsibility of the
Member State which it concerns, should be entrusted to
ATHENA.

2.
The Special Committee, in its decision, may authorise the
operation commander to enter into contracts on behalf of the
Member States participating in an operation, for the acquisition
of the supplies described. It may authorise ATHENA's budget
to prefinance expenditure by the Member States or decide that
ATHENA will collect the necessary funds from the Member
States in advance to honour the contracts entered into.

3.
ATHENA shall keep accounts of the expenditure borne
by each Member State the management of which has been
entrusted to it. Each month it shall send each Member State a
statement of the expenditure borne by it and incurred by it or
by its staff during the preceding month, and shall call for the
necessary funds to pay for this expenditure. The Member States
shall pay ATHENA the funds required within 30 days following
despatch of the call for funds.

its financial obligations, the Com-
If a State does not fulfil
munity rules on interest on late payment determined by Article
71 of Council Regulation (EC, Euratom) No 1605/2002 of 25
June 2002 on the Financial Regulation applicable to the
general budget of the European Communities (1) in relation to
the payment of contributions to the Community budget shall
be applicable by analogy.

CHAPTER 8

IMPLEMENTATION OF EXPENDITURE

Article 29

Principles

1.
ATHENA's appropriations shall be used in accordance
with the principles of sound financial management, that is in
accordance with the principles of economy, effectiveness and
efficiency.

2.
Authorising officers shall be responsible for implementing
ATHENA's revenue or expenditure in accordance with the prin-
ciples of sound financial management
the
requirements of legality and regularity are complied with. The
authorising officers shall make budgetary and legal commit-
ments, clear and authorise expenditure and carry out actions
prior to this implementation of appropriations. An authorising
officer may delegate his/her duties by a decision determining:

to ensure that

(a) staff at an appropriate level for such delegation;

(b) the extent of the conferred powers; and

(c) the scope for beneficiaries to subdelegate their powers.

3.
The implementation of appropriations according to the
principle of the segregation of the authorising officer and the
accounting officer shall be ensured. The duties of authorising
officer and accounting officer shall be mutually incompatible.
Any payment made on funds administered by ATHENA shall
require the joint signature of an authorising officer and an
accounting officer.

4. Without prejudice to this Decision, when the implemen-
tation of common expenditure is entrusted to a Member State,
a Community institution or, as appropriate, an international
organisation, that State, institution or organisation shall apply
the rules applicable to the implementation of its own expendi-
ture. When the administrator implements expenditure directly,
it shall comply with the rules applicable to the implementation
of the ‘Council’ section of the general budget of the European
Communities.

(1) OJ L 248, 16.9.2002, p. 1.

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However, the administrator may provide the Presidency
5.
with elements for proposal
to the Council or the Special
Committee on rules for the implementation of common expen-
diture.

Article 30

Common costs incurred in preparation for, or further to,
operations

By way of derogation from Article 17(5), in the case of
5.
imminent danger to the lives of personnel involved in a Union
military operation, the operation commander for that operation
may implement the necessary expenditure to save the lives of
those personnel, in excess of the appropriations entered in the
budget. He/she shall inform the administrator and the Special
Committee as soon as possible. In such a case, the adminis-
trator shall,
liaising with the operation commander, propose
the transfers needed to finance this unexpected expenditure. If
it is not possible to ensure sufficient funding for such expendi-
ture by means of a transfer, the administrator shall propose an
amending budget.

The administrator shall perform the duties of authorising
officer for expenditure covering the common costs incurred in
preparation for, or further to, operations.

CHAPTER 9

Article 31

Operational common costs

1.
The operation commander shall carry out the duties of
authorising officer for expenditure covering the operational
common costs of the operation he/she commands. However,
the administrator shall carry out
the duties of authorising
officer for expenditure covering the operational common costs
incurred during the preparatory phase of a specific operation,
which are implemented directly by ATHENA, or related to the
operation after the end of its active phase.

2.
The sums required for the implementation of expenditure
on an operation shall be transferred by the administrator from
ATHENA's bank account to the operation commander, upon
his/her request,
into the bank account opened on behalf of
ATHENA, of which the operation commander has provided the
details.

3.
By way of derogation from Article 17(5), the adoption of
a reference amount shall activate the right of the administrator
and the operation commander, each in his/her area of compe-
tence, to commit and pay expenses for the operation concerned
up to 30 % of the reference amount, unless the Council should
set a higher percentage. The Special Committee, on the basis of
a proposal from the administrator, may decide that additional
committed and paid. The Special
expenditure may be
Committee may decide to refer the question to the competent
preparatory bodies at the Council through the Presidency. This
derogation shall no longer apply from the date of adoption of a
budget for the operation concerned.

4.
During the period prior to the adoption of the budget for
an operation, the administrator and the operation commander
or his/her representative shall report to the Special Committee
every two weeks, each reporting on the matters concerning
him/her, as regards the expenses which are eligible as common
costs for that operation. The Special Committee, on the basis of
a proposal by the administrator, the operation commander or a
Member State, may issue directives on the implementation of
expenditure during this period.

FINAL DESTINATION OF EQUIPMENT AND INFRASTRUCTURE
FINANCED IN COMMON

Article 32

1. With a view to winding up the operation which he/she
has commanded, the operation commander shall act as neces-
sary to find a final destination for the equipment and infra-
structure acquired in common for that operation. He/she shall
propose to the Special Committee the relevant rate of deprecia-
tion as necessary.

2.
The administrator shall manage the equipment and infra-
structure remaining after the end of the active phase of the
operation, with a view if necessary to finding its final destina-
tion. He/she shall propose to the Special Committee the rele-
vant rate of depreciation as necessary.

The depreciation rate for equipment,

3.
infrastructure and
other assets shall be approved by the Special Committee at the
earliest time possible.

4.
The final destination of equipment and infrastructure
financed in common shall be approved by the Special
Committee, taking into account operational needs and financial
criteria. The final destination may be as follows:

(a) in the case of

to be sold or transferred
through ATHENA to the host country, a Member State or a
third party;

infrastructure,

(b) in the case of equipment, to be sold through ATHENA to a
Member State, the host country or a third party, or be
stored and maintained by ATHENA, a Member State or a
third party.

5.
Equipment and infrastructure shall be sold to a contri-
buting State, the host country or a third party for their market
value, or, where no market value can be determined, taking
account of the relevant rate of depreciation.

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Sale or transfer to the host country or a third party shall
6.
be in accordance with the security rules in force, particularly
within the Council, the contributing States or NATO, as appro-
priate.

7. When it is decided that ATHENA shall retain equipment
acquired for an operation, the contributing Member States may
ask for financial compensation from the other participating
Member States. The Special Committee, composed of the repre-
sentatives of all the participating Member States, shall take the
appropriate decisions on the basis of a proposal
from the
administrator.

CHAPTER 11

AUDIT AND PRESENTATION OF ACCOUNTS

Article 36

Regular reports to the Special Committee

CHAPTER 10

ACCOUNTING AND INVENTORY

Article 33

Principles

When the implementation of common expenditure has been
entrusted to a Member State, a Community institution or, as
appropriate, an international organisation, that State, institution
or organisation shall apply the rules which are applicable to
accounting for its own expenditure and its own inventory.

Article 34

Accounting for operational common costs

The operation commander shall keep accounts of
transfers
received from ATHENA, of expenditure he/she has committed
and of payments made, as well as an inventory of the movable
property financed by the ATHENA budget and used for the
operation which he/she commands.

Article 35

Consolidated accounts

Every three months, the administrator shall present
to the
Special Committee a report on the implementation of revenue
and expenditure during the preceding three months and since
the beginning of the financial year. To this end, every operation
commander shall provide the administrator in good time with
a report on expenditure relating to the operational common
costs of the operation which he/she commands.

Article 37

Auditing the accounts

1. When the implementation of ATHENA's expenditure has
been entrusted to a Member State, a Community institution or
an international organisation, that State, institution or organisa-
tion shall apply the rules which apply to the auditing of its
own expenditure.

2.
However, the administrator or persons appointed by him/
her may at any time carry out an audit of the common costs of
ATHENA incurred in preparation for, or further to, operations,
or the operational common costs of an operation. Furthermore,
the Special Committee, on the basis of a proposal by the
administrator or a Member State, may at any time appoint
external auditors, whose tasks and conditions of employment it
shall determine.

An audit of the expenditure relating to common costs
3.
incurred in preparation for, or further to, operations, and
operational costs which have not yet been audited by external
auditors acting on behalf of ATHENA shall be carried out in
the two months following the end of each financial year.

1.
The accounting officer shall keep the accounts of contri-
butions called for and transfers made. He/she shall also draw
up the accounts for the common costs incurred in preparation
for, or further to, operations, and for operational expenditure
implemented under the direct responsibility of the adminis-
trator.

The accounting officer shall draw up the consolidated
2.
accounts for ATHENA's revenue and expenditure. Each opera-
tion commander shall send him/her the accounts for the expen-
diture he/she has committed and the payments he/she has
made, as well as for the prefinancing he/she has approved to
cover the operational common costs of the operation which
he/she commands.

4. With a view to external audits, a six-member college of
auditors shall be established. Each year the Special Committee
shall appoint two members for a non-renewable three-year
period, from candidates proposed by the Member States. The
candidates must be members of a national audit body in a
Member State and offer adequate guarantees of security and
independence. They must be available to carry out tasks on
behalf of ATHENA as needed. In carrying out these tasks:

(a) the members of the college shall continue to be paid by
their audit body of origin and shall only receive from
their mission expenses in
ATHENA reimbursement of
the
accordance with the rules applicable to officials of
European Communities of an equivalent grade;

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(b) they shall neither request nor receive instructions other
than from the Special Committee; within its audit mandate
the College of Auditors and its members shall be comple-
tely independent and solely responsible for the conduct of
the external audit;

(c) they shall only report on their

task to the Special

Committee;

(d) they shall check that expenditure financed by ATHENA has
been implemented in conformity with the applicable legis-
lation and the principles of sound financial management,
that is in accordance with the principles of economy, effec-
tiveness and efficiency.

Each year the College of Auditors shall elect its chairman for
the forthcoming financial year. It shall adopt the rules applic-
able to audits carried out by its members in accordance with
the highest international standards. The College of Auditors
shall approve the audit reports drawn up by its members
before their transmission to the administrator and to the
Special Committee.

5.
The Special Committee may decide on a case-by-case
basis and upon specific motivations to use other external
bodies.

6.
The persons responsible for auditing ATHENA's expendi-
ture must, before carrying out their task, have received clear-
ance for access to classified information up to at least ‘Secret
UE’ level held by the Council, or equivalent clearance from a
Member State or NATO, as appropriate. Those persons shall
ensure that they respect the confidentiality of the information
and protect the data of which they acquire knowledge during
their audit task, in accordance with the rules applicable to that
information and data.

The

responsible

administrator and the persons

7.
for
auditing ATHENA's expenditure shall have access without delay
and without giving prior notice to the documents and to the
contents of all data supports relating to that expenditure, and
to the premises where those documents and supports are kept.
They may make copies. The persons involved in implementing
ATHENA's expenditure shall give the administrator and the
persons responsible for the audit of that expenditure the neces-
sary assistance in performing their task.

management accounts shall distinguish between the common
costs of ATHENA incurred in preparation for, or further to,
operations, and the operational common costs of each opera-
tion conducted during the financial year in question, as well as
miscellaneous revenue and revenue from Member States and
third States. The balance sheet shall show as assets all the assets
belonging to ATHENA, taking account of their depreciation
and any losses or decommissioning, and shall show its reserves
as liabilities. The administrator shall submit the management
accounts to the College of Auditors for examination and
opinion by February following the end of the financial year.

2.
The Special Committee shall approve the annual manage-
ment accounts and the balance sheets. It shall grant a discharge
to the administrator, the accounting officer and each operation
commander for the financial year in question.

All accounts and inventories shall be retained, each at his/
3.
her
level, by the accounting officer and each operation
commander for a period of five years from the date on which
the corresponding discharge was granted.

The Special Committee shall decide to enter the balance
4.
of
the budget outturn for a financial year for which the
accounts have been approved in the budget for the following
financial year, as revenue or expenditure depending on the
circumstances, by means of an amending budget.

5.
That part of the balance of the budget outturn for a finan-
cial year which comes from the implementation of appropria-
tions intended to cover common costs incurred in preparation
for, or further to, operations, shall be entered against the next
contributions from participating Member States.

6.
That part of the balance of the budget outturn which
comes from the implementation of appropriations intended to
cover the operational common costs of a given operation shall
be entered against the next contributions from the Member
States which have contributed to that operation.

If reimbursement cannot be done by deduction from the
the budget

7.
contributions due to ATHENA,
outturn shall be repaid to the Member States concerned.

the balance of

8.
The cost of the audits carried out by auditors acting on
behalf of ATHENA shall be considered as a common cost to be
borne by ATHENA.

Article 39

Article 38

Annual presentation of accounts

1.
The administrator, with the assistance of the accounting
officer and each operation commander, shall draw up and
submit to the Special Committee, by April following the end of
the financial year, the annual management accounts, the annual
balance sheet for ATHENA, and an activity report. The annual

Presentation of the accounts of an operation

submit

1. When an operation is complete, the Special Committee
may decide, on the basis of a proposal by the administrator or
by a Member State, that the administrator, with the assistance
of the accounting officer and of the operation commander,
shall
to the Special Committee the management
accounts and the balance sheet for that operation, at least up to
the date on which it was completed, and, if possible, up to the
date on which it was wound up. The deadline imposed on the
administrator may not be less than four months from the date
on which the operation was completed.

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If the management accounts and balance sheet cannot,
2.
within the given deadline, include the revenue and expenditure
connected with the winding up of that operation, then that
revenue and expenditure shall appear in the annual manage-
ment account and balance sheet for ATHENA and shall be
examined by the Special Committee in connection with the
annual presentation of accounts.

3.
The Special Committee shall approve the management
account and balance sheet for the operation which have been
submitted to it. It shall grant a discharge to the administrator,
the accounting officer and each operation commander for the
operation in question.

If reimbursement cannot be done by deduction from the
the budget

4.
contributions due to ATHENA,
outturn shall be repaid to the Member States concerned.

the balance of

CHAPTER 12

LEGAL LIABILITY

Article 40

1.
The conditions governing the disciplinary or criminal
liability of the operation commander, the administrator and
other staff made available in particular by the Community insti-
tutions or Member States in the event of misconduct or negli-
gence in the implementation of the budget shall be governed
by the Staff Regulations or the arrangements applicable to
them. In addition, ATHENA may at its own initiative or at the
request of a contributing State bring a civil action against the
abovementioned staff.

2.
In no case may the European Communities or the Secre-
tary-General of the Council be held liable by a contributing
State as a result of the performance of their duties by the
administrator, the accounting officer or the staff assigned to
them.

The contractual liability which may arise from contracts
3.
concluded in the context of implementation of the budget shall
be covered through ATHENA by the contributing States. It
shall be governed by the law applicable to the contracts in
question.

In the case of non-contractual

4.
liability, any damage
caused by the operation, headquarters, force headquarters and
component headquarters of the crisis structure, the composi-
tion of which shall be approved by the operation commander,
or by their staff in the course of their duties shall be covered
in accordance
through ATHENA by the contributing States,

with the general principles common to the laws of the Member
States and the Staff Regulations of the forces, applicable in the
theatre of operations.

5.
the
In no case may the European Communities or
Member States be held liable by a contributing State for
contracts concluded in the framework of budget implementa-
tion or for damage caused by the units and departments of the
crisis structure, the composition of which shall be approved by
the operation commander, or by their staff in the course of
their duties.

Article 41

Transitional provisions

1.
The initial budget shall be adopted by 1 June 2004. The
first financial year shall begin on the date of adoption of the
initial budget and shall end on the following 31 December.

By 1 June 2004, the Special Committee shall appoint the
2.
first six members of the College of Auditors provided for in
Article 37(4). Two members whose term in office will be one
year, and two members whose term in office will be two years,
will be decided by lot. The term in office of the other two
members will be three years.

Article 42

Review

This Decision,
including its Annexes, shall be reviewed after
every operation and at least every 18 months. The first review
shall take place before the end of 2004 at the latest. ATHENA's
management bodies shall contribute to such reviews.

Article 43

Final provisions

This Decision shall enter into force on 1 March 2004. It shall
be published in the Official Journal of the European Union.

Done at Brussels, 23 February 2004.

For the Council

The President

B. COWEN

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ANNEX I

Common costs borne by ATHENA whenever they are incurred

In cases when the following common costs cannot be linked directly to a specific operation, the Special Committee may
decide to allocate the corresponding appropriations to the general part of the annual budget. These appropriations
should, as much as possible, be entered in articles showing the operation to which they are most related.

1. Auditing costs

2. Mission expenditure incurred by the operation commander and his/her staff for submitting an operation's accounts

to the Special Committee

3. Indemnities for damages and costs resulting from claims and actions to be paid through ATHENA

4. Banking costs (common costs will always be included in the general part of the annual budget)

5. Costs pursuant to any decision to store material which was acquired in common for an operation (where these costs

are attributed to the general part of the annual budget, a link to a specific operation shall be indicated)

ANNEX II

Operational common costs relative to the preparatory phase of an operation borne by ATHENA

Incremental costs of transport and accommodation necessary for exploratory missions and preparations by military
forces with a view to a specific Union military operation.

Medical services: the cost of emergency medical evacuations (Medevac) of persons taking part in exploratory missions
and preparations by military forces with a view to a specific Union military operation, when medical treatment cannot
be provided in theatre.

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ANNEX III

III-A

Operational common costs relative to the active phase of operations always borne by ATHENA

For any Union military operation, ATHENA will bear as operational common costs the incremental costs required for
the operation defined below.

1. Incremental costs for (deployable or fixed) headquarters for EU-led operations or exercises

(a) Headquarters (HQ):

operation, force and component headquarters;

(b) Operation Headquarters (OHQ):

the static, out-of-area headquarters of the operation commander,
which is responsible for building up, launching, sustaining, and
recovering an EU force.

The definition of common costs applicable to an OHQ for an
operation shall also be applicable to the General Secretariat of the
Council and ATHENA in so far as they are acting directly for that
operation;

(c) Force Headquarters (FHQ):

the headquarters of an EU force deployed to the area of opera-
tions;

(d) Component Headquarters (CCHQ):

(e)

transport costs:

(f)

administration:

(g)

locally hired personnel:

(h) communications:

(i)

transportation/travel
costs) within the operations area of HQs:

(excluding ‘per diem’

the headquarters of an EU component commander deployed for
the operation (i.e. air, land, maritime and other specific functions
that could be deemed necessary to designate
commanders
depending on the nature of the operation);

transport to and from the theatre of operations to deploy, sustain
and recover FHQs and CCHQs; transport costs incurred by the
OHQ necessary to an operation;

additional office and accommodation equipment, contractual
services and utilities, maintenance costs of the buildings;

civilian personnel,
international consultants and locally hired
(national and expatriate) personnel needed for the conduct of the
operation over and above the normal operational requirements
(including any overtime compensation payments);

capital expenditure for the purchase and the use of additional
communications and IT equipment and costs for rendered services
(lease and maintenance of modems, telephone lines, satphones,
cryptofax, secure lines,
local area
networks);

internet providers, data lines,

expenditure related to vehicle transportation and other travel by
other means and freight costs,
including travel by national
augmentees and visitors; incremental costs of fuel over and above
what normal operations would have cost; lease of additional vehi-
cles; costs of official
location
and Brussels and/or EU-organised meetings; third-party insurance
costs imposed by some countries upon international organisations
conducting operations on their territory;

journeys between the operational

(j) barracks and lodging/infrastructure:

expenditure for acquisition, rental or refurbishing of required HQ
facilities in theatre (rental of buildings, shelters, tents), if required;

(k) public information:

costs related to information campaigns and to inform media at
OHQ and FHQ, in accordance with the information strategy devel-
oped by the operational HQ;

(l)

representation and hospitality:

representational costs; costs at HQ level necessary for the conduct
of an operation.

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2. Incremental costs incurred for providing support to the force as a whole

The costs defined below are those incurred following the force deployment to its location:

(a)

infrastructure:

(b) essential additional equipment:

(c)

identification marking:

(d) medical services:

expenditure absolutely needed for the force as a whole to fulfil its
mission (common used airport, railway, harbours, roads, power
and water supply);

the rental or purchase in the course of the operation of unforeseen
specific equipment essential for the execution of the operation,
decided by the operation commander and approved by the Special
Committee,
in so far as the purchased equipment is not repa-
triated at the end of the mission;

specific identification marks,
identity cards,
badges, medals, flags in European Union colours or other Force or
HQ identification marking (excluding clothes, hats or uniforms);

‘European Union’

the cost of emergency medical evacuations (Medevac) when
medical treatment cannot be provided in theatre.

3. Incremental costs incurred by EU recourse to NATO common assets and capabilities made available for an EU-led

operation

The cost for the European Union of the application for one of its military operations of the arrangements between
the EU and NATO relating to release, monitoring and return or recall of NATO common assets and capabilities made
available for an EU-led operation.

III-B
Operational common costs relative to the active phase of a specific operation, borne by ATHENA when the
Council so decides

Transport costs:

Barracks and lodging/infrastructure:

transport to and from the theatre of operations to deploy, support and
recover the forces necessary for the operation;

expenditure for acquisition, rental or refurbishing of premises in theatre
(rental of buildings, shelters, tents), as necessary for the forces deployed
for the operation.

ANNEX IV

Operational common costs relative to the winding-up of an operation, borne by ATHENA

Costs incurred for finding the final destination for the equipment and infrastructure commonly funded for the operation.

Incremental costs of drawing up the accounts for the operation. The eligible common costs shall be determined in
accordance with Annex III, keeping in view the fact that the staff needed to draw up the accounts belong to the head-
quarters for that operation, even after the latter has ceased its activities.