Council Regulation (EC, Euratom) No 2028/2004 of 16 November 2004 amending Regulation (EC, Euratom) No 1150/2000 implementing Decision 94/728/EC, Euratom on the system of the Communities' own resources
Date: 2004-11-16
Institutions: Council of the European Union
Subjects: Member States' contribution, financial regulation, own resources

27.11.2004

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Official Journal of the European Union

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC, EURATOM) No 2028/2004

of 16 November 2004

amending Regulation (EC, Euratom) No 1150/2000 implementing Decision 94/728/EC, Euratom on
the system of the Communities' own resources

(3)

(4)

(5)

(6)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community, and in particular Article 279(2) thereof,

establishing the European

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

Having regard to Council Decision 2000/597/EC, Euratom of
29 September 2000 on the system of the Communities' own
resources (1), and in particular Article 8(2) thereof,

Having regard to the proposal from the Commission,

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

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

Whereas:

(1)

(2)

The Berlin European Council of March 1999 issued a
the
number of conclusions concerning the system of
Communities'
the
to
led
adoption of Decision 2000/597/EC, Euratom.

resources, which

own

the percentage

Under Article 2(3) and Article 10(2)(c) of Decision
2000/597/EC, Euratom,
retained by
Member States by way of collection costs should be set
at 25 % of the amounts referred to in paragraphs 1(a)
and (b) of Article 2 of that Decision which are estab-
lished after 31 December 2000 with the exception of
those amounts that, to comply with the own resources
Regulations, should have been made available to the
Communities before 28 February 2001, for which the
rate of 10 % should continue to apply.

(1) OJ L 253, 7.10.2000, p. 42.
(2) Opinion delivered on 26 February 2004 (not yet published in the

Official Journal).

(3) OJ C 318, 30.12.2003, p. 1.

The Berlin European Council decided that, in sharing out
the financial burden borne by the other Member States
for the correction for budgetary imbalances in favour of
the United Kingdom, the shares of Austria, Germany, the
Netherlands and Sweden should be adjusted so that their
financial contribution is limited to one quarter of their
normal contribution.

In accordance with the Amsterdam Treaty and Protocols
4 and 5 attached thereto, Denmark, the United Kingdom
and Ireland need not participate in measures falling
under Title IV of the EC Treaty and are not therefore
obliged to bear the financial consequences as a result of
measures taken, other than the administrative costs. They
can therefore obtain an adjustment to the own resources
paid for each year in which they do not participate.

Given that the Member States are under an equal obli-
gation to pay interest in the event of delays in entering
own resources in the accounts and that difficulties are
currently being encountered in the determination of the
interest rates to be applied which,
lead to
differences between the rates notified by the Member
States participating in the Economic and Monetary
Union which are difficult to justify, the reference rate
for these States should be standardised on the basis of
the rate used by the European Central Bank for its refi-
to those
nancing operations, which is
proposed as reference rates for Member States outside
the euro area.

comparable

in practice,

The dual account system introduced in 1989 was set up
to distinguish between recovered and outstanding duties.
This system has only partly met its objectives regarding
the mechanism used to discharge items from the separate
account. Checks by the European Court of Auditors and
the Commission have highlighted recurrent anomalies in
the keeping of the separate account, which prevent the
account
from reflecting the real situation as regards
recovery. The separate account should be cleansed of
those amounts where recovery is unlikely at the end of
a given period and the retention of which gives an inac-
curate balance.
In addition, from the cost-effectiveness
angle, Member States will no longer incur the adminis-
trative costs involved in monitoring these amounts.

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(7)

(8)

(9)

The Commission should act in close cooperation with
the Member States. In particular, it should have the possi-
bility to forward its comments to the Member State
concerned.

Taking into account
solution concerning certain administrative difficulties,
is
advisable
arrangements.

the need to find a temporary
it
transitional

provide

some

for

to

In response to a request of the Court of Auditors and in
the separate account provides a
order to ensure that
better picture of
the
the actual budgetary situation,
should send to the Commission,
Member
together with the final quarterly statement for a given
year, an estimate of the total amount of entitlements
contained in the separate account for which recovery is
unlikely.

States

(10) According to Article 2(7) of Decision 2000/597/EC,
Euratom,
for the purposes of applying that Decision
‘GNP’ shall mean GNI for the year at market prices as
provided by the Commission in application of the ESA
95 in accordance with Council Regulation (EEC) No
2223/96 of 25 June 1996 on the European system of
national and regional accounts in the Community (1) In
Euratom) No
addition,
1287/2003 (2) lays down rules on the harmonisation of
gross national income at market prices.

Regulation

Council

(EC,

(11)

In accordance with Decision 2000/597/EC, Euratom, the
Commission shall undertake, before 1 January 2006, a
general
system. New
proposals made by the Commission on the basis of
this review should give particular attention to Article
2(3), Article 4 and Article 5 of that Decision.

the own resources

review of

2.

in Article 6:

(a) paragraph 3(c) shall be replaced by the following:

‘(c) VAT resources and the additional resource, taking
into account the effect on these resources of the
correction granted to the United Kingdom for
budgetary imbalances shall, however, be recorded
in the accounts as specified in point (a) as follows:

— the twelfth referred to in Article 10(3) shall be
recorded on the first working day of each
month,

— the balances referred to in Article 10(4) and (7)
and the adjustments referred to in Article 10(6)
and (8) shall be recorded annually, except for
the particular adjustments referred to in the first
indent of Article 10(6), which shall be recorded
in the accounts on the first working day of the
month
the
Member State concerned and the Commission.’;

agreement

following

between

(b) the following shall be added at the end of paragraph

4(b):

‘Together with the final quarterly statement for a given
year, Member States shall forward an estimate of the
total amount of entitlements contained in the separate
account at 31 December of
for which
recovery has become unlikely.’;

that year

(12)

Regulation (EC, Euratom) 1150/2000 should therefore be
amended accordingly (3),

3. Article 7 shall be replaced by the following:

HAS ADOPTED THIS REGULATION:

‘Article 7

Article 1

Regulation (EC, Euratom) No 1150/2000 is hereby amended as
follows:

1.

in the title, Article 1, Article 2 and Article 5:

After 31 December of the third year following a given year,
no further corrections shall be made to the sum of the
monthly statements
in by Member States under
Article 6(4)(a) for the year in question, except on points
notified before this date either by the Commission or by
the Member State concerned.’;

sent

(a)

the references to ‘Decision 94/728/EC, Euratom’ shall
be replaced by ‘Decision 2000/597/EC, Euratom’;

4.

in Article 9:

(b) Iin Article 1,

to ‘Decision
the new reference
2000/597/EC, Euratom’ shall be accompanied by the
following footnote: ‘(*) OJ L 130, 31.5.2000, p. 1.’;

(1) OJ L 310, 30.11.1996, p. 1. Regulation as last amended by Regu-
lation (EC) No 1267/2003 of the European Parliament and of the
Council (OJ L 180, 18.7.2003, p. 1).

(2) OJ L 181, 19.7.2003, p. 1.
(3) OJ L 130, 31.5.2000, p. 1.

(a)

the following paragraph shall be inserted:

‘1a.
The Commission shall receive, from the Member
States or the bodies appointed by them by any appro-
priate means, preferably electronic ones, as a general
rule on the day on which they are entered, but
within three working days at the latest, a statement
of account showing the entry of the own resources.’;

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(b) paragraph 2 shall be replaced by the following:

‘2.
The amounts credited shall be accounted for in
euro in accordance with the Financial Regulation (*)
applicable to the general budget of
the European
Communities and its implementing rules.

___________
(*) Council Regulation (EC, Euratom) No 1605/2002 of
the Council of 25 June 2002 relating to the
Financial Regulation applicable
to the general
budget of the European Communities (OJ L 248,
16.9.2002, p. 1).’;

5.

in Article 10:

(a)

the first subparagraph of paragraph 1 shall be replaced
by the following:

system of

‘1.
After deduction of collection costs in accordance
with Article 2(3) and Article 10(2)(c) of Decision
2000/597/EC, Euratom of 29 September 2000 on
the European Communities' own
the
resources (*), entry of the own resources referred to in
Article 2(1)(a) and (b) of that Decision shall be made at
the latest on the first working day following the 19th
day of the second month following the month during
which the entitlement was established in accordance
with Article 2 of this Regulation.

___________
(*) OJ L 253, 7.10.2000, p. 42.’;

taking into account

in the budget for VAT resources and/or the additional
resource,
the effect on these
resources of
the correction granted to the United
Kingdom for budgetary imbalances, but excluding
own resources to cover the reserve for loan guarantees
and the reserve for emergency aid.’;

(c)

the sixth subparagraph of paragraph 3 shall be replaced
by the following:

‘The entry in respect of the EAGGF monetary reserve
referred to in Article 6 of Decision 2000/597/EC,
Euratom, the reserve relating to loans and loan guar-
antees and the emergency aid reserve created by
Decision 94/729/EC (*), shall be made on the first
working day of the month following the charging to
the budget of the expenditure concerned and shall be
limited to the said expenditure if charging is effected
before the 16th day of the month. If such is not the
case, the entry shall be made on the first working day
of the second month after charging.

___________
(*) Decision repealed and replaced by Regulation (EC)
No 2040/2000 (OJ L 244, 29.9.2000, p. 27).’;

(d)

in the seventh subparagraph of paragraph 3, the text
‘Article 6 of the Financial Regulation of 21 December
1977 applicable to the general budget of the European
Communities (13), hereafter named “Financial Regu-
lation” shall be replaced by “Article 8 of the Financial
Regulation”.

(b) the first and second subparagraphs of paragraph 3 shall

be replaced by the following:

(e)

the ninth, tenth, eleventh and twelfth subparagraphs of
paragraph 3 shall be replaced by the following:

the effect on these resources of

‘3.
VAT resources and the additional resource, taking
into account
the
correction granted to the United Kingdom for
budgetary imbalances-excluding the reserve relating to
loans and loan guarantees and to the reserve for
emergency aid-shall be credited on the first working
day of each month, the amounts being one-twelfth of
in the budget, converted into
the relevant
national currencies at
the
the rates of exchange of
last day of quotation of the calendar year preceding
the budget year, as published in the Official Journal of
the European Union, C Series.

totals

For the specific needs of paying EAGGF Guarantee
Section expenditure, pursuant to Regulation (EEC) No
1765/92 and depending on the Community's cash
position, Member States may be
invited by the
Commission to bring forward by one or two months
in the first quarter of the financial year the entry of
one-twelfth or a fraction of one-twelfth of the amounts

‘Any change in the uniform rate of VAT resources, in
the rate of the additional resource, and in the correction
granted
to the United Kingdom for budgetary
imbalances and in its financing referred to in Articles
4 and 5 of Decision 2000/597/EC, Euratom, shall
require the final adoption of an amending budget and
shall give rise to readjustments of the twelfths which
have been entered since the beginning of the financial
year.

These readjustments shall be carried out when the first
entry is made following the final adoption of
the
amending budget, if it is adopted before the 16th of
the month. Otherwise they shall be carried out when
the second entry following final adoption is made. By
way of derogation from Article 8 of the Financial Regu-
these readjustments shall be entered in the
lation,
accounts
the
amending budget in question.

the financial year of

in respect of

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Calculation of the twelfths for January of each financial
year shall be based on the amounts provided for in the
draft budget, referred to in Article 272(3) of the EC
the EAEC Treaty and
Treaty and Article 177(3) of
the rates of
converted into national currencies at
exchange of the first day of quotation following 15
December of the calendar year preceding the budget
year; the adjustment shall be made with the entry for
the following month.

(i)

the percentages determined by Articles 2(1)(c) and
Euratom…’
10(2)(b)
of Decision
(remainder unchanged);

2000/597/EC,

the first
paragraph 6 shall be replaced by the following:

the second subparagraph of

sentence of

If the budget has not been finally adopted before the
beginning of the financial year, the Member States shall
enter on the first working day of each month, including
January, one-twelfth of the amount of VAT resources,
and the additional resource taking into account
the
effect on these resources of the correction granted to
the United Kingdom for budgetary imbalances, entered
in the last budget finally adopted; the adjustment shall
be made on the first due date following final adoption
of the budget if it is adopted before the 16th of the
month. Otherwise, the adjustment shall be made on the
the
second due date following final adoption of
budget.’;

(f) paragraph 4 shall be replaced by the following:

‘4.
Each Member State shall, on the basis of the
annual statement on the VAT resources base provided
for in Article 7(1) of Regulation (EEC, Euratom) No
1553/89, be debited with an amount calculated from
the information contained in the said statement by
applying the uniform rate adopted for the previous
financial year and credited with the 12 payments
made during
each
financial
Member State's VAT resources base to which the
above rate is applied may not exceed the percentage
determined by Article 2(1) of Decision 2000/597/EC,
Euratom of its GNP, as referred to in the first sentence
of paragraph 7 of this Article. The Commission shall
work out the balance and shall
inform the Member
in the account
States in time for them to enter it
referred to in Article 9(1) of this Regulation on the
first working day of December of the same year.’;

year. However

that

(g) paragraph 5 shall be deleted.

‘The changes to GNP referred to in paragraph 8 of this
Article shall also give rise to an adjustment of
the
balance of any Member State whose base, allowing
the percentages
for those corrections,
and 10(2)(b) of
determined by Articles 2(1)(c)
Decision 2000/597/EC, Euratom.’;

is capped at

(j)

the following paragraph shall be added:

‘10.
In conformity with Article 2(7) of Decision
2000/597/EC, Euratom, for the purposes of applying
that Decision, “GNP” shall mean GNI for the year at
market prices as defined by Regulation (EC, Euratom)
No 1287/2003 of 15 July 2003 on the harmonisation
of gross national income at market prices (*).

___________
(*) OJ L 181, 19.7.2003, p. 1.’;

6.

the following Article shall be inserted:

‘Article 10a

1. Where, pursuant to the Amsterdam Treaty and its
Protocols 4 and 5, a Member State does not take part in
the financing of a specific Union action or policy, it shall
be entitled to an adjustment, calculated in accordance with
paragraph 2, of the amount it has paid in own resources in
respect of each year in which it has not taken part. This
adjustment shall be made only once and it shall be final in
the event of subsequent modification of the GNP figure.

2.
The Commission shall calculate the adjustment during
the year following the financial year concerned, at the same
time as it determines the GNP balances provided for in
Article 10 of this Regulation.

(h) The first subparagraph of paragraph 6 shall be replaced

by the following:

The calculation shall be made on the basis of the figures
relating to the financial year in question:

‘6.
Any corrections to the VAT resources base under
Article 9(1) of Regulation (EEC, Euratom) No 1553/89
shall give rise for each Member State concerned whose
base, allowing for these corrections, does not exceed

— aggregate GNP at market prices and its components,

— the budgetary outturn of operational expenditure corre-

sponding to the measure or policy in question.

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the GNP of

The adjustment shall be equal to the product of multiplying
the total amount of the expenditure in question, with the
exception of that financed by participating third countries,
by the percentage that
the Member State
entitled to the adjustment represents of the GNP of all
Member States. The adjustment shall be financed by the
participating Member
scale
States
determined by dividing their respective GNP by the GNP
of all the participating Member States. For the purposes of
calculating the adjustment, amounts shall be converted
the
between the national currency and the euro at
exchange rate on the last day of quotation of
the
calendar year preceding the budget year concerned.

according

to

a

8. Article 12(5) shall be replaced by the following:

‘5.
The Member States, or the body designated by them
in accordance with Article 9(1), shall execute the Commis-
sion's payment orders as quickly as possible, and within not
more than five working days of receipt, and shall send the
Commission a statement of account by any appropriate
means, preferably electronic ones, within not more than
completing each transaction.
three working days of
However,
in the case of cash movement transaction, the
Member States shall execute the orders within the period
requested by the Commission.’;

There shall be no subsequent revision of this adjustment in
the event of subsequent modification of the GNP figure.

9. Title V shall be deleted.

3.
The Commission shall inform the Member States in
good time of the amount of the adjustment so that they
can credit it to the account referred to in Article 9(1) of
this Regulation on the first working day of December.’;

10. the heading of Title VI shall be replaced by the following:

‘Procedure for the application of Article 7 of Decision
2000/597/EC, Euratom’;

7. Article 11 shall be replaced by the following:

11. Article 15 shall be replaced by the following:

‘Article 11

1.
Any delay in making the entry in the account referred
to in Article 9(1) shall give rise to the payment of interest
by the Member State concerned.

2.
In the case of Member States belonging to the
Economic and Monetary Union, the interest rate shall be
equal to the rate as published in the Official Journal of the
European Union, C series which the European Central Bank
applied to its refinancing operations, on the first day of the
month in which the due date fell,
increased by two
percentage points.

This rate shall be increased by 0,25 of a percentage point
for each month of delay. The increased rate shall be applied
to the entire period of delay.

3.
In the case of Member States not belonging to the
Economic and Monetary Union, the rate shall be equal to
the rate applied on the first day of the month in question
by the Central Banks for their main refinancing operations,
increased by two percentage points, or, for the Member
States for which the Central Bank rate is not available,
the most equivalent rate applied on the first day of the
month in question on the Member State's money market,
increased by two percentage points. This rate shall be
increased by 0,25 of a percentage point for each month
of delay. The increased rate shall be applied to the entire
period of delay.

‘Article 15

For
the purpose of applying Article 7 of Decision
2000/597/EC, Euratom, the balance of a given financial
year shall consist of the difference between:

— all the revenue collected in respect of that financial year,

and

— the amount of payments made against appropriations
for that financial year increased by the amount of the
appropriations for the same financial year carried over
pursuant to Article 9 of the Financial Regulation. This
difference shall be increased or decreased on the one
hand, by the net amount of appropriations carried over
from previous financial years which have been cancelled
and on the other hand, by way of derogation from
Article 5(1) of the Financial Regulation, by:

— payments made in excess of non-differentiated
appropriations
from the previous
carried over
the
financial year under Article 9(1) and (4) of
Financial Regulation as a result of change in euro
rates,

and

For the payment of interest, referred to in paragraph

4.
1, Article 9(2) and (3) shall apply mutatis mutandis.’

— the balance resulting from exchange gains and

losses during the financial year.’;

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12.

in Article 16:

(b) the following paragraphs shall be inserted:

the second subparagraph shall be replaced by the following:

‘2.
Any appreciable differences in relation to original
estimates may give rise to a letter of amendment to the
preliminary draft budget for the following financial year or
an amending budget for the current financial year’;

13.

in Article 17:

(a) Paragraph 2 shall be replaced by the following:

‘2. Member States shall be released from the obli-
gation to place at the disposal of the Commission the
amounts
corresponding to established entitlements
which prove irrecoverable either:

(a)

for reasons of force majeure; or

(b) for other reasons which cannot be attributed to

them.

Amounts of established entitlements shall be declared
irrecoverable by a decision of the competent adminis-
trative authority finding that they cannot be recovered.

Amounts of established entitlements shall be deemed
irrecoverable, at the latest, after a period of five years
from the date on which the amount has been estab-
lished in accordance with Article 2 or, in the event of
an administrative or judicial appeal, the final decision
has been given, notified or published.

If part payment or payments have been received, the
period of five years at maximum shall start from the
date of the last payment made, where this does not
clear the debt.

removed

from the

Amounts declared or deemed irrecoverable shall be
definitively
account
referred to in Article 6(3)(b). They shall be shown in
an annex to the quarterly statement referred to in
Article 6(4)(b) and where applicable,
in the quarterly
statement referred to in Article 6(5).’;

separate

the

‘3. Within three months of
administrative
decision mentioned in paragraph 2 or in accordance
with the time limits referred to in that paragraph,
Member States shall provide the Commission with
information on those cases where paragraph 2 has
been applied provided the established entitlements
involved exceed EUR 50 000.

This timeframe may be extended by up to three years
by Member States for cases of established entitlements,
which have been declared irrecoverable or deemed irre-
coverable prior to 1 July 2006.

This report, which shall be made on a form to be
produced by the Commission after consulting the
include all
committee referred to in Article 20, shall
the facts necessary for a full examination of
the
reasons referred to in paragraph 2(a) and (b), which
prevented the Member State concerned from making
available the amounts in question, and the recovery
measures the Member State took in the case or cases
in question.

4.
The Commission has six months from the receipt
of the report provided for in paragraph 3 to forward its
comments to the Member State concerned.

Where the Commission finds it necessary to request
additional
information, the six month time-limit shall
run from the date of receipt of the requested supple-
mentary information.’;

(c) current paragraph 3 becomes paragraph 5 and reads as

follows:

‘5. Member States shall inform the Commission, by
means of annual reports, of the details and results of
their inspections and of the overall data and questions
of principle concerning the most important problems
arising out of the application of this Regulation and, in
particular, matters in dispute. The reports shall be sent
to the Commission by 1 March of the year following
the financial year in question. The summary report on
the notifications by Member States under this Article
shall be contained in the Commission report referred to
the Treaty. A report and duly
in Article 280(5) of
substantiated amendments thereto shall be drawn up
by the Commission after consulting the committee
referred to in Article 20. Any appropriate time limits
for implementation shall be provided for.’;

14.

the reference to ‘Decision 94/728/EC,
in Article 18(1),
Euratom’ shall be replaced by ‘Decision 2000/597/EC,
Euratom’;

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15.

in Article 21, paragraph 1(c) shall be replaced by the follo-
wing:

‘(c) the inspection measures and controls laid down in

Article 18(2) and (3).’;

implementing Decision
system of

94/728/EC,
the Communities' own

1150/2000
No
Euratom on the
resources (*) enters into force.
___________
(*) OJ L 352 of 27.11.2004, p. 1.’;

16. the following Title IX shall be inserted:

17. the current Title IX becomes Title X.

‘TITLE IX

Transitional provisions

Article 21a

The rate provided for in Article 11 of this Regulation shall
continue to apply for the calculation of interest for late
payment where the due date falls before the end of the
month in which Council Regulation (EC) 2028/2004 of
16 November 2004 amending Regulation (EC, Euratom)

Article 2

The other provisions of Regulation (EC, Euratom) No
1150/2000 shall remain in force in so far as they are not
specifically amended by this Regulation.

Article 3

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

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

Done at Brussels, 16 November 2004.

For the Council
The President

G. ZALM