Proposal for a Council regulation amending Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (COM(2005)0181 - C6-0234/2005 - 2005/0090(CNS))
Date: 2006-03-15
Institutions: European Parliament
Subjects: budgetary procedure, drafting of EU law, financial management, financial regulation, general budget (EU), implementation of the budget

30.11.2006

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Official Journal of the European Union

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P6_TA(2006)0085

Wednesday, 15 March 2006

Financial Regulation applicable to the general budget of the European Commu-
nities *

Proposal for a Council regulation amending Regulation (EC, Euratom) No 1605/2002 on the Finan-
cial Regulation applicable to the general budget of the European Communities (COM(2005)0181 —
C6-0234/2005 — 2005/0090(CNS))

(Consultation procedure)

The proposal was amended as follows (1):

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AMENDMENTS
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Amendment 1

Recital 1

the financial management reform. As such,

(1) Council Regulation (EC, Euratom) No 1605/2002, herein-
after ‘the Financial Regulation’, lays down the legal foundations
of
its essential
elements should be maintained and strengthened. Moreover, it
establishes budgetary principles which should be respected by
all legislative acts and from which derogations should be kept
to a strict minimum.

the financial management reform. As such,

(1) Council Regulation (EC, Euratom) No 1605/2002, herein-
after ‘the Financial Regulation’, lays down the legal foundations
of
its essential
elements should be maintained and strengthened. Moreover, it
establishes budgetary principles, derived from Article 268 et
seq. of the EC Treaty, which should be respected by all legisla-
tive acts and from which derogations should be kept to a strict
minimum.

Amendment 2

Recital 2

(2) Certain amendments are justified in light of practical
experience in order to facilitate budget implementation and the
realisation of the underlying policy objectives and to adjust
some procedural and documentary requirements so as to
make them more proportionate to the risks and cost involved.

(2) Certain amendments are justified in light of practical
experience in order to facilitate budget implementation and the
realisation of the underlying policy objectives and to enshrine
expressly the principle of proportionality of administrative
action set forth in Article 5 of the EC Treaty, so as to make
it clear that it is proportionate to the risks and cost involved.

Amendment 3

Recital 3

(3) All amendments must contribute to achieving the objec-
tives of the Commission's reforms, should help improve or
ensure sound financial management, and should enhance the
protection of the Communities' financial interests against fraud
and illegal activities, thus contributing to obtaining a reason-
able assurance of the legality and regularity of financial opera-
tions.

(3) All amendments must contribute to achieving the objec-
tives of the Commission's reforms, should help improve or
ensure sound financial management, and should protect the
Communities' financial interests more effectively against fraud
and illegal activities, thus contributing to obtaining a reason-
able assurance of the legality and regularity of financial opera-
tions.

(1) The matter was then referred back to committee pursuant to Rule 53(2) (A6-0057/2006).

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Amendment 4

Recital 5 a (new)

(5a) Pursuant to point 1 of the Protocol on the application
of the principles of subsidiarity and proportionality, annexed
to the EC Treaty and appended to the Treaty of Amsterdam
of 2 October 1997, each institution, in exercising the powers
conferred on it, is required to comply with the principle of
proportionality, according to which any action by the Com-
munity must not go beyond what is necessary to achieve the
objectives of the Treaty.

Amendment 5

Recital 6

(6) On certain points, more efficiency and transparency is
needed with regard to the application of budgetary principles,
in order better to suit operational needs.

(6) Practical experience of applying the Financial Regulation
has shown that, when exercising their powers in individual
instances, financial actors make too little use of their discre-
tion. Yet exercising those powers means also that they may
use their discretion to decide independently,
in individual
instances, when a measure is proportionate within the
meaning of Article 5 of the EC Treaty and the Protocol on
the application of the principles of subsidiarity and propor-
tionality, annexed to the EC Treaty and appended to the
Treaty of Amsterdam of 2 October 1997.

Amendment 6

Recital 12

(12) At present, the Commission must be authorised by the
budgetary authority before accepting donations, such as gifts
or bequests, which involve a charge. To avoid unnecessary and
cumbersome procedures,
should be made
compulsory only in the case of significant charges.

authorisations

(12) At present, the Commission must be authorised by the
budgetary authority before accepting donations, such as gifts
or bequests, which involve a charge. To avoid unnecessary and
cumbersome procedures,
should be made
compulsory where there are follow-up costs.

authorisations

Amendment 7

Recital 13

In relation to the principle of specification of the
(13)
budget,
the rules governing transfers of appropriations
should be simplified and clarified on certain points because
in practice they have proven cumbersome or unclear. The
intention was for Article 22 of the Financial Regulation to
apply to institutions other than the Commission since the
Commission has its own regime. That provision should there-
fore be amended accordingly.

deleted

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Amendment 8

Recital 14

(14) As regards the ‘notification procedure’, the Commis-
sion and the other institutions notify their transfer proposals
to the budgetary authority, which may invoke the normal
procedure if it wishes to raise objections. In such cases, in
theory, the normal deadlines apply for the decision of the
budgetary authority on the transfer. However, the text does
not state when time for the purposes of the deadline is to be
deemed to start running, and that omission should be reme-
died.

deleted

Amendment 9

Recital 16

(16) For reasons of efficiency, the Commission should be
allowed to decide autonomously on transfers from the reserve
in cases where no basic act, within the meaning of Article 49
of the Financial Regulation, exists for the action concerned
at the time when the budget is established, but where the
basic act is adopted in the course of the year.

deleted

Amendment 10

Recital 17

(17) The rules on the Commission's administrative transfers
should be adapted to the new Activity-Based Budgeting
(ABB) structure. Thus, the ‘notification procedure’ should be
limited to transfers between articles, within the administra-
tive chapter of each title, which exceed 10 % of the appro-
priations of the year. On the other hand, transfers between
articles of different titles financing expenditure of identical
nature should be decided autonomously by the Commission.

deleted

Amendment 11

Recital 22 a (new)

(22a) The rules on the liability of authorising officers
should be more clearly defined in the interests of greater legal
certainty.

Amendment 12

Recital 27

(27) A period of limitation on the validity of claims should
be introduced. The Community, unlike many of its Member
States,
is not subject to a period of limitation under which
financial claims are extinguished after a certain period of time.
Nor is the Community restricted by a period of limitation in
the pursuit of its claims against third persons. The introduction
of such a period of limitation in a new Article 73b corre-
sponds to sound financial management.

(27) A period of limitation on the validity of claims should
be introduced. The Community, unlike many of its Member
States,
is not subject to a period of limitation under which
financial claims are extinguished after a certain period of time.
Nor is the Community restricted by a period of limitation in
the pursuit of its claims against third persons. The introduction
of such a period of limitation in a new Article 73b corre-
sponds to sound financial management. However, perpetrators
of deliberate damage should not be able to invoke limitation
to the same extent as other debtors. The start of the limita-
tion period should therefore be confined to the point in time
when the entire scope of a claim has been established.

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Amendment 13

Recital 27 a (new)

(27a) Award procedures should, where possible and appro-
priate, be carried out on an interinstitutional basis so as to
ease the administrative burden on smaller entities too.

Amendment 14

Recital 27 b (new)

(27b) Supply and service contract award procedures must
be streamlined and brought more into line with the needs of
tenderers. In this connection, attention should be paid in par-
ticular to ensuring that the principle of proportionality also
to documentation efforts. Framework contracts
extends
should be reflected in the Financial Regulation. Competition
should not be constrained as a result of unnecessarily long
contractual
ties in framework contracts, and small and
medium-sized undertakings should not be effectively debarred
right from the outset, because of their size, from contract
award procedures.

Amendment 15

Recital 29

(29) The Financial Regulation rules on the exclusion of
tenderers impose a stricter regime for the Community institu-
tions than that provided for in Directive 2004/18/EC. The
Financial Regulation makes no distinction between the most
serious grounds for exclusion and other grounds. Directive
2004/18/EC, on the other hand, does make such a distinction
and that distinction should be made available for the Com-
munity institutions. Articles 93 and 94 of the Financial
Regulation should provide for mandatory exclusion in the
most serious cases, while allowing the possibility for the
contracting authority, on the basis of a risk assessment, to
add other cases of exclusion. The same distinction should be
made in Article 114 of the Financial Regulation, as regards
grants. The rules on penalties, laid down in Article 96 of
that Regulation, should be adjusted accordingly.

(29) The Financial Regulation rules on the exclusion of
tenderers impose a stricter regime for the Community institu-
tions than that provided for in Directive 2004/18/EC. The
exclusion of tenderers should be subject to the principle of
proportionality. The exclusion period should be limited to no
more than 10 years so as to prevent disproportionate penal-
ties. Exclusions for more than five years should take place
only on the basis of an unappealable judgment.

Amendment 16

Recital 30 a (new)

(30a) The requirement to provide supporting documents
should be confined to what is necessary. The documentation
effort required should be based, inter alia, on the value of the
contract concerned.

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Amendment 17

Recital 30 b (new)

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AMENDMENTS
BY PARLIAMENT

(30b) To preserve the institutions' reputation for adminis-
trative fairness and propriety, Community servants involved
in grant procedures should always notify their superiors
accordingly so as to rule out any conflict of interest.

Amendment 18

Recital 32 a (new)

(32a) Tenderers who have been passed over should have
effective legal safeguards, which the Member States are also
required to provide. To that end, independent vetting bodies
should be set up which can verify award procedures quickly,
without disproportionate effort, and provide effective legal
protection.

Amendment 19

Recital 32 b (new)

(32b) Protecting the Union's financial interests must not
demand too much of contractors. The provision of security by
contractors should therefore be restricted to instances where
this is justified and must not go beyond the purpose of
providing the security.

Amendment 20

Recital 34

(34) As regards grants, simplification of the rules is needed.
Requirements for checks and guarantees should be more
proportionate to the financial risks involved. Some essential
changes need to be made first in the Financial Regulation, so
that detailed provision can later be made in the implementing
rules. The scope of grants needs to be clarified in Article 108
of the Financial Regulation, in particular as regards financing
related to loan activities and share-holdings. The principle of
proportionality has to be added.

(34) As regards grants, simplification of the rules is needed.
The requirements which the administrative procedure imposes
on the parties involved in it must be proportionate at all
should be
times. Accordingly, unsuccessful applications
screened out at the earliest possible stage in the procedure, in
order to spare applicants needless efforts. The scope of grants
needs to be clarified in Article 108 of the Financial Regulation,
in particular as regards financing related to loan activities and
share-holdings. Particularly in the case of small amounts, it
must be possible to provide assistance on the basis of an
individual decision instead of a voluminous, complex assis-
tance agreement.

Amendment 21

Recital 36

(36) The rule that grants should be awarded on the basis of
calls for proposals has proved its worth. Experience has shown,
however, that in certain situations the nature of the action
leaves no choice
selection of beneficiaries, and
Article 110 of the Financial Regulation should expressly recog-
nise that such exceptional cases arise.

in the

(36) The rule that grants should be awarded on the basis of
calls for proposals has proved its worth. In this connection, it
should be ensured in the interests of both legal and planning
certainty that requirements notified to applicants at the start
of the tendering process do not change during the procedure.
Experience has shown, however, that in certain situations the
nature of the action leaves no choice in the selection of benefi-
ciaries, and Article 110 of the Financial Regulation should
expressly recognise that such exceptional cases arise.

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Amendment 22

Recital 37

(37) The rule that the same action should not give rise to
to any one beneficiary should be
more than one grant
adjusted because some basic acts do permit Community
funding to be combined and such cases may increase in
future in order to ensure the effectiveness of expenditure.
However, the opportunity should be taken to make clear in
Article 111 of the Financial Regulation that the same costs can
never be financed twice by the Community budget.

(37) The opportunity should be taken to make clear
in
Article 111 of the Financial Regulation that the same costs can
never be financed twice by the Community budget and that
cost eligibility may not exceed 100 %.

Amendment 23

Recital 39

(39)
For reasons of clarity and transparency, the use of flat-
rate payments should be authorised in a new Article 113a of
the Financial Regulation, to co-exist with the more traditional
method of reimbursing costs actually incurred.

(39)
For reasons of clarity and transparency, the use of flat-
rate payments should be authorised in a new Article 113a of
the Financial Regulation, to co-exist with the more traditional
method of reimbursing costs actually incurred. There should
be a clearer definition of eligible costs.

Amendment 24

Recital 40

In Article 114 of the Financial Regulation, certain
(40)
restrictions on the
should be
removed in order to allow for grants to natural persons and
certain types of entity which lack legal personality.

eligibility of beneficiaries

(40) The obligation for grant beneficiaries
to provide
supporting documents and the penalties to which they are
subject should at all times be proportionate to the risk
involved. Furthermore, certain restrictions on the eligibility of
beneficiaries should be removed in order to allow for grants to
natural persons and certain types of entity which lack legal
personality.

Amendment 25

Recital 40 a (new)

(40a) To enhance information for applicants, a joint service
should be set up to deal with standardising applications for
similar types of funding, providing applicants with informa-
tion, and benchmarking for awarding funding.

Amendment 26

Recital 47

(47)
It is necessary to allow appropriations which have been
decommitted as a result of total or partial non-implementation
of the projects for which they were earmarked to be made
available again. However, that should be possible only under
strict conditions, and only in the area of research, since
research projects present a higher financial risk than those in
other policy areas.

(47) Because of the special importance of research support
for European Union competitiveness, it is necessary to allow
commitment appropriations which have not been used or have
been decommitted as a result of total or partial non-implemen-
tation of the projects for which they were earmarked to be
made available again.

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AMENDMENTS
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Amendment 27

Article 1, point 2

Article 2 (Regulation (EC, Euratom) No 1605/2002)

the
Any provision concerning the implementation of
2.
revenue and expenditure of the budget, contained in another
legislative act, must comply in particular with the budgetary
principles set out in Title II.

the
Any provision concerning the implementation of
2.
revenue and expenditure of the budget, contained in another
legislative act, must comply with the budgetary principles set
out in Article 268 et seq. of the EC Treaty.

Amendment 28

Article 1, point 2

Article 2, paragraph 1 a (new) (Regulation (EC, Euratom) No 1605/2002)

All measures taken by institutions to implement the budget
pursuant to this Regulation shall comply with the principle
of proportionality laid down in Article 5 of the EC Treaty.

Amendment 29

Article 1, point 2

Article 2, paragraph 1 b (new) (Regulation (EC, Euratom) No 1605/2002)

(1b)
If the Commission, in a proposal for another legisla-
tive act, intends to depart from the provisions of the Finan-
cial Regulation, it must explicitly and separately inform the
European Parliament committee responsible for budgetary
matters of this fact.

Amendment 136

Article 1, point 5 a (new)

Article 9, paragraph 1 (Regulation (EC, Euratom) No 1605/2002)

(5a)

In Article 9, paragraph 1 is replaced by the following:

1.
Appropriations which have not been used at the
end of the financial year for which they were entered
shall in principle be cancelled.

However, they may be carried over to the following year
only, by a decision taken by the institution concerned by
15 February at the latest,
in accordance with para-
graphs 2 and 3, or be carried over automatically in
accordance with paragraph 4.

earmarked, may,

However, commitment appropriations not used and the
commitment appropriations corresponding to the amount
of the commitments decommitted as a result of total or
partial non-implementation of projects for which they
in duly substantiated cases
were
the budgetary
provided for by a joint decision of
authority, by a basic act or by agreement of
the
budgetary authority, be made available again, up to a
maximum amount of […] euro a year, where it is essen-
tial to carry out the programmes originally planned or to
have funds available to finance new actions.

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Amendment 30

Article 1, point 6

Article 12, paragraph 2 (Regulation (EC, Euratom) No 1605/2002)

operations may

in duly substantiated exceptional cases, the appro-
However,
priations for the purposes of crisis management aid and huma-
nitarian aid
from
15 December of each year against the appropriations provided
for the following financial year. Such commitments may not
exceed one quarter of the appropriations on the corresponding
budget line for the last adopted budget.

committed

be

as

operations may

in duly substantiated exceptional cases, the appro-
However,
priations for the purposes of crisis management aid and huma-
nitarian aid
from
15 December of each year against the appropriations provided
for the following financial year. Such commitments may not
exceed one quarter of the appropriations on the corresponding
budget
the last adopted budget. The budgetary
authority shall be notified of these commitments.

committed

line for

be

as

Amendment 31

Article 1, point 6 a (new)

Article 14, paragraph 2 (Regulation (EC, Euratom) No 1605/2002)

In Article 14, paragraph 2 is

(6a)
following:

replaced by the

2. Without prejudice to Article 46(1)(4), the European
Community and the European Atomic Energy Com-
munity, as well as the bodies set up by the Communities
as referred to in Article 185, may not raise loans except
in the case of direct financing necessary for the acquisi-
tion of immovable property intended to be used by the
institutions on which the budgetary authority has issued
a favourable opinion under Article 179(3).

Amendment 32

Article 1, point 7

Article 16, paragraph 2, sentence 2 (new) (Regulation (EC, Euratom) No 1605/2002)

Currency conversion operations shall be carried out in such a
way that there is no major change to Union cofinancing for
project grants.

Amendment 33

Article 1, point 9

Article 19, paragraph 2, sentence 1 (Regulation (EC, Euratom) No 1605/2002)

Acceptance of donations which involve a significant financial
charge shall be subject to the authorisation of the European
Parliament and the Council, both of which shall act on the
matter within two months of the date of receipt of the request
from the Commission.

Acceptance of donations which involve follow-up costs shall
be subject to the authorisation of the European Parliament and
the Council, both of which shall act on the matter within two
months of the date of receipt of the request from the Commis-
sion.

Amendment 34

Article 1, point 10

Article 22, paragraph 1, point (ba) (new) (Regulation (EC, Euratom) No 1605/2002)

(ba) from one article to another without limit.

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Amendment 35

Article 1, point 10

Article 22, paragraph 2, subparagraph 1 (Regulation (EC, Euratom) No 1605/2002)

the institutions

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

the institutions

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

Amendment 36

Article 1, point 10

Article 22, paragraph 2, subparagraph 2 (Regulation (EC, Euratom) No 1605/2002)

The budgetary authority shall take decisions on these trans-
fers within the time limits laid down in Article 24, which
shall be deemed to begin on the date on which the budgetary
authority was informed by the institution of the intended
transfer.

deleted

Amendment 37

Article 1, point 10

Article 22, paragraph 3 (Regulation (EC, Euratom) No 1605/2002)

Any institution other than the Commission may propose
3.
to the budgetary authority, within its own section of
the
budget, transfers from one title to another exceeding the limit
of 10 % of the appropriations for the financial year on the line
is to be made. The budgetary
from which the transfer
inform the Commission accordingly. Those
authority shall
transfers shall be subject
to the procedure laid down in
Article 24.

Any institution other than the Commission may propose
3.
to the budgetary authority, within its own section of
the
budget, transfers from one title to another exceeding the limit
of 10 % of the appropriations for the financial year on the line
from which the transfer is to be made. Those transfers shall be
subject to the procedure laid down in Article 24.

Amendment 38

Article 1, point 10

Article 22, paragraph 4 (Regulation (EC, Euratom) No 1605/2002)

4.
Any institution other than the Commission may, within
its own section of the budget, make transfers within chapters
without first informing the budgetary authority.

deleted

Amendment 39

Article 1, point 11(a) (i)

Article 23, paragraph 1, point b (Regulation (EC, Euratom) No 1605/2002)

(i) point (b) is replaced by the following:

deleted

(b)

as regards staff and operating expenditure, transfer
appropriations
to another only
between articles financing expenditure of identical
nature;

from one

title

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Amendment 40

Article 1, point 11(a) (ii)

Article 23, paragraph 1, point d (Regulation (EC, Euratom) No 1605/2002)

(ii) the following point (d) is added:

(d)

transfer appropriations from the ‘provisions’ title
referred to in Article 43 for the cases where no basic
act exists for the action concerned when the budget
is established but is adopted during the course of
the budget year;

deleted

Amendment 41

Article 1, point 11(a) (iii)

Article 23, paragraph 1, subparagraph 2 (Regulation (EC, Euratom) No 1605/2002)

(iii) the second subparagraph is deleted;

(iii) the second subparagraph is replaced by the following:

Three weeks before making the transfers referred to in
inform the
points (b) and (c), the Commission shall
budgetary authority of its decision. In the event of duly
justified reasons being raised within this period by either
branch of the budgetary authority, the procedure laid
down in Article 24 shall apply.

expenditure

implementation of

Three months before the end of the budgetary year, the
Commission shall report to the budgetary authority on
the
in
point (b), and shall announce its intention to make trans-
fers regarding staff, external staff and other agents in
If, within the six weeks
accordance with point
following the announcement,
the budgetary authority
does not object to the intended transfers, the Commission
may proceed and shall inform the budgetary authority of
the transfers in the following month.

referred to

(b).

Amendment 42

Article 1, point 11(b)

Article 23, paragraph 1 a (Regulation (EC, Euratom) No 1605/2002)

(b) the following paragraph 1a is inserted:

deleted

The Commission shall

1a.
authority three weeks before making the following:

inform the budgetary

(a) transfers between articles within the chapter corre-
sponding to administrative appropriations of
the
same title which exceed 10 % of the appropriations
of the year shown on the article from which the
transfer is made;

(b) transfers referred to in point (c) of paragraph 1.

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the procedure

In the event of duly substantiated reasons being raised
within that three-week period by either branch of the
budgetary authority,
down in
Article 24 shall apply. The budgetary authority shall
take decisions on these transfers within the time limits
laid down in Article 24, which shall be deemed to begin
on the date on which the budgetary authority was
informed by the Commission of the intended transfer.

laid

Amendment 43

Article 1, point 11(c)

Article 23, paragraph 2 (Regulation (EC, Euratom) No 1605/2002)

(c) in paragraph 2, ‘paragraph 1(c)’ is replaced by ‘para-

deleted

graphs 1 and 1a’.

Amendment 44

Article 1, point 12

Article 26, paragraph 2, subparagraph 1 (Regulation (EC, Euratom) No 1605/2002)

In Article 26(2), the first subparagraph is replaced by

(12)
the following:

deleted

Decisions on transfers to allow the utilisation of the
reserve for emergency aid shall be taken by the budgetary
authority on a proposal from the Commission. A separate
proposal must be submitted for each individual operation.

Amendment 45

Article 1, point 12 a (new)

Article 27, paragraph 1 (Regulation (EC, Euratom) No 1605/2002)

(12a)
following:

In Article 27, paragraph 1 is replaced by the

Budget appropriations shall be used in accordance
1.
with the principle of sound financial management,
namely in accordance with the principles of economy,
efficiency, effectiveness and proportionality.

Amendment 46

Article 1, point 12 b (new)

Article 27, paragraph 2, subparagraph 3 a (new) (Regulation (EC, Euratom) No 1605/2002)

(12b)
added:

In Article 27(2),

the following subparagraph is

The principle of proportionality is concerned with an
appropriate relationship between effort, including effort
on checks, and the amounts and risks involved.

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Amendment 47

Article 1, point 12 c (new)

Article 27, paragraph 4 a (new) (Regulation (EC, Euratom) No 1605/2002)

(12c)

In Article 27, the following paragraph is added:

4a.
For carrying out programmes and activities, proce-
dure shall be governed by their content. The requirements
of this Article shall be specified in the implementing
rules.

Amendment 48

Article 1, point 12 d (new)

Article 27, paragraph 4 b (new) (Regulation (EC, Euratom) No 1605/2002)

(12d)

In Article 27, the following paragraph is added:

4b.
Institutions shall set up systems for measuring
and comparing efficiency and effectiveness as regards
procurement procedures and the procedure for the award
of grants.

Amendment 49

Article 1, point 12 e (new)

Article 28, paragraph 2 (Regulation (EC, Euratom) No 1605/2002)

(12e)
following:

In Article 28, paragraph 2 shall be replaced by the

2. During the budgetary procedure, institutions and
other bodies shall provide the necessary information for a
in the appropriations
comparison between changes
required and the initial forecasts made in the financial
statements. This information shall include progress made
and the stage reached by the legislative authority in its
consideration of proposals presented. The appropriations
required shall, where appropriate, be revised in the light
of the progress of deliberations on the basic act.

Amendment 50

Article 1, point 12 f (new)

Article 28, paragraph 3 (Regulation (EC, Euratom) No 1605/2002)

(12f)
following:

In Article 28, paragraph 3 shall be replaced by the

In order to prevent risk of fraud or irregularity,
3.
institutions and other bodies shall record in the financial
statement any
information regarding existing and
planned fraud prevention and protection measures.

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BY PARLIAMENT

Amendment 51

Article 1, point 13

Article 29, paragraph 2 (Regulation (EC, Euratom) No 1605/2002)

(13)

In Article 29, paragraph 2 is replaced by the following:

(13)

Article 29 is replaced by the following:

Article 29

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

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

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

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

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

The consolidated annual accounts and the report on
budgetary and financial management drawn up by each
institution shall be published in the Official Journal of
the European Union.

The Commission reports shall also contain information
on action taken on the remarks in the budget.

Amendment 52

Article 1, point 13 a (new)

Chapter 9 and Article 30a (new) (Regulation (EC, Euratom) No 1605/2002)

(13a)
Title II of Part One:

The following Chapter and Article are added in

Chapter 9

Principle of effective and efficient internal control

Article 30a

1.
The implementation of the budget shall be ensured
through effective and efficient internal control in accord-
ance with each management mode.

2.
For the purpose of implementation of the budget,
internal control is defined as a process applicable at all
levels in the chain of control and designed to provide
reasonable assurance on the achievement of the following
objectives:

(a) effectiveness and efficiency of operations,

(b) reliability of financial reporting,

(c) safeguarding of assets and information, and preven-

tion and detection of fraud and irregularities,

(d) adequate management of the risks related to the
legality and regularity of the underlying transactions.

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Amendment 53

Article 1, point 16(a)

Article 43, paragraph 1, subparagraph 2 (Regulation (EC, Euratom) No 1605/2002)

(a) in the second subparagraph of paragraph 1, ‘Article 24’

deleted

is replaced by ‘Articles 23 and 24’;

Amendment 54

Article 1, point 16(b)

Article 43, paragraph 2 (Regulation (EC, Euratom) No 1605/2002)

(b) in paragraph 2, ‘Article 24’ is replaced by ‘Articles 23

deleted

and 24’.

Amendment 55

Article 1, point 19(a) (ii)

Article 46, paragraph 1, point (1) (f) (Regulation (EC, Euratom) No 1605/2002)

(ii) point (f) is deleted;

deleted

Amendment 56

Article 1, point 19(b)

Article 46, paragraph 1, point (2) (Regulation (EC, Euratom) No 1605/2002)

(b) point (2) is replaced by the following:

2.

In the section for each institution, the revenue and
expenditure shall be shown in the same structure as
in point 1;

deleted

Amendment 57

Article 1, point 19(c)

Article 46, paragraph 1, point (3) (c) (Regulation (EC, Euratom) No 1605/2002)

(c) in point (3), point (c) is replaced by the following:

deleted

(c) as regards scientific and technical staff, the classifi-
cation may be based on groups of grades, in accord-
ance with the conditions laid down in each budget;
the establishment plan must specify the number of
highly qualified technical or scientific personnel who
are accorded special advantages under the specific
provisions of the Staff Regulations;

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AMENDMENTS
BY PARLIAMENT

Amendment 58

Article 1, point 19(d)

Article 46, paragraph 1, point 5 (Regulation (EC, Euratom) No 1605/2002)

(d) point (5) is replaced by the following:

(5)

the budget lines under revenue and expenditure
necessary for implementing the Guarantee Fund for
external actions.

deleted

Amendment 59

Article 1, point 20 a (new)

Article 48, paragraph 1 (Regulation (EC, Euratom) No 1605/2002)

(20a)
following:

In Article 48, paragraph 1 shall be replaced by the

1.
The institutions shall implement the revenue and
expenditure of the budget in accordance with this Regu-
lation, on their own responsibility and within the limits
of the appropriations authorised.

Article 53, paragraph 3, subparagraph 2, introduction (Regulation (EC, Euratom) No 1605/2002)

Amendment 60

Article 1, point 22(a)

In order to ensure in shared management that the funds are
used in accordance with the applicable rules and principles, the
Member States shall take all the measures necessary to:

In order to ensure in shared management that the funds are
used in accordance with the applicable rules and principles, the
Member States shall take all the legislative, regulatory, admin-
istrative or other measures necessary for protecting the
Communities' financial interests in order to:

Amendment 61

Article 1, point 22(a)

Article 53, paragraph 3, subparagraph 2, point (b) (Regulation (EC, Euratom) No 1605/2002)

(b) prevent and deal with irregularities and fraud;

(b) prevent and deal with irregularities, mismanagement and

fraud;

Amendment 62

Article 1, point 23(b) (i) (new)

Article 54, paragraph 2, introduction (Regulation (EC, Euratom) No 1605/2002)

(i) the introduction is replaced by the following:

2. Where the Commission implements the budget on a
centralised and indirect basis, pursuant to Article 53
(2), or pursuant to Article 53(4), it may, subject to
compliance with the restrictions laid down in para-
graph 1, delegate sovereign tasks,
in particular
budget implementation tasks, to the following bodies:

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Amendment 63

Article 1, point 23 (c a) (new)

Article 54, paragraph 3 a (new) (Regulation (EC, Euratom) No 1605/2002)

(ca) the following paragraph is added:

3a. When exercising the powers conferred on it by
the Commission pursuant to Article 50, the European
Parliament may, in keeping with the provisions of its
Rules of Procedure, and by adopting specific rules,
delegate implementation tasks to its political groups
for well defined appropriations.

specific

This
from
Article 56, unless the specific operating needs of the
political groups require it.

regulation may not deviate

Amendment 64

Article 1, point 24

Article 56, paragraph 1, introduction (Regulation (EC, Euratom) No 1605/2002)

1. Where the Commission implements
the budget by
indirect centralised management, it shall first obtain evidence
of the existence, relevance and proper operation within the
in accordance
entities to which it entrusts implementation,
the
with the rules of
following:

sound financial management, of

1. Where the Commission or the European Parliament
implements the budget by indirect centralised management,
they shall first obtain evidence of the existence, relevance and
proper operation within the entities to which they entrust
implementation, in accordance with the rules of sound finan-
cial management, of the following:

Amendment 65

Article 1, point 24

Article 56, paragraph 3 (Regulation (EC, Euratom) No 1605/2002)

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

3.
The Commission and/or the European Parliament shall
ensure supervision, evaluation and control of the implementa-
tion of the tasks entrusted. They shall take the equivalence of
control systems into account when they carry out controls
using their own control systems.

Amendment 66

Article 1, point 27

Article 60, paragraph 7, sentence 1 (Regulation (EC, Euratom) No 1605/2002)

In Article 60, the first sentence of paragraph 7 is

(27)
replaced by the following:

7.
The authorising officer by delegation shall report to
his/her institution on the performance of his/her duties in
the form of an annual activity report together with finan-
cial and management information and a declaration of
assurance certifying that the information contained in the
report presents a true and fair view.

(27)

In Article 60, paragraph 7 is replaced by the following:

7.
The authorising officer by delegation shall report to
his/her institution on the performance of his/her duties in
the form of an annual activity report together with finan-
cial and management information and any reservations in
relation to the latter accompanied by a declaration of
assurance certifying that the information contained in the
report presents a true and fair view.

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This report shall indicate the results of the operations by
reference to the objectives set, the risks associated with
these operations, the use made of the resources provided
and the way the internal control system functions. The
internal auditor shall take note of the annual report and
any other pieces of information identified. No later than
15 June each year the Commission shall send to the
budgetary authority a summary of the annual reports for
the previous year. These reports shall set out details of
the measures taken to limit the risk of errors in connec-
tion with the operations dealt with in the report and an
assessment of the effectiveness of those measures.

Amendment 67

Article 1, point 28 (a) (new)

Article 61, paragraph 1, point (e a) (new) (Regulation (EC, Euratom) No 1605/2002)

(a) in paragraph 1, the following point (ea) is inserted:

(ea)

the effective functioning of these systems;

Amendment 68

Article 1, point 28 (a)

Article 61, paragraph 2 a (Regulation (EC, Euratom) No 1605/2002)

2a.
The accounting officer shall prepare the accounts on
the basis of the information presented under paragraph 2.
The final accounts drawn up under Article 129(2) and (3)
shall be accompanied by a certificate established by the
accounting officer, by which he declares that
they were
prepared in accordance with Title VII and with the
accounting principles, rules and methods set out in annex to
the financial statements.

Before their adoption by the institution, the accounting
2a.
officer shall sign off
they
present a true and fair view of the financial situation of the
institution.

the accounts, certifying that

For this purpose the accounting officer shall satisfy himself
that the accounts have been prepared in accordance with the
accounting rules, methods and accounting systems estab-
lished under his responsibility as laid down in this Regu-
lation for the accounts of his institution, and that all revenue
and expenditure is entered in the accounts.

He shall be empowered to check the information received as
well as to carry out any further checks he deems necessary in
order to sign off the accounts.

He shall make reservations if necessary, explaining exactly
the nature and scope of such reservations.

The authorising officers by delegation shall forward all infor-
mation the accounting officer needs in order to fulfil his
duties. The authorising officers shall remain fully responsible
for the proper use of the funds they manage as well as the
legality and regularity of the expenditure under their control.

The accounting officers of the other institutions and agencies
shall sign off their annual accounts and send the certificate
to the Commission's accounting officer.

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Amendment 69

Article 1, point 32 (a)

Article 66, paragraph 1, sentence 1 (Regulation (EC, Euratom) No 1605/2002)

(a) in paragraph 1, the first sentence is replaced by the

(a) paragraph 1 is replaced by the following:

following:

The authorising officer shall be liable for payment of
compensation as laid down in the Staff Regulations, which
specify that a member of staff covered by the relevant
provisions may be required to make good, in whole or in
part, any damage suffered by the Communities as a
result of serious misconduct on his/her part in the course
of or in connection with the performance of his/her
duties, in particular if he/she determines entitlements to
be recovered or issues recovery orders, commits expendi-
ture or signs a payment order without complying with this
Regulation and the implementing rules.

The authorising officer shall be liable for payment of

1.
compensation as laid down in the Staff Regulations.

The requirement to pay compensation shall apply in par-
ticular if:

— the authorising officer, whether

intentionally or
through serious negligence on his part, determines
entitlements to be recovered or issues recovery orders,
commits expenditure or signs a payment order without
complying with this Regulation and the implementing
rules,

— the authorising officer, whether

intentionally or
through serious negligence on his part, omits to draw
up a document establishing a debt, neglects to issue a
recovery order or is late in issuing it or is late in
issuing a payment order, thereby rendering the insti-
tution liable to civil action by third parties.

When the case and the degree of misconduct are consid-
ered, all circumstances, in particular the resources made
available to the authorising officer to enable him to
perform his duties, must be taken into account.

In keeping with the principle of proportionality, the level
of liability of the authorising officer shall be assessed
primarily on the basis of the degree of misconduct. If the
authorising officer acts negligently, the liability shall be
restricted to a maximum of 12 months' salary. If the
authorising officer acts intentionally or deliberately, he
shall be liable for the entire loss suffered.

Amendment 70

Article 1, point 32 (b a) (new)

Article 66, paragraph 4, subparagraph 1 (Regulation (EC, Euratom) No 1605/2002)

(ba) in paragraph 4, the first subparagraph is replaced by

the following:

4.
Each institution shall set up or participate in the
joint establishment of a specialised financial irregula-
rities panel which shall function independently and
determine whether
irregularity has
occurred and what the consequences, if any, should be.
Joint panels may be set up by a group of institutions.
The members of a specialised panel may be appointed
from any institution.

financial

a

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Amendment 71

Article 1, point 33 a (new)

Article 72, paragraph 2 a (new) (Regulation (EC, Euratom) No 1605/2002)

(33a)

In Article 72, the following paragraph is added:

2a.
Unduly paid amounts belong to the Community
budget and should be recovered, taking into account the
principle of proportionality, and entered in the budget.

When recovery procedures are dealt with by the Member
States or by other institutions, the Community budget
may be used to reimburse the costs associated with these
recoveries. Such reimbursements shall be governed by the
implementing rules.

Amendment 72

Article 1, point 35

Article 73b (Regulation (EC, Euratom) No 1605/2002)

Without prejudice to the provisions of specific regulations and
the application of the Council Decision relating to the Commu-
nities' own resources system, entitlements of the Communities
in respect of third parties and entitlements of third parties in
respect of the Communities shall be subject to a limitation
period of five years.

Without prejudice to the provisions of specific regulations and
the application of the Council Decision relating to the Commu-
nities' own resources system, entitlements of the Communities
in respect of third parties and entitlements of third parties in
respect of the Communities shall be subject to a limitation
period of five years.

If the entitlement is the result of deliberate damage to the
Communities' interests, the limitation period shall commence
at the earliest on the date on which the damage and the justi-
fication for and level of the entitlement to compensation were
actually and legally recognised and placed on record. The
limitation period shall be interrupted by the assertion of the
claim in the courts. If a number of debtors are jointly and
severally liable, the interruption with regard to one debtor
shall apply to all those jointly and severally liable.

The date for calculating the limitation period and the condi-
tions for interrupting this period shall be laid down in the
implementing rules.

The date for calculating the limitation period and the condi-
tions for interrupting this period shall otherwise be laid down
in the implementing rules.

Amendment 73

Article 1, point 35 a (new)

Article 74, paragraph 1 (Regulation (EC, Euratom) No 1605/2002)

(35a)
following:

In Article 74, the first paragraph is replaced by the

Revenue received by way of fines, agreements, periodic
penalty payments and other penalties, amounts recovered
and any accrued interest shall not be finally recorded as
budgetary revenue as long as the decisions imposing
them may be annulled by the Court of Justice.

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Amendment 74

Article 1, point 37 a (new)

Article 79, paragraph 1 a (new) (Regulation (EC, Euratom) No 1605/2002)

(37a)

In Article 79, the following paragraph is added:

Claims for payment shall give rise to payments by the
Commission only in duly substantiated cases.

Amendment 75

Article 1, point 37 b (new)

Article 80, paragraph 1 a (new) (Regulation (EC, Euratom) No 1605/2002)

(37b)

In Article 80, the following paragraph is added:

Where periodic payments are made with regard to
services rendered or goods delivered and subject to his
risk analysis, the authorising officer may order the appli-
cation of a direct debit system.

Amendment 76

Article 1, point 37 c (new)

Article 83, paragraph 1 a (new) (Regulation (EC, Euratom) No 1605/2002)

(37c)

In Article 83, the following paragraph is added:

The institutions shall submit to the budgetary authority
a report on compliance with the time-limits laid down in
the implementing rules and on the suspension of those
time-limits.

Amendment 77

Article 1, point 39 (a a) (new)

Article 88, paragraph 1, subparagraph 1 a (new) (Regulation (EC, Euratom) No 1605/2002)

(aa) in paragraph 1, the following subparagraph is added

after the first subparagraph:

A start may be made on implementing the contract only
after it has been signed.

Amendment 78

Article 1, point 39 a (new)

Article 89, paragraphs 2 a and 2 b (new) (Regulation (EC, Euratom) No 1605/2002)

(39a)

In Article 89, the following paragraphs are added:

2a. With a view to minimising marginal costs and
avoiding parallel procurement procedures, the contracting
authority shall take appropriate measures to ensure that
procurement procedures are carried out on an interinsti-
tutional basis.

2b. Due account shall be taken of the interests of
small and medium-sized undertakings primarily by split-
ting contracts, where appropriate, into specialist or part-
lots. The thresholds laid down in Articles 105 and 167
may not be circumvented by means of such splitting.

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Amendment 79

Article 1, point 39 b (new)

Wednesday, 15 March 2006

AMENDMENTS
BY PARLIAMENT

Article 90, paragraph 1, subparagraph 1, sentence 2 (new) (Regulation (EC, Euratom) No 1605/2002)

(39b)
the first subparagraph:

In Article 90(1), the following sentence is added to

This shall also apply to contracts concluded under a
framework contract if, as a result of the conclusion of an
individual contract or of the aggregate volume of the
contracts concluded under the framework contract, the
thresholds provided for in Articles 105 and 167 are
exceeded.

Amendment 80

Article 1, point 41 a (new)

Article 91 a (new) (Regulation (EC, Euratom) No 1605/2002)

(41a)

The following article is inserted:

Article 91a

1.

If the contracting authority establishes that:

(a) the

costs of

likely administrative

implementing
several simultaneous or successive procurement proce-
dures in respect of similar items exceed the likely
savings
to be achieved by implementing those
procurement procedures and are therefore inefficient,
or

(b) the subject of the contract necessitates such a step,

and

(c) competition would
restricted as a result,

not

be

disproportionately

it may decide to conclude a framework contract. The
authorising officer must
include a copy of the duly
substantiated decision to conclude a framework contract
in the relevant files.

2.
The duration of the framework contract for the
provision of services may not exceed 24 months, although
tacit extension for a period of up to 24 months shall be
admissible (basic duration). Provision may be made for
partial termination, provided that this is consistent with
the purpose of the contract.

The contract may be tacitly extended only if the
3.
requirements laid down in paragraph 1 have been met at
the time the decision to extend the contract is taken. The
authorising officer must check that
the requirements
have been met and include a document setting out the
results in the relevant files.

4.
If, on the basis of an assessment carried out at the
time when the contract is concluded, the purpose of the
contract can be achieved only if the contract is concluded
for a period in excess of the basic duration, the author-
ising officer must also include a document setting out the
reasons for exceeding that basic duration in the relevant
files.

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If the contract is for the supply of goods, when the
5.
framework contract is concluded, and notwithstanding
the requirements laid down in paragraph 1, suitable
arrangements must be made
the
contracting authority does not suffer any economic disad-
vantage for the period of the framework contract.

ensure

that

to

Amendment 81

Article 1, point 41 b (new)

Article 92 (Regulation (EC, Euratom) No 1605/2002)

(41b) Article 92 is replaced by the following:

Article 92

A full, clear and precise description of the subject
1.
of the contract must be given in the documents relating
to the invitation to tender.

2.
The selection criteria for evaluating the capability
of candidates or tenderers and the award criteria for eval-
uating the content of the tenders shall be defined in
advance and set out in the call for tender.

Candidates or

3.
informed in
advance of the grounds for exclusion (Articles 93 and
94).

shall be

tenderers

4.
Subject to the provisions of Article 93a, candidates'
or tenderers' attention shall be drawn to the requirement
that they must notify the contracting authority without
delay if one or more of the exclusion criteria applies to
them and, if necessary, confirm that none of the criteria
applies. Attention shall be drawn to the legal implica-
tions of Article 96.

5.
In the case of a framework contract, candidates' or
tenderers' attention shall be drawn to the fact that other
institutions are also entitled to receive deliveries on the
basis of the terms and conditions laid down in the frame-
work contract.

Amendment 82

Article 1, point 42

Article 93, paragraph 1, point (a) (Regulation (EC, Euratom) No 1605/2002)

(a) they have been the subject of a judgment which has the
force of res judicata for fraud, corruption, involvement in a
criminal organisation, money laundering or any other
illegal activity detrimental to the Communities' financial
interests;

(a) during a period of five years prior to the date on which the
invitation to tender is issued they have been the subject of
a judgment which has the force of res judicata for fraud,
corruption, involvement in a criminal organisation, money
laundering or a similar criminal activity; the duration of
the exclusion may be extended to up to 10 years if the
candidate or tenderer has been the subject of a judgment
which has the force of res judicata for an action detri-
mental to the Communities' financial interests;

Amendment 83

Article 1, point 42

Article 93, paragraph 3 (Regulation (EC, Euratom) No 1605/2002)

The situations of exclusion shall be defined in advance

3.
and communicated to candidates or tenderers.

deleted

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Amendment 84

Article 1, point 42

Article 93, paragraph 4, subparagraph 1 (Regulation (EC, Euratom) No 1605/2002)

Candidates or tenderers must certify that they are not in
4.
one of the situations listed in paragraph 1 and, as appropriate,
that they are not in one of the situations listed in paragraph 2.

Subject to the provisions of Article 93a, candidates or
4.
tenderers must certify that they are not in one of the situations
listed in paragraph 1 and, as appropriate, that they are not in
one of the situations listed in paragraph 2.

Amendment 85

Article 1, point 42

Article 93, paragraph 4, subparagraph 2 (Regulation (EC, Euratom) No 1605/2002)

Where the candidate or tenderer is a legal entity, information
on the ownership or on the management, control and power
of representation of the legal entity must be provided, when-
ever requested by the contracting authority.

deleted

Amendment 86

Article 1, point 42

Article 93a (new) (Regulation (EC, Euratom) No 1605/2002)

Article 93a

Notwithstanding the provisions of Article 89, at all
1.
stages of
the procurement procedure administrative
requirements and requirements to produce supporting
documents must be clearly defined and directly linked to
the procedure in question. In particular:

(a) except

in the case of contracts involving small
amounts for which a single tender lodged under the
negotiated procedure is admissible, authorising offi-
cers may, on the basis of their risk assessment, waive
the requirement to supply one or more supporting
documents;

(b) in the

of

case

other

procurement procedures
conducted pursuant to Article 91(3), the contracting
authority may require a certificate and/or other
supporting documents which prove that the candidate
is not in one of the situations listed in Articles 93
and 94 and that he meets the other award criteria;

(c) in all other cases, the contracting authority may
require candidates or tenderers to produce those
supporting documents which it regards as essential
to the implementation of the procurement procedure.

In addition, at the request of the contracting authority,
candidates or tenderers must state who owns the legal
entity submitting a tender, or who makes up its manage-
ment, or who exercises control or power of representation.

Notwithstanding the provisions of Section 4,
2.
payments on account may not be retained on the sole
grounds that no use was made of the possibility of
requiring candidates or tenderers to produce supporting
documents.

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Amendment 87

Article 1, point 42

Article 94, paragraph 1 a (new) (Regulation (EC, Euratom) No 1605/2002)

Notwithstanding any other provisions concerning conflicts of
interest,
in particular those laid down in Article 52, a
conflict of interest within the meaning of point (a) shall be
presumed to exist if, at any stage of a procedure relating to
the award of a grant, the candidate or tenderer was an
employee of the Communities, unless his participation in the
procurement procedure was authorised in advance by his
superior.

Amendment 88

Article 1, point 43

Article 95, paragraph 2 (Regulation (EC, Euratom) No 1605/2002)

(43)

In Article 95, the following paragraph is added:

(43)

Article 95 is replaced by the following:

However, for cost-effectiveness reasons, two or more
institutions may agree to use a common database.

Article 95

1.
Each institution shall communicate the details of
candidates and tenderers who are in one of the situations
described in Articles 93 and 94 to a central database
operated by the Commission.

2.
The database shall be consulted by authorising offi-
cers in all institutions and agencies before awarding a
tender. Access to the database shall be granted also to
the relevant authorities of the Member States. Access
may be granted to third countries and international orga-
nisations if this is necessary on important public interest
grounds without prejudice to Community rules on the
processing of personal data.

3. Member States shall communicate to the Commis-
sion details of economic operators in one of the situations
referred to in Article 93(1)(a) and (2)(b) and (c) where
the conduct of these operators was detrimental to the
Communities' financial
interests and the Communities
judicial proceedings.
have not already been part of
Member States' authorities shall consult the Commis-
sion's databases when awarding a contract if financial
resources from EU funds are involved and use the infor-
mation accordingly.

Amendment 89

Article 1, point 44

Article 96, paragraph 2 a (new) (Regulation (EC, Euratom) No 1605/2002)

A candidate or tenderer may be excluded for a period
2a.
of more than five years only on the basis of a judgment or
analogous decision against the candidate or tenderer which
has the force of res judicata for an action justifying exclusion
which is detrimental to the Communities' interests.

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Amendment 90

Article 1, point 44 a (new)

Bofore Article 97, Section 3a (new) (Regulation (EC, Euratom) No 1605/2002)

(44a)
inserted:

Before Article 97, the following new Section 3a is

Section 3a

Rights of parties involved in procurement procedures

Amendment 91

Article 1, point 44 b (new)

Article 97, paragraph 1 (Regulation (EC, Euratom) No 1605/2002)

(44b)

In Article 97, paragraph 1 is deleted.

Amendment 92

Article 1, point 46 (a a) (new)

Article 98, paragraph 2 (Regulation (EC, Euratom) No 1605/2002)

(aa) paragraph 2 is replaced by the following:

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

Amendment 93

Article 1, point 46 a (new)

Article 100, paragraph 2 a (new) (Regulation (EC, Euratom) No 1605/2002)

(46a)

In Article 100, the following paragraph is added:

2a.
The contract may not be signed prior to the expiry
of a period of 14 weekdays commencing on the date on
which the candidate or tenderer was notified of the rejec-
tion of its tender (paragraph 2, first phrase), provided
that the Communities would not suffer a significant
financial loss as a result. The time-limit shall begin to
run only once the candidate or
tenderer has been
the legal remedies available
informed in writing of
against the decision, in particular as regards the instance,
time-limit and form. A contract signed prior to expiry of
the time-limit shall be null and void.

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Amendment 94

Article 1, point 46 b (new)

Article 100 a (new) (Regulation (EC, Euratom) No 1605/2002)

(46b)

The following article is inserted:

Article 100a

1.
The Commission shall take the necessary measures
to ensure that, as regards procedures for the award of
public contracts falling within the scope of the Financial
Regulation, decisions taken by the contracting authorities
may be reviewed effectively and, in particular, as rapidly
as possible in accordance with the conditions set out, in
particular,
in order to determine
whether such decisions have infringed Community law in
the field of public procurement or other provisions imple-
menting that law.

in Article 100b(7)

2.
The Commission shall ensure that the review proce-
dure is available, in accordance with conditions to be laid
down in the implementing rules, at least to any person
having or having had an interest in obtaining a particu-
lar public supply or public works contract and who has
been or risks being harmed by an alleged infringement.
In particular,
the
person seeking the review must have previously notified
the contracting authority of the alleged infringement and
of his intention to seek review.

the Commission may require that

Amendment 95

Article 1, point 46 c (new)

Article 100 b (new) (Regulation (EC, Euratom) No 1605/2002)

(46c)

The following article is inserted:

Article 100b

The Commission shall ensure that the measures
1.
taken concerning the review procedures specified in
Article 100a include provision for the powers required to:

(a) take, at the earliest opportunity and by way of inter-
locutory procedures, interim measures with the aim
of correcting the alleged infringement or preventing
further damage to the interests concerned, including
measures to suspend or to ensure the suspension of
the procedure for the award of a public contract or
the
implementation
the
contracting authority;

decision

any

by

of

(b) either set aside or ensure the setting aside of deci-
sions taken unlawfully,
including the removal of
discriminatory technical, economic or financial speci-
fications in the invitation to tender, the contract
documents or in any other document relating to the
contract award procedure;

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(c) award damages to persons harmed by an infringe-

ment.

2.
The powers specified in paragraph 1 may be
conferred on separate bodies responsible for different
aspects of the review procedure.

3.
Review procedures need not in themselves have an
automatic suspensive effect on the contract award proce-
dures to which they relate.

4.
The Commission may provide that when consid-
ering whether to order interim measures the body respon-
sible may take into account the probable consequences of
the measures for all interests likely to be harmed, as well
as the public interest, and may decide not to grant such
measures where their negative consequences could exceed
their benefits. A decision not to grant interim measures
shall not prejudice any other claim of the person seeking
these measures.

5.
The Commission may provide that where damages
are claimed on the grounds that a decision was taken
unlawfully, the contested decision must first be set aside
by a body having the necessary powers.

6.
The effects of the exercise of the powers referred to
in paragraph 1 on a contract concluded subsequent to its
award shall be laid down in the implementing rules.

Furthermore, except where a decision must be set aside
prior to the award of damages, the Commission may
provide that, after the conclusion of a contract following
its award, the powers of the body responsible for the
review procedures shall be limited to awarding damages
to any person harmed by an infringement.

The Commission shall ensure that decisions taken
7.
by bodies responsible for review procedures can be effec-
tively enforced.

8. Where bodies responsible for review procedures are
not judicial in character, written reasons for their deci-
sions shall always be given. Furthermore, in such a case,
provision must be made to guarantee procedures whereby
any allegedly illegal measure taken by the review body or
any alleged defect in the exercise of the powers conferred
on it can be the subject of judicial review or review by
another body which is a court or tribunal within the
meaning of Article 234 of the EC Treaty and independent
of both the contracting authority and the review body.

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The members of such an independent body shall be
appointed and leave office under the same conditions as
members of the judiciary as regards the authority respon-
sible for their appointment, their period of office, and
their removal. At least the President of this independent
body shall have the same legal and professional qualifica-
tions as members of the judiciary. The independent body
shall take its decisions following a procedure in which
both sides are heard, and these decisions shall, by means
determined by the Commission, be legally binding.

Amendment 96

Article 1, point 46 d (new)

Article 102 (Regulation (EC, Euratom) No 1605/2002)

(46d) Article 102 is replaced by the following:

Article 102

In certain duly substantiated cases,
the contracting
authority may require contractors to lodge a guarantee in
advance in order to:

(a) ensure full performance of the contract;

(b) limit the financial risks connected with pre-financing
and payments on account. In the case of payments
on account, guarantees shall be required only if the
payment does not relate to supplies already delivered
or services provided on the basis of instalments
agreed in advance.

Amendment 97

Article 1, point 50 (a) (new)

Article 108, paragraph 1, introduction (Regulation (EC, Euratom) No 1605/2002)

(a) in paragraph 1,

the introduction is replaced by the

following:

Grants are direct financial contributions, by way of
1.
donation, from the budget of the European Communities
in order to finance:

Amendment 98

Article 1, point 50(a a) (new)

Article 108, paragraph 1, subparagraph 2 (Regulation (EC, Euratom) No 1605/2002)

(aa) in paragraph 1, the second subparagraph is replaced by

the following:

Grants shall be the subject of a written award agree-
ment or an award decision to be notified to the appli-
cant. The decision to award a grant may lay down
terms and conditions,
time-limits
provided that those provisions could also have been the
subject of a grant award agreement.

requirements or

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Amendment 99

Article 1, point 50 (a)

Article 108, paragraph 2, points g a and g b (new) (Regulation (EC, Euratom) No 1605/2002)

(ga)

expenditure on organisations consisting of members
and former members and staff and former staff of an
Institution that:

— promote the interests or support the functioning

of the institution; and/or

— organise cultural, sporting, social and other
activities for the benefit of the institution and/
or its members and former members and staff
and former staff; and

(gb)

expenditure in the framework of cooperation with
third persons, not governed by the provisions on
procurement, and related to the information policy of
the institution.

These categories are considered administrative expenditure
within the meaning of Article 49. They shall be dealt with in
a separate budget item.

Amendment 100

Article 1, point 52

Article 109, paragraph 1, subparagraph 2 (Regulation (EC, Euratom) No 1605/2002)

They may not be cumulative or awarded retrospectively and
they must involve co-financing.

They may not be cumulative or awarded retrospectively;
notwithstanding the provisions governing the award of
grants as lump sums or on the basis of flat-rate financing
(Article 113a(1)(b) and (c)), they must involve co-financing.

Amendment 101

Article 1, point 52

Article 109, paragraph 3, point d (Regulation (EC, Euratom) No 1605/2002)

(d)

low-value grants taking one of the forms provided for in
points (b) or (c) of Article 113a(1), or a combination
thereof, in accordance with the implementing rules.

(d) grants taking one of the forms provided for in points (b)
or (c) of Article 113a(1), or a combination thereof,
in
accordance with the implementing rules.

Amendment 102

Article 1, point 52

Article 109, paragraph 3, point (d a) (new) (Regulation (EC, Euratom) No 1605/2002)

(da) own resources, in particular contributions and member-
ship fees, aggregated in the annual operations of a poli-
in accordance with
tical party at European level
Article
(EC) No
2004/2003 (1), which exceed the 25 % of eligible cost to
be borne by the beneficiary according to Article 10(2)
of that Regulation.

of Regulation

2(1)

and

(2)

(1) Regulation (EC) No 2004/2003 of the European Parliament
and of the Council of 4 November 2003 on the regulations
governing political parties at European level and the rules
regarding their funding (OJ L 297, 15.11.2003, p. 1).

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Amendement 103

Article 1, point 52 a (new)

Article 109 a (new) (Regulation (EC, Euratom) No 1605/2002)

(52a)

The following Article is inserted:

Article 109a

A joint service shall have the task of providing informa-
tion and advice to applicants. In particular, this service
shall:

— lay down joint standards for application forms for
similar grants and monitor the size and readability of
the application forms,

— supply information to potential applicants (in par-
ticular by means of seminars and the provision of
handbooks), and

— maintain a database with the help of which the

Commission can notify applicants.

Amendment 104

Article 1, point 52 b (new)

Article 110, paragraph 1, subparagraph 1 (Regulation (EC, Euratom) No 1605/2002)

(52b)
by the following:

In Article 110(1), the first subparagraph is replaced

subject

Grants

shall be

1.
of an annual
the
programme, to be published at the start of the financial
year, and at all events not later than 15 March. This
provision shall not apply to crisis management aid and
humanitarian aid operations.

Operating grants as defined in Article 112 shall also be
the subject of an annual programme, which may already
be published during the previous year, subject to the
availability of appropriations in the following year.

Amendment 105

Article 1, point 53

Article 110, paragraph 1, subparagraph 2 (Regulation (EC, Euratom) No 1605/2002)

That work programme shall be implemented through the
publication of calls for proposals save in duly substantiated
exceptional cases of urgency or where the characteristics of the
beneficiary or of the action leave no other choice for a given
action.

That work programme shall be implemented through the
publication of calls for proposals save in duly substantiated
exceptional cases of urgency or where the characteristics of the
beneficiary or of the action leave no other choice for a given
action. The call for proposals may already be published in the
previous year, subject to the availability of appropriations in
the following year. Irrespective of the time of publication and
notwithstanding Article 115, it shall indicate all the rules
which apply to the award of the grant (particularly the exclu-
sion criteria as referred to in Articles 93 and 94), in which
connection
permissible.
Throughout the procedure, the rules to be applied shall be
binding in the version applicable at
the
announcement.

the time of

provisions

references

are

to

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Amendement 106

Article 1, point 53 a (new)

Article 110, paragraph 2 (Regulation (EC, Euratom) No 1605/2002)

(53a)
following:

In Article 110, paragraph 2 is replaced by the

2.
All grants awarded in the course of a financial year
shall be published annually, where appropriate by elec-
tronic means, with due observance of the requirements of
confidentiality and security.

Amendment 107

Article 1, point 53 b (new)

Article 110, paragraph 2 a (new) (Regulation (EC, Euratom) No 1605/2002)

(53b)

In Article 110, the following paragraph is added:

Simultaneously with publication pursuant to para-
2a.
graph 2, the Commission shall forward to the European
Parliament a report on:

(a) the number of applicants in the past year;

(b) the number and percentage of successful applications
per call for proposals and per subsidising agency;

(c) the mean duration of the procedure from publication
of the call for proposals to the conclusion of the
grant agreement or the issuing of a decision on
awarding a grant per call for proposals and per
subsidising agency;

(d) the mean period until the final assessment and final

payment (Article 119(1)).

Amendment 108

Article 1, point 54

Article 111 (Regulation (EC, Euratom) No 1605/2002)

One action may give rise to the award of only one grant from
the budget to any one beneficiary, except where otherwise
authorized by the basic acts concerned.

One action may give rise to the award of only one grant
1.
from the budget to any one beneficiary, except where other-
wise authorised by the basic acts concerned.

A beneficiary may be awarded only one operating grant from
the budget per financial year.

A beneficiary may be awarded only one operating grant
2.
from the budget per financial year. The applicant shall imme-
diately inform the authorising officers of any multiple appli-
cations and multiple grants for the project.

In any case, the same costs shall not be financed twice by the
budget.

3.
In any case, the same costs shall not be financed twice by
the budget. On no account may the combined total costs
eligible for financing be exceeded.

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Amendment 109

Article 1, point 55 a (new)

Article 113, paragraph 2 (Regulation (EC, Euratom) No 1605/2002)

(55a)
following:

In Article 113, paragraph 2 is replaced by the

2.
Unless otherwise specified in the basic act with
regard to bodies pursuing an objective of general Euro-
pean interest
the provisions
and notwithstanding
governing the award of grants as lump sums or on the
basis of flat-rate financing (Article 113a(1)(b) and (c)),
when operating grants are renewed, they shall be gradu-
ally decreased in a proportionate and equitable manner.

Amendment 110

Article 1, point 56

Article 113 a, paragraph 1, point a (Regulation (EC, Euratom) No 1605/2002)

(a) reimbursement of a specified proportion of the eligible

(a) reimbursement of a maximum or specified proportion of

costs actually incurred;

the eligible costs actually incurred;

Amendment 111

Article 1, point 56

Article 113 a, paragraph 1 a (new) (Regulation (EC, Euratom) No 1605/2002)

The following, in particular, may be claimed as costs

1a.
eligible for financing:

(a) the costs of a bank guarantee or comparable surety to be
to

the grant pursuant

lodged by the beneficiary of
Article 118;

(b) the amounts of turnover tax which the beneficiary of the

grant cannot claim as a deduction of input tax;

(c) the costs of an external audit (Articles 117 and 119)

(d) administrative expenditure and staff and equipment

costs;

(e) depreciation.

Amendment 112

Article 1, point 57

Article 114, paragraph 3, subparagraph 2 (Regulation (EC, Euratom) No 1605/2002)

Applicants must certify that they are not in one of the situa-
tions referred to in the first subparagraph.

Applicants shall certify, in keeping with the principles referred
to in Article 109, at the request of the authorising officer,
that they are not in one of the situations referred to in the first
subparagraph.

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Amendment 113

Article 1, point 57

Article 114, paragraph 4, subparagraph 2 (Regulation (EC, Euratom) No 1605/2002)

Such penalties may also be imposed on beneficiaries who,
during the implementation of the grant agreement, have made
false declarations in supplying the information required by the
authorising officer or fail to supply this information.

Such penalties may also be imposed on beneficiaries who,
during the implementation of the grant agreement, intention-
ally or through gross negligence, have made false declarations
in supplying the information required by the authorising
officer or fail to supply this information.

Amendment 114

Article 1, point 57

Article 114, paragraph 4 a (new) (Regulation (EC, Euratom) No 1605/2002)

4a.
The authorising officer shall propose that declarations
be issued, applications be made or declarations or applica-
tions be corrected if it is clearly only due to an oversight or
ignorance that they have not been issued or made or have
been issued or made incorrectly. In so far as necessary and
feasible and permissible in the light of the possibilities avail-
able, he shall provide information about the rights and obli-
gations of the participants in the procedure.

The authorising officer shall keep appropriate records of
contacts with applicants during the procedure.

Amendment 115

Article 1, point 57 a (new)

Article 115, paragraph 1 (Regulation (EC, Euratom) No 1605/2002)

(57a)
following:

In Article 115, paragraph 1 is replaced by the

Taking account of the principles referred to in
1.
Article 109(1) and using selection criteria stated in
advance in the call for proposals, the applicant's ability
to complete the proposed action or work programme shall
be
to
Article 110(1). The award criteria shall give a picture of
the specific characteristics of
the projects and their
quality and implementation.

shall be without prejudice

evaluated. This

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Amendment 116

Article 1, point 57 b (new)

Article 115, paragraphs 2 a (new) and 2 b (new) (Regulation (EC, Euratom) No 1605/2002)

(57b)

In Article 115, the following paragraphs are added:

2a.
The award procedure shall as a matter of principle
be divided into several procedural stages, the first of
which shall comprise solely an approximate evaluation of
the permissible applications submitted. If an application
has already no prospect of success after this stage of the
procedure, the applicant shall be informed accordingly in
accordance with Article 116(3). Each subsequent stage of
the procedure must be clearly distinct from the previous
one, particularly as regards the quantity and substance of
the evidence to be submitted by the applicant. If evidence
is required from an applicant, it may be required only
once in the course of the procedure. Data which have
been
database
(Article 109a). Efforts shall be made to complete the
procedure speedily.

obtained

stored

shall

be

in

a

Notwithstanding the principles

referred to in
2b.
Article 109(1), the authorising officer shall, throughout
the procedure, take particular care to ensure that the
effort required of an applicant for purposes of publica-
tion, documentation and the provision of other compul-
sory evidence pertaining to a grant is not dispropor-
tionate to the value of the grant to be awarded.

Amendment 117

Article 1, point 58

Article 116, paragraph 1 (Regulation (EC, Euratom) No 1605/2002)

Proposals

1.
shall be evaluated, on the basis of pre-
announced selection and award criteria, with a view to deter-
mining which proposals may be financed.

1.
Proposals shall be evaluated within two months on the
basis of pre-announced selection and award criteria, with a
view to determining which proposals may be financed.

Amendment 118

Article 1, point 58 a (new)

Article 116, paragraph 3 (Regulation (EC, Euratom) No 1605/2002)

(58a)
following:

In Article 116, paragraph 3 is replaced by the

The authorising officer responsible shall

inform
3.
applicants in writing of the decision concerning their
application and sign the contract after expiry of the
period referred to in Article 100(2a).

If the grant requested is not awarded, the institution
shall give the reasons for the rejection of the application,
with reference in particular to the selection and award
criteria already announced.

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Amendment 119

Article 1, point 58 b (new)

Article 117 (Regulation (EC, Euratom) No 1605/2002)

(58b) Article 117 is replaced by the following:

Article 117

1.
The pace of payments shall be determined by the
financial risks involved, the duration and progress of the
action or the costs incurred by the beneficiary. Payments
must be made within a reasonable period.

If the schedule of payments is laid down contractually or
by a decision, payments shall be made without any
further demand when they fall due. This shall be without
prejudice to Article 119(2).

In order to ascertain the financial risks, the author-
2.
the principles
taking account of
ising officer may,
referred to in Article 109(1), require the beneficiary of
the grant to submit an attestation by an independent
auditor. The implementing provisions may provide for
cases in which an attestation is to be obtained from an
in which an attestation is not
external auditor or
required.

Amendment 120

Article 1, point 58 c (new)

Article 118 (Regulation (EC, Euratom) No 1605/2002)

(58c) Article 118 is replaced by the following:

Article 118

The authorising officer responsible may, if other equally
effective ways of minimising risk are not available,
require the beneficiary to lodge a guarantee in advance in
order to limit the financial risks connected with the
payment of pre-financing.

Amendment 121

Article 1, point 58 d (new)

Article 119 (Regulation (EC, Euratom) No 1605/2002)

(58d) Article 119 is replaced by the following:

Article 119

1.
The amount of the grant shall not become final
until after the institution has accepted the final reports
and accounts, without prejudice to subsequent checks by
the
limitation period
institution.
the institution shall commence
(Article 73b) against
when the last payment is made. The limitation period
(Article 73b) against the beneficiary shall commence
when the amount of the grant becomes final.

In this

case

the

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Should the beneficiary fail to comply with his/her
2.
legal or contractual obligations or with obligations laid
down in the decision on the award of a grant, the grant
may be suspended, reduced or terminated in accordance
with the provisions provided for by the implementing
rules after the beneficiary has been given the opportunity
to make his/her observations.

Reductions must be proportionate to the error objected
to.

If the breach of duty is not due to the conduct of the
beneficiary, the grant shall be suspended, reduced or
terminated only in exceptional cases, particularly if
implementing or upholding the grant would result in the
ceiling for project costs eligible for financing being
exceeded or if the dereliction of duty has the effect of
making it impossible for the aim of the grant to be
achieved any longer.

Amendment 122

Article 1, point 59

Article 120, paragraph 1 (Regulation (EC, Euratom) No 1605/2002)

1. Where implementation of the action requires the award
of procurement contracts by the beneficiary, the relevant
procedures shall be as set out in the implementing rules.

1. Where implementation of the action requires the award
of procurement contracts, this shall be subject to the princi-
ples in Title V of this Part.

The implementing provisions may provide for arrangements
for a simplified procedure, depending on the size of the
contract.

Amendment 123

Article 1, point 61

Article 122 (Regulation (EC, Euratom) No 1605/2002)

In Article 122,

(61)
‘Article 121’.

‘Article 185’

is

replaced

by

(61)

Article 122 is replaced by the following:

Article 122

A report on budgetary and financial management in the
financial year concerned shall be attached to the accounts
of the institutions and of the bodies referred to in
Article 121, which gives an account, inter alia, of the
rate of implementation of the appropriations and of
transfers of appropriations among the various budget
items.

Amendment 124

Article 1, point 68 a (new)

Article 139, paragraph 2 (Regulation (EC, Euratom) No 1605/2002)

(68a)
following:

In Article 139, paragraph 2 is replaced by the

2.
The institutions shall forward their internal finan-
cial rules to the Court of Auditors and the budgetary
authority, for information.

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Amendment 125

Article 1, point 68 b (new)

Article 143, paragraph 3 (Regulation (EC, Euratom) No 1605/2002)

(68b)
following:

In Article 143, paragraph 3 is replaced by the

3.
The annual report shall contain an assessment of
the soundness of financial management. It shall contain
an evaluation of
efficiency and regularity of
budgetary and economic management.

the

Amendment 126

Article 1, point 75

Article 153, paragraph 1 (Regulation (EC, Euratom) No 1605/2002)

(75) In Article 153, paragraph 1 is

replaced by the

deleted

following:

1. Where the Commission may transfer appropria-
tions pursuant to Article 23, it shall take its decision
by 31 January of the following financial year at the
latest and shall inform the budgetary authority three
weeks before making the transfers
referred to in
point (a) of Article 23(1).

Amendment 127

Article 1, point 82 a (new)

Article 160 b (new) (Regulation (EC, Euratom) No 1605/2002)

(82a)

The following Article 160b is inserted:

Article 160b

Notwithstanding Article 110, a call for proposals may
already be published in the previous year, subject to the
availability of appropriations in the following year. Irre-
spective of the time of publication and notwithstanding
Article 115, the Commission shall indicate all the rules
which apply to the award of the grant (particularly the
exclusion criteria as referred to in Articles 93 and 94), in
which connection references to provisions are permissible.
Throughout the procedure, the rules to be applied shall
be binding in the version applicable at the time of the
announcement.

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Amendment 128

Article 1, point 85 a (new)

Article 168, paragraph 1, subparagraph 1 a (new) (Regulation (EC, Euratom) No 1605/2002)

(85a)
added:

In Article 168(1), the following subparagraph is

As regards Community external assistance, the rules for
the participation in tendering procedures laid down in
Regulation (EC) No 2110/2005 of the European Parlia-
ment and of the Council of 14 December 2005 on access
to Community external assistance (1) and Council Regu-
lation (EC) No 2112/2005 of 21 November 2005 on
access to Community external assistance (2) shall apply.

(1) OJ L 344, 27.12.2005, p. 1.
(2) OJ L 344, 27.12.2005, p. 23.

Amendment 129

Article 1, point 87

Article 169a, paragraph 1a (new) (Regulation (EC, Euratom) No 1605/2002)

The following, in particular, may be claimed as costs eligible
for financing:

(a) the costs of a bank guarantee or comparable surety to be
to

the grant pursuant

lodged by the beneficiary of
Article 118;

(b) the amounts of turnover tax which the beneficiary of the

grant cannot claim as a deduction of input tax;

(c) the costs of an external audit (Articles 117 and 119);

(d) the costs of administrative expenditure and staff and

equipment costs;

(e) depreciation.

Amendment 130

Article 1, point 94 a (new)

Article 179, paragraph 3, subparagraph 1 (Regulation (EC, Euratom) No 1605/2002)

(94a)
by the following:

In Article 179(3), the first subparagraph is replaced

3.
The institutions shall inform the two branches of
the budgetary authority as soon as possible, but at least
3 weeks prior to any deadline before which a decision has
to be taken by the budgetary authority, of any building
project likely to have significant financial implications
for the budget.

Amendment 131

Article 1, point 94 b (new)

Article 183, sentence 2 (new) (Regulation (EC, Euratom) No 1605/2002)

(94b)

In Article 183, the following sentence is added:

It shall seek the opinion of the budgetary authority and
take due account thereof, where appropriate.

30.11.2006

EN

Official Journal of the European Union

C 291 E/291

TEXT PROPOSED
BY THE COMMISSION

Wednesday, 15 March 2006

AMENDMENTS
BY PARLIAMENT

Amendment 132

Article 1, point 94 c (new)

Article 185, paragraph 1 (Regulation (EC, Euratom) No 1605/2002)

(94c)
following:

In Article 185, paragraph 1 is replaced by the

The Commission shall adopt a framework financial
1.
regulation for the bodies set up by the Union and having
legal personality. The financial rules governing these
bodies may not depart from the framework regulation
except where their specific operating needs so require and
with the Commission's prior consent.

Amendment 133

Article 1, point 95

Article 185, paragraph 3 (Regulation (EC, Euratom) No 1605/2002)

3.
Each body referred to in paragraph 1 shall establish an
internal audit function which must be performed in compli-
ance with the relevant international standards. The Commis-
sion's internal auditor shall certify that the operation of the
audit function respects international audit standards and, for
that purpose, may conduct quality audits.

3.
The Commission's internal auditor shall conduct the
audits for the bodies referred to in paragraph 1. The bodies
referred to in paragraph 1 may establish an internal audit
function. The Commission's internal auditor may, in duly
substantiated cases, delegate his task to their internal audi-
tors. This delegation shall be made in writing, setting out the
reasons for delegation and the names of the responsible audi-
tors (delegating and delegate). Notwithstanding the delega-
tion, the Commission's internal auditor may conduct internal
audits for the bodies referred to in paragraph 1 and revoke
the delegation at any time he thinks fit.

In cases in which an internal audit function is set up by the
bodies referred to in paragraph 1, it shall be performed in
compliance with guidelines established by the Commission's
internal auditor. These guidelines shall
include a duty to
submit all and any reports made to the Commission's
internal auditor. The Commission's internal auditor shall
certify that the operation of the audit function meets internal
audit standards and, for that purpose, may conduct quality
audits.

Amendment 134

Article 1, point 95

Article 185, paragraph 4 (Regulation (EC, Euratom) No 1605/2002)

4.
The bodies referred to in Article 121 shall apply the
accounting rules set out in Article 133 so that their accounts
can be consolidated with the Commission's accounts.

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