Proposal for a Council Decision on a Community position within the Ministerial Council of the Energy Community on certain procedural issues related to the budget of the Energy Community, on the procedural rules on acceptance of countries as Observers and rights and obligations of Observers to the Energy Community, and on the acceptance of Moldova, Ukraine, Norway and Turkey as Observers to the Energy Community
Date: 2006-11-14
Institutions: European Commission
Subjects: EU financing, EU office or agency, Moldova, Norway, Türkiye, Ukraine, energy policy, operation of the Institutions

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 14.11.2006 
COM(2006) 709 final 

Proposal for a 

COUNCIL DECISION 

on a Community position within the Ministerial Council of the Energy Community on 
certain procedural issues related to the budget of the Energy Community, on the 
procedural rules on acceptance of countries as Observers and rights and obligations of 
Observers to the Energy Community, and on the acceptance of Moldova, Ukraine, 
Norway and Turkey as Observers to the Energy Community 

(presented by the Commission) 

EN 

   EN 

 
 
 
  
EXPLANATORY MEMORANDUM  

On 17 November 2006, the first meeting of the Ministerial Council of the Energy Community 
will take place.  

The meeting will have a strong focus on the adoption of procedural acts that are envisioned in 
the Energy Community Treaty and are necessary for a smooth operation and functioning of 
the Energy Community. Under Article 88 of the Energy Community Treaty, acts related to 
budgetary issues are to be prepared and submitted in the Energy Community by the European 
Commission. 

Further point on the agenda of the Ministerial Council is the acceptance of Moldova, Ukraine, 
Norway and Turkey, upon their own request in accordance with Article 96 of the Energy 
Community Treaty, as Observers to the Energy Community.  

EN 

2 

   EN 

 
Proposal for a 

COUNCIL DECISION 

on a Community position within the Ministerial Council of the Energy Community on 
certain procedural issues related to the budget of the Energy Community, on the 
procedural rules on acceptance of countries as Observers and rights and obligations of 
Observers to the Energy Community, and on the acceptance of Moldova, Ukraine, 
Norway and Turkey as Observers to the Energy Community 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article 300 paragraph 2, second subparagraph, 

Having regard to the proposal from the Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Articles  74  and  88  of  the  Energy  Community  Treaty  provide  that  the  Ministerial 
Council  of  the  Energy  Community  shall  adopt  a  Procedural  Act  specifying  the 
Procedure  for  the  implementation  of  the  budget,  and  for  presenting  and  auditing 
accounts and inspection. 

Pursuant to Article 96 of the Energy Community Treaty, the Ministerial Council of the 
Energy  Community  may,  by  unanimity,  accept  a  neighbouring  third  country  as  an 
Observer. 

Pursuant to Article 86 of the Energy Community Treaty, the institutions of the Energy 
Community  are  empowered  to  take  Procedural  Acts  which  regulate  organizational, 
budgetary and transparency issues. 

Following  the  accession  of  Bulgaria  and  Romania  to  the  European  Union,  the 
contributions  from  these  countries  to  the  Energy  Community  budget,  foreseen  in 
Annex  IV  to  the  Energy  Community  Treaty,  will  be  borne  by  the  European 
Community  in  accordance  with  Article  6  of  the  Act  of  Accession1  and,  pursuant  to 
Article  99  of  the  Energy  Community  Treaty,  these  countries  become  Participants  in 
the Energy Community. 

1 

OJ L 157 from 21.6.2005, p. 203. 

EN 

3 

   EN 

 
                                                 
HAS DECIDED AS FOLLOWS: 

Article 1 

The position to be adopted by the Community within the Ministerial Council of the Energy 
Community on the Energy Community procedure for the implementation of the budget, and 
for  presenting  and  auditing  accounts  and  inspection,  is  that  defined  in  the  attached  draft 
Procedural  Act  on  adoption  of  Energy  Community  Procedures  for  the  establishment 
and implementation of budget, auditing and inspection, set out in Annex A. 

Article 2 

The position to be adopted by the Community within the Ministerial Council of the Energy 
Community  on  the  implementation  of  Annex  IV to  the  Energy  Community  Treaty  after  the 
accession of Bulgaria and Romania to the European Union is that defined in the attached draft 
Procedural  Act  on  the  implementation  of  Annex  IV  of  the  Treaty  establishing  the  Energy 
Community  with  respect  to  Bulgaria  and  Romania  becoming  Participants  of  the  Energy 
Community, set out in Annex B. 

Article 3 

The position to be adopted by the Community within the Ministerial Council of the Energy 
Community  on  the  procedural  rules  on  acceptance  of  countries  as  Observers  and  rights  and 
obligations  of  Observers  to  the  Energy  Community  is  that  defined  in  the  attached  draft 
Procedural Act on adoption of the Procedural rules on acceptance of countries as Observers to 
the Energy Community and on Rights and Obligations of Observers, set out in Annex C. 

Article 4 

The position to be adopted by the Community within the Ministerial Council of the Energy 
Community  with  regard  to  the  acceptance  of  Moldova,  Ukraine,  Norway  and  Turkey  as 
Observers to the Energy Community is that these countries shall be accepted as Observers to 
the Energy Community. 

Done at Brussels, 

For the Council 
The President 

EN 

4 

   EN 

 
 
 
ANNEX A 

Draft 

PROCEDURAL ACT OF THE MINISTERIAL COUNCIL OF THE ENERGY COMMUNITY 

2006/…../MC-EnC:  Ministerial  Council  Decision  of  17  November  2006  on  adoption  of 
Energy  Community  Procedures  for  the  Establishment  and  Implementation  of  Budget, 
Auditing and Inspection  

The Ministerial Council of the Energy Community, 

Having regard to the Treaty Establishing the Energy Community, and in particular Article 74 
thereof, 

Having regard to Article 88 of the Treaty Establishing the Energy Community, 

Having regard to the proposal, made by the European Commission, dated ……….., 

HAS DECIDED AS FOLLOWS: 

Article 1 

Adopts  the  Procedures  for  the  Establishment  and  Implementation  of  Budget  of  the  Energy 
Community, Auditing and Inspection presented in annex to this procedural act. 

Article 2 

The  Director  of 
implementation of these rules. 

the  Energy  Community  Secretariat  shall  be  responsible  for 

the 

Article 3 

This  decision  is  addressed  to  all  Parties  and  institutions  under  the  Treaty  Establishing  the 
Energy Community.  

Article 4 

The  Director  of  the  Energy  Community  Secretariat  shall  make  this  decision  and  its  annex 
available to all Parties and institutions under the Treaty Establishing the Energy Community 
within 7 days after its adoption. 

EN 

5 

   EN 

 
 
 
Article 5 

This decision shall enter into force upon adoption.  

Done at …………… (place), ……… (date).  

For the Ministerial Council 

……………… (signed by Presidency)  

EN 

6 

   EN 

 
 
 
 
Annex to the 

Procedural Act  

on  

Adoption of Energy Community Procedures for the Establishment and Implementation 
of Budget, Auditing and Inspection 

TITLE I 

SCOPE AND APPLICATION 

Article 1  

This  Procedural  Act  on  Budgetary  Issues  (hereinafter  “Rules”)  spells  out  the  essential 
financial rules for the administration of the Energy Community budget. 

TITLE II 

OBLIGATIONS OF THE PARTIES 

Article 2 

1.  Parties  assume  full  responsibility  for  the  operational  expenditure  of  the  Energy 
Community, by way of annual contributions as set out in Annex IV of the Treaty, 
as stipulated in the relevant article 74 of the Treaty.  

2.  The  annual  contributions  of  the  Parties  are  to  be  transferred  to  the  Energy 

Community budget during the first quarter of each budget year.  

3.  Annual contributions of the Parties to the Energy Community budget are  paid in 

Euros. 

4.  If  a  Party  fails  to  meet  its  obligation  to  the  Energy  Community,  the  Budget 
Committee  shall  report  to  the  Ministerial  Council  that  in  turn  determine  the 
existence of a breach by a Party pursuant to article 91 of the Treaty.   

EN 

7 

   EN 

 
 
 
 
 
 
TITLE III 

BUDGETARY PRINCIPLES 

Article 3 

The  establishment  and  implementation  of  the  budget  of  the  Energy  Community 
(hereinafter "the budget") shall comply with the principles of unity and budget accuracy, 
annuality,  equilibrium,  unit  of  account,  universality,  specification,  sound  financial 
management and transparency as provided for in these rules. 

CHAPTER 1 
PRINCIPLE OF UNITY AND BUDGET ACCURACY 

Article 4 

The  budget  is  the  instrument  which,  for  each  financial  year,  forecasts  and  authorises  the 
revenue and expenditure considered necessary for the functioning of the Energy Community 
and its relevant institutions.  

The budget shall comprise: 

Article 5 

a.  Revenue made up of the financial contributions by the Parties to the Treaty, in 

accordance with Article 2(1) of these Rules, 

b.  Revenue assigned to specific items of expenditure in accordance with Article 

15(1) of these Rules, 

c.  Carry over of the previous year in accordance with Article 10 of these Rules, 

d.  The expenditure of the Energy Community, in accordance in Article 74 of the 

Treaty, including administrative expenditure. 

Article 6 

1.  No revenue shall be collected and no expenditure effected unless booked to a line in 

the budget. 

EN 

8 

   EN 

 
 
 
 
2.  An  appropriation  must  not  be  entered  in  the  budget,  if  it  is  not  for  an  item  of 

expenditure considered necessary. 

3.  No  expenditure  may  be  committed  or  authorised  in  excess  of  the  appropriations 

authorised by the budget. 

CHAPTER 2 
PRINCIPLE OF ANNUALITY 

Article 7 

1.  According to Article 74 of the Treaty, the Ministerial Council adopts every two years 
the  budget  of  two  consecutive  years.  Each  year  is  covered  by  a  separate  budget 
endorsed by the Ministerial Council on an annual basis. 

2.  The  appropriations  entered  in  the  budget  shall  be  authorised  for  one  financial  year 

which shall run from 1 January to 31 December. 

Article 8 

1.  The  budget  shall  contain  administrative  appropriations  which  are  non-differentiated 
and which shall consist of commitment appropriations and payment appropriations. 

2.  Commitment  appropriations  shall  cover  the  total  cost  of  the  legal  commitments 

entered into during the current financial year. 

3.  Payment appropriations shall cover payments made to honour the legal commitments 

entered into in the current financial year and/or earlier financial years. 

4.  Administrative expenditure arising from contracts covering periods that extend beyond 
the financial year, either in accordance with local practice or relating to the supply of 
equipment, shall be charged to the budget of the financial year in which it is effected. 

Article 9 

1.  The revenue of the Energy Community referred to in Article 5 shall be entered in the 
accounts  for  the  financial  year  on  the  basis  of  the  amounts  collected  during  the 
financial year in accordance with Article 2(2) of these Rules. 

2.  The appropriations authorised in the budget for a relevant year may be used solely to 
cover expenditure committed and paid in that financial year, and to cover amounts due 
against commitments from the previous financial year 

3.  Commitments shall be entered in the accounts on the basis of the legal commitments 

entered into up to 31 December. 

4.  Payments  shall  be  entered  in  the  accounts  for  a  financial  year  on  the  basis  of  the 
payments effected by the accounting officer by 31 December of that year at the latest. 

EN 

9 

   EN 

 
 
 
 
 
 
 
1.  Appropriations  which  have  not  been  used  at  the  end  of  the  financial  year  for  which 
they were entered shall be carried over into the following budget year as revenue.  

Article 10 

2.  Appropriations carried over shall be identified respectively in the accounts. 

CHAPTER 3 
PRINCIPLE OF EQUILIBRIUM 

1.  The budget revenue and expenditure must be in balance. 

Article 11 

2.  The Energy Community may not raise loans. 

CHAPTER 4 
PRINCIPLE OF UNIT OF ACCOUNT 

Article 12 

The budget shall be drawn up and implemented in Euro and the accounts shall be presented in 
Euro. 

CHAPTER 5 
PRINCIPLE OF UNIVERSALITY 

Article 13 

Total revenue shall cover total expenditure. All revenue and expenditure shall be entered in 
full without any adjustment against each other. 

1.  Revenue  earmarked  for  specific  purposes  in  the  form  of  donations  (Other  income) 

shall be used only to finance them in accordance with these Rules. 

Article 14 

2.  All  items  of  revenue  within  the  meaning  of  paragraph  1  shall  cover  all  direct  or 

indirect expenditure incurred by the activity or purpose in question. 

3.  The  budget  shall  carry  lines  to  accommodate  the  categories  of  assigned  revenue 

referred to in paragraph 1 and shall indicate the amount. 

EN 

10 

   EN 

 
 
 
 
 
 
 
 
Article 15  

1.  The  Director  may  accept  donations  to  the Energy  Community  only  upon  in  advance 
agreement of the Budget Committee, based on written information about the amount 
and the purpose of the donation and the financial charges involved.  

2.  The yearly financial report to the Ministerial Council shall include explicit information 

on proposed and received donations and their usage.  

1.  The following deductions may be made from payment requests, invoices or statements, 

which shall then be passed for payment of the net amount: 

Article 16 

(a)  penalties imposed on parties to contracts, including procurement contracts; 

(b)  adjustments  for  amounts  paid  unduly,  which  can  be  made  by  means  of  direct 
deduction  against  a  new  payment  of  the  same  type  to  the  same  payee  under  the 
chapter, article and financial year in respect of which the excess payment was made, 
and which give rise to interim payments or payments of balances. 

2.  Discounts, refunds and rebates on invoices and payment requests shall not be recorded 

as revenue of the Energy Community. 

3.  Any negative balance shall be entered in the budget as expenditure. 

CHAPTER 6 
PRINCIPLE OF SPECIFICATION 

Article 17 

The  appropriations  in  their  entirety  shall  be  earmarked  for  specific  purposes  by  title  and 
chapter; the chapters shall be further subdivided into articles and items. 

Article 18 

1.  The  Director  shall  take  decisions  on  transfers  of  appropriations  [(excluding  human 
resources budget line)] within the lines of the budget within the a total limit of [10%] 
of the appropriations for the financial year.  

2.  The Director shall inform the Chairman of the Budget Committee within 7 days upon 

deciding on transfers in accordance with item 1 of this Article.  

EN 

11 

   EN 

 
 
 
 
 
 
 
 
 
 
3.  Other  transfers  than  those  referred  to  in  paragraph  1  have  to  receive  the  preliminary 

agreement of the Budget Committee. 

Article 19 

Appropriations corresponding to assigned revenue may be transferred only, if they are used 
for the purpose to which the revenue is assigned. Appropriations may be transferred only 
to budget lines for which the budget has authorised appropriations or carries a token entry. 

CHAPTER 7 
PRINCIPLE OF SOUND FINANCIAL MANAGEMENT 

Article 20 

1. 

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

2.  The principle of economy requires that the resources used by the Energy Community 
for  the  pursuit  of  its  activities  shall  be  made  available  in  due  time,  in  appropriate 
quantity and quality and at the best price.  

3.  The principle of efficiency is concerned with the best relationship between resources 

employed and results achieved. 

4.  The  principle  of  effectiveness  is  concerned  with  attaining  the  specific  objectives  set 

and achieving the intended results. These results shall be evaluated. 

5.  The  annual  work  programme  of  the  Energy  Community  adopted  by  the  Ministerial 

Council shall contain objectives and performance indicators. 

CHAPTER 8 
PRINCIPLE OF TRANSPARENCY 

Article 21 

1.  The  budget  shall  be  drawn  up  and  implemented  and  the  accounts  presented  in 

compliance with the principle of transparency. 

2.  The  budget  and  amending  budgets,  as  finally  adopted,  shall  be  published  on  the 

website of the Energy Community Secretariat. 

EN 

12 

   EN 

 
 
 
 
 
 
 
 
 
TITLE IV 

BUDGET COMMITTEE 

1.  A Budget Committee is hereby established. 

Article 22 

2.  The Budget Committee supervises and advises the Director in the financial management 
of  the  operations  of  the  Energy  Community  and,  in  case  of  disagreement  with  the 
Director, reports to the Ministerial Council in accordance with these rules. 

3.  The  Director  shall  inform  regularly  the  Budget  Committee  on  all  matters  relating  to 
budgetary  and  financial  management.  The  Budget  Committee  shall  be  empowered  to 
obtain any necessary information or explanations regarding budgetary matters. 

1. 

2. 

3. 

Article 23 

The Budget Committee of the Energy Community shall consist of one member 
from each of the Contracting Parties and two members of the European Community, 
represented by the European Commission.  

The  European  Community  and  each  Contracting  Party  nominate  their 

representatives. The term of office of the Budget Committee is 2 years. 

Meetings  of  the  Budget  Committee  will  be  chaired  by  the  European 

Commission. The Chairperson may appoint a Co-chair.  

4.  The Budget Committee shall hold at least four ordinary meetings a year. In addition it 
shall meet at the instance of the Chairperson or at the request of at least one third of its 
members  

5.  The Budget Committee shall adopt its internal rules of procedure. Its decisions may be 
taken  by  written  procedure.  Budget  Committee  shall  act  by  simple  majority  of  the 
votes including the positive vote of the European Community. In case of a equal votes, 
the European Community shall have the deciding vote.  

6.  The Secretariat of the Budget Committee shall be provided by the Energy Community 

Secretariat.  

7.  The Energy Community Secretariat shall be represented at the meetings of the Budget 

Committee without voting rights. 

EN 

13 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
TITLE V 

ESTABLISHMENT AND STRUCTURE OF THE BUDGET 

CHAPTER 1 

ESTABLISHMENT OF THE BUDGET 

Article 24 

The budget shall be established in accordance with the Article 74 and 75 of the Treaty. It shall 
cover  the  operational  expenses  of  the  Energy  Community  necessary  for  functioning  of  its 
institutions  in  accordance  with  t  he  tasks  of  those  defined  in  Title  V  ("Institutions  of  the 
Energy Community") of the Treaty. The expenditure of each Institution shall be set out in a 
different part of the budget. 

Article 25 

1.  For each year, the Director of the Energy Community Secretariat shall propose to the 
European  Commission  an  estimate  of  the  revenue  and  expenditure  of  the  Energy 
Community of year N+1, by 31 March each year at the latest. This proposal shall be 
accompanied by explanatory general budgetary assumptions.  

2.   The  European  Commission  shall  submit  this  estimate  to  the  Ministerial  Council  and 
propose  the  amount  of  the  appropriations  for  the  Energy  Community  in  accordance 
with Annex IV of the Treaty. It shall also propose the number of staff of the Secretariat 
it  considers  that  the  Energy  Community  needs  to  carry  out  the  tasks  given  under  the 
Treaty in the budget period in question. 

3.  The budget proposal of the Energy Community , in addition to the stipulations of point 

(2) above, shall contain the following:  

a.  Outline  of  the  work  programme  of  the  Energy  Community  for  the  budget 

period in question.  

EN 

14 

   EN 

 
 
 
 
 
 
 
 
 
b.  An  establishment  plan  setting  the  number  of  permanent  and  temporary  posts 

authorised within the limits of the budget appropriations; 

c.  a statement justifying the request for new posts- where there is a change in the 

number of persons in post. 

Article 26 

Any  required  amendment  to  the  budget  related  to  the  estimated  expenditures,  including  the 
number  staff  of  the  Secretariat,  shall  be  subject  of  an  amended  budget  adopted  by  the 
Ministerial Council by the same procedure as the initial budget.  

CHAPTER 2 
STRUCTURE AND PRESENTATION OF THE BUDGET 

Article 27 

The budget shall comprise a statement of revenue and a statement of expenditure.  

Article 28 

The budget shall show: 

1. 

In the statement of revenue: 

a.  The  estimated  revenue  of  the  Energy  Community  for  the  financial  year  in 

question;  

b.  The estimated revenue of the Energy Community for the preceding  financial 

year;  

c.   

Appropriate remarks on each revenue line; 

2. 

In the statement of expenditure: 

a.  Appropriations for the financial year in question; 

b.  Appropriations for the preceding financial year;  

c.   

Appropriate remarks on each subdivision. 

EN 

15 

   EN 

 
 
 
 
 
Article 29 

The  establishment  plan  referred  to  in  Article  24  shall  show  next  to  the  number  of  posts 
authorised for the financial year, the number authorised for the preceding year and the number 
of posts actually filled. 

It shall constitute an absolute limit for the Energy Community; no appointment may be made 
in excess of the limit set.  

Article 30 

The draft Budget presented for adoption to the Ministerial Council shall contain an explanatory 
memorandum prepared by the Director and agreed by the European Commission setting out the 
considerations which have guided the preparation of the budget, together with a summary table 
showing the proposed appropriations apportioned by the major items of the Energy Community 
expenditure. 

EN 

16 

   EN 

 
 
TITLE VI 

IMPLEMENTATION OF THE BUDGET 

CHAPTER 1 
GENERAL PROVISIONS 

Article 31 

The Director shall perform the duties of authorising officer. He shall implement the budget in 
compliance  with  these  rules  on  the  ground  of  Article  74  of  the  Treaty,  on  his  own 
responsibility and within the limits of the appropriations authorised. 

Article 32 

1.  The  Director  may  delegate  his  powers  of  budget  implementation  to  staff  of  the 
Secretariat.  Those  so  empowered  may  act  only  within  the  limits  of  the  powers 
expressly conferred upon them. 

Article 33 

1.  All financial actors within the meaning of Chapter 2 of this Title shall be prohibited 
from  taking  any  measures  of  budget  implementation  which  may  bring  their  own 
interests into conflict with those of the Energy Community. Should such a case arise, 
the  actor  in  question  must  refrain  from  such  measures  and  refer  the  matter  to  the 
competent authority. 

2.  There  is  a  conflict  of  interests  where  the  impartial  and  objective  exercise  of  the 
functions  of  an  actor  in  the  implementation  of  the  budget  or  an  internal  auditor  is 
compromised  for  reasons  involving  family,  emotional  life,  political  or  national 
affinity,  economic  interest  or  any  other  shared  interest  with  the  beneficiary  or 
contractor. 

3.  The competent authority referred to in paragraph 1 shall be the immediate superior of 
the member of staff concerned. If the member of staff is the Director, the competent 
authority shall be the Chairperson of the Budget Committee. 

Article 34 

Technical  expertise  tasks  and  administrative,  preparatory  or  ancillary  tasks  involving 
neither the exercise of public authority nor the use of discretionary powers of judgement 
may be entrusted by contract to external private-sector entities or bodies, where this proves 
to be indispensable. 

EN 

17 

   EN 

 
 
 
 
CHAPTER 2 
FINANCIAL ACTORS 

SECTION 1 
PRINCIPLE OF SEGREGATION OF DUTIES 

Article 35 

The  duties  of  authorising  officer  and  accounting  officer  shall  be  segregated  and  mutually 
incompatible. 

SECTION 3 
AUTHORISING OFFICER 

Article 36 

1.  The authorising officer shall be responsible for implementing revenue and expenditure 
in accordance with the budgetary principles as described in Title III of this Procedural 
Act,  and  for  ensuring  that  the  requirements  of  legality  and  regularity  are  complied 
with. 

2.  To  implement  expenditure,  the  authorising  officer  shall  make  budget  commitments 
and  legal  commitments,  shall  validate  expenditure  and  authorise  payments  in 
accordance with the relevant provisions of this Procedural Act, and shall undertake the 
preliminaries for the implementation of appropriations. 

3. 

Implementation  of  revenue  shall  comprise  drawing  up  estimates  of  amounts 
receivable,  establishing  entitlements  to  be  recovered  and  issuing  recovery  orders.  It 
shall involve waiving established entitlements where appropriate. 

4.  The  authorising  officer  shall  assure  that  all  the  supporting  documents  related  to 
operations carried out for a period of five years from the date of the decision granting 
discharge in respect of implementation of the budget are properly preserved. 

Article 37 

1.  Having due regard to the risks associated with the management environment and the 
nature  of  the  actions  financed,  the  authorising  officer  shall  put  in  place  the 
organisational  structure,  internal  management,  control  systems  and  procedures 
(hereinafter  “Internal  Management  Rules  of  the  Energy  Community”)  suited  to  the 
performance of his duties, including where appropriate ex post verifications 

2.  Before  an  operation  is  authorised,  the  operational  and  financial  aspects  shall  be 
verified by members of staff other than the one who initiated the operation. Initiation 
and the ex ante and ex post verification of an operation shall be separate functions.  

EN 

18 

   EN 

 
 
 
 
 
 
3.  The  staff  responsible  for  the  verifications  shall  be  different  from  those  initiating  the 

operation and shall not be their subordinates. 

Article 38 

The Director, as authorising officer, shall report to Ministerial Council and inform the Budget 
Committee  on  the  performance  of  his  duties  in  the  form  of  an  annual  activity  report 
(hereinafter  "Authorising  officer's  report"),  together  with  financial  and  management 
information.  

Article 39 

Any member of staff involved in the financial management and control of transactions who 
considers that a decision he is required by his superior to apply or to agree to is irregular or 
contrary  to  the  budgetary  principles,  as  defined  in  Title  III  of  this  Procedural  Act,  or  the 
professional  rules  he  is  required  to  observe  shall  inform  the  Director  in  writing  and,  if  the 
latter fails to take action within a reasonable period, the Budget Committee. In the event of 
evidence  of  any  illegal  activity,  fraud  or  corruption  which  may  harm  the  interests  of  the 
Community,  he  shall  inform  the  authorities  and  bodies  designated  by  the  applicable 
legislation of the domicile country. 

Where powers of budget implementation are delegated, Article 36 of these Rules shall apply 
mutatis mutandis to the authorised officers. 

Article 40 

SECTION 3 
ACCOUNTING OFFICER 

Article 41 

1.  Upon proposal of the European Commission, the Director shall appoint an accounting 
officer, in accordance with the Procedural Act applicable to Rules for the recruitment, 
working  conditions  and  geographic  equilibrium  of  the  Secretariat,  who  shall  be 
responsible in the Secretariat for: 

a.  Proper  implementation  of  payments,  collection  of  revenue  and  recovery  of 

amounts established as being receivable; 

b.  Preparing and presenting the accounts in accordance with Title VI; 

c.  Keeping the accounts in accordance with Title VI; 

d.  Implementing, in accordance with Title VI, the accounting rules and methods 

and the chart of accounts; 

EN 

19 

   EN 

 
 
 
 
e.  Laying  down  and  validating  the  accounting  systems  and  where  appropriate 
validating  systems  laid  down  by  the  authorising  officer  to  supply  or  justify 
accounting information; 

f.  Treasury management. 

2.  Subject paragraph 3 the accounting officer is alone empowered to manage monies and 

other assets. He shall be responsible for their safekeeping. 

3. 

If  necessary,  the  accounting  officer  may  delegate  certain  tasks,  with  respect  to  the 
principle of segregation of duties.  

CHAPTER 3 
LIABILITY OF THE FINANCIAL ACTORS 

SECTION 1 
GENERAL RULES 

Article 42 

1.  The responsibility under these Rules is personal.  

2.  Any member of staff may be required to make good, in whole or in part, any damage 
suffered by the Energy Community as a result of misconduct on his part in the course 
of or in connection with the performance of his duties assigned to him in accordance 
with the relevant duty description.  

1. 

2. 

Article 43 

 Without prejudice to any disciplinary action, the authorising officer may withdraw any 
delegation  at  any  time  temporarily  or  definitively.  The  Chairman  of  the  Budget 
Committee  shall  be  immediately  informed  for  such  an  action  with  a  proper 
justification.  

 Without prejudice to any disciplinary action, the accounting officer may at any time be 
suspended  temporarily  or  definitively  from  his  duties  by  the  Director,  upon 
preliminary agreement of 
 the  European  Commission.  On  a  proposal  of  the 
European  Commission,  the  Director  shall  appoint  an  interim  accounting  officer  and 
consequently a permanent accounting officer in accordance with the recruitment rules 
of the Energy Community.   

EN 

20 

   EN 

 
 
 
 
 
 
 
Article 44 

1.  

  The  provisions  of  this  chapter  are  without  prejudice  to  the  criminal  law  liability 
which the authorising officer and the persons referred to in this Chapter may incur as 
provided in the applicable national law of the domicile country and in the provisions in 
force on the protection of the Energy Communities' financial interests and on the fight 
against  corruption  involving  officials  of  the  Energy  Community  or  officials  of  the 
Parties. 

2.     Any  person,  who  has  authority  under  these  Rules,  shall  be  respectively  liable  to 
disciplinary  action  in  accordance  with  them  and/or  the  applicable  legislation  of  the 
domicile country. In the event of evidence of illegal activity, fraud or corruption which 
may  harm  the  interests  of  the  Energy  Community,  the  matter  will  be  referred  to  the 
competent authorities and bodies. 

SECTION 2 
RULES APPLICABLE TO THE AUTHORISING OFFICER  

Article 45 

1. 

 The  authorising  officer  may  be  required  to  make  good,  in  whole  or  in  part,  any 
damage  suffered  by  the  Energy  Community  as  a  result  of  serious  misconduct  on  his 
part in the course of or in connection with the performance of his duties, in particular 
if  he  determines  entitlements  to  be  recovered  or  issues  recovery  orders,  commits 
expenditure or signs a payment order without complying with this Procedural Act. The 
same shall apply where, through serious misconduct, he fails to draw up a document 
establishing an amount receivable or if he fails to issue a recovery order or is, without 
justification, late in issuing it, or if he fails to issue a payment order or is late in issuing 
it, thereby rendering the Energy Community liable to civil action by third parties. 

2.  An  authorising  officer  by  delegation  who  considers  that  a  decision  falling  under  his 
responsibility is irregular or contrary to the principles of sound financial management 
shall inform the delegating authority in writing. If the delegating authority then gives a 
reasoned  instruction  in  writing  to  the  authorising  officer  by  delegation  to  implement 
the decision in question, the latter must implement it and may not be held liable. 

3. 

In the event of delegation, the authorising officer shall continue to be responsible for 
the effectiveness of the internal management rules put in place and for the choice of 
the authorising officer by delegation. 

4.  The Authorising officer shall not be held responsible for any rulings, provided by the 
Budget  Committee  and/or  the  Ministerial  Council,  in  case  they  are  strictly  followed. 
Should the Authorising officer disagree with any of these rulings, he has the right to 
notify the relevant authority in writing. However, he is obliged to follow the relevant 
rulings. 

EN 

21 

   EN 

 
 
 
 
 
 
SECTION 3 
RULES APPLICABLE TO THE ACCOUNTING OFFICER 

In case of misconduct, the accounting officer may be liable to disciplinary action, in particular 
but not exclusively, where: 

Article 46 

a.  he  loses  or  damages  money,  assets  and  documents  in  his  keeping  or  causes 

them to be lost or damaged by his negligence; 

b.  he  alters  bank  accounts  or  postal  giro  accounts  without  notifying  the 

authorising officer in advance; 

c.  he  recovers  or  pays  amounts  which  are  not  in  conformity  with  the 

corresponding recovery or payment orders; 

d.  he fails to take all necessary measures to collect revenue due. 

CHAPTER 4 
REVENUE OPERATIONS 

SECTION 1 
GENERAL PROVISIONS 

Article 47 

The Energy Community shall receive contributions from the Parties as laid down in Article 2 
of this document.  

The funds paid to the Energy Community by the Parties shall bear interest for the benefit of 
the Energy Community budget. 

Article 48 

EN 

22 

   EN 

 
 
 
 
SECTION 2 
ESTIMATE OF AMOUNTS RECEIVABLE 

Article 49 

An estimate of the amount receivable shall first be made by the authorising officer responsible 
in respect of any measure or situation which may give rise to or modify an amount owing to 
the Community body. 

SECTION 3 
ESTABLISHMENT OF AMOUNTS RECEIVABLE 

Article 50 

1. 

Establishment of an amount receivable is the act by which the authorising officer or 
authorising officer by delegation: 

(a) 

verifies that the debt exists; 

(b)  determines or verifies the reality and the amount of the debt; 

(c) 

verifies the conditions in which the debt is due.  

2. 

3. 

4. 

Any amount receivable that is identified as being certain, of a fixed amount and due 
must be established by a recovery order given to the accounting officer, accompanied 
by  a  debit  note  sent  to  the  debtor.  Both  of  these  documents  shall  be  drawn  up  and 
sent by the authorising officer responsible. 

Without  prejudice  to  the  provisions  laid  down  in  the  rules,  contract  or  agreement 
applicable, any debt not repaid on the due date laid down in the debit note shall bear 
interest. 

In  duly  substantiated  cases,  certain  routine  revenue  items  may  be  established 
provisionally. 

Provisional  establishment  shall  cover  the  recovery  of  several  individual  amounts 
which need not therefore be established individually. 

Before the end of the financial year, the authorising officer shall amend the amounts 
established  provisionally  to  ensure  that  they  correspond  to  the  amounts  receivable 
actually established. 

EN 

23 

   EN 

 
 
Article 51 

The authorisation of recovery is the act whereby the authorising officer responsible instructs 
the  accounting  officer,  by  issuing  a  recovery  order,  to  recover  an  amount  receivable  which 
he/she has established. 

1. 

2. 

3. 

4. 

5. 

1. 

2. 

Amounts wrongly paid shall be recovered. 

Article 52 

The  accounting  officer  shall  act  on  recovery  orders  for  amounts  receivable  duly 
established by the authorising officer or authorising officer responsible. He/she shall 
exercise due diligence to ensure that the Energy Community receives its revenue and 
shall see that its rights are safeguarded. 

Where  the  authorising  officer  responsible  is  planning  to  waive  recovery  of  an 
established  amount  receivable,  he/she  shall  ensure  that  the  waiver  is  in  order  and 
complies with the principle of sound financial management. 

Such  a  waiver  shall  be  by  decision  of  the  authorising  officer,  which  must  be 
substantiated. The authorising officer may not delegate such a decision. 

The waiver decision shall state what action has been taken to secure recovery and the 
points of law and fact on which it is based.  

The  authorising  officer  responsible  shall  cancel  an  established  amount  receivable 
when the discovery of a mistake as to a point of law or fact reveals that the amount 
had  not  been  correctly  established.  Such  cancellation  shall  be  by  decision  of  the 
authorising officer responsible and shall be suitably substantiated.  

The  authorising  officer  responsible  shall  adjust  the  amount  of  an  established  debt 
upwards or downwards when the discovery of a factual error entails the alteration of 
the amount of the debt, provided that this correction does not involve the loss of the 
established  entitlement  of  the  Energy  Community.  Such  an  adjustment  shall  be  by 
decision of the authorising officer responsible and shall be suitably substantiated. 

Article 53 

Upon actual recovery of the sum due, the accounting officer shall make an entry in 
the accounts and shall inform the authorising officer responsible.  

A  receipt  shall  be  issued  in  respect  of  all  cash  payments  made  to  the  accounting 
officer. 

EN 

24 

   EN 

 
Article 54 

1. 

2. 

If actual recovery has not taken place by the due date stipulated in the debit note, the 
accounting  officer  shall  inform  the  authorising  officer  responsible  and  immediately 
launch  the  procedure  for  effecting  recovery  by  any  means  offered  by  the  law, 
including,  where  appropriate,  by  offsetting  and,  if  this  is  not  possible,  by  enforced 
recovery.  

The  accounting  officer  shall  recover  amounts  by  offsetting  them  against  equivalent 
claims that the Energy Community has on any debtor who himself has a claim on the 
Community body that is certain, of a fixed amount and due, provided that offsetting 
is legally possible. 

Article 55 

The  accounting  officer,  in  collaboration  with  the  authorising  officer  responsible,  may  allow 
additional time for payment only at the written request of the debtor, with due indication of 
the reasons, provided that the following two conditions are met: 

(a) 

(b) 

the  debtor  undertakes  to  pay  interest  at  the  rate  specified  for  the  entire  additional 
period allowed, starting from the date on which the payment was originally due; 

in  order  to  safeguard  the  rights  of  the  Energy  Community,  the  debtor  provides  a 
financial guarantee covering both the principal sum and the interest. 

CHAPTER 5 
EXPENDITURE OPERATIONS 

Article 56 

1.  Every item of expenditure shall be committed, validated, authorised and paid. 

2.  Every commitment of expenditure shall be preceded by a justified financing decision. 

3.  The work programme of the Energy Community shall be equivalent to the financing 
decisions for  the activities it covers, provided that they are clearly identified and the 
underlying criteria are spelled out precisely.  

4.  Administrative  appropriations  related  to  the  every-day  operations  of  the  Energy 
community and its institutions may be implemented without a prior financing decision. 

EN 

25 

   EN 

 
 
 
 
 
SECTION 1 
COMMITMENT OF EXPENDITURE 

Article 57 

1.  The  budget  commitment  is  the  operation  reserving  the  appropriation  necessary  to 

cover subsequent payments to honour a legal commitment. 

2.  The  legal  commitment  is  the  act  whereby  the  authorising  officer  responsible  enters 

into or establishes an obligation which results in a charge for the budget. 

3.  The  budget  commitment  is  individual  when  the  beneficiary  and  the  amount  of  the 

expenditure are known.  

4.  The  budget  commitment  is  global  when  at  least  one  of  the  elements  necessary  to 

identify the individual commitment is still not known. 

Article 58 

1. 

In  respect  of  any  measure  which  may  give  rise  to  expenditure  chargeable  to  the 
budget,  the  authorising  officer  responsible  must  first  make  a  budget  commitment 
before entering into a legal obligation with third parties. 

2. 

Individual  legal  commitments  relating  to  individual  budget  commitments  shall  be 
concluded by 31 December of the current financial year. 

3.  The  legal  commitments  entered  into  for  actions  extending  over  more  than  one 
financial  year  and  the  corresponding  budget  commitments  shall,  save  in  the  case  of 
officials expenditure, have a final date for implementation set in compliance with the 
principle of sound financial management. 

Article 59 

1.  In  respect  of  any  measure  which  may  give  rise  to  expenditure  chargeable  to  the 
budget,  the  authorising  officer  responsible  must  first  make  a  budget  commitment 
before entering into a legal obligation with third parties. 

2.  Global budget commitments shall cover the total cost of the corresponding individual 

legal commitments concluded up to 31 December of year n + 1. 

3.  Individual  legal  commitments  relating  to  individual  budget  commitments  shall  be 

concluded by 31 December of year N. 

EN 

26 

   EN 

 
 
 
 
 
 
 
 
4.  At the end of the periods referred to in the paragraphs 2 and 3, the unused balance of 
these  budget  commitments  shall  be  decommitted  by  the  authorising  officer 
responsible. 

5.  The  legal  commitments  entered  into  for  actions  extending  over  more  than  one 
financial  year  and  the  corresponding  budget  commitments  shall,  save  in  the  case  of 
staff  expenditure,  have  a  final  date  for  implementation  set  in  compliance  with  the 
principle of sound financial management. 

Any parts  of such  commitments which have not been executed six months after that 
final date shall be decommitted  

6.  Where a legal commitment has not then resulted in a payment after a period of three 

years, the authorising officer responsible shall decommit it. 

When adopting a budget commitment, the authorising officer responsible shall ensure that: 

Article 60 

b.  The expenditure has been charged to the correct item in the budget; 

c.  The appropriations are available; 

d.  The  expenditure  conforms  to  the  applicable  provisions,  in  particular  those  of 
the  Treaty,  the  internal  management  rules  of  the  institutions  of  the  Energy 
Community;  

e.  The principle of sound financial management is complied with. 

SECTION 2 
VALIDATION OF EXPENDITURE 

Article 61 

Validation of expenditure is the act whereby the authorising officer responsible: 

a.  Verifies the existence of the creditor's entitlement; 

b.  Verifies the conditions in which payment is due; 

c.  Determines or verifies the reality and the amount of the claim. 

Article 62 

1.  Validation  of  any  expenditure  shall  be  based  on  supporting  documents  attesting  the 
creditor's  entitlement,  on  the  basis  of  a  statement  of  services  actually  rendered, 
supplies  actually  delivered  or  work  actually  carried  out,  or  on  the  basis  of  other 
documents justifying payment.  

EN 

27 

   EN 

 
 
2.  The validation decision shall be expressed by the signing of a "passed for payment" 

voucher by the authorising officers responsible. 

SECTION 3 
AUTHORISATION OF EXPENDITURE 

Article 63 

1.  Authorisation of expenditure is the act whereby the authorising officer responsible, 
by  issuing  a  payment  order,  instructs  the  accounting  officer  to  pay  an  item  of 
expenditure which he has validated. .  

2.  The payment order shall be dated and signed by the authorising officer responsible, 
then sent to the accounting officer. The supporting documents shall be kept by the 
authorising officer responsible in accordance with Article 36(4). 

3.  Where  appropriate,  the  payment  order  sent  to  the  accounting  officer  shall  be 
accompanied  by  a  document  certifying  that  the  goods  have  been  entered  in  the 
inventories referred to in Article 71. 

SECTION 4 
PAYMENT OF EXPENDITURE 

Article 64 

1.  Payment shall be made on production of proof that the relevant action has been 

carried out in accordance with the provisions of the basic act and shall cover one of 
the following operations: 

a.   

b.   

Payment of the entire amount due; 

Payment of the amount due in any of the following ways: 

i.  pre-financing, which may be divided into a number of payments;  

ii.   

one or more interim payments;  

iii.   

payment of the balance of the amounts due. 

Pre-financing shall count in full or in part against the interim payments. 

The  entire  pre-financing  and  interim  payments  shall  count  against  the  payment  of 
balances. 

EN 

28 

   EN 

 
 
 
 
 
2.  A distinction shall be made in the accounts between the different types of payment 

referred to in paragraph 1 at the time they are made. 

3.  The validation, authorisation and payment of expenditure must be carried out within 
the time-limits specified in - and in accordance with the provisions of - the detailed 
rules for implementation provided for in Article 88. 

Payment of expenditure shall be made by the accounting officer within the limits of the funds 
available. 

Article 65 

EN 

29 

   EN 

 
 
TITLE VII 

PROCUREMENT AND GRANTS 

Article 66 

As  regards  procurement,  the  relevant  provisions  for  public  procurement  of  the  domicile 
country shall apply. 

The Energy Community Secretariat may not award grants. 

Article 67 

TITLE VIII 

PRESENTATION OF THE ACCOUNTS AND ACCOUNTING 

CHAPTER 1 
PRESENTATION OF THE ACCOUNTS 

Article 68 

The annual accounts of the Energy Community shall comprise: 

a.  The financial statements of the Energy Community  

b.  The report on implementation of the budget of the Energy Community  

c.  The  annual  accounts  of  the  Energy  Community  shall  by  accompanied  by 
explanations  referring  to  the  financial  statements,  consisting  of  the  balance 
sheet, income statement as well as assets analysis of the Energy Community.  

The  accounts  must  comply  with  the  fundamental  accounting  rules  and  be  accurate  and 
comprehensive and present a true and fair view: 

Article 69 

EN 

30 

   EN 

 
 
 
a.  as  regards  the  financial  statements,  of  the  assets  and  liabilities,  charges  and 
income, entitlements and obligations not shown as assets or liabilities and cash 
flow; 

b.  as  regards  report  on  budget  implementation,  of  revenue  and  expenditure 
operations 

The  financial  statements  shall  be  drawn  up  in  accordance  with  the  generally  accepted 
accounting principles, namely: 

Article 70 

a.  Going concern; 

b.  Prudence; 

c.  Consistent accounting methods; 

d.  Comparability of information; 

e.  Materiality[]; 

f. 

 No netting; 

g.  Fair presentation; 

h.  Accrual-based accounting. 

Article 71 

1. 

In  accordance  with  the  principle  of  accrual-based  accounting  revenue  and 
expenses are recorded in the period in which they are earned or incurred regardless of 
the date of payment or collection.  

2.  The  value  of  assets  and  liabilities  shall  be  determined  in  accordance  with  the 
valuation  rules  laid  down  by  the  accounting  methods  provided  for  in  International 
Accounting Standard and, if necessary, in National standards of the domicile country.  

Article 72 

1.  The financial statements shall be presented in Euro and shall comprise: 

a.  The  balance  sheet  and  the  income  statement,  which  represent  the  assets  and 
liabilities and result of the financial year at 31 December in comparison with 
the previous year; 

b.  The cash-flow statement showing amounts collected and disbursed during the 

year and the final treasury position; 

EN 

31 

   EN 

 
 
 
 
c.  The statement of changes in equity during the financial year. 

2.   The  annex  to  the  financial  statements  shall  supplement  and  comment  on  the 
information presented in the statements referred to in paragraph 1 and shall supply 
all  the  additional  information  prescribed  by  internationally  accepted  accounting 
practice where such information is relevant to the Energy Community's activities. 

CHAPTER 2 
ACCOUNTING 

SECTION 1 
COMMON PROVISIONS 

Article 73 

1.  The  accounting  system  of  the  Energy  Community  is  the  set  of  manual  and 
identifying  relevant 
computerized  procedures  and  controls 
transactions  or  events;  preparing  accurate  source  documents,  entering  data  into  the 
accounting  records  accurately,  processing  transactions  accurately,  updating  master 
files properly, and generating accurate documents and reports. 

that  provide  for 

2.  The accounts shall consist of general accounts and budget accounts. These accounts 

shall be kept in Euro on the basis of the calendar year. 

3.  The figures in the general accounts and the budget accounts shall be adopted at the 
close of the budget year so that the accounts referred to in Chapter 1 can be drawn up. 

4.  The accounting officer shall adopt accounting rules and methods which take account 
of  the  internationally  accepted  accounting  standards  for  the  public  sector,  and  if 
necessary  of  the  rules  applied  by  the  public  authorities  of  the  [domicile  country]  or 
[European Communities]. 

SECTION 2 
GENERAL ACCOUNTS 

Article 74 

The general accounts shall record, in chronological order using the double entry method, all 
events  and  operations  which  affect  the  economic  and  financial  situation  and  the  assets  and 
liabilities of the Energy Community.  

EN 

32 

   EN 

 
 
 
 
 
 
 
1.  Movements on the accounts and the balances shall be entered in the accounting 

ledgers. 

Article 75 

2.  All accounting entries, including adjustments to the accounts, shall be based on 

supporting documents, to which they shall refer. 

3.  The accounting system must be such as to leave a trail for all accounting entries. 

Article 76 

The accounting officer of the Energy Community shall, after the close of the budget year and 
up  to  the  date  of  presentation  of  the  final  accounts,  make  any  adjustments  which,  without 
involving disbursement or collection in respect of that year, are necessary for a true and fair 
presentation of the accounts in compliance with these rules. 

SECTION 3 
BUDGET ACCOUNTS 

Article 77 

1.  The budget accounts shall provide a detailed record of budget implementation. 

2.  For the purposes of paragraph 1, the budget accounts shall record all budget revenue 

and expenditure operations provided for in Title V of these rules. 

CHAPTER 3 

PROPERTY INVENTORIES 

Article 78 

The Energy Community shall keep inventories showing the quantity and value of all the 
tangible, intangible and financial assets constituting Energy Community property. 

EN 

33 

   EN 

 
 
 
 
 
 
 
 
 
TITLE IX 

EXTERNAL AUDIT AND DISCHARGE 

CHAPTER 1 
EXTERNAL AUDIT 

Article 79 

Each year, the accounting officer establishes the accounts of the previous year no later than 
the 31 March. These accounts are validated by the Director. 

Article 80 

The  Director  shall,  subject  to  approval  by  the  Budget  Committee,  designate  an  independent 
External Auditor to carry out the annual audit of the Energy Community as defined under the 
Treaty, the Terms of Reference for which shall also be approved by the Budget Committee. The 
term of service of the External Auditors is renewable every year, unless otherwise specified by 
the Ministerial Council. 

Article 81 

1.  The  External  Auditors  shall  submit  to  the  Ministerial  Council  and  the  Budget 
Committee a report, together with the statement of assets and liabilities and certified 
accounts, not later than eight months after the end of the financial year to which they 
relate. 

2.  The  Director  shall  make  such  observations  as  he  considers  appropriate  on  the 

External Auditors' report. 

3.  The External Auditors shall conduct such audits as deemed necessary, in accordance 
with  their  approved  Terms  of  Reference  The  External  Auditors  shall,  in  particular, 
inspect  the  accounting  records  and  procedures  of  the  Energy  Community  for  the 
purpose of verifying the accuracy and completeness of the records. The external audit 
determines the overall validity of financial statements. 

4.  The  External  Auditors  shall  as  a  part  of  the  annual  audit,  review  the  Internal 
Management Rules of the Energy Community and its operational implementation. 

5.  The  External  Auditors  shall  submit  an  audit  report  and  certified  accounts,  together 
with a statement of assurance relating to the reliability of the accounts and the legality 
and  regularity  of  the  underlying  transactions,  to  the  Budget  Committee  so  that  they 
may be available to the Ministerial Council not later than eight months after the end 
of the financial year to which the accounts relate. The Budget Committee shall make 
to  the  Ministerial  Council  such  observations  on  the  documents  submitted  by  the 
Auditors as it may consider appropriate. 

EN 

34 

   EN 

 
 
 
 
 
CHAPTER 2 
DISCHARGE 

Article 82 

Taking account of the potential observations of the Budget Committee, and with a view 
to granting the discharge to the Director, the Ministerial Council shall examine the certified 
accounts and financial statements of the Energy Community. It shall also examine the report 
of the external auditors and the auditors' statement of assurance. 

Article 83 

On the basis of this report, and, the Ministerial Council shall discharge the Director from his 
management and administrative responsibility in respect of the budget before 31 December 
N+ 1.  

Article 84 

1.  The Director shall take all appropriate steps to act on the observations accompanying 

the Ministerial Council’s discharge decision. 

2.  At  the  request  of  the  Ministerial  Council  or  of  the  Budget  Committee,  the  Director 
shall report on the measures taken in the light of these observations and comments.  

EN 

35 

   EN 

 
 
 
 
TITLE X 

TRANSITIONAL AND FINAL PROVISIONS 

Article 85 

[These  rules  are  in  compliance  with  the  fundamental  principles  of  the  accounting  of  the 
Commercial  Code  of  the  domicile  country  as  well  as  of  the  International  Accounting 
Standards.]  

Article 86 

The Ministerial Council, Budget Committee and the Parties to the Treaty shall be empowered to 
obtain any necessary information or explanations regarding budgetary matters within their fields 
of competence. 

Upon approval of the European Commission, the Director shall, as far as is necessary, adopt 
detailed rules for implementing of these rules applicable to the Energy Community.  

Article 87 

Till the formal establishment of a Budget Committee, its functions will be performed by the 
European Commission.  

Article 88 

Article 89 

This Procedural Act shall be binding in its entirety on all Parties to the Treaty and the 
Institutions set up under the Treaty. 

The Ministerial Council may amend these rules upon a proposal of the European Community.  

This Procedural Act has been adopted by the Ministerial Council of the Energy Community 
on the ground of Article 74 of the Treaty Establishing the Energy Community on ………. and 
become effective upon the day of their adoption.  

EN 

36 

   EN 

 
 
ANNEX B 

Draft 

PROCEDURAL ACT 

OF THE MINISTERIAL COUNCIL  

OF THE ENERGY COMMUNITY 

2006/…../MC-EnC:  Ministerial  Council  Decision  of  17  November  2006  on  the 
implementation  of  Annex  IV  of  the  Treaty  establishing  the  Energy  Community  with 
respect to Bulgaria and Romania becoming Participants of the Energy Community 

The Ministerial Council of the Energy Community, 

Having regard to the Treaty Establishing the Energy Community, and in particular to Articles 
86 and 99 thereof, 

Having  regard  to  Article  73  of  Treaty  Establishing  the  Energy  Community,  which  provides 
for a procedure for a review of Annex IV of that Treaty and that procedure can be applied by 
analogy, 

Whereas, 

(1) Annex IV provides that Bulgaria and Romania shall, respectively, cover 1 and 2.2 % of 
the Energy Community Budget. 

(2) On 1st January 2007, Bulgaria and Romania will join the European Union, and thus will 
become Participants in the Energy Community as provided for  Article 99 of the Treaty and 
without  any  further  act  of  any  institution  of  the  Energy  Community  being  necessary  to  that 
effect,  

(3)  From  1st  January  2007,  the  contributions  of  Bulgaria  and  Romania  to  the  budget  of  the 
Energy Community specified in Annex IV to the Treaty will, in accordance with the internal 
rules of the European Community respectively be covered by the European Community,  

EN 

37 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
HAS DECIDED AS FOLLOWS: 

Article 1 

The financial contributions to the budget of the Energy Community of Bulgaria and Romania 
upon their accession to the European Union shall be covered by the European Community. 

Article 2 

This  decision  is  addressed  to  all  Parties  and  institutions  under  the  Treaty  Establishing  the 
Energy Community.  

Article 3 

The  Director  of  the  Energy  Community  Secretariat  shall  make  this  decision  and  its  annex 
available to all Parties and institutions under the Treaty Establishing the Energy Community 
within 7 days after its adoption. 

Article 4 

This decision shall enter into force upon adoption.  

Done at …………… (place), ……… (date).  

For the Ministerial Council 

……………… (signed by Presidency)  

EN 

38 

   EN 

 
 
 
 
ANNEX C 

Draft 

PROCEDURAL ACT 

OF THE MINISTERIAL COUNCIL  

OF THE ENERGY COMMUNITY 

2006/…../MC-EnC:  Ministerial  Council  Decision  of  17  November  2006  on  adoption  of 
Procedural  Rules  on  Acceptance  of  Countries  as  Observers  to  the  Energy  Community 
and on Rights and Obligations of Observers  

The Ministerial Council of the Energy Community, 

Having regard to the Treaty Establishing the Energy Community, and in particular Article 86 
thereof, 

Having  regard  to  the  proposals,  made  by  the  Permanent  High  Level  Group,  dated  16 
November 2006,  

Having regard to Article 96 of the Treaty, 

HAS DECIDED AS FOLLOWS: 

Article 1 

Adopts Procedural Rules on Acceptance of Countries as Observers to the Energy Community 
and on Rights and Obligations of Observers as presented in annex to this procedural act.  

Article 2 

EN 

39 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
This  decision  is  addressed  to  all  Parties  and  institutions  under  the  Treaty  Establishing  the 
Energy Community.  

Article 3 

The  Director  of  the  Energy  Community  Secretariat  shall  make  this  decision  and  its  annex 
available to all Parties and institutions under the Treaty Establishing the Energy Community 
within 7 days after its adoption. 

Article 4 

This decision shall enter into force upon its adoption. 

Done at …………… (place), ……… (date).  

For the Ministerial Council 

……………… (signed by Presidency)  

EN 

40 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annex to the 

Procedural Act 

On 

Rules on Acceptance of Countries as Observers to the Energy Community and Rights 
and Obligations of Observers 

I. 

GENERAL 

1.  Without  prejudice  to  Article  96(1),  second  sentence,  of  the  Treaty  Establishing  the 
Energy Community (hereinafter: “the Treaty”),  these rules establish the procedure for 
the acceptance of a country as an Observer to the Energy Community in accordance 
with Article 96 of the Treaty. These Rules further set forth the rights and obligations 
of the Observer(s).  

2.  In accordance with the Treaty and its objectives, Observer status might be granted to a 

neighboring country ready to gradually take up the acquis.   

II. 

PROCEDURAL STEPS 

1.  The Observer status is granted by the Ministerial Council of the Energy Community 

upon a reasoned request by the applicant country submitted to the Presidency. 

2.  The Presidency shall notify the request to the Ministerial Council at the next meeting 
of  the  Ministerial  Council  following  the  receipt  of  the  request.  In  parallel,  the 
Presidency,  after  consultation  with  the  Vice-Presidents  and  prior  to  the  Ministerial 
Council’s  meeting,  may  ask  the  Secretariat  to  prepare  additional  information  in 
relation to the request. 

3.  The  decision  of  the  Ministerial  Council  under  subparagraph  1  shall  be  taken 

unanimously. It shall refer to Article 96(1) of the Treaty and these Rules. 

III. 

PRINCIPAL RIGHTS AND OBLIGATIONS OF THE OBSERVERS  

1.  The  Observers  to  the  Energy  Community  have  the  rights  to  be  represented  at  the 
meetings of the Ministerial Council, the Permanent High Level Group, the Regulatory 
Board  and  the  Fora  (one  representative  per  meeting,  excluding  the  Fora,  where  any 
Observer might have up to three representatives).  

EN 

41 

   EN 

 
 
 
 
 
 
 
 
 
 
 
2.  The  Observers  are  entitled  to  receive  any  information  distributed  before,  during  and 

after the relevant meetings which is related to the discussed topics.  

3.  The  Observers  follow  any  requirements  for  confidentiality,  which  are  valid  to  the 

Parties.  

4.  The Observers may make statements upon request and consequent permission by the 

chair of the meeting at which they want to make statement. 

5.  Observers have no right to participate in voting. 

6.  In case of conflict between these Rules and the specific Internal Rules of Procedure of 
any  institution  of  the  Energy  Community,  the  Internal  Rules  of  Procedure  of  the 
institution in question shall prevail. 

IV.  MISCELLANEOUS AND CONCLUSIVE REMARKS 

1.  The  Observer  status,  granted  to  any  country  by  the  Ministerial  Council,  prior  to  the 

adoption of these rules, shall not be affected by them. 

2.  The rules have been adopted by the Ministerial Council on the ground of Articles 86 

and 96 of the Treaty. 

3.  The rules enter into force on the day of their adoption. 

These rules have been adopted on ………………….. 

EN 

42 

   EN