Proposal for a Council Regulation on the Financial Regulation applicable to the 10th European Development Fund
Date: 2007-07-16
Institutions: European Commission
Subjects: ACP countries, European Development Fund, European Investment Bank, agreement (EU), financial management, financial regulation

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.7.2007 
COM(2007) 410 final 

2007/0154 (CNC) 

Proposal for a 

COUNCIL REGULATION 

on the Financial Regulation 
applicable to the 10th European Development Fund 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

The  ACP-EC  Partnership  Agreement  signed  in  Cotonou  on  23  June  2000  between  the 
members  of  the  African,  Caribbean  and  Pacific  Group  of  States  of  the  one  part,  and  the 
European Community and its Member States, of the other part, was revised in Luxembourg 
on 25 June 2005.  

The  financial  framework  necessary  to  implement  this  Partnership  Agreement  for  the  period 
2008  to  2013  was  adopted  by  the  Council  and  enshrined  in  the  Internal  Agreement  of 
17 July 2006. It covers commitments beginning on 1 January 2008 for a period of six years. In 
order  to  implement  this  financial  framework,  the  Internal  Agreement  notably  establishes  a 
10th  European  Development  Fund  (EDF)  and  foresees  in  its  Article  10  (2)  that  a  financial 
regulation  should  be  adopted  before  the  entry  into  force  of  the  ACP-EC  Partnership 
Agreement. 

The  present  Commission  communication  aims  at  presenting  a  proposal  for  the  financial 
regulation  applicable  to  the  10th  EDF.  It  has  been  aligned  as  far  as  possible  with  the 
provisions  of  the  Financial  Regulation  applicable  to  the  general  budget  of  the  European 
Communities as revised on 13 December 2006 (General Financial Regulation), while taking 
into account the specificity of the EDF whose financing remains outside the EU budget. 

Contrary to the general Financial Regulation, there are no implementing rules completing the 
financial  regulation  applicable  to  the  EDF.  Nethertheless,  some  issues  which  do  not 
necessarily need to be dealt with in extenso in the financial regulation deserved clarification. 
Since  this  clarification  already  exists  in  the  implementing  rules  applicable  to  the  general 
Financial  Regulation,  and  in  order  to  avoid repetition,  the  Commission  proposes  that,  when 
necessary,  some  articles  directly  refer  to  the  implementing  rules  of  the  general  Financial 
Regulation.  

As provided for in Article 10 (2) of the Internal Agreement, the Commission's proposal shall 
be submitted to the Council for adoption, as well as to the Court of Auditors and the European 
Investment Bank for an opinion. 

Main changes compared to the Financial Regulation applicable to the 9th EDF: 

1. 

2. 

Alignment of the structure on the General Financial Regulation. 

Simplification: provisions concerning Member States contributions which are drafted 
in  detail  in  the  Internal  Agreement  do  not  need  to  be  repeated  in  the  Financial 
Regulation.  Provisions  which  mirrored  some  articles  of  the  implementing  Rules  of 
the general Financial Regulation laid down in Regulation (EC, Euratom) 2342/2002 
have  been  replaced  by  a  reference  to  the  concerned  article(s)  of  that  Regulation. 
Moreover, provisions which mirror some articles of the general Financial Regulation 
and  need  further  clarification  or  implementing  rules  have  been  completed  with  a 
reference to the applicable articles of Regulation (EC, Euratom) 2342/2002.  

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2007/0154 (CNC) 

Proposal for a 

COUNCIL REGULATION 

on the Financial Regulation 
applicable to the 10th European Development Fund 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having regard to the Partnership Agreement between the members of the African, Caribbean 
and  Pacific  Group  of  States  of  the  one  part,  and  the  European  Community  and  its  Member 
States, of the other part, signed in Cotonou on 23 June 20001 and revised in Luxembourg on 
25 June 20052 (hereinafter the 'ACP-EC Agreement'), 

Having regard to Council Decision 2001/822/EC of 27 November 2001 on the association of 
the  overseas  countries  and  territories  with  the  European  Community  (the  'Overseas 
Association Decision') 3, amended by Council Decision 2007/249/EC of 19 March 20074, and 
in particular the fourth paragraph of Article 23 thereof 

Having  regard  to  Decision  No  1/2006  of  the  ACP-EC  Council  of  Ministers  of  2  June  2006 
specifying  the  multiannual  financial  framework  for  the  period  2008  to  2013  and  modifying 
the revised ACP-EC Agreement5, 

Having regard to the Internal Agreement between the Representatives of the Governments of 
the Member States, meeting within the Council, on the financing of Community aid under the 
multiannual financial framework for the period 2008 to 2013 in accordance with the ACP-EC 
Agreement  and  on  the  allocation  of  financial  assistance  for  the  Overseas  Countries  and 
Territories to which Part Four of the EC Treaty applies6 (hereinafter the 'Internal Agreement') 
and in particular Article 10 (2) thereof, 

Having regard to the proposal from the Commission7, 

Having regard to the opinion of the Court of Auditors8, 

Having regard to the opinion of the European Investment Bank9, 

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3 
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7 
8 

OJ L 317, 15.12.2000, p. 3. 
OJ L 287, 28.10.2005, p. 4. 
OJ L 314, 30.11.2001, p. 1. 
OJ L 109, 26.4.2007, p. 33. 
OJ L 247, 9.9.2006, p. 22. 
OJ L 247, 9.9.2006, p. 32. 
OJ C , , p. . 
OJ C , , p. . 

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Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

It is necessary to determine the detailed rules for the payment of contributions by the 
Member States to the 10th European Development Fund (hereinafter referred to as 'the 
EDF'), set up by the Internal Agreement, and for the allocation of financial assistance 
for the Overseas Countries and Territories to which Part Four of the EC Treaty applies 
(hereinafter 'OCTs'). 

Rules  should  be  laid  down  for  the  treatment  of  the  balances  remaining  from  the 
previous EDFs, in particular as regards the detailed arrangements for their transfer to 
the 10th EDF and the rules applicable for their implementation, or the consequences of 
their decommitment in relation with Member States contributions. 

It  is  necessary  to  lay  down  the  conditions  in  accordance  with  which  the  Court  of 
Auditors must exercise its powers in respect of the EDF.  

It  is  necessary  to  lay  down  the  conditions  in  accordance  with  which  the  European 
Investment Bank ('EIB') manages EDF resources. 

The  provisions  concerning  scrutiny  by  the  Court  of  Auditors  of  the  EDF  resources 
managed by the EIB should comply with the Tripartite Agreement concluded between 
the Court of Auditors, the EIB and the Commission10 provided for in Article 248(4) of 
the Treaty. 

It is appropriate to ensure the proper, prompt and efficient execution of programmes 
and  projects  financed  under  the  ACP-EC  Agreement  and  to  establish  management 
procedures  which  are  transparent  and  easy  to  apply,  and  which  facilitate  the 
decentralisation of tasks and responsibilities. 

It is necessary to establish the detailed rules in accordance with which the authorising 
officer  by  delegation  establishes  the  necessary  arrangements  to  ensure  the  proper 
execution of operations, in close cooperation with the National Authorising Officer. 

As far as possible, Council Regulation (EC, Euratom) No 1605/2002 of 25 June 2002 
on  the  Financial  Regulation  applicable  to  the  general  budget  of  the  European 
Communities11 should, as the cornerstone of the reform of the Commission's internal 
management,  be  taken  into  account  in  this  Regulation,  for  reasons  of  efficiency  and 
simplification. If appropriate Commission Regulation (EC, Euratom) No 2342/2002 of 
23  December  2002  laying  down  detailed  rules  for  the  implementation  of  Council 
Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the 
general budget of the European Communities12 should be applied mutatis mutandis in 
certain cases. 

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11 

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OJ C, p. . 
OJ L  
OJ  L  248,  16.9.2002,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC,  Euratom)  No  1995/2006 
(OJ L 390, 30.12.2006, p. 1). 
OJ  L  357,  31.12.2002,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC,  Euratom)  No  478/2007 
(OJ L 111, 28.4.2007, p. 13). 

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(9) 

All changes in comparison with the Financial Regulation of 27 March 2003 applicable 
to  the  9th  European  Development  Fund13  should  contribute  to  achieving  the 
objectives  of  the  Commission's  reforms,  should  improve  or  ensure  sound  financial 
management,  and  should  enhance  the  protection  of  the  financial  interests  of  the 
Community  against  fraud  and  other  illegal  activities,  and  thus  enhance  legality  and 
regularity of financial operations.  

(10)  Some  changes  in  comparison  with  the  Financial  Regulation  for  the  9th  EDF  are 
necessary in the light of practical experience in order to facilitate EDF implementation 
and the realisation of the underlying policy objectives and to adjust some procedural 
and  documentary  requirements.  Transparency,  in  particular,  has  to  be  reinforced  by 
providing for information on beneficiaries of Community funds. 

(11)  The  budgetary  principle  of  sound  financial  management  should  imply  effective  and 

efficient internal control for the implementation of EDF resources. 

(12)  As  regards  EDF  resources,  it  should  be  made  possible  for  Member  States  and  other 
donor  countries  to  make  ad  hoc  financial  contributions  for  projects  or  programmes 
managed by the Commission. 

(13)  The principle of specification should apply to the EDF. 

(14)  As  regards  the  methods  of  implementation  of  the  EDF  resources,  the  provisions  on 
centralised,  decentralised  and  joint  management  as  laid  down  in  the  Financial 
Regulation for the 9th EDF should be restructured for the purpose of clarity and some 
requirements  should  be  made  clearer.  In  particular,  the  requirements  for  joint 
management,  the  conditions  for  the  delegation  of  tasks  and  the  criteria  for  using 
national public-sector bodies should be simplified in order to facilitate their use and to 
respond to growing operational needs.  

(15)  The  prohibition  on  delegating  implementation  tasks  to  private  bodies  should  be 
adjusted  in  respect  to  centralised  management  because  the  terms  of  that  prohibition 
have turned out to be unnecessarily strict. It should be possible for the Commission to 
engage  the  services  of  a  travel  agency  or  a  conference  organiser  to  take  charge  of 
reimbursing  the  costs  of  participants  at  conferences,  provided  that  care  is  taken  to 
ensure that no discretionary powers are exercised by the private company. 

(16)  As regards the accounting officer, his responsibility for certifying the accounts on the 
basis of the financial information supplied to him by the authorising officers has to be 
made  clearer.  To  this  end,  the  accounting  officer  should  be  empowered  to  check  the 
information received by the authorising officer by delegation and to enter reservations, 
if necessary. 

(17)  The conditions and limitations regarding financial liability of all financial actors and 

any other person involved in EDF implementation should be clarified. 

(18)  The  rules  on  recovery  of  amounts  receivable  should  be  clarified  and  strengthened  in 
order to better safeguard the financial interests of the Communities. In particular, the 
conditions in which interest on late payments is due to the EDF should be specified. 

13 

OJ L 83, 1.4.2003, p. 1. 

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(19)  Provision  should  be  made  for  periods  of  limitation  on  the  validity  of  claims.  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  periods  of  limitation  should  correspond  to  the 
principle of sound financial management. 

(20) 

In  line  with  the  general  Financial  Regulation  and  Directive  2004/18/EC  of  the 
European  Parliament  and  the  Council  of  31  March  2004  on  the  coordination  of 
procedures for the award of public works contracts, public supply contracts and public 
service  contracts14,  the  rules  on  exclusion  from  a  procurement  procedure  need  to  be 
clarified.  A  clear  distinction  should  be  made  between  mandatory  exclusion  and 
exclusion  on  the  basis  of  an  administrative  penalty.  In  addition,  for  reasons  of  legal 
certainty and proportionality, a maximum period of exclusion should be laid down. An 
exception  to  the  rules  on  exclusion  may  be  provided  for  as  regards  the  purchase  of 
supplies  on  particularly  advantageous  terms  from  either  a  supplier  which  is 
definitively  winding  up  its  business  activities,  or  the  receivers  or  liquidators  of  a 
bankruptcy, an arrangement with creditors, or a similar procedure under national law. 

(21) 

It  is  appropriate  to  allow  the  use  of  the  central  database  concerning  candidates  or 
tenderers  in  situations  of  exclusion  set  up  under  Regulation  (EC,  Euratom) 
No 1605/2002 in the context of the EDF. 

(22)  As regards grants, some clarifications need to be made in Article 103, in particular as 
regards their scope. To improve the management of grants and to simplify procedures, 
it should be possible to award grants either by decisions of the institution or by written 
agreements  with  beneficiaries,  and  to  authorise  the  use  of  lump  sum  and  flat-rate 
payments  alongside  the  more  traditional  method  of  reimbursing  costs  actually 
incurred.  Finally,  requirements  for  checks  and  guarantees  should  be  more 
proportionate to the financial risks involved. 

(23)  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  in  the  selection  of  beneficiaries.  It  should  therefore  be 
expressly recognised that such exceptional cases arise. 

(24)  Where grants are given for running costs, the rule that the necessary agreement may 
not be signed more than four months after the start of the beneficiary's financial year 
has proven unnecessarily rigid. That deadline should therefore be fixed at six months. 

(25)  As grants should continue to be awarded on the basis of selection and award criteria, 
there  is  no  need  to  have  those  criteria  evaluated  in  all  cases  by  a  committee.  Other 
more flexible means should be allowed for the evaluation of the selection criteria. 

(26)  For the sake of clarity, the rule concerning the procurement requirements to be applied 
by  beneficiaries  of  grants  should  be  simplified.  Moreover,  it  should  be  expressly 
provided for the case in which the implementation of an action necessitates financial 
support to third parties. 

14 

OJ  L  134,  30.4.2004,  p.  114.  Directive  as  last  amended  by  Council  Directive  (EC)  No  2006/97/EC 
(OJ L 363, 20.12.2006, p. 107). 

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HAS ADOPTED THIS REGULATION: 

PART ONE 
MAIN PROVISIONS 

TITLE I 
SUBJECT MATTER AND SCOPE 

Article 1 

This Regulation lays down the rules for the establishment and financial implementation of the 
resources of the 10th European Development Fund (EDF), and the presentation and auditing 
of the accounts. 

Article 2 

1. 

The  Commission  shall  assume  the  responsibilities  of  the  Community  defined  in 
Article 57 of the ACP-EC Agreement and in the Overseas Association Decision.  

To that end, it shall undertake the financial implementation of operations carried out 
with  EDF  resources  allocated  in  the  form  of  non-repayable  aid,  excluding  interest 
rate subsidies, and make payments in accordance with this Regulation. 

2. 

For the purposes of the application of this Regulation, the Commission shall act on 
its own responsibility and within the limits of the resources allocated. 

Article 3 

The EIB, acting on behalf of the Community, shall manage the Investment Facility, as well as 
interest rate subsidies, and shall conduct operations there under, in accordance with the rules 
set  out  in  Part  Two.  In  that  context,  the  EIB  shall  act  on  behalf  of  and  at  the  risk  of  the 
Community. 

The EIB shall undertake the financial implementation of operations carried out by means of 
loans from its own resources, where applicable combined with interest rate subsidies drawn 
from the EDF's grant resources. 

Article 4 

The  provisions  of  this  Part  and  Part  Three  shall  apply  exclusively  to  the  financial 
implementation of the EDF resources managed by the Commission. Those provisions may not 
be  interpreted  as  giving  rise  to  any  obligations  on  the  Commission's  part  in  respect  of  the 
financial implementation of EDF resources managed by the European Investment Bank (EIB). 

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Article 5 

1. 

Unless otherwise specified, references in this Regulation to the ACP States shall be 
deemed to refer also to the bodies or representatives defined in Articles 13 and 14 of 
Annex IV to the ACP-EC Agreement, which they may duly mandate to exercise their 
responsibilities under that Agreement. 

2. 

The financial year shall begin on 1 January and end on 31 December. 

TITLE II 
FINANCIAL PRINCIPLES 

EDF resources shall be established and implemented in compliance with the following 
principles as set out in this Regulation: 

Article 6 

(a) 

(b) 

(c) 

(d) 

(e) 

1. 

2. 

3. 

1. 

financial accuracy,  

unit of account,  

specification,  

sound financial management,  

transparency. 

CHAPTER 1 
PRINCIPLE OF FINANCIAL ACCURACY 

Article 7 

No  revenue  shall  be  collected  and  no  expenditure  effected  unless  booked  to  an 
allocation of the EDF. 

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

Interest yielded by the funds which are the property of the EDF shall be entered as 
EDF revenue. 

Article 8 

Interest generated by pre-financing payments shall be assigned to the programme or 
the action concerned and deducted from the payment of the balance of the amounts 
due to the beneficiary. 

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2. 

Interest shall not be due to the Communities in the following cases: 

(a) 

pre-financing which does not represent a significant amount; 

(b)  pre-financing  paid  under  a  procurement  contract  within  the  meaning  of 

Article 91; 

(c) 

advances paid to members of the institutions and to staff in accordance with the 
Staff Regulations of officials of the European Communities and the Conditions 
of  employment  of  other  servants  of  the  European  Communities,  hereinafter 
"the Staff Regulations"; 

(d)  pre-financing paid in the framework of joint management as referred to in point 

(3) of Article 20(1). 

3. 

Articles  3,  4  and  4a  of  Regulation  (EC,  Euratom)  No  2342/2002,  as  amended  by 
Regulation  (EC,  Euratom)  No  478/2007  shall  apply  mutatis  mutandis  to  the 
implementation of paragraphs 1 and 2. 

CHAPTER 2 
PRINCIPLE OF THE UNIT OF ACCOUNT 

Article 9 

EDF resources shall be drawn up and implemented in euro and the accounts shall be presented 
in euro. 

However,  for  the  treasury  management  purposes  referred  to  in  Article  39,  the  accounting 
officer may carry out operations in euros or in other currencies. 

CHAPTER 3 
PRINCIPLE OF SPECIFICATION 

Article 10 

EDF resources shall be earmarked for specific purposes according to the main instruments of 
cooperation,  as  described  in  the  Financial  Protocol  of  the  ACP-EC  Agreement  and  in  the 
Overseas Association Decision. 

In respect of the ACP States, those instruments are laid down by the Financial Protocol set out 
in Annex Ib to the ACP-EC Agreement. Earmarking of resources shall also be based on the 
provisions  of  the  Internal  Agreement  and  shall  take  account  of  the  resources  reserved  for 
support expenditure linked to programming and implementation under Article 6 thereof. 

In  respect  of  the  OCTs,  those  instruments  are laid  down  in  Annex  II  A  bis  to  the  Overseas 
Association  Decision.  Earmarking  of  those  resources  shall  also  take  account  of  the  non-
allocated reserve provided for in Article 3(4) of that Annex and of the resources reserved for 
studies or technical assistance measures under Article 1(1)(c) thereof. 

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CHAPTER 4 
PRINCIPLE OF SOUND FINANCIAL MANAGEMENT 

Article 11 

1. 

2. 

EDF  resources  shall  be  used  in  accordance  with  the  principles  of  sound  financial 
management,  namely  in  accordance  with  the  principles  of  economy,  efficiency  and 
effectiveness. 

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

The principle of efficiency is concerned with the best relationship between resources 
employed and results achieved. 

The principle of effectiveness is concerned with attaining the specific objectives set 
and achieving the intended results. 

3. 

Specific,  measurable,  achievable,  relevant  and  timed  objectives  shall  be  set.  The 
achievement of those objectives shall be monitored by performance indicators. 

In order to improve decision-making, the following evaluations are required: 

Article 12 

(a) 

(b) 

1. 

2. 

the use of EDF resources shall be preceded by an ex ante evaluation of the operation 
to be undertaken  

the operation shall be submitted to an ex post evaluation with a view to ensuring that 
the intended results justify the means deployed. 

Article 13 

The  principle  of  sound  financial  management  required  that  EDF  resources  shall  be 
implemented  in  compliance  with  effective  and  efficient  internal  control  as 
appropriate in each management mode. 

For the purposes of the implementation of EDF resources, internal control is defined 
as  a  process  applicable  at  all  levels  of  the  management  and  designed  to  provide 
reasonable assurance on the achievement of the following objectives: 

(a) 

effectiveness, efficiency and economy of operations; 

(b) 

reliability of reporting; 

(c) 

safeguarding of assets and information; 

(d)  prevention and detection of fraud and irregularities; 

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(e) 

adequate management of the risks relating to the legality and regularity of the 
underlying  transactions,  taking  into  account  the  multi-annual  character  of 
programmes as well as the nature of the payments concerned. 

CHAPTER 5 
PRINCIPLE OF TRANSPARENCY 

1. 

2. 

3. 

Article 14 

EDF  resources  shall  be  established  and  implemented  and  the  accounts  presented  in 
compliance with the principle of transparency. 

The annual estimates of commitments and payments under Article 7 of the Internal 
Agreement,  together  with  the  EDF  accounts  referred  to  in  Article  118  of  this 
Regulation, shall be published in the Official Journal of the European Union. 

The Commission shall make available, in an appropriate manner, information on the 
beneficiaries  of  funds  deriving  from  the  EDF  held  by  it  when  EDF  resources  are 
implemented on a centralised basis and directly by its departments, and information 
on  the  beneficiaries  of  funds  as  provided  by  the  entities  to  which  financial 
implementation tasks are delegated under other modes of management. 

This information shall be made available with due observance of the requirements of 
confidentiality, in particular the protection of personal data as laid down in Directive 
95/46/EC of the European Parliament and of the Council of 24 October 1995 on the 
protection  of  individuals  with  regard  to  the  processing  of  personal  data  and  on  the 
free  movement  of  such  data  and  Regulation  (EC)  No45/2001  of  the  European 
Parliament and of the Council of 18 December 2001 on the protection of individuals 
with  regard  to  the  processing  of  personal  data  by  the  Community  institutions  and 
bodies and on the free movement of such data, and of the requirements of security, 
taking into account the specificities of each management mode referred to in Article 
20. 

TITLE III 
RESOURCES AND MEMBER STATES CONTRIBUTIONS 

CHAPTER 1 
COMPOSITION OF EDF RESSOURCES 

The  EDF  ressources  shall  consist  of  the  amounts  laid  down  in  Article  1  of  the  Internal 
Agreement. 

Article 15 

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Article 16 

The  Commission  may  manage  financial  contributions  from  Member  States  and  other  donor 
countries on their behalf, including in both cases their public and parastatal agencies, or from 
international organisations to certain projects or programmes financed by the EDF, pursuant 
to the relevant basic act. 

TITLE IV 
IMPLEMENTATION OF EDF RESOURCES 

CHAPTER 1 
GENERAL PROVISIONS 

Article 17 

The  Commission  may,  within  its  own  departments,  delegate  its  powers  to  implement  EDF 
resources, in accordance with the conditions laid down by this Regulation and by its internal 
rules and within the limits set by the Commission in the instrument of delegation. Those so 
empowered may act only within the limits of the powers expressly conferred upon them. 

Article 18 

1. 

2. 

All  financial  actors  and  any  other  person  involved  in  the  implementation, 
management, audit or control of EDF resources shall be prohibited from taking any 
action  which  may  bring  their  own  interests  into  conflict  with  those  of  the 
Community. Should a conflict of interests arise, the person in question shall refrain 
from such an action and refer the matter to the competent authority. 

There  is  a  conflict  of  interests  where  the  impartial  and  objective  exercise  of  the 
functions  of  a  financial  actor  or  other  person,  as  referred  to  in  paragraph  1,  is 
compromised  for  reasons  involving  family,  emotional  life,  political  or  national 
affinity, economic interest or any other shared interest with the beneficiary. 

Article 19 

For  the  purposes  of  this  Title,  the  term  'staff'  refers  to  persons  covered  by  the  Staff 
Regulations of officials of the European Communities and the Conditions of employment of 
other servants of the European Communities, hereinafter "Staff Regulations". 

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CHAPTER 2 
METHODS OF IMPLEMENTATION 

SECTION 1 
GENERAL PROVISION  

Article 20 

The Commission shall implement EDF resources in accordance with the provisions set out in 
Articles 21 to 29 in any of the following ways:  

(1) 

(2) 

(3) 

by decentralised management; 

by centralised management; 

by joint management with international organisations. 

SECTION 2 
DECENTRALISED MANAGEMENT 

Article 21 

A  a  general  rule,  the  Commission  shall  undertake  the  financial  implementation  of  EDF 
resources by one of the following: 

a) 

b) 

1. 

by means of decentralised management with the ACP States in accordance with the 
conditions  set  out  in  the  ACP-EC  Agreement  and  applying  the  breakdown  of 
responsibilities provided for in Article 57 of that Agreement and Articles 34, 35 and 
36 of Annex IV thereto; 

by  means  of  decentralised  management  with  the  OCTs  in  accordance  with  the 
conditions  set  out  in  the  Overseas  Association  Decision  and  in  the  measures 
implementing that Decision. 

Article 22 

In  the  context  of  decentralised  management,  the  Commission  shall  undertake  the 
financial implementation of EDF resources in accordance with the detailed rules laid 
down  in  paragraphs  2,  3  and  4  without  prejudice  to  delegation  of  residual  tasks  to 
bodies referred to in Article 25(3). 

2. 

The beneficiary ACP States or OCTs shall: 

(a) 

conduct  regular  checks  to  ensure  that  the  actions  to  be  financed  by  EDF 
resources have been implemented correctly; 

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3. 

4. 

(b) 

take appropriate measures to prevent irregularities and fraud and, if necessary, 
bring legal proceedings to recover funds wrongly paid. 

In  order  to  ensure  that  funds  are  used  in  accordance  with  the  applicable  rules  and 
within  the  limits  of  powers  thereby  conferred  upon  it,  the  Commission  shall  apply 
clearance-of-accounts procedures or financial correction mechanisms which enable it 
to discharge its obligations under the ACP-EC Agreement, in particular under Article 
34(1)  of  Annex  IV  thereto,  and  under  the  Overseas  Association  Decision,  in 
particular under Articles 20 and 32 thereof. 

Third  countries  to  which  implementation  tasks  are  delegated  shall  ensure,  in 
conformity with Article 14(3), adequate annual ex post publication of beneficiaries of 
funds deriving from the EDF. 

Article 23 

The  implementation  by  ACP  States  and  OCTs  of  operations  financed  from  EDF  resources 
shall be subject to Commission scrutiny. 

That  scrutiny  may  be  exercised  by  prior  approval,  by  ex  post  checks  or  by  a  combined 
procedure,  in  accordance  with  the  provisions  of  the  ACP-EC  Agreement,  the  Overseas 
Association Decision and the measures implementing that Decision. 

Article 24 

Depending  on  the  degree  of  decentralisation  provided  for  in  the  ACP-EC  Agreement,  the 
Overseas  Association  Decision  and 
the 
Commission  shall  strive  to  encourage  the  beneficiary  ACP  States  and  the  OCTs  to  adhere, 
when exercising the powers entrusted to them  under  the  ACP-EC  Agreement  and  under  the 
Overseas  Association  Decision,  to  the  principle  of  sound  financial  management  set  out  in 
Article 11, in particular the progressive application of the following criteria: 

that  Decision, 

the  measures 

implementing 

(a) 

(b) 

(c) 

(d) 

(e) 

transparent  procurement  and  grant-awarded  procedures,  which  are  non-
discriminatory and exclude any conflict of interests; 

an effective and efficient internal control system for the management of operations, 
which  includes  effective  segregation  of  the  duties  of  authorising  officer  and 
accounting officer or of the equivalent functions; 

an accounting system that enables the correct use of EDF resources to be verified and 
the use of funds to be reflected in the EDF accounts; 

an  independent  external  audit  exercised  by  a  national  institution  for  independent 
external auditing; 

in  the  case  of  the  direct-labour  operations  referred  to  in  Article  101(1),  adequate 
provisions  for  the  management  and  scrutiny  of  local  imprest  accounts  and  for  the 
definition  of  the  responsibilities  of  the  local  imprest  manager  and  the  local 
accounting officer. 

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For the purposes of applying the first subparagraph, the Commission shall, in agreement with 
the  beneficiary  ACP  States  and  OCTs,  incorporate  appropriate  provisions  in  the  financing 
agreements referred to in Article 70(3). 

SECTION 3 
CENTRALISED MANAGEMENT 

Article 25 

1. 

2. 

Where  the  Commission  implements  EDF  resources  on  a  centralised  basis, 
implementation  tasks  shall  be  performed  either  directly  by  its  departments  or 
indirectly, in accordance with paragraphs 2 to 4 of this Article and with Articles 26 
to 29.  

Indirect  implementation,  in  accordance  with  paragraphs  2  to  4  of  this  Article  and 
with Article 27 to 29 also applies in the case of delegation of residual tasks to bodies 
referred to in paragraph 3 of this Article in the case of decentralised management. 

The  Commission  may  not  delegate  to  third  parties  the  executive  powers  it  enjoys 
under  the  ACP-EC  Agreement  or  the  Overseas  Association  Decision  where  those 
powers  involve  a  large  measure  of  discretion  implying  political  choices.  The 
implementing tasks delegated shall be clearly defined and fully supervised as to the 
use made of them. 

The delegation of financial implementation tasks shall comply with the principle of 
sound  financial  management  and  shall  ensure  compliance  with  the  visibility  of 
Community action. No implementation tasks delegated in this way may give rise to 
conflicts of interests. 

3. 

Within  the  limits  laid  down  in  paragraph  2,  the  Commission  may  delegate  tasks  of 
public authority, and in particular financial implementation tasks, to the following: 

(a) 

the executive agencies established in accordance with Council Regulation (EC) 
No 58/200315; 

(b)  national public-sector bodies or bodies governed by private law with a public-
the 
service  mission  and  providing  adequate  financial  guarantees  for 
implementation of the tasks assigned to them. 

The Commission shall inform annually the Council of the cases, agencies and bodies 
concerned. It shall provide commensurate motivation of the use of national agencies. 

4. 

Implementation  of  the  corresponding  EDF  resources  by  an  agency  referred  to  in 
point (a) of paragraph 3 shall be carried out by the director of that agency. 

15 

OJ L 11, 16.1.2003, p. 1. 

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5. 

Where  the  agencies  and  bodies  referred  to  in  paragraph  3  perform  implementation 
tasks, they shall conduct regular checks to ensure that the actions to be financed from 
EDF resources have been implemented correctly. 

Such  agencies  and  bodies  shall  take  appropriate  measures  to  prevent  irregularities 
and fraud and if necessary bring legal proceedings to recover funds wrongly paid or 
incorrectly used. 

Article 26 

Where  the  Commission  implements  EDF  resources  by  indirect  centralised  management,  it 
shall first obtain evidence of the existence and proper operation within the entities to which it 
entrusts implementation of the following: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

transparent procurement and grant-awarded procedures which are non-discriminatory 
and exclude any conflict of interest and which are in accordance with Titles V and 
VII; 

an effective and efficient internal control system for the management of operations, 
which  includes  effective  segregation  of  the  duties  of  authorising  officer  and 
accounting officer or of the equivalent functions; 

an accounting system that enables the correct use of EDF resources to be verified and 
the use of funds to be reflected in the EDF accounts; 

an independent external audit; 

public access to information at the level provided for in Community Regulations; 

adequate annual ex post publication of beneficiaries of funds deriving from the EDF 
in conformity with Article 14(3). 

The  Commission  may  accept  that  the  audit,  accounting,  procurement  and  grant-awarded 
systems of the agencies and bodies referred to in Article 25(3) are equivalent to its own, with 
due account for internationally accepted standards. 

Article 27 

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. 

Article 28 

The  Commission  may  not  entrust  measures  of  implementation  of  funds  deriving  from  EDF 
resources, such as payment and recovery, to external private-sector entities or bodies except to 
those  referred  to  in  point  (b)  of  the  first  subparagraph  of  Article  25(3)  or  in  specific  cases 
where the payments involved are to be made to beneficiaries determined by the Commission, 

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are  subject  to  conditions  and  amounts  fixed  by  the  Commission  and  do  not  involve  the 
exercise of discretion by the entity or body making the payments. 

The  tasks  which  may  be  entrusted  by  contract  to  external  private-sector  entities  or  bodies 
other than those referred to in point (b) of the first subparagraph of Article 25(3) are technical 
expertise  tasks  and  administrative,  preparatory  or  ancillary  tasks  involving  neither  the 
exercise of public authority nor the use of discretionary powers of judgment. 

SECTION 4 
JOINT MANAGEMENT WITH INTERNATIONAL ORGANISATIONS 

Article 29 

1. 

Where  the  Commission  implements  EDF  resources  by  joint  management,  certain 
implementation  tasks  shall  be  delegated  to  international  organisations  in  the 
following cases: 

(a)  wherever  the  Commission  and  the  international  organisation  are  bound  by  a 
long-term  framework  agreement laying down the administrative and financial 
arrangements for their cooperation; 

(b)  wherever  the  Commission  and  the  international  organisation  elaborate  a  joint 

project or programme; 

(c)  where  the  funds  of  several  donors  are  pooled  and  are  not  earmarked  for 
specific items or categories of expenditure, that is to say, in the case of multi-
donor actions. 

These organisations shall, in their accounting, audit, internal control and procurement 
procedures,  apply  standards  which  offer  guarantees  equivalent  to  internationally 
accepted standards.  

The implementation by international organisations of operations financed from EDF 
resources  shall  be  subject  to  scrutiny  by  the  Commission.  Such  scrutiny  shall  be 
exercised by prior approval, by ex post checks or by a combined procedure. 

Individual  agreements  concluded  with  international  organisations  for  the  award  of 
financing  shall  contain  detailed  provisions  for  the  implementation  of  the  tasks 
entrusted to such international organisations. 

International organisations to which implementation tasks are delegated shall ensure, 
in conformity with Article 14(3), adequate annual ex post publication of beneficiaries 
of funds deriving from the EDF. 

2. 

3. 

4. 

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CHAPTER 3 
FINANCIAL ACTORS 

Article 30 

The Commission shall provide each financial actor with the resources required to perform his 
duties and a charter describing in detail his tasks, rights and obligations. 

SECTION 1 
PRINCIPLE OF SEGREGATION OF DUTIES 

Article 31 

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

SECTION 2 
AUTHORISING OFFICER 

Article 32 

1. 

2. 

3. 

4. 

In the context of the financial implementation of the operations referred to in Article 
2, the Commission shall perform the duties of authorising officer. 

The  Commission  shall  determine  the  staff  of  an  appropriate  level  to  whom  it 
delegates the duties of authorising officer, the scope of the powers delegated and the 
possibility for the persons to whom these powers are delegated to subdelegate them. 

The powers of authorising officer shall be delegated or subdelegated only to staff. 

Authorising officers by delegation or  sub-delegation may act only within the limits 
set  by  the  instrument  of  delegation  or  sub-delegation.  The  responsible  authorising 
officer  by  delegation  or  sub-delegation  may  be  assisted  in  his/her  task  by  one  or 
more  members  of  staff  entrusted,  under  his/her  responsibility,  to  carry  out  certain 
operations  necessary  for  the  implementation  of  EDF  resources  and  presentation  of 
the accounts. 

The authorising officer shall be responsible for the following: 

Article 33 

(a) 

implementing  revenue  and  expenditure  in  accordance  with  the  principle  of  sound 
financial management; 

(b) 

ensuring that the requirements of legality and regularity are complied with. 

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Article 34 

1. 

2. 

To  implement  expenditure,  the  authorising  officers  by  delegation  and  by  sub-
delegation  shall  make  financial  commitments  and,  where  appropriate,  legal 
commitments, shall validate expenditure and authorise payments and shall undertake 
the preliminaries for the implementation of EDF resources. 

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. 

Article 35 

Save in cases where management is centralised, operations relating to the implementation of 
programmes or projects shall be carried out by the national or regional authorising officer, as 
defined  in  Article  35  of  Annex  IV  to  the  ACP-EC  Agreement  and  in  the  measures 
implementing the Overseas Association Decision, in close cooperation with the Commission 
in accordance with Articles 34, 35 and 36 of Annex IV to the ACP-EC Agreement. 

Article 36 

Where  the  authorising  officer  by  delegation  becomes  aware  of  problems  in  carrying  out 
procedures  relating  to  management  of  EDF  resources,  he  shall,  in  conjunction  with  the 
national  or  regional  authorising  officer,  make  all  contacts  necessary  to  remedy  the  situation 
and take any steps that are necessary. 

In cases where the national or regional authorising officer does not or is unable to perform the 
duties incumbent on him under the ACP-EC Agreement, the authorising officer by delegation 
may  temporarily  take  his  place,  in  which  case,  the  Commission  may  receive,  from  the 
resources  allocated  to  the  ACP  State  in  question,  financial  compensation  for  the  extra 
administrative workload incurred. 

Article 37 

1. 

2. 

3. 

The  authorising  officer  by  delegation  shall  put  in  place,  in  compliance  with  the 
minimum standards adopted by the Commission and having due regard to the risks 
associated with the management environment and the nature of the actions financed, 
the  organisational  structure  and  the  internal  management  and  control  procedures 
suited  to  the  performance  of  his/her  duties,  including  where  appropriate  ex  post 
verifications.  

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.  The 
initiation and the ex ante and ex post verification of that operation shall be separate 
functions. 

All  staff  responsible  for  controlling  the  management  of  financial  operations  shall 
have  the  necessary  professional  skills.  They  shall  respect  a  specific  code  of 
professional standards established by the Commission. 

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4. 

Any  member  of  staff  involved  in  the  financial  management  and  control  of 
transactions  who  considers  that  a  decision  he/she  is  required  by  his/her  superior  to 
apply  or  to  agree  to  is  irregular  or  contrary  to  the  principles  of  sound  financial 
management or the professional rules he/she is required to observe shall inform the 
authorising officer by delegation in writing and, if the latter fails to take action, the 
panel referred to in Article 54(3).  

In  the  event  of  fraud,  corruption  or  any  other  illegal  activity  which  may  harm  the 
interests of the Community, he/she shall inform the authorities and bodies designated 
by the applicable legislation. 

Article 38 

The authorising officer by delegation shall report to the Commission on the performance of 
his  duties  in  the  form  of  an  annual  activity  report  together  with  financial  and  management 
information  confirming  that  the  information  contained  in  the  report  presents  a  true  and  fair 
view except as otherwise specified in any reservations related to the defined areas of revenue 
and expenditure. 

That 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 
efficiency and effectiveness of the internal control system. The internal auditor shall take note 
of the annual report and any other pieces of information provided. No later than 15 June each 
year, the Commission shall send to the European Parliament and the Council a summary of 
the annual activity report for the previous year. 

SECTION 3 
ACCOUNTING OFFICER 

Article 39 

1. 

The Commission shall appoint an accounting officer who shall be responsible 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 VIII; 

(c) 

keeping the accounts for: 

(i) 

the allocations referred to in Article 15, except those for the Investment 
Facility, and interest rate subsidies; 

(ii) 

the commitments referred to in Article 70; 

(iii)  payments, revenue and debts; 

(d) 

laying down, in accordance with Title VIII, the accounting rules and methods 
and the chart of accounts; 

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2. 

1 

(e) 

laying  down  and  validating  the  accounting  systems  and  where  appropriate 
validating systems laid down by the authorising officer by delegation to supply 
or justify accounting information; 

(f) 

treasury management and calls for Member States contributions. 

The  accounting  officer  shall  be  empowered  to  verify  the  respect  of  criteria  for  the 
validating referred to in point (e) of the first subparagraph. 

The  accounting  officer  shall  obtain  from  the  authorising  officer  by  delegation  and 
from  the  EIB,  who  shall,  each  for  their  own  part,  guarantee  its  reliability,  all  the 
information  necessary  for  the  production  of  accounts  giving  a  true  image  of  the 
financial implementation of EDF resources. 

Article 40 

Before the adoption of the accounts by the Commission, the accounting officer shall 
sign them off, thereby certifying that he has a reasonable assurance that the accounts 
present a true and fair view of the financial situation of the EDF. 

For that purpose the accounting officer shall satisfy himself that: 

(a) 

the  accounts  have  been  prepared  in  accordance  with  the  accounting  rules, 
methods  and  accounting  systems  established  under  his  responsibility  as  laid 
down in this Regulation for the EDF accounts; 

(b) 

all revenue and expenditure is entered in the accounts. 

The  authorising  officer  by  delegation  shall  forward  all  information  that  the 
accounting officer needs in order to fulfil his duties. 

The authorising officer shall remain fully responsible for the proper use of the funds 
he/she manages as well as the legality and regularity of the expenditure under his/her 
control. 

Article 41 

The  accounting  officer  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.  The 
accounting  officer  shall  make  reservations,  if  necessary,  explaining  exactly  the  nature  and 
scope of such reservations. 

Save as otherwise provided in this Regulation, only the accounting officer is empowered to 
manage cash and cash equivalents. He shall be responsible for their safekeeping. 

Article 42 

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Article 43 

Save  as  otherwise  provided  in  this  Regulation,  only  the  accounting  officer  may,  in  the 
performance of his duties, delegate certain tasks to subordinate staff. 

The instrument of delegation shall lay down the tasks entrusted to the delegatees. 

SECTION 4 
PAYING AGENT 

Article 44 

1. 

2. 

3. 

In order to make the payments provided for in Article 37(1) and (4) of Annex IV to 
the ACP-EC Agreement or in the measures implementing the Overseas Association 
Decision,  the  accounting  officer  shall  open  accounts,  where  appropriate,  with 
financial institutions in the ACP States and the OCTs, for payments in the national 
currencies  of  the  ACP  States  or  in  the  local  currencies  of  the  OCTs,  and  with 
financial  institutions  in  the  Member  States,  for  payments  in  euro  and  other 
currencies. 

These  financial  institutions,  which  act  as  paying  agents,  execute  payments  on  the 
instructions of the accounting officer. 

In accordance with Article 37(2) of Annex IV to the ACP-EC Agreement, deposits in 
accounts  with  financial  institutions  in  the  ACP  States  and  the  OCTs  shall  bear  no 
interest and the latter shall receive no remuneration for their services.  

In accordance with Article 1(6) of the Internal Agreement, deposits in accounts with 
financial institutions in the Member States shall bear interest. Such interest shall be 
credited to the one of the accounts provided for in that Article. 

Article 45 

The  relations  between  the  Commission  and  the  paying  agents  provided  for  in  Article  37  of 
Annex  IV  to  the  ACP-EC  Agreement  or  in  the  measures  implementing  the  Overseas 
Association Decision shall be the subject of contracts. Once signed, copies of those contracts 
shall be sent to the Court of Auditors for information purposes. 

Article 46 

1. 

2. 

The Commission shall transfer from the special accounts opened pursuant to Article 
59(3) the amounts needed to replenish the accounts opened in its name in accordance 
with  Article  44.  Such  transfers  shall  be  made on the basis of the cash  needs of the 
projects and programmes. 

The Commission shall endeavour to make any withdrawals from the special accounts 
referred to in the first subparagraph of Article 59(3) in such a way as to maintain a 

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distribution of its assets in those accounts corresponding to the proportions in which 
the various Member States contribute to the EDF. 

Article 47 

The  signatures  of  the  Commission  staff  who  are  empowered  to  carry  out  operations  on  the 
EDF's accounts shall be lodged with the banks concerned when the accounts are opened or, in 
the case of staff who are authorised subsequently, when they are designated.  

SECTION 5 
PAYING MANAGER 

Article 48 

1. 

2. 

1. 

In order to make the payments provided for in Article 44, the accounting officer shall 
appoint  a  paying  manager  to  execute  local  payments  through  the  paying  agent 
account.  

Paying managers shall be chosen from officials or, should the need arise and only in 
duly substantiated cases, from other members of staff.  

Article 49 

The  appointment  of  the  paying  manager  shall  be  the  subject  of  a  decision  by  the 
accounting  officer,  on  a  duly  substantiated  proposal  from  the  authorising  officer 
responsible. That decision shall set out the respective responsibilities and obligations 
of the paying manager and the authorising officer.  

It shall specify at least:  

(a) 

the  frequency  with  which  supporting  documents  are  to  be  produced  and  the 
procedure for producing them; 

(b) 

the procedure to be followed for replenishing the paying agent account;  

(c) 

the period of validity of the authorisation given to the paying manager by the 
accounting officer;  

(d) 

the identity of the appointed paying manager. 

The amendment of the decision referred to in the first subparagraph shall also be the 
subject of a decision by the accounting officer on a duly substantiated proposal from 
the authorising officer responsible. 

2. 

The paying manager may, after the instruction from the accounting officer, execute 
duly  authorised  payments  to  third  parties  within  the  limits  of  the  positive  residual 
balance of the paying agent account at the bank.  

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Article 50 
Replenishment of local bank accounts 

The accounting officer shall replenish paying agent accounts and shall monitor those accounts 
as regards the opening of bank accounts, the delegation of signatures and the controls on the 
spot and in the centralised accounts.  

Paying  agent  accounts  may  be  endowed  directly  by  miscellaneous  local  revenue  that  arise 
from:  

(a) 

(b) 

miscellaneous repayments 

recovery orders. 

CHAPTER 4 
LIABILITY OF THE FINANCIAL ACTORS 

SECTION 1 
GENERAL RULES 

Article 51 

1. 

2. 

3. 

1. 

2. 

Without  prejudice  to  any  disciplinary  action,  the  authorising  officers  by  delegation 
and  by  sub-delegation  may  at  any  time  have  their  delegation  or  sub-delegation 
withdrawn temporarily or definitively by the authority which appointed them. 

Without prejudice to any disciplinary action, the accounting officer may at any time 
be suspended temporarily or definitively from his/her duties by the Commission. 

Without  prejudice  to  any disciplinary action, the  paying managers may at any time 
be  suspended  temporarily  or  definitively  from  their  duties  by  the  authority  which 
appointed them. 

Article 52 

The provisions of this Chapter are without prejudice to any liability under criminal 
law which the financial actors referred to in Article 51 may incur as provided in the 
applicable  national  law  and  in  the  provisions  in  force  on  the  protection  of  the 
financial interests of the Communities and on the fight against corruption involving 
staff or officials of Member States. 

Each  authorising  officer  or  accounting  officer  shall  be  liable  to  disciplinary  action 
and  payment  of  compensation  as  laid  down  in  the  Staff  Regulations,  without 
prejudice to Articles 53 to 56 of this Regulation.  

In  the  event  of  fraud,  corruption  or  any  other  illegal  activity  which  may  harm  the 
interests  of  the  Community,  the  matter  shall  be  submitted  to  the  competent 
authorities or bodies. 

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SECTION 2 
RULES APPLICABLE TO AUTHORISING OFFICERS 

The obligation for the authorising officer to pay compensation as referred to in Article 52(2) 
shall apply in particular if: 

Article 53 

(a) 

(b) 

1. 

2. 

3. 

the authorising officer, whether intentionally or through gross 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; 

the authorising officer, whether intentionally or through gross negligence on his part, 
omits to draw up a document establishing an amount receivable, neglects to issue a 
recovery  order  or  is  late  in  issuing  it  or  is  late  in  issuing  a  payment  order,  thereby 
rendering the Commission liable to civil action by third parties. 

Article 54 

Where  an  authorising  officer  by  delegation  or  by  sub-delegation  considers  that  a 
decision  which  it  is  his/her  responsibility  to  take  is  irregular  or  contrary  to  the 
principles  of  sound  financial  management,  he/she  shall  inform  the  delegating 
authority in writing. If the delegating authority then gives a reasoned instruction in 
writing  to  the  authorising  officer  by  delegation  or  by  sub-delegation  to  take  the 
decision in question, the latter may not be held liable. 

In  the  event  of  sub-delegation  within  his  services,  the  authorising  officer  by 
delegation  continues  to  be  responsible  for  the  efficiency  and  effectiveness  of  the 
internal  management  and  control  systems  put  in  place  and  for  the  choice  of  the 
authorising officer by sub-delegation. 

The  specialised  financial  irregularities  panel  set  up  by  the  Commission  pursuant  to 
Regulation  (EC,  Euratom)  No  1605/2002  shall  have  competence  to  determine,  in 
relation  to  the  EDF,  whether  a  financial  irregularity  has  occurred  and  what  the 
consequences, if any, should be. In respect of the management of EDF resources by 
the Commission, cases shall be referred to that panel as provided for in Article 75 of 
Regulation (EC, Euratom) No 2342/2002. 

On the basis of the panel's opinion, the Commission shall decide whether to initiate 
proceedings entailing liability to disciplinary action or to payment of compensation. 
If the panel detects systemic problems, it shall send a report with recommendations 
to the authorising officer by delegation, provided the latter is not the person involved, 
as well as to the internal auditor. 

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SECTION 3 
RULES APPLICABLE TO ACCOUNTING OFFICERS AND PAYING MANAGERS 

Article 55 

An accounting officer shall be liable to disciplinary action and payment of compensation, as 
laid  down  and  in  accordance  with  the  procedures  in  the  Staff  Regulations.  He/She  may  in 
particular render himself/herself liable by any of the following forms of misconduct: 

(a) 

(b) 

(c) 

he/she loses or damages monies, assets and documents in his/her keeping; 

he/she wrongly alters bank accounts or postal giro accounts; 

he/she recovers or pays amounts which are not in conformity with the corresponding 
recovery or payment orders; 

(d) 

he/she fails to collect revenue due. 

Article 56 

A paying manager shall be liable to disciplinary action and payment of compensation, as laid 
down  and  in  accordance  with  the  procedures  in  the  Staff  Regulations.  He/She  may  in 
particular render himself/herself liable by any of the following forms of misconduct: 

(a) 

(b) 

(c) 

(d) 

he/she loses or damages monies, assets and documents in his/her keeping;  

he/she  cannot  provide  proper  supporting  documents  for  the  payments  he/she  has 
made;  

he/she makes payments to persons other than those entitled;  

he/she fails to collect revenue due. 

CHAPTER 5 
REVENUE OPERATIONS 

SECTION 1 
MAKING AVAILABLE OF EDF RESOURCES 

Article 57 

1. 

The  Member  States'  annual  contributions  for  the  year  n  shall  be  determined  by  the 
10th  of  December  of  the  year  n-1  by  the  Council,  acting  by  the  qualified  majority 
provided  for  in  Article  8  of  the  Internal  Agreement,  on  a  proposal  from  the 
Commission. 

EN 

26 

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2. 

3. 

The  Commission  shall  present  the  proposal  referred  to  in  paragraph  1  at  the  same 
time  as  its  communication  to  the  Council  on  the  statement  of  the  commitments, 
payments  and  the  annual  amount  of  the  calls  for  contribution  to  be  made  in  the 
current  and  the  two  following  budget  years,  as  referred  to  in  Article  7(1)  of  the 
Internal Agreement. 

The  Council  decision  shall  establish  global  amounts  for  the  whole  of  the  year  n. 
Amounts  which  shall  be  managed  by  the  Commission  and  amounts  which  shall  be 
managed by the EIB will be presented separately. 

1. 

Payments  of  Member  States'  contributions  shall  consist  of  monthly  instalments 
which shall be paid in accordance with the following: 

Article 58 

(a) 

each instalment shall consist of one twelfth of the annual amount; 

(b)  Member  States  shall  pay  their  contributions  due  at  the  latest  by  the  first 

working day of each month; 

(c) 

(d) 

(e) 

the Commission shall notify the Member States in advance, no later than two 
weeks before the entry requested; 

the Commission may call up to two anticipated twelfths during the first quarter 
for reasons of treasury management; 

during the year, the Commission, with consultation with the EIB if applicable, 
may  present  a  proposal  to  the  Council  to  modify  the  global  amounts,  in  line 
with the updated forecasts. The Council shall decide within 21 calendar days. If 
this  proposal  leads  to  a  reduction  of  the  global  amounts,  the  Commission  is 
entitled to reduce the monthly instalments accordingly; 

2. 

Each instalment of contributions shall specify, in accordance with Articles 1 to 5: 

(a) 

(b) 

the  amount  of  the  contributions  required  to  finance  the  EDF  operations 
managed by the Commission; 

the  amount  of  the  contributions  required  to  finance  the  EDF  operations 
managed by the EIB, including interest rates subsidies. 

3. 

4. 

The amounts to be paid by each Member State and referred to in paragraph 2 of this 
Article shall be set in such a way as to be in proportion to that State's contributions to 
the EDF as fixed in Article 1(2) of the Internal Agreement, for each of the amounts 
referred to in paragraph 2 of this Article. 

Calls  for  contributions  shall  first  use  up  the  amount  laid  down  in  the  internal 
agreements of previous EDFs, in a chronological order. 

EN 

27 

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1. 

2. 

3. 

1. 

2. 

3. 

Article 59 

The financial contributions of the Member States shall be expressed in euro. 

Each Member State shall pay the amount of its contribution in euro. 

In  respect  of  the  amount  due  to  the  Commission  under  point  (a)  of  Article  58(2), 
financial contributions shall be credited by each Member State to a special account 
entitled  "Commission  of  the  European  Communities  —  European  Development 
Fund" opened with the bank of issue of that Member State or the financial institution 
designated  by  it.  The  amount  of  such  contributions  shall  remain  in  those  special 
accounts until the payments provided for in Article 37 of Annex IV to the ACP-EC 
Agreement or in the measures implementing the Overseas Association Decision need 
to be made. 

In  respect  of  the  amount  due  to  the  EIB  under  point  (b)  of  Article  58(2)  of  this 
Regulation,  financial  contributions  shall  be  credited  by  each  Member  State,  in 
accordance with Article 146, to an account opened with the EIB in the name of each 
Member State. 

Where  necessary,  the  Commission  shall  provide  appropriate  technical  assistance  in 
the implementation of the Council decisions referred to in Articles 57 and 58. 

Article 60 

Where  an  instalment  of  contributions  payable  under  this  Article  is  not  paid  by  the 
concerned deadline fixed by point (b) of Article 58(1), the Member State concerned 
shall be required to pay interest in respect of the unpaid amount.  

The interest for unpaid amounts shall be charged at a rate of two percentage points 
above the interest rate applied by the European Central Bank to its main refinancing 
operations on the first working day of the month in which the amount falls due, as 
published  in  the  C  series  of  the  Official  Journal  of  the  European  Union.  That  rate 
shall be increased by a quarter of a percentage point for each month of delay.  

The  interest  shall  be  payable  for  the  entire  period  of  delay  and  shall  be  calculated 
from  the  first  calendar  day  following  the  deadline  for  payment  of  the  concerned 
instalment. 

In respect of the amount due to the Commission under point (a) of Article 58(2) of 
this  Regulation,  late  payment  interest  shall  be  credited  to  one  of  the  accounts 
provided for in Article 1(6) of the Internal Agreement. 

In  respect  of  the  amount  due  to  the  EIB  under  point  (b)  of  Article  58(2)  of  this 
Regulation, late payment interest shall be credited to the EIB. 

EN 

28 

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5. 

1. 

2. 

3. 

Article 61 

Upon expiry of the financial protocol set out in Annex Ib to the ACP-EC Agreement, 
that  part  of  the  contributions  which  the  Member  States  remain  obliged  to  pay  in 
accordance  with  Article  57  shall  be  called  up  by  the  Commission,  as  required,  in 
accordance with the conditions laid down in this Regulation. 

SECTION 2 
ESTIMATES OF AMOUNTS RECEIVABLE 

Article 62 

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 EDF. 

By way of derogation from paragraph 1, no estimate of the amount receivable shall 
be  made  before  Member  States  make  available  to  the  Commission  the  amounts  of 
their contributions to the EDF, as defined in  Articles 57 and 58 of this Regulation. 
The  authorising  officer  responsible  shall  issue  a  recovery  order  in  respect  of  these 
amounts. 

Article  77  of  Regulation  (EC,  Euratom)  No  2342/2002,  as  amended  by  Regulation 
(EC, Euratom) No 478/2007 shall apply mutatis mutandis to the implementation of 
paragraph 1. 

SECTION 3 
ESTABLISHMENT OF AMOUNTS RECEIVABLE 

1. 

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

Article 63 

(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. 

The  EDF  resources  made  available  to  the  Commission  and  any  amount  receivable 
that is identified as being certain, of a fixed amount and due shall be established by a 
recovery order to the accounting officer followed by a debit note sent to the debtor, 
both drawn up by the authorising officer responsible. 

3. 

Amounts wrongly paid shall be recovered. 

EN 

29 

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4. 

Article  86  of  Regulation  (EC,  Euratom)  No  2342/2002,  as  amended  by  Regulation 
(EC, Euratom) No 478/2007 shall apply mutatis mutandis as regards the conditions 
in which interest on late payment is due to the EDF. 

SECTION 4 
AUTHORISATION OF RECOVERY 

Article 64 

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

Without  prejudice  to  the  responsibilities  of  the  ACP  States  or  the  OCTs,  the 
Commission  may  formally  establish  an  amount  as  being  receivable  from  persons 
other than States by means of a decision which shall be enforceable under the same 
conditions as laid down in Article 256 of the Treaty. 

Articles  81  and  84  of  Regulation  (EC,  Euratom)  No  2342/2002,  as  amended  by 
Regulation  (EC,  Euratom)  No  478/2007  shall  apply  mutatis  mutandis  to  the 
implementation of paragraphs 1 and 2. 

SECTION 5 
RECOVERY 

Article 65 

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

The  accounting  officer  shall  recover  amounts  by  offsetting  them  against  equivalent 
claims that the EDF or the Community have on any debtor who himself/herself has a 
claim on the EDF or the Community that is certain, of a fixed amount and due. 

As regards the direct labour and indirect decentralised operations referred to in Title 
VI,  where  claims  from  the  EDF  on  the  National  Authorising  Officer  are  not 
recovered within the prescribed time-limits, the authorising officer responsible shall 
take  all  the  necessary  measures  to  obtain  actual  repayment  of  the  sums  due, 
including, where appropriate, suspension of the use of that type of arrangement for 
that State or OCT. 

Where the authorising officer by delegation is planning to waive or partially waive 
recovery of an established amount receivable, he/she shall ensure that the waiver is 
in  order  and  complies  with  the  principles  of  sound  financial  management  and 
proportionality.  The  waiver  decision  shall  be  substantiated.  The  authorising  officer 

1. 

2. 

3. 

1. 

2. 

3. 

4. 

EN 

30 

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may delegate the decision only as laid down by the Commission in Regulation (EC, 
Euratom) No 2342/2002, as amended by Regulation (EC, Euratom) No 478/2007. 

5. 

6. 

7. 

The authorising officer may cancel or adjust an established amount receivable. 

Entitlements of the EDF in respect of third parties and entitlements of third parties in 
respect of the EDF shall be subject to a limitation period of five years. 

Articles  82  to  85  and  87  to  89  of  Regulation  (EC,  Euratom)  No  2342/2002,  as 
amended by Regulation (EC, Euratom) No 478/2007 shall apply mutatis mutandis to 
the implementation of paragraphs 1 to 6. 

CHAPTER 6 
EXPENDITURE OPERATIONS 

SECTION 1 
GENERAL PROVISIONS 

Article 66 

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

SECTION 2 
COMMITMENT OF EXPENDITURE 

The  commitment  of  expenditure  shall  be  preceded  by  a  financing  decision  adopted  by  the 
Commission or by the authorities to which the Commission has delegated powers. 

Article 67 

Article 68 

1. 

2. 

3. 

The  financial  commitment  by  the  Commission  is  the  operation  reserving  the  funds 
necessary to cover subsequent payments to honour a legal commitment. 

The legal commitment by the Commission is the act whereby the authorising officer 
responsible enters into or establishes an obligation with regard to third parties which 
results in a charge to the EDF. 

The financial commitment and the legal commitment shall be adopted by the same 
authorising officer. That rule may be waived in the following cases: 

(a) 

administrative expenditure incurred by the Commission within the meaning of 
paragraph 3 of Article 69 in respect of which the financial commitments have 
been divided in accordance with paragraph 2 of Article 69; 

EN 

31 

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(b)  global  commitments  relating  to  financing  agreements  under  paragraph  3  of 

Article 70. 

Article 69 

The Commission's financial commitment is individual when the beneficiary and the 
amount of the expenditure are known. 

The Commission's financial commitment is global when at least one of the elements 
necessary to identify the individual commitment is still not known. 

Financial  commitments  for  administrative  expenditure  of  the  Commission  may  be 
divided  over  several  years  into  annual  instalments.  The  corresponding  legal 
commitments shall provide for that division. 

The  following  shall  be  regarded  as  administrative  expenditure  for  the  purposes  of 
point (a) of the third paragraph of Article 68 and paragraph 2: 

(a) 

expenditure on human resources other than regular staff; 

(b) 

training expenditure; 

(c)  mission expenses; 

(d) 

representation expenses; 

(e)  meeting expenses; 

(f) 

expenses relating to freelance interpreters and/or translators; 

(g) 

expenses relating to exchanges of officials; 

(h) 

cost of recurring rentals of movable and immovable property; 

(i) 

cost of miscellaneous insurance; 

(j) 

cost of cleaning and maintenance; 

(k) 

costs related to the use of telecommunications services; 

(l) 

cost of water, gas and electricity; 

(m)  outlay for periodical publications. 

Article 70 

The  authorising  officer  responsible  shall  make  a  financial  commitment  before 
entering into a legal commitment, binding upon the Commission, with third parties. 

Financing  decisions  taken  by  the  Commission,  in  accordance  with  the  ACP-EC 
Agreement  or  the  Overseas  Association  Decision,  which  authorise  it  to  grant 
financial  aid  from  the  EDF,  shall  give  rise  to  financial  commitments  by  the 
Commission. 

1. 

2. 

3. 

1. 

2. 

EN 

32 

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3. 

The following shall constitute legal commitments by the Commission: 

(a) 

(b) 

a  financing  agreement  between  the  Commission,  acting  on  behalf  of  the 
Community,  and  the  beneficiary  ACP  States  or  the  beneficiary  OCTs  or  the 
bodies they have designated; 

a  contract  or  grant  agreement  between  the  Commission  and  national  or 
international  public-sector  bodies  or  natural  or  legal  persons  responsible  for 
carrying out the actions. 

4. 

Each  financing  agreement,  contract  or  grant  agreement  shall  provide  expressly  for 
the  Commission,  OLAF  and  the  Court  of  Auditors,  to  exercise  their  powers  of 
control, on documents and on the spot, over all contractors and subcontractors who 
have received financing from EDF resources. 

Article 71 

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

(a) 

(b) 

(c) 

the expenditure has been charged to the correct accounting item; 

the funds are available; 

the  expenditure  is  in  accordance  with  the  relevant  provisions,  in  particular  of  the 
ACP-EC  Agreement,  the  Overseas  Association  Decision,  the  Internal  Agreement, 
this Regulation, and all acts adopted in implementation of those provisions; 

(d) 

the principle of sound financial management is complied with. 

Article 72 

When registering a legal commitment, the authorising officer shall ensure that the following: 

(a) 

(b) 

the commitment is covered by the corresponding financial commitment; 

the  expenditure  is  regular  and  in  accordance  with  the  relevant  provisions,  in 
particular  of  the  ACP-EC  Agreement,  the  Overseas  Association  Decision,  the 
Internal Agreement, this Regulation, and all acts adopted in implementation of those 
provisions; 

(c) 

the principle of sound financial management is respected. 

EN 

33 

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SECTION 3 
COMMITMENT OF EXPENDITURE UNDER CENTRALISED OR JOINT MANAGEMENT 

Where EDF resources are managed by the Commission on a centralised basis or jointly, the 
commitment of expenditure shall be subject to the provisions of this Section. 

Article 73 

1. 

2. 

1. 

2. 

Article 74 

Legal commitments relating to individual financial commitments shall be concluded 
by the Commission by 31 December of year N at the latest, year N being the year in 
which  the  Commission's  individual  financial  commitment  was  adopted,  subject  to 
Article 68(3). 

As  a  general  rule,  global  financial  commitments  shall  cover  the  total  cost  of  the 
corresponding individual legal commitments concluded by the Commission up to 31 
December  of  year  N + 1,  year  N  being  the  year  in  which  the  Commission's  global 
financial commitment was adopted, subject to Article 68(3). 

However, where the global commitments referred to in point (a) of Article 70(3) are 
implemented, the Commission shall conclude the corresponding individual contracts 
and  agreements  no  later  than  three  years  following  the  date  of  conclusion  of  the 
financing agreement.  

Individual  contracts  and  agreements  relating  to  audit  and  evaluation  may  be 
concluded later. Riders to contracts already concluded may also be concluded later. 

At  the  end  of  the  periods  referred  to  in  paragraph  1  and  the  first  and  second 
subparagraphs of this paragraph,  the  authorising  officer responsible shall  decommit 
the unused balance of those financial commitments. 

Article 75 

The  amount  of  each  individual  legal  commitment  adopted  by  the  Commission 
following  a  global  commitment  shall,  prior  to  signature,  be  registered  by  the 
authorising  officer  responsible  in  the  EDF  accounts  and  booked  to  the  global 
financial commitment. 

The  legal  commitments  entered  into  for  actions  extending  over  more  than  one 
financial  year  and  the  corresponding  financial  commitments  shall  have  a  final  date 
for  implementation  set  in  accordance  with  the  principle  of  sound  financial 
management, save in the case of the administrative expenditure referred to in Article 
69(3). 

Any parts of such commitments which have not been executed six months after that 
date shall be decommitted and the corresponding appropriations cancelled. 

EN 

34 

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The  amount  of  a  financial  commitment  corresponding  to  a  legal  commitment  for 
which no payment has been made in a period of three years following the signing of 
the  legal  commitment  shall  be  decommitted  and  the  corresponding  appropriations 
cancelled. 

3. 

Paragraph 2 shall apply without prejudice to the decisions that the Council may adopt 
under Articles 96 and 97 of the ACP-EC Agreement. 

Article 76 

The  termination  of  a  project  and  the  decommitment  of  the  funds  committed  in  accordance 
with Articles 73, 74 and 75 shall be carried out when the legal commitments entered into by 
the Commission in connection with that project with respect to third parties are concluded and 
the related payments and collections have been recorded in the EDF accounts. 

SECTION 4 
COMMITMENT OF EXPENDITURE UNDER DECENTRALISED MANAGEMENT 

Where EDF resources are managed on a decentralised basis, the commitment of expenditure 
by the Commission shall be subject to the provisions of this Section. 

Article 77 

Article 78 

1. 

2. 

Financing agreements with the beneficiary ACP States or OCTs shall be concluded 
by  31  December  of  year  N+1  at  the  latest,  N  being  the  year  in  which  the 
Commission's global financial commitment was adopted. 

Where financing agreements are not concluded by the deadline laid down in the first 
subparagraph, the corresponding appropriations shall be cancelled. 

The Commission shall be under an obligation to effect payment from EDF resources 
whenever  the  authorising  officer  responsible  endorses  contracts,  grant  agreements 
and programme estimates, as provided for in Article 101(3). 

The  authorising  officer  responsible  shall  register  in  the  EDF  accounts,  prior  to 
signature  for  endorsement,  the  amount  of  each  individual  legal  commitment  which 
he/she  has  endorsed  following  a  global  commitment.  He  shall  book  this  amount  to 
the global financial commitment. 

3. 

Paragraph 1 shall apply without prejudice to the decisions that the Council may adopt 
under Articles 96 and 97 of the ACP-EC Agreement. 

EN 

35 

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In accordance with the principle of sound financial management referred to in Article 11 and 
acting within its powers, the Commission shall endeavour to ensure that: 

Article 79 

(a) 

(b) 

the  legal  commitments  implementing  the  financing  agreements  referred  to  in 
Article  78  (1)  are  concluded  no  later  than  three  years  following  the  date  of 
conclusion of the corresponding financing agreement. Individual contracts and 
agreements  relating  to  audit  and  evaluation,  and  riders  to  contracts  already 
concluded, may be concluded later; 

the  amount  of  an  individual  financing  commitment  corresponding  to  a  legal 
commitment implementing a financing agreement referred to in Article 78 (1) 
and for which no payment has been made in a period of three years following 
the signing of the legal commitment shall be decommitted. 

At the end of any deadline fixed in the financing agreements for conclusion of 
the  legal  commitments  referred  to  in  point  (a)  of  the  first  subparagraph,  the 
authorising  officer  responsible  shall  decommit  the  unused  balance  of  the 
corresponding financial commitments. 

Legal commitments as referred to in point (b) of the first subparagraph shall be 
contracts,  grant  agreements  or  programme  estimates  concluded  by  the  ACP 
State or OCT or its authorities or contracts and grant agreements concluded by 
the Commission acting in their name and on their behalf. For the purposes of 
application of this subparagraph, the Commission shall, in agreement with the 
beneficiary  ACP  States  and  OCTs,  incorporate  relevant  provisions  in  the 
financing agreements referred to in Article 78(1). 

Article 80 

The  termination  of  a  project  and  the  decommitment  of  the  funds  committed  in  accordance 
with Articles 78 and 79 shall be carried out by the ACP State or OCT or its authorities, and/or 
by  the  Commission  acting  in  their  name  and  on  their  behalf  in  connection  with  that  project 
with respect to third parties, after conclusion of the legal commitments entered into and after 
the related payments and collections have been recorded in the EDF accounts. 

SECTION 5 
VALIDATION OF EXPENDITURE 

Article 81 

1. 

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

(a) 

verifies the existence of the creditor's entitlement; 

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

(c) 

verifies the conditions in which payment is due. 

EN 

36 

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2. 

Articles  97  to  101  of  Regulation  (EC,  Euratom)  No  2342/2002,  as  amended  by 
Regulation  (EC,  Euratom)  No  478/2007  shall  apply  mutatis  mutandis  to  the 
validation of expenditure. 

SECTION 6 
AUTHORISATION OF EXPENDITURE 

Article 82 

1. 

2. 

3. 

Authorisation  of  expenditure  is the act whereby the authorising officer responsible, 
having verified that the funds are available and by issuing a payment order, instructs 
the accounting officer to pay an amount of expenditure which he/she has validated. 

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

Articles  102  and  103  of  Regulation  (EC,  Euratom)  No  2342/2002,  as  amended  by 
Regulation  (EC,  Euratom)  No  478/2007  shall  apply  mutatis  mutandis  to  the 
implementation of this Article. 

SECTION 7 
PAYMENT OF EXPENDITURE 

Article 83 

1. 

Payment  shall  be  made  on  production  of  proof  that  the  relevant  action  is  in 
accordance with the basic act or the contract. Payment shall cover one or more of the 
following operations: 

(a) 

payment of the entire amount due; 

(b)  payment of the amounts 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. 

2. 

3. 

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. 

Articles  104  and  105  of  Regulation  (EC,  Euratom)  No  2342/2002,  as  amended  by 
Regulation (EC, Euratom) No 478/2007 shall apply mutatis mutandis. 

EN 

37 

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The accounting officer shall make the payment of expenditure within the limits of the funds 
available. 

Article 84 

Article 85 

Payments shall be effected through the bank accounts referred to in Article 44. The detailed 
rules  for  opening,  administering  and  using  such  accounts  shall  be  determined  by  the 
accounting officer. 

Those  rules  shall  in  particular  require  the  joint  signatures  on  transfer  orders  and  all  bank 
payments of two members of staff duly authorised by the accounting officer. 

For  payments  made  by  the  paying  manager,  the  authorising  officer  responsible  shall  ensure 
that checks are carried out before their execution. 

Article 86 

SECTION 8 
TIME LIMITS FOR EXPENDITURE OPERATIONS 

Article 87 

1. 

2. 

3. 

The validation, authorisation and payment of expenditure shall be completed within a 
period of no more than 90 days from the date on which payment is due. The national 
or  regional  authorising  officer  shall  authorise  the  expenditure  and  notify  the 
Commission's  authorising  officer  responsible  accordingly  no  later  than  45  days 
before that time limit expires. 

Creditors  paid  late  are  entitled  to  receive  default  interest  in  accordance  with 
Article 106 of Regulation (EC, Euratom) No 2342/2002, as amended by Regulation 
(EC, Euratom) No 478/2007. 

Claims for delayed payments for which the Commission is responsible in accordance 
with  Article  37  of  Annex  IV  to  the  ACP-EC  Agreement  shall  be  borne  by  the 
Commission from the account or accounts provided for in Article 1(6) of the Internal 
Agreement. 

CHAPTER 7 
IT SYSTEMS 

Article 88 

1. 

Where  revenue  and  expenditure  operations  are  managed  by  means  of  computer 
systems, documents may be signed by a computerised or electronic procedure. 

EN 

38 

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2. 

Articles  107  and  108  of  Regulation  (EC,  Euratom)  No  2342/2002,  as  amended  by 
Regulation  (EC,  Euratom)  No  478/2007  shall  apply  mutatis  mutandis  to  the 
implementation of this Article. 

CHAPTER 8 
INTERNAL AUDITOR 

Article 89 

The internal auditor of the EDF shall be the internal auditor of the Commission. He/she shall 
perform his/her duties in accordance with the relevant international standards. He/she shall be 
answerable to the Commission for verifying the proper operation of systems and procedures 
for implementing EDF resources managed by the Commission under Article 2. The internal 
auditor may not be either authorising officer or accounting officer. 

Article 90 

1. 

The  internal  auditor  shall  advise  the  Commission  on  dealing  with  risks,  by  issuing 
independent  opinions  on  the  quality  of  management  and  control  systems  and  by 
issuing  recommendations  for  improving  the  conditions  of  implementation  of 
operations and promoting sound financial management.  

He/She shall be responsible in particular for the following: 

(a) 

(b) 

assessing the suitability and effectiveness of internal management systems and 
the  performance  of  departments  in  implementing  policies,  programmes  and 
actions by reference to the risks associated with them; 

assessing  the  efficiency  and  effectiveness  of  the  internal  control  and  audit 
systems  applicable  to  every  operation  for  the  implementation  of  EDF 
resources. 

The  internal  auditor  shall  enjoy  full  and  unlimited  access  to  all  the  information 
required to perform his/her duties, if necessary on the spot, including in the Member 
States and in third countries. 

The  internal  auditor  shall  report  to  the  Commission  on  his/her  findings  and 
recommendations.  The  Commission  shall  ensure 
taken  on 
recommendations resulting from audits. The internal auditor shall also submit to the 
Commission an annual internal audit report indicating the number and type of audits 
carried  out, 
those 
recommendations. 

the  recommendations  made  and 

that  action 

the  action 

taken  on 

is 

Each  year  the  Commission  shall  forward  a  report  to  the  discharge  authority 
summarising 
the 
recommendations made and the action taken on those recommendations. 

internal  audits  carried  out, 

the  number  and 

type  of 

2. 

3. 

4. 

EN 

39 

   EN 

 
5. 

Articles  109  to  115  of  Regulation  (EC,  Euratom)  No  2342/2002,  as  amended  by 
Regulation  (EC,  Euratom)  No  478/2007  shall  apply  mutatis  mutandis  to  the 
implementation of this Article. 

TITLE V 
PROCUREMENT 

CHAPTER 1 
GENERAL PROVISIONS 

SECTION 1 
SCOPE AND AWARD PRINCIPLES 

1. 

2. 

Article 91 

Public  contracts  are  contracts  for  pecuniary  interest  concluded  in  writing  between 
one or more economic operators and one or more contracting authorities within the 
meaning of Article 92 in order to obtain, against payment of a price paid in whole or 
in  part  from  EDF  resources,  the  supply  of  movable  or  immovable  assets,  the 
execution of works or the provision of services. 

Those contracts comprise: 

(a) 

supply contracts; 

(b)  works contracts; 

(c) 

service contracts. 

Framework  contracts  are  contracts  concluded  between  one  or  more  contracting 
authorities and one or more economic operators, the purpose of which is to establish 
the terms governing contracts to be awarded during a given period, in particular with 
regard  to  price  and,  where  appropriate,  the  quantity  envisaged.  They  shall  be 
governed  by the provisions  of  this Title concerning  the award  procedure,  including 
advertising. 

1. 

The following shall be contracting authorities for the purposes of this Title: 

Article 92 

(a) 

the  beneficiary  ACP  States  or  bodies  duly  mandated  by  them  in  so  included 
official regional bodies, or their representatives; 

(b) 

the Commission, in the case of contracts awarded on its own account; 

(c) 

the Commission, on behalf of and for the account of one or more beneficiary 
ACP States; 

EN 

40 

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(d) 

a  national  or  international  public  sector  body  or  natural  or  legal  persons  who 
have signed a financing agreement or grant agreement with one or more ACP 
countries  or  with  the  Commission  for  the  implementation  of  a  programme  or 
project. 

2. 

The procurement procedures shall be laid down in the financing agreements referred 
to in Article 70(3). 

SECTION 2 
PUBLICATION 

Article 93 

Within the limits of the powers conferred on it by the ACP-EC Agreement and in accordance 
with the conditions laid down in Annex IV thereto, the Commission shall take the necessary 
steps  to  have  international  tendering  procedures  published  in  the  Official  Journal  of  the 
European Union and on the Internet. 

CHAPTER 2 
PROCUREMENT PROCEDURES  

Article 94 

1. 

2. 

The  conditions  for  participation  and  the  procedures  for  the  award  of  contracts 
relating  to  operations  financed  by  the  EDF  to  assist  ACP  States  shall  be  those 
defined in Annex IV to the ACP-EC Agreement. 

The procedures for the award of contracts relating to operations financed by the EDF 
to  assist  OCTs  shall  be  defined  in  the  measures  implementing  the  Overseas 
Association Decision. 

Where  the  Commission  acts  as  contracting  authority  for  the  implementation  of 
humanitarian aid or emergency aid within the framework of the ACP-EC Agreement 
or the Overseas Association Decision, it shall be required to comply with the relevant 
Community rules on procurement. 

Article 95 

The documents relating to the call for tenders shall give a full, clear and precise description of 
the subject of the contract and specify the exclusion, selection and award criteria applicable to 
the contract. 

1. 

Candidates  or  tenderers  shall  be  excluded  from  participation  in  procurement 
procedures if: 

Article 96 

EN 

41 

   EN 

 
(a) 

(b) 

(c) 

(d) 

they are bankrupt or being wound up, are having their affairs administered by 
the  courts,  have  entered  into  an  arrangement  with  creditors,  have  suspended 
business activities, are the subject of proceedings concerning those matters, or 
are in any analogous situation arising from a similar procedure provided for in 
national legislation or regulations; 

they have been convicted of an offence concerning their professional conduct 
by a judgment which has the force of res iudicata; 

they have been guilty of grave professional misconduct proven by any means 
which the contracting authority can justify; 

they  have  not  fulfilled  obligations  relating  to  the  payment  of  social  security 
contributions or the payment of taxes in accordance with the legal provisions of 
the  country  in  which  they  are  established  or  with  those  of  the  country  of  the 
contracting  authority  or  those  of  the  country  where  the  contract  is  to  be 
performed; 

(e) 

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

(f) 

they are currently subject to an administrative penalty referred to in Article 99. 

Points (a) to (d) of the first subparagraph shall not apply in the case of purchase of 
supplies  on  particularly  advantageous  terms  from  a  supplier  which  is  definitively 
winding  up  its  business  activities,  or  from  the  receivers  or  liquidators  of  a 
bankruptcy,  through  an  arrangement  with  creditors,  or  through  a  similar  procedure 
under national law. 

2. 

Candidates or tenderers shall certify that they are not in one of the situations listed in 
paragraph  1.  However,  the  contracting  authority  may  refrain  from  requiring  such 
certification for very low value contracts. 

For the purpose of the correct application of paragraph 1, the candidate or tenderer, 
whenever requested by the contracting authority, must: 

(a)  where  the  candidate  or  tenderer  is  a  legal  entity,  provide  information  on  the 
ownership  or  on  the  management,  control  and  power  of  representation  of  the 
legal entity; 

(b)  where subcontracting is envisaged, certify that the subcontractor is not in one 

of the situations referred to in paragraph 1. 

3. 

Article 133 of Regulation (EC, Euratom) No 2342/2002, as amended by Regulation 
(EC, Euratom) No 478/2007 shall apply mutatis mutandis to the implementation of 
this Article. 

EN 

42 

   EN 

 
Article 97 

A  contract  shall  not  be  awarded  to  candidates  or  tenderers  who,  during  the  procurement 
procedure for this contract: 

(a) 

(b) 

(c) 

are subject to a conflict of interest; 

are  guilty  of  misrepresentation  in  supplying  the  information  required  by  the 
contracting authority as a condition of participation in the procurement procedure or 
fail to supply this information; 

find themselves in one of the situations of exclusion, referred to in Article 96(1), for 
this procurement procedure. 

Article 98 

Within the limits of the powers conferred on it by the ACP-EC Agreement the Commission 
shall take steps to use the central database set up pursuant to Regulation (EC, Euratom) No 
1605/2002 and containing details of candidates and tenderers who are, according to the rules 
defined  in  Annex  IV  to  the  ACP-EC  Agreement,  in  a  situation  that  excludes  them  from 
participation  in  procedures  for  the  award  of  contracts  relating  to  operations  financed  by  the 
EDF. 

Article 99 

1. 

Subject  to  Annex  IV  to  the  ACP-EC  Agreement,  the  contracting  authority  may 
impose administrative or financial penalties on the following: 

(a) 

candidates or tenderers in the cases referred to in point (b) of Article 97; 

(b) 

contractors who have been declared to be in serious breach of their obligations 
under contracts covered by the EDF. 

In all cases, however, the contracting authority must first give the person concerned 
an opportunity to present his observations. 

2. 

The penalties referred to in paragraph 1 shall be proportionate to the importance of 
the contract and the seriousness of the misconduct, and may consist in: 

(a) 

the  exclusion  of  the  candidate  or  tenderer  or  contractor  concerned  from  the 
contracts and grants financed by the EDF, for a maximum period of ten years; 
and/or 

(b) 

the payment of financial penalties by the candidate or tenderer or contractor up 
to the value of the contract in question. 

3. 

Article 134b of Regulation (EC, Euratom) No 2342/2002, as amended by Regulation 
(EC, Euratom) No 478/2007 shall apply mutatis mutandis to contracts financed from 
EDF resources. 

EN 

43 

   EN 

 
TITLE VII 
DIRECT LABOUR AND INDIRECT DECENTRALISED OPERATIONS 

Article 100 

This Title shall govern the direct labour and indirect decentralised operations provided for in 
Article  24  of  Annex  IV  to  the  ACP-EC  Agreement.  It  shall  apply  mutatis  mutandis  to 
financial cooperation with the OCT. 

1. 

In  the  case  of  direct  labour  operations,  projects  and  programmes  shall  be 
implemented directly through public departments of the ACP States concerned. 

Article 101 

The Community shall contribute to the costs of those departments by providing the 
equipment  and/or  materials  that  they  lack  and/or  the  resources  to  acquire  any 
additional  staff  required,  such  as  experts  from  within  the  ACP  States  concerned  or 
other ACP States. The Community's participation shall cover only costs incurred by 
supplementary  measures  and  temporary  expenditure  relating  to  execution  that  are 
strictly confined to the requirements of the project in question. 

The financial management of a project implemented by direct labour in accordance 
with the first and second subparagraphs shall be carried out by local imprest accounts 
administered by a local imprest manager and a local accounting officer, appointed by 
the  national  or  regional  authorising  officer  with  the  prior  approval  of  the 
Commission's authorising officer responsible. 

In the case of indirect decentralised operations, the contracting authority within the 
meaning  of  point  (a)  of  Article  92(1)  shall  entrust  tasks  relating  to  the 
implementation of projects or programmes to bodies governed by public laws of the 
ACP  States  concerned  or  bodies  governed  by  private  law  that  are  legally  distinct 
from the ACP States concerned.  

In  such  cases,  the  body  concerned  shall  assume  responsibility  for  the  management 
and implementation of the programme or project in place of the national or regional 
authorising officer. Tasks so delegated may include the power to conclude contracts 
and manage contracts and the supervision of works on behalf of or for the account of 
the ACP States concerned. 

Direct labour and indirect decentralised operations shall be implemented on the basis 
of  a  programme  of  measures  to  be  carried  out  and  an  estimate  of  their  cost 
(hereinafter  the  "programme  estimate").  The  programme  estimate  is  a  document 
laying  down  the  programme  of  measures  to  be  carried  out  and  the  human  and 
material resources required, the corresponding budget and the detailed technical and 
administrative  implementing  arrangements  for  decentralised  execution  of  a  project 
over  a  specified  period  by  direct  labour  and,  possibly,  by  means  of  public 
procurement and the award of specific grants.  

2. 

3. 

EN 

44 

   EN 

 
Each  programme  estimate  shall  be  prepared  by  the  local  imprest  manager  and  the 
local accounting officer referred to in the third subparagraph of paragraph 1, in the 
case of direct labour operations, or by the body referred to in paragraph 2, in the case 
of  indirect  decentralised  operations.  It  shall  then  be  approved  by  the  national  or 
regional  authorising  officer  and  the  Commission's  authorising  officer  responsible 
before the activities it provides for commence. 

4. 

5. 

In  the  context  of  the  implementation  of  the  programme  estimates  referred  to  in 
paragraph  3,  the  procurement  and  grant  award  procedures  shall  comply  with  those 
referred to in Titles V and VII respectively.  

The  financing  agreements  referred  to  in  Article  70(3)  must  make  provision  for  the 
implementation of direct labour operations or indirect decentralised operations. 

Article 102 

In  the  case  of  indirect  decentralised  operations  the  contracting  authority  referred  to  in  point 
(a)  of  Article  92(1)  shall  conclude  a  delegation  agreement  when  entrusting  implementation 
tasks to a body governed by public laws of the ACP States concerned or by private law with a 
public  service  mission.  It  shall  conclude  a  service  contract  when  entrusting  those  tasks  to  a 
body governed by private law. The Commission shall ensure that the delegation agreement or 
service contract sets out: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

adequate  provisions  for  scrutiny  of  the  use  of  EDF  resources  by  the  Commission, 
OLAF,  the  national  or  regional  authorising  officer,  the  Court  of  Auditors  and  the 
national audit bodies of the ACP States concerned; 

a  clear  definition  and  precise  delimitation  of  the  powers  delegated  to  the  body 
concerned and the powers retained by the national or regional authorising officer; 

the  procedures  to  be  followed  in  exercising  the  powers  so  delegated,  such  as  the 
selection  of  actions  to  be  financed,  the  award  of  contracts  or  the  supervision  of 
works; 

the possibility of ex post review and financial penalties where the granting of funds 
or award of contracts by the body concerned does not correspond to the procedures 
laid down at point (c); 

an effective and efficient internal control system for the management of operations, 
which  includes  effective  segregation  of  the  duties  of  authorising  officer  and 
accounting officer; 

an accounting system that enables the correct use of EDF resources to be verified and 
the use of funds to be reflected in the EDF accounts. 

EN 

45 

   EN 

 
TITLE VI 
GRANTS 

CHAPTER 1 
SCOPE AND FORM OF GRANTS 

Article 103 

1. 

Grants are direct financial contributions, by way of donation, from EDF resources in 
order to finance: 

(a) 

either  an  action  intended  to  help  achieve  an  objective  of  the  ACP-EC 
Agreement or the Overseas Association Decision, or of a programme or project 
adopted  in  accordance  with  that  Agreement  or  in  accordance  with  that 
Decision; 

(b)  or the functioning of a body which pursues such an objective. 

They  shall  be  covered  either  by  a  written  agreement  or  by  a  Commission  decision 
notified to the successful applicant. 

2. 

The following shall not constitute grants for the purposes of this Title: 

(a) 

financing agreements as referred to in point (a) of Article 70(3); 

(b)  public contracts as referred to in Title V or direct labour operations as referred 

to in Title VI; 

(c) 

loans,  guarantees,  contributions,  contracts,  interest  rate  subsidies  or  any  other 
financial operation managed by the EIB; 

(d)  direct  or  indirect  budgetary  assistance,  or  aid  to  help  relieve  debt  or  support 

export earnings in the event of short-term fluctuations; 

(e) 

payments made to bodies to which implementation tasks are delegated by the 
Commission  as  provided  for  in  Articles  25  to  28  or  within  the  framework  of 
joint management referred to in Article 29. 

3. 

Articles 160 to 184a (Title VI 'Grants') of Regulation (EC, Euratom) No 2342/2002, 
as amended by Regulation (EC, Euratom) No 478/2007 shall apply mutatis mutandis 
to this title. 

1. 

Grants may take any of the following forms: 

Article 104 

(a) 

reimbursement of a specified proportion of the eligible costs actually incurred; 

EN 

46 

   EN 

 
(b) 

lump sums; 

(c) 

flat-rate financing; 

(d) 

a combination of the forms referred to in points (a), (b) and (c); 

2. 

Grants shall not exceed an overall ceiling expressed in terms of absolute value. 

CHAPTER 2 
PRINCIPLES 

Article 105 

1. 

Grants shall be subject to the principles of transparency and equal treatment.  

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

On  no  account  may  the  combined  total  costs  eligible,  as  specified  in  the  grant 
agreement, for financing be exceeded. 

2. 

Grants may not have the purpose or effect of producing a profit for the beneficiary. 

Paragraph 2 shall not apply to the following: 

(a) 

study, research or training scholarships paid to natural persons; 

(b)  prizes awarded following contests; 

(c) 

actions the objective of which is the reinforcement of the financial capacity of 
a beneficiary or the generation of an income. 

Article 106 

1. 

Grants shall be subject to an annual work programme, to be published at the start of 
the year. 

That annual 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,  or  where  the  beneficiary  is  identified  in  the  ACP-EC  Agreement  and  the 
Overseas Association Decision as recipient of a grant. 

The first subparagraph shall not apply to crisis management aid and humanitarian aid 
operations. 

2. 

All grants awarded in the course of a financial year shall be published annually with 
due observance of the requirements of confidentiality and security. 

EN 

47 

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Article 107 

1. 

2. 

Each action may give rise to the award of only one grant from EDF resources to any 
one beneficiary. 

A beneficiary may be awarded only one operating grant per financial year from EDF 
resources. 

The  applicant  shall  immediately  inform  the  authorising  officers  of  any  multiple 
applications  and  multiple  grants  relating  to  the  same  action  or  to  the  same  work 
programme. 

In no circumstances shall the same costs be financed twice by EDF resources. 

Article 108 

1. 

A grant may be awarded for an action which has already begun only if the applicant 
can demonstrate the need to start the action before the grant is awarded. 

In  such  cases,  costs  eligible  for  financing  may  not  have  been  incurred  prior  to  the 
date  of  submission  of  the  grant  application,  save  in  duly  substantiated  exceptional 
cases or in the case of expenditure necessary for the proper implementation of crisis 
management  aid  or  humanitarian  aid  operations,  as  provided  for  in  the  ACP-EC 
Agreement or the Overseas Association Decision. 

No grant may be awarded retrospectively for actions already completed. 

2. 

An  operating  grant  shall  be  awarded  within  six  months  after  the  start  of  the 
beneficiary's  budget  year.  Costs  eligible  for  financing  may  neither  have  been 
incurred  before  the  grant  application  was  lodged  nor  before  the  start  of  the 
beneficiary's budget year. 

Article 109 

The grant may not finance the entire costs of the action, except if this proves essential for it to 
be carried out. 

The grant may not finance the entire operating expenditure of the beneficiary body.  

CHAPTER 3 
AWARD PROCEDURE 

1. 

2. 

EN 

Grant applications shall be submitted in writing. 

Article 110 

Grant applications shall be eligible if they are submitted by the following persons: 

48 

   EN 

 
(a) 

legal persons; grant applications may be eligible if submitted by entities which 
do not have legal personality under the applicable national law, provided that 
their  representatives  have  the  capacity  to  undertake  legal  obligations  on  their 
behalf and assume financial liability;  

(b)  natural  persons in so far as this is required by the  nature  or characteristics of 

the action or the objective pursued by the applicant. 

3. 

Grants  may  not  be  awarded  to  applicants  who  are,  at  the  time  of  a  grant  award 
procedure, in one of the situations of exclusion referred to in Articles 96(1) and 97, 
and in point (a) of Article 99(2). 

Applicants shall certify that they are not in one of the situations referred to in the first 
subparagraph.  However,  the  authorising  officer  may  refrain  from  requiring  such 
certification for very low valued grants. 

4. 

The  authorising  officer  may  impose  administrative  and  financial  penalties  which 
shall be effective, proportionate and dissuasive on the applicant. 

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

Article 99 shall apply mutatis mutandis. 

Article 111 

1. 

2. 

1. 

2. 

3. 

The  selection  criteria  shall  be  such  as  to  make  it  possible  to  assess  the  applicant's 
ability to complete the proposed action or work programme. 

The award criteria announced in advance in the call for proposals shall be such as to 
make  it  possible  to  assess  the  quality  of  the  proposals  submitted  in  the  light  of  the 
objectives and priorities set. 

Article 112 

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

The authorising officer responsible shall then, on the basis of the evaluation provided 
for in paragraph 1, draw up the list of beneficiaries and the amounts approved. 

The authorising officer responsible shall inform applicants in writing of the decision 
on their application. If the grant requested is not awarded, he shall give the reasons 
for the rejection of the application, with reference in particular to the selection and 
award criteria already announced.  

EN 

49 

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CHAPTER 4 
PAYMENT AND CONTROL 

Article 113 

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. 

Article 114 

The authorising officer responsible may, if he deems it appropriate and proportionate, require 
the beneficiary to lodge a guarantee in advance in order to limit the financial risks connected 
with the payment of pre-financing. 

1. 

2. 

1. 

2. 

Article 115 

The amount of the grant shall not become final before the Commission has accepted 
the  final  reports  and  accounts,  without  prejudice  to  subsequent  checks  by  the 
Commission. 

Should  the  beneficiary  fail  to  comply  with  his  obligations,  the  grant  shall  be 
suspended  or  reduced  or  terminated  after  the  beneficiary  has  been  given  the 
opportunity to make his observations. 

CHAPTER 5 
IMPLEMENTATION 

Article 116 

Where implementation of the action requires the award of procurement contracts by 
the  beneficiary,  the  grant  agreements  referred  to  in  Article  103(1)  shall  make 
provision  for  procedures  that  comply  with  the  Community  rules  on  procurement 
applicable to cooperation with non-member countries. 

Where  implementation  of  the  action  requires  financial  support  to  be  given  to  third 
parties, the beneficiary of a grant may give such financial support provided that the 
following conditions are met: 

(a) 

the financial support is not the primary aim of the action; 

(b) 

the  conditions  for  the  giving  of  such  support  are  strictly  defined  in  the  grant 
decision  or  agreement  between  the  beneficiary  and  the  Commission,  with  no 
margin for discretion; 

(c) 

the amounts concerned are small. 

EN 

50 

   EN 

 
3. 

Each grant decision or agreement shall provide expressly for the Commission, OLAF 
and the Court of Auditors to exercise their powers of control, on documents and on 
the  premises,  over  all  contractors  and  subcontractors  who  have  received  financial 
assistance from EDF resources. 

Article 117 

In the context of decentralised management, referred to in Articles 21 to 24, the Commission 
shall strive to encourage management by the beneficiary ACP States and OCTs that is aimed 
at applying provisions equivalent to those laid down in this Title. 

TITLE VIII 
PRESENTATION OF THE ACCOUNTS AND ACCOUNTING 

CHAPTER 1 
PRESENTATION OF THE ACCOUNTS 

Article 118 

1. 

The Commission shall draw up, by 31 July each year at the latest, the accounts of the 
EDF  describing  the  financial  situation  of  the  Fund  as  at  31  December  of  the 
preceding year. The EDF accounts shall comprise: 

(a) 

the financial statements referred to in Article 122; 

(b) 

the reports on financial implementation referred to in Article 123; 

(c) 

the financial statements and the information supplied by the EIB in accordance 
with Article 149(2). 

2. 

The EDF accounts shall be accompanied by a report on financial management of the 
year containing an accurate description of: 

(a) 

(b) 

the achievement of the objectives for the financial year, in accordance with the 
principle of sound financial management;  

the  financial  situation  and  the  events  that  had  a  significant  influence  on  the 
activities carried out during the financial year. 

Article 119 

The accounts shall comply with the rules and shall be accurate and comprehensive. They shall 
present a true and fair view as regards the following: 

(a) 

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

EN 

51 

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(b) 

the  reports  on  financial  implementation,  of  the  revenue  and  expenditure  operations 
from EDF resources. 

The financial statements referred to in Article 122 shall be drawn up in accordance with the 
generally accepted accounting principles, namely: 

Article 120 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

1. 

2. 

1. 

going concern basis; 

prudence; 

consistent accounting methods; 

comparability of information; 

materiality; 

no netting; 

reality over appearance; 

accrual-based accounting. 

Article 121 

In  accordance  with  the  principle  of  accrual-based  accounting,  the  financial 
statements  referred  to  in  Article  122  shall  show  the  charges  and  income  for  the 
financial year, regardless of the date of payment or collection. 

The  value  of  assets  and  liabilities  shall  be  determined  in  accordance  with  the 
valuation rules provided for in Article 129. 

Article 122 

The financial statements shall be prepared by the accounting officer and presented in 
millions of euro. They shall comprise: 

(a) 

the  balance  sheet,  which  represents  the  assets  and  liabilities  and  financial 
situation and the economic outturn of the EDF at 31 December of the previous 
year;  it  shall  be  presented  in  accordance  with  the  structure  laid  down  by  the 
Directives of the European Parliament and Council on the annual accounts of 
certain types of companies, but with account being taken of the specific nature 
of the EDF's activities; 

(b) 

the cash-flow table showing amounts collected and disbursed during the year, 
the  final  treasury  position  and  a  statement  of  changes  in  capital  covering  the 
preceding financial year; 

EN 

52 

   EN 

 
(c) 

a table of items payable to the EDF showing: 

(i) 

amounts still to be recovered at the beginning of the financial year; 

(ii) 

entitlements established in the course of the financial year; 

(iii)  amounts recovered in the course of the financial year; 

(iv)  cancellation of established entitlements; 

(v) 

amounts still to be recovered at the end of the financial year. 

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 EDF's activities. 

Article 123 

The reports on financial implementation shall be prepared by the authorising officer 
responsible  in  conjunction  with  the  accounting  officer  and  presented  in  millions  of 
euro. They shall comprise: 

(a) 

(b) 

the  financial  outturn  account,  which  sets  out  all  financial  operations  for  the 
year in terms of revenue and expenditure.  

the  annex  to  the  financial  outturn  account,  which  shall  supplement  and 
comment on the information given in that account. 

2. 

1. 

2. 

The financial outturn account shall contain the following tables: 

(a) 

(b) 

(c) 

a table describing changes over the preceding financial year in the allocations 
indicated in the annex; 

a  table  showing  by  allocation  the  total  commitments,  assigned  funds  and 
payments  effected  during  the  financial  year  and  aggregate  totals  since  the 
opening of the EDF; 

tables showing by allocation, country, territory, region or sub-region, the total 
commitments, assigned funds and payments effected during the financial year 
and aggregate totals since the opening of the EDF. 

Article 124 

The  accounting  officer  shall  send  the  provisional  accounts  to  the  Court  of  Auditors  by 
31 March of the following financial year at the latest.  

By 30 April of the following financial year at the latest the accounting officer shall send to the 
European  Parliament,  the  Council  and  the  Court  of  Auditors  the  report,  referred  to  in 
Article 118(2), concerning financial management during the year. 

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1. 

2. 

3. 

4. 

1. 

2. 

3. 

Article 125 

The  Court  of  Auditors  shall,  by  15  June  at  the  latest,  make  its  observations  on  the 
provisional  accounts  as  regards  the  part  of  the  EDF  resources  for  which  the 
Commission  is  responsible  for  financial  management  under  Article  2,  so  that  the 
Commission  can  make  the  corrections  deemed  necessary  for  drawing  up  the  final 
accounts. 

The  accounting  officer  shall  prepare  the  final  accounts  accompanied  by  a  note 
established by himself/herself, by which he/she declares that they were prepared in 
accordance with Title VIII and with the accounting principles, rules and methods set 
out in annex to the financial statements. 

The  Commission  shall  approve  the  final  accounts  and  send  them  to  the  European 
Parliament,  the  Council  and  the  Court  of  Auditors  by  31  July  of  the  following 
financial year at the latest. 

The final accounts shall be published in the Official Journal of the European Union 
together with the statement of assurance given by the Court of Auditors in respect of 
the part of the EDF resources for which the Commission is responsible for financial 
management under Article 2 by 15 November of the following financial year. 

CHAPTER 2 
INFORMATION ON IMPLEMENTATION OF EDF RESOURCES 

Article 126 

The  Commission  and  the  EIB  shall  monitor,  each  to  the  extent  to  which  it  is 
concerned,  the  use  of  EDF  assistance  by  the  ACP  States,  the  OCTs  or  any  other 
beneficiary,  and  the  implementation  of  projects  financed  by  the  EDF,  having 
particular regard to the objectives referred to in Articles 55  and 56 of the  ACP-EC 
Agreement  and  in  the  corresponding  provisions  of  the  Overseas  Association 
Decision. 

The EIB shall periodically inform the Commission regarding the implementation of 
projects financed by the EDF resources it administers, following the procedures set 
out in the operational guidelines of the Investment Facility. 

The Commission and the EIB shall provide the EDF Committee with information on 
the operational implementation of EDF resources through the national and regional 
allocations  set  out  in  the  Annex.  Such  information  shall  also  cover  projects  and 
programmes financed from the Investment Facility. The Commission shall send that 
information  to  the  Court  of  Auditors  in  accordance  with  paragraphs  (5)  and  (7)  of 
Article 11 of the Internal Agreement. 

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CHAPTER 3 
ACCOUNTING 

Article 127 

1. 

2. 

3. 

4. 

The accounting system is the system serving to organise the financial information in 
such a way that figures can be input, filed and registered. 

The  accounts  shall  consist  of  general  accounts  and  financial  accounts.  Those 
accounts shall be kept in euro on the basis of the calendar year. 

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

Notwithstanding paragraphs 2 and 3, the authorising officer by delegation may keep 
analytical accounts. 

The  accounting  officer  shall  be  responsible  for  the  monitoring  and  entry  in  the  accounts  of 
payments by the Member States and other revenue. 

Article 128 

Article 129 

1. 

2. 

The  accounting  officer  shall  adopt  the  applicable  accounting  rules  and  methods. 
He/she shall prepare and, after consulting the authorising officer by delegation, adopt 
the chart of accounts to be applied to the EDF's operations.  

In  so  doing  the  accounting  officer  shall  be  guided  by  the  internationally  accepted 
accounting  standards  for  the  public  sector.  However,  he/she  may  depart  from  them 
where justified by the specific nature of the EDF's activities. 

Entries  in  the  accounts  shall  be  made  on  the  basis  of  the  chart  of  accounts  using  a 
nomenclature which makes a clear distinction between the general accounts and the 
financial accounts. The chart of accounts shall be sent to the Court of Auditors. 

Article 130 

The general accounts shall record, in chronological order using the double entry method, all 
events  and  operations  affecting  the  economic  and  financial  situation  and  the  assets  and 
liabilities of the EDF, and which make up the EDF balance sheet. 

1. 

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

Article 131 

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2. 

3. 

All  accounting  entries,  including  adjustments  to  the  accounts,  shall  be  based  on 
supporting documents, to which they shall refer. 

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

Article 132 

The  accounting  officer  shall,  after  the  close  of  the  financial  year  and  up  to  the  date  of 
presentation of the 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 
which complies with the rules. 

1. 

The financial accounts shall provide a detailed record of the financial implementation 
of EDF resources. 

Article 133 

They shall show all: 

(a) 

allocations; 

(b) 

commitments; 

(c) 

payments,  and  established  debts  and  collection  operations  for  the  financial 
year, in full and without any adjustment against each other. 

2. 

3. 

When  commitments,  payments  and  debts  are  expressed  in  national  currencies,  the 
accounting system shall make it possible, where necessary, for them to be recorded 
in national currencies as well as in euro. 

The commitments defined in Article 70 shall be recorded in euro for the value of the 
financing decisions taken by the Commission. 

The commitments defined in Article 78(2) shall be recorded in euro at the equivalent 
of the value of the contracts, grant agreements and programme estimates. That value 
shall include where appropriate: 

(a) 

provision  for  the  payment  of  reimbursable  expenses  on  presentation  of 
supporting documents; 

(b)  provision  for  the  revision  of  prices  and  contingencies  as  defined  in  EDF-

funded contracts; 

(c) 

financial provision for exchange rate fluctuations. 

4. 

All accounting records referring to the fulfilment of a commitment shall be kept for a 
period of five years from the date of the decision giving discharge in respect of the 
financial implementation of EDF resources, referred to in Article 142, concerning the 
financial year during which the commitment was closed for accounting purposes. 

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TITLE IX 
EXTERNAL AUDIT AND DISCHARGE 

CHAPTER 1 
GENERAL PROVISIONS 

Article 134 

The operations financed from EDF resources managed by the EIB in accordance with Article 
3 of this Regulation shall be subject to the audit and discharge procedures laid down in the 
Statutes  of  the  EIB  for  all  of  its  operations.  Detailed  rules  for  auditing  by  the  Court  of 
Auditors  are  set  out  in  the  Tripartite  Agreement.  They  shall  be  the  result  of  a  common 
agreement  between  the  EIB,  the  Commission  and  the  Court  of  Auditors  in  the  Agreement 
currently in force or possibly by a new Agreement or any other agreement that may replace it. 

As  regards  the  operations  financed  from  EDF  resources  managed  by  the  Commission  in 
accordance with Article 2, the Court of Auditors shall exercise its powers in accordance with 
this Title. 

CHAPTER 2 

EXTERNAL AUDIT 

Article 135 

1. 

2. 

1. 

The  Commission  shall  inform  the  Court  of  Auditors,  as  soon  as  possible,  of  all 
decisions and rules adopted pursuant to this Regulation. 

The Court of Auditors shall be informed of the appointment of authorising officers, 
internal  auditors,  accounting  officers  and  paying  managers  and  of  delegation 
decisions under Articles 17, 39, 43, 48 and 89. 

Article 136 

In  respect  of  cooperation  with  the  ACP  States,  the  Court  of  Auditors,  when 
examining  whether  all  revenue  has  been  received  and  all  expenditure  incurred  in  a 
lawful  and  proper  manner,  shall  have  regard  to  the  provisions  of  the  ACP-EC 
Agreement, this Regulation and all other acts adopted pursuant to those instruments. 

In  respect  of  cooperation  with  the  OCTs,  the  Court  of  Auditors,  when  examining 
whether all revenue has been received and all expenditure incurred in a lawful and 
proper  manner,  shall  have  regard  to  the  provisions  of  the  EC  Treaty,  the  Overseas 
Association Decision, this Regulation and all other applicable acts. 

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2. 

In the performance of its task, the Court of Auditors shall be entitled to consult, in 
the  manner  provided  for  in  paragraph  6,  all  documents  and  information  relating  to 
the  financial  management  of  departments  or  bodies  with  regard  to  operations 
financed  or  co-financed  from  EDF  resources.  It  shall  have  the  power  to  make 
enquiries  of  any  official  responsible  for  a  revenue  or  expenditure  operation  and  to 
use any of the auditing procedures appropriate to the aforementioned departments or 
bodies. 

In order to obtain all the necessary information for the performance  of  its  task,  the 
Court of Auditors may be present, at its request, during the audit operations carried 
out  within  the  framework  of  financial  implementation  by,  or  on  behalf  of,  the 
Commission. 

At  the  request  of  the  Court  of  Auditors,  the  Commission  shall  authorise  financial 
institutions holding EDF deposits to enable the Court of Auditors to ensure that the 
external data tally with the accounts. 

In the performance of its task, the Court of Auditors shall notify the Commission and 
the authorities to which this Regulation applies of the names of the members of its 
staff who are empowered to audit them. 

Article 137 

The  Court  of  Auditors  shall  ensure  that  all  securities  and  cash  on  deposit  or  in  hand  are 
checked  against  vouchers  signed  by  the  depositories  or  against  official  memoranda  of  cash 
and securities held. It may carry out such checks itself. 

Article 138 

1. 

The  Commission,  the  bodies  administering  revenue  or  expenditure  on  the  EDF 
behalf  and  the  final  beneficiaries  of  payments  from  EDF  resources  shall  afford  the 
Court of Auditors all the facilities and give it all the information which the Court of 
Auditors considers necessary for the performance of its task. They shall place at the 
disposal  of  the  Court  of  Auditors  all  documents  concerning  the  award  and 
performance of contracts and all accounts of cash or materials, all accounting records 
or  supporting  documents,  and  also  administrative  documents  relating  thereto,  all 
documents  relating  to  revenue  and  expenditure,  all  inventories,  all  organisation 
charts of departments, which the Court of Auditors considers necessary for auditing 
the financial outturn report on the basis of records or on the spot and, for the same 
purposes, all documents and data created or stored on a magnetic medium. 

The first subparagraph shall also apply to natural or legal persons receiving payments 
from EDF resources. 

2. 

The officials whose operations are checked by the Court of Auditors shall: 

(a) 

show their records of cash in hand, any other cash, securities and materials of 
all kinds, and also the supporting documents in respect of their stewardship of 
the funds with which they are entrusted, and also any books, registers and other 
documents relating thereto; 

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(b)  present  the  correspondence  or  any  other  document  required  for  the  full 
implementation of the audit referred to in Article 136.The information supplied 
pursuant  to  point  (b)  of  the  first  subparagraph  may  be  requested  only  by  the 
Court of Auditors. 

The Court of Auditors shall be empowered to audit the documents in respect of the 
EDF  revenue  and  expenditure  which  are  held  by  the  Commission  departments 
responsible. 

The  task  of  establishing  that  the  revenue  has  been  received  and  the  expenditure 
incurred in a lawful and proper manner and that the financial management has been 
sound  shall  extend  to  the  utilisation,  by  bodies  outside  the  Commission,  of  EDF 
resources received by way of grants.  

Financing from EDF resources paid to beneficiaries outside the Commission shall be 
subject to the agreement in writing by the beneficiaries or, failing agreement on their 
part, by the contractors or subcontractors, to an audit by the Court of Auditors of the 
use made of the financing granted. 

Use of integrated computer systems may not have the effect of reducing the access of 
the Court of Auditors to the supporting documents. 

Article 139 

The annual report of the Court of Auditors shall be governed by paragraphs 2 to 6 of 
this Article. 

The Court of Auditors shall transmit to the Commission, by 30 June at the latest, any 
observations  which  are,  in  its  opinion,  such  that  they  should  appear  in  the  annual 
report. Those observations must remain confidential. The Commission shall address 
its replies to the Court of Auditors by 15 October at the latest. 

The  annual  report  shall  contain  an  assessment  of  the  soundness  of  financial 
management. 

The Court of Auditors may add any summary report or general observations which it 
sees fit to make. 

The Court of Auditors shall take all necessary steps to ensure that the Commission's 
replies to its observations are published immediately after the observations to which 
they relate. 

The  Court  of  Auditors  shall  transmit  to  the  authorities  responsible  for  giving 
discharge  and  to  the  Commission,  by  15  November  at  the  latest,  its  annual  report 
accompanied with the replies of the Commission and shall ensure publication thereof 
in the Official Journal of the European Union. 

3. 

4. 

5. 

6. 

1. 

2. 

3. 

4. 

5. 

6. 

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Article 140 

1. 

2. 

The Court of Auditors shall notify the Commission of all observations which are, in 
its opinion, such that they should appear in a special report. Those observations must 
remain confidential. 

The Commission shall have two-and-a half months within which to inform the Court 
of Auditors of any comments it wishes to make on the observations in question. 

The  Court  of  Auditors  shall  adopt  the  definitive  version  of  the  special  report  in 
question the following month. 

The  special  reports  referred  to  in  paragraph  1,  together  with  the  Commission's 
replies,  shall  be  transmitted  without  delay  to  the  European  Parliament  and  the 
Council,  each  of  which  shall  decide,  where  appropriate  in  conjunction  with  the 
Commission, what action is to be taken in response. 

Should the Court of Auditors decide to have any such special reports published in the 
Official  Journal  of  the  European  Union,  they  shall  be  accompanied  by  the 
Commission's replies. 

3. 

The  Court  of  Auditors  may,  at  the  request  of  one  of  the  other  institutions,  issue 
opinions on matters relating to the EDF. 

Article 141 

At the same time as the annual report referred to in Article 139, the Court of Auditors shall 
provide  the  European  Parliament  and  the  Council  with  a  statement  of  assurance  as  to  the 
reliability of the accounts and the legality and regularity of the underlying transactions. 

CHAPTER 3 
DISCHARGE 

Article 142 

1. 

2. 

3. 

Before  15  May  of  year  N  + 2,  the  European  Parliament,  upon  a  recommendation 
from  the  Council  acting  by  a  qualified  majority,  shall  give  a  discharge  to  the 
Commission  in  respect  of  the  financial  implementation  for  year  N  of  the  EDF 
resources, which it manages in accordance with Article 2.  

If the date provided for in paragraph 1 cannot be met, the European Parliament or the 
Council shall inform the Commission of the reasons for the postponement.  

If  the  European  Parliament  postpones  the  decision  giving  a  discharge,  the 
Commission shall make every effort to take measures, as soon as possible, to remove 
or facilitate removal of the obstacles to that decision. 

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1. 

2. 

3. 

1. 

2. 

3. 

Article 143 

The discharge decision shall cover the accounts referred to in Article 118, except the 
part thereof provided by the EIB in accordance with Article 149(2).  

With  a  view  to  granting  the  discharge,  the  European  Parliament  shall,  after  the 
Council  has  done  so,  examine  the  accounts  referred  to  in  Article  118.  It  shall  also 
examine  the  annual  report  made  by  the  Court  of  Auditors  together  with  the 
Commission's replies, any relevant special reports by the Court of Auditors in respect 
of the financial year in question and the Court of Auditors' statement of assurance as 
to  the  reliability  of  the  accounts  and  the  legality  and  regularity  of  the  underlying 
transactions. 

The Commission shall submit to the European Parliament, at the latter's request, any 
information  required  for  the  control  of  implementation  of  the  EDF  resources 
managed by the Commission in accordance with Article 2 for the year in question.  

Access to confidential information and the arrangements for handling it shall comply 
with fundamental rights, the protection of business secrecy, the provisions governing 
judicial and disciplinary proceedings and the interests of the Community. 

Article 144 

The  Commission  shall  take  all  appropriate  steps  to  act  on  the  observations 
accompanying  the  European  Parliament's  discharge  decision  and  on  the  comments 
accompanying the recommendation for discharge adopted by the Council. 

At  the  request  of  the  European  Parliament  or  the  Council,  the  Commission  shall 
report on the measures taken in the light of those observations and comments, and, in 
particular, on the instructions given to those of its departments which are responsible 
for  the  financial  implementation  of  EDF  resources.  That  report  shall  also  be 
transmitted to the Court of Auditors. 

The  decision  giving  the  discharge  shall  be  published  in  the  Official  Journal  of  the 
European Union. 

PART TWO 
SPECIFIC PROVISIONS CONCERNING EDF RESOURCES MANAGED 
BY THE EIB 

Article 145 

Each  year,  before  1  September,  the  EIB  shall  send  the  Commission  its  estimates  of 
commitments and payments, which are necessary for drawing up the communication referred 
to  in  Article  7(1)  of  the  Internal  Agreement,  in  respect  of  the  operations  of  the  Investment 
Facility, including interest rate subsidies, in accordance with the Internal Agreement. 

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The EIB shall send the Commission updated estimates of commitments and payments when 
deemed  necessary.  Modalities  shall  be  defined  in  the  management  agreement  referred  to  in 
Article 152. 

Article 146 

1. 

2. 

3. 

4. 

5. 

The contributions referred to in Article 58 and adopted by the Council shall be paid 
by the Member States to the EIB via a special account opened in the name of each 
Member State. 

Save where the Council decides otherwise regarding the remuneration of the EIB in 
accordance with Article 5 of the Internal Agreement, proceeds received by the Bank 
via the credit balance of the special accounts referred to in paragraph 1 of this Article 
shall be recorded in an account in the Commission's name, and used for the purposes 
set out in Article 6 of the Agreement. 

Any  rights  resulting  from  operations  carried  out  by  the  EIB  using  EDF  resources, 
and particularly rights as creditor or owner, shall be vested in the Member States. 

The  EIB  shall  undertake  the  treasury  management  of  the  amounts  referred  to  in 
paragraph  1  in  accordance  with  the  detailed  rules  laid  down  in  the  management 
agreement provided for in Article 152. 

The  Investment  Facility  shall  be  managed  in  accordance  with  the  conditions  laid 
down in the ACP-EC Agreement, the Overseas Association Decision and the Internal 
Agreement. 

Article 147 

The EIB shall be remunerated on a full indemnity basis for the management of the Investment 
Facility  operations.  The  Council  shall  decide  on  the  resources  and  mechanisms  for 
remuneration  of  the  Bank  in  accordance  with  Article  5(2)  of  the  Internal  Agreement.  The 
measures  implementing  that  decision  shall  be  incorporated  in  the  management  agreement 
provided for in Article 152. 

Article 148 

The  EIB  shall  regularly  inform  the  Commission  of  the  operations  carried  out  under  the 
Investment  Facility,  including  interest  rate  subsidies,  of  the  use  made  of  each  call  for 
contributions  paid  to  the  EIB  and,  in  particular,  of  the  total  quarterly  amounts  of 
commitments, contracts and payments, in accordance with the detailed rules laid down in the 
management agreement provided for in Article 152. 

Article 149 

1. 

The  EIB  shall  keep  the  accounts  of  the  Investment  Facility,  including  interest  rate 
subsidies, financed by the EDF to provide a trail for the full circuit of the funds, from 
receipt  to  disbursement  and  then  to  the  revenue  to  which  they  give  rise  and  any 
subsequent  recoveries.  The  EIB  shall  draw  up  the  relevant  accounting  rules  and 

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methods according to international accounting standards and inform the Commission 
and the Member States accordingly. 

2. 

Each  year  the  EIB  shall  send  the  Council  and  the  Commission  a  report  on  the 
implementation  of  operations  financed  from  EDF  resources  under  its  management, 
including  the  financial  statements  drawn  up  in  accordance  with  the  rules  and 
methods referred to in paragraph 1 and the information referred to in Article 123(2). 

Those documents shall be submitted in draft form no later than 28 February and in 
their final version no later than 30 June of the following financial year, so that they 
can be used by the Commission in preparing the accounts referred to in Article 118 
of this Regulation in accordance with Article 11(6) of the Internal Agreement. The 
report  on  the  financial  management  of  the  resources  managed  by  the  EIB  shall  be 
submitted by  the  latter  to the  Commission no later than  31  March  of the  following 
financial year. 

The EIB's own rules shall apply to contracts financed by the EDF resources which it manages. 

Article 150 

Article 151 

Where programmes or projects are co-financed by the Member States or their implementing 
bodies  and  correspond  to  the  priorities  laid  down  in  the  Country  Cooperation  Strategies 
provided for in the implementation Regulation foreseen in paragraph 2 of Article 10(1) of the 
Internal  Agreement  and  in  Article  20  of  the  Overseas  Association  Decision,  the  EIB  may 
entrust responsibility for managing Community aid to Member States or their implementing 
bodies. 

The detailed rules for implementing this Part shall be the subject of a management agreement 
between the Commission, acting on behalf of the Community, and the EIB. 

Article 152 

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PART THREE 
TRANSITIONAL AND FINAL PROVISIONS 

TITLE I 
TRANSITIONAL PROVISIONS 

CHAPTER 1 
TRANSFER OF BALANCES REMAINING FROM PREVIOUS EDFS 

Article 153 

Transfers  to  the  10th  EDF  of  the  balances  remaining  from  resources  constituted  under  the 
Internal Agreements relating to the 7th16, 8th17 and 9th18 EDFs (hereinafter "previous EDFs") 
shall be made in accordance with Article 1 (2) (b), (3) and (4) of the Internal Agreement. 

Article 154 

1. 

2. 

The  balance  of  revenue  accruing  from  interest  on  the  resources  of  previous  EDFs 
shall  be  transferred  to  the  10th  EDF  and  allocated  for  the  same  purposes  as  the 
revenue provided for in Article 1(6) of the Internal Agreement. The same shall apply 
to miscellaneous revenue of previous EDFs comprising, for example, default interest 
received  in  the  event  of  late  payment  of  contributions  to  those  EDFs  by  Member 
States and the interest generated by the EDF resources managed by the EIB, that is 
payable to the Community. 

The provisions of the 10th EDF concerning the financial actors, revenue operations, 
validation, authorisation and payment of expenditure, IT systems, the presentation of 
accounts  and  accounting,  as  well  as  external  audit  and  discharge  also  apply  to 
operations financed from previous EDFs. 

CHAPTER 2 
BALANCES REMAINING FROM PREVIOUS EDFS 

Article 155 

The amounts from projects under the 9th EDF or from previous EDFs not committed 
according  to  art  1(3)  of  the  Internal  Agreement,  or  decommitted  unless  decided 
otherwise  by  the  Council  unanimously  according  to  art  1(4)  of  the  Internal 
Agreement,  shall  reduce  the  part  of  Member  States  contributions  stated  in  Article 
1(2) (a) of the Internal Agreement.  

16 
17 
18 

OJ L 229, 17.8.1991, p. 288. 
OJ L 156, 29.5.1998, p. 108. 
OJ L 83, 1.4.2003, p. 1. 

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The  impact  on  the  contribution  of  each  Member  State  shall  be  calculated  in 
proportion to the contribution of each Member State to the 9th EDF. The impact will 
be  calculated  annually  and  for  the  first  time  in  the  year  following  the  performance 
review of 2010 foreseen in Annex 1b of the ACP-EC Agreement. 

CHAPTER 3 
TRANSITIONAL PERIOD 

Article 156 

The procedure concerning Member States' contributions laid down in Articles 57 to 61 shall 
apply  for  the  first  time  for  the  contributions  of  the  year  N+2,  under  condition  that  the  10th 
EDF enters into force between 1st October of year N and 30th September of year N+1. 

The central database referred to in Article 98 shall be set up by 1 January 2009. 

Article 157 

TITLE II 
FINAL PROVISIONS 

Article 158 

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

It shall be applicable for the same period as the Internal Agreement. 

Done at Brussels,  

For the Council 
The President 

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