Proposal for a Regulation of the European Parliament and of the Council on the Financial Regulation applicable to the general budget of the European Union (Recast) {SEC(2010) 639}.
Date: 2010-05-28
Institutions: European Commission
Subjects: financial management, financial regulation, general budget (EU), implementation of the budget

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EUROPEAN COMMISSION 

Brussels, 28.5.2010 
COM(2010) 260 final 

2010/0154 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the Financial Regulation applicable to the general budget of the European Union 

(Recast) 

{SEC(2010) 639} 

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EXPLANATORY MEMORANDUM 

1. 

INTRODUCTION 

Budget is one of the key instruments to deliver EU policies. In 2011 more than EUR 
130  billion  is  planned  for  allocation  to  EU  policies  benefitting  the  Union  and  its 
citizens. In the current economic context it is even more important that the delivery 
mechanisms  of  the  budget  operate  in  the  most  efficient  way  and  facilitate  the 
implementation  of  EU  policies,  while  securing  sound  treatment  of  European 
taxpayers' money. In particular, it is important that these mechanisms are simple and 
transparent  (especially  to  final  recipients  of  EU  funds),  provide  the  possibility  for 
leverage  of  non-EU  budget  resources  and  at  the  same  time  strengthen  the 
Commission's accountability for implementation of the budget as set in Article 317 
TFEU. 

The  Financial  Regulation  (hereinafter  FR1)  contains  all  the  principles  and  rules 
which  govern  the  implementation  of  the  Union's  Budget.  It  has  a  horizontal 
character,  being  applicable  to  all  areas  of  expenditure  and  all  revenue.  The  FR  is 
subject to revision every three years, or whenever it proves necessary and the present 
proposal represents such a triennial revision. It also reflects the genuine necessity of 
revisiting budget delivery mechanisms in the current economic context and in view 
of the future policy challenges2. 

For  the  first  time  this  triennial  revision  is  handled  in  accordance  with  the  ordinary 
legislative  procedure  foreseen  in  Article  322  TFEU.  It  is  presented  as  a  recast  in 
accordance  with  the  Interinstitutional  Agreement  of  28  November  2001  on  a  more 
structured  use  of  the  recasting  technique  for  legal  acts3.  In  order  to  allow  the 
legislative  authority  to  have  a  global  view  of  the  proposed  modifications,  the 
Implementing Rules of the FR (hereinafter IR4) are presented, in a Commission Staff 
working  document,  together  with  the  FR  in  a  single  package.  The  Implementing 
Rules,  which  contain  more  detailed  provisions  complementing  the  FR,  will  be 
adopted  under  the  delegated  powers  of  the  Commission  according  to  Article  290 
TFEU. 

The present revision does not cover the changes stemming from the entry into force 
of the Lisbon Treaty, except for the obligations of Member States concerning internal 
control and audit and their resulting responsibilities in shared management which are 
included  in  the  present  revision.  The  Commission  has  treated  other  Lisbon-related 
changes,  due  to  their  very  specific  nature,  in  two  separate  ad  hoc  proposals:  one 
related to the creation of the European External Action Service5, and the other related 
to the new budgetary rules6 (introduction of the multiannual financial framework in 
the Treaty and new annual budgetary procedure in particular).  

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Council Regulation N°1605/2002 of 26.06.2002. 
Commission Communication COM(2010) 2020, point 3.2. 
OJ C 77, 28.3.2002, p. 1. 
Commission Regulation N° 2342/2002 of 23 December 2002. 
COM (2010) 85, 24.03.2010. 
COM(2010)71, 3.03.2010. 

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This  proposal  builds  on  the  results  of  the  public  consultation  of  19  October  20097, 
which  resulted  in  a  total  of  235  contributions  of  stakeholders  who  implement  or 
receive  Union  funds:  from  citizens  to  public  and  private  operators,  regional  and 
national  administrations.  The  Commission  has  adopted  its  proposal  on  the  basis  of 
the results of that consultation, as well as the experience of its operational services 
and lessons learned from previous revisions. 

2. 

CALENDAR 

The FR revision will be negotiated while preparation for the post-2013 programmes 
will  also  be  under  way,  and  should  be  considered  in  this  wider  context.  For  this 
reason,  it  is  important  that  all  the  actors  concerned  in  the  legislative  process,  in 
particular the European Parliament and the Council, agree on an ambitious timetable 
for  the  present  revision  and  on  the  need  to  ensure  coherence  between  the  financial 
rules  enshrined  in  the  FR  and  on  the  content  of  sectoral  basic  acts.  For  this  to  be 
effective, they should aim at an agreement on the package (FR + IR) that could enter 
into  application  by  the  end  of  2011,  which  is  a  very  ambitious  timetable  given  the 
inherent constraints of the ordinary legislative procedure.  

3. 

BASIS FOR UNDERTAKING THE PRESENT REVISION 

The FR should only contain the fundamental principles (FR, Title II) and the basic 
rules  of  budgetary  and  financial  management,  leaving  the  details  to  be  specified  in 
the IR and soft law such as internal guidelines. These principles must be respected in 
all legislative acts8 and by all institutions; they should be kept stable and derogations 
to them limited to a strict minimum. 

In terms of content, the key elements of the financial reforms should be preserved, in 
particular:  the  role  of  financial  actors,  the  importance  of  the  financing  decision 
adopted by the College for operational expenditure, the integration of controls with 
operational  services,  the  internal  audit  function,  activity-based  budgeting,  and 
modernisation  of  accounting  principles  and  basic  rules  applicable  to  grants. 
Procurement rules should be preserved in line with the procurement Directives. 

Moreover,  it  should  be  borne  in  mind  that  not  all  problems  encountered  with  the 
application of the rules require modifications of the FR. In the vast majority of cases, 
the  difficulties  raised  during  the  public  consultation  do  not  find  their  source  in  the 
Financial  Regulation  or  could  be  solved  by  interpretation  of  the  rules.  Difficulties 
also  stem  from  sector-based  regulations,  whose  level  of  detail  and  complexity 
increase significantly the risk of error or misinterpretation.  

In  terms  of  method,  any  modification  of  substance  has  been  assessed  against  the 
following benchmarks:  

– reduce  the  administrative  burden  for  beneficiaries,  contractors  and  implementing 

partners; 

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8 

http://ec.europa.eu/budget/library/consultations/FRconsult2009/draft_report_en.pdf 
Article 2 FR. 

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– facilitate, whenever possible, the leveraging of budget appropriations; 

–  facilitate the Commission’s obligation under Article 317 of the Treaty to implement 
the budget and accomplish the policy objectives by improving delivery instruments 
and simplifying the rules and procedures; 

– ensure  sound  financial  management  and  protect  the  financial  interests  of  the  Union 

against fraud and other illegal activities9. 

4. 

NEED FOR A REFORM 

Reform  is  necessary  with  a  view  to  adapting  the  financial  rules  to  the  new 
requirements  of  budget  implementation  (co-financing  with  other  donors,  specific 
financial  instruments,  PPPs)  or  where  the  basic  principles  create  disproportionate 
workload (interests on pre-financing) or may unduly impede efficiency (prohibition 
of budget implementation through private sector bodies). The award of small grants 
and contracts also needs to be facilitated. 

Furthermore, the new procedure applicable to the IR, as set out in the Lisbon Treaty, 
should  lead  to  a  new  articulation  between  the  FR  and  the  IR,  imposing  a  complete 
review of the whole set of financial rules. In this regard, some IR provisions which 
currently define exceptions or derogations to FR provisions should be introduced in 
the  FR  itself,  while  the  IR  should  be  limited  to  technical  details  and  implementing 
modalities10. 

In this context, the Commission has based its proposal on the following objectives: 

•  to introduce more flexibility in the application of budgetary principles, which should 
better  suit  operational  needs  and  alleviate  unnecessary  administrative  burden  for 
recipients of Union funds; 

•  to streamline relations with implementing partners to which the Commission entrusts 
the  management  of  programmes  or  part  of  programming  actions  (projects),  in 
particular taking account of the nature of the implementing partner (Member States, 
agencies,  EIB,  public  and  private  operators,  etc.)  and  the  financial  risks  entailed 
(proportionality); 

•  to shift the regime of grants from a real-cost based management (inputs) towards a 
performance-based  scheme  (outputs),  in  order  to  better  target  policy  objectives  and 
achieve significant simplification of procedural and documentary requirements for the 
benefit of beneficiaries, and facilitate the use of lump sums; 

•  to ensure sound financial management while leaving significant room for manoeuvre 
for  Authorising  Officers  so  that  they  can  adapt  the  means  to  their  operational 
constraints and the financial risks they are faced with; 

•  to  modernise  the  system  of  risk  management  and  control  measures  so  as  to  make 

them more proportional to the probability of errors and to the cost involved. 

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Article 310 (6) TFEU. 
Article 290 TFEU foresees that the legislative authority may entrust delegated powers to the Commission 
only "[…] to supplement or amend certain non-essential elements of the [concerned] legislative act", i.e. the 
FR. 

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5. 

MODIFICATIONS PROPOSED BY THE COMMISSION  

5.1. 

Exceptions to budgetary principles 

Regarding  the  principle  of  unity  of  the  budget,  the  rules  governing  interests 
generated by prefinancing should be simplified (Articles 5, 5a FR) as they generate 
excessive administrative burden on both sides and misunderstandings with operators 
and partners (particularly in the current period of low interest rates). These interests 
are  collected  in  accordance  with  the  principle  of  sound  financial  management  and 
represent  non  negligible  revenue  of  the  Union  Budget  (+/-  EUR50  M  per  year). 
Therefore,  the  changes  proposed  focus  on  grant  beneficiaries  and  the  obligation  to 
generate  pre-financing  interest  and  to  recover  such  interest  is  suppressed  except 
otherwise foreseen in a delegation agreement. This means that national agencies will 
be  allowed  to  re-use  interest  generated  for  the  programmes  they  manage,  and 
interests  generated  by  EU  bodies  will  continue  to  be  recovered  annually.  This 
measure will entail a limited loss for the Union miscellaneous revenue (+/- EUR 15 
M). 

Regarding  the  principle  of  universality,  a  dual  regime  for  assigned  revenue  is 
proposed  (Article  18  FR)  with  the  distinction  between:  1.  the  re-use  for  the  same 
purpose  of  funds  initially  assigned  by  the  Budget  Authority  (internal  assigned 
revenue),  for  which  the  current  regime  is  maintained  (carry  over  only  for  one  year 
and  once  carried  over  it  has  to  be  used  first  before  fresh  appropriations)  and;  2. 
revenue  collected  from  and  assigned  by  various donors to a specific programme or 
action  (external  assigned  revenue:  contribution  of  EFTA  and  third  countries  to  a 
Union  programme,  co-financing  of  external  actions  from  Member  States  and  other 
donors...),  for  which  the  carry  over  regime  should  be  more  flexible  in  order  to 
guarantee the purpose assigned by the donor. An appropriate regime of reporting to 
the Budget Authority is provided. 

In  relation  to  the  principle  of  specification  of  the  budget,  the  rules  governing 
transfers  of  appropriations  should  be  clarified  and  more  flexibility  allowed  in  the 
adoption  procedure  of  some  transfers  decided  by  the  Commission  (Articles  21,  23, 
26  FR),  to  respond  to  the  needs  of  better  budget  implementation,  especially  in 
to  payments  appropriations,  assigned  revenues  and  administrative 
relation 
appropriations which are common to several titles. It is also proposed to simplify the 
rules  concerning  transfers  which  require  the  budgetary  authority  to  be  informed  in 
order to avoid recurrent delays in their carrying out.  

Regarding the principle of sound financial management which includes the concept 
of proportionality, the FR should introduce the notion of tolerable risk (Article 28b 
FR). The objective of this proposal, made during the last revision but now backed-up 
by  solid  analysis  of  the  costs  and  benefits  of  control,  is  to  decide  on  a  level  of 
tolerable risk of error per policy area, taking into account the costs of control, the 
risk  or  error  and  the  benefits  of  the  policy.  This  will  mean  in  some  areas  fixing  a 
tolerable risk level above the 2% materiality threshold used by the Court of Auditors 
across  all  policy  areas  to  conclude  on  the  legality  and  regularity  of  the  underlying 
transactions. The tolerable risk levels would be decided by the Legislative Authority 
and would set a cost-effective level of control to provide a more appropriate basis for 
the  Discharge  Authority  (i.e.  the  EP)  to  judge  the  quality  of  the  Commission's 
management of risk. 

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Regarding the principle of annuality, no amendment to the FR is proposed except 
for  carry  over  rules  for  external  assigned  revenue  (Article  10  FR),  in  order  to  take 
into  account  the  dual  regime  proposed  for  assigned  revenue.  However,  the 
Commission  is  fully  aware  of  the  concerns  expressed  by  some  of  its  implementing 
partners  in  multi-annual  programmes  (EIB,  ITER,  Galileo,  research  programmes 
managed  by  Joint  Technological  Initiatives,  etc)  who  request,  before  signing  a 
contract or agreement with the Commission, assurance regarding the duration of the 
commitment  of  the  Union  budget  towards  a  specific  project  sometimes  going  even 
beyond  the  current  Multiannual  Financial  Framework.  It  should  be  noted  that  such 
assurance  currently  exists  through  annual  instalments  where  the  basic  act  fixes  the 
annual  amounts  throughout  the  duration  of  the  Multiannual  Financial  Framework 
(e.g. Structural Funds), or even beyond (e.g. ITER), in accordance with Article 76(3) 
FR.  Although  such  financial  programming11  is  indicative,  it  gives  appropriate 
information on the annual amounts foreseen for important programmes, e.g. for the 
Joint  Technological  Initiatives  and,  most  importantly,  it  gives  the  medium  term 
perspective  of  Union  funding  that  some  of  the  Union’s  implementing  partners  are 
looking for. Moreover, the degree of certainty provided by annual amounts which are 
enshrined  in  legal  bases  has  increased  with  the  extension  of  legislative  codecision, 
which is now the ordinary legislative procedure. 

Finally, no amendment is proposed regarding the principle of transparency. 

5.2. 

Implementation of the budget 

5.2.1. 

Streamline methods of implementation from 5 to 2 modes (Article 53 FR) 

Provisions  concerning  methods  of  implementation  are  a  key  element  of  the  2001 
Reform  and  govern  the  conditions  of  externalisation  of  budgetary  tasks  to  third 
parties. Their objective is to ensure that, whatever the mode chosen, expenditure is 
executed  with  a  level  of  control  and  transparency  equivalent  to  that  expected  from 
Commission services as set out in the FR. 

However,  these  provisions  have  become  so  complex  over  the  years  that  their 
underlying rationale is lost. The Commission proposal therefore aims at establishing 
a clear distinction between: 

–  situations  where  the  budget  is  implemented  directly  (by  the  Commission  or 

executive agencies – Article 53(1) point (1)); 

–  and  situations  where  the  budget  is  implemented  indirectly  in  shared  management 
with Member States or through other entities or persons (Articles 53 (1) point (2)). 

The proposal sets out common requirements for all types of indirect management 
with  specific  provisions  foreseen  for  indirect  management  with  Member  States 
(Article 53a FR). 

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Financial programming is transmitted twice a year to the budget authority, in accordance with Point 20 of 
the interinstitutional Agreement (IIA) between the European Parliament, the Council and the Commission on 
cooperation in budgetary matters. Cf COM(2010)73, 3.3.2010. This provision corresponds to Point 46 of the 
IIA currently into force. 

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The  proposal  aims  in  particular  at  finding  the  right  balance  between,  on  the  one 
hand, facilitating the task of the authorising officer to determine the mode of budget 
implementation appropriate for the specific action, and, on the other hand, providing 
the AO with a more secure environment. This balance is established by the following 
two elements: 

–  operational  needs  of  services  are  taken  into  account  by  introducing  more 
proportionality  in  ex-ante  controls,  depending  on  the  specific  risks  of  the  action 
and its overall control environment including the measures by the Commission to 
supervise and support the implementation. Furthermore, provisions are proposed 
to  accommodate  the  needs  of  newly  developing  financial  instruments  such  as 
those with the EIB and Private and Public Partnerships; 

–  the  responsibility  of  Member  States  and  entrusted  entities  or  persons  under 
indirect  management  is  strengthened,  and  control  and  audit  obligations  of  the 
Commission across all budget management types are streamlined. 

At  the  same  time,  provisions  are  proposed  to  strengthen  sound  financial 
the 
management 
implementation of the budget. They concern: 

the  Commission  accountability  for 

to  ensure 

in  order 

–  control and audit obligations, which Member States and entrusted entities have to 
comply with in order to provide for a sufficient level of protection of the Union's 
financial interests; 

–  management  declarations  of  assurance  for  all  indirect  budget  management 
types  not  subject  to  a  separate  discharge  from  the  budgetary  authority,  which 
should  strengthen  the  responsibility  of  Member  States  and  the  entrusted  entities 
and  give  more  assurance  to  the  Authorising  Officer,  notably  in  his  reporting 
duties; 

–  control and audit obligations for the Commission, including clearance of accounts 

procedures and the possibility to suspend or interrupt payments .  

5.2.2.  Control and audit obligations of Member States (Article 53a FR) 

New provisions based on Article 317 TFEU are introduced in the present proposal and 
contain  the  following  elements:  a  harmonised  administrative  structure  in  the  Member 
States;  common  management  and  control  obligations  for  these  structures;  annual 
management declaration of assurance with independent audit opinion thereon by which 
the accredited national body assumes responsibility for the management of Union funds 
it  has  been  entrusted  with;  financial  clearance,  suspension  and  correction  mechanisms 
operated by the Commission.  

These  provisions  should  apply  only  to  the  next  generation  of  sector-specific 
regulations, i.e. post-2013 (Article 187 FR).  

5.2.3.  Payments and fiduciary accounts (Article 61(4) FR) 

FR  provisions  only  cover  bank  accounts  opened  for  cash  management  under  the 
responsibility of the Accountant. The creation of fiduciary accounts, dedicated to the 
implementation  of  a  programme  under  indirect  management  by  financial  institutions, 

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should be allowed. These fiduciary accounts would be opened under the responsibility of 
Authorising Officers with the agreement of the Accounting Officer. 

Furthermore,  the  rules  related  to  pre-financing  have  been  reviewed  (Article  81  FR)  to 
allow  a  single  pre-financing  payment,  which  will  have  to  be  cleared  in  line  with  the 
progress of the action. This should provide recipients of EU grants with more security on 
the amount they receive, as the Commission would approve the eligibility of costs on a 
regular basis through interim payments. 

5.2.4.  Revenue operations (Article 73b, 74 FR) 

The  rules  on  recovery  should  be  strengthened  in  order  to  bring  more  efficiency  to 
safeguarding  the  financial  interests  of  the  Union.  In  particular,  recoveries  should  be 
treated  by  Member  States  in  the  same  way  as  they  treat  their  own  claims  on  their 
territory. 

It is also proposed to simplify the regime of forecasts of revenue in line with budgetary 
needs.  Registration  should  be  required  when  the  revenue  is  expected  with  a  certain 
degree of probability and can be reasonably translated into figures. 

5.2.5.  Procurement (Articles 88-107 FR) 

Within the limits authorised by the 2004 procurement Directive12, provisions concerning 
procurement are reviewed in order to simplify the rules (thresholds, bank guarantees) 
take  into  account  the  specific  status  of  the  EIB  in  the  Treaty  and  define the scope  of 
some  provisions  more  precisely,  notably  for  the  selection  of  experts.  In  addition,  a 
vendor  database  should  enable  more  efficient  communication  with  potential  tenderers 
for such contract values below the thresholds laid down in the procurement directive. 

Concerning  the  rules  on  exclusion,  derogation  from  the  obligation  of  exclusion  is 
introduced in Article 93 FR for overriding requirements of general interest, in particular 
to  preserve  service  continuity  of  institutions.  This  provision  aims  at  aligning  FR  rules 
with the relevant Directive. A provision is introduced in Articles 95 FR for the ECB and 
EIB  to  give  them  access  to  the  central  exclusion  database  on  the  same  footing  as  EU 
institutions. 

Finally a provision is inserted in Article 96(2) FR to provide for a sound legal basis for 
the publication  of administrative decisions of exclusion and financial  penalties, in  line 
with data protection requirements. 

5.2.6.  Grants (Articles 108-120 FR) 

Rules  for  grants  were  first  introduced  in  the  FR  and  IR  in  the  2002  recast.  The  2006 
revision  made  only  limited  modifications,  which  have  proved  insufficient  to  alleviate 
administrative burden imposed on operational services and beneficiaries. 

This  administrative  burden  prevents  services  from  using  their  resources  on  policy 
objectives and on timely delivery, while it implies excessive red tape for beneficiaries. It 
two  direct  causes:  excessive  similarity  between  procurement  and  grant 
has 

12 

Directive N°2004/18/EC. 

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rules/procedures, although the objectives are different (acquisition vs. support); and the 
fact  that  controls  for  grants  focus  on  real  costs  (real-cost  based  grant)  rather  than  on 
expected results (deliverables) of projects. 

It  is  therefore  proposed  to  shift  the  Union  scheme  towards  a  performance-based 
system,  based  on  the  definition  of  agreed  indicators  and  objectives  (outputs  and 
outcomes), and to proceed to a robust simplification of lump sums (lump sums, standard 
scale  of  unit  costs  and  flat  rates),  clearly  disconnected  from  any  verification  of  actual 
costs  of  implementation  (Article  109  FR).  This  new  approach  should  be  essentially 
enshrined  in  the  Implementing  Rules  and  would  encompass  the  methods  of  control 
(including  operational  audits),  while  ensuring  the  respect  of  common  principles 
applicable  to  grants.  For  these  reasons,  the  maximum  threshold  per  lump  sum  (EUR 
25,000) should be deleted and be left to the College to decide when adopting a specific 
lump sum framework. 

To  ensure  that  the  recourse  to  lump  sums  is  part  of  a  risk  assessment  made  by  the 
Authorising  Officer  and  to  safeguard  equal  treatment  between  beneficiaries,  the 
framework to be used for the determination of lump sums (consistency with the funded 
activities, maximum amount, basis and methods of calculation) should be adopted by the 
Commission, except for schemes of low value grants (≤ EUR 50,000). The Authorising 
Officer  would  then  be  able,  within  the  programme  duration,  to  establish  lump  sums, 
scales of unit costs and flat rates on the basis of a provisional budget submitted by the 
applicant taking into account its internal accounting practices, including only acceptable 
cost categories, which are consistently applied to similar operations by the applicant (no 
bias detrimental to EU Funds). 

In parallel, the real-cost regime, maintained as the default regime, should be reviewed 
(clarification  of  various  types  of  costs,  costs  actually  incurred,  in  kind  contributions, 
profit) and the possible profit of an action should be recovered on a prorata basis (where 
EU funds 50% of the costs, only 50% of the profit should be recovered).  

Concerning the gradual decrease of operating grants (Article 113(2) FR), it is proposed 
to review the application of this rule over four years, rather than completely abandoning 
it, because it is justified in principle. 

Procedures  for  the  award  of  grants  in  the  IR  are  reviewed  to  leave  the  choice  of 
modalities as much as possible to the Authorising Officer (decision vs. agreement, bank 
guarantees  and  documents  serving  to  assess  operational  and  financial  capacity). 
Furthermore,  the  award  of  low  value  grants  should  be  made  easier,  by  removing 
excessive  administrative  requirements  in  line  with  the  principle  of  proportionality  and 
increasing  the  current  threshold  (from  EUR  25,000  to  EUR  50,000).  This  follows  the 
trend started in 2006. 

Rules authorising exceptionally cascading grants have proven too strict and should be 
eased (Article 120(2) FR) in order to allow a beneficiary to redistribute its grant by way 
of  subsidies  to  third  parties.  This  should  improve  the  implementation  of  programmes 
targeting a large group of physical persons which can only be reached through two levels 
of dispatch (Universities for Erasmus, NGOs for cash transfer programmes in external 
actions).  The  Commission  proposes  to  facilitate  cascading  grants  by  removing  or 
relaxing some of the current restrictions where the redistribution of funds is the primary 
aim  of  the  action,  and,  if  appropriate  guarantees  are  presented  by  the  first  ranking 

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beneficiary as regards the recovery of the amounts. The principle which limits discretion 
in the redistribution of grants by the primary beneficiary is preserved. 

Furthermore,  flexibility  should  be  given  to  Authorising  Officers  to  consider  as  a  sole 
beneficiary  a  group  of  implementing  partners  such  as  a  consortium  being  part  of  a 
network. Procedural flexibility is also given, in Article 109(6) FR when awarding grants 
to the EIB reflecting its special position under the Treaty. 

Finally,  provisions  are  proposed  for  the  extension  of  findings  for  systemic  errors 
within  the  real-costs  regime  when  such  errors  have  been  detected  during  an  ex-post 
audit. In these cases, the responsible Authorising Officer should be entitled to apply the 
same proportion of financial correction to other non audited projects implemented by the 
same beneficiary and recover the relevant amounts if the beneficiary cannot demonstrate 
that the error does not affect non audited projects. 

5.2.7.  Prizes (New Title VIa , Article 120a FR) 

Prizes are given as a reward after a contest and constitute a different instrument of Union 
contribution than grants. It is therefore proposed to introduce provisions related to prizes 
in a separate Title of the FR. The Union contribution in this context would be completely 
disconnected from any reference to predictable costs.  

5.2.8.  Financial instruments managed by IFIs (New Title VIB, Articles 120b, 120c FR) 

Financial instruments are increasingly identified as an adequate means of leverage of 
EU funds, in particular when they are pooled with others funds (guarantee funds, risk 
capital, blended instruments mixing a Community grant with a loan or a guarantee). 

It  is  proposed  to  provide  for  a  new  type  of  financial  contribution  because  these 
financial  instruments,  currently  mostly  implemented  by  EIB  and  EIF,  cannot  be 
assimilated to services or grants. They should be subject to specific provisions to take 
into  account  the  specificities  of  their  implementation  (revolving  funds,  cascade  of 
contributions through banking networks) while respecting the principles of responsibility 
(such as the share of risks or co-financing, and penalties for non-performance) and sound 
financial management (limitation of the risks incurred by public funds). 

5.2.9.  Court of Auditors' reports and statements of preliminary findings. (Articles 143 and 

144) 

A series of amendments is proposed concerning the annual and special reports of the 
Court  of  Auditors,  in  order  to  reflect  the  current  practices  (the  contradictory 
procedure,  the  publication  of  the  replies  of  each  Institution  next  to  or  after  the 
observations of the ECA, the transmission of the Member States replies) or aimed at 
streamlining  the  timetable.  Finally,  a  new  provision  formalises  the  practice  of  the 
statement  of  preliminary  findings  sent  by  the  ECA  to  Commissioners,  bodies  and 
Member States. 

5.2.10.  Union trust funds (Article 164 FR) 

It is proposed to authorise the Commission to set up and manage Union trust funds for 
external actions, which would intervene in emergency, post-emergency crisis operations 

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(e.g. Haiti), or for thematic actions, and would pool the contribution of the Union budget 
with funds from other donors. 

The main objective of such delivery instrument is to allow the Union to act as a major 
and more visible player in the field of development aid. 

5.2.11.  Possibility to raise loans to finance the acquisitions of buildings (Article 179(3)b FR) 

For  both  transparency  and  cost-efficiency  reasons,  the  Commission  proposes  to 
introduce  the  possibility  to  raise  loans,  in  the  sole  case  where  institutions  envisage 
buying their premises. This would considerably simplify the current system, be more 
cost-efficient  as  institutions  could  profit  from  lower  interest  rates  due  to  the  Union 
AAA  rating  in  the  financial  market  and  would  allow  institutions  to  develop  a  long 
term real estate policy (in particular for delegations, OIB and OIL). 

In practice, only annual loan instalments (reimbursement of the loan) would appear 
in  the  budget,  but  the  "building"  loans  themselves  are  to  be  considered  outside  the 
budget  since  they  do  not  finance  the  budget  but  the  acquisition  of  assets.  For  this 
reason,  the  modification  is  introduced  in  Article  179  FR  instead  of  Article  14  FR. 
Article  96  IR,  which  defines  administrative  expenditure  covered  by  provisional 
commitments,  is  also  modified,  as  the  payment  of  each  annual  (or  periodic) 
instalment  is  to  be  treated  as  recurring  administrative  expenditure,  similar  to  a  rent 
payment. 

5.2.12.  A flexible approach for Public and Private Partnerships (PPPs) 

The  Commission  proposal  aims  at  facilitating  a  wider  use  of  PPPs,  notably  in  the 
research  field,  which  is  a  strong  request  of  most  operators  concerned.  The  flexibility 
proposed should accommodate a vast range of PPPs, depending on their structure and on 
the precise definition of the funded activity (clearly identified projects or R&D themes). 
It is thus proposed to add to the existing two possibilities of structure (community bodies 
under  Article  185  FR,  as  the  Joint  Technological  Initiatives  are  today,  consortium  of 
partners  structured  under  a  private  legal  entity  or  purely  contractual  network,  which 
receive a grant-Art.108 FR) two new ones. In particular, it is foreseen to: 

–  allow  private  bodies  to  be  entrusted  with  the  implementation  of  a  PPP  and  to 
manage EU funds (e.g. awarding grants) to that effect in the framework of indirect 
management (Article 53(1) 2(g) FR); 

–  provide for the adoption under delegated powers of a separate light model financial 
regulation  applicable  to  bodies  created  in  a  basic  act  and  charged  with  the 
implementation  of  a  PPP  (Article  185a  FR).  Such  model  financial  regulation  will 
comprise  a  common  set  of  principles  which  will  be  mandatory  in  order  to  ensure 
sound  management  of  EU  funds  and  adequate  protection  of  the  Union's  financial 
interests. However, PPPs would be able to apply their own rules (accounting, internal 
and external audit, procurement...) within the framework of applicable national law 
and the basic act. 

It would thus be possible to choose the structure best adapted to the objectives and nature 
of  the  activities  to  be  implemented,  in  a  range  varying  from  contractual  to 
institutionalised  ("incorporated")  arrangements,  the  latter  including  a  Union  body 

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(Article  185  FR),  a  private  sector  body  (Article  53(1)  2(g)  FR)  and  a  mixed  body 
(Article 185a and 53(1) 2(e) FR). 

5.3. 

Final provisions (Articles 182-187 FR) 

The regular triennial revision of the FR as currently foreseen does not ensure enough 
legal  security  and  stability  of  the  financial  rules.  Additionally,  the  revision 
mechanism is very rigid and does not take into account the multiannual programming 
cycle  of  the  EU  budget  and  related  sector  legislation.  As  a  consequence,  it  is 
proposed  that  future  revisions  of  the  Financial  Regulation  are  made  whenever  it 
proves necessary without resorting to specific time frames. 

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(cid:208) 1605/2002 (adapted) 
(cid:214) new 
2010/0154 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the Financial Regulation applicable to the general budget of the European 
Communities (cid:214) the general budget of the European Union  

(Recast) 

CONTENTS 

PART 1 

COMMON PROVISIONS … 

TITLE I 

SCOPE … 

TITLE II 

BUDGETARY PRINCIPLES … 

Chapter 1 

Principles of unity and of budget accuracy … 

Chapter 2 

Principle of annuality … 

Chapter 3 

Principle of equilibrium … 

Chapter 4 

Principle of unit of account … 

Chapter 5 

Principle of universality … 

Chapter 6 

Principle of specification … 

Chapter 7 

Principle of sound financial management … 

Chapter 8 

Principle of transparency … 

TITLE III 

ESTABLISHMENT AND STRUCTURE OF THE BUDGET 
… 

Chapter 1 

Establishment of the budget … 

Chapter 2 

Structure and presentation of the budget … 

TITLE IV 

IMPLEMENTATION OF THE BUDGET … 

Chapter 1 

General provisions … 

Chapter 2  Methods of implementation … 

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Chapter 3 

Financial actors … 

Section 1 

Principle of separation of duties … 

Section 2 

Authorising officer … 

Section 3 

Accounting officer … 

Section 4 

Imprest administrator … 

Chapter 4 

Liability of the financial actors … 

Section 1 

General rules … 

Section 2 

Rules applicable to authorising officers by delegation and 
subdelegation … 

Section 3 

Rules applicable to accounting officers and imprest 
administrators … 

Chapter 5 

Revenue operations … 

Section 1 

Making available of own resources … 

Section 2 

Estimate of amounts receivable … 

Section 3 

Establishment of amounts receivable … 

Section 4 

Authorisation of recovery … 

Section 5 

Recovery … 

Chapter 6 

Expenditure operations … 

Section 1 

Commitment of expenditure … 

Section 2 

Validation of expenditure … 

Section 3 

Authorisation of expenditure … 

Section 4 

Payment of expenditure … 

Section 5 

Time limits for expenditure operations … 

Chapter 7 

IT systems … 

Chapter 8 

Internal auditor … 

TITLE V 

PROCUREMENT … 

Chapter 1 

General provisions … 

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Section 1 

Scope and award principles … 

Section 2 

Publication … 

Section 3 

Procurement procedures … 

Section 4 

Guarantees and control … 

Chapter 2 

Provisions applicable to contracts awarded by the Community 
institutions ⌦ of the Union ⌫ on their own account … 

TITLE VI 

GRANTS … 

Chapter 1 

Scope and form of grants … 

Chapter 2 

Principles … 

Chapter 3 

Award procedure … 

Chapter 4 

Payment and control … 

Chapter 5 

Implementation … 

TITLE VII 

PRESENTATION OF THE ACCOUNTS AND 
ACCOUNTING … 

Chapter 1 

Presentation of the accounts … 

Chapter 2 

Information on the implementation of the budget … 

Chapter 3 

Accounting … 

Section 1 

Common provisions … 

Section 2 

General accounts … 

Section 3 

Budgetary accounts … 

Chapter 4 

Property inventories … 

TITLE VIII  EXTERNAL AUDIT AND DISCHARGE … 

Chapter 1 

External audit … 

Chapter 2 

Discharge … 

PART TWO  SPECIAL PROVISIONS … 

TITLE I 

EUROPEAN AGRICULTURAL GUARANTEE FUND … 

TITLE II 

STRUCTURAL FUNDS, COHESION FUND, EUROPEAN 
FISHERIES FUND, AND EUROPEAN AGRICULTURAL 

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FUND FOR RURAL DEVELOPMENT … 

TITLE III 

RESEARCH … 

TITLE IV 

EXTERNAL ACTIONS … 

Chapter 1 

General provisions … 

Chapter 2 

Implementation of actions … 

Chapter 3 

Procurement … 

Chapter 4 

Grants … 

Chapter 5 

Auditing of accounts … 

TITLE V 

EUROPEAN OFFICES … 

TITLE VI 

ADMINISTRATIVE APPROPRIATIONS … 

TITLE VII  EXPERTS … 

PART 
THREE 

TRANSITIONAL AND FINAL PROVISIONS … 

TITLE I 

TRANSITIONAL PROVISIONS … 

TITLE II 

FINAL PROVISIONS … 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 322 thereof, in conjunction with the Treaty establishing the European Atomic Energy 
Community, and in particular Article 106a thereof, 

Having regard to the proposal from the European Commission, 

Having regard to the opinion of the Court of Auditors13, 

After transmission of the draft legislative act to the Court of Justice of the European Union, 
the  European  Economic  and  Social  Committee,  the  Committee  of  the  Regions,  the 
Ombudsman and the Data Protection Officer, 

After transmission of the draft legislative act for information to the national Parliaments, 

After  transmission  of  the  draft  legislative  act  for  information  to  the  European  Central  Bank 
and the European Investment Bank, 

13 

OJ C 162, 5.6.2001, p. 1 and OJ C 92, 17.4.2002, p. 1. 

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16 

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Acting in accordance with the ordinary legislative procedure14, 

Whereas: 

(1) 

(2) 

(3) 

(cid:216) new 

Council  Regulation  (EC,  Euratom)  No  1605/2002  of  25  June  2002  on  the  Financial 
Regulation applicable to the general budget of the European Communities15 has been 
substantially  amended  several  times.  Since  further  amendments  are  to  be  made,  it 
should be recast in the interests of clarity. 

(cid:208) 1605/2002 recital 1 (adapted) 

Since times have changed considerably since the Financial Regulation of 21 December 
1977 applicable to the general budget of the European Communities16 was adopted, in 
particular  as  a  result  of  a  financial  perspective  forming  a  framework  for  the 
development of the budget, developments in the institutional structure and a series of 
enlargements, that Financial Regulation has been substantially amended several times. 
In  order  to  take  account,  in  particular,  of  the  requirements  of  simplification  in 
legislative  and  administrative  matters  and  the  tightening  up  of  management  of 
Community finances, the Financial Regulation of 21 December 1977 should be recast 
in the interests of clarity. 

(cid:216) new 

Regulation  (EC,  Euratom)  No  1605/2002  laid  down  the  budgetary  principles  and 
financial  rules  to  be  respected  in  all  legislative  acts  and  by  all  institutions.  The 
fundamental principles, the concept and the structure of that Regulation and the basic 
rules  of  budgetary  and  financial  management  need  to  be  maintained.  Derogations  to 
those  fundamental  principles  should  be  reviewed  and  simplified  as  far  as  possible, 
taking  into  account  their  continuing  relevance,  their  added-value  for  the  Union's 
annual budget, hereinafter “the budget”, and the burden they impose on stakeholders. 
It  is  necessary  to  maintain  and  strengthen  the  key  elements  of  the  financial  reform  - 
the role of the financial actors, the integration of controls in operational services, the 
internal  auditors,  the  Activity  Based  Budgeting  (ABB),  the  modernisation  of 
accounting principles and rules and the basic principles for grants. 

(4) 

Account should be taken of provisions implementing the revenue and expenditure of 
the  budget,  contained  in  the  basic  legal  acts  adopted  for  the  period  2007  to 2013,  in 
order to ensure coherence between those acts and ⌦ this ⌫ the Financial Regulation. 

(cid:208) 1995/2006 Recital 4  (adapted) 

14 
15 
16 

OJ C […], […], p. […]. 
OJ L 248, 16.9.2002, p. 1. 
OJ  L  356,  31.12.1977,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC,  ECSC,  Euratom)  No 
762/2001 (OJ L 111, 20.4.2001, p. 1). 

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17 

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(5) 

(6) 

(cid:216) new 

In the light of practical experience, some amendments should be made to the Financial 
Regulation  in  order  to  adapt  it  to  evolving  requirements  of  budget  implementation 
such as co-financing with other donors, to increase the efficiency of external aid and to 
facilitate  the  use  of  specific  financial  instruments  like  those  concluded  with  the 
European Investment Bank or implementation through public and private partnerships. 

(cid:208) 1605/2002 Recital 2 (adapted) 
(cid:214) new 

This Regulation ⌦ (EC, Euratom) No 1605/2002 ⌫ should be ⌦ was ⌫ confined 
to  stating  the  broad  principles  and  basic  rules  governing  the  whole  budgetary  sector 
covered by the Treaty ⌦ Treaties ⌫ , while the implementing provisions should be 
moved to a Regulation on rules for the implementation of this Regulation ⌦ were laid 
down in 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 Communities17 ⌫ in order to produce a better hierarchy of rules and 
make  the  Financial  Regulation  ⌦ (EC,  Euratom)  No  1605/2002 ⌫  easier  to  read. 
The  Commission  should  therefore  be  authorised  to  adopt  the  implementing  rules. 
(cid:214) However,  the  Treaty  on  the  Functioning  of  the  European  Union  limits  the 
possibility to delegate to the Commission the power to adopt implementing measures 
only for the purposes of supplementation or amendment of non-essential elements of 
legislative  acts.  As  a  consequence,  some  provisions  laid  down  in  Regulation  (EC, 
Euratom)  No  2342/2002  ,  should  be  incorporated  into  this  Regulation.  The 
implementing  measures  adopted  by  the  Commission  should  be  confined  to  technical 
details and implementing modalities.   

(7) 

The  establishment  and  implementation  of  the  budget  should  respect  the  four 
fundamental principles of budgetary law (unity, universality, specification, annuality), 
and  the  principles  of  budget  accuracy,  equilibrium,  unit  of  account,  sound  financial 
management and transparency. 

(cid:208) 1605/2002 recital 3 

(8) 

This  Regulation  should  reassert  those  principles  and  keep  exceptions  to  a  strict 
minimum subject to strict conditions. 

(cid:208)1605/2002 recital 4 

(9) 

As regards the principle of unity, this Regulation should specify that it also applies to 
operational expenditure on implementing the European Union Treaty provisions on the 

(cid:208) 1605/2002 recital 5 (adapted) 
(cid:214) new 

17 

⌦ OJ L 357, 31.12.2002, p. 1. ⌫ 

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18 

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common foreign and security policy and on police and judicial cooperation in criminal 
matters,  where  this  is  charged  to  the  budget.  The  principle  of  unity  and  budget 
accuracy ⌦ implies ⌫ means that all Community revenue and expenditure, and that 
of the Union, when this is charged to the budget, are entered in the budget.  

(10)  (cid:214) The  rules  governing  interest  generated  by  pre-financing  should  be  simplified  as 
they generate excessive administrative burden on both recipients of Union funds and 
Commission services and create misunderstandings between the Commission services 
and  operators  and  partners.  For  reasons  of  simplification,  in  particular  in  respect  of 
grant beneficiaries, and in line with the principle of sound financial management, there 
should no longer be an obligation to generate interest on pre-financing and to recover 
such interest. However, it should be possible to include such obligation in a delegation 
agreement in order to allow the re-use of interests generated by pre-financing for the 
programmes managed by some delegates, or its recovery.  

(cid:208) 1605/2002 recital 8 (adapted) 

(11)  As  regards  the  principle  of  annuality,  the  distinction  between  differentiated 
appropriations and non-differentiated appropriations should be retained. Decisions on 
carryovers  of  commitment  and  payment  appropriations  should  be  taken  by  each 
institution. The additional periods should be confined exclusively to the cases where 
they are absolutely necessary, namely EAGGF payments.With regard to the principle 
of annuality, m More ⌦ The current level of ⌫ flexibility and transparency should 
be  ⌦ maintained ⌫  introduced  to  respond  to  functional  needs.  The  carry-over  of 
appropriations should exceptionally be permitted in the case of expenditure on direct 
payments to farmers under the European Agricultural Guarantee Fund (EAGF) set up 
by  Council  Regulation (EC)  No 1290/2005  of  21 June  2005,  on  the  financing  of  the 
common agricultural policy18. 

(cid:208) 1995/2006 Recitals 9 and 10  
(adapted) 
(cid:214) new 

(12)  Payment  requests  from  the  Member  States  under  the  agricultural  rRegulations ⌦ in 
the  area  of  agriculture  tend  to ⌫  will  be  concentrated  overwhelmingly  at  the 
beginning  of  the  budget  year  n.  Therefore,  the  maximum  threshold  for  advance 
commitments  against  the  EAGF  (from  15 November  of  year  n-1)  to  cover  routine 
management  expenditure  (charged  to  the  budget  of  year  n)  should  be  increased  to 
three quarters of corresponding appropriations in the last adopted agricultural budget. 
As  regards  ⌦ The  provisions  concerning ⌫  the  limit  on  advance  commitment  of 
administrative  expenditure,  the  text  should  be  amended  so  that  it  refers    ⌦ should 
refer ⌫  to  appropriations  decided  by  the  budgetary  authority,  therefore  excluding 
transfers of appropriations. 

(13)  The use of non-differentiated appropriations for veterinary measures, charged against 
the EAGF, unduly hampers the implementation of such measures, especially in respect 
of  the  limits  placed  on  the  possibilities  for  carry-overs.  The  use  of  differentiated 

18 

OJ L 209, 11.8.2005, p. 1. 

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19 

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appropriations  for  such  expenditure  should  therefore  be  permitted,  as  this  is  more  in 
keeping with the multi-annual nature of the actions. 

(cid:216) new 

(14)  Carry over rules for assigned revenue should take into account the distinction between 
external and internal assigned revenue. In order to respect the purpose assigned by the 
donor, external assigned revenues should be carried over automatically and used until 
all the operations relating to the programme or action to which it is assigned have been 
carried out. Where the external assigned revenue is received during the last year of the 
programme  or  action,  it  should  also  be  possible  to  use  it  in  the  first  year  of  the 
succeeding  programme  or  action.  Internal  assigned  revenue  may  be  carried  over  for 
one year only, unless specified otherwise in the basic act applicable or in duly justified 
circumstances.  

(cid:208) 1605/2002 recital 9 (adapted) 

(15)  The principle of  equilibrium constitutes a basic budgetary rule. In this connection, it 
should  be  emphasised  that  recourse  to  loans  is  not  compatible  with  the  system  of 
Community  ⌦ Union's ⌫  own  resources.  However,  the  principle  of  equilibrium 
⌦ should  not  be  interpreted ⌫  is  not  such  as  to  hinder  the  borrowing  and  lending 
operations guaranteed by the general budget of the Union. 

(cid:208) 1605/2002 recital 10 (adapted) 

(16) 

In  accordance  with  Article ⌦ 320 ⌫  277,  first  paragraph,  of  the  EC  Treaty ⌦ on 
the  Functioning  of  the  European  Union, ⌫  and  Article  181,  first  paragraph,  of  the 
Euratom Treaty the unit of account in which the budget is drawn up, and which is also 
used  for  purposes  of  implementation  and  for  presentation  of  the  accounts,  should  be 
determined. 

(cid:208) 1605/2002 recital 6 (adapted) 
(cid:214) new 

(17)  As  regards  the  principle  of  universality,  the  practices  of  repayment  of  payments  on 
account and reuse ⌦ was ⌫ should be discontinued; ⌦ and ⌫ in some cases they 
should  be  replaced  by  assigned  revenue  and  ways  of  reconstituting  decommitted 
appropriations.  These  amendments  do  not  affect  the  ⌦ The ⌫  special  rules 
applicable to the Structural Funds ⌦ were not affected ⌫.  

(18)  (cid:214) The  derogation  concerning  assigned  revenue  should  be  modified  to  take  into 
account the specificities of, on the one hand, "Internal assigned revenue" arising from 
appropriations authorised by the budgetary authority and, on the other hand, "external 
assigned  revenue"  collected  from  and  assigned  by  various  donors  to  a  specific 
programme or action. Furthermore, external donors should continue to be allowed to 
co-finance external actions, in particular humanitarian actions, even in cases where the 
basic  act  does  not  expressly  provide  therefore.  To  facilitate  the  management  of  real 
estate stock, the list of internal assigned revenue should include revenue from the sale 
of buildings or assimilated operations.  

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(19)  As  regards  the  presentation  of  assigned  revenues  in  the  draft  budget,  more 
transparency  should  be  introduced  by  providing  that  amounts  of  assigned  revenue 
shall be included in the draft budget for the amounts which are certain at the date of its 
establishment. 

(cid:216) new 

(cid:208) 1995/2006 Recital 12 (adapted) 

(20)  At  present,  the  Commission  must  be  authorised  by  the  budgetary  authority  before 
accepting any donations, such as gifts or bequests, which involve a charge. To avoid 
unnecessary and cumbersome procedures before the Commission ⌦ is allowed to ⌫ 
can  accept  any  donations,  such  as  gifts  or  bequests,  which  involve  a  charge, 
authorisations by the budgetary authority should be made compulsory only in the case 
of donations exceeding a certain value and involving significant charges. 

(cid:208) 1605/2002 recital 7 

(21)  As regards the principle of specification, the institutions need to have some degree of 
management  flexibility  for  transfers  of  appropriations.  This  Regulation  should  allow 
integrated  presentation  of  the  allocation  of  financial  and  administrative  resources  by 
purpose. The procedures for transferring appropriations should also be harmonised for 
all  the  other  institutions  so  that  transfers  of  staff  and  operating  appropriations  are  a 
matter  for  each  institution.  As  regards  transfers  of  appropriations  concerning 
operational expenditure, the Commission may make transfers between chapters within 
one  and  the  same  title  within  a  total  limit  of  10 %  of  the  appropriations  for  the 
financial  year  which  appear  on  the  line  from  which  the  transfer  is  made.  The 
budgetary authority should be allowed to constitute reserves in only two cases: where 
there is no basic act or where it is not certain that appropriations are adequate. 

(cid:208) 1995/2006 Recitals 13 and 14  
(cid:214) new 

(22)  The rules governing transfers of appropriations should be simplified and clarified on 
certain  points  because  they  have  proved  cumbersome  or  unclear  in  practice.  (cid:214) It  is 
necessary  to  ensure  better  budget  implementation,  especially  in  relation  to  payments 
appropriations,  assigned  revenues  and  administrative  appropriations  which  are 
common to several titles. Therefore more flexibility should be allowed in the adoption 
procedure of some transfers.   

(23)  For reasons of efficiency, the Commission should be allowed to decide autonomously 
on  transfers  from  the  reserve  in  cases  where  no  basic  act  exists  for  the  action 
concerned  at  the  time  when  the  budget  is  established,  but  where  the  basic  act  is 
adopted  in  the  course  of  the  year. (cid:214) Moreover,  in  order  to  avoid  recurrent  delays  in 
carrying  out  of  transfers,  information  on  which  needs  to  be  transferred  to  the 
budgetary  authority,  it  is  necessary  to  simplify  procedure  and  typology  of  those 
transfers.  In  particular,  the  possibility  for  the  Commission  to  decide  on  transfers  of 
unused  budgetary  appropriations  in  cases  of  international  humanitarian  disasters  and 
crisis  has  proved  to  be  relevant  and  efficient.  That  possibility  should  therefore  be 

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extended to similar events occurring after 1st December. In those cases, for reasons of 
transparency, the Commission should  inform immediately  the budgetary authority of 
its decision. The Commission should also decide autonomously, within certain limits, 
on transfers from the emergency aid reserve.   

(cid:208) 1995/2006 Recitals 15 (adapted) 

(24)  The rules on the Commission's administrative transfers should be adapted to the new 
Activity-Based  Budgeting  (ABB)  ⌦ coherent  with  the  ABB ⌫  structure.  Thus, 
provision should be made for an exemption from the ‘notification procedure’. During 
the  last  month  of  the  financial  year,  the  Commission  should  be  allowed  to  decide 
autonomously  on  transfers  of  appropriations  concerning  staff  expenditure,  within 
certain limits. 

(cid:208) 1605/2002 recital 11 (adapted) 

(25)  The  principle  of  sound  financial  management  should  be  defined  by  reference  to  the 
principles  of  economy,  efficiency  and  effectiveness,  and  compliance  with  those 
principles  checked  by  means  of  performance  indicators  established  per  activity  and 
measurable  in  such  a  way  that  results  can  be  assessed.  The  institutions  should  carry 
out ex ante and ex post evaluation, in accordance with the guidelines ⌦ guidance ⌫ 
determined by the Commission. 

(cid:208) 1995/2006 Recital 5 (adapted) 
(cid:214) new 

(26) 

It should ⌦ also ⌫ be clarified that sound financial management requires effective 
and efficient internal control, and the main features and objectives of internal control 
systems should be defined. 

(27)  (cid:214) Concerning  provisions  on  proportionality,  the  notion  of  tolerable  risk  of  error 
should be introduced as part of the risk assessment made by the Authorising Officer. 
The  institutions  should  be  able  to  move  away  from  the  general  2%  materiality 
threshold used by the Court of Auditors to conclude on the legality and regularity of 
the  underlying  transactions.  Tolerable  risk  levels  would  be  a  more  appropriate  basis 
for  the  Discharge  Authority  to  judge  the  quality  of  the  management  of  risk  by  the 
Commission.  The  legislative  authority  should  therefore  determine  the  level  of 
tolerable  risk  of  error  per  policy  area,  taking  into  account  the  costs  and  benefits  of 
controls.  

(cid:208) 1605/2002 recital 12 (adapted)  

(28)  Finally, Aas regards the principle of transparency, information on implementation of 
the budget and the accounts should be improved. A strict deadline should also be set 
for  the  publication  of  the  budget  without  prejudice  to  provisional  publication  by  the 
Commission  between  the  declaration  of  definitive  adoption  by  the  President  of  the 
European  Parliament  and  publication  in  the  Official  Journal  of  the  European 
⌦ Union ⌫  Communities.  The  possibility  of  a  negative  reserve  ⌦ should ⌫  is 
also to be retained. 

EN 

22 

   EN 

 
 
 
 
 
(cid:208) 1995/2006 Recital 6 

(29) 

In order to ensure the transparency of the use of funds deriving from the budget, it is 
necessary  to  make  available  information  on  the  beneficiaries  of  these  funds  within 
certain  limits  necessary  to  protect  legitimate  public  and  private  interests  and  taking 
into account the particular accounting period for the European Agricultural Guarantee 
Fund. 

(cid:208) 1605/2002 recital 13 (adapted) 
(cid:214) new 

(30)  As  regards  the  establishment  and  presentation  of  the  budget,  the  current  provisions 
should  be  harmonised  and  simplified  by  eliminating  the  distinction,  which  has  no 
practical impact, between supplementary budgets and amending budgets. 

(31)  (cid:214) With regard to the establishment of the budget, it is important to clearly define the 
structure and the presentation of the draft budget drawn up by the Commission. The 
content  of  the  general  introduction  preceding  the  draft  budget  should  be  described 
more  precisely.  It  is  also  necessary  to  include  a  provision  on  financial programming 
for  the  years  to  come  as  well  as  on  a  possibility  for  a  Commission  to  submit  any 
working paper to support budget requests.  

(32)  The Commission section of the budget should present appropriations and resources by 
purpose,  i.e.  activity-based  budgeting,  with  a  view  to  enhancing  transparency  in  the 
management  of  the  budget  with  reference  to  the  objectives  of  sound  financial 
management and in particular efficiency and effectiveness. 

(cid:208) 1605/2002 recital 14 

(cid:208) 1605/2002 recital 15 (adapted) 

(33)  The institutions should enjoy a measure of flexibility in the management of statutory 
posts  in  relation  to  what  is  authorised  in  the  budget,  especially  as  the  emphasis  in 
management is now to be on results and not on means. This ⌦ flexibility should ⌫ 
freedom  will  ,  however,  continue  to  be  restricted  by  the  dual  limit  of  budget 
appropriations for a financial year and the total number of posts allocated.; Iin addition 
there ⌦ should ⌫ will be no latitude as regards grades ⌦ AD 16, AD 15 and AD 
14 ⌫ A 1, A 2 and A 3 posts. 

(cid:208) 1995/2006 Recital 19 (adapted) 

(34)  As regards the implementation of the budget, some adjustments are necessary in order 
to  better  reflect  the  specific  features  of  the  Common  Foreign  and  Security  Policy 
(CFSP) ⌦ should be reflected ⌫ . For reasons of legal clarity, the forms basic acts 
can take under the EC Treaty ⌦ on the Functioning of the European Union ⌫ and 
under  Title V  and VI  of  the  Treaty  on  European  Union  should  be  identified  in  the 
Financial  Regulation  instead  of  in  the  implementing  rules.  In  addition,  a  specific 
provision  should  be  ⌦ made ⌫  added  in  order  to  properly  reflect  the  types  of 
preparatory measures that may be undertaken in the field of the CFSP. 

EN 

23 

   EN 

 
 
 
 
 
 
(cid:208) 1605/2002 recital 16 (adapted) 
(cid:214) new 

(35)  As regards implementation of the budget, there should be clarification of the various 
possible  methods  of  implementing  the  budget,  either  on  a  centralised  basis  by  the 
Commission or on a shared basis with the Member States or on a decentralised basis 
with third countries receiving external aid or jointly with international organisations. It 
should  be  possible  for  centralised  management  either  to  be  performed  directly  by 
Commission  departments  or  indirectly  by  delegation  to  bodies  governed  by 
Community  law  or  by  national  public  law.  The  implementation  methods  should 
guarantee  that  the  procedures  for  protecting  Community  funds  are  complied  with, 
whatever the entity responsible for all or part of this implementation and must confirm 
that  final  responsibility  for  budgetary  implementation  lies  with  the  Commission  in 
accordance with Article 274 of the Treaty. 

(36)  (cid:214) As regards methods of implementation, which govern in particular the conditions of 
externalisation  of  implementing  powers  to  third  parties,  the  rules  have  become  too 
complex  over  the  years  and  should  be  simplified.  At  the  same  time,  the  initial 
objective of externalisation – to ensure that whatever the method of implementation, 
expenditure  should  be  implemented  with  a  level  of  control  and  transparency 
equivalent  to  that  expected  from  the  Commission  services  -  should  be  maintained. 
Therefore, a clear distinction should be made between situations where the budget is 
implemented  directly,  by  the  Commission  or  its  executive  agencies  and  situations 
where  the  budget  is  implemented  indirectly  through  third  parties.  This  should  allow 
establishment  of  a  common  regime  for  indirect  management  with  the  possibility  to 
adapt  it  in  accordance  with  sector  specific  rules,  in  particular  where  the  budget  is 
implemented  indirectly  by  Member  States  under  shared  management.  Such  common 
regime  should  include  in  particular  the  basic  principles  to  be  respected  by  the 
Commission  where  it  decides  to  implement  the  budget  indirectly  and  the  basic 
principles  to  be  respected  by  entrusted  parties.  The  Commission  should  be  able  to 
apply  Union  rules  and  procedures  or  to  accept  the  application  of  the  rules  and 
procedures  of  the  entrusted  entity,  provided  the  latter  guarantees  an  equivalent 
protection of the financial interests of the Union.  

(cid:208) 1605/2002 recitals 17 and 18 
(adapted) 
(cid:214) new 

(37)  As  the  Commission  is  responsible  for  implementation  of  the  budget,  it  may  not 
delegate any tasks of public authority involving the use of discretionary powers. This 
Regulation should restate this principle and specify the scope of the tasks that may be 
delegated.  It  should  also  be  stipulated  that  private-sector  bodies,  other  than  those 
which have a public-service mission and under specific conditions, should not be able 
to  undertake  any  budgetary  implementation  measure  but  only  provide  specialist 
technical or administrative services or perform preparatory or ancillary tasks. 

(38)  For  the  sake  of  compliance  with  the  principles  of  transparency  and  sound  financial 
management, the public-sector bodies or bodies with a public-service mission to which 
implementing  tasks  are  delegated  on  behalf  of  the  Commission  should  have 
transparent  procurement  procedures,  effective  internal  controls,  a  system  for 

EN 

24 

   EN 

 
 
 
presentation  of  the  accounts  which  is  separate  from  their  other  activities  and  an 
external audit. 

(39)  (cid:214) Rules on 'ex ante assessment' of entities -other than Member States which are not 
subject  to  ex-ante  assessment-  should  be  adapted  to  ensure  that  all  entrusted  entities 
and  persons  provide  a  level  of  protection  of  the  financial  interests  of  the  Union 
equivalent to that required under this Regulation.  As  part of the supervision tasks of 
the Commission, a set of control and audit obligations, including clearance of accounts 
procedures for all budget management types should be provided for.  

(cid:216) new 

(40) 

In  order  to  take  account  of  operational  needs  and  to  facilitate  implementation  by 
potential  beneficiaries  or 
implementing  partners,  requirements  should  remain 
proportionate  to  the  specific  risks  of  the  action  and  its  overall  control  environment. 
The nature of the tasks and the measures carried out by the Commission as part of the 
supervision  and  support  of  the  implementation  of  the  action  should  be  taken  into 
account when assessing the capacity of the third party or entity to comply with such 
requirements.  Furthermore,  this  Regulation  should  accommodate  new  financial 
instruments such as financial instruments and Private and Public Partnerships in order 
to improve budget and policy delivery. 

(cid:216) new 

(41)  The  experience  with  Public  Private  Partnerships  (PPPs)  institutionalised  as  Union 
bodies  under  Article  185  of  Regulation  (EC,  Euratom)  No  1605/2002  demonstrates 
that further alternatives should be added in order to increase the choice of instruments 
to include bodies whose rules are more flexible and accessible to the private partners 
than those applicable to the Union institutions. Such alternatives should operate under 
indirect management. An alternative should be a body established by a basic act and 
endowed with financial rules which should take into account the principles necessary 
to  ensure  sound  financial  management  of  Union  funds.  These  principles  should  be 
adopted  in  a  delegated  regulation  and  should  be  based  on  those  with  which  third 
entities  entrusted  with  budget  implementation  tasks  have  to  comply.  Another 
alternative should be the implementation of PPPs by bodies governed by private law 
of a Member State.  

(cid:216) new 

(42)  Basic  control  and  audit  obligations  of  Member  States  where  they  implement  the 
budget indirectly in shared management, which currently exist only in sector specific 
Regulations,  should  be,  in  accordance  with  Article  317  of  the  Treaty,  introduced  in 
this Regulation. Therefore it is necessary to include provisions, setting out a coherent 
framework for all policy areas concerned, on a harmonised administrative structure at 
national  level,  common  management  and  control  obligations  for  those  structures, 
annual  management  declaration  of  assurance  with  independent  audit  opinion  thereon 
and an annual declaration by Member States by which they assume the responsibility 
for  the  management  of  Union  funds  they  are  entrusted  with,  financial  clearance, 
suspension  and  correction  mechanisms  operated  by  the  Commission.  Detailed 
provisions should remain in sector specific Regulations. 

EN 

25 

   EN 

 
 
 
 
(43) 

In accordance with Article ⌦ 322 ⌫ 279(c) of the Treaty, this Regulation ⌦ should 
define ⌫  defines  the  powers  and  responsibilities  of  ⌦ financial  actors,  in 
particular ⌫ authorising officers, the accounting officers and the internal auditor. 

(cid:208) 1605/2002 recital 19 (adapted) 

Authorising officers ⌦ should be ⌫ are made fully responsible for all revenue and 
expenditure operations executed under their authority and ⌦ should ⌫ must be held 
accountable  for  their  actions,  including,  where  necessary,  through  disciplinary 
proceedings.  This  empowerment  should  therefore  be  strengthened  by  the  removal  of 
centralised prior controls and in particular ending the advance approval of revenue and 
expenditure  operations  by  the  financial  controller  and  the  check  by  the  accounting 
officer that payment constitutes valid discharge. 

The  accounting  officer  ⌦ should  continue ⌫  continues  to  be  responsible  for  the 
proper  execution  of  payments,  the  collection  of  revenue  and  the  recovery  of 
receivables.  He/She  manages ⌦ should  manage ⌫  the  treasury,  keeps  the  accounts 
and is ⌦ be ⌫ responsible for drawing up the institution's financial statements. 

The  internal  auditor  ⌦ should  perform ⌫  performs  his  duties  in  accordance  with 
international  audit  standards.  His  role  is  ⌦ should  be ⌫  to  verify  the  proper 
functioning  of  the  management  and  control  systems  put  in  place  by  the  authorising 
officers. 

The internal auditor is not an actor involved in the financial operations and does not 
have the role of exercising control over these operations ahead of the decisions by the 
authorising officers; the authorising officers should now assume full responsibility for 
these decisions. 

(cid:216) new 

(44)  With  regard  to  the  duties  of  the  authorising  officer  by  delegation,  some  provisions 
should  be  clarified,  in  particular  concerning  the  internal  control  procedures  that  he 
puts into place ex ante and ex post and his reporting duties. In this respect, the content 
of his annual activity report should be updated in line with practice which consists in 
including  the  required  financial  and  management  information  to  support  his 
declaration of assurance on the performance of his duties. 

(cid:208) 1995/2006 Recital 24  
(cid:214) new 

(45)  (cid:214) The  responsibilities  of  the  Accounting  Officer  of  the  Commission  should  be 
clarified, in particular it should be specified that he is the only person who is entitled 
to  define  the  accounting  rules  and  harmonised  charts  of  accounts,  while  Accounting 
Officers  of  all  other  institutions  define  accounting  procedures  applicable  in  their 
institutions.   Accounting  officers'  responsibility  for  certifying  the  accounts  on  the 
basis of the financial information supplied to them by the authorising officers should 
be  clarified.  To  this  end,  accounting  officers  should  be  empowered  to  check  the 
information received by the authorising officer by delegation and to enter reservations, 
if necessary. 

EN 

26 

   EN 

 
 
 
 
 
 
 
 
(cid:216) new 

(46) 

In order to facilitate the implementation of certain programmes or actions entrusted to 
financial institutions, the possibility to open fiduciary accounts should be introduced in 
this Regulation. Such bank accounts should be opened in the name or on behalf of the 
Commission in the books of  a financial institution. They should be managed by  that 
financial institution under the responsibility of the authorising officer and it should be 
possible to open them in other currencies than Euro. 

(cid:208) 1605/2002 Recital 20 (adapted)  

to 

the  application  of 

(47)  The  liability  of  authorising  officers,  accounting  officers  and  imprest  administrators 
⌦ should ⌫  is  not  ⌦ be ⌫  different  from  that  of  other  officials  and  staff  and 
should  be  subject,  under  the  Staff  Regulations  of  officials  of  the  European 
Communities,  and  the  Conditions  of  employment  of  other  servants  of  the  European 
Communities, 
the  existing  disciplinary  and  financial 
compensation  measures.  ⌦ However ⌫  On  the  other  hand,  certain  specific 
provisions  identifying  cases  of  misconduct  of  accounting  officers  and  imprest 
administrators, given the special nature of their duties, should be retained;they will no 
longer  have  any  special  allowance  or  insurance.  Furthermore,  the  liability  of  the 
authorising officer should be clarified. In cases not involving fraud, in order to provide 
the  appointing  authority  with  the  necessary  expertise,  each  institution ⌦ should ⌫ 
will  set  up  a  specialised  financial  irregularities  panel  which  ⌦ should ⌫  will 
determine whether or not an irregularity has occurred which could make the official or 
other  servant  liable  to  disciplinary  action  or  payment  of  compensation  and,  if  it  has 
detected  problems  with  systems,  to  report  to  the  authorising  officer  and  the  internal 
auditor. For cases of fraud, however, this Regulation should refer to the provisions in 
force  on  the  protection  of  the  European  Communities'  financial  interests  ⌦ of  the 
Union ⌫ and on the fight against corruption involving officials of the ⌦ Union ⌫ 
European Communities or officials of Member States of the European Union. 

(48)  The establishment by several institutions of joint financial irregularities panels should 

be made possible. 

(cid:208) 1995/2006 Recital 23 

(cid:216) new 

(49)  Concerning revenue operations, it is necessary to streamline the rules on estimates of 
receivable amounts in order to take into account budgetary needs. Registration should 
be required when expectation of revenue has a certain degree of probability and can be 
translated  into  figures  with  a  reasonable  degree  of  approximation.  Simplification 
should  be  achieved  by  introducing  some  specific  provisions  on  procedures  of 
adjustment or cancellation of an estimate of amount receivable. 

EN 

27 

   EN 

 
 
 
 
 
(cid:208) 1995/2006 Recital 26 (adapted) 
(cid:214) new 

(50)  A  period  of  limitation  on  the  validity  of  claims  should  be  ⌦ determined ⌫ 
introduced. The ⌦ Union ⌫ 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 ⌦ Union ⌫ Community restricted by a period of 
limitation in the pursuit of its claims against third persons. The introduction of such a 
period of limitation corresponds to sound financial management. 

(51)  (cid:214) The  rules  on  recovery  should  both  be  clarified  and  strengthened.  In  particular, 
clarification  is  needed  in  order  to  specify  that  the  cancellation  of  an  established 
amount  receivable  does  not  imply  a  waiver  of  a  European  Union's  established 
entitlement. Moreover, in order to reinforce the safeguarding of the financial interests 
of  the  Union,  Union  funds  claimed  for  reimbursement  should  be  treated  by  Member 
States in the same way as claims of public companies on their territory.  

(52)  Taking  into  account  Commission  Communication  on  the  management  of  fines 
temporarily  collected19,  fines,  penalties  and  sanctions  and  any  income  generated  by 
them should be recorded as budget revenue in the year following the exhaustion of all 
remedies against the decisions imposing them. As an exception to this rule, a portion 
limited  to  2%  of  the  total  amounts  of  fines  or  penalties  to  be  entered  in  the  budget 
should be withheld to supply the Fund created by that Communication. 

(cid:208) 1605/2002 recital 21 (adapted) 

(53)  The  concepts  of  budgetary  and  legal  commitment  of  expenditure  and  the  conditions 
for  applying  them  should  be  defined.  In  order  to  restrict  the  volume  of  dormant 
commitments, the period during which individual legal commitments may be made on 
limited.  Moreover,  a 
the  basis  of  overall  budget  commitments  should  be 
decommitment provision must ⌦ should ⌫ be ⌦ made ⌫ provided for individual 
commitments which have not given rise to any payment over a three-year period. 

(cid:216) new 

(54)  As  regards  payments  and  in  line  with  the  principle  of  sound  financial  management, 
clarification  of  the  various  types  of  payments  should  be  provided.  Moreover, 
prefinancing  payments  should  be  cleared  regularly  by  the  responsible  authorising 
officer in accordance with the accounting rules defined by the Accounting Officer of 
the Commission. To this effect, appropriate provisions should be included in contracts, 
grant  decisions,  grant  agreements  as  well  as  in  delegation  agreements  with  third 
parties. 

19 

C(2009) 4264 of [date]. 

EN 

28 

   EN 

 
 
 
 
                                                 
(cid:208) 1605/2002 recital 22 (adapted) 

(55)  This  Regulation  should  define  the  typology  of  payments  which  may  be  made  by 
authorising  officers.  Such  payments  must  ⌦ should ⌫  be  made  principally  as  a 
function  of  the  effectiveness  of  the  action  and  the  results  which  flow  from  it.  The 
rather  vague  concepts  of  advance  and  payment  on  account  should  be  removed; 
Ppayments  should  be  made  in  the  form  of  pre-financing,  interim  payments  and 
payments of the final balance, when the entire amount is not paid in one instalment. 

(56)  This Regulation should stipulate that Tthe operations of validation, authorisation and 
payment ⌦ should ⌫ must be completed within a time limit which will be set in the 
implementing rules and that in the event of failure to respect thatis time limit creditors 
⌦ should ⌫ will be entitled to default interest to be charged to the budget. 

(cid:208) 1605/2002 recital 23 (adapted) 

(cid:216) new 

(57) 

Institutions  should  be  allowed  to  give  their  prior  agreement  in  order  to  officially 
accept  the  transmission  of  documents  by  electronic  procedure.  Moreover,  in 
accordance  with  Commission  decisions  on  electronic  and  digitised  documents, 
financial provisions on verifications applicable to commitments should be updated and 
recognise  explicitly  the  legal  value  of  electronic  order  forms  and  invoices  for  the 
registration of legal commitments. 

(cid:208) 1995/2006 Recital 25  

(58)  The relationship between the Commission's internal auditor and bodies set up by the 
Communities  should  be  clarified.  Those  bodies  should  have  their  own  internal  audit 
function  reporting  to  their  own  management  boards,  whereas  the  Commission's 
internal  auditor  reports  to  the  College  of  Commissioners  on  the  procedures  and 
systems  of  the  Commission.  It  should  be  necessary  for  the  Commission's  internal 
auditor  only  to  confirm  that  the  bodies'  internal  audit  functions  meet  international 
standards, and for that purpose he should be able to conduct assessments of the quality 
of the internal audit activity. 

(cid:208) 1995/2006 Recital 27 (adapted) 

(59)  Thise  Financial  Regulation  should  reflect  the  importance  of  framework  contracts  in 
the  use  of 
the  management  of  public  procurement.  It  should  encourage 
interinstitutional  procurement  procedures  and  allow  for  the  possibility  of  joint 
procurement  procedures  between  an  institution  and  a  contracting  authority  from  a 
Member State. 

(60)  As  regards  contracts  awarded  by  the  institutions  of  the  Communities  on  their  own 
account,  provision  should  be  made  for  the  rules  contained  in  the  Directives  of  the 

(cid:208) 1605/2002 recital 24 (adapted) 

EN 

29 

   EN 

 
 
 
 
 
 
 
European Parliament and of the Council coordinating the procedures for the award of 
public works, service and supply contracts to apply: the rules applicable to contracts 
awarded on behalf of third parties should also be consistent with the principles posited 
by those Directives. 

(cid:208) 1995/2006 Recital 28 (adapted) 
(cid:214) new 

(61)  ⌦ With regard to the rules on public procurement, ⌫ certain adjustments should be 
made  to  ensure  that  this  Regulation  is  ⌦ should  be ⌫  in  line  with  the  Directive 
2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the 
coordination  of  procedures  for  the  award  of  public  works  contracts,  public  supply 
contracts and public service contracts20. The possibility, open to Member States under 
that  Directive,  to  determine  specific  procedures  for  contracts  declared  secret  when 
their  performance  must  be  accompanied  by  special  security  measures  or  when  the 
protection of the Member State so requires, should be made available to ⌦ Union ⌫ 
Community institutions. 

(62) 

In  order  to  prevent  irregularities  and  to  combat  fraud  and  corruption  and  promote 
sound and efficient management, candidates or tenderers who are guilty of such acts or 
have conflicting interests should be excluded from the award of contracts. 

(cid:208) 1605/2002 recital 25 

(cid:208) 1995/2006 Recital 29 (adapted) 
(cid:214) new 

(63) 

In  line  with  Directive 2004/18/EC,  the  rules  on  exclusion  from  a  procurement 
procedure  need  to  be  clarified.  In  addition,  For  reasons  of  legal  certainty  and 
proportionality, a maximum period of exclusion should be specified in thise Financial 
Regulation.  ⌦ Moreover, ⌫  in  the  light  of  Directive 2004/18/EC,  an  exception  to 
the  rules  on  exclusion  should  be  made  for  the  purchase  of  supplies  on  particularly 
advantageous  terms  from  either  a  supplier  which  is  definitively  winding  up  its 
business  activities,  from  the  receivers  or  liquidators  of  a  bankruptcy,  through  an 
arrangement with creditors, or through a similar procedure under national law.  

(64)  (cid:214) The  rules  for  exclusion  should  also  be  improved  in  order  to  strengthen  the 
protection  of  financial  interests  of  the  Union.  The  reference  to  money  laundering 
should be added, as provided for in the Directive 2004/18/EC. Moreover, situations of 
exclusion  concerning  candidates  or  tenderers  convicted  by  a  judgment  having  the 
force of res judicata for an offence concerning their professional conduct, or for fraud, 
corruption,  involvement  in  a  criminal  organisation,  money  laundering  or  similar 
criminal  infringements  detrimental  to  the  financial  interests  of  the  Union,  should  be 
extended to persons having powers of representation, decision making or control over 
these  candidates  and  tenderers.  However,  for  reasons  of  proportionality,  exclusion 
should not apply to candidates and tenderers who can demonstrate that they have taken 
adequate  measures  against  the  concerned  persons  having  powers  of  representation. 

20 

OJ L 134, 30.4.2004, p.114. 

EN 

30 

   EN 

 
 
 
 
                                                 
Finally, in order to ensure the continuity of service of the institution, derogation from 
the  obligation  of  exclusion  based  on  the  grounds  of  bankruptcy  or  analogous 
situations, grave professional misconduct and non compliance with social obligations 
should be introduced in case of negotiated procedures where, for technical or artistic 
reasons or for reasons connected with the protection of exclusive rights, the contract 
can be awarded only to a particular economic operator.  

(cid:208) 1995/2006 Recital 30 (adapted) 

(65) 

It  should  be  made  obligatory  under  the  Financial  Regulation  for  cCandidates  or 
tenderers  in  procurement  procedures  ⌦ should  be  obliged ⌫  to  certify,  if  so 
requested, the  ownership or the  management, control and power of representation of 
the legal entity submitting a tender and that this ownership, or their subcontractors, are 
not  in  one  of  the  situations  ⌦ giving  rise  to  exclusion  from  participation  in 
tenders ⌫ referred to in Article 93 of the Financial Regulation. Tenderers should not 
be required to certify that they are not in one of the situations giving rise to exclusion 
when  they  participate  in  a  procurement  procedure  for  the  award  of  very  low-value 
contracts. 

(cid:208) 1995/2006 Recital 31 (adapted) 
(cid:214) new 

(66) 

In  order  to  enhance  the  effectiveness  of  procurement  procedures,  the  database  of 
candidates or tenderers in situations of exclusion should be common to the institutions, 
executive agencies and bodies referred to in the Financial ⌦ this ⌫ Regulation.  

(67)  (cid:214) Although  the  European  Central  Bank  (ECB)  and  the  European  Investment  Bank 
(EIB) have their own specific status within the Union framework, the use of their own 
resources  is  of  financial  interest  to  the Union. Therefore, they should have access to 
the  information  contained  in  the  central  exclusion  database,  which  was  created  to 
protect the financial interests of the Union, and should take it into account under their 
responsibility for the award of contracts under their procurement rules. The ECB and 
the EIB should also communicate to the Commission information on tenderers which 
are  subject  to  a  definitive  judgment  for  fraud  or  similar  criminal  infringements 
detrimental to the financial interests of the Union.  

(cid:208) 1605/2002 Recitals 26 and 27 
(adapted) 

(68)  For  the  sake  of  transparency,  candidates  and  tenderers  should  be  informed  in  an 

appropriate manner about the award of contracts. 

(69)  Finally, as part of the process of empowerment of authorising officers, prior checking 
by  the  current  Advisory  Committee  on  Procurement  and  Contracts  should  be 
dispensed with. 

EN 

31 

   EN 

 
 
 
 
(cid:208) 1995/2006 Recitals 32 and 33 
(adapted) 

(70) 

In order to take account of the interests of unsuccessful tenderers, it is appropriate to 
provide that a contract covered by Directive 2004/18/EC cannot be signed before the 
end of a reasonable standstill period. 

(71)  The  obligations  of  the  institutions  to  suspend  a  procurement  procedure  or  a  contract 
under the Financial ⌦ this ⌫ Regulation in cases of fraud and irregularities should 
be  clarified  in  order  to  enhance  the ⌦ application ⌫  operation  of ⌦ other ⌫  the 
relevant provisions of that Regulation. 

(72)  Concerning  administrative  and  financial  penalties,  a  sound  legal  basis  for  the 
publication of decisions applying such penalties should be introduced, in line with data 
protection  requirements.  Such  publication  should  remain  facultative  for  reasons  of 
data protection and legal security. 

(cid:216) new 

(cid:208) 1605/2002 recital 28 (adapted) 
(cid:214) new 

(73)  As  regards  grants,  a  framework  for  the  award  and  monitoring  of  ⌦ Union ⌫ 
Community  grants  involving  specific  provisions  for  implementing  the  principles  of 
transparency,  equal  treatment,  co-financing,  (cid:214) non-profit,  degressive  award  for 
operating  grants,   prohibition  of  retrospective  awards  and  control  should  be  put  in 
place. 

(74) 

In order to avoid any cumulation, it should not be possible for grants to be awarded to 
finance twice the same action or for operating expenditure for the same year. 

(cid:208) 1605/2002 recital 29 (adapted) 

(75) 

In a similar manner to the rules concerning the award of public contracts, grounds for 
excluding certain parties from the award of grants should be laid down in order to give 
the institutions appropriate means of combating fraud and corruption. 

(cid:208) 1605/2002 recital 30 (adapted) 

(76)  To ensure that the rights and obligations of the institution and of the beneficiary are 

clear and are observed, the grant award should be the subject of a written agreement. 

(cid:208) 1605/2002 recital 31 (adapted) 

EN 

32 

   EN 

 
 
 
 
 
 
 
(cid:208) 1995/2006 Recitals 34, 35 and 
36 (adapted) 

(77)  ⌦ However,  for  reasons  of  simplicity, ⌫  As  regards  grants,  simplification  of  the 
rules  is  needed.  Tthe  requirements  for  checks  and  guarantees  should  be  more 
proportionate  to  the  financial  risks  involved.  The  definition  of  grants  needs  to 
⌦ should ⌫ be clarified, in particular as regards financing related to loan activities 
or  shareholdings  and  expenditure  relating  to  fisheries  markets.  To  ⌦ ensure  the 
sound ⌫ improve the management of grants and to simplify procedures, it should be 
possible  to  award  grants  either  by  a  decision  of  the  institution  or  by  a  written 
agreement with the beneficiary.  

(78)  For  reasons  of  clarity  and  transparency,  the  use  of  lump-sum  and  flat-rate  payments 
should  be  authorised  alongside  the  more  traditional  method  of  reimbursing  costs 
actually incurred. 

(79)  For reasons of legal clarity, the exceptions to the non-profit rule which are currently 
provided for in the implementing rules should be included in the Financial Regulation. 
Furthermore,  it  should  be  made  clear  that  the  purpose  of  awarding  grants  to  certain 
actions is to help reinforce financial capacity or generate an income. 

(cid:208) 1525/2007 Recitals 1, 4 and 5 
(adapted) 

(80)  Regulation  (EC)  No 2004/2003  of  the  European  Parliament  and  of  the  Council  of 
4 November 2003 on the regulations governing political parties at European level and 
the rules regarding their funding21 lays down, inter alia, rules governing the financing 
of political parties at European level from the Union budget. These rules governing the 
financing  of  political  parties  at  European  level  should  be  adapted  to  take  better 
account  of  the  special  conditions  under  which  political  parties  operate,  including 
shifting  political  challenges  and  agendas  creating  budgetary  impacts  that  political 
parties  cannot  predict  when  drawing  up their  annual  work  programmes  and  budgets. 
To that end limited possibilities to carry over funding from one year to the first quarter 
of the following year should be introduced. 

(81) 

In order to enhance parties' long-term financial planning capabilities, to take account 
of funding needs that vary from one year to another, and to strengthen the incentives 
for  parties  not  to  rely  on  public  funding  alone,  political  parties  at  European  level 
should  be  allowed  to  establish  limited  financial  reserves  based  on  own  resources 
generated from sources other than the Union budget. The abovementioned derogations 
from the non-profit rule should be exceptional and should not constitute a precedent.  

21 

OJ L 297, 15.11.2003, p. 1. Regulation as last amended by Regulation (EC) No 1524/2007 (See page 5 
of this Official Journal). 

EN 

33 

   EN 

 
 
 
                                                 
(cid:208) 1995/2006 Recitals 37, 38, 41 
(adapted) 

(82)  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 cases the nature of the action 
leaves no choice in the selection of beneficiaries; such cases should thus be exempted 
from ⌦ that ⌫ this rule. 

(83)  The rule that the same action should not give rise to more than one grant to any one 
beneficiary  should  be  adjusted.  Some  basic  legal  acts  do  permit  Community 
⌦ Union ⌫  funding  from  different  sources  to  be  combined,  and  such  cases  may 
⌦ become  more  common ⌫  increase  in ⌦ the ⌫  future ⌦ with  the  view ⌫  in 
order to ensure the effectiveness of expenditure. However, it should be made clear in 
thise Financial Regulation that the same costs cannot be financed twice by the Union 
budget.  

(84)  Certain  restrictions  on  the  eligibility  of  beneficiaries  should  ⌦ not  apply  in  certain 
cases ⌫ be removed in order to allow for grants to natural persons and certain types 
of entity which lack legal personality. In line with the principle of proportionality, for 
very low-value grants, the authorising officer ⌦ should be allowed to ⌫ may refrain 
from  requesting  applicants  to  certify  that  they  are  not  in  one  of  the  situations  of 
exclusion under the relevant provisions of the Financial ⌦ this ⌫ Regulation. 

(85)  As  regards  the  procurement  standards  to  be  applied  by  beneficiaries  of  grants,  the 
current  rule  in  thise  Financial  Regulation  is  unclear  and  should  be  simplified. 
Moreover, express provision should be made for the case in which the implementation 
of an action necessitates financial support to third parties. 

(cid:216) new 

(86) 

In  the  light  of  practical  experience,  the  lump  sums  regime  should  be  clarified  (lump 
sums, standard scale of unit costs and flat rates) and clearly distinguished from any ex-
post  verification  of  real  costs.  Control  measures  should  be  adjusted  to  this  new 
approach  with  the  possibility  to  request  operational  audits  and  to  extend  findings  to 
non audited projects of same beneficiary where recurrent errors have been detected in 
similar  projects.  Finally,  the  possibility  for  a  beneficiary  to  redistribute  its  grant  by 
way of subsidies to third parties should be extended under certain conditions in order 
to facilitate the correct implementation of programmes dedicated to numerous physical 
persons  who  can  only  be  reached  through  two  levels  of  dispatch.  This  redistribution 
should be authorised as long as appropriate guarantees are presented by the first rank 
beneficiary and adequate clauses to limit the margin of appreciation for the choice of 
sub-beneficiaries and the amount of the award are introduced in the grant agreement. 

(87)  As  a  new  type  of  financial  support,  prizes  should  be  regulated  separately  from  the 
grant  regime  with  specific  rules  not  containing  any  reference  to  predictable  costs. 
Prizes  should  be  part  of  the  annual  work  programme  and,  above  a  certain  threshold, 

(cid:216) new 

EN 

34 

   EN 

 
 
 
 
should be awarded by a beneficiary or by a contractor after their award conditions and 
criteria have been approved by the Commission. 

(88)  Financial instruments are increasingly valuable to multiply the effect of Union funds 
when those funds are pooled with others funds or include a leverage effect. Since such 
financial  instruments  cannot  be  assimilated  to  services  or  grants,  a  new  type  of 
financial support should be established. 

(cid:216) new 

(cid:208) 1605/2002 recital 32 

(89)  As regards accounting and the presentation of accounts, it should be stipulated that the 
accounts comprise general accounts and budget accounts and it should be added that 
the general accounts are based on a system of accrual accounting whereas the budget 
accounts  are  intended  to  draw  up  the  budget  outturn  account  and  the  reports  on 
implementation of the budget. 

(cid:208) 1995/2006 Recital 44  (adapted) 
(cid:214) new 

(54)  As  regards  the  rules  on  accounting  and  the  accounts,  (cid:214) the  presentation  of  accounts 
should  be  simplified  by  providing  that  Union's  accounts  comprise  only  the 
consolidated  financial  statements  and  the  aggregated  budgetary  accounts.  It  should 
also be clarified that the consolidation process only concerns the institutions financed 
by the Union's budget, in order to take into account the specific independent status of 
the  ECB.  Finally,   the  Financial  Regulation  should  make  it  ⌦ It  should  be ⌫ 
possible  for  the  Commission's  accounting  officer  to  determine,  in  compliance  with 
international standards, which other bodies in addition to those receiving Community 
⌦ Union ⌫  subsidies  fall  within  the  scope  of  the  consolidation  of  the  accounts,  it 
being  understood  that  the  consolidation  of  accounts  neither  entails  any  transfer  of 
funds  from  self-financed  bodies  to  the  general  budget  of  the  European  Union  nor 
influences their financial and operational autonomy and the discharge procedures for 
their accounts. 

(cid:216) new 

(55) 

In  order  to  clearly  separate  the  duties  and  responsibilities  of  the  Commission's 
Accounting  officer  from  those  of  the  accounting  officers  of  institutions  or  bodies 
whose  accounts  are  consolidated,  it  should  be  provided  that  the  report  on  budgetary 
and financial management of the financial year has to be prepared by each institution 
or  body  and  then  sent  to  the  budgetary  authority  and  the  Court  of  Auditors  by  31 
March of the following financial year. 

(90)  The  principles  on  which  the  general  accounts  are  based  and  the  financial  statements 
are  presented  should  be  defined  by  reference  to  internationally  accepted  accounting 
principles and the ⌦ Fourth Council Directive 78/660/EEC of 25 July 1978 based on 

(cid:208) 1605/2002 recital 33 (adapted) 

EN 

35 

   EN 

 
 
 
 
 
 
Article 54 (3) (g) of the Treaty ⌫ Directives of the European Parliament and of the 
Council on the annual accounts of certain types of companies ⌦ 22 ⌫ , where they 
are relevant in the context of the public service. 

(cid:208) 1605/2002 recital 34 (adapted) 

(91)  The provisions on the supply of information concerning implementation of the budget 
should  be  adapted  to  ⌦ include ⌫  extend  this  information  to  the  use  of 
appropriations  carried  over,  made  available  again  and  reused  and  to  the  various 
⌦ Union ⌫  Community-law  bodies,  to  improve  the  arrangements  for  providing 
monthly  figures  and  the  report  on  implementation,  which ⌦ should ⌫  will  be  sent 
three times a year to the budgetary authority. 

(92)  The  accounting  methods  employed  by  the  institutions  should  be  harmonised  and,  in 
this field, the Commission's accounting officer should have the right of initiative. 

(cid:208) 1605/2002 recital 35 

(93) 

It  should  be  specified  that  the  use  of  computerised  financial  management  systems 
should  in  no  way  restrict  the  Court  of  Auditors'  rights  of  access  to  supporting 
documents. 

(cid:208) 1605/2002 recital 36 (adapted) 

(94) 

It  is  necessary  to  update  the  Union  rules  and  principles  on  accounting  in  order  to 
ensure  their  coherence  with  the  International  Public  Sector  Accounting  Standard 
(IPSAS) rules. 

(cid:216) new 

(cid:216) new 

to 

(95)  The  provisions  concerning  provisional  and  final  accounts  should  be  updated,  in 
particular in order to provide for the reporting information that should accompany the 
the  purpose  of 
accounts  sent 
the  Commission's  Accounting  officer  for 
consolidation.  Reference  should  also  be  made 
letter 
accompanying the transmission, by the institutions and bodies financed by the budget, 
to the Court of Auditors of their final accounts, as well as to the representation letter 
accompanying the transmission of the Union's final consolidated accounts. Finally, an 
earlier deadline should be set out for the Court of Auditors to make its observations on 
the provisional accounts of institutions other than the Commission and bodies financed 
by  the  budget  in  order  to  allow  them  to  draw  up  their  final  accounts  taking  into 
account the Court's remarks. 

the  representation 

to 

22 

⌦ OJ L 222, 14.8.1978, p. 11. ⌫ 

EN 

36 

   EN 

 
 
 
 
 
 
                                                 
(96)  As regards external audit and discharge, although the Commission is fully responsible 
for  implementation  of  the  budget,  the  importance  of  management  shared  with  the 
Member  States  involves  their  cooperation  in  the  audit  procedure  by  the  Court  of 
Auditors and the discharge by the budgetary authority. 

(cid:208) 1605/2002 recital 37 

(97) 

In  order  to  ⌦ The  timetable  leading  up  to  discharge  should ⌫  provide  optimum 
conditions  for  the  presentation  of  the  accounts  and  the  discharge  procedure,  the 
timetable leading up to discharge should be amended. 

(cid:208) 1605/2002 recital 38 (adapted) 

(98)  The  Commission  should  submit  to  the  European  Parliament,  at  its  request,  any 
information  required  for  the  smooth  application  of  the  discharge  procedure  for  the 
⌦ relevant ⌫ financial year in question, in accordance with Article ⌦ 319 ⌫ 276 
of the EC Treaty. 

(cid:208) 1605/2002 recital 39 (adapted) 

(99)  Special provisions should be laid down for certain ⌦ Union ⌫ Community policies. 

Such provisions should comply with the basic principles of this Regulation. 

(cid:208) 1605/2002 recital 40 (adapted) 

(100)  It  seems  necessary  to  make  provision  for  the  possibility  of  advance  commitments 
against  EAGGF  and  administrative  appropriations  from  15  November  preceding  the 
financial year in question. 

(cid:208) 1605/2002 recital 41 (adapted) 

(cid:208) 1995/2006 Recitals 45 and 46 
(adapted) 
(cid:214) new 

(101)  In view of the coming into existence of the EAGF, which has replaced the European 
Agricultural  Guidance  and  Guarantee  Fund  (EAGGF)  with  respect  to  financing  of 
market  measures  from  1 January  2007,  certain  terminology  in  this  Financial 
Regulation should be adjusted. Clarification is also required in ⌦ to ⌫ the effect that 
provisional commitments may be made after the normal two-month deadline following 
receipt of the Member States' statements of expenditure in cases where a decision on a 
transfer  of  appropriations  is  expected.  The  special  provisions  of  the  Financial 
Regulation concerning transfers should be clarified.  

(102)  (59)  The terminology should also be adjusted so that reference is made only to the 
Structural  Funds,  the  Cohesion  Fund,  the  European  Fisheries  Fund,  the  European 
Agricultural Fund for Rural Development and funds in the area of Freedom, Security 
and Justice managed under shared management. References to pre-accession structural 
measures  (ISPA)  and  agricultural  measures  (Sapard)  should  be  removed,  since  they 

EN 

37 

   EN 

 
 
 
 
 
 
 
involve  (cid:214) indirect   management  by  third  countries  (cid:214) and  not  shared  management 
with  Member  States   .  As  regards  the  making  available  again  of  decommitted 
appropriations, in line with the new basic acts for structural actions in the period 2007 
to 2013  which  cover  the  case  of  force  majeure,  provision  should  be  maintained  in 
⌦ this ⌫  the  Financial  Regulation  only  for  cases  where  a  manifest  error  is 
attributable to the Commission. 

(cid:208) 1605/2002 recital 42 (adapted) 
(cid:214) new 

(103)  As  regards  (cid:214) the  specific  provisions  of  this  Regulation  concerning  the  structural 
funds,  cohesion  funds,  European  fisheries  fund,  the  European  Agricultural  Fund  for 
Rural Development and funds in the area of Freedom, Security and Justice managed 
under  shared  management   the  Structural  Funds,  the  provision  for  repayment  of 
payments  on  account  and  making  appropriations  available  again  contained  in  the 
Commission  declaration  annexed  to  Council  Regulation  (EC)  No  1260/1999  of  21 
June 1999 laying down general provisions on the Structural Funds23, as last amended 
by  Regulation  (EC)  No  1447/200124,  should  be  retained.  (cid:214) Moreover,  by  way  of 
derogation from the rule of carry over, it should be allowed to carry over commitment 
appropriations  available  at  the  end  of  the  financial  year,  arising  from  repayments  of 
payment on account, until the closure of the programme, and to use those commitment 
appropriations when other commitment appropriations are not longer available.  

(cid:208) 1995/2006 Recitals 47 and 48  
(adapted) 

(61)  A  ⌦ The ⌫  provision  ⌦ concerning ⌫  should  be  added  to  the  Financial 
Regulation to cover the assigned revenue generated by the winding-up of the European 
Coal  and  Steel  Community  and  the  making  available  of  the  corresponding 
appropriations ⌦ should be maintained ⌫ . 

(62) 

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

(cid:208) 1605/2002 recital 43 (adapted) 
(cid:214) new 

(104)  As  regards  research,  the  presentation  of  the  budget  should  be  ⌦ coherent ⌫ 
harmonised  with 
the  provisions  concerning  activity-based  budgeting.,  whilst 
preserving the ⌦ The ⌫ flexibility of management which the Joint Research Centre 
(JRC) currently enjoys ⌦ should be preserved ⌫ . 

23 
24 

OJ L 161, 26.6.1999, p. 1. 
OJ L 198, 21.7.2001, p. 1. 

EN 

38 

   EN 

 
 
 
 
                                                 
(105)  (cid:214) Furthermore, clarification is needed for the participation of the JRC in procurement 
and grant procedures when it carries out activities financed in whole or in part by the 
general  budget  outside  the  budget  lines  usually  dedicated  to  the  JRC  in  the  research 
funds. When participating in grant and public procurement procedures as a third party, 
the  JRC  should  be  exempted  from  the  application  of  the  provisions  concerning 
exclusion  criteria,  administrative  and  financial  penalties,  economic  and  financial 
capacity and the lodging of guarantees. Moreover, it is necessary to take into account 
the  technical-scientific  services  provided  by  the  JRC  to  other  Institutions  or 
Commission services through internal administrative arrangements, which fall outside 
public  procurement  rules.  Finally,  in  order  to  carry  out  these  tasks  effectively,  that 
revenue  stemming  from  the  activities  linked  to  those  tasks  should  exceptionally  be 
considered external assigned revenue.   

(106)  As regards external action, decentralisation of management of external aid should be 
authorised  provided  that  the  Commission  is  given  guarantees  of  sound  financial 
management and the beneficiary State is accountable to the Commission for the funds 
paid to it. 

(cid:208) 1605/2002 recital 44 (adapted) 

(cid:208) 1605/2002 recital 45 (adapted) 

(107)  Financing  agreements  or  contracts  signed  with 

the  beneficiary  State  or  a 
national, Community  or  international  public-sector  body  and  natural  or  legal  persons 
governed by private law must include the general procurement principles laid down in 
Title  V  of  part  one  and  Title  IV  of  part  two  of  this  Regulation  as  regards  external 
actions. 

(108)  As regards the specific provisions relating to the implementation of external actions, it 
is necessary to take into account the changes and simplification proposed concerning 
the various management modes. 

(cid:216) new 

(cid:216) new 

(109)  In  order  to  strengthen  the  international  role  of  the  Union  in  external  actions  and 
development,  increase  its  visibility  and  efficiency,  the  Commission  should  be 
authorised to create and manage European trust funds for emergency, post-emergency 
or thematic actions. Although not integrated in the budget those trust funds should be 
managed under the financial rules laid down in this Regulation to the extent necessary 
for  the  security  and  transparency  of  the  use  of  Union  funds.  For  that  purpose,  the 
Commission should chair the governing board established for each trust fund to ensure 
the  representation  of  donors  and  to  decide  for  the  use  if  the  funds.  Moreover,  the 
accounting  officer  of  each  trust  fund  should  be  the  accounting  officer  of  the 
Commission. 

EN 

39 

   EN 

 
 
 
 
 
(cid:216) new 

(110)  As  regards  entities  entrusted  under  indirect  management  to  implement  external 
actions, the period for the conclusion of contracts and grants by these entities should 
be limited to three years following the signature of the delegation agreement with the 
Commission, unless specific exceptional and external circumstances prevail. However, 
that  deadline  should  not  apply  to  multi-annual  programmes  implemented  under  the 
structural funds procedures. Detailed rules for de-commitment of appropriations in the 
latter case should be laid down in sector-specific rules. 

(111)  With  regard  to  specific  rules  on  procurement  applicable  to  external  actions,  it  is 
necessary  to  allow  third  country  nationals  to  participate  in  tender  procedures,  in  the 
case  of  implementation  without  a  basic  act  and  where  duly  justified  exceptional 
circumstances prevail. 

(cid:216) new 

(112)  A  special  title  should  be  included  containing  the  general  provisions  for  the 

management of European offices. 

(cid:208) 1605/2002 recital 46 

(cid:208) 1995/2006 Recital 50  (adapted) 

(113)  In  order  to  facilitate  management,  it  should  be  made  possible  for  the  institutions  to 
delegate the powers of authorising officers to Directors of inter-institutional European 
Offices  for  the  management  of  appropriations  entered  in  their  respective  sections  of 
the budget. While their content should remain unchanged, the relevant Articles of the 
Financial Regulation should be slightly re-structured in order ⌦ For that purpose, it is 
appropriate ⌫ to clarify the sub-delegation of authorising powers by the Directors of 
Offices. 

(cid:208) 1605/2002 recital 47 (adapted) 

(114)  A  ⌦ It  is  appropriate  to  maintain  a ⌫  separate  title  should  also  contain 
⌦ containing ⌫  the  special  rules  applicable  to  administrative  appropriations. 
Provision  should  also  be  made  to  enable  each  of  the  two  branches  of  the  budgetary 
authority  to  issue  an  opinion  in  good  time  on  building  projects  likely  to  have 
significant financial implications for the budget. 

The  change  in  the  timetable  for  the  consolidation  of  the  institutions'  accounts  should  be 
deferred  until  the  financial  year  2005  in  order  to  allow  the  necessary  time  to  put  in 
place the essential internal procedures involved. 

(cid:208) 1605/2002 recital 48 (adapted) 

EN 

40 

   EN 

 
 
 
 
 
 
 
(cid:208) 1995/2006 Recital 51 
(cid:214) new 

(115)  The  procedure  under  which  the  budgetary  authority  may  issue  an  opinion  on  a 
building  project  should  be  clarified.  Moreover,  (cid:214) in  order  to  allow  institutions  to 
develop a long term real estate policy and profit from lower interest rates thanks to the 
Union  favourable  credit  rating  on  the  financial  market,  they  should  be  authorised  to 
raise  loans  outside  the  budget  to  acquire  real  estate  assets.  This  would  provide  the 
possibility  to  address  the  complexity  of  the  current  system,  while  saving  costs  and 
introducing more transparency.   

(cid:208) 1995/2006 Recital 52  (adapted) 
(cid:214) new 

(116)  Successive  framework  research  programmes  have  facilitated  the  work  of  the 
Commission by laying down simplified rules for the selection of external experts for 
evaluation of proposals or grant applications and technical assistance for the follow-up 
and  evaluation  of  ⌦ funded ⌫  projects  funded.  This  procedure  ⌦ was ⌫  should 
be  made  available  in  respect  of  all  other  programmes.  Moreover,  i  (cid:214) In  the  light  of 
practical experience, the scope of the special selection procedure of natural persons as 
experts should be clarified as their assistance is required in the evaluation of project 
proposals,  grant  applications,  projects  and  tenders  and  for  providing  expert  opinion 
and advice.   

(cid:216) new 

(117)  As regards final provisions, the Commission should be empowered to adopt delegated 
acts  in  accordance  with  Article  290  of  the  Treaty  for  the  implementation  of  this 
Regulation. 

(118)  The measures necessary for the implementation of this Regulation should be adopted 
in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the 
procedures for the exercise of implementing powers conferred on the Commission25. 

(119)  The  revision  of  the  Financial  Regulation  should  be  made  only  when  necessary.  Too 
frequent revisions of the FR generate disproportionate cost of adjusting administrative 
structures  and  procedures  to  the  new  rules.  Furthermore,  time  may  be  too  short  to 
allow for valid conclusion to be drawn from the application of the rules in force. 

(cid:208) 1605/2002 recital 49 (adapted) 

(120)  A suitable framework, tailored to the specific management needs, should be provided 
for the financial rules to apply to bodies set up by the ⌦ Union ⌫ Communities and 
having  legal  personality,  which  receive  a  subsidy  from  the  general  budget  of  the 
⌦ Union ⌫ European  Communities.  At  the  same  time,  and  without  in  any  way 
impairing the organic autonomy required by these bodies for the performance of their 

25 

OJ L 184, 17.7.1999, p. 23. 

EN 

41 

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tasks, the substance of the rules governing certain matters, and in particular discharge 
and  accounting,  needs  to  be  harmonised.  The  Commission's  internal  auditor 
⌦ should ⌫  will  exercise  the  same  powers  over  these  bodies  as  over  Commission 
departments. The financial rules internal to these bodies ⌦ should ⌫ will have to be 
adapted accordingly to be compatible with this Financial Regulation. The Commission 
should  accordingly  be  empowered  to  draw  up  a  model  financial  regulation,  which 
⌦ Union ⌫ Community bodies ⌦ should be able to ⌫ can depart from only with 
the Commission's agreement ⌦ of the Commission. ⌫ 

(cid:216) new 

(121)  Some  modifications  are  necessary  to  identify  precisely  which  bodies  are  covered  by 
the  Framework  financial  regulation.  Furthermore  a  new  provision  should  be 
introduced to take into account the situation of public-private partnerships for which a 
model financial regulation  should  be  adopted by the Commission  in  order  to  lay  out 
the necessary principles to ensure sound financial management. 

(122)  In  order  to  ensure  continuity  in  the  implementation  of  the  current  programmes,  the 
provisions  concerning  control  and  audit  obligations  of  Member  States  when  they 
implement  the  budget  indirectly  under  shared  management  should  apply  only  to  the 
next generation of sector-specific regulations. 

HAVE ADOPTED THIS REGULATION: 

(cid:208) 1605/2002 (adapted) 

PART ONE 

COMMON PROVISIONS 

TITLE I 

SCOPE 

Article 1 

⌦ Subject matter ⌫ 

This Regulation lays down the rules for the establishment and implementation of the general 
budget of the European Union, hereinafter ‘the budget’, and the presentation and auditing of 
the accounts. 

(cid:208) 1995/2006 Art. 1.1 

EN 

42 

   EN 

 
 
 
 
For the purposes of this Regulation, the Economic and Social Committee, the Committee of 
the Regions, the Ombudsman and the European Data-Protection Supervisor shall be treated as 
Community institutions. 

(cid:208) 1605/2002 (adapted) 

Article 2 

⌦ Scope ⌫ 

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

TITLE II 

BUDGETARY PRINCIPLES 

(cid:208) 1995/2006 Art. 1.2 (adapted) 

Article 3 

⌦ Budgetary principles ⌫ 

The budget shall be established and implemented in compliance with the principles of unity, 
budgetary accuracy, annuality, equilibrium, unit of account, universality, specification, sound 
financial management which requires effective and efficient internal control, and transparency 
as set out in this Regulation. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 Corrigendum, OJ L 099, 
14.4.2007, p. 18 

CHAPTER 1 

PRINCIPLES OF UNITY AND OF BUDGET ACCURACY 

Article 4 

⌦ Definition of the budget ⌫ 

1.  The  budget  is  the  instrument  which,  for  each  financial  year,  forecasts  and  authorises  all 
revenue and expenditure considered necessary for the European Community and the European 
Atomic Energy Community. 

EN 

43 

   EN 

 
 
 
 
2. The revenue and expenditure of the Union shall comprise: 

the  revenue  and  expenditure  of 

(a) 
including 
administrative  expenditure  occasioned  for  the  institutions  by  the  provisions  of  the 
Treaty  on  European  Union  relating  to  the  common  foreign  and  security  policy  and 
police  and  judicial  cooperation  in  criminal  matters,  and  the  (cid:206)1 operational 
expenditure   occasioned  by  implementation  of  those  provisions  where  this  is 
charged to the budget; 

the  European  Community, 

(b) the expenditure and revenue of the European Atomic Energy Community. 

3. The budget shall record the guarantee for borrowing-and-lending operations entered into by 
the Union and payments to the Guarantee Fund for external actions. 

Article 5 

⌦ Rules governing the principles of unity and budgetary accuracy ⌫ 

1.  Subject  to  Article  74,  no  revenue  shall  be  collected  and  no  expenditure  effected  unless 
booked to a line in the budget. 

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

3. An appropriation may not be entered in the budget if it is not for an item  of expenditure 
considered necessary. 

(cid:208) 1995/2006 Art. 1.3 
(cid:214) new 

4. Subject to Articles 5a, 18 and 74, iInterest yielded by the funds which are the property of 
the Union shall be entered in the budget as miscellaneous revenue (cid:214) not be due to the Union 
save otherwise provided for in the agreements concluded with the entrusted entities listed in 
Article  53(1)  point  (2)  (b)  to  (h),  and  in  grant  decisions  or  agreements  concluded  with 
beneficiaries. 

In these cases, such interest shall be re-used for the corresponding programme or recovered. 
 

(cid:208) 1995/2006 Art. 1.4 

Article 5a 

1.  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. 

The  Regulation  laying  down  the  rules  for  implementing  this  Regulation,  hereinafter  ‘the 
implementing rules’, shall specify the cases in which the authorising officer responsible shall, 
by  way  of  exception,  recover  annually  such  interest.  That  interest  shall  be  entered  in  the 
budget as miscellaneous revenue. 

EN 

44 

   EN 

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

(a) pre-financing which does not represent a significant amount, as determined in the 
implementing rules; 

(b)  pre-financing  paid  under  a  procurement  contract  within  the  meaning  of 
Article 88; 

(c) pre-financing paid to Member States; 

(d) pre-financing paid under the pre-accession aid; 

(e) 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’; 

(f)  pre-financing  paid  in  the  framework  of  joint  management  as  referred  to  in 
point (c) of Article 53(1). 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 Corrigendum, OJ L 099, 
14.4.2007, p. 18 
(cid:206)2 1995/2006 Art. 1.5(b) 

CHAPTER 2 

PRINCIPLE OF ANNUALITY 

Article 6 

⌦ Definition ⌫ 

The appropriations entered in the budget shall be authorised for one financial year which shall 
run from 1 January to 31 December. 

Article 7 

⌦ Type of appropriations ⌫ 

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

2. Commitment appropriations shall cover the total cost of the legal commitments entered into 
during the current financial year, subject to Articles 77(2) and 166(2). 

3.  Payment  appropriations  shall  cover  payments  made  to  honour  the  legal  commitments 
entered into in the current financial year and/or earlier financial years. 

EN 

45 

   EN 

 
 
 
 
 
 
 
 
4. Paragraphs 1 and 2 shall be without prejudice to the special provisions of Titles I, IV and 
VI of part two. They shall not prevent appropriations being committed globally nor budgetary 
commitments being made in annual instalments. 

Article 8 

⌦ Accounting rules for the revenue and appropriations ⌫ 

1. The revenue of a financial year shall be entered in the accounts for the financial year on the 
basis of the amounts collected during the financial year. However, the own resources for the 
month of January of the next financial year may be paid in advance pursuant to the Council 
Regulation implementing the Decision on the system of the Union' own resources. 

2. The entries in respect of value added tax own resources, the additional GNP-based resource 
and any financial contributions may be adjusted in accordance with the Regulation referred to 
in paragraph 1. 

3.  The  appropriations  authorised  for  a  given  financial  year  may  be  used  solely  to  cover 
expenditure  committed  and  paid  in  that  financial  year  and  to  cover  amounts  due  against 
commitments from earlier financial years. 

4.  Commitments  shall  be  entered  in  the  accounts  on  the  basis  of  the  legal  commitments 
entered  into  up  to  31  December,  subject  to  the  global  commitments  referred  to  in  Article 
77(2)  and  the  agreements  referred  to  in  Article  166(2)  and  concluded  with  third  countries, 
which  shall  be  entered  in  the  accounts  on  the  basis  of  the  budget  commitments  up  to  31 
December. 

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

6. By way of derogation from paragraphs 3, 4 and 5, the expenditure of the Guarantee Section 
of the European Agricultural Guidance and Guarantee Fund (EAGGF) shall be entered in the 
accounts for a financial year in accordance with the rules laid down in Title I of part two. 

Article 9 

⌦ Cancellation and carry over of appropriations ⌫ 

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

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

(cid:206)1 2. Differentiated commitment appropriations  and non-differentiated appropriations not 
yet committed at the close of the financial year may be carried over in respect of: 

(a)  amounts  corresponding  to  commitment  appropriations  for  which  most  of  the 
preparatory  stages  of  the  commitment  procedure  have  been  completed  by  31 

EN 

46 

   EN 

 
 
December. These amounts may then be committed up to 31 March of the following 
year; 

(b) amounts which are necessary when the legislative authority has adopted a basic 
act in the final quarter of the financial year and the Commission has been unable to 
commit the appropriations provided for this purpose by 31 December. 

3. (cid:206)2 Payment appropriations  may be carried over in respect of amounts needed to cover 
existing  commitments  or  commitments  linked  to  commitment  appropriations  carried  over, 
when  the  appropriations  provided  for  the  relevant  lines  in  the  budget  for  the  following 
financial  year  do  not  cover  requirements.  The  institution  concerned  shall  first  use  the 
appropriations  authorised  for  the  current  financial  year  and  shall  not  use  the  appropriations 
carried over until the former are exhausted. 

4. Non-differentiated appropriations corresponding to obligations duly contracted at the close 
of the financial year shall be carried over automatically to the following financial year only. 

5.  The  institution  concerned  shall  inform  the  European  Parliament  and  the  Council 
(hereinafter ‘the budgetary authority’) by 15 March at the latest of the carry-over decision it 
has  taken  and  shall  state,  for  each  budget  line,  how  the  criteria  in  paragraphs  2  and  3  have 
been applied to each carry-over. 

6. (cid:214) Without prejudice to Article 10,  Aappropriations placed in reserve and appropriations 
for staff expenditure may not be carried over. 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 10 

⌦ Carry over rules for assigned revenue ⌫ 

Revenue  not  used  and  appropriations  available  at  31  December  arising  from  the  assigned 
revenue  referred  to  in  Article  18  shall  be  carried  over  automatically.  The  appropriations 
available corresponding to assigned revenue carried over must be used first. (cid:214) as follows:  

(cid:214) - external assigned revenue shall be carried over automatically and must be fully used until 
all the operations relating to the programme or action to which they are assigned have been 
carried  out.  External  assigned  revenue  received  during  the  last  year  of  the  programme  or 
action may be used in the first year of the succeeding programme or action;  

(cid:214) -  internal  assigned  revenue  shall  be  carried  over  for  one  year  only,  unless  specified 
otherwise  in  the  basic  act  applicable,  or  in  duly  justified  exceptional  circumstances.  The 
corresponding appropriations available must be used first.  

EN 

47 

   EN 

 
 
 
(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.6 

Article 11 

⌦ Decommittment of appropriations ⌫ 

Without  prejudice  to  (cid:206)1 Articles 157  and 160a ,  where  amounts  are  decommitted  as  a 
result of total or partial non-implementation of the actions for which they were earmarked, in 
any  financial  year  after  that  in  which  the  appropriations  were  entered  in  the  budget,  the 
appropriations concerned shall be cancelled. 

Article 12 

⌦ Commitment of appropriations ⌫ 

The appropriations entered in the budget may be committed with effect from 1 January, once 
the budget has been finally adopted, save as otherwise provided in Title I and Title VI of part 
two. 

Article 13 

⌦ Rules applicable in case of late adoption of the budget ⌫ 

1. If the budget has not been finally adopted at the beginning of the financial year, the first 
paragraph  of  Article  273  of  the  EC  Treaty  and  the  first  paragraph  of  Article  178  of  the 
Euratom  Treaty  shall  apply  to  commitment  and  payment  of  expenditure  which  it  has  been 
possible to book to a specific line in the budget as part of implementation of the last budget 
duly adopted. 

2. Commitments may be made per chapter to a maximum of one quarter of the total allotted 
appropriations  in  the  chapter  in  question  of  the  previous  financial  year  plus  one  twelfth  for 
each month which has elapsed. 

Payments  may  be  made  monthly  per  chapter  to  a  maximum  of  one  twelfth  of  the  allotted 
appropriations in the chapter in question of the preceding financial year. 

The  limit  of  the  appropriations  provided  for  in  the  draft  budget  in  preparation  may  not  be 
exceeded. 

3. If the continuity of action by the Union and management needs so require: 

(a) the Council, acting by a qualified majority at the request of the Commission and 
after consulting the European Parliament, may simultaneously authorise two or more 
provisional  twelfths  both  for  commitments  and  for  payments  over  and  above  those 
automatically made available by the provisions of paragraphs 1 and 2; 

EN 

48 

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(b)  for  expenditure  other  than  that  necessarily  resulting  from  the  Treaties  or  acts 
adopted pursuant thereto, the third paragraph of Article 273 of the EC Treaty and the 
third paragraph of Article 178 of the Euratom Treaty shall apply. 

The additional twelfths shall be authorised in full and shall not be divisible. 

4. If, for a given chapter, the authorisation of two or more provisional twelfths granted in the 
circumstances and under the procedures provided for in paragraph 3 is not sufficient to cover 
the  expenditure  necessary  to  avoid  a  break  in  continuity  of  the  Union'  activity  in  the  area 
covered  by  the  chapter  in  question,  authorisation  may  exceptionally  be  given  to  exceed  the 
amount  of  the  appropriations  entered  in  the  corresponding  chapter  of  the  budget  of  the 
preceding financial year. The budgetary authority shall act under the procedures provided for 
in paragraph 3. However, the available overall total of the appropriations in the budget of the 
preceding financial year may in no circumstances be exceeded. 

CHAPTER 3 

PRINCIPLE OF EQUILIBRIUM 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 14 

⌦ Definition and scope ⌫ 

1. Budget revenue and payment appropriations must be in balance. 

2. Without prejudice to Article 46(1)(4) (cid:214) Within the framework of the general budget , the 
European Community and the European Atomic Energy Community, as well as the bodies set 
up by the Union as referred to in Article 185, may not raise loans. 

Article 15 

⌦ Balance from financial year ⌫ 

1.  The  balance  from  each  financial  year  shall  be  entered  in  the  budget  for  the  following 
financial year as revenue in the case of a surplus or as a payment appropriation in the case of a 
deficit. 

2.  The  estimates  of  such  revenue  or  payment  appropriations  shall  be  entered  in  the  budget 
during the budgetary procedure and in a letter of amendment presented pursuant to Article 34. 
They  shall  be  drawn  up  in  accordance  with  the  Council  Regulation  implementing  the 
Decision on the system of the Union' own resources. 

3.  After  the  presentation  of  the  accounts  for  each  financial  year,  any  discrepancy  with  the 
estimates shall be entered in the budget for the following financial year through an amending 
budget devoted solely to that discrepancy. In such a case, the draft amending budget must be 

EN 

49 

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submitted  by  the  Commission  within  15  days  following  the  submission  of  the  provisional 
accounts. 

CHAPTER 4 

PRINCIPLE OF UNIT OF ACCOUNT 

Article 16 

⌦ Use of Euro ⌫ 

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

(cid:208) 1995/2006 Art. 1.7 
(cid:214) new 

However, for the cash-flow purposes referred to in Article 61, the accounting officer and, in 
the  case  of  imprest  accounts,  the  imprest  administrators,  and,  for  the  needs  of  the 
administrative  management  of  the  Commission's  External  Service,  the  authorising  officer 
responsible shall be authorised to carry out operations in national currencies as laid down in 
the (cid:214) delegated Regulation laying down the rules for implementing this Regulation referred 
to in Article 183,  hereinafter 'implementing rules. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.8(a) 
(cid:214) new 

CHAPTER 5 

PRINCIPLE OF UNIVERSALITY 

Article 17 

⌦ Definition and scope ⌫ 

Total revenue shall cover total payment appropriations, subject to Article 18. All revenue and 
expenditure  shall  be  entered  in  full  without  any  adjustment  against  each  other,  subject  to 
Article 20. 

Article 18 

⌦ Assigned revenue ⌫ 

EN 

50 

   EN 

 
 
 
1. (cid:206)1 Without prejudice to Article 160(1a) and Article 161(2), the following items of revenue 
(cid:214) External  assigned  revenue  and  internal  assigned  revenue   shall  be  used  to  finance 
specific items of expenditure:.  

(cid:214) 2. The following shall constitute external assigned revenue:  

(a)  financial  contributions  from  Member  States  to  certain  research  programmes 
pursuant to the Council Regulation implementing the Decision on the system of the 
Union' own resources; 

(cid:208) 1995/2006 Art. 1.8(b) (adapted) 
(cid:214) new 

(aab)  financial  contributions  from  Member  States  (cid:214) ,third   and  other  donor 
countries,  including  in  both  cases  their  public  and  parastatal  agencies,  (cid:214) legal 
entities,   or  from  international  organisations  (cid:214)or  natural  persons  to  certain 
external aid projects or programmes financed by the Community and managed by the 
Commission on their behalf , pursuant to the relevant basic act; 

(cid:208) 1605/2002 
(cid:214) new 

(bc) interest on deposits and the fines provided for in the Regulation on speeding up 
and clarifying the implementation of the excessive deficit procedure; 

(cd)  revenue  earmarked  for  a  specific  purpose,  such  as  income  from  foundations, 
subsidies,  gifts  and  bequests,  including  the  earmarked  revenue  specific  to  each 
institution; 

(de) contributions to Community activities from third countries or various bodies; 

(cid:214) (f) assigned revenue referred to in Article 160(1) a and Article 161(2).  

(cid:214) 3. The following shall constitute internal assigned revenue:  

(ea) revenue from third parties in respect of goods, services or work supplied at their 
request; 

(eab)  proceeds  from  the  sale  of  vehicles,  equipment,  installations,  materials,  and 
scientific  and  technical  apparatus  which  are  being  replaced  or  scrapped  when  the 
book value is fully depreciated; 

(cid:208) 1995/2006 Art. 1.8(c) 

(fc) revenue arising from the repayment of amounts wrongly paid; 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.9 
(cid:214) new 

EN 

51 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(gd)  proceeds  from 
the  supply  of  goods,  services  and  works  for  other 
(cid:214) departments,   institutions  or  bodies,  including  refunds  by  other  institutions  or 
bodies of mission allowances paid on their behalf; 

(he) insurance payments received; 

(if) revenue  from  payments connected with lettings (cid:214) the sale, letting or any other 
contract concerning rights connected with real estate ; 

(jg) revenue from the sale of publications and films, including those on an electronic 
medium. 

24.  The  basic  act  applicable  may  also  assign  the  revenue  for  which  it  provides  to  specific 
items of expenditure. (cid:214) Unless specified otherwise in the basic act applicable, such revenue 
shall constitute internal assigned revenue.  

35. The budget shall include lines to accommodate (cid:214) external assigned revenue and internal 
assigned revenue  and wherever possible shall indicate the amount. 

(cid:214) Assigned  revenue  may  be  included  in  the  draft  budget  only  for  the  amounts  which  are 
certain at the date of the establishment of the draft budget.  

Article 19 

⌦ Donations ⌫ 

1.  The  Commission  may  accept  any  donation  made  to  the  Union,  such  as  foundations, 
subsidies, gifts and bequests. 

2. (cid:206)1 Acceptance of donations of a value of EUR 50000 or more which involve a financial 
charge, including follow-up costs, exceeding 10 % of the value of the donation made, shall be 
subject  to  the  authorisation  of  the  European  Parliament  and  of  the  Council,  both  of  which 
shall  act  on  the  matter  within  two  months  of  the  date  of  receipt  of  the  request  from  the 
Commission.  If no objection has been made within that period, the Commission shall take 
a final decision in respect of acceptance. 

Article 20 

⌦ Rules on deductions and exchange rates adjustments ⌫ 

1. The implementing rules may specify the cases where certain revenue may be deducted from 
invoices or requests for payment, which shall then be passed for payment of the net amount. 

2. The cost of products or services provided to the Union incorporating taxes refunded by the 
Member  States  pursuant  to  the  Protocol  on  the  Privileges  and  Immunities  of  the  European 
Communities or by third countries on the basis of the relevant agreements shall be charged to 
the budget for the ex-tax (cid:214) inclusive  amount. (cid:214) Subsequent reimbursement of taxes shall 
be treated as assigned revenue in accordance with Article 18.  

EN 

52 

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3.  Adjustments  may  be  made  in  respect  of  exchange  differences  occurring  in  the 
implementation of the budget. The final gain or loss shall be included in the balance for the 
year. 

CHAPTER 6 

PRINCIPLE OF SPECIFICATION 

Article 21 

⌦ General provisions ⌫ 

1. Appropriations shall be earmarked for specific purposes by title and chapter; the chapters 
shall be further subdivided into articles and items. 

(cid:214) 2.  The  Commission  may,  within  its  own  section  of  the  budget,  transfer  appropriations 
autonomously as detailed in Article 23 or shall request the budget authority's approval for the 
transfer of appropriations in the cases detailed in Article 24.  

(cid:208) 1605/2002 Art. 25 

13.  Appropriations  may  be  transferred  only  to  budget  lines  for  which  the  budget  has 
authorised appropriations or carries a token entry (p.m.). 

24.  Appropriations  corresponding  to  assigned  revenue  may  be  transferred  only  if  such 
revenue is used for the purpose to which it is assigned. 

(cid:208) 1995/2006 Art. 1.10 (adapted) 

Article 22 

⌦ Transfers by institutions other than the Commission ⌫ 

1.  Any  institution  other  than  the  Commission  may,  within  its  own  section  of  the  budget, 
transfer appropriations: 

(a) from one title to another up to a maximum of 10 % of the appropriations for the 
year shown on the line from which the transfer is made; 

(b) from one chapter to another and from one article to another without limit. 

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

3. Any institution other than the Commission may propose to the budgetary authority, within 
its own section of the budget, transfers from one title to another exceeding the limit of 10 % 

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of the appropriations for the financial year on the line from which the transfer is to be made. 
Those transfers shall be subject to the procedure laid down in Article 24. 

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

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 23 

⌦ Internal transfers by the Commission ⌫ 

1. The Commission may, within its own section of the budget (cid:214) , autonomously : 

(a)  transfer  (cid:214) commitment   appropriations  within  articles  and  transfers  between 
articles within each chapter; 

(cid:214) (b) transfer payment appropriations within each title;  

(cid:208) 1995/2006 Art. 1.11(a) 
(cid:214) new 

(bc)  as  regards  expenditure  on  staff  and  administration  (cid:214) which  is  common  to 
several titles  , transfer appropriations from one title to another up to a maximum 
of 10 % of the appropriations for the year shown on the line from which the transfer 
is made, and up to a maximum of 30 % of the appropriations for the year shown on 
the line to which the transfer is made; 

(cd)  as  regards  operational  expenditure,  transfer  appropriations  between  chapters 
within  the  same  title,  up  to  a  maximum  total  of  10 %  of  the  appropriations  for  the 
year shown on the line from which the transfer is made;. 

(cid:208) 1605/2002 

(cid:208) 1995/2006 Art. 1.11(a) 

(d)  transfer  appropriations,  as  soon  as  the  basic  act  is  adopted  pursuant  to  the 
procedure laid down in Article 251 of the Treaty, from the ‘provisions’ title referred 
to  in  Article 43  for  the  cases  where  no  basic  act  existed  for  the  action  concerned 
when the budget was established. 

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

However,  during  the  last  two  months  of  the  financial  year,  the  Commission  may 
autonomously transfer appropriations concerning expenditure on staff, external staff and other 

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agents  from  one  title  to  another  within  the  total  limit  of 5 %  of  the  appropriations  of  the 
financial year. The Commission shall inform the budgetary authority within two weeks after 
its decision on those transfers. 

The Commission shall inform the budgetary authority within two weeks after its decision on 
transfers referred to in point (d) of the first subparagraph. 

(cid:216) new 

2.  The  Commission  may,  within  its  own  section  of  the  budget,  decide  on  the  following 
transfer  appropriations  from  one  title  to  another,  provided  it  informs  immediately  the 
budgetary authority of its decision: 

(a) transfer appropriations from the "provisions" title referred to in Article 43, where the only 
condition to lift the reserve lies in the adoption of a basic act in accordance with the 
ordinary legislative procedure foreseen in Article 294 TFEU. 

(cid:208) 1995/2006 Art. 1.12(c) 
(adapted) 

3(b).  In  duly  substantiated  exceptional  cases  of  international  humanitarian  disasters  and 
crises, occurring after 15 ⌦ 1 ⌫ December of the budgetary year, the Commission 
may  transfer  unused  budgetary  appropriations  for  the  current  budgetary  year  still 
available  in  the  budget  titles  falling  under  heading  4  of  the  multiannual  financial 
framework  to  the  budget  titles  concerning  the  crisis  management  aid  and 
humanitarian aid operations. The Commission shall inform the two branches of the 
budgetary authority immediately after making such transfers. 

2.  The  Commission  may  propose  to  the  budgetary  authority,  within  its  own  section  of  the 
budget, transfers other than those referred to in (cid:206)1 paragraph 1 . 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.11(b) 

⌦ Transfers by the Commission submitted to the budgetary authority ⌫ 

Article 24 

(cid:208) 1605/2002 Article 23(2) 
(cid:214) new 

21.  The  Commission  may  propose  to  the  budgetary  authority,  within  its  own  section  of  the 
budget, transfers other than those referred to in paragraph 1 (cid:214) Article 23. It shall submit its 
proposal simultaneously to the European Parliament and the Council . 

12. The budgetary authority shall take decisions on transfers of appropriations as provided for 
in paragraphs 2, 3 and 4 3, 4 and 5, save as otherwise provided in Title I of part two. 

(cid:208) 1605/2002 

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23. In the case of proposals for transfers of appropriations relating to expenditure necessarily 
resulting from  the  Treaties or  from acts adopted in accordance therewith, the Council shall, 
after consulting the European Parliament, act by a qualified majority within six weeks, except 
in  urgent  cases.  The  European  Parliament  shall  deliver  its  opinion  within  such  time  as  will 
permit  the  Council  to  take  note  of  it  and  to  act  within  the  stipulated  time  limit.  Where  the 
Council does not act within this time limit, the proposals for transfers shall be deemed to be 
approved. 

34.  In  the  case  of  proposals  for  transfers  relating  to  expenditure  other  than  that  necessarily 
resulting  from  the  Treaties  or  from  acts  adopted  in  accordance  therewith,  the  European 
Parliament  shall,  after  consulting  the  Council,  act  within  six  weeks,  except  in  urgent  cases. 
The Council shall deliver its opinion, by a qualified majority, within such time as will permit 
the European Parliament to take note of it and to act within the stipulated time limit. Where 
no decision is taken within this time limit, the proposals for transfers shall be deemed to be 
approved. 

45. Proposals for transfers relating both to expenditure necessarily resulting from the Treaties 
or from acts adopted in accordance therewith and to other expenditure shall be deemed to be 
approved if neither the European Parliament nor the Council has decided otherwise within six 
weeks of the date on which the two institutions received the proposals. If, in the case of such 
proposals for transfers, the European Parliament and the Council reduce the proposed transfer 
by  different  amounts,  whichever  is  the  smaller  of  the  amounts  accepted  by  one  of  the  two 
institutions shall be deemed to be approved. Where one of the institutions rejects the principle 
of the transfer, the transfer shall not be made. 

(cid:208) 1605/2002 

Article 25 

1. Appropriations may be transferred only to budget lines for which the budget has authorised 
appropriations or carries a token entry (p.m.). 

2. Appropriations corresponding to assigned revenue may be transferred only if such revenue 
is used for the purpose to which it is assigned. 

(cid:208) 1605/2002 (adapted) 

Article 26 

⌦ Transfer subject to special provisions ⌫ 

1.  Transfers  within  the  titles  of  the  budget  devoted  to  the  European  Agricultural  Guarantee 
Fund (EAGF),  the  Structural  Funds,  the  Cohesion  Fund,  the  European  Fisheries  Fund,  the 
European  Agricultural  Fund  for  Rural  Development (EAFRD)  and  Research  shall  be  the 
subject of special provisions under Titles I, II and III of Part Two. 

(cid:208) 1995/2006 Art. 1.12(a) 

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(cid:208) 1605/2002 
(cid:206)1 1995/2006 Art. 1.12(b) 
(cid:214) new 

2.  (cid:206)1 Decisions  on  transfers  to  allow  the  (cid:214) use   utilisation  of  the  reserve  for  emergency 
aid reserve shall be taken by the budgetary authority on a proposal from the Commission (cid:214) , 
or by the Commission for a maximum of 10% of the appropriations for the year shown on the 
line  from  which  the  transfer  is  made   A  separate  proposal  must  be  submitted  for  each 
individual operation . 

(cid:208) 1995/2006 Art. 1.12(b) 
amended by Corrigendum, OJ L 
048, 22.2.2008, p. 88 

The  procedure  provided  for  in  Article  24(23)  and  (34)  shall  apply.  If  the  Commission 
proposal  is  not  agreed  to  by  both  arms  of  the  budgetary  authority  and  there  is  a  failure  to 
arrive at a common position on the utilisation of this reserve, the European Parliament and the 
Council shall refrain from acting on the Commission's proposal for a transfer. 

(cid:208) 1995/2006 Art. 1.12(c) 

3.  In  duly  substantiated  exceptional  cases  of  international  humanitarian  disasters  and  crises, 
occurring  after  15 December  of  the  budgetary  year,  the  Commission  may  transfer  unused 
budgetary  appropriations  for  the  current  budgetary  year  still  available  in  the  budget  titles 
falling under heading 4 of the multiannual financial framework to the budget titles concerning 
the crisis management aid and humanitarian aid operations. The Commission shall inform the 
two branches of the budgetary authority immediately after making such transfers. 

(cid:208) 1605/2002 (adapted) 

CHAPTER 7 

PRINCIPLE OF SOUND FINANCIAL MANAGEMENT 

Article 27 

⌦ Principles of economy, efficiency and effectiveness ⌫ 

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

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

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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. 

(cid:208) 1605/2002 

3. Specific, measurable, achievable, relevant and timed objectives shall be set for all sectors 
of  activity  covered  by  the  budget.  Achievement  of  those  objectives  shall  be  monitored  by 
performance  indicators  for  each  activity  and  information  shall  be  provided  by  the  spending 
authorities  to  the  budgetary  authority.  Such  information,  as  referred  to  in  Article  33(2)(d), 
shall be provided annually and at the latest in the documents accompanying the draft budget. 

4. In order to improve decision-making, institutions shall undertake both ex ante and ex post 
evaluations  in  line  with  guidance  provided  by  the  Commission.  Such  evaluations  shall  be 
applied  to  all  programmes  and  activities  which  entail  significant  spending  and  evaluation 
results disseminated to spending, legislative and budgetary authorities. 

(cid:208) 1605/2002 (adapted) 

Article28 

⌦ Compulsory financial statement ⌫ 

(cid:208) 1995/2006 Art. 1.13(a) 

1. Any proposal or initiative submitted to the legislative authority by the Commission or by a 
Member State in conformity with the relevant provisions of the Treaty on the Functioning of 
the European Union or the Treaty on European Union (TEU), which may have an impact on 
the  budget,  including  changes  in  the  number  of  posts,  must  be  accompanied  by  a  financial 
statement and the evaluation provided for in Article 27(4) of this Regulation. 

Any amendment to a proposal or initiative submitted to the legislative authority which may 
have appreciable implications for the budget, including changes in the number of posts, must 
be  accompanied  by  a  financial  statement  prepared  by  the  institution  proposing  the 
amendment. 

(cid:208) 1605/2002 

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

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(cid:208) 1995/2006 Art. 1.13(b) 
(cid:214) new 

32. In order to prevent (cid:214) reduce  the risk of fraud and irregularities, the financial statement 
referred  to  in  paragraph 1  shall  record  any  information  regarding  (cid:214) provide  information  on 
the internal control system set up, an assessment of the risk involved, as well as  existing 
and planned fraud prevention and protection measures. 

(cid:208) 1995/2006 Art. 1.14 (adapted) 
(cid:214) new 

Article 28a 

⌦ Internal control of budget implementation ⌫ 

1. The budget shall be implemented in compliance with effective and efficient internal control 
as appropriate in each management mode, and in accordance with the relevant sector-specific 
regulations. 

2.  For  the  purposes  of  the  implementation  of  the  budget,  internal  control  is  defined  as  a 
process  applicable  at  all  levels  of  the  management  and  designed  to  provide  reasonable 
assurance of achieving the following objectives: 

(a) effectiveness, efficiency and economy of operations; 

(b) reliability of reporting; 

(c) safeguarding of assets and information; 

(d) prevention, and detection (cid:214) and correction  of fraud and irregularities; 

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

transactions, 

(cid:216) new 

Article 28b 

Tolerable risk of error 

The Legislative authority shall, in accordance with the procedure laid down in Article 322 of 
the  Treaty  on  the  Functioning  of  the  European Union,  decide on a level of tolerable risk of 
error  at  an  appropriate  aggregation  of  the  budget.  That  decision  shall  be  taken  into  account 
during the annual discharge procedure, in accordance with Article 146(2).  

The level of tolerable risk of error shall be based on an analysis of the costs and benefits of 
controls.  Member  States  and  entities  and  persons  referred  to  in  Article  53  shall  on  request 

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report to the Commission on the costs of controls borne by them as well as the number and 
size of activities financed by the Union budget. 

The level of tolerable risk of error shall be closely monitored and shall be reviewed in case of 
major changes in the control environment. 

(cid:208) 1605/2002 (adapted) 

CHAPTER 8 

PRINCIPLE OF TRANSPARENCY 

Article 29 

⌦ Publication of accounts, budgets and reports ⌫ 

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

(cid:208) 1995/2006 Art. 1.15 

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

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

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

(cid:208) 1605/2002 (adapted) 

Article 30 

⌦ Publication of EU funds recipients and other information ⌫ 

1. Information on borrowing-and-lending operations contracted by the Union for third parties 
shall appear in an Annex to the budget. 

2. Information on the operations of the Guarantee Fund for external actions shall appear in the 
financial statements. 

3.  The  Commission  shall  make  available,  in  an  appropriate  manner,  information  on  the 
beneficiaries (cid:214) recipients  of funds deriving from the budget held by it when the budget is 

(cid:208) 1995/2006 Art. 1.16 
(cid:214) new 

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implemented  on  a  centralised  basis  and  directly  by  its  departments,  and  information  on  the 
beneficiaries  (cid:214) recipients   of  funds  as  provided  by  the  entities  to  which  budget 
implementation tasks are delegated under other modes of management. 

in  particular 

the  protection  of  personal  data  as 

4.  This  information  shall  be  made  available  with  due  observance  of  the  requirements  of 
confidentiality, 
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 data26 and Regulation (EC) No 45/2001 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  data27,  and  of  the  requirements  of  security,  taking  into  account  the 
specificities  of  each  management  mode  referred  to  in  Article 53  and  where  applicable  in 
conformity with the relevant sector-specific rules. 

laid  down 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

TITLE III 

ESTABLISHMENT AND STRUCTURE OF THE BUDGET 

CHAPTER 1 

ESTABLISHMENT OF THE BUDGET 

Article 31 

⌦ Estimates of revenue and expenditure ⌫ 

The European Parliament, the Council, the Court of Justice of the European Union, the Court 
of  Auditors,  the  Economic  and  Social  Committee,  the  Committee  of  the  Regions,  the 
Ombudsman and the European Data-Protection Supervisor shall draw up an estimate of their 
revenue and expenditure, which they shall send to the Commission before 1 July each year. 

These  estimates  shall  also  be  sent  by  these  institutions  to  the  budgetary  authority  for 
information  by  no  later  than  1  July  each  year.  The  Commission  shall  draw  up  its  own 
estimates, which it shall also send to the budgetary authority by the same date. 

In preparing its own estimates the Commission shall use the information referred to in Article 
32. 

26 

27 

OJ  L 281,  23.11.1995,  p. 31.  Directive  as  amended  by  Regulation  (EC)  No 1882/2003  (OJ  L 284, 
31.10.2003, p. 1) 
OJ L 8, 12.1.2001, p. 1. 

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Article 32 

⌦ Estimated budget of the bodies referred to in Article 185 ⌫ 

Each body referred to in Article 185 shall, in accordance with the instrument establishing it, 
send to the Commission  (cid:214) and the Budgetary Authority  by  1 April (cid:214) 31 March  each 
year  an  estimate  of  its  revenue  and  expenditure,  including  the  establishment  plan,  and  its 
(cid:214) draft  work programme. 

The  Commission  shall  forward  these  documents  to  the  budgetary  authority  for  information, 
except in the case provided for in point (3)(d) of Article 46(1). 

Article 33 

⌦ Draft budget ⌫ 

1. The Commission shall place a preliminary draft budget before the Council by 1 September 
each year at the latest. It shall at the same time transmit the preliminary draft budget to the 
European Parliament. 

The  preliminary  draft  budget  shall  contain  a  summary  general  statement  of  the  expenditure 
and revenue of the Union and consolidate the estimates referred to in Article 31. 

(cid:216) new 

The draft budget shall follow the structure and presentation set out in Articles 41 to 46. 

Each of the sections of the draft budget shall be preceded by an introduction drawn up by the 
institution concerned. 

The  Commission  shall  draw  up  the  general  introduction  to  the  draft  budget.  The  general 
introduction shall comprise financial tables covering the main data by titles and justifications 
for  the  changes  in  the  appropriations  from  one  financial  year  to  the  next  by  categories  of 
expenditure of the multi-annual financial framework. 

2. Where relevant, the Commission shall attach to the draft budget a financial programming 
for the following years. 

The financial programming shall be updated after the adoption of the budget, to incorporate 
the results of the budgetary procedure and any other relevant decisions. 

(cid:208) 1605/2002 
(cid:214) new 

23.  The  Commission  shall  (cid:214) also   attach  to  the  preliminary  draft  budget  (cid:214) any  working 
paper it considers useful to support its budget requests  :. 

(a)  an  analysis  of  financial  management in  the  previous  year  and  the  commitments 
outstanding; 

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(b)  where  appropriate,  an  opinion  on  the  estimates  of  the  other  institutions  which 
may contain different estimates, accompanied by the reasons therefor; 

(c) any working paper it considers useful in connection with the establishment plans 
of the institutions and the grants which the Commission awards to the bodies referred 
to in Article 185 and to the European Schools; 

(cid:208) 1995/2006 Art. 1.17(a) 

(d) the activity statements containing the following: 

–  information  on  the  achievement  of  all  previously  set  specific,  measurable, 
achievable, relevant and timed objectives for the various activities as well as new 
objectives measured by indicators, 

–  full  justification  and  cost-benefit  approach  for  proposed  changes  in  the  level  of 

appropriations, 

–  clear  rationale  for  intervention  at  the  EU  level  in  keeping,  inter  alia,  with  the 

principle of subsidiarity, 

–  information  on  the  implementation  rates  of  the  previous  year's  activity  and 

implementation rates for the current year. 

Evaluation results shall be consulted and referred to as evidence of the likely merits 
of proposed budget changes; 

(e)  a  summary  statement  of  the  schedule  of  payments  due  in  subsequent  financial 
years to meet budgetary commitments entered into in earlier financial years. 

(cid:208) 1995/2006 Art. 1.17(b) 

(cid:208) 1605/2002 (adapted) 

Article 34 

⌦ Letter of amendment to the draft budget ⌫ 

1. The Commission may, on its own initiative or if requested by the other institutions, each in 
respect  of  its  own  section,  present  to  the  Council  a  letter  of  amendment  to  the  preliminary 
draft  budget  on  the  basis  of  new  information  which  was  not  available  at  the  time  the 
preliminary draft was established. 

2. However, save as otherwise agreed by the institutions or in exceptional circumstances, the 
Commission shall put such letter of amendment to the Council at least 30 days before the first 
reading  of  the  draft  budget  by  the  European  Parliament.  The  Council  must  put  the  letter  of 
amendment to the European Parliament at least 15 days before the said first reading. 

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Article 35 

⌦ Establishment of the draft budget ⌫ 

1. The Council shall establish the draft budget in accordance with the procedure laid down in 
Article 314(3) of the Treaty on the Functioning of the European Union and Article 177(3) of 
the Euratom Treaty. 

2. The Council shall place the draft budget before the European Parliament by 5 October of 
the year preceding that of implementation of the budget at the latest. The Council shall attach 
to that draft budget an explanatory memorandum defining its reasons for departing from the 
preliminary draft budget. 

Article 36 

⌦ Adoption of the budget ⌫ 

1.  The  President  of  the  European  Parliament  shall  declare  the  budget  finally  adopted  in 
accordance with the procedure provided for in Article 314(9) of the Treaty on the Functioning 
of the European Union and Article 177(7) of the Euratom Treaty. 

2.  Once  the  budget  has  been  declared  finally  adopted,  each  Member  State  shall,  from  1 
January of the following financial year or from the date of the declaration of final adoption of 
the budget if that is after 1 January, be bound to make over to the Community the payments 
due  as  specified  in  the  Council  Regulation  implementing  the  Decision  on  the  system  of  the 
Union's own resources. 

Article 37 

⌦ Draft amending budgets ⌫ 

1.  If  there  are  unavoidable,  exceptional  or  unforeseen  circumstances,  the  Commission  may 
present preliminary draft amending budgets. 

Requests  for  amending  budgets,  in  the  same  circumstances  as  referred  to  in  the  preceding 
paragraph, from institutions other than the Commission shall be sent to the Commission. 

Before presenting a preliminary draft amending budget, the Commission and institutions other 
than the Commission shall examine the scope for reallocation of the relevant appropriations, 
taking into account any expected under-implementation of appropriations. 

(cid:208) 1995/2006 Art. 1.18 (adapted) 

(cid:208) 1605/2002 (adapted) 

2.  The  Commission  shall,  save  in  exceptional  circumstances,  submit  any  preliminary  draft 
amending  budget  to  the  Council  by  1  September  each  year  at  the  latest.  It  may  attach  an 
opinion to the requests for amending budgets from the other institutions. 

3. The budgetary authority shall discuss them with due account for their urgency. 

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Article 38 

1. Where the Council receives a preliminary draft amending budget, it shall draw up a draft 
amending budget in accordance with Articles 35 and 37. 

2. Except for the timetable, Articles 35 and 36 shall apply to amending budgets. They must be 
substantiated by reference to the budget whose estimates they are amending. 

Article 39 

⌦ Early transmission of estimates and draft budgets ⌫ 

The Commission and the budgetary authority may agree to bring forward certain dates for the 
transmission of the estimates, and for the adoption and transmission of the preliminary draft 
and  draft  budgets.  This  arrangement  may  not,  however,  have  the  effect  of  shortening  or 
prolonging the periods allowed for consideration of these texts under 314 of the Treaty on the 
Functioning of the European Union and Article 177 of the Euratom Treaty. 

CHAPTER 2 

STRUCTURE AND PRESENTATION OF THE BUDGET 

Article 40 

⌦ Structure of the budget ⌫ 

The budget shall consist of: 

(a) a general statement of revenue and expenditure; 

(cid:208) 1995/2006 Art. 1.19 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 Corrigendum, OJ L 099, 
14.4.2007, p. 18 

(b) separate sections subdivided into statements of revenue and expenditure for each 
institution. 

Article 41 

⌦ Classification of the budget ⌫ 

1.  Commission  revenue  and  the  revenue  and  expenditure  of  the  other  institutions  shall  be 
classified  by  the  budgetary  authority  according  to  their  type  or  the  use  to  which  they  are 
assigned under titles, chapters, articles and items. 

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2. The statement of expenditure for the Commission section shall be set out on the basis of a 
nomenclature adopted by the budgetary authority and classified according to purpose. 

A  title  shall  correspond  to  a  policy  area  and  a  chapter  shall,  as  a  rule,  correspond  to  an 
activity. 

Each title may include (cid:206)1 operational appropriations  and administrative appropriations. 

The administrative appropriations for a title shall be grouped in a single chapter. 

Article 42 

⌦ Prohibition of negative revenue ⌫ 

The budget may not contain negative revenue. 

The  own  resources  paid  under  the  Council  Decision  on  the  system  of  the  Union'  own 
resources  shall  be  net  amounts  and  shall  be  shown  as  such  in  the  summary  statement  of 
revenue in the budget. 

Article 43 

⌦ Provisions ⌫ 

1. Each section of the budget may include a ‘provisions’ title. Appropriations shall be entered 
in this title in the following two circumstances: 

(a) where no basic act exists for the action concerned when the budget is established; 

(b) where there are serious grounds for doubting the adequacy of the appropriations 
or the possibility of implementing, under conditions consonant with sound financial 
management, the appropriations entered on the lines concerned. 

The  appropriations  in  this  title  may  be  used  only  after  transfer  in  accordance  with  the 
procedure laid down in Article 23(1)(d), where the adoption of the basic act is subject to the 
procedure laid down in Article 294 of the Treaty on the Functioning of the European Union, 
and that of Article 24, for all other cases. 

(cid:208) 1995/2006 Art. 1.20 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 Corrigendum, OJ L 099, 
14.4.2007, p. 18 
(cid:206)2 1995/2006 Art. 1.21 

2.  In  the  event  of  serious  implementation  difficulties,  the  Commission  may  propose,  in  the 
course  of  a  financial  year,  that  appropriations  be  transferred  to  the  ‘provisions’  title.  The 
budgetary authority shall take a decision on these transfers as provided in Article 24. 

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Article 44 

⌦ Negative reserve ⌫ 

The  Commission  section  of  the  budget  may  include  a  ‘negative  reserve’  limited  to  a 
maximum amount of EUR 200 million. This reserve, which shall be (cid:206)1 entered in a separate 
title , may comprise both commitment appropriations and payment appropriations. 

This reserve must be drawn upon before the end of the financial year by means of transfer in 
accordance with the procedure laid down in (cid:206)2 Articles 23 and 25 . 

(cid:208) 1995/2006 Art. 1.22 (adapted) 

Article 45 

⌦ Reserve for emergency aid ⌫ 

1. The Commission section of the budget shall include a reserve for emergency aid for third 
countries. 

2. The reserve referred to in paragraph 1 shall be drawn upon before the end of the financial 
year by means of transfer in accordance with the procedure laid down in Articles 24 and 26. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.23(a) 

Article 46 

⌦ Presentation of the budget ⌫ 

1. The budget shall show: 

(1)(cid:206)1 in the general statement of revenue and expenditure:  

(a) the estimated revenue of the Union for the financial year in question; 

(b) the estimated revenue for the preceding financial year and the revenue for 
year n - 2; 

(c)  the  commitment  and  payment  appropriations  for  the  financial  year  in 
question; 

(d)  the  commitment  and  payment  appropriations  for  the  preceding  financial 
year; 

(e) the expenditure committed and the expenditure paid in year n - 2, 

(gf) appropriate remarks on each subdivision, as set out in Article 41(1); 

(cid:208) 1995/2006 Art. 1.23(a) 

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

(cid:208) 1995/2006 Art. 1.23(b) 

(3) as regards staff: 

(cid:208) 1605/2002 

(a) for each section of the budget, an establishment plan setting the number of 
posts  for  each  grade  in  each  category  and  in  each  service  and  the  number  of 
permanent  and  temporary  posts  authorised  within  the  limits  of  the  budget 
appropriations; 

(b)  an  establishment  plan  for  staff  paid  from  the  research  and  technological 
development appropriations for direct action and an establishment plan for staff 
paid from the same appropriations for indirect action; the establishment plans 
shall  be  classified  by  category  and  grade  and  shall  distinguish  between 
permanent  and  temporary  posts,  authorised  within  the  limits  of  the  budget 
appropriations; 

(cid:208) 1995/2006 Art. 1.23(c) 

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

(cid:208) 1605/2002 

(d) an establishment plan setting the number of posts by grade and by category 
for each body referred to in Article 185 which receives a grant charged to the 
budget.  The  establishment  plans  shall  show  next  to  the  number  of  posts 
authorised for the financial year the number authorised for the preceding year; 

(4) as regards borrowing-and-lending operations: 

(a) in the general statement of revenue, the budget lines corresponding to the 
relevant operations and intended to record any reimbursements received from 
beneficiaries  who  initially  defaulted,  leading  to  activation  of  the  performance 
guarantee. These lines shall carry a token entry (p.m.) and be accompanied by 
appropriate remarks; 

(b) in the Commission section: 

(i)  the  budget  lines  containing  the  Union'  performance  guarantees  in 
respect of the operations in question. These lines shall carry a token entry 
(p.m.),  so  long  as  no  effective  charge  which  has  to  be  covered  by 
definitive resources has arisen; 

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(ii)  remarks  giving  the  reference  to  the  basic  act  and  the  volume  of  the 
operations  envisaged,  the  duration  and  the  financial  guarantee  given  by 
the Union in respect of these operations; 

(c) in a document annexed to the Commission section, as an indication: 

(i) ongoing capital operations and debt management; 

(ii) the capital operations and debt management for the financial year in 
question; 

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

(cid:208) 1995/2006 Art. 1.23(d) 

2. In addition to the documents referred to in paragraph 1 the budgetary authority may attach 
any other relevant documents to the budget. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.24 

Article 47 

⌦ Rules on the Establishment Plan for staff ⌫ 

1.  The  establishment  plan  described  in  point  3  of  Article  46(1)  shall  constitute  an  absolute 
limit for each institution or body; no appointment may be made in excess of the limit set. 

However,  save  in  the  case  of  (cid:206)1 grades  AD  16,  AD  15  and  AD  14 ,  each  institution  or 
body  may  modify  establishment  plans  by  up  to  10 %  of  posts  authorised,  subject  to  two 
conditions: 

(a) that the volume of staff appropriations corresponding to a full financial year is not 
affected, and 

(b) that the limit of the total number of posts authorised by each establishment plan is 
not exceeded. 

Three  weeks  before  making  the  modifications  referred  to  in  the  second  subparagraph,  the 
institutions  shall  inform  the  budgetary  authority  of  their  intentions.  In  the  event  of  duly 
justified reasons being raised within this period by either branch of the budgetary authority, 
the  institutions  shall  refrain  from  making  the  modifications  and  the  normal  procedure  shall 
apply. 

2. By way of derogation from the first subparagraph of paragraph 1, the effects of part-time 
work authorised by the appointing authority in accordance with the Staff Regulations may be 
offset by other appointments. 

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TITLE IV 

IMPLEMENTATION OF THE BUDGET 

CHAPTER 1 

GENERAL PROVISIONS 

(cid:208) 1605/2002 (adapted) 

Article 48 

⌦ Budget implementation according to sound financial management ⌫ 

1. The Commission shall implement the revenue and expenditure of the budget in accordance 
with  this  Regulation,  on  its  own  responsibility  and  within  the  limits  of  the  appropriations 
authorised. 

2.  The  Member  States  shall  cooperate  with  the  Commission  so  that  the  appropriations  are 
used in accordance with the principle of sound financial management. 

(cid:208) 1995/2006 Art. 1.25 (adapted) 

Article 49 

⌦ Basic act and exceptions ⌫ 

1.  A  basic  act  shall  first  be  adopted  before  the  appropriations  entered  in  the  budget  for  any 
action by the Union or by the European Union may be used. 

A  basic  act  is  a  legal  act  which  provides  a  legal  basis  for  the  action  and  for  the 
implementation of the corresponding expenditure entered in the budget. 

2.  In  application  of  the  Treaty  on  the  Functioning  of  the  European  Union  and  the  Euratom 
Treaty, a basic act is an act adopted by the legislative authority and may take the form of a 
regulation,  a  directive,  a  decision  within  the  meaning  of  Article 288  of  the  Treaty  on  the 
Functioning of the European Union or a decision sui generis. 

3. In application of Title V of the Treaty on European Union (concerning Common Foreign 
and  Security  Policy  —  CFSP),  a  basic  act  may  take  one  of  the  forms  specified  in 
Articles 13(2) and (3), 14, 18(5), 23(1) and (2) and 24 of the Treaty on European Union. 

4. In application of Title VI of the Treaty on European Union (concerning Police and Judicial 
Cooperation  in  Criminal  Matters),  a  basic  act  may  take  one  of  the  forms  referred  to  in 
Article 34(2) of the Treaty on European Union. 

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5.  Recommendations  and  opinions  do  not  constitute  basic  acts  within  the  meaning  of  this 
Article, nor do resolutions, conclusions, declarations or other acts which have no legal effects. 

6. By way of derogation from paragraphs 1 to 4, the following may be implemented without a 
basic act provided the actions which they are intended to finance fall within the powers of the 
Union or the European Union: 

(a)  appropriations  for  pilot  projects  of  an  experimental  nature  designed  to  test  the 
feasibility  of  an  action  and  its  usefulness.  The  relevant  commitment  appropriations 
may be entered in the budget for not more than two successive financial years; 

(b) appropriations for preparatory actions in the fields of application of the Treaty on 
the Functioning of the European Union and the Euratom Treaty and of Title VI of the 
TEU,  designed  to  prepare  proposals  with  a  view  to  the  adoption  of  future  actions. 
The  preparatory  actions  are  to  follow  a  coherent  approach  and  may  take  various 
forms. The relevant commitment appropriations may be entered in the budget for not 
more  than  three  successive  financial  years.  The  legislative  procedure  must  be 
concluded before the end of the third financial year. In the course of the legislative 
procedure,  the  commitment  of  appropriations  must  correspond  to  the  particular 
features  of  the  preparatory  action  as  regards  the  activities  envisaged,  the  aims 
pursued  and  the  persons  benefited.  Consequently,  the  means  implemented  cannot 
correspond in volume to those envisaged for financing the definitive action itself. 

When  the  draft  budget  is  presented,  the  Commission  shall  submit  a  report  to  the 
budgetary authority on the actions referred to in points (a) and (b) which shall also 
contain an assessment of results and the follow-up envisaged; 

(c)  appropriations  for  preparatory  measures  in  the  field  of  Title V  of  the  Treaty  on 
European  Union  (concerning  CFSP).  These  measures  shall  be  limited  to  a  short 
period of time and shall be designed to establish the conditions for European Union 
action  in  fulfilment  of  the  objectives  of  the  CFSP  and  for  the  adoption  of  the 
necessary legal instruments. 

For  the  purpose  of  EU  crisis  management  operations,  preparatory  measures  are 
designed  inter  alia  to  assess  the  operational  requirements,  to  provide  for  a  rapid 
initial deployment of resources, or to establish the conditions on the ground for the 
launching of the operation. 

Preparatory  measures  shall  be  agreed  by  the  Council,  in  full  association  with  the 
Commission.  To  this  end,  the  Presidency,  assisted  by  the  Secretary-General  of  the 
Council/High Representative for the CFSP, shall inform the Commission as early as 
possible of the Council's intention to launch a preparatory measure and in particular 
of  the  estimated  resources  required  for  this  purpose.  In  conformity  with  the 
provisions of this Regulation, the Commission shall take all the necessary measures 
to ensure a rapid disbursement of the funds; 

(d)  appropriations  for  one-off  actions,  or  even  actions  for  an  indefinite  duration, 
carried  out  by  the  Commission  by  virtue  of  tasks  resulting  from  its  prerogatives  at 
institutional level pursuant to the Treaty on the Functioning of the European Union 
and  the  Euratom  Treaty  other  than  its  right  of  legislative  initiative  referred  to  in 

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point (b) and under specific powers directly conferred on it by those Treaties, a list of 
which is given in the implementing rules; 

(e)  appropriations  for  the  operation  of  each  institution  under  its  administrative 
autonomy. 

(cid:208) 1605/2002 (adapted) 

Article 50 

⌦ Implementation of the budget by other Institutions ⌫ 

The  Commission  shall  confer  on  the  other  institutions  the  requisite  powers  for  the 
implementation of the sections of the budget relating to them. 

Each institution shall exercise these powers in accordance with this Regulation and within the 
limits of the appropriations authorised. 

(cid:208) 1995/2006 Art. 1.26 (adapted) 

(cid:208) 1605/2002 (adapted) 

Article 51 

⌦ Delegation of budget implementation powers ⌫ 

The  Commission  and  each  of  the  other  institutions  may,  within  their  departments,  delegate 
their  powers  of  budget  implementation  in  accordance  with  the  conditions  laid  down  by  this 
Regulation  and  by  their  internal  rules  and  within  the  limits  which  they  lay  down  in  the 
instrument of delegation. Those so empowered may act only within the limits of the powers 
expressly conferred upon them. 

(cid:208) 1995/2006 Art. 1.27 (adapted) 

Article 52 

⌦ Conflict of interests ⌫ 

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

2. There is a conflict of interests where the impartial and objective exercise of the functions of 
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. 

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(cid:208) 1605/2002 

CHAPTER 2 

METHODS OF IMPLEMENTATION 

(cid:208) 1995/2006 Art. 1.28 (adapted) 
(cid:214) new 

Article 53 

⌦ Management modes of the general budget ⌫ 

1. The Commission shall implement the budget in accordance with the provisions set out in 
Articles 53a to 53d in any of the following ways: 

(a1)  on  a  centralised  basis  (cid:214) by  its  departments,  or  through  executive  agencies 
referred to in Article 55 ; 

(b2)  by  shared  or  decentralised  management;  (cid:214) indirectly,  in  shared  management 
with Member States or by entrusting budget implementation tasks to:  

(a) third countries or the bodies they have designated; 

(b) international organisations and their agencies; 

(cid:216) new 

(c) financial institutions entrusted with the implementation of Financial Instruments 

pursuant to Title VIb; 

(d) the European Investment Bank and the European Investment Fund or any other 

subsidiary of the Bank; 

(e) bodies referred to in Articles 185 and 185a; 

(f) public law bodies or bodies governed by private law with a public service mission 

as far as these latter provide adequate financial guarantees; 

(g)  bodies  governed  by  private  law  of  a  Member  State,  entrusted  with  the 
implementation  of  a  public  and  private  partnership  and  providing  adequate 
financial guarantees; 

(h) persons entrusted with the implementation of specific actions pursuant to Title V 
of  the  Treaty  on  the  European  Union,  and  identified  in  the  relevant  basic  act 
within the meaning of Article 49 of this Regulation. 

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2. Member States and entities and persons listed under point (2) of paragraph 1 shall not have 
the status of authorising officer by delegation. 

3.  The  Commission  may  not  entrust  third  parties  with  executive  powers  it  enjoys  under  the 
Treaties where they involve a large measure of discretion implying political choices. 

(c) by joint management with international organisations. 

(cid:208) 1995/2006 Art. 1.28 

(cid:208) 1995/2006 Art. 1.29 (adapted) 

Article 53a 

⌦ Shared management with Member States ⌫ 

Where  the  Commission  implements  the  budget  on  a  centralised  basis,  implementation  tasks 
shall  be  performed  either  directly  by  its  departments  or  indirectly,  in  accordance  with 
Articles 54 to 57. 

(cid:216) new 

1.  Member  States  shall  respect  the  principles  of  sound  financial  management,  transparency 
and  non-discrimination  and  ensure  the  visibility  of  Union  action  when  they  manage  Union 
funds. To this end, Member States shall fulfil the control and audit obligations and assume the 
resulting responsibilities laid down in this Regulation. Complementary provisions may be laid 
down in sector-specific rules. 

(cid:216) new 

2.  Member  States  shall  prevent,  detect  and  correct  irregularities  and  fraud  when 
executing tasks related to the implementation of the Union budget. To this end 
they shall carry out ex ante and ex post controls including, where appropriate, 
on  the  spot  checks,  to  ensure  that  the  actions  financed  from  the  budget  are 
effectively  carried  out  and  implemented  correctly,  recover  funds  unduly  paid 
and bring legal proceedings as necessary.  

Member States shall impose effective, dissuasive and proportionate penalties on recipients as 
provided for in sector-specific rules and in national legislation. 

3.  In  accordance  with  the  sector-specific  rules,  Member  States  shall  accredit  one  or  more 
public sector bodies which shall be solely responsible for the proper management and control 
of the funds, for which accreditation has been granted. This shall be without prejudice to the 
possibility for these bodies to carry out tasks not related to the management of Union funds or 
to entrust certain of their tasks to other bodies. 

The  accreditation  shall  be  given  by  a  Member  State  authority  in  accordance  with  sector-
specific rules ensuring that the body is capable of properly managing the funds. The sector-
specific rules may also define a role of the Commission in the accreditation process. 

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The  accrediting  authority  shall  be  responsible  for  supervising  the  body  and  for  taking  all 
necessary measures  to remedy any deficiency in its operation, including  the suspension and 
withdrawal of the accreditation. 

4. Bodies accredited pursuant to paragraph 3 of this Article shall: 

(a) 

(b) 

(c) 

(d) 

(f) 

set up and ensure the functioning of an effective and efficient internal control system; 

use  an  annual  accounting  system  providing  accurate,  complete  and  reliable 
information in a timely manner; 

be  subject  to  an  independent  external  audit,  performed  in  accordance  with 
internationally  accepted  auditing  standards  by  an  audit  service  functionally 
independent of the accredited body; 

ensure, in conformity with Article 30(3), annual ex post publication of recipients of 
Union funds; 

ensure  a  protection  of  personal  data  which  satisfies  the  principles  laid  down  in 
Directive 95/46/EC. 

5. Bodies accredited pursuant to paragraph 3 of this Article shall provide the Commission by 
1 February of the following financial year with: 

their  accounts  drawn  up  for  the  expenditure  made  in  the  execution  of  the  tasks 

(a) 
entrusted; 

a summary of the results of all available audits and controls carried out, including an 
(b) 
analysis of systematic or recurrent weaknesses as well as corrective actions taken or planned; 

(c) 
a management declaration of assurance as to the completeness, accuracy and veracity 
of the accounts, the proper functioning of the internal control systems as well as to the legality 
and  regularity  of  the  underlying  transactions  and  the  respect  of  the  principle  of  sound 
financial management;  

(d) 

the  opinion  of  an  independent  audit  body  on  the  management  declaration  of 
assurance mentioned in point (c) of this paragraph, covering all its elements. 

If a Member State has accredited more than one body per policy area, it shall by 15 February 
of the following financial year provide the Commission with a synthesis report consisting of 
an  overview  at  national  level  of  all  management  declarations  of  assurance  and  the 
independent audit opinions thereon, prepared for the policy area concerned. 

6. The Commission shall: 

(a) 
apply  procedures  for  a  timely  financial  clearance  of  the  accounts  of  the  accredited 
bodies, ensuring that the accounts are complete, accurate and true and allowing for a timely 
clearance of irregularity cases; 

exclude from Union financing expenditure the disbursements which have been made 

(b) 
in breach of Union law. 

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Sector-specific  rules  shall  govern  the  conditions  under  which  payments  to  Member  States 
may be suspended by the Commission or interrupted by the authorising officer by delegation. 

(cid:208) 1995/2006 Art. 1.29 (adapted) 

Article 53b 

⌦ Indirect management with entities and persons other than Member States ⌫ 

1.  Where  the  Commission  implements  the  budget  by  shared  management,  implementation 
tasks shall be delegated to Member States. That method shall apply in particular to the actions 
referred to in Titles I and II of Part Two. 

2.  Without  prejudice  to  complementary  provisions  included  in  relevant  sector-specific 
regulations,  and  in  order  to  ensure  in  shared  management  that  the  funds  are  used  in 
accordance  with  the  applicable  rules  and  principles,  the  Member  States  shall  take  all  the 
legislative,  regulatory  and  administrative  or  other  measures  necessary  for  protecting  the 
Communities' financial interests. To this effect they shall in particular: 

(a) satisfy themselves that actions financed from the budget are actually carried out 
and to ensure that they are implemented correctly; 

(b) prevent and deal with irregularities and fraud; 

(c)  recover  funds  wrongly  paid  or  incorrectly  used  or  funds  lost  as  a  result  of 
irregularities or errors; 

(d)  ensure,  by  means  of  relevant  sector-specific  regulations  and  in  conformity  with 
Article 30(3), adequate annual ex post publication of beneficiaries of funds deriving 
from the budget. 

To that effect, the Member States shall conduct checks and shall put in place an effective and 
efficient internal control system, according to the provisions laid down in Article 28a. They 
shall bring legal proceedings as necessary and appropriate. 

3.  Member  States  shall  produce  an  annual  summary  at  the  appropriate  national  level  of  the 
available audits and declarations. 

4.  In  order  to  ensure  that  the  funds  are  used  in  accordance  with  the  applicable  rules,  the 
Commission shall apply clearance-of-accounts procedures or financial correction mechanisms 
which enable it to assume final responsibility for the implementation of the budget. 

(cid:216) new 

1. Entities and persons entrusted with budget implementation tasks pursuant to Article 53(1) 
point (2) (a) to (h) shall respect the principles of sound financial management, transparency 
and  non-discrimination  and  ensure  the  visibility  of  Union  action  when  they  manage  Union 
funds.  They  shall  guarantee  a  level  of  protection  of  the  financial  interests  of  the  Union 
equivalent  to  that  required  under  this  Regulation  when  they  manage  Union  funds,  with  due 
consideration to: 

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– 

– 

– 

the nature of the tasks entrusted and the amounts involved; 

the financial risks involved; 

the  level  of  assurance  stemming  from  their  systems,  rules  and  procedures  together 
with  the  measures  taken  by  the  Commission  to  supervise  and  support  the 
implementation of the tasks entrusted. 

2. To this effect, the entities and persons referred to in paragraph 1 shall: 

(a) 

(b) 

(c) 

(d) 

(e) 

set up and ensure the functioning of an effective and efficient internal control system; 

use  an  annual  accounting  system  providing  accurate,  complete  and  reliable 
information in a timely manner; 

be  subject  to  an  independent  external  audit,  performed  in  accordance  with 
internationally  accepted  auditing  standards  by  an  audit  service  functionally 
independent of the entity or person concerned;  

apply  appropriate  rules  and  procedures  for  providing  financing  from  Union  funds 
through grants, procurement and financial instruments; 

ensure, in conformity with Article 30(3), annual ex post publication of recipients of 
Union funds ; 

(f) 

ensure a reasonable protection of personal data. 

Persons referred to in Article 53(1) point (2)(h) may satisfy these requirements progressively. 
They shall adopt their financial rules with the Commission's prior consent. 

3.  The  entities  and  persons  referred  to  in  paragraph  1  shall  prevent,  detect  and  correct 
irregularities  and  fraud  when  executing  tasks  related  to  the  implementation  of  the  Union 
budget.  To  this  end  they  shall  carry  out  ex  ante  and  ex  post  controls  including,  where 
appropriate,  on  the  spot  checks,  to  ensure  that  the  actions  financed  from  the  budget  are 
effectively carried out and implemented correctly, recover funds unduly paid and bring legal 
proceedings as necessary.  

4. The Commission may suspend payments to entities and persons referred to in paragraph 1, 
in  particular  when  systemic  errors  which  question  the  reliability  of  the  internal  control 
systems  of  the  entity  or  person  concerned  or  the  legality  and  regularity  of  the  underlying 
transactions are detected.  

The authorising officer by delegation may interrupt payments to such entities or persons fully 
or  partially  for  the  purpose  of  further  verifications  when  information  comes  to  his  notice 
indicating a significant deficiency in the functioning of the internal control system or that the 
expenditure certified by the entity or person concerned is linked to a serious irregularity and 
has not been corrected, provided the interruption is necessary to prevent significant damage to 
the financial interests of the Union. 

5. The entities and persons referred to in paragraph 1 shall provide the Commission with: 

(a) 

a report on the implementation of the tasks entrusted; 

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their  accounts  drawn  up  for  the  expenditure  made  in  the  execution  of  the  tasks 

(b) 
entrusted; 

(c) 
a summary of the results of all available audits and controls carried out, including an 
analysis of systematic or recurrent weaknesses as well as corrective actions taken or planned; 

(d) 
a management declaration of assurance as to the completeness, accuracy and veracity 
of the accounts, the proper functioning of the internal control systems as well as to the legality 
and  regularity  of  the  underlying  transactions  and  the  respect  of  the  principle  of  sound 
financial management;  

the opinion of an independent audit body on the management declaration of assurance 

(e) 
mentioned in point (d) of this paragraph, covering all its elements. 

These elements shall be provided to the Commission by 1 February of the following financial 
year with the exception of the audit opinion referred to in point e). The latter shall be provided 
at the latest by 15 March. 

These obligations shall be without prejudice to the provisions made in agreements concluded 
with international organisations and third countries. These provisions shall include at least the 
obligation of such entities to provide the Commission annually with a statement that, during 
the  financial  year  concerned,  the  Union  contribution  has  been  used  and  accounted  for  in 
compliance  with  the  requirements  set  out  in  paragraph  2  of  this  Article  and  the  obligations 
laid  down  in  the  agreement  concluded  with  the  relevant  international  organisations  or  third 
country. 

6. The Commission shall: 

(a) 

ensure supervision and evaluation of the implementation of the tasks entrusted; 

(b) 
apply  procedures  for  a  timely  financial  clearance  of  the  accounts  of  the  entrusted 
entities and persons, ensuring that the accounts are complete, accurate and true and allowing 
for a timely clearance of irregularity cases; 

exclude from Union financing expenditure the disbursements which have been made 

(c) 
in breach of the applicable rules. 

7. Paragraphs 5 and 6 of this Article shall not apply to entities and persons which are subject 
to a separate procedure of discharge from the Budget Authority. 

(cid:208) 1995/2006 Art. 1.29 (adapted) 

Article 53c 

⌦ Ex ante controls and agreements under indirect management ⌫ 

the Commission 

1.  Where 
the  budget  by  decentralised  management, 
implementation tasks shall be delegated to third countries in accordance with Article 56 and 
Title IV of Part Two, without prejudice to delegation of residual tasks to bodies referred to in 
Article 54(2).  

implements 

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2.  In  order  to  ensure  that  the  funds  are  used  in  accordance  with  the  applicable  rules,  the 
Commission shall apply clearance-of-accounts procedures or financial correction mechanisms 
which enable it to assume final responsibility for the implementation of the budget. 

3.  Third  countries  to  which  implementation  tasks  are  delegated  shall  ensure,  in  conformity 
with Article 30(3), adequate annual ex post publication of beneficiaries of funds deriving from 
the budget. 

(cid:216) new 

1. Before the Commission entrusts tasks of budget implementation to entities or persons listed 
under  Article  53(1)  point  (2)  (a)  to  (h),  it  shall  obtain  evidence  that  the  requirements  of 
Article 53b(2)(a) to (d) are fulfilled. 

The entity or person concerned shall inform the Commission without delay of any substantial 
change in its systems, rules and procedures that relate to the management of the Union funds 
entrusted.  Where  such  a  change  occurs,  the  Commission  shall  review  the  agreements 
concluded with the entity or person concerned in order to ensure continued compliance with 
the conditions set out in Article 53b(2)(a) to (d). 

2. When choosing an entity from within a category listed in Article 53(1) point (2)(b), (c), (f) 
and (g) the Commission shall take due account of the nature of the tasks to be entrusted as 
well  as  the  experience  and  the  operational  and  financial  capacity  of  the  entities  concerned. 
The  choice  shall  be  justified  on  objective  grounds  and  may  not  give  rise  to  a  conflict  of 
interest. 

3.  Agreements  concluded  under  indirect  management  shall  stipulate  the  requirements  laid 
down in Article 53b(2)(a) to (d). They shall clearly define the tasks entrusted and contain an 
undertaking of the entities or persons concerned to fulfil the obligations laid down in Article 
53b(2)(e) and (f), and to refrain from any act which may give rise to a conflict of interests. 

(cid:208) 1995/2006 Art. 1.29 

Article 53d 

the Commission 

1.  Where 
joint  management,  certain 
implementation tasks shall be delegated to international organisations, in accordance with the 
implementing rules, in the following cases: 

the  budget  by 

implements 

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

laying  down 

(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. 

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

2.  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. 

3.  International  organisations  to  which  implementation  tasks  are  delegated  shall  ensure,  in 
conformity with Article 30(3), adequate annual ex post publication of beneficiaries of funds 
deriving from the budget. 

(cid:208) 1605/2002 

Article 54 

(cid:208) 1995/2006 Art. 1.30(a) 

1. The Commission may not delegate to third parties the executive powers it enjoys under the 
Treaties  where  they  involve  a  large  measure  of  discretion  implying  political  choices.  The 
implementing tasks delegated must be clearly defined and fully supervised as to the use made 
of them. 

The  delegation  of  budget-implementation  tasks  shall  comply  with  the  principle  of  sound 
financial management which requires effective and efficient internal control and shall ensure 
compliance with the principle of non-discrimination, and the visibility of Community action. 
No implementing tasks delegated in this way may give rise to conflicts of interests. 

(cid:208) 1605/2002 
(cid:206)1 1995/2006 Art. 1.30(b) 

2. (cid:206)1 Within the limits laid down in paragraph 1, the Commission may, when implementing 
the  budget  by  indirect  centralised  management  or  by  decentralised  management  under 
Articles 53a or 53c, delegate tasks of public authority and in particular budget implementation 
tasks to:  

(a)  agencies  governed  by  Community  law,  referred  to  in  Article  55,  hereinafter: 
‘executive agencies’; 

(cid:208) 1995/2006 Art. 1.30(b) 

(b)  bodies  set  up  by  the  Communities  as  referred  to  in  Article 185  and  other 
specialised  Community  bodies,  such  as  the  European  Investment  Bank  or  the 
European  Investment  Fund,  provided  that  to  do  so  is  compatible  with  the  tasks  of 
each body as defined in the basic act; 

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(c) national or international public-sector bodies or bodies governed by private law 
with a public-service mission providing adequate financial guarantees and complying 
with the conditions provided for in the implementing rules; 

(cid:208) 1995/2006 Art. 1.30(b) 

(d) persons entrusted with the implementation of specific actions pursuant to Title V 
of the Treaty on European Union, and identified in the relevant basic act within the 
meaning of Article 49 of this Regulation. 

(cid:208) 1995/2006 Art. 1.30(b) 

3.  Where  the  bodies  referred  to  in  paragraph  2  perform  implementation  tasks,  they  shall 
conduct  regular  checks  to  ensure  that  the  actions  to  be  financed  from  the  budget  have  been 
implemented correctly. 

(cid:208) 1605/2002 

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

(cid:208) 1995/2006 Art. 1.30(c) 

(cid:208) 1995/2006 Art. 1.31 (adapted) 
(cid:214) new 

Article 55 

⌦ Executive agencies ⌫ 

1.  The  executive  agencies  shall  be  legal  persons  under  Community  law  created  by 
Commission  Decision  to  which  powers  may  be  delegated  to  implement  all  or  part  of  a 
Community programme or project on behalf of the Commission and under its responsibility in 
accordance with Council Regulation (EC) No 58/2003 of 19 December 2002 laying down the 
statute  for  executive  agencies  to  be  entrusted  with  certain  tasks  in  the  management  of 
Community programmes28. 

2. Implementation of the corresponding operational appropriations shall be carried out by the 
director of the agency (cid:214) in direct management . 

28 

OJ L 11, 16.1.2003, p. 1. 

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(cid:208) 1995/2006 Art. 1.31 

Article 56 

1. Where the Commission implements the budget 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) 
transparent  procurement  and  grant-award  procedures  which  are  non-
discriminatory and exclude any conflict of interest and which are in accordance with 
the provisions of Titles V and VI respectively; 

(b)  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; 

(c)  an  accounting  system  that  enables  the  correct  use  of  Community  funds  to  be 
verified and the use of funds to be reflected in Community accounts; 

(d) an independent external audit; 

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

(f)  adequate  annual  ex  post  publication  of  beneficiaries  of  funds  deriving  from  the 
budget in conformity with Article 30(3). 

The  Commission  may  accept  that  the  audit,  accounting  and  procurement  systems  of  the 
entities  referred  to  in  paragraphs 1  and 2  are  equivalent  to  its  own,  with  due  account  for 
internationally accepted standards. 

2.  In  the  case  of  decentralised  management,  the  criteria  laid  down  in  paragraph 1  with  the 
exception of the criterion provided in point (e), shall apply, in full or in part, depending on the 
degree of decentralisation, agreed between the Commission and the third country, national or 
international public-sector bodies concerned. 

Notwithstanding paragraph (1)(a) and Article 169a, the Commission may decide: 

– 

– 

in the case of pooling of funds, and 

under the conditions provided in the basic act, 

to  use  the  procurement  or  grant  procedures  of  the  beneficiary  partner  country  or  as  agreed 
among donors. 

Before taking such a decision, the Commission shall first obtain evidence on a case-by-case 
basis  that  such  procedures  satisfy  the  principles  of  transparency,  equal  treatment  and  non-
discrimination, prevent any conflict of interest, offer guarantees equivalent to internationally 
accepted standards and ensure compliance with the provisions of sound financial management 
which requires effective and efficient internal control. 

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The third country, national or international public-sector bodies concerned shall undertake to 
fulfil the following obligations: 

(a)  to  comply,  subject  to  the  first subparagraph  of  this  paragraph,  with  the  criteria 
laid down in paragraph 1; 

(b)  to  ensure  that  the  audit  referred  to  in  point (d)  of  paragraph 1  is  exercised  by  a 
national institution for independent external auditing; 

(c)  to  conduct  regular  checks  to  ensure  that  the  actions  to  be  financed  from  the 
budget have been implemented correctly; 

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

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

(cid:208) 1605/2002 (adapted) 

Article 57 

⌦ Limits to delegation of powers ⌫ 

(cid:208) 1995/2006 Art. 1.32 (adapted) 

1. The Commission may not entrust measures of implementation of funds deriving from the 
budget, including payment and recovery, to external private-sector entities or bodies, except 
in the case referred to in Article 54(2)(c) ⌦ 53(1) point (2)(f) and (g), ⌫ or in specific cases 
where the payments involved are to be made to beneficiaries determined by the Commission, 
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. 

2. The tasks which may be entrusted by contract to external private-sector entities or bodies 
other  than  those  which  have  a  public-service  mission  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. 

(cid:208) 1605/2002 (adapted) 

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CHAPTER 3 

FINANCIAL ACTORS 

SECTION 1 

PRINCIPLE OF SEGREGATION OF DUTIES 

Article 58 

⌦ Segregation of duties ⌫ 

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

SECTION 2 

AUTHORISING OFFICER 

Article 59 

⌦ The authorising officer ⌫ 

1. The institution shall perform the duties of authorising officer. 

1a.  For  the  purposes  of  this  Title,  the  term  ‘staff’  refers  to  persons  covered  by  the  Staff 
Regulations. 

(cid:208) 1995/2006 Art. 1.33(a) 

2. Each institution shall lay down in its internal administrative rules the staff of an appropriate 
level  to  whom  it  delegates  in  compliance  with  the  conditions  in  its  rules  of  procedure  the 
duties of the authorising officer, the scope of the powers delegated and the possibility for the 
persons to whom these powers are delegated to subdelegate them. 

(cid:208) 1995/2006 Art. 1.33(b) 

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

(cid:208) 1995/2006 Art. 1.33(c) 

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(cid:208) 1605/2002 (adapted) 

4. Authorising officers by delegation or subdelegation may act only within the limits set by 
the  instrument  of  delegation  or  subdelegation.  The  responsible  authorising  officer  by 
delegation or subdelegation 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 
implementation of the budget and presentation of the accounts. 

Article 60 

⌦ Powers and duties of the authorising officer ⌫ 

1.  The  authorising  officer  shall  be  responsible  in  each  institution  for  implementing  revenue 
and  expenditure  in  accordance  with  the  principles  of  sound  financial  management  and  for 
ensuring that the requirements of legality and regularity are complied with. 

(cid:208) 1605/2002 Art. 60(4) (adapted) 
(cid:214) new 

42.  ⌦ For  the  purposes  of  paragraph  1  of  this  Article ⌫  Tthe  authorising  officer  by 
delegation shall put in place, in (cid:214) accordance  compliance with (cid:214) Article 28a and  the 
minimum standards adopted by each institution 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  ⌦ systems ⌫  suited  to  the 
performance  of  his/her  duties  (cid:214) ;the  establishment  of  such  structure  and  systems  shall  be 
supported  by  a  comprehensive  risk  analysis,   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 an operation shall be separate functions. 

(cid:208) 1605/2002 

2. To implement expenditure, the authorising officer by delegation and by subdelegation shall 
make  budgetary  commitments  and  legal  commitments,  shall  validate  expenditure  and 
authorise  payments  and  shall  undertake  the  preliminaries  for  the  implementation  of 
appropriations. 

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

4. The authorising officer by delegation shall put in place, in compliance with the minimum 
standards adopted by each institution 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  an 
operation shall be separate functions. 

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(cid:216) new 

4.  Each  operation  shall  be  subject  at  least  to  an  ex  ante  control  based  on  a  desk  review  of 
documents  and  on  the  available  results  of  controls  already  carried  out,  relating  to  the 
operational and financial aspects of the operation.  

Ex ante controls shall comprise the initiation and the verification of an operation. 

For a given transaction, members of staff who carry out the verification shall be other than, 
and not subordinate to, those who initiated the operation.  

5. The authorising officer by delegation may put in place ex post controls to verify operations 
already  approved  following  ex  ante  controls.  Such  controls  may  be  organised  on  a  sample 
basis according to risk. 

The ex ante controls shall be carried by the members of staff other than those responsible for 
the  ex  post  controls.  The  members  of  staff  responsible  for  the  ex  post  controls  shall  not  be 
subordinate to the members of staff responsible for the ex ante controls. 

(cid:208) 1605/2002 

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

67.  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 66(4). In the event of any illegal 
activity,  fraud  or  corruption  which  may  harm  the  interests  of  the  Community,  he/she  shall 
inform the authorities and bodies designated by the applicable legislation. 

(cid:208) 1995/2006 Art. 1.34 
(cid:214) new 

78. The authorising officer by delegation shall report to his institution on the performance of 
his  duties  in  the  form  of  an  annual  activity  report  together  with  financial  and  management 
information confirming that (cid:214) , containing financial and management information, including 
the results of controls, declaring that,  the information contained in the report presents a true 
and  fair  view  except  as  otherwise  specified  in  any  reservations  related  to  defined  areas  of 
revenue and expenditure (cid:214) , he has reasonable assurance that . 

(a) the information contained in the report presents a true and fair view; 

b)  the  resources  assigned  to  the  activities  described  in  the  report  have  been  used  for  their 
intended  purpose  and  in  accordance  with  the  principle  of  sound  financial 
management; 

(cid:216) new 

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c)  the  control  procedures  put  in  place  give  the  necessary  guarantees  concerning  the  legality 
and regularity of the underlying transactions. 

(cid:208) 1995/2006 Art. 1.34 

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 identified. No later than 15 June each 
year, the Commission shall send to the budgetary authority a summary of the annual reports 
for the previous year. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.35(a) 
(cid:214) new 

SECTION 3 

ACCOUNTING OFFICER 

Article 61 

⌦ Powers and duties of the accounting officer ⌫ 

1.  Each  institution  shall  appoint  an  accounting  officer  who  shall  be  responsible  in  each 
institution 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 VII; 

(c) keeping the accounts in accordance with Title VII; 

(d)  laying  down,  in  accordance  with  Title  VII,  the  accounting  rules  and  methods 
(cid:214) procedures  and the chart of accounts; 

(e)  laying  down  and  validating  the  accounting  systems  and  where  appropriate 
validating  systems  laid  down  by  the  authorising  officer  to  supply  or  justify 
accounting  information;  (cid:206)1 the  accounting  officer  shall  be  empowered  to  verify 
(cid:214) at any time  the respect of validation criteria;  

(f) treasury management. 

The  accounting  officer  of  the  Commission  shall  be  responsible  for  laying  down  the 

1a. 
accounting rules and the harmonised charts of accounts in accordance with Title VII. 

(cid:216) new 

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2.  The  accounting  officer  shall  obtain  from  authorising  officers,  who  shall  guarantee  its 
reliability,  all  the  information  necessary  for  the  production  of  accounts  which  give  a  true 
image  of  the  Communities'  assets  ⌦ Institutions'  financial  situation ⌫  and  of  budgetary 
implementation. 

(cid:208) 1605/2002 (adapted) 

(cid:208) 1995/2006 Art. 1.35(b) 
(adapted) 
(cid:214) new 

2a. Before the adoption of the accounts by the institution ⌦ or the body referred to in Article 
185 ⌫, 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 
institution ⌦ or body referred to in Article 185 ⌫. 

For  that  purpose,  the  accounting  officer  shall  satisfy  himself  that  the  accounts  have  been 
prepared  in  accordance  with  the  ⌦ Union ⌫  accounting  rules,  methods  and  accounting 
systems established under his responsibility as laid down in this Regulation for the accounts 
of his institution, (cid:214) and procedures  and that all revenue and expenditure is entered in the 
accounts. 

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

The  authorising  officers  shall  remain  fully  responsible  for  the  proper  use  of  the  funds  they 
manage, as well as the legality and regularity of the expenditure under their control (cid:214) and the 
completeness and accuracy of the information forwarded to the accounting officer . 

2b. 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. 

3. 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. 

(cid:208) 1995/2006 Art. 1.35(c) 

(cid:216) new 

4. Within the implementation of a programme or an action, fiduciary accounts may be opened 
in  the  name  of  the  Commission  and  on  its  behalf  in  order  to  allow  their  management  by  a 
entity listed in the first paragraph of Article 53, point 2 (c) and (d). 

These accounts shall be opened under the responsibility of the authorising officer in charge of 
the implementation of the programme or action in agreement with the accounting officer of 
the Commission. 

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That bank account is managed under the responsibility of the authorising officer. 

(cid:208) 1605/2002 (adapted) 

Article 62 

⌦ Powers which may be delegated by the accounting officer ⌫ 

The  accounting  officer  may,  in  the  performance  of  his  duties,  delegate  certain  tasks  to 
subordinate staff. 

(cid:208) 1995/2006 Art. 1.36 

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

(cid:208) 1605/2002 

SECTION 4 

IMPREST ADMINISTRATOR 

(cid:208) 1995/2006 Art. 1.37 (adapted) 

Article 63 

⌦ Imprest accounts ⌫ 

1. Imprest accounts may be set up for the collection of revenue other than own resources and 
for the payment of small sums as defined in the implementing rules. 

However,  in  the  field  of  crisis  management  aid  and  humanitarian  aid  operations  within  the 
meaning of Article 110, imprest accounts may be used without any limitation on the amount 
while  respecting  the  level  of  appropriations  decided  by  the  budgetary  authority  on  the 
corresponding budget line for the current financial year. 

2.  Imprest  accounts  shall  be  endowed  by  the  institution's  accounting  officer  and  shall  be 
placed  under  the  responsibility  of  imprest  administrators  designated  by  the  institution's 
accounting officer. 

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(cid:208) 1605/2002 (adapted) 

CHAPTER 4 

LIABILITY OF THE FINANCIAL ACTORS 

SECTION 1 

GENERAL RULES 

Article 64 

⌦ Suspension and withdrawal of delegations given to authorising officers ⌫ 

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

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

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

⌦ Liability of the authorising officer for illegal activity, fraud or corruption ⌫ 

Article 65 

(cid:208) 1995/2006 Art. 1.38 

1.  The  provisions  of  this  Chapter  are  without  prejudice  to  any  liability  under  criminal  law 
which  the  financial  actors  referred  to  in  Article 64  may  incur  as  provided  in  the  applicable 
national law and in the provisions in force on the protection of the Union' financial interests 
and  on  the  fight  against  corruption  involving  officials  of  the  Union  or  officials  of  Member 
States. 

2.  Each  authorising  officer,  accounting  officer  or  imprest  administrator  shall  be  liable  to 
disciplinary  action  and  payment  of  compensation  as  laid  down  in  the  Staff  Regulations, 
without prejudice to Articles 66, 67 and 68. In the event of illegal activity, fraud or corruption 

(cid:208) 1605/2002 (adapted) 

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which  may  harm  the  interests  of  the  Community,  the  matter  will  be  submitted  to  the 
authorities and bodies designated by the applicable legislation. 

SECTION 2 

RULES APPLICABLE TO AUTHORISING OFFICERS BY DELEGATION AND 
SUBDELEGATION 

Article 66 

⌦ Rules applicable to authorising officers ⌫ 

1.  The  authorising  officer  shall  be  liable  for  payment  of  compensation  as  laid  down  in  the 
Staff Regulations. 

(cid:208) 1995/2006 Art. 1.39(a) 

1a. The obligation to pay compensation shall apply in particular if: 

(cid:208) 1995/2006 Art. 1.39(b) 

(a) 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 and the 
implementing rules; 

(b) 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 institution liable to civil action by third parties. 

(cid:208) 1605/2002 

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

3.  In  the  event  of  subdelegation  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 
subdelegation. 

(cid:208) 1995/2006 Art. 1.39(c) 

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4.  Each  institution  shall  set  up  a  specialised  financial  irregularities  panel  or  participate  in  a 
joint  panel  established  by  several  institutions.  The  panels  shall  function  independently  and 
determine  whether  a  financial  irregularity  has  occurred  and  what  the  consequences,  if  any, 
should be. 

(cid:208) 1995/2006 Art. 1.39(d) 

(cid:208) 1605/2002 (adapted) 

On  the  basis  of  the  opinion  of  this  panel,  the  institution  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 and to the authorising officer by delegation, provided the latter is not the 
person involved, as well as to the internal auditor. 

SECTION 3 

RULES APPLICABLE TO ACCOUNTING OFFICERS AND IMPREST ADMINISTRATORS 

Article 67 

⌦ Rules applicable to accounting officers ⌫ 

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 liable by any of the following forms of misconduct: 

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

(b) he/she wrongly alters bank accounts or postal giro accounts; 

(c)  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 68 

⌦ Rules applicable to imprest officers ⌫ 

An imprest 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 liable by any of the following forms of misconduct: 

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

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

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

(d) he/she fails to collect revenue due. 

CHAPTER 5 

REVENUE OPERATIONS 

SECTION 1 

MAKING AVAILABLE OF OWN RESOURCES 

Article 69 

⌦ Own resources ⌫ 

An estimate of revenue constituted by own resources, as referred to in the Council Decision 
on the system of the Union' own resources, shall be entered in the budget in euro. It shall be 
made available in accordance with the Council Regulation implementing that Decision. 

SECTION 2 

ESTIMATE OF AMOUNTS RECEIVABLE 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 70 

⌦ Estimate of the amount receivable ⌫ 

1.  (cid:214) When  the  authorising  officer  responsible  has  sufficient  and  reliable  information  in 
respect of any measure or situation which may give rise to an amount owing to the Union, the 
authorising officer responsible shall first make an estimate of the amount receivable.  

1bis.  The  estimate  of  the  amount  receivable  is  adjusted  by  the  authorising  officer 
responsible  as  soon  as  he/she  is  aware  of  an  event  modifying  the  measure  or  the  situation 
which has generated its drawing up. 

(cid:216) new 

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When establishing the recovery order on a measure or situation that had previously resulted in 
an estimate of amounts receivable, the amounts thereof shall be adjusted accordingly by the 
authorising officer responsible. 

When the recovery order is drawn up for the same amount, the estimate of amounts receivable 
shall be reduced to zero. 

(cid:208) 1605/2002 

2.  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 own resources 
defined in the Council Decision on the system of the Union' own resources which are paid at 
fixed  intervals  by  the  Member  States.  The  authorising  officer  responsible  shall  issue  a 
recovery order in respect of these amounts. 

(cid:208) 1605/2002 (adapted) 

SECTION 3 

ESTABLISHMENT OF AMOUNTS RECEIVABLE 

Article 71 

⌦ Establishment of amounts receivable ⌫ 

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

(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  own  resources  made  available  to  the  Commission  and  any  amount  receivable  that  is 
identified as being certain, of a fixed amount and due must 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. 

4. The conditions in which interest on late payment is due to the Union shall be laid down in 
the implementing rules. 

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SECTION 4 

AUTHORISATION OF RECOVERY 

Article 72 

⌦ Authorisation of recovery ⌫ 

1.  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. 

2.  The  institution  may  formally  establish  an  amount  as  being  receivable  from  persons  other 
than States by means of a decision which shall be enforceable within the meaning of Article 
299 of the Treaty on the Functioning of the European Union. 

SECTION 5 

RECOVERY 

Article 73 

⌦ Rules on recovery ⌫ 

1. 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 
Union receive their revenue and shall see that their rights are safeguarded. 

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

(cid:208) 1995/2006 Art. 1.40 (adapted) 
(cid:214) new 

2.  Where  the  responsible  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 principle of sound financial management and proportionality in 
accordance  with  the  procedures  and  the  criteria  laid  down  in  the  implementing  rules.  The 
waiver decision must be substantiated. The authorising officer may delegate the decision only 
as laid down in the implementing rules. 

The responsible  authorising  officer  may  furthermore cancel or adjust an  established  amount 
receivable  (cid:214) in  full  or  in  part ,  in  accordance  with  the  conditions  set  out  in  the 
implementing rules. (cid:214) The partial cancellation of an established amount receivable does not 
imply a waiver of a European Union's established entitlement.  

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(cid:208) 1995/2006 Art. 1.41 (adapted) 

Article 73a 

⌦ Limitation period ⌫ 

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

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

(cid:216) new 

Article 73b 

National treatment for Union entitlements 

Amounts  receivable  by  the  Union  shall  not  be  treated  less  favourably  than  entitlements 
belonging  to  public  bodies  in  the  Member  States  where  the  recovery  proceeding  has  been 
conducted. 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 74 

⌦ Fines, penalties and accrued interest imposed by the Commission ⌫ 

Revenue  ⌦ Amounts ⌫  received  by  way  of  fines,  periodic  penalty  payments  and  other 
penalties and any accrued interest (cid:214) penalties and sanctions, and any accrued interest or other 
income generated by them  shall not be finally recorded as budgetary revenue as long as the 
decisions imposing them may be annulled ⌦ overruled ⌫ by the Court of Justice. 

(cid:216) new 

The amount referred to in the first paragraph shall be recorded as budget revenue at the latest 
in  the  year  following  the  exhaustion  of  all  legal  remedies  to  the  extent  that  they  are  not 
returned to the entity that paid them in accordance with a judgment of the Court of Justice. 

However, a portion not exceeding 2% of the total amounts referred to in the first paragraph 
may be withheld as a guarantee to ensure a minimum return on funds if the decision imposing 
the fine is overruled by the Court of Justice. This portion shall be recorded as budget revenue 
in following years. 

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The  first  paragraph  shall  not  apply  to  decisions  on  clearance  of  accounts  or  financial 
corrections. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.42 
(cid:214) new 

CHAPTER 6 

EXPENDITURE OPERATIONS 

Article 75 

⌦ The financing decision ⌫ 

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

2.  Except  in  the  case  of  appropriations  which  can  be  implemented  without  a  basic  act  in 
accordance with (cid:206)1 Article 49(6)(e) , the commitment of the expenditure shall be preceded 
by  a  financing  decision  adopted  by  the  institution  or  the  authorities  to  which  powers  have 
been delegated by the institution. 

SECTION 1 

COMMITMENT OF EXPENDITURE 

Article 76 

⌦ Types of commitments ⌫ 

1. The budgetary commitment is the operation reserving the appropriation necessary to cover 
subsequent payments to honour a legal commitment ⌦ commitments ⌫. 

The legal commitment is the act whereby the authorising officer enters into or establishes an 
obligation which results in a charge. 

The  budgetary  commitment  and  the  legal  commitment  shall  be  adopted  by  the  same 
authorising officer, save in duly substantiated cases as provided for in the implementing rules. 

2.  The  budgetary  commitment  is  individual  when  the  beneficiary  and  the  amount  of  the 
expenditure are known. 

The budgetary commitment is global when at least one of the elements necessary to identify 
the individual commitment is still not known. 

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The  budgetary  commitment  is  provisional  when  it  is  intended  to  cover  the  expenditure 
referred to in Article 150 or routine administrative expenditure and either the amount or the 
final beneficiaries are not definitively known. 

3.  Budgetary  commitments  for  actions  extending  over  more  than  one  financial  year  may  be 
broken down over several years into annual instalments only where the basic act so provides 
and (cid:214) or  for administrative expenditure. Where the budgetary commitment is thus divided 
into  annual  instalments,  the  legal  commitment  shall  stipulate  this,  except  in  the  case  of 
expenditure on staff. 

Article 77 

⌦ Rules applicable to commitments ⌫ 

1. In respect of any measure which may give rise to expenditure chargeable to the budget, the 
authorising officer responsible must first make a budgetary commitment before entering into a 
legal  obligation  with  third  parties  (cid:214) or  transferring  funds  to  a  Trust  Fund  on  the  basis  of 
Article 164 . 

(cid:216) new 

1bis. The obligation for a budgetary commitment before entering into a legal commitment as 
stipulated  in  paragraph  1,  is  not  applicable  to  legal  commitments  concluded  following  a 
declaration  of  a  crisis  situation  in  the  framework  of  the  Business  Continuity  Plan,  in 
accordance  with  the  procedures  adopted  by  the  Commission  under  its  administrative 
autonomy. 

(cid:208) 1605/2002 
(cid:214) new 

2. Subject to the special provisions of Title IV of part two, global budget commitments shall 
cover  the  total  cost  of  the  corresponding  individual  legal  commitments  concluded  up  to  31 
December of year n + 1. 

Subject  to  Article  76(3)  and  Article  179(2),  individual  legal  commitments  relating  to 
individual or provisional budgetary commitments shall be concluded by 31 December of year 
n. 

At the end of the periods referred to in the first and second subparagraphs, the unused balance 
of these budgetary commitments shall be decommitted by the authorising officer responsible. 

The  amount  of  each  individual  legal  commitment  adopted  following  a  global  commitment 
shall, prior to signature, be registered by the authorising officer responsible in the budgetary 
accounts  and  booked  to  the  global  commitment.  (cid:214) In  case  of  humanitarian  aid  operations, 
civil protection operations and crisis management aid, and when the urgency justifies it, the 
registration of the amounts may be done immediately after the signature of the corresponding 
individual legal commitment.  

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(cid:208) 1605/2002 (adapted) 

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

Any parts of such commitments which have not been executed six months after that date shall 
be decommitted in accordance with Article 11. 

(cid:208) 1995/2006 Art. 1.43 
(cid:214) new 

The  amount  of  a  budget  commitment  corresponding  to  a  legal  commitment  for  which  no 
payment within the meaning of Article 81 has been made in a period of three years following 
the signing of the legal commitment shall be decommitted (cid:214) , exception made for cases under 
litigation before judicial courts or arbitral bodies . 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 78 

⌦ Verifications applicable to commitments ⌫ 

1.  When  adopting  a  budgetary  commitment,  the  authorising  officer  responsible  shall  ensure 
that: 

(a) the expenditure has been charged to the correct item in the budget; 

(b) the appropriations are available; 

(c) the expenditure conforms to the provisions of the Treaties, of the budget, of this 
Regulation, of the implementing rules and of all acts adopted in accordance with the 
Treaties and regulations; 

(d)  the  principle  of  sound  financial  management  is  complied  with.  (cid:214) The 
opportunity of prefinancing payments, its amount and the overall payment schedule 
shall  be  commensurate  with  the  planned  duration,  the  progress  in  implementation 
and the financial risks such prefinancing entails.  

2.  When  registering  a  legal  commitment  (cid:214) by  physical  or  electronic  signature ,  the 
authorising officer shall ensure that: 

(a) the commitment is covered by the corresponding budgetary commitment; 

(b) the expenditure is regular and conforms to the provisions of the Treaties, of the 
budget,  of  this  Regulation,  of  the  implementing  rules  and  of  all  acts  adopted  in 
accordance with the Treaties and the regulations; 

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(c) the principle of sound financial management is respected. 

SECTION 2 

VALIDATION OF EXPENDITURE 

Article 79 

⌦ Validation of expenditure ⌫ 

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. 

SECTION 3 

AUTHORISATION OF EXPENDITURE 

Article 80 

⌦ Authorisation of expenditure ⌫ 

Authorisation  of  expenditure  is  the  act  whereby  the  authorising  officer  responsible,  having 
verified  that  the  appropriations  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. 

(cid:208) 1995/2006 Art. 1.44 

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(cid:208) 1605/2002 (adapted) 
(cid:206)1 1605/2002 
(cid:214) new 

SECTION 4 

PAYMENT OF EXPENDITURE 

Article 81 

⌦ Types of payments ⌫ 

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

(a) payment of the entire amount due; 

(b) payment of the amount due in any of the following ways: 

(i) pre-financing, which may be divided into a number of payments (cid:214) after the 
signature of the delegation agreement, the contract or grant agreement or after 
the reception of the grant decision  ; 

(ii) one or more interim payments (cid:214) as a counterpart of a partial execution of 
the action  ; 

(iii)  payment  of  the  balance  of  the  amounts  due  (cid:214) where  the  action  is 
completely executed . 

2.  A  distinction  shall  be  made  in  the  accounts  ⌦ budgetary  accounting ⌫  between  the 
different types of payment referred to in paragraph 1 at the time they are made. 

(cid:216) new 

3. The accounting rules referred to in Article 133 shall include the rules for clearing the pre-
financing in the accounts and for the acknowledgment of the eligibility of costs. 

4. Pre-financing payments shall be cleared regularly by the responsible authorising officer. To 
this  effect  appropriate  provisions  shall  be  included  in  the  contracts,  grant  decisions  and 
agreements  as  well  as  the  delegation  agreements  entrusting  implementation  tasks  to  the 
entities and persons referred to in points (a) to (h) of point (2) of the first paragraph of Article 
53. 

5. Further instalments made to beneficiaries of grants which take the form of a lump sum shall 
be treated as interim payments. 

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(cid:208) 1605/2002 (adapted) 

Article 82 

⌦ Payment limited to funds available ⌫ 

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

SECTION 5 

TIME LIMITS FOR EXPENDITURE OPERATIONS 

Article 83 

⌦ Time limits for expenditure ⌫ 

The validation, authorisation and payment of expenditure must be completed within the time 
limits  laid  down  in  the  implementing  rules,  which  shall  also  specify  the  circumstances  in 
which creditors paid late are entitled to receive default interest charged to the line from which 
the principal was paid. 

CHAPTER 7 

IT SYSTEMS 

Article 84 

⌦ Electronic management of operations ⌫ 

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

(cid:216) new 

Article 84a 

Subject to the prior agreement of the institutions concerned, any transmission of documents 
between institutions may be done by electronic means. 

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(cid:208) 1605/2002 (adapted) 

CHAPTER 8 

INTERNAL AUDITOR 

Article 85 

⌦ Appointment of the internal auditor ⌫ 

Each  institution  shall  establish  an  internal  auditing  function  which  must  be  performed  in 
compliance  with  the  relevant  international  standards.  The  internal  auditor  appointed  by  the 
institution  shall  be  answerable  to  the  latter  for  verifying  the  proper  operation  of  budgetary 
implementation  systems  and  procedures.  The  internal  auditor  may  not  be  either  authorising 
officer or accounting officer. 

Article 86 

⌦ Powers and duties of the internal auditor ⌫ 

1.  The  internal  auditor  shall  advise  his/her  institution  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: 

(a) for 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; 

(b)  for  assessing  the  efficiency  and  effectiveness  of  the  internal  control  and  audit 
systems applicable to every budgetary implementation operation. 

(cid:208) 1995/2006 Art. 1.45 

2.  The  internal  auditor  shall  perform  his/her  duties  on  all  the  institution's  activities  and 
departments.  He/She  shall  enjoy  full  and  unlimited  access  to  all  information  required  to 
perform  his  duties,  if  necessary  on  the  spot,  including  in  the  Member  States  and  in  third 
countries. 

(cid:208) 1605/2002 

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(cid:208) 1605/2002 Art. 60(7), 2nd 
subparagraph, 2nd sentence 
(adapted) 

The internal auditor shall take note of the annual report ⌦ of the authorising officers ⌫ and 
any other pieces of information identified. 

(cid:208) 1605/2002 (adapted) 

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

4. Each year the institution shall forward a report to the discharge authority summarising ⌦ a 
summary ⌫ the number and type of internal audits carried out, the recommendations made 
and the action taken on those recommendations. 

Article 87 

⌦ Independence of the internal auditor ⌫ 

Special rules applicable to the internal auditor shall be laid down by the institution and shall 
be such as to guarantee that he/she is totally independent in the performance of his/her duties 
and to establish his responsibility. 

If the internal auditor is a member of staff, he shall assume responsibility as laid down in the 
Staff Regulations and spelt out in the implementing rules. 

(cid:208) 1995/2006 Art. 1.46 

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(cid:208) 1605/2002 

TITLE V 

PROCUREMENT 

CHAPTER 1 

GENERAL PROVISIONS 

SECTION 1 

SCOPE AND AWARD PRINCIPLES 

(cid:208) 1995/2006 Art. 1.47 (adapted) 
(cid:214) new 

Article 88 

⌦ Definition of public contracts ⌫ 

1.  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 
Articles 104 and 167, in order to obtain, against payment of a price paid in whole or in part 
from the budget, the supply of movable or immovable assets, the execution of works or the 
provision of services. 

These contracts comprise: 

(a) contracts for the purchase or rental of a building (cid:214) contracts ; 

(b) supply contracts; 

(c) works contracts; 

(d) service contracts. 

2. 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. 

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3. This Title does not relate ⌦ apply ⌫ to grants, without prejudice to Articles 93 to 96 (cid:214) , 
or  to  service  contracts  concluded  between  the  Commission,  on  the  one  hand,  and  the 
European  Investment  Bank,  the  European  Investment  Fund  or  any  other  subsidiary  of  the 
European Investment Bank, on the other hand  . 

(cid:208) 1605/2002 (adapted) 

Article 89 

⌦ Principles applicable to public contracts ⌫ 

1.  All  public  contracts  financed  in  whole  or  in  part  by  the  budget  shall  comply  with  the 
principles of transparency, proportionality, equal treatment and non-discrimination. 

2. All procurement contracts shall be put out to tender on the broadest possible base, except 
when use is made of the negotiated procedure referred to in Article 91(1)(d). 

Contracting authorities may not use framework contracts improperly or in such a way that the 
purpose or effect is to prevent, restrict or distort competition. 

(cid:208) 1995/2006 Art. 1.48 

(cid:208) 1605/2002 (adapted) 

SECTION 2 

PUBLICATION 

Article 90 

⌦ Publication of public contracts ⌫ 

1. All contracts exceeding the  thresholds provided for in Article 105 or Article 167 shall be 
published in the Official Journal of the European Union. 

(cid:208) 1995/2006 Art. 1.49(a) 

Contract notices shall be published in advance except in the cases referred to in Article 91(2) 
of  this  Regulation,  as  specified  in  the  implementing  rules,  and  for  the  service  contracts 
covered  by  Annex IIB  to  Directive 2004/18/EC  of  the  European  Parliament  and  of  the 

(cid:208) 1995/2006 Art. 1.49(a) 

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Council of 31 March 2004 on the coordination of procedures for the award of public works 
contracts, public supply contracts and public service contracts29. 

Publication of certain information after the contract has been awarded may be dropped where 
it would hinder application of the law, would be contrary to the public interest or would harm 
the  legitimate  business  interests  of  public  or  private  undertakings  or  could  distort  fair 
competition between them. 

(cid:208) 1605/2002 

2. Contracts with a value below the thresholds provided for in Article 105 or Article 167 and 
the service contracts referred to in Annex IIB to Directive 2004/18/EC shall be advertised by 
appropriate means, as specified in the implementing rules. 

(cid:208) 1995/2006 Art. 1.49(b) 

(cid:208) 1605/2002 (adapted) 

SECTION 3 

PROCUREMENT PROCEDURES 

Article 91 

⌦ Procurement procedures ⌫ 

1. Procurement procedures shall take one of the following forms: 

(cid:208) 1995/2006 Art. 1.50(a) 
(cid:214) new 

(a) the open procedure; 

(b) the restricted procedure; 

(c) contests; 

(d) the negotiated procedure; 

(e) the competitive dialogue. 

Where  a  public  contract  or  a  framework  contract  is  of  interest  to  two  or  more  institutions, 
executive agencies or bodies referred to in Article 185 (cid:214) and 185a , and whenever there is 

29 

OJ L 134, 30.4.2004, p. 114. Directive as last amended by Commission Regulation (EC) No 2083/2005 
(OJ L 333, 20.12.2005, p. 28). 

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a possibility for realising efficiency gains, the contracting authorities concerned shall seek to 
carry out the procurement procedure on an interinstitutional basis. 

Where a public contract or framework contract is necessary for the implementation of a joint 
action  between  one  an  institution  and  a  contracting  authority  from  a  Member  State,  the 
procurement  procedure  may  be  carried  out  jointly  by  the  institution  and  this  contracting 
authority, as specified in the implementing rules. 

2. For contracts where the value exceeds the thresholds provided for in Article 105 or Article 
167, use of the negotiated procedure shall be authorised only in the cases provided for in the 
implementing rules. 

(cid:208) 1605/2002 

3.  The  thresholds  below  which  the  contracting  authority  may  either  use  a  negotiated 
procedure or, by way of derogation from the first subparagraph of Article 88(1), simply pay 
costs against invoices shall be determined in the implementing rules. 

(cid:208) 1605/2002 

(cid:208) 1995/2006 Art. 1.50(c) 
(adapted) 

4. The implementing rules shall define the procurement procedure, referred to in paragraph 1, 
applicable  to  service  contracts  covered  by  Annex IIB  to  Directive 2004/18/EC  and  to 
contracts which are declared to be secret, whose performance must be accompanied by special 
security measures, or when the protection of essential interests of the Union or the European 
Union so requires. 

(cid:208) 1995/2006 Art. 1.51 (adapted) 

Article 92 

⌦ Content of tender documents ⌫ 

⌦ Tender ⌫  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. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.52(a) 
(cid:214) new 

Article 93 

⌦ Exclusion criteria applicable for participation in tenders ⌫ 

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1. (cid:206)1 Candidates or tenderers shall be excluded from participation in procurement procedures 
if : 

(a) 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; 

(b)  they  (cid:214) or  persons  having  powers  of  representation,  decision  making  or  control 
over  them   have  been  convicted  of  an  offence  concerning  their  professional 
conduct by a judgment (cid:214) of a competent authority of a Member State  which has 
the force of res judicata; 

(c)  they  have  been  guilty  of  grave  professional  misconduct  proven  by  any  means 
which the contracting authority can justify (cid:214) including by decisions of the EIB and 
international organisations ; 

(d)  they  have  not  fulfilled  (cid:214) they  are  not  in  compliance  with  their   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  (cid:214) or  persons  having  powers  of  representation,  decision  making  or  control 
over them  have been the subject of a judgment which has the force of res judicata 
in  a  criminal  organisation  (cid:214) ,  money 
for  fraud,  corruption, 
laundering   or  any  other  illegal  activity,  where  such  an  illegal  activity  is 
detrimental to the Union's financial interests; 

involvement 

(f) they are currently subject to an administrative penalty referred to in Article 96(1). 

(cid:208) 1995/2006 Art. 1.52(a) 

(cid:208) 1995/2006 Art. 1.52(a) 
(adapted) 

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. 

Points  (b)  and  (e)  shall  not  apply  when  the  candidates  or  tenderers  can  demonstrate  that 
adequate  measures  have  been  adopted  against  the  persons  having  powers  of  representation, 
decision making or control over them who are subject to the judgement referred to in points 
(b) or (e). 

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(cid:216) new 

2.  In  case  of  a  negotiated  procedure  where,  for  technical  or  artistic  reasons,  or  for  reasons 
connected  with  the  protection  of  exclusive  rights,  the  contract  can  be  awarded  only  to  a 
particular economic operator, the institution may decide not to exclude the economic operator 
at  stake  on  the  grounds  referred  to  in  paragraph  1,  points  (a),  (c)  and  (d)  if  this  is 
indispensable in order to ensure the continuity of service of the institution. In this case, it shall 
motivate its decision. 

(cid:208) 1995/2006 Art. 1.52(b) 
(cid:214) new 

23.  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, as specified in the implementing rules. 

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 (cid:214) and certify that they are not in one of the situations referred to in paragraph 
1  ; 

(b) where subcontracting is envisaged, certify that the subcontractor is not in one of 
the situations referred to in paragraph 1. 

34. The implementing rules shall determine the maximum period during which the situations 
referred  to  in  paragraph 1  give  rise  to  the  exclusion  of  candidates  or  tenderers  from 
participation in a procurement procedure. The maximum period shall not exceed 10 years. 

(cid:208) 1995/2006 Art. 1.52(c) 

(cid:208) 1995/2006 Art. 1.53 (adapted) 

Article 94 

⌦ Exclusion criteria applicable during procurement procedure ⌫ 

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

(a) are subject to a conflict of interest; 

(b)  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; 

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(c) find themselves in one of the situations of exclusion, referred to in Article 93(1), 
for this procurement procedure. 

Article 95 

⌦ Central database of exclusions ⌫ 

1.  A  central  database  shall  be  set  up  and  operated  by  the  Commission  in  compliance  with 
Community  rules  on  the  protection  of  personal  data.  The  database  shall  contain  details  of 
candidates  and  tenderers  which  is  in  one  of  the  situations  referred  to  in  Articles 93,  94, 
96(1)(b) and (2)(a). It shall be common to the institutions, executive agencies and the bodies 
referred to in Article 185. 

2. The authorities of the Member States and third countries as well as the bodies, other than 
those  referred  to  in  paragraph 1,  participating  in  the  implementation  of  the  budget  in 
accordance with Articles 53 and 54, shall communicate to the competent authorising officer 
information  on  candidates  and  tenderers  which  are  in  one  of  the  situations  referred  to  in 
Article 93(1) (e), where the conduct of the operator concerned was detrimental to the Union's 
financial  interest.  The  authorising  officer  shall  receive  this  information  and  request  the 
accounting officer to enter it into the database. 

The  authorities  and  bodies  mentioned  in  the  first  subparagraph  shall  have  access  to  the 
information contained in the database and may take it into account, as appropriate and on their 
own  responsibility  for  the  award  of  contracts  associated  with  the  implementation  of  the 
budget. 

(cid:216) new 

3. The European Central Bank, the European Investment Bank and the European Investment 
Fund  shall  have  access  to  the  information  contained  in  the  database  for  the  purpose  of 
protecting  their  own  funds  and  may  take  it  into  account,  as  appropriate  and  on  their  own 
responsibility for the award of contracts in accordance with their procurement rules. 

They  shall  communicate  to  the  Commission  information  on  candidates  and  tenderers  which 
are in one of the situations referred to in Article 93(1)(c), where the conduct of the operators 
concerned was detrimental to the Union' financial interests. 

34.  Transparent  and  coherent  criteria  to  ensure  proportionate  application  of  the  exclusion 
criteria  shall  be  laid  down  in  the  implementing  rules.  The  Commission  shall  define 
standardised procedures and technical specifications for the operation of the database. 

(cid:208) 1995/2006 Art. 1.53  

(cid:208) 1995/2006 Art. 1.53 (adapted) 
(cid:214) new 

Article 96 

⌦ Administrative and financial penalties ⌫ 

EN 

111 

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1.  The  contracting  authority  may  impose  administrative  or  financial  penalties  on  the 
following: 

(a)  (cid:214) contractors    candidates  or  tenderers  in  the  cases  referred  to  in  point (b)  of 
Article 94; 

(b)  contractors  who  have  been  declared  to  be  in  serious  breach  of  their  obligations 
under contracts covered by the budget. 

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  budget,  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. Decisions or summary of decisions indicating the name of the economic operator, a short 
description of the facts, the duration of the exclusion or the amount of the financial penalties 
may be published by the institution. 

(cid:216) new 

(cid:208) 1995/2006 Art. 1.54 (adapted) 

Article 97 

⌦ Award criteria for contracts ⌫ 

1. Contracts shall be awarded on the basis of award criteria applicable to the content of the 
tender  after  the  capability  of  economic  operators  not  excluded  under  Articles 93, 94 
and 96(2)(a)  has  been  checked  in  accordance  with  the  selection  criteria  contained  in  the 
documents relating to the call for tenders. 

2.  Contracts  shall  be  awarded  by  the  automatic  award  procedure  or  by  the  best-value-for-
money procedure. 

(cid:208) 1605/2002 (adapted) 

Article 98 

⌦ Submission of tenders ⌫ 

EN 

112 

   EN 

 
 
 
 
 
 
 
 
(cid:208) 1995/2006 Art. 1.55(a) 

1.  The  arrangements  for  submitting  tenders  shall  be  such  as  to  ensure  that  there  is  genuine 
competition  and  that  the  contents  of  tenders  remain  confidential  until  they  are  all  opened 
simultaneously. 

2. If deemed appropriate and proportionate, the contracting authority may require tenderers, as 
provided in the implementing rules, to lodge a security in advance as a guarantee that the bids 
made will not be withdrawn. 

3. With the exception of the ⌦ low value ⌫ contracts involving small amounts referred to 
in Article 91(3), applications and tenders shall be opened by an opening board appointed for 
this purpose. Any tender or application declared by the board not to satisfy the conditions laid 
down shall be rejected. 

(cid:208) 1605/2002 (adapted) 

4.  All  requests  to  participate  or  tenders  declared  by  the  opening  board  as  satisfying  the 
conditions laid down shall be evaluated, on the basis of the criteria provided in the documents 
relating to the call for tenders, in order to propose to the contracting authority the award of the 
contract or to proceed with an electronic auction. 

(cid:208) 1995/2006 Art. 1.55(b) 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 99 

⌦ Principles of equal treatment and transparency ⌫ 

While the procurement procedure is under way, all contacts between the contracting authority 
and  candidates  or  tenderers  must  satisfy  conditions  ensuring  transparency  and  equal 
treatment. They may not lead to amendment of the conditions of the contract or the terms of 
the original tender. 

Article 100 

⌦ The award decision ⌫ 

1. The authorising officer shall decide to whom the contract is to be awarded, in compliance 
with  the  selection  and  award  criteria  laid  down  in  advance  in  the  documents  relating  to  the 
call for tenders and the procurement rules. 

2.  The  contracting  authority  shall  notify  all  candidates  or  tenderers  whose  applications  or 
tenders are rejected of the grounds on which the decision was taken, and all tenderers whose 
tenders are admissible (cid:214) who meet the exclusion and the selection criteria  and who make a 

EN 

113 

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request in writing of the characteristics and relative advantages of the successful tender and 
the name of the tenderer to whom the contract is awarded. 

However, certain details need not be disclosed where disclosure would hinder application of 
the  law,  would  be  contrary  to  the  public  interest  or  would  harm  the  legitimate  business 
interests  of  public  or  private  undertakings  or  could  distort  fair  competition  between  those 
undertakings. 

Article 101 

⌦ Cancellation of the procurement procedure ⌫ 

The contracting authority may, before the contract is signed, either abandon the procurement 
or cancel the award procedure without the candidates or tenderers being entitled to claim any 
compensation. 

The  decision  must  be  substantiated  and  be  brought  to  the  attention  of  the  candidates  or 
tenderers. 

SECTION 4 

GUARANTEES AND CONTROL 

(cid:208) 1995/2006 Art. 1.56 (adapted) 
(cid:214) new 

Article 102 

⌦ Guarantees ⌫ 

1. The contracting authority shall require contractors to lodge a guarantee in advance in the 
cases specified in the implementing rules. 

2.  The  contracting  authority  may,  if  it  deems  it  appropriate  and  proportionate,  require 
contractors to lodge such a guarantee in order to: 

(a) ensure full performance of the contract; (cid:214) or  

(b) limit the financial risks connected with payment of pre-financing. 

Article 103 

⌦ Errors, irregularities and fraud in the procedure ⌫ 

Where the award procedure proves to have been subject to substantial errors, irregularities or 
fraud,  the  institutions  (cid:214) contracting  authority   shall  suspend  the  procedure  and  may  take 
whatever measures are necessary, including the cancellation of the procedure. 

EN 

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Where, after the award of the contract, the award procedure or the performance of the contract 
prove  to  have  been  subject  to  substantial  errors,  irregularities  or  fraud,  the  institutions 
(cid:214) contracting authority  may, depending on the stage reached in the procedure, refrain from 
concluding  the  contract  or  suspend  performance  of  the  contract  or,  where  appropriate, 
terminate the contract. 

Where  such  errors,  irregularities  or  fraud  are  attributable  to  the  contractor,  the  institutions 
(cid:214) contracting  authority   may  in  addition  refuse  to  make  payments,  may  recover  amounts 
already paid or may terminate all the contracts concluded with this contractor, in proportion to 
the seriousness of the errors, irregularities or fraud. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.57 

CHAPTER 2 

PROVISIONS APPLICABLE TO CONTRACTS AWARDED BY THE COMMUNITY 
INSTITUTIONS ON THEIR OWN ACCOUNT 

Article 104 

⌦ The contracting authority ⌫ 

The  Community  institutions  shall  be  deemed  to  be  contracting  authorities  in  the  case  of 
contracts  awarded  on  their  own  account.  (cid:206)1 They  shall  delegate,  in  accordance  with 
Article 59, the necessary powers for the exercise of the function of contracting authority . 

(cid:208) 1995/2006 Art. 1.58 (adapted) 

Article 105 

⌦ Thresholds applicable ⌫ 

1.  Subject  to  Title IV  of  Part Two  of  this  Regulation,  Directive 2004/18/EC  lays  down  the 
thresholds which determine: 

(a) the publication arrangements referred to in Article 90; 

(b) the choice of procedures referred to in Article 91(1); 

(c) the corresponding time limits. 

2.  Subject  to  exceptions  and  conditions  specified  in  the  implementing  rules,  the  contracting 
authority shall not, in the case of contracts covered by Directive 2004/18/EC, sign the contract 
or framework contract with the successful tenderer until a period of standstill has elapsed. 

EN 

115 

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(cid:208) 1605/2002 (adapted) 

Article 106 

⌦ Rules on tender participation ⌫ 

Participation  in  tendering  procedures  shall  be  open  on  equal  terms  to  all  natural  and  legal 
persons coming within the scope of the Treaties and to all natural and legal persons in a third 
country  which  has  with  the  European  Union  a  special  agreement  in  the  field  of  public 
procurement under the conditions laid down in that agreement. 

Article 107 

⌦ WTO procurement rules ⌫ 

Where the Multilateral Agreement on Government Procurement concluded within the World 
Trade Organisation applies, the contracts shall also be open to nationals of the States which 
have ratified this agreement, under the conditions laid down in that agreement. 

TITLE VI 

GRANTS 

(cid:208) 1995/2006 Art. 1.59 

CHAPTER 1 

SCOPE AND FORM OF GRANTS 

(cid:208) 1605/2002 (adapted) 

Article 108 

⌦ Scope of grants ⌫ 

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

(a) either an action intended to help achieve an objective forming part of a European 
Union policy; 

(b) or the functioning of a body which pursues an aim of general European interest or 
has an objective forming part of a European Union policy ⌦ (operating grants) ⌫. 

EN 

116 

   EN 

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

(cid:208) 1995/2006 Art. 1.60(a) 

2. The following shall not constitute grants within the meaning of this Title: 

(cid:208) 1995/2006 Art. 1.60(b) 
(adapted) 
(cid:214) new 

(a) expenditure on the members and staff of the institutions and contributions to the 
European schools; 

(b)  loans,  risk-bearing  instruments  of  the  Community  or  Community  financial 
contributions  to  such  instruments,  the  public  contracts  referred  to  in  Article 88  and 
aid paid as macro financial assistance and budgetary support; 

(c)  equity  investments  on  the  basis  of  the  private  investor  principle,  quasi-equity 
financing and (cid:214) financial instruments as referred to in Title VIb of Part One, as well 
as  shareholdings or equity participations in international financial institutions such 
as  the  European  Bank  for  Reconstruction  and  Development (EBRD)  or  specialised 
Community bodies such as the European Investment Fund (EIF); 

(d)  contributions  paid  by  the  Union  as  subscriptions  to  bodies  of  which  they  are 
members; 

(e)  expenditure  implemented  as  part  of  shared,  decentralised  or  joint  (cid:214) under 
indirect  management within the meaning of Articles 53 to 53d ⌦ c ⌫; 

(f)  payments  made  to  bodies  to  which  implementation  tasks  are  delegated  in 
accordance with Article 54(2) and contributions made by virtue of their constitutive 
basic act to bodies set up by the legislative authority (cid:214) under Articles 55 ; 

(g) expenditure relating to fisheries markets referred to in Article 3(2) (f) of Council 
Regulation  (EC) No 1290/2005  of  21 June  2005  on  the  financing  of  the  common 
agricultural policy30; 

(h) repayment of travel and subsistence expenses incurred by, or where appropriate 
any other indemnities paid to, persons invited or mandated by the institutions. 

(cid:214) (i) prizes given as rewards for a contest, to which Title VIa of Part One applies.  

3. The following shall be assimilated to grants and shall be governed, as appropriate, by this 
Title: 

(cid:208) 1995/2006 Art. 1.60(c) 

30 

OJ  L 209,  11.08.2005,  p. 1.  Regulation  as  amended  by  Regulation  (EC)  No 320/2006  (OJ  L 58, 
28.2.2006, p. 42). 

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117 

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(a) the benefit deriving from an interest subsidy on certain loans; 

(b)  equity  investments  or  participations  other  than  those  referred  to  in  point (c)  of 
paragraph 2. 

43. Each institution may award grants for communication activities where, for duly justified 
reasons, the use of public procurement procedures is not appropriate. 

(cid:208) 1995/2006 Art. 1.61 (adapted) 
(cid:214) new 

Article 108a 

⌦ Forms of grants ⌫ 

1. Grants may take any of the following forms: 

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

(b) lump sums; 

(cid:214) (bb) standard scale of unit costs;  

(c) flat-rate financing; 

(d) a combination of the forms referred to in points (a), (b), (cid:214) (bb)  and (c). 

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

(cid:208) 1995/2006 Art. 1.62 

CHAPTER 2 

PRINCIPLES 

(cid:208) 1995/2006 Art. 1.63 (adapted) 

Article 109 

⌦ General principles applicable to grants ⌫ 

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

⌦ 2. 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 implementing rules, 
for financing be exceeded. 

EN 

118 

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⌦ 3. Grants must involve co-financing without prejudice  to the  specific rules laid down in 
Title IV of Part Two. ⌫ 

⌦ Grants shall not exceed an overall ceiling expressed in terms of an absolute value which is 
established on the basis of estimated eligible costs. ⌫ 

⌦ On no account may tThe grant shall not exceed the eligible costs. ⌫ 

23a.  Grants  may  not  have  the  purpose  or  effect  of  producing  a  profit  for  ⌦ within  the 
framework of the action or the work programme of ⌫ the beneficiary. 

3. Paragraph 2 ⌦ The first subparagraph ⌫ shall not apply to the following: 

⌦ (a)  actions  the  objective  of  which  is  the  reinforcement  of  the  financial  capacity  of  a 

beneficiary or the generation of an income; ⌫ 

(ab) 

study, research or training scholarships paid to natural persons; 

(b) 

(c) 

prizes awarded following contests; 

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

(cid:208) 1525/2007 Art. 1 

4. If a political party at European level realises a surplus of income over expenditure at the 
end of a financial year for which it received an operating grant, part of that surplus up to 25 % 
of  the  total  income  for  that  year  may,  by  derogation  from  the  no-profit  rule  laid  down  in 
paragraph 2, be carried over to the following year provided that it is used before the end of the 
first quarter of this following year. 

For  the  purpose  of  verifying  compliance  with  the  no-profit  rule,  the  own  resources,  in 
particular donations and membership fees, aggregated in the annual operations of a political 
party  at  European  level,  which  exceed  15 %  of  the  eligible  costs  to  be  borne  by  the 
beneficiary, shall not be taken into account. 

The  second  subparagraph  shall  not  apply  if  the  financial  reserves  of  a  political  party  at 
European level exceed 100 % of its average annual income. 

(cid:216) new 

5. For lumps sums, standard scale of unit costs and flat rate financing, the no-profit and the 
co-financing  rules  laid  down  in  paragraphs  (3)  and  (3a)  shall  be  reasonably  ensured  at  the 
time of their determination or at the stage of the evaluation of the grant application. 

6.  Articles  114,  115  and  116  shall  not  apply  to  grants  awarded  to  the  European  Investment 
Bank, the European Investment Fund or any other subsidiary of the Bank. 

EN 

119 

   EN 

 
 
 
(cid:208) 1605/2002 (adapted) 

Article 110 

⌦ Transparency ⌫ 

(cid:208) 1995/2006 Art. 1.64 (adapted) 
(cid:214) new 

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 a basic act as recipient of a grant. 

The  first  subparagraph  shall  not  apply  to  crisis  management  aid  (cid:214) ,  civil  protection 
operations  and humanitarian aid operations. 

2.  All  grants  awarded  in  the  course  of  a  financial  year  shall  be  published  annually  (cid:214) in 
accordance  with  Article 30 (3)  and  30(4)   with  due  observance  of  the  requirements  of 
confidentiality and security. 

(cid:208) 1605/2002 
(cid:214) new 

(cid:208) 1995/2006 Art. 1.65 (adapted) 
(cid:214) new 

Article 111 

⌦ Principle of non-cumulative award ⌫ 

Each  action  may  give  rise  to  the  award  of  only  one  grant  from  the  budget  to  any  one 
beneficiary, except where the relevant basic acts authorise otherwise. 

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

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 the budget. 

Article 112 

⌦ Retroactive award ⌫ 

EN 

120 

   EN 

 
 
 
 
 
1. A grant may be awarded for an action which has already begun only where 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 as provided 
for  in  the  basic  act  or  in  the  case  of  (cid:214) extreme  urgency   expenditure  necessary  for  the 
proper  implementation  of  crisis  management  aid  (cid:214) ,  civil  protection  operations   and 
humanitarian aid operations as provided for in the implementing rules. 

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 
budgetary year. Costs eligible for financing may neither have been incurred before the grant 
application was lodged nor before the start of the beneficiary's budgetary year. 

(cid:208) 1605/2002 (adapted) 

Article 113 

⌦ Principle of degressive award ⌫ 

1. The grant may not finance the entire costs of the action, subject to Title IV of part two. 

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

(cid:208) 1995/2006 Art. 1.66 
(cid:214) new 

2.  Unless  otherwise  specified  in  the  basic  act  (cid:214) or  in  the  financing  decision  for  grants 
awarded  under  Article  49(6)  point  (d)   with  regard  to  bodies  pursuing  an  objective  of 
general  European  interest,  when  operating  grants  are  renewed  for  a  period  exceeding  four 
years, they shall be gradually decreased after the fourth year. not apply to grants taking one of 
the form referred to in points (b) and (c) of Article 108a(1). 

(cid:208) 1605/2002 

CHAPTER 3 

AWARD PROCEDURE 

(cid:208) 1995/2006 Art. 1.67 (adapted) 
(cid:214) new 

Article 114 

⌦ Applications for grants ⌫ 

EN 

121 

   EN 

 
 
 
 
 
1. Grant applications shall be submitted in writing. 

2. Grant applications shall be eligible if submitted by the following: 

(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  ⌦ the 
behalf of the entity ⌫ behalf and assume financial liability (cid:214) offer guarantee for the 
protection  of  the  Union  financial  interests  equivalent  to  that  offered  by  legal 
persons  ; 

(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.  (cid:214) Articles  93  to  96  shall  apply  by  analogy  to  grants   Grants  may  not  be  awarded  to 
applicants who are, at the time of a grant award procedure, in one of the situations referred to 
in Articles 93(1), 94 and 96(2)(a). 

Applicants  must  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 value grants, as specified in the implementing rules., ⌦ for: ⌫ 

very low valued grants, or;  

(cid:216) new 

when such certification has recently been provided in another award procedure, or; 

when there is a material impossibility to provide such certification. 

(a) 

(b) 

(c) 

(cid:208) 1995/2006 Art. 1.67 

4.  Administrative  and  financial  penalties  which  are  effective,  proportionate  and  dissuasive 
may be imposed on applicants by the authorising officer, in accordance with Article 96. 

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. 

(cid:208) 1605/2002 (adapted) 

Article 115 

⌦ Selection and award criteria ⌫ 

1. 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. 

EN 

122 

   EN 

 
 
 
 
 
 
2. 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 116 

⌦ Evaluation procedure ⌫ 

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

(cid:208) 1995/2006 Art. 1.68 

(cid:208) 1605/2002 

2. 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. 

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

CHAPTER 4 

PAYMENT AND CONTROL 

Article 117 

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. 

(cid:208) 1995/2006 Art. 1.69 (adapted) 

Article 118 

⌦ Pre-financing guarantee ⌫ 

1.  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. 

2. The authorising officer shall require the beneficiary to lodge such a guarantee in advance in 
the cases specified in the implementing rules. 

EN 

123 

   EN 

 
 
 
 
(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 119 

⌦ Payment of grants and controls ⌫ 

1.  The  amount  of  the  grant  shall  not  become  final  until  after  the  institution  (cid:214) authorising 
officer  responsible   has  accepted  the  final  reports  and  accounts,  without  prejudice  to 
subsequent checks by the institution. 

(cid:208) 1995/2006 Art. 1.70 
(cid:214) new 

2. Should the beneficiary fail to comply with his obligations, the grant shall be suspended or 
reduced  or  terminated  in  the  cases  provided  for  by  the  implementing  rules  (cid:214) Where 
substantial  errors,  irregularities  or  fraud  are  committed  during  the  award  procedure  or  the 
implementation  of  the  grant  and   after  the  beneficiary  has  been  given  the  opportunity  to 
make his observations (cid:214) , the responsible authorising officer may take any of the measures 
referred to in Article 103 . 

(cid:216) new 

3. 
Where  controls  or  audits  demonstrate  that  recurrent  errors  exist  for  one  beneficiary 
which  also  have  an impact  on non-audited projects in which that beneficiary participates or 
has participated, the authorising officer may extend the findings to those non audited projects 
which  may  still  be  audited  in  accordance  with  the  grant  agreement  and  request  the 
reimbursement of the related amount.  

The  beneficiary  may,  within  an  adversarial  procedure,  challenge  the  correction  applied  by 
demonstrating that the calculation of corrections is erroneous and submitting new calculation. 

(cid:208) 1605/2002 

CHAPTER 5 

IMPLEMENTATION 

(cid:208) 1995/2006 Art. 1.71 (adapted) 
(cid:214) new 

Article 120 

⌦ Subcontracting and grant redistribution ⌫ 

EN 

124 

   EN 

 
 
 
 
 
 
1.  Where  implementation  of  the  action  (cid:214) ,  or  the  work  programme  in  case  of  operating 
grant,   requires  the  award  of  procurement  contracts  by  the  beneficiary,  the  relevant 
procedures shall be as set out in the implementing rules. 

2.  Where  implementation  of  the  action  (cid:214) or  the  work  programme   requires  financial 
support  to  be  given  to  third  parties,  the  beneficiary  of  a  Community  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; 

(a) 

before  awarding  the  grant,  the  responsible  authorising  officer  has  verified  that  the 
beneficiary offers adequate guarantees as regards the recovery of amounts due to the 
Commission; 

(cid:216) new 

(cid:208) 1995/2006 Art. 1.71 (adapted) 
(cid:214) new 

(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 ⌦ in 
order to avoid the exercise of ⌫ discretion ⌦ by the beneficiary ⌫ ; 

(c) 

the amounts concerned are small ⌦ , as defined in the Implementing Rules ⌫ . 

For the purpose of point (c), the maximum amount of financial support that can be paid to a 
third party by a beneficiary shall be determined in the implementing rules. 

3. Each grant decision or agreement shall provide expressly for the Commission and the Court 
of Auditors to exercise their powers of control, on documents and on the premises (cid:214) and on 
information,  even  stored  on  electronic  media   ,  over  all  contractors  and  subcontractors 
⌦ third parties ⌫ who have received Community ⌦ Union ⌫ funds. 

(cid:216) new 

TITLE VIA 

PRIZES 

Article 120a 

Definition 

For  the  purposes  of  this  Regulation,  "prizes"  shall  mean  financial  contributions  awarded 
following contests.  

EN 

125 

   EN 

 
 
 
 
 
Article 120a-i 

General rules 

1. 

Prizes are subject to the principles of transparency and equal treatment. 

Prizes shall be part of the work programme referred to in Article 110 and adopted by 

2. 
the Commission. The provisions of Article 110(2) are applicable.  

The rules of the contest shall at least establish the award conditions, the criteria, the amount of 
the prize and the modality of payment.  

Prizes may not be awarded directly without a contest and shall be subject to publication in the 
same way as call for proposals. 

3. 
Prizes shall be awarded by the responsible authorising officer or by a jury. They shall 
be free to decide whether or not to award prizes depending on their appraisal of the quality of 
the entries by reference to the rules of the contest. 

4. 

The amount of the prize shall not be linked to the costs incurred by the recipient. 

Where prizes exceeding 500.000 Euro are awarded by a beneficiary of a grant or by a 

5. 
contractor, their award conditions and criteria shall be approved by the Commission. 

TITLE VIB 

FINANCIAL INSTRUMENTS 

Article 120b 

Definition and scope 

1.  For  the  purpose  of  this  Regulation,  "financial  instruments"  shall  mean  EU measures  of 
financial support provided from the budget of the Union in order to address a specific policy 
objective by way of loans, guarantees, equity or quasi-equity investments or participations, or 
other risk-bearing instruments, possibly combined with grants. 

2.  The  provisions  of  this  Title  shall  also  apply  to  elements  directly  related  to  financial 
instruments, including technical assistance. 

3. The Commission may implement financial instruments in direct management mode, or in 
indirect management mode by entrusting tasks to the entities referred to in Article 53 (1) point 
2 (c) and (d). 

Article 120c 

Principles applicable to financial instruments 

EN 

126 

   EN 

 
1.  Financial  instruments  shall  be  provided  to  final  recipients  of  Union  funds  in  accordance 
with sound financial management, transparency and equal treatment and in accordance with 
the objectives established in the basic act that applies to those financial instruments. 

2. Without prejudice to points 4 and 5 of article 46 (1), the budgetary expenditure linked to a 
financial instrument shall be kept within the relevant budgetary commitment made for it. 

3. Financial intermediaries involved in the execution of financial operations under a financial 
instrument shall comply with relevant standards on the prevention of money laundering and 
fight against terrorism. They shall not be established in territories whose jurisdictions do not 
co-operate  with  the  Union  in  relation  to  the  application  of  internationally  agreed  tax 
standards. 

4.  Each  agreement  between  an  entity  referred  to  in  Article  53(1)  point  2  (c)  and  (d)  and  a 
financial intermediary referred to in paragraph 3 shall provide expressly for the Commission 
and  the  Court  of  Auditors  to  exercise  their  powers  of  control,  on  documents  and  on  the 
premises and on information, even stored on electronic media, over all third parties who have 
received Union funds. 

(cid:208) 1605/2002 (adapted) 

TITLE VII 

PRESENTATION OF THE ACCOUNTS AND ACCOUNTING 

CHAPTER 1 

PRESENTATION OF THE ACCOUNTS 

Article 121 

⌦ Structure of the Community accounts ⌫ 

The Community accounts shall comprise: 

(cid:208) 1995/2006 Art. 1.72(a) 
(adapted) 
(cid:214) new 

(a) 

(cid:214) the  consolidated  financial  statements,  which  present  the  consolidation  of  the 
financial information contained in  the financial statements of the institutions as set 
out in Article 126 (cid:214) financed by the Union's budget  , those of the bodies referred 
to  in  Article 185  and  of  other  bodies  whose  accounts  must  be  consolidated  in 
accordance with Community ⌦ Union ⌫ accounting rules; 

EN 

127 

   EN 

 
 
 
(cid:208) 1605/2002 
(cid:214) new 

(b) 

the consolidated financial statements which present in aggregated form the financial 
information  contained  in  the  financial  statements  of  the  institutions  and  bodies 
referred  to  in  point  (a) (cid:214) the  aggregated  budgetary  accounts  which  present  the 
information  contained  in  the  budgetary  accounts  of  the  institutions  financed  by  the 
Union's budget ; 

(c) the reports on implementation of the budget of the institutions and the budgets of 
the bodies referred to in Article 185; 

(d)  the  aggregated  reports  on  implementation  of  the  budget  which  present  the 
information contained in the reports referred to in point (c). 

(cid:208) 1995/2006 Art. 1.72(b) 

(cid:208) 1995/2006 Art. 1.73 (adapted) 

Article 122 

⌦ Report on budgetary and financial management ⌫ 

1.  The  accounts  of  the  ⌦ Each ⌫  institutions  and  bodies  ⌦ body ⌫  referred  to  in 
Article 121  shall  be  accompanied  by  ⌦ prepare ⌫  a  report  on  budgetary  and  financial 
management of the financial year. 

They  shall  send  the  report  to  the  budget  authority  and  the  Court  of  Auditors,  by  31  March 
following the financial year. 

(cid:216) new 

2. The report referred to in paragraph 1 shall give an account, inter alia ⌦ at least ⌫ , of the 
rate  of  implementation  of  the  appropriations  together  with  summary  information  on  the 
transfers of appropriations among the various budget items. 

(cid:208) 1995/2006 Art. 1.73 (adapted) 

(cid:208) 1605/2002 (adapted) 

Article 123 

⌦ Rules governing the accounts ⌫ 

EN 

128 

   EN 

 
 
 
 
 
 
 
 
 
(cid:216) new 

The  financial  statements  referred  to  in  Article  121  shall  comply  with  the  Union  accounting 
rules  as  adopted  by  the  Accounting  Officer  of  the  Commission  and  shall  present  a  true  and 
fair view of the assets and liabilities, charges, income and cash flow. 

The budgetary accounts referred to in Article 121 shall comply with the budgetary principles 
laid out in this Regulation. They shall present a true and fair view of the budgetary revenue 
and expenditure operations. 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

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

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

(b)  as  regards  reports  on  budgetary  implementation,  of  revenue  and  expenditure 
operations. 

Article 124 

⌦ Accounting principles ⌫ 

The  financial  statements  (cid:214) referred  to  in  Article  121  shall  present  information,  including 
accounting  policies,  in  a  manner  that  provides  relevant,  reliable,  comparable  and 
understandable 
in  accordance 
⌦ compliance ⌫  with  the  generally  accepted  accounting  principles  as  outlined  in 
the Union's accounting rules., namely 

shall  be  drawn  up 

information.  They  

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 125 

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

2.  The  value  of  assets  and  liabilities  shall  be  determined  in  accordance  with  the  valuation 
rules provided for in Article 133. 

Article 126 

⌦ Financial statements ⌫ 

EN 

129 

   EN 

 
 
 
 
 
 
1. The financial statements shall be presented in millions of euro and shall comprise: 

(a)  the  balance  sheet  and  the  economic  outturn  account  (cid:214) statement  of  financial 
performance  , which represent the assets and liabilities and financial situation and 
the economic outturn (cid:214) result  at 31 December of the previous year; they shall be 
presented  in  accordance  with  the  structure  laid  down  by  the  Directives  of  the 
European Parliament  and  of  the  Council on the annual accounts of certain types of 
companies, but with account being taken of the specific nature of the Communities' 
activities (cid:214) the relevant accounting rules adopted by the Accounting Officer of the 
Commission  ; 

(b)  the  cash-flow  table  (cid:214) statement   showing  amounts  collected  and  disbursed 
during the year and the final treasury position; 

(c)  the  statement  of  changes  in  (cid:214) net  assets   capital  presenting  in  detail  the 
increases  and  decreases  during  the  year  in  each  item  of  the  capital  accounts  (cid:214) an 
overview of the movements during the year in reserves and accumulated results  . 

2.  The  Annex  (cid:214) notes   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  activities  of  the  Communities  (cid:214) by  the  relevant  accounting 
rules adopted by the Accounting Officer of the Commission  . 

Article 127 

⌦ Budgetary implementation reports ⌫ 

The  budgetary  implementation  reports  shall  be  presented  in  millions  of  euro.  They  shall 
comprise: 

(a)  the  budgetary  outturn  account  (cid:214) budget  implementation  reports   ,  which  sets 
out  (cid:214) aggregate   all  budgetary  operations  for  the  year  in  terms  of  revenue  and 
expenditure;  the  structure  in  which  it  is  presented  shall  be  the  same  as  that  of  the 
budget itself; 

(b) the Annex (cid:214) notes  to the budget outturn account (cid:214) implementation reports  
,  which  shall  supplement  and  comment  on  the  information  given  in  that  account 
(cid:214) the reports  . 

The structure in which budget implementation reports are it is presented shall be the same as that 
of the budget itself. 

(cid:216) new 

EN 

130 

   EN 

 
 
 
 
 
 
 
(cid:208) 1995/2006 Art. 1.74 (adapted) 

Article 128 

⌦ Provisional accounts ⌫ 

The  accounting  officers  of  the  other  institutions  and  bodies  referred  to  in  Article 121  shall 
send to the Commission's accounting officer and to the Court of Auditors by 1 March of the 
following  year  at  the  latest  their  provisional  accounts  together  with  the  report  on  budgetary 
and financial management during the year. 

The accounting officers of the other institutions and bodies referred to in article 121 shall also 
send by 1 March of following year at the latest a reporting package to the accounting officer 
of  the  Commission,  in  a  standardized  format  as  laid  down  by  the  accounting  officer  of  the 
Commission for consolidation purposes. 

(cid:216) new 

(cid:208) 1995/2006 Art. 1.74 (adapted) 
(cid:214) new 

The  Commission's  accounting  officer  ⌦ of  the  Commission ⌫  shall  consolidate  these 
provisional accounts with the Commission's provisional accounts and shall send to the Court 
of  Auditors,  by  31 March  of  the  following  year  at  the  latest,  the  Commission's  (cid:214) and  the 
consolidated  Union   provisional  accounts  accompanied  by  its  report  on  budgetary  and 
financial management during the year together with the provisional consolidated accounts. 

The accounting officer of each institution and body referred to in Article 121 shall also send 
the  report  on  budgetary  and  financial  management  to  the  European  Parliament  and  the 
Council by the date specified in the second paragraph. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.75(a) 
(cid:214) new 

Article 129 

⌦ Approval of the final consolidated accounts ⌫ 

1. The Court of Auditors shall, by 15 (cid:214) the 1st of  June at the latest, make its observations 
on  the  provisional  accounts  of  each  institution  ⌦ other  institutions ⌫  and  each  body 
referred to in (cid:206)1 Article 121  (cid:214) , and by 15 June at the latest, make its observations on the 
provisional accounts of the Commission and the consolidated Union provisional accounts  . 

EN 

131 

   EN 

 
 
 
 
 
(cid:208) 1995/2006 Art. 1.75(b) 
(adapted) 
(cid:214) new 

2.  The  institutions  other  than  the  Commission,  and  each  of  the  bodies  referred  to  in 
Article 121, shall draw up their final accounts and send them to the Commission's accounting 
officer, and the Court of Auditors (cid:214) , the European Parliament and the Council  by 1 July 
of the following year at the latest with a view to drawing up the final consolidated accounts. 

(cid:216) new 

The  accounting  officers  of  the  other  institutions  and  bodies  referred  to  in  Article  121  shall 
also send by 1 July of the following year at the latest, a reporting package to the accounting 
officer of the Commission, in a standardized format as laid down by the accounting officer of 
the Commission for consolidation purposes. 

2a.  The  accounting  officer  of  each  institution and  body  referred  to  in  Article  121  shall  also 
send  to  the  Court  of  Auditors,  with  copy  to  the  accounting  officer  of  the 
Commission,  at  the  same  date  as  the  transmission  of  his  final  accounts,  a 
representation letter covering these final accounts. 

The final accounts shall be accompanied by a note established by the accounting officer, by 
which  he  declares  that  they  were  prepared  in  accordance  with  this  Title  and  with  the 
applicable accounting principles, rules and methods. 

(cid:208) 1995/2006 Art. 1.75(c) 
(adapted) 
(cid:214) new 

2ab.  The  Commission's  accounting  officer ⌦ of  the  Commission ⌫  shall  prepare  the  final 
consolidated  accounts  on  the  basis  of  the  information  presented  by  the  other  institutions 
(cid:214) and bodies referred to in Article 121  under paragraph 2. The final consolidated accounts 
shall be accompanied by a note established by the Commission's accounting officer, by which 
he/she declares that they were prepared in accordance with Title VII and with the accounting 
principles, rules and methods set out in annex to the financial statements. 

3. After approving the final consolidated accounts and its own final accounts, the Commission 
shall  send  them  both  to  the  European  Parliament,  the  Council  and  the  Court  of  Auditors 
before 31 July of the following financial year. 

(cid:208) 1995/2006 Art. 1.75(d) 

By the same date, the accounting officer of the Commission should transmit a representation 
letter covering the final consolidated accounts to the Court of Auditors. 

(cid:216) new 

EN 

132 

   EN 

 
 
 
 
 
 
(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.75(e) 
(cid:206)2 1995/2006 Art. 1.76(a) 
(cid:206)3 1995/2006 Art. 1.76(b) 
(cid:206)4 1995/2006 Art. 1.77 
(cid:206)5 1995/2006 Art. 1.78 
(cid:206)6 1995/2006 Art. 1.79 
(cid:214) new 

4. The final consolidated 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 accordance 
with Article 287 of the Treaty on the Functioning of the European Union and Article 160c of 
the Euratom Treaty by (cid:206)1 15 November  of the following financial year. 

CHAPTER 2 

INFORMATION ON THE IMPLEMENTATION OF THE BUDGET 

Article 130 

⌦ Report on the budgetary guarantees and risks ⌫ 

In  addition  to  the  statements  provided  for  in  Articles  126  and  127,  the  Commission  shall 
report  to  the  European  Parliament  and  to  the  Council  twice  (cid:214) once   a  year  on  budgetary 
guarantees ⌦ referred to in Article 46(4) ⌫ and the corresponding risks. 

This information shall be sent to the Court of Auditors at the same time. 

Article 131 

⌦ Budget implementation report ⌫ 

1. In addition to the statements provided for in Articles 126 and 127, (cid:206)2 the Commission's 
accounting officer  shall send once a month to the European Parliament and to the Council 
figures,  aggregated  at  chapter  level  at  least,  on  the  implementation  of  the  budget,  both  for 
revenue and for expenditure against all appropriations. 

These figures shall also provide details of the utilisation of appropriations carried over. 

The figures shall be sent within 10 working days following the end of each month. 

2.  Three  times  a  year,  within  the  30  working  days  following  31  May,  31  August  and  31 
December, (cid:206)3 the Commission's accounting officer  shall send to the European Parliament 
and to the Council a report on the implementation of the budget, covering both revenue and 
expenditure broken down by chapter, article and item. 

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This  report  shall  also  provide  details  of  the  utilisation  of  appropriations  carried  over  from 
previous financial years. 

3. The figures and the report on implementation of the budget shall at the same time be sent to 
the Court of Auditors. 

CHAPTER 3 

ACCOUNTING 

SECTION 1 

COMMON PROVISIONS 

Article 132 

⌦ The accounting system ⌫ 

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

2.  The  accounts  shall  consist  of  general  accounts  and  budgetary  accounts.  These  accounts 
shall be kept in euro on the basis of the calendar year. 

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

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

Article 133 

⌦ Common provision to the institutions' accounting system ⌫ 

1. The Commission's accounting officer shall, after consulting the accounting officers of the 
other institutions and bodies referred to in (cid:206)4 Article 121 , adopt the accounting rules and 
methods  and  the  harmonised  chart  of  accounts  to  be  applied  by  all  the  institutions 
⌦ financed by the Union's budget ⌫ , the offices referred to in Title V of part two and all 
the bodies referred to in (cid:206)4 Article 121 . 

2.  When  adopting  the  rules  and  methods  referred  to  in  paragraph  1,  the  Commission's 
accounting officer ⌦ of the Commission ⌫ shall be guided by the internationally accepted 
accounting  standards  for  the  public  sector  but  may  depart  from  them  where  justified  by  the 
specific nature of the Union's activities. 

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SECTION 2 

GENERAL ACCOUNTS 

Article 134 

⌦ The general accounts ⌫ 

The general accounts shall record, in chronological order using the double entry method, all 
events  and  operations  which  affect  the  economic  and  financial  situation  and  the  assets  and 
liabilities of the institutions and bodies referred to in (cid:206)5 Article 121 . 

Article 135 

⌦ Entries in the accounts ⌫ 

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

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

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

Article 136 

⌦ Accounting adjustments ⌫ 

The  accounting  officer  shall,  after  the  close  of  the  budgetary  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 Union's accounting rules. 

SECTION 3 

BUDGETARY ACCOUNTS 

Article 137 

⌦ Budgetary accounting ⌫ 

1. The budgetary accounts provide a detailed record of budgetary implementation. 

2. For the purposes of applying paragraph 1, the budgetary accounts shall record all budgetary 
revenue and expenditure operations provided for in Title IV of part one. 

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CHAPTER 4 

PROPERTY INVENTORIES 

Article 138 

⌦ The inventory ⌫ 

1.  Each  institution  and  each  body  referred  to  in  (cid:206)6 Article  121   shall  keep  inventories 
showing the quantity and value of all the Union's tangible, intangible and financial assets in 
accordance with a model drawn up by the accounting officer of the Commission. 

Each institution and each body referred to in (cid:206)6 Article 121  shall check that entries in the 
inventory correspond to the actual situation. 

2. The sale of movable property shall be suitably advertised. 

TITLE VIII 

EXTERNAL AUDIT AND DISCHARGE 

CHAPTER 1 

EXTERNAL AUDIT 

Article 139 

⌦ External audit by the Court of Auditors ⌫ 

1.  The  European  Parliament,  the  Council  and  the  Commission  shall  inform  the  Court  of 
Auditors, as soon as possible, of all decisions and rules adopted pursuant to Articles 9, 13, 18, 
22, 23, 26 and 36. 

2.  Each  institution  shall  inform  the  Court  of  Auditors  and  the  budgetary  authority  of  any 
internal rules it adopts in respect of financial matters. 

(cid:208) 1995/2006 Art. 1.80 

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(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.81(a) 
(cid:214) new 

3. The Court of Auditors shall be informed of the appointment of authorising officers, internal 
auditors,  accounting  officers  and  imprest  administrators  and  of  delegation  decisions  under 
Articles 51, 61, 62, 63 and 85. 

Article 140 

⌦ Rules and procedure on the audit ⌫ 

1. The examination by the Court of Auditors of whether all revenue has been received and all 
expenditure incurred in a lawful and proper manner shall have regard to the provisions of the 
Treaties,  the  budget,  this  Regulation,  the  implementing  rules  and  all  other  acts  adopted 
pursuant to the Treaties. 

2.  In  the  performance  of  its  task,  the  Court  of  Auditors  shall  be  entitled  to  consult,  in  the 
manner  provided  for  in  Article  142,  all  documents  and  information  relating  to  the  financial 
management  of  departments  or  bodies  with  regard  to  operations  financed  or  co-financed  by 
the Union. 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. The audit in the Member States shall be carried out in 
conjunction  with  the  national  audit  institutions  or,  where  they  do  not  have  the  necessary 
powers,  with  the  national  departments  responsible.  The  Court  of  Auditors  and  the  national 
audit bodies of the Member States shall cooperate in a spirit of trust while maintaining their 
independence. 

In order to obtain all the necessary information for the performance of the task entrusted to it 
by the Treaties or the acts adopted pursuant to them, the Court of Auditors may be present, at 
its  request,  during  the  audit  operations  carried  out  within  the  framework  of  the 
implementation of the budget by, or on behalf of, any Community institution. 

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

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

Article 141 

⌦ Controls regarding securities and cash ⌫ 

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. 

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Article 142 

⌦ Court of Auditors' right of access ⌫ 

1. The Commission, the other institutions, the bodies administering revenue or expenditure on 
the  Union's  behalf  and  the  final  beneficiaries  of  payments  from  the  budget  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 financed 
by  the  Community  budget  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  budgetary  and  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  other  services  and  internal  audit  bodies  of  the  national  administrations  concerned  shall 
afford the Court of Auditors all the facilities which it considers necessary for the performance 
of its task. 

The  first  subparagraph  shall  also  apply  to  natural  or  legal  persons  receiving  payments  from 
the Community budget. 

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; 

(b)  present  the  correspondence  and  any  other  document  required  for  the  full 
implementation of the audit referred to in Article 140(1). 

The information supplied under point (b) of the first subparagraph may be requested only by 
the Court of Auditors. 

3. The Court of Auditors shall be empowered to audit the documents in respect of the revenue 
and  expenditure  of  the  Union  which  are  held  by  the  departments  of  the  institutions  and,  in 
particular,  by  the  departments  responsible  for  decisions  in  respect  of  such  revenue  and 
expenditure,  the  bodies  administering  revenue  or  expenditure  on  the  Union's  behalf  and  the 
natural or legal persons receiving payments from the budget. 

4. 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  institutions,  of  Community  funds  received  by  way  of 
grants. 

5.  Community  financing  paid  to  beneficiaries  outside  the  institutions  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 into the use made of the 
financing granted. 

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6. The Commission shall provide the Court of Auditors, at its request, with any information 
on borrowing-and-lending operations. 

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

Article 143 

⌦ Annual report of the Court of Auditors ⌫ 

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

21. The Court of Auditors shall transmit to the Commission and the institutions concerned, by 
(cid:206)1 30 (cid:214) 15  June  (cid:214) and to other institutions and bodies referred to in Article 121 by 1st 
of  June   at  the  latest,  any  observations  which  are,  in  its  opinion,  such  that  they  should 
appear in the annual report. These observations must remain confidential (cid:214) and are subject to 
a contradictory procedure  . Each institution shall address its reply to the Court of Auditors 
by (cid:206)1 15 October  at the latest. The replies of institutions other than the Commission shall 
be sent to the Commission at the same time. 

2. After completion of the contradictory procedure, each institution or body concerned shall 
address  its  reply  to  the  Court  of  Auditors  by  15  October  at  the  latest.  The  replies  of 
institutions other than the Commission and of the bodies shall be sent to the Commission at 
the same time. 

(cid:216) new 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

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

4. The annual report shall contain a section for each institution. 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  replies  of  each 
institution to its observations are published immediately (cid:214) next to or  after the ⌦ each ⌫ 
observations to which they relate. 

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

(cid:208) 1995/2006 Art. 1.81(b) 

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(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.81(c) 
(cid:214) new 

6. As soon as the Court of Auditors has transmitted the annual report, the Commission shall 
inform  the  Member  States  concerned  immediately  of  the  details  of  that  report  (cid:214) Court's 
observations  which relate to management of the funds for which they are responsible under 
the rules applicable. 

Following  receipt  of  such  information,  the  Member  States  shall  reply  to  ⌦ inform ⌫  the 
Commission  within  60  (cid:214) 100   days  (cid:214) of  the  measures  taken  to  address  the  Court  of 
Auditors' aforementioned observations which pertain to their respective country  . The latter 
⌦ Commission ⌫  shall  transmit  a  summary  (cid:214) communicate  this  information   to  the 
Court of Auditors, the Council and the European Parliament before (cid:206)1 28 February . 

Article 144 

⌦ Special reports of the Court of Auditors ⌫ 

1.  The  Court  of  Auditors  shall  notify  ⌦ transmit  to ⌫  the  institution  (cid:214) or  the  body  
concerned  of  all  ⌦ any ⌫  observations  which  are,  in  its  opinion,  such  that  they  should 
appear in a special report. These observations must remain confidential (cid:214) and are subject to a 
contradictory procedure  . 

The institution (cid:214) or the body  concerned shall have two-and-a half months within which to 
inform  the  Court  of  Auditors  of  any  comments  ⌦ replies ⌫  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  (cid:214) upon  the  receipt  of  the  replies  made  by  the  institution  or  the  body 
concerned  . 

The  special  reports,  together  with  the  replies  of  the  institutions  (cid:214) or  bodies   concerned, 
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  replies  of  the  institutions 
concerned. 

(cid:208) 1995/2006 Art. 1.82(a) 

The  Court  of  Auditors  shall  take  all  necessary  steps  to  ensure  that  the  replies  of  each 
institution  or  body  concerned  to  its  observations  are  published  immediately  next  to  or  after 
each observation to which they relate. 

(cid:216) new 

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(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.82(b) 

2.  (cid:206)1 The  opinions  referred  to  in  Article 248  ⌦ 287 ⌫  (4)  of  the  EC Treaty  ⌦ on  the 
functioning  of  the  European  Union ⌫  and  Article 160c(4)  of  the  Euratom Treaty  which  do 
not  relate  to  proposals  or  drafts  covered  by  the  legislative  consultation  procedure  may  be 
published  by  the  Court  of  Auditors  in  the  Official  Journal  of  the  European  Union.   The 
Court of Auditors shall take its decision on publication after consulting the institution which 
requested the opinion or which is concerned by it. Opinions published shall be accompanied 
by any remarks by the institutions concerned. 

(cid:216) new 

Article 144a 

Statements of preliminary findings 

1.  The  Court  of  Auditors  shall  transmit  to  the  institutions,  bodies  or  Member  States  concerned  the 
statements of preliminary findings resulting from its audits. Statement of preliminary findings which 
are, in the Court's opinion, such that they should appear in the annual report shall be transmitted no 
later  than  by  1st  of  June  of  the  exercise  following  the  one  to  which  they  refer.  The  statements  of 
preliminary findings must remain confidential. 

2. The institution, the body or the Member State concerned shall have two and a half months 
within  which  to  inform  the  Court  of  Auditors  of  any  comments  it  wishes  to  make  on  the 
statements of preliminary findings in question. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.83 

CHAPTER 2 

DISCHARGE 

Article 145 

⌦ Timetable of the discharge procedure ⌫ 

1. The European Parliament, upon a recommendation from the Council acting by a qualified 
majority,  shall,  before  (cid:206)1 15  May   of  year  n  + 2  give  a  discharge  to  the  Commission  in 
respect of the implementation of the budget for year n. 

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. 

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3.  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. 

Article 146 

⌦ The discharge procedure ⌫ 

1. The discharge decision shall cover the accounts of all the Union's revenue and expenditure, 
the resulting balance and the assets and liabilities of the Union shown in the balance sheet. 

2. With a view to granting the discharge, the European Parliament shall, after the Council has 
done so, examine the accounts and financial statements referred to in Article 318 of the Treaty 
on  the  Functioning  of  the  European  Union  and  Article  179a  of  the  Euratom  Treaty.  It  shall 
also examine the annual report made by the Court of Auditors together with the replies of the 
institutions under audit, 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. 

3.  The  Commission  shall  submit  to  the  European  Parliament,  at  the  latter's  request,  any 
information required for the smooth application  of the discharge procedure  for the financial 
year  in  question,  in  accordance  with  Article  319  of  the  Treaty  on  the  Functioning  of  the 
European Union. 

Article 147 

⌦ Follow-up measures ⌫ 

1. In accordance with Article 319 of the Treaty on the Functioning of the European Union and 
Article 180b of the Euratom Treaty, the Commission and the other institutions 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. 

2. At the request of the European Parliament or the Council, the institutions shall report on the 
measures  taken  in  the  light  of  these  observations  and  comments,  and,  in  particular,  on  the 
instructions  they  have  given  to  those  of  their  departments  which  are  responsible  for  the 
implementation  of  the  budget.  The  Member  States  shall  cooperate  with  the  Commission  by 
informing  it  of  the  measures  they  have  taken  to  act  on  these  observations  so  that  the 
Commission may take them into account when drawing up its own report. The reports from 
the institutions shall also be transmitted to the Court of Auditors. 

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PART TWO 

SPECIAL PROVISIONS 

(cid:208) 1995/2006 Art. 1.84 

TITLE I 

EUROPEAN AGRICULTURAL GUARANTEE FUND 

(cid:208) 1605/2002 (adapted) 

Article 148 

⌦ Special provisions on the European Agricultural Guarantee Fund ⌫ 

1.  Parts One  and  Three  of  this  Regulation  shall  apply  to  expenditure  effected  by  the 
authorities and bodies referred to in the rules relating to the European Agricultural Guarantee 
Fund (EAGF), and to revenue, save as otherwise provided in this Title. 

(cid:208) 1995/2006 Art. 1.85 

2. Operations managed directly by the Commission shall be implemented in accordance with 
the rules laid down in parts one and three. 

(cid:208) 1605/2002 (adapted) 

Article 149 

⌦ Commitments of EAGF funds ⌫ 

1. For each financial year, the EAGF shall include non-differentiated appropriations, with the 
exception  of  the  expenditure  related  to  the  measures  referred  to  in  Article 3(2)  of 
Regulation (EC) No 1290/2005, which shall be covered by differentiated appropriations. 

(cid:208) 1995/2006 Art. 1.86(a) 

2. Payment appropriations which have been carried over but which have not been used by the 
end of the financial year shall be cancelled. 

(cid:208) 1605/2002 

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(cid:208) 1995/2006 Art. 1.86(b) adapted 

3.  Non-committed  appropriations  relating  to  the  actions  referred  to  in  Article 3(1)  of 
Regulation (EC) No 1290/2005 may be carried over to the next financial year only. 

Such carryover shall not exceed, within a limit of 2 % of the initial appropriations referred to 
in  the  first  subparagraph,  the  amount  of  the  adjustment  of  direct  payments  referred  to  in 
Article 11  of  Council  Regulation (EC)  No 73/2009  of  29 September 2003  establishing 
common  rules  for  direct  support  schemes  under  the  common  agricultural  policy  and 
establishing  certain  support  schemes  for  farmers31  and  which  was  applied  during  the  last 
financial year. 

Appropriations  which  are  carried  over  shall  be  returned  exclusively  to  the  budgetary  lines 
which cover the actions referred to in Article 3(1)(c) of Regulation (EC) No 1290/2005. 

Such  carryover  may  lead  to  an  additional  payment  only  to  the  final  beneficiaries  who  have 
been  subject,  in  the  last  financial  year,  to  the  adjustment  of  direct  payments  in  accordance 
with Article 11 of Regulation (EC) No 73/2009. 

The  carryover  decision  shall  be  taken,  at  the  latest  on  15 February  of  the  year  to  which  the 
carryover is being made, by the Commission, which shall inform the budgetary authority. 

(cid:208) 1605/2002 (adapted) 

Article 150 

⌦ Global provisional commitments of EAGF appropriations ⌫ 

1. The Commission shall reimburse the expenditure incurred by the Member States. 

(cid:208) 1995/2006 Art. 1.87 

2.  The  Commission  decisions  fixing  the  amounts  of  these  payments  shall  constitute  global 
provisional  commitments,  which  may  not  exceed  the  total  appropriations  entered  for  the 
EAGF. 

3. As from 15 November, routine management expenditure for the EAGF may be committed 
in  advance  against  the  appropriations  provided  for  the  following  financial  year.  Such 
commitments  may  not,  however,  exceed  three  quarters  of  the  total  corresponding 
appropriations for the current financial year. They may apply only to expenditure for which 
the principle is laid down in an existing basic act. 

31 

OJ L 270, 21.10.2003, p. 1. Regulation as last amended by Regulation (EC) No 1405/2006 (OJ L 265, 
26.9.2006, p. 1). 

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(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.88 

Article 151 

⌦ Schedule and timing of budgetary commitments of EAGF funds ⌫ 

1. (cid:206)1 Expenditure effected by the authorities and bodies referred to in the rules relating to the 
EAGF shall, within two months following receipt of the statements sent in by Member States, 
be the subject of a commitment by chapter, article and item. Such commitment may be made 
after  the  elapse  of  that  two-month  period  whenever  a  procedure  for  a  transfer  of 
appropriations concerning the budget lines in question is necessary. Save where payment has 
not yet been made by the Member States or where eligibility is in doubt, the amounts shall be 
charged as payments within the same two-month period . 

This  budgetary  commitment  shall  be  deducted  from  the  global  provisional  commitment 
referred to in Article 150. 

2.  Global  provisional  commitments  which  have  been  made  for  a  financial  year  and  which 
have not given rise to commitment on specific lines in the budget nomenclature by 1 February 
of the following financial year shall be cancelled in respect of the original financial year. 

3. Paragraphs 1 and 2 shall apply subject to the clearance of accounts. 

(cid:208) 1995/2006 Art. 1.89 (adapted) 

Article 152 

⌦ Accounting of EAGF funds ⌫ 

In budgetary accounting, expenditure shall be booked to the accounts for a financial year on 
the basis of the repayments made by the Commission to the Member States by 31 December 
of  the  year  concerned  at  the  latest,  provided  that  the  payment  order  has  reached  the 
accounting officer by 31 January of the following financial year at the latest. 

(cid:208) 1605/2002 (adapted) 

Article 153 

⌦ Transfer of EAGF appropriations ⌫ 

1. Where the Commission may transfer appropriations pursuant to Article 23(1), it shall take 
its  decision  by  31 January  of  the  following  financial  year  at  the  latest  and  shall  inform  the 
budgetary authority as provided for in Article 23(1). 

(cid:208) 1995/2006 Art. 1.90 

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(cid:208) 1605/2002 

2. In cases other than those referred to in paragraph 1, the Commission shall submit transfer 
proposals to the budgetary authority by 10 January of the following financial year at the latest. 

The  budgetary  authority  shall  take  decisions  on  such  transfers  in  accordance  with  the 
procedure provided for in Article 24, but within a time limit of three weeks. 

(cid:208) 1995/2006 Art. 1.91 (adapted) 

Article 154 

⌦ Assigned revenue of EAGF funds ⌫ 

1. Assigned revenue under this Title shall be assigned according to origin in accordance with 
Article 18(24). 

2.  The  result  of  decisions  on  clearance  of  accounts,  as  referred  to  in  Article 30  of 
Regulation (EC) No 1290/2005 shall be entered in a single Article. 

(cid:208) 1995/2006 Art. 1.92 

TITLE II 

STRUCTURAL FUNDS, COHESION FUND, EUROPEAN FISHERIES 
FUND, EUROPEAN AGRICULTURAL FUND FOR RURAL 
DEVELOPMENT AND FUNDS IN THE AREA OF FREEDOM, 
SECURITY AND JUSTICE MANAGED IN SHARED MANAGEMENT 

(cid:208) 1605/2002 (adapted) 

Article 155 

⌦ Scope of special provisions on other Union funds ⌫ 

1.  Parts One  and  Three  of  this  Regulation  shall  apply  to  expenditure  effected  by  the 
authorities  and  bodies  referred  to  in  the  Regulations  governing  the  European  Agricultural 
Fund  for  Rural  Development  (EAFRD)32,  the  European  Regional  Development  Fund 
(ERDF)33,  the  European  Social  Fund  (ESF)34,  the  Cohesion  Fund35,  the  European  Fisheries 

(cid:208) 1995/2006 Art. 1.93(a) 

32 
33 

Regulation (EC) No 1290/2005. 
Regulation (EC)  No 1080/2006  of  the  European  Parliament  and  of  the  Council  of  5 July  2006  on  the 
European Regional Development Fund (OJ L 210, 31.7.2006, p. 1). 

EN 

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   EN 

 
 
 
 
 
 
                                                 
Fund  (EFF)36,  and  funds  in  the  area  of  Freedom,  Security  and  Justice  managed  in  shared 
management  pursuant  to  Article  53a,  hereinafter  ‘the  Funds’,  and  to  their  revenue,  save  as 
otherwise provided in this Title. 

2. Operations managed directly by the Commission shall also be implemented in accordance 
with the rules laid down in parts one and three of this Regulation. 

(cid:208) 1605/2002 

(cid:208) 1605/2002 (adapted) 

Article 156 

⌦ Payments of contributions, interim payments and repayments regarding other Union 
funds ⌫ 

1.  Payment  by  the  Commission  of  financial  contributions  from  the  Funds  shall  be  made  in 
accordance with the regulations referred to in Article 155. 

2. The time limit for interim payments by the Commission shall be laid down in accordance 
with the regulations referred to in Article 155. 

3. The treatment of repayments by the Member States and the implications for the amount of 
contributions from the Funds shall be governed by the regulations referred to in Article 155. 

4.  By  way  of  derogation  from  article  10,  commitment  appropriations  available  on  31 
December  arising  from  repayments  of  payments  on  account  may  be  carried  over  until  the 
closure  of  the  programme  and  used  when  necessary  under  the  condition  that  other 
commitment appropriations are not longer available. 

(cid:216) new 

(cid:208) 1605/2002 (adapted) 

Article 157 

⌦ Decommitment of appropriation of other Union funds ⌫ 

The  Commission  shall  automatically  decommit  appropriations  that  have  been  committed  as 
provided for in the regulations referred to in Article 155. 

34 

35 

36 

Regulation (EC)  No 1081/2006  of  the  European  Parliament  and  of  the  Council  of  5 July  2006  on  the 
European Social Fund (OJ L 210, 31.7.2006, p. 12). 
Council  Regulation (EC)  No 1084/2006  of  11 July  2006  establishing  a  Cohesion  Fund  (OJ  L 210, 
31.7.2006, p. 79). 
Council  Regulation (EC)  No 1198/2006  of  27 July  2006  on  the  European  Fisheries  Fund  (OJ  L 223, 
15.8.2006, p. 1) 

EN 

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The decommitted appropriations may be made available again in the event of a manifest error 
attributable solely to the Commission. 

(cid:208) 1995/2006 Art. 1.94 

To  this  end,  the  Commission  shall  examine  decommitments  made  during  the  previous 
financial  year  and  decide,  by  15  February  of  the current year, on the  basis  of  requirements, 
whether it is necessary to make the corresponding appropriations available again. 

(cid:208) 1605/2002 

(cid:208) 1995/2006 Art. 1.95 (adapted) 

Article 158 

⌦ Transfer of appropriation between other Union funds ⌫ 

With  regard  to  the  operational  expenditure  referred  to  in  this  Title,  the  Commission  may, 
except in the case of the EAFRD, make transfers from one title to another, provided that the 
appropriations in question are for the same objective within the meaning of the Regulations 
governing the Funds referred to in Article 155, or are Technical Assistance expenditure. 

(cid:208) 1605/2002 (adapted) 

Article 159 

⌦ Management, selection and audit of other Union funds ⌫ 

Aspects concerning the management and selection of projects and audit shall be governed by 
the regulations referred to in Article 155. 

TITLE III 

RESEARCH 

Article 160 

⌦ Research funds ⌫ 

1.  Parts  one  and  three  shall  apply  to  the  research  and  technological  development 
appropriations, save as otherwise provided in this Title. 

These appropriations shall be entered either in one of the titles of the budget relating to the 
policy area research by direct or indirect action or in a chapter relating to research activities in 
another title. 

EN 

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They shall be used by implementation of the actions listed in the implementing rules. 

(cid:208) 1995/2006 Art. 1.96 

1a. The appropriations relating to the revenue generated by the Research Fund for Coal and 
Steel established by the Protocol annexed to the Treaty on the Functioning of the European 
Union on the financial consequences of the expiry of the ECSC Treaty and on the Research 
Fund for Coal and Steel shall be treated as assigned revenue within the meaning of Article 18. 
The commitment appropriations generated by this revenue shall be made available as soon as 
the  amount  receivable  has  been  estimated  and  the  payment  appropriations  as  soon  as  the 
revenue has been received. 

(cid:208) 1605/2002 

2.  With  regard  to  the  operational  expenditure  referred  to  in  this  Title,  the  Commission  may 
make  transfers  from  one  title  to  another,  provided  that  the  appropriations  are  used  for  the 
same purpose. 

3.  Experts  paid  from  the  research  and  technological  development  appropriations  shall  be 
recruited  in  accordance  with  the  procedures  laid  down  by  the  Council  when  it  adopts  each 
research framework programme. 

(cid:208) 1995/2006 Art. 1.97 (adapted) 

Article 160a 

⌦ Commitments of Research Fund ⌫ 

1.  The  commitment  appropriations  corresponding  to  the  amount  of  the  commitment 
decommitted  as  a  result  of  total  or  partial  non-implementation  of  the  projects  relating  to 
research for which they were earmarked may, exceptionally and in duly substantiated cases, 
be made available again where it is essential to carry out the programme originally planned, 
unless the budget for the current financial year contains funds for this purpose. 

2. For the purposes of paragraph 1, the Commission shall, at the beginning of each financial 
year, examine decommitments made during the previous financial year and assess, in the light 
of the requirements, the need for making the appropriations available again. 

On  the  basis  of  this  assessment,  the  Commission  may  submit  appropriate  proposals  to  the 
budgetary authority, by 15 February of each financial year, stating for each budget item the 
reasons for making these appropriations available again. 

3.  The  budgetary  authority  shall  decide  on  the  Commission's  proposals  within  six  weeks. 
Where  no  decision  is  taken  within  this  time  limit,  the  proposals  shall  be  deemed  to  be 
approved. 

The amount  of commitment appropriations to be made available again in year n shall in no 
case exceed 25 % of the total amount decommitted on the same budget line in year n-1. 

4. Commitment appropriations made available again shall not be carried over. 

EN 

149 

   EN 

 
 
 
 
Legal  commitments  relating  to  the  commitment  appropriations  which  have  been  made 
available again shall be concluded by 31 December of year n. 

At  the  end  of  year n,  the  unused  balance  of  the  commitment  appropriations  made  available 
again shall be definitively decommitted by the authorising officer responsible. 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 161 

⌦ Participation of the JRC in non Research fund actions ⌫ 

1.  The  Joint  Research  Centre  (JRC)  may  receive  funding  charged  to  appropriations  entered 
outside the titles and the chapters referred to in Article 160(1) in respect of its participation on 
a  competitive  or  negotiated  basis  in  Community  activities  (cid:214) to  procurement  and  grant 
procedures following Titles V and VI of Part One, and  financed in whole or in part from 
the general budget. 

For the purposes of the participation in the procurement and grant procedures, the JRC shall 
be considered as a legal entity established in a Member State. 

(cid:216) new 

2. The appropriations relating to the activities in which the JRC participates on a competitive 
basis  sShall  be  treated  as  assigned  revenue  within  the  meaning  of  Article  18(2). 
⌦ the appropriations relating to: ⌫ 

(cid:208) 1605/2002 (adapted) 

(a) 

(b) 

(c) 

grant and procurement procedures in which the JRC participates or; 

activities of the JRC on behalf of third parties or; 

(cid:216) new 

activities  undertaken  under  an  administrative  agreement  with  other  institutions  or 
other Commission's departments for the provision of technical-scientific services. 

The  commitment  appropriations  generated  by  this  revenue  referred  to  in  points  (a)  and  (c) 
shall be made available as soon as the amount receivable has been estimated. 

(cid:208) 1605/2002 adapted 

For  activities  referred  to  in  point  (c),  appropriations  not  used  within  five  years  shall  be 
cancelled. 

(cid:216) new 

EN 

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   EN 

 
 
 
 
 
 
 
The  utilisation  of  these  appropriations  shall  be  shown  in  a  set  of  analytical  accounts  in  the 
budgetary outturn account for each category of action to which it relates; it shall be separate 
from revenue originating from financing by third parties (public or private) and from revenue 
from other services carried out by the Commission for third parties. 

(cid:208) 1605/2002 

(cid:216) new 

3. When participating in grants or tender procedures in accordance with paragraph 1 of this 
Article, the JRC shall not be subject to the conditions laid in Articles 93, 94 b) and c), 95, 96, 
114(3)  and  114(4)  regarding  provisions  on  exclusion  and  sanctions  in  relation  to 
procurements and grants.  

The JRC shall also be presumed to meet the requirements on economic and financial capacity.  

The JRC shall be exempted from lodging guarantees as provided for in Articles 102 and 118. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.98 
(cid:214) new 

34. The rules on procurement in Title V of part one shall not apply to the activities of the JRC 
on behalf of third parties. 

45. By way of derogation from Article 23, the Commission may, within the title of the budget 
relating to the policy area ‘Direct action research’, make transfers between chapters of up to 
15 % of the appropriation in the line from which the transfer is made. 

TITLE IV 

EXTERNAL ACTIONS 

CHAPTER I 

GENERAL PROVISIONS 

Article 162 

⌦ External actions ⌫ 

1.  Parts  one  and  three  shall  apply  to  external  actions  financed  from  the  budget,  save  as 
otherwise provided in this Title. 

EN 

151 

   EN 

 
 
 
 
2.  The  appropriations  for  the  actions  referred  to  in  paragraph  1  shall  be  used  by  the 
Commission: 

(a) 

(b) 

either within the framework of aid granted on an autonomous basis; 

or  (cid:214) in  partnership  with  a  third  country  referred  to  in  Article  53(1)  point  (2)(a), 
through the signature of a financing agreement  under agreements concluded with 
one or more beneficiary third countries;  

(c) 

or under agreements with the international organisations referred to in Article 53. 

CHAPTER 2 

IMPLEMENTATION OF ACTIONS 

Article 163 

⌦ Implementation of External Actions ⌫ 

(cid:206)1 The  actions  referred  to  in  this  Title  may  be  implemented  on  a  centralised  basis 
⌦ directly ⌫  by  the  Commission,  by  shared  management,  on  a  decentralised  basis  by  the 
beneficiary  third  country  or  countries,  or  jointly  with  international  organisations  (cid:214) or 
indirectly  by  any  of  the  entities  or  persons  listed  in  points  (a)  to  (h)  of  point  (2)  the  first 
paragraph  of  Article  53,   in  accordance  compliance  with  the  relevant  provisions  of 
Articles 53  to 57 .  Appropriations  for  external  actions  may  be  combined  with  funds  from 
other sources to achieve a joint objective. 

(cid:216) new 

Article 164 

Trust funds for external actions 

For emergency, post-emergency or thematic actions, the Commission may create trust funds 
following an agreement concluded with other donors. The constitutive act of each trust fund 
shall define the objectives of the trust fund. 

The contributions of the Union and the donors shall be entered into a specific bank account. 
These  contributions  are  not  integrated  in  the  Union  budget  and  are  managed  by  the 
Commission under the responsibility of the authorising officer by delegation. The entities and 
persons  referred  to  in  Article  53(1)  point  (2)  (a)  to  (h)  may  be  entrusted  with  budget 
implementation tasks in accordance with the relevant rules for indirect management. 

The  accounting  officer  of  the  trust  fund  is  the  accounting  officer  of  the  Commission.  He  is 
responsible for laying down the accounting procedures and chart of accounts. 

The Commission’s internal auditor and the Court of auditors shall exercise the same powers 
over the trust fund as they do in respect of other actions carried out by the Commission.  

EN 

152 

   EN 

 
 
The specific bank account shall be opened and closed by the accounting officer. 

The Commission shall ensure a strict separation of duties between accountant and authorising 
officers. 

A  board  chaired  by  the  Commission  is  established  for  each  trust  fund  to  ensure  the 
representation of donors and to decide for the use of the funds. 

The  funds  pooled  into  the  trust  funds  are  managed  in  conformity  with  sound  financial 
management  and  transparency.  Funds  are  committed  and  paid  by  financial  agents  of  the 
Commission. 

The Commission is authorised to withdraw a maximum of 7 % of the amounts pooled into the 
trust fund to cover its management costs. For the duration of the trust fund, these management 
fees  are  assimilated  to  assigned  revenues  within  the  meaning  of  Article  18(2)(b)  of  the 
Financial Regulation. 

The accounting officer shall act on the recovery orders relating to actions funded by the trust 
fund.  Revenue  arising  from  the  repayment  of  these  recovery  orders  shall  be  returned  to  the 
specific bank account of the trust fund. Cancelation and waiving of recovery orders shall be 
made under the rules referred to in Article 73 of the Financial Regulation. 

Trust funds are created for a limited duration determined in their constitutive agreement. This 
duration may be extended by a decision of the Commission upon request of the board.  

The  liquidation  of  the  trust  fund  is  decided  by  the  Commission  after  expiration  of  the 
duration.  

The modalities of management, reporting and governance of these trust funds are detailed in 
the Implementing Rules. 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 165 

⌦ Implementation of external actions through indirect management ⌫ 

The  implementation  of  actions  by  beneficiary  third  countries  or  international  organisations 
(cid:214) implemented indirectly  is subject to scrutiny by the Commission. Such scrutiny shall be 
exercised either by prior approval, by ex post checks or by a combined procedure. 

Article 166 

⌦ Agreements on the implementation of external actions ⌫ 

1. Actions carried out shall give rise to ⌦ one or more of the following instruments ⌫ : 

EN 

153 

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(cid:208) 1995/2006 Art. 1.100(a) 
(adapted) 
(cid:214) new 

(a) 

(b) 

a financing ⌦ an ⌫ agreement drawn up between the Commission, acting for the 
Communities, and the beneficiary third country or countries or the bodies they have 
designated, hereinafter: ‘the beneficiaries’ (cid:214) an entity referred to in Article 163a  ; 

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

The terms on which the external aid is given shall be laid down in the instrument by which the 
financing agreements or the contracts or the grants provided for in points (a) and (b) shall be 
managed. 

(cid:208) 1995/2006 Art. 1.100(b) 
(adapted) 

(cid:208) 1995/2006 Art. 1.100(c) 
(adapted) 
(cid:214) new 

2.  Financing  aAgreements  with  the  beneficiary  third  countries  (cid:214) entities   referred  to  in 
paragraph 1(a) shall be concluded by 31 December of year n+1 at the latest, year n being the 
one in which the budgetary commitment was made. 

(cid:214) The agreements shall lay down the period within which the entities referred to in paragraph 
1a  shall  conclude  all   The  individual  contracts,  grant  decisions  and  agreements  ⌦ and 
grants ⌫  which  implement  (cid:214) the  action.  Save  for  multi-donor  actions,   such  financing 
agreements ⌦ period ⌫  shall  be  concluded  or  adopted  no  later ⌦ not  be  longer ⌫  than 
three years following the date of conclusion of the financing agreement. ⌦ , except: ⌫ 

⌦ (a) 

for ⌫ Iindividual contracts and agreements relating to audit and evaluation may be 
concluded later.; 

(b) 

under exceptional circumstances in the following cases: 

–  riders to contracts already concluded; 

(cid:216) new 

–  (ii)  individual  contracts  to  be  concluded  after  early  termination  of  an  existing 

contract; 

–  (iii) changes of entity charged with the entrusted tasks. 

EN 

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(cid:208) 1995/2006 Art. 1.100(d) 
(adapted) 
(cid:214) new 

3. The provision under p Paragraph 2 shall not apply to the multi-annual programmes (cid:214) that 
are implemented through split commitments  in the following cases: 

– 

– 

(cid:214) the transition assistance and institution building,  the cross-border cooperation, 
regional  development,  human  resources  development  and  rural  development 
components of the Pre-Accession Assistance, 

the  cross-border  cooperation  component  of  the  European  Neighbourhood  and 
Partnership policy. 

In these cases, (cid:214) the appropriations shall be automatically de-committed by the Commission 
in accordance with  the following (cid:214) sector-specific  rules shall apply:. 

(a) any portion of a budget commitment for such a multi-annual programme shall be 
automatically decommited where, by 31 December of the third year following year n 
being the one in which the budget commitment was made: 

(i) it has not been used for the purpose of pre-financing; or 

(ii) it has not been used for making intermediate payments; or 

(iii) no declaration of expenditure has been presented in relation to it; 

(b)  that  part  of  budget  commitments  still  open  on  31 December  2017  for  which  a 
declaration  of  expenditure  has  not  been  made  by  31 December  2018  shall  be 
automatically decommitted. 

(cid:208) 1605/2002 (adapted) 

CHAPTER 3 

PROCUREMENT 

Article 167 

⌦ External action procurement ⌫ 

1. The provisions of Article 56 and of Chapter 1 of Title V of part one relating to the general 
provisions on procurement shall be applicable to contracts covered by this Title subject to the 
special provisions relating to thresholds and the arrangements for awarding external contracts 
laid  down  in  the  implementing  rules.  The  contracting  authorities  for  the  purposes  of  this 
chapter shall be: 

EN 

155 

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(a) 

the  Commission  on  behalf  of  and  for  the  account  of  one  or  more  beneficiaries 
⌦ third countries ⌫ ; 

(b) the beneficiary or beneficiaries; 

(cid:208) 1995/2006 Art. 1.101(a) 
(cid:214) new 

(c) 

a  national  or  international  public-sector  body  or  natural  or  legal  persons  who  are 
beneficiaries  of  a  grant  for  the  implementation  of  an  external  action  (cid:214) entities 
referred 
the  corresponding  budget 
implementation tasks  . 

in  Article  163  and  entrusted  with 

to 

(cid:208) 1995/2006 Art. 1.101(b) 
(adapted) 

2. The procurement procedures must be laid down in the financing agreements or in the grant 
decision or grant agreement provided for in Article 166. 

3.  The  provisions  of  this  Chapter  shall  not  apply  to  actions  under  sector-specific  basic  acts 
relating  to  crisis  management  aid,  to  civil  protection  operations  and  to  humanitarian  aid 
operations, as referred to in Article 110. 

(cid:216) new 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 168 

⌦ Rules on participation in tender procedures ⌫ 

1.  Participation  in  tendering  procedures  shall  be  open  on  equal terms  to  all  persons  coming 
within the scope of the Treaties and, ⌦ to any other natural or legal person ⌫ in accordance 
with  the  specific  provisions  in  the  basic  instruments  governing  the  cooperation  sector 
concerned,  to  all  such  natural  and  legal  persons  who  are  nationals  of  the  beneficiary  third 
countries or of any other third country as are expressly mentioned in those instruments. 

2.  In  duly  substantiated  exceptional  cases  (cid:214) cases  referred  to  in  Article  49   ,  it  may  be 
decided,  on  the  basis  of  the  specific  conditions  laid  down  in  the  basic  acts  governing 
cooperation (cid:214) under exceptional circumstances duly motivated by the authorizing officer  , 
to  allow  third-country  nationals  other  than  those  referred  to  in  paragraph  1  to  tender  for 
contracts. 

3. Where an agreement on widening the market for procurement of goods or services to which 
the  Community  is  party  applies,  the  contracts  for  procurement  financed  by  the  budget  shall 
also  be  open  to  third-country  nationals  other  than  those  referred  to  in  paragraphs  1  and  2, 
under the conditions laid down in this agreement. 

EN 

156 

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(cid:208) 1995/2006 Art. 1.102 

CHAPTER 4 

GRANTS 

(cid:208) 1605/2002 (adapted) 

Article 169 

⌦ Full financing of an external action ⌫ 

An  action  may  be  financed  in  full  by  the  budget  only  if  this  proves  essential  for  it  to  be 
carried out. 

(cid:208) 1995/2006 Art. 1.103 (adapted) 
(cid:214) new 

Article 169a 

⌦ Applicable rules for external action grants ⌫ 

Grant  procedures  to  be  applied  in  decentralised ⌦ indirect ⌫  management  by  beneficiary 
third countries (cid:214) the entities referred to in Article 163  shall be laid down in the financing 
agreements referred to in Article 166 ⌦ concluded between the Commission and those these 
entities ⌫ .  

(cid:216) new 

Article 169b 

Income generated by an action 

The responsible authorising officer may deduct the income generated by an action from the 
profit referred to in Article 109(4) where a generation of income was provided for in the grant 
agreement and where it is reinvested to ensure the sustainability of the action. 

EN 

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(cid:208) 1605/2002 

CHAPTER 5 

AUDITING OF ACCOUNTS 

(cid:208) 1995/2006 Art. 1.104 (adapted) 

Article 170 

⌦ EU Audit in external action grants ⌫ 

Each  agreement  between  the  Commission  and  an  entity  referred  to  in  Article  163,  or  grant 
agreement  or  grant  decision  must  expressly  provide  for  the  Commission  and  the  Court  of 
Auditors  to  have  the  power  of  audit,  on  the  basis  of  documents  and  on  the  spot,  over  all 
contractors and subcontractors who have received ⌦ Union ⌫ Community funds. 

(cid:208) 1605/2002 (adapted) 

TITLE V 

EUROPEAN OFFICES 

Article 171 

⌦ The European Offices ⌫ 

1. ‘European offices’ for the purposes of applying this Title are the administrative structures 
set up by one or more institutions to perform specific cross-cutting tasks. 

2. This Title shall apply to the operation of the European Anti-fraud Office (OLAF), with the 
exception of Articles 174, 174a and 175(2). 

(cid:208) 1995/2006 Art. 1.105 

3. Parts one and three shall apply to the operation of the European offices, save as otherwise 
provided in this Title. 

(cid:208) 1605/2002 (adapted) 

Article 172 

⌦ Appropriations regarding the Offices ⌫ 

EN 

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1. The appropriations for each European office, the total amount of which shall be entered in a 
specific budget line within the section of the budget relating to the Commission, shall be set 
out in detail in an Annex to that section. 

The Annex shall take the form of a statement of revenue and expenditure, subdivided in the 
same way as the sections of the budget. 

The  appropriations  entered  in  that  Annex  shall  cover  all  the  financial  requirements  of  each 
European office in the performance of its duties on behalf of the institutions. 

2. Each European office's establishment plan shall be annexed to that of the Commission. 

3.  The  Director  of  each  European  office  shall  take  decisions  on  transfers  within  the  Annex 
provided  for  in  paragraph  1.  The  Commission  shall  inform  the  budgetary  authority  of  such 
transfers. 

4. Each European office's accounts shall form an integral part of the Union's accounts referred 
to in Article 121. 

(cid:208) 1995/2006 Art. 1.106 (adapted) 

Article 173 

⌦ Authorising Officer of the Inter-institutional Offices ⌫ 

The  Commission  shall,  in  respect  of  the  appropriations  entered  in  the  Annex  for  each 
European  office,  delegate  the  powers  of  authorising  officer  to  the  Director  of  the  European 
office concerned, in accordance with Article 59. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.107 

Article 174 

⌦ The accounts of the Inter-institutional Offices ⌫ 

1. Each interinstitutional European office shall draw up analytical accounts of its expenditure, 
enabling  the  proportion  of  its  services  supplied  to  each  of  the  institutions  to  be  determined. 
(cid:206)1 The  Director  of  the  European  office  concerned  shall  adopt,  after  approval  by  its 
Management Committee, the criteria on which the accounting system shall be based . 

2. The remarks concerning the specific budget line in which is entered the total appropriation 
for  each  interinstitutional  European  office  shall  show  an  estimate  of  the  cost  of  services 
supplied  by  the  office  to  each  of  the  institutions.  This  shall  be  based  on  the  analytical 
accounts provided for in paragraph 1. 

3. Each interinstitutional European office shall notify the institutions concerned of the results 
of the analytical accounts. 

EN 

159 

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(cid:208) 1995/2006 Art. 1.108 (adapted) 

Article 174a 

⌦ Delegation of powers for Inter-institutional Offices ⌫ 

1.  Each  institution  may  delegate  authorising  officer  powers  to  the  director  of  an 
interinstitutional European office for the management of appropriations entered in its section 
and shall set the limits and conditions for this delegation of powers. 

2.  The  internal  auditor  of  the  Commission  shall  exercise  all  responsibilities  laid  down  in 
Title IV, Chapter 8 of Part One. 

(cid:208) 1995/2006 Art. 1.109 (adapted) 

Article 175 

⌦ Services to third parties ⌫ 

Should the remit of a European office involve supplies to third parties for pecuniary interest, 
its  Director  shall,  after  approval  of  the  Management  Committee,  lay  down  the  specific 
provisions governing how these supplies are to be made and the keeping of the corresponding 
accounts. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.111(a) 
(cid:206)2 1995/2006 Art. 1.111(b) 
(cid:214) new 

TITLE VI 

ADMINISTRATIVE APPROPRIATIONS 

Article 177 

⌦ General provisions ⌫ 

Parts one and three shall apply to administrative appropriations, save as otherwise provided in 
this Title. 

Article 178 

⌦ Commitments ⌫ 

EN 

160 

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1. As from 15 November (cid:214) October  of each year, routine administrative expenditure may 
be committed in advance against the appropriations provided for the following financial year. 
(cid:206)1 Such commitments may not, however, exceed one quarter of the appropriations decided 
by the budgetary authority on the corresponding budget line for the current financial year . 
They  may  not  apply  to  new  expenditure  of  a  kind  not  yet  approved  in  principle  in  the  last 
budget duly adopted. 

2. Expenditure which must be paid in advance pursuant to legal or contractual provisions, for 
example  rents,  may  give  rise  to  payments  from  1  December  onwards  to  be  charged  to  the 
appropriations  for  the  following  financial  year.  (cid:206)2 In  this  case,  the  limit  referred  to  in 
paragraph 1 shall not apply . 

Article 179 

⌦ Specific provisions regarding administrative appropriations ⌫ 

1. Administrative appropriations shall be non-differentiated appropriations. 

(cid:208) Corrigendum, OJ L 025, 
30.1.2003, p. 43 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 Corrigendum, OJ L 099, 
14.4.2007, p. 18 

(cid:206)1 2.  Operating  ⌦ Administrative ⌫  expenditure   arising  from  contracts  covering 
periods  that  extend  beyond  the  financial  year,  either  in  accordance  with  local  practice  or 
relating  to  the  supply  of  equipment,  shall  be  charged  to  the  budget  of  the  financial  year  in 
which it is effected. 

3.  The  institutions  shall  inform  the  two  branches  of  the  budgetary  authority  as  soon  as 
possible  of  any  building  project  likely  to  have  significant  financial  implications  for  the 
budget. 

(cid:208) 1995/2006 Art. 1.112 

(a) If either branch of the budgetary authority intends to issue an opinion, it shall within two 
weeks after receipt of the information on the building project notify the institution concerned 
of  its  intention  to  issue  such  an  opinion.  Failing  a  reply,  the  institution  concerned  may 
proceed with the planned operation under its administrative autonomy, subject to Article 335 
of  the  Treaty  on  the  Functioning  of  the  European  Union  and  Article 185  of  the  Euratom 
Treaty with regard to Union representation. 

This  opinion  shall  be  forwarded  to  the  institution  concerned  within  two  weeks  of  such 
notification.  

EN 

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(b) The institutions shall request the approval of the budgetary authority for the acquisition of 
real state assets or any other building project, financed through a loan. 

(cid:216) new 

(cid:208) 1995/2006 Art. 1.113 (adapted) 
(cid:214) new 

TITLE VII 

EXPERTS 

Article 179a 

⌦ Experts ⌫ 

The  implementing  rules  shall  include  a  specific  procedure  for  the  selection  of  (cid:214) natural 
persons as  experts, to be paid on the basis of a fixed amount, for assisting the institutions, 
in  particular  in  ⌦ the  evaluation  of ⌫  evaluating  proposals  and  grant  applications  ⌦ , 
projects  and ⌫  or  tenders  for  procurement,  and  for  providing  technical  assistance  in  the 
follow-up to, and final evaluation of, projects financed by the budget (cid:214) opinion and advice in 
specific cases  . ⌦ These persons shall be paid on the basis of a fixed amount announced in 
advance ⌫ (cid:214) and shall be chosen on the basis of their professional capacity. The selection 
shall be done on the basis of selection criteria respecting the principles of non-discrimination, 
equal treatment and absence of conflict of interests.  

(cid:208) 1605/2002 

PART THREE 

TRANSITIONAL AND FINAL PROVISIONS 

TITLE I 

TRANSITIONAL PROVISIONS 

(cid:208) 1995/2006 Art. 1.115 (adapted) 

Article 181 

⌦ Transitional provisions ⌫ 

EN 

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1. As regards the Funds mentioned in Article 155(1) for which the basic acts were repealed 
before the date of application of this Regulation, appropriations which were decommitted in 
application  of  Article 157(1)  may  be  made  available  again  in  the  event  of  a  manifest  error 
attributable  solely  to  the  Commission  or  in  the  case  of  force  majeure  which  has  serious 
repercussions for the implementation of operations supported by these Funds. 

2. The central database referred to in Article 95 shall be set up by 1 January 2009. 

32.  For  transfers  of  appropriations  concerning  operational  expenditure  referred  to  in  the 
Regulations  governing  the  Structural  Funds  and  the  Cohesion  Fund  for  the  2000  to  2006 
programming period, for which Community payments still have to be made for the financial 
settlement  of  outstanding  Community  commitments  until  the  closure  of  the  assistance,  the 
Commission may make transfers from one title to another, provided that the appropriations in 
question: 

–  are for the same objective, or 

–  relate to Community initiatives or to technical assistance and innovative measures 

and are transferred to measures of the same nature. 

4.  Article 30(3)  shall  apply  for  the  fund  mentioned  in  Article 148(1)  for  the  first  time  in 
respect of the payments charged to the 2008 budget. 

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

TITLE II 

FINAL PROVISIONS 

Article 182 

⌦ Information requests by the Budgetary Authority ⌫ 

The European Parliament and the Council shall be empowered to obtain any information or 
explanations regarding budgetary matters within their fields of competence. 

Article 183 

⌦ Adoption of the Implementing Rules ⌫ 

(cid:214) In accordance with Article 290 of the Treaty on the Functioning of the European Union,  
Tthe  Commission  shall  adopt  (cid:214) a  delegated  Regulation  on   rules  for  implementing  this 
Regulation. 

EN 

163 

   EN 

 
 
(cid:216) new 

Article 183aa 

Exercise of the delegation 

The powers to adopt the delegated act referred to in Article 183 shall be conferred on 

1. 
the Commission for an indeterminate period of time. 

As soon as it adopts this delegated act, the Commission shall notify it simultaneously 

2. 
to the European Parliament and to the Council. 

The powers to adopt the delegated act are conferred on the Commission subject to the 

3. 
conditions laid down in Articles 183ab and 183ac.  

(cid:216) new 

Article 183ab 

Revocation of the delegation  

The delegation of power referred to in Article 183 may be revoked at any time by the 

1. 
European Parliament or by the Council. 

The  institution  which  has  commenced  an  internal  procedure  for  deciding  whether  to 
2. 
revoke the delegation of power shall inform the other institution and the Commission within a 
reasonable  time  before  the  final  decision  is  taken,  indicating  the  delegated  powers  which 
could be subject to revocation and possible reasons for a revocation. 

3. 
The decision of revocation shall put an end to the delegation of the powers specified in 
that decision. It shall take effect immediately or at a later date specified therein. It shall not 
affect the validity of the delegated acts already in force. It shall be published in the Official 
Journal of the European Union.  

(cid:216) new 

Article 183ac 

Objections to delegated acts  

1. 
The  European  Parliament  and  the  Council  may  object  to  the  delegated  act  within  a 
period  of  two  months  from  the  date  of  notification.  At  the  initiative  of  the  European 
Parliament or the Council this period shall be extended by one month.  

2. 
If,  on  expiry  of  that  period,  neither  the  European  Parliament  nor  the  Council  has 
objected  to  the  delegated  act  it  shall  be  published  in  the  Official  Journal  of  the  European 
Union and shall enter into force at the date stated therein. 

EN 

164 

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The delegated act may be published in the Official Journal of the European Union and enter 
into force before the expiry of that period if the European Parliament and the Council have 
both informed the Commission of their intention not to raise objections.  

If the European Parliament or the Council objects to a delegated act, it shall not enter 
3. 
into force. The institution which objects shall state the reasons for objecting to the delegated 
act. 

(cid:208) 1605/2002 (adapted) 

Article 184 

⌦ Revision ⌫ 

Every three years, or This Regulation shall be revised whenever it proves necessary to do so, 
this Regulation shall be the subject of a review in accordance with the procedure laid down by 
Article 322 of the Treaty on the Functioning of the European Union 279 of the EC Treaty and 
Article  183  of  the  Euratom  Treaty  establishing  the  European  Atomic  Energy  Community, 
after recourse to the conciliation procedure, if the European Parliament so requests. 

(cid:208) 1605/2002 (adapted) 
(cid:206)1 1995/2006 Art. 1.116(a) 
(cid:214) new 

Article 185 

⌦ Framework financial regulation for agencies and bodies set up under the Treaty on 
the functioning of the European Union and the Treaty establishing the European Atomic 
Energy Community ⌫ 

1.  (cid:214) In  accordance  with  Article  290  of  the  Treaty  on  the  Functioning  of  the  European 
Union,  (cid:206)1 Tthe  Commission  shall adopt a  framework  financial  regulation  for  the bodies 
set  up  under  ⌦  this  Treaty  and  the  Treaty  establishing  the  European  Atomic  Energy 
Community by the Communities, ⌫ and having which have legal personality which actually 
receive ⌦ and receive ⌫ contributions charged to the ⌦ Union ⌫ budget .  

(cid:214) This  framework  financial  regulation  will  be  based  on  the  principles  and  rules  provided 
under this Regulation.  

The  financial  rules  of  these  bodies  may  not  depart  from  the  framework  regulation  except 
where  their  specific  operating  needs  so  require  and  with  the  Commission's  prior  consent. 
(cid:214) Such exception may not concern the budgetary principles referred to in Title II of Part One, 
the  principle  of  equality  of  treatment  of  operators,  or  specific  provisions  contained  in  the 
basic acts creating such bodies.  

2. Discharge for the implementation of the budgets of the bodies referred to in paragraph 1, 
shall be given by the European Parliament on the recommendation of the Council. 

EN 

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3. The Commission's internal auditor shall exercise the same powers over the bodies referred 
to in paragraph 1 as he/she does in respect of Commission departments. 

(cid:214) 4. Unless otherwise provided in the basic act creating a body referred to in paragraph 1, the 
Court of Auditors shall examine the legality and regularity of the revenue and expenditure of 
this  body  before  its  accounts  are  consolidated  with  the  Commission's  accounts.  This 
examination  shall  rely  on  the  audit  report  established  by  an  independent  external  auditor 
designated by the body and whose mission is to verify the conformity of the body's accounts 
with Article 123 of this Regulation.  

(cid:214) 5. The provisions of Articles 183aa, 183ab and 183ac shall apply mutatis mutandis to this 
Article.  

(cid:216) new 

Article 185a 

Model Financial Regulation for public-private partnership bodies 

The  bodies  having  legal  personality  set  up  by  a  basic  act  and  entrusted  with  the 
implementation  of  a  public-private  partnership  pursuant  to  Article  53(1)  point  (2)  (e)  shall 
adopt their financial rules.  

These rules shall include a set of principles necessary to ensure sound financial management 
of Union funds, inspired in particular by Article 53b of the present Regulation and which shall 
be  laid  down  in  a  light  model  financial  regulation,  to  be  adopted  by  the  Commission,  in 
accordance with Article 290 of the Treaty on the Functioning of the European Union. 

The  provisions  of  Articles  183aa,  183ab  and  183ac  shall  apply  mutatis  mutandis  to  this 
Article. 

(cid:216) new 

Article 185b 

Specific provisions concerning the Euratom Supply Agency 

The administrative expenditure relating to the appropriations provided in the Union's budget 
for  the  Euratom  Supply  Agency  set  up  under  the  Treaty  establishing  the  European  Atomic 
Energy Community shall be implemented in accordance with the relevant provisions of this 
Regulation and the detailed provisions set out in the Implementing Rules of this Regulation.  

(cid:208) 1605/2002 (adapted) 
(cid:214) new 

Article 186 

⌦ Repeal ⌫ 

166 

   EN 

EN 

 
 
 
 
The  Financial  Regulation  of  21  December  1977  ⌦ (EC,  Euratom)  No  1605/2002 ⌫  is 
hereby  repealed  with  the  exception of  its  Article  53b  which  shall  apply  to  all  commitments 
made before the 31 December 2013 of funds referred to in Article 155. 

References to the repealed Regulation shall be construed as references to this Regulation and 
shall be read in accordance with the correlation table in the Annex II. 

Article 187 

⌦ Entry into force ⌫ 

This Regulation shall enter into force on the 20th third day following that of its publication in 
the Official Journal of the European Communities Union. 

It  shall  apply  from  1  January  2003  (cid:214) the  date  of  entry  into  application  of  the  Commission 
Regulation amending Regulation (EC, Euratom) No 2342/2002 laying down detailed rules for 
the implementation of the Financial Regulation and at the latest from 1 January 2012  . 

(cid:216) new 

Article  53a  shall  apply  from  the  date  of  entry  into  application  of  new  rules  governing  the 
Structural  Funds,  the  Cohesion  Fund,  Rural  Development,  the  European  Fund  for  Fisheries 
and  funds  in  the  area  of  Freedom,  Security  and  Justice  managed  in  shared  management 
pursuant  to  Article  53a  under  the  Multiannual  Financial  Framework  to  be  adopted  for  the 
period from 1 January 2014. 

(cid:208) 1605/2002 (adapted) 

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

Done at […],[…] 

For the European Parliament 
The President 
[…] 

For the Council 
The President 
[…] 

EN 

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ANNEX 

CORRELATION TABLE 

referred to in Article 186 

Financial Regulation of 21st December 1977 

Financial Regulation of 25th June 
2002 

Part I — Provisions applicable to the general budget of 
the European Communities 

Part one — Common provisions 

Title I: General principles 

Title II: Budgetary principles 

Article 1, 1(1) 

Article 1, 1(2) 

Article 1, 1(3) 

Article 1, 1(4) and 1(5) 

Article 1, 1(6) 

Article 1, 1(7) 

Article 2 

Article 3 

Article 4, 4(1) 

Article 4, 4(2) 

Article 4, 4(3) 

Article 5 

Article 6 

Article 7, 7(1) 

Article 7, 7(2) 

Article 7, 7(3) 

Article 7, 7(4) 

Article 7, 7(5) 

Article 7, 7(6) 

Article 4, 4(1) and 4(2) 

Article 6 

Article 179, 179(2) 

Article 7 

Deleted 

Article 77, 77(3) 

Articles 27 and 48, 48(2) 

Article 28 

Article 17 

Articles 17 and 18 

Article 19 

Article 5 

Articles 6 and 8 

Article 9(1), 9(2), 9(4) and 9(6) 

Article 9(1), 9(2), 9(3), 9(5) and 
9(6) 

Deleted 

Article 10 

Article 9(1) 

Articles 11 and 157 

EN 

168 

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Article 7, 7(7) 

Article 7, 7(8) 

Article 7, 7(9) 

Article 8, 8(1) 

Deleted, except Article 156, 156(3) 

Consigned to the regulation 
foreseen in Article 183 

Consigned to the regulation 
foreseen in Article 183 

Article 12 

Article 8, 8(2) and 8(3) 

Articles 150, 150(3) and 178 

Article 9 

Article 10 

Article 11 

Title II: Establishment and structure of the budget 

Section I: Establishment of the budget 

Article 13 

Article 29, 29(2) 

Article 16 

Title III: Establishment and 
structure of the budget 

Chapter 1: Establishment of the 
budget 

Article 12 

Article 13 

Article 14 

Article 15, except 15(2) 

Articles 15, 15(2) and 16, 16(2) 

Article 16, 16(1) 

Article 17 

Article 18 

Section II: Structure and presentation of the budget 

Article 19, 19(1) 

Article 19, 19(2) and 19(3) 

Article 19, 19(4) 

Article 19, 19(5) 

Article 19, 19(6) 

Article 31 

Article 33 

Article 34 

Article 37 

Article 38 

Article 35 

Article 36 

Article 39 

Chapter 2: Structure and 
presentation of the budget 

Articles 40 and 41 

Article 41 

Article 43 

Article 44 

Deleted 

EN 

169 

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Article 19, 19(7) 

Article 19, 19(8) 

Article 20, except 20(4) 

Article 20, 20(4) 

Article 30, 30(1) 

Article 45 

Article 46 

Article 47 

Title III: Implementation of the budget 

Title IV: Implementation of the 
budget 

Section I: General provisions 

Chapter 1: General provisions 

Article 21 

Article 22, 22(1) 

Article 22, 22(2) 

Article 22, 22(3) 

Article 22, 22(4) 

Article 22, 22(4a) 

Article 22, 22(5) 

Article 23 

Article 24 

Article 24a 

Article 25 

Article 26, 26(1) 

Article 26, 26(2) and 26(4) 

Article 26, 26(3) 

Article 26, 26(5) 

Article 26, 26(6) and (7) 

Article 26, 26(8) and (9) 

Article 26, 26(10) and (11) 

Article 27, 27(1) 

Article 27, 27(2) and (5) 

Article 58 

Articles 48 and 49 

Article 50, 54(1) and 57(1) 

Deleted 

Articles 51, 52 and 59 

Article 56 

Article 1(2) 

Article 84 

Deleted 

Articles 85 and 86 

Article 61 

Article 21 

Article 22 

Article 23 

Article 24 

Deleted 

Article 25 

Article 26 

Article 20, 20(1) 

Deleted 

EN 

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Article 27, 27(2a) 

Article 27, 27(3) 

Article 27, 27(4) 

Article 20, 20(2) 

Deleted 

Article 20, 20(3) 

Section II: Budgetary revenue, management of 
available funds 

Chapter 5: Revenue operations 

Article 28, 28(1) 

Article 28, 28(2) 

Article 28, 28(3) 

Article 28a 

Article 29 

Article 30 

Article 31 

Article 32 

Article 33 

Article 34 

Article 35 

Article 70, 70(1) 

Article 71, 71(2) 

Article 70, 70(2) 

Article 74 

Article 73 

Consigned to the regulation 
foreseen in Article 183 

Article 69 

Article 15 

Consigned to the regulation 
foreseen in Article 183 

Article 131 

Consigned to the regulation 
foreseen in Article 183 

Section III: Commitment, validation, authorisation and 
payment of expenditure 

Chapter 6: Expenditure operations 

Article 36 

Article 37 

Article 38 

Article 39 

Article 40 

Article 41 

Article 42 

Articles 77, 77(1) and (2) and 166, 
166(2) 

Deleted 

Deleted 

Deleted 

Article 79 

Consigned to the regulation 
foreseen in Article 183 

Consigned to the regulation 

EN 

171 

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Article 43 

Article 44 

Article 45 

Article 46 

Article 47 

Article 48 

Article 49 

Article 50 

Article 51, 51(1) 

Article 51, 51(2) 

Article 51, 51(3) 

Article 52 

Article 53 

Article 54 

Section IV: Management of posts 

Article 55 

foreseen in Article 183 

Article 80 

Consigned to the regulation 
foreseen in Article 183 

Consigned to the regulation 
foreseen in Article 183 

Article 81 

Deleted 

Deleted 

Article 71, 71(4) 

Deleted 

Deleted 

Article 82 

Deleted 

Deleted 

Consigned to the regulation 
foreseen in Article 183 

Article 63 

Deleted 

Title IV: Conclusion of contracts, inventories, 
accountancy 

Title V: Procurement 

Section I: Contracts for the supply of goods and 
services; contracts for purchase, lease and hire 

Article 56 

Article 57 

Article 58, 58(1) 

Article 58, 58(2) 

Article 58, 58(3) 

Article 105 

Deleted 

Articles 88, 89, 89(2) and 91 

Article 90 

Article 97, 97(1) 

EN 

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Article 58, 58(4) 

Consigned to the regulation 
foreseen in Article 183 

Article 59 

Article 60 

Article 61 

Article 62 

Article 63 

Article 64 

Article 64a 

Article 91, 91(2) 

Article 91, 91(3) 

Deleted 

Article 89, 89(1) 

Deleted 

Deleted 

Article 102 

Section II: Inventories of movable and immovable 
property 

Title VII: Presentation of the 
accounts and accounting 

Article 65 

Article 66 

Article 67 

Article 68 

Section III: Accounts 

Article 69 

Article 70 

Article 70a 

Article 71 

Article 72 

Title V: Responsibilities of authorising officers, 
financial controllers, accounting officers and 
administrators of advance funds 

Chapter 4: Property inventories 

Article 138, 138(1) 

Article 138, 138(2) 

Consigned to the regulation 
foreseen in Article 183 

Consigned to the regulation 
foreseen in Article 183 

Chapter 3: Accounting 

Articles 132 and 133 

Articles 132, 133, 134 and 137 

Consigned to the regulation 
foreseen in Article 183 

Deleted 

Articles 132, 132(3) and 136 

Title IV: Implementation of the 
budget 

Chapter 4: Liability of the financial 
actors 

Article 73 

Article 66 

EN 

173 

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Article 74 

Article 75, 75(1) 

Article 75, 75(2) 

Article 75, 75(3) 

Article 75, 75(4) 

Article 75, 75(5) 

Article 76 

Article 77 

Title VI: Presenting and auditing accounts 

Article 78 

Article 79 

Article 80 

Article 81 

Article 82 

Article 83, 83(1) 

Article 83, 83(2) bis (4) 

Article 84 

Article 85 

Article 86 

Article 87 

Article 88 

Article 88a 

Deleted 

Article 67 

Article 68 

Deleted 

Deleted 

Consigned to the regulation 
foreseen in Article 183 

Article 65, 65(2) 

Deleted 

Title VII: Presentation of the 
accounts and accounting 

Chapter 1: Presentation of the 
accounts 

Article 128 

Article 128 

Articles 122 and 127 

Articles 126 and 128 

Article 128, 128(2) 

Article 140, 140(3) 

Article 139 

Deleted 

Article 140, 140(1) and (2) 

Article 141 

Article 142, 142(1) bis (5) 

Article 143 

Deleted 

Article 89, 89(1) 

Article 145, 145(1) 

Article 89, 89(2), (3) and (5) 

Article 146 

EN 

174 

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Article 89, 89(4) 

Article 89, 89(6) 

Article 89, 89(7) and (8) 

Article 89, 89(9) and (10) 

Article 145, 145(2) and (3) 

Deleted 

Article 147 

Consigned to the regulation 
foreseen in Article 183 

Article 90 

Article 144 

Title VII: Special provisions applicable to research and 
technological development appropriations 

Article 91 

Article 92, 92(1) and (2) 

Article 92, 92(3) 

Article 92, 92(4) 

Article 93 

Article 94 

Article 95 

Article 96, 96(1) and (4) 

Article 96, 96(2) and (3) 

Article 97 

Title VIII: Special provisions applicable to the 
European Agricultural Guidance and Guarantee Fund, 
Guarantee Section 

Article 98 

Article 99, 99(1) 

Article 99, 99(2) 

Article 100 

Article 101 

Article 102 

Part Two: Special provisions 

Title III: Research 

Article 160, 160(1) 

Article 160, 160(1) 

Article 161, 161(1) 

Article 161, 161(3) 

Deleted 

Deleted 

Article 161, 161(4) 

Article 161, 161(2) 

Deleted 

Deleted 

Part Two: Special provisions 

Title I: European Agricultural 
Guidance and Guarantee Fund, 
Guarantee Section 

Article 148 

Article 150, 150(1) and (2) 

Deleted 

Article 151, 151(1) 

Article 152 

Consigned to the regulation 

EN 

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Article 103 

Article 104 

foreseen in Article 183 

Article 151, 151(2) 

Article 153 

Title IX: Special provisions applicable to external aid 

Part Two: Special provisions 

Title IV: External actions 

Section I: General provisions 

Chapter 1: General provisions 

Article 105, 105(1) and (2) 

Article 162 

Article 105, 105(3) 

Article 105, 105(4) 

Article 105, 105(5) 

Article 106, 106(1) 

Article 106, 106(2) 

Article 106, 106(3) 

Section II: Implementation 

Article 107 

Article 108 

Article 109 

Article 110 

Article 111 

Consigned to the regulation 
foreseen in Article 183 

Deleted 

Consigned to the regulation 
foreseen in Article 183 

Article 166 

Deleted 

Consigned to the regulation 
foreseen in Article 183 

Chapter 2: Implementation of 
actions 

Deleted 

Deleted 

Deleted 

Deleted 

Deleted 

Section III: Award of contracts 

Chapter 3: Procurement 

Article 112 

Article 113 

Article 114 

Article 115 

Article 167, 167(1) 

Article 167, 167(2) 

Article 168 

Consigned to the regulation 
foreseen in Article 183 

EN 

176 

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Article 116 

Article 117 

Article 118 

Article 119 

Deleted 

Deleted 

Consigned to the regulation 
foreseen in Article 183 

Deleted 

Section IV: Auditing of accounts 

Chapter 4: Auditing of accounts 

Article 120 

Title X: Special provisions applicable to the 
management of appropriations relating to staff serving 
in offices and suboffices in the Community and in 
delegations outside the Community and to their 
administration 

Article 121 

Article 122 (Deleted) 

Article 123 

Title XI: Special provisions applicable to financial 
participation by third parties and outside bodies in 
Community activities 

Section I: General provisions 

Article 170 

Deleted 

Deleted 

Deleted 

Deleted 

Deleted 

Article 124 to 126 

Article 18(1)(d) 

Section II: Provisions applicable to participation 
provided for pursuant to the agreement on the European 
Economic Area 

Article 127 to 132 

Article 18(1)(d) 

Title XIa: Special provisions relating to the sanctions 
referred to in Section 4 of Regulation (EC) No 1467/97 

Article 132a 

Article 18(1)(b) 

Title XII: Special provisions relating to the Office for 
Official Publications of the European Communities 

Title V: European Offices 

Article 133 

Article 171 to 175 

Part II: Provisions applicable to borrowing-and-lending 
operations by the European Communities 

EN 

177 

   EN 

 
 
 
 
 
Article 134 

Article 135 

Article 136 

Article 137 

Part III: Transitional and final provisions 

Article 138 

Article 139 

Article 140 

Article 141 

Article 142 

Article 143 

Article 130 

Consigned to the regulation 
foreseen in Article 183 

Deleted 

Article 142, 142(6) 

Part three: Transitional and final 
provisions 

Article 182 

Article 183 

Article 184 

Article 186 

Article 185 

Article 187 

EN 

178 

   EN 

 
 
(cid:207) 

ANNEX I 

Repealed Regulation with list of its successive amendments 

Council Regulation (EC, Euratom) No 1605/2002 

(OJ L 248, 16.9.2002, p. 1) 

Council Regulation (EC, Euratom) No 1995/2006 of 
13 December 2006 

(OJ L 390, 30.12.2006, p. 1) 

Council Regulation (EC) No 1525/2007 of 
17 December 2007 

(OJ L 343, 27.12.2007, p. 9) 

EN 

179 

   EN 

 
 
 
ANNEX V 

CORRELATION TABLE 

Regulation (EC, Euratom) No 1605/2002 

This Regulation 

Article 1 

- 

Annex 

Annex I 

Annex II 

________ 

EN 

180 

   EN