COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT  pursuant to Article 294(6) of the Treaty on the Functioning of the European Union  concerning the Council position on the adoption of a Regulation of the European Parliament and of the Council amending Regulation (EC) No 1905/2006 establishing a financing instrument for development cooperation (original Commission proposal 'taxes amendment', COM(2009)194)
Date: 2010-12-13
Institutions: European Commission
Subjects: EU aid, EU financing, aid system, cooperation policy, democratisation, development aid

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EUROPEAN COMMISSION 

Brussels, 13.12.2010 
COM(2010) 788 final 

2009/0060/A (COD) 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT 

pursuant to Article 294(6) of the Treaty on the Functioning of the European Union 

concerning the 

Council position on the adoption of a Regulation of the European Parliament and of the 
Council amending Regulation (EC) No 1905/2006 establishing a financing instrument 
for development cooperation (original Commission proposal 'taxes amendment', 
COM(2009)194) 

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2009/0060/A (COD) 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT 

pursuant to Article 294(6) of the Treaty on the Functioning of the European Union 

concerning the 

Council position on the adoption of a Regulation of the European Parliament and of the 
Council amending Regulation (EC) No 1905/2006 establishing a financing instrument 
for development cooperation (original Commission proposal 'taxes amendment', 
COM(2009)194) 

1. 

BACKGROUND 

Date of transmission of the proposal to the European Parliament and 
to the Council 
(document COM(2009) 194 final – (2009)/0060A COD): 

transmission: 
21 April 2009 
corrigendum: 
30 November 2009), 
amended:  
01 December 2009  
(entry into force of the 
Lisbon Treaty) 

Date of the opinion of the European Parliament, first reading: 

21 October 2010. 

Date of transmission of the amended proposal: 

[…]. 

Date of adoption of the position of the Council: 

10 December 2010. 

2. 

OBJECTIVE OF THE PROPOSAL FROM THE COMMISSION 

The various EU financial instruments for external cooperation contain a minor inconsistency 
regarding  exceptions  to  the  principle  of  non-eligibility  for  EU  financing  of  costs  related  to 
taxes, duties and other charges imposed by third countries. 

The development cooperation instrument (DCI) does not provide for flexibility as regards the 
non-eligibility of such costs for funding. The other instruments lay down that EU support may 
not  be  used  to  finance  these  costs  “in  principle”:  They  therefore  allow  for  flexibility  on  a 
case-by-case basis, and the authorising officer responsible may, where appropriate, decide to 
accept eligibility in the interests of sound financial management and proper implementation of 
programmes and projects.  

The proposal therefore simply adds the words “in principle” to the text. 

3. 

COMMENTS ON THE COUNCIL POSITION  

3.1. 

General comments on the Council position 

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The  Commission  can  accept  the  Council  position  which  is  in  line  with  the  Commission’s 
initial  proposal  and  with  the  European  Parliament’s  first  reading,  with  the  exception  of  the 
specific issues mentioned below.  

3.2. 

Main characteristics of the Council position  

The Council position reflects the following key elements: 

•  Taxes  and  duties:  The  wording  “in  principle”  is  added  to  the  non-eligibility  of  taxes, 
duties and other charges, thus signalling the possibility of exceptions, these being regulated 
internally by the instructions given to Authorising Officers. 

•  Split into two separate acts: one for the DCI and one for the EIDHR. The Commission 
initially proposed one act making the same amendment to both instruments. The equivalent 
amendment of DCI (adding “in principle”) is now incorporated in the Council position on 
COM  (2010)  102  final  –  2010/0059  COD  (which  is  the  amendment  of  DCI  to  include 
bananas accompanying measures).  

3.3. 

Specific issues (amendments by Parliament not acceptable to Council): 

Delegated  acts  (Article  290  TFEU):  Parliament  seeks  by  its  first  reading  amendments  to 
apply  this  procedure  to  the  adoption  of  multiannual  strategy  papers  by  the  Commission. 
Despite long and intensive negotiations (notably trilogues held on 2 February, 23 March and 
20  October)  it  was  not  possible  to  reach  agreement  on  this  issue.  The  Council  has  not 
accepted  these  amendments  in  its  positions  at  first  reading  The  Commission  is  ready  to 
continue  efforts  to  reconcile  the  positions  of  the  institutions  and  to  find  ways  to  meet  the 
substantive  concerns  behind  Parliament’s  amendments,  in  particular  in  ensuring  that 
Parliament  can  exercise  appropriate  oversight  over  the  formulation  of  external  cooperation 
strategies and the proper implementation of external financial instruments. 

National  Parliaments.  Parliament  also  adopted  amendments  introducing  references  to 
national parliaments which Council has not accepted. The Commission consider that the main 
concern  behind  Parliament’s  amendments,  to  ensure  that  national  parliaments  may  involve 
themselves in monitoring and evaluating the implementation of the instrument, is covered by 
existing  provisions  concerning  national  parliaments,  notably  the  protocols  to  the  Treaty  on 
Functioning of the EU (TFEU). 

4. 

CONCLUSION 

The Commission can accept the Council position at first reading. 

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