Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU, Euratom) No 966/2012 as regards the financing of European political parties
Date: 2012-11-29
Institutions: European Commission
Subjects: EU financial instrument, auditing, economic support, financial control, general budget (EU), political parties, use of aid

EUROPEAN 
COMMISSION 

Brussels, 29.11.2012  
COM(2012) 712 final 

2012/0336 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EU, Euratom) No 966/2012 as regards the financing of European 
political parties 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

It  is  necessary  to  amend  the  Financial  Regulation1  in  order  to  take  account  of  the  changes 
proposed in the Commission proposal for a Regulation of the European Parliament and of the 
Council  on  the  statute  and  funding  of  European  political  parties  and  European  political 
foundations2  which  will  replace  current  Regulation  (EC)  No  2004/20033.  In  application  of 
Article  224  of  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU)  the  draft 
Regulation replacing Regulation (EC) n° 2004/2003 contains new rules regarding, inter alia, 
the funding of political parties and political foundations at European level. Their effectiveness 
requires that they are accompanied by a corresponding set of financial rules anchored in the 
Financial Regulation. 

It  is  proposed  that  a  new  Title  "Contributions"  be  inserted  at  the  end  of  part  two  of  the 
Financial  Regulation  ("special  part")  just  before  part  three  ("transitional  and  final 
provisions").  

Last, it is not envisaged at this stage to have any delegated act, based on article 290 TFEU, for 
this new Title. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

The  proposal  follows  the  EP  resolution  regarding  the  financing  of  the  European  political 
parties  (the  Giannakou  report)4  which  considers  that,  in  light  of  the  experience  gained,  the 
financing  of  European  political  parties  and  European  political  foundations  should  be 
improved  as  regards  a  number  of  points.  In  particular,  it  calls  for  an  end  to  the  system  of 
grants  and  the  creation  of  a  new  financing  instrument  in  the  Financial  Regulation  'devoted 
solely and tailored specifically to the funding of European Parties and foundations'.  

After close analysis, it is proposed that Political parties should indeed be financed through a 
new  instrument  ("contributions")  as  illustrated  in  this  draft  proposal  rather  than  through  an 
operating grant, as it is currently the case. 

As  regards  European  political  foundations,  it  is  considered  that  they  should  continue  to 
receive  an  operating  grant.  The  request  of  the  European  Parliament  to  exclude  as  well 
European  political  foundations  from  the  grant  system  is  not  justified  given  that  the 
specificities  of  European  political  parties  are  not  present  in  the  European  political 
foundations.  In  addition,  most  of  the  concerns  raised  by  the  European  Parliament  regarding 
the  difficulties  encountered  by  these  foundations  under  the  Financial  Regulation  (EC)  n° 

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Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 
2012  on  the  financial  rules  applicable  to  the  general  budget  of  the  Union  and  repealing  Council 
Regulation (EC, Euratom) N° 1605/2002. (OJ L 298, 26.10.2012, p.1) 
COM 499/2012 Final of 12.9.2012 
Regulation (EC) No 2004/2003 of the European Parliament and of the Council of 4 November 2003 on 
the regulations governing political parties at European level and the rules regarding their funding. (OJ L 
297, 15.11.2003, p. 1) 
"On the application of Regulation (EC) No 2004/2003 on the regulations governing political parties at 
European level and the rules regarding their funding of 15 March 2011" –(2010/2201 INI) 

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1605/20025
  shall  disappear  with  the  application  of  the  Financial  Regulation,  removing  the 
need  for  specific  derogations.  This  is  the  case  in  particular  for  the  possibility  for  the 
foundations to receive the entire amount of pre-financing without lodging a guarantee, and to 
build up financial reserves from their own sources, as the amounts dedicated to these reserves 
shall not be taken into account for the purpose of verifying compliance with the no-profit rule. 

Contributions to European political parties are based on a model similar to the grant system 
but with the specificities detailed hereunder. 

In  addition  the  Commission  has  consulted  relevant  stakeholders  (representatives  of  the 
political parties and foundations at European level, national and academic experts…). 

Last, this proposal was first presented as a Commission working document6 at the same time 
than  the  Commission  proposal  for  a  Regulation  of  the  European  Parliament  and  of  the 
Council  on  the  statute  and  funding  of  European  political  parties  and  European  political 
foundations.  

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1. 

New  title  in  the  Financial  Regulation:  "Contributions  to  European  political 
parties" 

The proposal establishes a new Title VIII in part Two of the Financial Regulation dedicated to 
Contributions  to  European  political  parties  and  it  repeals  the  specific  provisions  regarding 
European political parties which are currently foreseen the Title VI (grants) of part One. 

3.2.  Major modifications in comparison to the current grant system. 

This proposal introduces the following elements: 

3.2.1.  Abolition of the "annual work programme" 

The  Giannakou  report  cited  above  calls  in  its  §18  for  the  abolition  of  the  annual  work 
programme for European political parties pointing out that this precondition is inappropriate 
for them and is not required in any Member State legislation. 

In particular, the activities of political parties demand a much larger degree of flexibility and 
reaction to current events than the one imposed by the system of grants, which requires the 
presentation  of  an  annual  work  programme  and  a  provisional  budget  in  the  request  for 
funding.  

For  this  reason,  the  contributions  should  be  awarded  without  annual  work  programmes  or 
estimated operating budgets. 

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Regulation (EC) No 1605/2002 of 25 June 2002 ( OJ L 248, 16.9.2002, p.1) 
Commission working document COM 500/2012 final of 19.9.2012 prefiguring the proposal for an 
amendment to the Financial Regulation introducing a new title on the financing of European political 
parties. 

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3.2.2. 

Introduction of eligibility criteria  

Eligibility criteria for funding of political parties have been introduced in accordance with the 
proposal  for  a  Regulation  on  the  statute  and  funding  of  European  political  parties  and 
European  political  foundations.  In  practice,  the  authorising  officer  should  request  directly 
from the Registry of European political parties (set up in the EP) certificates confirming that 
European political parties are duly registered and are in compliance with relevant obligations 
(e.g. presentation of accounts) and have not been suspended or subject to any administrative 
penalty as foreseen in this above proposal for a Regulation. 

3.2.3.  Abolition of the selection criteria 

The  selection  criteria  will  not  be  required  in  the  new  Title,  since  there  is  little  value  in 
verifying the financial and operational capacity of European political parties to represent its 
citizens, a fortiori when no annual work programme or estimated budget is submitted. 

3.2.4.  Control on their statutory obligations 

A provision has been introduced which will explicitly require that European political parties 
should not be subject to debarment from the Registry or subject to an administrative penalty 
during the financial year covered by the contribution. In such cases, their contributions would 
be reduced or terminated and any pre-financing paid recovered.  

The  authorising  officer  should  request  such  confirmation  to  the  EP  Registry  before  making 
the payment of the balance.  

3.2.5.  Controls on expenditure and not on actions 

The departure from the current system of grants, which is subject to the submission of a work 
programme and of an estimated budget, should not be perceived as a 'carte blanche' to allow 
political parties  to  misuse  EU  funds. While financial support should be awarded without an 
annual  work  programme  and  estimated  operating  budget,  European  political  parties  should 
justify ex post the sound use of Union funds. 

In  particular,  the  authorising  officer  should  verify  if  the  EU  funds  have  been  used  to  pay 
reimbursable expenditure as established in the call for contributions within the time limits laid 
down in this Regulation. This solution will simplify the request for contributions as there is no 
submission of annual work programmes or estimated budgets, and will allow political parties 
to implement their activities freely and adjust them in the course of the year. 

3.2.6.  Time limits to use of EU funds 

The Giannakou report calls in its §24 for the possibility to 'build up reserves and carry-over of 
funds'. The new Title does not prevent European political parties from building reserves from 
their  own  sources.  In  addition,  European  political  parties  should  also  benefit  from  a  certain 
flexibility regarding the time limits to use the EU funds awarded. A strict application of the 
obligation to use these funds within the financial year for which they were awarded would be 
difficult to reconcile with the need for European political parties to adjust their resources to 
the electoral cycle. 

However,  EU  funds  that  have  not  been  spent  should  be  used  within  a  reasonable  time. 
Contributions  to  European  political  parties  should  be  spent  to  cover  reimbursable 

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expenditures  within  two  financial  years  following  the  financial  year  for  which  they  were 
awarded (n+2), after which, any unspent funds should be recovered by the authorising officer. 

3.2.7.  Co-financing 

Financing of European political parties shall follow the principle of co-financing established 
by  Regulation  xx/xxxx,  without  prejudice  to  the  possibility  mentioned  above  to  use  any 
unused  part  of  the  EU  contribution  to  cover  reimbursable  expenditure  within  the  following 
two financial years after its awarding. 

3.2.8.  Financing methods 

As in grants, contributions may be paid either through the reimbursement of a percentage of 
the expenditures incurred or through a system of predefined lump sum, unit costs, and flat rate 
(forfaits).  

3.2.9. 

100% pre-financing 

Contributions should be paid in one pre-financing payment covering 100% of the sum, unless 
the authorising officer decides otherwise for duly justified reasons.  

3.2.10.  Interest on pre-financing 

By  derogation  to  Article  5  of  the  Financial  Regulation,  any  interest  yielded  by  the  pre-
financing  amounts  perceived  by  the  European  political  parties  should  be  used  to  pay 
reimbursable expenditures within the following two financial years. 

3.2.11.  Penalty and control regime  

As it is the case for grants, the new Title should include the standard provisions regarding the 
control of the EP, OLAF, and the Court of Auditors. It should also include the same penalty 
regime (administrative and financial penalties) which is applicable to grant beneficiaries. 

4. 

BUDGETARY IMPLICATION 

The envisaged modification of the Financial Regulation has no budgetary implications. 

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P2012/0336 (COD) 

roposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EU, Euratom) No 966/2012 as regards the financing of European 
political parties 

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, 

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

Having regard to the opinion of the Court of Auditors7, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Political parties at European level are important as a factor for integration within the 
Union. 

Article  10  of  the  Treaty  on  European  Union  and  Article  12(2)  of  the  Charter  of 
Fundamental  Rights  of  the  European  Union  state  that  political  parties  at  European 
level  contribute  to  forming  a  European  political  awareness  and  to  expressing  the 
political will of the citizens of the Union.  

On  4  November  2003  the  European  Parliament  and  the  Council  adopted  Regulation 
(EC)  No  2004/2003  on  the  regulations  governing  political  parties  at  European  level 
and the rules regarding their funding8.  

In its resolution of 6 April 2011 on the application of Regulation (EC) No 2004/2003 
on the regulations governing political parties at European level and the rules regarding 
their funding9, the European Parliament has, in light of experience gained, suggested a 
number of improvements on the financing of European political parties and European 
political foundations. 

(5) 

On […] the European Parliament and the Council adopted Regulation (EU) No […] on 
the  statute  and  funding  of  European  political  parties  and  European  political 

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OJ […], […], p. […]. 

OJ L 297, 15.11.2003, p.1. 
2010/2201(INI).  

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foundations10  repealing  Regulation  (EC)  No  2004/2003.  That  Regulation  lays  down 
new  rules  for,  inter  alia,  the  funding  of  political  parties  and  political  foundations  at 
European level, in particular with regard to funding conditions, mode and distribution 
of  funding,  donations  and  contributions,  financing  of  campaigns  for  elections  to  the 
European  Parliament,  reasonable  expenditure,  prohibition  of  funding,  accounts, 
implementation and control, penalties, and transparency.  

Regulation  (EU,  Euratom)  No  966/2012  of  the  European  Parliament  and  of  the 
Council of 25 October 2012 on the financial rules applicable to the general budget of 
the  Union11  (hereinafter  "the  Financial  Regulation")  should  include  rules  on  the 
contributions by the European Parliament to the European political parties. Those rules 
should allow political parties at European level to have a broader degree of flexibility 
as regards the time limits to use those contributions, as the nature of their activities so 
require. 

The  system  of  financial  support  to  European  political  parties  through  an  operating 
grant as provided by Article 125(6) of the Financial Regulation is not suited to their 
needs,  in  particular  the  obligation  to  submit  an  annual  work  programme  and  an 
estimated  operating  budget,  a  requirement  that  does  not  exist  in  the  legislation  of 
Member  States.  Therefore,  the  financial  support  given  to  European  political  parties 
should  take  the  form  of  a  specific  contribution,  to  match  the  specific  needs  of  the 
European political parties. 

(6) 

(7) 

(8)  While financial support is awarded without an annual work programme and estimated 
operating  budget,  European  political  parties  should  justify  ex  post  the  sound  use  of 
Union funds. In particular, the authorising officer should verify if the funds have been 
used to pay reimbursable expenditure as established in the call for contributions within 
the  time  limits  laid  down  in  this  Regulation.  Contributions  to  European  political 
parties should be spent within two financial years following the financial year it was 
awarded,  after  which,  any  unspent  funds  should  be  recovered  by  the  authorising 
officer.  

(9) 

Union funds awarded to finance  the operating costs of the European political parties 
should  not  be  used  for  other  purposes  than  those  established  in  Regulation  (EU)  No 
[…],  in  particular  to  finance  directly  or  indirectly  other  entities  such  as  national 
political parties. The European political parties should use the contributions to pay a 
percentage of current and future expenditures and not expenditures or debts incurred 
before the submission of their applications for contributions. 

(10)  The award of contributions should also be simplified and adapted to the specificities of 
the  European  political  parties,  in  particular  by  the  absence  of  selection  criteria,  the 
establishment  of  100%  pre-financing  as  a  general  rule  or  the  possibility  to  use  lump 
sums, flat-rate and unit cost financing. 

(11)  The contributions from the Union budget should be reduced or terminated where the 
European  political  parties  violate  the  obligations  laid  down  in  Regulation  (EU)  No 
[…]. 

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OJ L … 
OJ L 298, 26.10.2012, p. 1. 

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(12)  Penalties  that  are  based  both,  on  the  Financial  Regulation  and  Regulation  (EU)  No 
[…], to be imposed by the same institution, should be imposed in a coherent way and 
respecting  the  principle  of  non  bis  in  idem.  In  accordance  with  Regulation  (EU)  No 
[…] administrative and/or financial penalties provided for by Financial Regulation are 
not to be imposed in one of the cases for which penalties have already been imposed 
on the basis of Regulation (EU) No […].  

(13)  The Financial Regulation should therefore be amended accordingly, 

HAVE ADOPTED THIS REGULATION: 

Regulation (EU, Euratom) No 966/2012 is amended as follows:  

Article 1 

(1) 

In Part Two, the following Title VIII is added: 

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"TITLE VIII 
CONTRIBUTIONS TO EUROPEAN POLITICAL 
PARTIES 

1. 

2. 

1. 

2. 

3. 

4. 

5. 

Article 204a  
General provisions 

For the purposes of this Regulation, European political parties shall mean the entities 
constituted  and  registered  as  such  in  accordance  with  Regulation  (EU)  No  [….]  of 
the European Parliament and of the Council(*). 

Direct financial contributions from the budget may be awarded to European political 
parties in view of their contribution to forming European political awareness and to 
expressing the political will of the citizens of the Union.  

Article 204b 
Principles 

Contributions shall only be used to reimburse a percentage of the operating costs of 
European political parties directly linked to objectives of those parties. Contributions 
shall not be used to grant directly or indirectly any personal advantage, in cash or in 
kind, to any individual member or staff of a European political party.  

Contributions  shall  not  be  used  to  fund  activities  of  third  parties,  in  particular 
national  political  parties  or  political  foundations  at  European  or  national  level, 
whether in the form of grants, donations, loans or any other similar agreements.  

Contributions shall be subject to the principles of transparency and equal treatment, 
in accordance with the criteria laid down in Regulation (EU) No [….]. 

Contributions shall be awarded by the European Parliament on an annual basis and 
shall be published in accordance with Article 35(2). 

European political parties receiving a contribution shall not receive other funds from 
the budget for the same purposes. In any case, no cost item may be financed twice by 
the budget. 

Article 204c 
Budgetary aspects 

Contributions shall be paid from the European Parliament section of the budget. 

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Article 204d 
Call for contributions 

Contributions shall be awarded through a call for contributions published each year, 
at least on the website of the European Parliament.  

A European political party may only be awarded one contribution per year. 

A European political party may only receive a contribution if it applies for funding 
on the terms and conditions laid down in the call for contributions. 

The  call  for  contributions  shall  determine  the  eligibility  criteria  to  be  met  by  the 
applicant as well as the exclusion criteria.  

The call for contributions shall determine, at least, the nature of the expenditure that 
may be reimbursed by the contribution. 

Article 204e 
Award procedure 

Applications  for  contribution  shall  be  submitted  in  writing,  including,  where 
appropriate, in a secure electronic format. 

Contributions may not be awarded to applicants who are, at the time of a contribution 
award procedure, in one of the situations referred to in Articles 106(1) and 107 and 
point  (a)  of  Article  109(1)  and  those  who  are  registered  in  the  Central  exclusion 
database referred to in Article 108. 

Applicants  must  certify  that  they  are  not  in  one  of  the  situations  referred  to  in 
paragraph 2.  

Contributions  shall  be  awarded  through  a  contribution  agreement  or  decision  as 
specified in the call for contributions. 

The authorising officer may be assisted by a committee to evaluate and establish the 
award  decision.  The  authorising  officer  shall  specify  the  rules  regarding  the 
composition,  appointment  and  functioning  of  such  committee,  and  the  rules  to 
prevent any conflict of interests.  

Article 204f 
Evaluation procedure  

Applications shall be selected on the basis of the award criteria set out in Regulation 
(EU) No [….] among applications respecting the eligibility and exclusion criteria. 

The  eligibility  criteria  shall  determine  the  conditions  for  an  applicant  to  be  able  to 
receive a contribution according to the rules laid down in Regulation (EU) No [….].  

The decision of the authorising officer responsible on the applications shall state at 
least: 

1. 

2. 

3. 

4. 

5. 

1. 

2. 

3. 

4. 

5. 

1. 

2. 

3. 

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(a) 

 the subject and the overall amount of the contribution; 

(b) 

the name of the selected applicants and the amounts accepted; 

(c) 

the names of any applicants rejected and the reasons for that rejection. 

4. 

The authorising officer responsible shall inform applicants in writing of the decision 
on their application. If the contribution request is rejected or the amounts requested 
are  not  awarded  in  part  or  in  full,  the  authorising  officer  shall  give  the  reasons  for 
either  the  rejection  of  the  application  or  the  non-award  of  the  amounts  requested, 
with  reference  in  particular  to  the  eligibility  and  award  criteria  referred  to  in 
paragraphs 1 and 2. 

Article 204g 
Form of contributions 

1. 

Contributions may take any of the following forms: 

(a) 

reimbursement of a percentage of the expenditures actually incurred; 

(b) 

reimbursement on the basis of unit costs; 

(c) 

lump sums; 

(d) 

flat-rate financing; 

2. 

1. 

2. 

3. 

4. 

(e) 

a combination of the forms referred to in points (a) to (d). 

Only  the  expenditure  which  meets  the  criteria  established  in  the  calls  for 
contributions and which has not been incurred prior to the date of submission of the 
application may be reimbursed. 

Article 204h 
 Rules for contribution 

Lump sums shall cover, in global terms, certain expenditures necessary for carrying 
out a specific activity of the European political party. Lump sums shall only be used 
in combination with other forms of contributions. 

Unit  cost  shall  cover  all  or  certain  specific  categories  of  reimbursable  expenditure 
which are clearly identified in advance by reference to an amount per unit. 

Flat-rate financing shall cover specific categories of reimbursable expenditure which 
are clearly identified in advance by applying a percentage. 

Where lump sums, flat-rate financing and unit costs are used, they shall be defined in 
the  call  for  contributions.  The  contribution  agreement  or  decision  shall  include 
provisions that allow verifying that the conditions for the award of lump sums, flat-
rate financing or unit costs have been respected. 

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Article 204i 
Pre-financing 

The contributions shall be paid in the form of  one  pre-financing  of 100%, except if in duly 
justified cases, the authorising officer decides otherwise. 

Article 204j 
 Guarantees 

The  authorising  officer  responsible  may,  if  he  deems  it  appropriate  and  proportionate,  on  a 
case-by-case basis and subject to risk analysis, require the European political party to lodge a 
guarantee  in  advance  in  order  to  limit  the  financial  risks  related  to  the  payment  of  pre-
financing only when, in the light of his risk assessment, the political party is at an imminent 
risk of being in one of the situations described in points (a) and (d) of Article 106(1) or when 
the European Parliament has formally initiated an administrative procedure that could lead to 
a debarment and/or revocation of its contribution.  

The provisions laid down in Article 134 on the pre-financing guarantee for grants shall apply 
mutatis  mutandis  to  guarantees  which  may  be  required  in  the  cases  foreseen  in  the  above 
paragraph to pre-financing payments made to European political parties.  

Article 204k 
Use of contributions 

1. 

2. 

3. 

4. 

5. 

Contributions shall be spent in accordance with Article 204b. 

Any  part  of  the  contribution  not  used  within  the  financial  year  covered  by  this 
contribution  shall  be  spent  on  any  reimbursable  expenditure  incurred  by  31 
December of year n+2. The remaining part of the contribution that is not spent within 
the n+2 time limit shall be recovered in accordance with Chapter 5 of Part One. 

European political parties shall respect the maximum co-financing rate established in 
Regulation  xx/xxxx.  Remaining  amounts  of  the  previous  two  years'  contributions 
may  not  be  used  to  finance  the  part  which  European  political  parties  must  provide 
from their own resources. 

European political parties shall first use the funds that have not been used within the 
financial  year  covered  by  the  contribution  before  using  the  contributions  awarded 
after that year. 

Any  interests  yielded  by  the  pre-financing  payments  shall  be  considered  as  part  of 
the Union contribution. 

Article 204l 
Report on the use of the contributions 

The  European  political  party  shall,  in  accordance  with  the  conditions  and  time  limits  laid 
down in the call for contributions, submit to the authorising officer for approval a final report 
on the use of the contribution and its accounts.  

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The authorising officer shall draft his annual activity report referred to in Article 66(9) on the 
basis  of  the  final  report  and  accounts  referred  to  in  the  first  paragraph.  He  may  use  other 
supporting documents for the purposes of his report.  

1. 

2. 

3. 

4. 

5. 

1. 

2. 

Article 204m 
 Payment of the balance 

The  amount  of  the  contribution  shall  not  become  final  until  after  the  authorising 
officer  has  accepted  the  final  report  and  accounts  referred  to  in  Article  204l. 
Acceptance  of  the  report  and  accounts  shall  be  without  prejudice  to  subsequent 
checks by the European Parliament.  

Any unspent amount of pre-financing shall not become final until it has been used by 
the European political party to pay reimbursable expenditures which meet the criteria 
defined in the call for contributions.  

Where the European political party fails to comply with its obligations related to the 
use of contribution, the contributions shall be suspended, reduced or terminated after 
the  European  political  party  has  been  given  the  opportunity  to  present  its 
observations. 

The  authorising  officer  shall  verify  before  making  the  payment  of  the  balance  that 
the European political party is still registered in the registry referred to in Article 6 of 
Regulation  (EU)  No  [….]  and  has  not  been  the  subject  of  any  of  the  penalties 
provided for in Article 22 of that Regulation between the date of its application and 
the end of the financial year covered by the contribution.  

Where the European political party is no longer registered in the Registry referred to 
in  Article  6  of  Regulation  (EU)  No  [….]  or  has  been  the  subject  of  any  of  the 
penalties  provided  for  in  Article  22  of  that  Regulation,  the  authorising  officer 
responsible may suspend, reduce or terminate the contribution and recover amounts 
unduly  paid  under  the  contribution  agreement  or  decision,  in  proportion  to  the 
seriousness of the errors, irregularities, fraud or other breach of obligations related to 
the  use  of  contribution,  after  the  political  party  has  been  given  the  opportunity  to 
present its observations. 

Article 204n 
Control and penalties 

Each  contribution  agreement  or  decision  shall  provide  expressly  for  the  European 
Parliament, European Anti-Fraud Office and the Court of Auditors to exercise their 
powers  of  control,  on  documents  and  on  the  premises,  over  all  European  political 
parties, contractors and subcontractors who have received Union funds. 

Administrative  and  financial  penalties  which  are  effective,  proportionate  and 
dissuasive  may  be  imposed  on  applicants  by  the  authorising  officer,  in  accordance 
with Article 109 of this Regulation, without prejudice to Article 22(7) of Regulation 
(EU) No [….].  

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3. 

1. 

2. 

Penalties  referred  to  in  paragraph  2  may  also  be  imposed  on  European  political 
parties which, at the moment of the submission of the application for contribution or 
after having received the contribution, have made false declarations in supplying the 
information requested by the authorising officer or fail to supply such information. 

Article 204o 
Record keeping 

European  political  parties  shall  keep  records,  supporting  documents,  and  other 
records  pertinent  to  the  contribution  for  five  years  following  the  submission  of  the 
final report and accounts referred to in Article 204l.  

Records related to audits, appeals, litigation or the settlement of claims arising out of 
the  use  of  the  contribution  shall  be  retained  until  the  end  of  such  audits,  appeals, 
litigation or settlement of claims. 

___________________ 

(*)  OJ […] 

" 

(2) 

In paragraph 2 of Article 121, the following point (j) is added: 

"(j) contributions to European political parties referred to in Title VIII of Part Two." 

(3) 

The second subparagraph of Article 125(3) and paragraph 6 of Article 125 are 
deleted. 

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

Article 2 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels,  

For the European Parliament 

For the Council 

The President 

The President 

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