COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND TO THE COUNCIL on the follow-up to 2011 discharge - Replies to requests from the European Parliament
Date: 2013-09-26
Institutions: European Commission
Subjects: EU control, EU expenditure, audit, budgetary control, financial control, general budget (EU), management audit













EUR-Lex - 52013SC0349 - EN











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52013SC0349

COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND TO THE COUNCIL on the follow-up to 2011 discharge - Replies to requests from the European Parliament /* SWD/2013/0349 final */









TABLE OF CONTENTS
INTRODUCTION....................................................................................................................... 5
European Parliament resolutions on 2011...................................................................................... 6
Priority actions for the Commission...................................................................................... 7
Follow-up to the 2010 discharge resolution........................................................................ 23
The Court of Auditors' Statement of Assurance.................................................................. 26
Horizontal issues................................................................................................................ 27
Budgetary management...................................................................................................... 40
Revenue ........................................................................................................................... 41
Agriculture........................................................................................................................ 44
Market and direct support................................................................................................. 45
Rural development............................................................................................................. 47
Environment, public health and food safety......................................................................... 51
Fisheries 52
Regional policy; energy and transport................................................................................. 53
Employment and social affairs............................................................................................ 58
Bulgaria and Romania........................................................................................................ 62
Control of Structural Funds in the Czech
Republic.............................................................. 63
Gender issues.................................................................................................................... 65
External relations, aid and enlargement............................................................................... 66
Aid to Haiti....................................................................................................................... 69
Research and other internal policies.................................................................................... 71
Education and culture........................................................................................................ 74
Administrative and other expenditure.................................................................................. 75
Getting results from the Union budget................................................................................. 78
SR 12/2011 - Have EU measures contributed to
adapting the capacity of the fishing fleets to available fishing opportunities?...................................................................................................... 85
SR 13/2011 - Does the control of customs
procedure 42 prevent and detect VAT evasion? 89
SR 14/2011 - Has EU assistance improved Croatia’s
capacity to manage post-accession funding?           93
SR 16/2011 - EU Financial assistance for the
decommissioning of nuclear plants in Bulgaria, Lithuania and Slovakia:
Achievements and Future Challenges................................................................... 95
SR 1/2012 - Effectiveness of European Union
development aid for food security in sub-Saharan Africa    98
SR 2/2012 - Financial instruments for SMEs
co-financed by the European Regional Development Fund   102
SR 3/2012 - Structural Funds: Did the
Commission successfully deal with deficiencies identified in the Member States'
management and control systems?...................................................................... 107
SR 4/2012 - Using Structural and Cohesion
Funds to co-finance transport infrastructures in seaports: an effective
investment?....................................................................................................... 113
SR 5/2012 - The Common External Relations
Information System (CRIS)....................... 115
SR 6/2012 - European Union Assistance to the
Turkish Cypriot Community..................... 116
SR 7/2012 - The reform of the common
organisation of the market in wine: Progress to date 117
SR 9/2012 - Audit of the control system
governing the production, processing, distribution and imports of organic
products............................................................................................................ 121
SR 12/2012 - Did the Commission and Eurostat
improve the process for producing reliable and credible European statistics?........................................................................................................... 123
8th, 9th and 10th European Development Funds
(EDF).................................................... 130
Performance, financial management and control
of EU agencies........................................ 144
Agency for the Cooperation of Energy
Regulators (ACER).............................................. 153
Body of European Regulators for Electronic
Communications........................................... 154
European Centre for the Development of
Vocational Training (CEDEFOP)...................... 155
European Police.............................................................................................................. 156
European Aviation Safety Agency.................................................................................... 157
European Banking Authority............................................................................................ 158
European Centre for Disease Prevention and
Control....................................................... 159
European Chemicals Agency........................................................................................... 160
European Environment Agency........................................................................................ 161
European Fisheries Control Agency................................................................................. 162
European Insurance and Occupational Pensions
Authority................................................ 163
European Medicines Agency........................................................................................... 165
European Monitoring Centre for Drugs and Drug
Addiction.............................................. 166
European Network and Information Security
Agency....................................................... 167
European Railway Agency............................................................................................... 168
European Securities and Markets Authority...................................................................... 169
European Training Foundation......................................................................................... 170
European Agency for Safety and Health at Work............................................................. 171
European Foundation for the Improvement of
Living and Working Conditions................... 172
European Union's Judicial Cooperation Unit
(EUROJUST).............................................. 173
European Police Office (EUROPOL).............................................................................. 174
European GNSS Agency................................................................................................. 175
ARTEMIS - Embedded Computing Systems................................................................... 176
ENIAC Joint Undertaking............................................................................................... 177
Fuel Cells and Hydrogen Joint Undertaking...................................................................... 178
INTRODUCTION
This Commission Staff Working Paper
completes the Report from the Commission to the European Parliament and the
Council on the Follow-up to the 2011 Discharge. It presents in detail the
answers to 387 specific requests made by the European Parliament in its
Resolutions forming an integral part of its Decisions on the 2011 Discharge[1]
European Parliament resolutions on 2011
Priority
actions for the Commission
Communication of the
Commission on the protection of the Union budget
1.           (§ 1a) The
Commission should adopt annually, and for the first time in September 2013, a
communication to Parliament, the Council and the Court of Auditors with a view
to making the impact of its preventive and corrective actions as regards the
protection of the Union budget public; notes that it should, in particular,
disclose in due time all suspensions, interruptions and retentions which aimed
to prevent errors and all the amounts (in nominal terms) recovered per Member
State, international organisation or third country in the course of the
preceding year through financial corrections and recoveries for all management
modes at the level of the Union and broken down by Member States; the
Commission should demonstrate as far as possible that the financial corrections
adequately compensated for errors made, and that they contributed to lasting
improvements of the management and control systems.
Commission's
response:
The
Communication will be issued in September 2013
2.           (§ 1b) Financial
corrections should be made by the Commission for the total amount of the
Union's contribution of a programme if, due to errors or mismanagement of funds
by national or regional authorities, the programme fails largely to achieve its
aims, even when a part of the programme has been financed and funds have
already been dispersed.
Commission's
response:
The
requested action has partly been taken. The Commission works within a legal
framework which defines the possibilities it has. The Commission is bound by
decision C(2011)7321 on financial corrections made under articles 99-100 of the
reg. 1083/2006. The Commission sets scales of flat rate financial corrections
from 10% to 100% when deficiencies are detected in national, Commission or
Court audits, or OLAF investigations, and taking into account the principle of
proportionality. Flat rates applied depend on the type, gravity and importance
of the deficiencies detected, as listed in the Commission’s decision. For
individual errors identified by the Court, the Commission or OLAF, the
Commission ensures follow-up and that (financial) corrections (and if required
recoveries) are implemented.
As regards
agriculture, the Commission is bound by Article 31 of Regulation (EC) N°
1290/2005. Financial corrections are applied when expenditure has been incurred
in a way that infringed community rules and are proportionate to the gravity of
the infringement and the financial damage to the EU.
3.           (§ 1c) The
Commission should provide the relevant data covering all the policies managed
by the Commission in Note 6 "Financial corrections and recoveries",
attached to the accounts of the Union.
Commission's
response:
This will
be included in the Commission Communication of September 2013.
4.           (§ 1d) As regards
the policies managed by multiannual programmes, the Commission should specify,
upon the closure of the programming period, the impact of the recoveries and
financial corrections made during that period on the error rate; notes,
moreover, that the Commission should demonstrate that the financial corrections
adequately compensated for errors made, and that they contributed to lasting
improvements of the management and control systems.
Commission's
response:
The
Commission Communication of September 2013 will include cumulative information
on the corrections made for the last three programming periods. The
Communication will not however cover the issue of error rates.
5.           (§ 1e) The
Commission should shoulder greater responsibility for national audit
authorities and for control systems in those Member States in which most errors
were detected; is of the opinion that the Commission should draw up a proposal
in how far the certification and work of audit authorities in those Member
States could be further improved; believes that the Commission should publish
its findings, and integrate them into the midterm-review of relevant
regulations and the MFF.
Commission's
response:
The
Commission will not be taking the requested action. The reason for this is that
the Commission works within a legal framework which restricts the possibilities
it has. 
As regards
cohesion policy, the Commission cannot agree to a formal certification of AAs
even if it would consider the idea as acceptable in principle. The Commission
is in a way "certifying" the quality, compliance and reliability of
the AA work when it grants an article 73 letter, by far the main audit enquiry
is about the review of the work of audit authorities which in itself is a
building-capacity exercise. The Commission has made the same proposal for
2014-2020 (AA are not under the designation process, but are reviewed and
supervised by the Commission which can decide to rely on them), but no
systematic ex ante certification (revision of criteria for Commission to review
the designation process for MA and CA on risk basis and only for programmes
above EUR 250 million of EU allocation in Commission proposal for 2014-2020).
The
management for the agricultural funds is shared with the MS as provided for in
the financial regulation. It is therefore of fundamental importance that it is
the MS who take the responsibility that their national management and control
bodies can meet the strict accreditation criteria which are laid down by the
Commission. Several proposals for the next programming period aim at improving
the assurance about the quality of the controls carried out by the Member
States and the accuracy of the data they provide the Commission on the outcome
of the controls and the level of error. In the political agreement with the
co-legislator on the main elements of the CAP reform, in particular the
horizontal regulation, Article 7(5) of the latter provides that where an
accredited paying agency does not meet or no longer meets one or more of the
accreditation criteria the Member State, on its own initiative or at the
request of the Commission, shall withdraw its accreditation unless the paying
agency makes the necessary changes within a period to be determined according
to the severity of the problem. Furthermore, Article 9 of the horizontal
regulation provides for additional work on the part of the certification bodies
(independent audit bodies) in order to give greater assurance on the quality of
the control underlying the expenditure.
Error rate in shared
management
6.           (§ 1f) The
Parliament calls on the Commission to harmonise the practice of its services
concerning the interruption/suspension of payments when significant
deficiencies are detected at the level of the supervisory and control systems
of Member States.
Commission's
response:
The
Commission is taking the requested actions. The information contained in
various Commission reports shows that interruptions and suspensions are
intensively used and it is the Commission's firm intention to continue to use
all these tools. The Commission's actions in this regard have also been further
harmonized in 2012, in particular in the area of Cohesion policy where both DG
REGIO and EMPL now apply a fully aligned approach.
As regards
interruptions and suspensions in agriculture, the political agreement with the
co-legislators on the main elements of the CAP reform will bring about a
further harmonization with the practices of other services. Specifically,
Article 43 of the new horizontal regulation will enable the Commission to
suspend payments when serious deficiencies are detected.
7.           (§ 1g) The
Parliament calls on the Commission to urge Member States to communicate to its
services the draft eligibility rules in order to adapt national eligibility
rules which are not compatible with the relevant Union rules and to intensify
the controls on the declaration of costs and the effectiveness of the
first-level checks.
Commission's
response:
The
Commission will not be taking the requested action. The reason for this is that
the purpose of defining rules at national level in the current programming
period - as agreed by the legislative authority - is to allow MS to use the
same national, regional and local rules for both purely national schemes or EU
funded projects, thus avoiding additional complexity and addressing the
criticism that EU rules were not familiar to the MS administrations in charge
of EU programmes.
However,
the Commission takes the necessary action when it detects national eligibility
rules that are either too complex or not compliant with EU regulations. For
instance, as regards the ESF, progress is being made on spreading the use of
simplified cost options with a view to replacing in full or in part detailed
and sometimes burdensome national eligibility rules. These simplified cost
options are promoted for the ERDF co-funded programmes as well, when
appropriate.
8.           (§ 1h) The
Parliament calls on the Commission to collect information from Member States
concerning the degree to which national rules render Union legislation on
budget management terms unnecessarily complicated (‘gold-plating’) and report
to Parliament by October 2013; recalls that an infringement of those national
rules represents an error in budget management and that the Commission is
ultimately responsible for errors in implementing the Union budget (Article 317
TFEU); requests that this information is sent to the national parliaments once a
year and that Parliament's Committee on Budgetary Control is duly informed.
Commission's
response: 
The
Commission shares the concerns regarding the so-called "gold-plating
effect", which significantly contributed to the 2011 error rate. However,
this is relevant in particular for the ESF since the ERDF and the Cohesion Fund
are more affected by infringement of public procurement rules. Therefore, the
Commission will present a report to the Discharge Authority on gold plating in
ESF programmes in October 2013. To limit as far as possible the effect of
"gold-plating", the Commission proposals for 2014-2020 include a
clear requirement for all MS to reduce administrative burden for the
beneficiaries.
Concerning
Cohesion policy in general, the Commission is discussing bilaterally with MS
ways of improvement both in the course of implementing the 2007-2013 programmes
and during the preparation for the 2014-2020 programmes, when it detected
unnecessarily complicated administrative rules for beneficiaries. The Commission
will continue working bilaterally with Member States to seek possibilities to
apply more systematically simplified cost options.
Concerning
the rural development legal framework, the Commission has made specific
proposals according to which MS would be required to ensure that all the rural
development measures they intend to implement are verifiable and controllable.
Commission will raise the awareness of Member States as regards "gold
plating" in the framework of the actions to reduce the error rate in rural
development. This proposal could be amended by the co-legislators to require
Member States to ensure that measures are designed in a way that does not
create undue risk of errors.
The
Commission is ready to inform the Parliament on its endeavours, together with
Member States, to push the use of simplified cost options ahead and to reduce
the occurrence of "gold plating". It is important that, when
identified, "gold plating" is addressed. 
However, a
general reporting to the Parliament can only be based on a systematic review of
national eligibility rules in force at national, regional or even local level.
Such exercise would take valuable resources away from audit and sound financial
management of OP's. Therefore, the Commission prefers to work closely together
with Member States to advance the use of simplified cost options, which would
have the same effect as well as additional positive impacts (for example
reduced administrative burden for beneficiaries).
MS should
inform their National Parliaments. Therefore, the Commission will not be taking
the requested action related to the last part of the recommendation
("requests that this information is sent to the national parliaments once
a year and that Parliament's Committee on Budgetary Control is duly
informed").
9.           (§ 1i) The
Parliament calls on the Commission to support the management and control
authorities of the Member States in identifying the systemic sources of errors
and in particular in ensuring compliant implementation of public procurement
rules and give guidance in the form of motivated opinions to those authorities
in their simplification efforts; those opinions will be made public.
Commission's
response:
The
Commission has taken the requested action and reported in the 2012 AARs of the
respective DGs. It has made and continues to make considerable efforts to
ensure strict compliance with eligibility requirements and the correct
application of public procurement rules, through training and guidance on
eligibility rules to programme managing authorities to ensure they transmit
this knowledge to all bodies in charge of managing the funds. Moreover, when it
identifies complex rules at programme level, the Commission makes
recommendations to simplify them. It has also shared with Member States an
analysis of the types of procurement errors detected by EU audits in cohesion
policy during previous years and has launched an exercise to collect best
practices and possible answers by Member States to remedy such errors and
reduce their occurrence.
The
Commission verifies compliance with EU and national eligibility requirements
and with public procurement rules through its extensive audit work. It has an
audit strategy in place covering all structural fund instruments, which is
updated annually. For the 2007-2013 programming period, the control strategy
contributing to the assurance building is implemented through the following
various strands of controls foreseen in the regulatory framework.
Transparency
is already ensured through AARs where the Commission discloses all problems and
its assurance per Member State.
Furthermore,
regarding simplified cost options, and in particular flat rates, the Commission
provides a Member State, on request, with an agreement to the proposed method,
or observation on how to obtain this agreement. However, given the technical
nature of these exchanges, the Commission does not see the value added of
making them public.
As regards
rural development, a large exercise, conducted by DG AGRI already in 2012, lead
to a list of root causes of errors and possible corrective actions which was
discussed with all Member States at different levels.
For 2013,
DG AGRI has started a new comprehensive initiative with all Member States which
concerns the following elements: Analysis, corrective actions, preventive
actions. The Commission has sent by the end of June 2013 a report to Council
and Parliament which also covers these activities.
Under
shared management, it is the Member States' responsibility to set up the
control systems in accordance with the EU legislation and their own particular
national administration systems. The Commission provides guidance and
assistance to Member States in this respect, but cannot provide a formal
ex-ante approval.
10.         (§ 1j) The
Parliament calls on the Commission to apply the principle of proportionality,
without underestimating the rules to reduce administrative burdens and
facilitate streamlining of procedures; notes that an additional step towards
simplification is the obligatory use of the electronic project application and
reporting, as well as the unification and standardisation of documents and
procedures for management and implementation of the operational programmes.
Commission's
response:
The
Commission is taking the requested action and proposed in the area of cohesion
policy and rural development the use electronic applications in the next
programming period. However, the Commission will not unify/standardise procedures
and documents, since this affects the internal organisation of the MS
administration. The regulation provides for key designation criteria and key
requirements for the management and control procedures.
11.         (§ 1k) The
Parliament calls on the Commission to harmonise the criteria used by its
services for making reservations in its annual activity report and the
different methodologies used to quantify public procurement errors in the two
policy areas of agriculture and cohesion policy.
Commission's
response:
The
Commission is taking the requested action. It shares and supports the call for
greater coherence. As a follow-up to the 2010 discharge, DG REGIO launched an
exercise to update the existing quantification used by the Cohesion Policy
services for irregularities linked to public procurement issues. The aim is to
prepare a decision - to be adopted by the Commission - for all shared
management services and possibly other services as well. This exercise is
on-going and the Commission should be in a position to adopt this decision in
the second half of 2013. In addition, in November 2012, the Commission
horizontal services updated their internal guidance for the determination of
error rates and the criteria on whether to qualify the declaration of assurance
with a reservation in the case of errors linked to public procurement
procedures. This guidance, which took into account the changes in methodology
introduced by the Court, was aimed at ensuring transparency and comparability
as well as at producing a realistic calculation of the actual financial
exposure while adequately considering the possible reputational impact of
serious procedural errors. This guidance was applied by the Commission DGs for
the first time in their AARs for 2012. The Commission will reassess the need
for revising its guidance with the closure of the 2012 reporting cycle.
12.         (§ 1l) The
Parliament calls on the Commission to speed up the audit and financial correction
procedures followed by its own services and in particular, consider merging the
different stages of the 'contradictory' procedure leading to a financial
correction.
Commission's
response:
The
Commission has taken the requested action which is already the current practice
since 2012 in the Cohesion Policy area. This concerns in particular the closure
of contradictory procedures earlier than planned, enabling about 100
operational programmes to be timely closed for launching the financial correction
procedure still in 2012. The details of this new approach have been provided in
the 2012 AARs of the Services concerned. Other policy areas will follow but for
the next financial period where sector-related legislation is not yet finally
approved.
Concerning
agriculture, fully merging the different stages of the procedure would not be
compatible with the Member States' right within the existing contradictory
procedure (as agreed in the political agreement with the co-legislator on the
main elements of the CAP reform, in particular for a horizontal regulation).
The Commission will consider other procedural changes which might speed up the
procedure (notably stricter deadlines for each step of the procedure).
13.         (§ 1m) The
Parliament calls on the Commission to evaluate the progress made in the
financial management under the policy groups of the budget of the Union with a
view to arriving at a positive statement of assurance and to report about this
evaluation by March 2014 in the context of the annual activity reports drafted
by the Directors-General and the Synthesis report on the Commission's
management achievements for 2013.
Commission's
response:
The
Commission will evaluate the progress made and report on this in the annual
activity reports and the synthesis report for 2013.
14.         (§ 1n) DG AGRI
should align its practices for the interruption of payments with the best
practices of other directorates-general or services as well as put forward
proposals for enhanced application and use of suspensions in the policy area of
agriculture and rural development.
Commission's
response:
Commission
Regulation 883/2006 was amended in April 2013 with the objective to facilitate
interruptions of Rural Development payments to the MSs already in the current
programming period in case of deficiencies in the functioning of the management
and control system.
However, a
full harmonisation of interruption and suspension activities across all policy
areas is not possible under the current legal framework.
For the
new programming period 2014-2020, the Commission's proposal for common
provisions for the Structural Funds foresees a further harmonisation of the
interruption of payments for all these Funds, including Rural Development (See
Article 74 of COM(2011) 615 final).
Furthermore,
the Commission fully supports the EP amendment of Article 43 of the Commission
proposal for the horizontal regulation, which is currently under consideration
in Council and Parliament and would allow the Commission to suspend payments
when serious deficiencies are detected and no remedial actions are implemented.
Depending on the outcome of the CAP reform process these new rules would apply
from 1 January 2014.
15.         (§ 1o) Taking into
account the legal framework, DG AGRI should systematically interrupt and
suspend payments when the prime level controls reveal that they are materially
affected by error; the payments should be resumed only if sufficient
appropriate evidence gathered on the spot proves that the weaknesses have been
remedied.
Commission's
response:
Commission
Regulation 883/2006 was amended in April 2013 with the objective to facilitate
interruptions of Rural Development payments to the MSs already in the current
programming period in case of deficiencies in the functioning of the management
and control system.
However, a
full harmonisation of interruption and suspension activities across all policy
areas is not possible under the current legal framework.
For the
new programming period 2014-2020, the Commission's proposal for common
provisions for the Structural Funds foresees a further harmonisation of the
interruption of payments for all these Funds, including Rural Development (See
Article 74 of COM(2011) 615 final).
Furthermore,
the Commission fully supports the EP's amendment of Article 43 of the
Commission proposal for the horizontal regulation, which is currently under
consideration in Council and Parliament and would allow the Commission to
suspend payments when serious deficiencies are detected and no remedial actions
are implemented. Depending on the outcome of the CAP reform process these new
rules would apply from 1 January 2014.
16.         (§ 1p) The
Commission should report by the end of June 2013 on the progress made by the
working group set up by DG AGRI to assess the root causes of Rural Development
errors and develop corrective action for the current and future programming
periods; that report should be sent to the Member States, national parliaments
and Parliament's Committee on Agriculture and Rural Development so that they
can analyse the causes of errors, deliver non-binding opinions and submit
proposals for countering those errors.
Commission's
response:
A
Commission staff working document on the assessment of root causes of errors in
the implementation of rural development policy and corrective actions
(SWD(2013)244) was transmitted to the EP and Council on 27 June 2013. Some Member
States (Portugal, Spain, Bulgaria and Italy) have already amended their rural
development programmes in to reduce the risk of errors in implementation.
17.         (§ 1q) DG AGRI
should take all necessary measures to support the Member States' efforts to
eliminate from their programmes those conditions that are intrinsically prone
to creating implementation and control difficulties.
Commission's
response:
Commission
services have been co-operating with the Member States in order to address the
root problems causing these errors. Each time that audits have identified
related difficulties, the services in charge of the rural development programme
concerned have invited the respective Member State to take corrective actions, including
modifying the programme. In this context and since 2001, DG Agriculture has
followed 322 audit findings, which led to 23 RDP modifications.
For the
next programming period, the Commission intends to approve only Rural
Development programmes where the design of the measures does not create undue
risk of error. Member States are encouraged to establish their draft programmes
in such a way that measures are clear, verifiable and controllable. Article 69
of the draft regulation for rural development in the period 2014-2020
establishes that Paying Agencies must undertake ex ante assessments of all the
measures, from the controllability and verifiability perspective. To support
Member States in this endeavour, the Commission has started establishing guidelines
for programming.
18.         (§ 1r) The
Commission should maintain its original proposals for the general provisions of
the 2014-2020 programming period in cohesion policy and should insist,
vis-à-vis the Member States, on the absolute need to introduce in the new
legislation the principles of net financial corrections as well as streamlined
procedures and conditions under which payments can be interrupted or suspended.
Commission's
response:
The
Commission is taking the requested action and confirms that it will continue to
defend its proposal as regards net financial corrections as well as streamlined
procedures and conditions under which payments can be interrupted or suspended
during the legislative process.
19.         (§ 1s) The
Commission should also use, as far as possible, net financial corrections to
correct serious errors in the current programming period pursuant to Article 99
et seq. of Council Regulation (EC) No 1083/2006; in particular net financial
corrections should be applied at the closure of the programming period.
Commission's
response:
The
Commission is taking the requested action. However, it cannot impose net
corrections when the Member States have the regulatory option to accept a
correction and reuse the amounts (Art. 98 of Regulation (EC) No 1083/2006). At
closure, it will apply financial corrections on the remaining material errors,
individual and systemic, after all corrections already implemented by the
Member States authorities either on own initiative or at the Commission's
request have been deducted. Additional corrections will also be applied when
they did not contribute to lasting improvements of the management and control
systems up to closure. Financial corrections at closure can be net.
20.         (§ 1t) The
Commission should defend its initial position not to allow the secondary
selection of projects physically completed or fully implemented before the
funding application (so-called ‘retrospective projects’) for the funding period
2014-2020.
Commission's
response:
The
Commission is taking the requested action and confirms that it will continue to
defend its proposal as regards "retrospective projects" during the
legislative process.
21.         (§ 1u) DG REGIO
should fully align its payment practices with the best practices of other
directorates-general or services, and continue making direct and full use of
the legal instruments provided for by the regulations, especially the
interruption of payments or whenever necessary by the suspension of operational
programmes.
Commission's
response:
The
Commission has taken the requested action. The information contained in various
Commission reports shows that interruptions and suspensions are intensively
used and it is the Commission's firm intention to continue to use all these
tools. The Commission's actions in this regard have also been further
harmonized in 2012, in particular in the area of Cohesion policy where both DG
REGIO and EMPL now apply a fully aligned approach.
22.         (§ 1v) The
Parliament calls for more stringent monitoring and conditions in the case of
Member States which manifestly breach Union provisions on budgetary and
competition law (particularly with regard to the award of public contracts);
calls for systematic suspension of payments for the relevant Structural Fund
programmes where Union law is breached until rules are complied with, so that use
of the funds in accordance with Union rules is guaranteed.
Commission's
response:
The
Commission has taken the requested action. It fully uses interruptions and
suspensions instruments as soon as irregularities are detected, leading to
actions plans to correct past expenditure and to adapt management and control
systems. The Commission only resumes payments when it has a reasonable
assurance that irregular expenditure have been corrected and that management
and control systems are adapted. The respective DGs have reported on this in
their 2012 AARs.
23.         (§ 1w) The
Parliament calls for a tougher suspension policy for the European Regional
Development Fund (ERDF) and Cohesion Fund (CF), like that already successfully
applied to European Social Fund payments, thus enabling early action to prevent
any improper use of Structural Fund monies and underpinning, from the outset,
the zero-tolerance approach by the Commission.
Commission's
response:
The
Commission has taken the requested action. The information contained in various
Commission reports shows that interruptions and suspensions are intensively
used and it is the Commission's firm intention to continue to use all these
tools. The Commission's actions in this regard have also been further
harmonized in 2012, in particular in the area of Cohesion policy where both DG
REGIO and EMPL now apply a fully aligned approach.
24.         (§ 1x) DG REGIO
should systematically interrupt the payments and suspend the programmes when
the prime level controls reveal that they are materially affected by error; the
payments should be resumed only if there is sufficient and reliable evidence
that weaknesses have been remedied.
Commission's
response:
The Commission
has taken the requested action. It fully uses interruptions and suspensions
instruments as soon as irregularities are detected, leading to actions plans to
correct past expenditure and to adapt management and control systems. The
Commission only resumes payments when it has a reasonable assurance that
irregular expenditure have been corrected and that management and control
systems are adapted. DG REGIO has reported on this in its 2012 AARs.
Error rate in
centralised management
25.         (§ 1y) By the end
of June 2013, the Commission (DG Research) should present a report to
Parliament assessing the impact of the simplification measures introduced in
2011.
Commission's
response:
The
Commission presented to the European Parliament the report on the impact of the
simplification measures introduced in 2011 (Ares(2013)2634919).
26.         (§ 1z) That report
should also assess the improvements announced by the Commission in respect of
the ex ante control and the ex post audit strategies and of the improvement in
the guidance on the most common errors given to participants in the Seventh
Framework Research Programme and to auditors.
Commission's
response:
The
Commission presented to the European Parliament the report on the progress of
Commission’s ex ante control, ex post audit strategy and on the guidance on the
most common errors to auditors and participants in the Seventh Framework
Research Programme (Ares(2013)2634919).
27.         (§ 1aa) In that
report, the Commission should explain whether the measures taken to reduce the
audit burden, generated by the fact that seven Authorising Officers by
Delegation are responsible for the Research budget, have been effective and, if
not, propose other solutions.
Commission's
response:
See
response to § 1z.
Evaluation report
(Article 318 TFEU) and enhanced use of performance audits
28.         (§ 1ab) The
Commission services should develop a new culture of performance, defining in
their management plan a number of targets and indicators meeting the
requirements of the Court of Auditors in terms of relevance, comparability and
reliability; furthermore performance indicators and targets should be fully
integrated in all proposals for new policies and programmes.
Commission's
response:
a) The
Commission will present an action plan as part of the 2013 evaluation report.
This action plan will foresee that DG's report back on the performance audits
performed by external and internal auditors.
b)
Elements of progress and performance management will be included in the
Management Plans for 2014: setting objectives, performance indicators and
associated targets per programme, evaluations planned.
c) Reporting
will be deepened in the Annual Activity Reports on how the financial and human
resources have been used to achieve the policy objectives set by the College,
and on progress and how these policies have generated EU added value.
d) The
peer-review process on the Annual Activity Reports will be strengthened by
including increased focus on the performance information included in these
reports. Consistency will be improved between Evaluation report and Annual
Activity Reports.
29.         (§ 1ac) The
Parliament asks the Commission to take full account of the remarks and requests
formulated in the 'Response of the European Court of Auditors to the
Commission's second Article 318 evaluation report'.
Commission's
response:
The Commission
reiterates its intention to redesign and improve the report in the future in
discussion with the Discharge Authority.
The
Commission equally points out that this could only be achieved under the new
performance framework which will be based on the legislative proposals which
have yet to be adopted by the Legislative authority.
Account
has been taken of the indications provided by the Court in the preparation of
this year's evaluation report to the extent possible within the existing
framework of the MFF 2007-13. This report has been adopted on 26 June 2013.
30.         (§ 1ad) The
Parliament calls on the Commission, until the midterm review in the various
areas of policy and programmes, to propose a clear definition of European added
value; calls for a review of the programmes with the aim of avoiding national
and regional displacement effects and genuinely only financing measures which
could not be carried out without impetus from the Union.
Commission's
response:
a) The
Commission has already proposed a clear definition of EU-added value which has
been used as a basis for the proposals it made for the next generation of
programmes under the MFF 2014-2020. See report on the added value of EU
spending (SEC(2011)867).
b) Most of
the new programmes contain a mid-term review. The Commission confirms that
programmes should be developed in such a way that displacement effects are
avoided.
31.         (§ 1ae) In their
annual activity reports, the services should measure their performance in
summarising the results achieved when contributing to the main policies pursued
by the Commission; this "departmental" performance will be
complemented by a global evaluation of the performance of the Commission in the
evaluation report provided for by Article 318 TFEU.
Commission's
response:
In its
evaluation report for the financial year 2012, the Commission has presented an
action plan for the future development of future evaluation reports. 
The
Commission Central services will 
* deepen
the performance framework that should underpin all future AARs. Such a
framework consists of a performance-driven culture throughout the organisation,
ex-ante setting of objectives, regular monitoring, ex-post measurement and
reporting of achievements.
* review
the 2013 AAR Standing Instructions and guidelines with a view of including the
elements of performance reporting; and 
* develop
further the content and coverage of the evaluation report, for example by using
more performance information and by ensuring consistency between the evaluation
report and the AARs.
32.         (§ 1af) The
Commission should modify the structure of the abovementioned evaluation report,
distinguishing the internal policies from the external ones and focussing,
within the section relating to internal policies, on the Europe 2020 strategy
as being the economic and social policy of the Union; the Commission should
place the emphasis on the progress made in the achievement of the flagship
initiatives.
Commission's
response:
The
Commission included in its proposals for the new generation of programmes
several elements aimed at delivering a stronger performance framework, which
would be more focused on efficiency and effectiveness in the attainment of the
overall objectives of the different financial programmes. The Commission relies
on Parliament and Council as co-legislators to ensure that the new multi-annual
financial framework contains the simpler, stronger framework proposed by the
Commission.
The next
multi-annual framework also provides the opportunity for stronger monitoring
and evaluation arrangements to feed better reporting. The Commission will
report on progress in achieving the objectives of the financial programmes
which are designed to contribute to the achievement of EU 2020 targets. This
reporting should continue to follow the structure of the different budget
headings, thereby covering the internal and external policies and actions.
33.         (§ 1ag) The
Parliament expects that in the framework of a new and enhanced policy on
performance, all evaluation reports done or paid for by the Commission will be
made available in full to Parliament, which may decide to make them available
on its website for consultation.
Commission's
response:
In line
with the existing evaluation standard, evaluation results must be made publicly
available and targeted summary information should be prepared to facilitate
communication to the general public. This applies unless there is a
justification not to publish the results under Regulation 1049/2001 regarding
public access to European Parliament, Council and Commission documents. 
The Art
318 report contains a list of evaluations providing hyperlinks to the
documents.
Revenues and
traditional own resources
34.         (§ 1ah) In order
to ensure proper protection of the Union's financial interests, and with a view
to equipping the Union with sufficient own resources for growth, the Commission
should provide Parliament, in time for the 2012 discharge procedure with an
evaluation of the cost of postponing the full application of the Modernised
Customs Code (MCC), which would quantify the budgetary consequences of such postponement.
Commission's
response:
Mr Šemeta
replied positively to that request, as mentioned earlier (PA n°4: reply
available at
http://www.europarl.europa.eu/document/activities/cont/201302/20130225ATT61662/20130225ATT61662EN.pdf)
and provided the Parliament with a reply concerning an estimate of the costs
related to postponing the full application of the Modernised Customs Code (see
Letter of 12/04/2013).
35.         (§ 1ai) The
Commission should collect reliable data on the customs and VAT gap in the
Member States and report every six months to Parliament in this regard.
Commission's
response:
While the
Commission cannot accept all aspects of this request, it can however act upon
certain aspects: No specific study on the customs gap made by the Commission.
The Commission however cooperates in the ongoing study launched by the EP. (See
Mr Šemeta's) reply mentioned earlier (PA n°4).
The study
on the estimation of the VAT gap will be updated and made available by 30
October 2013 at the latest to the other European Institutions. It is the
Commission's intention through this update to publish a new estimate of the VAT
gap for all 27 Member States following the same approach as in 2009, that is to
say by comparing accrued VAT receipts with a theoretical net VAT liability for
the economy as a whole.
It is the
intention of the Commission - if resources allow - to update this estimation on
a regular basis.
36.         (§ 1aj) The
Commission should identify and implement actions which would increase the
effectiveness and efficiency of the collection of customs duties and VAT in the
Member States; the Commission and the Member States should implement the Court
of Auditors' recommendation in the Special Report No 13/2011.
Commission's
response:
Implementation
of tax or customs collection is a national competence and the Commission is not
in the position to present an action plan. Nevertheless, as pointed out before,
the Commission is providing technical assistance to certain Member States,
targeting an increase in the efficiency of the tax administration and its tax
collection capacities. This is an on-going activity. Furthermore, the
Commission has adopted on 6 December 2012, a comprehensive and ambitious action
plan on fighting tax fraud and tax evasion. A series of measures are proposed
to better fight against tax fraud and evasion, including VAT fraud. The plan
includes the Quick reaction Mechanism against VAT fraud that the Commission
proposed in July 2012. It provides that Member States would be able to apply a
"reverse charge mechanism" which makes the recipient of the goods or
services liable for VAT in cases of massive and sudden fraud. This would
significantly improve the Member States' capacity of effectively tackling
complex fraud schemes, such as carrousel fraud. Moreover, the action plan was
accompanied by two recommendations to Member States which promote specific
countermeasures to deal with aggressive tax planning and to treat the issue of
tax havens.
As for VAT
and customs duties, the Commission is thoroughly following up the
recommendations made by the European Court of Auditors in the context of past
and recent audits, in particular the European Court of Auditors Special Report
No 13/2011 "Does the control of customs procedure 42 prevent and detect
VAT evasion?". The Commission also put forward an ambitious proposal for a
Directive on the fight against fraud to the EU's financial interests by means
of criminal law (COM (2012)363). The new rules, when adopted, would harmonise
and strengthen notably the protection of EU revenue. However, implementation of
tax or customs collection is a national competence.
37.         (§ 1ak) The
Commission should identify the channels and schemes allowing for tax evasion
and tax avoidance, in particular by multinationals and through post box
companies, and promote appropriate countermeasures; welcomes in this context
the OECD report on tax base erosion and profit shifting and calls on the
Commission to cooperate with the OECD who will establish an action plan on how
to address this problem by July 2013.
Commission's
response:
On 6
December 2012, the Commission adopted a comprehensive and ambitious action plan
on fighting tax fraud and tax evasion. A series of measures are proposed to
better fight against tax fraud and evasion, including VAT fraud. Moreover, the
action plan was accompanied by two recommendations to Member States which
promote specific countermeasures to deal with aggressive tax planning and to
treat the issue of tax havens.
The
Commission cooperates with the OECD in the establishment of the action plan
concerning the tax base erosion and profit shifting problem.
38.         (§ 1al) The Commission
should raise the Member States' and public awareness, in the context of the
negotiations on the Multiannual Financial Framework, that effective revenue
collection remains an essential feature of sound management of public finances,
including the fact that uncollected revenue aspects have an impact on the
availability of the Union's own resources, the economic situation of the Member
States and the internal market and commission a study which would calculate the
potential financial benefits for the Member States in tax revenue terms if an
equal level playing field against tax evasion and tax avoidance throughout the
Union should be created.
Commission's
response:
As revenue
collection impacts differently upon each own resource, ranging from no effect
for GNI to a direct impact for traditional own resources (TOR), Commission
action has varied. For TOR the Commission systematically draws Member States'
attention to recovery issues and strengthens awareness by the application of the
principle of financial responsibility where non-recovery is attributable to a
Member State. For VAT, where by far the greater financial incentive arising
from effective recovery of VAT accrues to Member States (for every euro
collected a minimum of 97 cents goes to national budgets, with less than 3
cents for the EU), revenue collection has received due consideration in the
negotiations on the multi-annual financial framework which have just been
completed. With regard to the request for a study on the potential financial benefits,
given the current state of data availability on this topic and the limitations
of current methodologies, the results of such a study would be rather
speculative. Nevertheless in the context of its annual report on 'Tax Reforms
in the Member States', the European Commission is collecting all available
international and national estimates of the shadow economy. On the basis of
this work the Commission will decide how best to tackle the quantification of
tax revenue losses. The Commission is currently finalising a study
(commissioned to an external contractor) on the computation of the VAT gap (see
the Commission's reply to §1ai).
39.         (§ 2) The
Parliament calls on the Commission to take urgent measures to eliminate the
possibilities of diverting thousands of billions of euros away from the normal
financial circuit (of offshore financial activities) in order primarily to
avoid tax and to hide illegal funds from the tax authorities in the Member
States.
Commission's
response:
On 6
December 2012, the Commission adopted a comprehensive and ambitious action plan
on fighting tax fraud and tax evasion. A series of measures are proposed to
better fight against tax fraud and evasion, including VAT fraud. Moreover, the
action plan was accompanied by two recommendations to Member States which
promote specific countermeasures to deal with aggressive tax planning and to
treat the issue of tax havens.
40.         (§ 3) The
Parliament strongly suggests that the Commission should take measures to ensure
that all banking activities related to advising on, and setting up, offshore
structures are made illegal and that no bank within the European Union involved
in such activities will or can receive European funding under any scheme or
benefit from national support measures.
Commission's
response:
Offshore
structures can be set up for multiple reasons. A blanket approach to defining
all services of setting up overseas structures as illegal would be problematic
in the context of a free market economy. As a consequence the Commission would
not envisage such measures. However, in the area of taxation in general, the
Commission has already taken action in its Action Plan and associated
recommendations of 6 December 2012 to promote co-ordinated action against tax
fraud, evasion and tax avoidance.
41.         (§ 4) The
Parliament expects to receive, within two months, draft legislative proposals
from the Commission to end the practice of the use of tax havens by
individuals, companies and even public institutions.
Commission's
response:
The
Commission made relevant proposals (Action Plan and Recommendations, see
COM(2012)722, C(2012)8805 and 8806) in December 2012 which it considers to be
the appropriate mix of legislative and coordination initiatives to fight
efficiently against tax fraud and evasion. This includes a Recommendation
directed towards third countries not complying with good governance standards
(tax havens). Possible further initiatives will be assessed in a later stage,
where appropriate.
In making
Recommendations rather than proposing legislation the Commission took into
account the fact that Recommendations could produce quicker results as even if
not all MS are supportive some can implement them. A legislative proposal
requires unanimity and from experience once a legal proposal has been made MS
tend to wait until Council has approved it by unanimity which could take some
time.
Follow-up to
the 2010 discharge resolution
42.         (§ 6) The
Parliament asks the Commission to clarify what percentage of the amounts of
structural funds implemented through FEIs actually dispersed over the period
2007-2013 went to truly private enterprises, as opposed to majority publicly
owned enterprises.
Commission's
response:
The
Commission will not be taking the requested action. The report on progress made
in financing and implementing financial engineering instruments, which is
prepared by the Commission, is based on formal annual reporting from Member
States. The scope of this reporting, which is set out in Article 67(2)(j) of
Council Regulation (EC) No 1083/2006, is limited to certain type of data and
does not contain information relating to the ownership of the final recipients.
43.         (§ 10) The
Parliament calls on the Commission to take concrete steps to significantly
improve the use of the FEIs with a view to better protecting the Union's
financial interests.
Commission's
response:
The
Commission is taking the requested action. To reinforce the principles of sound
financial management, post 2013 cohesion policy will contain a number of
safeguards as proposed by the Commission in the legislative package for
2014-2020. Ex-ante assessment of investment needs will be compulsory for each
financial instrument. Moreover, in order to avoid over-allocation of EU
resources, managing authorities will need to justify the level of the
allocations made to financial instruments on the basis of assessed marked
failures and delivery capacity of the mechanism in place. Furthermore, post
2013 managing authorities must make phased payments to financial instruments in
accordance with the actual investment progress at project level and anticipated
capital requirements. Monitoring and reporting obligations concerning the use
of cohesion policy resources in financial instruments will be clearly defined.
44.         (§ 11) The
Parliament reiterates that Parliament invited the Commission to evaluate
objectively and critically the experiences with FEIs in the Cohesion policy for
the programming period 2007-2013, to provide a risk assessment considering
different FEIs separately, as well as taking into account the risk structure of
beneficiaries of the FEIs, and to report annually to Parliament, in time for
the respective discharge procedure, on the use of FEIs in Member States,
including comparable indicators on the effectiveness, efficiency and economy of
FEIs, and also on how the Commission coordinates, ensures consistency and
mitigates the risk of overlapping across the policy areas.
Commission's
response:
The
Commission has taken the requested action. In 2012, the Commission carried out
an evaluation through the expert evaluation network on the use of the ERDF to
support FEIs. The report of this evaluation was transmitted to the EP in
December 2012. In addition, in February 2012 the Commission published a Staff
Working Document on financial instruments in cohesion policy, which analysed
the experience of implementation of financial instruments in the current
period, lessons learnt and proposed strengthening of the regulatory framework
for post 2013. Regarding reporting in the current programming period, the amendment
of Council Regulation (EC) No. 1083/2006 in December 2011 introduced an
obligation for Member States to formally report on FEIs within the Annual
Implementation Report. In 2012, the Commission produced on this basis a summary
report (which was also transmitted to EP in December 2012). The risk assessment
was made on the basis of the summary of data and the
"underperforming" cases are being followed by the Commission
services. The monitoring takes place also in regular monitoring committee meetings
where the Managing Authorities responsible for operational programme discuss
the progress of implementation of all relevant operations including financial
engineering instruments.
45.         (§ 13) The
Parliament calls on the Commission to further improve the quality and
comparability of the annual activity reports.
Commission's
response:
The
Commission Central services regularly review the reporting process, draw
lessons to improve the value of these reports as instruments for management
accountability and revise the AAR Standing Instructions and guidelines
accordingly. 
The
Commission Central services also monitor the consistent implementation of the
instructions of the DGs before the AAR are finalised, by reviewing and
providing comments on the draft AARs.
46.         (§ 14) The
Parliament asks the Commission to communicate which steps and measures it will
take to ensure that the remaining 10 Member States will grant their permission
to access Member States' annual summaries.
Commission's
response:
In the
area of Structural funds all annual summaries for the financial years 2010 and
2011 have been transmitted to the Parliament. 
However,
the publication of the annual summaries shall comply with the rules laid down
in Regulation (EC) No 1049/2001 of the EP and of the Council regarding public
access to EP, Council and Commission documents, as well as in the Framework
Agreement on relations between the EP and the European Commission (L 304/47 -
Annex II; Forwarding of confidential information to Parliament, point 1.2.3).
Therefore the information contained in these documents shall not be published
or be made public without prior authorisation of the Member States.
Nevertheless, the Commission will insist with the remaining Member States to
get their permission in the future.
47.         (§ 15) The
Parliament welcomes the new rules introduced in Financial Regulation (EU,
Euratom) No 966/2012 about the regular clearing of pre-financing and encourages
the Commission to continue its efforts to follow the recommendations of the
Court of Auditors as regards the relevant accounting data and methods.
Commission's
response:
Guidelines
were issued and there is continuous follow up as part of BUDG C2's day to day
work.
48.         (§ 17) The
Parliament calls on the Commission to investigate the possibilities of setting
up a correctional system for error prone spending areas, in which the total
material value of errors in year n will be partially or entirely deducted
from the yearly reimbursement requests made by accrediting organizations
depending on the severity of the irregularities.
Commission's
response:
The
Commission has taken the requested action. For cohesion policy, it has proposed
for the 2014-2020 period the retention of 10% on each payment claim and it has
requested for annual accounts with corrections on all errors identified and net
corrections for serious deficiencies detected by EU audits after submission of
annual accounts.
For
agriculture, net financial corrections are already systematically applied to
the CAP expenditure where risks are detected.
The Court of
Auditors' Statement of Assurance
49.         (§ 34) The
Parliament recalls that the most likely error rate for payments in the
financial year 2010 was estimated at 3,7 % and in the financial year 2009 at
3,3 %; is dismayed about this increase because it reverses the positive trend
observed in the years 2007, 2008 and 2009; calls on the Commission, therefore,
to take the necessary steps to achieve a trend that shows a consistent decrease
in the error rate.
Commission's
response:
There has
been a significant reduction in the error rate for the EU budget as a whole and
the gap between the error rate and the materiality threshold applied by the
Court of Auditors has been reduced significantly over the years. The Commission
continues to make improvements to the financial management system of EU funds;
these are mostly based on recommendations from the Court of Auditors in its
Annual and Special Reports as well as on the follow up to European Parliament
discharge resolutions and the Council discharge recommendations. Examples
include the reinforced use of interruptions/suspensions of payments and of
recoveries/financial corrections in order to protect the EU budget. In its
legislative proposals for the Multiannual Financial Framework 2014-2020, the
Commission has proposed further structural improvements through simplification,
reinforcing the accountability of financial actors under shared management as
well as the supervisory and control mechanisms. All of these proposals aim at
further reducing the risk of errors.
It is
important to note that the error rate presented by the Court of Auditors has to
be put into perspective as it does not take into account all actions taken by
the Commission to protect the EU budget: for example, in 2011, the Commission
imposed financial corrections and recoveries amounting to 1,84 billion euros
which represents 1,4% of the payments made in 2011. The Commission will
therefore further use the preventive and corrective capacity of supervisory and
control systems efficiently and effectively to its full extend. To strengthen
the Commission's preventive actions, the application of interruptions and
suspensions has been further harmonized in 2012, in particular in the area of
Cohesion policy. 
The
Commission will provide the Parliament with a new report on the protection of
the EU budget to give a more detailed insight into the performance of its
multi-annual preventive and corrective systems.
Horizontal
issues
50.         (§ 45) The
Parliament expects the future regulation covering the structural instruments to
ensure that Member States provide the data on the final beneficiaries of
ERDF/CF funds to be published on the Commission's official website in one of
the three working languages of the Union and based on a set of common criteria
to allow comparison and detection of error.
Commission's
response:
The
Commission is taking the requested action. In its draft proposal for the new
general Cohesion policy regulation 2014-2020, it has proposed a common set of
criteria, data formats (only CSV and XML) and data fields for the list of
operations, which will ensure full transparency, because the data can be
exported, grouped, ranked, sorted, etc. – see Annex V (1) of the general
regulation. Moreover, the Commission proposal foresees that the headings of the
data fields and the name of the operations in the list of operations will be
provided in at least one other official EU language than that of the given
Member State.
51.         (§ 46) The
Parliament calls on the Commission to apply the method of trend analysis to
identify financial risks and to take measures to improve Member States'
administrative performance in the field of revenue and expenditure in shared
management, especially related to detecting irregularities, fraud and errors
and financial follow-up in both the customs field and spending of Union funds.
Commission's
response:
The
Commission will not be taking the requested action. In the field of Cohesion
policy, the effective functioning of management and control systems of the
Member States is verified by the Commission according to art. 71 (compliance
assessment) and 72 (on the spot audits) of Regulation (EC) No. 1083/2006. Legal
proceedings such as interruptions, suspensions and financial corrections must
be supported by audit evidence.
It is
unclear what is meant by trend analysis and at what level it should be applied,
keeping in mind that the current legal framework does not give the possibility
to apply such methodology to the management of Structural Funds. The Commission
does however point out that it has started with a practice called "data
mining" which will increasingly allow to detect high risk domains of
support.
The AARs
provide each year full detail about the actions undertaken by the Commission
where the management and control systems have been considered less than
satisfactory. This is done in the form of reserves, but also through the
reporting on warning letters, interruption of payments decisions, and
suspension of payments decisions adopted by the Commission. The Commission
imposes, in this context, regularly Action Plans on Member States with a view
to addressing the issues identified by audits.
52.         (§ 49) The
Parliament calls on the Commission to assist the Member States in providing
voluntary management declarations as referred to in Article 59(5) of the new
Financial Regulation (EU, Euratom) No 966/2012 by promoting best practices;
insists that Parliament should receive both the management declarations and the
voluntary declarations.
Commission's
response:
The
Commission has assisted Member States by issuing guidelines which identify the
elements which would add value to the existing political national declarations
(SEC(2011) 250). Furthermore, these elements have been taken into account for
the definition of the content of the mandatory management declarations in the
new Financial Regulation.
It should
be noted that the new Financial Regulation introduces a reinforced mandatory
reporting for the Member States. This includes the accounts accompanied by a
management declaration and a summary of final audit reports and of controls
carried out. The requirements on the content of the summary report have in
addition been enhanced in the new Regulation; the report should include an
analysis of the nature and extent of errors and weaknesses identified in the
systems, as well as corrective action taken or planned. These documents will
furthermore also be subject to an independent audit opinion. The Commission
considers that this new system will provide the Commission with substantial
additional assurance as to the use of EU funds by Member States and contribute
to a more effective reporting by the Member States. 
The
Commission is of the view that, as these reinforced reporting system is
introduced and effectively implemented, the conditions would be set for further
promoting the issuance of political national declarations. This approach would
allow concentrating first on the removal of any technical difficulties which
may be used as a pretext to prevent the introduction of political declarations.
The issue of national declarations is currently also formally being discussed
in the framework of the inter-institutional negotiations of the MFF and the
Inter-Institutional agreement. 
On the
transmission of these documents to Parliament and in accordance with article
59(5) of the Financial Regulation, it is for each Member State to decide
whether the management and voluntary, national declarations should be
published. Mandatory publishing of management declarations is not proposed by
the Commission as it may risk undermining the value of these declarations as
effective accountability instruments. In addition this would entail a large
administrative burden (currently 317 ERDF/CF programmes) and it would not be
reasonable to request translation of these documents (cf. EP request on annual
summaries). It should be taken into consideration that the overall assessments
of all the available information received from the Member States will in any
case be presented in a synthesised form in the Annual Activity Reports of the
concerned Commission Services.
53.         (§ 50) The
Parliament notes that the Commission should give guidance to Member States to
draft meaningful annual summaries; notes that for this purpose, information
given on operational programmes under shared management should be standardised
as regards form and content; annual summaries should be put at the disposal of
Parliament and should not only be made available in the language of the Member
State, thus increasing transparency and accountability.
Commission's
response:
Guidelines
on the form and content of the summaries have been provided to Member States in
2010, including a template. The Commission notes that, in terms of assurance,
Annual Control Reports and audit opinions by audit authorities provide the
basis for the AAR assurance and more detailed information than the annual
summaries. The Commission therefore considers that the added value of the
summaries is limited, as shown by an external study which was communicated in
May 2011 to the EP (Ares(2011)505770).
In the
area of Structural funds all annual summaries for the financial year 2010 have
been submitted to the Parliament in the original language. Requesting the MS to
transmit their AS in another language than theirs would affect current
regulatory provisions on the use of languages by Member States (Regulation 1,
article 2). However, even if the EP has also a translation service, and taking
duly the principles of proportionality and cost-effectiveness into account, the
Commission is committed to provide translation by DGT of the most important
elements of those summaries into English provided that there are no
confidential information in them that would preclude their translation being
externalised by DGT and that sufficient time is allotted for the task. Given
the current resources situation, DGT would have to re-invoice the requesting DG
for the costs incurred for these translations. If possible, the annual
summaries in German and French should not be subject to any translation.
54.         (§ 51) The
Parliament reiterates its request that the Commission should analyse the
strengths and weaknesses of national control systems on the basis of the annual
summaries received; and demands that the Commission take immediate action to
ensure that the next annual summaries are useful for assessing the performance
of beneficiaries.
Commission's
response:
The
Commission notes that, in terms of assurance, Annual Control Reports and audit
opinions by audit authorities provide the basis for the AAR assurance and more
detailed information than annual summaries. The Commission therefore considers
that the added value of the summaries is limited, as shown by an external study
which was communicated in May 2011 to the EP (Ares(2011)505770).
Annual
summaries do not assess the performance of beneficiaries but provide a summary
of controls over the programme in the previous year (information more easily
accessible in the audit opinion in the annual control reports).
55.         (§ 53) The
Parliament calls on the Member States to issue national management declarations
at the appropriate political level and asks the Commission to establish a
template for such a declaration.
Commission's
response:
The
Commission has assisted Member States by issuing guidelines which identify the
elements which would add value to the existing political national declarations
(SEC(2011) 250). Furthermore, these elements have been taken into account for
the definition of the content of the mandatory management declarations in the
new Financial Regulation, which will apply to commitments as from 1.1.2014.
It should
be noted that the new Financial Regulation introduces a reinforced mandatory
reporting for the Member States. This includes the accounts accompanied by a
management declaration and a summary of final audit reports and of controls
carried out. The requirements on the content of the summary report have in
addition been enhanced in the new Regulation; the report should include an
analysis of the nature and extent of errors and weaknesses identified in the
systems, as well as corrective action taken or planned. These documents will
furthermore also be subject to an independent audit opinion. The Commission
considers that this new system will provide the Commission with substantial
additional assurance as to the use of EU funds by Member States and contribute
to a more effective reporting by the Member States. 
In the
context of the MFF agreement between the Council and the EP, the Commission
presented a declaration stating that it is prepared to examine the request to
establish a template for national management declarations to be issued by MS at
the appropriate political level and is willing to invite both institutions to
participate in a working group with a view to issue recommendations by the end
of this year.
56.         (§ 54) The Parliament
calls on the Commission to establish in the short term, in cooperation with
Member States, a model for national management declarations which will make
them meaningful and comparable; calls on the Commission to openly provide its
opinion on those declarations; takes the view that such declarations should,
inter alia, certify criteria (such as true and fair accounts, the effectiveness
of management and control systems and the legality and regularity of underlying
transactions) and specify the scope of assurance reservations and disclaimers.
Commission's
response:
With
regarding the model for national declarations: See reply to § 53.
Regarding
the request that the COM should provide an opinion on national declarations it
should be noted that this is already done in the AAR for each of the 4 MS who
submitted a declaration under 2007-2013 (see page 84-85 of REGIO AAR 2011 and
49 of EMPL AAR). However in the Commission’s view the AAR should provide a
clear situation per MS not per single national declaration, as publishing a
Commission opinion for each MS and declaration would go too far.
57.         (§ 54) The
Parliament asks the Commission to present proposals for decreasing the burden
of controls for those Member States or regions that perform consistently well,
according to the annual reports of the Court of Auditors and to their own
national management declarations; is of the opinion that the Court of Auditors
and the Commission should be able to take account of the substance of national
management declarations in their audit work.
Commission's
response:
The
Commission considers that it has already taken action in this direction by the
implementation of article 73 (reliance on MS audit work by the Commission). So
far reliance has formally been placed on 15 Audit Authorities covering more
than 96% of ERDF/CF allocations (51 programmes), and 9 ESF Audit Authorities
(covering 10 programmes) thus limiting the audit work of the Commission on
these 61 programmes and focussing instead on risks in other programmes
("differentiated approach" based on risk). 
Reducing
the burden of controls should not only be based on the ECA annual report and
the national declarations of the MS. The annual report of the ECA does not
provide an opinion per Member State and moreover not all Member States are
covered in the ECA’s sample each year. In consequence, other sources of
assurance need also to be taken account of notably the Commission’s own audit
work and the audit work of the audit authorities in the Member States.
58.         (§ 59) The
Parliament regrets that the Court of Auditors found weaknesses in the
instructions and their implementation, in particular as regards the residual
error rate; urges the Commission, as a result of this, to adapt its guidance as
an immediate priority.
Commission's
response:
The
standing instructions for the preparation of the Annual Activity Reports for
2012 have been improved regarding better consistency in the use of terminology,
in the presentation of error rates, in the calculation of the amount at risk
and the application of materiality criteria as well as the use of the best
reliable information available in the shared management area.
59.         (§ 61) The
Parliament encourages the Commission to make progress in disclosing more
precise and reliable data concerning recoveries and financial corrections and
to present information reconciling as far as possible the year in which payment
is made, the year in which the related error is detected and the year in which
recoveries or financial corrections are disclosed in the notes to the accounts.
Commission's
response:
The
relevant note in the 2012 EU annual accounts has been updated and now includes
information on the corrections implemented by Member States themselves. A
reconciliation is made with the programming period due to the multi-annual
nature of the expenditure concerned.
60.         (§ 63) The
Parliament calls on the Commission to extend the practice of reporting on
financial corrections in 2000-2006 to the other policies managed by multiannual
programmes.
Commission's
response:
The
relevant note in the 2012 EU annual accounts includes information on all areas
of EU spending.
61.         (§ 64) Recommends,
in accordance with the view expressed by the Court of Auditors, that a clear
link be established between amounts included in annual activity reports, in
particular for establishing the residual error rate, and information on
recoveries/financial corrections presented in the accounts.
Commission's
response:
A clear
link has been established between amounts included in annual activity reports,
in particular for establishing the residual error rate, and information on
recoveries/financial corrections presented in the accounts. Detailed
information appears on these points in the 2012 Annual Activity Reports and in
the 2012 Synthesis Report. As from September 2013, the Commission will prepare
a user-friendly presentation of the amounts recovered through financial
corrections and recoveries in the course of the preceding year. The
presentation of the information offered in the AARs will be aligned with this
presentation to establishing this link more clearly.
62.         (§ 66) Suggests to
the Commission that it should request its Directors-General to systematically
gather an overview of the corrections of errors and irregularities and publish
them in their annual activity reports.
Commission's
response:
The
Commission is already reporting systematically on corrections of errors and
irregularities in the respective annual activity reports. As from September
2013, the Commission will prepare a user-friendly presentation of the amounts
recovered through financial corrections and recoveries in the course of the
preceding year. The presentation of the information reported by the
Director-Generals in the AARs will be aligned with this presentation.
63.         (§ 67) The
Parliament calls on the Commission to issue in time for the respective
discharge procedure annual communications to Parliament, the Council and the
Court of Auditors listing, by country and programme, financial corrections and
recoveries collected, in order to demonstrate its performance in the protection
of the Union's budget; calls on the Commission, on this basis, to draw up a
performance ranking.
Commission's
response:
The
Communication will be issued in September 2013.
64.         (§ 68) The
Parliament calls on the Commission to make annually public in a communication
all the amounts corrected the preceding year through financial corrections and
recoveries for all management modes at the level of the Union and by the Member
States.
Commission's
response:
This will
be included in the Commission Communication of September 2013.
65.         (§ 69) The
Parliament is worried that the Commission itself confirms in the said Note 6
the assessment made by the Court of Auditors on the lack of reliability of
supervisory and control systems of the Member States, and deeply regrets that
this could affect the reliability of Commission management representations;
calls on the Commission to ensure that data communicated by Member States are
complete and fully reliable.
Commission's
response:
Improvements
were noted during 2012 in the reliability of the figures reported by Member
States. The relevant Commission services obtained reasonable assurance that a
sample of Member States authorities audited have satisfactory arrangements for
keeping an account of amounts to recover and for reporting them the Commission.
Audits will continue in 2013 and beyond in other Member States.
66.         (§ 72) The
Parliament consequently reiterates its previous demand that the Commission
establish reliable and objective annual activity reports.
Commission's
response:
The
Commission Central services regularly review the reporting process, draw
lessons to improve the value of these reports as instruments for management
accountability and revise the AAR Standing Instructions and guidelines
accordingly. 
The
Commission Central services also monitor the consistent implementation of the
instructions of the DGs before the AAR are finalised, by reviewing and
providing comments on the draft AARs.
67.         (§ 75) The
Parliament calls on the Member States and the Commission to urgently reinforce
first-level checks to address unacceptably high level of mismanagement in the
audited regional policy and ESF transactions.
Commission's
response:
The
requested action has been taken. The Commission continues to remind Member
States authorities that they should carry out proper and sufficient management
verifications, before accepting and declaring expenditure submitted by
beneficiaries. It also audits in priority programmes/areas where management
verifications appear to be weak. Audit Authorities continuously review this key
requirement in the systems through audits on statistical sample of operations
each year. When serious deficiencies are detected, the Commission
interrupts/suspends payments for Structural or Cohesion Funds and imposes
financial corrections, when necessary.
However,
administrative capacity in some Member States and/or programmes needs to be
improved further, to make sure that Managing Authorities are adequately staffed
or that they address the problems connected to the high turnover of staff in
some administrations. But Member States also need to provide training at their
turn at all administrative layers, in order to ensure that rules are properly
known and implemented, particularly in case of staff turnover. To help them, DG
REGIO has set-up in August 2012 a special competence centre for administrative
capacity building.
The
Commission will continue to verify the functioning of the management and
control systems in the Member States through all audit results available at EU
and national levels, including reported error rates, and to take action when
necessary. In its 2012 AAR (page 42), DG REGIO indicated that by end 2012 91%
of the ERDF and Cohesion Fund programmes' management verifications were
assessed as working well with only minor or some improvements needed. For the
remaining programmes, substantial improvements were needed and remedial action
plans linked to interruption/suspension of payments were decided in 2012 and
2013.
Concerning
ESF, on 12 November 2012, DG EMPL's Director General sent a letter to all
Managing Authorities drawing their attention to the need to improve the
reliability of the management verifications and calling upon them to strengthen
existing procedures and practices in the light of the Court's findings concerning
first level checks. DG EMPL will also carry out in 2013 a number of thematic
audits on the effectiveness of first-level checks in a set of operational
programmes selected on a risk basis. Furthermore, the Commission will continue
encouraging and supporting national authorities in their simplification
efforts, in particular the effective implementation of the simplified costs
options provided for in the current regulations. In this regard, besides the
Sectoral Event on Simplified Costs held on 13 December 2011, to which all
Managing Authorities were invited, specific simplification seminars with
Managing Authorities have already taken place in Spain, Portugal Italy,
Bulgaria, Hungary and Croatia in 2012 and early 2013. Another one will take
place in Romania in April 2013. Besides contributing to a further reduction in
error rates (and error frequency), the effective implementation of simplified
costs would also significantly reduce the administrative burden on
beneficiaries and the cost of control.
With a
view to the next programming period, the Commission has proposed to build up on
experience to reinforce systems to ensure legality/regularity across programmes
and improve further management accountability. The formal certification of
annual accounts once all national controls have been done, combined with the
10% retention mechanism on interim payments, net corrections following
Community audits once accounts have been certified and the requirement of
annual management declarations by managing authorities are meant to offset the
risk that expenditure claimed are not legal and regular and to improve
accountability at national level.
As regards
agriculture, the Commission fully agrees with the European Court of Auditors
and the European Parliament on the key and irreplaceable role played by the
national authorities in protecting EU funds under shared management. 
The
Commission provides guidance to the Member States and monitors the
effectiveness of their control systems on an on-going basis and especially
through its annual plan of compliance audit missions. In 2011, for EAFRD, 28
audit missions were carried out, covering 15 Member States. These figures do
not include further audit missions carried out in the framework of the
clearance of accounts (accreditation of Paying Agencies and certification by
independent bodies) and other audit missions carried out for the first pillar
and also concerning area-based schemes in the second pillar. From 2013, the
audit resources devoted to EAFRD will be reinforced as part of the response to
the high error rate.
Whenever
weaknesses are found, the Commission protects the Union's financial interests
by means of financial corrections imposed on the Member States. The decisions
adopted by the Commission in 2011 and 2012 in respect of EAFRD, for
non-compliances with EU rules found in previous years, concerned respectively
58 and 67 million euros to be corrected and recovered to the EU budget.
68.         (§ 82) The
Parliament urges the Member States to identify and report to Parliament, in
coordination with the Commission and in consultation with the Court of
Auditors, unnecessarily complex national rules on public procurement in order
to simplify them.
Commission's
response:
The
request is primarily addressed at the Member States and not at the Commission.
The Commission, therefore, does not see itself in the lead of initiating the
request. It, furthermore, refers to its reply to request § 1h.
69.         (§ 83) The
Parliament calls on the Commission, where breaches of budgetary and competition
law are known to have occurred in the Member States (particularly in the award
of public contracts), to apply more stringent monitoring and conditions and, in
case of doubt, to suspend financing from the Structural Funds immediately until
compliance with the rules and hence a use of the funds which accords with Union
law are guaranteed.
Commission's
response:
As regards
cohesion policy, the requested action has been taken and the controls are
already in place. DG REGIO and DG EMPL fully use interruptions and suspensions
instruments as soon as irregularities, including those linked to the award of
public contracts, are detected, leading to actions plans to correct past expenditure
and to adapt management and control systems. The Commission only resumes
payments when it has a reasonable assurance that irregular expenditure have
been corrected and that management and control systems are adapted. However,
the Commission notes that the request is vague and does not focus on cohesion
policy legislation.
As regards
agriculture, DG AGRI is increasing the audits of the implementation by the
Member States of the Rural Development Policy. To allow for greater flexibility
regarding interruptions and suspensions of payments in rural development
already in the current programming period, the Commission has amended the
respective Commission rules (Regulation (EC) No 883/2006) in view of covering
cases where the Member State does not provide the Commission with the necessary
information demonstrating that it is addressing deficiencies in its management
and control system or where such information is manifestly insufficient. As
regards the new programming period 2014-2020, in the political agreement with
the co-legislator on the main elements of the CAP reform, in particular for a
horizontal regulation, Article 43 of the latter will enable the Commission to
suspend payments when serious deficiencies are detected.
70.         (§ 84) The
Parliament encourages the services of the Commission to launch a pilot action
plan, as DG Employment did in policy sectors with a high error risk, aiming at
identifying key areas where simplification could help to reduce the error rate at
beneficiary level.
Commission's
response:
The
requested action has been taken. DG REGIO applies a similar policy as DG EMPL
in concentrating efforts of support to Member States that show difficulties in
meeting the requirements of adequate management and control systems. Particular
attention to overcome structural weaknesses has been paid in this respect most
recently to the Czech Republic, Spain and Italy, all Member States that were in
particular targeted by interruption and pre-suspensions of payments.
On a more
general level and following the adaption of the ERDF regulation to the
provisions foreseen in the ESF regulation, DG REGIO had started to apply
simplified costs options in particular to sectors that are more exposed to
potential errors due to a high ratio of indirect costs. In particular
programmes with interventions in RTD have started to take advantage of the
modified legal provision in this period.
For the
next programming period for 2014-2020, the Commission has proposed a number of
provisions for management and control systems ensuring the prevention and
detection of irregularities, including fraud, and thus reasonable assurance on
the regularity of expenditure. At the same time the delivery system should be
as simple and streamlined as possible to ensure efficient implementation and
the reduction of administrative burden for beneficiaries. The options proposed
for cohesion policy include inter alia different reimbursement options (based
on real costs and simplified cost options), a proportional approach entailing
risk based control arrangements and eGovernance. If implemented, these
provisions will reduce error rates at beneficiaries level.
As regards
agriculture, an action plan for rural development is described in the reply to
§ 1i. This action plan both addresses the authorities and beneficiaries. It
will also promote simplification through the analysis of root causes and the
discussion with all Member States in the rural development committee and the
meetings with the paying agencies. This exchange will allow to compare
different practices and to develop best practices. In addition, the guidance
documents under preparation will also address simplification issues. The
guidance document on simplified costs will contribute to promote administrative
practices which simplify the implementation of projects for beneficiaries.
71.         (§ 85) The
Parliament urges the Commission to develop additional instruments to facilitate
the process of consultation with beneficiaries and to strengthen their direct
feedback to the national authorities, in line with the efforts to simplify the
national rules and to reduce the error rate.
Commission's
response:
The
Commission is taking the requested action as regards agriculture. It will
invite the Member States to use the technical assistance of the rural
development programmes in order to organise awareness raising actions with
beneficiaries and authorities involved in the implementation of programmes at
the occasion of the seminar on error rate in rural development on 16 October
2013.
However,
as regards cohesion policy, the Commission will not be in a position to take
the requested action. It cannot have direct links with hundreds of thousands of
beneficiaries in shared management and, therefore, overpass managing
authorities for the management of projects.
72.         (§ 86) The
Parliament once again requires the Commission to name the Member States
responsible for the cumulative quantifiable errors identified.
Commission's
response:
The
requested action has been taken. In 2011, the Commission published an analysis
of errors in Cohesion Policy for the years 2006-2009 (SEC(2011) 1179, 5 October
2011), showing a concentration of errors detected by the Court in that period
in Spain, Italy and the UK. 
The Staff
Working Document also reported that since 2007 operational programmes in Spain
and Italy represented approximately 60 % of the number of programmes under
reservation. Therefore, special action plans focused on these two Member States
have been developed besides the usual corrective and preventive measures
applied for all programmes in reservation in the various Member States.
For the
2007-2013 period, error rates for each operational programme are provided by
the Member States' audit authorities in their Annual Control Reports and
reviewed by the Commission in the framework of the elaboration of its Annual
Activity Report. The resulting cumulative (average) risk rate by MS,
reservations and corrective actions taken are fully disclosed in the 2012 AARs
of DG REGIO (pages 129-133) and DG EMPL (page XX). DG REGIO's 2012 AAR
discloses the risks for payments for all Member States (table on p. 7), out of
which one can draw conclusions on the Member States contributing most to the
risk (AT, EL, SI, FR). In DG EMPL's 2011 AAR, 4 Member States (ES, DE, IT, CZ)
represent the highest financial risk and account for two-thirds of the
reservations made in the 2011 AAR.
With a
view to the Court's 2011 Annual Report, there was less concentration of errors
for the ERDF in some Member States/programmes than in previous years, as, due
to the increased preventive actions (interruptions/suspensions) in 2011, the
programmes more at risk could not be selected for the DAS sample as no payments
were made. Results show that a high error rate is not a problem of the policy
as a whole, but of some programmes in some Member States; if payments are
interrupted to these problematic programmes, the error rate goes down and
remedial actions are taken for future payments. All details on programmes under
reservation as well as on remedial action plans are provided in DG REGIO's and
DG EMPL's Annual Activity Reports (see above). 
As regards
Agriculture, the Commission already named those Member States that had a
residual error rate for second pillar expenditure (rural development) as a
whole which was above the materiality threshold (>2%) for the financial year
2011 in the Annual Activity Report 2011 of the Directorate General for Agriculture
and Rural Development (Austria, Denmark, Estonia, Spain, France, Ireland,
Latvia, Portugal, Romania, Sweden, Slovenia and Slovakia). Two other Member
States (Bulgaria and Malta) with a high error rate for measures under Axis 2
were named as well, although they did not exceed, the overall threshold. This
reservation has been carried over in 2012 DG AGRI AAR. Further analysis of the
errors in rural development was presented in the Commission staff working
document on the assessment of root causes of errors in the implementation of
rural development policy and corrective actions, adopted by the Commission at
the end of June 2013. As for the expenditure under the first pillar of the CAP,
following an integrated approach for the calculation of the residual error rate
for decoupled direct aids, DG AGRI 2012 AAR contained a reservation concerning
serious deficiencies in direct payments in Portugal, Bulgaria and France. These
three Member States named were displaying error rates above 5% and contributed
the most to the overall residual error rate. Statistics on the residual error
rates by individual Member States were disclosed in the 2012 AAR for EU-27
allowing for identification of the Member States exceeding the materiality
threshold.
73.         (§ 87) The
Parliament notes the entry into force of the European Stability Mechanism but
regrets that this mechanism was set up outside the Union's institutional
framework, as this precludes any democratic, political and budgetary control by
the Union institutions and in particular by Parliament; deems it essential that
the ESM will be discussed at least once a year in a plenary debate in the
presence of the Council and the Commission on the basis on the annual report
from the ESM Board of Auditors.
Commission's
response:
The
Commission can only take note that the ESM was established by an
intergovernmental treaty outside the EU framework. The Commission will gladly
participate to any debate in the European Parliament on the ESM but must point
out that it only enjoys an observer status in the ESM governing bodies. The
Commission should also point out that the European Court of Auditors is also
involved in the ESM, as one Member of the ESM Board of Auditors is appointed
from the European Court of Auditors.
74.         (§ 88) The
Parliament calls on the Commission to report on and evaluate the anti-fraud
strategies established within each directorate general following the adoption
of the Commission's new Anti-Fraud Strategy (COM(2011)0376) and the Internal
Action Plan (SEC(2011)0787) for its implementation in June 2011.
Commission's
response:
The annual
activity reports of the authorising officers by delegation refer to the
adoption and implementation of their respective anti-fraud strategies. The
Commission will report on the implementation of its Anti-fraud Strategy
starting with the Commission report on the protection of the EU financial
interests for the year 2013.
75.         (§ 89) The
Parliament calls on the Commission to report how it intends to improve as soon
as possible its provision to introduce a pro-active management of potential
conflict of interests and 'revolving doors'.
Commission's
response:
The legal
framework common to all institutions and the implementing provisions adopted by
the Commission are a solid basis for dealing with all issues relating to
conflicts of interest, including in the so-called revolving door cases. These
rules are proactively managed by the Commission.
76.         (§ 90) The
Parliament calls on the Commission to report how it has implemented Article
5(3) of the WHO Framework Convention on Tobacco Control and how it intends to
improve and clarify existing rules.
Commission's
response:
Please
refer to request made in § 92. As set out its replies to the parliamentary
questions E-011643/2012 and E-001718/2013, the Commission does not see a need
for new provisions.
77.         (§ 91) The
Parliament calls on the Commission to provide Parliament as soon as possible
with an overview about all (public and non-public) documents and all persons
involved in the negotiations of the four cooperation agreements with the
tobacco industry.
Commission's
response:
There has
been an exchange of letters between EP CONT Committee Chairman, Mr. Theurer,
and Commissioner Semeta in relation to CONT's request to have access on a
confidential basis to non-public documents related to the Agreements with
tobacco manufacturers. The Commissioner indicated in the annexes to his letters
dated 6 November 2012, 20 December 2012, and 27 March 2013 transmitted to Mr.
Theurer those documents which can be made available to CONT in a secure reading
room. They include the minutes of the annual meetings with the four cigarette
manufacturers with which the EU and the Member States have concluded
agreements. Following the receipt of a reply from Mr. Theurer on 13 June to the
most recent letter from the Commissioner dated 27 March arrangements will now
be put in place to enable CONT members to have sight of the documents on a
confidential basis. This was confirmed by Commissioner Semeta in a CONT meeting
on 18 June.
78.         (§ 92) The
Parliament calls on the Commission to report on how the provisions of Article
5(3) have been implemented in the Union and its institutions, especially
considering the following question: how far does implementation follow
guidelines set by the WHO to Article 5(3); questions how and why the Commission
has deviated from those guidelines.
Commission's
response:
As regards
the guidelines for implementing art 5(3) of the Framework Convention on Tobacco
Control (FCTC), the Commission believes that the ethical framework applying to
Members and staff is fully compatible with this provision, as explained in its
replies to the parliamentary questions E-011643/2012 and E-001718/2013, in the
two-year report under the FCTC submitted on 9th November 2012, and in the
response of President BARROSO to a letter of Mr GROOTE, Chairman of the
Committee on the Environment, Public Health and Food Safety.
Budgetary
management
79.         (§ 94) The
Parliament is concerned by the acceleration in the rate of payment requests by
the Member States towards the end of the year as regards the ESF, the ERDF and
the Cohesion fund, because this prevents the Commission from requesting an
amending budget from the budgetary authority in due time in order to increase
the payment appropriations with a view to honouring the claims received;
therefore asks the Commission to urge the Member States to transmit most of the
claims as early as possible.
Commission's
response:
The
requested action has been taken. The Commission shares the EP's concern. In
view of this, three Commissioners (Andor, Hahn, Lewandowski) sent a letter to
Member States on 22 March 2012 asking for 1) MS to submit payment claims before
31 October and 2) more regular spreading of payment applications throughout the
year. For 2012, it can be noted that Member States have clearly improved the
management of their claims. The Commission received 28% of total payment claims
for the concerned funds during the two last months of the year, whereas the
similar figure was 42% in 2011. In 2013, a similar letter has been sent on
04/03/2013 to Member States, including for rural development programmes
requesting forecasts of claims to be submitted in 2013 and 2014. In 2013,
particular attention will be drawn on the impact of the N+2/N+3 rule and a
potential significant backlog of unpaid claims at the end of 2013. In order to
enable a better assessment of the remaining budgetary needs Member States will
be invited to send their applications as soon as possible.
80.         (§ 97) The
Parliament insists that sufficient payment appropriations need to be made
available in future years from the outset.
Commission's
response:
The
Commission has taken the recommended action.
The
Commission will continue to estimate as precisely as possible the required
level of payment appropriations, and on this basis submit to the Budget
Authority draft budgets with sufficient appropriations. 
Thereafter,
the Commission calls on the Budgetary Authority to adopt a Budget with an
adequate amount of payment appropriations, in accordance with the Financial
Regulation.
Revenue
81.         (§ 104) The
Parliament requests information before September 2013 on progress made with
reference to the main findings and observations of the Court of Auditors'
Special Report No 13/2011.
Commission's
response:
The
Commission follows up the Court's recommendations regularly and reports on them
within the normal follow up cycle and will continue to do so. The Commission is
thoroughly following up the recommendations made by the European Court of
Auditors in the context of past and recent audits, in particular the European
Court of Auditors Special Report No 13/2011 "Does the control of customs
procedure 42 prevent and detect VAT evasion?". See also the Commission's
reply to Parliament's request to report on the progress in terms of the
follow-up on the Court of Auditor's recommendations (Hearing on 21 January
2013, point 48). See also Commission's reply in the special report No 13/2011
on initiatives taken.
82.         (§ 106) The
Parliament requests information as to the reasons why the Commission has not
implemented Recommendation No 6 of Special Report No 13/2011.
Commission's
response:
The
Commission has explored this possibility with Member States who, however,
prefer to use targeted exchanges of information via Eurofisc instead. Therefore
an amendment of the VAT Directive would not have the unanimous support from
Member States that is necessary for legislative proposals to be approved in the
field of taxation. Moreover, as of 1/1/2013 national authorities and traders'
obligations in relation with Customs procedure 42 have been clarified: VAT
numbers have to be included in box 44 of the customs declaration in order to
benefit from the exemption. An evidence that "the imported goods are
intended to be transported or dispatched from the Member State of importation
to another Member State" will be provided, if required by a Member State
(broadly meaning a reference to the related transport document).
83.         (§ 108) The
Parliament calls on the Commission to intensify its efforts to remedy the
situation with regard to the state of implementation of the Court of Auditors'
recommendations contained in its Special Report No 13/2011.
Commission's
response:
The
Commission first would like to stress that the audits carried out by the Court
in Member States covered the period before the new Article 143(2) of VAT
Directive, which specifies the conditions for applying the exemption of VAT
payment in a more detailed manner than in the past, entered into force.
Therefore, since the start of the audit, the following progress has been
achieved: - At the end of 2008, the Commission proposed to modify the VAT
Directive and further clarify the conditions under which the exemption can
apply. The proposal was adopted by Council and entered into force in early
2010. - The Commission actively supports any initiative that could lead to the
creation of an EU risk profile addressing the risk of VAT fraud concerning
imports under procedure 42. In Eurofisc a specific working field was created in
February 2011 in order to exchange targeted information on fraudulent
transactions using the customs procedure 42. In this working field both
representatives from customs and tax departments are present and they have
identified the transactions that require further close monitoring and the best
way to do this. Until now, Member States still prefer to keep performance of
the related risk analysis tasks to national level. Results, however, are shared
with all other Member States. – The Commission amended the Modernised Customs
Code Implementing Provisions to implement the compulsory and uniform
communication at the time of importation of the information required by Article
143(2) of Directive 2006/112/EC when the VAT exemption applies (Commission
Regulation 756/2012 of 20/8/2012). The information required from 1.1.2013 in
Box 44 of the customs declaration includes the relevant VAT numbers and the
reference to the evidence of the intended transport to the Member State of
final destination. For technical reasons, communication at the time of
importation of the information required by Article 143(2) of Directive
2006/112/EC is not possible in regard to the Local Clearance Procedures. –
Definitions are clarified and explanations/examples for procedure code 42 are
given in order to spell out the link between Customs and VAT provisions and to
remove any possible ambiguity as to the obligations to provide VAT
identifications in those customs declarations. – The Commission is closely
monitoring the actions taken at national level to ensure the implementation of
this legislation both by customs and tax administrations. The purpose is to
check a) what has been done in each country to ensure that all the information
relating to imports under the customs 4200 procedure has been transmitted or
communicated from the customs authorities to the domestic tax administration b)
and to check whether measures have been taken at national level to provide
customs authorities with on line access to information contained in the VIES
database, so that proper checks on the validity of VAT identification numbers
can be made by the customs authorities at the time of importation. This
monitoring exercise indicates that most MS are working on this. The results of
this monitoring will be reflected in the Article 12 Report on Own Resources to
be presented in 2013. – The Commission has also encouraged the automatic
verification of the validity of VAT identification numbers in VIES in the
Member States customs electronic clearance system by reminding MS about the
need to perform automatic verifications of VAT ID. In addition, the Commission
monitors the situation. The Commission therefore considered that it is
thoroughly following up the recommendations made by the European Court of
Auditors, in particular the Special Report No 13/2011 "Does the control of
customs procedure 42 prevent and detect VAT evasion?".
84.         (§ 110) The
Parliament calls on the Commission to make an evaluation of the cost of
postponing full application of the Modernised Customs Code (MCC), quantifying
the budgetary consequences of such postponement.
Commission's
response:
- See Mr
Šemeta's reply on request made in § 1ah.
85.         (§ 111) The
Parliament calls on the Commission to step up its efforts to ensure that the
MCC is implemented at the earliest possible date, and in any event to avoid the
worst-case scenario indicated in the study for March 2033.
Commission's
response:
- See Mr
Šemeta's reply on the request made in § 1ah.The Commission closely follows this
issue. It fully participated in the preparation and finalisation of a study
commissioned by the European Parliament in 2012. According to this study, the
estimated deadlines for the implementation of the Customs Code range from 31
December 2017 (most optimistic scenario) to March 2033 (most pessimistic
scenario). The 2020 deadline proposed by the Commission can therefore already
be considered as very ambitious. All stakeholders (including the EP in the
Salvini report of 1 December 2012) unanimously agreed to postpone given that MS
were not in a position to commit to the development of the necessary IT
systems. Inter-institutional negotiations on the proposal for the Union Customs
Code are now closed and EP and Council agreed on the ultimate date of
31.12.2020 for the implementation of all UCC-related IT systems, as proposed by
the Commission.
86.         (§ 114) The
Parliament calls on the Commission to strengthen its coordination with the
Member States in order to collect reliable data on the customs and VAT gap in
the respective countries and to report on a regular basis to Parliament in that
regard.
Commission's
response:
- See Mr
Šemeta's reply mentioned earlier (PA n°4). The Commission would like to recall
two different and on-going initiatives: on the one hand, the study
"Levelling the Playing field on the Single Market" commissioned by
the EP, and the active participation of the Commission services in the
elaboration of this study. The study on the estimation of the VAT gap will be
updated and made available by 30 October 2013, at the latest, to the other
European Institutions. It is the Commission's intention through this update to
publish a new estimate of the VAT GAP for all 27 Member States following the
same approach as in 2009, that is to say by comparing accrued VAT receipts with
a theoretical net VAT liability for the economy as a whole. See also reply to
§1ai.
Agriculture
87.         (§ 119) The
Parliament calls on the Commission and the Court of Auditors to agree on a
consistent methodology with a view to rendering the yearly budget
implementation figures more comparable.
Commission's
response:
The
Commission shares the European Parliament’s view that it would be preferable to
agree on a consistent approach. However, the Commission acknowledges that in
its function as independent external auditor of the EU institutions, the Court
is free to choose its own methodology.
The
Commission has informed the Court of its position that cross-compliance
requirements are not eligibility conditions, as they do not affect the farmers'
entitlement to receive their payments. Therefore cross compliance violations do
not affect the legality and regularity of the direct CAP aid expenditure. It is
the opinion of DG AGRI that sanctions applied for cross compliance violations
should not be taken into account in the calculation of error rates concerning
the legality and regularity of transactions.
The
Commission therefore regrets that for formal reasons it is obliged to reject
the recommendation. However, in future Annual Activity Reports DG AGRI will
explain how the different approaches of the ECA and the Commission on this
issue impact on the residual error rate.
Market and
direct support
88.         (§ 129) The
Parliament calls on the Commission to remedy the situation of inaccurate data
in the various databases and an incorrect administrative treatment of claims by
the paying agencies in certain Member States without any delays using
suspensions and interruptions of funding when necessary.
Commission's
response:
Commission
Regulation 883/2006 was amended in April 2013 with the objective to facilitate
interruptions of Rural Development payments to the MSs already in the current
programming period in case of deficiencies in the functioning of the management
and control system.
However, a
full harmonisation of interruption and suspension activities across all policy
areas is not possible under the current legal framework.
For the
new programming period 2014-2020, the Commission's proposal for common
provisions for the Structural Funds foresees a further harmonisation of the
interruption of payments for all these Funds, including Rural Development (See
Article 74 of COM(2011) 615 final).
Furthermore,
the Commission fully supports the EP amendment of Article 43 of the Commission
proposal for the horizontal regulation, which is currently under consideration
in Council and Parliament and would allow the Commission to suspend payments
when serious deficiencies are detected and no remedial actions are implemented.
Depending on the outcome of the CAP reform process these new rules would apply
from 1 January 2014.
89.         (§ 132) The
Parliament insists that on-the-spot inspections should be of the quality
necessary to identify the eligible area in a reliable manner.
Commission's
response:
The
Commission shares the view of the Court that the quality of on-the-spot checks
is essential to complete the administrative checks and to establish a reliable
error rate. Deficiencies in the quality of the on-the-spot checks identified
during the audits carried out by the Commission services are systematically
followed up through conformity clearance procedures which ensure that the risk
to the EU budget is adequately covered. 
From claim
year 2014 the certification bodies will be required to systematically and every
year re-perform on a statistically valid sample all checks done by the paying
agencies, in view of delivering an opinion on the quality of the administrative
and on-the-spot controls and the legality and regularity of the underlying
transactions. This will reinforce the assurance on the quality of the controls.
90.         (§ 134) The
Parliament calls on the Commission to take all necessary actions so that paying
agencies remedy weaknesses detected in their administration and control system;
insists that the design and quality of the work to be performed by certifying
bodies must be improved in order to provide reliable assessment of legality and
regularity of operations in the paying agencies; asks the Commission to
investigate if it is possible to cooperate with private individuals to verify
cross compliance standards and reduce administrative burden.
Commission's
response:
The
Commission shares the view that paying agencies shall remedy to weaknesses in
their administration and control system as soon as they are detected, be it by
their internal control system, by the certification body, by Commission
services or by the Court of Auditors Deficiencies identified during the audits
carried out by the Commission services are systematically followed up through
conformity clearance procedures which ensure that the risk to the EU budget is
adequately covered. 
From claim
year 2014 the certification bodies will be required to systematically and every
year re-perform on a statistically valid sample all checks done by the paying
agencies, in view of delivering an opinion on the quality of the administrative
and on-the-spot controls and the legality and regularity of the underlying
transactions. This will reinforce the assurance on the quality of the controls.
The
Commission considers that to cooperate with private individuals for
cross-compliance controls is not suitable. The involvement of a third party
(private individuals) would significantly complicate the current structure by
adding a new layer of control elements in terms of delegation, supervision,
performance or responsibility.
Rural
development
91.         (§ 137) The
Parliament calls on the Commission and the Member States to ensure that the
existing rules are better enforced.
Commission's
response:
New
guidelines on the treatment of non-respect of public procurement rules are
under development between are in preparation between the DGs concerned and will
be finalised and presented to the Member States during the course of 2013.
92.         (§ 138) The
Parliament reiterates its regrets that the Commission follows different
methodologies to quantify public procurement errors in the two policy areas
agriculture and cohesion both of which being furthermore not in line with the
Court of Auditors' methodology and calls on the Commission and the Court of Auditors
to harmonise the treatment of public procurement errors in these two policy
areas urgently.
Commission's
response:
The
Commission is taking the requested action. The system of quantification of
public procurement errors by the Court differs from the one used by the
Commission or Member States when deciding how to respond to the incorrect
application of public procurement rules. The Commission, according to its
established methodology, which is also used by many national authorities,
applies flat-rate corrections which ensure corrections which are proportionate
to the severity of the infringement. The Court has a 0% or 100% approach. This
difference in quantifying public procurement errors explains that five 100%
public procurement errors for ERDF/CF projects, out of 168 projects audited in
2011, make up 45% of the error rate calculated by the Court in its 2011 annual
report. 
The
Commission has launched a revision of its methodology to quantify errors linked
to the implementation of public procurement, to take account of experience and
practices audited and detected so far (revision process to be finalised in
2013). The objective would be, through a Commission decision, to enhance the
legal character of these correction rates including when being used by Member
States authorities to impose financial corrections to their beneficiaries, and
to harmonise approaches within the Commission between policies under shared
management (agriculture, cohesion policy, home and justice affairs) and other
policy areas.
As regards
agriculture, the quantification of errors in relation to public procurement
work is on-going for harmonising the methodology between the different policy
areas, notably the agricultural and regional policies. This is also in response
to the European Parliament's call on the Commission in this respect in its
discharge resolution for 2010.
As
recommended by the Parliament in previous discharge recommendations, the
Commission proposed to the Court a harmonisation of approach on the
quantification of errors linked to public procurement. The Court did not take
the opportunity and confirmed that its approach for the purpose of assessing
the risk for the EU budget as a whole in its annual report may be different to
the Commission's legal approach to financial corrections imposed to Member
States (Cf. Annual Report 2010 - PART 2 — Audit approach and methodology for
the regularity of transactions ). The Commission explained this difference of
approach in its Staff Working Paper SEC(2011)1179 final.
93.         (§ 141) The
Parliament calls on the Commission to take account of findings identified by
the Court of Auditors when establishing the audit strategy of DG AGRI's
clearance of accounts.
Commission's
response:
The
findings identified by the Court are systematically assessed by Commission
services. They are duly taken into account in the central risk assessment
performed annually by DG AGRI and that serves as a basis for identifying most
risky areas and establishing the audit programme.
94.         (§ 144) The
Parliament insists on data exchange between the Court of Auditors and the
Commission to facilitate coordinated back casting for past periods in order to
ensure a reliable database for future comparisons with regards to management
and control systems for rural expenditure; is convinced of the usefulness of
tripartite meetings between the Court of Auditors, the Commission and
representatives from Member States concerned when looking for common analysis.
Commission's
response:
The
Commission systematically exchanges all its audit findings with the Court of
Auditors. This exchange has already been in place for years and works
satisfactorily.
The
Commission shares the view of the European Parliament that tripartite meetings
can in specific cases bring value to the proceedings. However, the Court of
Auditors seems more reluctant to pursue this procedure.
95.         (§ 145) The
Parliament calls on the Commission to take the necessary measures in order to
reduce the error rate in rural development.
Commission's
response:
In 2012 DG
AGRI established working group in order to make an in-depth analysis of the
causes of errors and to identify remedial measures. The group has continued its
work in 2013. In 2012 the work focused on the errors found in the Member
States' control statistics for 2011 (claim year 2010). In 2013 the work has
been enlarged also to include the results of the Court of Auditors DAS work. In
2012 the DG AGRI addressed the issue of errors with 14 Member States. In 2013
the exercise has been extended to cover all 27 MS. Following the outcome of
this work, corrective actions have already started. Where possible, Member
States have already amended their implementing arrangements or have amended
their programmes in order to reduce the risk of errors in the implementation.
The
Commission has conducted a number of actions to inform all Member States'
administrations about root causes identified and possible corrective actions. A
discussion in the Council took place on 29 November 2012, and Member States
have also on several occasions been informed through the Rural Development
Committee and annual conference of paying agencies. On 29 April 2013 a seminar
with the participation of members of the rural development committee and the
Funds committee took place in Brussels in order to present and discuss the
outcome of the work with all 27 MS for identifying root causes for errors and
remedial actions. The European Network for Rural Development is similarly being
used to raise further awareness of the issue. Member States have also already
scheduled information campaigns for beneficiaries. The Commission has provided
a specific training for rural development desk officers in DG AGRI.
Furthermore,
DG AGRI adapted its 2012 plan of audits of the implementation of rural
development measures in the Member States. Some audits to Member States or
regions with high error rates were added to the plan. In addition, in all
planned audit missions, increased focus on the error rates have been added to
the objectives of the audits. Similarly, in the preparation of the 2013 audit
plan of rural development, more attention has been paid to the issue of error
rate and risk detection. This is now an integral part of each audit performed.
The number of staff devoted to auditing the implementation of the 2007-2013
rural development programmes (EAFRD expenditure) is being increased so as to
increase substantially the number and coverage of audits in the next two years.
For the
preparation of the programmes for the next programming period, the Commission
will only approve Rural Development programmes where the design of the measures
does not create undue risk of error. Member States are encouraged to establish
their draft programmes in such a way that measures are clear, verifiable and
controllable. A specific provision on this is part of the proposal for the new
legal framework. To support Member States in this endeavour, the Commission has
started establishing guidelines for programming and are gradually making these
available to the Member States.
For rural
development, a range of approaches has been proposed for reimbursing payments
by beneficiaries on the basis of simplified costs involving standard scales of
unit costs, lump sums and flat-rate financing in the new legal EU framework. As
a result, the processes of claiming, managing and auditing reimbursement for
payments made would be easier for everyone, making rural development support
more accessible.
96.         (§ 146) The
Parliament calls on the Commission, nevertheless, to set up an action plan to
reduce the error rate not only by providing guidance and assistance to the
Member States by means of best practice examples but also by increasing
monitoring on the implementation of programmes and using sanctions such as
interruptions and suspensions of payments in particular in rural development
more effectively where needed.
Commission's
response:
Commission
Regulation 883/2006 was amended in April 2013 with the objective to facilitate
interruptions of Rural Development payments to the MSs already in the current
programming period in case of deficiencies in the functioning of the management
and control system.
However, a
full harmonisation of interruption and suspension activities across all policy
areas is not possible under the current legal framework.
For the
new programming period 2014-2020, the Commission's proposal for common
provisions for the Structural Funds foresees a further harmonisation of the
interruption of payments for all these Funds, including Rural Development (See
Article 74 of COM(2011) 615 final).
Furthermore,
the Commission fully supports the EP amendment of Article 43 of the Commission
proposal for the horizontal regulation, which is currently under consideration
in Council and Parliament and would allow the Commission to suspend payments
when serious deficiencies are detected and no remedial actions are implemented.
Depending on the outcome of the CAP reform process these new rules would apply
from 1 January 2014.
97.         (§ 147) The
Parliament calls on the Commission to further improve the quality control of
accreditation criteria for paying agencies and certifying bodies.
Commission's
response:
The work
plan for 2013 will take into account the need to reinforce the controls on the
adequacy of the accreditation criteria. In addition, the new guidelines that
are being developed for the certification bodies will also aim at improving the
work to be done by the certification body on the accreditation criteria in the
context of the yearly clearance of accounts exercise.
Environment,
public health and food safety
98.         (§ 154) The
Parliament encourages the Commission to focus in the future on PPs and PAs with
true added value for the Union
Commission's
response:
The
Commission will consider the added value for the Union of Pilot projects and
Preparatory actions in the executability letters of the budget and in the
reports on implementation of those PPs and PAs.
99.         (§ 155) The
Parliament encourages the Commission to strengthen the cooperation with Member
States in order to receive the best and most accurate data for the forecasts in
the policy area of food and feed safety, animal health, animal welfare and
plant health.
Commission's
response:
The
Commission put in place several measures in order to receive accurate data from
the Member States and to further improve the implementation rate of the budget.
As a result, the commitment execution reached 96,8 % in 2012, compared to 95%
in 2011 and 2010; payment execution increased to 99,7% in 2012 (98,1% in 2011;
90,5% in 2010). 
During the
preparation phase of the Draft Budget 2012, the accuracy of the planned budget
for the Member States' animal disease eradication programmes was improved by
comparing the initial estimates to the actual implementation of the Member
States' programmes in the previous years. The initial amounts were adapted in
close cooperation with the Member States to fit their real future needs. 
In
addition, budget preparations were improved by a more precise and restrictive
definition of eligible expenditure. This definition was introduced in the
Commission Decision for the veterinary programmes starting 1 January 2011. The
introduction of lump sums as from the 2012 animal disease eradication
programmes aims at simplifying the financial aspects of the Member States'
programme preparations; it is also expected to result in more accurate figures
for the budget planning.
During the
budget implementation phase, an additional tool for the assessment of animal
diseases eradication programmes was created by the Commission in the form of an
expert group. Its mission is to provide external technical assistance for the
pre-assessment of the 2013 and onwards programmes submitted by the Member
States related to a number of diseases. 
Finally,
potential under-expenditure is identified in the Commission's mid-term report
review process, with a view of reaching a full implementation rate of the
budget and of reallocating additional funds to other programmes where
justified.
Fisheries
100.       (§ 162) The Parliament
calls on the Commission to propose a fresh definition of capacity in the
technical assessment methods, in particular in order to avoid errors in
declaring certain expenditure under article 25(2) of Regulation (EC) No
1198/2006.
Commission's
response:
The
Commission is taking action in 2013 by developing common guidelines to provide
a working method leading to an assessment of whether a fishing fleet segment is
in a situation of overcapacity or not. This assessment will be based on
biological, technical and economic and social criteria. According to the
anticipated outcome of the reform of the Common Fisheries Policy (Based on the
Commission’s proposal COM (2011) 425 final), and in particular Article 34
thereof, the capacity assessment will be made by Member States. 
Where
overcapacity has been identified, Member States will be required to prepare an
action plan setting out the adjustment targets and tools to achieve a balance
between fishing capacity and the fishing opportunities from exploited resources
with a clear time-frame for the implementation of the plan.
In the
case that a Member State fails to implement an action plan, the Commission may
suspend or interrupt relevant Union financial assistance to that Member state
for investment in the relevant fleet segment.
Regional
policy; energy and transport
101.       (§ 168) The
Parliament calls on the Commission to urge the Member States to improve their
management and control systems in order to detect and correct errors at
national level.
Commission's
response:
The
requested action has been taken. The Commission continues to remind Member
States authorities that they should carry out proper and sufficient management
verifications, before accepting and declaring expenditure submitted by
beneficiaries. Audit Authorities continuously review this key requirement in
the systems through audits on statistical sample of operations each year. When
serious deficiencies are detected, the Commission interrupts/suspends payments
for Structural or Cohesion Funds and imposes financial corrections, when
necessary.
However,
administrative capacity in some Member States and/or programmes needs to be
improved further, to make sure that Managing Authorities are adequately staffed
or that they address the problems connected to the high turnover of staff in
some administrations. But Member States also need to provide training at their
turn at all administrative layers, in order to ensure that rules are properly
known and implemented, particularly in case of staff turnover. To help them, DG
REGIO has set-up in August 2012 a special competence centre for administrative
capacity building.
The
Commission will continue to verify the functioning of the management and
control systems in the Member States through all audit results available at EU
and national levels, including reported error rates, and to take action when
necessary. In its 2012 Annual Activity Report (page 42), DG REGIO indicated
that by end 2012 91% of ERDF and Cohesion Fund programmes presented management
verifications assessed as working well with only minor or some improvements
needed. For the remaining programmes, substantial improvements were needed and
remedial action plans linked to interruption/suspension of payments were decided
in 2011 and 2012 (Percentages do not add up to 100% due to rounding issues).
With a
view to the next programming period, the Commission has proposed to build up on
experience to reinforce systems to ensure legality/regularity across programmes
and improve further management accountability. The formal certification of
annual accounts once all national controls have been done, combined with the
10% retention mechanism on interim payments, net corrections following
Community audits once accounts have been accepted and the requirement of annual
management declarations by managing authorities are meant to offset the risk
that expenditure claimed are not legal and regular and to improve
accountability at national level.
102.       (§ 170) The
Parliament calls on the Commission to use all available instruments over the
next programming period 2014-2020, as outlined in the Commission proposal
(COM(2011)0615/2), in particular by means of delegated acts and implementing
acts, with a view to setting out conditions which the national audit
authorities shall fulfil and to adopting models for the audit strategy, the
audit opinion and the annual control report, as well as the methodology for the
sampling method.
Commission's
response:
The Commission
is taking the requested action. It will decide on the necessary delegated and
implementing acts in 2013 to ensure that the MS authorities fulfil their
obligations under the system of shared management in the next programming
period. It will prepare appropriate guidance for MS authorities, including the
requested elements.
103.       (§ 185) The
Parliament calls on the Commission to provide a comprehensive assessment of the
financial corrections made and their impact on the systems in respect of
preventing the recurrence of the same errors (specifically of a systemic
nature) in the future; calls on the Commission to inform Parliament about its
conclusions by the end of 2013.
Commission's
response:
The
requested action has been taken. The Commission recognises the crucial
importance of a solid reporting in this area as a mitigating impact of its
corrective mechanisms against the Court's reported error rate and is, under the
lead of DG BUDG, already working on this. See also the Commission's reply that
relates to the 2011 EP discharge recommendation 1(a). The Commission reports on
a quarterly basis figures on financial corrections to the Parliament.
As regards
cohesion policy, an "accounting exercise" on financial corrections
including at closure 2000-2006 has been provided to Parliament on 12 April
2013. 
However,
financial corrections are a tool to correct past expenditure already certified
to the Commission. These are accompanied by required remedial actions to
improve systems for the future, as reported in the annual activity reports. A
financial correction by itself does not lead to system improvement (accounting
exercise). Under shared management it is the Member States' responsibility to
ensure the functioning of effective management and control systems to prevent,
detect and correct irregularities (Articles 59-62, 91, 92 and 99 of Regulation
(EC) No. 1083/2006). At closure of 2007-2013, the Commission services will
calculate a residual error rate at programme level, which corresponds to all
remaining errors, individual and systemic, after deduction of all corrections
already implemented by the Member States authorities either on own initiative
or at the Commission's request. The Commission will apply a financial correction
corresponding to any material residual error rate (above 2%) on the closure
payment.
104.       (§ 187) The
Parliament calls for payments from the Structural Funds to be subject to
increased conditionality monitoring so as to ensure that the rules on the
proper use of Structural Funds are complied with in all Member States.
Commission's
response:
The
requested action has been taken. Based on the understanding that the
"conditionality monitoring" refers to the Commission's policy to
interrupt and suspend payments as soon as irregularities and/or weaknesses in
management and control systems are detected and as long as these
irregularities/weaknesses are not corrected the Commission refers to its
reporting in the Annual Activity Report of the structural funds DGs on the
strict policy to apply the tools.
105.       (§ 188) The
Parliament calls on the Commission to assist Member States in drafting
comprehensive, meaningful and comparable audit control reports, including a
chapter on the contributions Union funds have made in the respective countries
to attain the Europe 2020 objectives, both at national and regional level,
considering each region's individual potential for development and its possible
transformation in an economic growth centre.
Commission's
response:
Concerning
the Commission's assistance to Member States for drafting Annual Control
Reports, the Commission refers to the COCOF guidance note of 18 February 2009
(COCOF 09/0004/01), which provides general guidelines for the drafting of the
Annual Control Reports, to the guidance note on the treatment of errors in the
Annual Control Reports (COCOF 11/0041/01) and to the guidance note on sampling
methods (COCOF 08/0021/02 – currently under revision), which has significantly
contributed to the improvement of the reliability and consistency of the Annual
Control Reports. Furthermore, regular support is provided to the national audit
authorities through multilateral technical meetings, the Annual Coordination
meetings, the annual Homologues Group meeting and various training sessions
organised by the Commission services. 
However,
the recommendation is unclear since audit control reports by Member States are
about legality and regularity and not about performance auditing. Other tools
are foreseen in the proposals for the 2014-2020 period to report on results.
Therefore, the Commission is not in a position to agree to the recommendation
for comprehensive, meaningful and comparable audit control reports including a
chapter on the Europe 2020 objectives. However, the Commission will assist the
Member States by providing in the implementing acts for 2014-2020 for
comprehensive, meaningful and comparable Annual Control Reports. As it concerns
the reporting on the contribution EU funds make to attain Europe 2020
objectives, the Commission will require Member States to report on in the
Annual Implementation Reports, based on a stricter approach to indicators and
results in the Commission proposal for 2014-2020.
106.       (§ 191) The
Parliament shares the Court of Auditors' view that the Commission should
further reinforce the present sanction system (interruption, suspension,
financial corrections) by reducing the possibility of replacing ineligible
expenditure with other expenditure during the next programming period thereby
creating an additional incentive for Member States to detect and correct errors
at an early stage.
Commission's
response:
The
Commission considers that Member States should have the right to substitute
ineligible expenditure they detect with legal and regular one in order to
optimise the use of Cohesion spending, which contributes to its added value and
to ensure efficient controls at Member State level. However, the Commission
heard the EP's call for stricter provisions. Its proposal for the 2014-2020
regulatory framework provides that “Where irregularities affecting annual
accounts sent to the Commission are detected by the Commission or by the
European Court of Auditors, the resulting financial correction shall reduce
support from the Funds to the operational programme (Art. 137.6)” thereby
limiting the possibilities of withdrawal / replacement to the on-going
financial year. This provision on net financial corrections is intended as an
incentive for expenditure included in the annual certified accounts to be legal
and regular.
107.       (§ 192) The
Parliament calls on the Commission, in consultation with the Court of Auditors,
to establish a transparent system which allows, on the one hand, taking into
consideration annual financial corrections but also, on the other, financial
corrections during the life span of a programming period.
Commission's
response:
The
requested action has been taken. The Commission recognises the crucial
importance of a solid reporting in this area as a mitigating impact of its
corrective mechanisms against the Court's reported error rate and is, under the
lead of DG BUDG, already working on this. See also the Commission's reply that
relates to the 2011 EP discharge recommendation 1(a).For 2007-2013 programmes,
DG REGIO has introduced in its 2011 AAR a stronger annual supervision based on
a cumulative residual risk of error year after year, so that at closure only
residual problems will remain to be solved. The cumulative residual risk is
estimated for all programmes, based on the best available sources of
information (validated error rates, withdrawals, recoveries and pending recoveries).
This estimated cumulative residual risk is used to confirm whether corrective
measures already implemented by Member States had adequately mitigated the
risks of irregularities since the beginning of the programming period. As a
general rule, a cumulative residual risk above 2% leads to reservation for the
concerned programme. This will allow identifying the residual risk after all
corrections were taken during programme implementation. 
As regards
financial correction at the end of a programming period, the Commission carried
out an "accounting exercise" for the 2000-2006 period, on financial
corrections implemented during the lifetime of the programmes and at closure.
The report has been provided to Parliament on 12 April 2013.
108.       (§ 193) The
Parliament calls on the Commission to assist Member States in rendering
first-level controls and national audit authorities more effective by exchange
of best practice and closer cooperation between the Commission, the Court of
Auditors and national authorities (‘tripartite meetings’).
Commission's
response:
The
Commission agrees that tripartite meetings between Court, MS and the Commission
in the context of the DAS audits are helpful to ensure that the Court's
findings are based on mutually agreed evidence. However, the Commission
experienced that the Court of Auditors is increasingly reluctant since the 2012
DAS to keep this element in the contradictory procedure. The EP is, therefore,
asked to address its request to the Court directly.
The
Commission continues to remind Member States authorities that they should carry
out proper and sufficient management verifications, before accepting and
declaring expenditure submitted by beneficiaries. Audit Authorities
continuously review this key requirement in the systems through audits on
statistical sample of operations each year. When serious deficiencies are
detected, the Commission interrupts/suspends payments for Structural or
Cohesion Funds and imposes financial corrections, when necessary.
The
Commission has taken action to improve management verifications and the
certification of expenditure to the Commission under its 2008 Action Plan,
including improved guidance, advice, training and audits focussed on high risk
areas. However, administrative capacity in some Member States and/or programmes
needs to be improved further, to make sure that Managing Authorities are
adequately staffed or that they address the problems connected to the high
turnover of staff in some administrations. But Member States also need to
provide training at their turn at all administrative layers, in order to ensure
that rules are properly known and implemented, particularly in case of staff
turnover. To help them, DG REGIO has set-up in August 2012 a special competence
centre for administrative capacity building.
The
Commission will continue to verify the functioning of the management and
control systems in the Member States through all audit results available at EU
and national levels, including reported error rates, and to take action when
necessary.
With a
view to the next programming period, the Commission has proposed to build up on
experience to reinforce systems to ensure legality/regularity across programmes
and improve further management accountability. The formal certification of
annual accounts once all national controls have been done, combined with the
10% retention mechanism on interim payments, net corrections following
Community audits once accounts have been accepted and the requirement of annual
management declarations by managing authorities are meant to offset the risk
that expenditure claimed are not legal and regular and to improve
accountability at national level.
109.       (§ 194) The
Parliament calls on the Commission to start the preparation of a "best
practices" manual from the current programming period, incorporating
practical results, achieved effect and lessons learnt in order to optimise the
absorption process and to decrease the level of error rates; notes that in this
regard, the potential future beneficiaries for the next programming period
2014-2020 would profit.
Commission's
response:
The
Commission is taking the requested action. It will provide the appropriate
guidance, manuals and trainings for the next programming period to ensure that
the MS authorities are aware of the legal requirements and procedures to fulfil
their obligations under the system of shared management. These documents will
built on the experience made by the Commission and MS authorities in the
current and previous programming periods and include "best practices"
to stimulate mutual learning across Europe.
Employment and
social affairs
110.       (§ 206) The
Parliament recalls the need to monitor and measure the performance of financial
instruments against policy goals - Europe 2020 objectives - in order to be able
to identify shortcomings and to make progress; calls for performance
information and data be available on annual basis.
Commission's
response:
The
Regulation (EU) No 1310/2011 of 13 December 2011amending Council Regulation
(EC) No 1083/2006 as regards repayable assistance, financial engineering and
certain provisions related to the statement of expenditure have introduced new
reporting requirements for financial instruments both to be included in the
annual implementation reports of the operational programmes and to be attached
to each statement of expenditure including costs declared in relation to
financial engineering instrument. The amended regulation also provides for an
annual summary of the data collected by the Commission each year. 
The
progress of implementation is monitored through the evolution of the amounts
paid to and from each financial instrument. 
For the
next programming period, the Commission has propose to maintain and even extend
the reporting requirement, putting further emphasis on the monitoring of
performance, through information relating to the multiplier effect and the
contribution of the achievement of the indicators or the programme or priority.
111.       (207) The
Parliament calls on the Commission to propose, and on the Council to agree on,
accurate payment appropriations in annual budgetary procedure in order to avoid
uncertainty and unnecessary procedural burden on the budgetary authority and
provide beneficiaries with timely payments.
Commission's
response:
The
Commission proposed payment appropriations in the 2012's annual budgetary
procedure and the amending budgets to provide Member States and beneficiaries
with timely payments. These proposals were based on the rollover from 2011, the
2012's forecasts of the Member States and on the follow-up of implementation on
the ground.
However,
the final budget 2012 approved by the budgetary authority was not up to the
level requested by the Commission and a considerable part of payments had to be
postponed until 2013. 
In 2013,
the budgetary authority did not allocate in its initial budget the budget
requested by the Commission. The Commission corrected this through a Draft
amending budget 2 which aims at covering the obligations (commitments) which
have to be covered in 2013. The Commission hopes that the budgetary authority
will be able to adopt this amending budget.
112.       (§ 211) The
Parliament reiterates its call to ensure, in the light of implementation, an
orderly progression of the total appropriations for payments in relation to the
appropriations for commitments, so as to avoid any abnormal evolution of
outstanding commitments (RAL) (65 % of the total volume of the Cohesion Funds
at the end of 2011).
Commission's
response:
For the
2007-2013's ESF programming period DG EMPL ensures an orderly progression of
the total appropriations for payments in relation to the appropriations for
commitments based on the regulatory framework of the ESF (annual commitments,
automatic de-commitment at the end of N+2/3). 
For the
2000-2006's ESF programming period accelerated the closure process, so that the
huge majority of the closure files could be closed by the end of 2013, and so
the amount of the outstanding commitments would be decreased.
113.       (§ 218) The
Parliament calls on the Commission to assist Member States in drafting
comprehensive, meaningful and comparable audit control reports, including a
chapter on the contribution Union funds made in the respective Member State to
attain the Europe 2020 objectives (see also para 188).
Commission's
response:
The
Commission refers to the COCOF Guidance note of 18 February 2009 [COCOF
09/0004/01], which provides general guidelines for the drafting of the Annual
Control Reports (ACR) and to the sampling guidance issued in 2012, which has
significantly contributed to the improvement of the reliability and consistency
of the ACRs. Furthermore, regular support is provided to the national audit
authorities through the Annual Coordination meetings, the Homologues meeting
and various training sessions organized by the Commission services.
For
example, DG EMPL has either organized or participated in 2012 in numerous
training sessions, such as: the annual meeting of the Italian audit authorities
in Ferrara (17-19/10/2012); various training and information sessions given to
Spanish Audit Authorities ; several presentations on simplified costs (both for
MA and AA) in Hungary, Bulgaria, Spain, Portugal, Italy, Croatia and Romania
(last 2 in 2013); Homologues meeting in Vilnius 23-26/09/2012; Technical
working group on sampling (Brussels) 30/11/2012; annual technical meeting with
the audit authorities (Brussels) 4/6/2012. Looking forward, two training
sessions on sampling methods are planned for the German (16/4/2013) and Spanish
(24/4/2013) audit authorities. 
The
contribution the funds make towards attaining the 2020 strategy objectives is
addressed in the Annual Implementation Reports of the Member States, for each
OP. The Commission attaches great importance to the role of European funding
for making progress in the attainment of the 2020 strategy priorities.
114.       (§ 220) The
Parliament shares the Court of Auditors' view that the Commission should
further reinforce the present sanction system (interruption, suspension,
financial corrections) by reducing the possibility of replacing ineligible
expenditure with other expenditure during the next programming period thereby
creating an additional incentive for Member States to detect and correct errors
at an early stage (see also para 191).
Commission's
response:
The
Commission will continue its strict approach to interruptions, suspensions and
financial corrections under the current regulatory framework.
The
Commission's proposal for the new general regulation for 2014-2020 programming
period included a limitation to the possibility for the MS to re-use legally
ESF credits released through their own corrections withdrawal/replacement
mechanism): "When irregularities are detected by the Commission in
completed operations that have been included in annual accounts submitted to
the Commission, any financial correction subsequently made by the Commission
would be a net correction".
The
results of the co-decision procedure will determine how this proposal will be
integrated in the next regulatory framework.
115.       (§ 221) The
Parliament calls on the Commission and the Court of Auditors to establish a
transparent system which allows, on the one hand, to take into consideration
annual financial corrections but also, on the other, financial corrections
during the life span of a programming period (see also para 192).
Commission's
response:
For the
2000-2006 programming period, the assessment of closure documents by the
Commission's services will allow the determination of a residual error rate on
each operational programme, which takes into account all financial corrections
made on the operational programme life span and possible financial corrections
made by the Member State during the closure process at the request of the
Commission to compensate for uncorrected identified errors and system
deficiencies. Where Member States would not proceed with the necessary
financial correction based on the Commission's proposal in the closure letter,
the Commission will adopt a formal financial correction decision. 
Concerning
the 2007-2013 programming period, for the purposes of the AAR, the Commission
points out to the improved methodology applied by DG EMPL and DG REGIO in their
respective 2011 AAR in order to determine the need or not for a reservation for
each OP, where the residual error rate is calculated taking into account all
financial corrections implemented throughout the life span of the OP.
116.       (§ 222) The
Parliament calls on the Commission to assist Member States in rendering
first-level controls and national audit authorities more effective by exchange
of best practice and closer cooperation between the Commission, the Court and
national authorities ("tripartite meetings") (see also para 193).
Commission's
response:
The
Commission considers tripartite meetings as an important educational tool for
managing authorities, which have to implement the Court's recommendations. The
Commission underlines the critical importance of the tripartite meetings as
part of the contradictory process, and emphasizes the role of Tripartite
meetings as an effective way of enhancing mutual understanding, contributing to
a "sense of responsibility" on the MS concerned and allowing to clarify
complex issues. 
In order
to address the finding of the Court of auditors according to which 76% of the
errors found in DAS 2011 could have been detected by the managing authorities
before the certification of payment claims to the Commission, on 12 Nov 2012,
DG EMPL's Director General sent a letter to all Managing Authorities drawing
their attention to the need to improve the reliability of the management
verifications and calling upon them to strengthen existing procedures and
practices. DG EMPL is also carrying out a number of thematic audits on the
effectiveness of first-level checks in a set of operational programmes selected
on a risk basis; the audit plan for 2013 includes 8 missions on 8 OPs on this
subject. 6 missions took place in the first semester and 2 are foreseen in
November. 
In line
with the pilot actions already undertaken by DG EMPL for Spain and Italy in
2011-2012, the Commission intends to continue to provide specific support to
national authorities on the most problematic operational programmes, including
the review of national eligibility rules, where appropriate, in particular when
their complexity results in systemic, recurring errors.
The
Commission will also continue encouraging and supporting national authorities
in their efforts to implement simplified costs options.
Bulgaria and
Romania
117.       (§ 224) The
Parliament calls on the Commission to steadfastly and determinedly insist, as
far as the Romanian Government is concerned, especially in the light of Romania's
capability to protect the financial interest of the Union, that the
Commission's recommendations relating to the Cooperation and Verification
Mechanism are complied with and clarified; expects, finally, a series of
measures from the Commission, in cooperation with the Romanian government,
aimed at improving the integrity of the Romanian legal system.
Commission's
response:
The
Commission considers that the Cooperation and Verification Mechanism (CVM) has
been instrumental to progress in Romania on judicial reform and the fight
against corruption. It remains an appropriate tool to assist in reform efforts
in order to achieve a record of concrete and lasting results in line with the
objectives of the Mechanism. The Commission is of the view that further
acceleration of efforts to address all the recommendations set out in the CVM
reports is needed and will continue to cooperate with the authorities of
Romania to make concrete improvements, and to monitor the situation closely.
The Commission intends to present the next CVM report around the end of 2013.
118.       (§ 225) The
Parliament notes with concern the Commission's Report on the progress made by
Bulgaria under the Cooperation and Verification Mechanism with a view to
further efforts needed in order to demonstrate tangible results in the
monitored sectors; calls upon the effective implementation of the established
legislative and institutional framework; calls on the Commission steadfastly
and determinedly to insist, as far as the Bulgarian institutions are concerned,
that the Commission's recommendations are complied with; expects, finally, a
series of measures from the Commission, in cooperation with the Bulgarian
judiciary, to improve the integrity of the Bulgarian legal system.
Commission's
response:
The
Commission considers that the Cooperation and Verification Mechanism (CVM) has
been instrumental to progress in Bulgaria on judicial reform, the fight against
corruption and the fight against organised crime. It remains an appropriate
tool to assist in reform efforts in order to achieve a record of concrete and
lasting results in line with the objectives of the Mechanism. The Commission is
of the view that further acceleration of efforts to address all the recommendations
set out in the CVM reports is needed and will continue to cooperate with the
authorities of Bulgaria to make concrete improvements, and to monitor the
situation closely. The Commission intends to present the next report under the
CVM around the end of 2013.
Control of
Structural Funds in the Czech Republic
119.       (§ 226) The
Parliament takes note that an Action plan has been implemented by the Czech
government in 2012; notes with concern the centralisation of the audit
activities under the main audit authority in the Czech Ministry of Finance
since the Court of Auditors reported that this audit authority was ineffective;
calls on the Commission to report to the discharge authority on adjustments
concerning the staff of the audit authority, based on the Czech Government's
analysis, as requested in the Action Plan.
Commission's
response:
The
Commission will not be taking the requested action. The deficiencies in
relation to the Czech audit authority (AA) were not linked to the staff but to
the structure. They were mainly due to the lack of independence of the
Delegated Audit Bodies (DAB) which were located in and under the authority of
the managing authorities and due to the lack of supervision by the central audit
authority of the work carried out by the DABs. Therefore, the centralisation of
the AA and the integration of the former DABs into the central AA was
considered as essential to address the deficiency. This constituted part of the
action plan requested from the Czech authorities, together with financial
correction and other actions, to solve the deficiencies and to allow the
Commission to resume payments. The Commission notes that the EP (CONT
committee) organised a hearing with the Czech Minister of Finance on 21/11/2012
in this regard, who could provide all necessary explanations to the Honourable
Members.
See also
reply to § 227.
120.       (§ 227) The
Parliament takes note that the Commission has not applied any corrections due
to the ineffectiveness of the audit system in the Czech Republic; notes,
however, that the Commission applied corrections for some of the operational
programmes, mainly due to shortcomings in the functioning of the management and
control systems (errors in public procurement and the selection of operations);
notes that the corrections applied can be allocated to other projects; is
worried about information reported initially by the Court of Auditors which
suggested that the Czech Ministry of Finance used its role as an audit
authority and certification authority to influence the final error rate;
requests that the Commission report back to Parliament in detail on the matter;
calls on the Commission to elaborate in cooperation with the Czech Government
and to follow up on the implementation of an existing Action plan that tackles
the shortcomings in the Audit system at the core.
Commission's
response:
The
Commission will not be taking some of the requested actions while it considers that some have been implemented
("to elaborate" [...] "and to follow up on the implementation of
an existing Action plan") as detailed below. The statement that the
Commission did not apply any correction due to the failure of the audit system
is not correct. The flat rate corrections applied for OP Transport and OP
Environment were due to the following reasons: 
•        Lack
of independence of the DABs
•        Lack
of guidance and supervision of the DABs by the AA
•        Deficiencies
in the system for treatment of irregularities and recoveries
•        Weak
management verifications
Concerning
the remaining Operational Programmes, the central AA has been requested to
re-perform on basis of a representative sample the work of the DABs. Based on
the outcome of this exercise additional financial corrections might be applied
due to deficiencies in the audit system. 
Concerning
the statement that the corrections applied can be allocated to other projects,
it is important to point out that the corrections have been applied by the
Czech authorities under Article 98 of Regulation 1080/2006 and not by the
Commission. These other projects have to be new and eligible and cannot be
affected by the system deficiencies (Article 98.3 of Regulation 1080/2006).
Moreover, the Member State has to ensure that the new operations are free of
irregularities under the new management and control system. 
Concerning
the Ministry of Finance using its role as an audit authority and certifying
authority to influence the final error rate, the Commission considers, based on
the last Annual Control Reports, that this is not anymore the case except for
one OP. 
Finally,
as to the need to implement and action plan, according to the Commission the
deficiencies in the audit authority have already been addressed by the action
plan implemented in 2011-2012 as it covers the lack of independence of the
DABs, the lack of guidance and supervision by the AA and the deficiencies in
the system for treatment of irregularities and recoveries. However, during 2013
DG REGIO will follow-up the implementation of these corrective measures, and
especially the results of the re-performance of the audits of the DABs by the
AA, through its audits missions.
See
Commission's reply to § 336.
Gender issues
121.       (§ 231) The Parliament
reiterates its call for further efforts to develop gender-specific data, which
allow proper monitoring of how budgetary allocations affect the economic and
social opportunities of women and men, that can be included in the reports on
the implementation of the budget; underlines that the new Multiannual Financial
Framework provides an opportunity to develop and introduce such data, and
implement gender budgeting as a tool for good governance
Commission's
response:
The
Commission is partly taking the recommended action. 
The new
legal bases proposed by the Commission for the Multiannual Financial Framework
2014 -2020 have identified gender equality as a cross-cutting objective for all
relevant policy areas, including fundamental rights and citizenship, employment
and social inclusion, cohesion policy, education, research and innovation, and
external cooperation. Building upon these provisions, the Budgetary Circular
for Draft Budget 2014 included a specific instruction to DGs and Services to
present, where appropriate, gender equality objectives and linked
expenditure-related outputs in the Programme Statements which will justify the
Commission's annual Draft Budget in the 2014-2020 period. Training courses also
gave indication to that end. To the extent gender equality objectives are
included in relevant Programme Statements, the related performance information
will be taken into consideration by the Commission when justifying the
appropriations under the relevant policy areas. Reporting on the achievements
of the objectives included in Programme Statements taking into account the
corresponding resources used will be incorporated in the Annually Activity
Reports of DGs and Services and possibly also in the Synthesis Activity Report
presented by the Commission to the Budgetary Authority.
External
relations, aid and enlargement
122.       (§ 235) The
Parliament stresses the need for greater transparency in the management of
funds allocated to election observation missions; calls on the Commission to
send a report to the budgetary authority for each financial year on the costs
incurred for each mission, detailing all the budget items, including costs
associated with external service providers
Commission's
response:
FPI has committed
itself to produce each year a paper analysing the budget structure of EU EOMs
in order to facilitate the EP’s examination of the relative costs of the
missions. The first such paper has been sent to the EP at the end of July.
123.       (§ 242) The
Parliament is concerned that EuropeAid's and DG ECHO's supervisory and control
systems were again found to be only partially effective; points, in particular,
to the need to improve those systems in delegations; calls on the Commission to
set aside sufficient resources for delegation staff to perform monitoring and
supervision activities in a timely and satisfactory manner.
Commission's
response:
Alike
other Commission services, DG DEVCO is also subject to staff reductions under
the general Commission policy on the management of human resources. DG DEVCO,
with the close involvement of its staff in Delegations, has carried out in 2012
a workload assessment exercise. As a result, the services are now in the
process of implementing the Commission Decision of July 2012 on the workload
assessment, releasing posts where workload has reduced and transferring them to
Delegations where they are most needed. In consequence, resources will better
meet the needs in the field once this operation is finalised.
124.       (§ 243) The
Parliament calls on the Commission to continue investing in the improvement of
data quality and the development of CRIS functionalities, in particular linking
audit findings to the recovery of funds.
Commission's
response:
The
Commission will maintain the on-going efforts with data monitoring and
improvement of data validation processes in CRIS.
A
rationalisation and centralisation of data codes will be achieved by March
2014. Data quality controls and correction procedures will also be put in
place. The set of specific actions related to the findings identified by the
Court of Auditors will be implemented until end of 2014.
The
Commission has already established a link between audit financial findings and
recovery orders as required by the European Parliament.
125.       (§ 246) The
Parliament notes that in 2011, the first full year of operation of the European
External Action Service (EEAS), EEAS and Commission staff in delegations were
separated in terms of their allocation and funding; is concerned that in 2011,
at least 43 person-years allocated to EuropeAid were used by the EEAS, over and
above the agreed flexibility limits defined in the Working Arrangements
negotiated between both organisations; urges the EEAS and the Commission to
fully respect the Working Arrangements, seeing in particular to the fact that
EuropeAid staff focus on ensuring appropriate aid management, in order to avoid
putting the sound financial management of Union's assistance at risk.
Commission's
response:
The cases
mentioned in this recommendation have been followed-up and corrective actions
taken. In the context of the 2012 EAMR, the issue of the flexibility arrangements
has been evaluated again, further to which the delegations concerned have
received instructions from HQ in order to implement some further corrective
actions. 
In order
to follow-up their implementation as well as to keep on monitoring the
application of the flexibility arrangements in all delegations, a new KPI will
be added to the upcoming EAMR. As a result of this, Heads of Delegations will
have to commit to the application of the flexibility arrangements in their
Delegation, as set out in the joint instruction note to all Heads of
Delegations, issued in December 2011 by the SG of the COM and the COO of the
EEAS, outlining the flexibility arrangements for the management of staff in
Delegations (Ares(2011)1392088).
126.       (§ 248) The
Parliament urges the Commission and the EEAS to focus more on results and
impact measurement in the design of the new spending programmes under the next
Multiannual Financial Framework (MFF) for the period 2014-2020, inter alia by
using pre-defined, country-specific, clear, transparent and measurable
indicators adapted to the specificities and objectives of each instrument;
supports the Court of Auditors' recommendation that the Commission should
define policy objectives to demonstrate better how it secures Union added value
during the next programming period; reiterates its call for associating all
relevant stakeholders, including civil society and local authorities in partner
countries, in the evaluation phase of Union's assistance.
Commission's
response:
As the
Commission announced in its 'Agenda for Change' Communication, it will
strengthen the focus on results. It will do so in various ways, including in
the programming documents for the period 2014-2020, which are to make best
possible use of indicators used by the countries themselves. The Commission has
set out in the Agenda for Change on which policy areas and sectors it considers
it should focus over the next programming period the EU-funded assistance and
where the EU can have added value. This will need to be further worked out in
the programming documents for the period 2014-2020. It is standing practice to
associate the relevant stakeholders to the evaluation of the Union’s
assistance.
127.       (§ 250) Following
the creation of the EEAS, the Parliament requests a clear allocation and
coordination of roles and responsibilities of the Commission and the EEAS as
regards programming and implementation of the budget in third countries
Commission's
response:
The roles
of the Commission and the EEAS as regards the programming and the
implementation of the budget in third countries are clearly defined. The basic
principles and practical implementation modalities with regards to the
relationship between the Commission DGs and the EEAS can be found in the
"Working arrangements between Commission services and the European
External Action Service in relation to external relation issues"
(SEC(2012/48).
128.       (§ 251) The Parliament
asks the Commission to report before July 2013 on the number of NGOs to which
the Union contributes but which do not generate any revenue other than funding
from government agencies.
Commission's
response:
In
accordance with article 35 of the Financial Regulation, DG DEVCO publishes a
yearly list of contractors and beneficiaries on this web address:
http://ec.europa.eu/europeaid/work/funding/beneficiaries/index.cfm?lang=en.
Furthermore DEVCO publishes a yearly and more specific list of non-for-profit
NGOs it funds, containing the list of such grants awarded between January 1 and
December 31 of each year through the different instruments and programmes. That
list is available for the years 2011 and 2012 at the following web addresses: http://ec.europa.eu/europeaid/what/civil-society/documents/contracts_signed_in_2011.pdf
and
http://ec.europa.eu/europeaid/what/civil-society/documents/contracts_signed_in_2012.pdf.
Following
the Financial Regulation, a grant is approved only for a project which does not
generate any revenue. This is not directly linked to the legal status of the
organisation.
129.       (§ 252) The Parliament
calls for a detailed summary of the allocation of funding in Libya; calls for
clarification as to whether the subdelegation of the Union ambassador in Libya
has been revoked.
Commission's
response:
In 2011,
funding for Libya was gathered from a range of instruments to support the
democratic transition: ENPI: €11 million (needs assessment, institutional
building, civil society, education); NSA: €3 million (support to civil
society); EIDHR: €3.2 million (elections, media, women's rights, torture); IFS:
€3.4 million (civil society, reconciliation); Tempus: one project € 0.4 million
(quality assurance).
The
previous Head of Delegation of the EU Delegation in Tripoli / Libya resigned
from his post in January 2013. Until his resignation, he was authorizing
officer by sub-delegation.
A new Head
of Delegation, Mrs Natalya APOSTOLOVA, has been appointed by the HR/VP in May
2013. She will take up her duties in July and she will be authorizing officer
by sub-delegation for operational and administrative expenditures.
130.       (§ 253) The
Parliament calls on the Commission to use a ‘traffic light’ system in the
progress reports, for ease of reference, in order to show what has improved or
deteriorated from one year to the next.
Commission's
response:
Main Key
Performance Indicators (or Key Assurance Indicators) included in the External
Assistance Monitoring Reports elaborated by the EU Delegations will be assessed
each year against annual benchmarks defined by DG DEVCO. The assessment will be
done using a "traffic light" type of system.
Aid to Haiti
131.       (§ 257) The
Parliament urges the Commission to carry out the postponed first ever overall
impact evaluation of the Union’s aid programme for Haiti in 2013 and to produce
a report on this for the discharge authority
Commission's
response:
See reply
to the request made in § 256: The assessment is ongoing and the final report is
expected in the second quarter of 2014.
132.       (§ 254) The
Parliament urges the Commission to make public the performance indicators for
the budget support to the Republic of Haiti and the respective assessments of
the Government of Haiti’s performance in order to qualify for budget support.
Commission's
response:
The
Commission is pleased to inform that the Action Fiche for the 2010 programme
HAITI - Programme d'appui budgétaire général au Plan d'Action et de
Reconstruction (PARDH) et à la Stratégie Nationale de Croissance et de Réduction
de la Pauvreté (SNCRP), including the assessment of eligibility for Budget
Support, has been published under:
http://ec.europa.eu/europeaid/documents/aap/2010/af_aap-spe_2010_hti_p2.pdf
133.       (§ 255) The Parliament
notes that new criteria for budget support are set out in the Commission’s
policy ‘The future approach to EU budget support to third countries’; calls on
the Commission to apply these criteria from 2013 onwards in a transparent way
to the budget support for the Government of Haiti.
Commission's
response:
New Budget
Support modalities are applied for all new Budget Support programmes signed as
of 1st January 2013.
134.       (§ 256) The
Parliament calls on the Commission to publish the list of Union funded projects
in Haiti without delay and to provide an assessment of the sustainability of
these projects in a five-year perspective.
Commission's
response:
A list of
Union funded projects in Haiti has already been submitted to the Parliament.
The assessment is ongoing: the final report is expected in the second quarter
of 2014.
135.       (§ 258) The
Parliament urges the Commission to take recommendations of the Court of
Auditors, contained in its Special Reports Nos 1/2012 and 13/2012 on the
Effectiveness of European Union Development Aid for Food security in
Sub-Saharan Africa and on the European Union Development Assistance for
Drinking Water Supply and Basic Sanitation in Sub-Saharan Countries on board in
order to maximise the benefits from Union's development expenditure.
Commission's
response:
The
Commission is taking on board the recommendations of both ECA Special Reports,
in order to maximize the benefits of its development aid, through the
elaboration of appropriate and well-defined action plans addressing the Court's
findings. DG DEVCO is regularly monitoring and reporting on the timely
implementation of these action plans.
136.       (§ 259) The Parliament
welcomes the creation, under the new Financial Regulation (EU, Euratom) No
966/2012, of Union Trust Funds, which will increase the visibility of Union
action and allow for stricter control over the delivery chain of Union funds;
asks the Commission to report to Parliament on the effectiveness of those
funds.
Commission's
response:
Apart from
the cases of sudden crisis that cannot be predicted, the creation of the first
EU Trust Funds is not expected before 2014 with the new Multi-Annual Financial
Framework. The Commission proposes to report on the effectiveness of the EU
Trust Funds created within the then on-going discharge exercise.
Research and
other internal policies
137.       (§ 261) The
Parliament calls on the Commission to review the distribution of Commissioners'
portfolios in order to better reflect competences distribution of the
committees of Parliament and, as it is, wide spread practice in Member States.
Commission's
response:
The Treaty
establishes explicitly that it is for the Commission President to decide on the
internal organisation of the Commission and to appoint Vice-Presidents (Art
17(6)TEU). This provision is particularly important in the context of the
Union's specific institutional setting. The Parliament and the Commission
agreed in the Framework Agreement on the relations between the Parliament and
the Commission that the procedures relating to giving Parliament's consent to a
new Commission shall be designed in such a way as to ensure that the entire
Commission-designate is assessed in an open, fair and consistent manner (point
3 of the Framework Agreement).
138.       (§ 264) The
Parliament calls on the Commission to accept no excuses from the Lithuanian Government
which would cause the authorisation and the project of dismantling the Ignalina
Nuclear Power Plant to be further delayed; asks that the Commission set down a
rigid timetable and threaten to impose sanctions if it is not adhered to.
Commission's
response:
The
Commission will not be taking the requested action. The reason for this is that
it cannot impose a timeschedule on the Ignalina Nuclear Power Plant (INPP). The
responsibility and safety is under the full responsibility of INPP.
The
Commission also cannot unilaterally penalise Lithuania in case a contractor is
underperforming.
139.       (§ 270) The
Parliament calls on the Commission to bring the supervisory and control systems
under the Competitiveness and Innovation Framework Programme (CIP) - ICT Policy
Support programme (ICT-PSP) up to speed without delay.
Commission's
response:
The
Commission is taking note of the Parliament recommendation. It is indeed to be
recognized that there were limited cases of financial actors'
non-synchronization between ABAC and iFlow, as observed by the European Court
of Auditors. However, it has been proven that the latter did not imply
financial or control weaknesses. The Research DGs, including DG CONNECT, are
currently developing a new common IT system (called JAGATE) which will address
the issue of visas in the accounting systems. The JAGATE technical solution
will be in place for the next Research framework programme, Horizon 2020. Other
measures taken internally in DG CONNECT in order to ensure a coherent handling
of financial files are the OSAFU meetings, the current revision of the
available guidance notes regarding the Competitiveness and Innovation Framework
Programme (ICT Policy Support Programme (ICT-PSP) included) and the annual CIP
Coordinators' Day, which is also a part of the strong supervision and control
system in place.
The
Commission (DG CONNECT) has also adopted an audit strategy covering the
non-research strand of the DG's spending aiming at providing assurance to the
DG's Director-General as to the management of the non-research funding.
The launch
of 35 audits per year is foreseen in the timeframe 2012-2017 (a total of 215
audits). The strategy is in practice effectively in place starting from the
second half of 2012 in order to provide the necessary input for AAR2013. The
first results have been already delivered since the procedures concerning nine
of these audits have been finalised.
140.       (§ 272) The
Parliament calls on the Commission to improve its budgetary planning concerning
chapter 18 02 – Solidarity – External borders, return, visa policy and free
movement of people for the security and economy of the Union.
Commission's
response:
The
requested action has been taken. The Commission (DG Home Affairs) has reached
for consecutive years high implementation rates both for commitments and for
payments for budget line 18.02: for commitment appropriations 97,07% in 2012
and 98,42% in 2011; for payment appropriations 96,55% in 2012 and 92,46% in
2011). The improving of budgetary implementation remains an on-going and
constant preoccupation for DG Home Affairs.
141.       (§ 273) The
Parliament takes note of the reservations made by the Commission's
Directorate-General for Home Affairs in its annual activity report of 2011
regarding the reputational risks due to delays in implementing SIS II; takes
note of the financial risk resulting from the residual error rate in the
non-audited population of grants of the financial programmes "Prevention,
preparedness and consequence management of terrorism and other security related
risks" and "Prevention of and fight against crime"; calls on the
Commission to pursue the corrective measures announced.
Commission's
response:
The
requested action has been taken. With regard to the financial risk resulting
from the residual error rate in the non-audited population of grants of the
financial programmes "Prevention, preparedness and consequence management
of terrorism and other security related risks" and "Prevention of and
fight against crime", DG Home Affairs was able to lift this reservation in
its 2012 Annual Activity Report, following the full implementation of the
measures announced. With regard to the reputational risks due to the delay in
SISII, DG Home Affairs implemented the actions described in its 2011 Annual
Activity Report and therefore the risks described were mitigated. Nevertheless,
in its 2012 Annual Activity Report DG Home Affairs maintained the reservation
on the basis of two new reputational events which appeared very late in 2012.
The action plan to mitigate the respective risks has also been successfully
implementing, with the system going live on 9 May 2013.
142.       (§ 274) The
Parliament recognises that the number of participants in the Seventh Framework
Programme (FP7) has significantly increased to almost 20 000 and that
inexperience, in combination with a complex set of rules, could lead to errors;
encourages the Commission to continue to provide guidance and feedback to
participants.
Commission's
response:
At the end
of 2011 the Commission launched an initiative to provide more guidance to
participants and independent auditors. 
In this
context, a document setting out the most common errors identified in cost
claims and how to avoid them is available to all Framework Programme
participants in Cordis – the Community Research and Development Information
Service web site - (ftp://ftp.cordis.europa.eu/pub/fp7/docs/avoid-finance-errors-fp7-2012-03-19_en.pdf).

Furthermore,
there have been 22 events covering 22 Member States and associated countries.
These seminars, aimed at participants and their auditors, have been attended by
3500 participants and this will continue in 2013.
Additionally,
the Commission services are now writing directly to independent certifying
auditors if their own audit reveals different results. 
Furthermore,
the "Research Enquiry Service" replies to any questions from the
certifying auditors
143.       (§ 275) The
Parliament believes that the Commission must focus on giving guidance on the
professional qualifications of private auditors and providing additional
expertise.
Commission's
response:
See response
to § 274.
144.       (§ 280) The
Parliament urges the Commission to improve cooperation among all the
directorates-general and other bodies involved, and render the division of
labour, decision-making procedures and lines of responsibility between them
more transparent.
Commission's
response:
There are
already a variety of mechanisms in operation to ensure co-operation among all
the services involved in managing the framework programme. 
These were
set out in detail in a note delivered to the Budgetary Control Committee and
the rapporteur for the discharge 2011 during the discharge procedure. 
However,
the Commission is conscious that, especially with the potential for more actors
to be involved in Horizon 2020, these mechanisms need to be improved. 
This was
firstly done in the Horizon 2020 legislation, which brings together many
elements that are different today within one single regulatory framework. 
Secondly,
it is committed to ensuring a common IT platform, and common business
processes, across the research family. It is exploring the setting up of common
services across the research family in areas such as, for instance, audit and
legal affairs. 
These
developments should improve efficiency and decision making, and ensure a
harmonised approach to beneficiaries.
Education and
culture
145.       (§ 282) The
Parliament calls on the Education, Audiovisual and Culture Executive Agency
(EACEA) to revise the one-sided and inadequate financial ratios established in
order to evaluate the financial situation of beneficiaries and to decide upon
the level of grant instalments, even jeopardising projects selected by not
granting the usual payment of first instalments and waiting till the project is
finished and reported back.
Commission's
response:
The
current system for evaluating the financial capacity of applicants has been
reviewed and a new draft procedure prepared. The draft procedure is currently
being validated by the Agency's internal working group created for this purpose
and will be adopted most likely in the second part of the year. The main
objectives of the draft are to simplify the process while aligning with the new
requirements of the Financial Regulation 2012. The new procedure aims to
address also the specificities of some regular groups of applicants benefiting
from EU grants managed by the Agency (e.g. sole traders, SMEs, etc.).
146.       (§ 283) The
Parliament encourages the EACEA to further improve its control systems, to
adapt them to the different kinds of beneficiaries, and to raise awareness of
their financial obligations and controls.
Commission's
response:
Following
the reserve made in the last 3 Annual Activity Reports in relation with high
errors rates, in particular for the LLP programme, the Agency adopted an action
plan which foresees to improve the clarity of documents, to provide
beneficiaries with a dedicated "Info kit" with clear explanations on
some financial rules and to review its desk control strategy and introduce, as
from 2013, audit certificates for grants above 60.000€ and targeted controls
for grants below 60.000€. 
This
action plan was implemented in conformity with the timetable in 2011 –
beginning of 2012. While some actions, like better information to grant beneficiaries
during kick-off/information meetings and strengthening of monitoring visits,
were already in place during 2011 for all programmes managed by the EACEA
including the LLP, other actions will lead to improvements in later years. The
financial information kit started to bring benefits from 2012. The better
defined, value adding audit certificates under the new desk control strategy
are mandatory for projects committed as from 2013 and optional for projects
committed before. Therefore, it will most likely take until 2015 for all
effects to materialize.
147.       (§ 286) The
Parliament notes the successful actions that the Commission has undertaken in
the field of sport; nevertheless calls upon the Commission to be more ambitious
with the tools and budget it has, in order to prepare for the sports programme
in 2014.
Commission's
response:
The
Commission is gradually intensifying its preparations for E4A, including the
Sport Chapter. In this context, it is implementing the 2012 and 2013
Preparatory Actions on European Partnership on Sports.
Administrative
and other expenditure
148.       (§ 287) The
Parliament calls on the Commission not to reimburse any more travel costs of
advisors to Commissioners whose work has not produced any tangible findings
until an added value of their work can be proven.
Commission's
response:
Special
Advisers have the duty of providing high-level advice to Members of the
Commission. They must make all the necessary efforts to carry out this duty,
but, due to the specific nature of their tasks, they are not subject to an
obligation in terms of concrete results. Accordingly, it would not be useful to
establish a link between such results and the reimbursement of travel costs.
149.       (§ 288) The
Parliament recommends that the Commission follow up the recommendation of the
Court of Auditors to request staff to deliver at appropriate intervals
documents confirming their personal situation and that it implements a system
for the timely monitoring of these documents.
Commission's
response:
A new
module will be put in place in the front office of SYSPER2/Rights. Staff will
be asked to declare and update the professional activity of their spouse. The
other modules of SYSPER2/Rights being implemented or already in place also
include sections requesting staff to deliver documents confirming their
personal situation.
150.       (§ 289) The
Parliament calls on the Commission to execute an in-depth study on the
differences in required qualifications and the granted privileges, working
conditions, allowances, entitled vacation days as well as pay levels for
positions for civil servants and foreign services between Union and Member
States located in the same working place and on the question of whether these
differences legitimise the differences in remuneration of delegated national
compared with Union civil servants, taking into account the relevant applicable
tax system by comparing cases with standardised family situations.
Commission's
response:
There have
already been studies comparing salaries of EU officials and salaries in
international companies and national diplomatic services. None have revealed
any discrepancy across remunerations. As a result, the Commission has not
proposed to change the remuneration structure of officials in its proposal for
a Change in the Staff Regulations of December 2011 (COM(2011)890). This
proposal has been adopted by the European Parliament in
first reading on 2 July 2013 with some amendments to the original proposal,
none of which suggesting any revision of the remuneration or allowance system
of the EU officials.
It should
be further mentioned that the additional information that the requested
in-depth study would bring would be disproportionate with the cost it would
necessitate.
151.       (§ 290) The
Parliament requests that costs for hiring external staff and temporary agents
on a yearly basis are systematically monitored and requests that they are made
publically available.
Commission's
response:
The
recruitment of external staff and temporary agents potentially concerns several
services (EPSO, PMO, DG HR, the DGs concerned). Therefore, calculating and
monitoring these costs would imply a complex cost management system that would
be disproportionate as compared to the objective
152.       (§ 291) The
Parliament calls on the Commission to make more use of the available
technologies such as teleconferences and teleworking in order to reduce the
costs of buildings and travel; requests the Commission to estimate possible
financial savings which could be achieved with the increased use of these
technologies and to submit the results to Parliament by September 2013.
Commission's
response:
The
Commission already promotes the use of Visio-conference (VC) for its meetings
Savings are being made in travel costs as some of these VC meetings have
replaced missions. 
The
Commission also promotes, in the framework of its policy on equal
opportunities, teleworking arrangements for its staff.
However,
the estimation of possible financial savings deriving from further use of both
technologies would be highly uncertain as regards the cost such quantification
would require.
153.       (§ 292) The
Parliament demands the establishment of an interinstitutional database for
studies, so as to avoid multiple financing of the same issues and to achieve an
exchange of results.
Commission's
response:
Following
the EP 2008 and 2009 discharge resolutions on the same subject, the Management
Committee of the Publications Office set up an inter-institutional working
group in 2012.
All
institutions which produce studies have agreed:
 1) to
list their planned studies and to share their plans with each other;
2) to
complete an inventory of recent (2010-2012) studies and to check existing
studies in order to avoid duplication before launching new studies, and
3) to
identify and deposit their studies with the Publications Office, which will
make studies available to the public through the EU Bookshop.
Implementation
is currently in progress and should be completed by the end of 2014.
154.       (§ 293) The
Parliament calls for full transparency concerning breaches of fundamental
rights during OLAF investigations incidents, regardless of the identity of the
person(s) involved.
Commission's
response:
Assessing
whether fundamental rights have been breached in OLAF investigations is a
matter for the relevant Courts.
In
accordance with Article 12 (3) paragraph 2 of Regulation 1073/1999, the
Director-General of OLAF reports regularly to the European Parliament, the
Council, the Commission and the Court of Auditors on the findings of
investigations carried out by OLAF.
155.       (§ 295) The
Parliament calls on the Commission to give a detailed opinion of criticisms on
Eurobarometer's survey methods.
Commission's
response:
Regarding
Eurobarometer methodology, Eurobarometer surveys are conducted among a
statistically valid random sample of the population. 
Generally,
1000 citizens aged 15 years and more are interviewed in each country. The
questions go through rigorous translation process to make sure they mean the
same thing in all (now) 28 Member States.
Eurobarometer
remains the only survey conducted in each and every Member State using the same
methodology and identical questions, allowing the calculation of a weighted EU
average, comparisons between all Member States and trends over time.
Eurobarometer
surveys are carried out by recognised international opinion poll contractors,
following industry-standard codes of practice. These contractors are selected
through inter-institutional call for tenders.
The value
of Eurobarometer has been recognised at inter-institutional level. In addition
to the Commission, the European Parliament also uses Eurobarometer for its own
analysis of the state of public opinion in the EU.
Eurobarometer
data is accessible to researchers which have the possibility to evaluate this
instrument. Criticisms of the survey methods and in particular the
questionnaire design were recently voiced. The Commission however does not
agree with those criticisms. The Commission acknowledges that Eurobarometer
polls help to gauge what people say and feel, even if all respondents do not
necessarily know the subject in detail. Nevertheless, criticism about the lack
of knowledge of respondents on polls' topics could be made of virtually all
opinion polls. This is one of their limits. 
However,
many of the Standard Eurobarometer questions are quite straightforward; here
are a few examples: "What is your opinion on each of the following
statements? Please tell me for each statement, whether you are for it or
against it. A European economic and monetary union with one single currency,
the euro", "What do you think are the two most important issues
facing our country at the moment?", " And personally, what are the
two most important issues you are facing at the moment?", " In
general, does the EU conjure up for you a very positive, fairly positive,
neutral, fairly negative or very negative image?"
156.       (§ 294) The
Parliament demands full clarification of the allegations concerning OLAF's
investigation methods.
Commission's
response:
The
Commission and OLAF have already discussed the allegations referred to in great
detail with the relevant EP committee (CONT) in full transparency in meetings
which took place after the adoption of the discharge resolution.
Getting results
from the Union budget
157.       (§ 297) The
Parliament reiterates its previous request to the Commission to present the evaluation
report in the competent committee and plenary when the Court of Auditors'
Annual Report is presented.
Commission's
response:
The
Commission has further advanced the publication of the evaluation report as
requested and has adopted this year's Evaluation report on 26 June shortly
after the adoption of the Synthesis Report.
158.       (§ 301) The
Parliament encourages the Commission to take on board when shaping its policies
the main findings of evaluations from the report relating to the financial year
2011which contributed to improving final impact of the programmes.
Commission's
response:
The
Commission is taking onboad the results of evaluations in the impact
assessments prepared for shaping its policies.
159.       (§ 302) The
Parliament calls on the Commission to inform the budgetary authority on an
annual basis about the development of accounts outside the Union budget,
including their cash-flow development as well as the purpose of each account.
Commission's
response:
On 2 April
2013 the Commission has informed the European Parliament that there are no bank
accounts held or managed by the Commission outside of the budget in the sense
that funds are used for payments of actions which are not authorised by the
Budgetary Authority. 
Bank
accounts for which a double-signature system has been put in place (officials
of the Commission/the European External Action Service (EEAS), and the
beneficiary state) are legally opened in the name of either the Commission or
the beneficiary state. Commission/EEAS officials act as second signatories in
order to protect the EU funds and ensure that they are disbursed as intended.
Referring to these accounts as ‘accounts outside of the budget’ is therefore
not correct.
160.       (§ 305) The
Parliament insists on receiving an impact evaluation on the programmes
focussing on the performance observed in the preceding financial year, i.e.
measures taken to accomplish the Europe 2020 objectives annually, in full
accordance with Article 318 TFEU.
Commission's
response:
This
year's Evaluation report provides a better combination of performance
information from different sources covering progress in 2012 and evaluation
results/other performance-related feedback that became available in 2012
relating to earlier years. It reports on progress in achieving the objectives
of the financial programmes which are designed to contribute to the achievement
of EU 2020 targets.
161.       (§ 306) The
Parliament calls on the Commission to broaden the coverage of its assessment
and to develop a real cost effectiveness approach aiming at measuring the
results obtained in pursuing its political objectives on the basis of the
finances and staff devoted to the realization of those objectives.
Commission's
response:
The
Commission has targeted broader coverage of performance information in the
preparation of this year's report, developing an approach with increased focus
on cost-effectiveness within the framework of the current MFF.
162.       (§ 307) The
Parliament calls on the Commission to ensure that evaluations are conducted
independently; notes that the resulting reports should be shared as soon as
possible with the relevant committees of Parliament.
Commission's
response:
The
evaluation policy of the Commission is designed to ensure that evaluations
provide reliable, independent and complete results. The Commission is committed
to ensuring that evaluation results are shared as soon as possible with the
relevant committees of Parliament and are communicated effectively to all other
relevant decision-makers and interested stakeholders/parties.
163.       (§ 308) The
Parliament asks the Commission to outline in time for the discharge procedure
2012 a new system of management and performance information including the
design and the role of the evaluation report taking on board the
recommendations of Parliament as developed in paragraphs 327 and 328 of this
resolution and to present it to the discharge authority.
Commission's
response:
For the
next MFF, the Commission is working on a stronger and more coherent framework
for monitoring, evaluation and reporting on the performance of EU financial
programmes. The Commission proposals for the next set of programmes for 2014 -
20 focus on simplification, to facilitate and accelerate programme
implementation; improved monitoring and reporting on progress, to ensure
improved identification of delays or difficulties and quicker action to remedy
deficiencies; and improved evaluation and reporting on performance.
The
Commission awaits the adoption of the legal measures to support the financial
programmes in the next MFF to enable the Commission to complete its preparation
of an improved system of management and performance information.
164.       (§ 309) The
Parliament asks the Commission for this purpose to establish a reliable system
of data collection on the performance to identify outcomes and impacts when
they arise.
Commission's
response:
The
Commission calls on Parliament and Council to maintain the simpler framework
which the Commission has proposed and to ensure that a clear and strong
monitoring and reporting framework for the next MFF is established.
The
Commission awaits the adoption of the legal measures to support the financial
programmes in the next MFF to enable the Commission to complete its preparation
of an improved system of management and performance information.
165.       (§ 312) The
Parliament insists in the context of the entire 2007-2013 period that impact
indicators should have deadlines and quantified targets associated.
Commission's
response:
As part of
the preparation of the 2014 Management Plan, the Commission will provide
guidance to its services to ensure that SMART indicators are being used as much
as possible. For some indicators, it may be more appropriate to use trends.
166.       (§ 314) The
Parliament calls on the Commission to implement the rules of the rotation of
senior staff in the Commission administration across the board and underlines
the importance of leading by example and the taking of responsibility at the
highest levels.
Commission's
response:
The
Commission attaches important to mobility of its senior officials. That is why
it has drawn up rules which are applied taking account both of the interest of
the service and of the individual. These rules establish reference benchmarks
setting the general principle for senior official mobility; they are applied on
a case by case basis in the interest of the service.
167.       (§ 316) The Parliament
insists on the need to ensure the consistency between the objectives,
indicators and targets foreseen in the management plan and reported on in the
annual activity reports.
Commission's
response:
The
instructions for the 2014 Management Plans and the 2014 Annual Activity Reports
will include guidelines that facilitate a better linkage planning and
reporting.
168.       (§ 317) The
Parliament insists also on the need to explain why the performance achieved did
not meet the relevant objective or target in the annual activity report.
Commission's
response:
The
Commission Central services regularly review the reporting process, draw
lessons to improve the value of these reports and revise the AAR Standing
Instructions and guidelines accordingly. The instructions for the 2013 AARs
will underline the following requirements: 
• Services
are required to complement the progress reporting in Part 1 of the AAR (any
deviations from the set milestones or from the track of the expected trend) by
justifying any discrepancies between the results targeted and those achieved
(gap analysis) and describing the corrective actions taken or planned to remedy
the problem(s) encountered. The instructions will encourage Commission Services
to make better use of the information from their policy/programme evaluation
reports by re-using the key findings in their AAR reporting on policy
achievements. 
• Services
are required to include in Part 3 of the AAR key indicators of sound financial
management (effectiveness, efficiency, economy) of the EU funding, and report
the results of such indicators on an annual basis. Respectively, these
indicators could be based on, e.g., the quality results (% of decisions
challenged) of the project selection processes, the time-to-pay statistics and
the financial savings made during the contracting processes. 
Compliance
with the new requirements will be monitored in March 2014 (i.e. during the
annual peer review process for the 2013 AARs).
169.       (§ 318) The
Parliament points out that according to points 10.17 and 10.18 of the Court of
Auditors' Annual Report, the accuracy of the evaluation performed by DG AGRI
and DG REGIO is largely reliant on the quality of data supplied by the Member
States; encourages the Commission services to issue guidelines on data input
and to envisage to provide Member States with incentives to supply high quality
performance data.
Commission's
response:
The
Commission’s quality checking of the data supplied by the Member States for the
current programming period for monitoring and evaluation purposes will be
continued and intensified within what is possible in the context of the current
monitoring and evaluation framework.
According
to the proposals for the next financial period 2014-2020 (see also the European
Council's conclusions on the MFF) as an incentive for the Member States, 7 % of
the funds will remain unallocated at the beginning of the new programming
period to provide additional funds for those Member States that have attained
their milestones (performance review for all programmes under the European
Structural and Investment Funds).
170.       (§ 322) The
Parliament calls on the Commission to undertake more stringent quality reviews
and ensure that Eurostat guarantees that it will be accurate in its
presentation of statistical data; calls for a report on this matter to be
produced by March 2014.
Commission's
response:
Communication
COM (2011) 211 from the Commission to the European Parliament and the Council
"Towards robust quality management" proposes to develop and implement
a quality management framework following two lines of action:
1)
Preventive Approach to verifying government finance (EDP) statistics. In the
domain of Government Finance Statistics, and in line with the revision of
Regulation (EU) No 479/2009, a reinforced quality procedure is in place that
extends the focus on the quality of the whole statistical process including the
data from the so-called upstream area. The procedure includes more intense
dialogue visits to the countries as well as development of quality management
system for public finance statistics.
Adoption
depends on the co-legislators.
2)
Furthermore, the Commission has adopted a proposal for a Regulation of the
European Parliament and of the Council amending Regulation (EC) No 223/2009 on
European Statistics (COM(2012) 167) aiming at strengthening the system of
European Statistics which contributes to ensuring quality.
The Commission
will present a report on this matter as requested. Amendment to regulation
223/2009 when adopted by the EU legislator will also be taken into account.
171.       (§ 323) The
Parliament insists on the need to strengthen the credibility of the European
statistical system.
Commission's
response:
The
Commission acknowledges the need to further enhance the credibility of the
European statistical system and has started to implement the following actions:
Following
the recommendation in the 2008 Commission Report on implementation of the Code
of Practice, the November 2012 ESSC meeting set up a Task Force to develop a
methodology for a new round of peer reviews. 
The
methodology will be piloted over the summer 2013 in two countries. The
experiences will be presented to the DGINS at its September meeting, and its
recommendations will be taken into account in fine-tuning the methodology. The
ESSC will have a final discussion on the methodology at its November meeting
before launching the new round of peer reviews by the end of 2013.
The new
round of peer reviews seeks to:
• enhance
the credibility of the European Statistical System
•
strengthen the System’s capacity to produce European Statistics
• reassure
stakeholders about the quality of European Statistics and the trustworthiness
of the System
• assess
progress made in adherence to the principles of the CoP
• assess
progress made in the development of the ESS itself.
The CoP
and its principles set out a framework for credible and trustworthy statistics.
The second round of peer reviews seeks to assess progress made in adherence to
the CoP and identify areas where further progress should be made. It should
also highlight good practices different countries have developed when implementing
the CoP.
Adoption
of the Regulation of the European Parliament and of the Council amending
Regulation (EC) No 223/2009 on European Statistics (COM(2012) 167) aiming at
strengthening the credibility of the European statistical system.
172.       (§ 327) The
Parliament asks all the services of the Commission involved in the Europe 2020
Strategy to define in their management plan a limited number of simple targets,
meeting the requirements of the Court of Auditors in terms of relevance,
comparability and reliability in order to annually measure in their annual
activity reports the performance of the Commission in the achievement of the
Strategy.
Commission's
response:
The
standing instructions for the preparation of the management plan foresee
already that the general objectives should be linked to the EU2020-strategy.
173.       (§ 328) The
Parliament asks the Commission to fundamentally modify the structure of its
evaluation report foreseen by Article 318 TFEU, distinguishing the internal
policies from the external ones and focussing inside the 'internal policies
part' of this report on the Europe 2020 strategy as being the growth and jobs,
the economic and social policy of the Union; insists that the emphasis should
be put on the progress made in the achievement of the flagships initiatives.
Commission's
response:
Please see
Commission reply to § 1af European Parliament resolutions on 2011 discharge.
174.       (§ 330) The
Parliament requests that the Commission strengthen the follow-up on
recommendations of the Court of Auditors' special reports on performance audit
in order to respond in a timely efficient and effective manner to the
recommendations of the Court of Auditors and the discharge authority.
Commission's
response:
The
Commission is of the view that the audit recommendations included in the
Court’s performance audit reports give valuable input to achieve further
improvements in EU financial management across all policy areas. The timely,
efficient and effective follow-up of audit recommendation issued by the Court
of Auditors is therefore an integral part of the Commission’s financial
governance system. It strives to further strengthen the way the Commission
services are implementing the Court’s recommendations by continuously adapting
and aligning its internal systems and procedures.
175.       (§ 329) The
Commission should, in time for the 2012 discharge procedure, report on how it
intends to secure the added value of Union spending, in accordance with the
principles set out by the Court of Auditors in point 10.31 of its Annual Report
2011.
Commission's
response:
The
Commission has been improving the quality of objectives and indicators and the
demonstration of the EU added value in its legislative proposals.
The
Commission considers that the evaluation of the added value of sectoral
instruments and programmes has to be done at an early stage, when the co-legislators
discuss the criteria to be used in the legal bases of the programmes.
In his
letter of 26 November 2010 to the European Parliament and the Council, the
President of the Commission undertook to:
-Identify
European added value as part of the Commission's impact assessment of new
legislative proposals having budgetary impact;
-Fully
take into account European added value as well as synergies between the EU and
national budgets for specific policies, and possible savings, in its proposals
to the next Multiannual Financial Framework, including the legal bases for
multiannual expenditures programmes.
For the
period 2007-2013 the Commission used some criteria (efficiency, effectiveness
and synergy) to test the added value of its proposals in all policy areas and,
for the new Multiannual Financial Framework, the Commission took in
consideration the Court's observations and designed all sectoral instruments
and programmes on the basis of, amongst other criteria, the prominence of their
added value.
Within the
preparation of the Multiannual Financial Framework for the period 2014-2020,
the Commission already presented to the Discharge Authority a comprehensive
view of the added value, for Member States and EU citizens, of having an EU
budget and presenting many examples of how this works in practice in our Member
States. (SEC(2011)867 of 29.06.2011).
Finally,
the question of EU added value is also already addressed by Commission services
in ex ante an ex post evaluations and in the Commission Impact Assessment process
preparing evidence on the advantages and disadvantages of possible policy
options by assessing their potential impact.
SR 12/2011 -
Have EU measures contributed to adapting the capacity of the fishing fleets to
available fishing opportunities?
176.       (§ 6) The
Parliament calls on the Commission to define overcapacity and consider more
relevant and robust measures to facilitate actions to balance fishing capacity
with fishing opportunities.
Commission's
response:
The
Commission is taking action in 2013 by developing common guidelines to provide
a working method leading to an assessment of whether a fishing fleet segment is
in a situation of overcapacity or not. This assessment will be based on
biological, technical and economic and social criteria. According to the
anticipated outcome of the reform of the Common Fisheries Policy (Based on the
Commission’s proposal COM(2011) 425 final), and in particular Article 34
thereof, the capacity assessment will be made by Member States. 
Where
overcapacity has been identified, Member States will be required to prepare an
action plan setting out the adjustment targets and tools to achieve a balance
between fishing capacity and the fishing opportunities from exploited resources
with a clear time-frame for the implementation of the plan.
In the
case that a Member State fails to implement an action plan, the Commission may
suspend or interrupt relevant Union financial assistance to that Member state
for investment in the relevant fleet segment.
177.       (§ 7) The
Parliament believes that it is essential that the Commission urgently draft a
report containing the data on existing overcapacity in the Union, broken down
by fishery and country.
Commission's
response:
The
Commission will be taking the requested action by 2014. Each year, the
Commission will, according to the anticipated outcome of the reform of the
Common Fisheries Policy, prepare a report on the balance between the fishing
capacity of Member States’ fleets and their fishing opportunities. The report
will include action plans as referred to in the response to § 162. The first
report of this type will be submitted by 31 March 2015.
178.       (§ 10) The Parliament
calls on the Commission to enforce the Member States’ obligation to correctly
update their fleet register, and to establish the obligation to report on their
efforts to balance fishing capacity with fishing opportunities.
Commission's
response:
The Commission
is taking the requested action in 2013. 
Member
States are already obliged to update their fleet registers, following clear
rules. In addition, Article 16 of the regulation (EC) No 2371/2002 provides for
aid to be suspended if the fleet register is not updated. The Commission
therefore closely monitors compliance by the Member States with their fleet
register obligations. In the process of closing the FIFG-interventions, the
Commission is currently cross-checking fleet information for all vessels
decommissioned between 2000-2006 with FIFG support. Under the EFF (2007-2013)
Member States are not required to submit detailed data on decommissioning on
annual basis, but pursuant to article 40 of Commission Regulation (EC) No
498/2007, the Commission has requested this information. The Commission will
continue to request necessary data on decommissioning from Member States to
cross-check the fleet information reported in the EU fleet register against
projects financed under the EFF.
Under the
reformed Common Fisheries Policy (new Regulation to be adopted following the
Commission’s proposal COM(2011) 425 final), Member States will be obliged to
record information on ownership, vessel and gear characteristics and on the
activity of vessels flying their flag. The Commission will maintain a Union
fishing fleet register. 
The
Commission's proposal for the European Maritime and Fisheries Fund (EMFF)
foresees that in cases of non-compliance with CFP rules, including the failure
by a Member State to provide the necessary data, make a proportionate
interruption and suspension of the relevant Union financial assistance to that
Member State. This provision is still under discussion by the Council and
Parliament.
179.       (§ 16) The
Parliament calls on the Commission to set effective fishing fleet capacity
ceilings.
Commission's
response:
The
Commission will be taking the requested action in 2013. Fishing capacity
ceilings are already established for each Member State and will be updated
according to the new Common Fisheries Policy Regulation by end 2014.
180.       (§ 18) The
Parliament endorses the Court of Auditors' recommendations that actions should
be developed to effectively reduce overcapacity of the fishing fleet and to
better define and measure fishing capacity and fishing overcapacity, while at
the same time not disregarding that the remaining jobs in the fishing sector
should be maintained.
Commission's
response:
The
Commission is taking action in 2013 by developing common guidelines to provide
a working method leading to an assessment of whether a fishing fleet segment is
in a situation of overcapacity or not. This assessment will be based on
biological, technical and economic and social criteria. According to the
anticipated outcome of the reform of the Common Fisheries Policy (Based on the
Commission’s proposal COM (2011) 425 final), and in particular Article 34
thereof, the capacity assessment will be made by Member States. 
Where
overcapacity has been identified, Member States will be required to prepare an
action plan setting out the adjustment targets and tools to achieve a balance
between fishing capacity and the fishing opportunities from exploited resources
with a clear time-frame for the implementation of the plan.
In the
case that a Member State fails to implement an action plan, the Commission may
suspend or interrupt relevant Union financial assistance to that Member state
for investment in the relevant fleet segment.
181.       (§ 18) The
Parliament endorses the Court of Auditors' recommendations that the aid scheme
for modernising vessels should be reconsidered and the role of fishing right
transfer schemes clarified.
Commission's
response:
Action is
being taken. 
Discussions
with Member States during late 2012 and 2013 have led to increased efforts by
Member States to verify that the modernization operations do not increase the
ability to catch fish in line with Article 25(2) of the EFF regulation. Member
States have applied corrections where ineligible expenditure has been
identified. For a number of cases where the regularity of the expenditure under
the modernisation measure could not be ensured, the Commission has interrupted
payments.
182.       (§ 18) The
Parliament endorses the Court of Auditors' recommendations that clear selection
rules should be established for fishing vessel decommissioning schemes.
Commission's
response:
Actions
are being taken. A study (Retrospective Evaluation of Scrapping and temporary
Cessation Measures in the EFF) has been launched to understand the selection
criteria used in the FIFG (2000-2006) and EFF (2007-2013) for decommissioning
schemes co-financed by EU funds. The first results will be published in summer
2013.
183.       (§ 18) The
Parliament endorses the Court of Auditors' recommendations that: the fleet
register should be correctly updated, and Member State reports should contain
the required information and be of suitable quality.
Commission's
response:
The
Commission is taking the requested action in 2013. 
Member
States are already obliged to update their fleet registers, following clear
rules. In addition, Article 16 of the regulation (EC) No 2371/2002 provides for
aid to be suspended if the fleet register is not updated. The Commission
therefore closely monitors compliance by the Member States with their fleet
register obligations. In the process of closing the FIFG-interventions, the Commission
is currently cross-checking fleet information for all vessels decommissioned
between 2000-2006 with FIFG support. Under the EFF (2007-2013) Member States
are not required to submit detailed data on decommissioning on annual basis,
but pursuant to article 40 of Commission Regulation (EC) No 498/2007, the
Commission has requested this information. The Commission will continue to
request necessary data on decommissioning from Member States to cross-check the
fleet information reported in the EU fleet register against projects financed
under the EFF. 
Under the
reformed Common Fisheries Policy (new Regulation to be adopted following the
Commission’s proposal COM(2011) 425 final), Member States will be obliged to
record information on ownership, vessel and gear characteristics and on the
activity of vessels flying their flag. The Commission will maintain a Union
fishing fleet register. 
The
Commission's proposal for the European Maritime and Fisheries Fund (EMFF)
foresees that in cases of non-compliance with CFP rules, including the failure
by a Member State to provide the necessary data, make a proportionate
interruption and suspension of the relevant Union financial assistance to that
Member State. This provision is still under discussion by the Council and
Parliament.
SR 13/2011 -
Does the control of customs procedure 42 prevent and detect VAT evasion?
184.       (§ 30) The
Parliament urges the Commission and Member States to monitor and effectively
respond to both existing and new trends in fraud, and requests that the
Commission inform the Committee on Budgetary Control by September 2013 which
temporary and permanent measures were taken on the basis of customs procedure
42, not only by the Union, but also at national level and their effect on the
number of fraud cases; takes note of the Commission’s Green Paper on the future
of VAT – Towards a simpler, more robust and efficient VAT system
(COM(2010)0695), and calls for concrete proposals to be made on VAT reform.
Commission's
response:
On 6
December 2012, the Commission adopted a comprehensive and ambitious action plan
on fighting tax fraud and tax evasion. A series of measures are proposed to
better fight against tax fraud and evasion, including VAT fraud. Moreover, the
action plan was accompanied by two recommendations to Member States which
promote specific countermeasures to deal with aggressive tax planning and to
treat the issue of tax havens.
Regarding
the request to inform the Committee on Budgetary Control on measures taken by
the Union for customs procedure 42: The Commission has taken several
initiatives that have improved the situation (see reply of the Commission in
ECA's Special Report No 13/2011) and has informed the Parliament about the
Union's actions (see Commission's reply - Hearing on 21 January 2013).
As
concerns the actions at national level, it is important to highlight that
Eurofisc has set up a specific working field that monitors fraudulent
transactions misusing the customs 4200 scheme. The results of this working
field will be reflected in the annual report of Eurofisc to be presented in
April each year. The Commission is committed to request the responsible
authorities in Eurofisc to make this report available to the Committee by
September 2013.
185.       (§ 31) The
Parliament calls on the Commission to urge Member States to simplify their law
on VAT, introduce a standard form for the notification of the implementation of
VAT to tax authorities and establish uniform and proper management of cases of
exemption from VAT by the customs authorities of the Member States and to
ensure the improved availability of those legislative texts translated into
English, French and German as a minimum requirement.
Commission's
response:
With the
amended Article 143 entering into force on 1/1/2011 the legislation has
improved considerably. Furthermore, VAT being EU legislation, only the
Commission can propose simplification measures, not Member States. If the
second point refers to the obligation of MS to notify the Commission of their
transposition of EU legislation into domestic legislation, the Commission would
like to inform that this is already the case. Finally, it is not legally
possible for the Commission to impose the requirement on tax administrations to
have their legal text available in EN, FR and DE.
186.       (§ 32) The
Parliament urges the Commission and Member States to take the necessary steps
in order to speed up the preparation process [for the entry into force of the
Modernised Customs Code (MCC)].
Commission's
response:
- See Mr
Šemeta's replies on § 1ah and § 111.
187.       (§ 36) The
Parliament requests that the Commission keep Parliament's competent committees
and the Court of Auditors informed on a monthly basis on the developments in
all Member States on preventing fraud under customs procedure 42.
Commission's
response:
The
Commission has already implemented most of the recommendations put forward in
the Special Report from the European Court of Auditors. As far as the remaining
recommendations for Member States are concerned, the Commission will report by
the end of 2013 in its Article 12 Report mentioned above.
188.       (§ 37) The
Parliament calls on the Commission to create a system that would combine
assistance in the customs area and administrative cooperation in the area of
VAT to ensure effective information flows, so that the relevant authorities in one
field are routinely informed about action in the other field; considers that
this would make the cooperation between the competent authorities and the
charging of VAT in the Member State of destination more effective and rapid.
Commission's
response:
See
Commission's reply - Hearing on 21 January 2013 (point 48) and reply to § 40
(concerning direct automatic information exchange).
The
Commission considers that such automatic communication between customs of the
Member State of importation and tax authorities of the Member State of
destination would be highly complex due to two different legal bases in the
Treaty. A more pragmatic solution is therefore that the flow of information
takes place in the Member State of importation between the national customs and
tax authorities. Tax authorities in the Member State of importation would
subsequently communicate to tax authorities in the Member State of destination
under the existing administrative cooperation rules in the field of VAT.
189.       (§ 40) The
Parliament endorses the Court of Auditors' recommendations, in particular: the
recommendation to amend the Customs Code Implementing Provisions, implementing
compulsory communication of the relevant VAT ID numbers.
Commission's
response:
See
Commission's reply (Hearing on 21 January) 2013, Point No. 48. – The Commission
amended the Customs Code Implementing Provisions to implement the compulsory
and uniform communication at the time of importation of the information
required by Article 143(2) of Directive 2006/112/EC when the VAT exemption
applies (Commission Regulation 756/2012 of 20/8/2012). The information required
from 1.1.2013 in Box 44 of the customs declaration includes the relevant VAT
numbers and the reference to the evidence of the intended transport to the
Member State of final destination. For technical reasons, communication at the
time of importation of the information required by Article 143(2) of Directive
2006/112/EC is not possible in regard to the Local Clearance Procedures. –
Definitions are clarified and explanations/examples for procedure code 42 are
given in order to spell out the link between Customs and VAT provisions and to
remove any possible ambiguity as to the obligations to provide VAT identifications
in those customs declarations.
190.       (§ 40) The
Parliament endorses the Court of Auditors' recommendations, in particular: the
recommendation to amend the VAT Directive in order to hold importers jointly
and severally liable for the VAT loss.
Commission's
response:
The
Commission has taken the requested action. The issue of joint and several
liability was mentioned at Anti-Tax Fraud-Strategy Group meeting on 8/3/2011.
Recent Presidencies however did not consider to be dealt with under their
Presidency. The Commission's proposal remains therefore pending on the table of
the Council.
191.       (§ 40) The
Parliament endorses the Court of Auditors' recommendations, in particular: the
recommendation to the Commission to provide guidance to Member States on
assistance and administrative cooperation.
Commission's
response:
The
Commission is taking the requested action.
The
Commission provides guidance under different fora (e.g. in Fiscalis project
groups, SCAC, etc.)
As regard
the Customs Audit Guide the amendments to the texts for procedure 42 have been
drafted and have been submitted to all Member States on 30/5/2013 for comments
by 14 June 2013. After revision, the draft text will be translated in all
Community languages and will be submitted to all Member States. A timeline for
submission of the text in all community languages of this part of the Audit
Guide by 1/10/2013 therefore seems realistic.
192.       (§ 40) The
Parliament endorses the Court of Auditors' recommendations, in particular: the
recommendation to provide for automatic verification of VAT ID numbers and
creation of EU risk profile under customs procedure 42.
Commission's
response:
See Commission's
reply (Hearing on 21 January) 2013, Point No. 48. The Commission supports any
initiative that could lead to the creation of an EU risk profile addressing the
risk of VAT fraud concerning imports under procedure 42.
193.       (§ 40) The
Parliament endorses the Court of Auditors' recommendations, in particular: the
recommendation for amending the VAT Directive allowing for reconciliation
between customs and tax data.
Commission's
response:
The
Commission has explored this possibility with Member States who prefer a
targeted exchange of information via Eurofisc. An amendment of the VAT
Directive does therefore not seem foreseeable nor does it find the unanimous
support by Member States that is necessary for legislative proposals in
taxation.
194.       (§ 40) The
Parliament endorses the Court of Auditors' recommendations, in particular: the
recommendation to provide for exchange of information necessary for correct
charging of VAT.
Commission's
response:
The new
Implementing Regulation, listing the transactions for which automatic exchange
of information is required has been adopted by the Standing Committee on
Administrative Cooperation (SCAC). Member States did not agree to include this
category into the automatic exchange because they considered it more useful to
have a targeted exchange of information on this category of transactions
through the separate working field especially set up for this reason under
Eurofisc. The Commission therefore has to reject the Court's recommendation
taking into account the position of Member States.
195.       (§ 40) The
Parliament endorses the Court of Auditors' recommendations, in particular: the
recommendation to set up a direct automatic data exchange concerning risk-prone
transactions under customs procedure 42.
Commission's
response:
The
Commission considers that such automatic communication between customs of the
Member State of importation and tax authorities of the Member State of
destination would be highly complex due to two different legal bases in the
Treaty. A more pragmatic solution would therefore be that the flow of
information takes place in the Member State of importation between the national
customs and tax authorities. Tax authorities in the Member State of importation
would subsequently communicate to tax authorities in the Member State of
destination under the existing administrative cooperation rules. Information on
imports using the customs procedure 42 should be closely monitored through a
separate working field within Eurofisc where it is already targeted and
transmitted faster than via VAT recapitulative statement. An amendment of the
VAT Directive or of Regulation on administrative cooperation and combating
fraud in the field of value added tax does therefore not seem necessary nor is
it supported by Member States.
196.       (§ 40) The
Parliament calls on the Commission to report on a six-monthly basis on how and
when it will implement those recommendations [contained in the Court of
Auditors' Special Report].
Commission's
response:
The
Commission is thoroughly following up the recommendations made by the European
Court of Auditors in the context of past and recent audits, in particular the
European Court of Auditors Special Report No 13/2011 "Does the control of
customs procedure 42 prevent and detect VAT evasion?". See also the
Commission's reply to Parliament's request to report on the progress in terms
of the follow-up on the Court of Auditor's recommendations (Hearing on 21
January 2013). See also the Commission's reply in the Special Report No 13/2011
on initiatives taken by the Commission and the Commission's replies above
(concerning the Special Report 13/2011). Therefore, the Commission considers
additional reporting obligation unnecessary. The Commission would like to draw
the EP's attention to the fact that a follow up database exists access to which
would avoid double reporting.
SR 14/2011 -
Has EU assistance improved Croatia’s capacity to manage post-accession funding?
197.       (§ 55) The
Parliament calls on the Commission to maximise the potential for institutional
learning and capacity-building in candidate and potential candidate states,
notably by further aligning the procedures of pre-accession assistance with
those used under the Structural Fund, the European Social Fund, and the
European Agricultural Fund for Rural Development.
Commission's
response:
The
Commission accepts the proposed recommendation from the EP aimed at maximising
the potential for institutional learning and capacity-building in candidate and
potential candidate States by further aligning the procedures of pre-accession
assistance with those used under the Structural Fund, the European Social Fund,
and the European Agricultural Fund for Rural Development, subject to the
following remarks:
Given that
pre-accession assistance is accession driven and it has its own specificities,
the procedures used under the Structural, the Social and the Agricultural Funds
are considered appropriate for the enlargement countries only at a stage where
they have come sufficiently close to accession.
Therefore,
although the ultimate goal of bridging existing gaps through maximising the
potential for institutional learning and capacity-building is shared by the
Commission, the alignment of the procedures should be seen in the context of
the pre-accession assistance. This means that the alignment with the procedures
of the above-mentioned funds can only be applicable to assistance related to
the relevant policy area, and implemented only where the Commission entrusts
beneficiary countries with budgetary implementation tasks.
This
approach is embedded in the Commission proposal for the Instrument for
Pre-accession Assistance 2014-2020 (IPA II), which is currently subject of
negotiation between the European Parliament and the Council of Ministers.
Moreover,
concerning the new IPA II Regulation, it should also be underlined that the new
Regulation envisages a more gradual transition from direct management to
indirect management (a management mode close to shared management, but never
equivalent). Thus, transition towards indirect management will be carried out
in line with the development of capacities in the beneficiary countries, in
coherence with the progressive implementation of reforms required to prepare
for Union membership as well as with related institution and capacity building.
198.       (§ 57) The
Parliament calls on the Commission to report on Croatia's progress in tackling
these and other outstanding issues [the fact that with regard to regional
policy and coordination of structural instruments, further sustained efforts
need to focus on effectively implementing the plans to increase administrative
capacity for future cohesion policy implementation and to develop a mature
project pipeline].
Commission's
response:
Concerning
regional policy and the coordination of structural instruments, as reported in
the Monitoring Report on Croatia's accession preparations of 26 March 2013
(COM(2013)171), Croatia was able to demonstrate that it fulfils the conditions
for the waiver for ex-ante controls for all IPA components. Croatia, however
further needs to step up building the administrative capacity in the relevant
structures, finalise investment strategies and intensify the preparation of a
pipeline of high quality and mature projects as the numbers of co-funded
projects, of sectors touched and of interlocutors will substantially increase
over the time. A fully functioning management, monitoring and evaluation system
needs to be established for the future European Structural and Investment
Funds. Croatia needs to ensure that all relevant and necessary procedures are
put in place to ensure an effective, regular and transparent use of the
European Structural and Investment Funds, especially as far as public
procurement is concerned.
199.       (§ 62) The
Parliament urges the Commission and the Croatian authorities to prioritise the
build-up of robust public procurement capacities; emphasises, in this context,
that the fight against corruption plays a central role in the entire accession
process, and failure to implement preventive anti-corruption measures will
impede the future absorption of Union assistance.
Commission's
response:
Building
up public procurement capacity in Croatia is considered as a high priority and
progress has been made by Croatia's authorities. For example, , as reported in
the Monitoring Report on Croatia's accession preparations of 26 March 2013 (COM
(2013)171), transparency has increased in accordance with the new legislation
in force since January 2012. Information on signed and executed contracts is
published by all public bodies, which leads to a decreased risk of corruption
in the area of public procurement. Furthermore, in parallel Croatia needs to
take all necessary measures to prevent the occurrence of irregularities in the
procurement of projects to be co-financed under the Cohesion Policy by the
setup of a solid management and control system.
SR 16/2011 - EU
Financial assistance for the decommissioning of nuclear plants in Bulgaria,
Lithuania and Slovakia: Achievements and Future Challenges
200.       (§ 73) The
Parliament considers that a clear indication of national co-financing and the
way to secure this national funding in the long term should be provided [as
regards the Union support for the nuclear decommissioning assistance programme
in Bulgaria, Lithuania and Slovakia].
Commission's
response:
The
requested action has been taken. In Art. 4.1.B.of its proposal for a Council
regulation on Union support for the nuclear decommissioning assistance programmes
in Bulgaria, Lithuania and Slovakia of 24.11.2011 (COM(2011)783), the
Commission introduced an ex-ante conditionality in order to secure national
co-financing and to secure the funding for the completion of safe
decommissioning as precondition for further commitments under the next MFF.
201.       (§ 81) The
Parliament urges both parties involved to conclude a swift and timely agreement
on all remaining issues [as regards the Ignalina nuclear power plant].
Commission's
response:
The
Commission will not be taking the requested action given that the EP's request
is addressed to the parties concerned, i.e. the Ignalina Nuclear power Plant
(INPP) and the contractor consortium Nukem/GNS.
Nevertheless,
the Commission would like to stress that it has continuously urged both parties
to conclude a swift and timely agreement on all remaining issues. It has been
strongly supporting all efforts to ensure the dialogue between the involved
parties and to address all technical issues.
202.       (§ 85) The
Parliament calls on the Commission to send Parliament an estimate of the
funding required for the irreversible and complete dismantling of the three
nuclear power plants.
Commission's
response:
The requested
action has been taken. The impact assessment (SEC(2011)1387) accompanying the
Commission proposal for a Council regulation (COM(2011)783) provides revised
data on the funding required for the complete dismantling of the three nuclear
power plants. A figure for irreversible status cannot be provided as
irreversibility is not a clearly identified milestone in the decommissioning
planning and is not related to the completion of a specific action.
203.       (§ 88) The
Parliament requests that [as regards the Ignalina nuclear power plant] a clear,
unequivocal deadline for acquiring the decommissioning licences be set, if not
yet done.
Commission's
response:
The
Commission will not be taking the requested action. While it considers that
Lithuania has to improve the efficiency and effectiveness of the management for
the decommissioning of the Ignalina Nuclear Power Plant, the Commission cannot
impose a deadline for obtaining the decommissioning license. Licenses are issued
by the national authorities under the national responsibility. Any intervention
by the Commission would infringe the nuclear safety and waste directive.
204.       (§ 90) The
Parliament calls on the Commission to report annually to Parliament on the
state of play [i.e. the fact that disagreements on the interpretation of
treaties, the awarding of contracts and the ongoing technical and commercial
disputes between the Ignalina nuclear power plant and the main contractor for
the two projects should be submitted to an arbitration procedure and that any
additional Union financial assistance should be suspended until the dispute is
settled].
Commission's
response:
The
Commission will inform the EP annually on the identified issues. In addition,
as provided for in Art.8.4 of the Commission proposal COM(2011)783, the
Commission will formally report to the EP (and the Council) about the outcome
of the evaluation to be established in 2015.
205.       (§ 92) The
Parliament calls on the Commission to cooperate with the governments of
Bulgaria, Lithuania and Slovakia and to maximise progress in the
decommissioning of nuclear power stations by making available sufficient
funding by 2017 or, where appropriate, by 2020.
Commission's
response:
The
requested action has been taken. The Commission's proposal for a Council
Regulation COM(2011)783 of 24.11.2011 (and in particular the ex-ante
conditionalities therein) addresses this request.
206.       (§ 92) The
Parliament calls on the Commission, furthermore, to set ambitious
implementation targets and monitor progress towards those targets; takes the
view that penalties must be applied in the case of failure to meet those
targets.
Commission's
response:
The
requested action has been taken. The Commission's proposal for a Council
Regulation COM(2011)783 of 24.11.2011 (and in particular the ex-ante
conditionalities therein) addresses this request.
207.       (§ 92) The
Parliament calls [on the Commission] for an annual report on the progress made
[in the decommissioning of nuclear power stations] to be submitted to
Parliament.
Commission's
response:
The
Commission, although not taking the requested action in the form of an annual
report, will nevertheless inform the EP annually on the identified issues. In
addition, as provided for in Art.8.4 of the Commission proposal COM(2011)783,
the Commission will formally report to the EP (and the Council) about the
outcome of the evaluation to be established in 2015.
208.       (§ 96) The
Parliament asks the Commission to provide it with a copy of the evaluation
report [on the achievement of the objectives of all the measures, at the level
of results and impacts, the efficient use of resources and its Union added
value].
Commission's
response:
The
Commission is taking the requested action. It will provide the European
Parliament with a copy of this evaluation report.
209.       (§ 98) The
Parliament asks the Commission […] to assess the added-value of the cooperation
with the EBRD, and its capacity to act as administrator of funds, given that
the Union supplies 96 % of funding.
Commission's
response:
The
Commission is taking the requested action. This issue will be addressed in the
context of the detailed implementation procedures for the duration of the
Programme, provided for in Art. 6.2 of the Commission proposal COM(2011)783.
The Commission will adopt these procedures not later than 31 December 2014.
210.       (§ 99) The
Parliament calls on the Commission to draw up a report on the decommissioning
processes in those three countries [Bulgaria, Lithuania and Slovakia].
Commission's
response:
The
requested action has been taken. On 13.7.2011, the Commission adopted its
report on the use of financial resources during 2004-2009 provided to
Lithuania, Slovakia and Bulgaria to support the decommissioning of early shut-down
nuclear power-plants under the Acts of accession (COM(2011)432)
211.       (§ 99) The
Parliament calls on the Commission to also draw up a report on the
decommissioning of the nuclear power plant in Greifswald, with a view to
establishing technical and organisational best practice, thereby creating a
reference base for future decommissioning projects.
Commission's
response:
The
requested action has been taken. The technical and organisational experience of
decommissioning in Greifswald is already available in detail to all three
beneficiary Member States and was subject to presentations at multiple
international conferences on decommissioning. Such practices need however to be
adapted to the specific conditions and constraints of the individual
decommissioning project.
SR 1/2012 -
Effectiveness of European Union development aid for food security in
sub-Saharan Africa
212.       (§ 103) The
Parliament calls on the Commission and Member States to give more attention to
this area [food security] when drawing up the EDF country strategy papers and
to allocate more funding for this purpose [food security and eradication of
extreme poverty and hunger].
Commission's
response:
Under the
10th EDF, 12 African countries selected food security / sustainable agriculture
as a focal sector. DEVCO services have carried out an evidenced-based analysis
based on internationally recognised food and nutrition indicators and have
identified 52 most food-insecure countries. A joint DEVCO / EEAS note was sent
to Delegations in these food-insecure countries: about 25 countries in Africa
are proposing food security / sustainable agriculture as a focal sector in the
11th EDF.
213.       (§ 104) The
Parliament calls on the Commission's Directorate-General for Development and
Cooperation – EuropeAid to ensure the incorporation of data and analyses by the
field offices of the Directorate-General for Humanitarian Aid and Civil
Protection and from other sources and to help ensure that effective early
warning systems for food insecurity are in place.
Commission's
response:
The
Communication on Resilience (COM(2012)586 final) has re-established the
foundations of humanitarian/development principles needed to address the root
causes of food crises. 
An Action
Plan for Resilience in Crisis Prone Countries is being developed jointly and
has the objective of reinforcing the momentum of the resilience agenda, to
deliver early results and to allow further development of a body of evidence on
what constitutes effective resilience-focused interventions.
A Joint
DEVCO / ECHO taskforce (SHARE in the Horn of Africa, AGIR in Western Africa)
has been set up. However, DEVCO and ECHO should still develop a system to
ensure a more systematic channelling of information on ECHO's interventions.
214.       (§ 105a) The
Parliament calls on the Commission to elaborate upon response strategies for
different contingencies, making any relevant proposals.
Commission's
response:
The
Communication on Resilience (COM (2012)586 final) sets out the
humanitarian/development principles to address the root causes of food crises.
The Action Plan for Resilience in Crisis-Prone Countries recently adopted
focuses on reinforcing the momentum of the resilience agenda, to deliver early
results and to allow further development of a body of evidence on what
constitutes effective resilience-focused interventions.
In support
of the Action Plan, the use of flexible instruments like the B-envelope,
instruments like the V-Flex/Flex and Trust Fund are under discussion.
215.       (§ 105b) The
Parliament calls on the Commission to also take note of the fact that gradually
rising food prices is part of a marked, long-term upward trend, rather than a
short-term issue and consequently, it requires a long-term holistic strategy,
directly linked to broader development goals.
Commission's
response:
See reply
to § 104: The Communication on Resilience (COM(2012)586 final) has
re-established that the focus is on addressing the root causes of food
insecurity.
216.       (§ 105c) The
Parliament calls for the inclusion of a new Food Facility or a comparable mechanism
in the multi-annual financial framework for the years 2014 to 2020 to ensure
the Union's ability to respond swiftly to new food crises using similar funds,
given the unpredictability of new food crises and the increased volatility of
food prices.
Commission's
response:
Food
security and sustainable agriculture have been on top of the agenda (Resilience
communication COM(2012)586 final, Nutrition communication COM(2013)141 final,
Food Security implementation plan SWD(2013)104). Based on an evidenced-based
approach, 52 most food-insecure countries have been identified and for the
majority of countries, food security / sustainable agriculture has been
identified as a focal sector. 
Food
security will be addressed mainly through geographical instruments (bilateral)
including through the B-envelope. The thematic instrument of GPGC will
complement at global, regional or even national level intervention. More
flexible instruments like the B-envelope, instruments like the V-Flex/Flex and
Trust Fund are being discussed: the outcome of these ongoing discussions is
pending the negotiations on the next MFF and the programming exercise.
217.       (§ 107) The
Parliament calls on the Commission to harmonise the objectives of the two
instruments [EDF and food security], with a view to ensuring that they
complement one another and that the funds in question are used as effectively
as possible.
Commission's
response:
Both
geographic and thematic instruments supporting food security have to complement
one another and be used as effectively as possible. The objective is just that.
Geographic instruments (such as the EDF) carry out cooperation on food security
with partner countries on a bilateral basis (as well as at regional level), with
the overarching objective of poverty eradication. Thematic instruments for food
security (i.e. the Food Security Thematic Programme) complements the EU's
commitment towards poverty eradication and accompanies geographical instruments
by addressing global, continental and regional dimensions of food security as
well as ensuring transition from relief to development. This has been the case
for many years and will continue to be in the next programming cycle
(2014-2020) where bilateral cooperation on food security will mostly be covered
through geographic instruments, complemented by thematic support to global
public goods and challenges.
218.       (§ 108) The
Parliament considers that the Commission should take systematic account of the
food security situation and chronic food insecurity, in particular when
implementing Union development policy.
Commission's
response:
See reply
to § 105c: Based on an evidenced-based approach, 52 most food-insecure
countries have been identified and for the majority of countries, food security
/ sustainable agriculture has been identified as a focal sector.
219.       (§ 109) The
Parliament calls on the Commission to prioritise agriculture in its development
aid, including assistance to farmers in accessing markets.
Commission's
response:
The Agenda
for Change communication states that the EU should focus its support for
inclusive and sustainable growth on, inter alia, sustainable agriculture and
improving small farmer livelihoods. Support to small farmers includes an array
of measures including facilitating market access (locally, nationally and
internationally). Support to agriculture is hence one of the pillars of the
Commission's development aid but not the only one (e.g. energy being another
one). For the 2014-2020 programming cycle, partner countries have been
encouraged to select agriculture, food and nutrition security as one of the
focal sectors for EU aid. A majority of the countries considered food and nutrition-insecure
are expected to include agriculture, food and nutrition security as a focal
sector in their EU-financed national programme.
220.       (§ 113) The
Parliament reiterates its call on the Commission to draw up a specific
communication on this dimension [nutrition] and to integrate sound and
multi-sectoral nutrition strategies into its development policy.
Commission's
response:
A
communication on “Enhancing Maternal and Child Nutrition in External
Assistance: an EU Policy Framework” – COM (2013)141 - was adopted on 12 March
2013. During the recent "Nutrition for Growth" event organised by the
UK in June 2013, the EU committed to spend 3.8 billion Euros on programmes
relevant to nutrition between now and 2020.
221.       (§ 114) The
Parliament calls on the Commission to set more realistic and measurable
objectives for the interventions and to improve their definition in the general
budget support programmes, where special attention should be given to
encouraging entrepreneurship among the growing young population and addressing
the discrimination against women in the agricultural sector.
Commission's
response:
General
Budget Support or Good Governance and Development Contracts(GGDC) under the new
policy, provide budget support to a national development or reform policy and
strategy. The policy, commits to use budget support effectively to support
poverty reduction and the use of country systems, make aid more predictable and
strengthen partner countries' ownership of development policies and reforms.
GGDCs specific objectives focus on fostering domestic accountability and
strengthening national control mechanisms, or on strengthening core government
systems and supporting broader reforms, such as macroeconomic management,
public financial management (including procurement and the fight against
corruption). Improved government systems should lead to improved impacts also
concerning MDG indicators and cross-cutting service delivery aspects. Targets
within operational sectors such as entrepreneurship or discrimination against
women is dealt with by using sector support programmes when appropriate.
222.       (§ 115) The
Parliament remains convinced of the importance of scaling up the nutritional
aspect of development aid for food security and requests that the Commission
provide a written report on its progress on this by the spring of 2013.
Commission's
response:
The
Commission will produce an Action Plan showing how it will implement the
Communication on Nutrition. This Action Plan is expected to be ready in the
first half of 2014 and could be shared with the Parliament. However, the
Commission does not intend to produce a separate report for the Parliament.
SR 2/2012 -
Financial instruments for SMEs co-financed by the European Regional Development
Fund
223.       (§ 127) The
Parliament calls on the Commission to introduce relevant requirements,
including quantified benchmarks, regarding the role and application of the ex
ante assessment into the relevant regulation as part of the basic act;
considers that the issue of revolving provisions should also be tackled in the
legislative proposal for the next programming period.
Commission's
response:
Provisions
on ex-ante assessment requirements and the use of revolving funds have been
made respectively under Articles 32(2), 37, 38 and 39 of the Common Provisions
Regulation, as agreed by the co-legislators European Parliament and Council -
the trilogue on Title IV was concluded on 2 July 2013. The recommendation of
the European parliament has been implemented by the co-legislators following
Commission's proposals.
224.       (§ 128) The
Parliament notes that Structural Funds regulations allow establishing a
preference for the private sector compared to the public and invites the
Commission to find appropriate justification for this privileged position,
inasmuch as this treatment could limit the ability to repossess the excess
funds and the possibility to allocate them to other SMEs.
Commission's
response:
The
recourse to preferential treatment is an important factor to attract private
investors to co-invest with public funds in areas of high risk/low return,
pursuing public policy objectives. Without a certain amount of preferential
treatment providing private investors a reasonable expectation of financial
returns (within the limits of State aid) it cannot be expected that private
sector investors will play an important role to achieve cohesion policy
objectives. In the programming period 2007-2013 preferential treatment concerns
only the gains and other earnings generated by investments, as foreseen in
Article 43(5) of Regulation 1828/2006. The justification of the preferential
treatment of the private sector as regards returns from investments has been
embedded in the cohesion policy legislation but also in the State aid
legislation.
225.       (§ 136) The
Parliament calls on the Commission to take action, without delay, regarding the
findings of the Court of Auditors; considers particularly important that, in
the future, the ERDF’s ability to leverage in private investments that match
public contributions is increased.
Commission's
response:
Since in
cohesion policy, governed by the principle of shared management, the national
or regional authorities play a fundamental role in the design and delivery of
the programmes the legislative framework needs to maintain a certain level of
flexibility in order to enable a smooth implementation of financial instruments
in all European regions. Therefore the future regulation envisages that an
estimate of additional public and private resources to be potentially raised
(expected leverage effect) will be part of obligatory ex-ante assessment of
each financial instrument.
226.       (§ 137) The
Parliament calls on the Commission and Managing Authorities to avoid delays in
delivering SME access to finance mainly with origin in administrative, legal,
organisational or strategic reasons.
Commission's
response:
The delays
in implementation of financial engineering instruments were in most cases
explained by the novelty of the instruments in cohesion policy context and
State aid related issues. Furthermore, the report of the Court of Auditors took
place at a relatively early stage of development and implementation of
financial engineering instruments within the seven year cohesion policy
programming and implementation cycles. Data reported at the end of 2011 showed
that the rates of disbursement of financial instruments for SMEs were in line
with the average rates of disbursements of cohesion policy funds across all
forms of financing. It is expected that in the next programming period, the
development of "off the shelf" instruments will limit delays.
227.       (§ 138) The
Parliament urges the Commission to submit an integrated, clarifying proposal as
soon as possible on the problems caused by the current range of definitions of
SMEs, which vary in the Union according to the different purposes or
objectives, and to propose possible ways of remedying the situation.
Commission's
response:
At EU
level there are two SME Definitions :
The first
one is provided under the Commission’s Recommendation 2003/361/EC. It concerns
over 22 million enterprises and it is managed by DG Enterprise and Industry. It
is used mainly to identify a market failure related to the small size of an
enterprise, which deserves public intervention, [competition cases (in
particular state aid cases), eligibility for participation in EU funded
projects, statistical purposes etc.]
The second
one is provided under the Accounting Directive 1978/660/EEC and it concerns
only legally registered companies (currently 7.2 million) and is managed by DG
Internal Market. It is used to release registered SMEs from a number of
accountancy reporting obligations.
In the
recent past the Commission has considered a possible alignment of the two SME
definitions. Such an alignment, although in principle desirable, would in
reality create significant difficulties since the Directive and the
Recommendation are addressing different groups or populations of SMEs and more
importantly pursue divergent objectives. Accountancy reporting obligations are
in the public interest since they provide economic actors with valuable market
information. Increasing the financial ceilings of the Directive to the level of
the Recommendation would in practice lead to a complete elimination of the
information collected since the Recommendation applies to 99% of enterprises.
The
Commission monitors regularly the implementation of the Recommendation on SME
definition. A comprehensive study on the implementation of the Recommendation
was completed last year. The study concludes that the Recommendation has worked
well up until now and there is no need for a major revision of the SME
definition at the present time. An eventual update of the Definition will be necessary
to adjust for inflation, labour productivity and changes in the ratio of
turnover to balance sheet total, but these changes are not urgent and may be
incorporated into a future revision. 
The study
proposes some recommendations to clarify the application of certain rules which
can be implemented without changing the existing Recommendation, for example by
means of further guidance provided in a set of Frequently Asked Questions on
the ENTR SME definition website or by updating the current SME definition user
Guide.
The
Commission has endorsed the findings of the study, a letter from Vice-President
Tajani was sent to Ms Sartori, Chair of the Committee of Industry, Research and
Energy (Ares(2013)1541163-30/05/2013).
228.       (§ 143) The
Parliament recommends that in light of the combined complexity of FIs, shared
management and the State aid and Structural Funds rules, the Commission should
improve the communication and monitoring systems between the Commission, the Managing
Authorities and the beneficiaries (the financial intermediaries) and provide
for, given the new provisions of the 2007-2013 regulatory framework, better
guidance and advice.
Commission's
response:
The
Commission is taking the requested action. It proposed more comprehensive legal
framework on financial instruments in 2014-2020 and reinforced reporting
provisions under the current programmes (2007-2013). The proposal includes
clear and detailed rules for financial instruments and extensive provisions on
reporting and monitoring. It will provide the appropriate guidance, manuals and
trainings for the next programming period to ensure that the MS authorities are
aware of the legal requirements and procedures to fulfil their obligations
under the system of shared management.
229.       (§ 144) The
Parliament invites the Commission to also follow the Court of Auditors'
recommendation regarding agreement with Member States on a small number of
measurable, relevant, specific and uniform result indicators for FIs, which
would strengthen both monitoring and auditing processes.
Commission's
response:
The
requested action has been taken. The Commission’s proposals for post-2013
regulations included more detailed provisions on reporting and monitoring to be
reported by the managing authorities to the Commission within annual
implementation reports. Managing authorities will have to report on the
contribution of financial instrument to the achievement of the indicators of
the priority or measure concerned. However, in shared management rules, the
Commission’s capacity to monitor and report on the effective implementation of
financial instruments is limited by the monitoring and reporting data provided
by managing authorities who limit themselves to the mandatory reporting
obligations foreseen by the regulations.
230.       (§ 151) The
Parliament asks that lessons learnt from the current programming period be
reflected when designing the proposals for the Structural Funds regulation;
considers in particular that proposals should be oriented towards performance
and results rather than mere compliance.
Commission's
response:
The
requested action has been taken. The Commission has proposed a detailed and comprehensive
framework for the future. It will allow achieving the right balance between a
stable framework and increased effectiveness. It encourages and facilitates the
implementation of financial instruments while ensuring sound financial
management. In the proposed framework the payments to the financial instrument
and the level of management cost and fees will be conditional on performance.
231.       (§ 152) The
Parliament encourages the Commission and the Member States, in particular, to
agree on a small number of measurable, relevant, specific and uniform result
indicators for FIs.
Commission's
response:
The
Commission’s proposals for post-2013 regulations included more detailed
provisions on reporting and monitoring to be reported by the managing
authorities to the Commission within annual implementation reports. Managing
authorities will have to report on the contribution of financial instrument to
the achievement of the indicators of the priority or measure concerned.
However, in shared management rules, the Commission’s capacity to monitor and
report on the effective implementation of financial instruments is limited by
the monitoring and reporting data provided by managing authorities who limit
themselves to the mandatory reporting obligations foreseen by the regulations.
232.       (§ 153) The
Parliament shares the opinion that the Commission should explore the
possibility of supplying to the Member States off-the-shelf financial engineering
structures and instruments for SMEs (e.g. grants with royalties, dedicated
investment vehicles) only where these would result in speeding up
implementation and in reducing management costs, though in such a way that this
precondition does not excessively impair SMEs’ opportunities of making use of
those funding schemes.
Commission's
response:
The
Commission is taking the requested action. In view of encouraging and
facilitating the implementation of financial instruments Member States and
managing authorities will have more implementation options in 2014-2020.
Existing instruments can be continued and new instruments can be tailored to
specific regional circumstances. To facilitate the task of Managing
Authorities, standardised financial instruments, also called off-the-shelf
instruments, with pre-defined terms and conditions will be offered as an
option. Moreover, Member States will have the possibility to contribute
ring-fenced contributions from operational programmes to existing EU-level instruments
such as COSME or HORIZON 2020.
233.       (§ 155) The
Parliament takes the view that the Commission should propose a common
definition of multiplier effect, standard concepts of recycling in the
Structural Funds regulations, depending on the type of holding fund or fund as
well as require contractually binding minimum leverage ratios and minimum
revolving periods and data for the calculation of leverage indicators;
considers that the concept of added value should be regarded as a relevant
component in the calculation of leverage ratios in order to achieve relevant
policy objectives as well as take market conditions into account; considers
that to this end it would be advisable to articulate the concept of European added
value in the legal framework for the 2014-2020 period.
Commission's
response:
The
Commission is taking the requested action. The common definition of multiplier
effect (leverage effect) is agreed and provided in financial regulation
(Article 140(2)(d)).
The future
regulation envisages that an estimate of additional public and private
resources to be potentially raised (expected leverage effect) will be part of
obligatory ex-ante assessment of each financial instrument.
As regards
revolving period, the future regulation requires that resources paid back to
financial instruments generated during a period of at least ten years after the
end of eligibility period are used in accordance with the aims of the programme
within the same or other financial instrument. 
Financial
instruments in the context of cohesion policy are mere optional vehicles for
the delivery of the policy. Added value must be seen therefore in relation to
the policy objectives. The concept of added value in relation to financial
instruments appears in the regulatory provisions on ex-ante assessment under
Article 32. Namely, support of EIF funds to financial instruments should be
restricted to those cases of established evidence of market failures or
sub-optimal investment situations. Furthermore, the Managing Authorities are
obliged to carry out a thorough assessment of value added of financial
instruments before any programme contribution is made to financial instruments.
234.       (§ 156) The
Parliament asks the Council and the Commission to consider alternative ways of
pursuing SME support through financial engineering instruments if the cohesion
policy framework were to be considered unsuitable.
Commission's
response:
The
requested action has been taken. Under the current legislative framework it is
not possible to support the Member States within the framework of cohesion
policy through centrally managed programmes (Article 12 of Regulation
1083/2006). 
However,
the Commission's proposal for the future cohesion policy, provides in Article
33(1)(a) for the possibility of programme contribution to EU level financial
instruments. The proposal includes also incentives regarding the higher
co-financing rate for contributions to financial instruments set at EU level,
as foreseen in Article 110(7). It will be entirely up to each Member State and
region to decide on the type of financial instruments which they wish to
implement.
SR 3/2012 -
Structural Funds: Did the Commission successfully deal with deficiencies identified
in the Member States' management and control systems?
235.       (§ 160) The
Parliament notes that around 75 % of the requests based on annual reports as
referred to in Article 13 of Commission Regulation (EC) 438/2001 were not
followed by financial corrections; calls on the Commission, therefore, to
provide information on the reasons for the absence of financial corrections in
this context.
Commission's
response:
The
Commission provides the following information on the reasons for the absence of
financial corrections in this context. Article 13 reports of the 2000-2006
programming period were annual reports containing a summary of audit results
based on systems audits and audits on operations based on risks and non-statistical
samples of operation. They cannot be compared to the Annual Control Reports of
the audit authorities of the current programming period, since there was no
audit opinion and no statistical error rates. It was not in the
"nature" of these reports to trigger a straightforward financial
correction by the Commission, which had to ask further information from Member
States before launching any financial corrections. This is explained by the
Court when it says "they were necessarily formulated in general terms as
detailed information on deficiencies was not available". The Commission
is, therefore, not in a position to provide the requested information.
Moreover, the Court recognizes in paragraphs 23 and 26 of the report that its
" examination of 210 programmes, for which significant deficiencies had
been identified between 2006 and 2008, shows that the Commission took action in
all cases " and that "when it identified errors on projects which
were potentially systemic in character, the Commission requested action to be
taken with regard to other expenditure that was likely to be affected".
Therefore, the Commission could not trigger direct corrective action from the
article 13 reports in the previous programming period.
236.       (§ 161) The
Parliament asks the Commission to apply a coherent approach to demands for
first-level checks and to provide information for the programming periods after
2000-2006.
Commission's
response:
The
requested action has been taken. Weaknesses in first level checks were observed
for some programmes of the 2000-2006 programming period since there was no
regulatory threshold for the coverage of the first level checks. However, the
Commission took corrective actions: 
1) When
detecting such weaknesses, it systematically requested the MS to take
corrective actions (see Commission reply for paragraph 13 a) and box 5); 
2) For the
2007-2013 programming period, 100% desk checks are required by Art 13 (2) of
Regulation (EC) No. 1828/2006 (see the Commission's reply to paragraph 9a of
the Court's report)). 
The
Commission continues to take action through support to Member States, advice
and specific audit work (risk-based). See also the Commission's replies to §
1i, § 75, § 168 and § 193.
237.       (§ 162) The
Parliament asks the Commission to disseminate even more extensively elaborated
checklists and best practice manuals (with special focus on eligibility rules)
to be followed by the Member States and to strengthen its supervision on how
these elements are taken into account.
Commission's
response:
The
Commission notes that this request was already part of the draft discharge
report for SR 3/2012 and was turned down by the CONT committee.
This
request does not bring any added value to what is currently done by the
Commission on first level checks and eligibility rules. In general, sufficient
guidance documents have already been provided to the MS on management
verifications (COCOF 08/0020/04) and eligibility rules (COCOF 07/0029/01).
Please refer also to Commission reply to point 85, recommendation 1, third
indent of the Court's SR 3/2012.
Therefore,
this recommendation is either:
-
"implemented" for some parts (checklists already disseminated and
supervision strengthened on the respect of eligibility rules) and
-
"implemented in a different manner". Instead of disseminating best
practise manuals, seminars on simplification organised in some MS with
recurrent problems and targeted actions plans seem to be more efficient. 
Weaknesses
in first level checks were observed for some programmes of the 2000-2006
programming period since there was no regulatory threshold for the coverage of
the first level checks. For the 2007-2013 programming period, 100% desk checks
are required by Art 13 (2) of Reg. 1828/2006 and are complemented by
on-the-spot verifications by managing authorities to samples of risky
operations. The recommendation of the EP has already been implemented.
The
Commission continues to take action through support to Member States, advice
and specific audit work (risk based). A DG EMPL analysis of the Court's results
also shows that some errors could have been clearly avoided by simplification
measures at national level, including both simpler eligibility rules at national
level and further leveraging the application of simplified costs options (lump
sums, standard scale of unit costs and flat rates for the declaration of
indirect costs) in certain Member States.
Therefore
the Commission keeps on encouraging and supporting national authorities in
their efforts of simplification, in particular the effective implementation of
the simplified costs options. In this regard, besides the Sectoral Event on
Simplified Costs held on 13 December 2011, to which all Managing Authorities
were invited, specific simplification seminars with Managing Authorities have
already taken place for that purpose, focused on Member States where the
potential for simplified cost is high. Seminars in Spain, Portugal, Hungary and
Bulgaria have taken place in 2012. Two additional seminars were organized in
2013 in Croatia (January) and Romania (April). Besides contributing to a
further reduction in error rates and error frequency, the effective
implementation and increased use of these options would also significantly
reduce the administrative burden on beneficiaries and the cost of control.
238.       (§ 168) The
Parliament calls on the Commission therefore to fully enforce measures as
stated in the action plan for the 2007-2013 programming period and beyond
(COM(2008)0097); expects in this context from the Commission a considerable and
steady decrease in error rates, in particular of programmes that are expected
to have the highest error rates.
Commission's
response:
The
Commission has taken the requested action.
Regarding
the action plan for the 2007-2013 programming period and beyond, the Commission
has published an impact report in February 2010 (COM(2010)0052), providing
information on all measures taken as well as on the implementation of
additional actions taken by the Commission under the Joint Audit Strategy for
Structural Actions. Follow-up was given in each AAR of DG REGIO and DG EMPL
since 2010 and through ad hoc reports and reporting on financial corrections.
However,
the Commission considers that expecting a steady decrease of the error rate
goes beyond the possibilities of the Commission under shared management, taking
also into account the audit approach by the Court (yearly snapshot) compared to
implementation of the programmes (multiannuality, with corrections at different
levels, at latest at closure). However, since 2009 the Court estimates error
rates for cohesion policy which are much below the ones reported for the period
2000-2006.
The
Commission notes that this paragraph was already part of the draft discharge
report for SR 3/2012 and was turned down by the CONT committee.
239.       (§ 169) The
Parliament calls on the Commission to prioritise the earliest possible scrutiny,
assessment and follow-up action in its future management oversight of these
[structural] funds.
Commission's
response:
The
Commission is taking the requested action and will take it into account when
preparing the control procedures for the 2014-2020 programming period, both for
MS (audit strategy) and for the Commission (assurance model).
240.       (§ 170) The
Parliament calls on the Commission to endorse fully the Court of Auditors'
recommendations.
Commission's
response:
The
Commission has already implemented four of the five recommendations from the
Court's report. The fifth recommendation on arrangements regarding the
possibilities for substitution of ineligible expenditure is expected to be
implemented at the beginning of the next programming period.
241.       (§ 171) The
Parliament asks the Commission to make efforts to ensure that Member States do
not affect the continuity of programmes by changing entities, systems and personnel
responsible for Structural Funds control, that had already been certified as
effective by the Commission.
Commission's
response:
The
Commission is not in a position to implement this recommendation, since it is
not in line with the principle of shared management to intervene in the
internal organisation of national authorities. As long as regulatory
obligations are fulfilled by Member States, the Commission cannot impose
specific conditions in relation to their administrative organisation. The Commission
however does encourage Member States to avoid high turnovers. In case of
detected deficiency following reorganisation/staff shortage or turn-over, the
Commission has legal instruments to force MS to ensure appropriate systems,
such as interruptions, suspensions and financial corrections, if EU
reimbursements are at risk.
242.       (§ 172) The
Parliament asks the Commission therefore to provide information on the impact
of those [financial] corrections on the overall error rate for the 2000-2006
programming period.
Commission's
response:
The
requested action has been taken. The Commission recognises the crucial
importance of a solid reporting in this area as a mitigating impact of its
corrective mechanisms against the Court's reported error rate and is, under the
lead of DG BUDG, already working on this. See also the Commission's reply that
relates to the 2011 EP discharge recommendation 1(a).
As regards
cohesion policy, an "accounting exercise" on financial corrections
including at closure 2000-2006 has been provided to Parliament on 12 April 2013
(Ares(2013)689652).
However,
no "overall", representative error rate for the policy is available
for the 2000-2006 period (DAS error rate reported by the ECA since 2006 only; Member
States reported error rates per programme but which were based both on
representative and risk based criteria). This will only be available for the
current period (including through the Commission new approach on a
"cumulative residual risk").
243.       (§ 174) The
Parliament urges the Commission to implement this recommendation [indent 2 of
the Court of Auditors' recommendation 1].
Commission's
response:
The
requested action has been taken and belongs to the day-to-day audit work of the
Structural Funds DGs. Auditing the work of national audit authorities is
precisely the principal enquiry in the Commission’s audit strategy for 2007–13
programmes. The Commission is implementing a multiannual audit enquiry with the
key objective to review the work of the audit authorities most at risk, in
order to be able to rely on their annual audit opinions. The Commission review
on audit authorities, started in 2009, was also an opportunity to develop
capacity-building actions towards national audit authorities, as further
explained in the 2010 AARs of DG REGIO and DG EMPL. This allowed improving the
work of the reviewed authorities. Focus has therefore been put on ensuring that
audit authorities produce robust audit opinions and error rates on programmes.
The Commission services report each year in their AARs on the result of their
analysis of error rates and how they used them to quantify the amounts at risk
(DG REGIO and DG EMPL AARs since 2010, section 3).
244.       (§ 175) The
Parliament calls on the Commission to finalise the closure of the 2000-2006
programming period duly taking into account the Court of Auditors' observations
and to report to Parliament on how the Commission will ensure legality and
regularity in the process.
Commission's
response:
The
Commission is taking the requested action. The Commission recognises the
crucial importance of a solid reporting in this area as a mitigating impact of
its corrective mechanisms against the Court's reported error rate and is, under
the lead of DG BUDG, already working on this. See also the Commission's reply
that relates to the 2011 EP discharge recommendation 1(a).
As regards
cohesion policy, an "accounting exercise" on financial corrections including
at closure 2000-2006 has been provided to Parliament on 12 April 2013
(Ares(2013) 689652) showing the state of progress of closure and of financial
corrections applies so far.
DG REGIO
and DG EMPL are now finalising the closure process for some remaining, legally
complex issues in some programmes for which legal proceedings and hearings with
the MS are necessary before closure can be finalised.
245.       (§ 176) The
Parliament calls on the Commission, furthermore, to take into account the
lessons learned from the Court of Auditor's report and to monitor the
implementation of structural actions for the 2007-2013 period and to bear in
mind the Court of Auditors' observations in the discussions on the future
structural actions for the period 2014-2020.
Commission's
response:
The
Commission is taking the recommended action. In the current programming period,
the Structural Funds DGs have updated their methodology and introduced in its
AARs a stronger annual supervision based on a cumulative residual risk of error
year after year, so that at closure only residual problems will remain to be
solved. This estimated cumulative residual risk is used to confirm whether
corrective measures already implemented by Member States had adequately
mitigated the risks of irregularities since the beginning of the programming
period. As a general rule, a cumulative residual risk above 2% leads to a
reservation, followed by interruptions and/or suspensions for the concerned
programme. This will allow identifying the residual risk after all corrections
were taken during programme implementation. Guidelines for closure 2007-2013
were already presented to Member States.
For the
next programming period for 2014-2020, the Commission has proposed a number of
provisions for management and control systems ensuring the prevention and
detection of irregularities, including fraud, and thus reasonable assurance on
the regularity of expenditure. At the same time the delivery system should be
as simple and streamlined as possible to ensure efficient implementation and
the reduction of administrative burden for beneficiaries. The options proposed
for cohesion policy include inter alia different reimbursement options (based
on real costs and simplified cost options), a proportional approach to control
arrangements, retention of 10% on interim payments until accounts are certified
each year, introduction of management declarations to improve accountability at
programme level, the provision of net financial corrections once the accounts
are certified to the Commission as well as eGovernance. If implemented, these
provisions reduce error rates at the beneficiary and administrative level.
246.       (§ 177) The
Parliament believes strongly that the Commission should deepen its involvement
in the Structural Funds scrutiny process by further assisting and supervising
Member States' management and certifying authorities as well as the winding-up
bodies, throughout all phases of implementation and verification, in order to
ensure an even more efficient and less time and resource consuming process.
Commission's
response:
The
requested action has been taken. The Commission is constantly assisting and
supervising Member States' management and control systems. It refers in
particular to its constant audit work reflected in the Structural Funds DG's,
and guidance and capacity building provided throughout the programming period,
as referred in various ad hoc reports and AAR.
See also
Commission's reply to § 176.
SR 4/2012 -
Using Structural and Cohesion Funds to co-finance transport infrastructures in
seaports: an effective investment?
247.       (§ 188) The
Parliament calls on the Commission to fully endorse the Court of Auditors’
recommendations to use result and impact indicators not only at priority level,
but – with a scope appropriate to the possible impact of a single project –
also at project level.
Commission's
response:
The
Commission considers that the appropriate level to establish and to assess
performance indicators is at priority level rather than at project level.
Moreover, for the 2007-2013 period, major projects already include performance
and result indicators. The Commission's proposals for the 2014-2020 programming
period also provide for the definition of indicators for each priority (common
and specific programme indicators) to assess progress in achieving the
objectives. As a result, the regulatory framework for 2014-2020 has been
designed to allow for a better monitoring of the expected results of each
project included in the co-financed programmes.
248.       (§ 188) The
Parliament calls on the Commission to introduce an arrangement whereby
assessment of the results and impact of investment in transport infrastructure
is carried out after completion of the construction work, at a time when its
results and impact can be expected to have become apparent.
Commission's
response:
The
Commission considers that it has sufficient data covering the most appropriate
period to evaluate results and impact of the projects. According to the results
of the evaluation of the 1994-1999 projects carried out by the Commission in
2012, on average, the minimum time needed to evaluate the effects is at five
years after project completion.
249.       (§ 188) The
Parliament calls on the Commission to carry out an analysis comparing the
average completion time and the quality of administrative procedures across the
Member States in cases of comparable co-funded projects, in order to recommend
the implementation of best practice.
Commission's
response:
The
Commission shares the principle of this recommendation. However, it highlights
that there is a risk that its usefulness might be limited, given the
difficulties in the implementation of the identified "best practices"
in different administrative contexts. In the AARs of DG REGIO and DG EMPL, the
Commission also compares the functioning of the management and control systems
in different Member States. In the context of shared management, however, it
cannot go beyond an analysis related to the programmes.
250.       (§ 188) The
Parliament calls on the Commission to take into consideration the fact that
shortfalls from the achievement of set milestones are not always the result of
mismanagement, and exclude in its proposal for a performance framework the
refusal of funds in cases where the failure of investments to produce the
desired results could not have been prevented and/or could not have been
foreseen from an ex ante perspective.
Commission's
response:
The
Commission shares the approach and has proposed, in the regulatory framework
for 2014-2020, financial corrections for the future to achieve the set targets
in terms of performance. These corrections will take into account the
circumstances linked to the underperformance as mitigating factors, when
necessary or reasonable.
251.       (§ 188) The
Parliament calls on the Commission to increase the amount of information
available about the progress of projects, and demand remedies for discovered
shortcomings as a prerequisite for further funding; notes that a lack of
information on project implementation is intolerable.
Commission's
response:
The
Commission uses all the means at its disposal under shared management. It will
also continue to follow-up during the monitoring committees meetings, bilateral
meetings and technical meetings the implementation of projects and identify
potential problems. Member States have the obligation to provide at the request
of the Commission all information on the implementation of projects, and in
general they comply with this obligation.
252.       (§ 188) The
Parliament calls on the Commission to carry out analyses of the effectiveness
of the training seminars and guidance notes intended to raise awareness of the
principles of sound financial management.
Commission's
response:
The
Commission takes note of this observation and it will examine if it is feasible
to carry out this analysis through the results of the evaluations and the
performance audits available.
253.       (§ 188) The
Parliament calls on the Commission to propose changes to the legal provisions
to allow a more effective advisory role in monitoring committees, and carry out
an analysis investigating the efficacy of the aforementioned ‘other tools’
intended to influence effective spending.
Commission's
response:
The
Commission agrees on the usefulness of strengthening its role in the monitoring
committees and has made proposals in that sense for the 2014-2020 period.
However, it stresses that the Commission's role in these committees is
complemented by annual and bilateral meetings with the competent national or
regional authorities where the problems identified by the Commission are
discussed. In addition, the Commission proposed for the new regulatory
framework for cohesion policy various measures to ensure the effectiveness of
the policy (focus on results, performance framework, performance reserve ...).
SR 5/2012 - The
Common External Relations Information System (CRIS)
254.       (§ 191) The Parliament
calls on the Commission to define the role of CRIS and its objectives, as they
have not been updated since the system became operational in 2002, in spite of
the numerous changes to its content.
Commission's
response:
The
long-term vision on DG DEVCO's information systems was initially defined in
2009. It was later updated in 2011 in the light of the new policies at
Commission level concerning rationalisation of information systems and in
particular the role of CRIS in relation to ABAC. This strategic vision is now
described in the document "Stratégie des systèmes d'information de la DG
EuropeAid jusqu'à 2016", approved by the DEVCO IT Steering Committee in
December 2011.
255.       (§ 198) The
Parliament calls, nevertheless, on the Commission to remedy those weaknesses
[the fact that information provided to Parliament as discharge authority may be
unreliable] as quickly as possible to ensure the sound financial management of
CRIS; suggests that particular attention be paid to avoiding duplication of
functions as this is inefficient and risks erroneous data entries.
Commission's
response:
The
duplication of functions does not entail any duplication in the data encoding
process; therefore there are no risks of erroneous data entries. The financial
operations are strongly monitored and followed by correction or reconciliation
processes. The way financial data are processed in CRIS is regularly validated
by the account office in the Commission. The Commission has established an
Action Plan to eliminate the duplication of functions between ABAC and CRIS.
For example, the guarantee module will be phased out in 2014.
256.       (§ 205) The
Parliament calls on the Commission to address all shortcomings and
recommendations presented by Parliament and the Court of Auditors without
further delay.
Commission's
response:
The
Commission is addressing the Court of Auditors' and the European Parliament's
recommendations through the elaboration of appropriate and well-defined action
plans. DG DEVCO is regularly monitoring and reporting on the timely
implementation of these action plans.
SR 6/2012 -
European Union Assistance to the Turkish Cypriot Community
257.       (§ 211) The
Parliament asks the Commission, in supporting the Committee on Missing Persons,
to call upon the Turkish military forces to facilitate access to military
zones.
Commission's
response:
The
Commission welcomes the fact that the Committee on Missing Persons (CMP) now
has quicker access to military areas; it will certainly speed up the process.
The Commission hopes that this will continue and welcomes Turkey's support for
this important bi-communal reconciliation oriented project. There is, however, a
need to decrease dependency on EU funding for the CMP. The Commission hopes
that Turkey can allocate more funds for the project.
258.       (§ 227) The
Parliament recommends to the Commission to take into consideration the
accumulated experience in the implementation of the programme and, if
necessary, propose measures for its further improvement and inform Parliament
accordingly.
Commission's
response:
Learning
from experiences is part of the normal programme cycle. Evaluations are
routinely carried out and an overall programme evaluation will be completed in
2013. Output from evaluations and audits are fed into the annual programming
exercise. The Commission reports annually on the implementation of Regulation
389/2006 to the European Parliament.
259.       (§ 228) The
Parliament recommends to the Commission to keep pursuing the five objectives of
Regulation (EC) No 389/2006, supporting among others, bi-communal measures,
confidence building projects, missing persons related activities, civil society
(including the Armenian and Maronite minorities), the preservation and
restoration of historical sites, environmental protection as well as the
economic and social development and the implementation of the acquis
communautaire.
Commission's
response:
The
Commission remains committed to the aims of the Aid Regulation, including all
areas mentioned in the Parliament recommendation. The value of the bi-communal
and confidence building measures is fully appreciated, but the Commission has
to balance the needs of each objective and aid absorption capacity of the
beneficiaries. The Commission strives to maintain direct contact with and
assistance to civil society including NGOs, other groups and individuals. The
Commission reports annually on the implementation of Regulation 389/2006 to the
European Parliament.
SR 7/2012 - The
reform of the common organisation of the market in wine: Progress to date
260.       (§ 240) The
Parliament strongly encourages the Commission to ensure that an appropriate
strategy is in place to avoid unbalances [regarding wine].
Commission's
response:
The key
goal of the wine reform is to enhance the competitiveness of EU wine producers.
The restructuring measure is one of the measures which allow vine growers to
gain market shares by improving the quality of wines and by adapting their
vineyards to the market demand. Lower production costs and higher yields, in
particular if combined with improved quality, can contribute decisively to make
the sector more competitive. In this sense the grubbing-up measure was a
measure for uncompetitive vine growers and was not aimed at reducing the volume
of production of competitive wines.
Both
grubbing-up, investment and restructuring measures focus to adapt the
production to the market demand.
A second
programming period (2014-2018) is now on-going. 15 MS national programmes were
received by the Commission. The Commission is in permanent contacts with Member
States during the examination of the national support programmes with the view
to ensuring that the goals of the Reform are met. 85 % of the budget is
allocated to three structural measures: promotion in third countries,
restructuring and conversion of vineyards and investments. These measures are
targeted to improve the competitiveness of operators and therefore to avoid
unbalances.
261.       (§ 242) The
Parliament is of the opinion that the Commission should review the restructuring
measures to reinforce their effectiveness and maintain measures from the
previous programme that proved successful in order to boost the sector
competitiveness.
Commission's
response:
The
Commission modified several times Commission regulation (EC) No 555/2008 on the
restructuring and conversion measure with the view to clarifying rules for
Member States. DG AGRI guidelines on restructuring and conversion measure was
approved on 25.2.2013. The guidelines permit Member States to implement the measure
well focused to increase competitiveness of the sector. 
A second
programming period (2014-2018) is also on-going and 15 national programmes are
under examination. The restructuring and conversion measure is one of the key
measures implemented by Member States to enhance the competitiveness of wine
operators.
262.       (§ 242) The
Parliament expects the Commission to ensure that the Member States' national
programmes and the restructuring and conversion measures are in line with the
objective of the reform, especially the Single Payment Scheme.
Commission's
response:
The
Commission modified several times Commission Regulation (EC) No 555/2008 on the
restructuring and conversion measure with the view to clarifying rules for
Member States. DG AGRI Guidelines on restructuring and conversion measure was
approved on 25.2.2013. The guidelines permit Member States to implement the
measure well focused to increase competitiveness of the sector.
As regards
the Single Payment Scheme, the regime was adapted by Regulation (EC) No
568/2012 which modifies Regulation (EC) No 555/2008 with the view to
harmonising the scheme among sectors. As from the 2014 financial year onwards,
Member States may decide to transfer definitively amounts from the wine
envelope into the Single Payment Scheme.
263.       (§ 242) The
Parliament asks the Commission to improve the current provisions to enable
farmers to better adapt to market signals and better match the supply to the
products demanded.
Commission's
response:
The
Commission modified several times Commission regulation (EC) No 555/2008 on the
restructuring and conversion measure with the view to clarifying rules for
Member States. DG AGRI Guidelines on restructuring and conversion measure was
approved on 25.2.2013. The guidelines permit Member States to implement the
measure well focused to increase competitiveness of the sector.
264.       (§ 243) The
Parliament calls on the Commission to promote measures to safeguard the Union's
best winemaking traditions.
Commission's
response:
The
National Support programme is targeted to enhance the competitively of wine
producers, while ensuring quality and adaptation to market signals. Restructuring
and conversion of vineyards, investment and promotion in third countries target
also traditional and quality wine products.
265.       (§ 244) The
Parliament considers that the Commission should establish a regularly updated
estimate of the balance between supply and demand in the wine sector based on
statistical analysis of the sector variables, taking into account positive
output effects of restructuring and conversion measures; believes that on the
basis of that estimate, it should have determined the targeted area for the
grubbing-up measure and is of the opinion that in the future, it should
evaluate whether the improvement of any other measures is necessary to address
possible imbalances on the basis of that estimate.
Commission's
response:
The
Commission evaluates the situation of the wine market periodically and in
particular the report to Council and Parliament addressed all the key elements
of the reform and assessed whether any measures are needed to address possible
imbalances.
Currently,
the wine market is balanced or suffering from a shortage of supply, following a
reduction of the production potential of 300 000 ha over the last years and two
consecutive low harvests.
It must be
reminded that the grubbing-up scheme ceased in 2011 and it is not intended to
reinstall it.
266.       (§ 245) The
Parliament asks the Commission to evaluate the potential consequences of the
elimination of this regime [the planting rights liberalisation] in order to
adopt the most convenient decisions to guarantee the balance of the wine
market.
Commission's
response:
In the
2008 wine reform, EU Agricultural Ministers agreed to extend the end of the
system of wine planting rights from 2010 to 2015 - or 2018 if a Member State so
decides, bearing in mind that the decision on the expiration of such a system
in 2010 was already taken in 1999. 
In
reaction to the call from a number of Member States for planting rights to be
extended beyond 2015, Commissioner Cioloş took the initiative to set up a High
Level Group on planting rights to discuss the planned end of the transitional
planting rights system, in particular its functioning and its impacts in the
wine sector. 
The High
Level Group concluded its work in December 2012. The report has various
analysis on the potential consequences of the elimination of the prohibition to
plant. In the final conclusions, the HLG recommends to put in place a system of
authorisations of new plantings to ensure an orderly growth of the wine
plantings in Europe. There would be an EU safeguard clause to avoid an
excessive growth of plantings, with flexibility to Member States in its
implementation. 
In 2013
the Irish Presidency proposed a legal text on the wine authorisation regime. The
proposal was deeply discussed in the trilogues (Commission, Council and EP) on
the post 2013 CAP Reform. A political decision was reached in June 26th. It is
expected that the post 2013 CAP reform enters into force in 2014.
267.       (§ 247) The
Parliament urges the Commission to take measures ensuring that Member States
that use flat rates per ha to calculate payments install proper control
mechanisms for paying agencies guaranteeing that farmers are not
overcompensated, standardise the estimation of costs so that variations in
estimated costs for comparable measures are reduced to a minimum.
Commission's
response:
DG AGRI
guidelines on restructuring and conversion measure approved on 25.2.2013
focuses among others on flat rates, with the view to avoiding any
overcompensation to farmers when using flat rates.
268.       (§ 248) The
Parliament urges the Commission to take adequate action to establish
comparability and an acceptable level of standardisation for measures based on
Article 103q of Council Regulation (EC) No 1234/2007 of 22 October 2007
establishing a common organisation of agricultural markets and on specific
provisions for certain agricultural products (Single CMO Regulation).
Commission's
response:
The
Commission modified several times Commission Regulation (EC) No 555/2008 on the
restructuring and conversion measure. DG AGRI Guidelines on restructuring and
conversion measure was approved on 25.2.2013. These adaptations address, among
others, the issue of comparable standards.
269.       (§ 250a) The
Parliament asks the Commission to relaunch a policy to promote the wine sector
and improve its competitiveness in the internal market, including information
campaigns for adults on responsible consumption of wine, and on its specific
qualities and features, which highlights the cultural roots of European wines.
Commission's
response:
The post
2013-CAP Reform was under discussion between the three Institutions
(trilogies). Wine national support programmes, including wine promotion measure
and the point raised by EP were under discussion. The Institutions reached a
political agreement on June 26th, including on the point raised by the EP.
According to the political agreement, information campaigns with the EU for on
responsible consumption of wine, and on PDO/PGI wine scheme will be possible in
the future.
270.       (§ 250b) The
Parliament calls on the Commission to study an European strategy to increase
exports to third countries.
Commission's
response:
A report
on the promotion of wine on third country markets was communicated to the
European Parliament and to the Council in November 2011 (COM(2011) 774 final).
SR 9/2012 -
Audit of the control system governing the production, processing, distribution
and imports of organic products
271.       (§ 262) The
Parliament asks the Commission to bring forward initiatives and regulatory
proposals aiming to ensure that all the weaknesses pointed out by Special
Report No 9/2012 are remedied by the end of 2013.
Commission's
response:
Several
initiatives have already been and are being implemented. 
Audits by
the Food and Veterinary Office in DG SANCO, in close collaboration with DG
AGRI, resumed in 2012 and are planned to take place in the course of 2013 both
in Member States and in Third Countries to verify the effective functioning of
the organic control system. 
So far,
eight audits have been carried out (five in Member States and three in Third
Countries), and six are planned for the remaining part of 2013 (four in Member
States, one in a Third Country and one on a recognised Control Body for the
imports of products under equivalency).
In addition,
the Commission is making constant efforts to strengthen supervision and control
arrangements through regulatory proposals. 
Commission
regulation No 1235/2008 with the implementing rules on imports of organic
products from third countries and Commission regulation No 889/2008 with the
implementing rules on the control system for organic production were amended
for that purpose respectively in February and April 2013.
The new
control provisions, applicable as from 1 January 2014, enhance the exchange of
information between operators, control bodies and competent authorities,
strengthen the risk-based approach, call for an increased supervision of
control bodies by the competent authorities, for the development of a catalogue
of sanctions at Member State level, and for more structured reporting to the
Commission on supervision and control. 
The
Commission will consider the need for further improvement in the set-up and the
functioning of the organic control system, in the light of the results of the
audits carried out and as part of the on-going assessment of the EU political
and legal framework governing organic production, and will submit a proposal in
the first quarter 2014.
272.       (§ 269) The
Parliament asks the Commission to introduce appropriate measures to make sure
the flow of information is relevant, reliable and timely; in particular, asks
the Commission to take appropriate measures to speed up and to increase the
reliability of the communications relating to organics certification issues
such as those communicated through the "Organic Farming Information
System".
Commission's
response:
Provisions
stipulating exchange of information are contained in the EU Regulations on
organic production. There are several channels through which Member States
communicate with each other and the Commission: the Organic Farming Information
System (OFIS), an IT tool operated by the Commission; the organic farming page
of the Communication & Information Resource Centre Administrator (CIRCA);
and the Standing Committee on Organic Farming (SCOF). 
The
Commission is aware that improvements can be made and has recently introduced a
new module in OFIS for information exchange with recognised control bodies and
third countries on irregularities affecting the organic status of imported
products. Furthermore, the Commission introduced a 30-day deadline for replying
to notifications of such irregularities in its recent amendment to Regulation
(EC) No 1235/2008. The amendment to Commission Regulation (EC) No 889/2008 to
reinforce and harmonize the control systems for organic products in the
European Union, which will apply as from 1 January 2014, includes provisions to
ensure timely exchange of information on irregularities and provisions to better
structure and improve the quality of information in the multi-annual national
control plans and annual reports, inter alia on detected irregularities and
infringements and remedial measures.
SR 12/2012 -
Did the Commission and Eurostat improve the process for producing reliable and
credible European statistics?
273.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (a) since
the statistical authorities of the Union and the Member States share a common
responsibility for maintaining trust in Europe's democratic process, they
should strengthen the system of European statistics in ensuring professional
independence, sufficient resources, effective supervision with sanctions and
swift improvement of measures for cases where quality standards are not
respected.
Commission's
response:
The new
Decision on Eurostat adopted by the Commission on 17 September 2012
(2012/504/EU) expressly addresses professional independence with respect to
Eurostat and clarifies in particular the status and functional responsibilities
of the Director-General, who will, among other things, ensure that European
statistics are developed and disseminated in line with the European statistics
Code of Practice. 
The
Decision also foresees a strengthened planning and programming exercise within
the Commission which will improve the production of European statistics. 
The
Commission has been granted specific supervisory powers by the legislator
within the legislative packages reforming the Union's economic governance. In
this regard, the Commission Delegated Decision on investigations and fines
related to the manipulation of statistics as referred to in Regulation (EU) No
1173/2011 of the European Parliament and of the Council on the effective
enforcement of budgetary surveillance in the euro area will give the Commission
the necessary instruments for ensuring investigations on-site. This Decision
entered into force in November 2012. 
The
Commission also cooperates with the European Court of Auditors and national
audit authorities in order to ensure high quality of public finance data.
Action: 
A new
round of peer reviews will be launched in 2014 after the development and
testing of the methodology in 2013 (see answer to § 323).
Adoption
of the Regulation of the European Parliament and the Council amending
Regulation (EC) No 223/2009 on European Statistics (COM(2012)167) aiming at
strengthening the system of European statistics with the objective , amongst others,
of clarifying the principle of professional independence.
274.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (b) in order
to fully implement the ESCP, the Commission should propose amendments to the
regulatory framework for the production of European statistics that provide a
sound basis for review, enforcement and in appropriate cases, verification and
inspection covering the institutional environment of statistical production,
the statistical processes and the statistical output both at Union and national
level.
Commission's
response:
The
Commission has adopted a proposal for a Regulation of the European Parliament
and of the Council amending Regulation (EC) No 223/2009 on European Statistics
(COM(2012) 167) aiming at strengthening the professional independence and
accountability of the Heads of NSIs and clarifying the coordinating role in
national statistical systems. 
Adoption
depends on the co-legislators.
275.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (b) in order
to fully implement the ESCP, the Commission should take the necessary steps to
ensure legal certainty of the nature of the obligation to adhere to the ESCP.
Commission's
response:
Adoption
of the Regulation of the European Parliament and the Council amending
Regulation (EC) No 223/2009 on European Statistics (COM(2012)167) with the
objective, amongst others, of clarifying the principle of professional
independence and securing its unconditional application.
It is
proposed that each Member State, represented by its government, should
establish a ‘Commitment on Confidence in Statistics’ whereby specific policy
commitments are made to implement the Code of Practice. 
Adoption
depends on the co-legislators.
In
addition, Article 2 of the Regulation 223 is amended to clarify that the
principle of professional independence applies unconditionally.
276.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (b) in order
to fully implement the ESCP, the Commission should develop a supervisory
function to oversee reviews, verifications, and inspections, for example by
extending the current remit of the ESGAB.
Commission's
response:
This
request is accepted partially. The part concerning ESGAB to oversee
verifications and inspections is rejected.
ESGAB is
associated to the Task Force constituted for preparing the peer review
methodology. ESGAB appointed a member to the Task Force preparing the next
round of peer reviews in its meeting of 21 October 2012.
277.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (b) in order
to fully implement the ESCP, the Commission should enhance the professional
independence of the Chief Statistician of the European Union.
Commission's
response:
The new
Commission decision on Eurostat ensures that the Director-General of Eurostat
has the sole responsibility for deciding on statistical methods, standards and
procedures, and on the content and timing of statistical releases, and acts
independently when carrying out statistical tasks. An appropriate legal
framework and necessary safeguards exist to ensure that appointment and
dismissal procedures are transparent, ensuring full compliance with the
principle of independence as foreseen in Regulation (EC) No 223/2009 in this
respect.
278.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (b) in order
to fully implement the ESCP, the Commission should bring its internal decision
in Eurostat's role in line with the requirements of the ESCP, enable Eurostat
to apply its protocol on impartial access to data without the restriction (and
phase out the mechanism of sub-delegated operational credits for statistical
production which makes Eurostat, in part, financially dependent on other
Commission service).
Commission's
response:
This
request is accepted partially. The part concerning the phasing-out of the
mechanism of subdelegated operational credits for statistical production is not
accepted. Concerning the phasing-out of subdelegated operational credits for
statistical production the Commission considers that it does not run counter to
the principles of professional independence and adequacy of resources.
The new
Decision on Eurostat adopted on 17 September 2012 has brought its status in
line with the European statistics Code of Practice as reviewed and updated by
the European Statistical System Committee on 28 September 2011.
279.       (§ 276) "The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (b) in order
to fully implement the ESCP, the Commission should launch a new round of peer
reviews envisaged by the Commission for 2013 covering compliance with all
principles of the ESCP including a strong element of external element to allow
independent assessments and comparable results.
Commission's
response:
Following
the recommendation in the 2008 Commission Report on implementation of the Code
of Practice , the November 2012 ESSC meeting set up a Task Force to develop a
methodology for a new round of peer reviews. 
The
methodology will be piloted over the summer 2013 in two countries. The
experiences will be presented to the DGINS at its September meeting, and its
recommendations will be taken into account in fine-tuning the methodology. The
ESSC will have a final discussion on the methodology at its November meeting
before launching the new round of peer reviews by the end of 2013.
The new
round of peer reviews seeks to:
• enhance
the credibility of the European Statistical System
•
strengthen the System’s capacity to produce European Statistics
• reassure
stakeholders about the quality of European Statistics and the trustworthiness
of the System
• assess
progress made in adherence to the principles of the CoP
• assess
progress made in the development of the ESS itself.
The CoP
and its principles set out a framework for credible and trustworthy statistics.
The second round of peer reviews seeks to assess progress made in adherence to
the CoP and identify areas where further progress should be made. It should
also highlight good practices different countries have developed when
implementing the CoP.
280.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (b) in order
to fully implement the ESCP, the Commission should consider introducing rolling
peer review for the most important statistical domains covering the entire
production chain including providers of administrative data.
Commission's
response:
Accepted
as far as peer reviews for individual statistical domains are concerned
provided there is justified concern and MS willing to take part.
The peer
reviews will start with a preliminary assessment of each national statistical
system and will focus on issues identified by the review teams in the
preparatory phase as meriting further study. The final report will contain
recommendations in case of concerns over the quality of an individual
statistical domain. In that case the MS will be asked to accept an evaluation
of the statistical domain. (Action: To agree with the Member States on the
action plan.)
281.       (§ 276) The Parliament
broadly endorses the three main recommendations made by the Court of Auditors: 
              (c) Eurostat
should fully exploit the potential of the upcoming European statistical
programme for the years 2013-2017 and, in particular: define precise targets
and milestones each year in the annual statistical programmes and organise an
adequate follow-up.
Commission's
response:
Eurostat
has set up a Task Force and developed proposals for a new set of indicators.
Eurostat
will define precise targets and milestones for the Annual Work Programme.
The
greater synergy between the ESP 2013-2017 and the annual statistical work
programme, and between the annual statistical work programmes and management
plans is being implemented for the annual plan 2013 and will be further
implemented in the years to come. The Commission therefore does not see further
need for enhanced reporting in the annual activity reporting for accountability
purposes.
282.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (c) Eurostat
should fully exploit the potential of the upcoming European statistical
programme for the years 2013-2017 and, in particular: consider to revise the
programme if needed during its implementation and to synchronise it with the
Multiannual Financial Framework.
Commission's
response:
The option
to revise the European Statistical Programme in case of major developments and
taking into account the evolution of needs of its main users will be used where
appropriate once the implementation of the Programme is under way, particularly
on the basis of the Commission intermediate progress report to be submitted by
the Commission by 30 June 2015, as referred to in Article 14 (1) of Commission
proposal COM(2011) 928 final; 2011/0459 (COD) of 21.12.2011 for a Regulation on
the European statistical programme 2013 -2017. 
The
on-going revision of Regulation 223/2009 includes aligning the ESP with the
MFF.
283.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (c) Eurostat
should fully exploit the potential of the upcoming European statistical
programme for the years 2013-2017 and, in particular: systematically review the
statistical priorities taking into account the relevance of the statistical
outputs and the cost and burdens for the European statistical system, its
members and respondents and encourage statistical innovation when defining new
priorities.
Commission's
response:
This
request is accepted partially. The part concerning the need for regular
assessments of the costs and burdens for ESS / members / respondents for
purposes of reprioritisation process is not accepted.
The
Commission will provide an annual report on statistical priorities, as provided
for in Article 5a (2) of the Proposal for a Regulation on the European
Statistical Programme 2013-2017 (final compromise text of Commission, Council
and EP). The first report will cover priority setting for the year 2013.
Eurostat
will review and revise its procedure for defining priorities and the AWP, with
the aim of improving the balance between the consultation of Member States and
the consultation of DGs taking into account financial and human resource
constraints.
284.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (c) Eurostat
should fully exploit the potential of the upcoming European statistical programme
for the years 2013-2017 and, in particular: improve its support to European
Statistical Advisory Committee's functioning through more and better tailored
information on the budgetary and financial implications of statistical
programming choices and on the implementation of statistical programmes.
Commission's
response:
In order
to improve information of the ESAC on the implementation of the statistical
programmes, Eurostat will provide an annual report on statistical priorities.
(ref. § 276: systematic review of statistical priorities).
285.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (c) Eurostat
should fully exploit the potential of the upcoming European statistical
programme for the years 2013-2017 and, in particular: simplify and improve the
efficiency of the financial management of grants by resorting to standard
scales of unit costs for staff and to lump sums for data sets provided through
surveys.
Commission's
response:
The
Regulation of the European Parliament and of the Council on the European
Statistical Programme 2013-2017 now specifies that lump sums may be used for
statistical actions based on surveys, and provisions for simplifying the grant
management have been defined in the Financial Regulation applicable from 2013
onwards. In May 2013, the Commission adopted a decision allowing the use of
unit costs by the main beneficiaries of the European Statistical programme, and
a flat rate of 30% to cover indirect costs.
286.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (c) Eurostat
should fully exploit the potential of the upcoming European statistical programme
for the years 2013-2017 and, in particular: explore the option of a
performance-based system of grant management which relies on agreed indicators
and objectives.
Commission's
response:
The lump
sums approach referred to in the Regulation of the European Parliament and of
the Council on the European Statistical Programme 2013-2017 will allow such a
shift from an input based to a more performance based management of grants.
287.       (§ 276) The
Parliament broadly endorses the three main recommendations made by the Court of
Auditors: 
              (c) Eurostat
should fully exploit the potential of the upcoming European statistical
programme for the years 2013-2017 and, in particular: enhance competition in
procurement procedures notably by giving more weight to price criterion in best
value for money procedures and avoiding minimum thresholds that weaken price
competition.
Commission's
response:
The
standard tender specifications applicable in 2013 have been adapted. The new
method for awarding contracts is to divide the price by the number of technical
points. The bid with the lowest ratio is deemed the economically most
advantageous. It is no longer possible to overweight the technical mark. The
final step of the evaluation process is limited to the offers offering a
sufficient quality (50% of the total mark on quality). Only if duly justified
through a note to be signed by the authorising officer, the minimum score
required on the technical quality may be increased up to maximum 65%. Internal
trainings on the new tender specifications have been organised in January 2013
raising awareness of the participants on the importance to enhance competition
and providing appropriate guidelines in this context.
288.       (§ 279) The
Parliament calls for the ESGAB to be transformed into an independent
supervisory body which should be tasked with overseeing reviews, verifications
and inspections in the European Statistical System; to that end, invites the Commission
to draw up a proposal for a regulation which should replace Decision No
235/2008/EC of the European Parliament and of the Council of 11 March 2008
establishing the European Statistical Governance Advisory Board currently in
force.
Commission's
response:
Ref. reply
to § 276: develop a supervisory function. The current decision no. 235/2008/EC
established ESGAB as an independent body (Art. 1). Within its current legal
base ESGAB is involved in overseeing reviews (ref. peer reviews § 276: launch a
new round of peer reviews). The Commission does not consider it as appropriate
to task ESGAB with the supervision of verifications and inspections, under the
remit of other bodies. Other supervisory mechanisms are already in place at
different levels (AAR, synthesis report, Internal Audit Service, ECA)
289.       (§ 281) The
Parliament asks the Commission to clarify the position of the ESGAB in the
European statistical system's governance structure.
Commission's
response:
Mandated
by the Council and the Parliament, ESGAB provides an external and independent
view over European Statistical System (ESS) as regards the implementation of
the European Statistics Code of Practice. ESS partners are accountable to ESGAB
in terms of compliance with the Code’s principles and indicators. ESGAB
observes ESS as a system and addresses emerging issues which affect its
governance structure.
8th, 9th and
10th European Development Funds (EDF)
290.       (§ 5) The Parliament
calls on the Commission to complete the comparative analysis of the errors
detected by the Court of Auditors in 2010 and 2011 and to report its findings
to Parliament.
Commission's
response:
Working
groups have been set up within DG DEVCO and have proceeded to the analysis of
the 181 errors listed by the Court of Auditors in DAS 2010 and 2011, identified
the main root causes of error, classified them according to a precise typology
and put forward possible solutions.
291.       (§ 8) The
Parliament urges the Commission to examine the causes of errors and to
undertake remedial actions to eliminate them.
Commission's
response:
Working
groups have been set up within DG DEVCO and have proceeded to the analysis of
the 181 errors listed by the Court of Auditors in DAS 2010 and 2011, identified
the main root causes of error, classified them according to a precise typology
and put forward possible solutions. The main conclusion of their work is that
it is not appropriate to reinforce the already complex financial rules - which
should be further simplified - and that the solutions should mainly focus on
the correct implementation of the current rules.
Their
recommendations have been taken up in an action plan, approved by DEVCO
management in May 2013, with concrete measures for correcting the weaknesses in
the implementation of DG DEVCO's internal control system and mitigating the
related risks. Its implementation will be duly followed-up by DG DEVCO's Audit
and Control unit.
292.       (§ 10) The
Parliament calls on the Commission to use a 'traffic light' system in its
annual EDF report in order to show what has improved or deteriorated from one
year to the next.
Commission's
response:
Regular
EDF Reports contain information on financial and operational performance as
well as on improvement in quality of projects. Effectiveness of controls on
legality and regularity is also taken into consideration. This information can
be compared over years. Regular Reports on the European Community's Development
and External Assistance Policies and their Implementation also provide relevant
data which are comparable over time. Besides, a "traffic lights" type
of system will be already put in place in the framework of the External
Assistance Monitoring Reports, elaborated by every EU Delegation, for the
purpose of the annual assessment of the KPI (see response to § 253).
293.       (§ 13) The
Parliament encourages the Commission to strive for smooth financial
implementation of the10th EDF regional envelope and to draw lessons from the
present delays for the next programming period.
Commission's
response:
The
complicated implementation mode of some RIPs proved unsatisfactory and added
burden to the preparation and implementation of regional programmes. As a
result of the lessons learnt through the MTR of the 10th EDF, Commission and
EEAS services have developed a new approach which has been applied to 10th EDF
regional programmes in the revised 10th EDF RIPs after the MTR and is also
enshrined in the 11th EDF programming orientations. This approach includes:
-
Decentralised management with NAOs for projects with a regional dimension to be
implemented at the national level;
- Centralised
management or joint management with international organisations or relevant
sectorial bodies;
-
Contribution to blending mechanisms to leverage investment for regional
infrastructures; 
- Support
to regional organisations to reinforce their capacities and for activities
related to their core mandate.
294.       (§ 14) Human
resources policy has continued to be a persistent concern due to the high staff
turnover and the reorganisation that took place in mid-2011 and EuropeAid staff
members were being used for tasks other than aid management, over and above the
flexibility limits agreed with the European External Action Service (EEAS). The
Parliament expects that that situation will have been improved in 2012 and calls
for Parliament to be informed about the situation.
Commission's
response:
In order
to follow-up the implementation as well as to keep on monitoring the
application of the flexibility arrangements in all delegations, a new KPI will
be added to the upcoming EAMR. As a result of this, Heads of Delegations will
have to commit to the application of the flexibility arrangements in their
Delegation, as set out in the joint instruction note to all Heads of
Delegations, issued in December 2011 by the SG of the COM and the COO of the
EEAS, outlining the flexibility arrangements for the management of staff in
Delegations (Ares(2011)1392088).
295.       (§ 15) The
Parliament notes with regret that the Court of Auditors assessed ex ante checks
by authorising officers at EuropeAid's headquarters and in the delegations as
only partially effective; the Parliament calls on the Commission to continue
its efforts to improve its current systems and to report to Parliament on the
results by the end of November 2013.
Commission's
response:.
Following
several recommendations addressed by the Court of Auditors in its annual
reports, and a recent in-depth analysis by DG DEVCO of the errors listed by the
Court in DAS 2010 and 2011, an Action Plan has been set up - and approved by
DEVCO management in May 2013 - putting forwards concrete measures for
correcting the weaknesses in the implementation of DG DEVCO's internal control
system. Among them are the reinforcement of the financial/control skills at both
HQ and Delegations (through specific financial trainings, etc.), the further
improvement of the quality of external audits, and the enhancement of the
accountability of the Delegations in the framework of the EAMR. The effective
implementation of the Action Plan will be duly monitored by DG DEVCO's Audit
and Control unit.
296.       (§ 16) The
Parliament urges the Commission to intensify its technical assistance and
training efforts to improve the monitoring and supervision capacities of
National Authorising Officers (NAOs).
Commission's
response:
The
Commission accepts the recommendation and has already made it a priority to
strengthen the monitoring and supervision capacities of National Authorizing
Officers (NAOs). This has been implemented by providing 1) technical assistance
and 2) focused training: 
1.
Technical assistance: starting with mid-2008 the European Commission has
invested substantially in changing how it works with Technical Cooperation (TC)
instruments. To guide this process, it formulated the Backbone Strategy on
Reforming TC and PIUs which includes five quality criteria to measure
performance. The Commission launched a project on studying options for
strengthening capacity development in the framework of National/Regional
Authorising Officers support programmes while ensuring a better alignment with
national systems. The Study, on the basis of the survey undertaken, proposes
recommendations to make the NAO and its support units’ agents function in line with
Capacity Development using the five quality criteria of the Backbone Strategy.
In the wake of the 10th NAO meeting, this study intends to suggest alleyways to
seize on the opportunity offered by the NAO function and to make progress
towards more sustainable aid coordination and management practices. Over the
next years, the Commission will implement the findings of the study and will
focus on articulating a policy dialogue process with the aim of ensuring a
national ownership of aid-funded activities. Giving priority to ownership
implies defining the services and results the partner country wants to improve.
External support should not focus on the means to achieving technical
cooperation but on its potential final outputs. 
2. Focused
training: For the past few years, the Commission has contracted specialized
training companies to organize training for ACP NAOs with the aim of improving
their capacities in the field of financial management of EDF funds. According
to existing on-going contracts, training to the NAOs is already assured until
2017. The training given focuses on both the financial and contractual
procedures of the EDF. Each training mission consists of 9 full days of
training during which the following topics are covered: programming and establishment
of financing agreements - procurement procedures and financial commitments of
contracts - program estimates - grants and co-financing operations. In 2012, 22
training missions for NAOs took place with the total number of participants
standing at around 550 individuals. For 2013, 4 missions accounting for around
120 participants have already taken place and 13 more are scheduled by the end
of year. For 2014, approximately 22 missions are foreseen. Regarding the
coverage of the training, almost all NAOs have benefitted from training at
least once and advanced training is being provided for the second and in some
cases for the third time to a number of NAOs.
297.       (§ 17) The
Parliament welcomes the introduction of the Financial Management Toolkit to
improve contractors' and beneficiaries' knowledge of the Union's financial
management and eligibility rules; the EP urges the Commission to improve
further the management of contract awarding procedures by clarifying the
selection criteria and better documenting the evaluation process, and to
enhance the quality of grant contract supervision, with a view to reducing the
high number of errors found in project payments.
Commission's
response:
Measures
have been taken in the revision of the Practical Guide to clarify the selection
criteria even further. Moreover the focus has been shifted to quality rather
than quantity. In addition we have extended the examples of selection criteria
which should not be used. Means of redress have been added to the notification
letters. In order to reduce the number of errors concerning payments in grant
contracts, some simplification measures have been introduced, such as single
payment deadline (inclusive of approval of reports), simplified cost options,
interest on pre-financing and additional options in the financial support to
third parties.
298.       (§ 18) The
Parliament calls on the Commission to establish a blacklist of external service
providers that do not meet the required standards, including a set of binding
criteria, and to inform the discharge authority about its conclusions before
the beginning of the next discharge procedure.
Commission's
response:
The
Commission does not use blacklists of external service providers as the
possibility of using shortlists of acceptable service providers can only be
formally applied when the rules of the Financial Regulation allow for this.
However, contractual conditions foresee that the contracting authority (the
Commission or the beneficiary third country) can refuse the audit firm proposed
by a beneficiary of funds (namely grants and fee-based contracts). This option
is used in particular when the proposed audit firm has a track-record of poor
quality verifications.
299.       (§ 22) The
Parliament calls on the Commission to reconsider its whistleblowing policy,
including the implementation of that policy in the delegations; requests that
the Commission report to Parliament on its present policies and actions for
receiving and protecting both internal and external whistle blowers and any
changes thereof.
Commission's
response:
The
requested action has been taken. Commission issued guidelines on whistleblowing
for all its staff members on 6 December 2012. These guidelines constitute the
Commission's policy in this area. They explain the rules in plain language,
encourage staff to come forward if they discover serious irregularities in the
line of duty, and they highlight the protection offered to staff who do so in
good faith.
The
European Parliament was informed of the adoption of these guidelines by letters
of 18 January 2013 from Vice-President Šefčovič to the Chairpersons of JURI and
CONT. 
These
guidelines also apply to Commission staff in Delegations.
300.       (§ 23) The
Parliament is concerned about the Court of Auditors' assessment of the external
audit function in respect of the delegations in that there are deficiencies in
risk-based audits and delays in the audit clearance process, which could lead
to ineligible expenditure becoming irrecoverable; calls on the Commission and
the EEAS to solve that problem without delay.
Commission's
response:
The effectiveness of the audit function in European
Union Delegations very much depends on the availability of appropriate audit
resources in qualitative and quantitative terms and notably on the presence of
a good and preferably full-time audit manager. This situation varies
significantly from one Delegation to another. As to methodology, and notably
for audit planning, Delegations dispose of a well-developed planning
methodology (including risk assessment guidelines) and audit task managers are
advised to attend specific training modules regularly delivered by DG DEVCO's
Audit and Control unit.
301.       (§ 24) The
Parliament is worried that the Court of Auditors assessed internal audit as
partially effective; recognises that it is the Commission's reorganisation in
2011 that had a major impact on the activity of Internal Audit Capability;
expects that the situation will have improved in 2012.
Commission's
response:
In its
reply to the Court, the Commission pledged to assess the capacity of
EuropeAid's Internal Audit unit and considered a potential reinforcement if
found to be necessary. Indeed, the IAC's staff was reinforced with a new AD
post as from 1st October 2012. Moreover, a new Head of Unit was nominated in
March 2013. The post left vacant has been sent for publication. The IAC expects
to recruit a certified or experienced auditor in order to improve the audit
skills of the unit, in order to be assessed as effective by the Court.
302.       (§ 25) Regrets the
lack of compatibility between the Court of Auditors' estimation of the most
likely error rate based on the annual approach of the Court of Auditors and
current methodology and the Commission's practice to refer to the net residual
error rate covering more than one year; welcomes the Commission's initiative to
launch a study on EuropeAid's residual error rate and expects it to be
finalised within the set timeframe i.e. in the first quarter of 2013; calls on
the Commission to present the results of this study to Parliament as soon as
they become available.
Commission's
response:
The
Residual Error Rate study covering the Budget year 2012 followed a
recommendation by the European Court of Auditors and was finalised by DG DEVCO
in the first quarter of 2013. The European Parliament was duly informed of its
results.
303.       (§ 26) The
Parliament urges the Commission to fully implement the Court of Auditors'
recommendations contained in the Annual Report 2011.
Commission's
response:
See reply
to § 205.
304.       (§ 31) The
Parliament calls on the Commission to identify areas for improvement regarding
tax evasion and tax fraud in both Union legislation and administrative
cooperation between Member States; asks the Commission to study possibilities
to involve the recipient countries in the fight against tax avoidance through
an incentives based programme, and to report back to the discharge authority
with its findings before the end of the year 2013.
Commission's
response:
The
Commission is already addressing this issue in its political dialogue with
these countries, in particular through Budget Support and programmes to
strengthen Public Finance Management. In addition, a number of useful actions
have been financed through the former Budget line for good governance in tax
matters granted to the Commission in 2010 and 2011.
305.       (§ 35) The
Parliament notes that the customs authorities in many developing countries are
not functioning effectively, principally due to absence of efficient risk
management systems; calls on the Commission to pay particular attention to this
aspect of development and to concentrate its resources on remedying this
situation, especially by including sustainable reforms of customs systems in
the public financial management criteria for granting budget support.
Commission's
response:
The
Commission recognizes the importance of a well-functioning tax administration
system, including trade tax revenue (customs), for efficient public finance
management, as well as more particularly for good domestic revenue
mobilization. Customs services are an important part of the public
administration which needs to be strong and to perform well. This has been also
underlined in the communication on: "Tax and Development, Cooperating with
Developing Countries on Promoting Good Governance in Tax Matters" of April
2010. The Commission supports public administration reforms in a number of
countries. The new policy on Budget Support fully recognises and supports the
importance of nationally-owned sustainable administrative reform. In addition,
custom plays a role in the development of Domestic Resource Mobilisation, i.e.
realising the country's potential to finance needs by its own forces. Therefore
the Commission considers that the institution is already covered in existing
reform programmes.
306.       (§ 36) The
Parliament emphasises the fact that inefficient customs control is not
exclusive to developing countries; deplores that control of customs in Member
States is not functioning properly ,thus allowing for fraudulent behaviour;
urges the Commission to take all necessary steps in order to remedy the
situation by strengthening its cooperation with international networks such as
the Economic Crime Agency Network and national customs authorities in order to
gather evidence from manufacturers, shipping lines, logistics companies and
port authorities all over the world.
Commission's
response:
OLAF Director-General,
Mr. Giovanni Kessler, participated in the launching of a new international
network to fight economic crime hosted by the New Zealand Serious Fraud Office
in Auckland. The Economic Crime Agency Network (ECAN) was set up to establish a
forum to meet the specific operational interests of law enforcement agencies
fighting economic crime. It brings together agencies from all over the world
through operational cooperation and intelligence-sharing, contributing to a
better understanding of economic crime and promoting public awareness of such
issues. Participating agencies include the FBI, the Singapore Corrupt Practices
Investigation Bureau and the UK Serious Fraud Office.
OLAF
already cooperates closely with external stakeholders to protect the EU's
financial interests. To give an example, OLAF consulted the World Shipping
Council (WSC) in the context of the revision of Regulation 515/1997, which
should further strengthen the customs cooperation and which inter alia is
aiming at using information held by shipping lines to combat smuggling into the
EU. The cooperation between customs authorities in the Member States and with
the Commission (OLAF) is regulated in Regulation 515/1997 and is done via a
secured IT-network (Anti-Fraud Information System-AFIS) which is provided and
maintained by OLAF.
Furthermore
the Commission (DG TAXUD) issued in January 2013 a Communication on Customs
Risk Management and Security of the Supply Chain. (COM (2012) 793 final of 8
January 2013). One of the conclusions of this communication confirms that
traders, Member States and citizens in the EU all have an interest in effective
risk management. Closer engagement with economic operators is required to
attain the desired standards of data for risk analysis, facilitate the efficient
movement of legitimate trade and better combat illicit trade. This, together
with more systematic exchange of risk information and coordination between
customs and other authorities or agencies and closer international cooperation,
will reinforce the security and integrity of the supply chain.
307.       (§ 37) The
Parliament calls on the Commission to coordinate the different aid instruments
across the Union, such as the Union as well as Member States' bilateral programmes
and the European Investment Bank's (EIB) interventions.
Commission's
response:
The
Commission has strengthened its coordination efforts for the new programming
period 2014-2020 at country level (in particular, strongly enhanced joint
programming is underway), as between institutions (in particular though the new
coordination platform involving the EIB and other financial institutions for
enhanced blending operations) and globally as between the different instruments
managed by the Commission (by ensuring appropriate complementarity in
preparation of programming documents for the period 2014-2020).
308.       (§ 39) The
Parliament calls on the Commission to more often use the political dialogue
under Article 8 of the Cotonou Agreement when there are violations of human
rights, and if necessary suspend aid.
Commission's
response:
The
political dialogues with the third countries are conducted by the EEAS and not
by the Commission.
309.       (§ 43) The
Parliament stresses that more emphasis should be given to the sustainability of
aid; is concerned about the persisting weaknesses in terms of efficiency (with
40,3% of reviewed interventions facing problems), effectiveness (43%) and sustainability
(46%) of ongoing projects and programmes in Sub Saharan Africa revealed by
on-site assessments by independent experts; notes that similar performance
concerns affected implementation in the Caribbean, where the overall percentage
of projects performing well or very well had decreased from 74,6 % in 2009, to
72,9 % in 2010 and 61,5 % in 2011 , as well as the Pacific region, where a
significant share of the programs faced implementation difficulties.
Commission's
response:
The
Commission's services are in the process of working on the improvement of the
guiding principles and questions for ex-ante evaluation of new projects and
programmes and for the monitoring of the implementation of projects and
programmes as well as on the strengthening to the internal reporting systems
with a view to increasing the internal capacity to react and adjust.
310.       (§ 44) The
Parliament is deeply concerned about the findings of the Court of Auditors
contained in Special Reports Nos 1/2012 and 13/2012 of the Court of Auditors on
the Effectiveness of European Union Development Aid for Food security in
Sub-Saharan Africa and on the European Union Development Assistance for
Drinking Water Supply and Basic Sanitation in Sub Saharan Countries
respectively, which have demonstrated that the prospects for sustainability are
good for half of the interventions but there are fewer guarantees of continued
results for the other half; welcomes the Court of Auditors' recommendations
contained in those reports and urges the Commission to take them on board in
order to maximise the benefits from Union development expenditure.
Commission's
response:
See reply
to § 258.
311.       (§ 46) The
Parliament believes that the Commission should be able to demonstrate to the
taxpayers what has been achieved with Union development assistance in the field
of education and gender parity for school enrolment as it gives prospects for
the sustainability of aid efforts; calls on the Commission to formulate clear
objectives which then make it possible to do actual performance audits.
Commission's
response:
The EU
policy on education and development has a continuous clear priority on gender
parity, which is underlined in the Communication on “Education and Training in
the Context of Poverty Reduction in Developing Countries” (2002) and the Staff
Working Document “More and Better Education in Developing Countries” (2010)
which discuss in details the multifaceted nature of the issue. In addition to
guidance on indicators for the education sector, which includes one measuring
gender parity, the EU is in the process of developing a corporate results
framework. Whilst it is too early to speak about specific results indicators
that will be included in the framework, it is certain that both education as
well as cross-cutting issues such as gender mainstreaming will be reflected.
Through its support to education as a focal sector in 42 countries (programming
period 2007-2013), the EU has contributed to the good global progress that has
been made in improving gender parity in primary education where on global
aggregate level gender parity is close to being achieved. However, progress has
been unequal across countries and within countries, and a lot remains to be
done in other levels of education. Consequently, gender parity and gender
equality in education continues to be a high priority to the EU.
312.       (§ 47) The
Parliament calls on the Commission to communicate to Parliament by the end of
November 2013 the outcome of efforts regarding a common framework for measuring
and communicating the results of development policy, including for inclusive
and sustainable growth, as part of the implementation of the "Agenda for
Change".
Commission's
response:
The
Commission is in the process of preparing a Staff Working Document which is to
set out the results achieved so far in its work on a results reporting
framework for the external assistance managed by EuropeAid. However, as a
result of the May 2012 Council conclusions on the Commission's Communication
'Agenda for Change', the framework is not supposed to be a common framework for
both the EU and its Member states. Since the Council has asked the Commission
and MS to work on common approaches, the Commission services are working in
close association with interested Member states on the results framework, so as
to enhance shared and common approaches underlying the framework.
313.       (§ 49) The
Parliament stresses that long term social and economic development requires
sustainable sources of income other than aid; considers that sound and
well-functioning trade relations in line with WTO principles is a key issue in
this regard for developing countries and therefore urges the Council, the
Commission and the ACP countries to find solutions to the issues concerning the
Economic Partnership Agreements and free trade between the Union and the ACP
region.
Commission's
response:
The
Commission continues to be committed to concluding development-friendly and
WTO-compatible EPAs with all ACP regions that wish to enter into a trade
partnership with the EU. Exchanges are continuing on a regular basis with a
view to solving the remaining open issues in these negotiations.
314.       (§ 52) The
Parliament calls on the Commission to ensure a rigorous control of recipient
countries both before and after the decision to grant budget support, in
particular in countries receiving significant financial assistance from Union
development funds in which corruption is very much on the increase; calls
therefore for more effective Commission control mechanisms in order to ensure
that European taxpayers’ money is not misappropriated for funding terrorism or
corruption.
Commission's
response:
The fight
against fraud and corruption is a key element that has great prominence in
Budget Support, particularly when assessing the PFM eligibility criterion. The
Commission pays particular attention to these issues and promotes a stronger
use of anti-fraud and corruption provisions. Partner countries need to be
actively engaged in the fight against fraud and corruption and be equipped with
appropriate and effective mechanisms covering the whole "anti-fraud and
corruption cycle" (prevention, detection, investigation and sanctioning)
as well as adequate inspections authorities and judicial capacity. The
Commission also promotes capacity development in this area through a number of
initiatives linked to, as well as independent of, Budget Support. The Risk
Management Framework establishes a risk level and when necessary mitigation
measures before Budget Support is granted. Risks and mitigation measures are
monitored throughout the BS contract. Budget Support can only be granted if
there is sufficient level of trust that risks are acceptable.
315.       (§ 54) The
Parliament urges the Commission to take into account the existing reporting on
the illicit capital outflows before taking a decision on granting budget
support.
Commission's
response:
The
Communication on "The Future Approach to EU Budget Support to Third
Countries" emphasizes that Illicit capital outflows from developing
countries hamper their ability to achieve developing objectives, alleviate
poverty, and increase economic growth. Increasing transparency and
accountability of governments and companies on financial transactions play a
key role in tackling illicit capital flows. Issues such as corruption, fraud
and possible mismanagement of public funds are dealt with through the Budget
Support eligibility criteria and the Risk Management Framework. The Commission
also supports the fight against illicit capital outflows through a number of
initiatives not directly linked to Budget Support.
316.       (§ 55) When
assessing the Public Financial Management eligibility criterion in terms of
budget support, the Parliament urges the Commission to take into account
existing reporting on corruption and fraud levels before taking a decision on
granting budget support; insists that an independent national audit body must
be a condition for granting budget support.
Commission's
response:
The
Commission has set up a risk-management framework (RMF) which covers also
corruption/fraud. The steady improvement in financial control and public
procurement systems pursued in the context of Budget Support programmes
effectively reduces the scope for corruption. Partner countries efforts in
fighting corruption and fraud and in setting up the appropriate anti-fraud
mechanisms are vital. 
The new
policy fully recognizes the importance of proper budgetary control and the role
of national audit. The new policy fully addresses this through two of the four
eligibility criteria for Budget Support (public finance management and
transparency). EU Budget Support does systematically aim at strengthening the
national audit function in all countries recipient of Budget Support through
capacity building and through support to administrative reform of public
finance. EU Budget Support has helped to trigger the establishment of national
audit bodies in some countries. Therefore the Commission believes that such an
important issue should be dealt with within a nationally-owned reform process
aiming at building robust institutions. A precondition imposed by an outside
source may be counterproductive in the long run.
317.       (§ 56) The
Parliament takes note that programmes related to good governance are financed
in order to support developing countries in their fight against fraud,
corruption and financial mismanagement; keeping in mind that a corruption-free
judicial system is a condition sine qua non to ensure good governance and rule of
law, calls on the Commission to put a strong emphasis on the judiciary reform
programmes; acknowledges moreover that the Commission completed in 2011 a
thematic evaluation on justice and security system reform; calls on the
Commission to make publicly available the results of the evaluation.
Commission's
response:
Support to
the justice sector and justice sector reform is one of the principle avenues
for promoting democratic governance, the rule of law, citizen security, gender
equality and respect for human rights, and thereby socio-economic development.
For this reason, the European Union has been working over the past few decades
to implement justice sector interventions, being a major donor in this area.
With the recent policy documents, further emphasis is put on working on these
areas in development cooperation, which is also reflected e.g. through the
on-going programming and in the revised guidance on Budget Support operations.
As to JSSR evaluation, it is publicly available on the EuropeAid website.
318.       (§ 57) The
Parliament calls on the Commission to present the first results in terms of the
effectiveness of the new approach to Union's budget support introduced in
October 2011, which contributes to strengthening domestic accountability
mechanisms in ACP countries when the new guidelines have been fully applied.
Commission's
response:
The new
approach to Budget Support has been fully applicable as of January 2013. The
Commission will present the results of the implementation of the new policy as
part of the regular reporting on its cooperation.
319.       (§ 58) The
Parliament repeats its call on the Commission and Member States to create a
public register in which budget support agreements, procedures and development
indicators are transparently listed.
Commission's
response:
Currently,
several instruments, not specific to Budget Support, allow for transparency of
aid and Commission's operations (p.ex. the beneficiary database of EC
cooperation on:
http://ec.europa.eu/europeaid/work/funding/beneficiaries_en.htm; the FTS
(Financial Transparency System) or the Transparent Aid (TR-AID) tool). As of
January 2013, Commission services put in place the new tools and procedures
introduced by the new approach to Budget Support. Based on this overhaul of the
Budget Support system, Commission services have started in 2013 to prepare a
publicly available database with the required information.
320.       (§ 59) The
Parliament repeats its call on the Commission to provide regular reports on the
accomplishment of the goals set for Union budget support and on specific
problems encountered in particular recipient countries; calls on the Commission
to ensure that budget support is reduced or cancelled when clear goals are not
achieved.
Commission's
response:
The
Commission submits full information on Budget Support operations to the
European Parliament. These reports cover results and performance (including
non-payment) of BS operations by country. Following the introduction of the new
policy on Budget Support and related guidelines and tools, the European
Commission is working on improving the reporting as well. Further analysis on
impacts and overall goals are established through joint donor evaluations which
are systematically transmitted to the European Parliament.
321.       (§ 60) The
Parliament urges the Commission to make public the performance indicators for
budget support to the Republic of Haiti, and the respective assessments of the
Government of Haiti’s performance in order to qualify for budget support,
focussing on the following criteria: a) stable macro-economic framework; b)
national or sector policies and reforms focused on sustainable growth and
poverty reduction; c) public financial management, including the fight against
corruption; d) transparency and oversight of the budget, also to the public.
Commission's
response:
The
Commission is pleased to inform that the Action Fiche for the 2010 programme
HAITI - Programme d'Appui Budgétaire Général au Plan d'Action et de
Reconstruction (PARDH) et à la Stratégie Nationale de Croissance et de
Réduction de la Pauvreté (SNCRP), including the assessment of eligibility for
Budget Support has been published under:
http://ec.europa.eu/europeaid/documents/aap/2010/af_aap-spe_2010_hti_p2.pdf
322.       (§ 61) The
Parliament asks the Commission to apply from 2013 onwards, in a transparent
way, the new criteria for budget support as described in the Commission’s
policy ‘The future approach to EU budget support to third countries’ to the
budget support for the Government of Haiti.
Commission's
response:
See reply
to § 255: new Budget Support modalities are applied for all new Budget Support
programmes signed as of 1st January 2013.
323.       (§ 63) The
Parliament calls on the Commission to provide an assessment of the
sustainability of the Union funded projects in Haiti based on a five-year
perspective and to report to the discharge authorities on an annual basis.
Commission's
response:
See reply
to § 256: the assessment is ongoing: the final report is expected in the second
quarter of 2014.
324.       (§ 64) The
Parliament urges the Commission to continue its efforts towards strengthening
the Haitian government and administration; requests the Commission to report on
the situation and on the actions taken.
Commission's
response:
The Commission
is already strengthening capacities of Haiti's administration through a
multitude of EDF and budget programmes and regularly reporting about it.
325.       (§ 65) The
Parliament urges the Commission to ensure better coherence and complementarity
between humanitarian aid and development aid both at a policy level and in
practice.
Commission's
response:
The
European Commission has continued its increased efforts to better articulate
humanitarian and development interventions. At the policy level, the
Communication on the EU Approach to Resilience-Learning from Food Security
Crises was adopted in October 2012 and was followed up by the Action Plan for
Resilience in Crises-Prone Countries on 19 June 2013. More specifically in the
Horn of Africa and the Sahel, the Commission continued to put in practice the
articulation of humanitarian and development interventions with the SHARE and
AGIR initiatives.
326.       (§ 66) The
Parliament urges the Commission to ensure that the postponed, first ever
overall impact evaluation of the Union’s aid programme for Haiti takes place in
2013.
Commission's
response:
See reply
to § 256: the assessment is ongoing: the final report is expected in the second
quarter of 2014.
327.       (§ 69) The
Parliament regrets that it has taken this long for the World Bank Group's (WBG)
undertaking to share their internal audit reports with the Commission Services;
regrets that so far, there are no sustainable solutions and procedures for the
provision of necessary financial information from the WBG to the Union
institutions in each and every case; calls on the WBG and the Commission to
promptly arrive at a satisfactory outcome of the discussions in that area;
calls on the Commission to report to Parliament on the progress of those
discussions.
Commission's
response:
Discussions
have recently taken place between the Commission and the World Bank Group at
various levels and decisions have been taken to improve dramatically the
relations on financial matters between the WBG and the EU institutions. The
European Parliament will be kept duly informed of the further developments on
this issue.
328.       (§ 70) The
Parliament calls on the Commission to stop its grants and contribution
agreements with the WBG if no sustainable solution is found for the provision
of the necessary financial information from the WBG to the relevant Union
institution.
Commission's
response:
See reply
to § 69 which is as follows: 
Discussions
have recently taken place between the Commission and the World Bank Group at
various levels and decisions have been taken to improve dramatically the
relations on financial matters between the WBG and the EU institutions. The
European Parliament will be kept duly informed of the further developments on
this issue.
329.       (§ 81) The
Parliament welcomes the Commission's commitment to propose EDF budgetisation
for 2020, when the Cotonou Agreement expires; expects the Commission to honour
this commitment and to take appropriate measures to facilitate incorporating
the EDF into the Union's budget starting with the post‑2020 MFF; is of the
opinion that, in light of the current budgetary and economic crisis, the risk
of EDF budgetisation leading to a decrease in the overall funding level for
cooperation with ACP partners is too high at present; insists therefore that,
were budgetisation to be considered for the MFF 2014-2020, it must imply
transferring the entire EDF financial envelope as proposed by the Commission
(EUR 30,3 billion in 2011 prices) to heading 4 on Global Europe and should
under no circumstances be used as a pretext for reducing overall spending
ceilings for Union's external action in general, and development assistance in
particular.
Commission's
response:
The
European Development Fund (EDF) has traditionally been financed outside the EU
budget, considering the special partnership between the EU and its Member
States and the ACP countries. The Commission, however, remains convinced of the
need to develop a single, coherent EU development policy, to bring more
political accountability and democratic scrutiny to EU cooperation with ACP
countries and to enhance efficiency across EU financing instruments.
In order
to prepare for the possible future incorporation of the EDF into the EU budget,
the Commission has proposed to further align the keys for Member States'
contributions to the 11th EDF with the GNI-keys used for the EU budget.
Furthermore, the Commission proposes to align the provisions of the 11th EDF as
far as possible with relevant financing instruments in the budget, including
the DCI and the Common Implementing Rules and with the Financial Regulation of
the EU budget, while respecting the partnership principles enshrined in the
Cotonou Agreement.
330.       (§ 82) The
Parliament welcomes the Commission's commitment to align the Parliament's
scrutiny rights over the EDF to those it has over the Union's general budget,
in particular the Development Cooperation Instrument; urges the Commission to
bring forward without delay concrete proposals to this effect and to initiate a
dialogue to establish the precise modalities for Parliament's future scrutiny
over strategic decision-making regarding the EDF.
Commission's
response:
During the
preparation of the Commission proposals for the 2014-2020 Multiannual Financial
Framework (MFF), the Commission offered to the EP the same mechanism of
informal democratic scrutiny within the 11th EDF as it currently exists under
the DCI.
The
Communication 'A budget for Europe 2020' adopted in June 2011 [COM(2011) 500]
proposed to improve the democratic scrutiny of the EDF, so that the European
Parliament could play a role in the EU's geographic cooperation with one of the
most vulnerable and fragile regions of the world, while taking into account the
specificities of this instrument.
This
proposal was further explained in the Commission proposal for the draft
inter-institutional agreement [COM(2011)403], also adopted in June 2011, in
which it was proposed to establish a dialogue with the European Parliament on
development policy issues regardless of their source of financing, by aligning
the scrutiny of the European Parliament on the EDF, on a voluntary basis, with
the democratic scrutiny that exists under the current DCI.
The
Commission intends to apply the informal democratic scrutiny for the EDF
following the modalities currently applied for the DCI (2007-2013), including
transmission to and dialogue with the relevant EP Committee on relevant EDF
Committee documents, including draft programming documents.
Performance,
financial management and control of EU agencies
331.       (§ 8) The
Parliament points out, the relationship between administrative weight and the
output of the agencies and considers that access to services provided by the
Commission should also be improved, expanded and facilitated.
Commission's
response:
In the
Common Approach on EU decentralised agencies of July 2012, the EP, the Council
and the Commission recognised that the improvement or extension of services
provided by the Commission to agencies was a way to deliver the administrative
support that agencies need. In line with point 12 of its Roadmap on the follow
up to the Common Approach, the Commission will therefore assess the services it
provides to agencies on the basis of their input, and if necessary, improve,
clarify, extend or adapt those services.
332.       (§ 9) The
Parliament suggests that the financial rules applicable to the Agencies should
be simplified, which would allow the agencies' administrative staff costs to be
reduced; calls on the Commission to draw up proposals to that effect and to
encourage the agencies to use the simplification option as regards recruitment
procedures where the standard procedure is designed for a larger scale organisation
and presents an excessive burden for the agencies.
Commission's
response:
The
overall goal of the current revision of Framework Financial Regulation is to
provide for simplification of the financial rules applicable to the
decentralised agencies.
The
proposal of FFR revision foresees number of measures addressing this objective.
In particular, it will streamline financial rules as regards the treatment of
budgetary surpluses, additional tasks entrusted to agencies, internal audit,
reporting requirements, and annual work programme, multi-annual work and staff
policy plan, accounting and multi-annual instalments. (see also replies to § 13
and § 27)
333.       (§ 13) The
Parliament emphasises that the agencies have for some time been calling for
greater flexibility in the rules applicable to them under the Financial
Regulation; recognises that most of those rules are disproportionate and
ill-suited not only to the size and objectives of the majority of agencies, but
also to their characteristics; considers that simplification of the financial
and statutory rules applicable to the agencies would improve their efficiency,
reduce their expenditure and solve many of the problems pointed out by the
Court of Auditors.
Commission's
response:
The
Commission is currently revising the Financial Framework Regulation applicable
to decentralised agencies (FFR) aiming at aligning the text to the new
Financial Regulation, and solving recurrent problems encountered by agencies
and by the Commission, implementing the Joint Statement on the Common Approach
between Commission, EP and Council on Decentralised Agencies. The new FFR
should be adopted by the Commission in September 2013 and should apply from
2014. In particular, it will streamline financial rules as regards the
treatment of budgetary surpluses, additional tasks entrusted to agencies,
internal audit, reporting requirements, and annual work programme, multi-annual
work and staff policy plan, accounting and multi-annual instalments.
In the
framework of revision of the Staff Regulations, the Commission has proposed
several modifications with a view to simplification. For example, the revised
wording of Article 110 Staff Regulations (SR). The revised procedure under
Article 110 SR appropriately ensures the simplification and flexibility as
regards the implementing rules to the Staff Regulations and the Conditions of
Employment of Other Servants. Another example concerns social dialogue and
staff representation (where agencies will have the possibility to pool the
representation instances).
334.       (§ 16) The
Parliament believes that both the Commission and the Court of Auditors should
provide effective assistance to the agencies in th[e] area [of carryovers,
public procurement, and recruitment procedures].
Commission's
response:
The
Commission is taking the recommended action.
In line
with its Roadmap on the implementation of the Common Approach, the Commission
will assess the services it provides to agencies on the basis of their feedback
and, if necessary, improve, clarify, extend or adapt them.
335.       (§ 18) The
Parliament calls on the Commission to propose a solution to this issue [the
problem of agencies whose funding is based on charges] during the next revision
of the financial rules applicable to the agencies; points out that the
Financial Regulation is not suited either to agencies which generate surpluses,
and stresses that it is essential to consider, as part of the revision, ways of
resolving this problem, e.g. by creating a limited reserve fund.
Commission's
response:
There is
little evidence to justify the creation of a reserve fund for partially
self-financed agencies. Therefore it is proposed to keep the current practice
of taking into account the possible agency surpluses of year n-1, when
establishing the grant level to be entered in the draft budget for year n+1. 
If any
unforeseen shortfalls of fee revenue as compared to fee revenue forecasted for
year n, a number of measures are available to the agency, its managing board,
and the Commission, namely: to cope with such a situation:
The way to
address the risk of possible shortages on the revenue side is to use all the
room for manoeuvre available to the agency, its managing board, and the
Commission, namely:
- setting
a proper level of fees and initiating in due time the procedure for amending
the fee level should shortages become recurrent;
-
forecasting and monitoring revenue flows on a regular basis and anticipating
major risks of shortfalls by requesting top-ups if appropriate and in due time;
- taking
precautionary measures with regard to discretionary expenditure in case of
expected shortages;
- if
necessary, in agreement with the Commission, making use of the assigned
revenues stemming from the recovery of agency surpluses in year N-l;
- in case
of extreme need and if possible, a transfer from other budget lines where there
might be unused appropriations.
- a last
resort measure, the Commission may request an amending budget to cover the
residual shortage.
This way
of proceeding is proportionate to the perceived risk and fully preserves the
prerogatives of the Budgetary Authority.
336.       (§ 20) [Concerning
the lack of flexibility within the budget,] the Parliament calls on the
Commission to closely examine the situation and to come forth with proposals
addressing this issue.
Commission's
response:
The
Commission is currently revising the Framework Financial Regulation applicable
to decentralised agencies (FFR) in order to implement the Common Approach on
decentralised agencies signed by the European Parliament, the Council and the
Commission in July 2012.
In
addition, several provisions of the current FFR will be reviewed in order to
take into account the revised general Financial Regulation, and the experience
gained in the application of the current FFR. 
The FFR
should enter into force from 2014. As regards flexibility, the same rules as
those applicable to institutions by virtue of the general Financial Regulation
are foreseen. The Director of an agency will have the possibility of make
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.
337.       (§ 21) [Concerning
the organisation and planning of audits], the Parliament considers that the
agencies should be consulted in order to find practical solutions for this
issue without hampering the performance of their core tasks; invites the Court
of Auditors, the Commission, the agencies and the Network to come up with an
approach of this matter suitable for all involved parties.
Commission's
response:
The
Commission is taking the requested action. The Internal Audit Service presents
the audit topics to the agencies management boards for endorsement. The audit
work in a single agency takes 5 working days per year. The timing is agreed
with the agencies at least 4 weeks in advance and coordinated with the Court of
Auditors. The Commission intends to take further actions to improve
coordination with the internal audit capabilities where they exist.
338.       (§ 24) The
Parliament points out that there is a need for greater flexibility and
simplification of the statutory rules applicable to agencies in order to ensure
that they function more effectively in this respect; points out furthermore
that, [...], since the final decision rests with the Commission, it is vital
that a previous agreement be reached between the agencies and the Commission;
considers that, in the event of disagreement, the Commission should present a
reasoned decision to Parliament's committee responsible.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
However,
the Commission can only reject the request to present to the Parliament's
committee responsible a reasoned decision every time a disagreement will arise
in the implementation of the revised Article 110 of the Staff Regulation. This
would lead to disproportionate use of resources as well as unacceptable delay
incompatible with legal certainty.
339.       (§ 27) The
Parliament is increasingly concerned that the Commission annuls agreed Staff
Policy Plans within the annual budget procedure and, therefore, calls on the
Commission to restrict itself in this respect.
Commission's
response:
The
Commission does not "annul" Staff Policy Plans. It does, however,
propose in the annual draft budget the number of posts that it considers that
each agency needs, in accordance with Article 27(5) of the Framework Financial
Regulation. It is then the role of the budgetary authority to adopt the agency
establishment plans, as part of the adoption of the EU budget.
In this
regard, the Commission refers to its Communication to establish a programming
of agency human and financial resources for the years 2014-2020, as adopted in
July 2013 (COM(2013) 519). On that basis, the Commission intends to start the
procedure foreseen in point 47 of the current Inter-Institutional Agreement,
with the aim to arrive at a common understanding with Parliament and Council on
the resources needs of each agency for the next MFF period.
340.       (§ 42) The
Parliament urges the Commission and the agencies to implement measures stemming
from that review [Special Report No 15/2012] concerning potential conflicts of
interest.
Commission's
response:
The
Commission's overall legal framework for conflict of interest is robust and in
conformity with the OECD guidelines in this regard. Of course the Commission is
regularly updating its own guidelines in this field but no major new legal
instrument is necessary. Concerning agencies, the Commission is planning to
adopt guidelines on the prevention and management of conflicts of interest
specifically addressed to them before the end of 2013, in line with the Common
Approach.
341.       (§ 43) The
Parliament welcomes the Commission's foreseen action on conflicts of interest
and, in particular, its intention to come up with guidelines for a coherent
policy on the prevention and management of conflicts of interest for members of
the management boards and directors, experts in scientific committees, and
members of boards of appeal, a task for which the Commission itself takes responsibility
and has set 2013 as the target year; notes with satisfaction that this task is
one of the Commission's priority actions and milestones; urges the Commission
to respect the proposed deadline to implement this action and to report to the
discharge authority on its outcome before the end of 2013, attaching to its
report the relevant legislative proposals.
Commission's
response:
The
Commission confirms that it expects to respect the deadline announced in its
Roadmap for the adoption of guidelines on the prevention and management of
conflicts of interest in agencies, i.e. end 2013. The first report on the
implementation of the Roadmap to be issued also by the end of 2013 will include
further information on progress concerning this priority issue. However, the
Commission has never committed to put forward legislative proposals and does
not intend to do so at the moment.
342.       (§ 45) The
Parliament invites the Commission to bear in mind the need to maintain an
adequate balance between risks/benefits as regards the management of conflicts
of interest, on one hand, and the objective to obtain the best possible
scientific advice, on the other.
Commission's
response:
The
Commission fully shares the European Parliament's view and is acting upon.
343.       (§ 51) The
Parliament calls on the Commission to better use the capacity building and the
recommendations of agencies in the framework of the European Semester, notably
when elaborating the Annual Growth Survey and macroeconomic indicators;
underlines the key role of the agencies in achieving the objectives of the
Europe 2020 Strategy.
Commission's
response:
The
Commission notes that policy development does not fall in the remit of the
agencies. However, in its work the Commission is making good use of the deep
knowledge of the agencies in their respective fields of expertise, including
where relevant for the European Semester.
344.       (§ 57) The
Parliament believes that further synergies should be explored between the
European Police College and the European Police Office, taking into account the
results of the study issued by CEPOL in 2011 (contract CEPOL/CT/2010/002);
notes that in March 2014, the College is to leave its current premises in
Bramshill (UK); requests that the Commission presents a proposal to the
European Parliament and the Council for the relocation of the College to The
Hague (NL), where the European Police Office is currently located, in order for
both agencies to be able to share facilities and services without jeopardizing
their core tasks and autonomy; stresses that a swift decision on the relocation
of CEPOL would considerably reduce the level of uncertainty which can adversely
affect staff and recruitment procedures.
Commission's
response:
The
Commission's proposal for a European agency for law enforcement and training
(COM(2013) 173 final) proposes to merge CEPOL with Europol. Bringing
operational and training functions together will enable the functions to
reinforce one another, thus strengthening overall EU police cooperation. A
merged agency, located in The Hague, will allow for administrative costs
savings (in particular staff posts) that can be redeployed to implement the
European Law Enforcement Training Scheme. This is important in the wider
context of scarce resources and is fully in line with the July 2012 Common
Approach on EU agencies which called for considering mergers of agencies to
achieve synergies and efficiencies.
345.       (§ 58) The
Parliament invites the Commission to further explore, together with the
European Training Foundation, the European Centre for the Development of
Vocational Training, the European Foundation for the Improvement of Living and
Working Conditions and the European Agency for Safety and Health at Work, the
synergies that exist between those agencies and to report to the discharge
authority on their possible deeper integration; invites those agencies and the
Commission to evaluate whether closer cooperation could lead to economies of
scale and optimisation of their performance.
Commission's
response:
In line
with its Roadmap on the implementation of the Common Approach, the Commission
will also assess the potential for synergies between agencies in the case of
CEDEFOP, ETF, EUROFOUND and EU-OSHA.
346.       (§ 64) The
Parliament notes with concern that the provisions of the Financial Regulation
are not fully adapted to the ESAs' financing scheme as 55 % to 60 % of their
budget is financed by contributions from Member States and European Free Trade
Association countries; believes that appropriate mechanisms need to be found to
guarantee the security and financial stability of the ESAs, which are exposed
to specific risks on account of the mixed nature of their funding; believes
that that issue should be addressed, at the latest, in the course of the next
revision of the Financial Regulation as regards the agencies, and calls on the Commission
to evaluate this situation and to report on this issue to the discharge
authority.
Commission's
response:
The
mechanism of the balancing contribution principle foreseen in the Framework
Financial Regulation applicable to decentralised agencies (FFR) respects the
funding keys of agencies with mixed funding, and over the past its application
has ensured fairness and equal treatment for all contributors to the European
Supervisory Authorities (ESAs) budgets. 
In
addition, a specific Memorandum of Understanding between the Authorities and
the Commission has been established in order to ensure efficient establishment,
implementation and monitoring of the budget of the ESAs.
347.       (§ 65) The
Parliament expresses concern about the fact that the Commission has altered the
establishment plans proposed by the ESAs without clearly indicating this; urges
the Commission to be fully transparent on this and other issues.
Commission's
response:
The
Commission has taken the recommended action.
According
to Art 27§5 of the Framework Financial Regulation which sets out the financial
rules applicable to all EU decentralised agencies, including the 3 Financial
Supervisory Authorities, the Commission is entitled to propose in the Draft
Budget the amount of the subsidy and the number of staff it considers the body
needs. 
Concerning
the Financial Supervisory Authorities recently created, the financial
statements attached to the legislative proposals from the Commission, regularly
updated to take into account the results of the legislative procedure and the
impact of new tasks proposed, have provided the main reference point for the
Commission's position. 
Nevertheless,
the Commission performs each year a thorough analysis of the agencies' requests
for financial and human resources as a part of the annual procedure for
establishing the Draft Budget. Consequently, the proposed allocation reflects
the Commission's assessment of the actual needs of each agency and sets a level
which ensures continuation of the body's mission and tasks. 
Finally,
it is up to the Budgetary Authority to reassess the Commission's proposal and
agree on the agencies' annual EU subsidy and establishment plans as part of the
adoption of the annual budget.
Full
transparency is respected throughout the procedure. In this regard, as from the
2014 Draft Budget the Commission will further clarify the extent to which it
has modified the agencies’ requests in the Draft Budget, and the corresponding
reasons why, as a follow-up to the Common Approach on decentralised agencies
agreed by the three Institutions in July 2012.
348.       (§ 68) Given that
in most of the agencies, directors are appointed by the management board on the
basis of a shortlist adopted by the Commission, the Parliament calls on […] the
Commission to uphold the principles of gender equality and to take account of
the strategy launched by the Commission in 2010 to achieve a better gender
balance in positions of responsibility.
Commission's
response:
For
Management selection procedures in the Commission, the Institution is attentive
to the gender aspects from the very first stages such as the wording of
corresponding vacancy notice, eligibility and selection criteria, as well as
subsequently during the selection procedure. Such attention equally applies for
those procedures in which an Executive Director is appointed by the Commission
– notably in the case of Executive Agencies.
However,
it should be highlighted that in spite of such efforts some positions attract a
comparatively lesser number of one of the two genders. Furthermore, while
measures and actions to promote equal opportunities for men and women are
essential, gender considerations in the course of a selection procedure might
come into play only in a situation of equal qualification, and subject to an
objective assessment of all applications, as confirmed by the European Court of
Justice.
349.       (§ 70) The
Parliament calls on the Commission to adapt the fees [for using its IT systems]
to the size and financial capacity of the agencies.
Commission's
response:
In
relation to the usage of the Commission's central financial IT-system (ABAC),
the Commission wishes to clarify that:
•        Over
40 External Entities are making use of ABAC, including both Committees,
Traditional Agencies, Joint Undertakings and Executive Agencies;
•        The
same level of service is rendered to the External Entities as to the
Commission's internal departments; 
•        Twice
a year a meeting is organised with the External Entities to discuss
ABAC-related topics. The Entities are invited to propose themselves the topics
they wish to address;
•        A
charge-back mechanism is in place with the aim of recovering the incremental
costs for the provisioning of the IT-system and –importantly- the accompanying
services rendered. No budgetary means have been made available to the
Commission by the Budgetary Authority to cope with the workload stemming from
supporting the External Entities.
•        In
2013, the charging-back criteria were reviewed for the Traditional Agencies and
the Agency's Network decided themselves on the distribution of the total amount
with the aim of reducing the pressure on the smaller Agencies. The number of
actual users is the sole criterion, allowing the Agency to foresee the cost
into their budgetary forecast and demands.
•        ABAC
is an integrated IT-system managing financial/accounting operations in
compliance to the rules of the Financial Regulation across all DGs, Services
and External Entities. As such, the system does not provide highly tailored
functionality which would only be relevant for vertical businesses (e.g.
Structural Funds, FEAGA, ...). Likewise, the complexity and maintainability of
the central system cannot be compromised by adding Agency-specific requests.
However, the Commission is investing considerable resources in modernising and
facilitating the interoperability between the central systems and business
specific systems. 
•        The
Commission recalls that it is open to discussing the take-over of accounting
tasks from the External Entities where such centralisation would induce
economics-of-scale effects, reduce financial or business continuity risk and
could free up internal resources to more operational tasks."
350.       (§ 71) The
Parliament draws the Commission's attention to the difficulties encountered by
the agencies with complex IT systems […] and invites the Commission to
cooperate more closely with the agencies on this issue.
Commission's
response:
Besides
the Commission's 40 DGs and Service, ABAC is used by over 40 External Entities.
The External Entities are not only granted access to the financial/accounting
information system but they receive as well supporting services (IT helpdesk,
Financial helpdesk, training, …). Tailoring ABAC to the particular needs of
+/-80 Authorising Officers by Delegation would yield a system too complex to
maintain at an acceptable cost level and could induce system and business risks.
Therefore, Entities joining ABAC are expected to respect the same policies,
procedures and rules as those applicable to the Commission internally. The cost
generated to support of the External Entities – both in terms of IT as in terms
of business support- should be balanced by appropriations and posts made
available to the Commission's services.
Similarly,
concerning the HR information systems, the use by the agencies of the human
resource management system of the Commission (SYSPER 2) would be justifiable
from an economic point of view only to the extent that agencies adopt the same
rules and processes as the Commission. Otherwise, the technical adaptations and
costs of maintenance would be disproportionate compared to the potential gains.
In line
with its Roadmap on the implementation of the Common Approach, the Commission
will assess the services it provides to agencies on the basis of their feedback
and, if necessary, improve, clarify or extend them.
Any
decision to extend Sysper2 to agencies would have to meet the following three
conditions: same rules, good data quality, pay for the cost incurred (budget
appropriation and posts).
351.       (§ 72) The
Parliament proposes that the agencies be given the possibility of using the
human resources software, or any other kind of software, of the Commission,
instead of having to purchase their own expensive software.
Commission's
response:
Concerning
the HR information systems, the use by the agencies of the human resource management
system of the Commission (SYSPER 2) would be justifiable from an economic point
of view only to the extent that agencies adopt the same rules and processes as
the Commission. Otherwise, the technical adaptations and costs of maintenance
would be disproportionate compared to the potential gains.
In line
with its Roadmap on the implementation of the Common Approach, the Commission
will assess the services it provides to agencies on the basis of their feedback
and, if necessary, improve, clarify or extend them.
From the
timing point of view, the Commission is currently embarked in an already
ambitious programme of making available Sysper2 to other Institutions. This
implies that making available Sysper2 to new "clients" e.g. agencies
can be envisaged only in the medium term. Any decision to extend Sysper2 to
agencies would have to meet the following three conditions: same rules, good
data quality, pay for the cost incurred (budget appropriation and posts).
Agency for the
Cooperation of Energy Regulators (ACER)
352.       (§ 9) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
Body of
European Regulators for Electronic Communications
353.       (§ 8) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European Centre
for the Development of Vocational Training (CEDEFOP)
354.       (§ 16) The
Parliament invites the Commission, together with the European Training
Foundation, the European Centre for the Development of Vocational Training,
European Foundation for the Improvement of Living and Working Conditions and
the European Agency for Safety and Health at Work to further explore the
synergies that exist between those agencies and to report to the discharge
authority on the possible deeper integration of those four agencies; invites
those agencies and the Commission to evaluate whether closer cooperation could
lead to economies of scale and optimisation of their performance.
Commission's
response:
In line
with its Roadmap on the implementation of the Common Approach, the Commission
will also assess the potential for synergies between agencies in the case of
CEDEFOP, ETF, EUROFOUND and EU-OSHA.
European Police
355.       (§ 1) The
Parliament requests that the Commission come up with a proposal for the
relocation of the College to The Hague (NL), where the European Police Office
is located, in order to share facilities and services and benefit from
synergies, without jeopardising both agencies' core tasks and autonomy, and
present those proposals to Parliament and the Council.
Commission's
response:
The
Commission's proposal for a European agency for law enforcement and training
(COM(2013) 173 final) proposes to merge CEPOL with Europol. Bringing
operational and training functions together will enable the functions to
reinforce one another, thus strengthening overall EU police cooperation. A
merged agency, located in The Hague, will allow for administrative costs
savings (in particular staff posts) that can be redeployed to implement the European
Law Enforcement Training Scheme. This is important in the wider context of
scarce resources and is fully in line with the July 2012 Common Approach on EU
agencies which called for considering mergers of agencies to achieve synergies
and efficiencies.
356.       (§ 14) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European
Aviation Safety Agency
357.       (§ 8) The
Parliament asks the Commission to come forward, as soon as possible, with a
proposal to solve the contradiction between the principle of annuality and the
need to finance multiannual certification projects.
Commission's
response:
The
Commission is taking the requested action. Art.59, § 4 of the basic Regulation
216/2008 establishing EASA clearly distinguishes the activities to be financed
from subsidies and the ones covered by fees and charges. The latter are purely
market driven and by their very nature the projects are multi-annual (linked to
the applicant’s ability to demonstrate compliance which in turn impacts the
progress of the Agency’s work). As a consequence, according to the Fees and
Charges Regulation in force, if at the end of a financial year the overall
revenue from fees - which constitute an assigned revenue - , exceeds the overall
cost of certification tasks of the year, the excess shall be used to finance
certification tasks performed in the following years in accordance with the
Financial regulation of the Agency.
An
amending Fees and Charges Regulation is now under discussion. The purpose of
this review is to improve cost–reflectivity by setting up fees and charges in
such a way to allow EASA to organise its work for the duration of a project,
while avoiding as much as possible surpluses or shortfalls in the medium/long
term. 
In the
framework of the revision of the Fees and Charges Regulation and the evaluation
of the implementation of EASA basic regulation foreseen under article 62, the
Commission will re-assess how to reduce the carryover of appropriation stemming
from certification revenues by regular revision of the fees and charges level.
European
Banking Authority
358.       (§ 4) The
Parliament calls on the Commission [to] evaluate this situation [the provisions
of the Financial Regulation are not fully adapted to the Authority's financing
scheme as 60 % of its budget is financed by contributions from Member States
and EFTA countries] and to report on this issue to the discharge authority.
Commission's
response:
The
balancing contribution principle foreseen in the Framework Financial regulation
applicable to decentralised agencies (FFR) applies to all agencies. No
derogation in this regard is foreseen for ESA’s. 
The
Commission considers that this mechanism respects the funding keys of agencies
with mixed funding. A surplus in year N-1 would reduce, proportionally to the
funding key, the contributions in N+1 from the EU budget and from Member
States. 
In order
to ensure efficient establishment, implementation and monitoring of the budget
of the ESAs a specific Memorandum of Understanding between the Authorities and
the Commission was established. It envisages inter alia withholding the last
tranche of payment of the contributions from the EU budget and the MS in case
that a surplus is foreseen. This practical arrangement aims at avoiding
unnecessary recoveries and reimbursements.
359.       (§ 6) The
Parliament urges the Commission to be fully transparent on [the fact that it
has altered the establishment plan as proposed by the Authority without clearly
indicating this] and other issues.
Commission's
response:
See reply
to § 65.
360.       (§ 28) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European Centre
for Disease Prevention and Control
361.       (§ 13) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European
Chemicals Agency
362.       (§ 13) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European
Environment Agency
363.       (§ 9) The Parliament
emphasises that the Commission must exercise its supervisory role though its
participation in the Management Board and Bureau of the Agency, within the
limits set by Regulation (EC) No 401/2009 and with due respect to the Agency's
legal autonomy; emphasises that Parliament is to be kept regularly informed.
Commission's
response:
The
Commission has already two representatives on the Management Board of the
Agency.
The
present recommendation from the Parliament is partially accommodated, by the
following articles of the inter-institutional Common Approach on decentralised
agencies, which are in the process of being implemented:
Article
57: “A more rigorous differentiation between the responsibilities of the
Commission and those of the agencies would be appropriate in discharge
decisions and resolutions. Council's recommendations on the discharge of each
agency should be fully taken into consideration."
Article
59: “An alert/warning system will be activated by the Commission if it has
serious reasons for concern that an agency's Management Board is about to take
decisions which may not comply with the mandate of the agency, may violate EU
law or be in manifest contradiction with EU policy objectives. In these cases,
the Commission will raise formally the question in the Management Board and
request it to refrain from adopting the relevant decision. Should the
Management Board set aside the request, the Commission will formally inform the
European Parliament and the Council, with a view to allow the three institutions
to react quickly. The Commission may request the Management Board to refrain
from implementing the contentious decision while the representatives of the
three institutions are still discussing the issue.”
European
Fisheries Control Agency
364.       (§ 9) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European
Insurance and Occupational Pensions Authority
365.       (§ 4) The
Parliament calls on the Commission evaluate this situation [the fact that the
provisions of the Financial Regulation are not fully adapted to the Authority's
financing scheme, as 55 % of the budget is financed by contributions from
Member States and EFTA countries] and to report on this to the discharge
authority.
Commission's
response:
The
balancing contribution principle foreseen in the Framework Financial regulation
applicable to decentralised agencies (FFR) applies to all agencies. No
derogation in this regard is foreseen for ESA’s. 
The
Commission considers that this mechanism respects the funding keys of agencies
with mixed funding. A surplus in year N-1 would reduce, proportionally to the
funding key, the contributions in N+1 from the EU budget and from Member
States. 
In order
to ensure efficient establishment, implementation and monitoring of the budget
of the ESAs a specific Memorandum of Understanding between the Authorities and
the Commission was established. It envisages inter alia withholding the last
tranche of payment of the contributions from the EU budget and the MS in case
that a surplus is foreseen. This practical arrangement aims at avoiding
unnecessary recoveries and reimbursements.
366.       (§ 5) The
Parliament calls on the Commission to explore all the options for a new long
term sustainable financing of the Authority that safeguards its independence in
the context of the next review of the agencies' work and financing arrangements
by the Commission, which will be presented by 2 January 2014 at the latest.
Commission's
response:
The
Commission is taking the recommended action.
The
Commission is currently working on the evaluation of the European Supervising
Authorities which is to be ready in January 2014
367.       (§ 6) The
Parliament calls on the Commission to evaluate the possibility of coming up
with a proposal ensuring that the budgets of the three European Supervisory
Authorities (ESAs) are fully funded by the Union budget.
Commission's
response:
An
evaluation will be made beginning of 2014.
368.       (§ 8) The
Parliament urges the Commission to be fully transparent on this [the fact that
the Commission altered the establishment plan as proposed by the Authority
without clearly indicating this] and other issues.
Commission's
response:
See reply
to § 65.
369.       (§ 32) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European
Medicines Agency
370.       (§ 12) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European
Monitoring Centre for Drugs and Drug Addiction
371.       (§ 11) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European
Network and Information Security Agency
372.       (§ 8) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European
Railway Agency
373.       (§ 9) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European
Securities and Markets Authority
374.       (§ 3) The
Parliament calls on the Commission to explore all the options for a new long
term sustainable financing of the Authority that safeguards its independence in
the context of the next review of the agencies' work and financing arrangements
by the Commission, which will be presented by 2 January 2014 at the latest.
Commission's
response:
The
Commission is taking the recommended action.
The
Commission is currently working on the evaluation of the European Supervising
Authorities which is to be ready in January 2014
375.       (§ 4) The
Parliament calls on the Commission to evaluate the possibility of coming up
with a proposal ensuring that the budgets of the three European Supervisory
Authorities (ESAs) are fully funded by the Union budget.
Commission's
response:
The
evaluation will be made at the beginning of 2014.
376.       (§ 7) The
Parliament urges the Commission to be fully transparent on this [the fact that
the Commission altered the establishment plan as proposed by the Authority
without clearly indicating this] and other issues.
Commission's
response:
See reply
to § 65.
377.       (§ 33) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European
Training Foundation
378.       (§ 21) The
Parliament invites the Commission to further explore, together with the
European Training Foundation, the European Centre for the Development of
Vocational Training, the European Foundation for the Improvement of Living and
Working Conditions and the European Agency for Safety and Health at Work, the
synergies that exist between those agencies and to report to the discharge
authority on their possible deeper integration; invites those agencies and the
Commission to evaluate whether closer cooperation could lead to economies of
scale and optimisation of their performance.
Commission's
response:
In line
with its Roadmap on the implementation of the Common Approach, the Commission
will also assess the potential for synergies between agencies in the case of
CEDEFOP, ETF, EUROFOUND and EU-OSHA.
European Agency
for Safety and Health at Work
379.       (§ 8) The
Parliament invites the Commission, together with the European Training
Foundation, the European Centre for the Development of Vocational Training,
European Foundation for the Improvement of Living and Working Conditions and
the European Agency for Safety and Health at Work to further explore the
synergies that exist between those agencies and to report to the discharge
authority before any decisions concerning possible changes to the respective
responsibilities and/or working methods of these agencies are considered on the
possible deeper integration of those four agencies; invites those agencies and
the Commission to evaluate whether closer cooperation could lead to economies
of scale and optimisation of their performance.
Commission's
response:
In line
with its Roadmap on the implementation of the Common Approach, the Commission
will also assess the potential for synergies between agencies in the case of
CEDEFOP, ETF, EUROFOUND and EU-OSHA.
European
Foundation for the Improvement of Living and Working Conditions
380.       (§ 5) The
Parliament invites the Commission, together with the European Training
Foundation, the European Centre for the Development of Vocational Training, the
European Foundation for the Improvement of Living and Working Conditions and
the European Agency for Safety and Health at Work, to further explore the
synergies that exist between those agencies and to report, before any decisions
concerning possible changes to the respective responsibilities and/or working
methods of these agencies are considered, to the discharge authority on the
possible deeper integration of those four agencies; invites those agencies and
the Commission to evaluate whether closer cooperation could lead to economies
of scale and optimisation of their performance.
Commission's
response:
In line
with its Roadmap on the implementation of the Common Approach, the Commission
will also assess the potential for synergies between agencies in the case of
CEDEFOP, ETF, EUROFOUND and EU-OSHA.
381.       (§ 7) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European
Union's Judicial Cooperation Unit (EUROJUST)
382.       (§ 14) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
European Police
Office (EUROPOL)
383.       (§ 1) The
Parliament reiterates its call on the Commission to prepare a comprehensive
impact assessment regarding a potential merger of those two Agencies setting
out the cost and benefits, considering the complementarities between the Office
and the European Police College and the potential synergies, and to evaluate
whether the merger could lead to economies of scale and optimisation of the
performance in cross-border cooperation in the fight against crime.
Commission's
response:
The
Commission's proposal for a European agency for law enforcement and training
(COM(2013) 173 final), which proposes to merge CEPOL with Europol, was
accompanied by an impact assessment on such a merger (SWD(2013) 98 final Part
2). It concluded that the option of merging the agencies would achieve savings
enabling posts to be redeployed to implement the European Law Enforcement
Training Scheme (COM(2013) 172 final) and thereby reinforce EU police training.
European GNSS
Agency
384.       (§ 10) The
Parliament encourages the Commission to allow for a certain degree of
simplification under Article 110 of the Staff Regulations in regard to the
agencies.
Commission's
response:
In the
framework of revision of the Staff Regulations, the Commission has proposed the
revised wording of Article 110 Staff Regulations (SR). The revised procedure
under Article 110 SR appropriately ensures the simplification and flexibility
as regards the implementing rules to the Staff Regulations and the Conditions
of Employment of Other Servants.
ARTEMIS -
Embedded Computing Systems
385.       (§ 16) The
Parliament considers that cost-benefit analysis of a merger with ENIAC should
be undertaken and that the European Parliament should be notified about the
results of this assessment. This report should highlight the possible
advantages and disadvantages of such a merger.
Commission's
response:
In the
first quarter of 2012 the Commission commissioned a study by independent
experts to examine the opportunities to improve the effectiveness and impact of
European industry driven public-private collaboration research and innovation
initiatives in the field of electronic components and systems: ENIAC
(nano-electronics) and Artemis (embedded systems) Joint Technology Initiatives
(JTI) and the possible inclusion of the EPoSS European Technology Platform
(ETP) on smart systems.
The study
was to deliver insights on the impact of a potential new JTI resulting from the
merging of the two existing JTIs (ENIAC and Artemis) and their respective
strategic research agendas, as well as the possible inclusion of the smart
systems strand of the EPoSS ETP. The final results of the study were published
on 28 November 2012 and are available at
http://ec.europa.eu/information_society/newsroom/cf//itemdetail.cfm?item_id=9974.
The study
results have been used in the preparation of the Commission’s proposal for a
Council Regulation regarding the setting up of a new JTI on 'Electronic
Components and Systems', its governance and rules of operation.
The main
conclusion of the study is to proceed along a track of partial integration of
operations involving the setting up a one stop-shop efficient and effective
operational unit for managing programmes for the European electronic components
and systems industry. In addition to this, it involves creating room for
crosscutting programmatic activities to better accommodate an already visible
trend. However, large parts of the present stakeholder groupings and research
agendas should continue and/or even be stimulated in the direction of more
strategic focusing.
ENIAC Joint
Undertaking
386.       (§ 14) The
Parliament considers that cost benefit analysis of a merger with Artemis should
be undertaken and that Parliament should be notified about the results of this
assessment. This report should highlight the possible advantages and
disadvantages of such a merger.
Commission's
response:
In the
first quarter of 2012 the Commission commissioned a study by independent
experts to examine the opportunities to improve the effectiveness and impact of
European industry driven public-private collaboration research and innovation
initiatives in the field of electronic components and systems: ENIAC
(nano-electronics) and Artemis (embedded systems) Joint Technology Initiatives
(JTI) and the possible inclusion of the EPoSS European Technology Platform
(ETP) on smart systems.
The study
was to deliver insights on the impact of a potential new JTI resulting from the
merging of the two existing JTIs (ENIAC and Artemis) and their respective
strategic research agendas, as well as the possible inclusion of the smart
systems strand of the EPoSS ETP. The final results of the study were published
on 28 November 2012 and are available at
http://ec.europa.eu/information_society/newsroom/cf//itemdetail.cfm?item_id=9974.
The study
results have been used in the preparation of the Commission’s proposal for a
Council Regulation regarding the setting up of a new JTI on 'Electronic
Components and Systems', its governance and rules of operation.
The main
conclusion of the study is to proceed along a track of partial integration of
operations involving the setting up a one stop-shop efficient and effective
operational unit for managing programmes for the European electronic components
and systems industry. In addition to this, it involves creating room for
crosscutting programmatic activities to better accommodate an already visible
trend. However, large parts of the present stakeholder groupings and research
agendas should continue and/or even be stimulated in the direction of more
strategic focusing.
Fuel Cells and
Hydrogen Joint Undertaking
387.       (§ 11) The Parliament
urges the Joint Undertaking to implement, together with the Commission, all the
necessary measures to minimise the cash balances held on account to the levels
that are required within the limits provided in the financing agreements with
the Commission.
Commission's
response:
The
Commission is taking the recommended action.
As
foreseen in the Commission Roadmap on the follow-up to the Common Approach on
decentralised agencies agreed by the three Institutions in July 2012, the
Commission looks at ways to expand the level and scope of support activities it
currently provides to the agencies, such as in the areas of staff management,
accounting and finance, so as to reduce their administrative costs and to
enable the agencies to produce the outputs that are expected from them with the
available resources.
In
parallel, agencies are expected to improve their internal planning and revenue
forecasting in order to reduce their high carry over and cancellation rates, on
which the Commission intends to provide further guidance, notably in view of
developing a guide on the basis of best practices, which in the Roadmap on the
follow-up of the Common Approach is foreseen for 2014. When preparing the 2014
Draft Budget, the Commission has already looked into agency carry over and
cancellation rates, so as to align agency resources with real needs.
[1] 2011 General Budget
Discharge, ECA' Special Reports in the context of the Commission Discharge, EDF
Discharge, Agencies Discharge. Document references P7_TA(2013)0122, P7_TA(2013)0123,
P7_TA(2013)0125 and P7_TA(2013)0134 respectively available at the following Web
address: 
http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=20130417&secondRef=TOC&language=en