Proposal for a COUNCIL REGULATION amending Regulation (EU) 2015/323 of 2 March 2015 on the financial regulation applicable to the 11th European Development Fund
Date: 2015-09-16
Institutions: Directorate-General for Budget, European Commission
Subjects: European Development Fund, bank charges, bank deposit, central bank, financial institution, financial regulation, interest

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   EUROPEAN COMMISSION  Brussels, 16.9.2015  COM(2015) 463 final 2015/0213 (NLE)   Proposal for a COUNCIL REGULATION amending Regulation (EU) 2015/323 of 2 March 2015 on the financial regulation applicable to the 11th European Development Fund  
 
EXPLANATORY MEMORANDUM 

CONTEXT OF THE PROPOSAL 

1. 
The  Internal  Agreement  establishing  the  eleventh  European  Development  Fund  (11th  EDF) 
entered into force on 01 March 2015 after its ratification by all the Member States. 
While the 11th EDF is not included in the EU budget and its financial envelope is determined 
in the Internal Agreement, the funds will be implemented according to the 11th EDF Financial 
Regulation, which is aligned to the maximum with the Financial Regulation and its Rules of 
Application. 
The 11th EDF Financial Regulation was adopted on 02 March 2015 and entered into force on 
06 March 2015.  

A clarification to the current arrangements is proposed. It reflects the most recent experience 
as regards EDF accounts. 

The motivation for the amendment proposed by the Commission is presented hereafter. 

2. 

CONTENT OF THE PROPOSAL 

Ensuring that European Commission EDF accounts (Article 22(3) of Council Regulation (EU) 
2015/323) are kept free of any charge and negative interest: 

According  to  Article  22(3)  of  Council  Regulation  (EU)  2015/323,  contributions  to  the  EDF 
shall be credited by each Member State to a special account entitled ‘European Commission 
— European Development Fund’ opened with the central bank of the relevant Member State 
or the financial institution designated by it.  

It should be clarified that these special accounts opened by the Member States in the name of 
the Commission, for the purpose of depositing EDF contributions, until they need to be used 
for  payments,  are  not  only  to  be  kept  free  of  charges,  but  also  free  of  interest  (positive  or 
negative). The purpose of this provision is to prevent losses for the EDF budget. Any charge 
applied to those accounts would be equivalent to a reduction of the funds available to the EDF 
budget. In this respect, negative interest should equally be avoided as it has the same negative 
effect  as  charges.  Therefore,  it  is  proposed  that  the  Member  State  concerned  should 
compensate  the  EDF  budget  for  any  charge  or  negative  interest  applied  to  the  account  for 
EDF  resources  it  has  opened  in  the  name  of  the  Commission  pursuant  to  Article  22(3)  of 
Council Regulation (EU) 2015/323.  

This amendment further ensures that the EDF budget is not negatively affected by Decision 
2014/337/EU (ECB/2014/23) of the European Central Bank of 5 June 20141, providing for a 
negative interest rate which entails a payment obligation of the deposit holder to the relevant 
national central bank (NCB) including the right of that NCB to debit the relevant government 
deposit  account  accordingly,  or  by  similar  decisions  by  other  EU  central  banks  where  EDF 
funds have to be kept in accordance with Article 22 of Council Regulation (EU) 2015/323. In 
this  context,  it  should  be  recalled  that,  so  far,  the  Commission  has  not  requested  Member 
States to remunerate EDF accounts in case of positive ECB deposit rates. 

1 

2014/337/EU: Decision of the European Central Bank of 5 June 2014 on the remuneration of deposits, 
balances and holdings of excess reserves (ECB/2014/23), OJ L 168, 7.6.2014, p. 115. 

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2015/0213 (NLE) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EU) 2015/323 of 2 March 2015 on the financial regulation 
applicable to the 11th European Development Fund 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on European Union and to the Treaty on the Functioning of the 
European Union,  

Having regard to the Internal Agreement between the Representatives of the Governments of 
the Member States  of the European  Union,  meeting  within the Council, on the financing of 
European Union aid under the multiannual financial framework for the period 2014 to 2020, 
in  accordance  with  the  ACP-EU  Partnership  Agreement,  and  on  the  allocation  of  financial 
assistance for the Overseas Countries and Territories to which Part Four of the Treaty on the 
Functioning  of  the  European  Union  applies2  (‘the  Internal  Agreement’),  and  in  particular 
Article 10(2) thereof, 

Having regard to the proposal from the European Commission, 
Having regard to the opinion of the European Court of Auditors3, 

Having regard to the opinion of the European Investment Bank on the provisions concerning 
it4, 

Whereas: 

(1) 

(2) 

The  European  Central  Bank  adopted  on  5  June  2014  a  Decision5  providing  for  a 
negative interest rate, which entails a payment obligation of the deposit holder to the 
relevant  national  central  bank  (NCB)  including  the  right  of  that  NCB  to  debit  the 
relevant government deposit account accordingly. Other EU central banks where EDF 
funds  have  to  be  kept  in  accordance  with  Article  22  of  the  Financial  Regulation 
applicable to the 11th EDF adopted similar decisions. 
According to Article 22(3) of Council Regulation (EU) 2015/3236 of 2 March 2015 on 
the Financial Regulation applicable to the eleventh European Development Fund (11th 
EDF), contributions to the EDF are to be credited by each Member State to a special 
account  entitled  ‘European  Commission  —  European  Development  Fund’  opened 
with  the  central  bank  of  the  relevant  Member  State  or  the  financial  institution 
designated by it.  

(3) 

It should be clarified that these special accounts opened by the Member States in the 
name of the Commission, for the purpose of depositing EDF contributions, until they 

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4 
5 

6 

OJ L 210, 6.8.2013, p. 1 
OJ C […], , p. […]. 
OJ C […], […], p. […]. 
2014/337/EU: Decision of the European Central Bank of 5 June 2014 on the remuneration of deposits, 
balances and holdings of excess reserves (ECB/2014/23), OJ L 168, 7.6.2014, p. 115. 
OJ L 58, 3.3.2015, p.17 

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need  to  be  used  for  payments  should  be  kept  free  of  any  charge  and  interest.  The 
purpose of this provision is to prevent losses for the EDF budget. Any charge applied 
to those accounts would be equivalent to a reduction of the funds available to the EDF 
budget. In this respect, negative interest should equally be avoided as it has the same 
negative effect as charges. Therefore, the Member State concerned should compensate 
the  EDF  budget  for  any  charge  or  negative  interest  applied  to  the  account  for  EDF 
resources  it  has  opened  in  the  name  of  the  Commission  pursuant  to  Article  22(3)  of 
Council Regulation (EU) 2015/323. 

(4) 

Regulation (EU) 2015/323 should therefore be amended accordingly. 

HAS ADOPTED THIS REGULATION: 

Article 22 of Regulation (EU) 2015/323 is replaced by the following: 

Article 1 

"Article 22 

Payment of the instalments 

1.  Calls  for  contributions  shall  first  use  up  the  amounts  laid  down  for  previous  European 
Development Funds, one after the other. 

2. The contributions of the Member States shall be expressed in euro and shall be paid in euro. 

3. The contribution referred to in point (a) of Article 21(7) shall be credited by each Member 
State to  a special  account  entitled  ‘European Commission  — European Development  Fund’ 
opened  with  the  central  bank  of  the  relevant  Member  State  or  the  financial  institution 
designated by it. The amount of such contributions shall remain in those special accounts until 
the  payments  need  to  be  made.  The  Commission  shall  endeavour  to  make  any  withdrawals 
from  the  special  accounts  in  such  a  way  as  to  maintain  a  distribution  of  assets  in  those 
accounts  corresponding  to  the  contribution  key  pursuant  to  point  (a)  of  Article  1(2)  of  the 
Internal Agreement. 

The contribution referred to in point (b) of Article 21(7) of this Regulation shall be credited 
by each Member State in accordance with Article 53(1). 

4. The account referred to in paragraph 3 shall be kept free of any charge and interest.  

5. Each Member State shall compensate the Commission for any charges or negative interest 
applied to this account on the first working day of the second month following the application 
of these charges or negative interest." 

Article 2 

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

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

Done at Brussels, 

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For the Council 
The President 

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