Proposal for a COUNCIL REGULATION on measures concerning the implementation and financing of the general budget of the Union in 2020 in relation to the withdrawal of the United Kingdom from the Union
Date: 2019-09-04
Institutions: Directorate-General for Budget, European Commission
Subjects: United Kingdom, financial year, financing of the EU budget, general budget (EU), withdrawal from the EU

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   EUROPEAN COMMISSION  Brussels, 4.9.2019  COM(2019) 461 final 2019/0186 (APP)  Proposal for a COUNCIL REGULATION on measures concerning the implementation and financing of the general budget of the Union in 2020 in relation to the withdrawal of the United Kingdom from the Union  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

The  United  Kingdom  has  decided  to  leave  the  European  Union,  invoking  the  procedure  in 
Article  50  of  the  Treaty  on  European  Union  (TEU).  Following  a  request  by  the  United 
Kingdom, the European Council (Article 50) agreed on 11 April 20191 to extend further2 the 
period provided for in Article 50(3) TEU until 31 October 2019. Unless the United Kingdom 
ratifies the Withdrawal Agreement by 31 October 2019 or requests a third extension, to which 
the European Council (Article 50) agrees by unanimity, the period under Article 50(3) TEU 
will  end  then.  The  United  Kingdom  will  then  be  a  third  country  as  of  1  November  2019 
without an agreement to ensure an orderly withdrawal.The Commission continues to consider 
that  an  orderly  withdrawal  of  the  United  Kingdom  from  the  Union  on  the  basis  of  the 
Withdrawal Agreement is the best outcome. 

The  Communication  of  12  June  2019  on  the  ‘State  of  play  of  preparations  of  contingency 
measures for the withdrawal of the United Kingdom from the European Union’3 recalled that, 
in line with the approach which the European Council (Article 50) has emphasised throughout 
the  process,  all  actors  must  continue  to  prepare  for  all  possible  outcomes,  including  a 
withdrawal  without  an  agreement.  It  concluded  that  the  Commission  would  continue  to 
monitor political developments and assess if any extension of the adopted measures would be 
needed.  This  proposal  is  an  extension  to  2020  of  the  contingency  framework  for  the  Union 
budget  laid  down  in  Council  Regulation  (EU,  Euratom)  2019/1197  of  9  July  2019  on 
measures concerning the implementation and financing of the general budget of the Union in 
2019 in relation to the withdrawal of the United Kingdom from the Union4. The proposal lays 
down rules on the relations between the Union, on the one hand, and the United Kingdom and 
its beneficiaries, on the  other, as regards the financing and implementation of the budget  in 
2020.  

Since the notification by the United Kingdom of its withdrawal intention, the European Union 
has  consistently  stated  that  the  Union  and  the  United  Kingdom  are  bound  to  honour  their 
respective obligations resulting from the whole period of the United Kingdom’s membership 
in the Union. This principle was recalled in the European Council's conclusions of 29 April 
2017,  and  reflected  in  the  introduction  to  the  Withdrawal  Agreement5.  The  absence  of  a 
withdrawal agreement at the withdrawal date would not affect that guiding principle. 

A withdrawal  without an agreement would leave the budgetary relations between the Union 
and  the  UK  without  agreed  legal  arrangements.  Such  a  legal  vacuum  would  create 
considerable  uncertainty  and  difficulties  for  the  implementation  of  the  Union’s  budgets  for 
2019 and 2020, for all UK beneficiaries and in some cases also for beneficiaries of the other 
Member  States.  In  line  with  the  Commission’s  overall  approach,  this  proposal  is  a 
contingency measure in response to this situation. 

1  European Council Decision (EU) 2019/584, OJ L 101, 11.4.2019, p. 1.  
2  Following  a  request  by  the  United  Kingdom,  the  European  Council  decided  a  first  extension  on 

22 March 2019 (European Council Decision (EU) 2019/476, OJ L 80I, 22.3.2019, p. 1). 

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4 
5  Agreement  on  the  withdrawal  of  the  United  Kingdom  of  great  Britain  and  Northern  Ireland  from  the 

COM/2019/276 final. 
OJ L 189, 15.7.2019, p. 1. 

European Union and the European Atomic Energy Community, OJ, C 144I, 25.4.2019, p.1 

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After  withdrawal,  the  Treaties  and  the  secondary  legislation  will  not  be  applicable  to  the 
United  Kingdom.  The  United  Kingdom  or  entities  established  in  the  United  Kingdom  will 
cease  to  be  eligible  to  receive  funding  under  those  Union  programmes,  unless  relevant 
provisions  for  participation  of  third  countries  are  included  in  the  legal  acts  of  EU  spending 
programmes.  

The  purpose  of  this  proposal  is  to  extend  to  2020  the  contingency  framework  under 
Regulation  (EU,  Euratom)  2019/1197  and,  consequently,  to  avoid,  or  at  least  minimise,  the 
most significant disruptions for beneficiaries of EU spending programmes and other actions at 
the  time  of  withdrawal  and  until  the  end  of  2020,  also  with  the  expectation  that  this  will 
facilitate a financial settlement between the Union and the United Kingdom. 

The  proposed  contingency  framework  provides  for  the  possibility  to  maintain  throughout 
2020  the  eligibility  to  benefit  from  Union  financing  for  the  United  Kingdom  and  United 
Kingdom  entities  under  legal  commitments  entered  into  before  the  withdrawal  date  or 
between the withdrawal date and the end of 2019, in application of Regulation (EU, Euratom) 
2019/1197.  This  is  subject  to  the  condition  that  the  United  Kingdom  makes  a  written 
commitment to contribute to the financing of the budget for 2020 under the terms set in this 
proposal.  In  addition,  the  United  Kingdom  should  commit  in  writing  to  accept  the  controls 
and  audits  which  cover  the  entire  implementation  period  of  the  programmes  or  the  actions. 
Under these conditions, the financial interests of the Union will be protected. 

The United Kingdom and United Kingdom entities, as well as entities from the other Member 
States whose eligibility is affected by the UK withdrawal, would continue benefiting from the 
Union  financing  under  the  conditions  of  this  proposal.  This  would  mitigate  the  most 
significant  disruptions  of  the  withdrawal  on  existing  agreements  and  decisions.    It  would 
allow for an orderly budget implementation of legal commitments with the United Kingdom 
and United Kingdom entities signed or adopted before the date of withdrawal or between the 
withdrawal date and the end of 2019, in application of Regulation (EU, Euratom) 2019/1197.  

Furthermore, as the United Kingdom would finance its share of the budget 2020, and in line 
with  the  objective  of  implementing  fully  the  multiannual  financial  framework  2014-2020 
decided  while  the  United  Kingdom  was  a  member  of  the  Union,  the  United  Kingdom  and 
United Kingdom entities would be eligible in 2020 for the purposes of conditions set in any 
calls, tenders, contests or any other procedure which may lead to financing from the Union's 
budget. This would not apply in case there are restrictions in relation to security or to actions 
involving  the  European  Investment  Bank  or  the  European  Investment  Fund.  Such  Union 
funding  would  be  limited  to  eligible  expenditure  incurred  in  2020,  except  for  public 
procurement contracts signed before the end of 2020 in application of Title VII of Regulation 
(EU,  Euratom)  2018/1046  of  the  European  Parliament  and  of  the  Council    (‘the  Financial 
Regulation’),  which  would  continue  to  be  implemented  in  accordance  with  their  terms,  and 
except for the United Kingdom agricultural direct payment scheme for the claim  year 2020, 
which will be excluded from eligibility. 

The  proposed  contingency  framework  would  also  allow  financing  of  actions  in  which 
Member States and Member States' entities are beneficiaries where the eligibility depends on 
the  United  Kingdom  being  a  Member  State  or  results  from  Regulation  (EU,  Euratom) 
2019/1197,  provided  that  these  specific  actions  are  implemented  under  legal  commitments 
signed or adopted before the date of withdrawal or in 2019 in application of Regulation (EU, 
Euratom) 2019/1197. 

This eligibility of the United Kingdom and United Kingdom entities would only start applying 
after the conditions laid down in this proposal have been fulfilled, including that the United 
Kingdom has made its first payment to the EU budget for 2020.  The contingency framework 

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providing for the eligibility of United Kingdom and United Kingdom entities would cease to 
apply if the United Kingdom discontinues the payments or where significant deficiencies have 
been observed in the execution of the controls and audits. 

The contribution from the United Kingdom is based on the draft budget for 2020 as proposed 
on 5 July 2019 for 28 Member States6 and would be adjusted to take into account the level of 
payment appropriations under the adopted budget. It is reasonable that no Member State is in 
a less favourable position as regards their contribution than laid down in the budget for 2020 
as  proposed,  following  the  adoption  of  this  Regulation.  Therefore,  to  ensure  the  beneficial 
effect of this Regulation for all Member States, a specific amount would be deducted before 
that  contribution  is  entered  in  the  Union  budget.  Such  specific  amount  would  benefit  the 
Member  States  which  would  otherwise  be  at  a  disadvantage  following  the  adoption  of  this 
Regulation, as further specified in dedicated practical arrangements setting out the distribution 
of  the  payments  due  and  entrusting  the  Commission  with  the  disbursement  of  the  specific 
amount. 

The proposal is without prejudice to negotiating an agreement with the United Kingdom on a 
financial settlement covering the entirety of mutual obligations. If no agreement is reached in 
2019  or  2020,  the  situation  at  the  beginning  of  2021  will  be  equivalent  to  the  one  at  the 
withdrawal  date  for  the  mutual  commitments  undertaken  by  the  Union  and  the  United 
Kingdom.  In  any  event  the  Union  and  the  United  Kingdom  would  need  to  honour  their 
respective obligations resulting from the whole period of the United Kingdom membership in 
the Union. 

• 

Consistency with existing policy provisions in the policy area 

This  proposal  aims  at  minimising  the  negative  impact  of  the  withdrawal  of  the  United 
Kingdom for the Union budget and for the implementation of the policies of the Union. 

• 

Consistency with other Union policies 

This proposal is is part of the Union preparedness and contingency plan to mitigate the most 
significant  disruptions  of  a  withdrawal  of  the  United  Kingdom  from  the  Union  without  a 
withdrawal agreement and fully consistent with the Council mandate for the negotiations with 
the United Kingdom on its withdrawal from the Union. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

Article  352  TFEU  and  Article  203  of  the  Euratom  Treaty  allow  the  Union  to  adopt 
appropriate measures if actions by the Union should prove necessary, within the framework of 
the policies, to attain one of the objectives set out in the Treaties, and the Treaties have not 
provided  the  necessary  powers.  The  proposed  Regulation  constitutes  a  measure  allowing 
transition  following  the  withdrawal  of  a  Member  State  with  regard  to  financing  and 
implementation  of  actions  from  the  Union  budget  in  a  situation  in  which  no  agreement  has 
been concluded with that State. Such measure is necessary in order to implement the Union’s 
budget for 2020, which was proposed on 5 July 2019 for 28 Member States, allow to receive 
the  payments  from  the  withdrawing  Member  State,  as  well  as  provide  a  solution  for  the 
ongoing  actions  financed  from  the  Union’s  budget  for  the  United  Kingdom  and  United 
Kingdom’s  beneficiaries  and  for  new  actions  justified  by  the  contribution  of  the  United 
Kingdom  to  the  budget  2020.  The  Treaties  do  not  provide  for  the  necessary  powers  for  the 

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COM/2019/400 final of 5.7.2019. 

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Union to adopt such transitory measures and therefore Article 352 TFEU and Article 203 of 
the Euratom Treaty are the appropriate legal basis. 

• 

Subsidiarity (for non-exclusive competence)  

The  Union’s  budget  2020,  which  was  proposed  on  5  July  2019  for  28  Member  States,  will 
finance  the  actions  and  spending  programmes  under  the  multiannual  financial  framework 
2014-2020  as  they  were  adopted  by  the  Union  legislator.  The  objectives  of  the  proposed 
action can thus only be achieved by a measure at Union level. 

• 

Proportionality 

The proposal does not exceed what is necessary to achieve the objectives of the measure, as it 
is  limited  to  determining  the  conditions  required  for  the  establishment  of  eligibility  of  the 
United Kingdom and United Kingdom's entities. It is limited in time. 

• 

Choice of the instrument 

Given the need for a binding act which would be directly applicable proposing a regulation is 
the only adequate form. 

3. 

• 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

Stakeholder consultations 

It was not to possible to carry out a stakeholder consultation due to the urgency for preparing 
the proposal so that it can be adopted in time by the Council after obtaining the consent of the 
European Parliament in order to minimise the period of uncertainty for the beneficiaries and 
for the financing of the budget for 2020.  

• 

Impact assessment 

Due to the nature of the proposed measure, no impact assessment was carried out, in line with 
the Better Regulation Guidelines. The envisaged contingency framework would facilitate the 
smooth implementation of the budget 2020 and a possible future agreement with the United 
Kingdom  on  the  respective  obligations  resulting  from  the  whole  period  of  the  United 
Kingdom’s membership in the Union. 

4. 

BUDGETARY IMPLICATIONS 

In case of a withdrawal without an agreement, this proposal would restore the eligibility of the 
United  Kingdom  and  United  Kingdom  beneficiaries  as  long  as  the  United  Kingdom 
contributes  to  the  budget  for  2020.  It  would  also  allow  receiving  the  United  Kingdom’s 
contributions as laid down in the draft budget for 2020, which was proposed on 5 July 2019 
for  28  Member  States,  after  adjusting  those  contributions  to  take  into  account  the  level  of 
payment appropriations under the adopted budget.  

The United Kingdom’s acceptance of the conditions for the 2019 contingency framework and 
its  written  commitment  to  accept  the  necessary  controls  and  audits  would  be  conditions  for 
the application of this contingency framework for 2020. 

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2019/0186 (APP) 

Proposal for a 

COUNCIL REGULATION 

on measures concerning the implementation and financing of the general budget of the 
Union in 2020 in relation to the withdrawal of the United Kingdom from the Union 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 352 thereof, 

Having  regard  to  the  Treaty  establishing  the  European  Atomic  Energy  Community,  and  in 
particular Article 203 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the consent of the European Parliament7, 

Acting in accordance with a special legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

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On 29 March 2017, the United Kingdom submitted the notification of its intention to 
withdraw  from  the  Union  pursuant  to  Article  50  of  the  Treaty  on  European  Union 
(TEU). The Treaties will cease to apply to the United Kingdom from the date of entry 
into force of the withdrawal agreement or, failing that, two years after that notification 
that  is  from  30 March  2019,  unless  the  European  Council,  in  agreement  with  the 
United  Kingdom,  unanimously  decides  to  extend  that  period.  The  period  has  been 
extended  twice,  last  time  by  European  Council  Decision  (EU)  2019/5848,  which 
extended it until 31 October 2019.  In the absence of a withdrawal agreement with the 
United Kingdom  and of  a further extension of the period referred to  in  Article 50(3) 
TEU a financial settlement with regard to the financial obligations following from the 
United  Kingdom’s  membership  in  the  Union  needs  to  be  agreed  in  a  future 
international agreement between the United Kingdom and the Union. 

This Regulation is without prejudice to the respective obligations of the Union and the 
United  Kingdom  resulting  from  the  whole  period  of  the  United  Kingdom’s 
membership in the Union. 
Council  Regulation  (EU,  Euratom)  2019/11979  has  laid  down  rules  on  the  relations 
between the Union, on the one hand, and the United Kingdom and its beneficiaries, on 
the  other,  as  regards  the  financing  and  implementation  of  the  general  budget  of  the 
Union  (‘the  budget’)  in  2019.  It  is  necessary  to  lay  down  rules  on  the  relations 

Consent of […]. 
European Council  Decision (EU) 2019/584 taken in agreement  with the United Kingdom of 11  April 
2019 extending the period under Article 50(3)TEU, (OJ L 101, 11.04.2019, p.1). 
Council  Regulation  (EU,  Euratom)  2019/1197  of  9  July  2019  on  measures  concerning  the 
implementation and financing of the general budget of the Union in 2019 in relation to the withdrawal 
of the United Kingdom from the Union, (OJ L 189, 15.7.2019, p. 1).  

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(4) 

(5) 

(6) 

(7) 

(8) 

between the Union, on the one hand, and the United Kingdom and its beneficiaries, on 
the other, also as regards the financing and implementation of the budget in 2020. 

The Treaties do not provide powers other than those under Article 352 of the Treaty 
on  the  Functioning  of  the  European  Union  (TFEU)  and  Article  203  of  the  Treaty 
establishing  the  European  Atomic  Energy  Community  for  the  adoption  of  the 
measures  concerning  the  implementation  and  financing  of  the  budget  in  2020  in 
relation  to  the  withdrawal  of  the  United  Kingdom  from  the  Union  without  a 
withdrawal agreement. 

The United Kingdom and persons and entities established in the United Kingdom are 
participating in a number of Union programmes or actions on the basis of the United 
Kingdom’s  membership  in  the  Union.  The  participation  takes  place  on  the  basis  of 
agreements with the United Kingdom or persons or entities established in the United 
Kingdom  or  decisions  in  favour  of  the  United  Kingdom  or  persons  or  entities 
established in the United Kingdom which constitute legal commitments. 

For many of those agreements and decisions, the rules governing the eligibility require 
the  beneficiary  to  be  a  Member  State  or  a  person  or  entity  established  in  a  Member 
State. The eligibility of the United Kingdom  or persons or entities established in  the 
United Kingdom is in such cases linked to the United Kingdom being a Member State. 
The  withdrawal  of  the  United  Kingdom  from  the  Union  without  a  withdrawal 
agreement therefore entails the loss of eligibility of such recipients of Union financing 
under  the  agreements  and  decisions.  However,  this  does  not  concern  cases  where 
persons or entities established in  the United Kingdom  would participate  in  an action 
under,  and  subject  to  the  conditions  applicable  under,  the  respective  Union  rules  for 
persons and entities established in a third country. 

In case of a withdrawal  without a withdrawal agreement, it would be beneficial both 
for  the  Union  and  its  Member  States  and  for  the  United  Kingdom  and  persons  and 
entities established in the United Kingdom to provide for the eligibility in 2020 of the 
United  Kingdom  and  beneficiaries  established  in  the  United  Kingdom  to  receive 
Union funds and for the participation of the United Kingdom  in  the financing of the 
budget  for  2020.  It  would  also  be  beneficial  if  the  legal  commitments  signed  and 
adopted  before  the  date  of  withdrawal  or  in  2019  in  application  of  Article  4  of 
Regulation (EU, Euratom) 2019/1197, could continue to be executed throughout 2020. 

It  is  therefore  appropriate  to  lay  down  conditions  under  which  the  United  Kingdom 
and  persons  and  entities  established  in  the  United  Kingdom  could  continue  to  be 
eligible  in  2020  with  regard  to  the  agreements  signed  with  them  and  the  decisions 
adopted with regard to them until the date on which the Treaties cease to apply to and 
in the United Kingdom (‘date of withdrawal’) or in 2019 in application of Article 4 of 
Regulation  (EU,  Euratom)  2019/1197.  The  following  conditions  are  required  for  the 
application of this Regulation: i) the United Kingdom has confirmed the commitment 
in writing to the Commission to continue to pay a contribution calculated on the basis 
of the estimated own resources from the United Kingdom as set out in the draft budget 
for  2020,  as  proposed  on  5  July  2019,  and  adjusted  to  take  into  account  the  total 
amount of payment  appropriations  set  out  in  the adopted budget  for 2020;  ii) that a 
first  instalment  has  been  paid  by  the  United  Kingdom;  iii)  that  the  United  Kingdom 
has  confirmed  the  commitment  in  writing  to  the  Commission  to  allow  audits  and 
controls in full by the Union in compliance with the applicable rules; iv) and that the 
Commission has adopted the decision pursuant to Article 2(2) of Council Regulation 
(EU, Euratom) 2019/1197 and has not adopted a decision pursuant to Article 3(2) of 

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(9) 

that Regulation. In view of the need for certainty, it is appropriate to limit the time for 
the  fulfilment  of  the  conditions.  The  Commission  should  adopt  a  decision  on  the 
fulfilment of the conditions. 

The condition as regards the contribution from the United Kingdom should be based 
on the draft budget for 2020 as proposed for 28 Member States and should be adjusted 
to  take  into  account  the  total  amount  of  payment  appropriations  under  the  adopted 
budget. It is reasonable that no Member State should be in a less favourable position as 
regards  their  contribution  than  laid  down  in  the  budget  for  2020  as  proposed, 
following the adoption of this Regulation. Therefore, to ensure the beneficial effect of 
this  Regulation  for  all  Member  States,  it  is  appropriate  to  deduct  a  specific  amount 
from  the  amount  of  the  contribution  by  the  United  Kingdom  to  be  entered  in  the 
general budget of the Union. Such specific amount should benefit the Member States 
which would otherwise be at a disadvantage following the adoption of this Regulation, 
as further specified in dedicated practical arrangements setting out the distribution of 
the payments due and entrusting the Commission with the disbursement of the specific 
amount. 

(10)  As  long  as  the  conditions  for  eligibility  of  the  United  Kingdom  and  persons  and 
entities  established  in  the  United  Kingdom  under  this  Regulation  continue  to  be 
fulfilled, it is also appropriate to provide for their eligibility, in 2020, for the purposes 
of conditions set in calls, tenders, contests or any other procedure which may lead to 
financing  from  the  Union’s  budget,  with  the  exception  of  specific  cases  related  to 
security  and  to  the  loss  of  membership  of  the  United  Kingdom  in  the  European 
Investment Bank, and to provide Union funding to them. Such Union funding should 
be  limited  to  eligible  expenditure  incurred  in  2020,  except  for  public  procurement 
contracts signed before the end of 2020 in application of Title VII of Regulation (EU, 
Euratom) 2018/1046 of the European Parliament and of the Council10 (‘the Financial 
Regulation’),  which  continue  to  be  implemented in  accordance  with  their  terms,  and 
except for the United Kingdom agricultural direct payment scheme for the claim year 
2020, which should be excluded from eligibility. In line with the Financial Regulation, 
calls, tenders, contests or other procedures, as well as any ensuing agreements with, or 
decisions  in  favour  of,  the  United  Kingdom  or  persons  or  entities  established  in  the 
United  Kingdom,  are  to  stipulate  the  conditions  for  eligibility  and  for  continuation 
thereof by reference to this Regulation. 

(11) 

(12) 

10 

It is also appropriate to provide that the eligibility of the United Kingdom and persons 
and  entities  established  in  the  United  Kingdom  would  continue  under  the  conditions 
that the United Kingdom continues to pay the contribution for 2020 and that controls 
and  audits  can  be  carried  out  effectively.  Where  these  conditions  are  no  longer 
fulfilled,  the  Commission  should  take  a  decision  establishing  such  failure.  In  such  a 
case, the United Kingdom and persons and entities established in the United Kingdom 
should cease to be eligible for Union financing. 

It is also appropriate to provide for the continuation, in 2020, of eligibility of actions 
in  which  Member  States  or  persons  or  entities  established  in  the  Member  States 
receive  Union  funds  and  which  are  related  to  the  United  Kingdom.  However,  the 
potential  non-acceptance  by  the  United  Kingdom  of  controls  and  audits  should 

Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on 
the  financial  rules  applicable  to  the  general  budget  of  the  Union,  amending  Regulations  (EU)  No 
1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) 
No  1316/2013,  (EU)  No  223/2014,  (EU) No 283/2014,  and  Decision  No  541/2014/EU  and  repealing 
Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1). 

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constitute  an  element  to  be  taken  into  account  for  the  purposes  of  sound  financial 
management when assessing the implementation of such actions. 

(13)  The actions should continue to be implemented in compliance with the relevant rules 
governing such actions,  including  the  Financial  Regulation.  It  is  therefore, necessary 
to treat the United Kingdom as a Member State for the purpose of the application of 
such rules. 

(14)  Since  the  objectives  of  this  Regulation  cannot  be  sufficiently  achieved  by  the 
Member States but can rather, as they concern the Union budget and programmes and 
actions implemented by the Union, be better achieved at Union level, the Union may 
adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 
of  the  TEU.  In  accordance  with  the  principle  of  proportionality  as  set  out  in  that 
Article, this Regulation does not go beyond what is necessary in order to achieve those 
objectives. 

(15) 

In order to allow for a limited flexibility, the power to adopt acts in accordance with 
Article  290  TFEU  should  be  delegated  to  the  Commission  in  respect  of  a  possible 
extension of the deadlines set out in points (a), (b) and (c) of the first subparagraph of 
Article 2(1), and amendments to the payment schedule. It is of particular importance 
that the Commission carry out appropriate consultations during its preparatory work, 
including at expert level, and that those consultations be conducted in accordance with 
the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better 
Law-Making11.  In  particular,  to  ensure  equal  participation  in  the  preparation  of 
delegated acts, the European Parliament and the Council receive all documents at the 
same time as Member States’ experts, and their experts systematically have access to 
meetings of Commission expert groups dealing with the preparation of delegated acts. 
Where,  in  the  case  of  a  risk  of  a  serious  disruption  of  the  implementation  and 
financing of the Union budget in 2020, imperative grounds of urgency so require, the 
delegated  act  should  enter  into  force  without  delay  and  should  apply  as  long  as  no 
objection is expressed by the European Parliament or the Council, 

(16)  To avoid most significant disruptions for beneficiaries of Union spending programmes 
and other actions at the date of the withdrawal of the United Kingdom from the Union, 
this Regulation should enter into force as a matter of urgency on the day following that 
of its publication in the Official Journal of the European Union and should apply from 
the  day  following  that  on  which  the  Treaties  cease  to  apply  to  and  in  the  United 
Kingdom,  unless  a  withdrawal  agreement  concluded  with  the  United  Kingdom  has 
entered  into  force  by  that  date.  Given  that  this  Regulation  lays  down  measures 
concerning the implementation and financing of the budget of the Union for 2020, it 
should only apply to the eligibility for the year 2020, 

HAS ADOPTED THIS REGULATION: 

Article 1 
Subject matter and scope 

This  Regulation  lays  down  rules  on  the  implementation  and  the  financing  of  the  general 
budget  of  the  Union  (‘the  budget’)  in  2020    in  relation  to  the  withdrawal  of  the  United 
Kingdom  from  the  Union  without  a  withdrawal  agreement  and  on  actions  under  direct, 
indirect and shared management for which the eligibility is fulfilled through the membership 

11 

OJ L 123, 12.5.2016, p. 1. 

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of the United Kingdom in the Union at the date on which the Treaties cease to apply to and in 
the United Kingdom (‘date of withdrawal’). 

This Regulation applies without prejudice to the territorial cooperation programmes covered 
by  Regulation  (EU)  2019/491  of  the  European  Parliament  and  of  the  Council12  and  to  the 
learning  mobility  activities  under  the  Erasmus+  programme  covered  by  Regulation 
(EU) 2019/499 of the European Parliament and of the Council13. 

1. 

Article 2 
Conditions for eligibility 

Where the United Kingdom or a person or entity established in the United Kingdom 
receive  Union  funds  under  an  action  carried  out  in  direct,  indirect  or  shared 
management  pursuant  to  legal  commitments  signed  or  adopted  before  the  date  of 
withdrawal  or  in  2019  in  application  of  Article  4  of  Regulation  (EU,  Euratom) 
2019/1197 and eligibility under that action depends on the membership of the United 
Kingdom  in  the  Union,  they  shall  continue  to  be  eligible  for  Union  funding  for 
eligible  expenditure  incurred  in  2020  following  the  date  of  withdrawal,  if  the 
following conditions are met, and as long as no decision as referred to in Article 3(2) 
has entered into force: 

(a) 

(b) 

(c) 

(d) 

(e) 

the United Kingdom, on 1 January 2020 or  within [7] calendar days after the 
entry into force of this Regulation or after the date of its application, whichever 
is the later, has confirmed in writing to the Commission that it will contribute 
in  euros,  in  accordance  with  the  payment  schedule  laid  down  in  this 
Regulation, the amount resulting from the following formula: UK OR DB2020 
+ UK GNI key DB2020 x (PA B2020 – PA DB2020);  

the United Kingdom, on 20 January 2020 or within [20] calendar days after the 
entry into force of this Regulation or after the date of its application, whichever 
is  the  later,  has  paid  on  the  account  determined  by  the  Commission  the  first 
payment which corresponds to [3.5] twelfths of the amount referred to in point 
(a); 

the United Kingdom,  on 1 January 2020 or within [7] calendar days after the 
entry into force of this Regulation or after the date of its application, whichever 
is the later, has confirmed the commitment in writing to the Commission that it 
will continue to accept the controls and audits which cover the entire period of 
the programmes and actions in accordance with the applicable rules;  

the  Commission  has  adopted  the  decision  pursuant  to  Article  2(2)  of 
Regulation (EU, Euratom) 2019/1197 and has not adopted a decision pursuant 
to Article 3(2) of Regulation (EU, Euratom) 2019/1197; and 

the Commission has adopted the decision referred to in paragraph 4 confirming 
that  the  conditions  referred  to  in  points  (a),  (b)  and  (c)  of  this  subparagraph 
have been fulfilled. 

12 

13 

Regulation (EU) 2019/491 of the European Parliament and of the Council of 25 March 2019 in order to 
allow  for  the  continuation  of  the  territorial  cooperation  programmes  PEACE  IV  (Ireland-United 
Kingdom)  and  United  Kingdom-Ireland  (Ireland-Northern  Ireland-Scotland)  in  the  context  of  the 
withdrawal of the United Kingdom from the Union (OJ L 85I , 27.3.2019, p. 1). 
Regulation  (EU)  2019/499  of  the  European  Parliament  and  of  the  Council  of  25  March  2019  laying 
down  provisions  for  the  continuation  of  ongoing  learning  mobility  activities  under  the  Erasmus+ 
programme  established  by  Regulation  (EU)  No  1288/2013,  in  the  context  of  the  withdrawal  of  the 
United Kingdom from the Union (OJ L 85I , 27.3.2019, p. 32). 

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2. 

For the purposes of the formula set out in point (a) of paragraph 1 the following shall 
apply:  

(a) 

(b) 

(c) 

“UK OR DB2020” shall be the amount displayed in the line ‘United Kingdom’ 
and  the  column  ‘Total  own  resources’  of  table 7  of  the  part  ‘A.  Introduction 
and financing of the general budget’ of the revenue part of the budget for 2020 
set out in the draft budget of the European Union for the financial year 2020, as 
proposed on 5 July 201914; 

 “UK  GNI  key  DB2020”  shall  be  the  amount  displayed  in  the  line  ‘United 
Kingdom’ and the column ‘GNI-based own resources’ of table 7 of the part ‘A. 
Introduction  and  financing  of  the  general  budget’  of  the  revenue  part  of  the 
budget  for  2020  set  out  in  the  draft  budget  of  the  European  Union  for  the 
financial  year  2020,  as  proposed  on  5  July  2019,  divided  by  the  amount 
displayed in the line ‘Total’ of the same column; 

“PA  B2020  -  PA  DB2020”  shall  be  the  difference  between  the  amount 
displayed in the line ‘Total expenditure’ and the column ‘Budget 2020’ of the 
table  ‘Expenditure’  of  the  part  ‘A.  Introduction  and  financing  of  the  general 
budget’  of  the  revenue  part  of  the  budget  of  the  European  Union  for  the 
financial year 2020 as adopted, and the amount displayed in the same line and 
the same column of the same table of the same part of the draft budget of the 
European Union for the financial year 2020, as proposed on 5 July 2019; 

(d)  However,  if  the  budget  2020  is  not  definitively  adopted  by  the  date  of  entry 
into force of this regulation or by the date of its application, whichever is the 
later, the “PA B2020 - PA DB2020” shall be zero.   

The amount referred to in point (a) of paragraph 1, after deduction of the amount of 
the first payment referred to in point (b) of paragraph 1, shall be broken down into 
equal instalments. The number of instalments shall correspond to the number of full 
months between the date of the first payment referred to in point (b) of paragraph 1 
and the end of the year 2020. 

The  amount  referred  to  in  point  (a)  of  paragraph  1  shall  be  entered  in  the  general 
budget of the Union as other revenue after deduction of a specific amount aiming at 
ensuring the budgetary distribution as provided in the column ‘Total own resources’ 
of the table referred to in point (a) of paragraph 1 and subject to dedicated practical 
arrangements to that effect. 

The commitment referred to in point (c) of the paragraph 1 shall include in particular 
the  cooperation  in  the  protection  of  the  financial  interests  of  the  Union  and  the 
acceptance of the rights of the Commission, the Court of Auditors and the European 
Anti Fraud Office to access data and documents relating to Union contributions, and 
perform controls and audits. 

The  Commission  shall  adopt  a  decision  on  whether  the  conditions  laid  down  in 
points (a), (b) and (c) of  paragraph 1 have been fulfilled. 

The Commission is empowered to adopt delegated acts in accordance with Article 7 
concerning the extension of the deadlines set in points (a), (b) and (c) of paragraph 1 
of this Article. 

3. 

4. 

5. 

14 

COM (2019) 400 final of 5 July 2019. 

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Where, in the case of a risk of serious disruption of the implementation and financing 
of  the  Union  budget  in  2020,  imperative  grounds  of  urgency  so  require,  the 
procedure provided for in Article 8 shall apply to delegated acts adopted pursuant to 
this paragraph. 

Article 3  
Continuation of eligibility of United Kingdom  
and of persons and entities established in the United Kingdom 

1. 

The  eligibility  of  the  United  Kingdom  and  persons  and  entities  established  in  the 
United Kingdom established in accordance with Article 2 shall continue in the year 
2020 as long as the following conditions are fulfilled: 

the  United  Kingdom  has,  following  the  first  payment  made  in 
(a) 
accordance  with  Article 2(1)(b),  paid  on  the  account  determined  by  the 
Commission  the  monthly  instalment  referred  to  in  Article  2(3)  on  the  first 
working day of each month until August 2020; 

(b) 
the  United  Kingdom  has  paid  on  the  account  determined  by  the 
Commission  on  the  first  working  day  of  September  2020  the  remaining 
monthly  instalments  referred  to  in  Article  2(3),  unless  the  Commission 
communicates  to  the  United  Kingdom  a  different  payment  schedule  for  this 
payment by 31 August 2020; and 

no significant  deficiencies have been observed in the execution of the 

(c) 
controls and audits referred to in Article 2(1)(c). 

Where one or more of the conditions referred to in paragraph 1 are not fulfilled, the 
Commission shall adopt a decision to that effect. That decision shall be published in 
the Official Journal of the European Union. 

As of the date of entry into force of the decision referred to in the first subparagraph 
of  this  paragraph,  the  United  Kingdom  and  persons  and  entities  established  in  the 
United  Kingdom  shall  cease  to  be  eligible  under  paragraph  1  of  this  Article,  and 
under  Articles 2  and 4,  actions  shall  cease  to  be  eligible  under  Article 6(2),  and 
Article 5 shall cease to apply. 

The Commission is empowered to adopt delegated acts in accordance with Article 7 
concerning  a  different  payment  schedule  for  the  payments  referred  to  in  points  (a) 
and (b) of paragraph 1 of this Article. 

Where,  in  the  case  of  a  risk  of  a  serious  disruption  of  the  implementation  and 
financing of the Union budget in 2020, imperative grounds of urgency so require, the 
procedure provided for in Article 8 shall apply to delegated acts adopted pursuant to 
this paragraph. 

Article 4  
Participation in calls and eligibility of resulting expenditures 

As of the date of entry into force of the decision referred to in Article 2(1)(e), and as 
long  as  no  decision  as  referred  to  in  Article 3(2)  has  entered  into  force,  the  United 
Kingdom or persons and entities established in the United Kingdom shall be eligible 
in 2020 for the purposes of conditions set in any calls, tenders, contests or any other 
procedure which may lead to financing from the Union’s budget to the same extent 

2. 

3. 

1. 

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(a) 

(b) 

2. 

as  Member  States  and  persons  or  entities  established  in  the  Member States,  and  be 
eligible for Union funding for eligible expenditure incurred in 2020. 

Notwithstanding the first subparagraph: 

contracts  signed  in  application  of  Title  VII  of  the  Regulation  (EU,  Euratom) 
2018/1046 (‘the Financial Regulation’) until the end of 2020 shall be implemented in 
accordance with their terms and until their end date; 

expenditure in  respect  of  the United Kingdom  direct  payments scheme for the claim 
year 2020 pursuant to Regulation (EU) No 1307/2013 of the European Parliament and 
of the Council15 shall not be eligible for Union funding. 

Notwithstanding paragraph 1, the United Kingdom or persons or entities established 
in the United Kingdom shall not be eligible under Regulation (EU) No 1309/2013 of 
the European Parliament and of the Council16, as amended by Regulation XXX, for 
actions covering workers made redundant and self-employed persons whose activity 
has  ceased  as  a  consequence  of  a  withdrawal  without  an  agreement  and  under 
Council Regulation (EC) No 2012/200217 establishing the European Union Solidarity 
Fund, as amended by Regulation XXX, for actions covering serious financial burden 
inflicted on Member States directly imputable to a withdrawal without a withdrawal 
agreement. 

3. 

The first subparagraph of paragraph 1 shall not apply: 

(a) 

(b) 

where the participation is limited to the Member States and persons or 
entities established in the Member States for security reasons; 

to  financial  operations  carried  out  within  financial  instruments 
managed  directly  or  indirectly  under  Title  X  of  the  Financial 
Regulation  or  to  financial  operations  guaranteed  by  the  Union  budget 
under the European Fund for Strategic Investments (EFSI) established 
by Regulation (EU) 2015/1017 of the European Parliament and of the 
Council18  or  under  the  European  Fund  for  Sustainable  Development 
(EFSD)  established  by  Regulation  (EU)  2017/1601  of  the  European 
Parliament and of the Council19. 

15 

16 

17 

18 

19 

Regulation (EU) No 1307/2013 of the European Parliament and of the  Council of 17 December 2013 
establishing  rules  for  direct  payments  to  farmers  under  support  schemes  within  the  framework  of  the 
common  agricultural  policy  and  repealing  Council  Regulation  (EC)  No 637/2008  and  Council 
Regulation (EC) No 73/2009 (OJ L 347, 20.12.2013, p. 608). 
Regulation (EU) No 1309/2013 of the European Parliament and of the Council of 17 December 2013 on 
the  European  Globalisation  Adjustment  Fund  (2014-2020)  and  repealing  Regulation  (EC)  No 
1927/2006 (OJ L 347, 20.12.2013, p. 855). 
Council  Regulation  (EC)  No  2012/2002  of  11  November  2002  establishing  the  European  Union 
Solidarity Fund (OJ L 311, 14.11.2002, p. 3). 
Regulation  (EU)  2015/1017  of  the  European  Parliament  and  of  the  Council  of  25 June 2015  on  the 
European  Fund  for  Strategic  Investments,  the  European  Investment  Advisory  Hub  and  the  European 
Investment Project Portal and amending Regulations (EU)  No 1291/2013 and (EU) No  1316/2013  — 
the European Fund for Strategic Investments (OJ L 169, 1.7.2015, p. 1). 
Regulation  (EU)  2017/1601  of  the  European  Parliament  and  of  the  Council  of  26 September 2017 
establishing  the  European  Fund  for  Sustainable  Development  (EFSD),  the  EFSD  Guarantee  and  the 
EFSD Guarantee Fund (OJ L 249, 27.9.2017, p. 1). 

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Article 5  
Other necessary adaptations 

If the conditions laid down in Article 2(1) are fulfilled, and as long as no decision as referred 
to  in  Article  3(2)  has  entered  into  force,  for  the  purpose  of  the  application  of  any  rules 
governing the actions carried out under the legal commitments referred to in Article 2(1), the 
calls referred to in Article 4 and the actions carried out under the legal commitments signed or 
adopted  following  the  calls  referred  to  in  Article  4,  which  are  necessary  to  give  effect  to 
Articles 2(1) and 4(1), the United Kingdom shall be treated as a Member State, subject to the 
provisions of this Regulation. 

However,  the  United  Kingdom  or  United  Kingdom  representatives  shall  not  be  allowed  to 
participate in any committee assisting in the management under the rules of the relevant basic 
act, or expert groups or other bodies advising on the programmes or on the actions, with the 
exception of monitoring or similar committees specific for the particular operational, national 
or similar programmes in shared management. 

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1. 

2. 

3. 

Article 6  
Eligibility of actions that relate to the United Kingdom, where the Member States  
or persons or entities established in the Member States receive the Union funds 

Actions under direct, indirect and shared management for which the Member States 
or  persons  or  entities  established  in  the  Member  States  receive  Union  funds  under 
legal  commitments  signed  or  adopted  before  the  date  of  withdrawal  or  in  2019  in 
application of  Article 4  of Regulation  (EU, Euratom) 2019/1197  and for  which the 
eligibility is fulfilled through the membership of the United Kingdom in the Union at 
the  date  of  withdrawal  or  through  the  eligibility  of  the  United  Kingdom  in 
application of Article 4 of Regulation (EU, Euratom) 2019/1197, shall be eligible for 
Union funding for eligible expenditure incurred in 2020 as of the date of withdrawal.  

Actions  for  which  the  eligibility  condition  of  a  minimum  number  of  participants 
from  different  Member  States in  a consortium is  fulfilled at  the date of  withdrawal 
through  a  member  of  the  consortium  which  is  a  person  or  entity  established  in  the 
United  Kingdom,  shall  be  eligible  for  Union  funding  for  eligible  expenditure 
incurred in 2020 where the conditions of Article 2(1) are fulfilled and as long as no 
decision as referred to in Article 3(2) has entered into force. 

The  non-fulfilment  of  the  condition  referred  to  in  Article  2(1)(c)  or  a  Commission 
decision  as  referred  to  in  Article  3(2)  concerning  the  non-fulfilment  of  conditions 
referred to in point (c) of Article 3(1), shall be taken into account by the responsible 
authorising officer for the purposes of assessment of a possible serious deficiency in 
complying with the main obligations in the implementation of the legal commitment 
referred to in paragraph 1 of this Article. 

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1. 

2. 

3. 

4. 

5. 

6. 

1. 

2. 

Article 7  
Exercise of the delegation 

The  power  to  adopt  delegated  acts  is  conferred  on  the  Commission  subject  to  the 
conditions laid down in this Article. 

The power to adopt delegated acts referred to in Articles 2 and 3 shall be conferred 
on the Commission  for  an indeterminate period  of time from  the date of entry into 
force of this Regulation. 

The delegation of power referred to in Articles 2 and 3 may be revoked at any time 
by the European Parliament or by the Council. A decision to revoke shall put an end 
to the delegation of the power specified in that decision. It shall take effect the day 
following  the  publication  of  the  decision  in  the  Official  Journal  of  the  European 
Union  or  at  a  later  date  specified  therein.  It  shall  not  affect  the  validity  of  any 
delegated acts already in force. 

Before adopting a delegated act, the Commission shall consult experts designated by 
each  Member  State 
the 
in  accordance  with 
Interinstitutional Agreement of 13 April 2016 on Better Law-Making. 

the  principles 

laid  down 

in 

As soon as it adopts a delegated act, the Commission shall notify it simultaneously to 
the European Parliament and to the Council. 

A delegated act adopted pursuant to Articles 2 and 3 shall enter into force only if no 
objection  has  been  expressed  either  by  the  European  Parliament  or  by  the  Council 
within a period of one month of notification of  that act to the European Parliament 
and the Council or if, before the expiry of that period, the European Parliament and 
the  Council  have  both  informed  the  Commission  that  they  will  not  object.  That 
period shall be extended by one month at the initiative of the European Parliament or 
of the Council. 

Article 8  
Urgency procedure 

Delegated  acts  adopted  under  this  Article  shall  enter  into  force  without  delay  and 
shall apply as long as no objection is expressed in accordance with paragraph 2. The 
notification  of  a  delegated  act  to  the  European  Parliament  and  to  the  Council  shall 
state the reasons for the use of the urgency procedure. 

Either  the  European  Parliament  or  the  Council  may  object  to  a  delegated  act  in 
accordance  with  the  procedure  referred  to  in  Article  7(6).  In  such  a  case,  the 
Commission  shall  repeal  the  act  immediately  following  the  notification  of  the 
decision to object by the European Parliament or by the Council. 

Article 9 
Transitional provision 

By derogation from point (b) of the second subparagraph of Article 4(1) of Regulation (EU, 
Euratom) 2019/1197, expenditure in respect of the United Kingdom direct payment scheme 
for  the  claim  year  2019  pursuant  to  Regulation  (EU)  No  1307/2013  shall  be  eligible  for 
Union funding,  after the Commission adopted the decision referred to in Article 2(4) of this 
Regulation, unless it adopts a decision referred to in Article 3(2) of this Regulation. 

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Article 10  
Entry into force and application 

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

It shall apply from the date following that on which the Treaties cease to apply to and in the 
United Kingdom pursuant to Article 50(3) of the TEU. 

However,  this  Regulation  shall  not  apply  if  a  withdrawal  agreement  concluded  with  the 
United Kingdom  in  accordance with  Article 50(2) of the TEU has  entered into force by the 
date referred to in the second paragraph of this Article. 

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

Done at Brussels, 

For the Council 
The President 

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